It may qualify as prior art yet still fail to count as the kind of public disclosure that protects an inventor against a later third-party disclosure.
A sale can matter under patent law in two different ways. It may qualify as prior art yet still fail to count as the kind of public disclosure that protects an inventor against a later third-party disclosure. The Federal Circuit's recent decision in NCS Multistage, Inc. v. Nine Energy Service, Inc., No. 2025-1000, 2026 WL 2683059 (Fed. Cir. Sept. 14, 2026), illustrates that distinction and the risk a sale can create for companies that begin commercial activity before filing a patent application.
The court held that NCS' nonconfidential sale to one customer did not publicly disclose the invention because the product's relevant technical features were not accessible to the public. NCS therefore could not use that earlier transaction to disqualify a third-party's later sale and public use from the prior art record. The result is a practical warning: A private sale may create patent risk without providing the benefits of a public disclosure under the America Invents Act (AIA).
Why the Decision Matters
The AIA broadly identifies events that may become prior art, including an invention being patented, described in a printed publication, in public use, on sale or otherwise available to the public before the effective filing date. Section 102(b) also provides limited exceptions for certain disclosures made by an inventor, a joint inventor or by someone who obtained the subject matter from the inventor during the year before filing.
One of those exceptions can remove an intervening third-party disclosure from the prior art record if the inventor had already publicly disclosed the same subject matter. The word “publicly” is critical. A transaction does not become a public disclosure merely because it was a commercial sale or because the parties did not sign a confidentiality agreement. The relevant question is whether the public could learn the features of the claimed invention from the transaction.
The Transactions and the Patent
NCS owns U.S. Patent No. 10,465,445, which concerns a float tool used to help position a casing string in an oil and gas wellbore. NCS filed a provisional application on February 5, 2013, followed by a nonprovisional application on June 28, 2013. The Federal Circuit concluded that certain asserted claims lacked adequate written description support in the provisional application and were entitled only to the later filing date. That timing made the AIA's prior art provisions controlling.
The dispute centered on two earlier transactions. In July 2012, NCS sold its product to Tundra. The sale was not subject to a nondisclosure agreement, but it involved a single customer, and the product's important technical features were enclosed in a black tube that had to be cut open for examination. In August 2012, TCO Group AS sold a similar product to Apache, which then used it publicly.
After NCS sued Nine Energy for infringement, Nine Energy argued that TCO's sale to Apache and Apache's use were prior art that invalidated the asserted patent claims. NCS responded that its earlier sale to Tundra was itself a public disclosure. If that were correct, NCS argued, Section 102(b)(1)(B) would exclude TCO's later activity as prior art. A jury found the patent not invalid and infringed, but Nine Energy appealed.
The Federal Circuit's Ruling
The Federal Circuit rejected NCS' argument. Relying on Sanho Corp. v. Kaijet Technology International Ltd., 108 F.4th 1376 (Fed. Cir. 2024), the court distinguished a disclosure under Section 102(a)(1) from subject matter that was publicly disclosed for purposes of the prior art exceptions in Section 102(b). A private transfer may place a product in a customer's hands without teaching the invention to the public.
That is what occurred in NCS' transaction with Tundra. The product went to only one purchaser, and the record did not show that members of the public could inspect the concealed features or understand how the claimed invention worked. The absence of a confidentiality agreement did not fill that evidentiary gap. Because NCS had not publicly disclosed the relevant subject matter, its sale to Tundra could not disqualify TCO's later sale to Apache and Apache's public use as prior art. The Federal Circuit therefore vacated the district court's judgment that the patent was not invalid and that Nine Energy infringed.
The decision also highlights an apparent asymmetry in the law. Under Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., 586 U.S. 123 (2019), a confidential commercial sale can trigger the on-sale bar under Section 102(a)(1). Under Sanho and now NCS, however, a private sale that does not reveal the invention's relevant features to the public may be insufficient to invoke the public disclosure exceptions in Section 102(b). The same commercial strategy can therefore expose a patent applicant to prior art risk without creating a disclosure that neutralizes later third-party activity.
Practical Implications
- File before undertaking any commercial activity. The most reliable course is to file a patent application with adequate support for the invention before offering or selling the product, including in a private or confidential transaction.
- Do not equate “nonconfidential” with “public.” An agreement that lacks confidentiality restrictions does not establish that the public could access and understand the claimed features.
- Preserve evidence of what was disclosed. If a company needs to rely on the public disclosure exception, it should document who received the product or information, what technical features were visible, whether inspection was permitted, what explanatory materials were provided, and whether the information reached anyone beyond the immediate customer.
- Confirm support in any provisional application. A provisional filing protects later claims only to the extent that it adequately describes their subject matter. Gaps in support can move the effective filing date forward and bring additional events into the prior art period.
The practical lesson from NCS is straightforward. Companies should not rely on an early private sale as a substitute for filing or assume that a sale will operate consistently across the AIA's prior art rules and exceptions. The legal effect depends on the statutory provision at issue and, for the public disclosure exception, on what the public could actually learn about the invention.
For More Information
If you have any questions about this Alert, please contact Samuel W. Apicelli, Brandon A. Chan, Ph.D., any of the attorneys in our Intellectual Property Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
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