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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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` NINTENDO OF AMERICA, INC. and NINTENDO CO., LTD.,
`Petitioner
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`v.
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`BABBAGE HOLDINGS, LLC
`Patent Owner
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`____________
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`Case IPR2015-00568
`Patent 5,561,811
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`____________
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`BABBAGE HOLDINGS, LLC’S OPPOSITION TO PETITIONER’S
`MOTION FOR JOINDER
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`This paper responds to the Motion for Joinder (the “Motion”) filed by
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`Petitioners, Nintendo Co., Ltd., and Nintendo of America Inc. (collectively,
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`“Nintendo”).
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`I.
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`INTRODUCTION
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`The statutory provision governing joinder of inter partes review proceedings
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`is 35 U.S.C. §315(c). As the movant, Nintendo bears the burden to show that
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`joinder is appropriate. See, 37 C.F.R. §42.20(c). As will be seen, Nintendo’s
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`motion has not established entitlement to the requested relief.
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`Moreover, and as the Board’s website notes: “the rules governing the filing
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`and progress of IPRs, including the rules relating to joinder, are meant to ‘secure
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`the just, speedy, and inexpensive resolution of every proceeding’.” See, 37 C.F.R.
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`§42.1(b) (emphasis supplied). Because the parties to the underlying proceeding,
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`(IPR2014-00954) indeed have resolved their differences and are settling the
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`associated district court litigation, the grant of joinder here will frustrate that
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`express purpose.
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`II.
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`STATEMENT REGARDING MATERIAL FACTS
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`The motion identifies eleven (11) material facts. Whether the last sentence
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`in Material Fact No. 4 (namely, that “Sony does not oppose Nintendo’s Motion for
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`Joinder”) is true, is unknown; thus, for present purposes the fact is disputed. The
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`remaining facts asserted by Nintendo, and as stated, are true, but the listing is
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`incomplete. The following additional material facts are submitted per 37 C.F.R.
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`§42.23(a):
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`12. On February 2, 2015, Patent Owner and Defendants’ Activision
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`Publishing, Inc. and Blizzard Entertainment, Inc. filed a stipulated motion for
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`dismissal with prejudice in the related district court litigation. See, Exhibit 2002.
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`13. On February 2, 2015, Patent Owner and Defendant Square Enix, Inc.
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`filed a stipulated motion for dismissal with prejudice in the related district court
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`litigation. See, Exhibit 2003.
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`14. On February 3, 2015, Patent Owner and Defendant Riot Games, Inc.
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`filed a stipulated motion for dismissal with prejudice in the related district court
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`litigation. See, Exhibit 2004.
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`15. On February 5, 2015, Patent Owner and Defendant Capcom U.S.A.,
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`Inc. filed a stipulated motion for dismissal with prejudice in the related district
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`court litigation. See, Exhibit 2005.
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`16. On February 6, 2015, Patent Owner and Defendant Electronic Arts,
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`Inc. filed a stipulated motion for dismissal with prejudice in the related district
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`court litigation. See, Exhibit 2006.
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`17. On February 9, 2015, Patent Owner and Defendant Bandai Namco
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`Games America, Inc. filed a stipulated motion for dismissal with prejudice in the
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`related district court litigation. See, Exhibit 2007.
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`18. Nintendo filed the Petition in IPR2015-00568 on January 14, 2015,
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`but it did not provide the Petition to the Patent Owner’s litigation counsel until
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`later the next day, January 15th.1 By that time, however, Patent Owner and
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`Defendant Sony Computer Entertainment America LLC had already agreed in
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`principle to settle the related district court litigation. Sony executed a settlement
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`agreement on February 13, 2015, and the parties are now in the process of
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`executing the settlement, which includes the filing of a motion for dismissal with
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`prejudice in the related district court litigation.
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`19. With the exception of an action against Petitioner Nintendo of
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`America, Inc. (No. 5:14-cv-04822), and an action against Konami Digital
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`Entertainment, Inc. (No. 13-cv-754), all of the related district court litigation is
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`now settled. Defendant Konami has not joined either IPR2014-00954 or
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`IPR2015-00568.
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`1
`Although Nintendo sought to join IPR2014-00954, it did not provide the
`Patent Owner’s Lead Counsel (the undersigned) with either the Petition or
`the Motion at any time.
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`III. THE MOTION SHOULD BE DENIED
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`A. Nintendo has not met its burden to establish entitlement to relief
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`As the movant, Nintendo bears the burden to show that joinder is
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`appropriate. See, 37 C.F.R. §42.20(c).
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`A motion for joinder should: (1) set forth the reasons why joinder is
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`appropriate; (2) identify any new grounds of unpatentability asserted in the
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`petition; (3) explain what impact (if any) joinder would have on the trial schedule
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`for the existing review; and (4) specifically address how briefing and discovery
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`may be simplified. See e.g., Kyocera Corp. v. Softview LLC, Case IPR2013-00004,
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`slip op. at 4 (PTAB Apr. 24, 2013).
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`Regarding points (1) and (2), Nintendo contends that its Petition here “is in
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`all material respects the same as Ground I” in IPR2014-00954. Superficially, and
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`at present, Nintendo’s statement is true, however, the Motion also states that
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`“Nintendo will continue [following along with the other petitioners] unless and
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`until the ‘954 IPR is terminated as to all other petitioners.” (See, Motion, at 2,
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`FN1, emphasis supplied). Also, Nintendo wants the right to submit “separate
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`filings” if its “position differs from the position of the ‘954 IPR petitioners.” (Id.,
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`at 2). Nintendo did not identify in its Motion what this different “position” might
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`entail, only that it might need to pursue it. As noted below, however, the ‘954 IPR
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`petitioners have now settled out of the underlying district court litigation, and the
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`Patent Owner and those petitioners intend to file a motion to terminate the ‘954
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`IPR as soon as the litigation dismissals are finally entered by the district courts (at
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`most, a matter of weeks). Thus, if joinder is granted, there is a real possibility
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`Nintendo move this IPR in a new direction. The Motion is deficient because it
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`does not explain how “Nintendo’s position” may change, or why joinder would be
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`appropriate in such circumstances (it would not be).
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`The third factor considers what impact (if any) joinder would have on the
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`trial schedule for the existing review. Here, Nintendo says “joinder will not
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`adversely impact the trial schedule in the ‘954 IPR” and that it will “adhere to all
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`applicable deadlines set forth by the December 15, 2014 Scheduling Order.” (See,
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`Motion, at 1-2). Once again, these statements have superficial appeal but, as
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`noted above, Nintendo also is expressing its desire and intent to offer (or at least
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`reserve the right to offer) different “positions” from those of the ‘954 IPR
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`petitioners. Any such alternative filings (or theories) will have unintended
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`consequences (or may well derail) the current trial schedule. The Motion does not
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`attempt to reconcile these positions.
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`Regarding the fourth factor, Nintendo says it will agree to “consolidation of
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`all filings and will not submit any separate filings” (Motion, at 2), but – once again
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`– this offer is accompanied by a caveat that it may also need additional briefing
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`(including “if the ‘954 IPR is terminated as to all other petitioners” – which it will
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`be!). Thus, the Motion does not explain how “briefing and discovery may be
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`simplified.” Rather, Nintendo in effect urges that nothing will change, but this
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`position is unfounded; indeed, it is premised on the underlying ‘954 IPR
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`continuing with the petitioners intact.
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`Finally, Nintendo’s Motion states it “is in communication with counsel for
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`the ‘954 IPR petitioners and will cooperate on all briefing and discovery.” (See,
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`Motion, at 8). This promise, however, rings “hollow,” because the Motion does
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`not include proof of a reciprocal undertaking by the petitioners. See, e.g.,
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`Samsung Electronics Co., Ltd. et al. v. Arendi, S.A.R.L., IPR2014-01143, Paper
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`No. 11, at 6 (October 2, 2014).
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`For these reasons, Nintendo’s Motion has not met its burden to establish
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`entitlement to the relief it requests.
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`B.
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`Joinder will frustrate just and speedy resolution of the ‘954 IPR
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`As the Material Facts establish, the Patent Owner has settled the underlying
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`district court litigation with each and every Petitioner in IPR2014-00954. What
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`remains are logistics – the filing of dismissal papers (in just one case), waiting on
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`the district court to enter formal dismissal Orders, and then the filing (to the Board)
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`of a formal motion to terminate. For all intents and purposes, the district court
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`litigation is over, and it has been almost to the day Nintendo filed its paperwork in
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`the ‘568 IPR.
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`Nintendo contends that it filed “this petition and joinder motion to ensure
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`that the trial is completed in the event that the current petitioners in the ‘954 IPR
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`reach settlement with the Patent Owner.” (See, Motion, at 9, emphasis supplied).
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`With due respect, Nintendo’s position is disingenuous. As the Material Facts
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`establish, many of the parties had publicly settled out of the related district court
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`litigation before the Board’s Decision to Institute Trial (on December 15, 2014),
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`while still others settled out, once again publicly, shortly thereafter. By the time
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`the Motion was actually filed (on virtually the last day possible), the Patent Owner
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`indeed had settled the district court litigation (either actually, or in principle) with
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`every petitioner in IPR2014-00954. Given the circumstances, Nintendo
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`presumably knew full well the true state of affairs, namely, that the disputes that
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`precipitated the underlying IPR were going away.2
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`2
`Tellingly, Nintendo’s Motion states that “Sony does not oppose Nintendo’s
`Motion For Joinder” (see, alleged Material Fact No. 4). As noted, it is
`unknown whether this is true, but it follows, logically, that Nintendo could
`not make this statement unless it had been in touch with Sony at the time.
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`Although Nintendo states in its Motion (at page 2) it is acting to avoid being
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`“prejudiced” if “all petitioners reach a settlement,” the circumstances suggest the
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`exact opposite situation is true.
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`To state the obvious, and given that it is asserting the same invalidity
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`argument and evidence, Nintendo could have joined the original petitioners in
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`IPR2014-00954 simply by adding its name to that petition. Indeed, as far as the
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`record here reflects, there was nothing stopping Nintendo from joining the
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`underlying IPR. Plainly, and given that Nintendo waited eight (8) months,
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`Nintendo’s joinder is prejudicial to the Patent Owner (and perhaps the other
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`petitioners), at the very least because the Patent Owner settled the underlying
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`litigation in part under the assumption that such settlements also would have the
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`effect of disposing of the IPR.
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`Nintendo’s joinder here should be denied because it will frustrate the “just,
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`speedy, and inexpensive resolution” of the underlying IPR itself. See, 37 C.F.R.
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`§42.1(b) (“every proceeding” matters when considering the policy issues
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`surrounding a potential joinder). Stated another way, if a holdout (to the
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`underlying IPR) litigant like Nintendo is permitted to join an IPR despite
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`The Motion does not state that Nintendo was unaware of the Sony settlement
`discussions, and the defendants regularly had joint calls about the case.
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`settlement by the underlying parties, a Patent Owner may never be assured that a
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`given settlement will have its intended consequences. As long as such holdouts
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`remain (and Konami remains one such holdout here), there is always the possibility
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`that litigants can file serial IPRs, just as Nintendo has done. In promulgating the
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`AIA, Congress intended to prevent the serial harassment of patent holders by the
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`filing of multiple petitions. (See, Markup of America Invents Action, page
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`72:1438-39). Granting Nintendo’s motion would run counter to these goals and
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`encourage such gamesmanship (multiple, serial petitions), thereby adding
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`significant burden to the Board.
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`Nintendo’s suggestion that “no party will be prejudiced if the Board permits
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`joinder” (Motion, at 8) is untrue. As noted above, and at the very least, joinder
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`will frustrate the expectations of the Patent Owner (and perhaps the other parties to
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`the underlying IPR), and it will extend that IPR unnecessarily instead of allowing it
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`to end in the “speedy” and “inexpensive” manner that the parties there intended.
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`This is an unjust result.
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`Nintendo was served with the Complaint in October 2013. It filed the
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`present Petition and Motion more than one year after such service. Nintendo’s
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`Motion does not explain why it did not become a petitioner in the underlying ‘954
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`IPR; on this key point, Nintendo’s motivation is unexplained. That said,
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`Nintendo’s true motives now are clear from its footnote on page 2 of the Motion:
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`“Nintendo will continue [following along with the other petitioners] unless and
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`until the ‘954 IPR is terminated as to all other petitioners.” (See, Motion, at 2,
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`FN1, emphasis supplied). Given that Nintendo knew or should have known that
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`the underlying dispute was resolved, this statement makes clear that Nintendo
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`wants a blank slate to offer new arguments and evidence. This is manifestly
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`unfair to the Patent Owner, and it explicitly contravenes 35 U.S.C. §315(b)
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`because Nintendo was served with the complaint over one (1) year before it filed
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`the Petition and Motion.
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`Finally, and as a procedural matter, joinder is inappropriate unless and until
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`the Board has received the Patent Owner’s preliminary response, now set for
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`February 20, 2015, and determines to institute Nintendo’s Petition. See, 35 U.S.C.
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`§311(c).
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`For these reasons, the Motion should be denied.
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`Respectfully submitted,
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`/David H. Judson/
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`By: _____________________________
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`David H. Judson
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`February 17, 2015
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`APPENDIX OF EXHIBITS
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`Exhibit 2002 Patent Owner and Defendants’ Activision Publishing, Inc. and
`Blizzard Entertainment, Inc. stipulated motion for dismissal with
`prejudice in the related district court litigation, filed February 2,
`2015
`Exhibit 2003 Patent Owner and Defendant Square Enix, Inc. stipulated motion
`for dismissal with prejudice in the related district court litigation,
`filed February 2, 2015
`Exhibit 2004 Patent Owner and Defendant Riot Games, Inc. stipulated motion
`for dismissal with prejudice in the related district court litigation,
`filed February 3, 2015
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`Exhibit 2005 Patent Owner and Defendant Capcom U.S.A., Inc. stipulated
`motion for dismissal with prejudice in the related district court
`litigation, filed February 5, 2015
`Exhibit 2006 Patent Owner and Defendant Electronic Arts, Inc. stipulated
`motion for dismissal with prejudice in the related district court
`litigation, filed February 6, 2015
`Exhibit 2007 Patent Owner and Defendant Bandai Namco Games America, Inc.
`stipulated motion for dismissal with prejudice in the related district
`court litigation, filed February 9, 2015
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 17th day of February, 2015, a true and correct
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`copy of the foregoing Babbage Holdings, LLC’s Opposition to the Motion For
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`Joinder, was served via electronic mail upon jsp@nixonvan.com (Joseph S.
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`Presta), and rwf@nixonvan.com (Robert W. Faris).
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`Respectfully submitted,
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`/David H. Judson/
`Registration No. 30,467
`Attorney for Babbage Holdings, LLC
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