Case 1:16-cv-00454-RGA Document 578 Filed 11/01/21 Page 1 of 10 PageID #: 47713
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`Plaintiff,
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`v.
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`C.A. No. 16-453 (RGA)
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`C.A. No. 16-454 (RGA)
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`Defendant.
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`JOINT STATUS REPORT
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`Pursuant to the Court’s October 18, 2021 Oral Order and in advance of the November 4,
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`2021 Status/Scheduling Conference, Plaintiff Acceleration Bay LLC (“Acceleration Bay”) and
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`Defendants Activision Blizzard, Inc. (“Activision”) and Electronic Arts Inc. (“EA”) provide the
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`following Joint Status Report regarding Acceleration Bay LLC v. Activision Blizzard, Inc., C.A.
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`No. 16-453 (RGA) (the “Activision Case”) and Acceleration Bay LLC v. Electronic Arts Inc., 16-
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`454 (RGA) (the “EA Case”).
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`On April 21, 2020, the Court sua sponte stayed these actions pending the resolution of the
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`appeal from related case Acceleration Bay LLC, v. 2K Sports, Inc., 1:16-cv-00455 (the “Take
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`Two Action”). D.I. 711. The Court of Appeals for the Federal Circuit issued a decision in the
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`appeal from the Take Two Action, No. 2020-01700 (Fed. Cir.) (the “Take Two Appeal”) on
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`October 4, 2021. D.I. 725-1.
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`ACCELERATION BAY LLC,
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`ACTIVISION BLIZZARD, INC.,
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`ACCELERATION BAY LLC,
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`ELECTRONIC ARTS INC.,
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`Defendant.
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`Plaintiff,
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`v.
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`Case 1:16-cv-00454-RGA Document 578 Filed 11/01/21 Page 2 of 10 PageID #: 47714
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`The following is a summary of the asserted patents and accused products at issue in the
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`Activision Case:
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`Patent
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`6,701,344
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`6,714,966
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`6,732,147
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`6,910,069
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`Accused Products
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`World of Warcraft
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`World of Warcraft
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`Call of Duty: Black Ops III; Call of Duty: Advanced
`Warfare; Destiny
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`Call of Duty: Black Ops III; Call of Duty: Advanced
`Warfare; Destiny
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`Acceleration Bay’s Proposal for the Activision Case: Acceleration Bay requests that
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`the Court reopen and lift the stay in the Activision Case, rule on Acceleration Bay’s pending
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`Damages Proffer (D.I. 700), and then set the Activision Case for trial.
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`The Federal Circuit’s fact-specific decision in the Take Two Appeal does not impact the
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`Activision Case. The Federal Circuit found that it lacked jurisdiction to hear Acceleration Bay’s
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`appeal as to the ‘344 and ‘966 Patents, affirmed the Court’s construction of Claim 1 of the ‘069
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`Patent (which was the same construction the Court issued in the Activision Case), and affirmed
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`the Court’s finding of non-infringement of the ‘497 Patent, which is no longer being asserted in
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`the Activision Case. D.I. 725-1 at 2. Thus, the decision in the Take Two Appeal does not disturb
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`any ruling or raise any new issues in the Activision Case.
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`The Activision Case is therefore ready for trial, pending the Court’s decision on the
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`damages case. The Court held a pretrial conference on April 20, 2018, one week before the trial
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`was scheduled to begin. Due to a scheduling conflict with an earlier-filed case, the trial date was
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`postponed until October 29, 2018. D.I. 537, D.I. 619. The Court subsequently held a hearing on
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`the parties’ then-pending summary judgment and Daubert motions and ruled on all of the
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`pending motions, after receiving voluminous briefing, including supplementation on various
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`2
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`Case 1:16-cv-00454-RGA Document 578 Filed 11/01/21 Page 3 of 10 PageID #: 47715
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`issues after the hearing. D.I. 578, D.I. 579. As a result, the case is well beyond the summary
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`judgment stage, both sides have been fully heard on all summary judgment issues, and there is no
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`basis to reopen summary judgment.
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`Accordingly, the only item of business remaining is to resolve the status of Acceleration
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`Bay’s damages case. After excluding in-part the opinions of Acceleration Bay’s damages expert,
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`the Court requested briefing on Acceleration Bay’s damages case. D.I. 619. Acceleration Bay
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`submitted its proffer (D.I. 700) and Activision submitted a response (D.I. 702). There is no need
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`for further submissions, and the issue is ripe for the Court’s resolution.
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`Activision’s Proposal for the Activision Case: Activision requests a briefing schedule
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`to assess the collateral estoppel effect of the now-final rulings in Take Two, which Activision
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`contends should dispose of all infringement claims in this case. In Take Two, Acceleration Bay
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`fully litigated the same disputes on the scope of the same patents asserted here. With the
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`conclusion of the Take Two appeal, this Court’s rulings on those issues are now final judgments
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`that leave no genuine fact issue on Acceleration Bay’s materially identical infringement theories
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`in this case. Alternatively, because Acceleration Bay did not present a viable damages claim
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`when given a “final opportunity” to do so, Activision requests that the Court enter judgment on
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`damages, finding that Acceleration Bay has waived a reasonable royalty in this case, and
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`entering nominal or zero damages.
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`On non-infringement, Activision intends to renew its motion for leave to file a summary
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`judgment brief of no more than fifteen pages on issues of non-infringement, including how the
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`Take Two rulings are final judgments under the doctrine of collateral estoppel. Leave to file that
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`brief—which will address the impact of this court’s legal rulings on the scope of the terms “m-
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`regular” and “participant,” and the operation of prosecution history estoppel (D.I. 708)—was
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`3
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`Case 1:16-cv-00454-RGA Document 578 Filed 11/01/21 Page 4 of 10 PageID #: 47716
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`previously denied “without prejudice to refiling once the . . . sua sponte stay is lifted” (D.I. 711).
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`Now that Acceleration Bay has exhausted its appeal in Take Two, those three rulings are final
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`judgments that estop re-litigation of the same issues in this case even though different products
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`are at issue. See, Aspex Eyewear, Inc. v. Zenni Optical Inc., 713 F.3d 1377, 1381–82 (Fed. Cir.
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`2013) (affirming collateral estoppel on infringement against product from different defendants).1
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`While Acceleration Bay opposes Activision’s request for more briefing, the parties
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`propose the following schedule for additional summary judgment briefing if it is allowed:
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`Event
`Activision Opening Brief
`Acceleration Bay Opposition
`Activision Reply
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`Acceleration Bay’s Position
`Activision Position
`Dec. 10, 2021 (15 pages) Nov. 18, 2021 (10 pages)
`Jan. 14, 2022 (15 pages) Dec. 16, 16, 2021 (10 pages)
`Jan. 31, 2022 (7 pages)
`Jan. 10, 2022 (5 pages)
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`On damages, even if Acceleration Bay were not collaterally estopped, the Court should
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`still enter judgment on damages rather than schedule trial. The Court afforded Acceleration Bay
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`“a final opportunity to present [the Court] with an admissible damages case” (D.I. 619 at 2), but
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`Acceleration Bay submitted seven legally deficient opinions that this Court excluded, noting this
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`left Acceleration Bay “with no intact damages theories.” (D.I. 692 at 5). Acceleration Bay then
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`attempted to submit a new “thirteenth theory,” which Activision moved to strike because it
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`merely removed the apportionment analysis from a theory the Court had already stricken for
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`inadequate apportionment. (D.I. 702, p. 1).2
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`1 See also Phil-Insul Corp. v. Airlite Plastics Co., 854 F.3d 1344, 1353 (Fed. Cir. 2017)
`(explaining collateral estoppel applies on infringement “where the differences between” two
`products are “unrelated to the limitations in the claim of the patent”); Studiengesellschaft Kohle,
`mbH v. USX Corp., 675 F. Supp. 182, 188 (D. Del. 1987) (“SGK has had its day in court with
`respect to its claim that the polymerization of propylene infringes the '332 patent.”).
`2 This new theory was articulated by Acceleration Bay when the Court ordered a joint “status
`update” after excluding all “final” damages theories in this case. (D.I. 693; D.I. 694, pp. 1-2).
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`4
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`Case 1:16-cv-00454-RGA Document 578 Filed 11/01/21 Page 5 of 10 PageID #: 47717
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`This Court has provided Acceleration Bay with multiple opportunities to submit an
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`admissible damages case, but Acceleration Bay has failed to do so, each time straying further
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`from available real-world indicators of value and from acceptable legal principles. Under the
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`circumstances, the Court should find that Acceleration Bay has waived a reasonable royalty in
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`this case, enter judgment of zero damages, and dismiss the case as moot. See Promega Corp. v.
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`Life Techs. Corp., 875 F.3d 651, 660–66 (Fed. Cir. 2017) (affirming JMOL for accused infringer
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`and denial of new trial on damages, despite “evidence of admitted infringement,” after finding of
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`waiver on damages); see also Tronzo v. Biomet, Inc., 236 F.3d 1342, 1347 (Fed. Cir. 2001)
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`(affirming refusal to consider a new damages theory because the plaintiff “made strategic
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`decisions in the initial trial concerning what evidence and arguments to advance in support of his
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`theory of damages”); Devex Corp. v. General Motors Corp., 667 F.2d 347, 363 (3d Cir. 1981),
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`judgment aff'd, 461 U.S. 648 (1983) (affirming award of zero damages); ); AVM Techs, LLC v.
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`Intel Corp., 10-cv-00610-RGA, 2013 WL 8422202, at *2 (D. Del. Mar. 29, 2013) (entering final
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`judgment of no damages, excluding patentee’s damages proffer: “although the exclusion of [co-
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`inventor]’s testimony will leave AVM without evidence of damages…this situation is of AVM’s
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`making”). Activision stands ready to provide additional briefing or argument on this issue at the
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`Court’s convenience.
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`Accordingly, the Court should reopen this case to permit supplemental summary
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`judgment briefing and find that Acceleration Bay has waived its remaining damages case, or in
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`the alternative issue a finding of zero damages. Because these case-dispositive issues are ripe for
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`consideration, scheduling a trial setting is premature at this time.
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`Acceleration Bay’s Proposal for the EA Case: Acceleration Bay proposes that the stay
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`in the EA Case be maintained until the conclusion of the district court proceedings in the
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`5
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`Case 1:16-cv-00454-RGA Document 578 Filed 11/01/21 Page 6 of 10 PageID #: 47718
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`Activision Case. At that time, the parties will submit a Joint Report to the Court with proposals
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`on how to proceed in the EA Case based on the relevant developments in the Activision Case.
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`Maintaining the stay will preserve the resources of the Court and the parties. The damages
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`issues in the EA Case are already stayed until the resolution of the damages issues in the
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`Activision Case, and resolving the other issues in the Activision Case before proceeding to the EA
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`Case will avoid duplication of efforts and may narrow the issues in the EA Case. D.I. 553. EA
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`does not identify any prejudice from maintaining the stay.
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`Further rounds of summary judgment motions are not warranted in the EA Case. EA has
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`already filed two rounds of summary judgment motions (with two supplemental briefs) covering
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`over 30 issues and, as with the Activision Case, the Federal Circuit’s affirmance of the Court’s
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`fact-specific rulings in the Take Two Appeal does not impact the EA Case. See D.I. 559
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`(opposition to EA’s motion for leave to file third supplemental summary judgment brief). The
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`games and infringement issues are very different in each of the cases. Id.
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`EA’s Proposal for the EA Case: EA believes that Acceleration Bay’s infringement
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`allegations can and should be disposed of completely through a focused summary judgment
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`motion and requests leave to file such a motion. As explained below, Acceleration Bay is
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`collaterally estopped from the infringement allegations for the ‘344, ‘966 and ‘147 patent. As to
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`the ‘497 patent, the Court rejected Acceleration Bay’s sole theory of infringement in its March
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`27, 2019 summary judgment opinion, effectively removing that patent from the case.
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`On March 27, 2019, this Court granted most of EA’s motion for summary judgment (D.I.
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`545-546), leaving only a small number of claims remaining in the case. As to the ‘147 patent, the
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`only remaining allegation is infringement by equivalents. As to the ‘344 and ‘966 patents, the
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`only remaining claim is Acceleration Bay’s argument that the Plants vs. Zombies (PvZ) and
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`6
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`Case 1:16-cv-00454-RGA Document 578 Filed 11/01/21 Page 7 of 10 PageID #: 47719
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`NHL games supposedly infringe through internal testing. As to the ‘497 patent, although the
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`Court declined to grant summary judgment on the issue of internal testing, it negated the
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`significance of that ruling when it rejected Acceleration Bay’s sole, substantive infringement
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`theory. By the time of the hearing, Acceleration Bay was advancing a single infringement theory
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`– that the Blaze Redirector alone meets the limitations of the ‘497 patent.3 The Court rejected
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`this theory, finding noninfringement because “nothing in the cited portions of the report []
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`support a finding that the Blaze Redirector is the ‘means for selecting the call-in port of the
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`identified portal computer using a port ordering algorithm.’” DI 545, pp. 9-11. This substantive
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`finding of noninfringement means that there is no infringement of the ‘497 patent, by testing or
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`otherwise. Even if Acceleration Bay could show that EA “tested” the Blaze redirector in internal
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`testing, there is no infringement because the Court found that the Blaze Redirector does not
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`infringe the ‘497 patent. Thus, only the ‘147, ‘344 and ‘966 patents remain in the case.
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`On March 23, 2020, the Court granted Take-Two’s motion for summary judgment. C.A.
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`No. 16-455 RGA, D.I. 492. Notably, the Court held that:
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`(1) Take-Two does not infringe the ‘344, ‘966 or ‘497 patents because it does not make,
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`use or sell the claimed networks, broadcast channels hardware components. Id. pp. 7-
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`12.
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`(2) The accused GTAO network is not m-regular because even if “rules and constraints”
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`“drive[] the formation” of an m-regular network or “each participant ‘tends’ to
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`3 Acceleration’s original theory was that the customer’s PCs and Xboxs were the accused
`“hardware component” that met the claim limitations of the ‘497 patent. Because of this Court’s
`ruling in Activision, Acceleration Bay abandoned that theory and advanced a single argument that
`the “Blaze redirector” was the claimed hardware component that infringed the ‘497 patent. D.I.
`534, pp. 10-13; D.I. 525 35:13-36:17 (“MR. FRANKEL: But for the '497, it's just a component in
`a computer system for locating a call-in port, you construed that to be software running on a
`hardware processor, and that's exclusively being done by the redirector.”) (emphasis added).
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`7
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`Case 1:16-cv-00454-RGA Document 578 Filed 11/01/21 Page 8 of 10 PageID #: 47720
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`connect to the same number of other participants,” this still does not meet the claim
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`requirement “that the network is ‘configured to maintain’ an m-regular state.” Id. pp.
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`13-15.
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`(3) The accused NBA 2k network is not m-regular because it is a client-server network
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`where the server is “a participant in the network because it transfers data back and
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`forth between other network participants.” Id. pp. 17-18.
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`(4) Acceleration Bay’s doctrine of equivalents arguments fail as a matter of law by claim
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`vitiation, by prosecution history estoppel, and because “any reasonable jury would
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`have to conclude that the architecture of the NBA 2K network, which relies on a
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`central relay server, is fundamentally different from the m-regular networks of the
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`asserted claims, precluding a finding for Plaintiff under the doctrine of equivalents.”
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`Id. 15-17; 18-19.
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`On April 2, 2020, based on these rulings, EA moved for leave to file a supplemental
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`summary judgment on the “m-regular” claims, the briefs for which are D.I. 558-560.
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`On April 21, 2020, the Court stayed the case and denied EA’s motion for leave without
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`prejudice to refiling “once the Courts’s sua sponte stay is lifted,” noting that the Take-Two case
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`“has many similar issues, and the resolution of that appeal will likely simplify the remaining
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`issues in this case and likely indicate whether any of my prior decisions need to be revisited.”
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`D.I. 561.
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`On October 4, 2021, the Federal Circuit affirmed this Court’s grant of summary judgment
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`of non-infringement in the Take-Two case. Notably, Acceleration Bay did not appeal this Court’s
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`decision that neither of the accused networks meets the m-regular limitations, either literally or
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`by equivalents, because each participant player connects to a server, which cannot be m-regular.
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`Case 1:16-cv-00454-RGA Document 578 Filed 11/01/21 Page 9 of 10 PageID #: 47721
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`In light of this record, EA respectfully requests leave to file a supplemental summary
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`judgment as to all remaining claims. As to the m-regular claims (‘344, ‘966 and ‘147 patents),
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`the reasons set forth in its earlier Motion for Leave (D.I. 558) are even stronger now because
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`collateral estoppel clearly applies and Acceleration Bay did not appeal the core holding that a
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`client-server network is “fundamentally different” than the claimed m-regular network. Thus,
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`Acceleration Bay must to do more than argue that logic rules “drive the formation” of the
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`accused network, which the Court rejected in Take Two as a matter of law in clarifying its claim
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`construction. As explained in EA’s Motion for Leave, the accused client-server network in the
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`EA case does not meet the m-regular limitations for the reasons set forth in the Court’s summary
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`judgment ruling in the Take-Two case. Thus, a straightforward application of collateral estoppel
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`eliminates the m-regular claims. And because the Court’s summary judgment opinion rejected
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`Acceleration Bay’s sole theory of infringement for the ‘497 patent, elimination of the m-regular
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`claims ends the case.
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`As to damages, the parties stipulated, and the Court ordered, that damages issues in the
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`EA case would not be taken up until after the Court rules on the damages issues in the Activision
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`case, and that Acceleration Bay was limited to the damages theories presented in the Activision
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`case. That stipulation remains in place. D.I. 553. EA does ask the Court to note, however, the
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`serious infirmities of Acceleration Bay’s damages claim. Other than for the claim for
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`infringement by equivalents of the ‘147 patent, all of Acceleration Bay’s claims are based on
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`alleged infringement through internal testing. But Acceleration Bay offered no theory of
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`damages for alleged infringement through testing at any point in this case.
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`Lastly, EA submits that there is no reason to stay the case pending the outcome of the
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`proceedings in the Activision case, as Acceleration Bay proposes. The defects across all three
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`9
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`Case 1:16-cv-00454-RGA Document 578 Filed 11/01/21 Page 10 of 10 PageID #: 47722
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`cases as to the m-regular claims are both profound and similar, and the Court can efficiently
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`consider Activision and EA’s summary judgment motions in parallel. As to damages issues, the
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`EA case is already effectively stayed given the stipulated order that they will not take up
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`damages until after the Court rules on the damages issues in Activision. D.I. 553.
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`Although Acceleration Bay opposes EA’s request for leave, the parties propose the
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`following schedule for additional summary judgment briefing if it is allowed:
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`Acceleration Bay’s Position
`EA Position
`Event
`Dec. 10 2021 (18 pages) Nov. 18, 2021 (10 pages)
`EA Opening Brief
`Acceleration Bay Opposition Jan. 14, 2022 (18 pages) Dec. 16, 2021 (10 pages)
`EA Reply
`Jan. 31, 2022 (9 pages)
`Jan. 10, 2022 (5 pages)
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`Dated: November 1, 2021
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`POTTER ANDERSON & CORROON
`LLP
`
`
`By: /s/ Philip A. Rovner
`Philip A. Rovner (# 3215)
`Jonathan A. Choa (#5319)
`1313 North Market Street 6th Floor
`Wilmington, Delaware 19801
`(302) 984-6000
`provner@potteranderson.com
`jchoa@potteranderson.com
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`Attorneys for Plaintiff
`Acceleration Bay LLC
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`MORRIS, NICHOLS, ARSHT & TUNNELL
`LLP
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`By: /s/ Jack B. Blumenfeld
`Jack B. Blumenfeld (#1014)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@morrisnichols.com
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`Attorneys for Defendants
`Activision Blizzard, Inc. and
`Electronic Arts Inc.
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`10
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