NCS Multistage Inc., et al. v. Nine Energy Service Inc., Appeal No. 2025-1000 (Fed. Cir. Sep. 14, 2026)

In our Case of the Week, the Federal Circuit reviewed a judgment that defendant/appellant Nine Energy Service both directly infringed and induced infringement of plaintiff/appellee NCS’s patent, and associated claim construction, validity, and damages issues. Finding errors in claim construction and in the lower court’s application of 35 U.S.C. § 102(b)(1)(B) as concerns third-party prior art, the Federal Circuit vacated the district court’s decision and remanded the case for further proceedings.

Asserted U.S. Patent No. 10,465,445 is directed to a tool used in the oil and gas industry to “assist with inserting a long strip of pipe,” often referred to as the casing, “to the bottom of a wellbore.” Specifically, the ’445 patent’s invention allows the user to plug a section of well casing and fill that section with low density liquid to create buoyancy in that section of the well casing, without requiring the user to drill out the plug. Drilling out the well plug delays completion time for the drilling component of the operation.

The Court’s opinion primarily addressed three substantive issues: first, whether the term “internal diameter” should be construed differently when used in different portions of the relevant claim; second, whether the term “casing string” should be construed as a pipe with an outer diameter of at least 4.5 inches; and third, whether a sale of the patented tool prior to the patent’s priority date by plaintiff/appellee to a third party was a public disclosure that prevented a separate transaction from being considered as prior art.

First, the Court examined the district court’s determination that the term “internal diameter” could carry different meanings within the same claim of the 445 patent. The Court noted there is “a presumption that the same terms appearing in different portions of the claims should be given the same meaning unless it is clear from the specification and prosecution history that the terms have different meanings at different portions of the claims.” The Court examined the specification and prosecution history and found that there was not sufficient evidence in the claim prosecution history to overcome the presumption, and that therefore the district court had erred in construing the term “internal diameter” to carry different significance in different portions of the patent claim. Instead, the court determined that “internal diameter” should carry its common meaning throughout the patent claim, i.e. it should mean the measured diameter across the width of the casing.

Second, the Court examined the district court’s decision to construe the term “casing string” as “pipe that is customarily equal to or greater than 4.5 inches in outer diameter.” Again, the Court looked to the specifications in the claim to determine whether the district court’s construction was correct. Because the specification repeatedly referred to casing string without any size limitation, and used permissive rather than mandatory language when referring to size, the court determined that the district court’s construction of this term was also incorrect.

Having addressed the claim construction challenges, the Court examined whether plaintiff’s/appellee’s sale of the patented tool prior to the priority date of the patent constituted a public disclosure under 35 U.S.C. § 102(b)(1)(B). That provision states in relevant part that “[a] disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1),” if “the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or joint inventor.” To determine whether the patentee’s disclosure operated to establish priority in this case, the Court looked to its recent decision in Sanho Corp. v. Kaijet Technology International Ltd., where it had interpreted and applied substantively identical language found at 35 U.S.C. § 102(b)(2)(B). In Sanho, the Court rejected the argument that sale of a patented device automatically constituted a public disclosure that qualifies. Instead, the court held that the public disclosure grace period “applies only to ‘disclosures’ that result in the subject matter of the invention being ‘publicly disclosed.’” In comparing this case to Sanho, the Court noted that there was no instruction or teaching of the relevant aspects of the invention, as opposed to commercial exploitation without wide public dissemination of information.  Finding that the invention had thus not been “publicly disclosed” and that the later, pre-filing prior art should have been considered, the court vacated the district court’s judgment of no invalidity.

The opinion can be found here.

By Trevor Gruwell

ALSO THIS WEEK

TexasLDPC Inc. v. Broadcom Inc. et al., Appeal No. 2025-1074 (Fed. Cir. Sept. 14, 2026)

On review of an order dismissing plaintiff TexasLDPC’s infringement claims, the Federal Circuit analyzed whether its license agreement with patent owner Texas A&M University conveyed enough rights for TexasLDPC to bring its infringement suit without joining Texas A&M.  Finding that TexasLDPC’s license did not “terminate” because it shifted from research to IP enforcement activities—and that TexasLDPC otherwise held substantial rights sufficient to provide standing to sue—the Court reversed the lower court’s dismissal and remanded for further proceedings.

TexasLDPC is the exclusive licensee of patents related to certain error-correction technology used in data transmission. The inventor and co-founder of Texas LDPC, Dr. Kiran Gunnam, created the technology while studying as a graduate student at Texas A&M University, which owns the patent and related copyrights. In 2015, Texas A&M granted an exclusive license to Texas LDPC, allowing them to make, use, sell, and sublicense the patents and copyrights, and granted them the exclusive right to sue for infringement. In exchange, Texas A&M received equity in the company and retained the rights to collect royalties and a percentage of damages recovered. Texas A&M also retained the right to practice the patents for its own research and education, the sole right to bring infringement actions against Marvell (a prior non-exclusive licensee), the right to join certain other infringement actions, and the right to approve any assignment of the agreement (consent not to be unreasonably withheld).

By 2019, after running through its funding, TexasLDPC shifted its operations to focus entirely on enforcement litigation. Texas LDPC filed an infringement suit against Broadcom and others (here collectively referred to as “Broadcom”), alleging patent and copyright infringement, and did not join Texas A&M as a co-plaintiff. The district court dismissed the claim for lack of subject matter jurisdiction, finding that TexasLDPC’s license had automatically terminated when they ceased their business operations by halting attempts to sale or sublicense the technology and focusing solely on enforcement. Further, the district court ruled that even if the license agreement wasn’t terminated, the suit could not proceed without Texas A&M being joined as a co-plaintiff because TexasLPDC did not hold enough “substantial rights” in the patents to stand in Texas A&M’s shoes as the plaintiff. In determining whether Texas A&M was a necessary party, the court also noted that Texas A&M could claim sovereign immunity as a state university and refuse to hand over certain discovery materials, which would prevent the court from according complete relief to the parties.

The Federal Circuit reversed the district court’s decision, finding (1) that the license agreement did not terminate because enforcement activity is included under “business operations” as contemplated by the agreement, (2) that TexasLDPC did hold substantial rights under the license agreement and Texas A&M’s rights were not substantial enough to require joinder, and (3) Texas A&M was not a necessary party under Rule 19.

As to the first issue, the license agreement provided that if TexasLDPC ceased its business operations, the agreement would automatically terminate. The Federal Circuit found that the term “business operations” was not defined narrowly enough to exclude enforcement, since other provisions of the agreement expressly contemplated enforcing the patents and copyrights as part of TexasLDPC’s “commercially reasonable efforts,” and even tied part of TexasLDPC’s compensation to enforcement recoveries.

In determining whether the license agreement gave TexasLDPC enough rights to sue on its own, the Court focused primarily on two factors: whether TexasLDPC could freely make, use, and sell the patented technology, and whether it had an essentially unrestricted right to sue infringers.  The Court found that TexasLDPC held both. The Court then weighed those rights against the narrow rights Texas A&M kept—such as using the patents for its own research and the ability to sue one specific former licensee—and concluded that those retained rights were not significant enough to require Texas A&M to be part of the lawsuit.

Finally, the Federal Circuit rejected the argument that Texas A&M needed to join the case because Broadcom wanted more discovery from it, holding that Rule 19 is not a discovery tool, and difficulty obtaining evidence from an absent party is not a valid reason to force that party into the lawsuit. The Court also noted that Broadcom’s own damages expert had already completed a full damages analysis without the additional information from Texas A&M, undercutting the claim that the university’s participation was necessary for the case to proceed.

The opinion can be found here.

By Brittani Gambrell

This article summarizes aspects of the law and does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.