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Articles

Treasure maps or trade secrets (or both): Protecting against misuse of seismic maps in oil and gas exploration

February 2, 2014

Articles

Treasure maps or trade secrets (or both): Protecting against misuse of seismic maps in oil and gas exploration

February 2, 2014

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The recent oil/gas boom in Texas, North Dakota, and other parts of North America has unsurprisingly spurred an increase in oil/gas litigation. While most of that litigation typically involves contractual or real property disputes, more frequently disputes are arising out of the use (and alleged misuse) of oil and gas intellectual property—namely, trade secrets. And trade secret law is quickly developing as it relates to oil and gas exploration, as seen in Lamont v. Vaquillas Energy Lopeno Ltd, LLP (Tex. App.—San Antonio, Dec. 11, 2013).

In Lamont, the trade secret at issue was a seismic map referred to as the “Treasure Map.” The Treasure Map identified a sizeable reservoir that overlapped two tracts of property on the Lopeno Prospect—the Worley and El Milagro properties. Ricochet Energy, Inc., jointly owned by Thomas Lamont and Jerry Hamblin, began leasing and developing the Worley property.

Lamont decided to leave Ricochet and signed a separation agreement giving him an interest in the Lopeno Prospect. Thereafter, Lamont recruited other investors to join him in competing against Ricochet for the El Milagro lease (the other property on the Lopeno Prospect). In order to convince these investors of the value of the reserves found in the Lopeno Prospect, Lamont used the contents of the Treasure Map. Eventually, Lamont won the lease for the El Milagro property, drilled the property, and depleted the Lopeno Prospect—preventing Richochet and its partners from withdrawing as much as they might have. The two companies working with Ricochet to develop the Lopeno Prospect then sued Lamont and his business partners for misappropriation of trade secrets, among other things.

At trial, the jury found Lamont and his partners liable for misappropriation of trade secrets. On appeal, the trade secret portion of the case centered around two elements of trade secret misappropriation: (1) whether the Treasure Map was a trade secret, and (2) whether Lamont discovered the trade secret by “improper means.”

So what does this mean? What are the important oil/gas trade secret lessons that can be pulled from Lamont? Fish’s Steve Fox and Rex Mann answer those questions on this blog post which can be read in its entirety here.

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