DCT
1:24-cv-06102
ADASA Inc v. R Pac Intl LLC
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: ADASA Inc. (Oregon)
- Defendant: R-PAC INTERNATIONAL LLC (New York)
- Plaintiff’s Counsel: Pinilis Halpern; Friedman Suder & Cooke
- Case Identification: 1:24-cv-06102, S.D.N.Y., 08/12/2024
- Venue Allegations: Venue is alleged to be proper in the Southern District of New York based on Defendant R-Pac Intl LLC maintaining its global headquarters and principal place of business within the district.
- Core Dispute: Plaintiff alleges that Defendant’s radio frequency identification (RFID) tags and related encoding systems infringe a patent concerning a data structure designed to ensure the uniqueness of serial numbers without requiring a constant connection to a central database.
- Technical Context: The technology relates to item-level RFID tagging, a foundational component of modern supply chain management and retail inventory systems, used for tracking individual products.
- Key Procedural History: The patent-in-suit, U.S. Patent No. 9,798,967, was previously the subject of an ex parte reexamination proceeding, which confirmed the patentability of all claims. The patent was also successfully asserted in prior litigation against Avery Dennison Corporation, which resulted in a jury verdict of infringement, a finding of patent eligibility under 35 U.S.C. § 101 that was affirmed by the Federal Circuit, and a final judgment reportedly exceeding $88 million.
Case Timeline
| Date | Event |
|---|---|
| 2005-08-19 | '967 Patent Priority Date |
| 2017-10-24 | '967 Patent Issue Date |
| 2017-11-29 | '967 Patent Reexamination Requested |
| 2018-07-30 | '967 Patent Reexamination Certificate Issued |
| 2024-04-24 | Alleged Date of Pre-Suit Notice to Defendant |
| 2024-08-12 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
- Patent Identification: U.S. Patent No. 9,798,967 ("the '967 Patent"), titled "SYSTEMS, METHODS, AND DEVICES FOR COMMISSIONING WIRELESS SENSORS", issued on October 24, 2017.
The Invention Explained
- Problem Addressed: The patent addresses the challenge of generating globally unique serial numbers for RFID tags across disparate manufacturing and distribution locations, which traditionally required constant communication with a central database to avoid duplication, creating inefficiencies and potential points of failure (Compl. ¶13; ’967 Patent, col. 2:21-31).
- The Patented Solution: The invention proposes a specific data structure within the memory of an RFID tag. It partitions the standard serial number field into two parts: a fixed sequence of "most significant bits" (MSBs) and a sequence of remaining, variable bits. The MSB sequence acts as a prefix, uniquely identifying a block of serial numbers allocated to a specific manufacturer, location, or encoder. This allows for decentralized, "on-demand" encoding of unique tags without needing to query a central server for each tag (Compl. ¶15-17; ’967 Patent, col. 8:12-36).
- Technical Importance: This method enhances the scalability and reliability of RFID systems by enabling parallel, independent encoding operations across a global supply chain, reducing reliance on network connectivity and central server performance (Compl. ¶25-26).
Key Claims at a Glance
- The complaint asserts at least claim 1 of the ’967 Patent, which was amended during reexamination (Compl. ¶66).
- The essential elements of independent claim 1 are:
- An RFID transponder with a substrate, an antenna, and an electrically coupled integrated circuit (IC) chip.
- The IC chip is encoded with a unique object number, which itself comprises an object class information space and a unique serial number space.
- The unique serial number space is encoded with a serial number instance from an allocated block of serial numbers, where the block is assigned a limited number of most significant bits (MSBs).
- The unique serial number space is composed of the limited number of MSBs that "uniquely correspond" to the allocated block, combined with remaining bits of lesser significance, which together form the single serial number instance.
- The complaint's prayer for relief seeks a judgment of infringement on "one or more claims," reserving the right to assert additional claims (Compl. ¶91.a).
III. The Accused Instrumentality
Product Identification
The accused instrumentalities are Defendant RPac's encoded RFID tag products and the associated systems and services for encoding them. This includes tags encoded at RPac's "Service Bureau" locations as well as tags encoded by customers using RPac's "in-plant" printer and encoder solutions (Compl. ¶40, ¶46-47). The products are described as incorporating inlays from various manufacturers into finished labels or hangtags (Compl. ¶41). A visual in the complaint defines the basic components of such a tag, including the chip, antenna, and substrate (Compl. p. 13).
Functionality and Market Context
- RPac provides RFID solutions for item-level tagging to major retailers and brand owners, including Walmart (Compl. ¶39, ¶53).
- The accused functionality is managed by RPac’s proprietary "r-trac" system, a web-based platform for managing the generation and encoding of unique Electronic Product Codes (EPCs) onto RFID tags (Compl. ¶46-47).
- The complaint alleges that RPac's system is responsible for generating unique EPCs for tags encoded at its own facilities and for tags encoded at customer locations, touting its ability to guarantee "no duplicate serialization" (Compl. ¶47).
IV. Analysis of Infringement Allegations
The complaint alleges that RPac's RFID tags, particularly those supplied to customers like Walmart, infringe at least claim 1 of the ’967 Patent by implementing the claimed data structure within the tag's memory.
- Claim Chart Summary:
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| An RFID transponder comprising: a substrate; an antenna structure formed on the substrate; and an RFID integrated circuit chip which is electrically coupled to the antenna structure, | RPac sells encoded RFID tags that include an inlay comprising an antenna and an integrated circuit chip affixed to a substrate material. | ¶41 | col. 5:3-10 |
| wherein the RFID integrated circuit chip is encoded with a unique object number, the unique object number comprising an object class information space and a unique serial number space, | RPac encodes the accused RFID tags with an Electronic Product Code (EPC) that contains an object class information space and a unique serial number space. | ¶49 | col. 9:8-14 |
| wherein the unique serial number space is encoded with one serial number instance from an allocated block of serial numbers, the allocated block being assigned a limited number of most significant bits, | For certain customers, RPac allegedly uses a fixed number of most significant bits (MSBs) within the serial number space, which correspond to a block of serial numbers allocated to a specific encoder. | ¶50 | col. 8:3-16 |
| wherein the unique serial number space comprises the limited number of most significant bits uniquely corresponding to the limited number of most significant bits of the allocated block and of remaining bits of lesser significance that together comprise the one serial number instance. | The complaint alleges RPac uses a static sequence of MSBs (e.g., 18 bits) followed by a sequence of lesser significant bits (e.g., 20 bits) to form a complete, unique serial number. A table in the complaint shows scraped data with a fixed 18-bit prefix and variable trailing bits (Compl. p. 21). A separate visual shows RPac describing its use of a 3-bit prefix ("110") to identify its tags (Compl. p. 23). | ¶51, ¶56-59, ¶62-63 | col. 8:12-31 |
- Identified Points of Contention:
- Factual Question: The central dispute appears to be factual: does RPac's "r-trac" system encode RFID tags using the specific MSB-partitioning structure claimed by the patent? The complaint presents circumstantial evidence from scanned tags in Walmart stores, where RPac is one of several approved suppliers (Compl. ¶54, ¶60). The strength of the infringement case may depend on Plaintiff's ability to definitively link this data to RPac's specific products.
- Scope Question: The claim term "uniquely corresponding," which was added during reexamination, may become a point of contention. The question for the court would be whether the alleged use of a static MSB prefix to identify a specific block of numbers satisfies the meaning of this term, or if a more complex relationship is required by the claim language.
V. Key Claim Terms for Construction
- The Term: "uniquely corresponding"
- Context and Importance: This term was added to claim 1 during reexamination, replacing the word "comprises." Its interpretation is critical because it defines the required relationship between the MSBs and the "allocated block of serial numbers." Practitioners may focus on this term because amendments made during reexamination often become focal points for non-infringement arguments.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The complaint alleges that the reexamination amendments were "clarifying" and "non-substantive" (Compl. ¶21). Plaintiff may argue that the term simply requires a one-to-one mapping, where a given MSB prefix is exclusively associated with a specific block of serial numbers. This interpretation aligns with the patent’s overall goal of using MSBs to create distinct "sectors" in the serial number space to enable decentralized encoding ('967 Patent, col. 8:12-16).
- Evidence for a Narrower Interpretation: Defendant may argue that "uniquely corresponding" requires more than the presence of a static prefix. Since the specification does not explicitly define this phrase, arguments could be made that it implies a more dynamic or functional relationship. However, such arguments would need to overcome the patent's clear description of partitioning the serial number space using a subset of bits, which is consistent with the infringement theory presented in the complaint.
VI. Other Allegations
- Indirect Infringement: The complaint alleges both induced and contributory infringement.
- Inducement: The complaint alleges RPac induces its customers to infringe by providing them with encoding hardware, software (the "r-trac" platform), and training with the knowledge and intent that they will create infringing tags (Compl. ¶83).
- Contributory Infringement: The complaint alleges RPac provides its customers with unique object numbers (EPCs) generated by its U.S.-based servers, which are alleged to be a material component specially made for creating infringing tags and not a staple article of commerce (Compl. ¶77-79).
- Willful Infringement: Willfulness is alleged based on two theories of knowledge. First, Plaintiff alleges providing direct notice via a letter on April 24, 2024 (Compl. ¶87). Second, the complaint alleges RPac was aware of or willfully blind to the risk of infringement due to the widely publicized prior litigation against Avery Dennison involving the same patent (Compl. ¶88, ¶90).
VII. Analyst’s Conclusion: Key Questions for the Case
- A central issue will be one of evidentiary linkage: Can the Plaintiff prove that the RFID tags exhibiting the allegedly infringing data structure were, in fact, made or encoded by the Defendant, RPac, as opposed to other approved suppliers for retailers like Walmart? The outcome may turn on the sufficiency of the tag-scanning data and other discovery to establish this connection.
- A key legal question will be one of claim construction: How will the court interpret the scope of the term "uniquely corresponding," which was added during reexamination? The resolution of this issue will determine whether the accused data structure—a static MSB prefix followed by a variable serial number—falls within the boundaries of the asserted claim.
- A significant factual question will relate to willfulness: Given the extensive and public litigation history of the '967 Patent, the court will likely examine what RPac knew about the patent and when. The analysis will focus on whether RPac's alleged conduct was objectively reckless in light of the prior Avery Dennison verdict and the direct notice alleged by the Plaintiff.