IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS TYLER DIVISION OIL STATES ENERGY

SERVICES, L.L.C., f/k/a STINGER WELLHEAD PROTECTION, INC., Plaintiff, v. TROJAN WELLHEAD PROTECTION, INC., f/k/a GUARDIAN WELLHEAD PROTECTION, INC., and GREENES ENERGY GROUP, LLC, Defendants.

Civil Action No. 6:12-cv-611

PLAINTIFFS ORIGINAL COMPLAINT AND REQUEST FOR PRELIMINARY AND PERMANENT INJUNCTION Plaintiff Oil States Energy Services, LLC (OSES), formerly known as Stinger Wellhead Protection, Inc. (Stinger), by and through its undersigned attorneys, files this Original Complaint against Defendants Trojan Wellhead Protection, Inc. (Trojan), formerly known as Guardian Wellhead Protection, Inc. (Guardian), and Greenes Energy Group, LLC (Greenes) (collectively, Defendants) and alleges as follows: PARTIES 1. Plaintiff Oil States Energy Services, LLC is a Delaware limited liability company

with its headquarters and principal place of business located in Houston, Texas. 2. Defendant Trojan Wellhead Protection, Inc. (formerly known as Guardian

Wellhead Protection, Inc.) is a Texas corporation with its headquarters and principal place of business located Odessa, Texas. Trojan may be served with process via its registered agent for service of process, Murray A. Erickson, 6907 E. Commerce, Odessa, Texas 79762.

3.

Defendant Greenes Energy Group, LLC is a Texas limited liability company with

its headquarters and principal place of business located in Houston, Texas. Greenes may be served with process via its registered agent for service of process, Corporation Service Company, 211 E. 7th Street, Suite 620, Austin, Texas 78701-3218. JURISDICTION 4. This action arises under the patent laws of the United States, Title 35, United

States Code. The Court has subject matter jurisdiction pursuant to 28 U.S.C. 1338. In addition, the Court has jurisdiction pursuant to 28 U.S.C. 1331. 5. The Court has supplemental jurisdiction over OSESs state law claims pursuant to

28 U.S.C. 1367 because OSESs claims are so related to the claims within the Courts original jurisdiction that they form part of the same case or controversy. 6. The Court has specific personal jurisdiction over all Defendants because this

dispute arises from an agreement that was executed and performed in Texas, as well as conduct of the Defendants that occurred in Texas. 7. The Court has general personal jurisdiction over Defendants because they are

both residents of the State of Texas, and they both systematically and continuously conduct business in Texas. VENUE 8. Venue is proper in this Court pursuant to 28 U.S.C. 1391(b)(c) and 28 U.S.C.

1400(b) because the Defendants have committed acts of infringement in this District and Division and have sold or leased the infringing products or services in this District and Division. Additionally, the Settlement Agreement that forms the basis of OSESs breach of contract claims herein contains a forum section clause, which states that [t]he Parties agree that the state and federal courts located in the territory of the United States District Court for the Eastern District 2

of Texas will retain exclusive jurisdiction to enforce and construe the terms of this Agreement and matters connected with its performance and waive any challenge to the jurisdiction or venue of such courts over these matters. CONDITIONS PRECEDENT 9. All conditions precedent have been performed or have occurred. FACTS I. THE PATENTED TECHNOLOGY 10. During the late 1980s, L. Murray Dallas, then an executive of Stinger, conceived

a new way to isolate a wellhead during hydraulic fracturing (fracking) operations. Rather than using an isolation tool that had to be removed after the fracking operation, Mr. Dallas invented a tool that included a mandrel, which extended into the tubing spool, and would allow access to the well, thus permitting the well operator to leave the tool in place between fracking operations. 11. Stinger filed numerous patent applications related to different embodiments and

components of, and variations on, Mr. Dallass new wellhead isolation tool. For the purposes of this litigation, one of the patents infringed by Greenes wellhead isolation tools is U.S. Patent No. 6,179,053 (the 053 Patent). 12. On January 30, 2001, the 053 patent, entitled Lockdown Mechanism for Well

Tools Requiring Fixed-Point Packoff, was duly and legally issued by the U.S. Patent and Trademark Office to Mr. Dallas. A true and correct copy of the 053 patent is attached hereto as Exhibit 1. 13. 14. 15. The 053 patent is presumed valid pursuant to 35 U.S.C. 282. OSES is the current owner by assignment of the 053 patent. No other company is licensed to make, use, sell, offer to sell, or import any

product or service that is covered by the claims of the 053 patent. 3

II.

PREVIOUS PATENT INFRINGEMENT CLAIMS AGAINST GUARDIAN 16. Stinger previously asserted claims in federal court against Guardian, alleging that

Guardian had infringed U.S. Patent Nos. 6,289,993, 6,817,423, and 6,179,053 (collectively the Stinger Patents). 17. In May 2008, Guardian and Stinger resolved the patent infringement claims by

executing a Settlement Agreement (the Settlement Agreement). Pursuant to the Settlement Agreement, Guardian was given a limited license under the Stinger Patents to make and use certain wellhead isolation tools. Specifically, Guardian was prohibited from using the tools that it was using at the time the prior litigation began, but it was permitted to use the modified tools that it was using at the time of the Settlement Agreement (referred to in the Settlement Agreement as Third Design Tools), as long as it complied with the other terms of the Settlement Agreement. 18. Guardians license was limited to wellhead isolation tools that were solely for Guardian was not permitted to grant

use in Guardians wellhead protection services.

sublicenses and it was not permitted to manufacture wellhead isolation tools for third parties. In the event Guardians entire business was sold to a third party, the Settlement Agreement provided that it could sell only those wellhead isolation tools manufactured prior to the Acquisition, and the license granted under the Settlement Agreement would extend only to the tools manufactured and used by Guardian prior to the date of the Acquisition. 19. Additionally, the Settlement Agreement prohibited Guardian from assigning its

rights under the Settlement Agreement to a third party without providing written notice to Stinger. Pursuant to section 7.1, any unauthorized attempt by Guardian to transfer or assign its rights would result in the automatic termination of the Settlement Agreement.

III.

OSES OBTAINS THE PATENTED TECHNOLOGY 20. 21. In May 2005, Oil States International, Inc. acquired Stinger for $83.1 million. In December 2011, OSES became the owner of the Stinger Patents when OSES

merged with Stinger. IV. GREENES ACQUISITION OF GUARDIANS ASSETS 22. to Trojan. 23. On December 21, 2011, Greenes announced that it had acquired all of Guardians Upon information and belief, on December 20, 2011, Guardian changed its name

assets, including its wellhead isolation tools. The press release announcing the acquisition was the first time that OSES learned that Guardian was planning to sell its wellhead isolation tools. 24. Stinger (now OSES) promptly contacted Murray Erickson, President of Guardian

(now Trojan), to inquire about Guardians apparent breaches of the Settlement Agreement, and to request confirmation that Greenes was not planning to use the wellhead isolation tools it had apparently purchased from Guardian. OSES also informed Mr. Erickson that it was exercising its rights to audit Guardians books and records concerning the payment of royalties under the Settlement Agreement. 25. Mr. Erickson responded by belatedly providing the written notice of assignment

required by the Settlement Agreement. 26. As of the filing of this Complaint, Guardians books and records have never been

made available for inspection by OSES. As a result, OSES has now formally terminated any licenses and rights Guardian might have had under the Settlement Agreement pursuant to section 8.2.

CAUSES OF ACTION Count 1: Patent Infringement (against Greenes) 27. herein. 28. 29. OSES is the owner of the 053 Patent. Greenes is manufacturing, using, offering to sell, and/or selling, leasing, and/or OSES incorporates by reference and realleges all paragraphs previously alleged

offering to lease wellhead isolation tools that Greenes purportedly acquired from Guardian in December 2011 that infringe one or more claims of the 053 Patent without the authority or license to do so. 30. 053 Patent. 31. Greenes has also committed acts of contributory infringement of one or more OSES has provided Greenes with notice that it is infringing the claims of the

claims of the 053 Patent. Greenes has sold, offered to sell, and/or leased wellhead isolation tools that are covered by the claims of the 053 Patent, and which are used in practicing one or more claims of the 053 Patent. The wellhead isolation tools are material to practicing the patented invention and patented process covered by the claims of the 053 Patent, and they have no substantial non-infringing uses. Greenes had prior knowledge that the wellhead isolation tools were especially made or especially adapted for use in an infringement of the 053 Patent. Greenes has sold, offered to sell, and/or leased wellhead isolation tools to well operators who directly infringe upon the 053 Patent by using the tools in connection with their oil and gas wells. 32. Additionally, Greenes has actively induced and continues to induce others to

infringe one or more claims of the 053 Patent. Greenes has sold, offered to sell, and/or leased wellhead isolation tools to well operators who directly infringe one or more claims of the 053 6

Patent by using the tools in connection with their oil and gas wells. Greenes practice of selling, offering to sell, and/or leasing wellhead isolation tools to well operators demonstrates its intent to induce the operators to directly infringe the claims of the 053 Patent. Greenes had prior knowledge that the wellhead isolation tools infringed upon the 053 Patent because it was aware of the previous litigation between Guardian and Stinger, as well as the Settlement Agreement, which terminated that litigation. 33. Upon information and belief, Greenes infringing activities have been willful and

deliberate. Greenes knew that the wellhead isolation tools infringed the claims of the 053 Patent and Greenes deliberately disregarded the known risk that its actions would infringe a valid patent. 34. As a result of Greenes infringing activities, OSES has suffered actual damages in

an amount to be determined at trial. Additionally, as a result of the willful and deliberate nature of Greenes infringing activities, OSES is entitled to a trebling of its actual damages and is entitled to recover its attorneys fees and costs incurred in prosecuting this action. 35. Greenes acts of infringement have caused irreparable harm to OSES for which

there is no adequate remedy at law, and will continue to cause irreparable harm to OSES unless Greenes is preliminarily and permanently enjoined by this Court. Count 2: Breach of Contract (against Trojan) 36. herein. 37. On May 30, 2008, Stinger (now OSES) and Guardian (now Trojan) entered into a OSES incorporates by reference and realleges all paragraphs previously alleged

valid and enforceable contractthe Settlement Agreement. 38. The Settlement Agreement provided Guardian with a limited license under the

Stinger Patents to make certain wellhead isolation tools, to be used solely . . . in Guardians 7

wellhead protection services. Guardian expressly acknowledged that the license provided in this Agreement is solely intended for the benefit of Guardian and that Guardian shall have no rights to grant sublicenses or to extend a license to any Third Party. 39. According to the Settlement Agreement, the only circumstances under which

Guardian could assign its rights under the Settlement Agreement were the conditions set forth in section 7.1.1. Pursuant to that provision, Guardians rights could only be assigned upon written notice . . . as part of a sale of all or substantially all of Guardians wellhead protection business. 40. In December 2011, Guardian sold all of its assets to Greenes, including the

wellhead isolation tools. Guardian also attempted to assign its rights under the Settlement Agreement to Greenes. 41. Guardian, however, never provided Stinger with written notice of the assignment

before it executed the asset sale agreement with Greenes. The first time that Stinger heard about the assignment was in a press release that was issued by Greenes after its purchase of Guardians assets. Guardians failure to provide Stinger with the notice required by section 7.1.1 constituted a breach of the Settlement Agreement. 42. Additionally, Guardian breached section 6.6 of the Settlement Agreement by

refusing to permit Stinger (now OSES) to exercise its right to have the correctness of any royalty payments audited, at Stingers expense, by a firm of independent public accountants, selected by Stinger, [to] examine Guardians records . . . on matters pertinent to the calculation of royalty. 43. According to section 7.1 of the Settlement Agreement, if Guardian attempts a

transfer or assignment its rights in violation of section 7.1.1, the licenses and other rights granted in this Agreement shall automatically terminate. Because Guardian attempted to

transfer its rights to Greenes in violation of section 7.1.1, all of the rights and licenses granted in the Settlement Agreement have now automatically terminated. Additionally, OSES has now formally terminated any licenses and rights Guardian might have had under the Settlement Agreement pursuant to section 8.2. 44. Stinger (now OSES) fully performed its contractual obligations under the

Settlement Agreement. 45. Guardians breaches of the Settlement Agreement directly and proximately

caused injury to OSES. Upon information and belief, Greenes is now directly competing with OSES by manufacturing, using, offering to sell, and/or selling, leasing, and/or offering to lease the wellhead isolation tools that it purchased from Guardian in violation of the Settlement Agreement. Additionally, Guardians concealment of its activities prevented Stinger (now

OSES) from proactively exercising its rights under the Settlement Agreement and potentially negotiating a royalty with Greenes as contemplated by section 7.1.1 of the Settlement Agreement. 46. 47. OSES seeks unliquidated damages within the jurisdictional limits of this Court. OSES is entitled to recover reasonable attorneys fees under Texas Civil Practice

& Remedies Code chapter 38 because this suit is for breach of a written contract. Count 3: Tortious Interference with Contractual Relations (against Greenes) 48. herein. 49. On May 30, 2008, Stinger and Guardian entered into a valid and enforceable OSES incorporates by reference and realleges all paragraphs previously alleged

contractthe Settlement Agreement. 50. Upon information and belief, Greenes knew or had reason to know of the

Settlement Agreement, as well as Stingers interest in the Settlement Agreement. 9

51.

Greenes willfully and intentionally caused or induced Guardian to breach the

Settlement Agreement, as discussed in Count 2 above. 52. Greenes interference with the Settlement Agreement proximately caused an

injury to OSES. Upon information and belief, Greenes is now directly competing with OSES by manufacturing, using, offering to sell, and/or selling, leasing, and/or offering to lease the wellhead isolation tools that it purchased from Guardian in violation of the Settlement Agreement. Additionally, Greenes concealment of its activities prevented Stinger (now OSES) from proactively exercising its rights under the Settlement Agreement and potentially negotiating a royalty with Greenes as contemplated by section 7.1.1 of the Settlement Agreement. Greenes has profited from its wrongful conduct. 53. 54. OSES seeks unliquidated damages within the jurisdictional limits of this Court. Furthermore, OSESs injury resulted from Greenes malice, which entitles OSES

to exemplary damages under Texas Civil Practice & Remedies Code 41.003(a). Count 4: Conspiracy to Commit Tortious Interference with Contractual Relations (against Trojan and Greenes) 55. herein. 56. Guardian and Greenes conspired to breach Guardians obligations under the OSES incorporates by reference and realleges all paragraphs previously alleged

Settlement Agreement in an effort to improperly expand Guardians license to manufacture and use wellhead isolation tools. Guardian and Greenes sought to make Guardians license to use wellhead isolation tools more valuable because Greenes planned to purchase the license rights through the asset purchase agreement.

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57.

Upon information and belief, Guardian and Greenes both had knowledge of the

object and purpose of the conspiracy, and they both agreed that Guardian would breach the Settlement Agreement. 58. The Settlement Agreement was a binding and enforceable contract between

Stinger and Guardian. 59. To accomplish the object of their conspiracy, and as discussed in Count 2,

Guardian committed multiple breaches of the Settlement Agreement, and as discussed in Count 3, Greenes willfully and intentionally caused or induced Guardian to commit its breaches of the Settlement Agreement. 60. Greenes interference with the Settlement Agreement and Guardians breaches of

the Settlement Agreement proximately caused an injury to OSES. Upon information and belief, Greenes is now directly competing with OSES by manufacturing, using, offering to sell, and/or selling, leasing, and/or offering to lease the wellhead isolation tools that it purchased from Guardian in violation of the Settlement Agreement. Additionally, Guardians and Greenes concealment of their activities prevented Stinger (now OSES) from proactively exercising its rights under the Settlement Agreement and potentially negotiating a royalty with Greenes as contemplated by section 7.1.1 of the Settlement Agreement. profited from their wrongful conduct. 61. 62. OSES seeks unliquidated damages within the jurisdictional limits of this Court. Furthermore, OSESs injury resulted from Guardians and Greenes malice, Guardian and Greenes have

which entitles OSES to exemplary damages under Texas Civil Practice & Remedies Code 41.003(a).

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63.

As conspirators, Guardian (now Trojan) and Greenes are jointly and severally

liable for all acts done by either of them in furtherance of the conspiracy. JURY DEMAND 64. on all issues. PRAYER 65. For these reasons, OSES asks for a judgment against the Defendants that includes Pursuant to Federal Rule of Civil Procedure 38(b), OSES requests a trial by jury

the following relief: (A) A preliminary and permanent injunction enjoining Greenes, its owners, affiliates, officers, directors, managers, agents, servants, employees, trainees, and all persons in active concert or participation with it, from continuing to infringe United States Patent No. 6,179,053. (B) An award of damages adequate to compensate OSES for Greenes infringement of United States Patent No. 6,179,053; (C) A determination that Greenes infringement on United States Patent No. 6,179,053, has been willful and deliberate; (D) A determination that this case is exceptional under 35 U.S.C. 285, thereby entitling OSES to an award of its reasonable attorneys fees and costs incurred in prosecuting this action; (E) An award of treble damages based on the willful and deliberate nature of Greenes infringement; (F) An award of actual damages sufficient to compensate OSES for Greenes and Trojans breach of contract and tortious conduct;

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(G)

An award of attorneys fees pursuant to Chapter 38 of the Texas Civil Practice & Remedies Code;

(H)

An award of exemplary damages pursuant to Chapter 41 of the Texas Civil Practice & Remedies Code;

(I) (J) (K)

An award of pre-judgment and post-judgment interest on all damages computed; An award of court costs; and Such other relief as this Court deems fair and appropriate. Respectfully submitted, /s/ C. Erik Hawes C. Erik Hawes State Bar No. 24042543 ehawes@morganlewis.com Paul E. Krieger State Bar No. 11726470 pkrieger@morganlewis.com Clayton A. Morton State Bar No. 24056011 cmorton@morganlewis.com MORGAN, LEWIS & BOCKIUS LLP 1000 Louisiana Street, Suite 4000 Houston, Texas 77002 713.890.5000 Telephone 713.890.5001 Facsimile Attorneys for Plaintiff Oil States Energy Services, L.L.C.

Dated: September 10, 2012

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