Adasa Inc. v. Avery Dennison Corporation

Filing 68

Opinion and Order. The claims in this action are construed as discussed in this Opinion and Order. Signed on 1/22/2019 by Magistrate Judge Thomas M. Coffin. (plb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

ADASA INC.,
Plaintiff,
v.

6:17-cv-O1685-TC
Opinion and Order

AVERY DENNISON CORPORATION,
Defendant.
This is a patent action in which this court has full consent.
Presently before the court is the construction of the claims.
There have been no filings of motions for summary judgment at this
point in the litigation.

1 - OPINION AND ORDER

FACTUAL BACKGROUND
Plaintiff and counter defendant ADASA Inc.'s (plaintiff Adasa)
and

defendant

and

( Defendant Avery)

counter

claimant

Avery

seek construction of

Dennison

the

terms

Corporation
of plaintiff

Adasa's '967 patent.
The '967 Patent is related to merchandise tracking. As alleged
by plaintiff Adasa,

in merchandising tracking applications,

the

memory bank of an RFID 1 tag is encoded with an Electronic Product
Code.
the

The Electronic Product Code is an identifier for an item in
supply chain to uniquely identify that particular item.

identifier is

This

serialized to be unique for avoidance of duplicate

numbers among items in the supply chain.
Plaintiff alleges that "[t]he '967 Patent generally speaking,
relates in part, to systems for encoded and commissioned wireless
radio frequency identification ('RFID') devices."

Paragraph 7 of

Complaint.
The

parties

are

familiar

with

the

complex underlying

technology in this field and it is addressed as needed below.
A Claim Construction Hearing was held after extensive briefing
on the issues. 2

1

RFID stands for "Radio Frequency Identification Device."

2

This court granted plaintiff's motion to amend the complaint
at the beginning of the hearing.
2 - OPINION AND ORDER

DISCUSSION
The applicable Claim Terms as presented by the parties and
this court's constructions thereof follow.
I.

TERMS WITH

AGREED UPON CONSTRUCTIONS

1.

object class information space
The parties agree such phrase

field

should be construed as "data

within the memory of the RFID integrated circuit chip for

information identifying the class of an

object, such as a company

prefix, item reference code, partition value, and/or filter value."

2.

unique serial number space
The parties agree such phrase should be construed as" data

field

within

the

memory

of

the

RFID

integrated

circuit

for

information identifying a unique serial number."

3.

being assigned a limited number of most significant bits
The

parties

agree

such

phrase

should

be

construed

as

"includes a limited, predefined sequence of higher order bits at
the leading end."
4. remaining bits of lesser significance
The parties agree such phrase should be construed as "the
remaining lower order bits at the trailing end."

3 - OPINION AND ORDER

II.

TERMS WITH DISPUTED CONSTURCTIONS
As explained in further detail below, this court ultimately

construes the terms with disputed constructions in accordance

the

language proposed by plaintiff Adasa.

1.

is encoded with one serial number instance
Plaintiff Adasa argues that this phrase should be construed as

"[h]as stored within

it one serial number instance."

Defendant Avery initially argued that the phrase should be
construed with plaintiff's language and the addition of" stored by
an

encoder

that

a

central

database to ensure that the serial number is unique."

P. 2 of

Defendant Avery

does

not

Response

need

(#62).

to

communicate

Defendant

with

Avery

subsequently

conceded that its proposed construction was not appropriate as it
did not take into consideration the fact that "an RFID encoding
scheme

may

use

a

variety

databases, not just a

of

computers

to

'central database.'"

than proposed a different construction as
within it one serial number instance,
does

not

need

a

continuous

host

serial

number

Id . Defendant Avery
follows:

"Has stored

stored by an encoder that

connection with

any

serial

database to ensure that the serial number is unique."

number

Id.

In support of its constructions, defendant Avery argues that
plaintiff Adasa' s

constructions

are

improper because

plaintiff

Adasa disavowed claim scope during the reexamination of its claims.

4 - OPINION AND ORDER

However, find from the material before the court that Adasa

did

not disavow its claim scope during the reexamination proceedings:
Adasa,

for

example,

did not

disavow

all

uses

of

a

central

database for its hardware-based numbering scheme -such hardwarebased numbering scheme can be used in direct connection with a
central data base or in a less direct, ad hoc mode.
As explained in detail by plaintiff Adasa, the '967 Patent was
reviewed for patentability in an Ex Parte Reexamination.
reexamination,

plaintiff

Adasa

filed

briefs

and

declarations with the Patent and Trademark Office
against

the

Examiner's

combinations.

rejections

arising

from

During

supporting

(PTO)
two

arguing

prior

art

Plaintiff Adasa made the same arguments to overcome

the Examiner's rejections consistently throughout the reexamination
proceedings.
memory

Plaintiff Adasa repeatedly pointed to the partitioned

structure

within

the

claimed

RFID

transponders,

accommodating a serial number instance with most significant bits
along with bits of lesser significance, as a novel feature within
the claims of the '967 Patent not in any prior art combinations.
In its response to the PTO, plaintiff Adasa was explaining that the
prior art was focused on a centralized scheme operated entirely by
a

central

database,

which

was

the

sole

manner

of

ensuring

uniqueness of the Electronic Product Codes that were to be later
encoded to RFID transponders,
utilize

but the asserted claims require and

a hardware - based approach that is used on top of any

5 - OPINION AND ORDER

central database scheme for uniqueness.

Plaintiff Adasa then went

on to describe to the PTO the hardware based numbering scheme in
greater detail , noting that "[t]his hardware- based approach of
the

'967 Patent manages assignments of the serial number at the

binary level by partitioning the bits of the serial number space
into a limited number or most significant bits and a remaining
number of least significant bits."

P. 14 of #59-3.

I agree with plaintiff Adasa that a proper reading of the
arguments to the PTO reveals that the novel feature within the
challenged claims is the use of a "hardware-based numbering scheme"
which is manifest in the claims through inclusion of requiring that
the

serial

number

space

comprises

a

limited

number

of

most

significant bits which corresponds to the most significant bits of
an

allocated block.

insurance that
is

a

This

scheme

adds

an

additional

layer of

all serial numbers assigned will be unique,

fundamental

requirement

of

RFID

systems.

which

Plaintiff Adasa

explicitly stated that it is the "hardware -based numbering scheme"
feature that is missing from the prior art, and that such prior art
relies only on continuous connections to a central database to
ensure uniqueness.

Importantly,

neither plaintiff Adasa nor its

expert declarant before the PTO declared these two schemes for
ensuring uniqueness as being mutually exclusive such that an RFID

6 - OPINION AND ORDER

tagging system could not or would not implement both. 3

Rather, it

was noted that the use of the claimed scheme merely "allows" for
commissioning of

RFID

tags

without

continuous

connection to

database.

P.p. 4, 16 of #59-3; Paragraphs 43, 50 of# 59-2.

Prior

systems

a

art

utilized

only

a

single

means

for

ensuring

uniqueness- constant connection to a central database- rather than
a layered scheme also utilizing serial numbers comprising a limited
number of most significant bits.
Some of plaintiff Adasa's arguments were not initially found
persuasive by the Examiner and the non-final rejections of the
claims of the '967 Patent were maintained in the subsequent Final
Office Action.

The Examiner posited that the distinctions made by

Adasa relating to the hardware -based numbering scheme could not be
a basis for novelty because they related only to the process by
which the

claimed RFID transponders

were made

rather than the

structural elements of the RFID transponders. In plaintiff Adasa's
Amendment in Response to Final Office Action dated May 14, 2018,
Adasa successfully argued against this position asserting that

"

claim

1

should

be

interpreted

to

include

the

structural

limitation that the encoded serial number space must include a
serial number instance that was selected from an allocated block

3

Plaintiff Adasa has
demonstrated that despite the
occasional use of the phrase "in essence" in conjunction with the
ad hoc mode, there is not claim disavowal.
7 - OPINION AND ORDER

that was specifically assigned (or allocated) based on a limited
number of most significant bits" p.

10 of #59-7.

To that end,

Adasa made a clarifying amendment to the claims of the '967 Patent
for

the

purpose

of

clarifying

that

the most

significant bi ts

uniquely correspond to the allocated block in support of Adasa's
position that the claimed serial number structure

is a structural

limitation of the claimed RFID transponders. 4
The positions taken by both Adasa and the Examiner with
respect

to

the

final

rejection,

amendment

and

claims of the

'967

clarifying

subsequent confirmation of validity of the

Patent as presented in the Reexamination Certificate do not relate
at all to limitations of the process for how the claimed RFID
transponders are encoded.

There is little to no discussion of

continuous connection to a central database, autonomous or quasiautonomous

encoding,

or how the allocated block is derived or

assigned.

The discussion focuses

solely on the novel

advanced throughout the reexamination by Adasa
RFID

transponders

utilize

a

partitioned

feature

- that the claimed

serial

number

space

comprising most significant bits that was not present in any prior
art references.

4

In support of its disavowal argument, defendant Avery cites
Poly-America, L.P. v. API Indus., Inc., 839 F.3d 1131, 1136 (Fed
Cir.2016) and Krippelz v. Ford Motor Co., 667 F.3d 1261, 1267 (Fed.
Cir. 2012).
However, I find that such cases are distinguishable
and, as Adasa argued to the PTO, the patent at issue is more akin
to In Re Nordt, 881 F.3d 1371 (Fed Cir. 2018). See p.p. 50-54 of
Transcript (#67).
8 - OPINION AND ORDER

'

'

.
2. an allocated block of serial numbers
Plaintiff Adasa argues that this phrase should be construed
as "a pre-authorized range of serial numbers."

Defendant Avery

argues this phrase should be construed as plaintiff Adasa suggests
with the addition of the phrase" that has been assigned to an
encoder .."

Defendant Avery makes an argument similar to one above

regarding

disavowal

of

claim

scope.

Such

argument

is

not

persuasive for the reasons stated above.

3.

Uniquely Corresponding
Defendant Avery acknowledges that the parties'

constructions may mean the same thing, p.

differing

11 of Response

(#62).

Based on the above discussion, the phrase "uniquely corresponding"
is construed as having its plain and ordinary meaning as plaintiff
Adasa suggests.
CONCLUSION
The claims in this action are construed as discussed above.

DATED this

:l?--

day of January, 2019.

THOMAS
United

9 - OPINION AND ORDER