Federal Circuit Vacates Win for Patent Owner Due to Bad Claim Construction

In a precedential decision issued Monday, the U.S. Court of Appeals for the Federal Circuit (CAFC) vacated a patent infringement judgment against Nine Energy Service Inc., holding that the Western District of Texas court incorrectly construed two terms of NCS Multistage’s patent and that an earlier sale relied upon by NCS did not qualify as a public disclosure under the America Invents Act (AIA).

NCS accused Nine’s BreakThru Casing Flotation Device of infringing U.S. Patent No. 10,465,445, which is titled “Casing float tool” and covers technology used to help operators insert casing strings into oil and gas wellbores.

A jury found that Nine directly infringed claims 28 and 29, induced infringement of several additional claims and failed to prove the claims invalid. The district court denied Nine’s post-trial motions and entered judgment for NCS.

On appeal, however, the Federal Circuit found that the infringement verdict rested on an erroneous interpretation of the term “internal diameter.”

The district court had ruled that the term’s plain and ordinary meaning could refer both to a measured diameter and to an inner surface, thus allowing “internal diameter” to carry different meanings in different portions of the same claims. The Federal Circuit rejected that approach, explaining that there is a presumption that identical claim language should receive the same meaning throughout a patent unless the specification or prosecution history clearly establishes otherwise. In this case, neither source provided clarity, the CAFC concluded. “On the merits, it is not clear from the intrinsic evidence that an ‘internal diameter’ was meant to have a different meaning in different portions of the claims,” wrote the court.

NCS argued that some uses of “internal diameter” had to refer to the casing’s inner surface because the patent described the internal diameter as defining a fluid passageway. But Nine’s construction—under which the diameter is represented by a line measured across the casing—was also compatible with that language.

The prosecution history likewise failed to demonstrate that the patentee deliberately used the term in two different ways. During prosecution, NCS distinguished a prior-art patent known as Gano by arguing that Gano’s rupture disc was attached to a sloped surface rather than a region parallel to the casing string’s internal diameter. According to the Federal Circuit, that distinction remained accurate whether “internal diameter” meant a measured diameter or an inner surface.

The CAFC therefore held that “the plain meaning of ‘internal diameter’ is a ‘measured diameter’ across the width of the casing string.”

Nine maintained that its BreakThru rupture discs were attached to sloped surfaces and therefore were not parallel to the measured diameter. But the Federal Circuit identified other, smaller portions of the devices’ surfaces that a jury might find to be the relevant attachment locations. Because the proper application of the revised construction presented a factual question, the panel ordered a new trial on infringement rather than entering judgment for Nine.

The Federal Circuit separately rejected the district court’s construction of “casing string” as pipe “customarily” measuring at least 4.5 inches in outer diameter and intended to line a well so that a downhole tool could be deployed without restriction.

Although 4.5 inches may be a common casing size as a factual matter, the patent did not impose that threshold, the CAFC held. The specification generally described casing string according to its function, without a size limitation. When it did mention dimensions, it used “permissive” language and expressly recognized that sizes other than 4.5 inches were possible.

NCS cited industry catalogs showing that casing offerings of at least 4.5 inches were more common than smaller alternatives. But extrinsic evidence concerning common industry practices could not override the specification’s broader disclosure, said the court. “The problem with NCS’s position is that, even if those catalogs were evidence of definitional plain meaning rather than mere commonality, any such definition is explicitly contradicted by the specification,” wrote the CAFC.

By incorporating common size into the claim construction, the district court “put a thumb on the scale” and potentially influenced how the jury evaluated Nine’s prior-art defense, the Federal Circuit said.

That defense centered on a TDP-PO tool sold by TCO Group AS to Apache in August 2012 and used in a well operation by January 2013. NCS argued that the TDP-PO tool did not satisfy the casing-string limitation in part because it was smaller than 4.5 inches. The Federal Circuit’s removal of that size qualification materially alters the invalidity inquiry on remand.

The panel also held that the TDP-PO sale and Apache’s subsequent use constituted prior art as a matter of law. NCS had attempted to invoke the AIA’s Section 102(b)(1)(B) exception by pointing to its own July 2012 sale of an AirLock device to Tundra. Under that provision, certain third-party disclosures made within the one-year grace period are excluded as prior art when the same subject matter previously was publicly disclosed by the inventor or someone who obtained it from the inventor.

Relying on its 2024 decision in Sanho Corp. v. Kaijet Technology International Ltd., the Federal Circuit explained that a commercial sale does not necessarily make an invention “publicly disclosed” for purposes of the statutory exception. The relevant question is whether the disclosure placed the public in possession of the invention’s pertinent features.

NCS’s sale did not meet that standard. The AirLock was sold privately to a single customer, delivered inside a sealed black tube that had to be cut open and accompanied by technical documents marked confidential. There was no evidence that the devices were widely distributed, made available for public inspection or disclosed in a manner that taught the invention’s relevant aspects to anyone beyond Tundra.

NCS therefore could not use the AirLock transaction to remove the later TDP-PO activity from the prior-art field.

The court stopped short of holding the patent claims invalid. Because NCS presented other arguments supporting the jury’s no-invalidity verdict, and Nine did not establish that those theories were legally insufficient, a new trial is required, said the panel.

Finally, with respect to Nine’s argument that the district court abused its discretion in striking certain discovery documents, the panel affirmed the exclusion of documents concerning possible TCO sales to Maersk that were produced only two days before fact discovery closed. “We do not conclude that a district court, as a matter of law, abuses its discretion when it strikes as untimely documents disclosed during the fact discovery period but only shortly before the close of that period such that it prevents any meaningful opportunity for the opposing party to prepare how to respond to that newly disclosed discovery,” wrote the CAFC.