SML Intelligent Inventory Solutions LLC v. ADASA Inc

1. Case Identification

• Case #: IPR2025-00125
• Patent #: 9,798,967
• Filed: November 1, 2024
• Petitioner(s): SML Intelligent Inventory Solutions LLC and SML (USA) Inc.
• Patent Owner(s): ADASA, Inc.
• Challenged Claims: 1-20

2. Patent Overview

• Title: RFID Transponders with Unique Object Class Instance Numbers
• Brief Description: The ’967 patent relates to Radio Frequency Identification (RFID) transponders and methods for commissioning them. The core inventive concept is a method for generating unique serial numbers by subdividing a serial number space into sectors defined by a limited number of most significant bits (MSBs), allowing encoders to operate semi-autonomously without constant connection to a central database.

3. Grounds for Unpatentability

Ground 1A: Obviousness over IBM200 and Kuhno - Claims 1, 6-8, 10-12, and 20 are obvious over IBM200 in view of Kuhno.

• Prior Art Relied Upon: IBM200 (Patent 7,827,200) and Kuhno (Patent 7,857,221).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that IBM200 taught a system for managing the serialization of Electronic Product Codes (EPCs) on RFID tags, including allocating blocks of serial numbers to different manufacturer divisions to ensure uniqueness. While IBM200 disclosed the basic structure of an RFID tag with an object class and serial number space, it lacked a specific bit-level implementation for decentralized number allocation. Petitioner asserted that Kuhno supplied this missing element by teaching the subdivision of a serial number space at the bit level. Specifically, Kuhno disclosed partitioning a binary serial number into a fixed, more-significant portion (e.g., for production date and line) and a less-significant, incrementing portion, thereby defining a pre-authorized block of numbers with a fixed MSB prefix.
  • Motivation to Combine: A Person of Ordinary Skill in the Art (POSITA) starting with IBM200’s goal of efficiently managing unique serial numbers across multiple facilities would combine it with Kuhno’s method for practical implementation. Kuhno provided a known technique to further subdivide IBM200’s allocated blocks at the bit level, enabling the inclusion of useful metadata (like production line) and facilitating decentralized encoding, a recognized advantage in supply chain management.
  • Expectation of Success: Petitioner contended that because both IBM200 and Kuhno operated in the same field of RFID and EPC encoding, a POSITA would have had a reasonable expectation of success in combining Kuhno’s bit-level partitioning scheme with IBM200’s system of allocating number blocks, as it was a predictable application of known data management techniques.

Ground 2A: Obviousness over Bowers, Tilson, and TDS - Claims 1-8, 11-20 are obvious over Bowers in view of Tilson and TDS.

• Prior Art Relied Upon: Bowers (Patent 6,025,780), Tilson (Patent 7,777,628), and TDS (EPCglobal Tag Data Standards Version 1.3, Mar. 2006).
• Core Argument for this Ground:
  • Prior Art Mapping: Petitioner argued that Bowers taught allocating predefined sets of RFID tags and stressed the importance of avoiding serial number duplication across different entities, such as retail chains. To achieve this, a POSITA would turn to Tilson, which taught a concrete method for preventing duplication by partitioning a serial number space into MSBs identifying an entity (e.g., a manufacturer code) and LSBs identifying the specific item. To ensure industry compatibility, this combined system would be implemented using the TDS standard, which provided the widely adopted Gen2 data structure for RFID tags, including the claimed object class and serial number spaces.
  • Motivation to Combine: A POSITA seeking to implement the anti-duplication goal of Bowers would combine it with Tilson’s explicit MSB-partitioning technique as a known and reliable solution. The further motivation to incorporate TDS was to ensure the resulting RFID tag complied with the prevailing industry standard (Gen2), making the product interoperable and commercially viable.
  • Expectation of Success: Petitioner asserted that combining these references was a predictable convergence of solutions. Integrating Tilson’s entity-identification method into Bowers’ system and structuring the data according to the TDS standard would have been a straightforward design choice for a POSITA with a high expectation of success.
• Additional Grounds: Petitioner asserted additional obviousness challenges based on combinations of IBM200/Kuhno and Bowers/Tilson/TDS with other references. These grounds primarily added teachings from TDS, Nitzan (Patent 7,394,382), and Forster (Patent 7,571,862) to address specific limitations in dependent claims related to EPC data formats, polymer-based chips, and face stock materials, respectively.

4. Key Claim Construction Positions

• "an allocated block of serial numbers": Petitioner proposed this term be construed as "a pre-authorized range of binary serial numbers." This construction was based on intrinsic evidence, particularly arguments made during reexamination distinguishing the patent’s binary, MSB-based assignment from prior art methods that allocated ranges of decimal numbers.
• "uniquely corresponding": Petitioner proposed adopting the term's plain and ordinary meaning, consistent with a prior judicial interpretation that the term connotes a one-to-one correspondence. This means for any given set of MSBs, there is exactly one corresponding block of serial numbers, and vice versa.

5. Key Technical Contentions (Beyond Claim Construction)

• Petitioner’s central technical contention was that hierarchical, bit-level partitioning of a fixed-length identifier was a fundamental concept well-known to a POSITA before the invention. The petition cited analogous systems like IP address subnetting (where bits are borrowed from the Host ID to create a Network ID) and computer memory allocation (where MSBs identify a memory block and LSBs identify an offset) as evidence that applying this principle to RFID serial numbers was merely a predictable application of a known technique.

6. Arguments Regarding Discretionary Denial

• Petitioner argued against discretionary denial under both 35 U.S.C. § 325(d) and § 314(a).
• § 325(d): Petitioner contended that denial was improper because the U.S. Patent and Trademark Office had never considered the patentability of the claims over the specific combinations asserted in the petition. While some individual references (like IBM200 and TDS) were considered during reexamination, the key prior art references providing the motivation and bit-level partitioning teachings (Kuhno and Tilson) were not, meaning the core of the asserted grounds was new.
• § 314(a) (Fintiv/General Plastic): Petitioner argued that it had no involvement with the only other IPR filed against the ’967 patent or any prior litigation. Therefore, Petitioner asserted that General Plastic Factor 1 (whether the same petitioner previously filed a petition against the same claims) strongly favored institution and outweighed the other factors.

7. Relief Requested

• Petitioner requests institution of an inter partes review and cancellation of claims 1-20 of the ’967 patent as unpatentable.