A court heard Smith’s patent-infringement appeal.

After the U.S. Circuit Court of Appeals’ hearing, a Smith International attorney said he was “cautiously optimistic” that the court may reduce the $205-million judgment against Newport Beach-based Smith for infringing on a Hughes Tool Co. patent for a drill-bit seal. A five-judge panel questioned whether Hughes’ patent applies to all seals or only to seals of a particular hardness, a consideration Smith says would limit damages to $10 million. The panel is expected to issue its decision by the middle of 1987.