Real time patent nonsense from Halliburton?

Neil McNaughton discusses Halliburton’s ‘real time’ patent which covers pretty much all of the ‘digital oilfield’ (a.k.a. ‘field of the future’ or ‘e-field’). He looks back to the state of real time art in 2001, when the application was made, discusses the role of ‘mutually assured destruction’ in software patents—to conclude that ‘catch all’ patents like this are probably a bad thing.

First, apologies for the lateness of this issue. This is a busy time of the year—when our conference schedule tends to get in the way of the production process. I’m writing this on the 1st April and it is hard not to connect that date with this month’s lead on Halliburton’s real time patent. Except that the application was filed in October 2001.

Out of the box?

The filing date means that the authors were certainly thinking ahead, and to an extent, outside of the box. In 2001, most of the industry was focused on the internet and e-commerce in one form or another. But that does not mean that real time production optimization was unheard of—as some quick research on Oil shows.


In April 2001, Schlumberger acquired Baker Jardine—whose ProdMan software was described at the time as ‘enhancing oilfield profitability by surveillance, optimization and automation.’ In June 2001, Schlumberger was ‘fighting the down-trending depletion curve’ through ‘increased linkage of technical and business systems.’


Defending his ill-fated acquisition of Sema Group, Schlumberger chairman Euan Baird claimed ‘enormous interest from oil and gas clients on the potential of [..] real-time reservoir monitoring and control.’ Early 2002, more wheeling and dealing in the sim-opt space led Aspen Technology to acquire Calgary-based Hyprotech from AEA Technology for $99 million cash. In 2001 therefore, real time production optimization was certainly being mooted by Halliburton’s main competitor—and also by a few specialist software houses. The major oils likely had in-house programs in the real time, simulation/optimization space.


In May 2000, real time reservoir management was the subject a session in MIT’s ‘Disruptive Technologies’ conference. I suppose you could argue that if MIT deemed real time ‘disruptive’ in 2000, maybe that made it a good target for an aggressive patent application in 2001.

Plant automation

Today, if you Google ‘real time simulation optimization’ (RTSO), you’ll see a plethora of references to plant automation, process control—especially from oil refineries where these practices have been in use for a few decades.

A disclaimer

Before I go on, a disclaimer is in order. This is an editorial, I don’t know diddly about patent law—although we looked at this matter in some depth at the time of Amoco’s patent infringement suit against Landmark back in 1997 (OITJ Vol. 2 N° 7). Time also precludes an in depth review of the patent application itself—maybe there are gems of technological innovation that we overlooked. Bearing these caveats in mind though, I have to say that the Halliburton patent is of such breadth and nebulosity that one has to ask what the US patent office is actually looking for.


You might imagine that a patent person might be looking for accurate language—something that might be reasonably debated in a court of law, should the patent ever be tested. If I was a patent examiner, I would delete, for instance, a reference to ‘computer programs that seamlessly interface with each other’. After all, if Halliburton, or anybody else, made computer programs ‘seamlessly interface’ with anything, this issue of Oil IT Journal would shrink to 50% of its size, half its readers would be out of a job and the Oil IT Journal production process (a monthly struggle involving Microsoft Word, Publisher, Excel, Access, Visual Basic and more—none of which ‘seamlessly’ operate with each other) would take half as long.


I would look for reasonable granularity and scope in an application. A ‘field wide management system’ seems too broad—a patent on a whole work process which, even if aspects may be new, embeds too much prior art. I would also apply the reverse banality test* to stuff like ‘[the] system [..] provides for better reservoir management, thereby maximizing the value of the asset to its owner.’ Doh!


Conventional wisdom in the software industry sees such broad, probably untestable patents as part of a policy of ‘mutually assured destruction’ (MAD). The idea being that say IBM and Microsoft hold patents on everything—but refrain from exercising them for fear of retaliation. Patent MAD might work in a bipolar world, but the potential impact of a coverall patent on a startup could be disastrous. The slackness of the US patent system might be preparing us for a world where startups need a few million dollars of patent infringement liability insurance before they can get off the ground.


You can’t really fault Halliburton for trying to stake some kind of a claim to the RTSO space—they are indeed one of the main players. But it does seem ridiculous that the US patent office grants patents of such vagueness and scope—presumably on the basis that the law courts will sort things out a posteriori. This is great—for the lawyers! For the technology industry, it would be better to have a bit more science and linguistic rigor applied to the award process.

* Reverse Banality Test—see the December 2004 editorial.

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