Liability for Pre-Issuance Damages May Only Provide For Damages Before A Patent Issues If The Infringer Has Actual Notice of the Published Patent Application

The U.S. Court of Appeals for the Federal Circuit affirmed the district court’s summary judgment in Rosebud LMS Inc. v. Adobe Sys. Inc. 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 the asserted patent.

The Federal Circuit stated that “[g]enerally, patent owners may only collect damages for patent infringement that takes place during the term of the patent.”  The narrow exception to Section 154(d) is that it only provides for damages that take place before a patent issues if the infringer “had actual notice of the published patent application … [and] unless the invention as claimed in the patent is substantially identical to the invention as claimed in the published patent application.”

The nature of § 154(d)’s “actual notice” requirement is an issue of first impression for the Federal Circuit, which stated that it “agree[d] with Adobe and the district court that constructive knowledge would not satisfy the actual notice requirement.”

The Federal Circuit did not 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. But the ordinary meaning of ‘actual notice’ also includes knowledge obtained without an affirmative act of notification.” Correspondingly, the Federal Circuit equates ‘actual notice’ with knowledge.

The Court also corrected Adobe by stating that “the legislative history [maintains] 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 that was not mentioned in the text of § 154(d).

The Court compares Section 287(a), which explicitly requires an act of notification, unlike § 154(d), which merely requires “actual notice” and offers that the difference suggests that the two statutes are to be interpreted differently.

The Court further acknowledges that if Congress wishes, it can amend the statute to require an affirmative act by the patentee and that the Court cannot, and thus interprets the actual notice requirement of § 154(d) as it is clearly written to convey ordinary meaning.