Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 1 of 48 PageID #: 19505
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`AMAZON WEB SERVICES, INC.,
`
`Defendant.
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`C.A. No. 22-904 (RGA) (SRF)
`
`CONFIDENTIAL
`
`DEFENDANT AMAZON WEB SERVICES, INC.’S OPENING BRIEF IN
`SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT AND TO EXCLUDE
`PLAINTIFF ACCELERATION BAY LLC’S EXPERT OPINIONS
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Jennifer Ying (#5550)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@morrisnichols.com
`jying@morrisnichols.com
`
`Attorneys for Defendant Amazon Web Services,
`Inc.
`
`OF COUNSEL:
`
`Alan M. Fisch
`R. Williams Sigler
`Jeffrey M. Saltman
`Lisa N. Phillips
`Kyle K. Tsui
`FISCH SIGLER LLP
`5301 Wisconsin Avenue NW, Suite 400
`Washington, DC 20015
`(202) 362-3500
`
`Ken K. Fung
`FISCH SIGLER LLP
`400 Concar Drive
`San Mateo, CA 94402
`(605) 362-8207
`
`May 31, 2024
`
`ORIGINAL FILING DATE: MAY 31, 2024
`REDACTED FILING DATE: JUNE 7, 2024
`
`

`

`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 2 of 48 PageID #: 19506
`
`TABLE OF CONTENTS
`
`INTRODUCTION ...............................................................................................................1
`
`NATURE AND STAGE OF THE PROCEEDINGS ..........................................................2
`
`SUMMARY OF THE ARGUMENT ..................................................................................2
`
`STATEMENT OF FACTS ..................................................................................................4
`A.
`Boeing Licenses the Asserted Patents to AWS Then Sells Them to AB.................4
`B.
`AB Sues AWS..........................................................................................................4
`C.
`The Accused Products..............................................................................................5
`
`APPLICABLE LEGAL STANDARDS ..............................................................................8
`
`
`
`I.
`
`II.
`
`III.
`
`IV.
`
`V.
`
`VI.
`
`B.
`C.
`D.
`
`ARGUMENT .......................................................................................................................9
`A.
`The AWS-Boeing Agreement Precludes All Infringement Claims Relying on
`. ....................................................................................9
`AB’s Alleged Damages Period Contravenes the Marking Statute. .......................11
`Summary Judgment on Willfulness and Enhanced Damages is Appropriate........15
`Summary Judgment of Non-Infringement on All 16 Asserted Claims Is
`Warranted Because No Accused Products Maintain an M-Regular Network. ......19
`1.
`VPC Does Not Maintain an M-Regular Network. .....................................20
`2.
`Transit Gateway Does Not Maintain an M-Regular Network. ..................25
`3.
`AB Has Not Disclosed a Damages Theory for
` or
`Hyperplane. ................................................................................................29
`AB’s Experts’ Flawed Apportionment Approach Should be Excluded. ...............30
`1.
`Dr. Cole’s Opinion Relies on Documents Outside the Damages
`Period. ........................................................................................................30
`Dr. Cole Inconsistently Applied an Unreliable Methodology. ..................33
`2.
`Mr. Gunderson Relies on Revenue Unrelated to Infringement. ............................36
`Mr. Gunderson’s Reliance on A Jury Verdict Should Be Excluded......................39
`
`E.
`
`F.
`G.
`
`VII. CONCLUSION ..................................................................................................................40
`
`

`

`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 3 of 48 PageID #: 19507
`
`TABLE OF AUTHORITIES
`
`Cases
`
` Page(s)
`
`Acceleration Bay LLC v. Activision Blizzard, Inc.,
`324 F. Supp. 3d 470 (D. Del. 2018) .........................................................................................40
`
`Acceleration Bay LLC v. Activision Blizzard,
`C.A. No. 6-453, D.I. 858 (D. Del. May 3, 2024) ...........................................................4, 39, 40
`
`Acceleration Bay v. Take-Two Interactive Software, Inc.,
`612 F. Supp. 3d 408 (D. Del. 2020) .........................................................................................20
`
`Acceleron, LLC v. Dell Inc.,
`No. 1:12-cv-4123, 2022 WL 1087683 (N.D. Ga. Mar. 7, 2022), aff’d, No.
`2022-1620, 2023 WL 4503189 (Fed. Cir. July 13, 2023)........................................................16
`
`Amsted Indus. Inc. v. Buckeye Steel Castings Co.,
`24 F.3d 178 (Fed. Cir. 1994)........................................................................................12, 13, 15
`
`Bayer Healthcare LLC v. Baxalta Inc.,
`989 F.3d 964 (Fed. Cir. 2021)..................................................................................................15
`
`Bench Walk Lighting LLC v. LG Innotek Co.
`C.A. No. 20-51, 2021 WL 65071 (D. Del. Jan. 7, 2021), report and
`recommendation adopted, 530 F. Supp. 3d 468, 478 (D. Del. 2021). .....................................17
`
`Blackbird Tech LLC v. ELB Elecs., Inc.,
`C.A. No. 15-56, 2020 WL 5409052 (D. Del. Sept. 9, 2020) ...................................................18
`
`Celotex Corp. v. Catrett,
`477 U.S. 317 (1986) ...................................................................................................................8
`
`Contour IP Holding, LLC v. GoPro, Inc.,
`No. 3:17-CV-04738, 2020 WL 5106845 (N.D. Cal. Aug. 31, 2020) ......................................36
`
`CSIRO v. Cisco Sys., Inc.,
`809 F.3d 1295 (Fed. Cir. 2015)..................................................................................................9
`
`Datatreasury Corp. v. Wells Fargo & Co.,
`522 F.3d 1368 (Fed. Cir. 2008)............................................................................................1, 10
`
`Daubert v. Merrell Dow Pharm., Inc.,
`509 U.S. 579 (1993) .....................................................................................................1, 2, 8, 30
`
`Eastman Kodak Co. v. Agfa-Gevaert N.V.,
`560 F. Supp. 2d 227 (W.D.N.Y. 2008) ..............................................................................12, 13
`
`
`
`ii
`
`

`

`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 4 of 48 PageID #: 19508
`
`EF Operating Corp. v. American Buildings
`993 F.2d 1046 (3d Cir. 1993)...................................................................................................14
`
`Eko Brands, LLC v. Adrian Rivera Maynez Enter., Inc.,
`946 F.3d 1367 (Fed. Cir. 2020)................................................................................................16
`
`Epic Games, Inc. v. Acceleration Bay LLC,
`No. 4:19-cv-4133 (N.D. Cal.), D.I. 1 .................................................................................14, 18
`
`Erfindergemeinschaft UroPep GbR v. Eli Lilly & Co.,
`No. 2:15-cv-1202, 2017 WL 2190055 (E.D. Tex. May 18, 2017) ..........................................16
`
`Ericsson, Inc. v. D-Link Sys., Inc.,
`773 F.3d 1201 (Fed. Cir. 2014)....................................................................................29, 30, 39
`
`Extang Corp. v. Truck Accessories Grp., LLC,
`C.A. No. 19-923, 2022 WL 607868 (D. Del. Feb. 18, 2022) ..................................................15
`
`Finjan, Inc. v. Juniper Networks, Inc.,
`387 F. Supp. 3d 1004 (N.D. Cal. 2019) ...................................................................................15
`
`Flatworld Interactives LLC v. Samsung Elecs. Co.,
`77 F. Supp. 3d 378 (D. Del. 2014) ...........................................................................................12
`
`Genband US LLC v. Metaswitch Networks Corp.,
`No. 2:14-cv-33, 2016 WL 122967 (E.D. Tex. Jan. 9, 2016) ...................................................32
`
`Halo Electronics, Inc. v. Pulse Electronics, Inc.
`579 U.S. 93 (2016) ...................................................................................................................15
`
`Horizon Meds. LLC v. Apotex Inc.,
`C.A. No. 22-640, 2022 WL 16739909 (D. Del. Nov. 7, 2022) ...........................................1, 10
`
`In re Teleglobe Commc’ns Corp.,
`493 F.3d 345 (3d Cir. 2007).....................................................................................................14
`
`Innovus Prime, LLC v. Panasonic Corp.,
`No. 12-cv-660, 2013 WL 3354390 (N.D. Cal. July 2, 2013) ............................................10, 11
`
`IoEngine, LLC v. PayPal Holdings, Inc.,
`607 F. Supp. 3d 464 (D. Del. 2022) .........................................................................................40
`
`IP Power Holdings Ltd. v. Westfield Outdoor, Inc.,
`No. 2:19-CV-01878, 2020 WL 2992415 (D. Nev. June 4, 2020) ...........................................17
`
`Kaavo Inc. v. Amazon.com Inc.,
`323 F. Supp. 3d 630 (D. Del. 2018) .........................................................................................25
`
`iii
`
`

`

`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 5 of 48 PageID #: 19509
`
`Kimble v. Marvel Entertainment, LLC,
`576 U.S. 446 (2015) .................................................................................................................18
`
`Laser Dynamics, Inc. v. Quanta Computer, Inc.,
`694 F.3d 51 (Fed. Cir. 2012)..............................................................................................29, 30
`
`MasterObjects, Inc. v. Amazon.com, Inc.,
`No. C 20-08103 WHA, 2021 WL 4685306 (N.D. Cal. Oct. 7, 2021) .....................................17
`
`Maxwell v. J. Baker, Inc.,
`86 F.3d 1098 (Fed. Cir. 1996)..................................................................................................12
`
`Novartis Corp. v. Ben Venue Laby’s, Inc.,
`271 F.3d 1043 (Fed. Cir. 2001)................................................................................................24
`
`NXP USA, Inc. v. Impinj, Inc.,
`No. 2:20-cv-1503, 2023 WL 3852914 (W.D. Wash. June 6, 2023) ........................................19
`
`Podobnik v. U.S. Postal Serv.,
`409 F.3d 584 (3d Cir. 2005).......................................................................................................8
`
`Ravgen, Inc. v. Quest Diagnostics Inc.,
`No. 2:21-cv-9011, 2022 WL 2047613 (C.D. Cal. Jan. 18, 2022) ............................................19
`
`Refac Electronics Corp. v. A & B Beacon Business Machines Corp.
`695 F. Supp. 753 (S.D.N.Y. 1988). .........................................................................................12
`
`Schneider ex rel. Estate of Schneider v. Fried,
`320 F.3d 396 (3d Cir. 2003).......................................................................................................8
`
`Skills Platform Inc. v. AviaGames Inc.,
`No. 21-cv-2436, 2023 WL 8438738 (N.D. Cal. Dec. 5, 2023)................................................32
`
`SRI Int’l v. Advanced Tech. Labs.,
`127 F.3d 1462 (Fed. Cir. 1997)..........................................................................................12, 13
`
`Transcore LP v. Elec. Transaction Consultants Corp,
`563 F.3d 1271 (Fed. Cir. 2009)................................................................................................10
`
`Unova Inc. v. Hewlett-Packard
`No. 02-cv-3772, 2006 WL 5434534 (C.D. Cal. Feb. 16, 2006) ..............................................13
`
`VirnetX, Inc. v. Cisco Sys., Inc.,
`767 F.3d 1308 (Fed. Cir. 2014)................................................................................................29
`
`Wang Labs., Inc. v. Toshiba Corp.,
`993 F.2d 858 (Fed. Cir. 1993)..................................................................................................38
`
`iv
`
`

`

`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 6 of 48 PageID #: 19510
`
`Woods v. Showers,
`822 F. App’x 122 (3d Cir. 2020) .............................................................................................30
`
`Wrinkl, Inc. v. Facebook, Inc.,
`C.A. No. 20-1345, 2021 WL 4477022 (D. Del. Sept. 30, 2021) .............................................18
`
`Statutes
`
`35 U.S.C. § 284 ........................................................................................................................15, 19
`
`35 U.S.C. § 287 ...................................................................................................................... passim
`
`Rules
`
`Fed. R. Civ. P. 56(a) ........................................................................................................................8
`
`Fed. R. Evid. 702 .......................................................................................................................8, 30
`
`
`
`v
`
`

`

`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 7 of 48 PageID #: 19511
`
`I.
`
`INTRODUCTION
`
`Summary judgment is appropriate on four different grounds. First, a patent owner “cannot
`
`transfer an interest greater than that which it possesses.”1 So, Plaintiff Acceleration Bay (“AB”)
`
`cannot enforce rights that the prior owner of the asserted patents, Boeing, lacked. But that is what
`
`AB—and Boeing, which retained
`
`—are doing. In 2010, over
`
`a decade before this lawsuit was filed, Boeing and Defendant Amazon Web Services (“AWS”)
`
`entered into an agreement providing Boeing with access to AWS products
`
`. In exchange,
`
`.
`
`
`
`
`
`
`
` products, and then sold the patents to AB in 2014. Here, AB now accuses those
`
`products of infringing those same patents. But Boeing’s agreement with AWS bars AB’s claims.
`
`Second, there is no evidence that AWS received pre-suit notice of infringement, as required to start
`
`the damages period under 35 U.S.C. § 287. AB’s sole pre-suit letter did not specifically assert
`
`infringement of any claim by any product, which the law requires. Thus, summary judgment
`
`precluding any pre-suit damages is warranted. Third, and for similar reasons, there is no evidence
`
`of willful or egregious conduct that could warrant enhanced damages. Fourth, like with Take Two
`
`and EA in prior AB cases, the undisputed facts here show that AWS’s products do not use the
`
`asserted patents’ distinct “m-regular” network. Rather, AWS users must manually define every
`
`network connection in the accused products, which do not default to an m-regular configuration.
`
`Summary judgment of non-infringement on all asserted claims should thus be granted.
`
`In addition, certain of AB’s experts’ opinions on damages are unreliable and should be
`
`excluded under Daubert. Indeed, AB’s expert on technical apportionment, Eric Cole, failed to
`
`
`1 Horizon Meds. LLC v. Apotex Inc., C.A. No. 22-640, 2022 WL 16739909, at *4 (D. Del. Nov. 7,
`2022) (quoting Datatreasury Corp. v. Wells Fargo & Co., 522 F.3d 1368, 1372 (Fed. Cir. 2008)).
`
`

`

`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 8 of 48 PageID #: 19512
`
`properly analyze the accused products’ features or apportion the asserted patents’ value. And AB’s
`
`damages expert, Lance Gunderson, improperly relied on a jury verdict and the overall revenue of
`
`all the accused products, rather than the revenue associated with the accused usage. Thus, the
`
`challenged AB expert opinions should be excluded under Daubert.
`
`II.
`
`NATURE AND STAGE OF THE PROCEEDINGS
`
`AB accuses seven AWS products and three Amazon.com products of infringing five
`
`patents.2 This Court held a claim construction hearing in October 2023, and has issued an order
`
`construing “m-regular,” among other terms, the same as in prior AB cases involving these patents.3
`
`III.
`
`SUMMARY OF THE ARGUMENT
`
`1.
`
` Each of the following grounds for summary judgment would substantially reduce
`
`the contested issues and potential damages in this case, and one would dispose of the case entirely:
`
`(a).
`
`Boeing and AWS agreed that Boeing could use AWS’s products
`
`. When Boeing sold the asserted patents to AB,
`
`
`
`
`
`
`
`. Because these products were licensed, summary judgment of non-infringement on
`
`these products—and other products that allegedly infringe because they use VPC—is appropriate.
`
`(b).
`
`The parties agree that the potential damages period began when AB provided AWS
`
`with actual notice of alleged infringement under 35 U.S.C. § 287. AB claims that it provided such
`
`notice in a March 13, 2019 letter. But this letter mentioned only one product (CloudFront), never
`
`identified the asserted ’344 patent, and failed to state any patent-infringement claims. Summary
`
`judgment limiting damages to after the complaint’s filing is thus warranted.
`
`2 See Ex. 1 at 3.
`3 See D.I. 77.
`
`
`
`2
`
`

`

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`(c). No evidence shows that AWS had the necessary knowledge to willfully infringe
`
`before the complaint’s filing. Nor is there any evidence of any willful infringement or egregious
`
`conduct in the one-month period between AB’s filing of this lawsuit and the final patent’s
`
`expiration. Thus, summary judgment on willfulness and enhanced damages is appropriate.
`
`(d). All the asserted claims describe networks that are “m-regular,” which this Court
`
`construed as: “a state that the network is configured to maintain, where each participant is
`
`connected to exactly m neighbor participants.” AB cannot show that the accused VPC and Transit
`
`Gateway products satisfy the “m-regular” requirement, because uncontested facts shows that a
`
`user must manually create connections between participants in these networks. And since AB
`
`alleges that the accused products infringe only through their use of VPC or Transit Gateway,
`
`summary judgment of noninfringement on all asserted claims is warranted.
`
`2.
`
`Further, certain of AB’s expert opinions should be excluded because:
`
`(a). Mr. Gunderson relies on Dr. Cole for the apportionment percentages used in his
`
`damages analysis. But Dr. Cole used arbitrary lists of features for each accused product, and
`
`assigned each feature the same value without any underlying rationale. As this approach is
`
`unreliable under Federal Circuit law, these opinions should be excluded.
`
`(b). AB has independent infringement theories for only two products: VPC and Transit
`
`Gateway. AB alleges that the other accused products (e.g., EC2) infringe only through their use of
`
`VPC and Transit Gateway. Consistent with Judge Fallon’s denial of AB’s motion to compel EC2
`
`external financial data, AB’s infringement theories do not capture revenue associated with external
`
`customers’ (i.e., non-Amazon) usage of products like EC2. Mr. Gunderson’s opinions including
`
`such revenue in his calculations thus should be excluded.
`
`(c) Mr. Gunderson issued a second supplemental report opining that the recent AB v.
`
`3
`
`

`

`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 10 of 48 PageID #: 19514
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`Activision jury verdict supports his damages theories in this case. But verdicts are not evidence of
`
`an arms-length negotiation between the parties, as this Court held in the Activision case itself. The
`
`verdict is irrelevant, and Mr. Gunderson’s second supplemental report should be excluded.
`
`IV.
`
`STATEMENT OF FACTS
`
`
`
`On July 31, 2000, aerospace manufacturer Boeing filed the applications that would later
`
`issue as the asserted patents.4 These five patents arose out of an effort at Boeing to create a system
`
`that allowed its engineers to simultaneously view 3D schematics of airplanes.5
`
`A.
`
`Boeing Licenses the Asserted Patents to AWS Then Sells Them to AB.
`
`, Boeing and AWS entered into an Enterprise Customer Agreement
`
`(“AWS-Boeing Agreement”). Among other things, this agreement gave Boeing access to AWS’s
`
`services, and
`
`
`
`the owner of all asserted patents until December 10, 2014, when it sold them to AB.7 That sale
`
`.6 Boeing was the original assignee and remained
`
`agreement provided that Boeing would receive
`
`
`
`. By
`
`December 2014 though, Boeing had used
`
`. So, Boeing did not have the
`
`right to enforce the asserted patents against those
`
`.8
`
`B.
`
`AB Sues AWS.
`
`
`
`Despite Boeing’s agreement with AWS, on March 13, 2019, AB sent Amazon.com a letter
`
`
`4 D.I. 1-1 at 2, 61, 122, 183, 242.
`5 Ex. 2 at 45:16–46:11.
`6 Ex. 3 (AWS-Boeing Agreement) at 13.
`7 Ex. 4.
`8 See id.; Ex. 5; Ex. 6; Ex. 7 at 110:22-111:10, 111:17-112:2, 112:8-14, 112:16-114:12; Ex. 8 at
`132:18–21.
`
`4
`
`

`

`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 11 of 48 PageID #: 19515
`
`referencing the ’966, ’147, ’634, and ’069 patents.9 The letter mentioned CloudFront, but did not
`
`reference any other products. And the letter did not allege that CloudFront infringed, nor reference
`
`any patent claims. AWS responded that it would investigate AB’s allegations.10 AB did not reply,
`
`and on July 6, 2022, filed its complaint. By that point, two of the asserted patents had expired, two
`
`more would expire within two weeks, and the last expired 32 days after the complaint was filed,
`
`on August 7, 2022.11 Thus, the damages period ended on August 7, 2022.
`
`The Accused Products
`
`C.
`The first two AWS products that AB accuses are VPC and Transit Gateway.12 AB also
`
`accuses eight other AWS or Amazon-related products, by virtue of their reliance on VPC, or both
`
`VPC and Transit Gateway.13
`
`VPC: VPC allows users (i.e., customers) to set up a virtual network on AWS’s hardware
`
`infrastructure that is “logically isolated from other virtual networks in the AWS cloud.”14 When a
`
`user does so, the virtual network resembles a private network that a customer would build on its
`
`own premises, but uses the AWS infrastructure to allow for scalability (i.e., the addition of
`
`additional computing resources).15
`
`A user can connect multiple VPCs through a feature called VPC peering, which is a
`
`
`
`9 Ex. 9.
`10 Id.
`11 See Ex. 11 at ¶ 249.
`12 Ex. 1 at 3 (identifying first two products as: (1) VPC, “including VPC Peering, Transit VPC,
`and
`”; and (2) Transit Gateway, “including Hyperplane and Multicast”).
`13 Id. Five are accused “through use of VPC” (CloudFront, Elastic Kubernetes Service, GameLift,
`App Mesh, and Luna), and three “through use of VPC and Transit Gateway” (EC2, Prime Video,
`and Twitch). Id. Of these, Luna, Prime Video, and Twitch are not AWS products.
`14 Ex. 12 at 3. As used in AWS documents, “VPC” refers to either the “Virtual Private Cloud”
`service or a virtual network that a customer sets up using it.
`15 Id.
`
`5
`
`

`

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`
`connection between VPCs established by one VPC’s user sending a request to connect and a
`
`second VPC’s user accepting.16 Users must use a “route table” to manually create routes between
`
`VPCs for them to communicate with each other.17 And VPCs do not support transitive routing,
`
`i.e., a user cannot use a third VPC to indirectly transfer information between two VPCs. 18
`
`However, users can set up a “transit VPC” network in a hub-and-spoke configuration where a
`
`single central VPC uses an instance of EC2 (another AWS product) to route traffic to different
`
`VPCs, but customers must manually configure and maintain this routing themselves.19
`
`VPC also uses another AWS networking service called
`
`
`
`. 20 In addition to VPC,
`
` is used by many other
`
`components and services of AWS, including NAT Gateway, Network Load Balancer, and Elastic
`
`File System. 21
`
`appropriate destination.22
`
`.23 There are
`
` to route network traffic to the
`
`
`
`
`
`
`
`
`
`.24
`
` at the customer’s VPC to
`
` attached to
`
`
`
`16 Id. at 8; Ex. 13 at 1–2.
`17 Ex. 12 at 2.
`18 Ex. 14 at 4, 6.
`19 Id. at 7.
`20 E.g., Ex. 15 at 1.
`21 E.g., id.; Ex. 16.
`22 Ex. 15 at 7–8.
`23 Id. at 4.
`24 Id. at 5–6.
`
`6
`
`

`

`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 13 of 48 PageID #: 19517
`
`. 25
`
` uses processes called shuffle sharding and flow
`
`hashing to determine which route to send packets on and how to spread traffic to ensure that no
`
`customer’s workload overloads the physical servers underlying other VPCs.26
`
`Transit Gateway: Launched on November 26, 2018, Transit Gateway is a virtual router
`
`used to interconnect a customer’s VPCs and on-premises networks.27 So, the purpose of a Transit
`
`Gateway is to connect VPCs. Transit Gateway instances act as hubs that direct traffic between
`
`“attachments” (VPCs and customers’ own networks). 28 Attachments connect only to Transit
`
`Gateway, not to each other, in a hub-and-spoke model.29 Like VPCs, Transit Gateway instances
`
`need users to define routes in a route table.30 The table then determines how to route packets from
`
`the source attachment to the target attachment. 31 Transit Gateway also supports multicast
`
`functionality, which allows it to send a single message to multiple recipients.32
`
`Transit Gateway uses Hyperplane as one component to route data. 33 Hyperplane is an
`
`underlying networking service that AWS also uses to power other services besides Transit
`
`Gateway, like Network Load Balancer.34 Hyperplane is made up
`
`
`
`
`
`25 Id. at 4–6.
`26 Id. at 5, 7–9.
`27 Ex. 17 at 1; Ex. 18.
`28 Ex. 17 at 6.
`29 Ex. 14 at 5 (“This hub-and-spoke model simplifies management and reduces operational costs
`because VPCs only connect to the Transit Gateway instance to gain access to the connected net-
`works.”).
`30 Ex. 17 at 6.
`31 Id.
`32 See id. at 58.
`33 Ex. 19 at 1.
`34 Ex. 20 at 53:8-54:9; Ex. 21 at 1.
`
`7
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`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 14 of 48 PageID #: 19518
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`
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`—to execute the
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` used to route packets between attachments based on the routing tables.36 Because
`
`of shuffle sharding, not every
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` has a route to every destination.37 But, through
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` it can send the data to another
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` that has the appropriate route.38
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`Hyperplane also has a health layer that monitors the status of
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`.39
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`V.
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`APPLICABLE LEGAL STANDARDS
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`Under Federal Rule of Civil Procedure 56(a), summary judgment is appropriate when
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`“there is no genuine issue as to any material fact” and the moving party “is entitled to judgment as
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`a matter of law.” When the nonmoving party bears the burden of proof on an element at trial, but
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`fails to supply sufficient evidence to establish that element, summary judgment must be granted in
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`favor of the moving party.40 And the nonmoving party “must present more than just ‘bare asser-
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`tions, conclusory allegations or suspicions’” to avoid summary judgment.41
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`Federal Rule of Evidence 702 requires that expert testimony be “not only relevant, but
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`reliable.”42 Reliable testimony “must be based on the ‘methods and procedures of science’ rather
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`than on ‘subjective belief or unsupported speculation’.”43 And the Federal Circuit has explained
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`
`
` and
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` use “different software, dif-
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`35 Ex. 21 at 1–2.
`36 Id. at 10; Ex. 22 at 71:19-21 (
`ferent hardware”).
`37 Ex. 19 at 3.
`38 Ex. 21 at 4, 15–16.
`39 Id. at 17–18.
`40 See Celotex Corp. v. Catrett, 477 U.S. 317, 324–25 (1986).
`41 Podobnik v. U.S. Postal Serv., 409 F.3d 584, 594 (3d Cir. 2005) (citation omitted).
`42 Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589 (1993).
`43 Schneider ex rel. Estate of Schneider v. Fried, 320 F.3d 396, 404 (3d Cir. 2003) (internal cita-
`tions omitted).
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`that “damages awarded forpatent infringement mustreflect the value attributable to the infringing
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`features of the product, and no more.”
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`VI.
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`ARGUMENT
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`A.
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`The AWS-Boeing Agreement Precludes All Infringement Claims Relying on
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`Boeing bargained away itsrh
`aei. 2010, four years before it sold the patents to AB. Thus, Boeing could not transfer
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`that ightto
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`21! infringementclaims relying on these products should be dismissed.*°
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`inthe AWS-BocingAgreement,
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`
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`It’s undisputed that when it entered into the AWS-Boeing AgreementEEBoeing
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`ownedthe asserted patents. And when Boeing sold them to AB in December2014,it had accrued
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`ee its use ofTRas confirmed by AWS’sbilling
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`“4 CSIRO v.Cisco Sys., Inc., 809 F.3d 1295, 1301 (Fed. Cir. 2015) (internal quotation marks omit-
`ted).
`45 As noted, AB’s infringement contentions regarding CloudFront, Lambda, EKS, GameLift, and
`Lunaare premised solely on their use of VPC. Ex. 23 at §§ 103, 107, 117, 126, 145. Therefore,
`this motion, if granted, would eliminate CloudFront, EC2, VPC, Lambda, EKS, GameLift, and
`Lunaas accused products.
`46 Ex. 3 (AWS-Boeing Agreement) at 13 (emphasis added).
`47 See note 8, supra; Exs. 5; 6; 7 at 112:16-114:12.
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`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 16 of 48 PageID #: 19520
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`. Indeed, the Federal Circuit has explained that “a patent license agreement
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`is in essence nothing more than a promise by the licensor not to sue the licensee.”48 And here, per
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`its terms, the license applied
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`
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`When it sold the patents to AB, Boeing could assign only the patent rights it still possessed.
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`Through its agreement with AWS,
`
`
`
` and thus, it could not assign
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`Nor could it circumvent its agreement by
`
`
`
`
`
`. As
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`Judge Burke recently explained, “while the assignment of patent rights may alter the ownership of
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`those rights, such an assignment cannot expand those rights.”49 Thus, “the assignee of a patent is
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`bound by prior licenses issued with respect to that patent…even if the assignee was unaware of a
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`prior license agreement.”50 Indeed, “[i]t is a longstanding principle that an assignee…takes the
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`patent subject to prior licenses…whether or not [it] had notice.”51
`
`Innovus Prime, LLC v. Panasonic Corp. is also analogous. There, the original patent owner,
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`Philips, and the defendant, Panasonic, entered into a mutual non-assertion agreement covering
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`“patents relevant to ‘audio and video products.’”52 Innovus Prime, a later assignee, sued Panasonic
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`for infringement, arguing that it was not bound by the Philips-Panasonic Agreement.53 The court
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`disagreed, holding that “[p]atent owners cannot transfer an interest greater than what they possess,
`
`
`48 Transcore LP v. Elec. Transaction Consultants Corp, 563 F.3d 1271, 1275 (Fed. Cir. 2009).
`49 Horizon, 2022 WL 16739909, at *4.
`50 Id.
`51 Innovus Prime, LLC v. Panasonic Corp., No. 12-cv-660, 2013 WL 3354390, at *5 (N.D. Cal.
`July 2, 2013).
`52 Id. at *1.
`53 Id. at *2, *4.
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`10
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`so assignees ‘take[ ] a patent subject to the legal encumbrances thereon.’”54 As in Innovus, here
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`the original patent owner (Boeing/Philips)
`
`
`
`
`
` covering the asserted patent(s), then a later assignee (AB/Innovus
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`Prime) sued the defendant (AWS/Panasonic)
`
` And like Philips, Boeing agreed to
`
`
`
`
`
` as part of its agreement
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`with AWS. As such, Boeing could not have assigned the right
`
` to AB, and AB purchased the patents subject to the
`
`
`
`.
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`Thus, all infringement claims relying on
`
` should be dismissed.
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`B.
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`AB’s Alleged Damages Period Contravenes the Marking Statute.
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`It is undisputed that the potential damages period began when AB provided AWS with
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`actual notice of its alleged infringement.55 Although AB contends that its March 13, 2019 letter
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`provided the required notice, that letter mentioned only one product (CloudFront), did not identify
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`the ’344 patent, and did not state any specific infringement allegation.56 So, the damages period
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`began on July 6, 2022, when AB filed this case.
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`Section 287 provides that patentees who sell embodying products or authorize their sale
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`“may give notice to the public that the [products are] patented” by marking them.57 If they do not,
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`“no damages shall be recovered…for infringement” until the patentee provides actual notice of the
`
`
`54 Id. at *5 (quoting Datatreasury Corp. v. Wells Fargo & Co., 522 F.3d 1368 (Fed. Cir. 2008)).
`As a result, the court also explained that notice of such an encumbrance to the assignee “was not
`required.” Id. at *7.
`55 E.g., Ex. 11 at ¶ 59 (“Acceleration Bay is entitled to damages from … the date [it] sent a letter
`to Amazon.com providing notice….”).
`56 See id.; Ex. 9 (March 13 letter) at 2-3.
`57 35 U.S.C. § 287(a).
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`11
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`Case 1:22-cv-00904-RGA-SRF Document 156 Filed 06/07/24 Page 18 of 48 PageID #: 19522
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`alleged infringement. 58 As the Federal Circuit has pronounced, this requires “affirmative
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`communication of a specific charge of infringement by a specific accused product or device.”59
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`Here,