Case 1:16-cv-00453-WCB Document 848 Filed 04/28/24 Page 1 of 6 PageID #: 56521
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`ACCELERATION BAY LLC,
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`Plaintiff,
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`ACTIVISION BLIZZARD INC.,
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`v.
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`Defendant.
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
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`ORDER RESOLVING EVIDENTIARY DISPUTES
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`Civil Action No. 16-453-WCB
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`This order rules on various evidentiary disputes that the parties have raised through letter
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`briefs:
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`I. Survey Evidence
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`Acceleration Bay may use the contested survey evidence for the limited purpose of
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`establishing that the allegedly infringing large game modes in Call of Duty are of equal or greater
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`importance compared to the small, non-infringing game modes.
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`The court has twice addressed the survey evidence Acceleration Bay seeks to introduce.
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`The surveys at issue are Activision’s own surveys, PTX 123, 124, and 718. In Dkt. No. 692, the
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`court excluded various opinions of Mr. Parr, in which he used the contested survey evidence as the
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`basis for apportioning the value of the patented technology. The court reasoned that Mr. Parr’s
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`methodology failed to account for features such as the “story, characters, game quality, ease of use,
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`quality of customer service, and compatibility with popular platforms.” Id. at 9. In Dkt. No. 762,
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`the court reiterated that “Acceleration will not be permitted to rely on damages theories that have
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`Case 1:16-cv-00453-WCB Document 848 Filed 04/28/24 Page 2 of 6 PageID #: 56522
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`already been excluded,” including apportionment based on Activision’s consumer survey
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`evidence. The court did not, however, categorically exclude the surveys.
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`Acceleration Bay now represents that it intends to introduce the surveys to establish that
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`the infringing large Call of Duty game modes are at least as important to Activision customers as
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`the small modes that do not implicate the patented technology. Among other things, the surveys
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`at issue identify large multiplayer game modes as the “primary mode driving” the purchase of Call
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`of Duty games. The surveys are a reliable means of establishing this limited fact. Acceleration
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`Bay’s use of the surveys for this limited purpose does not contradict the court’s previous orders
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`excluding Mr. Parr’s damages apportionment opinions based on the same surveys.
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`II. Foreign Sales of World of Warcraft
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`Acceleration Bay may introduce evidence of foreign sales of World of Warcraft if it
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`provides evidence that foreign World of Warcraft users are supported by the allegedly infringing
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`U.S. based system of servers. If, at the point that Acceleration Bay seeks to introduce evidence of
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`foreign World of Warcraft sales, Acceleration Bay has not yet introduced such evidence, the
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`evidence of foreign World of Warcraft sales may be conditionally admitted.
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`Activision objects to the admission of documents containing revenues attributable to
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`foreign sales of World of Warcraft. Acceleration Bay’s theory is that Activision uses the infringing
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`system, which consists of servers located entirely within the United States, to support North and
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`South American foreign World of Warcraft players. Activision contends that Acceleration Bay
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`cannot prove that Activision serves foreign World of Warcraft players via its U.S. based system.
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`Acceleration Bay’s infringement theory as to North and South American World of Warcraft
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`players is plausible. Accordingly, Acceleration Bay will be permitted to introduce evidence of
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`foreign World of Warcraft sales and revenues.
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`Case 1:16-cv-00453-WCB Document 848 Filed 04/28/24 Page 3 of 6 PageID #: 56523
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`III. Offers to License/Sell Patented Technology
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`Activision may introduce evidence regarding Boeing’s offers to sell or license the patents
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`at issue. Activision may not introduce evidence that Boeing’s offers were declined.
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`Activision seeks to introduce, over Acceleration Bay’s objection, that in 2010 Boeing
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`offered to sell the patents at issue in this case, together with others, for $1,000,000. No sale was
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`consummated at that time. Acceleration Bay argues that evidence of offers to sell or license patents
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`is not admissible to show the value of a license to the patents in suit under Fed. R. Evid. 403. The
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`cases cited by Acceleration Bay for that proposition, however, relate to efforts by patent owners
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`to introduce evidence of the offers made by the patent owner to sell or license the patents. The
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`courts have regularly rejected such evidence on the ground that the patent owner could offer to sell
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`the patent at a vastly overstated price, which would not bear any relationship to the actual value of
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`the patent. See Whitserve, LLC v. Computer Packages, Inc., 694 F.3d 10, 29–30 (Fed. Cir. 2012)
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`(“We acknowledge that proposed licenses may have some value for determining a reasonable
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`royalty in certain situations. Their evidentiary value is limited, however, by, inter alia, the fact
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`that patentees could artificially inflate the royalty rate by making outrageous offers.”); see also
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`Deere & Co. v. Int’l Harvester Co., 710 F.2d 1551, 1557 (Fed. Cir. 1983); Atl. Thermoplasstics
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`Co. v. Faytex Corp., 5 F.3d 1477, 1482 (Fed. Cir. 1993); Miics & Partners, No. 14-804, 2017 WL
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`6268072, at *4 (D. Del. Dec. 7, 2017); Wi-Lan, Inc. v. LG Elecs., Inc., No. 18-cv-1577, 2019 WL
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`5681622 at *7 (S.D. Cal. Nov. 1, 2019).
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`In this case, by contrast, the offer is not being used by the patent owner, but by the accused
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`infringer to show that the patent owner was willing to license or sell the patents for a particular
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`amount. In that setting, the amount of the offer is quite relevant, as it shows that a license could
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`have been acquired for the price being offered by the patent owner. See In re ChanBond, LLC
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`Case 1:16-cv-00453-WCB Document 848 Filed 04/28/24 Page 4 of 6 PageID #: 56524
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`Patent Litig., No. 15-842, 2020 WL 550786, at *3 (D. Del. Feb. 4, 2020) (“Outside of the market
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`approach, the 2012 AST offer itself is independently relevant to the valuation of the patents-in-suit
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`and may come in as evidence of such.”); ViaTech Techs., Inc. v. Adobe, Inc., No. 20-358, 2023 WL
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`5975219, at *13-14 (D. Del. Sept. 14, 2023); AVM Techs., LLC v. Intel Corp., No. 15-33, 2017 WL
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`1787562, at *2 (D. Del. May 1, 2017) . In both ChanBond and ViaTech, the court held the evidence
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`of the offer admissible but ruled that the proponent of the evidence would not be permitted to
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`introduce the fact that the offer was not accepted, on the ground that such additional evidence
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`would be unduly prejudicial.1
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`Accordingly, evidence of Boeing’s offers to sell or license the patented technology will be
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`admitted for purposes of establishing Boeing’s valuation of the patents. Activision may not further
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`introduce evidence that the offers were not accepted.
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`IV. Top Line User Numbers
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`Acceleration may introduce evidence regarding the total number of Call of Duty and World
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`of Warcraft users.
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`1 Acceleration Bay argues that Judge Andrews in ChanBond found the evidence of the to
`be inadmissible. That is not an accurate reading of the case. The court in that case excluded the
`evidence of the offer as the basis for the defendant’s “market approach” calculation of the
`reasonable royalty. However, the court stated that evidence of a patent owner’s offer would be
`relevant in other settings, as long as evidence was not admitted that the offer was not accepted.
`Judge Andrews’ ruling on that point is clear not only from his opinion in ChanBond, but also from
`his later opinion in ViaTech, in which he held such an offer was admissible as long as it was not
`accompanied by evidence that the offer was not accepted. See ViaTech, 2023 WL 5975219, at *14
`(“While ViaTech’s offers to see the ’567 patent are relevant to Dr. Mody’s damages opinions, since
`they represent ViaTech’s placement of a value on owning the patents, the fact that ViaTech was
`unsuccessful is irrelevant and would be unfairly prejudicial. Any reference to ViaTech’s failure to
`sell or license the patent are excluded.”). Likewise statements Judge Andrews made during the
`hearing that led to the opinion in ChanBond make it clear that he regarded evidence of a patent
`owner’s offer to sell or license the patent to be relevant. See No. 15-cv-842, Dkt. No. 471, at 55,
`114 (Nov. 25, 2019) (“I think to the extent that there is an offer to sell, that’s a kind of check on
`the reasonableness of the damages opinions being offered by plaintiff’s damages expert that seems
`to be very relevant.”).
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`Case 1:16-cv-00453-WCB Document 848 Filed 04/28/24 Page 5 of 6 PageID #: 56525
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`Activision objects to the inclusion of total user numbers for World of Warcraft and Call of
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`Duty because the court has excluded any per-user damages opinions. Activision instead would
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`have Acceleration refer to the number of users who use the accused functionality, which Activision
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`engineers testified to in their depositions. Acceleration argues that the total number of users is
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`relevant to various disputed issues, such as the overall profitability, popularity, and commercial
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`success of the games.
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`The total number of users is at least minimally relevant to the issues Acceleration Bay
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`highlights. That evidence does not unfairly prejudice Activision. Accordingly, Activision’s
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`objection on this issue is overruled. Acceleration Bay may introduce evidence of the total number
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`of Call of Duty and World of Warcraft players; however, Acceleration Bay may not attempt to
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`equate the number of users to the royalty award.
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`V. Form of World of Warcraft Revenues
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`Acceleration may present streamlined spreadsheets showing only annual revenues for
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`World of Warcraft. Activision objects to Acceleration Bay presenting simplified versions of the
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`revenues, and instead seeks to require Acceleration to present those World of Warcraft revenues in
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`the form in which they were were produced, which was on a quarterly basis. The essence of
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`Activision’s argument is that Acceleration Bay’s simplification of the data obscures the downward
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`trend in revenues. If Activision believes this is important to its case, it may develop that argument
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`on cross. Acceleration Bay may use the data in its simplified form.
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`Case 1:16-cv-00453-WCB Document 848 Filed 04/28/24 Page 6 of 6 PageID #: 56526
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`IT IS SO ORDERED
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`SIGNED this 28th day of April, 2024.
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`______________________________
`WILLIAM C. BRYSON
`UNITED STATES CIRCUIT JUDGE
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