DCT
6:17-cv-01685
ADASA Inc v. Avery Dennison Corp
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: ADASA Inc (Oregon)
- Defendant: Avery Dennison Corp CORPORATION (Delaware)
- Plaintiff’s Counsel: Innovative Law Group; Friedman Suder & Cooke
- Case Identification: 6:17-cv-01685, D. Or., 02/15/2019
- Venue Allegations: Venue is alleged to be proper in the District of Oregon based on Defendant maintaining a "regular and established place of business" in Beaverton, Oregon, specifically its Retail Branding and Information Solutions business, and having committed alleged acts of infringement in the district.
- Core Dispute: Plaintiff alleges that Defendant’s encoded Radio Frequency Identification (RFID) tags and labels infringe a patent directed to a method of structuring serial numbers to ensure global uniqueness without requiring a real-time connection to a central database.
- Technical Context: The lawsuit concerns foundational technology for item-level tracking in supply chains, where assigning a unique identifier to every individual product is critical for logistics and inventory management.
- Key Procedural History: The patent-in-suit was the subject of an ex parte reexamination requested by the Defendant. The U.S. Patent and Trademark Office issued a Reexamination Certificate confirming that all claims of the patent are patentable, a factor that may be relevant to the patent's presumption of validity.
Case Timeline
| Date | Event |
|---|---|
| 2005-08-19 | ’967 Patent Priority Date |
| 2017-10-06 | Defendant allegedly received notice of infringement via letter |
| 2017-10-24 | ’967 Patent Issued |
| 2017-11-29 | Defendant filed ex parte reexamination request |
| 2018-07-30 | Reexamination Certificate for ’967 Patent Issued |
| 2019-02-15 | First 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's background section describes the challenge of efficiently generating globally unique serial numbers for RFID tags, which is "imperative... for EPCglobal RFID tagging implementations" (Compl. ¶13; ’967 Patent, col. 2:21-24). Prior art methods often required each encoding location to communicate with a central database to receive a number, a process that could be slow and inefficient, especially in distributed manufacturing environments (’967 Patent, col. 2:25-31).
- The Patented Solution: The invention claims to solve this problem by defining a specific data structure for the serial number on an RFID chip. The total serial number space (e.g., 38 bits in the SGTIN-96 standard) is subdivided into sectors defined by a "limited number of... Most Significant Bits" (MSBs) (’967 Patent, col. 8:12-16). A central authority can pre-allocate a unique block of serial numbers to a specific encoder simply by assigning it a unique set of MSBs. That encoder can then autonomously generate globally unique serial numbers by varying the remaining "lesser significance" bits within its assigned block, eliminating the need for real-time database connectivity (Compl. ¶¶15-16; ’967 Patent, col. 8:5-30).
- Technical Importance: This decentralized approach allows for "point-of-use and on-demand commissioning of RFID transponders," which is critical for the high-volume, reliable deployment of RFID technology in complex supply chains (’967 Patent, col. 3:26-32).
Key Claims at a Glance
- The complaint asserts infringement of claims 1-6, 8, and 10-15 (Compl. ¶20). Independent claim 1 is central to the dispute.
- The essential elements of independent claim 1 (as amended by the Reexamination Certificate) are:
- An RFID transponder comprising: a substrate; an antenna structure on the substrate; and an RFID integrated circuit (IC) chip coupled to the antenna.
- The 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 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 MSBs of the allocated block, plus remaining bits of lesser significance that together form the serial number instance.
- The complaint asserts dependent claims but does not specify a basis for their infringement distinct from that of claim 1.
III. The Accused Instrumentality
Product Identification
The accused instrumentalities are "EPC Class 1, Generation 2 UHF RFID tags and labels" that are made, encoded, sold, or imported by Defendant, including numerous specific product inlays such as AD-160u7 and AD-171m5 (Compl. ¶¶20-21).
Functionality and Market Context
The complaint alleges that Defendant’s "RFID Ticket Express Service Bureau" encodes these RFID tags for its customers, which include brand owners, manufacturers, and retailers (Compl. ¶20). The accused functionality is the specific act of encoding the tags with an Electronic Product Code (EPC) according to the allegedly infringing structure. This encoding is performed pursuant to GS1 standards and in accordance with specifications from brand owners or as delegated to the Defendant (Compl. ¶21). The complaint alleges that the accused tags are encoded in an EPC SGTIN-96 binary format, which uses a 38-bit serial number space (Compl. ¶23).
IV. Analysis of Infringement Allegations
The complaint alleges that Defendant's encoding process directly infringes the '967 Patent by creating an RFID tag with the claimed data structure. The complaint provides a diagram illustrating the standard SGTIN-96 structure, highlighting the "Serial" number portion that is the focus of the patent (Compl. p. 6).
’967 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... | Defendant makes, encodes, and sells RFID tags and labels which are RFID transponders comprising a substrate, antenna, and an RFID IC chip. | ¶21 | col. 6:1-10 |
| ...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... | The accused tags are encoded with an EPC, which has an object class information space and a unique serial number space. | ¶22 | col. 8:12-24 |
| ...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... | A block of serial numbers is allegedly allocated to the encoder, and a limited number of most significant bits (e.g., 18 bits) of the serial number space is fixed to correspond to this allocated block. A visual example of this structure is provided in the complaint (Compl. p. 10). | ¶¶22, 23 | col. 8:5-16 |
| ...wherein the unique serial number space comprises the limited number of most significant bits uniquely corresponding to...the allocated block and of remaining bits of lesser significance that together comprise the one serial number instance. | The 38-bit serial number space in the accused tags allegedly comprises the fixed most significant bits (e.g., 18 bits) and remaining "varied least significant bits" (e.g., 20 bits), which are encoded with a unique number from within the allocated block. | ¶¶22, 23 | col. 8:16-30 |
Identified Points of Contention
- Factual Question: The primary dispute appears to be factual. The complaint alleges, "upon information and belief," that Defendant's internal encoding process involves fixing MSBs to correspond to a pre-allocated block (Compl. ¶¶22, 24). A key question for the court will be what evidence, likely obtained through discovery, shows that Defendant's systems "actually operate" this way, as opposed to reaching a similar result through a different, non-infringing method. The complaint's evidence is based on analysis of "scanned RFID tags" (Compl. ¶23).
- Technical Question: Can Plaintiff demonstrate that the observed pattern of fixed bits on scanned tags is a direct result of the claimed process of "assigning" a limited number of MSBs to an "allocated block," or could Defendant argue the pattern arises from other technical constraints or an alternative numbering methodology?
V. Key Claim Terms for Construction
- The Term: "allocated block of serial numbers"
- Context and Importance: This term is foundational to the invention's concept of decentralized encoding. Infringement requires proving that the accused fixed bits correspond to such a "block." Practitioners may focus on this term because Defendant could argue that its encoding system does not formally "allocate blocks" in the manner described by the patent, even if the encoded output appears structured.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification discusses passing authority down a "hierarchical manner" from a central authority to member companies, who can "further allocate numbers from its upper level database to as many lower database levels as it deems necessary." This language may support a broad definition of "allocation" as any partitioning of a number space for use by a subordinate entity (’967 Patent, col. 7:60-8:4).
- Evidence for a Narrower Interpretation: Figure 14 of the patent depicts a "Serial Number Database" with tables containing explicit "Start" numbers and "Remaining" counts for blocks of different bit-lengths. This could support a narrower construction requiring a more formal, database-driven method of defining and tracking allocated blocks (’967 Patent, Fig. 14, col. 9:15-23).
VI. Other Allegations
- Indirect Infringement: The complaint does not include a separate count for indirect infringement. The allegations center on Defendant's own actions of making, encoding, and selling the accused products as direct infringement (Compl. ¶¶19-20).
- Willful Infringement: The complaint alleges that Defendant had pre-suit knowledge of the ’967 Patent as of October 6, 2017, based on a letter sent to its counsel (Compl. ¶26). This allegation forms the basis for a potential claim of willful infringement for any infringing conduct after that date.
VII. Analyst’s Conclusion: Key Questions for the Case
- A central issue will be one of evidentiary proof: Can Plaintiff, through discovery, produce direct evidence that Defendant's internal encoding software and processes perform the claimed steps of "assigning a limited number of most significant bits" to an "allocated block," or will the case depend on inferring this process from the output structure of the accused tags?
- The case may also hinge on claim construction: What level of formality is required for a "block" of numbers to be "allocated"? The court will need to determine whether the term requires an explicit, defined partitioning scheme within the accused system, or if an observable, consistent pattern of fixed bits in the final product is sufficient to meet the limitation.
- A significant procedural dynamic will be the impact of reexamination: How will the fact that the patent-in-suit survived a reexamination initiated by Defendant affect the litigation? This prior confirmation of the claims' patentability by the USPTO may raise the bar for Defendant's invalidity defenses at trial.