Tuesday, February 09, 2016

Rosebud loses appeal in Adobe case; CAFC explicates pre-grant damages under 35 USC 154(d)

The outcome

Rosebud LMS Inc. appeals from the district court’s
grant of summary judgment that Adobe Systems Inc. was
not liable for pre-issuance damages under 35 U.S.C.
§ 154(d) because it had no actual notice of the published
patent application that led to asserted U.S. Patent No.
8,578,280. For the reasons discussed below, we affirm.

The issue of pre-grant damages:

Relevant to this appeal, § 154(d)
provides for damages that take place before a patent
issues if the infringer “had actual notice of the published
patent application.” Id. § 154(d)(1)(B).

The arguments:

The nature of § 154(d)’s “actual notice” requirement is
an issue of first impression for this court. Adobe argues
that actual notice under § 154(d) requires an affirmative
act by the applicant. Without conceding knowledge,
Adobe argues that knowledge of the patent would not
have been enough—notice had to come directly from the
patentee for the “actual notice” requirement to be met.
Because it is undisputed that Rosebud did not affirmatively
give Adobe notice of the published ’280 patent
application, Adobe argues that we should affirm the
district court’s summary judgment.

We agree with Adobe and the district court that constructive
knowledge would not satisfy the actual notice
requirement. We do not, however, agree with Adobe that
§ 154(d)’s requirement of actual notice requires an affirmative
act by the applicant giving notice of the published
patent application to the infringer. Certainly, “actual
notice” includes a party affirmatively acting to provide
See, e.g., 58 Am. Jur. 2d Notice § 4 (2015) (defining
actual notice as “notice expressly and actually given”);
Black’s Law Dictionary 1227 (10th ed. 2014) (defining
actual notice as “[n]otice given directly to, or received
personally by, a party”). But the ordinary meaning of
“actual notice” also includes knowledge obtained without
an affirmative act of notification. “Indeed, ‘actual notice’
is synonymous with knowledge.” 58 Am. Jur. 2d Notice
§ 4 (2015) (also explaining that “[a]ctual notice rests upon
personal information or knowledge while constructive
notice is notice that the law imputes to a person not
having personal information or knowledge”).

The CAFC makes an invitation to Congress:

Moreover, a strict rule requiring notification by the applicant is
simpler to implement and does not leave the accused
infringer in the difficult situation of having to rebut
allegations that it knew of the published application. If
Congress wishes, it can amend the statute to require an
affirmative act by the patentee. We cannot. In the absence
of such action, we interpret the actual notice requirement
of § 154(d) as it is clearly written to have its
ordinary meaning

As to whether Adobe knew about the patent, there was a discovery

Rosebud alternatively argues that the district court
abused its discretion when it granted summary judgment
before completion of fact discovery relating to Adobe’s
knowledge of the published ’280 patent application. It
argues that it served a Federal Rule of Civil Procedure
30(b)(6) deposition notice on Adobe that included topics
related to the published ’280 patent application; that it
served subpoenas on Adobe’s outside counsel for the
earlier Rosebud litigations regarding their knowledge of
the published ’280 patent application; and that it requested
depositions of Adobe employees. It asserts that it
diligently scheduled this discovery to be completed before
fact discovery closed.

The district court did not abuse its discretion in granting
summary judgment before the close of discovery.
Rosebud had notice of Adobe’s intent to file an early
motion for summary judgment, and did not oppose this.

FRCP 56(a), (b), and (d) state:

(a) Motion for Summary Judgment or Partial Summary Judgment. A party may move for summary judgment, identifying each claim or defense — or the part of each claim or defense — on which summary judgment is sought. The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. The court should state on the record the reasons for granting or denying the motion.

(b) Time to File a Motion. Unless a different time is set by local rule or the court orders otherwise, a party may file a motion for summary judgment at any time until 30 days after the close of all discovery.

(d) When Facts Are Unavailable to the Nonmovant. If a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts essential to justify its opposition, the court may:

(1) defer considering the motion or deny it;

(2) allow time to obtain affidavits or declarations or to take discovery; or

(3) issue any other appropriate order.

Under FRCP 56(d), the appropriate course is to file a declaration or affidavit.
From the case SPIERER v. ROSSMAN, 798 F.3d 502 (CA7 2015) :

Rule 56(d) allows the non-moving party to submit an affidavit or declaration requesting the court to defer or deny judgment in order to allow for appropriate discovery to address matters raised by the motion. Fed. R. Civ. P. 56(d). Here, the plaintiffs took an unusual course of action: they responded to the motion and filed a declaration under Rule 56(d) that included a boilerplate request for discovery without identifying specific evidence needed to respond to defendants' motion. The magistrate judge found the declaration deficient because it was too general to notify the court of any actual evidence needed to respond to the motion. Still more problematic, the declaration, as composed, did not serve as a motion under Rule 56(d) for additional time to respond to the summary judgment motion.

***Entirely separately, from blawgsearch on 9 Feb. 2016:


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