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`Paper No. ____
`Filed: January 4, 2019
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________________________
`
`BUNGIE, INC.,
`Bungie,
`
`v.
`
`WORLDS INC.,
`Patent Owner.
`_____________________________
`
`Case IPR2015-01264 (Patent No. 7,945,856)
`Case IPR2015-01319 (Patent No. 8,082,501)
`Case IPR2015-01321 (Patent No. 8,145,998)1
`
`_____________________________
`
`
`PETITIONER BUNGIE’S BRIEF ON REMAND FROM CAFC
`
`
`
`1 This caption is used and identical papers are being filed in each captioned case
`
`pursuant to the Board’s November 29, 2018 order (Paper 48).
`
`[[REDACTED]]
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`

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`
`
`I. 
`II. 
`
`TABLE OF CONTENTS
`INTRODUCTION ................................................................................................. 1 
`ISSUE PRECLUSION BARS WORLDS’S RPI ARGUMENTS. .................................... 3 
`A.  Worlds litigated the same issue in the final and appealed IPRs. .......... 3 
`B. 
`The Board’s RPI determinations were essential to the judgment. ........ 5 
`C. 
`The appealed IPRs are subsequent actions to the valid final
`written decisions in the final IPRs. ....................................................... 6 
`III.  NO EXCEPTION APPLIES HERE. ........................................................................... 8 
`A.  Worlds’s disagreement with the decision does not create an
`exception to issue preclusion. ................................................................ 8 
`B.  Worlds waived any challenge to the denial of discovery
`motions. ............................................................................................... 11 
`C.  Worlds proposed “issue of law” exception does not exist. ................. 12 
`D. 
`The Board did not consolidate the appealed and final IPRs. .............. 14 
`IV.  THE BOARD SHOULD REINSTATE ITS FINDING THAT ACTIVISION IS NOT
`AN RPI. ........................................................................................................... 15 
`A. 
`Legal Standards ................................................................................... 15 
`B. 
`Statements of Material Fact (“SMF”) ................................................. 17 
`C. 
`The evidence demonstrates Activision is not an RPI. ......................... 19 
`i. 
`Lack of control supports finding Activision is not an RPI. ...... 19 
`ii. 
`Bungie is not Activision’s proxy. ............................................. 22 
`iii.  Bungie’s relationship with Activision does not make
`Activision a RPI in Bungie’s IPRs. .......................................... 25 
`Equities ................................................................................................ 28 
`D. 
`CONCLUSION ................................................................................................... 30 
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`-i-
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`V. 
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`[[REDACTED]]
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`
`TABLE OF AUTHORITIES
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`Page
`
`CASES
`Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336 (Fed.
`Cir. 2018) ............................................................................................. 2, 13, 16
`23, 26
`B &B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293 (2015) .................. 3, 6,
`8, 11, 14
`
`Cisco Sys., Inc. v. Hewlett Packard Enter. Co., IPR2017-01933,
`Paper 9 ........................................................................................................... 23
`In re Cygnus Telecom. Tech., LLC, Patent Litig., 536 F.3d 1343 (Fed.
`Cir. 2008) ....................................................................................................... 14
`Jennings v. United States, 374 F.2d 983 (4th Cir. 1967) ......................................... 29
`Maxlinear, Inc. v. CF Crespe LLC, 880 F.3d 1373, 1376-77 (Fed. Cir.
`2018) .......................................................................................................... 7, 13
`Nestle USA Inc. v. Steuben Food, Inc., 884 F.3d 1350 (Fed. Cir. 2018) ............. 7, 12
`RPX Corp. v. Virnetx Inc., IPR2014-00171, Paper 49 ............................................ 23
`Samsung Electronics Co., Ltd et al. v. Seven Networks, LLC,
`IPR2018-01106, Paper 21 .............................................................................. 27
`Taylor v. Sturgell, 553 U.S. 880 (2008) ....................................................... 15, 17, 20
`23, 25
`
`Unified Patents, Inc. v. Realtime Adaptive Streaming, LLC,
`IPR2018-00883, Paper 29 ........................................................................ 17, 26
`
`United States v. Des Moines Valley R. Co., 84 F. 40 (8th Cir. 1897) ...................... 23
`United States v. Munsingwear, Inc., 340 U.S. 36 (1950) .......................................... 6
`United States v. Utah Construction & Mining Co., 384 U.S. 394
`(1966) ............................................................................................................... 8
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`-ii-
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`Univ. of Tenn. v. Elliott, 478 U.S. 788 (1986) ....................................................... 8, 9
`WesternGeco LLC v. Ion Geophysical Corp., 889 F.3d 1308 (Fed. Cir.
`2018) ............................................................................................ 13, 16, 21, 25
`Wi-Fi One, LLC v. Broadcom Corp., 887 F.3d 1329 (Fed. Cir. 2018) ........... 2, 9, 12
`13, 21
`25
`
`Wickham Contracting Co. Inc. v. Board of Educ. of City of New York,
`715 F.2d 21 (2d Cir. 1983) ............................................................................ 12
`Worlds Inc. v. Bungie, Inc., 903 F.3d. 1237 (Fed. Cir. 2018) ........................... 1, 2, 3
`11, 12
`XY, LLC v. Trans Ova Genetics, L.C., 890 F.3d 1282 (Fed. Cir. 2018) .............. 7, 13
`STATUTES
`35 U.S.C. §§ 312(a)(2), 315(b) .................................................................................. 3
`35 U.S.C. § 315 ........................................................................................................ 30
`35 U.S.C. § 318(a) ..................................................................................................... 5
`35 U.S.C. §§ 319, 141-144 ........................................................................................ 6
`42 U.S.C. § 1983 ........................................................................................................ 9
`RULES
`37 C.F.R. § 42.2 ......................................................................................................... 7
`37 C.F.R. § 42.8(b)(1) ................................................................................................ 3
`37 C.F.R. § 42.73 ....................................................................................................... 5
`37 C.F.R. § 42.73(a) ................................................................................................... 7
`37 C.F.R. § 42.73(d)(3) .............................................................................................. 7
`37 C.F.R. § 90.3(a)(1) ................................................................................................ 6
`77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012) ............................................... 2, 13, 15
`MISCELLANEOUS
`18A Wright & Miller, Fed. Prac. & Proc. (3d ed. 2002) .............6, 15, 16, 28, 29, 30
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`-iii-
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`
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`I.
`
`Introduction
`After Worlds first threatened to accuse Bungie’s Destiny product of
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`infringement in November 2014, Bungie independently decided to file six different
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`IPR challenges to Worlds’s patents to protect Bungie’s own interests as a video
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`game developer. Worlds separately opposed each of the IPRs, arguing with almost
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`identical language and evidence that Activision was an unnamed real party-in-
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`interest (“RPI”) in Bungie’s IPRs. The Board determined the issue adversely to
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`Worlds each time as a prerequisite to finding claims of the involved patents
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`unpatentable. Worlds failed to exercise its right to appeal the decisions in
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`IPR2015-01268, IPR2015-01269, IPR2015-01325 (hereinafter, the “final IPRs”).
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`The other three IPRs are now remanded to “first address whether Worlds is
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`estopped from arguing the real-party-in-interest issue.” Worlds Inc. v. Bungie, Inc.,
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`903 F.3d. 1237, 1248 (Fed. Cir. 2018). The Federal Circuit remanded for
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`consideration whether “the ‘issue’ is the same between the now-final IPRs and the
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`IPRs currently on appeal” because “[t]he record before us is scant on details
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`regarding the [RPI] issues raised in the three unappealed IPRs.” Id. at 1247. As
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`explained above, the RPI issue Worlds litigated in the appealed IPRs is identical to
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`what Worlds litigated in the final IPRs. The Board should find Worlds estopped
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`from relitigating the RPI issue and re-instate its decisions of unpatentability.
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`Alternatively, the Board should reinstate its decisions of unpatentability
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`-1-
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`[[REDACTED]]
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`because the evidence supports the Board’s original finding that Activision is not an
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`RPI in Bungie’s IPRs. The Board’s decisions did not turn on placing a burden of
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`proof on Worlds, but on its correct evaluation of the evidence. The Board’s
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`interpretation of the DevPub Agreement was correct and contradicts Worlds’s
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`argument that Activision controlled Bungie’s IPRs.
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`It is well-settled that determining whether a party is an RPI demands a
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`flexible approach that must take into account equitable considerations and the
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`practical situation. Worlds Inc., 903 F.3d. at 1246-47; Applications in Internet
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`Time, LLC v. RPX Corp., 897 F.3d 1336, 1351 (Fed. Cir. 2018) (“AIT”); Wi-Fi
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`One, LLC v. Broadcom Corp., 887 F.3d 1329, 1349 (Fed. Cir. 2018); Trial Practice
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`Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012). Here, there simply is no
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`scenario in which it would be equitable or sensible to subject Bungie to a standing
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`bar based on a litigation matter in which Bungie has never been involved.
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`Moreover, the Activision Litigation Worlds identifies as barring Bungie’s standing
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`in these IPR’s was filed years before Bungie’s product was even released.
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`Worlds’s attempt to retroactively subject Bungie to the one-year bar is an unjust
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`attempt to game the estoppel system and is fundamentally incompatible with the
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`common law embodied in the AIA’s estoppel provisions. Based on the facts of this
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`case, the Board should reinstate its findings that Activision is not an RPI in the
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`IPRs.
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`-2-
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`[[REDACTED]]
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`II.
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`Issue preclusion bars Worlds’s RPI Arguments.
`“The general rule for issue preclusion (also called collateral estoppel) is
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`‘[w]hen an issue of fact or law is actually litigated and determined by a valid and
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`final judgment, and the determination is essential to the judgment, the
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`determination is conclusive in subsequent action between the parties, whether on
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`the same or a different claim.’” Worlds Inc., 903 F.3d at 1247 (quoting B &B
`
`Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 1303 (2015). Each of these
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`requirements is satisfied here, as discussed in detail below.
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`A. Worlds litigated the same issue in the final and appealed IPRs.
`The RPI issue in the final IPRs was identical to the RPI issue in the appealed
`
`IPRs. In each IPR, Worlds argued that each petition was barred by 35 U.S.C.
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`§§ 312(a)(2), 315(b) and 37 C.F.R. § 42.8(b)(1) because the petition did not list
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`Activision as an RPI. Worlds argued that, in a November 2014 letter to Activision,
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`Worlds triggered indemnification and warranty obligations of Bungie under a
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`DevPub Agreement (Ex. 2002), that the obligations allegedly required Bungie to
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`file the IPRs as “legal reviews” of Bungie’s products under Sec. 7A.15(j), and that
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`Activision allegedly funded and had the opportunity to control the IPRs under Sec.
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`7A.15(j). Compare Ex. 1052 at 2-3, 41-50; Ex. 1053 at 2-3, 40-49; Ex. 1054 at 3,
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`24-31 with IPR2015-01264, Paper 12, at 2-3, 30-39; IPR2015-01319, Paper 12, at
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`3, 39-48; IPR2015-01321, Paper 12, at 3, 23-30. Although some of the preliminary
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`-3-
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`[[REDACTED]]
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`responses have minor wording differences, Worlds made and cited all arguments
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`and evidence in the final IPRs that it made in the appealed IPRs.
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`The Board entered a different institution decision in each case, in which it
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`considered and rejected each of Worlds’s RPI allegations. Compare Ex. 1055 at
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`32-38; Ex. 1056 at 28-35; Ex. 1057 at 20-27 with IPR2015-01264, Paper 13, at 26-
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`33; IPR2015-01319, Paper 14, at 31-37; IPR2015-01321, Paper 13, at 21-28. The
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`Board concluded that each of Bungie’s IPRs was not a “legal review of the
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`Products” under Section 7A.15(j) of the DevPub agreement, and that neither
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`Section 7A.15(j) nor Sections 18.1-18.2 gave Activision an opportunity to direct or
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`control Bungie’s IPRs. Id. The Board rejected Worlds’s RPI allegations because
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`Worlds’s “arguments are based on unreasonable assumptions and interpretations of
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`various sections of the Agreement.” Compare Ex. 1055 at 34; Ex. 1056 at 30; Ex.
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`1057 at 22-23 with IPR2015-01264, Paper 13, at 28; IPR2015-01319, Paper 14, at
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`33; IPR2015-01321, Paper 13, at 23.
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`In its patent owner responses in each case, Worlds re-asserted the arguments
`
`from its preliminary responses and also argued that the DevPub agreement
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`establishes that Activision was “unjustly circumventing” the RPI identification
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`requirements by using a “proxy petitioner.” Compare Ex. 1058 at 47-52; Ex. 1059
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`at 49-55; Ex. 1060 at 39-44 with IPR2015-01264, Paper 20, at 2-3, 36-42;
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`IPR2015-01319, Paper 20, at 36-42; IPR2015-01321, Paper 20, at 39-45. Worlds’s
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`patent owner responses each argued that Bungie’s opportunity to file an IPR for
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`each patent expired on April 4, 2013, more than 18 months before Worlds sent the
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`November 2014 letter to Activision about Bungie’s product. Id. The simple fact is,
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`there were no arguments or evidence asserted in the appealed IPRs that were not
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`also asserted in the final IPRs. Id.
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`The Board entered a different final written decision under 35 U.S.C. §
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`318(a) and 37 C.F.R. § 42.73 in each case. In each of these decisions, the Board
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`concluded that the DevPub agreement and Worlds’s November 2014 letter did not
`
`support Worlds’s allegation that Activision was an unnamed RPI. Compare Ex.
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`1061 at 127-28; Ex. 1062 at 125-26; Ex. 1063 at 61-62 with IPR2015-01264, Paper
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`42, at 106-07; IPR2015-01319, Paper 42, at 54-55; IPR2015-01321, Paper 42, at
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`78-79. As the above discussion demonstrates, Worlds actually litigated the exact
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`same RPI issue in the final and appealed IPRs.
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`B.
`The Board’s RPI determinations were essential to the judgment.
`The Board’s final written decisions in the final IPRs each found that claims
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`Bungie challenged were unpatentable. Ex. 1061 at 135-36; Ex. 1062 at 134; Ex.
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`1063 at 70. As discussed above in Section II.A, Worlds argued that Activision’s
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`alleged status as an RPI precluded the Board from instituting each IPR and finding
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`claims unpatentable. The Board’s RPI determination was thus a prerequisite for
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`finding the claims unpatentable and essential to the judgment in each final IPR.
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`-5-
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`C. The appealed IPRs are subsequent actions to the valid final
`written decisions in the final IPRs.
`“Ordinary preclusion law teaches that if a party to a court proceeding does
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`not challenge an adverse decision, that decision can have preclusive effect in other
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`cases, even if it would have been reviewed de novo.” B&B Hardware, 135 S. Ct. at
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`1305; 18A Wright & Miller, Fed. Prac. & Proc. § 4433, at 71 (3d ed. 2002)
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`(“FPP”) (“preclusion cannot be defeated by electing to forgo an available
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`opportunity to appeal”)); id. (“[O]nce the time for appeal has run, a final
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`judgment...is res judicata without regard to the fact that appeal might have been
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`taken to a higher court.”). The final written decisions issued on November 28 and
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`30, 2016. Exs. 1061-1063. Worlds had a right, for a time, to appeal each of these
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`decisions to the Federal Circuit. 35 U.S.C. §§ 319, 141-144; 37 C.F.R.
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`§ 90.3(a)(1). Worlds elected not to appeal. The time for appeal for all three final
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`IPRs had expired by February 3, 2017. The USPTO thereafter cancelled claims it
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`found unpatentable in the final IPRs. Worlds’s decision to forgo appeal forever
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`waived any opportunity to contest their validity and removes any doubt as to their
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`finality. See B&B Hardware, 135 S. Ct. at 1299, 1302 (holding “a court should
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`give preclusive effect to TTAB decisions if the ordinary elements of issue
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`preclusion are met” where, “[d]espite a right to do so, Hargis did not seek judicial
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`review [of the TTAB decision] in either the Federal Circuit or District Court”);
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`United States v. Munsingwear, Inc., 340 U.S. 36, 39 (1950) (“Concededly the
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`-6-
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`judgment in the first suit would be binding in the subsequent ones if an appeal,
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`though available, had not been taken or perfected.”).
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`The Federal Circuit has repeatedly held IPR final written decisions to be
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`valid and final judgments entitled to issue preclusive effect, including when
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`deciding issues of law. See, e.g., XY, LLC v. Trans Ova Genetics, L.C., 890 F.3d
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`1282, 1294 (Fed. Cir. 2018) (exhaustion of appeal rights over final written decision
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`“renders final a judgment on the invalidity of the Freezing Patent and has an
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`immediate issue-preclusive effect on any pending or co-pending actions involving
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`the patent”); Nestle USA Inc. v. Steuben Food, Inc., 884 F.3d 1350, 1351 (Fed. Cir.
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`2018) (issue preclusion requires applying claim construction from final IPR in IPR
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`on a related patent); Maxlinear, Inc. v. CF Crespe LLC, 880 F.3d 1373, 1376-77
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`(Fed. Cir. 2018) (vacating IPR decision based on collateral estoppel effect of other
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`IPR decisions that became final through exhaustion of appeal rights).
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`As outlined above, the final written decisions in the final IPRs are now each
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`a valid, final judgment entitled to issue preclusive effect under common law
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`principles of issue preclusion applicable in the appealed IPRs. Preclusion is also
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`required by the Board’s own rules. See 37 C.F.R. § 42.73(a) (“A judgment, except
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`in the case of a termination, disposes of all issues that were, or by motion
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`reasonably could have been, raised and decided.”); 37 C.F.R. § 42.2 (“Judgment
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`means a final written decision by the Board....”); 37 C.F.R. § 42.73(d)(3) (“A
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`-7-
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`[[REDACTED]]
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`patent applicant or owner is precluded from taking action inconsistent with the
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`adverse judgment”). For the reasons discussed above, Worlds is precluded from
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`arguing in the appealed IPRs that Activision is an RPI.
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`III. No exception applies here.
`A. Worlds’s disagreement with the decision does not create an
`exception to issue preclusion.
`Worlds argued on appeal that no issue preclusion arises from the final IPRs
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`because issue preclusion allegedly attaches to an agency decision only when the
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`agency “properly resolve[s] the dispute before it.” Appeal Rply Br. at 30-31 (citing
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`United States v. Utah Construction & Mining Co., 384 U.S. 394, 422 (1966));
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`Univ. of Tenn. v. Elliott, 478 U.S. 788, 799 (1986)). Worlds’s proposed exception
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`does not exist and would turn issue preclusion doctrine squarely on its head.
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`General principles of collateral estoppel apply to Board determinations and the
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`issue preclusive effects of such determinations are not limited to when a
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`subsequent tribunal believes they were decided correctly. B&B Hardware, 135 S.
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`Ct. at 1299 (“[W]e hold that a court should give preclusive effect to TTAB
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`decisions if the ordinary elements of issue preclusion are met.”); id. at 1308 (“The
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`fact that the TTAB may have erred, however, does not prevent preclusion.”).
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`Worlds’s argument also is not supported by the Supreme Court precedent it
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`cites. The Court in Utah Construction held, based upon the parties’ contract as
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`modified by the Wunderlich Act and “general principles of collateral estoppel,”
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`that a federal administrative board’s fact-finding of no delay precluded a breach of
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`contract action for delay over which the board would not have had jurisdiction.
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`Utah Construction, 384 U.S. at 418-19 (“Although the Board lacked authority to
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`consider delay damages under these two claims, it did have authority to consider
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`the requests for extensions of time under Articles 4 and 9, and these requests called
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`for an administrative determination of the facts.”). The Court did not inquire
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`whether the board’s finding was made correctly; preclusion applied because “the
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`factual disputes resolved were clearly relevant to issues properly before” the board.
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`Id. at 422. Worlds’s proposed rule also finds no support in Elliott, in which the
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`Supreme Court held that “federal courts must give the [state] agency’s factfinding
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`the same preclusive effect [in an action under 42 U.S.C. § 1983] to which it would
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`be entitled in the State’s courts.” 478 U.S. at 798-99.
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`Worlds is also incorrect in the errors it assigns the final IPR decisions.
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`Worlds argued on appeal that the Board allegedly shifted the burden of proof and
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`interpreted the Agreement “not in accordance with law.” Appeal Rply Br. at 30-31.
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`But the Board’s contract interpretation was correct, as demonstrated in the original
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`briefing and the Board’s decisions. The Board’s RPI determination was also
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`correct and was supported by substantial evidence. See, e.g., Wi-Fi One, LLC, 887
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`F.3d at 1339-41 (affirming finding petitioner-manufacturer’s time-barred
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`customers were not RPIs despite petitioner’s indemnity agreements and litigation
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`coordination with them where petitioner clearly had its own interest in challenging
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`the patent and there was no evidence customers actually controlled the IPR or
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`petitioner controlled the litigation).
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`Further, the Board did not improperly shift the burden of proof to Worlds.
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`Although the Board’s final IPR decisions might have been phrased more expressly
`
`to emphasize the Board was not imposing any burden of persuasion on Worlds,
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`statements in the final IPR decisions that Worlds had “not shown” that Activision
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`was an RPI simply reflected the fact that the Board was evaluating the RPI
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`arguments that Worlds raised. The Board did not err by focusing on the RPI
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`arguments Worlds raised. See, e.g., Wi-Fi One, 887 F.3d at 1337-38 & n.3 (“[T]he
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`Board properly focused on the factors that Wi-Fi raised in its argument.”).
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`Having considered each of Worlds’s arguments, the Board found them to be
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`erroneous in light of the record evidence. See, e.g., Ex. 1055 at 33-34 (“Patent
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`Owner argues that Activision is a real party in interest because the second and
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`fourth categories in Taylor-a ‘pre-existing substantive legal relationship[]’ and
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`control—are satisfied....We disagree....Instead, we agree with Petitioner that Patent
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`Owner’s arguments are based on unreasonable assumptions and interpretations of
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`various sections of the Agreement.”); Ex. 1056 at 30 (same); Ex. 1057 at 22-23
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`(same); Ex. 1061 at 127-28 (rejecting RPI argument based on Worlds’s discovery
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`dispute with Activision); Ex. 1062 at 125-26 (same); Ex. 1063 at 61-62 (evidence
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`did not support Worlds’s argument that Activision is an unnamed RPI). This was
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`not an issue that turned on an erroneous burden shift by the Board. Worlds Inc.,
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`903 F.3d at 1246 (“There is a complete absence of any statement as to which party
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`should bear the burden of persuasion.”). Instead, it turned on the erroneousness of
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`Worlds’s speculative and unfounded arguments and the persuasive evidence
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`establishing Bungie acted for its own benefit, not at Activision’s behest.
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`Worlds also argued that collateral estoppel does not apply to the Board’s
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`RPI determinations because “matters must be ‘properly before’ the Board.” Appeal
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`Rply Br. at 30. But whether Activision was an RPI in the final IPRs was a disputed
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`issue “properly before” the Board. If Worlds is correct that the Board lacked
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`jurisdiction to resolve the RPI question in the final IPRs, then the Board would
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`have no jurisdiction to reach a different RPI conclusion here. Clearly the Board
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`had jurisdiction as the Patent Office cancelled Worlds’s claims. SMF Nos. 5-6.
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`B. Worlds waived any challenge to the denial of discovery motions.
`Worlds also does not establish that a relitigation is warranted by “differences
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`in the quality or extensiveness of the procedures” between the original forum and
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`the later forum. B&B Hardware, 135 S. Ct. at 1303. The discovery procedures
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`available in the final IPRs were identical to those available in the appealed IPRs.
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`Worlds did not make any RPI discovery requests after institution and did not
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`request rehearing from the Board. Worlds also did not seek review of the Board’s
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`discovery orders. Worlds Inc., 903 F.3d at 1241. The Board’s denial of Worlds’s
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`discovery requests was not an abuse of discretion. See Wi-Fi One, 887 F.3d at
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`1338-39 (denial of RPI discovery was not abuse of discretion). Worlds has
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`abandoned its discovery requests on remand. Ex. 1051 at 14:4-17:25 (arguing
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`against opening the evidentiary record). Worlds certainly may not justify
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`relitigating the RPI issue based on its abandoned discovery requests.
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`C. Worlds proposed “issue of law” exception does not exist.
`On appeal, Worlds also argued for an exception from issue preclusion based
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`on its assertion that the Board’s RPI determination was a pure question of law.
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`Appeal Rply Br. at 31-32 (citing Fifth Circuit cases). The Federal Circuit provided
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`the law of the case to apply on remand in this regard: issue preclusion applies
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`whether the issue is “an issue of fact or law.” Worlds Inc., 903 F.3d at 1247.
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`There is no “legal issue” exception to issue preclusion that applies here.
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`Worlds acknowledged in its brief that courts give preclusive effect to agency
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`determinations of law. Appeal Rply Br. at 31-32 (citing Wickham Contracting Co.
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`Inc. v. Board of Educ. of City of New York, 715 F.2d 21, 26 (2d Cir. 1983).
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`Wickham explains that the Second Circuit joined the Third, Fifth, and Sixth Circuit
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`in following the general rule that administrative decisions may be “binding as to
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`fact and law.” 715 F.2d at 26. The Federal Circuit has repeatedly held
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`administrative decisions binding as to both fact and law. See, e.g., Nestle, 884 F.3d
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`at 1351 (IPR decision preclusive on legal question of claim construction); see also
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`XY, LLC, 890 F.3d at 1294 (IPR decision of obviousness preclusive); Maxlinear,
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`880 F.3d at 1376-77 (same).
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`Moreover, RPI determinations are factual determinations. See Wi-Fi One,
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`887 F.3d at 1340-41 (RPI determinations reviewed for substantial evidence); 77
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`Fed. Reg. at 48759 (Aug. 14, 2012) (“a highly fact-dependent question”). The
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`Board’s RPI analysis made a factual determination that Activision was not an RPI
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`based on the practical and equitable situation.
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`Finally, no change in the applicable law justifies revisiting the Board’s RPI
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`decisions. Recent Federal Circuit decisions have reaffirmed the common law
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`principles outlined in the Trial Practice Guide and have not announced a new legal
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`standard. See AIT, 897 F.3d at 1344 n.2 (“[W]e do not believe that any of the
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`general legal principles expressed in the Trial Practice Guide cited by the Board
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`here run contrary to the common-law understanding of ‘real party in interest.’”);
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`Wi-Fi One, 887 F.3d at 1336 (“The interpretation of the concepts of privity and
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`real party in interest set forth in the PTO's Office Trial Practice Guide and applied
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`by the Board is consistent with general legal principles.”); id. at 1340;
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`WesternGeco LLC v. Ion Geophysical Corp., 889 F.3d 1308, 1317-19 (Fed. Cir.
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`2018) (“[T]hese descriptions of the privity analysis in the Trial Practice Guide
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`accurately reflect the common law considerations for a privity inquiry.”). The
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`Board applied these accepted principles when evaluating Worlds’s arguments in
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`the final IPRs. Worlds’s argument against repose on the RPI question should be
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`rejected. See B&B Hardware, 135 S. Ct. at 1307 (“[I]f federal law provides a
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`single standard, parties cannot escape preclusion simply by litigating anew in
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`tribunals that apply that one standard differently. A contrary rule would encourage
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`the very evils that issue preclusion helps to prevent.”).
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`D. The Board did not consolidate the appealed and final IPRs.
`Worlds falsely argued that the appealed IPRs were “consolidated” by the
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`Board with the final IPRs. Appeal Rply Br. at 32. As discussed above in Section
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`II.A, Worlds submitted separate briefs in each case and the Board entered separate
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`decisions in each case. Although the Board coordinated some schedules for
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`convenience, the cases themselves were never consolidated. The fact that Worlds
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`filed separate notices of appeal in the cases it appealed and that the Office has
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`already cancelled claims from the final IPRs confirms they were not consolidated.
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`The Federal Circuit recognizes that when cases are not consolidated one of
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`the actions might go “to judgment before the others, resulting in a judgment
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`adverse to” a party. In re Cygnus Telecom. Tech., LLC, Patent Litig., 536 F.3d
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`1343, 1349-50 & n.1 (Fed. Cir. 2008). The court recognized that a party’s “failure
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`to appeal the first judgment could result in the application of collateral estoppel
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`against it in each of the other cases.” Id. (holding collateral estoppel did not divest
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`patent owner of right to appeal decision in consolidated multi-district litigation
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`based on owner’s decision to settle with one of many defendants). As discussed
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`above in Section II.C, Worlds’s decision to forgo appeal of the final IPRs removes
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`any doubt as to their finality and preclusive effect here.
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`IV. The Board should reinstate its finding that Activision is not an RPI.
`If the Board revisits its RPI determinations, it should reinstate its decisions
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`of unpatentability. The evidence shows Bungie acted independently in filing the
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`IPRs for its own benefit, not at Activision’s behest. Worlds’s RPI allegations are
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`nothing more than gamesmanship.
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`A. Legal Standards
`An RPI determination is made “on a case-by-case basis taking into
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`consideration how courts have viewed” the term. Trial Practice Guide, 77 Fed.
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`Reg. at 48,759 (citing Taylor v. Sturgell, 553 U.S. 880, 893-95 (2008); FPP, §§
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`4449, 4451). “[T]he real party-in-interest may be the petitioner itself, and/or it may
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`be the party or parties at whose behest the petition has been filed.” Id. The Board
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`“will apply traditional common-law principles” of estoppel and preclusion to
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`evaluate an RPI allegation. Id. “A common consideration is whether the non-party
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`exercised or could have exercised control over the proceeding.” Id. (citing FPP §
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`4451). “Determining whether a non-party is a ‘real party in interest’ demands a
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`flexible approach that takes into account both equitable and practical
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`considerations, with an eye toward determining whether the non-party is a clear
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`beneficiary that has a preexisting, established relationship with the petitioner." AIT,
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`897F.3d at 1351.
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`The RPI inquiry is bounded, however, by the demands of due process. See
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`Taylor, 553 U.S. at 891 (“The federal common law of preclusion is, of course,
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`subject to due process limitations.”). “Because nonparty preclusion risks binding
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`those who have not had a full and fair opportunity to litigate, the Supreme Court
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`has cautioned that there is a general rule against nonparty preclusion, subject to
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`certain exceptions.” WesternGeco, 889 F.3d at 1319; FPP §4449 (“The basic
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`premise of preclusion is that parties to a prior action are bound and nonparties are
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`not bound.”). The “recognized exceptions” to “the rule against nonparty
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`preclusion” are (1) when the nonparty stipulates it will be bound by the judgment;
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`(2) where a qualifying, pre-existing “substantive legal relationship” (e.g.,
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`successive owner of property, bailee-bailor, or assignee-assignor) justifies non-
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`party preclusion; (3) when the nonparty enjoyed adequate representation “in
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`certain limited circumstances” in the prior litigation (i.e., suits brought as class
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`actions and those brought by trustees, guardians, and other fiduciaries); (4) when a
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`nonparty assumed control over the prior litigation and th