Case 1:15-cv-00311-RGA Document 107 Filed 03/25/16 Page 1 of 25 PageID #: 3158
`Case 1:15—cv—OO311—RGA Document 107 Filed 03/25/16 Page 1 of 25 Page|D #: 3158
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`V.
`
`ACTIVISION BLIZZARD, INC.,
`
`Defendant.
`
`ACCELERATION BAY LLC,
`
`Plaintiffl
`
`V.
`
`ELECTRONIC ARTS INC.,
`
`Defendant.
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`TAKE-TWO INTERACTIVE SOFTWARE,
`1Nc., ROCKSTAR GAMES, INC. and
`2K SPORTS, INC.,
`
`Defendants.
`
`
`
`
`
`é\2\/\4(\y\2\é\J\/\/\;\J\/\é\2€\./\/\é\2\2\&%/\y%%%\/¥/
`
`C.A. No. 15-228 (RGA)
`
`PUBLIC VERSION
`
`C.A. No. 15-282 (RGA)
`
`C.A. No. 15-311 (RGA)
`
`PLAINTIFF ACCELERATION BAY LLC_’S ANSWERING BRIEF IN OPPOSITION TO
`DEFENDANTS’ MOTION TO DISMISS FOR LACK OF STANDING
`
`

`
`Case 1:15-cv-00311-RGA Document 107 Filed 03/25/16 Page 2 of 25 PageID #: 3159
`Case 1:15—cv—OO311—RGA Document 107 Filed 03/25/16 Page 2 of 25 Page|D #: 3159
`
`Philip A. Rovner (#3215)
`Jonathan A. Choa (#5319)
`POTTER ANDERSON & CORROON LLP
`Hercules Plaza
`P.O. Box 951
`
`Wilmington, DE 19899
`(302) 984-6000
`provner@potteranderson.com
`jchoa@potteranderson.com
`
`Attorneysfor PlaintzflAcceleration Bay LLC
`
`OF COUNSEL:
`
`Paul J. Andre
`Lisa Kobialka
`James R. Hannah
`KRAMER LEVIN NAFTALIS
`& FRANKEL LLP
`990 Marsh Road
`
`Menlo Park, CA 94025
`(650) 752-1700
`
`Aaron M. Frankel
`KRAMER LEVIN NAFTALIS
`& FRANKEL LLP
`1177 Avenue of the Americas
`
`New York, NY 10036
`
`(212) 715-9100
`
`Dated: March 18, 2016
`Public Version Dated: March 25, 2016
`
`

`
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`
`TABLE OF CONTENTS
`
`1. Nature and Stage of Proceedings ........................................................................................... .. 1
`
`II. Summary of the Argument .................................................................................................... .. 1
`
`III. Statement of Facts ................................................................................................................. .. 2
`
`IV. Argument ............................................................................................................................... .. 3
`
`A.
`
`Acceleration Bay Has Prudential Standing to Assert its Patents .......................... .. 3
`
`1.
`
`2.
`
`Acceleration Bay is the Owner of the Asserted Patents ........................... .. 4
`
`Acceleration Bay Holds All Substantial Rights to the Asserted Patents
`
`6
`
`B.
`
`Acceleration Bay Has Constitutional Standing................................................... .. 14
`
`1.
`
`2.
`
`The Boeing’s Field of Use Does Not Apply to the
`Accused Video Games ............................................................................ .. 14
`
`Sony’s Ability to Sublicense Does Not Render Illusory
`
`Acceleration Bay’s Right to Sue Defendants .......................................... .. 18
`
`V. Conclusion ....................................... .,. ................................................................................. .. 20
`
`

`
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`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`
`Adaptix, Inc. v. T—Mobile USA, Inc.,
`No. 6:12-cv—00369, Memorandum Order (E.D. Tex. Nov. 5, 2014) ..................................... ..19
`
`Alfred E. Mann Found. v. Cochlear Corp.,
`604 F.3d 1354 (Fed. Cir. 2010) ................................................................................................ ..7
`
`Bluestone Innovations LLC v. Nichia Corp,
`No. C 12-00059 SI, 2013 WL 1729814 (N.D. Cal. Apr. 22, 2013) ............................. ..8, 12, 13
`
`Clouding IP, LLC v. Google Inc,
`61 F. Supp. 3d 421 (D. Del. 2014) ................................................................................... ..12, 13
`
`EMC Corp. v. Pure Storage, Inc.,
`No. C.A. 13—1985—RGA, 2016 WL 805814 (D. Del. Feb. 26, 2016).
`
`.............................. .. 7, 9
`
`Ethicon, Inc. v. US. Surgical C0l‘p.,
`135 F.3d 1456 (Fed. Cir. 1998) .............................................................................................. ..19
`
`Eurick v. Pemco Ins. Co.,
`
`108. Wash. 2d 338 (Sup. Ct. Wash., En Banc, June 11, 1987) ........................................... ..5, 15
`
`Int’l Gamco, Inc. v. Multimedia Games, Inc.,
`504 F.3d 1273 (Fed. Cir. 2007) ................................................................................................ ..8
`
`Lucent Techs. Inc. v. Gateway, Inc,
`No. 02—CV—2060, 2007 WL 1306535 (S.D. Cal. Apr. 27, 2007) ........................................... ..1’9
`
`Luminara Worldwide, LLC v. Liown Elecs. C0,,
`N0. 2015—CV—1671, 2016 WL 797925 (Fed. Cir. Feb. 29, 2016) ................................... ..11, 15
`
`MobileMedia Ideas, LLC v. Apple Inc.,
`885 F. Supp. 2d 700 (D. Del. 2012) ............................................................................... ..passim
`
`Princeton Digital Image Corp. v. Hewlett—Packard,
`Nos. 12 Civ. 779 (R18), 12 Civ. 6973 (RJS), 12 Civ. 6974 (RJS), 2013 WL
`1454945 (S.D.N.Y. Mar. 21, 2013) ................................................................................... ..8, 12
`
`Speedplay, Inc. v. Bebop, Inc.,
`211 F.3d 1245 (Fed. Cir. 2000) ........................................................................................ ..12, 13
`
`Suflolk Techs LLC v. AOL Inc.,
`910 F. Supp. 2d 850 (E.D. Va. 2012) .............................................................................. ..12, 14
`
`

`
`Case 1:15-cv-00311-RGA Document 107 Filed 03/25/16 Page 5 of 25 PageID #: 3162
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`
`TABLE OF AUTHORITIES
`
`(continued)
`
`Page(s)
`
`V
`Textile Pr0ds., Inc. v. Mead Corp,
`134 F.3d 1481 (Fed. Cir. 1998) .............................................................................................. ..19
`
`Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A.,
`944 F.2d 870 (Fed. Cir. 1991) .................................................
`
`............................... ..5, 7, 11, 12
`
`Matter of Wa/1l’s Estate,
`31 Wash. App. 815 (Wash. Ct. App. 1982) ........................................................................... ..16
`
`Walker Digital, LLC v. Expedia, Inc.,
`950 F. Supp. 2d 729 (D. Del. 2013) ......................................................................................... ..4
`
`Wz'A VS0luti0ns LLC v. Motorola, Inc,
`
`631 F.3d 1257 (Fed. Cir. 2010) .............................................................................. ..9, 12, 18, 19
`
`Statutes
`
`35 U.S.C. § 100(d) ......................................................................................................................... ..3
`
`35 U.S.C. § 281 .............................................................................................................................. ..3
`
`

`
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`
`I.
`
`NATURE AND STAGE OF PROCEEDINGS
`
`Plaintiff Acceleration Bay LLC (“Acceleration Bay”) filed individual complaints against
`
`Defendants in March and April 2015. D.I. 1.1 Discovery is well underway. Defendants began
`
`core technical discovery in December 2015, and Acceleration Bay served preliminary claim charts
`
`on March 2, 2016. The parties have collectively served 18 third-party subpoenas, and Acceleration
`
`Bay served 30(b)(6) deposition notices on Defendants on January 5, 2016, and has been trying to
`
`get a schedule and list of witnesses from Defendants for those depositions. A year after the
`
`complaints were filed, Defendants now move for dismissal for a second time. D.I. 100.
`
`H.
`
`SUMMARY OF THE ARGUMENT
`
`Acceleration Bay has both prudential and constitutional standing to assert its patents
`
`against D<=fendants-
`
`— Prudential standing is not an issue here because it is enly a concern when
`
`an exclusive licensee, not an owner, attempts to enforce patents alone, and Acceleration Bay is the
`
`owner of the Asserted Patents. M0bileMedz'a Idéas, LLC v. Apple Inc., 885 F. Supp. 2d 700, 706
`
`(D. Del. 2012).
`
`Alternatively, under any test, Acceleration Bay has prudential standing to proceed against
`
`Defendants because it holds “all substantial rights” in the Asserted Patents, and in particular, is the
`
`only entity that can bring these claims against Defendants. Neither Boeing nor anyone else
`
`(including third—party licensee Sony or financing company Hamilton Capital) has standing to bring
`
`these claims against Defendants’ video games, eliminating any risk of duplicative litigation, the
`
`primary consideration of prudential standing.
`
` s dispositive fact is clear from the four corners
`
`of the purchase agreement. Moreover, Boeing’s exclusive Field of Use license, upon which
`
`1 Docket citations are to Acceleration Bay LLC v. Activision Blizzard Ina, l:l5-cV—228—RGA, and
`are representative of similar pleadings filed in the related cases.
`
`

`
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`Defendants rely heavily in their brief, is not even relevant, given that Defendants fall outside that
`
`field, and standing is determined as to specific parties on a claim by claim basis, not in gross.
`
`Acceleration Bay also has constitutional standing to sue Defendants for all accused
`
`products. In arguing to the contrary, Defendants make the incredible claim that Boeing’s exclusive
`
`Field of Use somehow overlaps with Defendants’ videogames, only highlighting the infirrnities of
`
`Defendants’ Motion. Boeing’s exclusive Field of Use relates to Boeing’s actual business. The
`
`handful of accused games that have tangential gameplay elements relating to airborne vehicles are
`
`S
`
`fanciful and fantastic, such as gryphons, magic carpets, science fiction spaceships, or completely
`
`unrealistic depictions of airplanes. They are a far cry from simulations of actual airplanes and the
`
`like that comprise Boeing’s business, which was the basis for Acceleration Bay and Boeing’s
`
`drafting of the Field of Use. Finally, the prior license providing Sony with a limited right to
`
`sublicense does not impact Acceleration Bay’s right to sue Defendants for PlayStation games.
`
`Sony has no right to bring suit against Defendants or to license Defendants’ past infiingement.
`
`Accordingly, Defendants’ Motion should be denied.
`
`III.
`
`STATEMENT OF FACTS
`
`2 Unless otherwise noted, all “Ex.” citations are to the Declaration of Aaron Frankel in Support
`of Acceleration Bay’s Opposition, filed herewith.
`
`

`
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`IV.
`
`ARGUMENT
`
`A.
`
`Acceleration Bay Has Prudential Standing to Assert its Patents
`
`As the owner of the Asserted Patents, Acceleration Bay has standing to assert them against
`
`Defendants without further consideration of prudential standing. The Patent Act provides that a
`
`party holding legal title to the patent is entitled to bring a civil action for patent infringement. 35
`
`U.S.C. §§ 281 and l00(d); MobileMedz'a, 885 F. Supp. 2d at 706.
`
`Indeed, an assignee—plaintiff
`
`with title to a patent, such as Acceleration Bay, as a holder of legal title, holds prudential standing
`
`to sue in its own name despite the assignor’s retention of some rights.
`
`Id. at 709. Defendants’
`
`counsel recently argued in a (winning) brief to the Court, that a “patentee with legal title and the
`
`right to sue has standing in federal court,” which “ends the inquiry.” Ex. 9, EMC Corp. v. Pure
`
`Storage, Inc., No. l3—l985—RGA, Plaintiffs Reply Brief Regarding EMC Corporation’s Standing
`
`at l (D. Del. Feb. 26, 2016). Because Acceleration Bay is the owner of the Asserted Patents, there
`
`is no need to reach the issue of prudential standing, which is limited to exclusive licensees. See
`
`M0bI'leMedz'a, 885 F. Supp. 2d at 706.
`
`

`
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`Even under a prudential standing test, Acceleration Bay has standing to sue Defendants in
`
`its own name because it has “all substantial rights” to the patents. There is no risk of duplicative
`
`litigation here, the primary policy behind prudential standing, because only Acceleration Bay can
`
`assert these patents against Defendants.
`
`Indeed, even within Boeing’s exclusive Field of Use,
`
`which does not cover Defendants in any event, Boeing could not assert these patents without
`
`Acceleration Bay.
`
`1.
`
`Acceleration Bay is the Owner of the Asserted Patents
`
`The touchstone of Defendants’ entire prudential standing argument
`
`is the factually
`
`incorrect belief that Boeing owns the Asserted Patents, and that Acceleration Bay is only an
`
`exclusive licensee. While the title of an agreement is not determinative as to whether it transfers
`
`ownership, the substance of an agreement is, and “[a] transfer of the ‘entire interest’ of a patentee
`
`in a patent is well known to mean a full assignment of the patent-i.e., transfer of title.”
`
`Mobz'leMea’z'a, 885 F. Supp. 2d at 708-09 (finding assignee—plaintiff was owner of patents, despite
`
`assignors’ retention of various rights)(citations omitted).
`
`The eueeeeee Aeeeemeee
`
`therefore unequivocally and expressly transferred legal title ofthe Asserted Patents to Acceleration
`
`Bay.
`
`In Walker Digital, LLC v. Expedia, Inc., 950 F. Supp. 2d 729, 736 (D. Del. 2013), for
`
`example, Judge Robinson found that the following less—fulsome language “clearly transferred
`
`ownership rights” of that patent at issue:
`
`Walker Digital LLC (“Sel1er” for purposes of this Exhibit A) hereby
`conveys, assigns, and transfers to eBay Inc. (“Purchaser” for purposes of
`this Exhibit A), and Purchaser hereby accepts, all right title, and interest in
`and to the patents and patent applications described on Schedule A
`(collectively, the “Transferred Patents”).
`
`Id. at 732. Thus, there can be no reasonable dispute that Acceleration Bay is the owner of the
`
`Asserted Patents.
`
`

`
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`The contents of the Purchase Agreement are fatal to Defendants’ primary argument, which
`
`is based on an absurd construction of the Purchase Agreement whereby Acceleration Bay
`
`somehow did not purchase the Asserted Patents.
`
`In confirming that the Asserted Patents were
`
`assigned to Acceleration Bay, the Court need not look further than the Purchase Agreement to “[i]
`
`ascertain the intention of the parties and [ii] examine the substance of what was granted.” Vaupel
`
`Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 874 (Fed. Cir. 1991). -
`
`Defendants notably did not seek such evidence before filing this motion, presumably because it
`
`entirely undermines their motion.3
`
`Numerous provisions of the Purchase Agreement demonstrate the parties’ intention and
`
`agreement that Acceleration Bay was to be the owner of the Asserted Patents with the sole right to
`
`assert them against Defendants, and particularly, without the involvement of Boeing (or any other
`
`party for that matter).
`
`3 Under Washington law, the Purchase Agreement should be construed “to give effect to the
`apparent clear intention ofthe parties .
`.
`. and not a strained or forced construction leading to absurd
`results.” Eurick v. Pemco Ins. Co., 108 Wash. 2d 338, 340-41 (Sup. Ct. Wash., En Banc, June ll,
`l987)(internal quotations and citations omitted). EX. 1 at § 9.4 (Washington law controls Purchase
`Agreement).
`
`

`
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`2.
`
`Acceleration Bay Holds All Substantial Rights to the Asserted Patents
`
`To the extent that the Court looks beyond Acceleration Bay’s ownership of the Asserted
`
`Patents, Acceleration Bay has prudential standing to bring these actions against Defendants
`
`because it has “all substantial rights” in the Asserted Patents, including specifically as to these
`
`claims against Defendants. Even if not the owner (and Acceleration Bay is), a party “can sue in
`
`[its] own name alone” if it has “all substantial rights to the patent.” See M0bileMedz'a, 885 F. Supp.
`
`2d at 706 (citations omitted).
`
`Under such an analysis, which is unnecessary here, “[t]he court must look to the agreement
`
`between [Acceleration Bay and Boeing] and analyze the respective rights allocated to each party
`
`in order to determine whether substantial rights have been transferred.” Id. at 707 (internal
`
`quotations and citation omitted). Here, Acceleration Bay’s rights in and to the Asserted Patents,
`
`discussed above, confirm it is the owner of the patents or, at a minimum, the holder of “all
`
`

`
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`substantial rights” in the Asserted Patents, entitling Acceleration Bay to proceed against
`
`Defendants without Boeing as a party. In other words, possession of “all substantial rights” does
`
`not require ownership of all rights in the patents.
`
`Ia’. Rather, the Federal Circuit and other courts
`
`have found that licensees with rights less than those purchased by Acceleration Bay here (and,
`
`again, Acceleration Bay is the owner, not a licensee), have “all substantial rights” and prudential
`
`standing to sue in their own name.
`
`a.
`
`Acceleration Bav Has the Right to Sue Defendants
`
`Acceleration Bay holds the exclusive right to sue Defendants, which is the primary
`
`consideration ofthe substantial rights analysis, and resolves any concerns over prudential standing.
`
`Vaupel, 944 F.2d at 875. The grant of the right to sue is “particularly dispositive” in view of the
`
`court’s policy to “prevent the possibility of two suits on the same patent against a single infringer.”
`
`Id. (citations omitted). This Court has recognized that the nature and scope of the right to sue
`
`accused infringers is “the most important factor” in determining “whether an exclusive license
`
`transfers sufficient rights to render the licensee the owner of the patent,” and Acceleration Bay’s
`
`exclusive right to sue Defendants and the absence of risk of duplicative litigation should end the
`
`prudential standing analysis. EMC Corp. v. Pure Storage, Inc., No. C.A. l3—l985—RGA, 2016 WL
`
`805814, at *3 (D. Del. Feb. 29, 2016) (holding that “[t]he most significant consideration in
`
`deciding the standing inquiry is the nature and scope of the parties’ rights to bring suit for
`
`infringement”) (citing Alfred E. Mann Found. v. Cochlear Corp, 604 F.3d 1354, 1361 (Fed. Cir.
`2010)); M0bz'leMedz'a, 885 F. Supp. 2d at 709 (“There is no indication that [assignors] have
`
`constitutional standing to sue. .
`
`.
`
`. Thus, the court’s decision does not subject Apple to duplicative
`
`litigation”), citing Vaupel, 944 F.3d at 875.
`
`
`
`

`
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`While Defendants concede that Acceleration Bay holds the right to sue Defendants, they
`
`mistakenly claim that because Boeing has an exclusive license within a narrow field of use,
`
`Acceleration Bay is categorically precluded from asserting those patents without Boeing, even
`
`outside thatfield ofuse. Under Defendants’ unsupported reading of the law, a patent owner could
`
`never assert its patent alone in any field, after granting an exclusive license in a limited field of
`
`use. No court has reached this outlandish result. Defendants rely on Int’/7 Gamco, Inc. v.
`
`Multimedia Games, Inc., 504 F.3d 1273 (Fed. Cir. 2007) to suppoit their theory, but that case is
`
`inapposite and confirms that Acceleration Bay has standing here. ‘ Int ’l Gamco addresses the
`situation where an exclusive licensee with a field ofuse license attempts to assert a patent without
`
`the owner. Id. at 1278-79. But Acceleration Bay is the patent owner with the broad general right
`
`to enforce its patents, and Boeing is the exclusive licensee with a narrow field of use, wherein
`
`Boeing does not have standing to bring suit with the Asserted Patents even within the narrow field
`
`1” use. Accordingly, Int’l Gamco supports the conclusion that Boeing cannot proceed without
`
`Acceleration Bay (negating concerns of duplicative litigation), but not that Acceleration Bay
`
`cannot proceed without Boeing.
`
`Contrary to Defendants’ argument, a patent owner can alone assert its patents even after
`
`granting an exclusive field of use license. For example, in Bluestone Innovations LLC V. Nichia
`
`Corp., No. C 12-00059 SI, 2013 WL 1729814, at *5 (N.D. Cal. Apr. 22, 2013), the existence of
`
`an exclusive field of use license for lasers did not prevent the patent owner from asserting alone
`
`the patents against LED products that did not incorporate lasers. Id. Indeed, Bluestone cited the
`
`same Int’l Gamco case relied upon by Defendants to find that an exclusive license in a limited
`
`field of use did not defeat assignee Bluestone’s prudential standing because in a suit filed by the
`
`exclusive licensee (here Boeing) it would be required to join the patent owner.
`
`Id. Because
`
`Acceleration Bay “will be a party to any suit that [Boeing] initiates, it will be collaterally estopped
`
`from re—litigating an issue that received a final judgment on the merits,” removing the risk of
`
`diverse parties asserting the same patents against Defendants and obviating the concern prudential
`
`standing addresses. Id., citing Int’l Gamco, 504 F.3d at 1278; see also Princeton Digital Image
`
`

`
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`Corp. v. Hewlett—Packard, Nos. 12 Civ. 779 (RJ S), 12 Civ. 6973 (RJS), 12 Civ. 6974 (RJ S), 2013
`
`WL 1454945, at *6 (S.D.N.Y. Mar. 21, 2013) (finding assignee has standing to assert patent
`
`despite assignor’s retention of exclusive license in a field of use).
`
`Boeing’s exclusive Field of Use is not even relevant to Acceleration Bay’s standing as to
`
`Defendants, because Defendants’ accused products fall outside that field (see Section lV(B)(l)),
`
`and standing is determined as to specific claims against specific parties, not in gross. WITAV
`
`Solutions LLC v. Jl/Iotorola, Inc, 631 F.3d 1257, 1267 (Fed. Cir. 2010) (the “key question” in
`
`determining standing issue is not whether the plaintiff has the right to “exclude all others from
`
`practicing the patent,” but rather standing “to exclude the [specific] Defendants from engaging in
`
`the [specifically] alleged infringing activity”); see also EMC Corp., 2016 WL 805814, at *5
`
`(finding that exclusive license in unrelated field did not divest plaintiff of standing).
`
`Because there can be no assertion of the Asserted Patents against Defendants other than by
`
`Acceleration Bay, including by assignor Boeing, there is no risk of duplicative and inconsistent
`
`litigation.‘ Therefore, the policy concern underpinning prudential standing is not implicated,
`
`ending the inquiry into Acceleration Bay’s prudential standing to bring these actions.
`
`Mobz'leMedz'a, 885 F. Supp. 2d at 709 (finding assignee had prudential standing despite rights
`
`reserved to assignors due to the absence of the risk to defendant of “duplicative litigation”).
`
`b.
`
`Acceleration Baylrlas All Other Relevant Substantial Rights in the
`Asserted Patents
`
`Beyond Acceleration Bay’s right to sue Defendants and the absence of the risk of
`
`inconsistent litigation, which resolves any concerns over prudential standing, the other rights
`
`

`
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`Acceleration Bay holds confirm that it, not Boeing, is the owner of the Asserted Patents and has
`
`prudential standing.
`
`Ol
`
`§|'--‘n .'>009;an"9RF-‘o5 U3 :3:
`
`VJ o213an‘'1U)E*5
`
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`
`oH7 Er’co 53>U)37-1cuC-- "U.9’.(DE‘.(D as3 anNSs:B.3
`
`0%.E F?‘0 VJC
`
`Defendants resolves prudential standing, at the very least, the Federal Circuit and Judge Robinson,
`
`as well as numerous other courts, have found that allocations providingfewer rights to the assignee
`
`than those Boeing sold to Acceleration Bay still leave the assignee the effective owner of patents
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`with prudential standing to assert them without the assignor.
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`For example, the Federal Circuit recently found that an exclusive licensee had prudential
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`standing to enforce patents without the patent owner even where the assignor had a greater bundle
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`of rights than the limited rights Acceleration Bay granted to Boeing, including rights to (l) use the
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`patents, (2) license the patents within a specified field, including authorizing defendants to make
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`and sell products under the patents in certain circumstances, and (3) receive revenue from litigation
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`and licensing of the patents. Luminam Worldwide, LLC v. Liown Elecs. Co., No. 20l5—CV-1671,
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`2016 WL 797925, at *5—6 (Fed. Cir. Feb. 29, 2016). The patent owner also (1) retained title to the
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`patents—, (2) paid maintenance fees for the patents—, and (3)
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`received notification of litigation activities
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`Id. Notwithstanding these rights,
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`the Federal Circuit found the plaintiff had prudential standing because the licensor did not have
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`the right to sue the defendants. Id. (“[Licensor] need not be joined to protect [defendant] against
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`the possibility of facing multiple lawsuits on the same patent”). Moreover, unlike the Luminara
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`plaintiff, Acceleration Bay is the owner of the patents, not an exclusive licensee, giving it an even
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`greater claim to all substantial rights in the patents.
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`Similarly, due to the absence ofthe risk of duplicative litigation, the Federal Circuit found
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`that a plaintiff assignee held prudential standing to enforce patents, even though the assignor
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`retained rights greater than those granted to Boeing, including rights to (1) veto sublicensing-
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`_, (2) obtain foreign patents:, (3) notification before plaintiff filed
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`suit_, (4) reversion in ownership of the patents under certain conditions, and (5)
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`infringement damages. Vaupel, 944 F.2d at 875-76.
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`Similarly, Judge Robinson also found that an assignee had all substantial rights in patents
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`and prudential standing to assert them, notwithstanding that the assignors retained various rights
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`more substantial than those Acceleration Bay granted to Boeing. M0bz'leMedia, 885 F. Supp. 2d
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`at 708-09. The assignors’ rights include (1) licenses to use the patents, (2) approving any
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`assignment of the patents—, (3) approving entrance by assignee into contingency
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`fee arrangements_, (4) all proceeds from the enforcement of the patents -
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`—, and (5) managing legal affairs by delegating control of litigation to a third party-
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`—. Id. at 705, 708-09. While these rights are much more substantial and controlling
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`than the rights granted to Boeing, Judge Robinson nonetheless did not “deem such rights
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`‘substantial’ vis a vis those held by MobileMedia. . .[because] [t]here is no indication that either
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`Sony or Nokia, nonexclusive licensees .
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`.
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`. holding no legal title to the patents—in—suit, have
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`constitutional standing to sue.” Id. at 709.4
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` Speedplay, Inc. v. Bebop, Inc, 211 F.3d 1245, 1252 (Fed. Cir.
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`2000) (assignor “does not retain a substantial right in a patent merely by reserving a reversion in
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`the patent contingent upon the [assignee’s] financial distress or the [assignee’s] cessation of
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`production”); Vaupel, 944 F.2d at 875 (holding that termination provision in agreement and flow
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`of infringement damages back to owner did not defeat prudential standing, because the original
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`owner lacked right to sue the defendant, so there was no risk of duplicative litigation.) Thus,
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` does not reduce Acceleration Bay’s
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`ownership of all substantial rights.
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`Finally, while Defendants note that Acceleration Bay’s ownership‘ of the Asserted Patents
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`is subject to the prior non-exclusive license with Sony, the Federal Circuit has confirmed that such
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`licenses are routine and do not defeat prudential standing. Wz'AVSolutz'ons, 631 F .3d at 1266-67
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`(noting that patents often have a web of licenses and sublicenses); see also Bluestone, 2013 WL
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`1729814, at *5—6 (finding assignee had standing to assert patents notwithstanding pre-existing
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`exclusive field of use license).
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`Defendants rely heavily on Judge Stark’s Clouding IP decision, which found that an
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`assignor retained substantially all rights, depriving the assignee of prudential standing, but the case
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`4 Other courts have reached similar results. See, e. g. Suffolk Techs LLC v. AOL Inc., 910 F. Supp.
`2d 850, 854, 856-59 (E.D. Va. 2012) (finding assignee held “all substantial rights” even though
`assignor retained (1) world—wide license with limited right to sublicense, (2) 50% of proceeds from
`enforcement, (3) 90% of the profit from sale of the patent, (4) the right to bu back the atent for
`$10, (5) the right to inspect and receive reports on enforcement activities
`, (6)
`the right to limit retention of infringement counsel—, and (7) the assignee could
`not sue assignor’s customers); Princeton Digital Image Corp, 2013 WL 1454945, at *6
`(confirming assignee’s standing to sue alone despite assignor’s retention of (1) license to use
`patents, (2) exclusive right to enforce the patents against seventeen companies, and (3) exclusive
`right to enforce patent within a field of use).
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`is inapposite and confirms Acceleration Bay’s prudential standing.
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`In particular, “the most
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`importantfactor” to Judge Stark in deciding Clouding was the risk of duplicative litigation in that
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`assignor Symantec could assert the patents at issue “directly as a counter—plaintifF’ against the
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`defendants without plaintiff/assignee Clouding IP, because the patents would revert to Symantec
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`“for no consideration” should Clouding IP refuse to join as a counter—p1aintiff. Clouding IP, LLC
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`v. Google Inc, 61 F. Supp. 3d 421, 434-35 (D. Del. 2014) (emphasis in original). That situation
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`cannot happen here-
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` see also Bluestone, 2013 WL 1729814, at *5 (finding no risk of
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`duplicative litigation “because [assignee] will be a party to any suit that [field-of—use—1icensee]
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`initiates, it will be collaterally estopped from relitigating an issue that received a final judgment
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`ems T
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`T see speedpzay 2n ma at 1251-53
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`(plaintiff had standing to sue even though the transferor retained the right to bring its own
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`infringement suit if the plaintiff failed to enforce the patent because the transferor’s right to bring
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`an infringement suit could be rendered “nugatory by granting the alleged infringer a royalty-fiee
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`sublicense”).5
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`Accordingly, beyond Acceleration Bay’s ownership of the Asserted Patents and sole right
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`to sue Defendants, which are alone dispositive, applying the most analogous precedent,
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`Acceleration Bay’s bundle of rights constitutes all substantial rights in the Asserted Patents,
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`5 Clouding IP is further distinguishable in that, unlike here, assignor Symantec could control
`assignee Clouding’s ability to (1) assign the patents under Various conditions (“an important
`incident of ownership and .
`.
`. a strong indicator that the agreement does not grant .
`. all substantial
`rights”) and (2) enter into licenses that deviated from a pre—approved form (deemed “an important
`consideration”), and (3) could reclaim the patents if Clouding IP failed to pay maintenance. 61 F.
`Supp. 3d at 433-36.
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`satisfying prudential standing.
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`c.
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`The Finance Agreement Does Not Impact Prudential Standing
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`T Hamilton capital has no right to
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`these patents or any other substantial rights in them, and it would be impossible for