Adrea v. Barnes & Noble: Court Holds That Adrea Is Precluded From Seeking Certain Past Damages for Failure to Mark

by Jeffer Mangels Butler & Mitchell LLP

Adrea, LLC ("Adrea") filed a patent infringement action against Barnes & Noble, Inc., llc, and Nook Media LLC (collectively, "B&N"), which alleged that B&N's e-reader Nook infringed U.S. Patent Nos. 7,298,851 ("the '851 patent"), 7,299,501 ("the '501 patent"), and 7,620,703 ("the '703 patent"). As explained by the district court, "[t]he '851 patent describes systems and methods of securely distributing electronic books and other digital content to a portable viewing device, discloses an operations center for storing and transmitting electronic books and a device for viewing books, and further describes encryption processes for securing those electronic books. The '501 patent describes systems and methods of controlling access to electronic books, essentially a fixed-time rental system. The '703 patent describes devices and methods for retrieving information related to the usage context of devices and discusses embodiments where the device is configured to retrieve information about the usage context of the device without a web browser."

Both parties cross moved for summary judgment, including a motion by B&N to preclude certain past damages for failure to mark. The district court granted this summary judgment motion for failure to mark. "[T]he Court grants defendants summary judgment precluding damages incurred prior to March 29, 2012, for alleged infringement of the '851 patent. The Patent Act requires patentees to give notice to the public by marking the patented article (or packaging) with the identifying patent number. 35 U.S.C. § 287(a). Here, Adrea's licensees (such as Amazon) produced devices (such as the Kindle) that qualified as "patented articles," which should have been, but were not, so marked.

In response, plaintiff asserted that its licensees' products did not constitute "patented articles" with respect to the '501, '703, and '851 patents. The district court disagreed. "But it bases this assertion chiefly on the fact that in a prior litigation with Amazon, Adrea did not claim infringement of the '501 and '703 patents, because, Adrea asserts, there is no evidence that Amazon's licensed products infringe the '501 and '703 patents. However, in that very same litigation, Adrea took the position that Amazon infringed the '851 patent. Moreover, in the instant litigation, Adrea's own infringement expert Brian A. Berg states that it is likely impossible for an e-reader manufacturer to design around the '851 patent. Declaration of Yue-Han Chow, dated January 31, 2014 ("Chow Decl."), Exhibit ("Ex.") EE ¶ 62. Given all this, and given that it is the patentee who bears the burden in pleading and proving compliance with the marking statute. See, e.g., Maxwell v. J. Baker, Inc., 86 F.3d 1098, 1111 (Fed. Cir. 1996), the Court finds that Adrea has totally failed to provide adequate evidence from which a reasonable fact finder could find that Adrea complied with the marking statutes with respect to, at least, the '851 patent."

Adrea then contended that the date of notice occurred as early as October of 2010 when Adrea's Vice President of Licensing and Business Development, wrote to B&N and identified Adrea's "portfolio of over 300 patents related to eBooks," and stated that Adrea is "currently in litigation with Amazon related to the Discovery Networks eBook patents which Adrea now owns," one of which was the '851 Patent. Declaration of Micah Miller ("Miller Decl."), dated February 21, 2014, Ex. EE at 71-72.

The district court did not believe that such an email constituted notice. "Plaintiff would have the Court find that this email correspondence, which constituted the very first email ever sent to defendants, somehow satisfied the notification of infringement requirement because it referenced the Amazon litigation. However, "[f]or purposes of section 287(a), notice must be of 'the infringement,' not merely notice of the patent's existence or ownership. Actual notice requires the affirmative communication of a specific charge of infringement by a specific accused product or device." Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 187 (Fed. Cir. 1994). Adrea's communications with defendants in October of 2010 cannot reasonably constitute communication of a specific charge against a specific device, given that the communication mentioned no charge, no device, and indeed, no patent."

Instead, the district court concluded that a later notice, which included a substantive claim chart, actually notified B&N of infringement. "In contrast, on March 29, 2012, Adrea notified defendants' counsel of infringement via attachment of a detailed claim chart, noting both the relevant charges and the relevant devices. See Chow. Decl., Ex. HHH at ADREA016951 ('we have prepared sample claim illustrations regarding the Adrea portfolio and B&N devices for your review').

Accordingly, the district court determined that failure to mark precluded damages for the '851 patent prior to March 29, 2012, the date of actual notice.

Adrea, LLC v. Barnes & Noble, Inc., Case No. 13 Civ. 4137 (JSR) (S.D.N.Y. July 1, 2014)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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