Transocean Inc. Reports Agreement on Patent Infringement Lawsuit
HOUSTON--(BUSINESS WIRE)--Feb. 20, 2007--Transocean Inc.(NYSE:RIG) today announced that it has reached an agreement in itsdispute with contract driller GlobalSantaFe (NYSE:GSF) over patentinfringement of Transocean's offshore dual activity drillingtechnology. The agreement follows an amended final judgment enteredlast month by a federal district court against GlobalSantaFe. Thejudgment awarded damages to Transocean and permanently enjoinedGlobalSantaFe from further infringement of the Transocean dualactivity patents.
The agreement reached with GlobalSantaFe will permit GlobalSantaFeto utilize Transocean's dual activity drilling technology on itsDevelopment Driller I and II rigs currently working in the Gulf ofMexico and on its Development Driller III rig after delivery from theshipyard in Singapore. In exchange for this right, GlobalSantaFe hasagreed to discontinue any further proceedings challenging Transocean'sdual activity patents and has agreed to pay a $4 million fee for eachof the Development Drillers I, II and III and approximately $3 millionin aggregate for use to date by its two operating rigs as a royalty,for a combined payment of approximately $15 million. GlobalSantaFe hasfurther agreed to pay 3% of future revenues received on the threeDevelopment Driller rigs, and 5% of revenues on any other rigs whichGlobalSantaFe may acquire which incorporate the dual activitytechnology, as a license fee going forward when operating in an areawhere Transocean has dual activity patent rights. Transocean has notgiven any rights to build any additional rigs incorporating the dualactivity technology and any such construction would be subject tofurther negotiation or litigation. Transocean has reached thisagreement to permit GlobalSantaFe to utilize its technology for itscustomers and welcomes the opportunity to discuss licensingarrangements with other drilling contractors for its dual activitytechnology.
On January 19, 2007, Judge Sim Lake of the U.S. District Court forthe Southern District of Texas entered an amended final judgmentagainst GlobalSantaFe following a jury verdict in Transocean's favor.In August 2006, a federal jury found in favor of Transocean after atrial of approximately two weeks before Judge Lake. The jury upheldthe validity and enforceability of the Transocean dual activitypatents, and awarded reasonable royalty damages of 5% of the revenuereceived by GlobalSantaFe for its infringing rigs. Based on the juryfindings and an April 2005 summary judgment of infringement againstGlobalSantaFe's Development Drillers I and II semisubmersible rigs,Judge Lake issued the amended final judgment awarding Transoceanapproximately $5.1 million in damages and a permanent injunctionagainst further infringement by GlobalSantaFe. The damage award wasbased upon 5% of GlobalSantaFe's revenues from two infringingDevelopment Drillers I and II operating in the Gulf of Mexico fromstart up until GlobalSantaFe modified the structure of its rigs inlate December 2006 to comply with the terms of the permanentinjunction.
Transocean developed its dual activity drilling design in 1996 aspart of a project to more efficiently construct wells in deepwaterthrough the use of two complete drilling systems, allowing forparallel drilling operations to be conducted on a single well thatsaves operators both time and money, compared with conventional rigs.Transocean continues to discover new ways of saving its customers timeand money in the drilling of deepwater exploration and developmentwells with the patented design.
Transocean Inc. is the world's largest offshore drillingcontractor with a fleet of 82 mobile offshore drilling units. Thecompany's mobile offshore drilling fleet, consisting of a large numberof high-specification deepwater and harsh environment drilling units,is considered one of the most modern and versatile in the world due toits emphasis on technically demanding segments of the offshoredrilling business. The company's fleet consists of 33High-Specification Floaters (semisubmersibles and drillships), 20Other Floaters, 25 Jackups and other assets utilized in the support ofoffshore drilling activities worldwide. With a current equity marketcapitalization in excess of $22 billion, Transocean Inc.'s ordinaryshares are traded on the New York Stock Exchange under the symbol\"RIG.\"
CONTACT: Transocean Inc., Houston
Analyst Contact: John Briscoe, 713-232-7551
Media Contact: Guy A. Cantwell, 713-232-7647
SOURCE: Transocean Inc.