When Russ Emerson recently convinced an Eastern District of Texas judge to throw out the patent infringement claims against his oil and gas company client, it was a rare case of poetic justice — a defense win that employed actual poetry.
Emerson’s client, Tulsa-based BlueStone Natural Resources, was sued last year along with a dozen other companies operating in the Barnett Shale by a nonpracticing entity called Effective Exploration for infringing on a patent it owned for a system of drilling multiples wells from a single drilling pad.
While several of the defendants settled the cases with Effective Exploration in what Emerson described as “nuisance value” settlements — low offers that are a fraction of the cost of litigating the case — BlueStone refused the offer, denying that it had infringed on the patent.
“They made us a $40,000 settlement offer, which was a tiny fraction of what they were going to put on at trial’’ in damages, said Emerson, a Haynes and Boone partner who was the lead attorney on the case.
And in August, Effective Exploration moved for sanctions against BlueStone for prolonging the litigation after it refused to settle the case.
So in a brief written by Haynes and Boone associates Stephanie Sivinski and Matt Chiarizio, BlueStone decided to respond with poetry by citing a 100-year-old poem written by Rudyard Kipling called “Dane-Geld (A.D. 980-1016).” In it, Kipling warns against paying ransom demanded by Danish Vikings because “once you have paid him the Dane-geld, you never get rid of the Dane.”
“The fact that BlueStone is the only defendant sued in the current tranche of litigation that declined settlement thus far is also not a sanctionable offense,” BlueStone’s response stated. “It simply means that, unlike its codefendants, BlueStone thus far has taken Rudyard Kipling’s advice and refused to pay a nuisance-value settlement to make Effective Exploration go away.”
“The idea is you don’t pay these raiders money to go away because they’ll just come back,” Emerson said.
The sanctions motion was denied by U.S. Magistrate Judge Roy Payne on Sept. 1. And following the poet’s and their attorneys’ advice ultimately turned out to be the right move for BlueStone because on Nov. 13, Payne issued a summary judgment ruling dismissing Effective Exploration’s case.
Payne agreed with Emerson’s arguments that the plaintiff had not come forward with sufficient proof of infringement. And on Nov. 30, U.S. District Judge Rodney Gilstrap entered a final judgment finding that BlueStone did not infringe on the patent.
The ruling vindicates BlueStone’s decision not to settle on the cheap, Emerson said.
“It’s a business decision, right? And it’s a legitimate business decision to say ‘Look, we’re going to spend more money litigating this than to pay a little to settle,” Emerson said. “But they stood on principle and won. The next nonpracticing entity that thinks about suing them is going to think twice now.’’
And it’s not every day that a patent litigant gets a chance to use classic English poetry as a defense, Emerson said.
“I think it’s perfectly appropriate here. It’s quite analogous to the patent shakedown we see too often,” Emerson said. “And it’s fun to use a literary reference. It’s hard to find the opportunity but when you find it you use it. You have to have some fun right?”
Steven Daniels, a partner in Georgetown’s Farney Daniels who represents Effective Exploration, did not return a call for comment.