Rosebud Lms Inc. v. Adobe Systems Incorporated ( 2016 )


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  •   United States Court of Appeals
    for the Federal Circuit
    ______________________
    ROSEBUD LMS INC., DBA ROSEBUD PLM,
    Plaintiff-Appellant
    v.
    ADOBE SYSTEMS INCORPORATED,
    Defendant-Appellee
    ______________________
    2015-1428
    ______________________
    Appeal from the United States District Court for the
    District of Delaware in No. 1:14-cv-00194-SLR-SRF,
    Judge Sue L. Robinson.
    ______________________
    Decided: February 9, 2016
    ______________________
    JUSTIN CHEN, Ahmad, Zavitsanos, Anaipakos, Alavi &
    Mensing P.C., Houston, TX, argued for plaintiff-appellant.
    Also represented by JANE LANGDELL ROBINSON; ANDREW
    W. SPANGLER, Spangler Law PC, Longview, TX.
    MICHAEL BERTA, Arnold & Porter LLP, San Francisco,
    CA, argued for defendant-appellee. Also represented by
    MAULIK GIRISH SHAH.
    ______________________
    Before MOORE, HUGHES, and STOLL, Circuit Judges.
    2         ROSEBUD LMS INC.   v. ADOBE SYSTEMS INCORPORATED
    MOORE, Circuit Judge.
    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.
    BACKGROUND
    Rosebud has filed three suits against Adobe for patent
    infringement. Rosebud first sued Adobe for infringing
    U.S. Patent No. 7,454,760 in 2010, in a suit that was
    dismissed more than three years before this case was
    filed. Rosebud LMS Inc. v. Adobe Sys. Inc., No. 1:10-cv-
    00404-GMS (D. Del., filed May 14, 2010, dismissed
    Nov. 29, 2010) (“Rosebud I”). Rosebud next sued Adobe
    for infringing U.S. Patent No. 8,046,699 in 2012, in a suit
    that was dismissed with prejudice a few weeks after this
    case was filed. Rosebud LMS Inc. v. Adobe Sys. Inc., No.
    1:12-cv-01141-SLR (D. Del., filed Sept. 17, 2012, dis-
    missed Feb. 28, 2014) (“Rosebud II”). And on Febru-
    ary 13, 2014, Rosebud brought suit against Adobe for the
    third time, alleging that it infringed the ’280 patent. The
    ’280 patent is a continuation of the ’699 patent, which is a
    continuation of the ’760 patent. The patents teach tech-
    niques for enabling collaborative work over a network of
    computers.
    In the instant suit, Adobe moved for summary judg-
    ment of no remedies, claiming that Rosebud was not
    entitled to post-issuance damages because Adobe had
    discontinued use of the accused technology in January
    2013, ten months before the issuance of the ’280 patent.
    Adobe also asserted that Rosebud was not entitled to pre-
    issuance damages under § 154(d) because Adobe had no
    actual notice of the published patent application that led
    to the ’280 patent. Rosebud did not oppose Adobe’s mo-
    ROSEBUD LMS INC.   v. ADOBE SYSTEMS INCORPORATED           3
    tion for summary judgment with respect to post-issuance
    damages. Instead, Rosebud argued that there remained a
    genuine dispute of material fact as to whether Adobe had
    actual knowledge of the published ’280 patent application.
    Specifically, Rosebud argued that Adobe had actual
    knowledge of the grandparent patent to the ’280 patent
    application; that Adobe followed Rosebud and its product
    and sought to emulate some of its product’s features; and
    that it would have been standard practice in the industry
    for Adobe’s outside counsel in Rosebud II to search for the
    ’280 patent application, which was published before
    Rosebud II was filed and related to the patent asserted in
    that suit. Rosebud also argued that any decision on the
    issue would be premature because it had not yet complet-
    ed fact discovery.
    One month before the close of fact discovery, the dis-
    trict court granted Adobe’s motion for summary judgment.
    The court reasoned that Rosebud had not met § 154(d)’s
    requirement of actual notice because Rosebud’s evidence
    did not identify the ’280 patent application by number,
    and was, at best, evidence of constructive notice. It
    rejected the idea that the parties’ litigation history creat-
    ed an affirmative duty for Adobe to search for Rosebud’s
    published patent applications. Rosebud appeals. We
    have jurisdiction under 28 U.S.C. § 1295(a)(1).
    DISCUSSION
    We review a district court’s grant of summary judg-
    ment under the law of the regional circuit; here, the Third
    Circuit. Frolow v. Wilson Sporting Goods Co., 
    710 F.3d 1303
    , 1308 (Fed. Cir. 2013). The Third Circuit reviews a
    grant of summary judgment de novo. Nicini v. Morra, 
    212 F.3d 798
    , 805 (3d Cir. 2000) (en banc). Summary judg-
    ment is appropriate 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.” Fed. R. Civ. P.
    4         ROSEBUD LMS INC.   v. ADOBE SYSTEMS INCORPORATED
    56(a). “The evidence of the non-movant is to be believed,
    and all justifiable inferences are to be drawn in his favor.”
    Anderson v. Liberty Lobby, Inc., 
    477 U.S. 242
    , 255 (1986).
    The Third Circuit reviews a district court’s denial of a
    request for time to conduct additional discovery under
    Federal Rule of Civil Procedure 56(d) for abuse of discre-
    tion. Shelton v. Bledsoe, 
    775 F.3d 554
    , 559 (3d Cir. 2015).
    I.     Section 154(d)’s “Actual Notice” Requirement
    Generally, patent owners may only collect damages
    for patent infringement that takes place during the term
    of the patent. See 35 U.S.C. § 271. Section 154(d) is a
    narrow exception to that rule:
    (1) In general.--In addition to other rights provid-
    ed by this section, a patent shall include the right
    to obtain a reasonable royalty from any person
    who, during the period beginning on the date of
    publication of the application for such patent un-
    der section 122(b), . . . and ending on the date the
    patent is issued--
    (A)(i) makes, uses, offers for sale, or sells in the
    United States the invention as claimed in the pub-
    lished patent application . . . ; and
    (B) had actual notice of the published patent ap-
    plication . . . .
    35 U.S.C. § 154(d). 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 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
    ROSEBUD LMS INC.   v. ADOBE SYSTEMS INCORPORATED          5
    patentee for the “actual notice” requirement to be met.
    Because it is undisputed that Rosebud did not affirma-
    tively 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 con-
    structive 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 affirm-
    ative act by the applicant giving notice of the published
    patent application to the infringer. Certainly, “actual
    notice” includes a party affirmatively acting to provide
    notice. See, e.g., 58 Am. Jur. 2d Notice § 4 (2015) (defin-
    ing 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”).
    Adobe argues that the legislative history of § 154(d)
    confirms that the patent applicant must affirmatively
    provide notice to the alleged infringer. The House Report
    discussing the proposed § 154(d) stated:
    The requirement of actual notice is critical. The
    mere fact that the published application is includ-
    ed in a commercial database where it might be
    found is insufficient. The published applicant
    must give actual notice of the published applica-
    tion to the accused infringer and explain what
    acts are regarded as giving rise to provisional
    rights.
    6         ROSEBUD LMS INC.   v. ADOBE SYSTEMS INCORPORATED
    H.R. Rep. No. 106-287, pt. 1, at 54 (1999). However, the
    legislative history states that the applicant must not only
    affirmatively give notice of the published application to
    the accused infringer, but must also “explain what acts
    are regarded as giving rise to provisional rights”—an
    additional requirement not even hinted at in the text of
    § 154(d). 
    Id. The language
    enacted by Congress is not
    consistent with Adobe’s interpretation.
    Nor does our construction of 35 U.S.C. § 287(a) apply
    to § 154(d). Section 287(a), the marking provision, prohib-
    its the collection of post-issuance damages if a patentee
    sells a product that falls within its own patent claims
    without (1) marking the patented articles with the patent
    number or (2) “proof that the infringer was notified of the
    infringement and continued to infringe thereafter.” We
    have interpreted this latter provision to require “the
    affirmative communication of a specific charge of in-
    fringement.” Amsted Indus. Inc. v. Buckeye Steel Castings
    Co., 
    24 F.3d 178
    , 187 (Fed. Cir. 1994) (citing Dunlap v.
    Schofield, 
    152 U.S. 244
    (1894)). But we will not read this
    requirement into § 154(d), where the statute itself does
    not recite the condition. 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. But that is not the case. Section 287(a)
    explicitly requires an act of notification, unlike § 154(d),
    which merely requires “actual notice.” If anything, these
    differences suggest that we should interpret the two
    statutes differently. Section 287(a) shows that Congress
    knows how to use language requiring an affirmative act of
    notification when it wishes. It could have used that
    language in § 154(d) and did not.
    Perhaps there are, as Adobe argues, policy reasons for
    requiring an affirmative act of notification by the patent-
    ee. Requiring the applicant to affirmatively provide
    notice to potential infringers is in line with the extraordi-
    ROSEBUD LMS INC.   v. ADOBE SYSTEMS INCORPORATED           7
    nary nature of statutory pre-issuance damages. Moreo-
    ver, 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 ab-
    sence of such action, we interpret the actual notice re-
    quirement of § 154(d) as it is clearly written to have its
    ordinary meaning.
    II.    Summary Judgment on § 154(d)’s “Actual No-
    tice” Requirement
    Having interpreted § 154(d)’s “actual notice” require-
    ment to include actual knowledge of the published patent
    application, we next consider if there is a genuine dispute
    of material fact as to whether Adobe actually knew of the
    published ’280 patent application. Adobe asserted in its
    verified interrogatory response that it first received notice
    of the published ’280 patent application when Rosebud’s
    counsel threatened this lawsuit on February 4, 2014—
    after it had discontinued use of the patented technology.
    Rosebud disputes Adobe’s assertion and claims that it
    presented sufficient circumstantial evidence of Adobe’s
    knowledge that a reasonable jury could find in its favor.
    We do not agree and conclude, as the district court did,
    that there is no genuine dispute of material fact on the
    record before us.
    Rosebud’s evidence falls into three main categories.
    First, there is evidence that Adobe knew of the grandpar-
    ent patent to the ’280 patent (namely, the ’760 patent).
    Second, Rosebud argues that it presented evidence that
    Adobe followed Rosebud and its product and sought to
    emulate the product’s features. Finally, Rosebud argues
    it is standard practice when defending against a charge of
    patent infringement to search for patents and applica-
    8         ROSEBUD LMS INC.   v. ADOBE SYSTEMS INCORPORATED
    tions related to the asserted patent, such that Adobe’s
    outside counsel would have discovered the published ’280
    patent application during Rosebud II. We address each of
    these categories of evidence in turn.
    First, the fact that Adobe knew of the related ’760 pa-
    tent does not show it had actual notice of the published
    ’280 patent application. The ’760 patent and the ’280
    patent share a specification. But the notice requirement
    is not limited to the specification. The alleged infringer
    must also have notice of the claims of the published
    patent application and the fact that the applicant is
    seeking a patent covering those claims.             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. Knowledge of related
    patents does not serve this function, and is therefore
    legally insufficient to establish actual notice of the pub-
    lished patent application.
    Second, Rosebud argues that it put forth evidence
    showing that Adobe followed Rosebud and its product and
    sought to emulate the product’s features. But Rosebud’s
    proffered evidence does nothing of the sort. Rosebud
    offers seven exhibits of emails from Adobe employees and
    a single reference to “Rosebud” in one line of Adobe’s
    source code. But all the emails cited by Rosebud were
    sent more than two years before the publication of the
    ’280 patent application. Five of the seven email chains
    originate from unsolicited emails Rosebud sent to Adobe
    employees about its product. And Rosebud’s argument
    that Adobe’s source code references “Rosebud” borders on
    the frivolous, as this reference is to a Microsoft product
    from before 2004, not the plaintiff in this lawsuit. Noth-
    ing in the evidence suggests that Adobe or its employees
    were monitoring Rosebud and its products, let alone to
    ROSEBUD LMS INC.   v. ADOBE SYSTEMS INCORPORATED          9
    such an extent that they would have actively sought out
    Rosebud’s published patent applications more than two
    years after the emails were sent.
    Finally, Rosebud argues that a reasonable jury could
    conclude that Adobe’s outside counsel would have discov-
    ered the published ’280 patent application while prepar-
    ing for the Rosebud II litigation. We disagree. Rosebud
    argues that it is standard practice during litigation to
    review related patents, applications, and prosecution
    history to evaluate possible claim constructions. Howev-
    er, Rosebud II never reached the claim construction stage
    because Rosebud missed all of its court-ordered deadlines.
    Even when all of the evidence is taken into account and
    all reasonable inferences are made in Rosebud’s favor, we
    agree with the district court that no reasonable jury could
    find that Adobe had actual knowledge of the published
    ’280 patent application.
    III.   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 request-
    ed 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 grant-
    ing 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
    10        ROSEBUD LMS INC.   v. ADOBE SYSTEMS INCORPORATED
    request or indicate at the time that it needed further
    discovery on issues relevant to the motion. Moreover,
    Rosebud did not serve its Rule 30(b)(6) deposition notice
    or its subpoenas on Adobe’s outside counsel until several
    weeks after it received Adobe’s motion for summary
    judgment. It appears that Rosebud delayed filing much of
    its discovery until after it received Adobe’s motion for
    summary judgment, without informing Adobe or the court
    that such discovery might be necessary. Given this tim-
    ing, we see no abuse of discretion in the district court’s
    action.
    CONCLUSION
    We affirm the district court’s grant of summary judg-
    ment on Rosebud’s claim for damages under 35 U.S.C.
    § 154(d).
    AFFIRMED
    

Document Info

Docket Number: 2015-1428

Judges: Hughes, Moore, Stoll

Filed Date: 2/9/2016

Precedential Status: Precedential

Modified Date: 11/5/2024