Patent infringement is usually framed around making, using, or selling a claimed invention. Steelhead LNG (ASLNG) Ltd. v. Arc Resources Ltd., 2024 FCA 67, tests a narrower and more interesting question: what happens when a party never builds anything, but shares detailed plans of a patented design with potential investors instead.
A Confidential Design, Then a Shared Study
Steelhead's patent covered apparatus, methods, and systems for near-shore or at-shore liquefaction of natural gas, built around three key elements: a floating modular design, an air-cooled liquefaction process, and electric-driven compressors. In 2018, Steelhead disclosed a confidential design for such a facility to Arc. After discussions between the companies ended, Arc had received engineering work, including drawings, specifications, and cost estimates for an LNG project, and went on to share that study with third parties, including potential investors and industry contractors.
What "Use" Means Under Section 42
Steelhead argued that sharing a design incorporating all of its patent's essential elements, even without building it, was itself an infringing use, because it let Arc exploit the commercial goal and advantage of the invention to attract investment. The Federal Court of Appeal disagreed, holding that "use" under section 42 of the Patent Act is confined to the invention actually claimed in the patent, and does not extend to exploiting the goal, purpose, or advantage of that invention for commercial benefit. Because none of the patent's essential elements were ever physically present or operated in Canada, sharing the study did not constitute infringing use.
The Case Is Now Final
Steelhead sought leave to appeal to the Supreme Court of Canada. On July 3, 2025, the Supreme Court denied leave, leaving the Federal Court of Appeal's decision as the final word: plans, drawings, and cost estimates, standing alone, do not infringe an apparatus, system, or method patent.
What This Means for Patent Owners and Dealmakers
For a patent owner who discloses a design in confidence during commercial discussions, the practical lesson is that patent infringement is unlikely to be an effective remedy if the other side shares that design further without building it; confidentiality obligations and contract law, not the Patent Act, are doing the real protective work in that scenario. For a party evaluating or shopping a technical concept to investors, the decision confirms there is real room to do so, using another's patented design as a reference point, without that alone infringing, so long as nothing is actually built or operated.
We advise both patent owners sharing confidential technical designs during deal discussions, and parties receiving them, on where the line between permitted disclosure and patent infringement actually sits.