Adasa Inc. v. Avery Dennison Corporation: Turning the Abstract into the Eligible

“The name of the game is the claim,” wrote Giles Rich, the Chief Judge of the Federal Circuit at the time of this comment.[1] Whether or not this pithy aphorism remains true in other aspects of patent law, it has become clear that in the realm of Subject Matter Eligibility, the story told by the specification has taken on increasing importance. The Federal Circuit’s decision in Adasa, Inc. v. Avery Dennison Corp.[2] illustrates this point neatly. In Adasa, the Court relied heavily on the specification’s description of the technical improvements provided by the claim in dispute to find it patent eligible.

Adasa comes to the Federal Circuit via the U.S. District Court for the District of Oregon, which, inter alia, granted summary judgment to Adasa on the issue of whether U.S. Patent No. 9,798,967 is direct to eligible subject matter under 35 U.S.C. §101. Avery Dennison appealed that verdict and the case came before Chief Judge Moore of the Federal Circuit. Judge Moore affirmed the eligibility of the ‘967 patent..[3]

The ’967 patent deals with RFID transponders and, more specifically, the best methods of assigning unique identification serial numbers to RFID transponders. As the ‘967 patent explains, conventional systems and methods for assigning unique numbers to RFID transponders involves obtaining numbers from a central issuing authority.[4] In some cases, it may be necessary to maintain a network connection to the central authority when allocating new identification numbers to ensure uniqueness.[5] The ‘967 patent purports to overcome shortcomings related to conventional methods by classifying the serial numbers into blocks or sectors according to the “Most Significant Bits” (“MSBs”) of a serial number, where the MSBs represent a designated portion of the entire serial numbers. If an organization is assigned a block or sector of serial numbers having a unique set of MSBs as compared to other organizations, it can be assured that all serial numbers having the unique set of MSBs are unique to the assigned organization. Thus, the assigned organization does not need to query the central database as frequently as conventional methods.[6]

The RFID transponder of the ‘967 patent is claimed according to claim 1, the only claim at issue:

An RFID transponder comprising:
a substrate;
an antenna structure formed on the substrate; and
an RFID integrated circuit chip which is electrically coupled to the antenna structure,
wherein the RFID integrated circuit chip is encoded with a unique object number, the unique object number comprising an object class information space and a unique serial number space,
wherein the unique serial number space is encoded with one serial number instance from an allocated block of serial numbers, the allocated block being assigned a limited number of most significant bits, and
wherein the unique serial number space comprises the limited number of most significant bits corresponding to the allocated block and remaining bits of lesser significance that together comprise the one serial number instance.[7]

Avery Dennison argued that “claim 1 is directed to the abstract idea of mentally assigning meaning to a subsection of a data field and does not recite any eligibility conferring inventive concepts.” The Court did not agree.[8] Instead, the Court found that claim 1 is “directed to a specific, hardware-based RFID serial number data structure designed to enable technological improvements to the commissioning process.”[9] The Court focused on the claimed “data structure” and its division into two components, arguing that the MSB structure effectively created an additional data field.[10] The Court cited to Uniloc[11] and Enfish,[12] both of which involved data structures, in support of its arguments.

Avery Dennison argued that structurally, claim 1 of the ‘967 patent recites nothing more than an RFID transponder encoded with a number. Arguably, the encoded number only gains significance from the claim language that describes how the encoded number is selected and its relationship to other numbers that are not claimed. There may be no objectively observable difference between an RFID transponder according to the claims and an RFID transponder that is assigned a random number. The challenger argued that the inventive significance of the encoded number is based on the significance externally assigned to the different portions of the encoded number. Avery Dennison’s argument may be accurate at its heart, but it ultimately proves too much because it applies to nearly any data structure, which typically require external software to provide them with meaning.

In the present case, the Court looked to the specification to find that meaning. In particular, the Court relied heavily on the specification’s description of advantages, stating that “[a]s the written description details, by appropriate assignment of the allocated blocks to lower levels in the commissioning hierarchy, for example, to in-dividual encoders, unique serial numbers can be guaran-teed without the need for a continuous connection to a central database.”[13] Thus, the Court was able to find that “[t]he meaning of the MSB data field—and the improvements that flow therefrom—is the result of the unique correspondence between the data physically encoded[14] on the claimed RFID tags with pre-authorized blocks of serial numbers. That is not a mere mental process, but a hardware-based data structure focused on improvements to the technological process by which that data is encoded.” Thus, despite the potentially abstract nature of the data structure when viewing the claim alone, Judge Moore found the claims patent eligible based on the strength of the written description that provided a powerful description of the advantages of the claimed transponder.

[1] Giles S. Rich, The Extent of the Protection and Interpretation of Claims-American Perspectives, 21 Int’l Rev. Indus. Prop. & Copyright L., 497, 499 (1990).
[2] Adasa, Inc. v. Avery Dennison Corp., 55 F.4th 900 (Fed. Cir. 2022)
[3] Id. at page 2.
[4] U.S. Patent No. 9,798,967, at cols. 2-3.
[5] Id. cols. 3-4.
[6] Id. col. 8.
[7] Id. claim 1.
[8] Adasa, Inc. v. Avery Dennison, pp. 10-11.
[9] Id.
[10] Id.
[11] Uniloc USA, Inc. v. LG Elecs. USA, Inc., 957 F.3d 1303 (Fed. Cir. 2020)
[12] Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016)
[13] Adasa, Inc., pg. 12.
[14] Id.