Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01428/USCOURTS-ca13-15-01428-0/pdf.json

Parties Involved:
Adobe Systems Incorporated
Appellee
Rosebud LMS Inc.
Appellant

Document Text:

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.

Case: 15-1428 Document: 47-2 Page: 1 Filed: 02/09/2016
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-cv00404-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, dismissed Feb. 28, 2014) (“Rosebud II”). And on February 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 techniques for enabling collaborative work over a network of 

computers. 

In the instant suit, Adobe moved for summary judgment 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 preissuance 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 moCase: 15-1428 Document: 47-2 Page: 2 Filed: 02/09/2016
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 completed fact discovery. 

One month before the close of fact discovery, the district 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 created 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 judgment 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 judgment 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. 

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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 discretion. 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 provided 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 under 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 published patent application . . . ; and

(B) had actual notice of the published patent application . . . . 

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 

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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 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 

notice. 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”). 

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 included in a commercial database where it might be 

found is insufficient. The published applicant 

must give actual notice of the published application to the accused infringer and explain what 

acts are regarded as giving rise to provisional 

rights.

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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, prohibits 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 infringement.” 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 patentee. Requiring the applicant to affirmatively provide 

notice to potential infringers is in line with the extraordiCase: 15-1428 Document: 47-2 Page: 6 Filed: 02/09/2016
ROSEBUD LMS INC. v. ADOBE SYSTEMS INCORPORATED 7

nary nature of statutory pre-issuance damages. 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. 

II. Summary Judgment on § 154(d)’s “Actual Notice” Requirement

Having interpreted § 154(d)’s “actual notice” requirement 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 grandparent 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 applicaCase: 15-1428 Document: 47-2 Page: 7 Filed: 02/09/2016
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 patent 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 published 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. Nothing in the evidence suggests that Adobe or its employees 

were monitoring Rosebud and its products, let alone to 

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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 discovered the published ’280 patent application while preparing 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. However, 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 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 

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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 timing, we see no abuse of discretion in the district court’s 

action.

CONCLUSION

We affirm the district court’s grant of summary judgment on Rosebud’s claim for damages under 35 U.S.C. 

§ 154(d). 

AFFIRMED

Case: 15-1428 Document: 47-2 Page: 10 Filed: 02/09/2016