Case 1:16-cv-00453-RGA Document 551 Filed 05/07/18 Page 1 of 5 PageID #: 45907
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`C.A. No. 16-453 (RGA)
`
`)))))))))
`
`
`)
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`ACTIVISION BLIZZARD, INC.,
`
`Defendant.
`
`LETTER TO THE HONORABLE RICHARD G. ANDREWS
`FROM PHILIP A. ROVNER
`
`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: April 26, 2018
`
`PUBLIC VERSION
`
`Public version dated: May 7, 2018
`
`

`

`Case 1:16-cv-00453-RGA Document 551 Filed 05/07/18 Page 2 of 5 PageID #: 45908
`
`1313 North Market Street
`P.O. Box 951
`Wilmington, DE 19899-0951
`302 984 6000
`www.potteranderson.com
`
`Philip A. Rovner
`Partner
`Attorney at Law
`provner@potteranderson.com
`302 984-6140 Direct Phone
`302 658-1192 Firm Fax
`
`April 26, 2018
`
`BY CM/ECF & HAND DELIVERY
`
`The Honorable Richard G. Andrews
`U.S. District Court for the District of Delaware
`U.S. Courthouse
`844 North King Street
`Wilmington, DE 19801
`
`Re:
`
`Acceleration Bay LLC v. Activision Blizzard, Inc.,
`D. Del., C.A. No. 16-453-RGA
`
`Dear Judge Andrews:
`
`Acceleration Bay submits this letter pursuant to Your Honor’s directive during the
`pretrial conference on April 20, 2018 to (i) identify the docket numbers of complete copies of the
`opening, reply and supplemental reports of Acceleration Bay’s damages expert, Dr. Christine
`Meyer, and (ii) provide citations to the portions of Dr. Meyer’s report addressing the date of the
`hypothetical negotiation. In addition, Acceleration Bay responds to Activision’s unauthorized
`April 24, 2018 letter that requests for a second time, the Court reconsider its order to allow Dr.
`Meyer’s to submit a supplemental report.
`
`As a preliminary matter, Acceleration Bay filed complete copies of Dr. Meyer’s opening
`and reply reports with its summary judgment opposition briefing. D.I. 480 (Andre Decl.,
`Volume 1) at Ex. 69 (Meyer Opening Rpt.) and Ex. 70 (Meyer Reply Rpt.). Activision filed Dr.
`Meyer’s supplemental report under seal as D.I. 534, Attachment 1.
`
`Dr. Meyer’s analysis of the hypothetical negotiation is entirely consistent with this
`Court’s Order that “the date of first infringement is the relevant date for a hypothetical
`negotiation.” D.I. 521. Dr. Meyer performed a comprehensive analysis of the hypothetical
`negotiation utilizing several alternative dates, including those Activision proposed.
`
`In particular, regarding the date of first infringement, Dr. Meyer identified in her report
`the products accused of infringement (Meyer Opening Rpt. ¶ 20 n.34), the release date of each
`accused product (id. at ¶¶ 21-23 id. at Ex. 3) and the issue date of each of the asserted patents (id.
`at ¶¶ 14-19). See also Meyer Reply Rpt. ¶¶ 11, 14; Meyer Supp. Rpt. ¶¶ 7-8; id. at S15-S18.
`This is evidence that relates to the date of first infringement, which requires both that the patent
`issued and the accused product is sold. Boston Scientific Corp. v. Cordis Corp., 777 F. Supp. 2d
`783, 791 (D. Del. 2011) (“Infringement begins when both the patent has issued and the accused
`
`PUBLIC VERSION
`May 7, 2018
`
`

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`Case 1:16-cv-00453-RGA Document 551 Filed 05/07/18 Page 3 of 5 PageID #: 45909
`The Honorable Richard G. Andrews
`April 26, 2018
`Page 2
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`products are sold.”); Fujifilm Corp. v. Motorola Mobility LLC, No. 12-cv-03587-WHO, 2015
`WL 1265009, at *3 (N.D. Cal. Mar. 19, 2015) (the hypothetical negotiation date must be tied to
`the start of infringement by the products actually accused of infringement, “not just before the
`start of infringement by any [] product that incorporates allegedly infringing features”) (emphasis
`added); Applied Med. Res. Corp. v. U.S. Surgical Corp., 435 F.3d 1356, 1361–62 (Fed. Cir.
`2006) (hypothetical negotiation must be for accused products, not earlier products).
`
`In addition, Dr. Meyer considered the hypothetical negotiation from each of the dates
`Activision’s damages expert proposed, namely March 2, 2004 (i.e., earliest issuance date of one
`of the asserted patents), August 2007 (i.e., development period of Call of Duty: Modern Warfare,
`a Call of Duty game not accused of infringement, but in the same franchise of games as the two
`Call of Duty games that Acceleration Bay is accusing of infringement) and “as late as 2014”
`(i.e., development period of Destiny). Meyer Opening Rpt. ¶ 45, ¶ 46 n.133, ¶ 149, n.345;
`Meyer Reply. Rpt. ¶¶ 11-17; Meyer Supp. Rpt. ¶¶ 7-12. Dr. Meyer ultimately concluded that for
`each alternative hypothetical negotiation date, her opinion of the reasonable royalty did not
`change. Id.1 Notably, Activision’s damages expert, Ms. Lawton, did a similar analysis,
`determining that her opinion did not change if the hypothetical negotiation date was March 2,
`2004, August/September 2007 or late 2014. D.I. 486-487, Ex. C-6 to Barry Decl. in Support of
`Opp. (Lawton Rpt.) at ¶¶ 24(b), 878-895.2
`
`As explained in Acceleration Bay’s April 17, 2018 letter, Dr. Meyer’s supplemental
`report is consistent with her opening and reply reports, as well as with Orders by this Court and
`the Special Master. To argue otherwise, Activision conflates separate and independent rulings
`from the Special Master that, when correctly reviewed, establish that Activision has no grounds
`to exclude Dr. Meyer’s opinion based upon these orders.
`
`1 In reaching this conclusion, Dr. Meyer evaluated numerous inputs, including, for example: (i)
`Activision’s profits during the damages period, of which the parties to the hypothetical
`negotiation would be aware (Meyer Opening Rpt. ¶¶ 49-50; id., at Ex. 4A-E); (ii) purported non-
`infringing alternatives proposed by Activision (Meyer Opening Rpt. at ¶¶ 51-57; id. at Ex. 5);
`(iii) prior licenses to the asserted patents, including the
` License (Meyer Opening
`Rpt. ¶¶ 60-67); (iv) Activision’s licenses, which date back to 2003 (Meyer Opening Rpt. at ¶¶
`68-97); (v) the relationship between the negotiating parties (Meyer Opening Rpt. ¶ 108; Meyer
`Reply Rpt. ¶ 13); and (vi) Activision’s use of the invention (Meyer Opening Rpt. at ¶ 132-135;
`Meyer Reply Rpt. ¶ 14).
`
`2 As she explained in her reports, Dr. Meyer invoked the “book of wisdom” doctrine when
`evaluating the hypothetical negotiation in 2004 and/or 2007 to make the parties aware of the
`state of the video game market and the scope of infringement around the time of the accused
`infringement in the 2015 timeframe. Meyer Opening Rpt. ¶¶ 62-63, 149 n.345; Meyer Reply
`Rpt. ¶¶ 8, 16-17, 21; Meyer Supp. Rpt. ¶ 7, 10. Dr. Meyer explained that she did not invoke the
`“book of wisdom” for the analysis pursuant to a hypothetical negotiation date in 2014, since the
`nature of multiplayer would be similar in 2015. Meyer Supp. Rpt. ¶ 7 n.8.
`
`Public version dated: May 7, 2018
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`

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`Case 1:16-cv-00453-RGA Document 551 Filed 05/07/18 Page 4 of 5 PageID #: 45910
`The Honorable Richard G. Andrews
`April 26, 2018
`Page 3
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`Contrary to Activision’s claim, the Special Master already ruled that Dr. Meyer’s report
`containing opinions based on alternative dates for the hypothetical negotiation, including the
`dates proposed by Activision, does not violate any of the Special Master’s prior orders. After
`Dr. Meyer served her expert report, Activision filed a baseless motion to exclude Dr. Meyer’s
`opinion that her reasonable royalty would remain the same under alternate hypothetical
`negotiation dates. Activision raised the exact same arguments it asserts in its letter campaign
`regarding Dr. Meyer’s supplemental report, namely that Dr. Meyer’s opinion violates the Special
`Master’s prior order that Acceleration Bay is bound to the hypothetical negotiation date
`identified in its interrogatory responses. D.I. 347 (Special Master Order No. 12) at 7 (“Dr.
`Meyer allegedly states that damages would be the same regardless of the hypothetical
`negotiation date. According to Activision this violates the Special Master Order binding the
`Plaintiff to the date of service of the complaint as the hypothetical negotiation date.”). The
`Special Master denied Activision’s motion. Id. at 8-9.
`
`Critically, Activision did not appeal the Special Master’s Order and, therefore, it is now
`the law of the case. D.I. 62 (Rule 16 Scheduling Order) (“All Orders issued by the Special
`Master are deemed issued in these Actions.”). Ignoring the Special Master’s Order denying
`Activision’s motion to strike Dr. Meyer’s expert report, Activision instead focuses on an earlier
`discovery ruling by the Special Master. In the Special Master’s Order No. 3, the Special Master
`denied Activision’s motion seeking to preclude Acceleration Bay from arguing a different
`hypothetical date than Acceleration Bay identified in its interrogatory responses based on
`discovery disclosures. D.I. 227 (Special Master Order No. 6) at 8. Activision’s contention that
`this order precludes Dr. Meyer’s opinion in her supplemental report regarding the hypothetical
`negotiation is nothing more than an attempt to ignore the fact that the Special Master denied
`Activision’s subsequent motion to strike, in which Activision asserted that Acceleration Bay’s
`expert could not present an analysis regarding any other hypothetical negotiation dates. D.I. 347
`(Special Master Order No. 12) at 7.
`
`Moreover, and as explained in Acceleration Bay’s briefing to the Special Master, Dr.
`Meyer’s opinion is consistent with Acceleration Bay’s interrogatory response that explicitly
`stated Dr. Meyer would address the information included in Activision’s interrogatory responses,
`including the hypothetical negotiation dates that Activision proposes. Ex. A attached hereto,
`Relevant Portions of 10/30/2017 Pl. Opp. at 10-11. Thus, Activision’s cherry-picking language
`from the Special Master’s orders to conflate discovery issues with its present Daubert challenge
`is improper.
`
`Furthermore, neither Dr. Meyer nor Dr. Medvidović opined on infringement of earlier
`versions of the accused products. Indeed, Activision does not point to any actual “opinion”
`where an analysis was done that explicitly stated earlier versions were infringing. Dr. Meyer’s
`reasonable royalty opinion was limited to the accused products and did not include earlier
`versions. Dr. Meyer is not an infringement expert and repeatedly testified that she did not offer
`an infringement opinion. Ex. B attached hereto (Meyer Tr.) at 239:24-240:9. Dr. Meyer did not
`identify the 2004 version of the World of Warcraft franchise as an infringing product. Exhibit 3
`to her report, which Activision cites, simply lists a history of the franchises and which platforms
`are implicated. Meyer Opening Rpt. ¶ 23; id. at Ex. 3. That earlier games are in the same
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`Public version dated: May 7, 2018
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`

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`Case 1:16-cv-00453-RGA Document 551 Filed 05/07/18 Page 5 of 5 PageID #: 45911
`The Honorable Richard G. Andrews
`April 26, 2018
`Page 4
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`franchises as the accused products is not a contention or “admission” that they infringe the
`asserted claims.
`
`The specious nature of Activision’s argument regarding Dr. Medvidović’s opinion is
`apparent because Activision cherry-picks a single line from his expert report, but nowhere points
`to an affirmative opinion by Dr. Medvidović that earlier versions of Call of Duty infringe.
`Activision does not dispute that it did not make its source code available for earlier versions of
`Word of Warcraft or Destiny, and its argument that the games themselves are publicly available
`is a red-herring. Activision is using Dr. Meyer’s report, which contains no opinion regarding the
`infringement of earlier versions of the accused products, to confirm the baseless hypothetical
`negotiation date of Activision’s expert. Activision was forced to rely on its incorrect
`characterization of Dr. Meyer’s report because it did not produce any of its own evidence or
`opinion that the first date of infringement coincided with earlier versions of the accused
`products. Indeed, as explained in Acceleration Bay’s Daubert motion to preclude Ms. Lawton’s
`opinion, there is no evidence—and Ms. Lawton relied on none—establishing that earlier versions
`of the accused products infringe. D.I. 448 at 43-45.
`
` License
`Finally, Activision’s suggestion that Dr. Meyer dismissed the
`solely because of the date of the hypothetical negotiation is wrong. Dr. Meyer provided an
`extensive discussion of why the
` license is not comparable, including the significant
`differences in the field of use of the
`License compared to the hypothetical license,
`the availability of platforms and associated revenues at the time of the hypothetical negotiation
`going back to 2005, and that all but one of the infringing products were launched after the
`effective date of the of the
` License. Meyer Opening Rpt. ¶¶ 63-65; Meyer Reply.
`Rpt. ¶¶ 14-15, 16-17. Thus, Activision’s claim regarding Dr. Meyer’s analysis of the
` License has no support.
`
`For these reasons and as set forth in Acceleration Bay’s April 17, 2018 letter, the Court
`should deny Activision’s request that it reverse its Order authorizing Dr. Meyer’s supplemental
`report.
`
`Respectfully,
`
`/s/ Philip A. Rovner
`
`Philip A. Rovner (#3215)
`
`Attachments
`cc:
`All Counsel of Record (Via ECF Filing, Electronic Mail)
`
`5758452
`
`Public version dated: May 7, 2018
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`