Rosebud LMS Inc. et al. v. Adobe Systems Incorporated


Docket No. 2015-1428

MOORE, HUGHES, STOLL
February 9, 2016

Brief Summary: DC grant of SJ to Adobe as not liable for pre-issuance damages under 35 USC § 154(d) because it had no actual notice of the published patent application affirmed.

Summary: Rosebud appealed DC grant of SJ to Adobe as not liable for pre-issuance damages under 35 USC § 154(d) because it had no actual notice of the published patent application that led to asserted US 8,578,280 relating to techniques for enabling collaborative work over computer networks. Rosebud sued Adobe for infringement of US 7,454,760 in 2010 (“Rosebud I”) and then US 8,046,699 in 2012 (“Rosebud II”), of which the ‘280 patent is a continuation. Adobe’s motion for SJ claimed Rosebud was not entitled to either post-issuance damages because it had stopped using the technology ten months before the ‘280 patent issued or pre-issuance damages because it had no actual notice of the published application that became the ‘280 patent. Rosebud argued there remained a genuine issue of material fact as to whether Adobe had actual knowledge of the ‘280 grandparent, that Adobe followed Rosebud and emulated some of its product’s features, it would have been standard practice for Adobe’s Rosebud II outside counsel to search for the ‘280 patent application, and it had not yet completed fact discovery. Section § 154(d) is a “narrow exception” to § 271 under which “patent owners may only collect damages for patent infringement that takes place during the term of the patent”. Under § 154(d)(1)(B), the patentee may only obtain a reasonable royalty from “the period beginning on the date of the publication of the application” if that person “had actual notice of the published patent application”. The opinion notes that “[t]he nature of § 154(d)’s ‘actual notice’ requirement is an issue of first impression for this court.” The FC panel agreed with Adobe that “constructive knowledge would not satisfy the actual notice requirement” but disagreed that “actual notice requires an affirmative act by the applicant giving notice of the published patent application to the infringer” (not consistent with the legislative history; marking provision (§ 287(a)) not applicable (“If § 154(d) contained § 287(a)’s ‘proof that the infringer was notified’ language, our interpretation of § 287(a) would be relevant, and likely dispositive.”); “If Congress wishes, it can amend the statute to require an affirmative act by the patentee.”) Regarding whether there is a genuine dispute of material fact regarding Adobe’s knowledge under this interpretation of § 154(d), the FC panel explained that knowledge of a related patent is not enough since it is the claims of the published application that matter (“Indeed, § 154(d)(2) provides that pre-issuance damages are not available unless the invention claimed in the published patent application is ‘substantially identical’ to the patented invention. Otherwise, the infringer cannot know the scope of the claimed invention.”) Rosebud’s evidence regarding whether Adobe followed Rosebud and its product was unconvincing. The FC panel also disagreed regarding whether Adobe’s counsel should have found the application under the facts of this case but did not comment on whether this factor may be important in other situations.

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