Crusoe Energy v. Upstream Data: Federal Circuit Appeal Voluntarily Dismissed
Crusoe Energy Systems brought an invalidity/cancellation challenge against Upstream Data’s US11574372B2 — a patent covering blockchain mining operations at oil or gas facilities — to the Federal Circuit. The parties jointly agreed to dismiss the appeal after just 141 days, with each side bearing its own costs.
A short-lived Federal Circuit patent challenge in stranded-gas crypto mining
Crusoe Energy Systems, LLC — an operator known for deploying modular data centres at oil and gas flare sites — filed an appeal at the Court of Appeals for the Federal Circuit on 16 June 2025, challenging the patentability of US11574372B2 held by Canadian competitor Upstream Data Inc. The patent covers the concept of operating a blockchain mining facility at an oil or gas production site, a technology central to both companies’ commercial strategies for monetising stranded or flared natural gas.
The appeal was resolved on 4 November 2025 when the Federal Circuit entered an order dismissing the proceeding under Fed. R. App. P. 42(b), pursuant to agreement of the parties. No merits ruling was issued; the court made no finding on patentability or validity. Each side was ordered to bear its own costs, suggesting a negotiated resolution rather than a concession by either party.
At 141 days, the proceeding closed far faster than the typical Federal Circuit merits appeal, which consistent with a settlement, licensing arrangement, or strategic withdrawal — the public record does not disclose the underlying reason. What remains unknown is whether any cross-licensing, covenant not to sue, or commercial agreement accompanied the dismissal, and whether the underlying invalidity challenge at the PTAB or district court level remains pending or was also resolved.
Filing to Voluntary dismissal in 141 days
141 days — faster than the typical Federal Circuit appeal cycle of 18–24 months
Appeal voluntarily dismissed: what the agreed order means for both parties
Fed. R. App. P. 42(b): voluntary dismissal by agreement
Rule 42(b) allows parties to jointly stipulate to dismiss a Federal Circuit appeal at any time, without a merits ruling. The court simply enters the agreed order. Because no judgment on patentability issued, the dismissal does not resolve the underlying validity question — it merely ends this particular proceeding. The patent’s enforceability status is unchanged by the dismissal itself.
No merits adjudicationThe public record does not specify prejudice terms
A voluntary dismissal under Rule 42(b) can be with or without prejudice. Dismissal with prejudice would bar Crusoe from re-raising the same invalidity arguments; dismissal without prejudice would leave that door open. The court order as recorded states only that the proceeding is ‘DISMISSED’ — it does not specify prejudice terms. Parties and practitioners should not assume either outcome without reviewing the full stipulation filed with the court.
Prejudice terms not publicCrusoe exits the appeal — strategic reasons remain undisclosed
As appellant, Crusoe initiated this invalidity challenge and agreed to withdraw it. This could reflect a negotiated settlement, a commercial licence, or a reassessment of appeal prospects. Without a merits ruling, Crusoe has not formally lost on validity — but it has not prevailed either. The equal costs order is consistent with a mutually agreed resolution rather than a unilateral concession.
Agreed withdrawal — no concessionUpstream Data’s patent survives this challenge — for now
US11574372B2 remains in force following the dismissal. No invalidity finding was made, so Upstream Data retains full enforcement rights. However, the patent has not been affirmatively validated by an appellate court either. Competitors and potential licensees should treat the patent as presumptively valid under 35 U.S.C. § 282 and conduct FTO analysis accordingly. Future challenges via IPR or district court litigation remain possible.
Patent presumptively validFull party and counsel information
| Role | Name | Type | Detail |
|---|---|---|---|
| Plaintiff | CRUSOE ENERGY SYSTEMS, LLC | Company | Stranded-gas blockchain computing operator — appellant challenging US11574372B2Search in Eureka ↗ |
| Defendant | UPSTREAM DATA INC. | Company | Upstream Data Inc. — Canadian oil-field crypto mining hardware and IP companySearch in Eureka ↗ |
| Plaintiff counsel | John A. Dragseth | Attorney | Counsel for CRUSOE ENERGY SYSTEMS, LLCSearch in Eureka ↗ |
| Plaintiff counsel | John C. Phillips | Attorney | Counsel for CRUSOE ENERGY SYSTEMS, LLCSearch in Eureka ↗ |
| Plaintiff law firm | Fish & Richardson LLP | Law Firm | Representing CRUSOE ENERGY SYSTEMS, LLCSearch in Eureka ↗ |
| Defendant counsel | Clayton W. Thompson II | Attorney | Counsel for UPSTREAM DATA INC.Search in Eureka ↗ |
| Defendant counsel | Stanley Joseph Panikowski , III | Attorney | Counsel for UPSTREAM DATA INC.Search in Eureka ↗ |
| Defendant counsel | Yakov Zolotorev | Attorney | Counsel for UPSTREAM DATA INC.Search in Eureka ↗ |
| Defendant law firm | DLA Piper LLP (US) | Law Firm | Representing UPSTREAM DATA INC.Search in Eureka ↗ |
| Defendant law firm | DLA Piper US LLP | Law Firm | Representing UPSTREAM DATA INC.Search in Eureka ↗ |
| Presiding judge | Judge N/A | Judge | Court of Appeals for the Federal CircuitSearch in Eureka ↗ |
Official order — verbatim text
The order’s language — ‘The parties having so agreed’ — confirms this was a consensual dismissal, not a court-initiated termination. Under Fed. R. App. P. 42(b), the Federal Circuit exercises no discretion on the merits; it simply effectuates the parties’ agreement. The equal costs direction is standard for agreed dismissals and carries no inference of fault or weakness. Critically, the absence of any validity or patentability finding means US11574372B2 is neither validated nor invalidated by this proceeding — its legal status is identical to the day the appeal was filed.
US11574372B2 — Blockchain mining co-located at oil or gas production sites
US11574372B2 (application number US16/484728) protects systems and methods for operating a blockchain mining facility — including cryptocurrency mining hardware — at or near an oil or gas production site, enabling monetisation of otherwise flared or stranded gas by converting it to electrical power for computing loads. The patent sits at the intersection of energy infrastructure and distributed computing, a technically novel combination that emerged commercially in the late 2010s as flare-gas waste reduction became both an economic and regulatory priority.
For the stranded-gas computing sector, this patent represents potentially foundational IP. Both Crusoe Energy and Upstream Data have built commercial businesses on substantially similar operational models — deploying modular data centres at wellheads to consume associated gas that would otherwise be flared. A patent of this scope, held by one direct competitor against another, creates material licensing exposure for any operator or equipment provider entering the field. The fact that a well-resourced appellant chose to withdraw rather than litigate to a Federal Circuit merits decision may suggest the patent’s claims are more defensible than the challenger anticipated.
Should your team run an FTO against US11574372B2?
Any company planning to deploy cryptocurrency or high-performance computing hardware at oil or gas production facilities — whether at the wellhead, a gathering station, or a midstream processing site — should treat US11574372B2 as a priority FTO target. This includes modular data centre vendors, oilfield services companies adding computing load management to their offering, and energy transition operators pursuing flare-gas monetisation projects. The patent’s survival of a direct Federal Circuit invalidity challenge, even by voluntary dismissal, reinforces its near-term enforcement risk.
PatSnap Eureka’s FTO Search Agent can map your specific system architecture against the claim language of US11574372B2, identify prior art relevant to any design-around analysis, and surface the full prosecution history to assess claim scope and potential estoppel. Eureka also tracks the litigation and PTAB history of this patent in real time — so your team is immediately alerted if Upstream Data files new enforcement actions or if a future IPR petition is instituted against the patent.
Run a freedom-to-operate analysis on US11574372B2 to assess your product’s exposure
Run FTO in Eureka →Similar Federal Circuit patent appeals in blockchain and energy computing
Related Federal Circuit appeals and PTAB proceedings involving blockchain, cryptocurrency mining, and energy-adjacent computing patents — curated for the stranded-gas computing sector.
What this case signals for the stranded-gas crypto mining IP landscape
A 141-day Federal Circuit appeal ending in voluntary dismissal rarely happens without a commercial reason. Here is what it signals for the sector.
Voluntary dismissals at the Federal Circuit often mask commercial deals
When competitors agree to end a patent appeal this quickly — particularly one centred on a core technology both parties deploy commercially — it typically signals a licensing agreement, cross-licence, or covenant not to sue. IP teams monitoring the stranded-gas computing space should watch for follow-on commercial announcements or changes in enforcement behaviour from Upstream Data.
US11574372B2 remains a live risk for operators at oil and gas flare sites
The patent covers blockchain mining operations co-located at oil or gas production facilities — a model used by multiple operators beyond Crusoe. Because no invalidity ruling issued, the patent retains its full presumption of validity. Any company deploying modular computing at flare or wellhead sites should assess freedom to operate against this patent before scaling deployment.
CRUSOE v UPSTREAM — key questions answered
The Federal Circuit issued no merits ruling. The case was voluntarily dismissed by agreement of the parties under Fed. R. App. P. 42(b) on 4 November 2025, 141 days after filing. Each side bore its own costs. The patent US11574372B2 was neither validated nor invalidated by the proceeding.
Yes. Voluntary dismissal of the appeal does not affect the patent’s legal status. US11574372B2 remains presumptively valid under 35 U.S.C. § 282 and fully enforceable by Upstream Data Inc. No invalidity finding was made at the Federal Circuit, and the dismissal order does not address claim scope or patentability.
Rule 42(b) permits parties to a Federal Circuit appeal to agree to dismiss the proceeding at any time. The court enters the dismissal as an administrative order without examining the merits. In Case 25-1861, both Crusoe Energy and Upstream Data agreed to the dismissal, and the court ordered each side to bear its own costs — a standard outcome for consensual terminations under this rule.
US11574372B2 covers systems and methods for operating a blockchain — including cryptocurrency — mining facility co-located at an oil or gas production site. The invention enables stranded or flared natural gas to be converted into electrical power for computing loads, addressing both gas waste and computing infrastructure challenges simultaneously. The patent is central to the commercial model of multiple flare-gas computing operators.
The public record does not disclose the reason. At 141 days, the dismissal occurred far earlier than a typical Federal Circuit merits appeal resolution. Possibilities consistent with the record include a negotiated settlement, licensing arrangement, covenant not to sue, or strategic reassessment of the invalidity arguments. The equal costs order provides no inference of which party held stronger leverage at the time of agreement.
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