Case 1:16-cv-00453-WCB Document 746 Filed 11/08/22 Page 1 of 8 PageID #: 54181
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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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`ACCELERATION BAY LLC,
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`ACTIVISION BLIZZARD, INC.,
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`JOINT STATUS REPORT AND PROPOSED SCHEDULING ORDER
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`Pursuant to the Court’s October 25, 2022 Oral Order (D.I. 745), Plaintiff Acceleration
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`Defendant.
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`Bay LLC (“Acceleration Bay”) and Defendant Activision Blizzard, Inc. (“Activision”) provide
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`the following Joint Status Report and proposed Scheduling Order.
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`Joint Summary of Case Status: On April 21, 2020, the Court sua sponte stayed this
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`action pending the resolution of the appeal from related case Acceleration Bay LLC, v. 2K
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`Sports, Inc., 1:16-cv-00455 (the “Take Two Action”). D.I. 711.
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`The Court of Appeals for the Federal Circuit issued a decision in the appeal from the
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`Take Two Action, No. 2020-01700 (Fed. Cir.) (the “Take Two Appeal”) on October 4, 2021. D.I.
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`725-1. Based on that decision, Activision filed a motion for summary judgment of non-
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`infringement based on collateral estoppel. D.I. 730. The Court denied-in-part and granted-in-
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`part Activision’s motion. D.I. 744.
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`The following is a summary of the Asserted Patents and Accused Products at issue in this
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`case:
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`Case 1:16-cv-00453-WCB Document 746 Filed 11/08/22 Page 2 of 8 PageID #: 54182
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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: With the conclusion of summary judgment motions, this
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`case should be set for trial in early May 2023. This will allow ample time for the parties to
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`supplement discovery on the issue of damages (as described below), provide damages reports,
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`and prepare for trial.
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`At the time the Court stayed this action pending resolution of the appeal of the Take Two
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`Action, Acceleration Bay’s damages proffer was pending before the Court. D.I. 700. The
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`proffer was based on a combination of factual evidence and expert opinion. Id. Activision
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`submitted objections to Acceleration Bay’s damages proffer. D.I. 702. Given the stay, the Court
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`did not resolve Activision’s objections.
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`Since then and while the case has been dormant, there have been material intervening
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`events relevant to the measure of damages in this case. Specifically, Acceleration Bay entered
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`into a license agreement with another video game company and Activision entered into an
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`agreement to be acquired by Microsoft for $68.7 billion, a significant portion of which is related
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`to value generated by the accused products. Accordingly, rather than adjudicate the proffer,
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`which was provided several years ago, the parties should exchange supplemental document
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`productions relating to these important intervening developments. As is customarily done prior
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`to trial, Activision should supplement its revenue and usage data for the accused products so the
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`2
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`Case 1:16-cv-00453-WCB Document 746 Filed 11/08/22 Page 3 of 8 PageID #: 54183
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`information is up to date. The parties can then engage in expert discovery based on the updated
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`disclosures.
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`Acceleration Bay proposes the following schedule for updating the damages portion of
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`the case and indicates the dates it is available for trial. Activision declined to provide counter-
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`proposed dates and declined to indicate dates that it is available for trial.
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`Event
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`Acceleration Bay’s
`Proposed Date
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`Parties exchange documents relating to damages:
`Acceleration Bay will produce new license agreement.
`Activision will produce (1) updated revenue and usage data for the
`accused products and (2) documents regarding the valuation of the
`accused products in the Activision/Microsoft acquisition
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`Burden of Proof Expert Reports to Address Damages Issues
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`Rebuttal Expert Reports to Address Damages Issues
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`Close of expert discovery
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`Daubert Motion Opening Briefs regarding damages reports (15
`pages total)
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`Daubert Motion Opposition Briefs regarding damages reports (15
`pages total)
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`Daubert Motion Reply Briefs regarding damages reports (10 pages
`total)
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`Joint proposed final pretrial order
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`Pre-trial Conference
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`12/2/22
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`1/20/23
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`2/24/23
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`3/3/23
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`3/16/23
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`3/30/23
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`4/6/23
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`TBD
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`TBD
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`Subject to the
`Court’s calendar:
`Acceleration Bay is
`available 5/1/23 and
`5/8/23
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`Trial (5 days)
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`3
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`Case 1:16-cv-00453-WCB Document 746 Filed 11/08/22 Page 4 of 8 PageID #: 54184
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`Activision should not be heard to complain that Acceleration Bay now seeks to update its
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`damages case in view of significant intervening events since the entry of the stay. Activision just
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`engaged in six months of proceedings based on the alleged impact of the intervening Take-Two
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`appeal on Acceleration Bay’s infringement case against Activision. With the case having been
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`effectively stayed for two and a half-years, there is no prejudice to Activision from participating
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`in an orderly process for the parties to update their damages cases. Once the parties have
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`completed expert discovery, any objections that Activision has to the admissibility of the
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`evidence upon which Acceleration Bay will rely can be addressed in connection with Daubert
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`briefing or through in limine motions.1 Activision’s proposal to have an initial round of briefing
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`on its objections before the parties even exchange updated information and expert reports would
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`be highly inefficient and just inject further delay into the resolution of this dispute.
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`Activision’s Proposal:
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`At the time the Court stayed this action, the Court had excluded Acceleration Bay’s expert
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`opinions on damages. Pending before the Court was Acceleration Bay’s “fact-based damages
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`proffer,” (D.I. 700) which Activision opposed as inadmissible. (D.I. 702).
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`With the conclusion of summary judgment motions, there are two outstanding issues for
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`the Court. The first is whether Acceleration Bay is entitled to yet again attempt to come forward
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`with a submissible damages case after it repeatedly failed to do so. The second is case scheduling,
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`including trial, if appropriate and necessary.
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`1 Activision’s objections set forth below are without merit. For example, the Federal Circuit has
`confirmed that a patent license agreement entered into in settling an earlier patent suit may be
`admissible evidence of the damages in later patent suits. Prism Techs. LLC v. Sprint Spectrum
`LP, 849 F. 3d 1360, 1370-1371 (Fed. Cir. 2017).
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`4
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`Case 1:16-cv-00453-WCB Document 746 Filed 11/08/22 Page 5 of 8 PageID #: 54185
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`Damages. After several orders excluding Acceleration Bay’s many improper damages
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`theories in this case, this Court granted Acceleration Bay one “final opportunity to present [the
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`Court] with an admissible damages case.” D.I. 619 at 2. Acceleration Bay submitted the Court-
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`ordered proffer on February 15, 2019. This Court struck all aspects of Acceleration Bay’s “final
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`opportunity” on September 4, 2019, and specifically recognized that its “exclusion of those two
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`[challenged] aspects of Mr. Parr’s report leaves Plaintiff with no intact damages theories.” D.I.
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`692 at 5. In that same order, this Court noted that the rejected proffer was “Plaintiffs final
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`opportunity to present a damages case,” and that “Plaintiff will not have an opportunity to submit
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`revised expert reports” again. Id. at 7. Acceleration Bay moved for reconsideration of the Court’s
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`order, see D.I. 695, which this Court denied shortly before the case was stayed pending
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`Acceleration Bay’s appeal in Take-Two. D.I. 705; D.I. 711.
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`In view of the above, Acceleration Bay squandered its “final opportunity” to develop a
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`submissible expert damages case for trial. Acceleration Bay has presented no cause—let alone
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`good cause—for seeking yet another opportunity to submit an expert damages report and
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`reconsideration of this Court’s prior orders, including its determination that Acceleration Bay has
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`no “intact damages theories” to present at trial. D.I. 692 at 5; see also 705 (denying motion for
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`reconsideration).
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`The two “intervening events” identified by Acceleration Bay above shed no light on the
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`proper reasonable royalty at the hypothetical negotiation, or otherwise warrant reconsideration of
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`the Court’s rulings. As to Acceleration Bay’s “license agreement with another video game
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`company” entered sometime since April 2021, this litigation-induced settlement2 says nothing
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`about the reasonable royalty from a hypothetical negotiation 10-15 years earlier. See Sprint
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`2 See Epic Games, Inc. v. Acceleration Bay LLC, No. 19-cv-4133 (N.D.Ca.).
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`5
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`Case 1:16-cv-00453-WCB Document 746 Filed 11/08/22 Page 6 of 8 PageID #: 54186
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`Commc’ns Co. L.P. v. Comcast IP Holdings, LLC, No. CV 12-1013-RGA, 2015 WL 456154, at
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`*2 (D. Del. Jan. 30, 2015) (excluding expert testimony based two license agreements that
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`“occurred over a decade after the hypothetical negotiation date, and were entered into with non-
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`practicing entities for purposes of settlement”); see also M2M Sols. LLC v. Enfora, Inc., 167 F.
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`Supp. 3d 665, 675 (D. Del. 2016). As for Microsoft’s proposed acquisition of Activision, also
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`some 10+ years after the date of the hypothetical negotiation, Acceleration Bay offers no evidence
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`to support its bald claim that a “significant portion of [the acquisition] is related to value generated
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`by the accused products.” Nor has Acceleration Bay identified how revenues from the accused
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`products—including revenues generated after the expiration of the patents—has any rational nexus
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`to the apportioned value of the patented inventions let alone the result of the hypothetical
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`negotiation 10+ years earlier.
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`It thus appears that Acceleration Bay wants to do what it has repeatedly done before—
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`burdening both Activision and the Court with even more legally infirm damages theories. This
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`Court afforded Acceleration Bay one “final opportunity” to come forward with a proper damages
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`case. Acceleration Bay failed to comply with this Court’s directive, and this Court has already held
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`that “Plaintiff will not have an opportunity to submit revised expert reports” again. D.I. 692 at 7.
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`The Court should reject Acceleration Bay’s request, and stand on its prior decisions precluding
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`Acceleration Bay from taking yet another bite at the damages apple. D.I. 692 at 5, 7 (all proffered
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`theories excluded, and declining any further supplementation); D.I. 705 (reconsideration denied).
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`Schedule. With respect to the schedule, Acceleration Bay’s proposal is simply unworkable.
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`Activision’s counsel has eight trials between now and May. Four of those trials will be in front of
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`6
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`Case 1:16-cv-00453-WCB Document 746 Filed 11/08/22 Page 7 of 8 PageID #: 54187
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`this Court before Acceleration Bay’s seven-day window in May 2023.3 Aside from the trial
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`conflicts, Activision has not had an opportunity to clear Acceleration Bay’s seven-day window
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`with its witnesses or experts.
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`Moreover, in the event the Court accedes to Acceleration Bay’s request for yet another
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`opportunity to offer up a submissible damages case, Acceleration Bay’s proposed schedule does
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`not afford sufficient time for Activision to meaningfully challenge whatever improper damages
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`theories Acceleration Bay has in mind going forward—a concern that is squarely rooted in the
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`history of this case and the alleged “intervening events” recited in its above Proposal. Finally, as
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`the patents are all expired, there is no forward-looking harm to Acceleration Bay that warrants an
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`expedited trial on issues that have already been precluded and on theories that have not even been
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`disclosed.
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`Patent
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`Expiration
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`6,701,344
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`September 21, 2021
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`6,714,966
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`September 21, 2021
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`6,732,147
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`July 20, 2022
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`6,910,069
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`July 9, 2022
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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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`In view of the Court’s orders excluding every damages theory from Acceleration Bay in
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`this case, 4 including the theories proffered in its “final opportunity” to present an admissible case,
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`3 Sprint Commnc’s Co. L.P. v. CSC Holdings, LLC, No. 18-cv-1752 (December 2022);
`Wonderland Switzerland AG v. Evenflo Company, Inc., No. 20-cv-727 (January 2023, Judge
`McKalla presiding); Sprint Commnc’s Co. L.P. v. Mediacom Commnc’s Corp., No. 17-cv-1736
`(April 2023); Sprint Commnc’s Co. L.P. v. WideOpenWest, Inc., 18-cv-361 (April 2023).
`4 See D.I. 578 at 27-28 (excluding theories based on a jury verdict in Uniloc case), D.I. 600
`(excluding grounds offered in support of a 15.5% royalty rate); D.I. 620 at (denying
`reconsideration of D.I. 600 because the Court did “not agree with Plaintiff that [it] committed
`error”); D.I. 619 at 2 (giving Plaintiff one “final opportunity to present me with an admissible
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`7
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`Case 1:16-cv-00453-WCB Document 746 Filed 11/08/22 Page 8 of 8 PageID #: 54188
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`Activision respectfully ask the Court to deny Acceleration Bay’s request for yet another bite at the
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`damages apple. Instead, Activision requests parallel briefing to outline the authorities on this issue
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`and identify the most efficient and appropriate way to manage this case going forward:
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`Event
`Opening Briefs (10 pages)
`Answering Briefs (5 pages)
`Status Report
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`Date
`December 9, 2022
`December 23, 2022
`14 days after Court ruling
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`Dated: November 8, 2022
`10432307
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`POTTER ANDERSON & CORROON
`LLP
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`
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`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
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`damages case”); D.I. 692 at 5 (excluding all damages theories in Plaintiff’s last-chance damages
`proffer, and noting that the order “leaves Plaintiff with no intact damages theories” for trial); D.I.
`705 (denying reconsideration of D.I. 692).
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`8
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