Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 1 of 25 PageID #: 46829
`
`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.
`
`PLAINTIFF ACCELERATION BAY LLC’S SUPPLEMENTAL
`BRIEF REGARDING ACTIVISION BLIZZARD, INC.’S INFRINGEMENT
`THROUGH THE SALE, MANUFACTURE AND USE OF SOFTWARE
`
`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
`
`Aaron M. Frankel
`Cristina Martinez
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
`(212) 715-9100
`
`Dated: June 1, 2018
`
`PUBLIC VERSION
`
`Public version dated: June 12, 2018
`
`

`

`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 2 of 25 PageID #: 46830
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`TABLE OF CONTENTS
`
`Page
`
`I.
`
`II.
`
`Introduction ......................................................................................................................... 1
`
`Argument ............................................................................................................................ 2
`
`A.
`
`Activision Directly Infringes the System Claims of the ‘344 and ‘966 Patents ..... 2
`
`1.
`
`2.
`
`3.
`
`Activision Sells the Infringing Networks ................................................... 2
`
`Activision Infringes By Making the Infringing Networks .......................... 7
`
`Activision Uses the Infringing Networks ................................................. 11
`
`B.
`
`Activision Directly Infringes the Claims of the ‘497 Patent................................. 18
`
`III.
`
`Conclusion ........................................................................................................................ 20
`
`i
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`

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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 3 of 25 PageID #: 46831
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`
`Aatrix Software, Inc. v. Green Shades Software, Inc.,
`882 F.3d 1121 (Fed. Cir. 2018)..................................................................................................6
`
`Akamai Techs., Inc. v. Limelight Networks, Inc.,
`797 F.3d 1020 (Fed. Cir. 2015)................................................................................................17
`
`Atlas IP, LLC v. Medtronic, Inc.,
`No. 13-23309-CIV, 2014 WL 5043017 (S.D. Fla. Oct. 8, 2014) ..............................................8
`
`Brilliant Instruments, Inc. v. GuideTech, LLC,
`707 F.3d 1342 (Fed. Cir. 2013)................................................................................................20
`
`California Inst. of Tech. v. Hughes Commc’ns Inc.,
`59 F. Supp. 3d 974 (C.D. Cal. 2014) .........................................................................................7
`
`Centillion Data Sys., LLC v. Qwest Commc’ns Int’l, Inc.,
`631 F.3d 1279 (Fed. Cir. 2011)........................................................................................ passim
`
`Centrak, Inc. v. Sonitor Techs., Inc.,
`No. 14-183-RGA, 2017 WL 3730617 (D. Del. Aug. 30, 2017) ..........................................8, 11
`
`CNET Networks, Inc. v. Etilize, Inc.,
`528 F. Supp. 2d 985 (N.D. Cal. 2007) .....................................................................................18
`
`DDR Holdings, LLC v. Hotels.com, L.P.,
`773 F.3d 1245 (Fed. Cir. 2014)..................................................................................................6
`
`Digitech Image Techs. LLC v. Elecs. For Imaging, Inc.,
`758 F.3d 1344 (Fed. Cir. 2014)..............................................................................................6, 7
`
`EBS Auto. Servs. v. Illinois Tool Works, Inc.,
`No. 09–cv–996 (JLS)(MDD), 2011 WL 4021323 (S.D. Cal. Sept. 12, 2011) ..........................9
`
`Eli Lilly & Co. v. Teva Parenteral Medicines, Inc.,
`845 F.3d 1357 (Fed. Cir. 2017)................................................................................................17
`
`Finjan, Inc. v. Blue Coat Sys., Inc.,
`879 F.3d 1299 (Fed. Cir. 2018)..................................................................................................6
`
`Grecia v. McDonald’s Corp.,
`No. 2017-1672, 2018 WL 1172580 (Fed. Cir. Mar. 6, 2018) ..................................................17
`
`ii
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`

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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 4 of 25 PageID #: 46832
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`High Tech Med. Instrumentation, Inc. v. New Image Indus., Inc.,
`49 F.3d 1551 (Fed. Cir. 1995)....................................................................................................9
`
`LifeNet Health v. LifeCell Corp.,
`837 F.3d 1316 (Fed. Cir. 2016)................................................................................................16
`
`Metro–Goldwyn–Mayer Studios Inc. v. Grokster, Ltd.,
`545 U.S. 913 (2005) .................................................................................................................10
`
`Microsoft Corp. v. AT & T Corp.,
`127 S. Ct. 1746 (2007) ...............................................................................................................5
`
`Paper Converting Mach. Co. v. Magna–Graphics Corp.,
`745 F.2d 11 (Fed. Cir. 1984)......................................................................................................9
`
`Rembrandt Social Media, LP v. Facebook, Inc.,
`950 F. Supp. 2d 876 (E.D.V.A. 2013) .........................................................................11, 15, 17
`
`Segan LLC v. Zynga Inc.,
`No. 11-670-GMS, 2013 WL 12156529 (D. Del. May 2, 2013) ..............................................11
`
`Transcenic, Inc. v. Google, Inc.,
`No. 11-582-LPS, 2014 WL 7275835 (D. Del. Dec. 22, 2014) ............................................2, 11
`
`Travel Sentry, Inc. v. Tropp,
`877 F.3d 1370 (Fed. Cir. 2017)..........................................................................................10, 17
`
`Uniloc USA, Inc. v. Microsoft Corp.,
`632 F.3d 1292 (Fed. Cir. 2011)................................................................................................16
`
`Statutes
`
`35 U.S.C. § 271 ...................................................................................................................... passim
`
`iii
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`

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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 5 of 25 PageID #: 46833
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`Acceleration Bay LLC (“Acceleration Bay”) submits this supplemental brief in
`
`opposition to Activision Blizzard, Inc.’s supplemental opening brief (D.I. 565).
`
`I.
`
`INTRODUCTION
`
`Activision admits that it sells Destiny and Call of Duty. See e.g., D.I. 565 at 13. Indeed,
`
`Activision receives billions of dollars in profits from its sales of millions of copies of these
`
`games and retains full ownership and total control over every aspect of the games and the
`
`infringing networks they comprise. These facts alone are sufficient to deny Activision’s motion
`
`for summary judgment that it does not make, use or sell the infringing systems.
`
`Nonetheless, Activision seeks to immunize itself from infringement, arguing that the
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`video games cannot infringe the Asserted Claims of the ‘344 and ‘966 Patents based on the
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`infirm position that video games are software and software supposedly cannot infringe system
`
`claims. At the recent May 17th hearing on this motion, Activision went a step further and
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`claimed that a valid system claim cannot cover software. This position flies in the face of recent
`
`Federal Circuit cases which affirmatively found that software system claims are patent eligible.
`
`Activision also makes and uses the accused infringing systems. There is abundant
`
`evidence that Activision makes and uses the computer network systems covered by the Asserted
`
`Claims. The Centillion case and other controlling authorities establish that an accused infringer
`
`makes or uses a computer system by making or selling the components of the system and uses a
`
`computer system by putting into use the components and benefiting from their use. Centillion
`
`Data Sys., LLC v. Qwest Commc’ns Int’l, Inc., 631 F.3d 1279, 1284 (Fed. Cir. 2011).
`
`Here, the claim elements at issue for the claimed networks are “participants,” which has
`
`been construed to mean computer processes, i.e., software. There is ample evidence that
`
`Activision makes, sells and uses the infringing software, much of which Activision simply
`
`

`

`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 6 of 25 PageID #: 46834
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`ignores. For example, Acceleration Bay’s experts provided unrebutted evidence that Activision
`
`(1) owns and controls the Call of Duty and Destiny software that are the infringing networks; (2)
`
`owns and controls the servers providing the networks, (3) puts the networks into use and obtains
`
`the benefits of their use and (4) masterminds and controls all aspects of the operation of the
`
`networks. D.I. 475, Accel. Bay. MSJ Opp. Br. at 1-2, citing Ex. 28 (Mitz. Rpt.) at ¶¶ 210-214,
`
`227, 242, 247, 259, 270, 281, 291, 298, 315, 328; Ex. 35 (Mitz. Reply Rpt.) at ¶¶ 72-73; Ex. 40
`
`(Med. Rpt.) at ¶¶ 322-331, 352-354, 357-359, 373, 386-389, 403-405, 412-413, 441-446, 454-
`
`461, 467, 587-588, 595-637; Ex. 50 (Med. Reply Rpt.) at ¶¶ 60-61.1 At a minimum, this
`
`substantial (and almost entirely undisputed) factual evidence is enough for a reasonable jury to
`
`find that Activision infringes and, therefore, precludes a grant of summary judgment.
`
`Transcenic, Inc. v. Google, Inc., No. 11-582-LPS, 2014 WL 7275835, at *3 (D. Del. Dec. 22,
`
`2014) (denying summary judgment where a “reasonable juror, taking all the evidence in the light
`
`most favorable to [plaintiff] . . . could find” infringement).
`
`Independent of its infringement through sales of Destiny and Call of Duty to its
`
`customers, Activision also directly infringes by making and using the infringing networks when
`
`its employees play, test, maintain and development expansions and enhancements for the games.
`
`This activity further precludes a grant of summary judgment.
`
`II.
`
`ARGUMENT
`
`A.
`
`Activision Directly Infringes the System Claims of the ‘344 and ‘966 Patents
`
`1.
`
`Activision Sells the Infringing Networks
`
`Activision infringes the ‘344 and ‘966 Patents by selling Destiny and Call of Duty, which
`
`are software. D.I. 475, Accel. Bay MSJ Opp. at 1-5. This fact is undisputed and thus, precludes
`
`1 Exs. 1-62 are to D.I. 453, 454, 455. Exs. 63-102 are to D.I. 480, 482. Exhibits 113-126 are to
`the June 1, 2018 Andre Declaration, submitted herewith.
`
`2
`
`

`

`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 7 of 25 PageID #: 46835
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`summary judgment. D.I. 565, Def. Supp. Br. at 4. To avoid addressing this issue, Activision
`
`doubles down on two arguments that contradict the parties’ stipulated claim construction, the
`
`Court’s claim construction order, and established Federal Circuit precedent.
`
`Both arguments center around what constitutes a “participant.” The Asserted Claims of
`
`the ‘344 and ‘966 Patents are directed to computer network systems, which can be made up
`
`solely of software. See, e.g., Ex. 3 (‘344 Patent), Claim 12. For Destiny and Call of Duty in
`
`connection with the Asserted Claims of the ‘344 and ‘966 Patents, Acceleration Bay has always
`
`accused software, namely Destiny and Call of Duty, of being the infringing computer network
`
`system.
`
`
`
`
`
` Contrary to
`
`Activision’s claim, Activision has been the only party in this case to claim that hardware
`
`components are necessary to infringe Claim 12 of the ‘344 and ‘966 Patents. D.I. 565, Def.
`
`Supp. Br. at 10. Specifically, Activision alleges that the claim element “participants” must be a
`
`combination of hardware and software and that networks cannot be software. The claim
`
`construction orders in this case, however, obliterate the foundation of Activision’s argument.
`
`First, the parties stipulated that “participants” can be computer processes. D.I. 320 at 2
`
`(“participant” and “participants” mean “a computer and/or computer process that participates in a
`
`network”). Second, the Court’s construction of “computer network” was consistent with the
`
`parties’ stipulation for “participants,” finding that a “computer network” can be either a “group
`
`of connected computers or group of connected computer processes” in construing Claim 12 of
`
`the ‘344 and ‘966 Patents. D.I. 423 at 8. Computer processes are software, not hardware. Thus,
`
`3
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`

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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 8 of 25 PageID #: 46836
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`“participants” do not have to be hardware components. Ex. 28 (Mitz. Rpt.) at ¶ 47.
`
`Accordingly, Activision sells every component of the infringing network, including the disputed
`
`“participant” element of the claims. Ex. 40 (Med. Rpt.) at ¶¶ 48-54, 80, 83-84; Ex. 28 (Mitz.
`
`Rpt.) at ¶¶ 72, 75-76.
`
`Hardware components are not necessary for infringement. Activision argues that
`
`software “requires a processor to execute,” but that is irrelevant for numerous reasons. D.I. 565,
`
`Def. Supp. Br. at 1-2. First, as described above, a “participant” has been construed to be a
`
`computer process, which is software. Therefore, no hardware is necessary to satisfy the claim
`
`elements of Asserted Claims of the ‘344 and ‘966 Patents. Second, nothing in the Asserted
`
`Claims require the process to execute on a computer. In fact, execution on a computer is a
`
`specific claim element found in other unasserted claims, such as Claim 9 of the ‘344 and ‘966
`
`Patents, which explicitly recite the element of “each participant is a process executing on a
`
`computer.” Thus, the ‘344 and ‘966 Patents recite when executing on a computer is a necessary
`
`limitation to the claims. Here, the Asserted Claims do not have such a claim limitation.
`
`Consequently, Activision is attempting to read in limitations that simply do not exist in the
`
`Asserted Claims and that it did not request during claim construction.
`
`Activision attempts to draw a distinction between the software it sells and the
`
`“application programs” that make up the infringing network. They are one and the same and
`
`Activision does not offer any expert or factual evidence to the contrary. Acceleration Bay and its
`
`experts do not (as Activision incorrectly claims) confirm any distinction between the software
`
`that is Destiny and Call of Duty and the participant processes that comprise the infringing
`
`network. Rather, the participants are “software applications” or “application programs,” which
`
`are nothing more than software. Ex. 28 (Mitz. Rpt.) at ¶ 47. Indeed, Activision’s license
`
`4
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`

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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 9 of 25 PageID #: 46837
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`agreements, which unambiguously provide that Activision retains ownership and control over its
`
`software, do not make any distinction between the software it licenses and the software when it
`
`is operating. Activision’s customers do not suddenly obtain ownership and control over Destiny
`
`and Call of Duty when they play the games. See, e.g., Ex. 74 (Terms of Use) at AB-AB-009835.
`
`Therefore, a reasonable jury could find that Activision does, in fact, sell the entire
`
`networks claimed in the ‘344 and ‘966 Patents.2
`
`Federal Circuit precedent demonstrates that Activision’s waived patent eligibility
`
`argument is wrong. Activision’s second argument is premised on the assumption that “[i]f
`
`Acceleration [Bay] is accusing pure software … then the patents are invalid because pure
`
`software is not patentable in an apparatus claim.” D.I. 565, Def. Supp. Br. at 10-11. During oral
`
`argument, Activision went even further and asserted that “software by itself” is never patentable
`
`because software is just a set of instructions. Ex. 115 (5/17/18 Tr.) at 126:25-127-10.
`
`As a preliminary matter, the Court rejected this invalidity argument when it denied
`
`Activision’s motion to dismiss the claim for lack of patent eligibility. D.I. 276 at 8-9. The Court
`
`concluded that “Defendants fail[ed] to show that the claims are directed to an abstract idea under
`
`step one of Alice.” Id.
`
`More important is that Activision’s assumption that software system claims are per se
`
`2Activision relies on Microsoft to argue that it sells discs that contain “no more than a ‘set of
`instructions’ or ‘blueprint’ that Activision’s customers may follow,” not networks. Microsoft,
`however, concerned § 271(f), and more specifically, “in what form … does software qualify as a
`‘component’ under § 271(f)?” Microsoft Corp. v. AT & T Corp., 127 S. Ct. 1746, 1753-54
`(2007). Section 271(f) applies to the supply abroad of ‘the components of a patent invention,
`where such components are uncombined in whole or in part, in such manner as to actively induce
`the combination of such components.” Id. at 1755. Here, Acceleration Bay is not arguing that
`Activision induced infringement under Section 271(f). Rather, Acceleration Bay alleges direct
`infringement under Section 271(a). Id. at 1755. Moreover, in that case, Microsoft exported a
`master disk that was then copied onto tangible medium abroad. Id. The software was not
`considered a “combinable component” until it was copied onto a medium, such as a CD-ROM,
`which is not at issue here. Id. As such, Microsoft is inapplicable.
`
`5
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`

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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 10 of 25 PageID #: 46838
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`patent ineligible contradicts Federal Circuit law. The Federal Circuit, on multiple occasions,
`
`held that software system claims are patent eligible subject matter. Aatrix Software, Inc. v.
`
`Green Shades Software, Inc., 882 F.3d 1121, 1125-26 (Fed. Cir. 2018), held that the data
`
`processing system claims that were a pure software innovation were patentable. In finding
`
`software system claims that were exclusively comprised of software elements to be patent
`
`eligible, the Federal Circuit stated: “[l]ike many claims that focus on software innovations, it is a
`
`system claim. It claims a data processing system which clearly requires a computer operating
`
`software, a [software] means for viewing and changing data, and a [software] means for viewing
`
`forms and reports. This is very much a tangible system.” Id. Another recent example is the
`
`Federal Circuit’s finding in Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299 (Fed. Cir. 2018),
`
`that network security software patents which were directed toward a “system and method for
`
`providing computer security” are directed to eligible subject matter and reiterating that
`
`“software-based innovations can make ‘non-abstract improvements to computer technology.’”
`
`Id. at 1302, 1304; see also, e.g., DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257-
`
`59 (Fed. Cir. 2014) (upholding system claims for software as patent-eligible).
`
`To support its unfounded position that software by itself is categorically not patentable
`
`subject matter, Activision relies on Digitech.3 D.I. 565, Def. Supp. Br. at 11–12. Digitech is
`
`inapposite because the claims in that case covered “[d]ata in its ethereal, non-physical form,” not
`
`software. Digitech Image Techs. LLC v. Elecs. For Imaging, Inc., 758 F.3d 1344, 1349-50 (Fed.
`
`Cir. 2014) (invalidating a claim for data sets “describing” color and spatial information, where
`
`the claims were neither an “embodiment of hardware [n]or software”) (emphasis added). The
`
`3 Activision also cites to the non-precedential Allvoice case, but that decision predates the recent
`Federal Circuit decisions confirming the eligibility of software inventions, such as Finjan and
`Aatrix. Further, the Federal Circuit did not hold that software by itself is per se ineligible.
`
`6
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`

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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 11 of 25 PageID #: 46839
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`claims here require far more than “data in the ether,” and cover networks where the participants
`
`can be software. Another court squarely rejected Activision’s overbroad reading of Digitech,
`
`recognizing that accepting the position that a claim is not patentable if it consists of
`
`mathematical algorithms that transform data is a “simplistic take” that “would eviscerate all
`
`software patents, a result that contradicts Congress’s actions and the Supreme Court’s guidance
`
`that software may be patentable if it improves the functioning of a computer.” California Inst. of
`
`Tech. v. Hughes Commc’ns Inc., 59 F. Supp. 3d 974, 987 (C.D. Cal. 2014).
`
`Therefore, there is no basis for this Court to hold that the ‘344 and ‘966 Patents are patent
`
`ineligible or that Activision does not infringe because the Asserted Claims cover software.
`
`2.
`
`Activision Infringes By Making the Infringing Networks
`
`Activision makes the software and networks that infringe the ‘344 and ‘966 Patents. D.I.
`
`475, Accel. Bay MSJ Opp. Br. at 1-5; Ex. 40 (Med. Rpt.) at ¶¶ 48-54, 80, 83-84, 89-90; Ex. 28
`
`(Mitz. Rpt.) at ¶¶ 72, 75-76.
`
`
`
`
`
`
`
`
`
` For example, Activision’s license agreements, which players
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`accept when downloading the software, explicitly state that Activision maintains complete
`
`ownership of the software, confirming that Activision is the party building the network: “All
`
`title, ownership, and intellectual property rights in and to the Product . . . are owned by
`
`Activision and/or Activision's licensor(s).” Ex. 74 at AB-AB-009835 (emphasis added). Based
`
`on this substantial evidence, a jury could reasonably conclude that Activision makes (and owns)
`
`the infringing networks, thereby directly infringing the ‘344 and ‘966 Patents. Centillion, 631
`
`7
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`

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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 12 of 25 PageID #: 46840
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`F.3d at 1288 (to “make” an infringing system under § 271(a), the alleged infringer must
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`“combine all of the claim elements[.]”).
`
`Moreover, the Court already specifically rejected Activision’s claim that it cannot
`
`infringe because the network is not formed without the involvement of its customers turning on
`
`their games. The Court held that “the claims do not ‘claim activities performed by the user’ or
`
`make any reference to a ‘user.’ . . . Rather, they claim a network in which participants are
`
`configured to send data to their neighbors.” D.I. 386 at 22-23. Thus, to show infringement by
`
`“making,” Acceleration Bay need only show that Activision made and controls the infringing
`
`network. Atlas IP, LLC v. Medtronic, Inc., No. 13-23309-CIV, 2014 WL 5043017, at *7-9 (S.D.
`
`Fla. Oct. 8, 2014) (finding that a manufacturer could infringe by making the components for a
`
`medical device even where the components needed to be turned on by a customer to be used
`
`because the claim did not require the customer’s actions).
`
`Activision relies on case law that is inapplicable. Activision’s reliance on Centillion is
`
`misplaced because it does not apply to a claim for infringement for “making” the network. In
`
`Centillion, the defendant “manufacture[d] only part of the claimed system.” Centillion, 631 F.3d
`
`at 1288. Here, Activision makes every element of the Asserted Claims of the ‘344 and ‘966
`
`Patents. Centrak, the other case Activision relies upon is similarly unavailing. Centrak does not
`
`stand for the proposition that Activision cannot make or sell an infringing software system by
`
`selling, owning and controlling software. The claims and facts in Centrak are very different
`
`from those at issue here. Centrak, Inc. v. Sonitor Techs., Inc., No. 14-183-RGA, 2017 WL
`
`3730617 (D. Del. Aug. 30, 2017). Specifically, Centrak’s patents covered a “system for
`
`determining a location and an identity of a portable device,” where the system includes multiple
`
`ultrasonic base stations and portable devices in addition to software. Id. at *1-2. The Court
`
`8
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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 13 of 25 PageID #: 46841
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`found that, while the defendant undisputedly sold the software component, there was no factual
`
`evidence that the defendant also sold or assembled the additional components of the system, such
`
`as the base stations and mobile devices. Id. at *7. Here, in contrast, the infringing network
`
`systems are software and there is no dispute that Activision owns, makes and sells them.
`
`At a minimum, Activision directly infringes by “making” the networks because it
`
`provides the components for the networks and controls their formation. Further, even if the
`
`input of Activision’s customers is required to cause the network to be formed (which is not the
`
`case — the networks are made exclusively by Activision’s software), Activision does not avoid
`
`infringement by selling an otherwise-infringing, but disassembled network. See, e.g., High Tech
`
`Med. Instrumentation, Inc. v. New Image Indus., Inc., 49 F.3d 1551, 1556 (Fed. Cir. 1995). “[I]f
`
`a device is designed to be altered or assembled before operation, the manufacturer may be held
`
`liable for infringement if the device, as altered or assembled, infringes a valid patent.” Id. (citing
`
`Paper Converting Mach. Co. v. Magna–Graphics Corp., 745 F.2d 11, 19 (Fed. Cir. 1984)).
`
`Centillion does not replace the High Tech / Paper Converting standard where, as is the case here,
`
`no actions by other parties are required to make the component claim limitations. EBS Auto.
`
`Servs. v. Illinois Tool Works, Inc., No. 09–cv–996 (JLS)(MDD), 2011 WL 4021323, at *6 (S.D.
`
`Cal. Sept. 12, 2011) (finding that Centillion does not apply when a device sold embodied every
`
`limitation and customer only needed to assemble — not make — the device or combine two
`
`related devices sold by the same entity to complete the infringing product).
`
`Activision is vicariously liable for the actions of its customers. To the extent the
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`involvement of Activision’s end-users in starting Destiny and Call of Duty is required to infringe
`
`under the “making” (or “using”) prongs of § 271(a) (which it is not for the reasons discussed
`
`above), Activision still directly infringes because it is vicariously liable for its customers’
`
`9
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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 14 of 25 PageID #: 46842
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`actions. Travel Sentry, Inc. v. Tropp, 877 F.3d 1370, 1378 (Fed. Cir. 2017) (citing Metro–
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`Goldwyn–Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930 (2005) (“an actor ‘infringes
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`vicariously by profiting from direct infringement’ if that actor has the right and ability to stop or
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`limit the infringement”)).
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`Acceleration Bay’s experts provided more than substantial evidence confirming that the
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`actions of Activision’s customers are attributed to Activision, including through Activision’s
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`complete control of their use of Activision’s software pursuant to the license agreements. Ex. 40
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`(Med. Rpt.) at ¶¶ 322-326; Ex. 28 (Mitz. Rpt.) at ¶¶ 210-215. Here, the facts establish that
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`Activision infringes vicariously because it conditions participation in the Call of Duty and
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`Destiny games on its customers’ use of Activision’s software and entry into a license agreement.
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`Ex. 28 (Mitz. Rpt.) at ¶ 213; Ex. 40 (Med. Rpt.) at ¶ 325. Activision’s customers are not allowed
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`to modify the software or provide their own matchmaking services. Ex. 28 (Mitz. Rpt.) at e.g.,
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`¶¶ 210-215; Ex. 40 (Med. Rpt.) at e.g., ¶¶ 322-325.
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`Thus, Activision’s customers can only participate in the games by taking a license and
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`using Activision’s infringing software, which performs the patented method, and through which
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`Activision precisely controls the manner of its customers’ performance of the steps, preventing
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`them from having any choice in how these functions are performed. Id. Finally, Activision
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`directly profits from its customers’ use of Destiny and Call of Duty and can “stop or limit”
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`infringement at any time by revoking its customers’ licenses and suspending their access to the
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`infringing multiplayer networks. Ex. 74 at AB-AB 009834 (“Activision … reserves the right to
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`modify or discontinue online Product features in its discretion….”); id. at 9836-37.
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`Activision does not dispute these facts, which are sufficient, e.g., under Travel Sentry, to
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`establish infringement through vicarious liability. 877 F.3d at 1385 (an actor infringes “‘by
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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 15 of 25 PageID #: 46843
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`profiting from direct infringement’ if that actor has the right and ability to stop or limit the
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`infringement.”). Thus, a reasonable jury could find that Activision infringes the Asserted Claims
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`of the ‘344 and ‘966 Patents by making the infringing networks.
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`3.
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`Activision Uses the Infringing Networks
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`Activision directly infringes the ‘344 and ‘966 Patents by using the infringing networks.
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`A defendant’s use of a system infringes when (1) it actually uses the infringing system and (2) it
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`“put[s] the invention into service, i.e., control[s] the system as a whole and obtain[s] benefit from
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`it.” Rembrandt Social Media, LP v. Facebook, Inc., 950 F. Supp. 2d 876, 884 (E.D.V.A. 2013);
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`Centrak, 2017 WL 3730617, at *7 (actual use, such as testing, infringes).
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`Activision’s actual use. Activision directly infringes the Asserted Claims through its
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`employees’ updating, maintaining, playing and testing of Destiny and Call of Duty. Ex. 28
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`(Mitz. Rpt.) at ¶¶ 52-55; Segan LLC v. Zynga Inc., No. 11-670-GMS, 2013 WL 12156529, at *1
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`n.1 (D. Del. May 2, 2013) (accused infringer’s “accessing of its own games is sufficient” to
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`constitute “use” under § 271(a)). As this Court recognized, “[i]t is certainly true that testing a
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`system may constitute an infringing use.” Centrak, 2017 WL 3730617, at *7. For these reasons,
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`a “reasonable juror, taking all the evidence in the light most favorable to [AB] . . . could find”
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`infringement, and the Court should deny Activision’s Motion. Transcenic, Inc. v. Google, Inc.,
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`No. 11-582-LPS, 2014 WL 7275835, at *3 (D. Del. Dec. 22, 2014).
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`Notably, Activision does not deny that through its employees, it tests, researches,
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`updates, develops, maintains, plays and uses its games. Instead, Activision coyly and incorrectly
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`suggests that there is no evidence that it does so, especially after March 2015 when damages
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`began to accrue. To the contrary, there is ample evidence in the record to confirm Activision’s
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`continued infringement after March 2015 through its own making and using of the infringing
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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 16 of 25 PageID #: 46844
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`networks for playing, testing and development purposes.
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`Activision’s SEC filings confirm that it has teams that develop, review and test its
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`software, including Destiny and Call of Duty:
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`technology and
`We provide various forms of product support. Central
`development teams review, assess, and provide support to products throughout the
`development process. Quality assurance personnel are also involved throughout
`the development and production of published content. We subject all such
`content to extensive testing before public release to ensure compatibility with
`appropriate hardware systems and configurations and to minimize the number of
`bugs and other defects found in the products. (Ex. 116 at ATVI0030557)
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`Indeed, Activision employs an entire division dedicated to testing its games.
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`Activision argues that there is no evidence that its infringement through internal use and
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`testing continued after March 2015, given that some of Destiny and Call of Duty were already on
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`sale at that time. However, Activision continued to update, patch and provide new content and
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`expansions for Destiny and Call of Duty well beyond March 2015. For example, Activision
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`released over 40 updates to Destiny from 2015 through 2017. Ex. 121 (List of Destiny Updates);
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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18 Page 17 of 25 PageID #: 46845
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`see also e.g., Ex. 122 (significant updates for Call of Duty Black Opps III from January to April
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`2018).
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`Activision and its contractual partners continue, even today, to hire Quality Assurance
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`test engineers with experience playing Destiny and Call of Duty for testing and quality assurance
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`purposes for these games. Recent exemplary job postings are reproduced below (See Ex. 126).
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`Case 1:16-cv-00453-RGA Document 573 Filed 06/12/18