Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 1 of 13 PagelD #: 13820
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`ACCELERATION BAYLLC,
`
`Plaintiff,
`
`v.
`
`ACTIVISION BLIZZARD,INC.,
`
`Defendant.
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`Vv.
`
`ELECTRONIC ARTSINC.,
`
`Defendant.
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`Vv.
`
`TAKE-TWO INTERACTIVE SOFTWARE,
`INC., ROCKSTAR GAMES, INC., and 2K
`SPORTS, INC.,
`
`Defendants.
`
`NeeeeeeeeNeNeaeNeeeeeeeeeeeesaeaSeeaeeeeee
`
`C.A. No. 16-453 (RGA)
`
`PUBLIC VERSION
`
`C.A. No. 16-454 (RGA)
`
`C.A. No. 16-455 (RGA)
`
`PLAINTIFF ACCELERATION BAY LLC’S
`OBJECTIONS TO SPECIAL MASTER ORDER NO.3
`
`

`

`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 2 of 13 PagelD #: 13821
`
`Philip A. Rovner (#3215)
`Jonathan A. Choa (#5319)
`POTTER ANDERSON & CORROON LLP
`Hercules Plaza
`P.O. Box 951
`Wilmington, DE 19899
`(302) 984-6000
`provner@potteranderson.com
`jchoa@potteranderson.com
`
`Attorneys for Plaintiff
`Acceleration Bay LLC
`
`OF COUNSEL:
`
`Paul J. Andre
`Lisa Kobialka
`KRAMER LEVIN NAFTALIS
`& FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`(650) 752-1700
`
`Aaron M. Frankel
`KRAMER LEVIN NAFTALIS
`& FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
`(212) 715-9100
`
`Dated: June 9, 2017
`Public Version dated: June 16, 2017
`5242373
`
`

`

`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 3 of 13 PagelD #: 13822
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`I.
`
`INTRODUCTION
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`Pursuant to Rule 53(f)(2) of the Federal Rules of Civil Procedure, Plaintiff Acceleration
`
`Bay respectfully objects, in part, to the Special Master’s May 19, 2017 Order No. 3 (Ex. A, No.
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`16-453, DI. 155,
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`the “Order’), which granted,
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`in part, Defendants’ motions to compel
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`supplemental response to various interrogatories.! As set forth below, Acceleration Bay served
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`supplemental interrogatory responsesthat it believes comply with the Order. However, because
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`portions of the Order are somewhat unclear, Acceleration Bay objects to the Order to the extent
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`Defendants claim it requires further supplementation.
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`Such supplementation would require
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`information that is not in Acceleration Bay’s possession, premature disclosure of expert reports
`(rather than underlying facts), and extensive discovery into hundreds of video gamesthat are not
`
`accused ofinfringement, are not relevant to any claim or defense in these actions and for which
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`Acceleration Bay has not had any discovery.
`
`I.
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`NATURE AND STAGE OF THE PROCEEDINGS
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`Fact discovery closes in these actions on July 31, 2017 and opening expert reports are due
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`September 22,2017. D.I. 62 at §§ 3(a), 10(a). After a May 10, 2017 hearing, the Special Master
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`issued the Order, granting various motions to compelfiled by the parties on May 19, 2017. Ex.
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`A. On June 2, 2017, Acceleration Bay complied with the Order by serving supplemental
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`responses to Defendants’ individual interrogatories 1, 2 and 4, subject to the objections set forth
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`herein. Ex. B. As further directed by the Special Master, by June 19, 2017, Acceleration Bay
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`will provide supplemental responses to Activision’s interrogatories 7 and 9. Ex. A, Orderat6.
`
`' All docketcitations are to C.A. No. 16-453-RGA,andare representative offilings in the related
`cases.
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`

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`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 4 of 13 PagelD #: 13823
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`i.
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`OBJECTIONS
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`The Court reviews the Special Master’s Order de novo.
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`Fed. R. Civ. P. 53(f)
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`Acceleration Bay objects to the Order to the extent Defendants claim it requires Acceleration
`
`Bayto:
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`(1) Further supplement Interrogatory 1 to further disclose Acceleration Bay’s damages
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`claims,
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`including the specific royalty base and amount, because Defendants have not yet
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`produced the information necessary to make this calculation and because this is the subject of
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`expert discovery;
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`(2) Further supplement Interrogatory 2 to compare Defendants’ accused products to
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`dozens. of unaccused products which are not at issue in this case and have not been the subject of
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`discovery;
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`(3) Further supplement Interrogatory 4 to identify which of the hundreds of third-party
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`Sony PlayStation games infringe, when those products are not at issue in this case, Acceleration
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`Bay has ‘not had any discovery into any of these products and it would be a tremendously
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`burdensome task to analyze infringement for these games, which is not proportional to the
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`discovery needsofthis case; and
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`(4) Further supplement Interrogatories 7 and 9 to further disclose Acceleration Bay’s
`infringement allegations as to Activision by effectively requiring full infringement expert reports
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`months before they are to be provided under the Scheduling Order and in the midst of fact
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`discovery.
`
`* Acceleration Bay submits these objections pursuant to the Order Appointing Special Master.
`C.A. No. 15-228-RGA, D.I. 94 at 96.
`In accordance with that Order, Acceleration Bay submits
`herewith an Appendix containing the transcript from the hearing before the Special Master and
`the materials submitted by the parties in connection with the hearing.
`
`

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`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 5 of 13 PagelD #: 13824
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`A.
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`Acceleration Bay Fully Responded to Defendants’ Interrogatory No. 1 Given
`the Current State of Discovery
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`Defendants’ Interrogatory 1 sought information on a wide variety of damages topics. Ex.
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`B (Supp. Resp.) at 1-2. Acceleration Bay’s initial responses identified the forms of damages
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`Acceleration Bay is pursuing andidentified additional discovery that Acceleration Bay is seeking
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`to develop its damages case.
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`Jd. at 2-4.
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`In response to the Order, Acceleration Bay provided
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`detailed supplemental responses, identifying (1) the forms of damages Acceleration Bay seeks,
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`(2) the damages theories Acceleration Bay is pursuing, (3) an identification of the benefits of the
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`Asserted Patents relevant to the damages case, (4) relevant evidence Acceleration Bay is seeking
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`in discovery, (5) documents and deposition testimony Acceleration Bay has already obtained in.
`discovery that will support its damages claim, (6) upcoming depositions that Acceleration Bay
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`anticipates will be relevant to the damages case, (7) the need for updated financial information
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`from Defendants and discovery into the financial data for new versions of the accused products
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`that Acceleration Bay accused of infringement but for which Defendants have withheld
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`discovery, (8) the royalty bases Acceleration Bay may pursue, (9) Acceleration Bay’s contention
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`as to the applicable royalty rate (without
`the benefit of expert analysis),
`(10) Plaintiff's
`contentions as to whyit is entitled to more than a reasonable royalty, (11) the largest amount of
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`damages Plaintiff will seek from the jury, based on discovery to date, for infringement though
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`2016, and (12) the participants in the reasonable royalty hypothetical negotiation. Jd.
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`Plaintiff also explained that, because discovery is ongoing and Defendants have withheld
`financial data for 2016 and 2017 sales and products, it cannot calculate the royalty base or total
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`royalty amountat this time. Plaintiff further explained that the apportionmentofthe royalty base
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`will be the subject of expert analysis. Plaintiff thus fully complied with the Order.
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`While Acceleration Bay understands the Order to only require the disclosure ofthe facts
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`

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`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 6 of 13 PagelD #: 13825
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`known to Acceleration Bay at this time anda clarification of whether Acceleration Bay will seek
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`damages based on units sold, revenues from such sales or both, Acceleration Bay objects to the
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`extent Defendants argue that the Order requires further disclosures.
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`Indeed, the case relied upon
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`by the Special Master, In Re: Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent
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`Litigation, recognizes that “the final calculation of damages is properly the subject of expert
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`opinion” and only ordered the plaintiff to disclose in its interrogatory response, on a good faith
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`basis, some “underlying” facts in support of its elected damages theories on which its experts
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`would rely. Ex. I, No. 09-MD-2118-SLR, D.I. 453 at 2-3 (D. Del. Oct. 22, 2013). Here,
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`Acceleration Bay provided such underlying facts for its damages theories and identified the
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`specific underlying information that Defendants have yet to provide. Consistent with the
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`Scheduling Order in the case, after fact discovery has been completed, Acceleration Bay will
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`provide reports disclosing its damages experts’ opinions. D.I. 62 at § 10(a).
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`B.
`
`Defendants’ Interrogatory No. 2 Improperly Seeks an Infringement Analysis
`of Unaccused Products
`
`Defendants’ second interrogatory asks Acceleration Bay to disclose the date of the
`hypothetical license negotiation for each product accused of infringement and “the specific
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`features that Plaintiff contends are present in those product or products that were not present in
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`prior products.” Ex. B (Supp. Response) at 10. Acceleration Bay objected because, to respond,
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`Acceleration Bay required further discovery into when Defendants’ infringement began. Ex. D
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`(Letter Brief) at 3-4. The Special Master overruled Acceleration Bay’s objections. Ex. A, Order
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`at 8-9.
`In compliance with the Order, Acceleration Bay provided supplemental interrogatory
`responses identifying that, for purposes of the hypothetical negotiation for the reasonableroyalty,
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`infringement began with the service of the complaints in the predecessor cases to these actions.
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`Ex. B (Supp. Resp.) at 13.
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`

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`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 7 of 13 PagelD #: 13826
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`Acceleration Bay fully complied with the Order by identifying the date of the
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`hypothetical license negotiation and the basis for that date. However, Acceleration Bay objects
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`to the extent that Defendants contend the Order further requires Acceleration Bay to compare the
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`accused products to dozens of Defendants’ earlier games not accused of infringement, which was
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`requested by Interrogatory No. 2, but not addressed in the Order. Ex. A, Order at 8-9. Such
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`information is not relevant because those earlier products are not accused of infringement and
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`are, therefore, outside the scope of the claims and defenses at issue in the case. See Leader
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`Techs. Inc. v. Facebook Inc., No. 08-862-JJF-LPS, 2009 WL 3021168, at *2 (D. Del. Sept. 4,
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`2009) (finding interrogatory “unduly burdensome” because it required an infringement chart of
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`unaccused products); Novanta Corp., v. Iradion Laser, Inc., No. 15-1033-SLR-SRF, 2016 WL
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`4987110, at *7 (D. Del. Sept. 16, 2016) (denying discovery into numerous unaccused products as
`unduly | time-consuming”). Moreover,
`it would be extremely burdensome for Plaintiff to
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`develop infringement positions for dozens ofirrelevant games, which have not been the subject
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`of discovery.
`
`Cc.
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`Defendants’ Interrogatory No. 4 Seeks Irrelevant and Unduly Burdensome
`Discovery Regarding Hundreds of Products Not At Issue
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`Defendants’ Interrogatory No. 4 asks Acceleration Bay to “[iJdentify and describe all
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`products by Sony including but not limited to all versions of the Sony PlayStation gaming
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`system and each and every game that can be played on a Sony gaming system that Plaintiff
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`contends infringe the Asserted Patents.” Ex. B at 13-14. Acceleration Bay objected on various
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`ground, including that this would be an extremely burdensometask and that this information is
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`irrelevant to the claims and defenses at issue in this case.
`Jd. (Supp. Resp.) at 14-15; Ex. D
`(Letter Brief) at 4-5. The Special Master overruled Acceleration Bay’s objections. Ex. A, Order
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`at 9.
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`In compliance with the Order, Acceleration Bay provided a supplemental response (1)
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`

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`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 8 of 13 PagelD #: 13827
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`identifying the 20 Sony PlayStation games which it has accused of infringement in this action,
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`ie
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`e200 (3) stating that “Acceleration Bay
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`takes no position as to if the hundreds of other games sold by third-parties for use with the
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`PlayStation infringe the Asserted Patents.” Ex. B (Supp. Resp.) at 14-15.
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`Given that Acceleration Bay does not contend for purposes of these actions that any of
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`these products infringe, Acceleration Bay has fully complied with the Order. However, to the
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`extent Defendants argue that the Order requires Acceleration Bay to determineif these hundreds
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`of other third-party games infringe, Acceleration Bay objects. The Order does not explain why |
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`such discovery would be relevant. Ex. A, Order at 9. For example, while the Order notes that
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`Defendants argued that one of Plaintiff's experts in inter partes review proceedings discussed
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`Sony PlayStation in connection with secondary ‘considerations of non-obviousness, the Order
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`also notes the expert “never expressly stated that Sony infringed.” Jd. To the extent there was
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`ever any ambiguity on this point, Acceleration Bay confirmed in its interrogatory responsethat,
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`for purposes of these actions, it will not take the position that these third-party gamesinfringe.
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`Thus, information about third-party gamesis not relevant. Leader, 2009 WL 3021168, at *2.
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`Moreover,
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`to the extent the Order does actually require information about whether
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`hundreds of irrelevant products infringe,
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`the Crder does not explain its conclusion that “a
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`response does not appear to be unnecessarily burdensome.” Ex. A, Order at 9. There are
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`hundreds of third-party PlayStation video games, and Acceleration Bay has not received any
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`discovery on any of them. Requiring Acceleration Bay to conduct an independentinfringement
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`analysis for each of these games would be a monumentally burdensometask that is completely
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`disproportionate to the needs of the case, especially given that Acceleration Bay will not be
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`

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`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 9 of 13 PagelD #: 13828
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`relying on these games as secondary evidence of non-obviousness.
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`D.
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`Activision’s Interrogatory Nos. 7 and 9 Seek Early Expert Reports
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`Pursuant to the Scheduling Order, Acceleration Bay provided preliminary infringement
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`claim charts on March 2, 2016.3 When Defendants resisted providing technical depositions on
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`the theory that Acceleration Bay’s charts did not sufficiently disclose the infringement issues in
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`the case, the Special Master granted Acceleration Bay’s motion to compel those depositions,
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`finding that Acceleration Bay’s charts fulfilled the disclosure obligation required under the
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`Delaware standard. C.A. No. 15-228-RGA, D.I. 129 (4/19/16 Special Master Order No. 2)at 2-
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`3. The Special Master separately ordered that Acceleration Bay provide supplemental responses
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`to Defendants Interrogatories 7 and 9, which sought further detail on Acceleration Bay’s
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`infringement allegations. After taking those initial depositions, Acceleration Bay provided
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`supplemental interrogatory responses, which further identified the accused networks at issue, and
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`explained why they are m-regular and incomplete. When Activision moved to compel
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`Acceleration Bay to further supplement its interrogatory responses, the Special Master ordered
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`that Acceleration Bay could either (1) further respond or (2) state that it had fully responded
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`based on the discovery available to it to date. Ex. F (5/8/17 Letter Br.) at Ex. 3 (3/14/17 Hearing
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`Tr.) at 61:23-62:11. Acceleration Bay provided further supplemental responses,
`supporting deposition testimony and source code. Ex. F (Letter Br.) at 4-6.
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`identifying
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`On Activision’s motion to compel yet further supplemental responses, the Special Master
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`ordered that, in view of the impending end offact discovery, “it is appropriate for Plaintiff to be
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`as specific as possible to its infringement claims in its supplemental interrogatory responses,”
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`3 Tronically, in their Opening Brief in Support of Their Motion to Strike Acceleration Bay’s
`Untimely Disclosed Proposed Claim Constructions (D.I. 166 at 14), Defendants appearto
`complain that Acceleration Bay’s infringement contentions “at nearly five thousand pages”are
`too long.
`
`

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`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 10 of 13 PagelD #: 13829
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`and required Acceleration Bay to (1) “Identify, individually and with specificity, all accused
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`methods, broadcast channels and networks, including by separately identifying each and every
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`participant and connection for each such network or broadcast channel and explaining how each
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`is alleged to be m-regular and incomplete;” and (2) “Provide a separate infringement chart for
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`each accused method, network and broadcast that demonstrates how each accused methodstepis
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`allegedly performed by Activision and how each accused network and broadcast channel is
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`_alleged to meet each limitation of each asserted claim.” Ex. A, Order at 5-7.
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`To comply with the first part of the Order (whichrelates to Interrogatory 9), Acceleration
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`Bay will serve by June 19, 2017, supplemental responses identifying the accused methods,
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`broadcast channels and networks, as specifically as possible. Acceleration Bay objects to the
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`extent Activision claims that the Order requires still further supplementation.
`
`In particular,
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`Acceleration Bay anticipates that Activision will argue it has not “separately identified”
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`methods, broadcast channels and networks. Plaintiff will identify each accused network, but
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`because the accused networks provide the broadcast channels and the accused methods are
`performed in and by these networks, it is unclear how they can be separately identified.
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`To the extent Activision asserts that participants have not been specifically identified,
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`Acceleration Bay will identify the participants as specifically as possible. For example, the
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`application running on a customer’s computer to play a multiplayer game, which is as specific as
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`Acceleration Bay can be given the technology at issue. To set an impossibly high bar, Activision
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`seems to be complaining that Acceleration Bay has not identified by name the specific people
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`playing its gameor the particular servers from its pool, a level of specificity not required by the
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`claims or applicable patent law. Thus, Acceleration Bay objects to the Order to the extent
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`Activision seeks such irrelevant disclosures.
`
`

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`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 11 of 13 PagelD #: 13830
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`Acceleration Bay will comply with the second part of the Order (which relates to
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`Interrogatory 7), by providing separate claim charts for each accused network,
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`including
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`explaining how Activision is responsible for each step of the method claims and providing
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`Acceleration Bay’s allegation as to how Activision meets each limitation of each asserted claim,
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`whichis all Acceleration Bay understands the Order to require.
`
`Acceleration Bay objects to the Order to the extent Activision argues it requires
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`Acceleration Bay to prove infringement to Activision’s satisfaction (another impossibly high
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`standard), rather than identify Acceleration Bay’s “allegations.” After the conclusion of fact
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`discovery and claim construction, Acceleration Bay will provide expert reports on infringement.
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`Activision cannot, with a single interrogatory, override the local rules and Scheduling Order and
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`compel Acceleration Bay to provide its full infringement expert report in the middle of fact
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`discovery, months before it is required to do so by the Scheduling Order. There is no support for
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`such an extreme result, which would eviscerate the staged discovery schedule used in this
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`District of core technical discovery then fact discovery, then expert discovery.’
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`For example, a Special Master in this District explained that initial claim charts must
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`identify “what” is accused of infringement, but need not prove the “why”of infringement, which
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`is the subject of expert reports:
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`Plaintiff’s obligation .. . requires ... all facts then known that describe what
`products and what components are alleged to infringe and a description of
`what the infringement is of the responder’s patent(s). Why [the accused]
`products and components infringe as described is left to another day when
`the plaintiff includes in it’s expert reports and expert discovery the reasons,
`
`4 Activision’s position is inconsistent with its response to Plaintiffs mirror image interrogatory
`seeking Activision’s contentions as to why each claim is invalid in view of the prior art.
`Activision simply objected that the interrogatory was compoundandtoo broad, and stated that,
`consistent with the Scheduling Order,
`it would provide this information in its invalidity
`contentions and expert reports. Ex. F (Letter Brief) at Ex. 8 at 6-7. There is no basis for
`Activision to hold Acceleration Bay to a different standard for its infringement contentions.
`
`

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`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 12 of 13 PagelD #: 13831
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`opinions and theories why the identified products and components of the
`defendant infringe on the patent or patents of the plaintiff. While .
`defendants may beinterested in the theories of infringementat this time, they
`are not entitled to them under the schedule that postpones that disclosure until
`the time when expert reports are required to be filed and served....
`
`Ex. H, Xpoint Tech., Inc. v. Cypress Semiconductor Corp., No. 09-CV-628-SLR, D.I. 884 at 5
`
`(D. Del. Apr. 8, 2011) (Special Master Order) (emphasis added); see also Invensas Corp. v.
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`Renesas Elecs. Corp., 287 F.R.D. 273, 283 (D. Del. 2012) (preliminary claim charts are “a
`
`mechanism to facilitate discovery during the initial
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`stages of the litigation”)
`
`(citation
`
`omitted); SSZ Servs., LLC v. Cisco Sys., Inc., No. 15-cv-00433-JRG-RSP, 2016 WL 727673, at
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`*8 (E.D. Tex. Feb. 24, 2016) (“infringement contentions ‘are not meant to provide a forum for
`
`litigation of the substantive issues’”) (citation omitted); Finjan, Inc. v. Proofpoint, Inc., 2015 WL
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`9023166, *2-3 (N.D. Cal. Dec. 16, 2015) (“The rule’s purpose is to provide notice of the
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`patentee’s theory of infringement, not to provide the evidence supporting that theory.”)
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`(emphasis added andcitation omitted); Stratasys, Inc. v. Microboards Tech. LLC, No. 13-cv-
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`3228 (DWF/TNL), 2015 WL 3869672, *1-4 (D. Minn. June 23, 2015) (“Claim charts must
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`contain enough information to provide notice of the party’s infringement contentions and
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`defenses, but they are not meant to be a substitute for discovery... . [T]he next step is for
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`[plaintiff] to provide an expert report that more fully describes the particulars ofits infringement
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`theory”) (emphasis added). Acceleration Bay’s updated initial claim charts will satisfy this
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`notice requirement and will have provided more fulsome infringement contentions than typical in
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`this District.
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`IV.
`
`CONCLUSION
`
`For the foregoing reasons, Acceleration Bay respectfully requests that the Court sustain
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`Acceleration Bay’s objections to Special Master Order No.3.
`
`10
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`

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`Case 1:16-cv-00455-RGA Document 145 Filed 06/16/17 Page 13 of 13 PagelD #: 13832
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`POTTER ANDERSON & CORROON LLP
`
`By: /s/ Philip A. Rovner
`Philip A. Rovner (#3215)
`Jonathan A. Choa (#5319)
`Hercules Plaza
`P.O. Box 951
`Wilmington, DE 19899
`(302) 984-6000
`provner@potteranderson.com
`jchoa@potteranderson.com
`
`Attorneys for Plaintiff
`Acceleration Bay LLC
`
`OF COUNSEL:
`
`Paul J. Andre
`Lisa Kobialka
`KRAMER LEVIN NAFTALIS
`& FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`(650) 752-1700
`pandre@kramerlevin.com
`Ikobialka@kramerlevin.com
`
`Aaron M.Frankel
`KRAMER LEVIN NAFTALIS
`& FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
`(212) 715-9100
`afrankel@kramerlevin.com
`
`Dated: June 9, 2017
`Public Version dated: June 16, 2017
`5242373
`
`11
`
`