Halliburton vs. Schlumberger moves from oil field to patent office Halliburton alleges Schlumberger's work not all that innovative

A Halliburton wellhead is visible at a fracking site Monday, June 26, 2017, in Midland. Massive pumps borne on a dozen trucks shook the earth on the outskirts of Midland, blasting a cocktail of water and sand deep underground to break apart dense rock and release a wellspring of oil and gas. Hydraulic fracturing operations like Halliburton's here in West Texas have set off the second U.S. oil boom in a decade, this time delivering heavier payloads in more prolific regions, and countering efforts by OPEC to curb the world's oil glut and weighing on prices. It?s an operation at the heart of a resurgent U.S. oil industry that?s bringing back jobs in regions that had waned in the downturn. ( Steve Gonzales / Houston Chronicle ) less A Halliburton wellhead is visible at a fracking site Monday, June 26, 2017, in Midland. Massive pumps borne on a dozen trucks shook the earth on the outskirts of Midland, blasting a cocktail of water and ... more Photo: Steve Gonzales, Staff Photo: Steve Gonzales, Staff Image 1 of / 9 Caption Close Halliburton vs. Schlumberger moves from oil field to patent office 1 / 9 Back to Gallery

Halliburton isn't content to limit its battle for market share with Schlumberger to the oil field these days. It's opened a new front in an unlikely place: the patent office.

The Houston-based provider of drilling services is waging an aggressive campaign to persuade the U.S. Patent and Trademark Office to cancel some of Schlumberger's fracking-related patents, telling the agency they're not inventions but old ideas repackaged. At the same time, Halliburton is pursuing more patents.

"They're the two big dogs in the space," said J. David Anderson, an analyst at Barclays. "Halliburton and Schlumberger have been battling for that top spot in North American services for a decade, so the fact they're going after each other with patents is not surprising."

Halliburton has long been the top North American contractor, while Schlumberger has dominated international markets, but they've been increasingly encroaching on each other's turf as crude recovers from its worst crash in a generation.

Hydraulic fracturing blasts water, sand and chemicals underground to release trapped oil and gas. Oil field services providers such as Halliburton and Schlumberger are being asked by their customers for better technology to help them do more with less so they can be more prudent with spending and return cash to shareholders.

"Everybody's fighting for that small little edge," said James Wicklund, an analyst at Credit Suisse in Dallas.

Patents can help provide an edge, and Halliburton has racked up some early wins. Since December, the Patent Trial and Appeal Board has agreed to review the validity of six Schlumberger patents after making a preliminary finding that Halliburton had shown a "reasonable likelihood" of winning its arguments.

Schlumberger has given up on one of the patents; and the board is considering Halliburton challenges on four others. Final decisions on the patents under review are expected by year-end.

Among the Schlumberger patents Halliburton has challenged are those covering the use of fiber optic tools to monitor interior well conditions, sensors to collect temperature readings across a broader area, and ways to more precisely control where the fracking fluid goes.

Halliburton, in several petitions, said the patents are simply "a classic situation where known elements are combined according to known methods to yield predictable results."

Schlumberger, in filings with the patent board, rejected Halliburton's characterizations. In individual responses, one patented invention provided "many advantages and efficiencies," while another was "a significant advance" over earlier techniques, company lawyers wrote.

Schlumberger did not respond to requests for comment.

Emily Mir, a spokeswoman for Halliburton, declined to comment on the patent disputes. But, she said, the company focuses its own research "on products and services that will improve efficiency and enhance production while reducing costs for its customers."

Halliburton is on a record pace to obtain its own patents, putting it in the neighborhood of tech heavyweights like Oracle Corp. and Micron Technology. The company received 738 patents last year, making it No. 44 in the list of recipients, according to a study by IFI Claims Patent Services, a unit of Fairview Research.

It was the only oil and gas company in the list of IFI's top 50 recipients. Baker Hughes was No. 74 on the list with 496 patents, and Schlumberger was No. 86 with 434 patents.