UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_______________
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`_______________
`
`
`BUNGIE, INC.,
`Petitioner
`
`v.
`
`WORLDS INC.,
`Patent Owner
`
`_______________
`
`Case IPR2015-01269
`Patent 7,493,558
`
`_______________
`
`
`PATENT OWNER WORLDS INC.’S
`PRELIMINARY RESPONSE
`
`
`
`
`
`BUNGIE - EXHIBIT 1053
`Bungie, Inc. v. Worlds Inc.
`IPR2015-01264, -01319, -01321
`
`

`

` 
`
`
`
` 
`
`TABLE OF CONTENTS
`
`
`Introduction .......................................................................................................... 1
`I.
`II. Background .......................................................................................................... 3
`a. About U.S. Patent No. 7,493,558 (the “‘558 patent” or “Leahy”) ................... 3
`b. The Petition Challenges Claims 4-9 of the ‘558 Patent ................................... 7
`c. Petitioner Failed to Conduct a Proper Claim Construction Analysis and
`Applied Unreasonably Broad Interpretations of the Claim Terms ......................... 9
`d. Petitioners’ Grounds of Challenge Rely On Art Already Considered by the
`USPTO Examiner ................................................................................................. 12
`III. Argument ........................................................................................................ 14
`a. Petitioner’s Theories of Anticipation Fail to Identify Each Recited Feature of
`the Challenged Claims .......................................................................................... 14
`b. Ground 1’s Challenge Based on Funkhouser Fails to Identify all Features of
`Claim 4 .................................................................................................................. 14
`c. The Petition Fails to Address Meaningful Differences Between Claim 4 and
`the Remaining Independent Claims ...................................................................... 25
`d. Ground 3’s Challenge Based on Durward Also Fails to Identify all Features
`of Claim 4 ............................................................................................................. 27
`e. The Petition Again Fails to Address Meaningful Differences Between Claim
`4 and the Remaining Independent Claims ............................................................ 35
`f. The Petition’s Obviousness-Based Challenges Also Fail Due to
`Shortcomings of the Secondary References ......................................................... 36
`g. The Petition Fails to Name All Real Parties in Interest ................................. 40
`IV. Conclusion ...................................................................................................... 49
`
`
`ii 
` 
`
`

`

`Cases 
`
`TABLE OF AUTHORITIES
`
`Askeladden LLC v. McGhie et al., IPR2015-00122 (PTAB Mar. 16, 2015) (Paper
`34) ......................................................................................................................... 48
`Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc., IPR2013-00453 (PTAB
`Jan. 6, 2015) (Paper 88) ........................................................................................ 41
`Gonzalez v. Banco Cent. Corp., 27 F.3d 751 (1st Cir. 1994) .................................. 41
`In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007) ......................... 9
`Loral Space & Comms., Inc. v. Viasat, Inc., IPR2014-00236 (PTAB Apr. 21, 2014)
`(Paper 7) ................................................................................................................ 48
`Net MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359 (Fed. Cir. 2008) ..................... 31
`St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., IPR2013-00258 (PTAB Oct.
`16, 2013) (Paper 29) ............................................................................................. 48
`Taylor v. Sturgell, 553 U.S. 880 (2008) ................................................................... 41
`Universal Remote Control, Inc. v. Universal Elecs., Inc., IPR2013-00168 (PTAB
`Aug. 26, 2013) (Paper 9) ...................................................................................... 48
`Statutes 
`
`35 U.S.C. § 102(a) ................................................................................................... 15
`35 U.S.C. § 312(a)(2) ........................................................................................ 40, 47
`35 U.S.C. § 314(a) ................................................................................................... 27
`35 U.S.C. § 315(b) ........................................................................................ 3, 44, 48
`35 U.S.C. § 325(d) ................................................................................................... 13
`Other Authorities 
`
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48756 (Aug. 14, 2012) .......... 9, 41
`Rules 
`
`37 C.F.R. § 42.8(b)(1) ....................................................................................... 40, 47
`37 C.F.R. § 42.22(a)(2) ..................................................................................... 14, 22
`37 C.F.R. § 42.51(b)(1)(iii) ...................................................................................... 42
`37 C.F.R. § 42.65(a) ................................................................................................. 18
`37 C.F.R. § 42.100(b) ................................................................................................ 9
`37 C.F.R. § 42.104(b)(4) .......................................................................................... 22
`
`iii 
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`

`

`
`
`
`
`Exhibit
`
`2001
`
`2002
`
`
`2003
`
`
`2004
`
`
`2005
`
`
`2006
`
`
`2007
`
`
`2008
`
`
`2009
`
`
`
`LIST OF PATENT OWNER’S EXHIBITS
`
`
`
`Description
`
`Transcript of Conference Call of July 23, 2015
`
`“Exhibit 1” to Exhibit 2001 (Software Publishing and
`Development Agreement, dated April 16, 2010)
`
`Proof of Service in Worlds Inc. v. Activision Blizzard, Inc., et
`al., Case No. 1:12-cv-10576 (D. Mass.)
`
`Letter dated November 13, 2014, from Worlds’ litigation
`counsel to Activision’s litigation counsel
`
`Patent Owner’s First [Proposed] Set of Requests for Production
`of Documents and Things to Petitioner (Nos. 1-6)
`
`Claim Construction Order dated June 26, 2015 in Worlds Inc. v.
`Activision Blizzard, Inc., et al., Case No. 1:12-cv-10576 (D.
`Mass.)
`
`Complaint in Worlds Inc. v. Activision Blizzard, Inc., et al.,
`Case No. 1:12-cv-10576 (D. Mass.)
`
`Copilevitz, Todd, “Here’s a chat room worth talking about,”
`The Dallas Morning News, June 11, 1995
`
`Smith, Gina, “Whole new Worlds on-line,” San Francisco
`Examiner, May 14, 1995
`
`
`iv 
` 
`
`

`

`IPR2015-01269
`U.S. Patent No. 7,493,558
` 
`
`
`I.
`
`Introduction
`
` 
`
`Bungie, Inc. (“Bungie” or “Petitioner”) filed the current Petition (“Petition”)
`
`for inter partes review of claims 4-9 of U.S. Patent No. 7,493,558 (“the 558
`
`patent” or “Leahy”) on May 26, 2015. In the Petition, Bungie challenges claims 4,
`
`6, 8, and 9 of the ‘558 patent as allegedly anticipated by two references, “RING: A
`
`Client-Server System for Multi-User Virtual Environments” authored by Thomas
`
`A. Funkhouser (“Funkhouser”) (Ex. 1005) and U.S. Patent No. 5,659,691 issued to
`
`Durward et al. (“Durward”) (Ex. 1008). Bungie also challenges claims 5 and 7 as
`
`allegedly obvious over Funkhouser and Durward in view of separate secondary
`
`references, including Thomas A. Funkhouser, Adaptive Display Algorithm for
`
`Interactive Frame Rates During Visualization of Complex Virtual Environments
`
`(“Funkhouser ‘93”) (Ex. 1017) and U.S. Patent No. 5,777,621 to Schneider
`
`(“Schneider”) (Ex. 1019).
`
`Five other petitions for inter partes review of patents related to the ‘558
`
`patent have also been filed by Bungie. These other petitions also look to
`
`Funkhouser and Durward as allegedly anticipatory, or as primary references in
`
`asserted obviousness combinations. But Funkhouser and Durward each include
`
` 
`
`1
`
`

`

`crucial gaps in their disclosure; these gaps are fatal to this Petition’s anticipation-
`
`based and obviousness-based challenges.
`
`For example, Petitioner alleges that both Funkhouser and Durward disclose
`
`claim 1’s feature of “determining from the positions received in step (C), by said
`
`each client process, avatars that are to be displayed to the user associated with said
`
`client process.” Pet. at 17, 41. But the Petition never points to precise disclosures
`
`in these references for this feature of the challenged claims for good reason, since
`
`both Funkhouser and Durward fail to expressly disclose such features. To gloss
`
`over this shortcoming, both the Petition and Dr. Michael Zyda, whose testimony is
`
`submitted as Ex. 1002 to the Petition, try to fill in the gaps in disclosure with
`
`mischaracterizations about the references’ operations, and pure conjecture about
`
`how their technology could be implemented. Indeed, Petitioner diverges toward the
`
`theory that those features are inherently disclosed in Funkhouser and Durward,
`
`without satisfying the threshold showing that such features must necessarily be
`
`present, as required under a theory of inherency.
`
`Further, the Petition fails to identify all real parties in interest, and
`
`particularly excludes real party in interest Activision Publishing, Inc.
`
`(“Activision”), which has been engaged in infringement litigation with Patent
`
`Owner Worlds Inc. on (inter alia) the ‘558 patent since 2012. Through a pre-
`
`existing substantive legal relationship with Petitioner, Activision possessed the
`
`2 
` 
`
`

`

`contractual right to review and approve Petitioner’s legal reviews related to
`
`intellectual property, including the legal reviews underlying this Petition.
`
`Additionally, Activision provided funding to Bungie for the development of a
`
`software gaming product. This funding was intended by Activision and Bungie to
`
`cover all tasks under their agreement, including the legal review underlying this
`
`Petition. Based on these factors, Activision is an unnamed real party in interest
`
`having at least an opportunity to control this proceeding through its
`
`review/approval and funding. This failure to name Activision renders the Petition
`
`defective on its face. Moreover, since Activision was served with a complaint for
`
`infringement of the ‘558 patent in 2012, Activision’s status as a real party in
`
`interest to this Petition requires the Petition to be dismissed in its entirety under 35
`
`U.S.C. § 315(b).
`
`For at least these reasons presented above and explained in more detail
`
`below, this Petition for inter partes review of the ‘558 patent should be denied with
`
`no trial instituted.
`
`II.
`
`Background
`
` 
`
`a. About U.S. Patent No. 7,493,558 (the “‘558 patent” or “Leahy”)
`
`In Petitioner’s Opposition to Patent Owner’s Motion for Routine or
`
`Additional Discovery (paper 10), Petitioner opens its Background discussion by
`
`3 
` 
`
`

`

`characterizing Patent Owner Worlds Inc. as a “notorious patent assertion entity.”
`
`Paper 10 at 2 (though citing no evidence for this derogatory characterization).
`
`Whatever negative connotation was intended by Bungie through this statement, it
`
`is undermined by Worlds’ reputation at the dawn of 3-D virtual reality
`
`development, when Worlds unveiled a 3-D virtual space referred to as “Worlds
`
`Chat” in early 1995 and distributed it to the public for free. Articles written that
`
`year and published in such periodicals as the Dallas Morning News touted Worlds
`
`Chat as “the hottest innovation the Internet will see this year,” and noteworthy for
`
`“the potential it brings to cyberspace.” Ex. 2008. In an article published in the San
`
`Francisco Examiner, Gina Smith reported that Worlds Chat is “one of the first
`
`examples of virtual reality on the Internet I’ve seen.” Ex. 2009 at 1. Perhaps as a
`
`result, Worlds drew the attention of Steven Spielberg, who “announced that his
`
`nonprofit Starbright Foundation is working with Worlds, Intel, UB Networks and
`
`Sprint to create a 3-D environment where hospitalized children can play and
`
`socialize with each other.” Id. at 3.
`
`Further deflating Petitioner’s characterization of Patent Owner Worlds Inc.
`
`as a “notorious patent assertion entity,” Worlds’ employees developed the
`
`technology leading to the ‘558 patent, rather than acquiring it for the sole purpose
`
`of pursuing litigation. Coming out of Worlds’ innovation associated with Worlds
`
`Chat was the technology that provides the backbone for the patent at issue here.
`
`4 
` 
`
`

`

`The ‘558 patent was filed as U.S. Patent Application No. 11/591,878 on November
`
`2, 2006, and claims priority to and the benefit of U.S. Provisional Patent
`
`Application No. 60/020,296, filed on November 13, 1995. The ‘558 patent also
`
`claims priority to a chain of U.S. non-provisional patent applications, including
`
`U.S. Patent Application Nos. 09/632,154; and 08/747,420. The title of the ‘558
`
`patent is “SYSTEM AND METHOD FOR ENABLING USERS TO INTERACT
`
`IN A VIRTUAL SPACE.”
`
`In the Background of the ‘558 patent, Leahy describes the difficulty of a
`
`“client-server system” for 3-D virtual reality “game playing, where the positions
`
`and actions of each user need to be communicated between all the players to
`
`inform each client of the state changes (position, actions, etc.) which occurred at
`
`the other clients.” Leahy at 1:56-59 (emphasis added). Per Leahy, the prior “peer-
`
`to-peer architecture” required many messages to provide the state change updates,
`
`and because of the heavy processing loads and limited capabilities of a workstation
`
`in a 3-D environment, this requirement to process many messages limited “the
`
`number of clients which can be connected to the network.” Id. at 1:63-2:1.
`
`As an improvement, Leahy describes an embodiment in which the virtual
`
`world server is “much more discriminating as to what data is provided to each
`
`client[].” Id. at 3:46-47. Additionally, to handle the remote avatar positions
`
`received by a client, the client includes the capability to determine which avatars to
`
`5 
` 
`
`

`

`display using, according to various embodiments, proximity, user ID, or a crowd
`
`control function (which is “needed in some cases to ensure that neither client 60
`
`nor user A get overwhelmed by the crowds of avatars likely to occur in a popular
`
`virtual world.”). Id. at 5:65-67; 5:32-36.
`
`In an embodiment, N represents a server variable setting the “maximum
`
`number of other avatars A will see,” and N’ represents a client variable setting the
`
`“maximum number of avatars client 60 wants to see and/or hear.” Id. at 5:37-41.
`
`Through the server’s application of such criteria, the server can implement the
`
`crowd control function. For example, the server 61 can include a “user object 64,”
`
`which “maintains a list of the N nearest neighboring remote avatars … in the
`
`room.” Id. at 14:32-34. Leahy describes the “process of notifying client 60 of only
`
`the N nearest neighbors … as part of crowd control” on the server side. Id. at
`
`14:38-40. The client may then use “position data to select N’ avatars from the N
`
`avatars provided by the server” for display of the N’ avatars. Id. at 6:7-8.
`
`Thus, according to the disclosed embodiments discussed above, Leahy
`
`discloses server-side selection of avatars, such that the server may notify the client
`
`of the positions of only certain relevant neighbors, and the client has the capability
`
`to further determine the avatars to be displayed based on the received positions.
`
`6 
` 
`
`

`

`b. The Petition Challenges Claims 4‐9 of the ‘558 Patent
`
`In this Petition, Petitioner challenges the validity of claims 4-9 of the ‘558
`
`patent. Claims 4, 6, and 8 are each independent claims. Claims 4 is a method claim
`
`reciting features performed “by said each client process,” claim 6 is a method
`
`claim including steps performed by both “each client process” and “the server
`
`process,” and claim 8 is a method of features that could be performed by a server
`
`process in communication with first client process and second client computers.
`
`Claim 4 is presented below for reference:
`
`4. A machine-readable medium having a program stored in the
`medium, the program enabling a plurality of users to interact in a
`virtual space, wherein each user of the plurality of users is associated
`with a different client process on a different computer, wherein each
`client process has an avatar associated with said each client process,
`and wherein said each client process is configured for communication
`with a server process, wherein the program comprises instructions for:
`(a) monitoring, by said each client process, a position of the
`avatar associated with said each client process;
`(b) transmitting, by said each client process to the server
`process, the position of the avatar associated with said each client
`process;
`(c) receiving, by said each client process from the server
`process, the positions of avatars in a set associated with said each
`client process, wherein the set associated with said each client process
`does not include at least one avatar of the avatars associated with the
`
`7 
` 
`
`

`

`client processes of the plurality of users, the at least one avatar not
`being associated with said each client process; and
`(d) determining from the positions received in step (C), by said
`each client process, avatars that are to be displayed to the user
`associated with said each client process.
`
`
`According to these recited features of claim 4, the claimed method includes
`
`“determining from the positions received in step (C), by said each client process,
`
`avatars that are to be displayed to the user associated with said each client
`
`process.” (emphasis added). Claim 6 includes a similar “determining” step. Claim
`
`8 does not include a “determining” step, but does recite (inter alia), “receiving
`
`from each second client computer a second received position of a second avatar…
`
`.”
`
`Petitioner alleges that claims 4, 6, and 8 are separately anticipated by both
`
`Funkhouser and Durward. The Petition was also supported by the Declaration of
`
`Dr. Michael Zyda. Ex. 1002. But as will be explained below, the Petition fails to
`
`establish each feature of the ‘558 patent’s claims 4, 6, and 8 within the disclosures
`
`of Funkhouser and Durward.
`
`The Petition is flawed in its challenges of the dependent claims as well. For
`
`example, according to claim 5 (which depends from claim 4), the “determining”
`
`step of claim 4 is further clarified to include “determining a maximum number of
`
`8 
` 
`
`

`

`avatars that can be displayed,” and “comparing the actual number [of avatars] to
`
`the maximum number.” Similar features are recited in claim 7. The Petition relies
`
`upon secondary references Funkhouser ’93 and Schneider for disclosing these
`
`features. But as will be explained below, even assuming that Schneider is prior art
`
`(which Patent Owner does not concede), the Petition also fails to establish the
`
`features of dependent claims 5 and 7 within the disclosures of Funkhouser ’93 and
`
`Schneider.
`
`c. Petitioner Failed to Conduct a Proper Claim Construction Analysis
`and Applied Unreasonably Broad Interpretations of the Claim
`Terms
`
`The standard for construing claim terms in this proceeding is not in dispute.
`
`Since the ‘558 patent is not expired, the Board will interpret claims using the
`
`broadest reasonable interpretation as understood by one of ordinary skill in the art
`
`and consistent with the disclosure. See Office Patent Trial Practice Guide, 77 Fed.
`
`Reg. 48756, 48766 (Aug. 14, 2012); 37 C.F.R. § 42.100(b). Under the broadest
`
`reasonable construction standard, claim terms are given their ordinary and
`
`customary meaning, as would be understood by one of ordinary skill in the art at
`
`the time of the invention. In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed.
`
`Cir. 2007).
`
`For the purpose of this preliminary stage of the inter partes review, the
`
`Board need not construe any of the claim terms to recognize that Petitioner’s
`
`9 
` 
`
`

`

`alleged grounds of challenge fail to establish even the likelihood of success against
`
`the ‘558 patent’s claims. To simplify this Preliminary Response only, and without
`
`waiving its right to identify terms for construction, or present constructions or
`
`evidence in support in a Response (should one be necessary), Patent Owner will
`
`respond to Petitioner’s challenges based on Petitioner’s proposed constructions,
`
`with one clarification.1
`
`Claim 4 recites, in relevant part, “determining from the positions received in
`
`step (C), by said each client process, avatars that are to be displayed to the user
`
`associated with said each client process.” As noted above, claim 6 also uses the
`
`“determining” term.
`
`Petitioner identifies the “determining” term for the Board’s construction.
`
`Pet. at 12. Specifically, Petitioner contends that the “the step of determining, as
`
`recited in the claims, can herein reasonably be construed in light of the
`
`specification as including executing a client process to determine, from user
`
`positions received from the server, other users’ avatar(s) located within a point of
`                                                            
`1 Patent Owner notes that the standards of construction applied in this proceeding
`
`are different from the standards applied in the related litigation. The District Court
`
`Claim Construction Order, issued June 26, 2015, is attached as Ex. 2006 but Patent
`
`Owner reserves its right to present its claim construction arguments until a full
`
`Response, should one be necessary. 
`
`10 
` 
`
`

`

`view or perspective (e.g., field of view) of the first user.” Id. at 14. In applying this
`
`proposed construction, however, Petitioner fails to differentiate between
`
`“determining … avatars that are to be displayed to the user associated with said
`
`each client process,” as that feature is recited in claim 4 (emphasis added) and the
`
`act of displaying “the client workstation screen from the point of view of one or
`
`more of its entities,” as disclosed by Funkhouser (see Pet. at 16). Petitioner
`
`similarly fails to differentiate between this same quoted language of claim 4 and
`
`updating “the images viewed and sounds heard with the new positional and sound
`
`data,” as disclosed by Durward (see Pet. at 41). In each ground of rejection, the
`
`Petitioner focuses not on any expressly disclosed capability of “determining …
`
`avatars that are to be displayed to the user associated with said each client
`
`process,” in Funkhouser and Durward (both of which fail to disclose such
`
`features). Rather, Petitioner focuses on what is displayed in these references,
`
`without regard for how such display is achieved.
`
`As such, Petitioner proposes a construction of the “determining” recited in
`
`claims 4 and 6, but fails to apply that proposed construction in its challenges of the
`
`claim.
`
`In evaluating the Petition, the Board should apply the broadest reasonable
`
`construction consistent with the specification for the claimed “determining, from
`
`the received positions, a set of the other users’ avatars that are to be displayed to
`
`11 
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`

`

`the first user.” (emphasis added). But even the broadest reasonable interpretation
`
`consistent with the specification of this term is not so broad as to blur the
`
`difference between “determining” avatars to be displayed and displaying those
`
`avatars. Petitioner’s theory on this term effectively rewrites the claim, despite its
`
`very language that makes clear that this step is directed toward a client’s capability
`
`to determine what is to be displayed, and not simply the step of displaying.
`
`d. Petitioners’ Grounds of Challenge Rely On Art Already Considered
`by the USPTO Examiner
`
`The purported grounds of rejection are as follows:
`
`Ground Basis
`
`Reference
`
`Anticipation of Claims 4, 6, 8,
`
`Funkhouser
`
`and 9
`
`Obviousness of Claims 5 & 7
`
`Funkhouser in view of Funkhouser ‘93
`
`Anticipation of Claims 4, 6, 8,
`
`Durward
`
`and 9
`
`Obviousness of Claims 5 & 7 Durward in view of Schneider
`
`1
`
`2
`
`3
`
`4
`
`
`
`Throughout this Preliminary Response, for ease of understanding, Patent
`
`Owner will refer to these prior art references by the names indicated above, rather
`
`12 
` 
`
`

`

`than by exhibit number. These prior art references are described below at Section
`
`III, in conjunction with the arguments presented in this Preliminary Response.2
`
`Notwithstanding the many substantive defects of Durward and Funkhouser,
`
`as explained below, the Board possesses the discretion to deny at least Grounds 3-4
`
`based on Durward. Indeed, there is no reason for the Board to institute an inter
`
`partes review based on Durward. The Petition’s Grounds 3-4 rely upon Durward,
`
`but Durward was already considered by the examiner during prosecution, and the
`
`claims of the ‘558 patent issued over this subject matter.
`
`Thus, even if the Petition were not deficient in its grounds of challenge
`
`based on these references for the reasons discussed below, 35 U.S.C. § 325(d)
`
`gives the Board statutory discretion to dismiss the Petition’s Grounds 3-4 since the
`
`same or substantially the same prior art was previously presented to the USPTO:
`
`“[i]n determining whether to institute or order a proceeding under this chapter,
`
`chapter 30, or chapter 31, the Director may take into account whether, and reject
`
`the petition or request because, the same or substantially the same prior art or
`
`                                                            
`2 Patent Owner reserves all right to present further argument and evidence related
`
`to these prior art references and the content of the Petition and supporting Exhibits
`
`if Inter Partes Review is instituted, consistent with the Board’s Rules and practice.
`
`No waiver is intended by any argument withheld at this stage of the proceeding.
`
` 
`
`13 
` 
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`

`

`arguments previously were presented to the Office.” (emphasis added). The
`
`claims of the ‘558 patent were rightfully allowed over Durward. The Board should
`
`not disturb the examiner’s correct conclusion.
`
`III. Argument
`a. Petitioner’s Theories of Anticipation Fail to Identify Each Recited
`Feature of the Challenged Claims
`
`As shown below, Petitioner’s theories of anticipation fail to consider the full
`
`claim language of independent claims 4, 6, and 8. Specifically, in each challenge,
`
`Petitioner fails to explain, as required under 37 C.F.R. § 42.22(a)(2), how the full
`
`features of the claim elements are separately disclosed by the allegedly-
`
`anticipatory Funkhouser and Durward references. This failure is fatal to the
`
`Petition, which should be denied without institution.
`
`b. Ground 1’s Challenge Based on Funkhouser Fails to Identify all
`Features of Claim 4
`
`Funkhouser discloses a system of communicating entity state changes to
`
`clients in a virtual environment. Funkhouser’s system, RING, uses algorithms “to
`
`compute the region of influence for each state change, and then update messages
`
`are sent only to the small subset of workstations to which the update is relevant.”
`
`Funkhouser at 02. “Real-time update messages are propagated only to servers and
`
`clients containing entities inside some cell visible to the one containing the updated
`
`entity.” Id. at 03. However, Funkhouser is completely silent regarding how the
`
`14 
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`
`

`

`client workstation uses the update messages to generate the resulting image
`
`displayed on the workstation. For example, while claim 4 recites the step of
`
`“determining … avatars that are to be displayed to the user associated with said
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`each client process,” Funkhouser fails to expressly disclose how or even whether
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`the client workstation is capable of determining which avatars are displayed.
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`Moreover, as will be explained below, Petitioner implicitly concedes this
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`disclosure failure in Funkhouser since Petitioner trends toward a theory of inherent
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`disclosure without establishing that such features are necessarily disclosed as
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`required under such a theory.
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`As such, even if Funkhouser is a proper prior art publication, which Patent
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`Owner does not concede3, Petitioner fails to establish all features of claim 4, as
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`arranged in the claim, in Funkhouser. Thus, Funkhouser necessarily fails to
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`anticipate claim 4.
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`According to Petitioner, Funkhouser anticipates the independent claims by
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`allegedly disclosing both “server-side filtering” that reduces the number of
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`3 Petitioner alleges a publication date for Funkhouser of no later than April 12,
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`1995 (see Pet. at 7), while Worlds Chat was released to the public and drawing the
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`attention of technology journalists nearly contemporaneously. See Ex. 2008, 2009.
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`Patent Owner denies that Funkhouser was published prior to the “date of
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`invention,” as required under 35 U.S.C. § 102(a).
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`positional update messages sent from the server to the client workstation, and also
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`“client processing” that reduces the number of entities further for display on the
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`client workstation. Pet. at 7. But contrary to Petitioner’s position, Funkhouser fails
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`to disclose at least “determining … avatars that are to be displayed to the user
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`associated with said each client process,” as recited in claim 4. Funkhouser
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`similarly fails to disclose features of the ‘558 patent’s other independent claims.
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`One source of Petitioner’s error is the reliance on Funkhouser’s disclosure
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`that an “entity’s visibility is conservatively over-estimated.” Funkhouser at 03;
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`Pet. at 24. Petitioner presents this quotation as support that the client receives
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`more positions than “a narrower set of updates that are actually visible based on
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`the client’s line of sight.” Pet. at 26. Based on this quotation, Petitioner argues that
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`the client determines, from the received positions, “avatars that are to be displayed
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`to the user associated with said each client process,” as recited in claim 4. Pet. at
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`26. But this characterization of Funkhouser is not consistent with Funkhouser’s
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`express disclosure, and is entitled to no weight.
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`Specifically, according to Funkhouser, each client maintains surrogates for
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`the “subset of remote entities visible to at least one entity local to the client.”
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`Funkhouser at 04. A surrogate represents a client’s model of the other entity, and
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`contains “representations for the entity’s geometry and behavior.” Id. at 03.
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`Notably, Funkhouser does not disclose a client using an “update message” for
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`16 
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`anything other than updating the “geometric and behavioral models for the entity’s
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`local surrogate.” Id. Further, per Funkhouser, “[b]etween updates, surrogate
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`behavior is simulated by every client.” Id.
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`Funkhouser also discloses that “[c]lient workstations must store, simulate,
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`and process update messages only for the subset of entities visible to one of the
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`client’s local entities.” Id. at 04 (emphasis added). But according to Funkhouser,
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`this processing is limited to updating the “geometric and behavioral models for the
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`entity’s local surrogate.” Id. at 03. Funkhouser does not expressly disclose any
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`other use of update messages, and fails to expressly disclose at least “determining
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`… avatars that are to be displayed to the user associated with said each client
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`process,” as recited in claim 4.
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`Compounding Petitioner’s error is Dr. Zyda’s argument that Funkhouser
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`Plate II “describes that the client received and processed updates for 14 remote
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`entities but, as shown in the picture, determines a set of four entities to display
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`based on the user’s field of view.” Pet. at 27 (citing to Funkhouser at 09, Plate II;
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`Ex. 1002 at ¶89). Dr. Zyda also testifies that:
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`[A]fter receiving the filtered positional updates from the server, the
`client performs its own calculations, including updating the surrogates
`of the remote entities, in order to determine which of the remote
`entities to display within the client’s field of view. This is further
`illustrated by the Funkhouser’s Plate II (showing a user’s viewpoint)
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`and the corresponding caption, which describes that the client
`received and processed updates for 14 remote entities but, as shown in
`the picture, determined a set of four entities to display based on the
`user’s field of view. Id. at 09 (Plate II).
`Ex. 1002 at ¶89 (citing to Funkhouser at 09 (Plate II)). As should be evident above,
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`Dr. Zyda provides no citation for his assertion that the “client performs its own
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`calculations … in order to determine which of the remote entities to display within
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`the client’s field of view.” Dr.