Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 1 of 59 PageID #: 29765
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`C.A. No. 16-453 (RGA)
`
`C.A. No. 16-454 (RGA)
`
`C.A. No. 16-455 (RGA)
`
`))))))))))
`
`))))))))))
`
`)))))))))))
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`ACTIVISION BLIZZARD, INC.,
`
`Defendant.
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`ELECTRONIC ARTS INC.,
`
`Defendant.
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`TAKE-TWO INTERACTIVE SOFTWARE,
`INC., ROCKSTAR GAMES, INC., and 2K
`SPORTS, INC.,
`
`Defendants.
`
`PLAINTIFF ACCELERATION BAY LLC’S
`OPENING SUMMARY JUDGMENT AND DAUBERT BRIEF
`
`PUBLIC VERSION
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 2 of 59 PageID #: 29766
`
`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
`
`OF COUNSEL:
`
`Paul J. Andre
`Lisa Kobialka
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`(650) 752-1700
`pandre@kramerlevin.com
`lkobialka@kramerlevin.com
`
`Aaron M. Frankel
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
` (212) 715-9100
`afrankel@kramerlevin.com
`
`Dated: February 2, 2018
`
`i
`
`Public version dated: February 9, 2018
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 3 of 59 PageID #: 29767
`
`TABLE OF CONTENTS
`
`Page
`
`SUMMARY OF ARGUMENT .......................................................................................................1
`
`ARGUMENT ...................................................................................................................................2
`
`I.
`
`The Asserted Claims Are Valid Over Defendants’ Asserted Prior Art .........................2
`
`A.
`
`IPR Estoppel Bars Various of Defendants’ Invalidity Challenges to the
`Asserted Claims of the ‘344 and ‘966 Patents ...............................................................4
`
`1.
`
`Defendants are estopped from asserting DirectPlay against Claim 12 of
`the ‘344 and ‘966 Patents ......................................................................................4
`
`B.
`
`The PTAB Already Rejected Several of Defendants’ Invalidity Arguments ................7
`
`1.
`
`2.
`
`3.
`
`4.
`
`The PTAB Already Found That Obraczka Thesis, Shoubridge and Denes
`Do Not Render Obvious Claims 1 and 11 of the ‘069 Patent. ..............................7
`
`The PTAB Already Found That Shoubridge Does Not Render Obvious
`Claim 12 of the ‘344 and ‘966 Patents..................................................................9
`
`The PTAB Already Found That Shoubridge in View of Denes and
`Rufino Does Not Render Obvious Claims 1, 11, 15 and 16 of the ‘147
`Patent...................................................................................................................10
`
`The PTAB Already Found That Neither DirectPlay in View of
`Shoubridge Nor Obraczka in View of Shoubridge and Obraczka Thesis
`Renders Obvious Claims 19 and 22 of the ‘634 Patent ......................................10
`
`C.
`
`Defendants’ Prior Art Fails to Disclose an Incomplete, M-regular Network ..............11
`
`1.
`
`2.
`
`3.
`
`Alagar does not teach an incomplete, m-regular network ..................................11
`
`AoE in View of Alagar Does Not Teach a Non-Complete, M-Regular
`Network...............................................................................................................13
`
`DirectPlay in View of Alagar Does Not Teach a Non-Complete, M-
`Regular Network .................................................................................................13
`
`D.
`
`Kegel and ActiveNet Do Not Invalidate the Asserted Claims of the ‘497
`Patent............................................................................................................................14
`
`1.
`
`2.
`
`Kegel Was Not Available Until After the Filing Date of the ‘497 Patent ..........14
`
`ActiveNet Was Not Publicly Available Until After the Filing Date of the
`‘497 Patent ..........................................................................................................16
`
`i
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 4 of 59 PageID #: 29768
`
`II.
`
`The Accused Products infringe Claim 12 of the ‘344 Patent.......................................17
`
`A.
`
`Destiny Infringes Claim 12 of the ‘344 Patent ............................................................18
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`Destiny Provides “A computer network for providing a game
`environment for a plurality of participants”........................................................19
`
`In Destiny, “each participant ha[s] connections to at least three neighbor
`participants” ........................................................................................................19
`
`In Destiny, “an originating participant sends data to the other
`participants by sending the data through each of its connections to its
`neighbor participants and … participant sends data that it receives from
`a neighbor participant to its other neighbor participants,” ..................................20
`
`The Destiny Network “is m-regular, where m is the exact number of
`neighbor participants of each participant” and “the number of
`participants is at least two greater than m thus resulting in a non-
`complete graph” ..................................................................................................22
`
`In Destiny, “the interconnections of participants form a broadcast
`channel for a game of interest.” ..........................................................................24
`
`B.
`
`Call of Duty Infringes Claim 12 of the ‘344 Patent .....................................................24
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`6.
`
`CoD provides “A computer network for providing a game environment
`for a plurality of participants” .............................................................................24
`
`In CoD, “each participant ha[s] connections to at least three neighbor
`participants” ........................................................................................................25
`
`In CoD, “an originating participant sends data to the other participants
`by sending the data through each of its connections to its neighbor
`participants and … participant sends data that it receives from a
`neighbor participant to its other neighbor participants,” ....................................26
`
`The CoD “network is m-regular, where m is the exact number of
`neighbor participants of each participant” ..........................................................27
`
`For CoD, “the number of participants is at least two greater than m thus
`resulting in a non-complete graph” .....................................................................27
`
`In CoD, “the interconnections of participants form a broadcast channel
`for a game of interest.”........................................................................................28
`
`C. World of Warcraft Infringes Claim 12 of the ‘344 Patent ...........................................28
`
`ii
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 5 of 59 PageID #: 29769
`
`1. WoW provides “A computer network for providing a game environment
`for a plurality of participants” .............................................................................29
`
`2.
`
`3.
`
`4.
`
`5.
`
`In WoW, “each participant ha[s] connections to at least three neighbor
`participants” ........................................................................................................29
`
`In WoW, “an originating participant sends data to the other participants
`by sending the data through each of its connections to its neighbor
`participants and … participant sends data that it receives from a
`neighbor participant to its other neighbor participants,” ....................................30
`
`The WoW “network is m-regular, where m is the exact number of
`neighbor participants of each participant” and “the number of
`participants is at least two greater than m thus resulting in a non-
`complete graph” ..................................................................................................30
`
`In WoW, “the interconnections of participants form a broadcast channel
`for a game of interest.”........................................................................................32
`
`III.
`
`Ms. Lawton’s Opinions Should Be Excluded ..............................................................32
`
`A. Ms. Lawton’s Damages Opinions Should be Excluded as Arbitrary,
`Unsupported by the Facts of this Case and Unreliable ................................................32
`
`1. Ms. Lawton’s Reasonable Royalty Opinion Necessarily Rests on
`Speculation ..........................................................................................................32
`
`License,
`2. Ms. Lawton’s Damages Opinion Relies Upon the
`For Which She Assumes Comparability Without Any Analysis ........................38
`
`3. Ms. Lawton’s Opinion as to the Date For the Hypothetical Negotiation is
`Unsupported and Arbitrary .................................................................................43
`
`B. Ms. Lawton is Not Qualified to Offer Technical Opinions Regarding Non-
`Infringing Alternatives .................................................................................................46
`
`C. Ms. Lawton’s Separate Opinion Responding to Acceleration Bay’s Technical
`Validity Expert Is Unreliable .......................................................................................48
`
`CONCLUSION ..............................................................................................................................50
`
`iii
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 6 of 59 PageID #: 29770
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Anderson v. Liberty Lobby, Inc.,
`477 U.S. 242 (1986) .............................................................................................................4, 17
`
`Apple Inc. v. Samsung Elecs. Co.,
`839 F.3d 1034 (Fed. Cir. 2016)................................................................................................48
`
`Applied Med. Res. Corp. v. U.S. Surgical Corp.,
`435 F.3d 1356 (Fed. Cir. 2006)................................................................................................44
`
`Biscotti Inc. v. Microsoft Corp.,
`No. 13-CV-01015-JRG-RSP, 2017 WL 2526231 (E.D. Tex. May 11, 2017) .......................5, 6
`
`Blue Calypso, LLC v. Groupon, Inc.,
`815 F.3d 1331 (Fed. Cir. 2016)..........................................................................................15, 16
`
`Boston Scientific Corp. v. Cordis Corp.,
`777 F. Supp. 2d 783 (D. Del. 2011) .........................................................................................43
`
`Bowling v. Hasbro, Inc.,
`C.A. No. 05-229S, 2008 WL 717741 (D.R.I. Mar. 17, 2008) ...........................................34, 37
`
`Brandeis Univ. v. Keebler Co.,
`2013 WL 5911233 (N.D. Ill. Feb. 18, 2013) ...........................................................................48
`
`Carnegie Mellon Univ. v Marvell Tech. Group,
`No. 09-290, 2012 WL 6562221 (W.D. Pa. Dec. 15, 2012) ...............................................49, 50
`
`Clearlamp, LLC v. LKQ Corp.,
`No. 12 C 2533, 2016 WL 4734389 (N.D. Ill. Mar. 18, 2016) ...................................................6
`
`Cobalt Boats, LLC v. Sea Ray Boats, Inc.,
`No. 15cv21, 2017 WL 2605977 (E.D. Va. June 5, 2017) ..........................................................6
`
`DataQuill Ltd. v. High Tech Computer Corp.,
`887 F.Supp.2d 999 (S.D. Cal. 2011) ........................................................................................42
`
`Daubert v. Merrell Dow Pharms., Inc.,
`509 U.S. 579 (1993) ......................................................................................................... passim
`
`iv
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 7 of 59 PageID #: 29771
`
`Douglas Dynamics, LLC v. Meyer Prods. LLC,
`No. 14-cv-886-jdp, 2017 WL 1382556 (W.D. Wis. Apr. 18, 2017),
`reconsideration granted in part on other grounds, No. 14-CV-886-JDP, 2017
`WL 2116714 (W.D. Wis. May 15, 2017) ..................................................................................6
`
`Egyptian Goddess, Inc. v. Swisa, Inc.,
`543 F.3d 665 (Fed. Cir. 2008)....................................................................................................4
`
`Fairchild Semiconductor Corp. v. Power Integrations, Inc.,
`No. CV 12-540-LPS, 2015 WL 1303643 (D. Del. Mar. 20, 2015) .........................................33
`
`Fujifilm Corp. v. Motorola Mobility LLC,
`No. 12-CV-03587-WHO, 2015 WL 1265009 (N.D. Cal. Mar. 19, 2015) ...............................44
`
`Georgia–Pacific Corp. v. U.S. Plywood Corp.,
`318 F. Supp. 1116 (S.D.N.Y. 1970).........................................................................................38
`
`In re Hall,
`781 F.2d 897 (Fed. Cir. 1986)..................................................................................................14
`
`Hilgraeve Inc. v. Symantec Corp.,
`271 F. Supp. 2d 964 (E.D. Mich. 2003) .............................................................................14, 17
`
`Honeywell Int’l, Int’l v. Hamilton Sundstrand Corp.,
`378 F. Supp. 2d 459 (D. Del. 2005) .........................................................................................41
`
`Insight Tech., Inc. v. SureFire, LLC,
`No. 04-CV-74-JD, 2007 WL 3244092 (D.N.H. Nov. 1, 2007) ...............................................15
`
`Invitrogen Corp. v. Biocrest Mfg., L.P.,
`424 F.3d 1374 (Fed. Cir. 2005)..........................................................................................18, 32
`
`LaserDynamics, Inc. v. Quanta Computer, Inc.,
`694 F.3d 51 (Fed. Cir. 2012)....................................................................................................42
`
`LaserDynamics v. Quanta Computer,
`No. 2:06-CV-348, 2011 WL 197869 (E.D. Tex. Jan. 20, 2011) .............................................46
`
`Lucent Techs., Inc. v. Gateway, Inc.,
`580 F.3d 1301 (Fed. Cir. 2009)................................................................................................38
`
`M2M Sols. LLC v. Enfora, Inc.,
`167 F. Supp. 3d 665 (D. Del. 2016) .........................................................................................38
`
`M2M Sols. LLC v. Motorola Sols., Inc.,
`No. CV 12-33-RGA, 2016 WL 767900 (D. Del. Feb. 25, 2016) ............................................38
`
`v
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 8 of 59 PageID #: 29772
`
`Microsoft Corp. v. Proxyconn, Inc.,
`789 F.3d 1292 (Fed. Cir. 2015)..................................................................................................3
`
`NetAirus Techs., LLC v. Apple, Inc.,
`2013 U.S. Dist. LEXIS 184514 (C.D. Cal. Oct. 23, 2013) ......................................................42
`
`Network-1 Techs., Inc. v. Alcatel-Lucent USA, Inc.,
`No. 6:11-CV-492-RWS-KNM, 2017 WL 4478236 (E.D. Tex. Sept. 26, 2017) .......................5
`
`Norian Corp. v. Stryker Corp.,
`363 F.3d 1321 (Fed. Cir. 2004)................................................................................................14
`
`Parallel Networks Licensing, LLC v. Int'l Bus. Machines Corp.,
`No. CV 13-2072 (KAJ), 2017 WL 1045912 (D. Del. Feb. 22, 2017), appeal
`dismissed, No. 2017-2042, 2017 WL 5897705 (Fed. Cir. Sept. 20, 2017) ...............................5
`
`Procter & Gamble Co. v. Team Techs., Inc.,
`Case No. 1:12-cv-552, 2014 WL 12656554 (S.D. OH July 3, 2014) ........................................8
`
`ResQNet.com, Inc. v. Lansa, Inc.,
`594 F.3d 860 (Fed. Cir. 2010)..................................................................................................41
`
`Sciele Pharma Inc. v. Lupin Ltd.,
`684 F.3d 1253 (Fed. Cir. 2012)..................................................................................................8
`
`Sprint Commc'ns Co. L.P. v. Comcast IP Holdings, LLC,
`No. CV 12-1013-RGA, 2015 WL 456154 (D. Del. Jan. 30, 2015) .........................................38
`
`SRI Int’l, Inc. v. Cisco Sys., Inc.,
`179 F. Supp. 3d 339 (D. Del. 2016) .........................................................................................17
`
`Uniloc USA, Inc. v. Microsoft Corp.,
`632 F.3d 1292 (Fed. Cir. 2011)................................................................................................38
`
`Verinata Health, Inc. v. Ariosa Diagnostics, Inc.,
`2017 WL 235048 (N.D. Cal. 2017) ...........................................................................................4
`
`Virnetx, Inc. v. Cisco Sys., Inc.,
`767 F.3d 1308 (Fed. Cir. 2014)................................................................................................33
`
`Wordtech Sys. v. Integrated Networks Solutions, Inc.,
`609 F.3d 1308 (Fed. Cir. 2010)....................................................................................37, 38, 39
`
`Statutes
`
`35 U.S.C. 315(e)(2) ..........................................................................................................................5
`
`35 U.S.C. § 314(a) ...........................................................................................................................8
`
`vi
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 9 of 59 PageID #: 29773
`
`35 U.S.C. § 315(e)(2) .......................................................................................................................4
`
`Other Authorities
`
`Fed. R. Civ. P. 56(a) ....................................................................................................................2, 4
`
`Fed. R. Evid. 403 ...........................................................................................................................50
`
`vii
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 10 of 59 PageID #: 29774
`
`NATURE AND STAGE OF THE PROCEEDINGS
`
`Acceleration Bay LLC filed suit against Activision Blizzard, Inc. on March 11, 2015.
`
`Fact and expert discovery respectively closed on July 31, 2017 and January 26, 2018. D.I. 384.1
`
`Trial is set for April 30, 2018. D.I. 62. Acceleration Bay now moves (1) for summary judgment
`
`on several of Defendants’ invalidity defenses, (2) for summary judgment that each of the
`
`Accused Products infringes Claim 12 of the ‘344 Patent and (3) to exclude the proposed opinions
`
`of Activision’s damages expert under Daubert and Rule 702 of the Federal Rules of Evidence.
`
`SUMMARY OF ARGUMENT
`
`Validity should not be an issue in this case. Defendants collectively filed 20 serial IPRs,
`
`12 of which resulted in trials, challenging the validity of the Asserted Patents. The PTAB
`
`rejected all of Defendants’ challenges to the asserted claims, confirming their validity over the
`
`prior art. IPR estoppel is an absolute bar to several of the invalidity defenses that Defendants
`
`continue to pursue, and the concessions of Defendants’ invalidity expert and the PTAB’s
`
`findings compel summary judgment of validity on multiple other of Defendants’ invalidity
`
`theories.
`
`Summary judgment that Activision infringes Claim 12 of the ‘344 Patent is also
`
`warranted. Activision’s source code, technical documents, corporate witnesses and even its non-
`
`infringement experts leave undisputed facts sufficient to establish infringement, leaving no
`
`triable issues of fact. As set forth below, each of the accused video games uses infringing non-
`
`complete, m-regular networks to broadcast gameplay data.
`
`Finally, the Court should preclude Defendant’s economic expert from providing
`
`fundamentally flawed and unreliable opinions in rebuttal to Acceleration Bay’s experts. She
`
`1 All docket citations are to C.A. No. 16-453 (RGA).
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 11 of 59 PageID #: 29775
`
`provides an improper damages calculation that is based on arbitrary and speculative calculations
`
`untethered to the facts of the case, premises her entire opinion on a license agreement that is
`
`neither technically nor economically comparable and offers technical opinions on non-infringing
`
`alternatives and validity that lack any factual basis and for which she concedes she is unqualified
`
`to provide.
`
`ARGUMENT
`
`The Court should grant Acceleration Bay’s motions for summary judgment because
`
`“there is no genuine dispute as to any material fact and [Acceleration Bay] is entitled to
`
`judgment as a matter of law.” Fed. R. Civ. P. 56(a). As movant, Acceleration Bay bears the
`
`burden of demonstrating the absence of a genuine issue of material fact. Matsushita Elec. Indus.
`
`Co. v. Zenith Radio Corp., 475 U.S. 574, 585 n.10, 586 (1986). Defendants must then “come
`
`forward with specific facts showing that there is a genuine issue for trial.” Id. at 587.
`
`I.
`
`The Asserted Claims Are Valid Over Defendants’ Asserted Prior Art
`
`Defendants filed 18 IPR petitions against the Asserted Patents and Activision’s affiliate,
`
`Bungie, filed another two. After the PTAB expended considerable resources resolving those
`
`proceedings and Acceleration Bay was put to the task of defending its claims, all of the Asserted
`
`Claims emerged unscathed. Despite the PTAB resoundingly confirming the validity of these
`
`claims, Defendants still challenge validity as though those IPR proceedings had never happened.
`
`Defendants continue to assert a barrage of prior art defenses, including many that they
`
`already raised or reasonably could have raised before the PTAB. Defendants also pursue
`
`arguments that the PTAB already rejected as meritless in declining to institute IPR proceedings
`
`under the less stringent “reasonable likelihood of prevailing” standard. Given that the clear and
`
`convincing evidence standard applies to these proceedings, no reasonable jury could find for
`
`Defendants on these defenses. Additionally, Defendants assert multiple references against
`
`2
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 12 of 59 PageID #: 29776
`
`claims that require an incomplete, m-regular network, but their invalidity expert Dr. Karger
`
`admits that these references do not disclose an incomplete, m-regular network under the Court’s
`
`claim constructions. Finally, Defendants rely on certain purported prior art references without
`
`having come forward with any evidence that those references were publicly available.
`
`Defendants thus fail to create a genuine material issue as to invalidity based on these references.
`
`Defendants’ attempt to take a mulligan on validity is directly contrary to the intent of
`
`Congress. Congress wanted IPRs to be a way to streamline resolution of validity issues and
`
`conserve the resources of the parties and the courts, where infringers take their best shot at
`
`challenging the asserted claims, but then are estopped from re-litigating those issues. Microsoft
`
`Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1303, 1308 (Fed. Cir. 2015) (noting “Congress's
`
`purpose in creating IPR as part of a more efficient and streamlined patent system that will
`
`improve patent quality and limit unnecessary and counterproductive litigation costs.” (quotations
`
`omitted)). IPRs were never meant to multiply invalidity proceedings, which Defendants seek to
`
`do here. The following table summarizes Defendants’ invalidity grounds at issue:
`
`Patent:
`‘344 &
`‘966
`
`Claims:
`12
`
`Invalidity Grounds:
`Alagar
`
`‘344: 13, 14,
`15
`
`‘966: 13
`1, 11
`
`1, 11, 15, 16
`19, 22
`
`9, 16
`
`‘069
`
`‘147
`‘634
`
`‘497
`
`Alagar and AoE
`
`Alagar and DirectPlay
`DirectPlay
`Shoubridge
`Alagar and AoE
`Alagar and DirectPlay
`
`Bases For Summary Disposal:
`IPR estoppel;
`No incomplete, m-regular network
`IPR estoppel;
`No incomplete, m-regular network
`No incomplete, m-regular network
`IPR estoppel
`PTAB denied petition for IPR
`No incomplete, m-regular network
`No incomplete, m-regular network
`
`Obraczka Thesis, Shoubridge
`and Denes
`
`Shoubridge, Denes and Rufino
`DirectPlay, Shoubridge,
`Obraczka and Obraczka Thesis
`Kegel in View of Naugle
`ActiveNet in View of Naugle
`
`PTAB already found no fully
`connected portal computer contacted
`by a seeking participant
`PTAB denied petition for IPR
`PTAB denied petition for IPR
`
`Kegel not available as prior art
`ActiveNet not available as prior art
`
`3
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 13 of 59 PageID #: 29777
`
`Because Defendants bear the burden of proof on invalidity, Acceleration Bay “need not
`
`produce evidence showing the absence of a genuine issue of material fact; rather [its] burden . . .
`
`may be discharged by . . . pointing out to the district court – that there is an absence of evidence
`
`to support the nonmoving party’s case,” as is the case here. Avia Group Int’l, Inc. b L.A. Gear
`
`Cal., Inc., 853 F.2d 1557, 1560 (Fed. Cir. 1988), abrogated on other grounds by Egyptian
`
`Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 671 (Fed. Cir. 2008). Summary judgment is proper
`
`on Defendants’ untenable invalidity defenses because it will “isolate and dispose of factually
`
`unsupported claims or defenses.” Fed. R. Civ. P. 56(a); Celotex Corp., 477 U.S. at 323-24.
`
`A.
`
`IPR Estoppel Bars Various of Defendants’ Invalidity Challenges to the
`Asserted Claims of the ‘344 and ‘966 Patents
`
` For the claims that were the subject of the 12 IPRs that resulted in final written
`
`decisions, IPR estoppel precludes Defendants from asserting in this action invalidity defenses
`
`they “raised or reasonably could have raised” during those IPRs” 35 U.S.C. § 315(e)(2).
`
`1.
`
`Defendants are estopped from asserting DirectPlay against Claim 12
`of the ‘344 and ‘966 Patents
`
`IPR estoppel bars Defendants from asserting DirectPlay against Claim 12 of the ‘344
`
`Patent and Claim 12 of the ‘966 Patent. The PTAB granted Defendants’ petition for IPR of both
`
`claims based on the combination of DirectPlay and Lin. Ex. 12 (IPR2015-1970 Final Written
`
`Decision) at 2-3; Ex. 2 (IPR2015-1951 Final Written Decision) at 2-3. In its Final Written
`
`Decisions, the PTAB confirmed that Claim 12 of the ‘344 and ‘966 Patents is valid over those
`
`references. Ex. 1 at 25; Ex. 2 at 24.
`
`The IPR bar precludes Defendants’ attempt to now assert DirectPlay alone, as this is a
`
`subset of the grounds the PTAB already rejected. See Verinata Health, Inc. v. Ariosa
`
`2 Unless otherwise noted, all exhibits are attached to the Declaration of Paul J. Andre in Support
`of Acceleration Bay’s Opening Summary Judgment and Daubert Brief.
`
`4
`
`

`

`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 14 of 59 PageID #: 29778
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`Diagnostics, Inc., 2017 WL 235048, *2-7 (N.D. Cal. 2017), denying mandamus, No. 2017-109,
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`2017 WL 1422489, *1-2 (Fed. Cir. Mar. 9, 2017) (applying IPR estoppel to a subset of a
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`combination of references asserted in IPR); Advanced Micro Devices 2017 WL 2774339, at *6
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`(same); Biscotti Inc. v. Microsoft Corp., No. 13-CV-01015-JRG-RSP, 2017 WL 2526231, at *7-
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`8 (E.D. Tex. May 11, 2017) (same); Network-1 Techs., Inc. v. Alcatel-Lucent USA, Inc., No.
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`6:11-CV-492-RWS-KNM, 2017 WL 4478236, at *6 (E.D. Tex. Sept. 26, 2017), report and
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`recommendation adopted, No. 6:11-CV-00492-RWS, 2017 WL 4856473 (E.D. Tex. Oct. 27,
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`2017) (same). Therefore, Defendants are barred as a matter of law from asserting DirectPlay
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`against Claim 12 of the ‘344 Patent and Claim 12 of the ‘966 Patent.
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`2.
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`Defendants Are Barred From Asserting Alagar or Alagar in
`Combination With Age of Empires Against Claim 12 of the ‘344 and
`‘966 Patents
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`Defendants are estopped from asserting Alagar (S. Alagar, et al., “Reliable Broadcast in
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`Mobile Wireless Networks”) and Alagar in combination with Age of Empires (AoE) against
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`Claim 12 of the ‘344 Patent and Claim 12 of the ‘966 Patent because Defendants reasonably
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`could have raised those grounds in their IPR proceedings, but elected not to do so. Under the
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`majority reading of 35 U.S.C. 315(e)(2), IPR petitioners are estopped from raising invalidity
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`grounds that they reasonably could have raised in a petition granted by the PTAB. Parallel
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`Networks Licensing, LLC v. Int'l Bus. Machines Corp., No. CV 13-2072 (KAJ), 2017 WL
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`1045912, at *12 (D. Del. Feb. 22, 2017), appeal dismissed, No. 2017-2042, 2017 WL 5897705
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`(Fed. Cir. Sept. 20, 2017). Sitting by appointment in this District, Circuit Judge Kent A. Jordan
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`explained the policy behind applying IPR estoppel to prevent petitioners from raising invalidity
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`defenses they could have included in an IPR petition (Id.):
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`Allowing IBM to raise arguments here that it elected not to raise during the
`IPR would give it a second bite at the apple and allow it to reap the benefits of
`the IPR without the downside of meaningful estoppel. To prevent that unfair
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`5
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`

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`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 15 of 59 PageID #: 29779
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`result, I conclude that IBM is estopped from asserting prior art references and
`combinations that it reasonably could have raised before the PTAB.
`Numerous other courts have come to the same conclusion and barred a party from
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`asserting invalidity defenses it could have raised in an instituted IPR. See, e.g., Cobalt Boats,
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`LLC v. Sea Ray Boats, Inc., No. 15cv21, 2017 WL 2605977, at *2–3 (E.D. Va. June 5, 2017)
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`(concluding that estoppel applies to non-petitioned grounds that the petitioner reasonably could
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`have raised); Biscotti, 2017 WL 2526231, at *7 (same); Douglas Dynamics, LLC v. Meyer
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`Prods. LLC, No. 14-cv-886-jdp, 2017 WL 1382556, at *4 (W.D. Wis. Apr. 18, 2017),
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`reconsideration granted in part on other grounds, No. 14-CV-886-JDP, 2017 WL 2116714 (W.D.
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`Wis. May 15, 2017) (same); Clearlamp, LLC v. LKQ Corp., No. 12 C 2533, 2016 WL 4734389,
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`at *7–8 (N.D. Ill. Mar. 18, 2016) (same).
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`Here, Defendants “reasonably could have raised” their invalidity theories based on
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`Alagar and AoE because, by exercising reasonable diligence prior to filing their petition they
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`would have identified these references. See Clearlamp, LLC, 2016 WL 4734389, *6-10 (“an
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`inter partes review petitioner is estopped from relying on any ground that could have been raised
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`based on prior art that could have been found by a skilled searcher's diligent search”).
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`Indeed, no search at all was necessary to locate Alagar. Alagar appears on the face of the
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`‘344 and ‘966 Patents as one of the cited references and was substantively discussed in the file
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`histories for both patents, confirming that Defendants could have easily found it without any
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`searching. Ex. 3 (‘344 Patent) at 2; Ex. 4 (‘966 Patent) at 2; D.I. 118-1, Ex. B-1, ‘344 File
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`History (5/21/03 Office Action) at 4-6, (9/10/03 Amend.) at 8-11 ; see also D.I. 118-1, Ex. B-2,
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`‘966 File History (9/10/03 Amend.) at 7-11.
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`Defendants included AoE in their May 6, 2016 invalidity contentions, served about three
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`weeks after the IPR petitions at issue, confirming it was readily available to Defendants. Ex. 5 at
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`6
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`Case 1:16-cv-00455-RGA Document 398 Filed 02/09/18 Page 16 of 59 PageID #: 29780
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`14 (referencing AoE Readme and Manual). Indeed, Dr. Karger contends that AoE and related
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`documentation are commercially available materials. Ex. 6 (Karger Rpt.) at ¶ 269.3
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`Accordingly, the Court should grant Acceleration Bay summary judgment on
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`Defendants’ challenges to Claim 12 of the ‘344 Patent and Claim 12 of the ‘966 Patent based on
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`Alagar or Alagar combined with AoE because Defendants reasonably could have included these
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`grounds in their instituted IPRs against those claims.
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`B.
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`The PTAB Already Rejected Several of Defendants’ Invalidity Arguments
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`1.
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`The PTAB Already Found That Obraczka Thesis, Shoubridge and
`Denes Do Not Render Obvious Claims 1 and 11 of the ‘069 Patent.
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`The combination of Shoubridge, Denes and Obraczka Thesis does not render obvious
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`claims 1 and 11 of the ‘069 Patent. Dr. Karger relies on this combination but identifies only the
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`Obraczka Thesis as supposedly disclosing the “seeking participant contact[ing] a fully connected
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`portal computer” limitation, which is required by both claims 1 and 11. Ex. 6 (Karger Rpt.) at
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`¶ 1023. Originally, Dr. Karger claimed that there is a “master” that is fully connected when a
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`participant seeking to join a network contacts the “group master.” Id. at ¶¶ 1024-1030.
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`To point to a portal computer that is both fully connected and contacted by a seeking
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`participant, Dr. Karger incorrectly suggested that “gr