# NovaTag v. DeltaMark — Damages Window Analysis

## 1. Did the January–June 2022 marking rate give constructive notice?

**No.** From January 1 through June 30, 2022, only **60 percent** of distributed patented units bore the patent number. Rule 2 sets the bright line at **95 percent**; a lower percentage "does not" constitute substantial compliance. At 60 percent, NovaTag's program was 35 points short of the threshold, so no constructive notice ran during this period. Because NovaTag made and sold the patented tracking tag, it was subject to the marking requirement (Rule 1), and its failure to substantially comply means damages are unavailable for that window absent actual notice — of which there was none before October 2022 (and the October communication fails, below).

## 2. First constructive-notice date

**July 1, 2022.** Beginning that date, 97 percent of distributed units bore the patent number, exceeding the 95 percent threshold. Under Rule 3, constructive notice begins on the date substantial compliance begins, and it continued uninterrupted because compliance "remained at 97 percent or higher through expiration." NovaTag carries its Rule 7 burden through its marking records; DeltaMark has offered no proof of earlier unmarked patented sales after July 1, 2022 that would break compliance.

## 3. Did the October 15, 2022 email give actual notice?

**No.** The email fails all three elements of Rule 4:

| Requirement | October 15 email | Satisfied? |
|---|---|---|
| Identify the patent | No patent number or patent identified | No |
| Identify accused product/conduct | Names "Model K" | Yes |
| Charge infringement | Says only "technology similar to ours" and proposes a license | No |

Rule 4 expressly excludes a "licensing invitation" and "a statement that products use similar technology." The email is both, and nothing more. It has no legal effect on the damages window.

## 4. Effect of the February 1, 2023 letter

The letter **is** valid actual notice: it identifies the patent, identifies Model K, maps two claims, and states that DeltaMark's sales infringe. All three Rule 4 elements are met.

**But it is legally redundant.** Constructive notice had already attached on July 1, 2022 — over six months earlier. Under Rule 5, once notice begins (constructive *or* actual), damages run for all later infringement through expiration. Actual notice is an *alternative* route to the damages window, not a replacement start date that overrides an earlier-triggered constructive window. The letter therefore does not move the start date forward; its only practical value is as a backstop had the marking program been found non-compliant.

**This is the critical drafting point for our damages contentions:** DeltaMark will urge February 1, 2023 as the start. That is wrong, and it costs seven months.

## 5. The six-year filing lookback

Suit was filed **June 1, 2026**. Rule 6 bars damages for infringement more than six years earlier, i.e., before **June 1, 2020**. The patent did not issue until January 1, 2022, so the entire potential damages period post-dates the lookback cutoff. **The lookback is not the operative constraint here** and, per Rule 6's second sentence, it does not shorten the later notice-based start date of July 1, 2022.

## 6. First recoverable damages date

**July 1, 2022** — the constructive-notice date, which is later than both the lookback cutoff (June 1, 2020) and the patent issue date (January 1, 2022).

## 7. Recoverable months and units

Window: **July 1, 2022 through December 31, 2025** (patent expiration).

| Period | Months |
|---|---|
| July–December 2022 | 6 |
| January–December 2023 | 12 |
| January–December 2024 | 12 |
| January–December 2025 | 12 |
| **Total** | **42** |

Units: 42 months × 2,000 units/month = **84,000 units**

## 8. Total royalty damages

84,000 units × $18/unit = **$1,512,000**

## 9. Damages if February 1, 2023 were incorrectly used

Window: February 1, 2023 – December 31, 2025.

- February–December 2023: 11 months
- 2024: 12 months
- 2025: 12 months
- **Total: 35 months**

35 × 2,000 = **70,000 units** → 70,000 × $18 = **$1,260,000**

## 10. Value lost from the incorrect start date, and the unrecoverable March–June 2022 period

**Loss from the erroneous February 1, 2023 start date:**
- Months lost: 42 − 35 = **7 months** (July 2022 – January 2023)
- Units lost: 14,000
- **Value lost: $252,000**

**Unrecoverable March–June 2022 period** (DeltaMark sold Model K from March 2022, but marking was only 60 percent and no actual notice existed):
- Months: **4** (March, April, May, June 2022)
- Units: 8,000
- **Value forfeited: $144,000**

**Summary of the full exposure picture:**

| Scenario | Months | Units | Damages |
|---|---|---|---|
| Theoretical maximum (March 2022 – Dec 2025) | 46 | 92,000 | $1,656,000 |
| **Correct recovery (July 1, 2022 start)** | **42** | **84,000** | **$1,512,000** |
| DeltaMark's erroneous position (Feb 1, 2023) | 35 | 70,000 | $1,260,000 |
| Forfeited to marking failure | 4 | 8,000 | $144,000 |
| At risk if we concede the start date | 7 | 14,000 | $252,000 |

## Bottom line

NovaTag should recover **$1,512,000** for 84,000 units over 42 months beginning **July 1, 2022**. The $144,000 attributable to March–June 2022 is irretrievably lost to the 60 percent marking rate — no litigation position recovers it, because the October 15 email cannot substitute for actual notice. The contested $252,000 turns entirely on establishing July 1, 2022 rather than February 1, 2023 as the trigger, which means our marking records for the July 2022 transition are the highest-value evidence in the case and must be authenticated with care under NovaTag's Rule 7 burden.