Case 1:16-cv-00453-RGA Document 621 Filed 11/02/18 Page 1 of 7 PageID #: 49870
`
`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
`MOTION FOR REARGUMENT AND RECONSIDERATION
`
`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
`James Hannah
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`(650) 752-1700
`
`Aaron M. Frankel
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
`(212) 715-9100
`
`Dated: October 22, 2018
`
`PUBLIC VERSION
`
`Public version dated: November 2, 2018
`
`

`

`Case 1:16-cv-00453-RGA Document 621 Filed 11/02/18 Page 2 of 7 PageID #: 49871
`
`Pursuant to Local Rule 7.1.5, Plaintiff Acceleration Bay LLC (“Acceleration Bay”)
`
`respectfully moves for reconsideration of the portion of the Court’s October 17, 2018 Order
`
`(Dkt. No. 600, the “Order”) excluding Acceleration Bay from using a publisher agreement
`
`between Defendant Activision Blizzard, Inc. (“Activision”) and non-party Microsoft Licensing
`
`G.P. (Ex. 1, the “Microsoft Publisher Agreement”) for damages where the Court allowed
`
`Activision to use another publisher agreement in moving to limit Acceleration Bay’s damages.
`
`Here, the Court permitted Activision to rely on a redacted publisher agreement to
`
`preclude liability and damages as to PlayStation versions of the accused products (Ex. 2, the
`
`“Sony Publisher Agreements”) on a motion to dismiss, but then precluded Acceleration Bay
`
`from using the parallel unredacted Microsoft Publisher Agreement in which Activision provided
`
`a royalty rate, which is relevant to damages. Because the Microsoft Publisher Agreement is
`
`relevant evidence of the value to Activision of access to the technology accused of infringement
`
`in this case, it is admissible under Fed. R. Evid. 401-402. The Court’s finding otherwise
`
`constitutes clear error of law and fact, and will result in manifest injustice to Acceleration Bay.
`
`I.
`
`ARGUMENT
`
`Reconsideration and reversal of the Court’s rulings that Microsoft Publisher Agreement
`
`is not relevant and therefore inadmissible is necessary because it (i) is based on clear error of law
`
`regarding the admissibility of relevant evidence; (ii) misapprehends or overlooks facts that, if
`
`properly considered, would have led the Court to reach a contrary result regarding relevance; and
`
`(iii) results in manifest injustice to Acceleration Bay by rewarding Activision for its improper
`
`discovery tactics. Max’s Seafood Cafe v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999)
`
`(reconsideration is warranted “to correct a clear error of law or fact to prevent manifest
`
`injustice”); Dentsply Int’l, Inc. v. Kerr Mfg. Co., 42 F. Supp. 2d 385, 419 (D. Del. 1999) (courts
`
`

`

`Case 1:16-cv-00453-RGA Document 621 Filed 11/02/18 Page 3 of 7 PageID #: 49872
`
`have discretion to reconsider their prior rulings); Karr v. Castle, 768 F. Supp. 1087, 1093 (D.
`
`Del. 1991) (“the court should reconsider a prior decision when it appears the court has
`
`overlooked facts . . . which, had they been considered, might reasonably have altered the result.”)
`
`First, the Microsoft Publisher Agreement satisfies the test for admissibility under the
`
`Federal Rules of Evidence. In particular, Fed. R. Evid. 401 provides that relevant evidence
`
`“means evidence having any tendency to make the existence of any fact that is of consequence to
`
`the determination of the action more or less probable than it would be without the evidence,”
`
`which is a relatively low hurdle to clear. Thomas v. Dragovich, 142 F. App'x 33, 37 (3d Cir.
`
`2005) (threshold for finding evidence relevant is low). In turn, Fed. R. Evid. 402 provides that
`
`relevant evidence is admissible.
`
`Specifically, the Microsoft Publisher Agreement is a relevant indicator of the value to
`
`Activision to obtain access to the licenses that allow the accused products to access the
`
`infringing technology platform. Acceleration Bay’s damages expert, Dr. Christine Meyer,
`
`highlighted this relevance in her report wherein she opines that, while the Microsoft Publisher
`
`Agreement is not a “directly comparable” patent license, it provides valuable insight into the
`
`royalty rate Activision was willing to pay for access to the infringing platform. Dkt. No. 480,
`
`Ex. 69, Meyer Rpt. at ¶ 72.
`
`Activision confirmed the relevance of its publisher agreements to damages because it
`
`relied upon the Sony Publisher Agreements to claim Sony licensed the Asserted Patents to
`
`Activision. Dkt. No. 268 n.3 (citing Dkt. No. 235, 7/10/17 Hearing Tr. at 37:2-12). Indeed,
`
`despite admitting that it “does not have a written license agreement with Sony expressly
`
`identifying the Asserted Patents by number,” Activision nonetheless used its Sony Publisher
`
`Agreements which redacted the royalty rates to claim that Acceleration Bay did not have
`
`2
`
`

`

`Case 1:16-cv-00453-RGA Document 621 Filed 11/02/18 Page 4 of 7 PageID #: 49873
`
`standing to pursue the Sony PlayStation versions of the accused products. Ex. 3, Excerpted
`
`Portions of Activision Response to Common Request for Admission No. 1; Dkt. No. 18. At the
`
`hearing, Activision represented that its publisher agreement with Sony granted it a license to the
`
`Asserted Patents. Dkt. No. 268 at 3 n. 3 (“As a side note, Defendant[s] assert they have actual
`
`licenses (Tr. 37:2-12) . . .”).1 The Microsoft and Sony Publisher Agreements contain parallel
`
`patent license provisions regarding, for example, royalty rate information. Compare Ex. 1,
`
`Microsoft Publisher Agreement at 28-29 (royalties paid for use of platform) with Ex. 2, Sony
`
`Publisher Agreements at 27 (redacted royalty rates applicable to licensed products). The Court
`
`committed clear error in permitting Activision to use its publisher agreement as a sword and thus
`
`relevant for purposes of its defenses, but then shield Activision when it is relevant for purposes
`
`of Acceleration Bay’s damages claims.
`
`Second, the Court’s relevancy determination is premised on a clear error of fact insomuch
`
`as the Court overlooked and/or misapprehended facts confirming the relevance of the Microsoft
`
`Publisher Agreement and the discovery efforts surrounding Activision’s publisher agreements.
`
`As explained above, despite using its parallel Sony Publisher Agreements as a sword to limit
`
`damages, Activision concealed with redactions the royalty rates associated and unit pricing with
`
`that agreement that allegedly licensed Acceleration Bay’s Asserted Patents to Activision, as well
`
`1 Dkt. No. 235, 7/10/17 Hearing Tr. at 37:2-12: “Activision Counsel: 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 these products are
`manufactured by Sony. All we do is provide code to the products to Sony, who makes the
`games and distributes them.” (emphasis added).
`
`3
`
`

`

`Case 1:16-cv-00453-RGA Document 621 Filed 11/02/18 Page 5 of 7 PageID #: 49874
`
`as its other confidential publisher agreements. Ex. 4, Excerpted Portions of 8/16/18 Pl. Ltr. Br.
`
`re: Discovery Motions at 1-3, 5.
`
`When Acceleration Bay moved to unredact the financial terms of these publisher
`
`agreements, Activision argued that, notwithstanding its reliance on certain provisions of these
`
`agreements as a defense to infringement, “these agreements are extremely confidential and
`
`sensitive, such that the redacted financial terms should not be disclosed even under the Protective
`
`Order.” Dkt. No. 276 at 3. Activision also contended that the agreements are not relevant to the
`
`hypothetical negotiation. Id. The Special Master declined to grant Acceleration Bay’s motion to
`
`compel, based on the sensitivity of the publisher agreements and stating that they were “not
`
`likely to be relevant.” Dkt. No. 276 at 2-3. Thus, Activision blocked Acceleration Bay from
`
`obtaining the financial terms of the Sony Publisher Agreements and other publisher agreements.
`
`The Special Master’s reasoning does not apply, however, to Activision’s Microsoft
`
`Publisher Agreement — which was not at issue in Acceleration Bay’s motion to compel —
`
`because Activision did not redact the royalty rate or other information from the Microsoft
`
`Publisher Agreement. Activision deemed the Microsoft Publisher Agreement relevant and
`
`therefore produced it without redactions to Acceleration Bay during discovery. The financial
`
`terms of the Microsoft Publisher Agreement are relevant because they evidence what Activision
`
`is willing to pay for its arrangement with Microsoft and something that Activision, as well as the
`
`patentee, would be aware of at the time of the hypothetical negotiation.
`
`Thus, the Microsoft Publisher Agreement which includes similar rights as in the Sony
`
`Publisher Agreements provides insight into what the parties knew and understood at the time of
`
`4
`
`

`

`Case 1:16-cv-00453-RGA Document 621 Filed 11/02/18 Page 6 of 7 PageID #: 49875
`
`the hypothetical negotiation.2 In particular, the Microsoft Publisher Agreement grants the same
`
`ability to access a platform implicating the infringing technology as contemplated by the Sony
`
`Publisher Agreements, and provides that Activision was willing to pay a royalty rate of
`
`
`
`for an even for lesser bundle of rights than was authorized by the Sony Publisher Agreements.
`
`Ex. 1, Microsoft Publisher Agreement at 28-30. Although the Microsoft Publisher Agreement
`
`does not grant a license to the Asserted Patents, it is a relevant indicator of what Activision was
`
`willing to pay in royalty rates and value to Activision to obtain access to technology at issue in
`
`this case.
`
`Third, the Court’s ruling results in manifest injustice to Acceleration Bay. As described
`
`above, during discovery Activision’s took contradictory and self-serving positions regarding the
`
`relevance of its publisher agreements. As a result of these tactics, and corresponding rulings by
`
`the Special Master based on Activision’s arguments, Acceleration Bay has been hamstrung in its
`
`ability to take discovery on these agreements. Now, on the eve of trial, Acceleration Bay bears
`
`the consequence of Activision’s improper withholding of relevant discovery. Such manifest
`
`injustice is avoidable by a finding that the Microsoft Publisher Agreement is admissible under
`
`Fed. R. Evid. 401-402 as evidence of the value to Activision of the technology at issue in this
`
`case, particularly with Activision’s withholding of the specific financial terms of the Sony
`
`Publisher Agreements.
`
`II.
`
`CONCLUSION
`
`For the reasons set forth above, the Court should grant Acceleration Bay’s request for
`
`reconsideration, reverse its ruling and permit Acceleration Bay to introduce at trial the Microsoft
`
`2 As the Asserted Patents were not licensed to Microsoft, Activision’s publisher agreement could
`not be a license to the Asserted Patents. Presumably, if Acceleration Bay granted a license to
`Microsoft, Activision would undoubtedly claim that it constituted a license to the Microsoft
`platforms and would raise the same lack of jurisdiction and license defenses.
`
`5
`
`

`

`Case 1:16-cv-00453-RGA Document 621 Filed 11/02/18 Page 7 of 7 PageID #: 49876
`
`Publisher Agreement as relevant evidence related to damages, including what royalty rates
`
`Activision has been willing to pay in the past for the accused technology.
`
`POTTER ANDERSON & CORROON LLP
`
`By: /s/ Philip A. Rovner
`Philip A. Rovner (#3215)
`Jonathan A. Choa (#5319)
`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
`James Hannah
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`(650) 752-1700
`
`Aaron M. Frankel
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
`(212) 715-9100
`
`Dated: October 22, 2018
`
`5971133
`
`6
`
`Public version dated: November 2, 2018
`
`