UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_______________
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`_______________
`
`BUNGIE, INC.,
`Petitioner
`
`v.
`
`WORLDS INC.,
`Patent Owner
`
`_______________
`
`Case IPR2015-01319
`Patent 8,082,501
`
`_______________
`
`
`
`PATENT OWNER WORLDS INC.’S
`MOTION FOR ROUTINE DISCOVERY OR,
`ALTERNATIVELY, ADDITIONAL DISCOVERY1
`
`
`1 An identical motion, including exhibits, is being filed in each of IPR2015-01264,
`-01268, -01269, -01319, -01321, and -01325.
`
`
`
`_______________
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`_______________
`
`BUNGIE, INC.,
`Petitioner
`
`v.
`
`WORLDS INC.,
`Patent Owner
`
`_______________
`
`Case IPR2015-01319
`Patent 8,082,501
`
`_______________
`
`
`
`PATENT OWNER WORLDS INC.’S
`MOTION FOR ROUTINE DISCOVERY OR,
`ALTERNATIVELY, ADDITIONAL DISCOVERY1
`
`
`1 An identical motion, including exhibits, is being filed in each of IPR2015-01264,
`-01268, -01269, -01319, -01321, and -01325.
`
`
`
`
`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)
`
`
`
`
`
`
`Exhibit
`
`2001
`
`2002
`
`
`2003
`
`
`2004
`
`
`2005
`
`
`
`ii
`
`
`
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`I. REQUEST FOR RELIEF
`
`Pursuant to the Board’s Order (paper 8), Worlds Inc. moves under 37 C.F.R.
`
`§ 42.51(b) for Petitioner Bungie, Inc. to produce as “routine discovery”
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`information inconsistent with positions taken in Bungie’s Petition, or in the
`
`alternative to produce additional discovery. Worlds requests that the Board grant
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`discovery into the following categories related to real party-in-interest (“RPI”):
`
`(1) documents related to any use of Activision’s development
`advances pursuant to the agreement or any other money provided by
`Activision to fund these cases, (2) documents related to Activision’s
`opportunity to review and approve Petitioner’s legal review of
`intellectual property issues, (3) [omitted], (4) documents related to
`any claim by Activision for indemnification by Petitioner regarding
`Patent Owner’s patents, and (5) any communications regarding
`categories 1–4.
`Order at 2. The associated requests sought by this motion are:
`
`Category 1
`
`RFP NO. 1 - Documents identifying the Bungie account(s) from which payment
`
`was tendered for all legal reviews associated with the Worlds Patent(s), including
`
`legal analysis of the Worlds Patent(s), drafting the Bungie IPR petitions, and
`
`paying the USPTO filing fees for the IPRs.
`
`RFP NO. 2 - Documents identifying all Bungie account(s) into which Activision’s
`
`Development Advances are or were held or deposited, directly or indirectly, for the
`
`1
`
`
`
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`purpose of developing the Destiny Products.
`
`RFP NO. 3 - Documents showing that funds received from Activision were used,
`
`directly or indirectly, to pay for, or co-mingled with funds used to pay for Bungie’s
`
`legal review(s) relating to any Worlds Patent(s).
`
`Category 2
`
`RFP NO. 4 - Communications between Bungie and Activision concerning legal
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`review of any Worlds Patent(s), including Activision’s review or approval, or
`
`opportunity to review or approve Bungie’s legal reviews of any Worlds Patent(s)
`
`or any version(s) of an IPR Petition associated with any Worlds Patent(s).
`
`Category 4
`
`RFP NO. 5 - Communications between Bungie and Activision related to Bungie’s
`
`indemnification of or obligation to indemnify Activision based on any of the
`
`Worlds Patent(s).
`
`Category 5
`
`RFP NO. 6 - For all Communications/Documents responsive to RFPs Nos. 1-5 but
`
`withheld on privilege, a privilege log identifying the Communication/Document
`
`being withheld, the author or sender, recipient(s), subject matter, date, and the RFP
`
`to which the Communication/Document is responsive.
`
`II. FACTUAL BACKGROUND
`
`On April 16, 2010, Activision Publishing, Inc. and Bungie entered into a
`
`2
`
`
`
`
`Software Development and Publishing Agreement (“Agreement”), under which
`
`Bungie developed a game (Destiny) published by Activision. Ex. 2002. Under this
`
`Agreement, Bungie is obligated to conduct “legal reviews of the Products to ensure
`
`that all Intellectual Property and other rights are fully cleared for use.” Ex. 2002 at
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`10 (Sec. 7A.15(j)). Bungie also warrants that “the use, development, distribution
`
`and publishing [of the Product Intellectual Property] … shall not infringe upon or
`
`violate the rights of, nor require consent of, any other party.” Ex. 2002 at 19 (Sec.
`
`14.1.2). This warranty requires Bungie’s “reasonable investigation.” Id. And while
`
`Bungie must perform the legal reviews for IP clearance, Bungie’s reviews are
`
`subject to Activision’s “prior review and approval.” Ex. 2002 at 10 (Sec. 7A.15).
`
`The Agreement also provides for financial support from Activision to
`
`Bungie for development of Destiny. Activision and Bungie “understand and
`
`acknowledge that the Development Advances shall fully fund [Bungie’s]
`
`operations directly related to the development of the Products (including overhead
`
`costs associated therewith, but excluding any built-in profit margin) during the
`
`Development Term.” Ex. 2002 at 15 (Sec. 10.1). These operations include the legal
`
`reviews required under Sec. 7A.15(j), which Bungie and Activision intended to be
`
`paid for by the Development Advances. Bungie in fact warrants this usage to
`
`Activision: “All Development Advances paid by Activision to [Bungie] hereunder
`
`shall be utilized by [Bungie] solely to fund the costs of creation and development
`
`3
`
`
`
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`of the Products and otherwise cover day-to-day overhead and operational expenses
`
`that are reasonably necessary and related to the creation and development of the
`
`Products … .” Ex. 2002 at 20 (Sec. 14.1.4).
`
`Further, Activision was served with a complaint on this IPR’s patent on
`
`April 4, 2012, and has been litigating with Worlds since that time. Ex. 2003. Under
`
`35 U.S.C. § 315(b), an IPR petition filed more than 1 year after Activision’s
`
`service of the complaint cannot be instituted against this patent if Activision is
`
`petitioner or real party-in-interest to the petition. See Loral Space & Comms., Inc.
`
`v. Viasat, Inc., IPR2014-00236, paper 7 at 8 (PTAB Apr. 21, 2014). On November
`
`13, 2014, a letter from Worlds’ litigation counsel to Activision’s litigation counsel
`
`identified the Activision/Bungie game Destiny as an intended product-at-issue in
`
`the litigation. Ex. 2004. Bungie’s IPR petitions followed in 2015.
`
`Under the Agreement, Bungie was required to perform legal reviews related
`
`to the Worlds patents for IP clearance and warranty of non-infringement, and these
`
`reviews were contractually subject to Activision’s prior review and approval.
`
`Further, Activision and Bungie intended for these legal reviews to be funded as
`
`part of Destiny development by Activision’s Development Advances. Through
`
`these mechanisms, Activision possessed a contractual opportunity to control and
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`fund the IPR petitions against Worlds. Worlds seeks evidence of Activision’s
`
`actual control and funding of the IPR petitions against Worlds.
`
`4
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`
`
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`III. REAL PARTY-IN-INTEREST AND ROUTINE DISCOVERY
`
`Factors relevant to the RPI determination include (inter alia): “whether a
`
`pre-existing substantive legal relationship with the party named in the proceeding
`
`justifies binding the third party;” and “whether the third party exercised or could
`
`have exercised control over the proceeding.” Atlanta Gas Light Co. v. Bennett
`
`Regulator Guards, Inc., IPR2013-00453, paper 88 at 9 (PTAB 1/6/2015) (citing to
`
`Taylor v. Sturgell, 553 U.S. 880, 893 n.6 (2008)). Through independent
`
`investigation, Worlds discovered the Agreement between Activision and Bungie.
`
`This Agreement represents a “pre-existing substantive legal relationship” that gives
`
`Activision at minimum the opportunity to control Bungie’s legal reviews and IPR
`
`petitions. This Agreement is inconsistent with Bungie’s position that it is the sole
`
`RPI. Thus, this Agreement should have been produced under routine discovery.
`
`Worlds seeks discovery directed toward Activision’s actual exercise of
`
`control over Bungie’s legal reviews and IPR petitions by way of correspondence
`
`about Bungie’s legal reviews of the Worlds patents, Bungie’s preparation of the
`
`IPR petitions, Bungie’s direct or indirect use of Activision’s Development
`
`Advances, and Activision’s demand for indemnification by Bungie. Each of these
`
`categories indicates actual control, and is inconsistent with Bungie’s position that it
`
`is the sole RPI (i.e. the sole party having opportunity or actual control of the IPR
`
`petitions). For example, RFPs 1-4 are directed to factors showing that Activision
`
`5
`
`
`
`
`actually controlled these IPR petitions, and RFP 5 is directed to Bungie and
`
`Activision’s “pre-existing substantive legal relationship” through indemnification.
`
`Responsive evidence is inconsistent with Bungie’s statement about RPI, and is
`
`relevant and useful to show that Activision is also an RPI. See, e.g.,Hughes
`
`Network Systems, LLC et al v. California Inst. Of Tech., IPR2015-00059, paper 21
`
`at 4-5 (PTAB May 11, 2015). Moreover, Bungie already should have produced this
`
`information as “routine discovery” under 37 C.F.R. § 42.51(b)(1)(iii).
`
`IV. REASONS FOR ORDERING ADDITIONAL DISCOVERY
`
`Worlds alternatively requests additional discovery into documents revealing
`
`that Activision should have been named as an RPI. The additional discovery
`
`requested by Worlds is “in the interests of justice.” See 37 C.F.R. 42.51(b)(2)(i).
`
`The discovery requests satisfy the factor test from Garmin Int’l, Inc. et al v.
`
`Cuozzo Speed Techs. LLC, IPR2012-00001, paper 26 (PTAB Mar. 5, 2013) ((i)
`
`more than a possibility and mere allegation; (ii) litigation positions and underlying
`
`basis, (iii) ability to generate equivalent information by other means, (iv) easily
`
`understandable instructions, and (v) requests not overly burdensome to answer.).
`
`Further, the Board weighs “other considerations in addition to the Garmin factors,
`
`such as whether the requested additional discovery is very limited and sought early
`
`in the proceeding.” Arris Group, Inc. v. C-Cation Tech., LLC, IPR2014-00746,
`
`paper 15 at 3 (PTAB July 24, 2014). This request is being brought early in this
`
`6
`
`
`
`
`proceeding, before a preliminary response is filed, and is limited to categories of
`
`discovery approved by the Board in other cases.
`
`A. Request for Production on Financial Support (RFPs 1-3)
`
`RFP Nos. 1-3 are easily understandable and seek documents sufficient to
`
`identify whether the Development Advances paid to Bungie by Activision were
`
`used for or co-mingled with funds used to pay for legal reviews of the Worlds
`
`patents or the IPR petitions. The existence of these documents is more than a mere
`
`possibility or allegation; Bungie’s account records must exist, and Bungie must
`
`possess documents indicating payment sources for legal review and IPR petitions.
`
`Per the Agreement, Bungie and Activision envisioned that all development of
`
`Destiny, including overhead costs (like legal review related to IP clearance) would
`
`be paid for by Development Advances. Further, Bungie is required to maintain
`
`books of account for project development. Ex. 2002 at 17 (Sec. 11.5-11.6). Thus,
`
`the requested materials exist and these requests are not overly burdensome.
`
`These requests are in the interest of justice to provide the Board with the
`
`necessary information to evaluate whether Activision’s funding was used or co-
`
`mingled with funds used for this IPR petition or the underlying review. See, e.g.,
`
`Hughes Network Systems, LLC, IPR2015-00059, paper 21 at 4-5 (granting
`
`discovery into third party funding of IPR petitions). Evidence that Bungie used
`
`funds earmarked by the Agreement for the development of the Destiny Products
`
`7
`
`
`
`
`would be useful to show that Activision should have been named an RPI. Also, this
`
`request does not ask for litigation positions. It is directed to whether Activision’s
`
`Development Advances were used or co-mingled with funds used to pay for the
`
`legal work rather than the substance of the work itself. Finally, the requested
`
`information cannot be obtained by other means as Bungie’s account information is
`
`not public or otherwise accessible to Worlds.
`
`B. Request for Production on Control of the IPR Petitions (RFP 4)
`
`The Agreement requires Bungie to perform legal reviews for IP clearance,
`
`but gives Activision the contractual right (i.e. opportunity) to review and approve
`
`Bungie’s legal review with respect to the Worlds patents. Ex. 2002 at 10 (Sec.
`
`7A.15(j)). Thus, it is more than a possibility that the requested communications
`
`exist; the documents sought by Worlds are documents expressly required by the
`
`Agreement. The Agreement expressly grants Activision the ability to exercise
`
`control over the IPR proceedings, a critical aspect of the RPI analysis. Activision’s
`
`communications about the legal review or IPR petitions are similarly critical as
`
`they will show Activision’s exercise of control provided for under the Agreement.
`
`Once again, this request does not ask for litigation positions, and privileged
`
`communications may be logged rather than produced (See RFP 6). Further, the
`
`requested information cannot be obtained by other means as it is not public or
`
`otherwise accessible to Worlds. Finally, this request is easily understandable and
`
`8
`
`
`
`
`not overly burdensome as it is directed to recent and focused communications. As
`
`such, this request is also in the interests of justice. See, e.g., Hughes Network
`
`Systems, LLC, IPR2015-00059, paper 21 at 4-5 (granting discovery into review of
`
`IPR petitions by third party); see also Coalition for Affordable Drugs II LLC. V.
`
`NPS Pharmaceuticals, Inc., IPR2015-00990, paper 14at 7 (PTAB Jul. 2, 2015).
`
`C. Request for Production of Indemnification Claim (RFP 5)
`
`RFP No. 5 is easily understandable, as it seeks a communications regarding
`
`indemnification from Activision to Bungie. The Agreement conditions Bungie’s
`
`indemnification of Activision on notice and an opportunity for Bungie to control
`
`the litigation. Ex. 2002 at 21 (Sec. 15.3). This Agreement, along with Activision’s
`
`claim for indemnification, provides evidence that Activision and Bungie have a
`
`“pre-existing substantive legal relationship,” a factor that contributes to a finding
`
`that Activision is an RPI to this Petition. Further, the existence of this document is
`
`more than a mere possibility or allegation; after litigation counsel notified
`
`Activision that Destiny was an intended product-at-issue in the litigation, Bungie’s
`
`obligation to conduct legal reviews was triggered. Further, there is no dispute that
`
`Bungie possesses an indemnification obligation under the Agreement. This request
`
`is easily understandable and not overly burdensome as is directed to recent and
`
`focused communications. Further, it does not request litigation positions and
`
`privileged communications may be logged rather than produced. Finally, the
`
`9
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`
`
`
`requested information cannot be obtained by other means as it is not public or
`
`otherwise accessible to Worlds. It is therefore in the interests of justice. See, e.g.,
`
`Arris Group, Inc., IPR2014-00746, paper 15 at 3 (granting additional discovery
`
`into indemnification).
`
`V. CONCLUSION
`
`By the very existence of the Agreement and the documents that must exist
`
`according to the Agreement terms, there is sufficient evidence for the Board to
`
`conclude that Activision had the opportunity to control this proceeding, and
`
`therefore should have been named a real party-in-interest in the Petition. These
`
`proposed discovery requests attached as Exhibit 2005 and discussed above are in
`
`the interests of justice because they seek evidence documenting Activision’s actual
`
`control over the IPR proceedings. The requested discovery is useful in that it will
`
`provide further support that Activision should have been named a real party-in-
`
`interest under 35 U.S.C. § 312(a)(2), and this outcome is relevant to whether a
`
`statutory bar against institution exists under 35 U.S.C. § 315(b).
`
`Respectfully submitted,
`
`By: /s/ Wayne M. Helge
`Wayne M. Helge (Reg. No. 56,905)
`Counsel for Patent Owner
`
`10
`
`
`
`
`Dated: August 6, 2015
`
`
`
`
`
`
`
`
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`CERTIFICATE OF SERVICE
`
`
`
`
`
`I hereby certify that on August 6, 2015, a true and correct copy of the
`
`foregoing Patent Owner’s Motion for Routine Discovery or, Alternatively,
`
`Additional Discovery, including exhibits, is being served via email, by consent, to
`
`the Petitioner at the correspondence addresses of record as follows:
`
`Michael T. Rosato
`Reg. No. 52,182
`Wilson Sonsini Goodrich & Rosati
`701 Fifth Ave.
`Suite 5100
`Seattle, WA 98104-7036
`Telephone: (206) 883-2529
`Facsimile: (206) 883-2699
`E-mail: mrosato@wsgr.com
`
`Matthew A. Argenti
`Reg. No. 61,836
`Wilson Sonsini Goodrich & Rosati
`650 Page Mill Road
`Palo Alto, CA 94304
`Telephone: (650) 354-4154
`Facsimile: (650) 493-6811
`E-mail: margenti@wsgr.com
`
`
`
`By: /s/ Wayne M. Helge
` USPTO Reg. No. 56,905
` Counsel for Patent Owner
`
`
`
`11
`
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