Fresh From the Bench: Latest Federal Circuit Court Case

CASE OF THE WEEK

ADASA Inc. v. Avery Dennison Corporation, Appeal No. 2022-1092 (Fed. Cir. Dec. 16, 2022)

In the Federal Circuit’s only precedential opinion this week, the Court considered issues arising from infringement litigation concerning appellee ADASA’s U.S. Patent No. 9,798,967 (the ’967 patent), which is directed to systems and methods for encoding radio-frequency identification (RFID) tags. Following a $26.6 million jury verdict in ADASA’s favor, Avery Dennison appealed the district court’s orders (1) granting summary judgment that claim 1 of the ’967 patent was directed to patent-eligible subject matter under 35 U.S.C. § 101 and valid under §§ 102 and 103; (2) denying Avery Dennison’s motion for a new trial, on the basis that the district court had improperly excluded certain damages evidence and testimony and improperly instructed the jury on damages; and (3) imposing $20 million in discovery sanctions under Fed. R. Civ. P. 37(c)(1). The Federal Circuit affirmed the district court’s ruling on patent eligibility under § 101, reversed its ruling on anticipation and obviousness, affirmed its denial of a new trial, vacated the sanctions award, and remanded for further proceedings.

Claim 1 of the ’967 patent was the only claim at issue on appeal, and claims RFID tags encoded with serial numbers subdivided into a data field comprising a series of “most significant bits” “uniquely corresponding” to an allocated block of serial numbers authorized by a central commissioning authority, and remaining bits comprising a unique serial number for the RFID. The ’967 patent discloses that this subdivision helps ensure the uniqueness of RFID serial numbers when a continuous connection to a central commissioning authority may be unavailable, as the pre-authorized allocated blocks of serial numbers may be utilized by remote manufacturers or manufacturing lines to ensure uniqueness of each complete serial number without each RFID needing to be authorized by the commissioning authority.