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Roxar wins court ruling to protect multiphase flow meter technology

Posted: 11 August 2005

Roxar AS, reported it has won a ruling in the Norwegian Court of Appeal (‘Gulating Lagmannsrett’) to protect its industry-leading multiphase flow meter technology from unlawful use by other companies.

The verdict came on Friday August 5th 2005. The Court of Appeal ruled against Norwegian company, FlowSys AS, founded by former employees of Roxar in 1999, and the technologies behind its TopFlow and Wellsense (SubFlow) multiphase meters. The court overturned the original ruling, which found in favor of FlowSys in May 2003, stating that it had "every reason to question whether the persons involved have acted as cautiously as they should have in relation to a former employer."

The Court of Appeal continued that the "common interest in highly qualified employees being able to leave an employment without being impeded from using their specialist competence to develop new products" should "be balanced against the concern that a company which invests in product development as Roxar (then known as Fluenta) has done, should be reasonably secure that key personnel will not take with them the competence they have built up and use it in a competitive enterprise." The Court of Appeal concluded that "in the current case, it is this (latter) concern which must be decisive."

The Court ordered FlowSys to refrain from producing, selling or marketing its TopFlow and Wellsense (SubFlow) multiphase flow meters for a period of three years. In addition, Roxar was awarded US$1.25 million (8 million NOK) in damages and US$310,000 (2 million NOK) in court costs. As the ruling only covers Norway, a similar suit has also been filed by Roxar in the United States Courts against FlowSys Inc. FlowSys has already indicated that it intends to appeal the Norwegian ruling to the Norwegian Supreme Court.

Gunnar Hviding, Managing Director, Roxar Flow Measurement, said: "As an industry-leader and technology innovator in the oil and gas instrumentation market, Roxar takes great pride in its multiphase meters. While we welcome competition as a means of encouraging innovation and moving our industry forward, it is paramount that this competition takes place on a level playing field where intellectual property, confidentiality agreements and the many years of research & development which goes into developing such products, are respected. Otherwise it will be impossible to attract investments into technology companies."

Roxar CEO, Sandy Esslemont said: "In today’s competitive global Exploration & Production (E&P) industry where success is measured by performance, production and profits, companies, such as Roxar, have to provide the very best in technology innovation – something that our multiphase flow meters do. Today’s court decision is a full vindication of our approach to protect our intellectual property and standing in the market and we look forward to continuing to be a market leader for many years to come."

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