On October 18, 2024, the Federal Circuit issued its opinion in UTTO Inc. v. Metrotech Corp., No. 2023-1435, 2024 U.S. App. LEXIS 26340, (Fed. Cir. Oct. 18, 2024) addressing the propriety of conducting claim construction at the Rule 12 stage. UTTO alleged that Metrotech’s RTK-Pro locator device infringed U.S. Patent No. 9,086,441 (the ’441 patent), which describes methods for detecting and identifying buried assets, such as underground utility lines. The case hinged on the interpretation of the claim term “group of buried asset data points,” with the district court construing the term to require at least two data points. Based on this construction, the district court dismissed UTTO’s infringement claim under Rule 12(b)(6), finding that Metrotech’s device used only a single data point at a time. UTTO Inc., 2024 U.S. App. LEXIS 26340, at *8.
The Federal Circuit’s analysis centered on whether the district court prematurely resolved the parties’ claim-construction dispute. UTTO argued that “group” in the claim phrase “group of buried asset data points” could include a single data point, citing portions of the ’441 patent specification that referenced “one or more buried asset data points” (’441 patent, col. 5, ll. 58–66). The district court’s construction, requiring two or more points, relied on the “ordinary and customary meaning” of the term “group” and the specification’s depiction of embodiments involving multiple data points. Id. at *8.
The Federal Circuit rejected UTTO’s contention that claim construction at the Rule 12 stage is categorically improper. The court explained that “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 … that no additional process is needed.” Id. at *14. The Federal Circuit, however, emphasized that fuller proceedings are often necessary to resolve disputed claim terms. Specifically, the Federal Circuit noted that “two passages mention the use of the claimed method in conjunction with ‘one or more buried asset data points,’” citing ’441 patent, col. 5, ll. 58–66, and col. 9, l. 67 through col. 10, l. 2. Id. at *25.
The Federal Circuit also highlighted that claim construction not only depends on intrinsic evidence such as the patent’s specification and prosecution history, but it may also involve extrinsic evidence where appropriate. The Federal Circuit observed that UTTO had indicated its intention to present additional materials, including expert testimony and technical references, during claim-construction proceedings. By dismissing the case at the Rule 12 stage without fully considering these materials, the district court risked resolving critical disputes prematurely. Id. at *21, *25.
Accordingly, the Federal Circuit vacated this dismissal, emphasizing that the district court’s approach to claim construction was insufficiently developed given the case’s procedural posture. The Federal Circuit’s ruling provides valuable guidance on addressing claim-construction issues at the Rule 12 stage. The decision underscores the importance of robust claim-construction proceedings, particularly when the interpretation of a key term is central to the case. By vacating the dismissal, the Federal Circuit signaled that district courts must carefully evaluate whether claim terms can be definitively construed at the pleading stage or whether further analysis is necessary.
The decision also suggests that while early resolution of claim-construction disputes can be efficient, district courts must balance the need for judicial economy with procedural fairness. Although the decision subtly encourages accused infringers to raise claim-construction disputes early in litigation—potentially securing dismissals without costly discovery or protracted claim-construction proceedings—it also highlights the risks of premature decisions that may overlook critical evidence. The Federal Circuit’s approach reflects a careful weighing of these competing interests.
For the accused infringer, the ruling may offer strategic opportunities to challenge infringement allegations at the Rule 12 stage, possibly bypassing lengthy litigation processes. This tactic can increase the pressure on patent owners, who may be limited in the extrinsic evidence they can present to counter a motion to dismiss for noninfringement. Courts will need to carefully assess whether a claim term’s meaning is sufficiently clear to justify early dismissal or whether further proceedings are necessary to ensure that all relevant evidence is considered.