Anticipation for Dummies

by Dennis Crouch

My personal name is fairly unique. But, there are several of us, including the most famous Dennis Crouch, the world’s most famous folk music double bassist. The photo below shows Dennis Crouch performing alongside Allison Kraus and Robert Plant. Sometimes folks get confused about who-is-who, but we quickly figure it out.  And, in our world of easy data-tracking, some folks prefer having common names to help avoid undue detection.  There is no central naming authority and so any attempt to ensure unique names would likely fail.

RFID chips are little electronic identification tags and, like names, RFID chips work best when given a unique serial number.  For commercial products, a common approach is to have a three-part ID number that identifies the brand, the class of goods, and the particular product.  The hardware does not have any anti-authoritarian bias, but it is still a tricky process to ensure uniqueness – especially in a distributed global system.

Adasa Inc. v. Avery Dennison Corp., — F.4th. — (Fed. Cir. 2022).

Adasa’s U.S. Pat. No. 9,798,967 facilitates unique RFID serial numbers, allowing them to be created on-demand and without additional authorizations or queries to some central authority. The basic solution here: some RFID authority allocates a block of serial numbers to the RFID creator who then gives each RFID being created a unique serial number taken from the block.

In 2017, Adasa sued Avery Dennison for patent infringement. At the close of discovery, both sides made several summary judgment arguments:

  • Avery Dennison moved for summary judgment of non-infringement — DENIED.
  • Avery Dennison moved for summary judgment of ineligibility — DENIED.
  • Adasa moved for summary judgment that its claims were not-invalid as anticipated/obvious (vis-a-vis prior art suggested by AD). — GRANTED.
  • Asada moved for summary judgment that its claims were infringed — GRANTED IN PART (District court held claim 1 was infringed).

Thus, at the summary judgment (pre-trial), the district court completely sided with the patentee as to claim 1, finding it infringed and not invalid.  All that was left for claim 1 was a trial on damages.  At that point, other claims were still pending, but the patentee successfully requested that those claims be dismissed without prejudice so that the case could efficiently move forward.  At trial, the jury returned a verdict of 0.45 cents per chip — which added up to $35 million.   The district court also added a $20 million sanction against the defendant for discovery abuse. (AD had failed to disclose more than two-billion RFID chips it had sold until a post-trial audit revealed their existence).

= = =

As I was reading this case, I was sure that the Federal Circuit was going to flip the whole table based upon eligibility.  But no, the Federal Circuit affirmed the district court’s conclusion that the claims are directed to a “hardware-based RFID serial number data structure designed to enable technological improvements to the commissioning process.”  It certainly helped the patentee here that Chief Judge Moore was on the panel, but Judge Hughes and Stark also signed-on to the opinion.

= = =

Patentee did not fare as well on anticipation/obviousness. Defendant had relied upon “RFID for DUMMIES” as the key prior art.  That reference included a description of how ID allocation worked when the central server was unavailable. And, the court concluded that a reasonable juror “could find RFID for Dummies discloses each element of claim 1.”

RFID for Dummies describes a methodology for ensuring the assignment of unique serial numbers to RFID tags when a central numbering authority is inaccessible or impractical, for example, when a company utilizes multiple manufacturing lines to produce the same product. To decentralize and make feasible the allocation of unique serial numbers across all manufacturing lines, RFID for Dummies discloses an “intelligent hierarchy” in which “a range of serial numbers for each product is allocated to each manufacturing facility.” “Within a facility, a range of numbers from those allocated to the facility is allocated to each line” thereby effectively subdividing the serial number “into a facility number, line number, and subserial number in which the allocation hierarchy is maintained between facility number and line number.”

According to the court, this description could be read to be the same thing that is claimed. In other words, this is an issue for the jury.  Although the focus was on anticipation, the Federal Circuit here also vacated the single reference summary judgment of non-obviousness.  (The court also concluded that a second reference also could reasonably be seen as anticipatory and that summary judgment had been inappropriate).

= = =

On remand, the court will likely hold a new trial on anticipation/obviousness. If the claims are still valid then the damages verdict should stand.

The defendant on appeal argued that the judge should have asked the jury for a lump-sum payment rather than only a per-piece royalty amount.  But, during trial the defendant never advanced a lump-sum damages theory.

It may be that in some circumstances licenses, standing alone without supporting lay or expert testimony, can support a lump-sum instruction. This is not such a case. Here, Avery Dennison clearly and repeatedly argued against the relevancy of the [lump sum] licenses upon which it now relies. Its damages expert opined at least two of the three licenses were not helpful to understanding the value of a hypothetical negotiation. . . . Avery Dennison instead focused its damages theory at trial on design-around costs, which it presented to the jury as a starting-point in a hypothetical negotiation for a running royalty, not a lump-sum payment.

Where Avery Dennison failed to present a lump-sum damages theory to the jury and, moreover, actively undermined the very evidentiary basis it now contends required a lump-sum instruction, the district court did not err in declining to include such an instruction. Further, because there was insufficient evidence to warrant a lump-sum instruction, the district court appropriately declined to include a lump sum option on the verdict form.

Slip oP.

= = = =

Sanctions: After trial had completed, Avery Dennison disclosed that it had sold more than 2-billion additional RFID tags.  The district court at that point sanctioned the company an additional .2 cents per infringing tag. The district court additionally noted Avery Dennison’s bad behavior throughout the litigation process: “patent and continuous disregard for the seriousness of this litigation and its expected obligations.” On appeal, the Federal Circuit found no general problem with awarding sanctions or the process involved.

However, the Federal Circuit did find fault with the district court’s sanction calculation. In particular, the district court sanctioned the defendant 0.2 cents for every infringing tag. It should have imposed the penalty only on the 2 billion that were disclosed late in the process. That would have totaled out to ~ $5 million  sanction instead of ~ $20 million.

On remand, the district court can re-institute the sanctions.  The appellate panel recognized that a new validity trial will be ongoing, but noted that the sanctions award can persist even if the defendant ultimately wins the new trial.

= = =

Derek Shaffer (Quinn Emanuel) handled the appeal for Avery Dennison with Robert Greenspoon (Dunlap Bennett) for Adasa.

51 thoughts on “Anticipation for Dummies

  1. 7

    If the publication prior art is that good, the logical question is why did this case go through an expensive trial and appeal and remand rather than a IPR?

    1. 7.1

      The whole defense makes you scratch your head.

    2. 7.2

      The simplest theory is that the art wasn’t as good as implied (i.e., it only “could” be read in the manner suggested by the judge). The defendants thought the “…for Dummies” title would sway a lay jury/judge more than a technically trained ALJ.

  2. 6

    So moderation now approves of NW baselessly calling people woke (3.1.1), but not pointing out that others’ comments demonstrate that they haven’t read the original post (my, now deleted, 3.1.1.1).

    I can’t imagine what set of rules produced that result. Perhaps moderation policy was recently outsourced to Twitter?

    1. 6.1

      Being woke is a good thing.

      1. 6.1.1

        “Woke” is definitely not a good thing.

        If you are aware of its underpinnings you are actively E V 1 L.
        If you are not aware, you are a sheeple to E V 1 L.

      2. 6.1.2

        I do not see that being “woke” is either good or bad. The word has no real meaning. It means a million different things in a million different mouths. Some use the word as a compliment, others as an insult—and, of course, some of the folks who mean it as an insult are so lost to honor that the insult in their mouths should be regarded as a compliment among honorable folk.

        Precisely because the word is so meaningless, I do not know what Ben can mean in complaining that it was tossed “baselessly at him. Who can say whether the epithet was “baseless”?

        1. 6.1.2.1

          A patent law blog seems to be a poor place to engage in linguistic sophistry. I think everyone here has a rough idea of what the term means, and that no reasonable person would construe my post as either “woke” or suggesting that I am “woke.”

          One does not need to dislike Zoroastrianism to object to being labeled a Zorastrian if they are not, and have done nothing to suggest that they are, a Zoroastrian.

        2. 6.1.2.2

          and, of course, some of the folks who mean it as an insult are so lost to honor that the insult in their mouths should be regarded as a compliment among honorable folk.

          Quite the opposite.
          Literally.

          1. 6.1.2.2.1

            There is no doubt that there is a connection between the anti-patent judicial activists and the Woke mob. The biggest difference between these groups and the rational right is that the anti-patent judicial activists and the Woke believe that laws are to provide equity in accordance with their beliefs (and in accordance with historical inequities and people’s identity) whereas the rational right believes laws are to be applied and that “equity” is in the purview of the Congress.

            I notice too that the anti-patent judicial activists use the same tactics as the Woke mob in that they don’t care about a rational debate and their goal is to defame and out shout their opponents. They are just like Mao’s thugs during the Cultural Revolution.

            1. 6.1.2.2.1.1

              People haven’t realized it yet but what we are in the middle of is a neo-Marxist revolution in the USA. It is a redux of the 60’s but with social media and the mainstream media assisting the neo-Marxists. We should all be afraid of how this is going to play out over the next several years. Typically, neo-Marxist revolutions end very badly for the average person.

              Interesting too that we have this 30 year period going on. 60’s (baby boomer driven), 90’s (gen x driven), and now 2020’s (millennium driven).

              But there is no doubt that the anti-patent judicial activists like Lemley are the vanguard of the neo-Marxist where the legal system is being perverted to the ends by any means.

              Anyway, a dose of reality.

              link to youtube.com

              1. 6.1.2.2.1.1.1

                Translation: “GET OFF MY LAWN, YOU MEDDLING KIDS!”

                Seriously, gramps, maybe take one of your guns and put yourself to sleep (after writing your manifesto so we can all have another laugh afterwards).

              2. 6.1.2.2.1.1.2

                “People haven’t realized it yet”

                I’m pretty sure that there’s a few folks realizing it.

                “It is a redux of the 60’s”

                Yep, except with a whole lot less ez hippie women and drugs are a bit different of a landscape now.

                ” Typically, neo-Marxist revolutions end very badly for the average person.”

                Especially the avg. ev il capitalist.

            2. 6.1.2.2.1.2

              Without wearing pink glasses one would notice that the most powerful and effective anti-patent folks have been presidents and major-capitalist-owners of some of the largest and most lobbying-effective high tech U.S. corporations, not the noisy-left-wing-nuts the right-wing obsesses over. And, continuing to ignore which justices on the Supreme Court, of which political extreme, have written the most anti-patent decisions?

              1. 6.1.2.2.1.2.1

                I don’t know about the “pink” reference Paul, but your thrust here was debunked awhile ago.

                As to, “anti-patent folks have been presidents and major-capitalist-owners of some of the largest and most lobbying-effective high tech U.S. corporations, not the noisy-left-wing-nuts the right-wing obsesses over.

                The most egregious ARE aligned with the Liberal Left — and NO “right wing nut case” needed to recognize that.

                As to, “continuing to ignore which justices on the Supreme Court, of which political extreme, have written the most anti-patent decisions?

                while certainly anti-patent decisions have come from “both sides of the aisle,” there is Zero doubt that the Far Left contingent is BY FAR the most anti-patent.

                That you (again) try to suggest otherwise is beyond bizarre.

          1. 6.1.2.3.1

            Drum on “Woke” is a non-starter.

      1. 6.2.1

        Indeed it is.

        I apologize for being excessively harsh.

  3. 5

    I worked in industry for over a decade, invented many things, some patented and some not, and if i were faced with the question of: “How can we assign unique serial numbers to RFID chips,” I would absolutely think to look at “hey what other industry uses unique serial numbers and how do they assign them?”

    If you, as a product manager, didnt do that (and, even worse, thought it “was almost impossible” to do that)– well, its a good thing you are a lawyer now.

    This is not the patent you want to use as your “hindsight bias gone too far” example.

    1. 5.1

      meant to be in response to night writer at 1.2.1.2.3

    2. 5.2

      What a nasty little comment. Maybe it is obvious or anticipated. But a full analysis should be done trying to place yourself in place of the inventor at the time of the invention. Not people looking at the claim and using it to match up with some prior art or their idea of what “common sense” is.

      I was a product manager. And I can tell you likely weren’t a good one. What I found out was things that seemed obvious and simple after seeing it done were nearly impossible to figure out at the time of the invention. I saw this over and over again with new features of cutting-edge technology.

      1. 5.2.1

        You sound like a backwater type of person. I was in the middle of the internet and cellular revolution. Try to stay in your lane.

        1. 5.2.1.1

          And I could give actual examples, but I don’t want to give away my identity.

        2. 5.2.1.2

          “I was a middle manager in the late 90’s, so you need to stay in your lane” is a great comment.

          1. 5.2.1.2.2

            So, being an active product manager (and inventor) and working with inventors in a cutting edge technology is characterized by you as being in “middle management.” OK.

    3. 5.3

      ochoeighttochoeight,

      This is why I postulated the (known) aspect that sometimes non-analogous art is appropriately used in the obviousness analysis.

      One COULD dive into more details on any one particular set of facts, but as a general rule, this is not a debatable point.

  4. 4

    Any invention can be found to be obvious using hindsight reconstruction. KSR makes that a trivial exercise. Just as Alice makes it a trivial exercise to find any invention invalid as being abstract. I can literally make a good argument that any claim is invalid as being both obvious and abstract.

    It would be interesting, Dennis, to see a graph of the use of the word “hindsight reasoning” by the CAFC over the years. What I read is the CAFC applying hindsight reasoning as if KSR held that hindsight reasoning no longer exists.

    And on this blog, I read these willy-nilly arguments about why some claim is invalid because of this or that with some vague explanation where in each case the elements of the claim are used as a template to recreate the invention by the geniuses on the blog.

    It is a sad state of affairs. The psychological literature is clear that what people do on this blog and at the CAFC is bad science. Just as science and the English language make it clear that Alice is outrageously ridiculous.

    Plus, I think you threw in the other DC because being a musician was your true calling in life.

  5. 3

    It is always amazing how people who have never invented anything think that anything new is obvious–after they have had someone explain it to them.

    Why do we hear so little about hindsight bias from the CAFC? A simple Google Scholar search will yield thousands of papers about how hard if not impossible it is for a person to forget something once they have learned it.

  6. 2

    In my scheme, this invention is eligible. The useful result of the process is information only and the utility of the information is realized by non-human actors.

    To me the analysis should be more like that for MPEGS or other tech standards. The standard is non-obvious because nobody would necessarily choose that particular array, but it’s also not novel to format a numbering system into a hierarchy.

    Yet another case where the invention and the PHOSITA should be formally construed….

    1. 2.1

      Now you want to use “novel” in your (typically incorrect for law) colloquial manner?

  7. 1

    Isn’t this basically how TCP/IP addresses are allocated? Seems like there’s a strong obviousness argument there.

    1. 1.1

      Yes. There is a little bit more to the claim than what I talked through, but not much. (The serial number has two parts..)

    2. 1.2

      phone numbers, too. They dress the claim language up in that the first numbers of the serial number are “most significant bits” (like an area code) and the other numbers are less significant and assigned by the mfr.

      Hell, in my office building, each floor gets assigned a lead number (ie, 4th floor gets “4xx”) and then the floor’s tenant subassigns numbers (403, 405, 407, 469, whatever), and this probably meets the claim limitations.

      But when you have RFID specific art for it, why reach more than that.

      There’s a reason “RFID for dummies” is their lead art.

      My bigger question is why is this not at PTAB? Would be much less risk averse than a jury.

      1. 1.2.1

        Those are really good examples. And also social security numbers, they’re organized as AAA-GG-SSSS, with the first part being a geographic area number (A), followed by a group number (G), then a serial number (S).

        Aside from the prior art issue you mention, it was a little curious that this passed muster under 101. The supposed secret cause here (distributed unique number assignment without a central authority) is a longstanding practice of real-world and computer-based distributed numbering schemes.

        Using Social Security as an example, the purpose of the numbering scheme was to allow local SSA field offices to assign nationally-unique SSNs (with each locally-assigned SSN having fixed area/group portions assigned by the central SSA office). This allowed SSA field offices to assign nationally-unique SSNs without having to clear each number beforehand with the central office.

        1. 1.2.1.1

          + 1 (nicely stated)

        2. 1.2.1.2

          Those are really good examples. And also social security numbers, they’re organized as AAA-GG-SSSS, with the first part being a geographic area number (A), followed by a group number (G), then a serial number (S).
          This is where hindsight bias comes in. I can look at any invention and come up with analogies to something that was done in the past and say that invention Z is just a combination of prior art X and Y. However, this is not how inventing works.

          Inventing works when an inventor needs to solve a problem and they have a whole alphabet to work with. Let’s say the inventor was trying to solve a problem with RFID chips. What is obvious about applying concepts involving telephone numbers or office numbers of SS#s to RFID chips? Each of those are arguably nonanalogous prior art, and one having ordinary skill in the art (legally speaking) isn’t supposed to be looking at nonanalogous prior art.

          1. 1.2.1.2.1

            Wt,

            Are you not missing the “or solves a problem” to which an item of non-analogous art may still appropriately be used?

          2. 1.2.1.2.2

            “What is obvious about applying techniques for allocating unique identifiers for people to the problem of how to allocate unique identifiers to RFID Chips?”

            -Voight-Kampff Test Question #12

          3. 1.2.1.2.3

            WT,

            I agree. I actually worked on real consumer products as a product manager and saw firsthand how something once done seems so obvious but can be almost impossible to invent before it is done.

            You see this in the real world when you are competing with other products and the competitors come up with innovations that had you thought of first, it would have made you millions.

          4. 1.2.1.2.4

            Hence the problem of hindsight. In the biotech field, and I assume for chemistry as well, examiners can simply search for papers referencing each element of the claim and then advance a reason they would be combined. I often see, “one would want to improve the product (of the primary reference), and this element would do so.” Never mind that the primary reference states that it was the next best thing since sliced bread, and identified no issues to further investigate. One always wants to improve, right?

            1. 1.2.1.2.4.1

              I’m sorry folks, but I am super skeptical of hindsight bias here. All of these examples are analogous art.

              First: This is NOT a difficult problem that suddenly got solved and now everyone is saying, “whoa, that was obvious.” This is instead a relatively common problem for which the same solution has been implemented in a variety of fields.

              Second: This easily meets the “same problem” prong of the analogous test. There are plenty of cases, like the piano hinge on a laptop where the same problem solved in another area gets applied.

              Third: My art reference especially is in the same field – assigning unique serial numbers to network connected devices.

              Fourth: The fact that three people, who presumably know nothing about RFID came up with three different solutions that all solve this exact problem the exact same way says to me factually that a PHOSITA who looked for a solution would find one, even outside the field of RFID.

              I worry about hindsight bias just like you all, but this ain’t it.

            2. 1.2.1.2.4.2

              Agree 95%. It is never going to happen that I will be named Director of the USPTO, but if it were to happen, one reform that I would enact would be to require that an examiner’s prima facie case must identify a specific problem that a specific technician working in the field needs to solve.

              By definition, the person whose motivation is to improve merely for improvement’s sake is an inventor. The person of ordinary skill is not motivated to improve technology. The person of ordinary skill is just trying to do his/her day job, and makes changes to the exemplified embodiments of the prior art only because s/he has to do so in the course of doing the day job. Therefore, at the point that you find yourself arguing that the motivation to combine is just an abstract motivation to improve technology, you are actually proving the non-obviousness of the claimed invention, not the obviousness.

              1. 1.2.1.2.4.2.1

                “one reform that I would enact would be to require that an examiner’s prima facie case must identify a specific problem that a specific technician working in the field needs to solve.”

                Why not make the applicant identify that in the application? And require that each claim element actually relates to that specific problem and solution? (you know, like two part form claiming)? That would make examination much easier. But applicants intentionally avoid doing that– instead having 20 element combination claims where maybe 3 of the elements (if you are lucky) actually relate to the specific solution.

                Is taking a car that uses 4G connection, and upgrading it to 5G connection (once it is rolled out), a non-obvious invention? Its done merely for the sake of improvement. Seems like you would call it non-obvious under your test. Which is a problem.

                1. Why not make the applicant identify that in the application? And require that each claim element actually relates to that specific problem and solution? (you know, like two part form claiming)?

                  Agreed. Once again, I am never going to be Director, but if I were, another reform that I would promulgate would be to require that claims be presented in Jepson form for examination.

                2. Anyone pushing for anything remotely Jepson claim format as even remotely necessary or required should be dismissed most harshly.

                3. “ Is taking a car that uses 4G connection, and upgrading it to 5G connection (once it is rolled out), a non-obvious invention? Its done merely for the sake of improvement. Seems like you would call it non-obvious under your test. Which is a problem.”

                  Why do you h@te progress?

              2. 1.2.1.2.4.2.2

                “The person of ordinary skill is just trying to do his/her day job, and makes changes to the exemplified embodiments of the prior art only because s/he has to do so in the course of doing the day job. ”

                That’s obviously not legally accurate. The person of ordinary skill has ordinary creativity as well. That’s the law iirc.

                1. The person of ordinary skill has ordinary creativity as well. That’s the law iirc.

                  Sure, that is the black letter law. “A person of ordinary skill is also a person of ordinary creativity, not an automaton.” KSR Int’l. v. Teleflex Inc., 550 U.S. 398, 421 (2007). What does that mean, however?

                  By definition, an inventor is someone who invents, and—also by definition—a person of ordinary skill is not an inventor. “Inventors, as a class, according to the concepts underlying the Constitution and the statutes that have created the patent system, possess somethingcall it what you will—which sets them apart from the workers of ordinary skill…,” (emphasis in original). Bausch & Lomb v. Hydrocurve Inc., 796 F.2d 443, 448 (Fed. Cir. 1986). Therefore, “ordinary” skill is not the sort of skill that gives rise to invention, and “ordinary” creativity is not the kind of creativity that goes tinkering and changing for the sake of curiosity or investigation.

                  To the extent that you really are dealing with ordinary creativity, you are dealing with the sort of creativity that is able to apply existing technical knowledge to a new situation, to solve a problem already within the ambit of that which is known. Therefore, the one positting obviousness should be able to articulate a concrete problem that was encountered pre-filing date in the course of some pre-existing job scenario. That is the setting in which “ordinary” creativity gets employed. To the extent that one cannot plausibly describe such a scenario, you are really building an argument that what was done required inventive creativity, not “ordinary” creativity.

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