DCT
6:17-cv-00287
ADASA Inc v. Avery Dennison Corp
Key Events
Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: ADASA Inc. (Oregon)
- Defendant: AVERY DENNISON CORPORATION (Delaware)
- Plaintiff’s Counsel: Harris Bricken; Friedman, Suder & Cooke
- Case Identification: 6:17-cv-00287, D. Or., 02/21/2017
- Venue Allegations: Plaintiff alleges venue is proper in the District of Oregon because Defendant Avery Dennison has established continuous and systematic contacts with Oregon, conducts business there, and has committed acts of infringement in the district. Specifically, the complaint notes that Avery Dennison's Retail Branding and Information Solutions headquarters, which includes its retail RFID business, is located in Beaverton, Oregon.
- Core Dispute: Plaintiff alleges that Defendant’s encoded RFID tags and labels, and the services used to create them, infringe a patent related to ensuring the uniqueness of serial numbers in RFID systems.
- Technical Context: The lawsuit concerns the technical standards for encoding Radio Frequency Identification (RFID) tags, which are widely used for tracking individual items in retail and supply chain management.
- Key Procedural History: The complaint alleges that after the patent’s inventor, Clarke McAllister, filed for patent protection, the RFID industry began widely implementing the patented idea, including through what became known as the "multi-vendor chip-based serialization" (MCS) agreement. This suggests a potential dispute over whether the accused practices were independently developed or derived from the patented invention.
Case Timeline
| Date | Event |
|---|---|
| 2005-08-19 | '805 Patent Priority Date |
| 2016-03-01 | U.S. Patent No. 9,272,805 Issued |
| 2017-02-21 | Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 9,272,805 - "SYSTEMS, METHODS, AND DEVICES FOR COMMISSIONING WIRELESS SENSORS"
- Patent Identification: U.S. Patent No. 9,272,805, "SYSTEMS, METHODS, AND DEVICES FOR COMMISSIONING WIRELESS SENSORS," issued March 1, 2016 (the "’805 Patent").
The Invention Explained
- Problem Addressed: In large-scale supply chains, RFID tags for items of the same type (e.g., a specific brand of shirt) are often encoded by different machines at different locations. The patent’s background section and the complaint identify the challenge of ensuring that each item receives a globally unique serial number to avoid duplication when there is no central, real-time database coordinating all the encoders (Compl. ¶12; ’805 Patent, col. 2:17-28).
- The Patented Solution: The invention proposes a method for structuring the data within an RFID tag’s memory. It divides the serial number field into two parts: a small, fixed block of the "most significant bits" and a larger block of the remaining bits. An "external numbering authority" assigns a unique value for the most significant bits to a specific encoder or location. That encoder can then freely assign serial numbers using the remaining bits, confident that its tags will not conflict with tags created by other encoders who have been assigned different "most significant bits" (Compl. ¶13-14; ’805 Patent, col. 8:56-68). This creates a hierarchical system for generating unique numbers without constant network connectivity.
- Technical Importance: This approach enables quasi-autonomous, decentralized commissioning of RFID tags, which is critical for efficient, high-volume manufacturing and logistics across a distributed supply chain (Compl. ¶14; ’805 Patent, col. 3:55-65).
Key Claims at a Glance
- The complaint asserts independent claim 1 and dependent claims 2, 4, 5, and 6 (Compl. ¶19).
- Independent Claim 1 requires:
- An RFID transponder comprising a substrate, an antenna, and an RFID 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 has an "allocated block" stored in it, where this block is defined by a limited number of the "most significant bits" of that serial number space.
- This allocated block is designated by an "external numbering authority."
III. The Accused Instrumentality
Product Identification
- The accused instrumentalities are encoded RFID tags and labels that Avery Dennison "makes, encodes, sells, and offers to sell" to its customers, as well as the services for producing them, such as "AVERY DENNISON's RFID Ticket Express Service Bureau" (Compl. ¶18-20).
Functionality and Market Context
- The complaint alleges that Avery Dennison, acting as a third-party encoder, creates RFID tags for brand owners. These tags are encoded with an Electronic Product Code (EPC) that includes a unique serial number (Compl. ¶21). The core of the infringement allegation is that to ensure uniqueness, "a block of the most significant bits of the memory structure of the serial number space is allocated to the encoder by the brand owner and/or by agreement between the brand owner and AVERY DENNISON" (Compl. ¶21). This allocated block allegedly provides distinguishing information, such as identifying Avery Dennison as the authorized encoder or specifying a particular location or machine (Compl. ¶22).
IV. Analysis of Infringement Allegations
No probative visual evidence provided in complaint.
'805 Patent Infringement Allegations
| 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, | Avery Dennison makes, encodes, and sells RFID tags and labels, which are RFID transponders comprising a substrate, an antenna, and an RFID IC chip. | ¶20 | col. 35:43-46 |
| 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, and | Avery Dennison encodes the RFID tags with an Electronic Product Code (EPC) having a unique serial number for a specific object class. | ¶21 | col. 35:47-50 |
| wherein the unique serial number space has an allocated block stored therein defined by a limited number of most significant bits of the unique serial number space | Avery Dennison encodes the tags such that "a block of the most significant bits of the memory structure of the serial number space is allocated to the encoder... to ensure the uniqueness of the serial number." | ¶21 | col. 35:51-53 |
| as designated by an external numbering authority. | The block of most significant bits is allocated to Avery Dennison "by the brand owner and/or by agreement between the brand owner and AVERY DENNISON." | ¶21 | col. 35:54 |
- Identified Points of Contention:
- Scope Questions: A central dispute may concern the term "external numbering authority". The complaint alleges the brand owner (Avery Dennison's customer) performs this role. The court will need to determine if a brand owner, who itself operates under the authority of a standards body like GS1, qualifies as an "external numbering authority" with respect to its own vendor (the encoder), as the patent requires.
- Technical Questions: The case may turn on evidence demonstrating how Avery Dennison's encoding process actually works. Does its system partition the serial number bits and dedicate the most significant bits to an "allocated block" for ensuring uniqueness, or does it use other methods to avoid duplication that fall outside the patent's claims? The complaint's allegation of allocation "by agreement" raises the question of whether a contractual arrangement is sufficient to meet the claim limitation of an "allocated block stored therein."
V. Key Claim Terms for Construction
The Term: "external numbering authority"
Context and Importance: This term is critical because the infringement theory hinges on the brand owner (Defendant's customer) qualifying as this entity. The definition will determine whether the alleged conduct—receiving a block of numbers from a customer for encoding—falls within the scope of the claim.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent describes authority being "passed down in a hierarchical manner to member companies" from a central authority like GS1, and that these companies can "further allocate numbers from its upper level database to as many lower database levels as it deems necessary" (’805 Patent, col. 8:49-54). This could support Plaintiff’s view that a brand owner can act as an "external numbering authority" relative to its own vendors.
- Evidence for a Narrower Interpretation: The patent repeatedly refers to GS1 as "a central authority" (’805 Patent, col. 8:46-47). A defendant might argue that the term is limited to such top-level standards bodies, not downstream commercial entities like brand owners.
The Term: "allocated block stored therein"
Context and Importance: Practitioners may focus on this term because the infringement allegation relies on an "allocation" that occurs by agreement between the defendant and its customer. The construction will determine whether this requires a specific data structure to be formally written into the tag's memory or if a more functional or contractual allocation suffices.
Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent describes the allocation functionally, as a way to "subdivide the entire object class serial number space into sectors" that can be managed by different encoders (’805 Patent, col. 8:65-68). This language focuses on the purpose of the allocation, which may support a broader interpretation not tied to a specific implementation.
- Evidence for a Narrower Interpretation: The patent specification, particularly Figure 14 and the accompanying text, describes the allocated block in database-like terms, with a "starting number," a "block size," and an index representing "how much of the block has been used" (’805 Patent, col. 9:1-5). This could support a narrower definition requiring a more formal, structured data element.
VI. Other Allegations
- Indirect Infringement: The complaint focuses on direct infringement under 35 U.S.C. § 271(a) (Compl. ¶18-19). It does not plead specific facts to support claims for induced or contributory infringement, such as allegations of specific intent or the provision of a non-staple component.
- Willful Infringement: The complaint does not contain an explicit allegation of willful infringement. It requests that the court declare the case "exceptional" and award attorney's fees under 35 U.S.C. § 285, but it does not plead the factual predicates for willfulness, such as pre-suit knowledge of the patent (Compl. ¶e, p.8).
VII. Analyst’s Conclusion: Key Questions for the Case
The resolution of this case will likely depend on the court's answers to two central questions:
- A core issue will be one of definitional scope: can the term "external numbering authority", as used in the patent, be construed to cover a brand owner who allocates a block of serial numbers to its own third-party encoding vendor, or is the term limited to a top-level standards body?
- A key evidentiary question will be one of technical implementation: what evidence will show that Avery Dennison's accused encoding services utilize a memory structure with an "allocated block" defined by the "most significant bits" of the serial number space, as required by the claim, versus other potential methods for generating unique serial numbers?