In a decision handed down yesterday, Judge Kenneth Hoyt of the U.S. District Court for the Southern District of Texas has ruled in favor of defendant Maersk Contractors USA Inc. in patent litigation with Transocean, Inc., finding that dual-activity offshore drilling technology patented by Transocean is the result of years of progress in the industry and not, as the company claims, its own invention. The loss marks a departure from a string a victories, including jury awards and favorable settlements, that Transocean has amassed pursuing infringement claims over its drilling patents.

Transocean claimed that since the mid-1990s, its technology has allowed oil rigs to drill wells faster and more efficiently by combining all the prior time-saving methods into one design. Maersk contested the claims arguing that Transocean's advances did not improve upon methods that had been patented by four separate inventors in the U.S. and U.K. between 1980 and the months before Transocean filed its first patent application. Transocean has stated that it plans to appeal the decision.

Until this ruling, Transocean had been victorious in its previous protection of the "dual-activity" patent. In August 2006, a jury found that GSF had willfully infringed the patents and awarded Transocean $3.6 million. Transocean filed a similar suit over the same patents against rival Noble Corp. in February 2007. The parties settled in July 2007 and signed a licensing agreement in which Noble consented to pay an undisclosed royalty to continue to use the technology. Also in July 2007, Pride International, Inc. agreed to pay Transocean $10 million to use one dual activity rig, plus $15 million for each subsequent rig and a 5% royalty on revenue generated in patented countries.

While Transocean has advised that Judge Hoyt's ruling will not have an impact on the current licensing agreements, it surely will affect Transocean's ability to continue licensing the technology to the Gulf Coast exploration and production industry.