Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 1 of 72 PageID #: 4043
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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`CA NO. 15-228-RGA,
`15-282-RGA,
`15-311-RGA
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`May 2, 2016
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`2:00 o'clock p.m.
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`: : : : : : : : : :
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`ACCELERATION BAY LLC
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`Plaintiff,
`
`v.
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`ACTIVISION BLIZZARD INC., et
`al.,
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`Defendants,
`.............................
`
`TRANSCRIPT OF MOTION TO DISMISS FOR LACK OF STANDING
`BEFORE THE HONORABLE RICHARD G. ANDREWS
`UNITED STATES DISTRICT JUDGE
`
`APPEARANCES:
`
`For Plaintiff:
`
`POTTER, ANDERSON & CORROON
`BY: PHILIP A. ROVNER, ESQ
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`1
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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`CA NO. 15-228-RGA,
`15-282-RGA,
`15-311-RGA
`
`May 2, 2016
`
`2:00 o'clock p.m.
`
`: : : : : : : : : :
`
`ACCELERATION BAY LLC
`
`Plaintiff,
`
`v.
`
`ACTIVISION BLIZZARD INC., et
`al.,
`
`Defendants,
`.............................
`
`TRANSCRIPT OF MOTION TO DISMISS FOR LACK OF STANDING
`BEFORE THE HONORABLE RICHARD G. ANDREWS
`UNITED STATES DISTRICT JUDGE
`
`APPEARANCES:
`
`For Plaintiff:
`
`POTTER, ANDERSON & CORROON
`BY: PHILIP A. ROVNER, ESQ
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 2 of 72 PageID #: 4044
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`For Defendants:
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`-and-
`KRAMER LEVIN NAFTALIS & FRANKEL
`BY: PAUL J. ANDRE, ESQ
`BY: AARON M. FRANKEL, ESQ
`
`MORRIS, NICHOLS, ARSHT & TUNNELL
`BY: STEPHEN J. KRAFTSCHIK, ESQ
`-and-
`WINSTON & STRAWN
`BY: DAVID P. ENZMINGER, ESQ
`BY: MICHAEL A. TOMASULO, ESQ
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`Also present:
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`OMER SALIK
`Activision Blizzard - Representative
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`Court Reporter:
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`LEONARD A. DIBBS
`Official Court Reporter
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 3 of 72 PageID #: 4045
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`P R O C E E D I N G S
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`(The proceedings occurred at 2:00 o'clock p.m. as
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`follows:
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`THE COURT: Good afternoon. Please be seated.
`Sorry for the delay.
`This is Acceleration Bay v. Activation Blizzard, Civil
`Action No. 15-228, and also other related cases; 15-282 and
`15-311.
`
`Mr. Rovner, who have you got with you?
`MR. ROVNER: Good afternoon, your Honor.
`Phil Rovner from Potter, Anderson for the plaintiff.
`With me is Paul Andre and Aaron Frankel from Kramer
`
`Levin.
`
`THE COURT: Good afternoon to you.
`THE COURT: Mr. Kraftschik?
`MR. KRAFTSCHIK: Good afternoon, your Honor.
`Stephen Kraftschik from Morris Nichols.
`With me is David Enzminger and Michael Tomasulo from
`Winston & Strawn.
`And from one of the clients is Omer Salik from
`Activision Blizzard.
`THE COURT: Good afternoon to you all.
`Mr. Enzminger, are you making the argument here?
`MR. ENZMINGER: Yes, I am.
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 4 of 72 PageID #: 4046
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`THE COURT: All right.
`You may proceed.
`MR. ENZMINGER: I have hard copies of our presentation,
`if I may hand them up?
`THE COURT: Sure.
`(Pause)
`MR. ENZMINGER: Good afternoon, your Honor.
`David Enzminger from Winston & Strawn on behalf of all
`of the defendants.
`We have moved for Dismissal for Lack of Standing based
`on the production by Boeing of the agreement between Boeing and
`the plaintiffs, which we received nine months after the
`litigation started, in which it became clear that the plaintiffs
`do not have standing to bring this litigation.
`I will make four basic arguments in my presentation
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`today.
`
`The first two deal with prudential standing and the
`second two deal with constitutional standing.
`We have reversed the traditional order, because the
`prudential standing arguments apply to the entire case, and all
`the products. The constitutional standing arguments apply only
`to a subset of products, although, they are a majority of the
`products, but not all.
`So let me start with the first concept with respect to
`prudential standing, which is the one issue that is completely
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 5 of 72 PageID #: 4047
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`undisputed in this case, and it is that Boeing owns an exclusive
`right to practice this patent, an exclusive right to enforce
`this patent, and exclusive right to sue on this patent, within
`its reserved field of use.
`There is no dispute about that. Boeing is an
`exclusive -- at least an exclusive licensee. We contend that
`they are the owner. But Boeing has exclusive rights to this
`patent, and they are not in this courtroom.
`THE COURT: If they were in this courtroom, all the
`issues would be resolved, right?
`MR. ENZMINGER: If they were in this courtroom, all of
`the prudential standing issues would be resolved.
`If they were in this courtroom, there would be a
`dispute as between Acceleration Bay and Boeing concerning the
`defendants' products that have flight simulators, because
`Acceleration Bay has no rights to products that include flight
`simulation technology.
`THE COURT: So, in other words, if Boeing was joined,
`they would both be plaintiffs, and, so, Boeing could sue you on
`-- assuming you're right about what's covered by simulation,
`Boeing could sue you for whatever part Acceleration Bay couldn't
`sue you on?
`MR. ENZMINGER: Boeing would be able to make that
`allegation, yes.
`THE COURT: Okay.
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 6 of 72 PageID #: 4048
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`MR. ENZMINGER: The Supreme Court, over a 125 years
`ago, talked about what you can do with a patent in terms of
`assignment.
`There are only three ways to assign ownership of a
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`patent.
`
`The first is, you can assign the whole patent, which
`did not happen here, because Acceleration Bay received a --
`fewer than all of the rights.
`Secondly, an undivided part or share of the exclusive
`right can be done. In other words, two people can share
`ownership of the entire patent. That's not applicable here.
`And then, finally, the exclusive right under a patent
`within a specific geographic region of the United States may be
`assigned.
`
`Those, according to the Supreme Court, are the only
`ways that a patent can be assigned.
`THE COURT: So are you saying that a field of use is an
`illegal assignment?
`MR. ENZMINGER: I'm not saying it's an illegal
`assignment at all, but I am saying that a field of use license
`does not convey standing without all parties that have the use
`to the entire patent present in the courtroom.
`That's what we're about to go into.
`THE COURT: Okay.
`MR. ENZMINGER: An assignment of a field of use is a
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 7 of 72 PageID #: 4049
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`license by definition. It is not an assignment of a patent,
`because it's less than all of the rights.
`So --
`THE COURT: But here the person who has the field of
`use is Boeing, right?
`MR. ENZMINGER: Well, so, if we go back to our summary
`of argument, the first bullet point there talks about a
`partitioning of the patent by Exclusive Fields of Use.
`For that argument, it doesn't matter who the owner is
`or who the exclusive licensee is. The law is, if you have an
`exclusive licensee, you have to join both; the owner and the
`exclusive licensee.
`The second point goes to the issue of, if Boeing, as it
`retains the patent, which they did, and Acceleration Bay is
`merely an exclusive licensee, does Acceleration Bay have
`sufficient rights to sue on this patent?
`But at the outset -- and the easiest way to dispose of
`this case is that when you have a field of use partition,
`everyone with an interest has to be here.
`As noted by the Supreme Court, allowing a licensee,
`even one with exclusive rights for a particular field of use to
`sue in his name only, poses a substantial risk of multiple
`suits, and multiple liabilities against an alleged infringer for
`a single act of infringement.
`To alleviate this, the Federal Circuit confirms, the
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 8 of 72 PageID #: 4050
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`Supreme Court requires that the owner and the field of use
`licensee must be there, but it's not just limited.
`THE COURT: Well, wait, wait. Let's go back here a
`
`second.
`
`MR. ENZMINGER: Okay, sure.
`THE COURT: Hold on a minute.
`(Pause)
`What page is that at?
`MR. KRAFTSCHIK: 1278, 1279.
`THE COURT: Hold on a minute.
`(Pause)
`All right.
`So that's about -- let assume, for the sake of
`argument, that the owner of this patent is Acceleration Bay and
`the exclusive licensee is Boeing.
`That doesn't address that situation, right?
`MR. ENZMINGER: It does, because the law is -- works in
`both directions, and that's --
`THE COURT: But that's only one direction right there.
`MR. ENZMINGER: This is one direction. This is the
`situation where the patent owner has an exclusive licensee. The
`exclusive licensee to sue must join the patent owner.
`THE COURT: Right. Right. Got that direction. No
`doubt about that.
`MR. ENZMINGER: Let's go to the next direction then.
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 9 of 72 PageID #: 4051
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`9
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`We'll skip to -- what we display is different from --
`we had to switch computers right before the presentation.
`If your Honor looks at the hard copy, I can --
`THE COURT: Yes, yes, yes, no problem at all.
`MR. ENZMINGER: Page 6.
`THE COURT: Yep.
`MR. ENZMINGER: This deals with the issue going in the
`other direction. This is a footnote from Judge Stark's decision
`in Clouding:
`Relatedly, where the patent plaintiff is a patentee who
`is given away some, but not all substantial rights, it must join
`its exclusive licensee."
`So this is dealing with the situation where the owner
`has given away an exclusive license and is bringing the lawsuit.
`And the law is that the owner, when there is an exclusive
`licensee, must also bring in the exclusive licensee.
`And Judge Stark quoted the Alfred E. Mann Foundation
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`case.
`
`THE COURT: Okay.
`MR. ENZMINGER: And the policy reason for this is
`obvious. We're trying to --
`THE COURT: I've got the policy reason.
`Go ahead.
`MR. ENZMINGER: Further, in the case of -- return to in
`the -- also in the hard copy at Page 6 -- Aspex Eyewear. This
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 10 of 72 PageID #: 4052
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`was a case that was somewhat similar to the one before the Court
`today in the sense of the defendant alleged that the plaintiff
`was not the owner of the patent, because the assignment didn't
`convey all substantial rights.
`The Court -- the District Court agreed with the
`defendants, but it was reversed at the Federal Circuit.
`But, interestingly, the Federal Circuit said, but
`that's not the end of the inquiry. All we've determined is that
`the plaintiff is the owner. We haven't determined whether all
`indispensable parties are here. And the Court goes on to say
`that an exclusive licensee must be joined.
`So, as we're about to go into -- we believe that Boeing
`never transferred all rights, title, and interest in these
`patents to the plaintiff. That they didn't transfer all
`substantial rights.
`THE COURT: Do you think it makes a difference -- let's
`assume the present allocation of rights, whatever they may be,
`do you think it makes a difference whether it happened, because
`Acceleration Bay once had all the patents and gave Boeing some
`stuff, or is that any different if Boeing had them and gave
`Acceleration Bay some stuff? Does it make a difference who had
`them first?
`MR. ENZMINGER: Since the license we're talking about
`is an exclusive license, it does not make a difference.
`And the reason it doesn't make a difference is because
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 11 of 72 PageID #: 4053
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`you have two parties, both with exclusive rights in the patent,
`and the potential for multiple lawsuits where you have two
`parties with their own exclusive rights are such. The Supreme
`Court and the Federal Circuit have said those parties have to be
`joined, so that all disputes with respect to the patent can be
`resolved in one litigation.
`THE COURT: Let me ask you this.
`If I end up agreeing with you, do you think that Boeing
`will be joined by the plaintiff in this suit?
`MR. ENZMINGER: I have absolutely no idea.
`THE COURT: Okay. Continue.
`MR. ENZMINGER: So what I'm going to do is, if the
`Court permits, I'm just going rely on the hard copy.
`THE COURT: Okay. Yes, yes, that's fine.
`MR. ENZMINGER: With respect to the video, there are
`really only two things that I wanted to show anyway, which
`happens to be a video, and that is an actual video of --
`THE COURT: This is a video of someone playing a video
`game with a life-like missile in it or something?
`MR. ENZMINGER: Exactly, right.
`THE COURT: Okay. I don't think you need to play that
`
`for me.
`
`MR. ENZMINGER: Okay. So, if we turn to Page 9 of the
`PowerPoint presentation, I'd like to talk about the Clouding
`decision of this court, Judge Stark, and what was actually
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 12 of 72 PageID #: 4054
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`granted by Boeing to Acceleration Bay.
`THE COURT: Just to make sure I understand it, because
`while I respect the other decisions of the Judges of this Court,
`I have to follow the decisions of the Court of Appeals. And
`what you were citing to me a moment ago, seems to suggest that
`as far as the principles of law go, it's not Clouding that you
`are asking me to follow, but it's Alfred E. Mann?
`MR. ENZMINGER: Exactly.
`THE COURT: Okay.
`MR. ENZMINGER: And a series of other Federal Circuit
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`cases.
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`In our papers, we rely heavily on Federal Circuit
`cases. The opposition makes almost no reference to Federal
`Circuit cases in choosing to rely on out of district, District
`Court cases.
`The departure point on Page 10, which is also the
`foundation Supreme Court decision, which talks about what can be
`assigned, and anything less than those three rights is a license
`and not an assignment.
`So if we turn to the Page 11, which is from Clouding,
`but quoting Sicom, a case, by the way, which the Federal Circuit
`found no standing, because of a field of use license.
`The owner of the one of the field of use, which was the
`-- Her Majesty, the Queen and the right of Canada, had the right
`to non-commercial uses. And the plaintiff had only the right to
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 13 of 72 PageID #: 4055
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`commercial uses. And the Court held that the field of use
`partition, Her Majesty, the Queen, must be in the case and
`dismissed. And I believe that was a dismissal with prejudice,
`because it was the second time they tried to amend.
`On Page 12, what is of note from the Clouding decision
`is that the license grant in Clouding is exactly the same
`license grant as in this case. The transfer of all rights,
`title, and interest in the patents identified in the agreement,
`was made subject to terms of this agreement, including the
`license set forth in Section 4.5.
`When we turn to the next page, 13, we see the actual
`transfer from the limitation of the assignment of the patent.
`And, again, the language is subject to pre-existing licenses and
`the license set forth in 4.3.
`One pre-existing license was the license to Sony
`Entertainment, which we'll get to at the very end of this
`presentation, and the other was the reserved rights to Boeing
`under this agreement.
`On Page 14, I just set out side-by-side the language
`Judge Stark considered in Clouding, and the language and
`disagreement between Acceleration Bay and Boeing, noting that
`the -- whatever it was that Boeing -- that Boeing transferred to
`Acceleration Bay, it was subject to the licenses on Exhibit C,
`and the license in 4.3 of the agreement.
`THE COURT: Boeing subject to a non-exclusive license
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 14 of 72 PageID #: 4056
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`is not of any import, right?
`MR. ENZMINGER: No. Non-exclusive -- that's not
`actually true. Non-exclusive licenses are normally not of any
`technical importance, but as we'll get -- as I was going to get
`to constitutional standing, the non-exclusive to license -- the
`non-exclusive license to Sony is important here, because that
`licensed conveyee with it a license to pass through to Sony --
`THE COURT: But in terms of the prudential standing,
`the license to Sony is not important, right?
`MR. ENZMINGER: I agree with that.
`On Page 15, we lay out the non-exclusive lists of
`factors from Alfred E. Mann that court look at to determine --
`THE COURT: But, in some ways what you're saying is,
`this is in your view, this is a heads I win, tails you lose, as
`to who's the exclusive licensee or not?
`MR. ENZMINGER: Yes.
`THE COURT: Okay.
`MR. ENZMINGER: That's exactly what we're saying.
`So to determine whether Acceleration Bay has sufficient
`rights to sue, certainly without Boeing, the factors are set
`forth on Page 15, which enables the Court to determine whether
`they are, in fact, the owner, or whether they are merely a
`licensee.
`
`We submit, as we go through the patent Purchase
`Agreement beginning on Page 16, that they are merely a licensee.
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 15 of 72 PageID #: 4057
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`Page 17 is the actual transfer of rights. And, as
`we've seen on several previous slides, it's subject to the
`license granted to Boeing as part of the agreement.
`So under Section 4.3, Paragraph 18, the first thing
`that was granted was a non-exclusive, non sort of licensable,
`non-transferable, irrevocable, paid-up license to practice the
`patent on behalf of Boeing and its customers for the covered
`products.
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`This, by itself, would probably not be enough, although
`the Supreme Court -- I mean the Federal Circuit in the Diamond
`case, did find that where the transferor withheld the rights to
`practice the patent, it was indicative of ownership and not of
`transfer of ownership.
`Page 19 is the exclusive license. And this is really,
`in my judgment, the most important aspect of this, because what
`Boeing retained was, in its field of use, an exclusive
`transferable, perpetual license in the Boeing field of use.
`So --
`THE COURT: And, I'm sorry. You said "transferable."
`It doesn't say "non-transferable"?
`MR. ENZMINGER: It says "transferable." Page 19.
`THE COURT: Page 19.
`MR. ENZMINGER: You're on the non-exclusive.
`THE COURT: Sorry.
`MR. ENZMINGER: So they have a non-exclusive grant for
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 16 of 72 PageID #: 4058
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`all aspects of the patent.
`In the Boeing field of use, it's an exclusive grant.
`No one, not even Acceleration Bay and its licensees, may
`practice these patents within the Boeing field of use. That
`right to Boeing is exclusive to Boeing and it is transferable,
`meaning Boeing can even sell this to someone else. Boeing could
`sell this right to another patent troll who might sue us.
`THE COURT: All right.
`Or to Air Bus?
`MR. ENZMINGER: They could sell it to Air Bus.
`So what you have here is --
`THE COURT: By the way, calling people patent trolls,
`really doesn't help you.
`MR. ENZMINGER: Pardon me?
`THE COURT: It doesn't help you.
`MR. ENZMINGER: All right.
`My point is that this may be sold to another purchaser.
`It's a right that does not belong to Acceleration Bay.
`We have multiple parties with multiple interests and
`this right was retained by Boeing. Not only the right -- the
`exclusive right to practice, but the sole right to sublicense,
`the sole right to enforce the patents and pursue infringers.
`There is no case where a party has transferred a
`patent, retained the right to sue infringers, and been found
`unnecessary to participate in the lawsuit.
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 17 of 72 PageID #: 4059
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`If we turn to Page 22 -- Pages 21 to Page 22 are the
`same provision with different highlighting.
`On Page 22, Boeing retains the right to enforce this
`patent against anyone in all fields of use, including the field
`of use that was purportedly transferred to Acceleration Bay, if
`they assert it as a counterclaim.
`They have the right to direct Acceleration Bay to
`participate in a lawsuit with Boeing to assert these patents in
`any field of use.
`The Clouding case decided by Judge Stark does not
`involve exclusive rights. Judge Stark found this provision was
`sufficient to defeat standing, because this provision, in the
`Clouding, case meant that the transferor retained the rights to
`sue under the patent.
`In this case, Boeing retained the right to assert these
`patents against anyone on any -- in any field of use, as long as
`it's by way of a counterclaim.
`On Page 23, Boeing retains the right to direct
`Acceleration Bay to grant licenses in certain situations. Also
`indicative -- as an indication of ownership.
`On Page 24, Boeing's field of use is quite broad in
`their opposition papers.
`THE COURT: Well, your argument doesn't really make any
`difference whether it's broad or not, right?
`MR. ENZMINGER: For purposes of the exclusive use,
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 18 of 72 PageID #: 4060
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`that's right. Absolutely, that is right, because there are
`multiple parties with the ability to exclusively bring this
`lawsuit.
`
`And particularly with respect to the ability of certain
`patents by way of a counterclaim, it's not restricted at all by
`a field of use, in any way at all. It's any right.
`Further indications of ownership on Page 25, Boeing
`retained the right to recover up to 75 percent of all
`settlements, fees, or revenues, generated by efforts to monetize
`this patent, up to an amount of $22 million.
`On Page 26, a further indication of ownership. Boeing
`retains a reversionary right. In other words, if the plaintiff
`does not monetize this patent within the parameters of the
`agreement, Boeing has the right to have the patents back, and
`can then assert them without any restriction on field of use or
`otherwise, they have a reversionary interest.
`On Page 27, Boeing's reversionary rights continue, and
`it's not just a matter of getting initial revenue, and getting
`initial enforcement. Boeing retains the reversionary interest,
`if they don't meet a minimum payment within 30 months.
`But Boeing is not the only party with rights in this
`agreement.
`After acquiring the license from Boeing, Acceleration
`Bay sought financing for this lawsuit. And, in that lawsuit,
`starting on Page 28 -- or in that agreement starting on Page 28,
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 19 of 72 PageID #: 4061
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`they entered into a Promissory Note, which gave Hamilton Capital
`certain rights.
`THE COURT: But this is a throw-in on your argument,
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`isn't it?
`
`I mean, if this were -- if you only had Hamilton out
`there, you would have nothing, right?
`MR. ENZMINGER: If you only had Hamilton out there, it
`would depend on whether Hamilton had exercised any rights under
`the Security Agreements, which it has, but that, by itself,
`would not be enough.
`The point is that Acceleration Bay does not have enough
`rights in -- enough of the bundle of sticks.
`THE COURT: But, I mean, in other words, you either win
`or lose on Boeing, and Hamilton Capital is not really going to
`affect anything?
`MR. ENZMINGER: If we don't prevail on the Boeing
`argument, I would agree with the Court that Hamilton Capital
`does not.
`
`THE COURT: Well, let's skip Hamilton.
`MR. ENZMINGER: Okay. So with respect to whether
`Acceleration Bay is an owner of this patent, we would submit
`that the only thing that distinguishes Acceleration Bay from the
`unsuccessful plaintiff in Clouding, is a factor which weighs
`heavily in favor of the defendants.
`And that is, in Clouding, the plaintiff wasn't an
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 20 of 72 PageID #: 4062
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`exclusive -- the plaintiff, the patent owner, was not an
`exclusive licensee.
`So here, for purposes of standing, we have a patent
`that's been fractured among two parties claiming exclusive
`rights. The law says both have to be here.
`If we look just at the Boeing to Acceleration Bay
`agreement, and does Acceleration Bay have the right to bring a
`claim in the absence of Boeing, the law, as expressed very well
`by Judge Stark in Clouding, following Alfred E. Mann is that
`Acceleration Bay did not receive enough rights in that agreement
`to maintain standing.
`They do not have exclusive use. They gave exclusive
`use. Boeing retained the right to sue in an exclusive field.
`Boeing retained the right to sue in every field. Boeing
`retained the right to get the money. Boeing retained the right
`to pull the patents back.
`And all of those things factored together, as Judge
`Stark determined in Clouding, compelled a result that they don't
`have prudential standing in this case.
`THE COURT: All right.
`MR. ENZMINGER: Let's talk a little bit about
`constitutional standing.
`And for this we'll go -- we'll try to resurrect our
`antedated video.
`For purposes of constitutional standing, Acceleration
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 21 of 72 PageID #: 4063
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`Bay has the burden of prove that they have an injury. That they
`have the right to assert these cases.
`We saw the Boeing field of use, and the Boeing field of
`use could not be clearer that it includes aircraft, missiles --
`THE COURT: It includes Boeing's line of work?
`MR. ENZMINGER: It doesn't say anything about Boeing's
`line of work.
`THE COURT: I have some idea what Boeing does. That's
`their line of work.
`MR. ENZMINGER: We all do. And simulation is there,
`
`too.
`
`THE COURT: It is there, but, you know, in the ordinary
`kind of meaning of simulation -- like have you seen the movie
`Apollo 13?
`MR. ENZMINGER: Yes.
`THE COURT: Isn't that the simulation? Isn't what the
`astronauts do, presumably airplane pilots do? Isn't that's what
`is the ordinary understanding of simulation?
`MR. ENZMINGER: I don't believe so, your Honor. That
`is a simulation. Other simulations are video games, including
`video games that have flight simulators that people use to train
`for flight, that people use for enjoyment.
`And there's nothing in that agreement that excludes us.
`The plaintiff tries to get a Declaration of some Boeing employee
`--
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 22 of 72 PageID #: 4064
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`THE COURT: I'm not too concerned about that. I guess
`actually in this, I can consider evidence, right?
`MR. ENZMINGER: We have objected to that on multiple
`grounds because, one, it's not a signatory to the agreement.
`Second, there's an --
`THE COURT: But the general idea is that I can consider
`it simply, you know, because it's there?
`MR. ENZMINGER: The Court may consider evidence, yes.
`THE COURT: Yes. That's all I was saying.
`MR. ENZMINGER: Yes. For purposes of standing.
`From one of our video games is the -- this is from Call
`of Duty Black Ops.
`The player -- I don't know how well the Court can see
`that. The player has a choice of various drones to select. A
`drone being an aircraft. I think no one would dispute that.
`Can select missiles in the lower part, and now they'll launch
`the drone and fly it.
`(Pause)
`This video seems to be going fairly slow, but the --
`and I'll now launch a missile at a target, flying through
`terrain.
`
`THE COURT: All right.
`I think I've seen enough video.
`MR. ENZMINGER: Okay. The video didn't go very well.
`And then further within this same game are missile
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 23 of 72 PageID #: 4065
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`strikes, which simulate videos, simulate missile strikes. This
`one, these are still photographs. But here you have an overhead
`view of a target. You have the missile that you've selected
`firing from an aircraft taking it out.
`Some of these -- you talk about life-like -- selecting
`this missile, for example, looking at this target. This is not
`all that different from pictures we've all seen from actual
`real-life war zones, except this one is taken out by a video
`game missile.
`Here's an interesting comparison.
`This is the comparison between a Plaintiff's Exhibit 11
`and Defendants' Exhibit V.
`Their argument is that our simulation, the simulations
`in the video games, are not sufficiently life-like.
`Boeing has the right to transfer these rights.
`Is this Court prepared to say that no rational person
`would be able to -- would think that the bottom pictures, the
`picture of a flight simulation and throw them out of court, if
`they were to make that allegation against our clients?
`The fact is, this is a flight simulation. You have an
`instrument panel, you have the declared -- you have the ability
`to fly those planes.
`Again, it includes many flight simulation modules.
`These are set forth in still photos and in our papers.
`Flying jets, flying private jets, flying a fighter jet.
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 24 of 72 PageID #: 4066
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`This fighter jet, for example -- and I don't know if
`this video is going to be any more successful -- the player gets
`into the fighter jet.
`There's the canopy. It takes off. The player is
`manipulating the plane, identifying the plane, firing missiles.
`By the plain words of the Boeing agreement, that
`simulation is within Boeing's exclusive field of use.
`Acceleration Bay does not have any right to accuse the product
`with that type of flight simulation.
`There are flight simulators. Different kinds of
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`aircraft.
`
`And what the plaintiff, basically, argues in its
`opposition, it doesn't deny that these are flight simulators,
`but tries to add new words to the contract that isn't found
`there.
`
`The agreement actually says that Boeing has the
`exclusive right to bring cases against products that simulate
`aircraft missiles, military equipment.
`The plaintiff's argument is that, well, it's really
`only limited to physical spacecraft and real-world products.
`Those words are not in the contract.
`It's limited to Boeing's commercial operations.
`Also not in the contract.
`None of that is in the contract. And since this is a
`transferable right, we have to worry about whether somebody is
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 25 of 72 PageID #: 4067
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`going to buy this right and decide that a video game that
`clearly simulates aircraft, and clearly simulates missiles,
`spacecraft, satellites, space stations, vehicles, could be
`construed by a Court to follow within this field of use.
`It falls within the field of use by the clear words of
`the language. There can be no debate about that.
`THE COURT: I guess for your purposes, it's actually
`maybe on the prudential side of things, you're just as happy for
`it to be vague as to whether it does or does not fall within the
`field of use, aren't you?
`MR. ENZMINGER: I don't know that the interest is one
`way or the other.
`The point is that the potential for -- in this I would
`prefer specificity, but this seems rather specific to me. This
`is in Boeing's field of use. It's not in Acceleration Bay's
`field of use.
`Acceleration Bay does not have a legal right to accused
`products that include aircraft, airplane, missiles, satellites,
`space stations, vehicles, or platforms, or a simulation of any
`of the above, and they have. More than half of our products
`fall within that definition.
`The other argument that they make is that the field of
`use is limited to customers such as airline operators and
`national militaries. None of that is in the agreement.
`And, again, this is a transferable right. So whether
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`Case 1:15-cv-00228-RGA Document 133 Filed 05/07/16 Page 26 of 72 PageID #: 4068
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`the Court believes that this is within Boeing's commercial use
`or not, Boeing has the right to sell this right. And someone
`else may view it differently. The words of the contract would
`cert
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