Schlumberger Fined, Trade Secrets Suit Against Ex-Atty Gutted

Share us on: By Jeremy Heallen

Law360, Houston (August 27, 2014, 4:55 PM ET) — Schlumberger Ltd. was ordered to pay $600,000 in attorneys’ fees and sanctions on Wednesday after a Texas judge threw out the majority of a lawsuit the company had filed accusing its former chief intellectual property lawyer of sharing trade secrets with Acacia Research Group.

Harris County District Judge R.K. Sandill dismissed causes of action for misappropriation of trade secrets, conversion, breach of fiduciary duty and violations of the Texas Theft Liability Act the oilfield giant was pursuing against Charlotte Rutherford. He also ordered Schlumberger to pay $350,000 in attorneys’ fees, as well as a $250,000 sanction under the Texas Citizens’ Participation Act that is believed to be the largest ever awarded under the act, an anti-SLAPP statute.

Schlumberger’s lawsuit against Rutherford is now reduced to a single breach of contract claim, which alleges that she violated a confidentiality agreement she had signed by refusing to turn over sensitive company data when she left to go to work for Acacia. But Judge Sandill’s order was a death blow to Schlumberger’s meatiest claims, which revolved around allegations that Rutherford had used her former employer’s confidential information to help Acacia launch a pair of patent infringement suits.

An attorney for Schlumberger did not immediately respond to a request for comment Wednesday. However, Craig Smyser of Smyser Kaplan & Veselka LLP told Judge Sandill during a recent hearing on Rutherford’s TCPA motion that the company would likely appeal any adverse decision.

Judge Sandill’s order comes about a week after Schlumberger filed an amended lawsuit, suggesting that Rutherford is behind at least two patent infringement suits filed against the oilfield services giant.

In an amended petition filed on Aug. 15, Schlumberger provided additional detail regarding its primary contention that after Rutherford took a job with Acacia, she advised the company to acquire a patent covering three-dimensional geological modeling that she allegedly had known her former employer could be sued for infringing.

The filing also referred indirectly to a possible connection between Rutherford and a second infringement suit Acacia filed against Schlumberger over a piece of oilfield equipment used to separate precious drilling fluid from wellbore waste.

Rutherford’s attorneys have argued since the onset of the case that Schlumberger has been using the suit as an improper discovery tool and a way to gain leverage in the patent litigation. Judge Sandill has expressed agreement with that sentiment at times and said at an Aug. 14 hearing that he would likely dismiss at least some of the company’s claims against Rutherford.

Schlumberger launched the trade secrets suit in March, alleging Rutherford, who worked for the company from 2006 until May 2013 and had served as its director of intellectual property, “unlawfully appropriated, secured or stole” trade secrets before going to work for Acacia.

Schlumberger claims, among other things, that Rutherford used her knowledge of gaps in the company’s intellectual property to help Acacia identify patents it could acquire and then sue Schlumberger for infringing.

Schlumberger is represented by Craig Smyser and Land Murphy of Smyser Kaplan & Veselka LLP and by Maximilian A. Grant and Andrew Fossum of Latham & Watkins LLP.

Rutherford is represented by Joseph Y. Ahmad, Timothy C. Shelby and Adam Milasincic of Ahmad Zavitsanos Anaipakos Alavi & Mensing PC, Ashish Mahendru and Darren A. Braun of Mahendru PC and Richard B. Specter of Corbett Steelman & Specter.

The case is Schlumberger Ltd. v. Rutherford, case number 2014-13621, in the 127th Judicial District Court of Harris County, Texas.

—Editing by Christine Chun.


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