UTTO Inc. v. Metrotech Corp., Appeal No. 23-1435 (Fed. Cir. Oct. 18, 2024)

In its only precedential patent decision this week, the Court analyzed the extent to which claim construction is appropriate on a motion to dismiss a complaint. In the end, the Court concluded it is appropriate for a district court to engage in claim construction while assessing a motion to dismiss, but that, in this case, more was needed. The Court remanded for further findings.

UTTO owns a patent directed to detecting and identifying “buried assets,” which refers to underground utility lines. In general, the process involves a combination of geographical location information provided by GPS and previously stored information about buried assets. The method involves generating a buffer zone around a buried asset, which enables field technicians to avoid it. One of the claim limitations recites “generating, based on the group of buried asset data points, a two dimensional area comprising a buffer zone.”

Metrotech, a competitor of UTTO, has a system with a feature called “walk back.” That feature allows the device user to connect to a database and retrieve one or more location points previously saved in the database. An arrow directs the user to a specific point. Critically, the walk back feature identifies a specific point, which raised questions about whether it meets the “group of buried asset data points” limitation in the “generating” claim limitation.

UTTO sued Metrotech, which moved to dismiss. In resolving the motion to dismiss, the district court construed the claim language “group of buried asset data points” in the “generating” limitations to require “two or more” buried asset data points for each buried asset. The district court dismissed the complaint. (UTTO had also asserted a state law claim for tortious interference based on communications between Metrotech and a third party, which the district court also dismissed.)

On appeal, UTTO challenged the district court’s adoption of the “group” phrase—as requiring at least two data points per buried asset—in resolving the motion to dismiss. UTTO argued that a district court may never engage in claim construction when deciding a motion to dismiss. UTTO relied on prior decisions by the Federal Circuit that suggested claim construction was inappropriate at the motion-to-dismiss stage.

The Federal Circuit rejected that argument, noting that, where claim construction is based on intrinsic evidence, its determination is purely a question of law. The Court held “[w]here claims are construed based on intrinsic evidence alone, a decision on claim construction is not different in kind from the interpretation of other legal standards, which is proper and routine in ruling on a motion under Rule 12(b)(6).” The Court also noted it had repeatedly endorsed claim construction in resolving motions to dismiss based on Section 101. The Court added that district courts have wide latitude about how to resolve the matters before them, and claim construction hearings are not required. Accordingly:

there is no procedural error in the mere fact that a court has construed claims without conducting a separate Markman claim-construction set of proceedings, much less without hearing extrinsic evidence or expert testimony. Some case-specific circumstances can make it improper for a district court to resolve a claim construction dispute in the context of adjudicating a Rule 12(b)(6) motion, but sometimes a claim’s meaning may be so clear on the only point that is ultimately material to deciding the dismissal motion that no additional process is needed.

On the other hand, in the instant case, “fuller claim-construction proceedings and analysis are needed than were provided in and by the district court.” UTTO had indicated to the Court its intention to rely on extrinsic evidence to support its position that, in a mathematical sense, “group” can refer to a singular data point. The Court found that “[t]he district court had good reason to start with the premise that the phrase ‘group of buried asset data points,’ in its most usual meaning in ordinary parlance, calls for two or more such points. But UTTO raises at least a question as to whether a relevant artisan would read the phrase in light of a recognized meaning of ‘group’ in mathematics to mean one or more, not two or more.” The Court also noted the word “group” has sometimes been used in patents to refer to “one or more,” and it identified certain portions of the specification that could lead to such a construction.

“Finally, on remand, there may be a role for extrinsic evidence to play in this case in recognized ways, including in coming to understand the invention as disclosed.” For these reasons, the Court vacated the district court’s dismissal and remanded for further claim construction proceedings. The Court affirmed the district court’s dismissal of the tortious interference claims.

The full opinion can be found here.

By Nika Aldrich