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Dig. Drilling Data Sys., L.L.C. v. Petrolink Servs.

United States Court of Appeals for the Fifth Circuit

July 2, 2020, Filed

No. 19-20116

Opinion

 [*369]  STUART KYLE DUNCAN, Circuit Judge:

Digital Drilling Data Systems, L.L.C. ("Digidrill"), a company that provides software used in oil drilling operations, sued its competitor, Petrolink Services, Inc. ("Petrolink"), alleging Petrolink hacked into its software at various oil drilling sites in order to "scrape" valuable drilling data in real time. The district court granted Petrolink's motion for summary judgment on Digidrill's copyright claims, but allowed Digidrill's unjust enrichment claim to proceed to trial, [**2]  where a jury ultimately returned a verdict in Digidrill's favor. Both parties appealed. We affirm in part, vacate in part, and remand for further proceedings.

When oil and gas exploration companies ("operators") drill below the Earth's surface, they often engage directional drilling companies to steer drill bits into specific targets deep underground—a process known as "geosteering." To assist with this process, the directional drillers in turn hire "measurement while drilling" ("MWD") companies who attach specialized tools near the end of the drill pipe just above the drill bit. These MWD tools send "downhole" data up to the surface, including raw data about the location and orientation of the drill bit and about the characteristics of the surrounding geological formation. MWD companies then rely on other companies who furnish data logging and visualization services—hardware and software packages at the surface that collect and store the data from the MWD tools, and also display the data on computer  [*370]  screens in real-time to assist with the geosteering process.

Digidrill is one such data logging and visualization service provider. Digidrill's initial commercial product, a software [**3]  program called "DataLogger," was designed to be installed on an MWD company's computer to collect raw data from downhole instruments, filter and correct the raw data (based partly on calibration inputs provided by the MWD company), and then log both the raw and corrected data to a database. To prevent unauthorized use of DataLogger, Digidrill designed the program to run only when a USB security dongle is plugged into the laptop.

At the filtering and correction stage, DataLogger applies certain algorithms and scaling factors to account for the context of the raw data. For example, DataLogger applies a formula to raw gamma data received from the downhole gamma ray sensor, scaling and correcting for factors such as gamma ray absorption by drill components located near the sensor. DataLogger similarly corrects the raw depth measurement values received from the drill bit.

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965 F.3d 365 *; 2020 U.S. App. LEXIS 20803 **; 2020 U.S.P.Q.2D (BNA) 10730; 2020 WL 3603953

DIGITAL DRILLING DATA SYSTEMS, L.L.C., Plaintiff - Appellant Cross-Appellee v. PETROLINK SERVICES, INCORPORATED, Defendant - Appellee Cross-Appellant

Prior History:  [**1] Appeals from the United States District Court for the Southern District of Texas.

Digital Drilling Data Sys. LLC v. Petrolink Servs., 2019 U.S. Dist. LEXIS 10122 (S.D. Tex., Jan. 22, 2019)Digital Drilling Data Sys. LLC v. Petrolink Servs., 2018 U.S. Dist. LEXIS 83158 (S.D. Tex., May 16, 2018)

CORE TERMS

enrichment, unjust, database, RIG, preempted, prevailing, drilling, visualization, infringement, preemption, qualitative, raw, installed, license, dongle, sites, technological, software, duress, gamma, unauthorized, circumvent, password, Printer, columns, prong, customers, real-time, surveyors, default

Civil Procedure, Judgments, Summary Judgment, Evidentiary Considerations, Appeals, Summary Judgment Review, Standards of Review, Entitlement as Matter of Law, Genuine Disputes, Legal Entitlement, Materiality of Facts, Standards of Review, De Novo Review, Trials, Judgment as Matter of Law, Postverdict Judgment, Abuse of Discretion, Copyright Law, Damages, Types of Damages, Costs & Attorney Fees, Civil Infringement Actions, Elements, Copying by Defendants, Ownership, Reviewability of Lower Court Decisions, Preservation for Review, Copying by Defendants, Substantial Similarity, Copyright Infringement Actions, Digital Millennium Copyright Act, Prohibited Conduct, Constitutional Copyright Protections, Federal & State Law Interrelationships, Federal Preemption, Business & Corporate Compliance, Contracts Law, Types of Contracts, Quasi Contracts, Contracts Law, Remedies, Equitable Relief, Quantum Meruit, Computer & Internet Law, Copyright Protection, Remedies