Case 1:16-cv-00455-RGA Document 28 Filed 10/13/16 Page 1 of 4 PageID #: 1546
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`M O R R I S , N I C H O L S , A R S H T & T U N N E L L L L P
`1201 NORTH MARKET STREET
`P.O. BOX 1347
`WILMINGTON, DELAWARE 19899-1347
`
`(302) 658-9200
`(302) 658-3989 FAX
`
`October 13, 2016
`
`JACK B. BLUMENFELD
`(302) 351-9291
`(302) 425-3012 FAX
`jblumenfeld@mnat.com
`
`
`The Honorable Richard G. Andrews
`United States District Judge
` For the District of Delaware
`844 North King Street
`Wilmington, DE 19801
`Re:
`Acceleration Bay LLC v. Activision Blizzard, Inc., et al,
`C.A. Nos. 16-453, 16-454, 16-455-RGA
`
`VIA ELECTRONIC FILING
`
`Dear Judge Andrews:
`We write on behalf of defendants Activision Blizzard, Inc., Electronic Arts Inc., Take-
`Two Interactive Software, Inc., Rockstar Games, Inc., and 2K Sports, Inc., (the “Video Game
`Companies”) in response to Acceleration Bay’s October 12, 2016 letter (D.I. 251). In that letter,
`Acceleration Bay objects on procedural grounds to the Video Game Companies’ October 4 12(b)
`motions to dismiss (D.I. 18, 21), and requests that the Court schedule a Rule 16 conference
`before resolving those motions. Contrary to Acceleration Bay’s assertions, the motions to
`dismiss are procedurally proper. Further, because each of these motions may independently
`dispose of approximately half of the cases, the Video Game Companies respectfully suggest that
`a Rule 16 conference be held after the Court has ruled on the motions.
`First, the pending motions are procedurally proper. By stipulation and Order, the Video
`Game Companies had until October 4, 2016 “to respond to Acceleration Bay’s complaints . . .”
`(D.I. 16 at 3). It is axiomatic that “a civil defendant may respond to a complaint with a motion to
`dismiss.” United States v. $8,221,877.16 in U.S. Currency, 330 F.3d 141, 153 (3d Cir. 2003).
`There is no doubt that “the rules provide that such a motion may be filed in lieu of an answer.”
`Yan Yan v. Pennsylvania State Univ., 623 F. App’x 581, 582 (3d Cir. 2015) (citing Fed. R. Civ.
`P. 12(b)(6)).
`Acceleration Bay nevertheless argues that the October 4 date was the deadline to answer,
`not to respond. It bases this tortured reading on Fed. R. Civ. P. 12(g)(2), arguing that the Video
`Game Companies’ previous motion to dismiss, stay or transfer, which was based on the ”first-to-
`file” rule and the convenience of the parties, bars any subsequent motion to dismiss.
`Acceleration Bay’s reading of Rule 12(g)(2) is incorrect. “By its own terms, Rule 12’s
`waiver provision applies only to defenses raised under Rule 12.” Veverka v. Royal Caribbean
`Cruises Ltd., 649 F. App’x 162 (3d Cir. 2016) (unpublished table decision) (discussing Rule
`12(g)(2)). Thus, “a party that makes a motion under this rule must not make another motion
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`1 All docket citations are to Acceleration Bay LLC v. Activision Blizzard, Inc., C.A. No. 16-453-
`RGA. Substantially similar pleadings were filed in the related actions.
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`Case 1:16-cv-00455-RGA Document 28 Filed 10/13/16 Page 2 of 4 PageID #: 1547
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`The Honorable Richard G. Andrews
`October 13, 2016
`Page 2
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`under this rule raising a defense or objection that was available to the party but omitted from its
`earlier motion.” Fed. R. Civ. P. 12(g)(2) (emphasis added). The Video Game Companies’
`Motions to dismiss or stay were based on the first-to-file rule and transfer under 28 U.S.C. §
`1404 not Rule 12 or any ground there enumerated. (See D.I. 7).
`Acceleration Bay nonetheless asserts that the Video Game Companies’ motion should be
`“deemed” a Rule 12 motion. But it does not cite a single case holding that a first-to-file motion
`is deemed a Rule 12 motion. Cf. Main Iron Works LLC v. Rolls Royce Marine N. Am., Inc., 2015
`WL 3952709, at *2 (E.D. La. June 29, 2015) (“Rolls Royce has not argued, and this Court could
`find no case stating, that a motion under the first-to-file rule is a Rule 12 Motion.”). Some of the
`cases cited by Acceleration Bay describe first-to-file motions as 12(b) motions, but these
`descriptions are unconsidered dicta, untethered to any holding, let alone an application of Rule
`12(g)(2). Nor does Acceleration Bay cite a single case holding that a motion for transfer based
`purely on convenience should be deemed a Rule 12 motion. Instead it cites two decisions that
`deemed motions for transfer to be Rule 12 motions because they were based on the same facts as
`the defendants’ subsequent motions to dismiss for lack of personal jurisdiction. That is not the
`case here. In any event, these decisions are contrary to the plain language of the rule and the
`weight of authority:
`
`“Technically speaking, motions to transfer are made pursuant to a motion under
`the statute rather than under Rule 12(b)(3), although little, other than the possible
`application of the consolidation requirement in Rule 12(g), turns on this
`distinction.” Wright & Miller, 5B Fed. Prac. & Proc. Civ. § 1352 (3d ed.).
`“Although School–Link cited Rule 12(b)(3) and 28 U.S.C. § 1404(a) as the
`grounds for its motion, the motion was technically made under the transfer statute.
`. . . Accordingly, the current Rule 12(b)(3) motion is not a successive Rule 12
`motion that is barred by the consolidation and waiver principles of Rules 12(g)
`and (h)(1).” Sch.-Link Techs., Inc. v. Applied Res., Inc., 2005 WL 2269182, at *2
`(D. Kan. Sept. 16, 2005).
`“A motion to transfer venue for the convenience of parties or witnesses or in the
`interests of justice, brought pursuant to 28 U.S.C. § 1404(a), is not a motion under
`Rule 12(b)(3) of the Federal Rules of Civil Procedure, so the waiver provision of
`Rule 12(h) is inapplicable.” Red Wing Shoe Co. v. B-JAYS USA, Inc., 2002 WL
`1398538, at *2 (D. Minn. June 26, 2002).
`In any event, Acceleration Bay waived its argument when it stipulated to extend the
`Video Game Companies’ “time to respond” to the Complaints (D.I. 16 at 3). That stipulation
`was an agreement between the parties where the Video Game Companies—while “reserving all
`rights”—agreed to withdraw their motions to dismiss, stay or transfer and to dismiss their
`declaratory judgment actions, in exchange for an extension of their “time to respond to
`Acceleration Bay’s complaints.” (D.I. 16 at 2–3). Acceleration Bay’s apparent “[b]elie[f] that
`Defendants intended to answer and were procedurally barred from filing serial motion to
`dismiss,” is implausible in light of the unambiguous language of the stipulation and Order.
`Accordingly, the motions are procedurally proper and the Video Game Companies should
`not be ordered to answer while their motions are pending.
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`Case 1:16-cv-00455-RGA Document 28 Filed 10/13/16 Page 3 of 4 PageID #: 1548
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`The Honorable Richard G. Andrews
`October 13, 2016
`Page 3
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`Additionally, the Video Game Companies submit that a Rule 16 conference should not be
`scheduled until the Court has ruled on the motions to dismiss. Resolution of those motions may
`greatly simplify and streamline the case. If the motion to dismiss the claims concerning the
`Sony-compatible products for lack of standing is granted, that would foreclose technical and
`damages discovery on effectively half of the case, and limit the need for third-party discovery
`that would otherwise be required from Sony.2 Resolving the motion to dismiss for lack of
`standing first would be particularly appropriate, given “[t]he requirement that jurisdiction be
`established as a threshold matter.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94–95
`(1998).
`Furthermore, the motion to dismiss for lack of patent eligible subject matter is directed at
`three of the six patents and, if it is granted, the infringement, validity and claim construction
`issues will be cut nearly in half. And invalidity for lack of patent eligibility is also an issue
`frequently decided at the outset of the case, as it will also result in a similar saving of resources.
`Those same three patents are also the subject of IPR proceedings that are due for decisions no
`later than March 2017. The March 2017 decisions from the Patent Office on these IPRs may
`also resolve nearly half of this case and will also address certain claim construction disputes.
`Discussions about scheduling held while these motions are pending would be conducted
`in the shadow of substantial uncertainty about the amount and scope of discovery needed and
`would not produce an informed scheduling order. There is simply no reason to set a schedule or
`to commence discovery when Acceleration Bay’s standing to assert infringement by half of the
`accused products and the validity of half of the asserted patents are at issue before the Court.
`The grant of either or both of the Video Games Companies’ motions will dramatically affect how
`these cases should proceed. Waiting until these motions are resolved would conserve the
`resources of the Court and the parties.
`Although Acceleration Bay complains about delay, it identifies no prejudice in its letter
`to the Court and provides no reason not to wait until the motions are resolved. It suggests that
`the Video Game Companies brought these motions to dismiss as a delay tactic. That is not so.
`The patents-in-suit are all more than a decade old, having issued in 2004 and 2005. Thus, any
`delay can hardly be attributed to the defendants. Moreover, Acceleration Bay invited a round of
`motions to dismiss, because it asserted claims against Sony-compatible products knowing that
`the Video Game Companies had previously objected to those claims on standing grounds.
`Finally, given that Acceleration Bay is a non-practicing entity, there can be no harm to it in the
`marketplace from waiting until the resolution of the pending motions.
`The motions to dismiss are procedurally proper and may cut the discovery needed
`roughly in half and resolve most of the claims and half of the patents. The Video Game
`Companies submit that judicial economy counsels in favor of resolving those motions before
`scheduling a Rule 16 conference.
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`2 All but one of the accused games are played primarily on specialized computers called video
`game consoles. Sony, Microsoft, and Nintendo are the three major console manufacturers, with
`Sony’s PlayStation line of consoles representing approximately half of the worldwide market.
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`Case 1:16-cv-00455-RGA Document 28 Filed 10/13/16 Page 4 of 4 PageID #: 1549
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`The Honorable Richard G. Andrews
`October 13, 2016
`Page 4
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`JBB/dlw
`cc:
`Clerk of Court (Via Hand Delivery)
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`All Counsel of Record (Via Electronic Mail)
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`Respectfully,
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`/s/ Jack B. Blumenfeld
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`Jack B. Blumenfeld (#1014)
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