Utto Inc. v. Metrotech Corp.
Citation119 F.4th 984
Date Filed2024-10-18
Docket23-1435
Cited13 times
StatusPublished
Full Opinion (html_with_citations)
Case: 23-1435 Document: 46 Page: 1 Filed: 10/18/2024
United States Court of Appeals
for the Federal Circuit
______________________
UTTO INC.,
Plaintiff-Appellant
v.
METROTECH CORP., AKA VIVAX-METROTECH,
Defendant-Appellee
______________________
2023-1435
______________________
Appeal from the United States District Court for the
Northern District of California in No. 3:22-cv-01904-WHO,
Judge William H. Orrick, III.
______________________
Decided: October 18, 2024
______________________
JAMES DENISON, Aliso Viejo, CA, argued for plaintiff-
appellant.
JASON LAO, Haynes and Boone, LLP, Costa Mesa, CA,
argued for defendant-appellee. Also represented by
ANDREA LEVENSON.
______________________
Before PROST, TARANTO, and HUGHES, Circuit Judges.
TARANTO, Circuit Judge.
Case: 23-1435 Document: 46 Page: 2 Filed: 10/18/2024
2 UTTO INC. v. METROTECH CORP.
UTTO Inc. owns U.S. Patent No. 9,086,441, which
describes and claims methods for detecting and identifying
what the patent calls “buried assets,” referring to
underground utility lines. UTTO sued Metrotech Corp.,
alleging infringement of the patent and tortious
interference with prospective economic advantage under
California law. The district court dismissed both counts of
the complaint for failure to state a claim on which relief can
be granted. Regarding patent infringement, we conclude
that fuller claim-construction analysis and proceedings are
needed in this case to determine the scope of the disputed
claim language. Regarding the state-law tort, we see no
reversible error in the district court’s dismissal.
Accordingly, we vacate in part, affirm in part, and remand.
I
A
UTTO’s ’441 patent is titled “Detection of Buried Assets
Using Current Location and Known Buffer Zones.” It
describes variations on a process for detecting and
identifying “buried assets (i.e., underground utility lines),”
such as lines for telephones, electricity, natural gas,
Internet, or wastewater pipes. ’441 patent, col. 1, line 45;
id.lines 51–54. The core of the process involves using both (a) a geographical location provider (e.g., a global positioning system (GPS)) to pinpoint a person’s location and (b) previously stored buried asset data to locate, and generate a buffer zone around, a buried asset; with that information, a field technician with a locator device is informed whether the technician is inside or outside the buffer zone for a particular asset.Id.,
col. 3, line 58, through col. 4, line 2. The patent teaches, among other things, using the method in a way that reduces the possibility that the desired information about one buried asset is clouded by interfering signals from another.Id.,
col. 4, lines 2–10. Independent claim 1 of the ’441 patent
reads:
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UTTO INC. v. METROTECH CORP. 3
A method on a mobile computing device for locating
electromagnetic signals radiating from a buried
asset, the method comprising:
receiving, via a communications network
communicatively coupled with the mobile
computing device, a group of buried asset data
points corresponding to a particular buried asset
sought by an operator of the mobile computing
device;
reading a predefined value pertaining to a width of
a buffer zone;
generating, based on the group of buried asset data
points, a two dimensional area comprising the
buffer zone at an above-surface location, wherein a
width of the buffer zone corresponds to the
predefined value, and wherein the buffer zone
corresponds to the particular buried asset;
iteratively executing the following four steps:
a) calculating an above-surface location of the
mobile computing device using spatial processes;
b) determining whether the above-surface location
of the mobile computing device is located within the
two dimensional area;
c) if the above-surface location is not located within
the two dimensional area, displaying a first graphic
in a display of the mobile computing device; and
d) if the above-surface location is located within the
two dimensional area, displaying a second graphic
in the display.
Id., col. 17, line 48, through col. 18, line 16 (emphases
added).
Metrotech, a competitor of UTTO’s, sells its RTK-Pro
locator device, which has a “walk back” feature. That
Case: 23-1435 Document: 46 Page: 4 Filed: 10/18/2024
4 UTTO INC. v. METROTECH CORP.
feature allows the device user to connect to a database and
retrieve one or more location points previously saved in
that database. When the user selects a point to “walk back”
to, the RTK-Pro, having information about its own location,
shows an arrow directing the user to that point. When the
user (holding the device) is within 10 feet of the point, the
screen shows a “zero-in” display that consists of a circle
centered around the point and a symbol representing the
user’s location in relation to the point. Once the user
reaches the center of the circle, the device confirms its
arrival at the walk-back point and displays the point’s
coordinates.
B
On March 25, 2022, UTTO brought the present action
against Metrotech, stating two counts in its complaint:
infringement of the ’441 patent and unfair competition.
UTTO also moved for a preliminary injunction. Metrotech
both opposed the motion for a preliminary injunction and
sought dismissal of UTTO’s complaint under Federal Rule
of Civil Procedure 12(b)(6) for failure to state a claim on
which relief could be granted. Before the district court
could rule on either motion, UTTO filed a First Amended
Complaint, alleging infringement and tortious interference
with prospective economic advantage, and Metrotech
sought dismissal of the new complaint.
On June 2, 2022, the district court denied the motion
for a preliminary injunction. UTTO Inc. v. Metrotech
Corp., No. 22-cv-01904-WHO, 2022 WL 1814145, at *6 (N.D. Cal. June 2, 2022) (UTTO Preliminary Injunction Denial). In relevant part, the court held that UTTO failed to show a likelihood of success on the merits of its infringement claim.Id.
at *3–5. In so concluding, the court
set forth the claim construction that is the issue on appeal
regarding the patent count of the complaint.
The court construed the claim language “group of
buried asset data points” in both the “receiving” and
Case: 23-1435 Document: 46 Page: 5 Filed: 10/18/2024
UTTO INC. v. METROTECH CORP. 5
“generating” limitations of claim 1 to require “two or more”
buried asset data points for each buried asset, adopting
that construction as reflecting the “ordinary and customary
meaning.” Id.at *3–4. The court acknowledged that the specification in two places refers to “one or more buried asset data points” for a given buried asset, but the court said that those references to the singular occur “[o]nly twice” and “neither supports the ordinary reading of the claim language itself.”Id. at *4
. “Moreover,” the court noted, “the figures showing the buffer zone generation (Figures 4A to 4G) all depict multiple data points.”Id.
The court also stated that it was not persuaded by UTTO’s argument that a relevant artisan “would understand [‘group of buried asset data points’] to ‘encompass one data point if that were all that existed.’”Id.
UTTO had contended that buried assets typically are power lines, water pipes, and telephone cables; that “it takes at least two points to define a line”; and that a relevant artisan would “understand the claim description to reflect that reality” and not to mean that the method did not work if there were only one data point.Id.
The court suggested that this argument was self-defeating because, “if it takes at least two points to define a line,” a relevant artisan would likely interpret the claim language “to mean more than one—in other words, ‘two or more.’”Id.
Because the ’441 patent requires the use of “multiple points” to generate a buffer zone and Metrotech’s “walk back feature requires only a single point,” the district court concluded, UTTO had not shown a likelihood of success on the merits of its infringement claim.Id.
On July 8, 2022, the district court dismissed UTTO’s
First Amended Complaint, while granting UTTO leave to
amend it. UTTO Inc. v. Metrotech Corp., No. 22-cv-01904-
WHO, 2022 WL 17968846, at *5 (N.D. Cal. July 8, 2022) (UTTO First Dismissal). As to patent infringement, the court determined that UTTO had not sufficiently pleaded facts about Metrotech’s product that could meet the “receiving” or “generating” limitations.Id.
at *3–4. For the Case: 23-1435 Document: 46 Page: 6 Filed: 10/18/2024 6 UTTO INC. v. METROTECH CORP. “receiving” limitation, the court relied on its claim construction from the UTTO Preliminary Injunction Denial, where it had construed “group of buried asset data points” to require two or more data points, and it concluded the amended complaint did not allege that Metrotech’s device receives two or more data points for a particular buried asset.Id. at *3
. For the “generating” limitation, the court drew the same conclusion.Id. at *4
. The court also dismissed UTTO’s claim of tortious interference with prospective economic advantage, concluding that UTTO had failed to allege several required elements of the tort.Id.
at *4–5.
UTTO then filed a Second Amended Complaint, which
Metrotech moved to dismiss under Rule 12(b)(6). On
October 4, 2022, the district court dismissed that
complaint, while again granting UTTO leave to amend.
UTTO Inc. v. Metrotech Corp., No. 22-cv-01904-WHO, 2022
WL 17968771, at *8 (N.D. Cal. Oct. 4, 2022) (UTTO Second Dismissal). As to patent infringement, the court ruled that UTTO had now plausibly alleged that the “receiving” limitation was met, based on a Metrotech video (which UTTO attached to its complaint) that plausibly showed a field technician retrieving multiple data points using Metrotech’s locator device.Id.
at *3–4. The court determined, however, that there still were no facts alleged that plausibly supported an inference that the “generating” limitation was met.Id. at *5
. As to the state-law count, the court held that UTTO had not adequately alleged two elements of its tort claim: that there was an economic relationship between UTTO and a third party with the probability of future economic benefit to UTTO,id. at *6
, and that Metrotech’s conduct was independently wrongful,id. at *7
.
In response to the second dismissal, UTTO filed a Third
Amended Complaint, and Metrotech moved to dismiss it.
On December 19, 2022, the district court dismissed UTTO’s
Third Amended Complaint—this time with prejudice.
Case: 23-1435 Document: 46 Page: 7 Filed: 10/18/2024
UTTO INC. v. METROTECH CORP. 7
UTTO Inc. v. Metrotech Corp., 646 F. Supp. 3d 1180, 1191 (N.D. Cal. 2022) (UTTO Final Dismissal). As to patent infringement, the court, following its claim construction from its preliminary injunction denial, agreed with Metrotech that “the buffer zone described in the generating limitation is only generated using multiple buried asset data points,” stating that the ’441 patent describes the generation of a buffer zone from “the ‘union’ of circular two- dimensional areas surrounding buried asset data points.”Id. at 1185
(emphasis added). After rejecting UTTO’s doctrine-of-equivalents argument (a rejection not challenged by UTTO in this appeal), the district court determined that “[t]he inherent problem with UTTO’s argument is that, as alleged, the walk back feature uses only one data point at a time and, as explained, the ’441 Patent requires the use of multiple data points to generate the buffer zone.”Id. at 1188
. “As a result,” the court concluded, “UTTO has not pleaded infringement, either directly or under the doctrine of equivalents.”Id.
As to the state-law count, the district court determined
that UTTO failed to state a claim of tortious interference
with prospective economic advantage. Id. at 1188–91. The
Third Amended Complaint makes the following
allegations: A third party, Honeywell, considering the
offering of locator services to its customers, expressed
interest in using UTTO’s software platform, possibly to run
on Metrotech’s hardware, for such an offering. J.A. 93–94
¶¶ 46–47. Starting in October 2021, UTTO engaged in
“continued negotiations,” “several follow-up telephone
calls,” and discussion of the terms of a possible software-
as-a-service agreement with Honeywell. J.A. 93 ¶ 46.
Representatives of UTTO, Honeywell, and Metrotech met
together on December 21, 2021, “at Honeywell’s urging to
see if Metrotech and UTTO could collaborate and whether
data retrieved by Metrotech’s physical devices could be
UTTO compliant.” J.A. 94 ¶ 47. According to UTTO, at the
meeting,
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8 UTTO INC. v. METROTECH CORP.
Mr. Burk [of Honeywell] asked if the Honeywell
data Metrotech was storing could be delivered in
a format that would work with the UTTO
software. As understood by UTTO and others
present, based on the conversations UTTO
subsequently had with Honeywell
representatives, Honeywell was aware that either
UTTO or Metrotech could convert the data into a
format that would work with UTTO’s software.
The inquiry was directed to whether converting
data would be a mechanical process involving
virtually no effort, or whether UTTO would have
to be involved. Mr. Drew, speaking for Metrotech,
said that it was not a question of whether
Metrotech could provide UTTO compliant data
and that of course it could, that Metrotech had
that covered, strongly suggesting that UTTO was
not necessary and that Metrotech knew how to
handle anything UTTO could in the way of
software. He said the question was whether
Metrotech was willing to provide the data to
UTTO and that, if it did, he would expect
Metrotech would charge Honeywell extra. . . . Ms.
O’Connor of Honeywell said, in words or
substance, “Isn’t that our data?” . . . Nevertheless,
Metrotech’s position was clear: Either Honeywell
would have to abandon plans to contract with
UTTO, or Honeywell would have to pay Metrotech
an increased price if it wanted to work with
UTTO, which Metrotech could determine as it
saw fit since it had possession of the data, and so
could it price UTTO out of the competition if it
wanted to.
J.A. 94–95 ¶ 51 (omitting sentences immaterial to
particular allegations now at issue on appeal). Mr. Drew,
however, “had no reasonable basis” for making the
Case: 23-1435 Document: 46 Page: 9 Filed: 10/18/2024
UTTO INC. v. METROTECH CORP. 9
assertion “that Metrotech had the transfer of UTTO-
compliant data ‘covered,’” because “within a day or so of the
December 21, 2021, meeting, [he] contacted [UTTO]
seeking to obtain various details about UTTO’s technical
specifications and features, and these discussions indicated
that Metrotech did not in fact have the level of software
expertise Metrotech wanted to lead Honeywell to believe it
had with regard to converting the data.” J.A. 95–96 ¶ 52.
Reviewing those allegations, the district court
dismissed the state-law count, without relying on one of the
grounds of insufficiency that it recited in its previous
dismissal—namely, that the asserted economic
relationship alleged to have been interfered with (with
Honeywell) was not sufficiently mature for purposes of this
tort. UTTO Final Dismissal, at 1189. The court noted that
UTTO had added allegations in the Third Amended
Complaint “that further support the existence of an
economic relationship between UTTO and Honeywell with
the probability of future economic benefit to UTTO,” but
the court did not determine whether this element of the
tort claim had now been adequately alleged. Id.Instead, the court concluded that UTTO had failed to plausibly allege that Metrotech’s conduct was independently wrongful, a required element of the asserted tort.Id.
The court entered a final judgment of dismissal with
prejudice on December 19, 2022. J.A. 1. UTTO timely
appealed. We have jurisdiction under 28 U.S.C.
§ 1295(a)(1).
II
UTTO challenges the district court’s adoption of the
construction of the “group” phrase—as requiring at least
two data points per buried asset—in granting the motion
to dismiss the patent count. Much more briefly, UTTO also
challenges the district court’s dismissal of its claim for
tortious interference with prospective economic advantage.
We address the two issues in turn.
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10 UTTO INC. v. METROTECH CORP.
We decide the propriety of the dismissals de novo,
following Ninth Circuit law, taking as true all well-pleaded
allegations of material fact and construing them in the
light most favorable to the nonmoving party. See
Sanderling Management Ltd. v. Snap Inc., 65 F.4th 698,
702(Fed. Cir. 2023); Puri v. Khalsa,844 F.3d 1152, 1157
(9th Cir. 2017). Substantively, the Supreme Court has directed a federal court’s inquiry under Rule 12(b)(6) to whether the factual allegations of the complaint are not merely consistent with but cross the line to support a plausible inference of liability under the invoked legal standard. See Ashcraft v. Iqbal,556 U.S. 662
, 678–80 (2009); Bell Atlantic Corp. v. Twombly,550 U.S. 544
, 555– 57, 570 (2007); In re Alphabet, Inc. Securities Litigation,1 F.4th 687, 698
(9th Cir. 2021); K-Tech Telecommunications, Inc. v. Time Warner Cable, Inc.,714 F.3d 1277
, 1282–83 (Fed. Cir. 2013). The proper claim construction and questions about intrinsic evidence are decided de novo, but “[s]ubsidiary fact-finding” based on extrinsic evidence is sometimes useful, and such fact-finding is “subject to appellate review for clear error.” ParkerVision, Inc. v. Qualcomm Inc., ___ F.4th ____,2024 WL 4094640
, at *10 (Fed. Cir. Sept. 6, 2024); see Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc.,574 U.S. 318
, 326–27, 331–33 (2015).
A
Regarding patent infringement, we agree in part with
UTTO. We do not agree that claim construction is
categorically forbidden at the Rule 12(b)(6) stage of a case.
But we agree that, in this case, additional analysis and
proceedings are needed to arrive at a proper construction.
1
UTTO argues that a district court may never engage in
claim construction in deciding a motion to dismiss. It relies
on portions of our opinion in Nalco Co. v. Chem-Mod, LLC,
883 F.3d 1337(Fed. Cir. 2018), in which we reversed a district court’s dismissal of patent-infringement claims as Case: 23-1435 Document: 46 Page: 11 Filed: 10/18/2024 UTTO INC. v. METROTECH CORP. 11 resting on a premature resolution of claim-construction disputes. One portion, which uses the familiar label for claim-construction proceedings based on Markman v. Westview Instruments, Inc.,517 U.S. 370
(1996), states:
Defendants’ objections to [plaintiff Nalco’s] theory
of infringement read like classic Markman
arguments. Defendants first take issue with
Nalco’s allegation that “coal combustion flue gas” is
“the gas that is created during the combustion of
coal.” But Defendants’ arguments boil down to
objections to Nalco’s proposed claim construction
for “flue gas,” a dispute not suitable for resolution
on a motion to dismiss.
Nalco, 883 F.3d at 1349 (emphasis added) (citation
omitted). Another portion states:
It is not appropriate to resolve these disputes, or to
determine whether the method claimed in the ’692
patent should be confined to the preferred
embodiment, on a Rule 12(b)(6) motion, without
the benefit of claim construction. The “purpose of
a motion to dismiss is to test the sufficiency of the
complaint, not to decide the merits.” Gibson v. City
of Chi., 910 F.2d 1510, 1520 (7th Cir. 1990)
(emphasis added) (citation omitted). The
plausibility standard “does not impose a
probability requirement at the pleading stage; it
simply calls for enough fact to raise a reasonable
expectation that discovery will reveal evidence” to
support the plaintiff ’s allegations. Twombly, 550
U.S. at 556 . . . .
Id. at 1350.
Those passages, we conclude, should not be read as
stating a categorical rule against a district court’s adoption
of a claim construction in adjudicating a motion to dismiss.
The passages do not in terms state such a rule. They are
readily understood to be drawing a conclusion about the
Case: 23-1435 Document: 46 Page: 12 Filed: 10/18/2024
12 UTTO INC. v. METROTECH CORP.
need for further proceedings to resolve the particular
claim-construction issues in that case before a sound
determination of the appropriateness of dismissal could be
reached. Nalco should be read in that case-specific way.
Doing so reflects the logical relationship of claim
construction to infringement and the normal function of
courts deciding whether to grant a Rule 12(b)(6) motion.
Adjudicating a claim of infringement generally requires a
two-step analysis: “[T]he court first determines the scope
and meaning of the claims asserted, and then the properly
construed claims are compared to the allegedly infringing
device (for an apparatus claim) or allegedly infringing act
(for a method claim).” Niazi Licensing Corp. v. St. Jude
Medical S.C., Inc., 30 F.4th 1339, 1350(Fed. Cir. 2022) (citing CommScope Technologies LLC v. Dali Wireless Inc.,10 F.4th 1289
, 1295 (Fed. Cir. 2021)). “The first step— claim construction—is a question of law we review de novo to the extent it is decided only on the intrinsic evidence.”Id. at 1351
(first citing Data Engine Technologies LLC v. Google LLC,10 F.4th 1375, 1380
(Fed. Cir. 2021); and then citing Teva, 574 U.S. at 331). In many cases, claim construction is properly done based on intrinsic evidence alone. See Teva, 574 U.S. at 331 (recognizing that claim construction “often requires the judge only to examine and to construe the document’s words without requiring the judge to resolve any underlying factual disputes”); Vitronics Corp. v. Conceptronic, Inc.,90 F.3d 1576, 1583
(Fed. Cir. 1996) (“In most situations, an analysis of the
intrinsic evidence alone will resolve any ambiguity in a
disputed claim term.”). Where 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).
UTTO’s proposed categorical rule would also be
inconsistent with our precedents. For example, in the
context of challenges to eligibility under 35 U.S.C. § 101, Case: 23-1435 Document: 46 Page: 13 Filed: 10/18/2024 UTTO INC. v. METROTECH CORP. 13 we have repeatedly approved the grant of a motion to dismiss a patent suit “when there are no factual allegations that, taken as true, prevent resolving the eligibility question as a matter of law.” Simio, LLC v. FlexSim Software Products, Inc.,983 F.3d 1353, 1359
(Fed. Cir. 2020) (quoting Aatrix Software, Inc. v. Green Shades Software, Inc.,882 F.3d 1121, 1125
(Fed. Cir. 2018)); see, e.g., Mobile Acuity Ltd. v. Blippar Ltd.,110 F.4th 1280
, 1289–90 (Fed. Cir. 2024); Aatrix,882 F.3d at 1125
(citing precedents). The application of eligibility standards depends on what is claimed—that is, on the meaning of the claims—and thus requires the court to interpret the claims. See, e.g., ChargePoint, Inc. v. SemaConnect, Inc.,920 F.3d 759
, 768–69 (Fed. Cir. 2019); Synopsys, Inc. v. Mentor Graphics Corp.,839 F.3d 1138, 1149
(Fed. Cir. 2016); see also Brumfield, Trustee for Ascent Trust v. IBG LLC,97 F.4th 854, 868
(Fed. Cir. 2024) (analyzing eligibility based on the “claims, understood in light of the specification”); Sequoia Technology, LLC v. Dell, Inc.,66 F.4th 1317, 1320
,
1323–26 (Fed. Cir. 2023) (reversing ineligibility ruling
based on reversal of claim construction).
As to the scope of necessary proceedings: We have
explained that a tribunal need not construe all claim terms
whose meaning is in dispute, but may limit itself to those
terms whose meaning must be determined to adjudicate
the matter in issue, such as infringement or invalidity. See
Realtime Data, LLC v. Iancu, 912 F.3d 1368, 1375 (Fed. Cir. 2019); Vivid Technologies, Inc. v. American Science & Engineering, Inc.,200 F.3d 795, 803
(Fed. Cir. 1999). In addition, we have said that district courts have “wide latitude in how they conduct the proceedings before them,” including claim-construction proceedings. Ballard Medical Products v. Allegiance Healthcare Corp.,268 F.3d 1352, 1358
(Fed. Cir. 2001). “[S]ome courts have found it useful to hold hearings and issue orders comprehensively construing the claims in issue,” but “[s]uch a procedure is not always necessary.”Id.
“As long as the trial court construes the claims to the extent necessary to determine Case: 23-1435 Document: 46 Page: 14 Filed: 10/18/2024 14 UTTO INC. v. METROTECH CORP. whether the accused device infringes, the court may approach the task in any way that it deems best.”Id.
Similarly, in the § 101 context, we have explained: “If there are claim construction disputes at the Rule 12(b)(6) stage, we have held that either the court must proceed by adopting the non-moving party’s constructions, or the court must resolve the disputes to whatever extent is needed to conduct the § 101 analysis, which may well be less than a full, formal claim construction.” Aatrix,882 F.3d at 1125
(citations omitted) (citing Genetic Technologies Ltd. v. Merial L.L.C.,818 F.3d 1369, 1373
(Fed. Cir. 2016)). And in challenges on appeal, we have repeatedly faulted the appellant for not having “explained how it might benefit from any particular term’s construction.” Simio,983 F.3d at 1365
; see also Mobile Acuity, 110 F.4th at 1293–94; Trinity Info Media, LLC v. Covalent, Inc.,72 F.4th 1355, 1361
(Fed. Cir. 2023); Electronic Communication Technologies, LLC v. ShoppersChoice.com, LLC,958 F.3d 1178
, 1183–84 (Fed. Cir. 2020); Cleveland Clinic Foundation v. True Health Diagnostics LLC,859 F.3d 1352, 1360
(Fed. Cir. 2017). Finally, while recognizing that “extrinsic evidence and expert testimony can help to educate the court concerning the invention and the knowledge of persons of skill in the field of the invention, even as we have cautioned against undue reliance on experts,” we have said that “[t]he decision as to the need for and use of experts is within the sound discretion of the district court.” Inpro II Licensing, S.A.R.L. v. T-Mobile USA, Inc.,450 F.3d 1350, 1357
(Fed. Cir. 2006) (citation omitted) (citing Key Pharmaceuticals v. Hercon Laboratories Corp.,161 F.3d 709, 716
(Fed. Cir. 1998)).
The foregoing authorities make clear that 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
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UTTO INC. v. METROTECH CORP. 15
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. Nalco does not establish a
rigid rule in place of the practical, case-specific inquiry.
2
In this case, we conclude, fuller claim-construction
proceedings and analysis are needed than were provided in
and by the district court. The claim limitation at issue is
“generating, based on the group of buried asset data points,
a two dimensional area comprising the buffer zone.” ’441
patent, col. 17, lines 58–59. The language, “the group of
buried asset data points” (emphasis added), refers back to
the claim limitation, “receiving . . . a group of buried asset
data points corresponding to a particular buried asset
sought by an operator of the mobile computing device.” Id.,
lines 51–55. The issue in dispute is whether “a group of
buried asset data points corresponding to a particular
buried asset” must consist of at least two data points. The
district court gave an affirmative answer in denying the
preliminary injunction and did not change that answer in
its rulings on the three dismissal motions. We conclude
that the analysis supporting that answer is inadequate.
As a threshold matter, we see no forfeiture of the
opportunity to present additional claim-construction
analysis and evidence and no missing explanation of how
additional proceedings could matter to the result. In its
Third Amended Complaint, UTTO alleged that “[a] ‘group’
in the mathematical or computing sense of the word could
refer to a single set of data upon which operations are
performed.” J.A. 91 ¶ 32. In opposing dismissal of the
Third Amended Complaint, UTTO indicated its intent to
present additional materials for claim construction at an
upcoming proceeding pursuant to the established schedule
for claim construction (which the district court did not
abrogate or alter): “Particularly since the claim
construction hearing is scheduled to take place in a month,
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16 UTTO INC. v. METROTECH CORP.
UTTO respectfully urges that the Court avoid premising
its ruling on Metrotech’s claim construction until all the
relevant claim construction evidence is considered.” J.A.
158–59. By that point, UTTO and Metrotech had already
filed a joint claim-construction and prehearing statement.
See UTTO Inc. v. Metrotech Corp., No. 22-cv-01904-WHO
(N.D. Cal. Oct. 24, 2022), ECF No. 40; J.A. 75. In it, UTTO
pointed to several pieces of extrinsic evidence that it sought
to present at further proceedings, including encyclopedia
articles on “group theory” and “group,” the testimony of its
founder, and the testimony and report of an expert. Id. at
2–4. Subsequently—and before the district court ruled on
the final motion to dismiss—UTTO also filed an opening
claim-construction brief elaborating on its legal arguments
and extrinsic evidence. UTTO Inc. v. Metrotech Corp., No.
22-cv-01904-WHO (N.D. Cal. Dec. 8, 2022), ECF No. 59;
J.A. 76. And there was never doubt in the district court
that the correctness of the “at least two” construction was
crucial to the district court’s basis for dismissing the patent
count of the complaint.
On the merits, the basic framework for claim
construction is familiar. “We generally give words of a
claim their ordinary meaning in the context of the claim
and the whole patent document; [and] the specification
particularly, but also the prosecution history, informs the
determination of claim meaning in context, including by
resolving ambiguities”; but “even if the meaning is plain on
the face of the claim language, the patentee can, by acting
with sufficient clarity, disclaim such a plain meaning or
prescribe a special definition.” K-fee System GmbH v.
Nespresso USA, Inc., 89 F.4th 915, 919(Fed. Cir. 2023) (alteration in original) (first quoting World Class Technology Corp. v. Ormco Corp.,769 F.3d 1120, 1123
(Fed. Cir. 2014); and then citing Personalized Media Communications, LLC v. Apple Inc.,952 F.3d 1336
, 1339– 40 (Fed. Cir. 2020)); see also Phillips v. AWH Corp.,415 F.3d 1303
, 1312–17 (Fed. Cir. 2005) (en banc); Thorner v.
Sony Computer Entertainment America LLC, 669 F.3d
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UTTO INC. v. METROTECH CORP. 17
1362, 1365 (Fed. Cir. 2012). Within that framework, we see
several issues relevant to a proper claim construction that
would significantly benefit from fuller exploration by the
parties and the district court.
We have previously exercised our discretion not to
resolve a claim-construction dispute ourselves, but instead
to remand for further proceedings on the dispute, where
“[t]here has been insufficient exploration in the record,
both here and in the district court, of too many questions of
apparent relevance to identifying a proper construction of
the limitation.” Frans Nooren Afdichtingssystemen B.V. v.
Stopaq Amcorr Inc., 744 F.3d 715, 721(Fed. Cir. 2014) (first citing Halliburton Energy Services, Inc. v. M-I LLC,514 F.3d 1244, 1251
(Fed. Cir. 2008); and then citing MeadWestVaco Corp. v. Rexam Beauty and Closures, Inc.,731 F.3d 1258
, 1270 n.8 (Fed. Cir. 2013)). We explained
that those questions “would be better addressed initially by
more focused analysis—and, if necessary, more focused
record development—on remand.” Id. at 722. This is such
a case. We flag the issues, leaving for remand the needed
additional examination of the case-specific materials and
of governing claim-construction precedents.
The 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. And
even aside from that possibility, which we do not explore
further, there are reasons for more analysis before deciding
whether the phrase should be assigned the two-or-more
meaning.
For one thing, the claim language does not appear to be
the kind of language that has so “plain” a univocal meaning
that to give it a contrary construction would require
meeting the high standard of redefinition or clear
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18 UTTO INC. v. METROTECH CORP.
disclaimer. See K-fee, 89 F.4th at 919. Otherwise, speaking of a “group of one or more” would be not just unusual but flatly impermissible as English because it would be self- contradictory—like (say) “pair of one or more.” Yet it does not seem to have that character. See IEX Corp. v. Blue Pumpkin Software, Inc.,122 F. App’x 458, 465
(Fed. Cir. 2005) (using phrase “group of one or more agents” without noting linguistic impropriety); cf. AlterWAN, Inc. v. Amazon.com, Inc.,63 F.4th 18, 19
(Fed. Cir. 2023) (same for
term “set”; involving a claim limitation of “a set of one or
more” items) (emphasis added).
Relatedly, to the extent that “group of [plural term]”
shares the character of plurals, the proper meaning is
presumptive, but only presumptive—the specification not
having to rise to the level of redefinition or disclaimer to
overcome the presumed “two or more” meaning. In
accordance with ordinary and customary meaning, we have
stated that “we presume a plural term refers to two or more
items,” but “[t]hat presumption can be overcome when the
broader context shows a different meaning applies.” Apple
Inc. v. MPH Technologies Oy, 28 F.4th 254, 261–62 (Fed. Cir. 2022) (citing Leggett & Platt, Inc. v. Hickory Springs Manufacturing Co.,285 F.3d 1353, 1357
(Fed. Cir. 2002)). “[I]n context, the plural can describe a universe ranging from one to some higher number, rather than requiring more than one item.” Versa Corp. v. Ag-Bag International Ltd.,392 F.3d 1325, 1330
(Fed. Cir. 2004). If the plural
expression “buried asset data points” inside the claim
expression “group of buried asset data points” can mean
“one or more buried asset data points,” the claim
expression would refer to “group of one or more buried
asset data points”—which, as noted above, seems
linguistically permissible though unusual. Thus, the
analysis of the claim term’s proper meaning must go
beyond a conclusion about the “ordinary and customary
meaning” of the words. UTTO Preliminary Injunction
Denial, at *3 (“The claim does not mention ‘one or more’
data points, or ‘a’ data point. It describes a ‘group’ of ‘data
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UTTO INC. v. METROTECH CORP. 19
points,’ plural. The ordinary and customary meaning
indicates that more than one data point is necessary to
create the buffer zone.”). The specification must play a
central role in arriving at a proper construction here, as it
generally does. See, e.g., Phillips, 415 F.3d at 1315–17.1
When we turn to the specification of the ’441 patent, we
see seeming support for UTTO’s proposed claim
construction as including one or more. Two passages
mention the use of the claimed method in conjunction with
“one or more” buried asset data points. First, in discussing
how various types of data for a buried asset may be
generated and stored in a database, the specification states
that the database “may store one or more records for each
buried asset, and each record may include one or more
buried asset data points.” ’441 patent, col. 5, lines 58–66.
Second, the specification states that, “[b]ased on the data
[that the locator device] has received and calculated, [the
locator device] calculates one or more buried asset data
points . . . for the target buried asset.” Id., col. 9, line 67,
through col. 10, line 2. We add that, in a third passage
(cited by Metrotech but warranting more attention than so
far given by the parties), the specification seemingly
describes a single-point-based buffer zone (as well as a
multi-point-based one): It says that Figure 4C “shows that
a circular two-dimensional area comprising a buffer zone
has been created around each buried asset data point,
wherein the union of all of the circular two-dimensional
areas comprises the buffer zone around the buried asset
data points.” ’441 patent, col. 12, lines 16–20. The first
clause seems to treat the area defined by the circle around
a single point as a buffer zone (and the union of such buffer
zones as itself a buffer zone).
1 The parties have not presented arguments to us
focused on prosecution history as illuminating claim scope.
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20 UTTO INC. v. METROTECH CORP.
The foregoing passages require close scrutiny. On their
face, they seem to lend support to the idea that the
invention described covers a technician’s use of a single
circular buffer zone around a single data point
corresponding to a utility line—perhaps when the
technician cares about only a small area, e.g., immediately
abutting a house, not a large area extending along the line.
The passages may illuminate the proper claim
interpretation, including by identifying the invention’s
“purpose.” See, e.g., Honeywell International, Inc. v. United
States, 609 F.3d 1292, 1302(Fed. Cir. 2010) (relying on patent-disclosed “purpose”); Altiris, Inc. v. Symantec Corp.,318 F.3d 1363, 1371
(Fed. Cir. 2003) (same); Minnesota Mining & Manufacturing Co. v. Johnson & Johnson Orthopaedics, Inc.,976 F.2d 1559
, 1566–67 (Fed. Cir. 1992)
(same).
The district court, in its preliminary-injunction
decision, stated that “[o]nly twice” does the specification
refer to the use of “one or more buried asset data points”
and that “neither [reference] supports the ordinary reading
of the claim language itself.” UTTO Preliminary
Injunction Denial, at *4. But it is not clear why twice is
not enough to support what may be a permissible, if
unusual and non-presumptive, meaning of the expression.
The court also said that “the figures showing the buffer
zone generation (Figures 4A to 4G) all depict multiple data
points.” Id.That is true, but the court’s statement does not assert that the figures depict only buffer zones based on more than one data point, and the above-quoted specification passage from col. 12, lines 16–20, seemingly does describe a “buffer zone” (in Figure 4C) as based on a single data point (along with a broader buffer zone based on more than one data point). More broadly, the specification never uses “the present invention requires” or similarly limiting language when referring to depicted embodiments; in fact, it appears to be meticulous in describing embodiments as mere examples. See ’441 patent, col. 3, lines 48–57; see, e.g.,id.,
col. 11, lines 32, 65;
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UTTO INC. v. METROTECH CORP. 21
col. 12, lines 1, 23, 32, 55, 64–65; col. 13, line 23; col. 14,
lines 16, 66.
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. See,
e.g., Inpro II Licensing, 450 F.3d at 1357. Here, for example (not necessarily only), extrinsic evidence may help to assess Metrotech’s argument that there is no indication that the ’441 patent allows the operator to turn off the functions performed on data points and then to work with only a “portion” of the data points retrieved. Metrotech Response Br. at 26–27. UTTO has alleged, including in its Third Amended Complaint, that its invention does work with one data point. J.A. 87 ¶ 19 (alleging that the ’441 patent can work with a “portion” of the data points retrieved and “can operate on each data point retrieved individually”). That assertion is a non-conclusory factual one under the standards governing Rule 12(b)(6), Twombly,550 U.S. at 555
, but to the extent it bears on claim construction, the
district judge may adjudicate its correctness through
adequate proceedings and must decide what role it should
play in drawing the ultimate legal conclusion of the proper
claim construction, see Teva, 574 U.S. at 331–33.
We vacate the district court’s dismissal of UTTO’s
infringement claim and remand for further claim-
construction proceedings. We do not here decide whether
the district court’s claim construction is correct.
B
A claim for intentional interference with prospective
economic advantage under California law requires a
showing of the following elements: “(1) an economic
relationship between the plaintiff and some third party,
with the probability of future economic benefit to the
plaintiff; (2) the defendant’s knowledge of the relationship;
(3) intentional acts on the part of the defendant designed
to disrupt the relationship; (4) actual disruption of the
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22 UTTO INC. v. METROTECH CORP.
relationship; and (5) economic harm to the plaintiff
proximately caused by the acts of the defendant.” Korea
Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134,
1153,63 P.3d 937, 950
(2003) (quoting Westside Center Associates v. Safeway Stores 23, Inc.,42 Cal. App. 4th 507
, 521–522,49 Cal. Rptr. 2d 793, 802
(1996)). In addition, the plaintiff must show that “the defendant’s conduct was ‘wrongful by some legal measure other than the fact of interference itself.’”Id.
(quoting Della Penna v. Toyota Motor Sales, U.S.A., Inc.,11 Cal. 4th 376, 393
,902 P.2d 740, 751
(1995)). The district court dismissed the Third
Amended Complaint because it determined that UTTO had
failed to plead that Metrotech’s conduct was independently
wrongful. UTTO Final Dismissal, at 1189–91.
On appeal, UTTO argues that Metrotech’s conduct was
independently wrongful in two respects: Metrotech
unlawfully tied its relocating software product to its
hardware product, and Metrotech fraudulently
misrepresented its software capabilities. UTTO Opening
Br. at 24–26. We conclude that UTTO’s brief assertions on
appeal on this issue are insufficient to support disturbing
the district court’s dismissal.
With respect to tying: UTTO argues that it “alleged
that the relocating software market consisted of two
participants, UTTO and Metrotech, and that Metrotech
had been eliminating its sole competitor from that market
by tying Metrotech’s hardware product to Metrotech’s
relocating software and the ‘Walk Back’ feature.” Id. at 25.
The only legal authority that UTTO cites in support of this
argument in its opening brief is a portion of a Ninth Circuit
case where the court discusses a tie that is unlawful under
a modified per se rule. Id. at 25–26 (citing Epic Games, Inc.
v. Apple, Inc., 67 F.4th 946, 982(9th Cir. 2023), cert. denied,144 S. Ct. 681
(2024), and cert. denied,144 S. Ct. 682
(2024)); see also Jefferson Parish Hospital District No. 2 v. Hyde,466 U.S. 2, 12
(1984), abrogated on other grounds by
Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U.S.
Case: 23-1435 Document: 46 Page: 23 Filed: 10/18/2024
UTTO INC. v. METROTECH CORP. 23
28 (2006). Accordingly, we construe UTTO’s contention to
be that Metrotech has tied its product in a way that is per
se unlawful (as opposed to a tie that is unlawful under a
Rule of Reason analysis).2
To state a claim for a tie that is per se unlawful, a
plaintiff must adequately allege, among other things, that
the defendant has market power in the tying-product
market. See Epic Games, 67 F.4th at 997. Here, UTTO is
asserting that the hardware market is the tying-product
market and the software market is the tied-product
market. UTTO Opening Br. at 25. But, although UTTO
has alleged facts supporting an inference that Metrotech
has market power in the software market, i.e., the tied-
product market, J.A. 94 ¶ 50, it has failed to allege that
Metrotech has market power in the hardware market, i.e.,
the tying-product market. That deficiency is enough to
hold that tying has not been adequately alleged, though
there may well also be other deficiencies—such as,
perhaps, the absence of an allegation of a Metrotech policy
beyond the dealing with one customer described by UTTO.
J.A. 93–97 ¶¶ 44–58.
With respect to the alleged fraud: UTTO asserts that it
alleged that Metrotech “made false representations about
its [software] capabilities” to disrupt UTTO and
Honeywell’s dealings. UTTO Opening Br. at 24–25; see J.A.
94–96 ¶¶ 51–55. The sole basis for the allegation is that
Metrotech’s representative assertedly stated during the
December 21, 2021 meeting with Honeywell and UTTO
that “it was not a question of whether Metrotech could
2UTTO adds a “see also” citation to Epic’s reference to
an “incipient violation of an antitrust law,” 67 F.4th at
1000, but there is no developed argument on the point, so we disregard it. See Game and Technology Co., Ltd. v. Wargaming Group Ltd.,942 F.3d 1343
, 1350–51 (Fed. Cir.
2019).
Case: 23-1435 Document: 46 Page: 24 Filed: 10/18/2024
24 UTTO INC. v. METROTECH CORP.
provide UTTO compliant data and that of course it could,
that Metrotech had that covered,” J.A. 94–95 ¶ 51, yet the
same Metrotech representative called UTTO within a day
or so of the December 21, 2021 meeting asking for “various
details about UTTO’s technical specifications and
features,” J.A. 95–96 ¶ 52. On that basis alone, UTTO
alleges that Metrotech made “false and misleading
statements about its software capabilities,” J.A. 96 ¶ 55,
violating the prohibition against fraudulent business acts
or practices under California’s Unfair Competition Law,
California Business & Professions Code § 17200. Id.;
UTTO Opening Br. at 26.
We agree with the district court’s conclusion that this
allegation is insufficient to escape dismissal. UTTO has
not stated facts that spell out a plausible allegation that
Metrotech’s statement was fraudulent under the Unfair
Competition Law. A follow-up communication to ask for
technical specifications before converting data does not
allow the drawing of a reasonable inference that Metrotech
would not be able to provide the data in a compliant format,
once it had the knowledge of UTTO’s technical
specifications—which a follow-up call was the first step in
acquiring. In other words, UTTO has not alleged facts that
would “nudge[] [its] claims across the line from conceivable
to plausible.” Twombly, 550 U.S. at 570; see alsoid. at 557
(discussing “[t]he need at the pleading stage for allegations
plausibly suggesting (not merely consistent with)” the
alleged violation of law).
We therefore discern no reversible error in the district
court’s dismissal of UTTO’s state-law claim.
III
We vacate the district court’s dismissal of the claim of
patent infringement and remand for further proceedings
consistent with this opinion. We affirm the district court’s
dismissal of the claim of tortious interference with
prospective economic advantage.
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UTTO INC. v. METROTECH CORP. 25
The parties shall bear their own costs.
VACATED IN PART, AFFIRMED IN PART, AND
REMANDED