Eugene, Oregon – October 15, 2021. On October 14, 2021, the law firm of Friedman, Suder & Cooke in Fort Worth, Texas (fsclaw.com) obtained a Final Rule 58 Judgment in connection with the unanimous jury verdict it obtained in Eugene, Oregon Federal Court against Avery Dennison Corp. (AVY: NYSE) for patent infringement of US Patent number 9,798,967. The jury found that Avery Dennison infringed the ’967 Patent, both literally and under the doctrine of equivalents, and awarded $26,641,876.75 in damages for past infringement from October 17, 2017 through March 31, 2021.
The Final Rule 58 Judgment issued on October 14 escalated Avery Dennison’s liabilities to over $62 million through that date. The Court noted extraordinary facts emerging post-verdict about hidden evidence, litigation misconduct, and exceptional litigant behavior. Substantial post-verdict proceedings occurred for calculating the monetary impact of Avery Dennison’s actions. The initial finding by the jury occurred without the jury knowing all of those facts.
Subsequent to that initial finding, ADASA filed for an exceptional case finding, prejudgment interest, an enhanced ongoing royalty and sanctions. Part of the basis for the exceptional case finding and sanctions was Avery Dennison’s pre- and post-trial discovery misconduct, which included failing to disclose voluminous additional infringing product until after the trial had been completed. While Avery Dennison successfully argued to the jury that a lower royalty rate should be awarded because only 17% of their products were accused of infringement and as such, the ’967 Patent is not that valuable, post-trial discovery demonstrated that this assertion was false and should never have been argued in the first place. Post-verdict, Avery Dennison agreed that an additional $9,417,343 should be added to the verdict based on the royalty rate found by the jury.
Throughout the post-trial process, Avery Dennison offered both ADASA and the Court shifting excuses for its misconduct, ultimately identifying that it simply had dropped the ball and not taken its discovery obligations seriously. Even after hiring an outside accounting firm to identify the issue, Avery Dennison ultimately was forced to admit that it failed to follow its obligations under the Federal Rules.
In response to this misconduct, along with a practice of avoiding obligations, refusing to produce relevant information, proffering weak and untenable arguments, and refusing to accept defeat when the Court granted ADASA’s motions for summary judgment, the Court declared the case exceptional and awarded ADASA over $20,000,000 in sanctions based on a rate of $0.0025 per infringing tag and all of its attorneys’ fees. In addition, the Court awarded ADASA the highest prejudgment interest rate requested, awarded an ongoing royalty rate twice that found by the jury and consistent with the rate asked for by ADASA at trial. The total judgment without the ongoing royalties is $62,407,801.50.
Lead counsel for ADASA, Jonathan Suder, along with co-counsel Glenn Orman, argued the post-verdict motions, including the motion for sanctions and explained the incredible difficulties throughout the case that ADASA had in obtaining relevant information to justify the sanctions. Suder in asking the rhetorical question “Who is watching the watch dogs?” argued that “because a public corporation whose sole mission is to make money for their shareholders and sell product for their customers has an in-house legal team who are their watchdogs and make sure that they respect the rule of law. So who is watching those watchdogs to make sure they’re doing their jobs right? Judge, you are that watchdog. This falls squarely at the feet of the legal counsel, who weren’t watchdogs, they were bulldogs, they were pitbulls that threatened Mr. McAllister, set this course in process.”
In announcing the sanction at the hearing, the Honorable Judge Mustafa T. Kasubhai provided careful, deliberative, and poised rationales for his decision that sanctions were appropriate based on the totality of the circumstances of this case and that Avery Dennison exhibited a reckless disregard for the litigation process that is contrary to the expectations of the rules of civil litigation, and disrespect for our judicial system and for the peaceful resolution of disputes between parties.
In response to the entry of the final judgement, Suder added “sometimes our legal system gets tested and pushed to its limits and requires dedication and perseverance to the rule of law. We, as lawyers, are forced to trust and believe in the process and when we do, the system works. The verdict, from the District of Oregon, as well as the Final Judgment shows that the rule of law and all inventors, no matter how big or small, must be respected.”
“It was clear from the beginning of this case that Avery Dennison did not take Mr. McAllister’s property rights or the Federal Rules seriously,” said Orman. “Thankfully, the jury and Judge Kasubhai recognized the exceptional misconduct at hand and saw the important contributions Mr. McAllister made to the RFID industry through his inventions. We are extremely proud to have represented someone like Mr. McAllister and thankful that the process reached the correct result.”
“I’m overwhelmed with gratitude for the jury’s and Judge Kasubhai’s hard work and relieved after such a long and emotional process,” said ADASA founder and inventor of the ’967 Patent Clarke McAllister. “This is a major milestone for ADASA and I’m so proud of our team and everyone’s efforts. Most of all, despite this battle taking years and many turns, I know that through determination and perseverance that the legal system can prevail.”
The case was tried before The Honorable Judge Mustafa T. Kasubhai and styled ADASA Inc. v. Avery Dennison Corporation, Case Number 6:17-cv-01685-MK. Avery Dennison was represented by K&L Gates.
While portions of the transcript remain publicly unavailable, it will be available after certain redactions have been made. In addition, a final written opinion detailing the full basis for the award of attorneys’ fees and sanctions will be issued by the Court.
With Suder and Orman for Friedman, Suder & Cooke was Richard Wojcio, Jr., as well as Alan Thayer of Innovative Law Group in Eugene, Oregon. Post-verdict, Robert Greenspoon and William Flachsbart formerly of Flachsbart & Greenspoon and now of Dunlap, Bennett, & Ludwig PLLC in Chicago, Illinois have joined the legal team to assist in the post-verdict motions as well as the appeal.