Paper No. ___
`Filed: July 25, 2016
`
`
`
`
`
`
`
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_____________________________
`
`
`BUNGIE, INC.,
`Petitioner
`
`v.
`
`WORLDS INC.,
`Patent Owner
`
`_____________________________
`
`IPR2015-01319
`Patent 8,082,501
`
`_____________________________
`
`
`BUNGIE’S OPPOSITION TO
`PATENT OWNER’S MOTION TO EXCLUDE
`
`
`Filed: July 25, 2016
`
`
`
`
`
`
`
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_____________________________
`
`
`BUNGIE, INC.,
`Petitioner
`
`v.
`
`WORLDS INC.,
`Patent Owner
`
`_____________________________
`
`IPR2015-01319
`Patent 8,082,501
`
`_____________________________
`
`
`BUNGIE’S OPPOSITION TO
`PATENT OWNER’S MOTION TO EXCLUDE
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`
`Table of Contents
`
`Page
`
`I.
`
`INTRODUCTION ........................................................................................ 1
`
`II.
`
`REASONS WHY REQUESTED RELIEF SHOULD BE DENIED .............. 1
`
`A.
`
`B.
`
`C.
`
`Exhibit 1033 – “Worlds.com Sues NCSoft for Infringing Key
`Virtual Worlds Patents” Press Release ................................................ 1
`
`Exhibit 1034 – “Worlds.com CEO: We’re ‘Absolutely’ Going
`To Sue Second Life And World Of Warcraft” .................................... 4
`
`Exhibit 1041 – “Psychedelics and the Creation of Virtual
`Reality” ............................................................................................... 6
`
`D.
`
`Exhibit 1042 – “CyberSamhain Invitation” ....................................... 11
`
`E.
`
`Exhibit 1037 – Funkhouser ’95 ......................................................... 11
`
`III. CONCLUSION .......................................................................................... 13
`
`
`
`
`
`
`-i-
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`
`I.
`
`INTRODUCTION
`
`Petitioner Bungie, Inc. (“Bungie”) responds to Patent Owner Worlds Inc.’s
`
`(“Patent Owner”) Motion to Exclude Petitioner’s Evidence (Paper 33).
`
`Patent Owner’s motion is a sideshow, targeting evidence that, while relevant
`
`and admissible, is unlikely to be consequential to the Board’s decision.
`
`Nonetheless, Patent Owner misapprehends the purpose and import of Bungie’s
`
`evidence. The identified exhibits are not “directed to character ‘evidence’” as
`
`Patent Owner contends. Paper 33 at 1. Instead, as explained in more detail below,
`
`they are relevant to issues raised by Patent Owner itself. And as Patent Owner has
`
`not identified any sound basis for excluding Bungie’s evidence, its motion should
`
`be denied.
`
`II. REASONS WHY REQUESTED RELIEF SHOULD BE DENIED
`
`A. Exhibit 1033 – “Worlds.com Sues NCSoft for Infringing Key
`Virtual Worlds Patents” Press Release
`
`Exhibit 1033 is a 2008 press release (not an article as suggested by Patent
`
`Owner) issued by Patent Owner and its partner, “General Patent Corporation
`
`(GPC), a leading patent licensing and enforcement firm,” regarding Patent
`
`Owner’s then-current patent enforcement activities and future patent enforcement
`
`plans. EX1033. Exhibit 1033 is evidence that contravenes Patent Owner’s
`
`
`
`1
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`contention that Bungie’s motivation for challenging the patents is in acting on
`
`behalf of Activision. See id.
`
`As an initial matter, it is unclear why Patent Owner is seeking to exclude
`
`Exhibit 1033. Exhibit 1033 was submitted in opposition to Patent Owner’s motion
`
`for discovery regarding its contention that Activision is an un-named real party in
`
`interest. Paper 10 at 2. In denying Patent Owner’s motion and rejecting Patent
`
`Owner’s theory, the Board did not appear to rely on Exhibit 1033. Paper 11. While
`
`rejecting the same theory again in its Institution Decision, the Board did not appear
`
`to rely on Exhibit 1033. Paper 14 at 31-37. While Patent Owner presses the same
`
`theory a third time in its Patent Owner Response (Paper 20 at 36-42), it is believed
`
`that the Board can again resolve the issue using a similar rationale as the Board has
`
`previously identified.
`
`Should the Board be inclined to rely on Exhibit 1033, however, Patent
`
`Owner’s evidentiary objections are unfounded. In particular, Exhibit 1033 was not
`
`submitted to “attack[] the character of the Patent Owner.” Paper 33 at 3. As is
`
`apparent in the context it was cited, Exhibit 1033 was submitted as background
`
`evidence and to corroborate Bungie’s state of mind in initiating this proceeding.
`
`Paper 10 at 2-3. Patent Owner continues to contend that Bungie is a “proxy
`
`petitioner” operating at the behest of Activision, and that in denying this
`
`
`
`2
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`contention, the Board’s “reasoning [was] disingenuous and illustrate[d] the
`
`Board’s abdication of its role in preventing the gamesmanship that § 315(b) was
`
`designed to prevent.” Paper 20 at 40. But Patent Owner’s charge is
`
`unsubstantiated—Bungie is not engaged in gamesmanship or acting as a proxy for
`
`Activision and the Board has not abdicated its role. And Exhibit 1033 is evidence
`
`that tends to support a simpler, if less exciting, explanation for initiating the
`
`present proceeding: (1) Patent Owner made threats against Bungie and (2) Patent
`
`Owner had a reputation in the industry for aggressively asserting its patents.
`
`Paper 10. Accordingly, Patent Owner’s argument that Exhibit 1033 is irrelevant
`
`under FRE 402 should be denied.
`
`For similar reasons, Patent Owner’s argument that the probative value of
`
`Exhibit 1033 is substantially outweighed by a danger of unfair prejudice under
`
`FRE 403 should also be denied. As an initial matter, it is odd, at the least, to ask a
`
`fact finder to exclude evidence on the basis that the evidence would unduly
`
`prejudice that same fact finder. See, e.g., U.S. v. Preston, 706 F.3d 1106 (9th Cir.
`
`2013) (“Rule 403 is inapplicable to bench trials.”). Moreover, it is unclear why
`
`Patent Owner believes the Board would (unfairly, presumably) “conclude that
`
`Patent Owner … is a bad actor.” Paper 33 at 4. Bungie is not advocating for bias,
`
`
`
`3
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`nor does it believe that the Board is biased, against patent assertion entities, even
`
`ones that conduct their business aggressively or vigorously.
`
`And Patent Owner’s complaints about the use of adjectives like “aggressive”
`
`ring hollow, especially when those adjectives come directly from materials
`
`promoting Patent Owner. Exhibit 1033 is a press release from Patent Owner and
`
`its partners stating, “We intend to vigorously enforce [Patent Owner’s] intellectual
`
`property rights….” EX1033. Exhibit 1035, which Patent Owner does not move to
`
`exclude, is a financial disclosure in which Patent Owner says it intends “to more
`
`aggressively enforce [its patent portfolio] against alleged infringers.” EX1035 at 8.
`
`Indeed, it seems likely that one of Patent Owner’s goals in issuing such statements
`
`may have been to increase its notoriety in the industry it was targeting. To
`
`complain now, when Bungie submits those statements as tending to show that
`
`notoriety might reasonably influence a decision to file the present action, is
`
`unavailing. Accordingly, Patent Owner’s argument that the probative value of
`
`Exhibit 1033 is outweighed by the risk of prejudice under FRE 403 should be
`
`denied.
`
`B.
`
`Exhibit 1034 – “Worlds.com CEO: We’re ‘Absolutely’ Going To
`Sue Second Life And World Of Warcraft”
`
`Exhibit 1034 is a 2009 Business Insider article also regarding Patent
`
`Owner’s then-current patent enforcement activities and future patent enforcement
`
`
`
`4
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`plans. EX1034. Again, Exhibit 1034 is evidence that contravenes Patent Owner’s
`
`contention that Bungie is acting on behalf of Activision. See id.
`
`Similar to Exhibit 1033, it is not apparent why Patent Owner has moved to
`
`exclude Exhibit 1034, and it is believed that the Board can resolve the real party in
`
`interest issue without reference to Exhibit 1034. With respect to relevance under
`
`FRE 402 and unfair prejudice under FRE 403, Patent Owner’s arguments fail for
`
`substantially the same reasons discussed above. That is, Exhibit 1034 is not
`
`submitted as an attack on Patent Owner’s character. It is submitted in rebuttal to
`
`Patent Owner’s contentions as to why Bungie initiated this proceeding. So Exhibit
`
`1034 is relevant to the extent Patent Owner continues to press the real party in
`
`interest issue. And moreover, Patent Owner has not substantiated its concerns that
`
`it will be unduly prejudiced by the Board knowing that Patent Owner is a notorious
`
`patent assertion entity. Accordingly, Patent Owner’s arguments under FRE 402
`
`and 403 should be denied.
`
`Patent Owner further argues that Exhibit 1034 should be excluded as hearsay
`
`under FRE 801. Again, Patent Owner’s argument fails because Patent Owner
`
`misapprehends the purpose of Exhibit 1034. For a statement to be hearsay, it must
`
`be offered “to prove the truth of the matter asserted in the statement.” FRE
`
`801(c)(2). But Exhibit 1034 is not offered for the truth of any particular statement
`
`
`
`5
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`contained in Exhibit 1034. That is, the truth of Patent Owner’s statement that it
`
`intended to sue any company that made a successful massively-multiplayer
`
`videogame (EX1034) is not particularly relevant to any issue in this proceeding.
`
`Instead, Exhibit 1034 is offered as corroborating evidence of a reasonable state of
`
`mind in initiating this proceeding, not for the truth of any particular statement in
`
`Exhibit 1034. Accordingly, Patent Owner’s argument that Exhibit 1034 should be
`
`excluded as hearsay under FRE 801 should be denied.
`
`C. Exhibit 1041 – “Psychedelics and the Creation of Virtual Reality”
`
`Exhibit 1041 is an excerpt from an interview with Patent Owner’s expert,
`
`Mark Pesce, regarding his drug use around the time of the alleged invention. The
`
`interview was conducted at the 1999 AllChemical Arts conference, a conference
`
`regarding the relationship between hallucinogens and the creative process, and
`
`published in the journal of MAPS, the Multidisciplinary Association for
`
`Psychedelic Studies. EX1041. Exhibit 1041 is evidence that bears on the credibility
`
`of Patent Owner’s expert and the reliability of his testimony in this proceeding,
`
`including his ability to accurately recall details from the relevant time period. See
`
`id.
`
`Again it is unclear why Patent Owner is seeking to exclude Exhibit 1041. It
`
`is only cited in support of a single sentence in Bungie’s Reply. Paper 31 at 3.
`
`
`
`6
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`Mr. Pesce’s inconsistent, unreliable, and uncorroborated testimony, which Bungie
`
`spent significantly more words on, is more damaging to his credibility. See id. at 1-
`
`3 (discussing many of the faults in Mr. Pesce’s testimony). Even just focusing on
`
`his qualifications, that he does not have a college degree—he dropped out of
`
`college shortly after he started using psychedelic drugs (EX1046, 49:8-11)—and
`
`inaccurately represented the practical experience that allegedly made him an expert
`
`(EX1046, 40:10-20) present even more significant issues with respect to his
`
`credibility.
`
`But nonetheless, Exhibit 1041 is relevant to Mr. Pesce’s credibility and the
`
`reliability of his testimony, and thus Patent Owner’s evidentiary objections are
`
`unfounded. Again, contrary to Patent Owner’s allegations, Exhibit 1041 is not
`
`submitted to attack Mr. Pesce’s character.1 Instead it is submitted as relevant
`
`evidence regarding his capacity to remember details from the relevant time period
`
`and the quality of any such recollections. Paper 31 at 3.
`
`
`1 Thus, Patent Owner’s citations to FRE 404, 405, and 608 are misplaced, even
`
`if they had been actually addressed by Patent Owner, rather than lumped in with
`
`FRE 402.
`
`
`
`7
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`To the extent they are cognizable at all, Patent Owner’s arguments go to
`
`weight, rather than admissibility. Patent Owner argues “contrary to [Bungie’s]
`
`commentary, Mr. Pesce never testified that he was unable to recall technical facts
`
`from the 1990s based on any use of psychedelic drugs.” Paper 33 at 7. Beyond
`
`being a highly specific thing for him to have not testified, and not coincidentally
`
`something Bungie never suggested he had testified, Patent Owner misses the point.
`
`Mr. Pesce had significant difficulty remembering details from the relevant time
`
`period and refused to address whether his drug use affected his recollection of
`
`events during that time period. See, e.g., EX1046, 46:11-47:21, 50:25-56:2. Indeed,
`
`Mr. Pesce testified that he does not even remember giving the interview in
`
`question. EX1046, 47:22-48:2. Bungie had a reasonable basis to question
`
`Mr. Pesce’s ability to recall events from the early 90s and his use of psychedelic
`
`drugs during that time period is a relevant subject of inquiry.
`
`Patent Owner argues that Exhibit 1041 does not support an assertion “that
`
`Mr. Pesce was a heavy user of drugs” and does not “undermine his status as co-
`
`inventor of VRML.” Paper 33 at 7-8. Regarding whether Mr. Pesce’s drug use was
`
`heavy, heavy may be a relative term, but Exhibit 1041 seems to at least suggest
`
`heavy psychedelic drug use. Similarly, it may not “undermine his status as co-
`
`
`
`8
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`inventor of VRML,”2 whatever that might mean, but as relevant to this proceeding,
`
`it does cast doubt on his ability to credibly testify regarding details from that time
`
`period, including regarding virtual reality technology. It is difficult to capture short
`
`clips from Exhibit 1041 given the unsurprisingly rambling nature of the interview,
`
`but for example, Mr. Pesce described this experience working on VRML while on
`
`psychedelics:
`
`“In particular with all this stuff that’s become VRML, and all that. I
`
`didn’t get all the details. I got the chunks. And part of that is, you
`
`know, I get the chunks, and it’s software. Well, I’ll just go work on it.
`
`You know. And I’ll turn it up. And I’ll sit and I’ll think on it, and
`
`think on it, and think on it, talk it out with other people. I mean after I
`
`did that, I actually talked it out with other people while we were
`
`tripping. And this is a case of specific usage.” EX1041 at 2.
`
`Indeed, the very first thing that Mr. Pesce said in the interview was that he was
`
`“not sure that [he would] be doing any of the work that [he was] doing now,”
`
`presumably referring to his virtual reality work, without psychedelics. Id. at 1.
`
`Patent Owner argues that “Bungie improperly uses Mr. Pesce’s election to
`
`[assert the Fifth Amendment] against him.” Paper 33 at 8. As a preliminary matter,
`
`Mr. Pesce’s refusal to testify was not a legitimate exercise of the Fifth Amendment
`
`
`2 Mr. Pesce’s claim to have “invented” VRML is controversial.
`
`
`
`9
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`privilege, not least because he did not have a reasonable fear of prosecution.
`
`Nonetheless, even if it were a valid exercise of the privilege, Patent Owner is
`
`wrong to suggest that exercising the privilege cannot lead to an adverse inference
`
`in a civil matter, such as this one. See LiButti v. United States, 107 F.3d 110, 124
`
`(2d Cir. 1997). What’s more, Bungie is not seeking to use Mr. Pesce’s refusal to
`
`answer questions against Mr. Pesce, it is seeking to use Mr. Pesce’s refusal to
`
`answer questions against Patent Owner.
`
`Accordingly, because Exhibit 1041 is relevant to the credibility of Mr. Pesce
`
`and the reliability of his testimony, Patent Owner’s argument that it should be
`
`excluded as irrelevant under FRE 402 should be denied. For similar reasons, Patent
`
`Owner’s argument with respect to FRE 403 should also be denied. Moreover, the
`
`only “unfair prejudice” identified by Patent Owner is that the Board will give
`
`Mr. Pesce’s testimony little or no weight in view of the evidence. The Board
`
`should accord Mr. Pesce’s testimony little or no weight, as doing so would be
`
`appropriate for at least the reasons identified in Bungie’s Reply. While that might
`
`not be Patent Owner’s desired outcome, it would be the correct outcome and is not
`
`a form of unfair prejudice.
`
`
`
`10
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`D. Exhibit 1042 – “CyberSamhain Invitation”
`
`Exhibit 1042 is a 1994 email from Mr. Pesce to the VRML mailing list
`
`inviting anyone interested to participate in “a ritual of CyberSamhain, a ritual
`
`which acknowledges and welcomes the God into his realm on the other side,
`
`within Cyberspace” using then-current virtual reality tools. EX1042 at 1. Patent
`
`Owner is correct that Exhibit 1042 is not cited in Bungie’s Reply. Patent Owner is
`
`not correct that Exhibit 1042 is not cited in any other paper filed with the Reply.
`
`Exhibit 1042 is cited and discussed in the deposition of Mr. Pesce. See generally
`
`EX1046. Accordingly, Bungie submitted Exhibit 1042 to provide the necessary
`
`context for that testimony.
`
`E.
`
`Exhibit 1037 – Funkhouser ’95
`
`Exhibit 1037 is a version of the Funkhouser ’95 paper that is currently
`
`available on Prof. Funkhouser’s university website. EX1038. It was submitted in
`
`response to Patent Owner’s continued attempts to cause confusion or cast doubt on
`
`the credibility of Bungie’s expert, Prof. Zyda, based on a minor and harmless
`
`quotation error contained in his original declaration.
`
`The relevant facts are set out in detail in a second declaration of Prof. Zyda
`
`(EX1038), which Patent Owner does not move to exclude. In sum, at one point in
`
`quoting a caption to a figure from Funkhouser ’95 in his declaration, Prof. Zyda
`
`
`
`11
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`inadvertently quoted the version of Funkhouser ’95 available from Prof.
`
`Funkhouser’s university website (EX1037), rather than the version as published by
`
`the ACM (EX1005). EX1038. The texts of the two versions are nearly identical,
`
`other than minor variations in the figure captions. EX1038.
`
`Patent Owner noted the error in its Preliminary Response, but the Board did
`
`not find it to be consequential in its Institution Decision. See Paper 14 at 11 n.3.
`
`Nonetheless, Patent Owner continues to press the issue, including at the deposition
`
`of Prof. Zyda and in its Patent Owner Responses, without acknowledging that the
`
`precise nature of the mistake has been explained to Patent Owner multiple times.
`
`See, e.g., IPR2015-01264, Paper 20 at 30-31. Accordingly, for the avoidance of
`
`doubt, Bungie submitted the second declaration of Prof. Zyda and the
`
`accompanying Exhibit 1037 in response to Patent Owner’s continued attempts to
`
`cause confusion or cast doubt on the credibility of Prof. Zyda.
`
`Thus, Patent Owner’s arguments that Exhibit 1037 has not been established
`
`as prior art (although it would be prior art) or that it was not submitted as
`
`supplemental evidence or supplemental information are misplaced. As is clear
`
`from Prof. Zyda’s second declaration and Bungie’s Reply, neither are relying on
`
`Exhibit 1037 as prior art, and both continue to rely on the versions of
`
`Funkhouser ’95 submitted with Bungie’s Petition. Paper 31; EX1038, ¶¶ 16-17.
`
`
`
`12
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`Even Patent Owner recognizes this, though it does not seem to recognize its
`
`import. Paper 33 at 11. That is, Exhibit 1037 was not submitted for its prior art
`
`value, it was submitted to demonstrate the precise nature of the minor and harmless
`
`error first identified by Patent Owner, which the Board deemed to not be
`
`consequential. As Patent Owner continues to press the issue, Exhibit 1037 is
`
`relevant because it easily dissipates any potential confusion that Patent Owner
`
`attempts to create.
`
`Accordingly, Patent Owner’s argument that Exhibit 1037 is irrelevant under
`
`FRE 402 should be denied.
`
`III. CONCLUSION
`
`For the foregoing reasons, Bungie respectfully requests that Patent Owner’s
`
`motion to exclude be denied.
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`Dated: July 25, 2016
`
`
`
`
`
`
`/ Michael T. Rosato /
` Michael T. Rosato, Lead Counsel
` Reg. No. 52,182
`
`
`
`
`
`
`
`
`
`13
`
`
`
`Case IPR2015-01319
`Patent 8,082,501
`
`
`CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. § 42.6(e), this is to certify that I caused to be served a
`
`true and correct copy of the foregoing Bungie’s Opposition to Patent Owner’s
`
`Motion to Exclude on this 25th day of July, 2016, on the Patent Owner at the
`
`correspondence address of the Patent Owner as follows:
`
`
`
`
`
`
`
`
`Wayne Helge
`Donald L. Jackson
`Michael Casey
`Davidson Berquist Jackson & Gowdey L.L.P.
`8300 Greensboro Drive, Suite 500
`McLean, VA 22102
`whelge@dbjg.com
`djackson@bdjg.com
`mcasey@dbjg.com
`
`
`
`
`Respectfully submitted,
`
`Dated: July 25, 2016
`
`
`
`
`
`
`
`
`
`/ Michael T. Rosato /
` Michael T. Rosato, Lead Counsel
` Reg. No. 52,182
`
`
`
`
`
`14
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
