Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 1 of 12 PageID #: 961
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`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF DELAWARE
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`ACCELERATION BAY LLC, a Delaware )
`Limited Liability Corporation,
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`)
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`))
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`)
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`Plaintiff,
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`v.
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`ACTIVISION BLIZZARD, INC.,
`a Delaware Corporation,
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`Defendant.
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`C.A. No. 15-228-RGA
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`DEMAND FOR JURY TRIAL
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`))
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`))
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`))
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`PLAINTIFF ACCELERATION BAY LLC’S OPPOSITION TO
`ACTIVISION BLIZZARD, INC.’S MOTION TO DISMISS
`
`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
`
`Dated: May 21, 2015
`
`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
`
`Attorneys for Plaintiff Acceleration Bay LLC
`
`

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`Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 2 of 12 PageID #: 962
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`TABLE OF CONTENTS
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`Page
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`I.
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`II.
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`III.
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`IV.
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`STATEMENT AND NATURE OF THE PROCEEDINGS .............................................. 1
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`SUMMARY OF ARGUMENT .......................................................................................... 1
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`STATEMENT OF FACTS ................................................................................................. 2
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`ARGUMENT...................................................................................................................... 2
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`A.
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`B.
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`Activision’s Motion Should Be Denied Because Acceleration
`Bay Alleges Inducement of a Single Direct Infringer ............................................ 2
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`Acceleration Bay Alleges That Activision Knew of the Asserted
`Infringement Claims At Least As of the Filing of This Action .............................. 5
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`V.
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`CONCLUSION................................................................................................................... 7
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`i
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`Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 3 of 12 PageID #: 963
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`TABLE OF AUTHORITIES
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`Page(s)
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`Cases
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`Amakai Techs. Inc. v. Limelight Networks, Inc.,
`2015 WL 2216261 (Fed. Cir. May 13, 2015) ............................................................................3
`
`Andrulis Pharms. Corp. v. Celgene Corp.
`No. 13-1644-RGA, 2014 WL 1572906 (D. Del. Apr. 10, 2014)...............................................5
`
`Apeldyn Corp. v. Sony Corp.,
`852 F. Supp. 2d 568 (D. Del. 2012)...........................................................................................6
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007)...................................................................................................................3
`
`In re Bill of Lading Transmission & Processing Sys. Patent Litig.,
`681 F.3d 1323 (Fed. Cir. 2012)..................................................................................................4
`
`Chalumeau Power Systems LLC v. Alcatel-Lucent,
`C.A. No. 11-1175-RGA, 2012 WL 6968938 (D. Del. July 18, 2012).......................................7
`
`Courtesy Prods., L.L.C. v. Hamilton Beach Brands, Inc.,
`2014 WL 5780877 (D. Del. Nov. 5, 2014) ................................................................................6
`
`Deston Therapeutics LLC v. Trigen Labs. Inc.,
`723 F. Supp. 2d 665 (D. Del. 2010)...........................................................................................4
`
`Global-Tech Appliances, Inc. v. SEB S.A.,
`131 S. Ct. 2060 (2011)...............................................................................................................6
`
`Internet Media Corp. v. Hearst Newspapers, LLC,
`Civ. No. 10–690–SLR, 2011 WL 2559556 (D. Del. June 28, 2011).........................................4
`
`IpVenture Inc. v. Lenovo Group Ltd.,
`C.A. No. 11-588-RGA, 2013 WL 126276 (D. Del. Jan. 8, 2013) .............................................6
`
`McRo, Inc. v. Rockstar Games, Inc.,
`C.A. No. 12-1513-LPS-CJB, 2014 WL 1051527 (D. Del. Mar. 17, 2014) ...............................3
`
`Novartis Pharms. Corp. v. Actavis, Inc.,
`C.A. No. 12-366-RGA-CJB, 2012 WL 6212619 (D. Del. Dec. 5, 2012)..................................4
`
`Rosenau v. Unifund Corp.,
`539 F.3d 218 (3d Cir. 2008).......................................................................................................3
`
`ii
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`

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`Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 4 of 12 PageID #: 964
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`Walker Digital, LLC v. Facebook, Inc.,
`852 F. Supp. 2d 559 (D. Del. 2012).......................................................................................4, 6
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`Other Authorities
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`Fed. R. Civ. P. 8(a)(2)..................................................................................................................3, 6
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`iii
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`

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`Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 5 of 12 PageID #: 965
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`I.
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`STATEMENT AND NATURE OF THE PROCEEDINGS
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`On March 11, 2015, Plaintiff Acceleration Bay LLC (“Acceleration Bay”) filed a
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`complaint against Defendant Activision Blizzard, Inc. (“Activision”), alleging six counts of
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`direct infringement and three counts of indirect infringement of the following six patents: U.S.
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`Patent Nos. 6,701,344 (the “’344 Patent), 6,714,966 (the “’966 Patent”), 6,732,147 (the “’147
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`Patent”), 6,829,634 (the “’634 Patent”), 6,910,069 (the “’069 Patent”) and 6,920,497 (the “’497
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`Patent”) (collectively the “Patents-in-Suit”). D.I. 1. On March 31, 2015, Acceleration Bay filed
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`an amended complaint adding to each direct infringement count allegations that Activision is
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`jointly and vicariously liable for infringement by the users of its products because Activision has
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`direction or control over those users. D.I. 7 (the “Complaint”).
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`On May 4, 2015, Activision sought to dismiss Acceleration Bay’s three counts of induced
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`infringement of the ‘147, ‘069 and ‘497 Patents (collectively the “Method Patents”). D.I. 11, 12.
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`Activision does not seek dismissal of the six counts of direct infringement of the Patents-in-Suit.
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`Id.
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`II.
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`SUMMARY OF ARGUMENT
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`1.
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`Activision’s motion should be denied because Acceleration Bay plausibly pleads
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`that Activision’s customers, users and developers are each singledirect infringers who have been
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`induced by Activision to perform “all the steps of the method claims.” D.I. 7, ¶¶ 75, 106, 127.
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`At this pleading stage, these factual allegations must be taken as true, which alone defeats
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`Activision’s motion.
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`2.
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`Activision’s motion should also be denied because Acceleration Bay plausibly
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`pleads that Activision had knowledge of the Method Patents and the factual basis for
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`Acceleration Bay’s infringement theories at least as of the filing of this action, which is sufficient
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`to state a claim of post-filing induced infringement at this pleading stage.
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`Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 6 of 12 PageID #: 966
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`III.
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`STATEMENT OF FACTS
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`Acceleration Bay alleges direct and indirect infringement of the Patents-in-Suit, which
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`are generally directed to systems and methods for effectively broadcasting data over a peer-to-
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`peer network. With respect to the Method Patents, Acceleration Bay alleges that Activision is
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`jointly and vicarious liable for its users’ direct infringement because Activision “has direction or
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`control over users’ performance of the steps of claimed methods….” D.I. 7, ¶¶ 66, 97, 118.
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`In addition, Acceleration Bay alleges that Activision is liable for indirect infringement of
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`the Method Patents. Specifically, Acceleration Bay alleges that Activision induced its
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`“customers, users and developers” to infringe the Method Patents by “instructing, directing
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`and/or requiring [them] to perform one or more of the steps of the method claims […] whereall
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`the steps of the method claims are performed byeither Defendant, its customers, usersor
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`developers, or some combination thereof.” D.I. 7, ¶¶ 75, 106, 127 (emphasis added).
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`With regard to Activision’s knowledge of the Method Patents and of Acceleration Bay’s
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`infringement allegations, the Complaint alleges that Activision has had such knowledge at least
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`since the filing of this action on March 11, 2015. D.I. 7, ¶¶ 81, 112, 133. Based on this fact,
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`Acceleration Bay further alleges that Activision “has had the specific intent to, or was willfully
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`blind to the fact that its actions would, induce infringement” of the Method Patents at least since
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`the filing of this action. Id.
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`IV.
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`ARGUMENT
`A.
`Activision’s Motion Should Be Denied Because Acceleration Bay Alleges
`Inducement of a Single Direct Infringer
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`Activision’s motion is premised on the incorrect argument that the Complaint “fails to
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`identify any single actor that is the actual direct infringer.” D.I. 12 at 5-9. The Complaint,
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`however, identifies each of Activision’s customers, users and developers as single actors that are
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`2
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`

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`Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 7 of 12 PageID #: 967
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`actual direct infringers. D.I. 7, ¶¶ 75, 106, 127 (“all the steps of the method claims are
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`performed by either Defendant, its customers, usersor developers”) (emphasis added). Such
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`allegations are sufficient to sustain indirect infringement claims and, therefore, the motion should
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`be denied. Amakai Techs. Inc. v. Limelight Networks, Inc., 2015 WL 2216261, at *1 (Fed. Cir.
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`May 13, 2015) (holding that a method claim is infringed when a single actor, either directly or
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`vicariously carries out all of the steps of the claim);also see McRo, Inc. v. Rockstar Games, Inc.,
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`C.A. No. 12-1513-LPS-CJB, 2014 WL 1051527, at *5 (D. Del. Mar. 17, 2014)report and
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`recommendation adopted, 2014 WL 1677366 (D. Del. Apr. 24, 2014) (“Identification of a
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`specific third-party direct infringer is not required to survive a motion to dismiss an induced
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`infringement claim, so long as the factual allegations are sufficient to allow the inference that at
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`least one direct infringer exists … the identification of ‘game developers’ as the alleged direct
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`infringers is sufficient to meet this requirement.”) (citations omitted).
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`In opposing Activision’s motion to dismiss, Acceleration Bay is entitled to have all
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`factual allegations in the Complaint deemed as true and viewed in the most favorable light.
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`Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008). The threshold question is whether
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`the complaint contains “a short and plain statement of the claim” that provides “the defendant
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`fair notice of what the … claim is and the grounds upon which it rests.” Bell Atl. Corp. v.
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`Twombly, 550 U.S. 544, 554-55 (2007) (citation omitted); Federal Rule of Civil Procedure
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`8(a)(2). Accordingly, Acceleration Bay’s allegations regarding direct infringement by third
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`parties should be accepted as true, and satisfy the requirements ofTwombly and Rule 8 in
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`identifying direct infringers who alone perform all of the steps of the method claims under the
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`direction of Activision.
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`3
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`Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 8 of 12 PageID #: 968
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`Activision further argues that Acceleration Bay’s indirect infringement claims are
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`implausible because, under Activision’s reading of the claims of the Method Patents, each claim
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`at issue is directed to communications between multiplecomputers and, therefore, cannot be
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`infringed by a single actor. D.I. 12 at 7-8. In so arguing, Activision implicitly seeks a
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`construction of the terms of the Method Patents such as “computer,” “participant,” and “node” as
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`requiring multiple “actors.” Activision’s attempt to narrowly construe the claim language at the
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`pleading stage is “inappropriate” because the courts “afford the claims their broadest possible
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`construction at this stage of the proceedings.” In re Bill of Lading Transmission & Processing
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`Sys. Patent Litig., 681 F.3d 1323, 1343 n.13 (Fed. Cir. 2012);see also Novartis Pharms. Corp. v.
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`Actavis, Inc., C.A. No. 12-366-RGA-CJB, 2012 WL 6212619, at *8 (D. Del. Dec. 5, 2012)
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`(citing Bill of Lading and denying motion to dismiss when it required claim construction);
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`Walker Digital, LLC v. Facebook, Inc., 852 F. Supp. 2d 559, 563 (D. Del. 2012) (“The court is
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`not prepared to engage in a claim construction exercise at this stage of the proceedings, with no
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`context whatsoever provided by discovery or a motion practice.”);Internet Media Corp. v.
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`Hearst Newspapers, LLC, Civ. No. 10–690–SLR, 2011 WL 2559556, at *3 (D. Del. June 28,
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`2011) (same); Deston Therapeutics LLC v. Trigen Labs. Inc.,723 F. Supp. 2d 665, 670 (D. Del.
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`2010) (same).
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`Under the “broadest possible construction” and with all “reasonable inferences,” direct
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`infringement of the Method Patents by a single entity is facially plausible. For example, a single
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`customer household, as an “actor,” may have multiple computers running Activision’s game
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`software and connecting to each other using the infringing methods. Additionally, Activision’s
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`developers are also likely to practice, as single “actors,” Activision’s accused products, which
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`would entail employees of the developer playing the accused products’ multiplayer modes to
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`4
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`Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 9 of 12 PageID #: 969
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`ensure that the infringing methods are actually performed and provide an efficient broadcasting
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`of data. Under either scenario, multiple computers or nodes would be controlled and used by a
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`single entity.
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`Activision misses the mark in citing toAndrulis Pharms. Corp. v. Celgene Corp., which
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`stands for the unremarkable proposition that the Court should dismiss implausible claims. D.I.
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`12 at 9; C.A. No. 13-1644-RGA, 2014 WL 1572906, at *1 (D. Del. Apr. 10, 2014). InAndrulis,
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`the Court dismissed an undivided direct infringement claim as unsupported by any factual
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`allegations and as facially implausible. 2014 WL 1572906, at *1. The Court, however,
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`sustained joint direct infringement claims and induced infringement claims that were based on
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`plausible allegations that the defendant was vicariously liable for the third-parties’ direct
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`infringement by exerting “a high degree of control over” them, or alternatively the defendant was
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`liable for inducing the third-parties to directly infringe. Id. at *2. Here, as in the claims
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`sustained in Andrulis, Acceleration Bay identified Activision’s customers, users and developers
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`as direct infringers and attached Activision’s Terms of Use and links to various instructions
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`published by Activision as examples of how Activision has direction and control over them.
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`Thus, Acceleration Bay’s induced infringement claims are based on allegations of direct
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`infringement by single third-parties and are plausible on their face. Activision’s motion,
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`therefore, should be denied.
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`B.
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`Acceleration Bay Alleges That Activision Knew of the Asserted Infringement
`Claims At Least As of the Filing of This Action
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`Activision also incorrectly argues that Acceleration Bay does not plausibly plead
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`knowledge of the Method Patents. To the contrary, Acceleration Bay alleges that Activision
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`knew of the Method Patents, the asserted claims and Acceleration Bay’s infringement allegations
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`at least as of the filing of this action. D.I. 7, ¶¶ 81, 112, 133. This Court has recognized that
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`5
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`Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 10 of 12 PageID #: 970
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`such allegations of post-filing knowledge are sufficient to sustain an indirect infringement claim
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`as of the date of the complaint. See e.g. Apeldyn Corp. v. Sony Corp., 852 F. Supp. 2d 568, 573
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`(D. Del. 2012) (holding that “there is no legal impediment to having an indirect infringement
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`cause of action limited to post-litigation conduct”);Courtesy Prods., L.L.C. v. Hamilton Beach
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`Brands, Inc., 2014 WL 5780877, at *4 (D. Del. Nov. 5, 2014) (denying motion to dismiss by
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`finding that post-filing knowledge of the patents-in-suit was sufficient for indirect infringement);
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`Walker Digital, 852 F. Supp. 2d at 565 (“…if a complaint sufficiently identifies, for purposes of
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`Rule 8, the patent at issue and the allegedly infringing conduct, a defendant's receipt of the
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`complaint and decision to continue its conduct despite the knowledge gleaned from the
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`complaint satisfies the [knowledge] requirements ofGlobal–Tech [to sustain an induced
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`infringement claim].”) (citingGlobal-Tech Appliances, Inc. v. SEB S.A.,131 S. Ct. 2060, 2068
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`(2011)); IpVenture Inc. v. Lenovo Group Ltd., C.A. No. 11-588-RGA, 2013 WL 126276, at *2-3
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`(D. Del. Jan. 8, 2013) (sustaining induced infringement claims as of the filing of the action).
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`Whether Activision had pre-filing knowledge of the Method Patents is an issue that goes
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`to the damages window, and does not support dismissal of the entire claim. Walker Digital, 852
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`F. Supp. 2d at 565. In finding that post-filing knowledge of patents is sufficient for inducement
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`claims as of the date of the complaint, this Courtopined that “the fundamental purpose of
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`asserting indirect infringement” is “to ensure that the patentee can recover full compensation for
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`any damages suffered as a result of infringement.” Id. This Court further stated that “[t]he fact
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`that Walker Digital would be prohibited from collecting damages related to indirect infringement
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`for any pre-knowledge (e.g., pre-filing) conduct is the only substantive consequence of allowing
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`allegations such as those at bar to go forward.” Id. Thus, Activision’s argument that it is entitled
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`to dismissal of the entire indirect infringement claims is wrong.
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`6
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`Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 11 of 12 PageID #: 971
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`Activision’s reliance upon Chalumeau Power Sys. LLC v. Alcatel-Lucentto argue for
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`dismissal of the inducement claims is inapposite. D.I. 12 at 9-10; C.A. No. 11-1175-RGA, 2012
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`WL 6968938, at *1 (D. Del. July 18, 2012). InChalumeau, the Court dismissed indirect
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`infringement claims because the complaint failed to provide any detail regarding the plaintiff’s
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`infringement theories. See Chalumeau, 2012 WL 6968938, at *1; also see Chalumeau Power
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`Sys. LLC v. Alcatel-Lucent, Case No. 1:11-cv-01175-RGA, D.I. 28, First Amended Complaint
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`for Patent Infringement (D. Del. Mar. 26, 2012). Here, unlikeChalumeau’s threadbare seven-
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`page-complaint, Acceleration Bay’s Complaint consists of 37 pages with nine counts, each
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`identifying specific accused products and infringing acts. Indeed,Chalumeau supports denial of
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`Activision’s motion in finding that “[s]ervice of the original complaint gives the defendants
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`actual notice of the patent’s existence” and that it is also “plausible” that the defendant gained
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`the knowledge of infringement from the complaint. Chalumeau, 2012 WL 6968938, at *1.
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`Thus, Activision’s post-filing knowledge includes not only the existence of the Patents-
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`in-Suit, but also the infringing acts and products. Accordingly, Acceleration Bay plausibly
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`alleges the knowledge required for induced infringement claims as of the date of the Complaint,
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`and Activision’s motion should be denied.
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`V.
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`CONCLUSION
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`For the foregoing reasons, Acceleration Bay respectfully requests that the Court deny
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`Activision’s motion to dismiss.
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`7
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`Case 1:15-cv-00228-RGA Document 15 Filed 05/21/15 Page 12 of 12 PageID #: 972
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`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
`
`Dated: May 21, 2015
`1190574
`
`POTTER ANDERSON & CORROON LLP
`
`By: /s/ Philip A. Rovner
`Philip A. Rovner (#3215)
`Jonathan A. Choa (#5319)
`Hercules Plaza
`P.O. Box 951
`Wilmington, DE 19899
`(302) 984-6000
`provner@potteranderson.com
`jchoa@potteranderson.com
`
`Attorneys for Plaintiff Acceleration Bay LLC
`
`8