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`Case 1:16-cv-00455-RGA Document 350 Filed 12/26/17 Page 1 of 123 PageID #: 24139
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`IN THE UNITED STATES DISTRICT COURT
`IN AND FOR THE DISTRICT OF DELAWARE
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`CIVIL ACTION
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`NO. 16-0453-RGA
`CIVIL ACTION
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`NO. 16-0454-RGA
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`:::::::::::::::::::
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`ACCELERATION BAY, LLC,
`Plaintiff,
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`vs.
`ACTIVISION BLIZZARD,
`Defendant.
`---------------------------
`ACCELERATION BAY, LLC,
`Plaintiff,
`
`vs.
`ELECTRONIC ARTS INC.,
`Defendant.
`
`- - -
`Wilmington, Delaware
`Monday, December 18, 2017
`9:03 o'clock, a.m.
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`BEFORE: HONORABLE RICHARD G. ANDREWS, U.S.D.C.J.
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`
`
`
`
`Valerie J. Gunning
`Official Court Reporter
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`CIVIL ACTION
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`NO. 16-0455-RGA
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`ACCELERATION BAY, LLC,
`Plaintiff,
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`vs.
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`TAKE-TWO INTERACTIVE
`SOFTWARE, INC., ROCKSTAR
`GAMES, INC. and 2K SPORTS,
`INC.,
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`Defendants.
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`APPEARANCES:
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`POTTER, ANDERSON & CORROON LLP
`BY: ALAN SILVERSTEIN, ESQ.
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`-and-
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`KRAMER LEVIN NAFTALIS & FRANKEL LLP
`BY: JAMES HANNAH, ESQ.
`(Menlo Park, California)
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`-and-
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`KRAMER LEVIN NAFTALIS & FRANKEL LLP
`BY: AARON M. FRANKEL, ESQ.
`(New York, New York)
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`Counsel for Plaintiff
`Acceleration Bay LLC
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`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`BY: JACK B. BLUMENFELD, ESQ.
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`-and-
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`WINSTON & STRAWN LLP
`BY: MICHAEL A. TOMASULO, ESQ.
`(Los Angeles, California)
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`APPEARANCES (Continued):
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`WINSTON & STRAWN LLP
`BY: THOMAS M. DUNHAM, ESQ.
`(Washington, D.C.)
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`Counsel for Defendant
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`P R O C E E D I N G S
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`THE COURT: All right. Good morning, everyone.
`Please be seated.
`This is Acceleration Bay versus Activision
`Blizzard, Inc., Civil Action No. 16-453, plus the two
`related cases.
`Mr. Silverstein?
`MR. SILVERSTEIN: Good morning, Your Honor.
`THE COURT: Good morning.
`MR. SILVERSTEIN: Good morning. Alan
`Silverstein, Potter Anderson. With me today is James
`Hannah.
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`MR. HANNAH: Good morning, Your Honor.
`MR. SILVERSTEIN: And Aaron Frankel from Kramer
`
`Levin.
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`THE COURT: Good morning, gentlemen.
`Mr. Blumenfeld?
`MR. BLUMENFELD: Good morning, Your Honor. Jack
`Blumenfeld from Morris Nichols for the defendants along with
`Tom Dunham and Mike Tomasulo from Winston & Strawn, and
`Linda Zabriskie from Take-Two is a few rows back.
`THE COURT: All right. Good morning to you all.
`MR. TOMASULO: Good morning.
`THE COURT: All right. Mr. Hannah?
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`MR. HANNAH: Your Honor, we have some
`housekeeping issues that we can kind of take care of,
`take some terms off the table based on the recent
`submission.
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`
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`THE COURT: All right. Tell me about this happy
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`news.
`
`MR. HANNAH: It's indeed happy, Your Honor.
`So, again, we reiterated our position that, you
`know, these terms and all of the terms in the subsequent
`briefing, the plain and ordinary meaning should apply and
`that would resolve the parties' dispute. However, to the
`extent the Court wishes to construe these terms, we've
`agreed to the construction of term -- for term 10.
`THE COURT: Ten, yes.
`MR. HANNAH: 13 of the '344 patent and claim 13
`of the '966 patent.
`And --
`THE COURT: Wait a second. These are not terms
`that are for today. Right?
`MR. HANNAH: Term 10.
`THE COURT: Term 10 is, yes.
`MR. HANNAH: Network. So network within the
`construct of claim 13 of the '344 patent we would agree
`would be each of the broadcast channels.
`THE COURT: Wait. Is term 13 on today's list?
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`MR. HANNAH: I'm sorry if I misspoke. Term 10,
`and that only relates to claim 13 of the '344 patent.
`THE COURT: Oh, claim 13. Sorry. I'm getting
`claims and terms mixed up here. Okay.
`MR. HANNAH: I apologize Your Honor.
`THE COURT: All right. Term 10. I got that.
`
`Network.
`
`MR. HANNAH: Yes. So network within claim 13 of
`the '344 patent and claim 13 of the '966 patent. We would
`agree that network, the plain and ordinary meaning is each
`of the broadcast channels that comports with Acceleration
`Based's understanding.
`And then for term 24, that relates to claim 19
`of the '634 patent.
`THE COURT: Yes.
`MR. HANNAH: We would agree that the preamble,
`which is a computer based non-routing table based
`non-switched based method for adding a participant to a
`network of participants.
`THE COURT: All right. That's term 25.
`MR. HANNAH: Term 25. I'm sorry. Let me go to
`term 24. Let's do this in order.
`So term 24 is a non-routing table based
`computer-readable meaning controlling constructions for
`controlling communications of a participant of abroad cast
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`Case 1:16-cv-00455-RGA Document 350 Filed 12/26/17 Page 8 of 123 PageID #: 24146
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`channel within a network.
`THE COURT: Yes.
`MR. HANNAH: We would agree that defendant's
`proposed construction, which is a computer-readable medium
`containing instructions that control communications of a
`participant of a broadcast channel within a network that
`does not use routing tables, we would agree with that
`construction for claim, for term 24, which is claim 19 of
`the '634 patent.
`THE COURT: I'm sorry. Did the defendant's
`proposal change somewhere in the middle of the briefing?
`MR. HANNAH: Your Honor asked for supplemental
`briefing, I mean supplemental positions from the defendants,
`and to the extent that the term is not found.
`THE COURT: Okay.
`MR. HANNAH: And that was a submission on
`Friday. We haven't had a chance to respond to that and so
`we analyzed it over the weekend.
`THE COURT: All right. Yes. I'm not apparently
`sure I even saw that.
`All right. In any event, whatever is in
`defendant's letter, you agree with that?
`MR. HANNAH: Yes, which I just stated.
`THE COURT: Yes.
`MR. HANNAH: I mean, I say I agree to the
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`Case 1:16-cv-00455-RGA Document 350 Filed 12/26/17 Page 9 of 123 PageID #: 24147
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`construction. I'm not agreeing to the positions that
`they're taking.
`THE COURT: All right. In any event, 24 is
`resolved in your view?
`MR. HANNAH: Correct. And then term 25. Now
`I'm messing up claims and terms. Term 25, which is Claim 1
`of the '069 patent. Again, defendants propose a
`construction for the term, a computer-based, non-routing
`table based, non-switched based method for adding a
`participant to a network of participants. They proposed a
`construction this last Friday, a computer-based method for
`adding a participant to a network of participants that does
`not use routing tables or switches. And we would agree to
`that construction for Claim 1 of the '069 patent.
`THE COURT: Okay.
`MR. HANNAH: But we met and conferred with the
`defendants and they were fine with taking these off the
`table. However, they did wish me to inform the Court that
`they preserve their indefiniteness arguments and would
`submit that on the briefing unless the Court had any
`questions regarding those terms this morning.
`THE COURT: All right.
`MR. HANNAH: And then with that, I believe the
`parties would just take the rest of the terms in order,
`starting with term nine.
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`THE COURT: All right. Let me just check before
`you go. Mr. Dunham or Mr. Tomasulo, you are in agreement
`with what has been stated?
`MR. DUNHAM: We are, Your Honor. This is Tom
`Dunham for defendants. And we agree to the constructions
`that we submitted Friday for the three terms will apply, and
`then today, if the Court would like, I would be prepared to
`address the other issues we raised with respect to those
`terms, the 112 issues, the Beauregard issues, the printed
`matter issues.
`If the Court would like to hear that today, I
`would be happy to. If you'd like to defer to those
`validity-related issues --
`THE COURT: The only thing I think I might be
`interested in hearing -- hold on. Let me go back.
`Yes. The only out of those three I might be
`interested in hearing about would be for term 24, the
`indefiniteness issue. Okay?
`MR. DUNHAM: Absolutely. I will be prepared to
`address that then.
`THE COURT: All right. All right. So otherwise
`we have a game plan here.
`So we're starting with computer network. Is
`that right, Mr. Hannah?
`MR. HANNAH: I'm sorry, Your Honor. Mr. Frankel
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`will be taking that one.
`THE COURT: All right. Good enough.
`MR. FRANKEL: Good morning, your Honor.
`THE COURT: Good morning, Mr. Frankel.
`MR. FRANKEL: Here we have the parties' proposed
`constructions -- oh. Your Honor, may I approach to hand up
`some copies of the presentation?
`THE COURT: Sure, yes.
`(Mr. Frankel handed slides to the Court.)
`THE COURT: Mr. Frankel, can you just hold on a
`second? Go ahead.
`MR. FRANKEL: This is another term, Your Honor,
`that we think does not require construction. Computer
`network is a term that everyone would understand.
`There's nothing in the patents or the file
`history that gives --
`THE COURT: But nevertheless, even though you
`say that, you have a proposed construction.
`MR. FRANKEL: As ordered by the Court to provide
`a construction, we complied with that order, and our
`construction we think is consistent with the plain and
`ordinary meaning, that a computer network is computers or
`computer processes that are connected.
`The dispute between the parties is if there has
`to be a physical computer in the construction and if there
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`have to be at least two computers.
`I will first address the physical versus process
`issue. I think the two computer issues are entirely
`hypothetical. I don't believe that's relevant to the
`infringement or validity issues in the case, but it's
`unnecessary, confusing, and incorrect.
`THE COURT: All right. Go ahead.
`MR. FRANKEL: The specification makes clear that
`the network includes computer processes. It says that the
`network is made up of participants. The parties agreed to
`the construction for participants, that it includes computer
`processes.
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`So term 13 was participant, and everyone has
`agreed that a participant is a computer and/or computer
`process that participates in a network. So if we go back to
`claim 12, which depends from claim 1, the computer network
`is connected participants, and the parties have already
`agreed that the participants can be computers and/or
`computer processes.
`If you look at our construction, it's just
`taking the definition of participants, which is already
`agreed.
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`THE COURT: Do I take it that claim 1 is not
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`asserted?
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`MR. FRANKEL: That's correct, your Honor. Claim
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`12 is asserted, so it incorporates the limitations of claim
`1.
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`THE COURT: Right. Okay. I assumed that, but I
`just wanted to check.
`MR. FRANKEL: So we have an agreed upon
`definition that really should resolve this issue already.
`But turning to the specification, as we highlighted in our
`briefing and we pulled some excerpts out on the slides, it
`repeatedly refers to the network as connecting computer
`processes. For example, it says, each computer is connected
`to four other computers, and then parenthetically it says,
`actually, it's process executing on a computer that's
`connected to four other processes.
`If four people are driving around in cars and
`talking on their cellphones, in a sense you could say that
`the cars are communicating with each other, but in reality
`it's the people in the cars talking on the phones. Here, if
`we have four or more computers in a network, it's really the
`processes inside of the computers that are communicating
`with each other, as is made clear in the spec.
`THE COURT: So what is a -- I mean, I understand
`maybe you've stipulated to this and the construction is
`something else, but in more technical terms, what is meant
`by a computer process?
`MR. FRANKEL: Well, a computer process is
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`software that's being run on a computer. And this gets to
`why the defendants even proposed this physical computer
`limitation, which I think would potentially be very
`confusing to the jury.
`Just to be clear, there's nothing accused in
`this case that involves a metaphysical computer or imaginary
`computer. These are --
`THE COURT: I guess I was wondering, what kind
`of -- maybe this is a question better asked of the
`defendants, but when you modify computer by physical, then
`you do think what is the realm of computers that are being
`excluded by saying something is a physical computer as
`opposed to a non-physical computer? And do you have --
`what's your opinion on that?
`MR. FRANKEL: Well, there are theoretical
`quantum computers, but I mean, that's not the issue in this
`case. Everything that's being accused of infringement is,
`someone is at home playing a game on their computer, or
`there's a server. I believe the issue is defendants are
`trying to create a noninfringement defense where they say
`that they don't actually sell computers, they just sell
`software that's running on the computers. So that's the
`issue.
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`construction, that they would then try and say, oh, we don't
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`sell any physical computers, we just selling the processes
`that are running on the computers.
`THE COURT: And so when you say computer
`processes, is that fair to say that a different way of
`saying that is software running on a computer?
`MR. FRANKEL: That's fair, Your Honor. So the
`specification makes clear that when it's referring to
`participants in the network, it's referring to the software
`that's being run on the computer that's talking to other
`software running on other computers.
`We have some additional quotes from the
`specification that talk about the computer is really
`executing processes and that you can have multiple processes
`running on a computer, on a single computer.
`So also I will point out that claim 9 of the
`'344 patent reads that the computer network of claim 1,
`wherein each participant is a process executing on a
`computer. So, again, claim 9 confirms what the parties have
`already agreed to, that the participants in the computer can
`be a process.
`And then the final issue is, does the network
`have to be made of at least two computers that are talking
`with each other. Again, we don't think it's an issue in
`this case because we're not accusing a single computer
`that's running multiple processes, but it is incorrect, the
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`specification says that in the small regime, which we've
`talked about at prior hearings when there are not a large
`number of participants, a single computer can form a
`network, an initial network by communicating within itself.
`THE COURT: So, but if I decide that only what's
`covered by the claims is the large regime, then you would
`agree there have to be at least two computers?
`MR. FRANKEL: I would not agree, Your Honor,
`because a network -- the way network software is typically
`configured is that you have multiple participants and
`they're not even aware if they're on the same computer or
`not. The scenario where they cut corners because there are
`two computer processes or more on the same computer, it's
`called peeking over the wall, and in computer science,
`that's considered a very bad idea. It's a sloppy way of
`designing a network to create these shortcuts. It's a way
`of cutting corners.
`So, for example, if you are playing a game with
`multiple participants, the computer shouldn't really even
`care if they're all on the same computer or if they're in
`multiple remote locations. Making that -- making a special
`way of networking when they're all in a single place, it's
`not something that -- it's considered a very bad practice.
`And in the IPRs and in this case, one of the
`primary invalidity references that defendants have relied on
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`on is called Shoebridge, and Shoebridge simulates a computer
`network within a single computer. And defendants have
`applied Shoebridge to all of these claims involving a
`computer network, basically saying that if Shoebridge is
`simulating communications between 40 different computers by
`putting all of those processes within a single computer,
`they've said that that is a computer network as well. So at
`least for validity purposes, defendants have taken a very
`contrary position.
`THE COURT: All right. So you're saying this
`construction, two physical computers that are interconnected
`as they propose, this would exclude their invalidity
`reference or at least anticipation, I guess?
`MR. FRANKEL: That's correct.
`THE COURT: Okay. And so people think a
`computer network can be one computer?
`MR. FRANKEL: Well, would a layperson --
`THE COURT: I mean, people of ordinary skill in
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`the art?
`
`MR. FRANKEL: Yes. A computer network would
`require multiple participants, but those participants can be
`computer processes, and they may or may not be located on a
`single physical computer.
`THE COURT: So under your theory, if two people
`are sitting with their XBox controllers in the same room
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`playing a game, that could be a computer network?
`MR. FRANKEL: It could be. So there are
`different ways of structuring a multi-player game. If
`there's a single process that's handling both players, so
`back when I was a kid, if you would go to Chuck-E-Cheese and
`you would put a quarter in a video game, sometimes you could
`have two people playing on a machine.
`THE COURT: Yes?
`MR. FRANKEL: That's one process. But if you
`have a game that's set up that you can have multiple
`processes that would run independently but communicate with
`each other in a multi-player scenario, then that would be
`considered a network.
`Did I answer the question, Your Honor?
`THE COURT: I think you did. I'm just trying
`to -- so keep going.
`MR. FRANKEL: Well, that's the basic concept,
`that if the two people locally each have their own
`independent copy of the game running and those copies could
`be talking to each other or to people in a remote location
`and it wouldn't really make a difference to them, then in
`that situation you do have a network that there are distinct
`processes that are sharing information with each other.
`THE COURT: What is the -- I gorget. Maybe I
`saw this in here somewhere, but what is the priority date
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`for these patents?
`MR. FRANKEL: I believe --
`THE COURT: Roughly?
`MR. FRANKEL: I believe it's 1999.
`THE COURT: All right. And so if I have a --
`you are saying in 1999, if I had a standalone desktop
`computer, which I guess is what a lot of people had in those
`days, that could conceivably -- and it's not connected to
`the Internet, that could conceivably be a computer network
`if I had the right software on it?
`MR. FRANKEL: That's correct, Your Honor.
`THE COURT: So what is it that distinguishes a
`computer network from a computer?
`MR. FRANKEL: Well, again, a computer network,
`we've all agreed, is multiple computer processes and/or
`computer sharing information. So you need to have multiple
`processes that are communicating with each other.
`For example, there's a very old network
`structure, which is a bus network, where you can have
`multiple nodes that are all sharing information, and that
`can be run on a single chip.
`THE COURT: Is there any intrinsic support for
`this idea of what you are telling me a computer network
`could be?
`
`MR. FRANKEL: Sure. In the, just pointing to
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`some of these quotes, you know, here we say that the network
`is a process executing a computer that is connecting to four
`other processes executing on this or four other computers.
`So already it's saying that the network can be multiple
`processes operating on a single computer.
`THE COURT: All right. Okay.
`MR. FRANKEL: That's all I have, Your Honor.
`THE COURT: All right. Any further questions?
`MR. FRANKEL: Thank you, Mr. Frankel.
`MR. DUNHAM: May it please the Court, Tom Dunham
`for defendants.
`Your Honor, I think two things struck me during
`your questions and counsel's responses.
`First -- and it's really what's driving the
`claim construction issue. First, I heard a lot of reference
`to broadcast channels and I heard a lot of discussion about
`networks that may exist on a single computer, but I listened
`very carefully to the argument, and what I didn't hear in
`the argument and what I didn't see in plaintiff's slides was
`the specific reference to computer network, and that's the
`issue that we're facing.
`When we look at term 9, the plaintiff has
`proposed a group of connected computers and/or computer
`processes. And the quarrel that we have with the plaintiff
`is for the phrase, compute network. There has to be meaning
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`Case 1:16-cv-00455-RGA Document 350 Filed 12/26/17 Page 21 of 123 PageID #: 24159
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`to the word "computer." And our construction proposes
`physical computers that capture that concept. That a
`computer network has to have computers, not just the
`processes.
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`THE COURT: So, okay. And so when you say
`physical computer in your proposed construction, what you're
`really telling me you are trying to do is distinguish it
`from software?
`MR. DUNHAM: Right. It has to be a physical
`thing. And we're not trying to distinguish between a
`physical computer and a metaphysical computer. As counsel
`said, that's not an issue in this case. Our point is a
`computer network has to have computers. That's how you end
`up with a network.
`And Your Honor asked about the state of the art
`in the 1999/2000 time frame. Like Mr. Frankel, I also was
`an engineer and worked in industry. And your question was
`an apt question, what would be a computer network. And I
`will walk you through a little bit of the evidence in the
`case, and I submit a computer network at that time frame
`would require multiple computers, and that's consistent with
`what the specification shows in this case and with what the
`experts have said.
`THE COURT: And down the road, why does it
`matter, this dispute?
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`MR. DUNHAM: Some of the claims in this case are
`directed to networks. Some are directed to broadcast
`channels, and some of the claims are directed to compute
`networks, and there are different requirements in each
`claim.
`
`For the computer network claims, we submit that
`the plaintiff will have to show the existence of the
`computers that form the network, and that has been a
`challenge of ours in working through this case with opposing
`counsel. So we think we need a clear claim construction
`that makes clear to all of us a compute network has a
`plurality of computers. Other networks we may have defined
`in a different way depending on the claim.
`THE COURT: But I guess what I'm wondering is, I
`don't actually know for sure what the accused products are,
`but I gather these are the kinds of things that people sit
`around at different locations and they play against other
`participants, if you will, who are located elsewhere, and
`that presumably, all of these people are sitting at a
`computer terminal or a phone or have some kind of device on
`which they're controlling the actions of the game, however
`they get involved in this.
`And I guess I'm wondering if that is the
`scenario, how it's going to matter whether we have two
`physical computers or not, because isn't it clear that when
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`people are playing these games, there are going to be
`multiple physical computers that are interconnected?
`MR. DUNHAM: Well, I would submit it is clear,
`but based on the infringement contentions and the claim
`construction briefing that I've reviewed, it is not clear to
`us that the plaintiff agrees with that. And one of the
`reasons it matters is, as the Court is familiar from the
`original Markman hearing --
`THE COURT: The Court has forgotten the original
`Markman hearing.
`MR. DUNHAM: I would be loathe to remind you,
`but there were terms like and regular and other terms.
`THE COURT: I do remember some of it now.
`MR. DUNHAM: Sure.
`THE COURT: Now that you mention it.
`MR. DUNHAM: Where you have to define where the
`connections are and who they are between and that's going to
`matter if you say my computer network is these five
`computers. Then we check to see, do those computers have
`the connections that would meet the regular limitations or
`not?
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`And you heard about the flooding limitation. We
`would have to say, okay. If my network is with these six
`computers, then I would look to see between those computers,
`the flooding limitation is met. So it's really a precursor
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`to doing the infringement analysis, is to know which
`elements in
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