DCT
6:17-cv-01685
ADASA Inc v. Avery Dennison Corp
Key Events
Amended Complaint
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: ADASA Inc. (Oregon)
- Defendant: AVERY DENNISON CORPORATION (Delaware)
- Plaintiff’s Counsel: Innovative Law Group; Friedman, Suder & Cooke
- Case Identification: 6:17-cv-01685, D. Or., 10/02/2019
- Venue Allegations: Plaintiff alleges venue is proper in the District of Oregon because Defendant maintains a regular and established place of business in Beaverton, Oregon, which includes its retail RFID business, and has committed alleged acts of infringement in the district.
- Core Dispute: Plaintiff alleges that Defendant’s RFID tags, labels, and associated encoding systems infringe a patent related to methods for ensuring the uniqueness of RFID serial numbers in a decentralized manner.
- Technical Context: The lawsuit concerns Radio Frequency Identification (RFID) technology used for item-level tracking in supply chains, where unique Electronic Product Codes (EPCs) are critical for avoiding data collisions and ensuring accurate inventory management.
- Key Procedural History: The patent-in-suit was the subject of an ex parte reexamination requested by Defendant Avery Dennison. On July 30, 2018, the U.S. Patent and Trademark Office issued a Reexamination Certificate, confirming the patentability of all claims as amended during the proceeding, which may influence subsequent claim construction and validity arguments. Plaintiff alleges it provided Defendant with actual notice of infringement via a letter on October 6, 2017.
Case Timeline
| Date | Event |
|---|---|
| 2008-05-21 | ’967 Patent Priority Date |
| 2017-10-06 | Plaintiff allegedly sent letter notifying Defendant of infringement |
| 2017-10-24 | U.S. Patent No. 9,798,967 Issued |
| 2017-11-29 | Defendant filed request for ex parte reexamination of the ’967 Patent |
| 2018-07-30 | Reexamination Certificate for the ’967 Patent Issued |
| 2019-10-02 | Second Amended Complaint Filed |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 9,798,967 - SYSTEMS, METHODS, AND DEVICES FOR COMMISSIONING WIRELESS SENSORS
The Invention Explained
- Problem Addressed: The patent addresses the challenge of efficiently generating globally unique serial numbers for millions of RFID tags that are encoded at numerous, distributed locations (e.g., different factories or distribution centers) (Compl. ¶14). Traditional methods that require each encoder to query a central database in real-time to obtain a unique number can create network delays and operational bottlenecks, hindering large-scale RFID adoption (’967 Patent, col. 4:1-13).
- The Patented Solution: The invention discloses a "quasi-autonomous" method for managing serial numbers without constant database connectivity. It proposes subdividing the entire available serial number space (e.g., the 38-bit serial number field in the SGTIN-96 standard) into large sectors defined by a "limited number of most significant bits" (MSBs) (’967 Patent, col. 8:12-16). A central authority pre-allocates these large "blocks" of numbers to individual encoders. Each encoder can then independently and rapidly generate millions of unique serial numbers within its assigned block by iterating through the "lesser significant bits," thereby avoiding the need for real-time network requests (’967 Patent, col. 8:4-12, 23-31).
- Technical Importance: This approach facilitates the scalable, high-volume, and decentralized commissioning of RFID tags, a key requirement for widespread adoption in complex global supply chains (Compl. ¶10).
Key Claims at a Glance
- The complaint asserts infringement of at least independent claim 1 and dependent claims 2-6 and 12-15 (Compl. ¶21).
- Independent Claim 1 (as amended in reexamination) requires an RFID transponder with an integrated circuit chip encoded with a unique object number, which comprises:
- an object class information space and a unique serial number space;
- the unique serial number space is encoded with one serial number instance from an allocated block of serial numbers;
- the allocated block is assigned a limited number of most significant bits;
- 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
- remaining bits of lesser significance that together comprise the one serial number instance.
- The complaint reserves the right to assert additional claims (Compl. ¶21).
III. The Accused Instrumentality
Product Identification
The accused instrumentalities are "EPC Class 1, Generation 2 UHF RFID tags and labels" that Defendant Avery Dennison makes, encodes, sells, and offers for sale (Compl. ¶21). The complaint identifies specific product lines by their inlay models (e.g., AD-160u7, AD-227m5) (Compl. ¶22). The infringement allegations also extend to Defendant's encoding services, including its "RFID Ticket Express Service Bureaus" and "In-Plant Printing Systems ('IPPS')" (Compl. ¶21, 27).
Functionality and Market Context
The complaint alleges that Defendant encodes these RFID tags with an Electronic Product Code (EPC) in a binary SGTIN-96 format (Compl. ¶24). The core accused functionality is the method used to structure the serial number within that EPC. The complaint asserts that Defendant partitions the 38-bit serial number space by fixing a set of "most significant bits" to correspond to a block of serial numbers allocated to an encoder, while the remaining "lesser significance" bits are varied to create unique identifiers for individual items (Compl. ¶¶23-24). The complaint includes a diagram illustrating the structure of an EPC SGTIN-96, highlighting the distinct "Serial" number section (Compl. p. 6, "A typical EPC SGTIN-96 Structure:"). These encoded tags are sold to customers like brand owners and retailers for item-level tracking and inventory management (Compl. ¶21).
IV. Analysis of Infringement Allegations
’967 Patent Infringement Allegations
| Claim Element (from Independent Claim 1, as amended) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| An RFID transponder comprising: a substrate; an antenna structure...; and an RFID integrated circuit chip... | Defendant makes, encodes, and sells RFID tags and labels that are RFID transponders comprising a substrate, an antenna, and an RFID IC chip. | ¶22 | 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 | Defendant encodes the RFID tags with an EPC, which is a unique object number. The EPC is encoded as a binary encoding having an object class information space and a unique serial number space. | ¶23 | col. 8:17-23 |
| 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 | The complaint alleges a block of serial numbers is allocated to the encoder by the brand owner or by agreement, and that this block is defined by a limited number of most significant bits of the serial number space. | ¶23 | col. 8:4-9 |
| 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 the 38-bit serial number is composed of a fixed set of most significant bits (e.g., 18 bits) corresponding to the allocated block, and remaining "varied least significant bits" that form the rest of the unique serial number. An example of this partitioned bit structure is provided as a visual in the complaint (Compl. ¶24). | ¶23-24 | col. 8:23-31 |
Identified Points of Contention
- Scope Questions: A central question may be whether Defendant's method of using a fixed prefix for customer tags constitutes assigning an "allocated block of serial numbers" as that term is used in the patent. The patent frames this concept as a delegation of "quasi-autonomous... encoding authority" from a higher level in a hierarchy (e.g., a brand owner) to a lower level (e.g., an encoder) (’967 Patent, col. 8:4-9). The dispute may focus on whether the accused system involves such a delegation of authority or merely follows a standard data formatting convention.
- Technical Questions: The complaint alleges that the allocation of serial number blocks occurs "by the brand owner and/or by agreement between the brand owner and AVERY DENNISON" (Compl. ¶23). A key factual question will be what evidence supports this specific allegation of an agreement or delegation, as opposed to an alternative explanation where the serial number structure is an inherent feature of an industry standard or a default schema proposed by Defendant without a specific "allocation" of a number block from the customer.
V. Key Claim Terms for Construction
The Term: "allocated block of serial numbers"
- Context and Importance: This term is the conceptual core of the asserted claims. The patent's claimed solution to the problem of decentralized encoding hinges on pre-"allocating" a "block" of numbers. The infringement analysis will depend on whether Defendant's actions are found to meet this definition. Practitioners may focus on this term because the outcome could determine whether applying a standard prefix to a range of serial numbers falls within the patent's scope.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The patent states that "large pre-authorized blocks of serial numbers are made available to [an] encoder" and that subdividing the serial number space is a "preferred method of providing pre-authorized blocks" (’967 Patent, col. 8:7-12). This could support a construction where any system that reserves a range of numbers for an encoder by using a fixed prefix meets the "allocated block" limitation.
- Evidence for a Narrower Interpretation: The specification describes the allocation in terms of a hierarchy of "authority" being passed down from a central source like GS1 to member companies, and then further down (’967 Patent, col. 7:60-65; col. 8:31-36). This language may support a narrower construction requiring a formal delegation of numbering authority, not just the technical use of a prefix.
The Term: "most significant bits"
- Context and Importance: This term defines the mechanism by which the "allocated block" is created. Its construction will clarify how the partitioning of the serial number space must be performed to infringe.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The term itself has a well-understood meaning in computer science as the bits in a binary number with the largest value. This plain meaning could support a broad interpretation covering any bits at the beginning of the serial number string used to define a range.
- Evidence for a Narrower Interpretation: The patent provides a specific example: "the upper 14 bits could be designated as the most significant bits for a particular embodiment," creating 16,384 "sectors" (’967 Patent, col. 8:23-26). This example, tied to the purpose of creating distinct sectors for allocation, could support a narrower construction requiring the bits to be used specifically for this partitioning and allocation function. The amended claim language tying the MSBs in the final serial number "uniquely" to the MSBs "of the allocated block" further reinforces this functional link.
VI. Other Allegations
Indirect Infringement
The complaint alleges induced infringement under § 271(b), asserting that Defendant sells the accused RFID tags knowing they are especially designed for infringing uses like item-level tracking (Compl. ¶39). It is alleged that Defendant instructs customers on this use, advertises its benefits, and sells RFID readers for this purpose (Compl. ¶¶37-38). The complaint also alleges contributory infringement under § 271(c) and infringement under § 271(f) for supplying data files from the U.S. for combination into infringing tags abroad (Compl. ¶¶36, 42).
Willful Infringement
The complaint alleges Defendant had actual notice of the ’967 Patent and its infringement at least as of October 6, 2017, from a letter sent in connection with prior litigation (Compl. ¶45). The complaint alleges that infringement continued after this date, after the filing of the original complaint in the litigation, and after Defendant itself initiated the reexamination proceeding, which may be argued as evidence supporting willfulness (Compl. ¶45).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of definitional scope: can the patent’s concept of an "allocated block of serial numbers," which is described in the context of a "quasi-autonomous" delegation of encoding "authority," be construed to cover the defendant's practice of applying a fixed prefix to serialize RFID tags for its customers?
- A central evidentiary question will be one of intent and practice: does the evidence show that Defendant's partitioning of the serial number space is a deliberate implementation of the patented method for decentralized management, or is it an incidental result of adhering to industry data formats (like SGTIN-96) that was adopted without reference to the patent's teachings on allocating authority?