Avoiding Oil and Gas Disputes
Handling a variety of expert witness cases, including patent disputes, inter partes review of patents, equipment failure, operational negligence, trade secrets, damages modeling and oil and gas commercial litigation, Harold McGowen shares more about why these cases occur and what he predicts is in the pipeline for the petroleum field in the upcoming years.
Why do the aforementioned cases arise?
Different types of cases arise for different reasons. Patent related cases typically arise due to the infringement of a patent, by either the plaintiff or the defendant. Trade secret cases typically arise due to the alleged misappropriation of a trade secret by a third-party.
Equipment failure cases typically arise from incorrect equipment specifications, cyclical fatigue, or alleged negligent engineering design that results in a catastrophic failure.
Operational negligence cases arise from mistakes made by personnel in a drilling, completion or facilities construction operation in the field. We also use our engineering economic analysis and big-data analysis techniques to generate defensible damages models.
Oil and gas commercial litigation cases typically arise from a disagreement related to a business transaction or contractual relationship between oil and gas operators, mineral interest owners, or between an oil and gas operator and one or more service companies.
What are the vital regulations and requirements clients must meet, in order to avoid such disputes?
In patent related cases, a thorough analysis of the prior art and narrowly focusing the patent application on the embodiment which is likely to generate the greatest return on investment should make for a stronger and more valuable patent. We have often seen patents that are designed to cover the largest possible number of embodiments, but in the process, they become vulnerable to attack through the prior art. Navidad Energy Advisors can assist in the process of assessing the marketplace for a particular patent idea so that the patent attorneys can take into account the most valuable applications for the invention when drafting the patent.
Contractual indemnification and other limitations on liability related to equipment failures is probably the best defence against equipment failures in the field. Also, equipment manufacturers and vendors should carefully document their quality control and quality assurance methodology and provide sufficient technical support and training for end users.
For trade secret cases, employers should make sure that their employees understand what trade secrets are, and the ramifications of misappropriations of trade secrets. Many personnel in the oil and gas industry do not have an accurate understanding of the seriousness of trade secret misappropriation, or even what types of information are defined as trade secrets under the law.
In my experience, a significant amount of commercial litigation in the oil and gas industry is related to poorly drafted contracts that are not easily understood by personnel with the responsibility of adhering to those contracts.
In my experience, a significant amount of commercial litigation in the oil and gas industry is related to poorly drafted contracts that are not easily understood by personnel with the responsibility of adhering to those contracts. Attorneys with a thorough understanding of the business objectives of the parties, that will work to create fair and equitable contracts that are practical to implement over the course of time, can help their clients avoid litigation in the future. Vague and/or poorly written win/lose contracts provide fertile ground for future litigation. Moreover, many potentially lucrative deals have been killed by the introduction of complex and inequitable terms that only benefit one party.
How do you expect the field of petroleum engineering to change in the next few years? How do you predict this will change the types of disputes you will see?
The industry will have to become more and more efficient as the sweet spots within existing oil and gas plays are drilled up and the less productive adjoining acreage is developed. This will require improved efficiency that can only be obtained through more innovative and sophisticated technologies, processes, materials and procedures. I expect to see intense competition related to intellectual property across the entire spectrum of the oil and gas industry from geophysical acquisition through drilling, completion, production and transportation. I also expect to see patent and trade secret cases related to the application of big data in AI to the oil and gas industry. Navidad Energy Advisors has a strong background in the application of database technology in the oil and gas industry, therefore we are well positioned to assist clients in these matters.
Navidad Energy Advisors
16421 FM 344 West
Bullard, Texas 75757
Phone: +1 (844) 628-4323
Contact email: hmcgowen@navidadenergy.com
www.navidadenergyadvisors.com
About Harold and the Firm
My name is Harold McGowen, and my firm is Navidad Energy Advisors, which is a registered professional engineering firm in the state of Texas. We specialize in petroleum engineering related projects with an emphasis on horizontal drilling, hydraulic fracturing and related downhole tools, processes, and equipment.
