Item 8.01 Other Events.
In a verdict issued on May 14, 2021 in the matter of ADASA Inc. v. Avery
Dennison Corporation, in which ADASA Inc. ("Adasa") brought an action against
Avery Dennison Corporation (the "Company") in the Federal District Court in
Oregon (Eugene) alleging that two of the Company's methods for encoding
radio-frequency identification (RFID) tags infringe a U.S. patent assigned to
Adasa, a jury found infringement and awarded Adasa damages in the amount of
approximately $26.6 million, based on an assumed royalty rate on RFID tags sold
beginning in October 2017. The Company strongly believes that Adasa's patent is
invalid and that, even if valid, it has not been infringed by the Company, as
well as that the royalty rate used as the basis for the jury's determination is
unreasonable under prevailing industry standards. As such, the Company will
appeal this decision.
The two methods at issue in this case impact a relatively small portion of the
Company's annual RFID tag sales volume. While the Company strongly disputes the
merits of Adasa's case, the Company is accelerating its continued migration to
alternative encoding methods used in its other RFID tags.
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