After More Than 15 Years, the Federal Circuit Clarifies the “Actual Notice” Requirement for Post-publication, Pre-issuance Patent Infringement

The American Inventor’s Protection Act (AIPA) was passed in 1999 and added § 154(d) to title  35 of the United States Code, which provides a remedy for patent applicants for post-publication, pre-issuance patent infringement. Section 154(d) provides a right to obtain a reasonable royalty from the date of publication of the application to the date the patent is issued if the patent infringer had “actual notice of the published patent application” and “the invention as claimed in the patent is substantially identical to the invention as claimed in the published patent application.” This section is a narrow exception to the general rule that patent owners may only collect damages for infringement that takes place during the term of the patent. It was added as a compromise to the requirement that most U.S. patent applications be published before the patent is granted.

In order to gain relief under § 154(d), the patent holder must show that the infringer had actual notice of the patent application. Over 15 years later, the Court of Appeals for the Federal Circuit has finally given us a definition for the “actual notice” requirement of § 154(d). Rosebud LMS Inc. v. Adobe Sys. Inc., No. 2015-1428 (Fed.Cir. Feb. 9, 2016) marks the conclusion of Rosebud LMS Inc.’s (“Rosebud”) third patent infringement lawsuit against Adobe Sys. Inc. (“Adobe”). Rosebud first sued Adobe in 2010 for infringing U.S. Patent No. 7,454,760 (“’760 patent”). That case was dismissed more than four years ago. Next, Rosebud sued Adobe for infringing U.S. Patent No. 8,046,699 (“’699 patent”) in 2012. That case was dismissed with prejudice in 2014. Finally, the third lawsuit was brought against Adobe in 2014 for infringement of U.S. Patent No. 8,578,280 (“’280 patent”). The three patents belong in the same patent family. The ’280 patent is a continuation of the ’699 patent and the ’699 patent is a continuation of the ’760 patent. All three patents were titled “Method and software for enabling N-way collaborative work over a network of computers” and use the same specification.

At the District Court level, Adobe moved for summary judgment. There were no post-issuance damages because Adobe had discontinued use of the accused feature (Adobe Acrobat’s Collaborate Live feature) ten months before the ’280 patent was issued. Adobe also asserted that Rosebud could not obtain pre-issuance damages, as Rosebud did not provide Adobe with actual notice of the published patent application that resulted in the ’280 patent. The District Court granted Adobe’s motion for summary judgment because Rosebud’s evidence did not identify the ’280 patent application by number and the parties’ litigation history did not create an affirmative duty for Adobe to search Rosebud’s published patent applications.

Judge Moore affirmed the district court’s grant of summary judgment and, in the process, clarified that constructive notice does not satisfy § 154(d)’s “actual notice” requirement. The court noted that the requirement obviously includes a party affirmatively acting to provide notice. The court also noted that “actual notice” includes knowledge obtained without an affirmative act of notification based on the ordinary meaning of the term as well. This is supported by the Federal Circuit’s construction of 35 U.S.C. § 287(a), which requires “proof that the infringer was notified of the infringement and continued to infringe thereafter.” Unlike § 287(a),  §154(d) does not explicitly require an act of notification. The differences in statutory language have been seen as a signal from Congress that § 154(d) is written to have its ordinary meaning.

After interpreting “actual notice,” the court applied the requirement to the summary judgment appeal. Rosebud presented three categories of evidence in the record. First, the fact that Adobe knew of the related ’760 patent was not enough to show actual notice of the published ’280 patent application because the notice requirement requires notice of the claims. While the two patents share the same specification, that is not enough to provide “actual notice.” Adobe did not have knowledge of the claims of the later patent application and would not know the scope of the claimed invention. Second, Rosebud’s seven exhibits of emails from Adobe employees and a single reference to “Rosebud” in a line of source code did not show that Adobe sought to emulate Rosebud’s product. All of the emails cited by Rosebud were sent more than two years before the ’280 patent application was published. In addition, the source code reference of “Rosebud” referred to a product by Microsoft from created more than ten years before the filing of the lawsuit. Third, Adobe would not have discovered the published ’280 patent application while preparing for the prior litigation because the lawsuit never reached the claim construction stage, as Rosebud managed to miss all the court-ordered deadlines. In the end, the Court agreed that no reasonable jury could find that Adobe had actual knowledge of the published ’280 patent application.

Now that the “actual notice” requirement of § 154(d) has been interpreted, future cases will explain what evidence is required to meet the lower standard of “knowledge,” which can obtained without an affirmative act of notification.

Unfortunately, the Federal Circuit has not yet resolved the “substantially identical” requirement of § 154(d). The Federal Circuit has only one non-precedential case that addresses this requirement. That case, Innovention Toys, LLC v. MGA Entm’t, Inc., 611 Fed. Appx. 693, 695 (Fed. Cir. 2015), explained that “[C]laims are ‘identical’ to their original counterparts if they are ‘without substantive change.’” And that determining substantive change is based on the scope of claims, not whether different words are used. This stringent requirement is still open for the Federal Circuit to decide and is the most pressing issue concerning § 154(d) now that “actual notice” has been clarified.

Inzer Ni is a J.D. candidate, 2017, at NYU School of Law.