Nimbelink Corp. v. Digi International Inc.

• Court: Court of Appeals for the Federal Circuit
• Decided: February 23, 2026
• Docket: 24-2292
• Status: Unpublished

Opinion

Case: 24-2292 Document: 40 Page: 1 Filed: 02/23/2026

NOTE: This disposition is nonprecedential.

United States Court of Appeals for the Federal Circuit ______________________

NIMBELINK CORP., Plaintiff-Appellant

v.

DIGI INTERNATIONAL INC., Defendant-Appellee ______________________

2024-2292 ______________________

Appeal from the United States District Court for the District of Minnesota in No. 0:22-cv-02345-NEB-DJF, Judge Nancy E. Brasel. ______________________

Decided: February 23, 2026 ______________________

DEVAN V. PADMANABHAN, Padmanabhan & Dawson PLLC, Minneapolis, MN, argued for plaintiff-appellant. Also represented by ERIN DUNGAN, BRITTA LOFTUS, MARIAH L. REYNOLDS, PAUL J. ROBBENNOLT.

KATHERINE S. RAZAVI, Faegre Drinker Biddle & Reath LLP, Minneapolis, MN, argued for defendant-appellee. Also represented by KELLY J. FERMOYLE, TIMOTHY E. GRIMSRUD; ANDREW M. MCCOY, Indianapolis, IN. ______________________ Case: 24-2292 Document: 40 Page: 2 Filed: 02/23/2026

Before MOORE, Chief Judge, DYK and TARANTO, Circuit Judges. MOORE, Chief Judge. NimbeLink Corp. (NimbeLink) appeals an invalidity judgment from the United States District Court for the Dis- trict of Minnesota and the dismissal of NimbeLink’s breach-of-contract claims. For the following reasons, we reverse the judgment of invalidity and affirm the dismissal of NimbeLink’s breach-of-contract claims. BACKGROUND NimbeLink owns U.S. Patent Nos. 9,497,570 and 9,838,066 (collectively, the Asserted Patents), which relate to embedded cellular modems. ’570 patent at 1:11–14. 1 The disclosed modems facilitate machine-to-machine com- munication in remote environments via cellular networks. ’570 patent at 1:18–23, 35–43. Claim 1 of the ’570 patent is representative: 1. A space-efficient cellular modem device for ma- chine-to-machine communications, the modem de- vice comprising: a multi-layer printed circuit board defining a top side and a bottom side and including a first circuit layer adjacent the top side, a second circuit layer adjacent the bottom side, a ground plane layer, and a power plane layer, the ground and power plane

1 Because the parties agree the Asserted Patents’ specifications are nearly identical, we cite to the specifica- tion of the ’570 patent alone. NimbeLink Br. 3 n.1; Digi Br. 7 n.1. Case: 24-2292 Document: 40 Page: 3 Filed: 02/23/2026

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layers located between the first and second circuit layers; a cellular transceiver module configured to communicate over a cellular wireless cellu- lar network, the cellular transceiver mod- ule comprising a processor and attached to a top side of the multi-layer printed circuit board; electrical power-management components attached to the multi-layer printed circuit board, the power-management components in electrical communication with the cellu- lar transceiver module; a first plurality of electrically-conductive pins in electrical connection with the cellu- lar transceiver module and aligned along a first pin axis to form a first row of pins, each of the first plurality of pins extending outwardly and away from the bottom side of the multi-layer printed circuit board; a second plurality of electrically-conductive pins in electrical connection with the cellu- lar transceiver module and aligned along a second pin axis to form a second row of pins, each of the second plurality of pins ex- tending outwardly and away from the bot- tom side of the multi-layer printed circuit board, the second row of pins located oppo- site the first row of pins; and a communications port in electrical com- munication with the cellular transceiver module, the communications port config- ured to receive and transmit communica- tion signals over the cellular wireless network. Case: 24-2292 Document: 40 Page: 4 Filed: 02/23/2026

Id. at 6:6–41 (emphasis added). In 2022, NimbeLink sued Digi International Inc. (Digi) for allegedly infringing at least claim 1 of each of the As- serted Patents with its accused XBee cellular modem prod- ucts and breaching non-disclosure agreements (NDAs) executed in 2015 (2015 NDA) and 2016 (2016 NDA). Nim- beLink’s patent infringement claims proceeded to claim construction, where the parties disputed whether the pre- amble phrase appearing in every asserted independent claim—“space-efficient cellular modem device”—is limit- ing, and if so, whether the term “space-efficient” is indefi- nite. See J.A. 9–27. The district court determined the preamble was limiting because it recites additional struc- ture the specification underscores as important to the in- vention. J.A. 10–12. The court then held the term “space- efficient” indefinite because the term failed to convey dis- cernable, objective boundaries to a skilled artisan. J.A. 14–22. Following the court’s determination, the par- ties stipulated to judgment that all asserted claims of the Asserted Patents are invalid as indefinite under 35 U.S.C. § 112(b) and that Digi therefore does not infringe any valid claim of the Asserted Patents. See J.A. 3–4. The court ac- cordingly entered judgment to that effect. Id. NimbeLink’s breach-of-contract claims arise from an independent set of factual allegations, which we accept as true for the purposes of this appeal. In 2015, while the ap- plication for the ’570 patent was pending, Digi sought Nim- beLink’s help to develop a product that would incorporate the Skywire 2 product. J.A. 135 ¶ 16. NimbeLink and Digi then entered into the 2015 NDA, under which they would exchange information about product design. J.A. 135 ¶ 17; J.A. 217–18. During the 2015 NDA’s term, Digi expressed

2 Skywire is NimbeLink’s line of cellular embedded modems designed to provide plug-in cellular connectivity. J.A. 133 ¶¶ 9–10. Case: 24-2292 Document: 40 Page: 5 Filed: 02/23/2026

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interest in acquiring NimbeLink and asked to be educated on the Skywire product, NimbeLink’s cellular certification process, and the Skywire product’s market potential. J.A. 135 ¶ 18. In December 2015, Nimbelink and Digi rep- resentatives met twice to discuss the Skywire product, and during those meetings, Nimbelink disclosed financial and marketing information related to the Skywire product. J.A. 135–36 ¶¶ 19, 26. Discussions continued through Jan- uary 2016, when Digi informed Nimbelink that Digi was no longer interested in an acquisition. Id. ¶¶ 19–20. Later that year, however, Digi developed a renewed interest in acquiring NimbeLink, prompting the parties to enter into the 2016 NDA, under which Digi would receive marketing and financial information from NimbeLink. J.A. 136 ¶ 22; J.A. 137 ¶¶ 31–32. Digi ultimately chose not to acquire NimbeLink; instead, in January 2017, Digi introduced its own cellular modem products, including the XBee Cellular modem product line. J.A. 136 ¶ 23; J.A. 138 ¶ 36. Nim- beLink subsequently brought breach-of-contract claims al- leging Digi violated the 2015 and 2016 NDAs. J.A. 137 ¶¶ 28, 34. Digi moved to dismiss. See J.A. 29. The district court granted Digi’s motion, concluding the complaint failed to plausibly allege (1) the specific nature of the con- fidential information allegedly disclosed under the NDAs and (2) Digi’s unauthorized use. J.A. 33–36. NimbeLink appeals the invalidity judgment and the dismissal of its breach-of-contract claims. We have juris- diction under 28 U.S.C. § 1295(a)(1). DISCUSSION NimbeLink argues we should: (1) reverse the district court’s holding that the preamble phrase “space-efficient cellular modem device” is indefinite; and (2) reverse the district court’s dismissal of NimbeLink’s breach-of-contract claims because the complaint adequately alleges the na- ture of the confidential information disclosed under the Case: 24-2292 Document: 40 Page: 6 Filed: 02/23/2026

NDAs, as well as Digi’s unauthorized use of that confiden- tial information. I. Preamble Construction Whether preamble language is a claim limitation is a question of law. Data Engine Techs. LLC v. Google LLC, 10 F.4th 1375, 1380 (Fed. Cir. 2021). We review a district court’s claim construction based on intrinsic evidence de novo and its subsidiary fact findings about extrinsic evi- dence for clear error. Forest Lab’ys, LLC v. Sigmapharm Lab’ys, LLC, 918 F.3d 928, 932–33 (Fed. Cir. 2019). Nor- mally, a preamble is used to state a purpose or intended use for the invention and therefore is generally not limit- ing. Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283, 1292 (Fed. Cir. 2015). We have articulated a number of guideposts to aid in determining whether the preamble is limiting. For example, a preamble may be limiting if it re- cites additional structure or steps the specification under- scores as important, provides antecedent basis for a claim limitation, or serves as a basis for distinguishing prior art during prosecution. Catalina Mktg. Int’l, Inc. v. Coolsav- ings.com, Inc., 289 F.3d 801, 808 (Fed. Cir. 2002). Digi argues the Asserted Patents’ written description, claim language, and prosecution history confirm the pre- amble phrase “space-efficient cellular modem device” is limiting. Digi Br. 17–21. The written description supports that conclusion, in Digi’s view, for three reasons. First, the written description identifies “space-efficient embedded cellular modems” as the “present invention.” ’570 patent at 1:12–14. Second, the written description refers to the invention and embodiments as “space-efficient” cellular modem devices, emphasizing the important role space effi- ciency plays in the claimed invention. See id. at Abstract (disclosing “[a] space-efficient cellular modem device”), 1:36–37 (disclosing that “[e]mbodiments of the invention comprise various space-efficient, embedded cellular mo- dems”). Third, the written description refers to the Case: 24-2292 Document: 40 Page: 7 Filed: 02/23/2026

NIMBELINK CORP. v. DIGI INTERNATIONAL INC. 7

structure, arrangement, or size of the cellular modem de- vice as “space-efficient.” See, e.g., id. at 4:19–21 (“compact, space-efficient embedded cellular modem”), 4:32 (“efficient spacing of surface-mounted components”), 5:3–4 (“[t]he space-efficient size of [the] embedded cellular modem”). Digi argues the claims further suggest the preamble phrase is limiting because the phrase provides antecedent basis for multiple dependent claims reciting “the modem device” or “the cellular modem device.” Compare id. at claims 5–6, 15–16, with claims 1, 10. And finally, Digi ar- gues the prosecution history shows the preamble phrase is limiting because the examiner distinguished the prior art based on the claimed cellular modem device’s “arrange- ment, relative size and overall complete structure,” each of which the specification describes as “space-efficient.” J.A. 927 (notice of allowance); see ’570 patent at 4:19–21, 4:31–33, 5:3–6. While NimbeLink argues that “space-effi- cient” is limiting (if the claims are not indefinite), NimbeL- ink Br. 30–31, at the same time, NimbeLink argues “space- efficient” does not recite essential structure, does not pro- vide antecedent basis for any terms in the bodies of the claims, and did not serve as a basis for distinguishing prior art during prosecution. Id. We conclude that the term “space-efficient” in the preamble is not a limitation. 3

3 In determining whether the preamble phrase is limiting, neither the parties’ constructions nor that of the district court bind us on de novo review. See DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1299 (Fed. Cir. 2006) (“This court reviews claim construction without defer- ence.”); Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1274 (Fed. Cir. 2012) (“Just as a district court may construe the claims in a way that neither party advocates, . . . we may depart from the dis- trict court and adopt a new construction on appeal[.]”) (in- ternal citations omitted). Case: 24-2292 Document: 40 Page: 8 Filed: 02/23/2026

Even accepting Digi’s premise that the written descrip- tion identifies a “space-efficient cellular modem” as the “present invention,” the preamble phrase does not recite additional, essential structure beyond what is already oth- erwise claimed. As the written description explains, a skilled artisan may achieve space savings through various design choices, including the use of a stacked or multi-layer circuit board configuration, ’570 patent at 5:15–18; various pin arrangements, id. at 4:7–13; the XBee form factor, id. at 4:19–21; surface mount connectors, id. at 4:31–33; and a micro-SIM card slot, id. at 5:9–11. Every such space-sav- ing feature appears in the body of the various claims. See, e.g., id. at 6:8–14 (reciting a multi-layer printed circuit board), 7:17–24 (reciting two rows of outwardly extending, electrically conductive pins), 8:10–11 (reciting a cellular modem device conforming to an XBee form factor), 6:15–19 (reciting a cellular transceiver module attached to a top side of—i.e., mounted on the surface of—the multi-layer printed circuit board), 6:62–63 (reciting a micro-SIM card slot). In other words, the claims themselves, by virtue of their recited elements, already embody a degree of space efficiency without relying on the preamble to add another structural limitation. We conclude that the preamble de- scribes a characteristic or result of the claimed design choices, but it does not supply an additional structural re- quirement necessary to define the invention. We have long held that preamble language that merely extolls the bene- fits or features of the claimed invention does not limit claim scope. Catalina, 289 F.3d at 809. We conclude that the term “space-efficient” in the preamble does exactly this—extoll the virtues of the structurally complete inven- tion contained within the body of the claim. While Digi is correct that portions of the preamble pro- vide antecedent basis for claim limitations contained within the body of the claim, the dependent claims of the ’570 patent refer back to “the cellular modem device.” ’570 patent at claims 5–6, 15–16. A preamble that is Case: 24-2292 Document: 40 Page: 9 Filed: 02/23/2026

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limiting in part does not transform nearby descriptive words in the preamble into claim limitations. TomTom, Inc. v. Adolph, 790 F.3d 1315, 1323 (Fed. Cir. 2015) (“[t]hat [part of] the phrase in the preamble . . . provides a neces- sary structure for [independent] claim 1 does not neces- sarily convert the entire preamble into a limitation”). That is particularly true when, as here, the bodies of the depend- ent claims recite a structurally complete device “such that deletion of [‘space-efficient’] does not affect the struc- ture . . . of the claimed invention.” Id. at 1324 (quoting Am. Med. Sys., Inc. v. Biolitec, Inc., 618 F.3d 1354, 1358–59 (Fed. Cir. 2010)) (internal quotations omitted). We con- clude that the bodies of the claims at issue define a com- plete and operative invention and that the preamble language is not, in this case, an additional claim limitation beyond what is already contained in the body of the claim. The prosecution history does not compel a different conclusion. In the reasons for allowance, the examiner noted “[w]hen taken as a whole, in combination, none of the prior art discloses” the claimed cellular modem’s “specific circuit structure including the arrangement, relative size and overall complete structure.” J.A. 927. This examiner reference does not demonstrate reliance on the term “space-efficient” in the preamble as a limitation. Georgetown Rail Equip. Co. v. Holland L.P., 867 F.3d 1229, 1236 (Fed. Cir. 2017) (quoting Catalina, 289 F.3d at 808) (holding that a term in the preamble was not limiting where there was no clear reliance on it to distinguish the claimed invention from the prior art). We see no basis to deviate from the general rule that preamble language is not limiting. The claims at issue de- scribe a complete and operative invention. The preamble does not introduce essential structure but rather extolls the virtues of the claimed invention. Therefore, we reverse the judgement of invalidity. Case: 24-2292 Document: 40 Page: 10 Filed: 02/23/2026

II. Breach-of-Contract Claims We review the grant of a motion to dismiss according to the law of the regional circuit, here the Eighth Circuit. Disc Disease Sols. Inc. v. VGH Sols., Inc., 888 F.3d 1256, 1259 (Fed. Cir. 2018) (citing Cleveland Clinic Found. v. True Health Diags. LLC, 859 F.3d 1352, 1359 (Fed. Cir. 2017)). The Eighth Circuit reviews the grant of a motion to dismiss de novo. Affordable Comtys. of Mo. v. Federal Nat’l Mortg. Ass’n, 714 F.3d 1069, 1073 (8th Cir. 2013). In doing so, the Eighth Circuit “accept[s] all facts pled by the nonmoving party as true and draw[s] all reasonable infer- ences from the facts in favor of the nonmovant.” Waldron v. Boeing Co., 388 F.3d. 591, 593 (8th Cir. 2004). NimbeLink argues the district court erred in two re- spects by dismissing the breach-of-contract claims. Nim- beLink Br. 46–53. First, as to confidential information, NimbeLink argues it is not required to disclose the infor- mation itself; instead, it need only describe the nature of that information, which NimbeLink maintains it did with sufficient detail. See, e.g., J.A. 135 ¶ 18 (alleging Digi sought information regarding the Skywire product and NimbeLink’s cellular certification process); id. at ¶ 19 (al- leging NimbeLink provided Digi “technical information” re- garding the Skywire product and “detailed business and market strategy information that underlies the success of the Skywire[] product” under the 2015 NDA); J.A. 136 ¶ 22 (alleging NimbeLink provided Digi “financial and market information . . ., including detailed financial information about the Skywire[] product and information about the market for that product” under the 2016 NDA). Second, as to unauthorized use, NimbeLink argues it plausibly al- leged that Digi used NimbeLink’s confidential information in breach of the NDAs to launch a competing cellular mo- dem. See, e.g., J.A. 137 ¶ 27 (alleging “[d]uring the term of the 2015 NDA, Digi used NimbeLink’s Proprietary Infor- mation for non-permitted uses,” including to develop and enter the market with its own cellular modem products); Case: 24-2292 Document: 40 Page: 11 Filed: 02/23/2026

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id. at ¶ 28 (alleging “Digi’s non-permitted uses of NimbeL- ink’s Proprietary Information constitute a breach of the 2015 NDA”); id. at ¶¶ 33–34 (alleging the same regarding the 2016 NDA). Taken together, NimbeLink contends these allegations suffice to state a breach-of-contract claim. We do not agree. NimbeLink’s complaint fails to sufficiently plead the nature of the alleged confidential information at issue. NimbeLink characterizes that information as relating to “financ[e] and marketing,” but that is too vague to pass muster under Rule 8. See Sip-Top, Inc. v. Ekco Grp., Inc., 86 F.3d 827, 831 (8th Cir. 1996) (when a breach-of-contract claim is based on the alleged use of confidential infor- mation, the plaintiff must demonstrate the information al- legedly used in violation of the contract “was the type of information covered by the Confidentiality Agreement”). NimbeLink’s description of the alleged confidential infor- mation as “technical” or related to “business and marketing strategy” does not meaningfully distinguish between confi- dential and non-confidential information to survive the mo- tion to dismiss. J.A. 135 ¶ 19. While NimbeLink alleges with more particularity that it provided Digi information about the Skywire product and cellular certification pro- cesses, it fails to allege that information was confidential. Id. at ¶ 18. NimbeLink correctly notes Rule 8 does not re- quire disclosure of the confidential information itself, but the rule does require sufficient factual content to allow the court to draw the reasonable inference that Digi is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Like the district court, we conclude that Nim- beLink’s complaint fails to meet this requirement. The complaint also fails to plausibly allege unauthor- ized use of confidential information. NimbeLink’s theory of breach rests primarily on Digi’s later introduction of competing modem products after the NDA-governed dis- cussions concluded. But the 2015 NDA expressly permits independent development. J.A. 217 (“[N]either Party will Case: 24-2292 Document: 40 Page: 12 Filed: 02/23/2026

be precluded from independently developing technology or pursuing business opportunities similar to those covered by this Agreement.”). And the 2016 NDA prohibits an in- ference of breach from the mere fact of later competition. J.A. 260 (establishing Digi’s use of “practices, techniques, concepts or information as those used by [NimbeLink]” does not “give rise to any inference that any Information was used or disclosed in violation of this agreement”). Un- der these circumstances, NimbeLink’s allegations do not support a reasonable inference that Digi used NimbeLink’s confidential financial information rather than its own knowledge, experience, or any information exchanged be- tween the parties that Digi was permitted to use. We can- not say the district court erred in dismissing the breach-of- contract claims under these circumstances. CONCLUSION We have considered Digi’s remaining arguments and find them unpersuasive. We reverse the judgment of inva- lidity. We affirm the dismissal of NimbeLink’s breach-of- contract claims. AFFIRMED-IN-PART, REVERSED-IN-PART, AND REMANDED COSTS No costs.