Stylwan IP Holding, LLC v. Stress Engineering Services, Inc., decided May 27, 2025

Case: STYLWAN IP HOLDING, LLC, STYLWAN, INC., STYLWAN IIT, LLC v. STRESS ENGINEERING SERVICES, INC. Court: United States Court of Appeals for the Federal Circuit Case Numbers: 2023-1269, 2023-1271 Decided: May 27, 2025

I. Summary

The case revolves around six patents owned by Stylwan related to non-destructive systems and methods for assessing material integrity, particularly in the oil and gas industry. The core issue on appeal was the district court's claim construction of certain terms, specifically the "program limitations." The Federal Circuit affirmed the district court's claim construction, which led the parties to stipulate to noninfringement. Consequently, the Federal Circuit affirmed the final judgment of noninfringement and did not reach SES's cross-appeal regarding patent eligibility under 35 U.S.C. § 101.

II. Background

• Asserted Patents: Stylwan owns U.S. Patent Nos. 7,231,320, 7,403,871, 8,050,874, 8,086,425, 8,428,910, and 8,831,894. These patents describe "non-destructive systems and methods for assessing material integrity, such as in pipelines and pressure vessels commonly used in the oil and gas industry." This includes Non-Destructive Inspection (NDI), Remaining Useful Life (RULE) estimation, and Fitness for Service (FFS) assessment systems.

• Problem Addressed by Patents: Prior art NDI techniques often relied on "one-dimensional signal processing" and frequently yielded inaccurate results, requiring "costly and time-consuming manual verification." The Asserted Patents aimed to solve these problems by using "complex signal analysis and computational methods to accurately detect material defects, assess structural integrity and fit-ness-for-service, and estimate the remaining useful life of an inspected material, without the need for manual verifi-cations."

• Representative Claim: Claim 1 of the '874 patent is presented as representative, describing an evaluation system including "at least one computer," a "material features acquisition system," "a plurality of identifier equations and co-efficients," and "at least one database." The computer is programmed to utilize these components to "estimate a remaining useful life of a material under evaluation."

• Procedural History: Stylwan sued SES for infringement. SES moved to dismiss, arguing patent ineligibility under § 101, which the district court rejected. The district court issued a claim construction order construing three categories of disputed terms: "sensor/signal," "excitation," and "program" limitations. Following this order, the parties stipulated to noninfringement, and the district court entered a final judgment of noninfringement. Stylwan appealed the claim construction, and SES cross-appealed the § 101 eligibility determination.
  

III. Key Issues on Appeal

• Claim Construction of Program Limitations: Stylwan challenged the district court's construction of the program limitations ("program," "programming," "programmed," "programmable," "processor," and "material features acquisition system"). The district court construed these terms to mean: "[C]omputer program that autonomously recognizes the nature of the material features using three identifier equations [specifically listed] and autonomously distinguishes between defective and non-defective material features."

• SES's Cross-Appeal on Patent Eligibility (§ 101): SES cross-appealed the district court's finding that the Asserted Patents were not directed to patent-ineligible subject matter.
  

IV. Court's Reasoning and Analysis

The Federal Circuit focused solely on the district court's construction of the program limitations because Stylwan's counsel conceded during oral argument that an affirmance of this construction would resolve the case.

• Autonomous Functionality: The court found that the intrinsic record supported the district court's construction requiring autonomous functionality.

• The Asserted Patents "repeatedly and con-sistently" characterize the claimed inventions as "autonomous," appearing in titles and abstracts.

• The independent claims' language aligns with autonomous functionality, describing the computer as "being executed" or "programmed to utilize" components for recognizing and distinguishing material features. The court states these provisions "make clear that the relevant analysis is executed autonomously by a computer without human intervention."

• The patent specifications define "autonomous" as "able to function without external control or intervention" and describe the inventions as replicating "pattern recognition and inspection tasks traditionally performed by human inspectors."

• The patents criticize "manual processes," warning that "uncontrollable ‘human factors’” and human decisions "may lead to a catastrophic failure."

• The prosecution history further supports this, as Stylwan amended claims to require a computer program make the fitness for service determination to "reduce human intervention error."

• Incorporation of Identifier Equations: The court also upheld the district court's incorporation of the three specific identifier equations into the claim construction.

• The patents expressly state that "[t]he fundamen-tal operation of the autonomous NDI is performed by the identifier equations."

• The patents further clarify that "each stage may comprise multiple identifier equations uti-lizing equations 1, 2, or 3."

• The court highlighted that the district court's construction is proper because, as SES argued and Stylwan did not dispute, these identifier equations satisfy the enablement requirement under 35 U.S.C. § 112.

• Citing precedent (MagSil Corp. v. Hitachi Glob. Storage Techs., Inc.), the court emphasized that "the scope of the claims must align with the scope of the enablement." While Stylwan argued other formulas could be used, they did not assert that the inventors enabled the use of formulas beyond the three disclosed equations. Therefore, the court concluded, "even assuming the claimed inventions could operate using other formulas, the district court did not err by limiting the claims to the iden-tifier equations in its construction."
  

V. Conclusion

The Federal Circuit affirmed the district court's claim construction of the program limitations, finding it supported by the intrinsic evidence. Because this construction led to the parties' stipulation of noninfringement and the district court's final judgment, the Federal Circuit affirmed that judgment. The court did not reach SES's cross-appeal regarding patent eligibility as it was raised solely as an alternative ground for affirmance.

VI. Outcome

The district court's final judgment of noninfringement of the Asserted Patents is affirmed. Costs are assessed against Stylwan.