Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 1 of 12 PageID #: 49422
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`Plaintiff,
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`v.
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`C.A. No. 16-453 (RGA)
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`ACCELERATION BAY LLC,
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`ACTIVISION BLIZZARD INC.,
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`DEFENDANT’S OPPOSITION TO
`PLAINTIFF’S MOTION FOR REARGUMENT AND RECONSIDERATION
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`
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`Defendant.
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`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Stephen J. Kraftschik (#5623)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mnat.com
`skraftschik@mnat.com
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`Attorneys for Defendants
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`OF COUNSEL:
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`Michael A. Tomasulo
`Gino Cheng
`David K. Lin
`Joe S. Netikosol
`WINSTON & STRAWN LLP
`333 South Grand Avenue, 38th Floor
`Los Angeles, CA 90071
`(213) 615-1700
`
`David P. Enzminger
`Louis L. Campbell
`WINSTON & STRAWN LLP
`275 Middlefield Road, Suite 205
`Menlo Park, CA 94025
`(650) 858-6500
`
`Dan K. Webb
`Kathleen B. Barry
`Sean H. Suber
`WINSTON & STRAWN LLP
`35 West Wacker Drive
`Chicago, IL 60601
`(312) 558-5600
`
`

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`Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 2 of 12 PageID #: 49423
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`
`Krista M. Enns
`WINSTON & STRAWN LLP
`101 California Street, 35th Floor
`San Francisco, CA 94111
`(415) 591-1000
`
`Michael M. Murray
`Anup K. Misra
`WINSTON & STRAWN LLP
`200 Park Avenue,
`New York, NY 10166
`(212) 294-6700
`
`Andrew R. Sommer
`Thomas M. Dunham
`Joseph C. Masullo
`Paul N. Harold
`WINSTON & STRAWN LLP
`1700 K Street, N.W.
`Washington, DC 20006
`(202) 282-5000
`
`B. Trent Webb
`Aaron E. Hankel
`Jordan T. Bergsten
`Maxwell C. McGraw
`SHOOK HARDY & BACON LLP
`2555 Grand Boulevard
`Kansas City, MO 64108
`(816) 474-6550
`
`October 23, 2018
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`
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`

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`Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 3 of 12 PageID #: 49424
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`Acceleration’s request that the Court reverse its exclusion of the Microsoft Publisher
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`Agreement rests on the incorrect assertion that the Court allowed Activision to rely on its
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`publisher agreement with Sony (“Sony Publisher Agreement”) to limit Acceleration’s damages.
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`In truth, Defendants’ Motion to Dismiss for Lack of Standing (D.I. 19) had nothing to do with
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`the Sony Publisher Agreement; the motion was based solely on a 2006 patent license agreement
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`between Boeing and Sony (“Boeing-Sony Patent License Agreement”). The motion to dismiss,
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`which was filed on behalf of all three defendants, did not mention Activision’s (or any other)
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`publisher agreement with Sony, and that agreement was not the basis for this Court’s Order
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`granting Activision’s motion (D.I. 268).
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`Second, Acceleration cannot show the Court committed clear error. The Court did not
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`“overlook” or “misapprehend” these arguments – Acceleration did not even present them. Nor
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`can Acceleration show “manifest injustice.” The Special Master correctly found the publishing
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`agreements were not relevant. This occurred in 2017, and Acceleration Bay did not appeal.
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`Most importantly, the Court’s ruling that the “Microsoft Publisher Agreement is
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`inadmissible because it is irrelevant” is correct. The Microsoft Publisher Agreement sets forth a
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`complex business relationship between Activision and Microsoft having nothing to do with a
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`patent license, let alone a license for the patents-in-suit within the context of a hypothetical
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`negotiation between Activision and Boeing on the eve of infringement. Acceleration has
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`presented no witness who could possibly testify about technical or economic comparability, and
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`Acceleration’s damages expert correctly opined
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`the Agreement was not comparable.
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`Acceleration has presented no new facts or law suggesting otherwise. Accordingly, Acceleration
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`has failed to identify any appropriate grounds for reconsideration and Acceleration’s Motion
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`should be denied.
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`

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`Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 4 of 12 PageID #: 49425
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`I.
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`FACTS
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`A. Activision’s Motion to Dismiss Relied on Sony’s Agreement with Boeing And
`Did Not Mention Sony’s Publisher Agreement With Activision.
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`On October 4, 2016, Activision moved to dismiss as to the accused Sony platform games,
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`because Acceleration lacked constitutional standing. D.I. 19 (opening brief); D.I. 32 (reply
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`brief). That motion was based entirely on the Boeing-Sony Patent License Agreement and never
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`mentioned the Sony Publisher Agreement. Id. Under the Boeing-Sony Patent License
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`Agreement, Boeing granted Sony a “license to the Asserted Patents1 that allows Sony, at its own
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`unfettered discretion, to grant Defendants a license to the Asserted Patents with the Sony ‘Field
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`of Use.’” D.I. 19 at 1. “Sony’s authority to sublicense to the Defendants all of the Asserted
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`Patents deprive[d] Acceleration Bay of constitutional standing to assert claims within the Sony
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`Field of Use.” Id.; see also D.I. 32 at 1. Activision’s standing argument relied on Sony’s
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`“authority to sublicense” and not any actual sublicense. Id.
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`During the hearing on the Motion to Dismiss, counsel for Activision made clear that the
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`Motion to Dismiss was not based on a license agreement resulting from the Sony Publisher
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`Agreement, but rather was based exclusively on a standing issue resulting from the Boeing-Sony
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`Patent License Agreement:
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`THE COURT: Everybody’s licensed to Sony or Sony has some kind of license in
`that field.
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`MR. ENZMINGER: Sony has --
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`THE COURT: When you say, they have a license in 2006, none of the defendants
`have a license, right?
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`MR. ENZMINGER: No, that’s not in their motion. Well, I'm sorry. Let me be
`clear. All of the defendants are licensed. But that is an affirmative defense, and
`we would rather not have to go through expert reports on half the products
`in this case to get to an affirmative defense. So, if the Court would indulge a
`Summary Judgment on license defense, we can do that. All of these products are
`licensed products. And they are licensed not only because of directly through the
`Sony license, which does not require us to be licensed, by the way, because all
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`2
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`

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`Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 5 of 12 PageID #: 49426
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`these products are manufactured by Sony. All we do is provide code to the
`products to Sony, who makes the games and distributes them. So -- but that's not
`what this motion is about. What this motion is about is the fact that they are
`accusing products which Boeing, the predecessor in interest on this patent,
`released from all future liability. So there is no injury to the successor
`plaintiff, Acceleration Bay, because there is no right to seek damages against
`Sony products.
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`D.I. 235 (7/10/17 Hr’g Tr.) at 36:20-37:19 (emphasis added). Similarly, the Court’s August 24,
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`2017 Order granting Activision’s Motion to Dismiss did not rely on the Sony Publisher
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`Agreement. D.I. 268.
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`B. Activision’s Discovery Conduct Was Proper
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`Acceleration alleges that Activision engaged in discovery misconduct with respect to the
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`Sony Publisher Agreement even though the Special Master denied Acceleration’s motion on this
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`issue. In an effort to avoid the Special Master’s conclusion that both the Sony and Microsoft
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`agreements were not sufficiently relevant to the case to warrant production of unredacted copies,
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`Acceleration attempts to argue that Activision conceded the issue of relevance. This is incorrect.
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`Acceleration’s Motion expressly asked the Special Master Order each of the Defendants
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`to produce all of its publisher agreements, and in fact sought “to preclud[e] Defendants from
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`using at trial, or in any motion made in these actions, any agreements they have with Sony,
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`Microsoft and Bungie, or at a minimum, compelling them to produce unredacted copies of these
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`agreements.” D.I. 261 at 2 (emphasis added).1 The Defendants all argued that these agreements
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`were not relevant, and Special Master denied Acceleration’s motion on that basis, finding that
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`“Sony, Microsoft and Bungie redacted portions of their agreements with Defendants are
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`extremely confidential and not likely to be relevant to Plaintiff’s damages, because of the lack of
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`1 Sony filed a motion to intervene to oppose Acceleration’s motion because it involved
`commercially sensitive information belonging to Sony, which the Special Master granted. D.I.
`267, 272, 273. Sony filed its opposition to Acceleration’s motion explaining the commercial
`sensitivity of the redacted information. D.I. 278.
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`3
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`Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 6 of 12 PageID #: 49427
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`comparability of these agreements with standard patent license agreements.” D.I. 303 (9/13/17
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`Special Master Order No. 11) at 3 (emphasis added). Acceleration did not object to the Special
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`Master’s Order.
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`II.
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`LEGAL STANDARD
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`The purpose of a motion for reconsideration is to “correct manifest errors of law or fact
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`or to present newly discovered evidence.” Max's Seafood Ccifi ex reL Lou-Ann, Inc. v.
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`Quinteros, 176 F.3d 669, 677 (3d Cir. 1999). “Motions for reargument or reconsideration should
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`be granted sparingly and may not be used to rehash arguments which have already been briefed
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`by the parties and considered and decided by the Court.” Jester v. State of Delaware Dep’t of
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`Safety, 2016 WL 4497055, at *1 (D. Del. Aug. 26, 2016). “Litigants who fail in their first
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`attempt to persuade a court to adopt their position may not use a motion for reconsideration
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`either to attempt a new approach or correct mistakes made in their previous one or to argue new
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`facts or issues that inexcusably were not presented to the court in the mater previously decided.
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`A motion for reconsideration is not intended to present a litigant with a second bite at the apple.”
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`Id. (internal citations omitted).
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`III. ARGUMENT
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`A. The Premise of Acceleration’s Motion is Not Correct.
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`Acceleration’s Motion is predicated on its incorrect assertion that “the Court permitted
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`Activision to rely on a redacted publisher agreement to preclude liability and damages to the
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`PlayStation versions of the accused products.” D.I. 602, “Mot.” at 1. The alleged use of the
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`Sony Publisher Agreement in connection with Activision’s Motion to Dismiss is the sole basis
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`for Acceleration’s argument that the Court committed a clear error of law, overlooked facts and
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`issued an order resulting manifest injustice. The entire premise of the motion is simply wrong.
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`4
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`Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 7 of 12 PageID #: 49428
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`Activision’s Motion to Dismiss was not based on the Sony Publisher Agreement in any
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`respect. Rather, Activision’s Motion to Dismiss was based exclusively on the Boeing-Sony
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`Patent License Agreement. D.I. 19. Indeed, Activision specifically limited its Motion to
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`Dismiss to issues of constitutional standing (which is plaintiff’s burden to establish) and avoided
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`the affirmative defense of licensing so that the issue could be resolved on a motion to dismiss at
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`the outset of the case rather than years later during summary judgment. D.I. 235 (7/10/17
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`Hearing Tr.) at 36:20-37:19. Neither the Motion to Dismiss nor the Court’s Order granting the
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`Motion was based on the Sony Publisher Agreement. D.I. 268. Of course, even if Activision
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`had relied on the Sony Publisher Agreement for its standing argument, that reliance could not by
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`some magic transform all publisher agreements into comparable licenses relevant to damages
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`because no one opined such agreements are comparable. The Special Master, plaintiff’s
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`damages expert, and this Court have all agreed that there is no comparability. Acceleration’s
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`motion should be denied.2
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`B. The Court Reached The Correct Conclusion in Excluding the Microsoft
`Publisher Agreement.
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`Both the Court and Special Master correctly concluded that the Microsoft Publisher
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`Agreement is not relevant to damages. As a matter of law, the Microsoft Publisher Agreement is
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`not relevant to a reasonable royalty analysis,3 because the agreement is not a comparable license
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`2 Even if Acceleration were correct, the history of the Motion to Dismiss and the Sony Publisher
`Agreement were known for over a year. Acceleration did not raise these issues in its opposition
`brief. D.I. 583. Acceleration has therefore has waived these arguments.
`3 Acceleration notes that Activision “did not redact the royalty rate or other information from the
`Microsoft Publisher Agreement.” Mot. at 4. Activision produced the agreement because it was
`relevant to identifying who “makes” allegedly infringing products. 35 U.S.C. § 271(a).
`Activision disclosed the royalty rate so to avoid an unnecessary discovery dispute, not because it
`believed the royalty rate to be relevant. Sony objected to the production of its publisher
`agreement without redaction and intervened to oppose Acceleration’s motion to compel. D.I.
`278.
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`5
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`Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 8 of 12 PageID #: 49429
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`agreement — i.e., it is not comparable to the hypothetical patent license agreement that the
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`would-be licensor (Boeing) and the would-be licensee (Activision) would have entered for a
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`license under the patents-in-suit, had the parties negotiated and entered into a patent license on
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`the eve of the alleged infringement. The Microsoft Publisher Agreement is not a patent license
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`and does not relate to or cover the patents-in-suit. The Microsoft Publisher Agreement
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`establishes the terms under which Activision may publish video games for use on Microsoft’s
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`video-game platforms, such as the XBox console. The multifaceted agreement covers issues
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`like: (1) a license to Microsoft’s software development tools; (2) loans of hardware from
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`Microsoft to Activision; (3) Microsoft’s right of approval for any games and marketing material
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`to be released on Microsoft’s platforms; (4) requirements that the games be localized for foreign
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`markets; and (5) post-release bug-fixing obligations. Pltf’s Ex. 1 at ATVI0030937–940. The
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`agreement also provides that Microsoft oversees the manufacturing of the finished games and
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`their distribution on Microsoft’s online services. Id. at ATVI0030941. Therefore, the Microsoft
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`Publisher Agreements sets forth a complex business relationship between Activision and
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`Microsoft having nothing to do with a patent license, let alone a license for the patents-in-suit
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`within the context of a hypothetical negotiation between Activision and Boeing on the eve of
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`infringement.
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`No witness has testified that the Microsoft agreement is technically or economically
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`comparable to the patented technology. In fact, as the Court correctly observed, Plaintiff’s
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`experts made no effort at all to tie the Microsoft Publisher Agreement to a royalty in this case.
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`D.I. 600 at 6-7. Moreover, Acceleration’s damages expert, Dr. Meyer, admitted the Microsoft
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`Agreement was “not directly comparable to a patent license.” Meyer Report (D.I. 444, Ex. C-3)
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`¶¶ 11, 72. Plaintiff now argues that Dr. Meyer opined that it provides “valuable insight” into the
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`6
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`Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 9 of 12 PageID #: 49430
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`“royalty rate Activision was willing to pay for access to the infringing platform.” (emphasis
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`added). But that is not what Dr. Meyer opined. The Microsoft Xbox is not an “infringing
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`platform” and is not accused of infringing any patent in this case. Dr. Meyer’s report merely
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`states that the Agreement “provides insight into the amount Activision was willing to pay for
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`access to the platform that allowed Activision’s customers to use the infringing products.” Id.
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`Under established Federal Circuit precedent, the publisher agreements are irrelevant to
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`the reasonable royalty determination in this action. See ResQNet.com, Inc. v. Lansa, Inc., 594
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`F.3d 860, 870 (Fed. Cir. 2010) (Plaintiff’s expert improperly relied upon “rebundling licenses”
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`which “furnished finished software products and source code, as well as services such as
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`training, maintenance, marketing, and upgrades, to other software companies in exchange for
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`ongoing revenue-based royalties” and had no relation to the claimed invention.); see also M2M
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`Sols. LLC v. Enfora, Inc., 167 F. Supp. 3d 665, 675–76 (D. Del. 2016) (“The testimony of a
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`damages expert in a patent suit who relies on non-comparable licenses in reaching his royalty
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`rate should be excluded.”) (internal quotations omitted); Uniloc USA, Inc. v. Microsoft Corp.,
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`632 F.3d 1292, 1317 (Fed. Cir. 2011) (“there must be a basis in fact to associate the royalty rates
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`used in prior licenses to the particular hypothetical negotiation at issue in the case.”).
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`IV. Conclusion.
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`Both the Court and Special Master correctly found that the Microsoft Publisher
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`Agreement is not relevant or admissible. Acceleration has not shown that decision was incorrect,
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`let alone meeting the very high bar for a motion for reconsideration. The motion should be
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`denied.
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`7
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`Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 10 of 12 PageID #: 49431
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`OF COUNSEL:
`
`Michael A. Tomasulo
`Gino Cheng
`David K. Lin
`Joe S. Netikosol
`WINSTON & STRAWN LLP
`333 South Grand Avenue, 38th Floor
`Los Angeles, CA 90071
`(213) 615-1700
`
`David P. Enzminger
`Louis L. Campbell
`WINSTON & STRAWN LLP
`275 Middlefield Road, Suite 205
`Menlo Park, CA 94025
`(650) 858-6500
`
`Dan K. Webb
`Kathleen B. Barry
`Sean H. Suber
`WINSTON & STRAWN LLP
`35 West Wacker Drive
`Chicago, IL 60601
`(312) 558-5600
`
`Krista M. Enns
`WINSTON & STRAWN LLP
`101 California Street, 35th Floor
`San Francisco, CA 94111
`(415) 591-1000
`
`Michael M. Murray
`Anup K. Misra
`WINSTON & STRAWN LLP
`200 Park Avenue,
`New York, NY 10166
`(212) 294-6700
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`
`/s/ Stephen J. Kraftschik
`__________________________________
`Jack B. Blumenfeld (#1014)
`Stephen J. Kraftschik (#5623)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@mnat.com
`skraftschik@mnat.com
`
`Attorneys for Defendants
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`8
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`

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`Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 11 of 12 PageID #: 49432
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`Andrew R. Sommer
`Thomas M. Dunham
`Joseph C. Masullo
`Paul N. Harold
`WINSTON & STRAWN LLP
`1700 K Street, N.W.
`Washington, DC 20006
`(202) 282-5000
`
`B. Trent Webb
`Aaron E. Hankel
`Jordan T. Bergsten
`Maxwell C. McGraw
`SHOOK HARDY & BACON LLP
`2555 Grand Boulevard
`Kansas City, MO 64108
`(816) 474-6550
`
`October 23, 2018
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`9
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`

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`Case 1:16-cv-00453-RGA Document 607 Filed 10/23/18 Page 12 of 12 PageID #: 49433
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`CERTIFICATE OF SERVICE
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`I hereby certify that on October 23, 2018, I caused the foregoing to be electronically filed
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`with the Clerk of the Court using CM/ECF, which will send notification of such filing to all
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`registered participants.
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`I further certify that I caused copies of the foregoing document to be served on October
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`23, 2018, upon the following in the manner indicated:
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`VIA ELECTRONIC MAIL
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`VIA ELECTRONIC MAIL
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`VIA ELECTRONIC MAIL
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`
`/s/ Stephen J. Kraftschik
`________________________________
`Stephen J. Kraftschik (#5623)
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`Philip A. Rovner, Esquire
`Jonathan A. Choa, Esquire
`POTTER ANDERSON & CORROON LLP
`1313 North Market Street, 6th Floor
`Wilmington, DE 19801
`Attorneys for Plaintiff
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`Paul J. Andre, Esquire
`Lisa Kobialka, Esquire
`James R. Hannah, Esquire
`Hannah Lee, Esquire
`Yuridia Caire, Esquire
`Greg Proctor, Esquire
`KRAMER LEVIN NAFTALIS & FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`Attorneys for Plaintiff
`
`Aaron M. Frankel, Esquire
`Marcus A. Colucci, Esquire
`Cristina Martinez, Esquire
`Shannon H. Hedvat, Esquire
`KRAMER LEVIN NAFTALIS & FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
`Attorneys for Plaintiff
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