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Sold but not shown: Private sale does not always constitute public disclosure

The US Court of Appeals for the Federal Circuit found that a commercial sale did not qualify as a “public disclosure” under 35 U.S.C. § 102(b)(1)(B) where the sale did not make the relevant aspects of the invention available to the public. NCS Multistage Inc. v. Nine Energy Service, Inc., Case No. 25-1000 (Fed. Cir. Sept. 14, 2026) (Cunningham, Reyna, Hughes, JJ.)

NCS Multistage sued Nine Energy Service for infringing claims of a patent directed to a “float tool” used in the oil and gas industry to help run casing strings to the bottom of a wellbore. The claimed invention uses a rupture disc to seal the casing during installation and rupture once the casing is positioned, avoiding the need to drill out plugs.

At trial, Nine argued that a prior-art device (the TDP-PO tool, which a third party, TCO, sold to Apache in August 2012) anticipated the asserted claims. NCS responded that its own earlier sale of an AirLock device to Tundra in July 2012 constituted a “public disclosure” under § 102(b)(1)(B), thereby removing the later Apache sale from the prior art. The jury returned a verdict in favor of NCS on both infringement and no invalidity. Nine appealed.

The Federal Circuit disagreed with NCS, concluding that the AirLock sale was not a public disclosure as a matter of law. Relying on its 2024 decision in Sanho Corp. v. Kaijet Technology Int’l Ltd, Inc., which interpreted the same “publicly disclosed” language in § 102(b)(1)(B), the Court explained that placing an invention “on sale” does not necessarily mean that the invention has been publicly disclosed. NCS privately sold the AirLock to a single customer. The device was delivered inside a sealed black tube that had to be cut open to inspect its internal components. There was no evidence that receipt of the tube made the claimed features available to the public, including the rupture disc’s configuration and its relationship to the casing string’s internal diameter. Although the transaction was not subject to a nondisclosure agreement, there was likewise no evidence that the invention’s relevant features were communicated beyond Tundra, and NCS’s own technical materials were marked confidential. On those facts, the Court concluded that the AirLock sale did not qualify as a public disclosure under § 102(b)(1)(B).

The Federal Circuit also reversed two claim construction rulings. First, it found that the term “internal diameter” has a single meaning (i.e., a measured diameter across the width of the casing string) and rejected the district court’s construction permitting the term to refer either to that measurement or to an inner surface. Second, the Court found that the term “casing string” should not be limited to casing measuring at least 4.5 inches because the specification’s permissive language did not establish either lexicography or disavowal.

The claim construction errors, together with the erroneous treatment of the AirLock sale, required a new trial on infringement and invalidity. Accordingly, the Federal Circuit vacated and remanded for further proceedings.

Practice note: Patent owners seeking to invoke [...]

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Private Sale Means Public Fail

The US Court of Appeals for the Federal Circuit affirmed a Patent Trial & Appeal Board decision that a private sale of a product embodying the claimed invention did not qualify as a “public disclosure” under 35 U.S.C. § 102(b)(2)(B). Sanho Corp. v. Kaijet Technology Int’l Ltd, Inc., Case No. 23-1336 (Fed. Cir. July 31, 2024) (Dyk, Clevenger, Stoll, JJ.)

Sanho owns a patent directed to a port extension apparatus designed to enhance connectivity of end-user devices (such as laptops) with other devices (such as printers). Kaijet petitioned for inter partes review (IPR) challenging certain claims of Sanho’s patent, arguing that the claims were obvious based on a prior art reference. The Board found that the patent claims were invalid because of the prior art reference’s earlier effective filing date. Sanho argued that a prior sale of its HyperDrive device by the inventor of the patent should disqualify the reference as prior art. However, the Board determined that Sanho failed to demonstrate a public disclosure of the HyperDrive sale before the prior art reference’s effective filing date. Thus, the patent was invalidated. Sanho appealed.

The Federal Circuit affirmed, explaining that the America Invents Act (AIA) redefined prior art, shifting from a first-to-invent to a first-inventor-to-file system. Under the AIA, prior art includes patents and applications filed before the patent’s effective filing date subject to exceptions for public disclosures by the inventor. Sanho argued that the HyperDrive sale fell into this exception.

The Federal Circuit dismissed Sanho’s argument that the phrase “publicly disclosed” in § 102(b)(2)(B) should encompass all types of disclosures described in § 102(a)(1), including private sales. The crux of the issue was whether placing an invention “on sale” was tantamount to a “public disclosure” under § 102(b)(2)(B). The statute states that a disclosure is not prior art if the subject matter was publicly disclosed by the inventor before the effective filing date of the prior art. Sanho argued that “publicly disclosed” includes any disclosure, even private sales. The Court disagreed, explaining that the statute’s use of “publicly” implies a narrower scope than just “disclosed.” The Court noted that the purpose of this exception is to protect inventors who make their inventions available to the public before another’s patent filing.

The Federal Circuit also relied on legislative history in support of the conclusion that “public disclosure” in § 102(b)(2)(B) means the invention must be made available to the public. Sanho argued that as long as there are no confidentiality requirements, all disclosures, even private sales, should constitute public disclosures. Again, the Court rejected that argument, noting that the statute differentiates between “publicly disclosed” and general “disclosures,” implying different meanings.

The Federal Circuit determined that § 102(b)(2)(B) protects inventors who publicly disclose their inventions from subsequent disclosures by others, ensuring that prior public disclosure by the inventor prevents a third party’s disclosure from becoming prior art. This provision aims to encourage inventors to share their innovations with the public.

Practice Note: For a disclosure to qualify as “public” under the [...]

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