IP Law Daily, PATENT—Fed. Cir.: Invalidity ruling on cellular modem patents reversed; NDA claims’ dismissal affirmed, (Feb 24, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

Court found that the term “space-efficient” in the patent claims’ preamble was not a limiting term and that the NDA complaint failed to plausibly allege confidential information or misuse.

In a non-precedential disposition, the U.S. Court of Appeals for the Federal Circuit has affirmed-in-part, reversed-in-part, and remanded a district court judgment involving embedded cellular modem technology. The appellate court reversed the district court’s determination that two modem patents were invalid as indefinite, holding that the preamble phrase “space-efficient cellular modem device” was not a limiting claim element and therefore could not render the claims indefinite under 35 U.S.C. § 112(b). However, the court affirmed the dismissal of the patentee’s breach-of-contract claims, concluding that the complaint failed to plausibly allege the specific confidential information disclosed under the parties’ nondisclosure agreements or any unauthorized use of that information (NimbeLink Corp. v. Digi International Inc., No. 24-2292 (Fed. Cir. Feb. 23, 2026)).

Background. The plaintiff/appellant, NimbeLink Corp., developed embedded cellular modem products for machine-to-machine communications. The defendant/appellee, Digi International Inc., operated in the same communications technology space and later introduced competing modem products. The dispute arose after Digi engaged in acquisition discussions with NimbeLink under NDAs and subsequently launched its own modem line.

The patents at issue were U.S. Patent Nos. 9,497,570 (the ’570 patent) and 9,838,066 (the ’066 patent). They relate to space-saving embedded cellular modems designed for remote machine-to-machine communication via cellular networks. Each asserted independent claim began with the preamble phrase “A space-efficient cellular modem device.”

In 2022, NimbeLink sued in the District of Minnesota, alleging infringement of at least claim 1 of each asserted patent based on Digi’s XBee cellular modem products and asserting breach-of-contract claims under 2015 and 2016 NDAs. During claim construction, the parties disputed whether the preamble phrase was limiting and, if so, whether the term “space-efficient” was indefinite under 35 U.S.C. § 112(b). The district court held that the preamble was limiting because it recited a structure emphasized in the specification and then found the term “space-efficient” indefinite for lacking objective boundaries. The parties stipulated to judgment that all asserted claims were invalid and not infringed. Separately, the district court granted Digi’s motion to dismiss the NDA claims for failure to plausibly allege confidential information and unauthorized use. NimbeLink appealed both rulings.

Preamble limitation. The Federal Circuit reviewed de novo whether the preamble constituted a claim limitation, citing Data Engine Techs. LLC v. Google LLC, 10 F.4th 1375 (Fed. Cir. 2021). The court reiterated that preambles generally state a purpose or intended use and are not limiting unless they recite essential structure or were relied upon to distinguish prior art, citing Catalina Marketing International, Inc. v. Coolsavings.com, Inc., 289 F.3d 801 (Fed. Cir. 2002).

Although the specification described “space-efficient embedded cellular modems” as the invention, the appellate court concluded that the claims themselves already recited the structural features that achieved space efficiency, including the multi-layer board configuration, pin arrangements, surface mounting, and compact form factor. The preamble did not introduce additional essential structure beyond what the body of the claims required. Relying on Catalina, the court explained that language extolling benefits does not limit claim scope.

Antecedent basis. Digi argued that the preamble provided an antecedent basis for dependent claims referring to “the cellular modem device.” The Federal Circuit rejected that argument, citing TomTom, Inc. v. Adolph, 790 F.3d 1315 (Fed. Cir. 2015), and emphasized that a preamble may be limiting in part without converting descriptive terms into limitations. The court found that deleting “space-efficient” would not affect the structure of the claimed device, confirming that the claims were complete without it.

Prosecution history. The court also addressed the prosecution history. Although the examiner referred to the modem’s “arrangement, relative size and overall complete structure” in allowing the claims, the court found no clear reliance on the term “space-efficient” to distinguish prior art. Citing Georgetown Rail Equipment Co. v. Holland L.P., 867 F.3d 1229 (Fed. Cir. 2017), the court held that the record did not compel treating the preamble phrase as limiting. Because the preamble was not limiting, the district court erred in holding the claims indefinite based on the preamble phrase “space-efficient.” The Federal Circuit therefore reversed the invalidity judgment.

Breach-of-contract claims. Turning to the NDA claims, the court applied Eighth Circuit law for the Rule 12(b)(6) dismissal, citing Disc Disease Solutions Inc. v. VGH Solutions, Inc., 888 F.3d 1256 (Fed. Cir. 2018).

The court held that NimbeLink failed to sufficiently plead the nature of the confidential information allegedly disclosed. General references to “technical,” “financial,” or “marketing” information did not adequately distinguish confidential from non-confidential material, as required under Sip-Top, Inc. v. Ekco Group, Inc., 86 F.3d 827 (8th Cir. 1996). Moreover, under Ashcroft v. Iqbal, 556 U.S. 662 (2009), the complaint lacked sufficient factual content to support a plausible inference of liability.

The court also found that the NDAs expressly permitted independent development and barred inferring breach merely from later competition. Given those contractual provisions, the complaint did not plausibly allege that Digi used NimbeLink’s confidential information rather than independently developing its own products.

Thus, the Federal Circuit affirmed the dismissal of the breach-of-contract claims, reversed the invalidity judgment, and remanded the case without awarding any costs.

The Case is No. 24-2292.

Judge: Moore, K.

Attorneys: Erin Dungan (Padmanabhan & Dawson PLLC) for Nimbelink Corp. Katherine S. Razavi (Faegre Drinker Biddle & Reath LLP) for Digi International Inc.

Companies: Nimbelink Corp.; Digi International Inc.

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