Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 1 of 12 PageID #: 51430
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`Plaintiff,
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`v.
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`C.A. No. 16-453 (RGA)
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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 Defendant
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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 ACTIVISION BLIZZARD, INC.’S MOTION FOR LEAVE
`TO FILE SUMMARY JUDGMENT BASED ON NEW FACTS
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`Defendant.
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`OF COUNSEL:
`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
`
`Tanya Chaney
`SHOOK HARDY & BACON LLP
`600 Travis Street, Suite 3400
`Houston, TX 77002
`(713) 227-8008
`
`March 15, 2019
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`

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`Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 2 of 12 PageID #: 51431
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`INTRODUCTION
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`Activision respectfully requests leave of Court to file a renewed motion for summary
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`judgment to address non-infringement issues relating to the “m-regular” claim limitations and the
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`extent to which Activision can be found to infringe method claims under §271(a) through the
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`sale of software products. The Court previously denied Activision’s motion on these issues,
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`noting that they were “at best cursorily briefed.” The Court currently is considering additional
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`briefing on similar issues in the related Acceleration Bay v. Electronic Arts lawsuit.
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`Further briefing on these issues is needed because of the new damages theories set forth
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`in Acceleration’s damages proffer, which reveal fatal flaws with its underlying liability theories,
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`including (1) whether Acceleration has properly apportioned for what it now claims are the
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`infringing networks and (2) whether Acceleration may seek damages based on product sales
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`(including sales outside the United States) for the alleged infringement of method claims.
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`Activision, therefore, respectfully requests the opportunity renew its motion for summary
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`judgment (D.I. 440, 442) on these focused and case dispositive liability issues that are
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`foundational to the new damages theories proffered by Acceleration.
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`A. Summary Judgment
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`BACKGROUND
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`1.
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`Both parties filed motions for summary judgment on February 2, 2018. (D.I. 439,
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`448; D.I. 440, 442). Oppositions and replies were filed were filed on February 23 and March 9,
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`2019, respectively. (D.I. 474, 475, 503, 505.)
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`2.
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`Among other issues, Activision’s original motion sought summary judgment on
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`the following issues relevant here: a) The accused Call of Duty and Destiny products cannot
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`infringe the asserted method claims as a matter of law; and b) The accused products are not
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`infringing because they are not configured to maintain an m-regular state.
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`Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 3 of 12 PageID #: 51432
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`3.
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`The Court issued its Memorandum Opinion in August 2018. (D.I. 578). While
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`the Court resolved many issues in Activision’s favor,1 the Court declined to resolve the above
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`issues which were admittedly cursorily briefed. (D.I. 578 at 23).
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`B. New Circumstances and Admissions After Summary Judgment Briefing
`1. Continuance of the October 2018 Trial
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`4.
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`On September 28, 2018, Activision filed a Motion to Preclude (D.I. 581) that
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`“revealed the magnitude of the implications of [the Court’s] ruling” precluding Acceleration
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`from relying on the Uniloc verdict at trial. (D.I. 619 at 1).
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`5.
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`At the pretrial conference, “Plaintiff advocated ... that it still had admissible
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`damages theories.” (Id.) And, even if it did not, Plaintiff assured the Court that it eventually
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`would “com[e] up” with one. (D.I. 606 at 109:7-11).
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`6.
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`The Court requested additional briefing, which was completed just five days
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`before the scheduled trial. (See D.I. 601, 603, 609). Given the timing, the Court indefinitely
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`postponed trial “pending resolution on the admissibility of Plaintiffs damages case.” (D.I. 619 at
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`2).
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`2. Acceleration Retains New Expert
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`7.
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`After continuing trial, the Court granted Acceleration one “final opportunity to
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`present [the Court] with an admissible damages case.” (D.I. 619 at 2).
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`8.
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`A “supplemental” report from a new expert, Mr. Parr, was served on December 7,
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`2018. (D.I. 633.) Acceleration’s proffer was filed on March 15, 2019. (D.I. 641).
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`3. Mr. Parr’s New Opinions and Assumptions
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`1 D.I. 578 at 7-9 (‘634 Patent invalid as indefinite), id. at 9-18, 19-20 (Call of Duty and Destiny
`do not infringe the asserted ‘344, ‘966, and ‘497 Patents); id. at 20-23 (‘147 and ‘634 Patents
`invalid as patent-ineligible), id. at 26-30 (excluding opinions of Dr. Lawton).
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`2
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`Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 4 of 12 PageID #: 51433
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`9.
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`Mr. Parr’s “supplemental” report outlines seven different damages calculations:
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`a) five based on alleged “costs-savings” Activision realized in 2012-2014; b) a sixth based on
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`worldwide revenues; and c) a seventh based on worldwide users. (D.I. 642-1, Parr Report.) For
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`each of these opinions, Mr. Parr assumed that the patents-in-suit “enable large-scale, unlimited
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`online collaborations with numerous participants continually joining and leaving an application
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`such as multiplayer online games.” (D.I. 642-1 at ¶35).
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`10.
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`In his “cost-savings” opinions, “Mr. Parr opined that [Activision and Boeing]
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`would have agreed to a royalty based on the development savings for the first non-infringing
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`alternative that Activision would have needed” in September 2012. (D.I. 641 at 8). Because
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`World of Warcraft “is always a multiplayer game,” Mr. Parr assumed “that the game is always
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`infringing the Patents-in-Suit.” (D.I. 642-1 at ¶212).
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`11. Mr. Parr’s revenue- and user-based opinions rest on the following assumptions:
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` “all U.S. sales of the infringing products are infringing” (id. at ¶213);
` “sales outside the U.S. are infringing to the extent ... the products being sold were
`made, used, sold, or offered for sale in the U.S.” (id.);
` “a product manufactured in the United States, but sold outside of the United States
`is deemed to infringe” (id.);
` “foreign located players [that] are participating in the networks ... hosted in the
`United States ... should be deemed used in the United States by Defendant” (id.);
`and
` “worldwide sales are infringing” because “people outside the United States are able
`to connect to people inside the United States” (id. at ¶¶ 214-215).
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`ARGUMENT
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`Recognizing, as the Court noted, that Activision’s earlier summary judgment briefing
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`failed to adequately elucidate the issues presented to the Court, Activision respectfully requests
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`leave to succinctly renew the issues outlined below based on various faulty assumptions of law
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`and fact that permeate nearly every aspect of Acceleration’s damages proffer.
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`3
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`Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 5 of 12 PageID #: 51434
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`Addressing the issues below on summary judgment likely will simplify the Court’s task
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`in resolving all the various issues raised by the damages proffer, as they would either be
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`dispositive of some or all liability issues, or at a minimum help explain Acceleration’s
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`infringement theories that are foundational to assessing the appropriateness of its damages
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`proffer.2
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`A. Mr. Parr Assumed The Manufacture And Sale Of Call Of Duty And Destiny
`Infringe The Asserted Method Claims Despite Decades Of Precedent To The
`Contrary3
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`Acceleration seeks “a reasonable royalty” for the alleged infringement of method claims
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`by Call of Duty and Destiny. There is no material dispute of fact, however, that Activision does
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`not perform any of the claimed method steps. Rather than base his reasonable royalty calculation
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`on the alleged infringement via performance of the patented methods, Mr. Parr relied on clearly
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`erroneous assumption that “sales” and “manufacture[]” of these games are “deemed to infringe”
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`the asserted method claims. (See ¶11).
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`Mr. Parr’s assumptions run contrary to decades of Federal Circuit precedent. Joy Techs.,
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`Inc. v. Flakt, Inc., 6 F.3d 770, 774-75 (Fed. Cir. 1993) (“The law is unequivocal that the sale of
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`equipment to perform a process is not a sale of the process within the meaning of section
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`271(a).”); Ricoh Co., Ltd. v. Quanta Comput. Inc., 550 F.3d 1325, 1335 (Fed. Cir. 2008) (“[A]
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`party that sells or offers to sell software containing instructions to perform a patented method
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`does not infringe the patent under § 271(a).”).
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`Accordingly, based on the damages calculations raised in Acceleration’s proffer,
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`2 While Activision requests leave to address each of the listed issues, Activision would
`appreciate an opportunity to revisit either of these issues that are of particular interest to the
`Court.
`3 Activision addresses the impact of this issue on the admissibility and reliability of Mr. Parr’s
`opinions in its Proffer Response. Summary judgment is warranted for the reasons discussed
`there.
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`4
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`Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 6 of 12 PageID #: 51435
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`Activision cannot be found to be a direct infringer of method claims under §271(a) because it
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`does not perform any of the claimed steps and only sells software products. Activision therefore
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`respectfully requests leave to address liability issues of Activision’s alleged direct infringement
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`of method claims through the sale of Call of Duty and Destiny software.
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`B. Foreign Sales And Foreign Customers Of Call Of Duty And Destiny Do Not Support
`Mr. Parr’s Worldwide Damages Opinions
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`Acceleration’s damages proffer also includes royalties for the alleged infringement of
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`method claims based on the sale of Call of Duty and Destiny software outside the United States
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`for use by players in foreign countries. In its landmark NTP decision, the Federal Circuit did not
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`mince its words that there can be no infringement unless each method step is performed within
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`the United States: “We therefore hold that a process cannot be used ‘within’ the United States
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`as required by section 271(a) unless each of the steps is performed within this country.” NTP,
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`Inc. v. Research In Motion, Ltd., 418 F.3d 1282, 1317-18 (Fed. Cir. 2005).
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`Mr. Parr assumed precisely the opposite in order to render his opinions that Activision
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`owes damages for worldwide sales and worldwide customers. For example, Mr. Parr’s assumed
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`that “foreign located players [that] are participating in the networks ... hosted in the United States
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`... should be deemed used in the United States.” (¶11). Mr. Parr further assumed that
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`“worldwide sales are infringing” and that “foreign located players ... should be deemed used in
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`the United States” for purposes of the alleged method infringement. (Id.) None of these
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`assumptions can be reconciled with Federal Circuit precedent regarding method claim
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`infringement. See NTP, 418 F.3d at 1317-1318; see Riverbed Tech., Inc. v. Silver Peak Sys.,
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`Inc., No. 11-484-RGA, 2014 WL 4695765, at *4 (D. Del. Sept. 12, 2014) (“Any instances of
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`direct infringement must take place within the United States.”).
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`Activision respectfully request leave to address this fatal deficiency on summary
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`5
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`Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 7 of 12 PageID #: 51436
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`judgment.
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`C. Acceleration’s New Positions On Alleged First Infringement Show That The
`Accused Games Do Not Infringe, And That Mr. Parr Failed To Apportion The
`Incremental Value Of The Specific Features Accused Of Infringement
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`In its damages proffer, Acceleration sets forth a new date of 2012 for the hypothetical
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`negotiation based on the release date for an expansion to the World of Warcraft (“WoW”) game.4
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`Similar to its statements during the pretrial conference (D.I. 606 at 45:13-18), Acceleration
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`identifies this version of WoW because it was the first to include the feature known as “cross-
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`realm zones.” Despite Acceleration’s apparent concession that earlier versions of WoW are not
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`infringing, Acceleration’s damages proffer continues to seek damages for the preexisting WoW
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`base game and does not apportion for the limited “cross-realm zone” functionality introduced in
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`2012. In fact, Mr. Parr assumed precisely the opposite. (¶10 (assuming that WoW “is always
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`infringing” because, like the base game introduced long-before 2012, it is “a multiplayer game”).
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`Accordingly, resolution of the non-infringement issues relating to the preexisting WoW base
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`game and the “cross-realm zone” is foundational to the issues raised in the damages proffer.
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`Acceleration also conceded during the recent EA summary judgment hearing that its
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`infringement theories were limited to the “application layer” network and that there would be no
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`infringement if the analysis is done at the “network layer.” (D.I. 525, C.A. 16-454, at 75:18-21).
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`As with the EA products, the accused products here cannot infringe at the “network layer.” Also
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`as with the EA issues, Acceleration’s “application layer” arguments require that the Court ignore
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`the very servers that Acceleration admitted in its infringement contentions and expert reports are
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`participants in the accused network.
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`4 “Acceleration contends that the date of the hypothetical negotiation is the September 2012
`launch of the Mists of Pandaria version of World of Warcraft,” which was the “first of the games
`accused of infringement in this case ... to launch.” (D.I. 630 at 2).
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`6
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`Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 8 of 12 PageID #: 51437
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`Even if the Court is inclined to accept such a contradiction in Acceleration’s infringement
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`position at this late stage, there still is no infringement at the alleged “application layer” for at
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`least two reasons. First, the accused games do not configure the “application layer” network to
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`maintain an m-regular state, as required by the Court’s construction. Acceleration’s
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`infringement theory appears to be that the application layer networks will become m-regular
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`when certain hypothetical game conditions are reached. Even of this were true (it is not),
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`Acceleration admits that reaching these conditions depends entirely on factors not configured by
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`the game software. These include factors such as the firewall settings on a user’s router, where
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`the players choose to move in the game, what game modes the players choose to play, what
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`teammates the players choose to play with, and whether players are speaking at given moment in
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`time. This is precisely the regularity-by-chance excluded during claim construction. (D.I. 275 at
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`15). Second, if the servers are ignored and only client applications are considered at the
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`“application layer,” the accused networks are full mesh—not incomplete—because each client
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`can communicate with every other client.
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`CONCLUSION
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`For the aforementioned reasons, Activision respectfully requests that the Court grant its
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`request for leave to file a renewed motion for summary judgment to address the discrete and
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`dispositive liability issues discussed above.
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`7
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`Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 9 of 12 PageID #: 51438
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`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 Defendant
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`OF COUNSEL:
`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
`
`Tanya Chaney
`SHOOK HARDY & BACON LLP
`600 Travis Street, Suite 3400
`Houston, TX 77002
`(713) 227-8008
`
`March 15, 2019
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`8
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`Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 10 of 12 PageID #: 51439
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`7.1.1 CERTIFICATION
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`I hereby certify that the subject of the foregoing motion has been discussed with
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`counsel for the plaintiff and that we have not been able to reach agreement.
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`/s/ Stephen J. Kraftschik
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`Stephen J. Kraftschik (#5623)
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`Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 11 of 12 PageID #: 51440
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`Plaintiff,
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`
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`v.
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`
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`C.A. No. 16-453 (RGA)
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`
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`ACCELERATION BAY LLC,
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`
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`ACTIVISION BLIZZARD, INC.,
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`
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`
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`
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`[PROPOSED] ORDER GRANTING DEFENDANT ACTIVISION BLIZZARD, INC.’S
`MOTION FOR LEAVE TO FILE SUMMARY JUDGMENT BASED ON NEW FACTS
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`The Court having considered Activision Blizzard, Inc.’s Motion for Leave to File
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`
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`Defendant.
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`Summary Judgment Based on New Facts (the “Motion for Leave”), and good cause being shown
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`therefore;
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`IT IS HEREBY ORDERED, this ______ day of _________, 2019, that the
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`Motion for Leave is GRANTED. Defendant shall file its motion and opening brief within 3
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`United States District Judge
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`days.
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`Case 1:16-cv-00453-RGA Document 654 Filed 03/15/19 Page 12 of 12 PageID #: 51441
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`CERTIFICATE OF SERVICE
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`I hereby certify that on March 15, 2019, I caused the foregoing to be
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`electronically filed with the Clerk of the Court using CM/ECF, which will send notification of
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`such filing to all registered participants.
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`I further certify that I caused copies of the foregoing document to be served on
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`March 15, 2019, upon the following in the manner indicated:
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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
`Michael H. Lee, Esquire
`William Hannah, Esquire
`KRAMER LEVIN NAFTALIS & FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`Attorneys for Plaintiff
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`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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`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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`