The US Court of Appeals for the Federal Circuit reversed a district court’s grant of dismissal as the pleading stage, concluding that the district court inappropriately engaged in claim construction at the pleading stage. Nalco Co. v. Chem-Mod, LLC, Case No. 17-1038 (Fed. Cir., Feb. 27, 2018) (O’Malley, J).

Nalco owns a patent directed to a method for removing mercury, a toxic pollutant, from the flue gas of coal-fired power plants. The claimed method involves reacting halogens (chlorine or bromine) with mercury in flue gas in order to form solid mercury-containing particles that can be filtered from the gas. Because halogens have corrosive properties, however, they cannot be inserted directly into the flue gas. Instead, the Nalco patent claims require injecting into the flue gas a halogen precursor, which will turn into the desired halogen at the high temperatures in the flue. The patent describes a preferred embodiment where the halogen precursor is directly injected into the flue gas downstream of the combustion zone.

Nalco filed a patent infringement lawsuit against Chem-Mod alleging the “Chem-Mod Solution” infringed the patent’s claims. Nalco’s first complaint alleged that the Chem-Mod Solution uses halogen precursors and meets the “injecting” step by adding these precursors directly to the coal before the coal is fed into the combustion zone. Chem-Mod moved to dismiss, and the district court granted the motion, finding that the Chem-Mod Solution differed from the claims of the patent based on when it is applied (before the coal is burned versus after) and how it is applied (to cold coal versus flue gas).

Nalco amended its complaint four separate times to add details regarding the Chem-Mod Solution and further explain its theory that the Chem-Mod Solution involved “injecting . . . into said flue gas.” Nalco’s amended complaint also alleged that the claims did not restrict when, where or how the injecting step is performed. Each time, the district court found that the amended complaint did not adequately plead that the Chem-Mod Solution met the claimed “injecting” step. Eventually, the district court dismissed the fourth amended complaint with prejudice. Nalco appealed.

On appeal, Nalco argued that the district court implicitly construed the term “injecting” to be limited to the first time the halogen precursor is mixed, thereby equating the place of mixing with the site of “injection.” Nalco thus argued that the ultimate resolution of the infringement claims depends on claim construction. The Federal Circuit agreed, finding that Nalco’s complaint plausibly pleaded infringement and that Chem-Mod’s arguments “read like classic Markman arguments” and “boil down to objections to Nalco’s proposed claim construction . . . a dispute not suitable for resolution on a motion to dismiss.” Thus, the Federal Circuit reversed the dismissal of Nalco’s claims and remanded.