Paper: 48
`Trials@uspto.gov
`571-272-7822 Entered: November 29, 2018
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`BUNGIE, INC.,
`Petitioner,
`
`v.
`
`WORLDS INC.,
`Patent Owner.
`____________
`
`Case IPR2015-01264 (Patent 7,945,856 B2)
`Case IPR2015-01319 (Patent 8,082,501 B2)
`Case IPR2015-01321 (Patent 8,145,998 B2)
`____________
`
`
`
`Before KARL D. EASTHOM, KEN B. BARRETT, and
`JASON J. CHUNG, Administrative Patent Judges.
`
`BARRETT, Administrative Patent Judge.
`
`
`
`
`ORDER
`Conduct of the Proceedings
`37 C.F.R. § 42.5
`
`

`

`IPR2015-01264 (Patent 7,945,856 B2)
`IPR2015-01319 (Patent 8,082,501 B2)
`IPR2015-01321 (Patent 8,145,998 B2)
`
`
`Background
`On September 7, 2018, the United States Court of Appeals for the
`
`Federal Circuit issued a decision vacating the Board’s final written decisions
`in the above-captioned inter partes reviews1 and remanded for consideration
`as to whether Patent Owner Worlds Inc. is estopped from arguing the real-
`party-in-interest (“RPI”) issue and, if not, to reevaluate the merits of that
`RPI issue. Worlds Inc. v. Bungie, Inc., 903 F.3d 1237, 1248 (2018). The
`Federal Circuit stated that it could not discern whether the Board improperly
`“placed the burden on Worlds, the patent owner, to persuade the Board that
`Bungie failed to list a real party in interest that would render the petitions
`time-barred under § 315(b)” and remanded “with instructions for the Board
`to weigh the evidence in a manner that places the ultimate burden of
`persuasion on Bungie, the IPR petitioner, and to do so in a manner consistent
`with our recent precedent.” Id. at 1246–1247. Specifically, the Federal
`Circuit stated the following:
`On remand, the Board should
`[1] [F]irst address whether Worlds is estopped from arguing the
`real-party-in-interest issue. The Board should thoroughly
`consider the posture of the related proceedings, as well as any
`relevant exceptions to collateral estoppel.
`[2] If the Board determines that collateral estoppel does not
`apply, the Board should then reevaluate the merits of the real-
`party-in-interest issue.
`[3] And, in light of this court’s recent guidance on the
`substantive real-party-in-interest inquiry, the Board, in its
`discretion, should consider whether to allow for additional
`discovery on this issue.14
`
`1 Unless indicated otherwise, citations herein are to papers and exhibits filed
`in IPR2015-01264.
`
`2
`
`

`

`IPR2015-01264 (Patent 7,945,856 B2)
`IPR2015-01319 (Patent 8,082,501 B2)
`IPR2015-01321 (Patent 8,145,998 B2)
`
`Id. (paragraphing and numbering added) (citing, in footnote 14, Applications
`in Internet Time, LLC v. RPX Corp., 897 F.3d 1336 (Fed. Cir. 2018), Wi-Fi
`One, LLC v. Broadcom Corp., 887 F.3d 1329 (Fed. Cir. 2018), and
`WesternGeco LLC v. ION Geophysical Corp., 889 F.3d 1308 (Fed. Cir.
`2018)).
`
`As to the collateral estoppel matter, the Federal Circuit stated the
`following:
`Without a more comprehensive understanding of the issues
`raised in each case [of the six related cases], we decline to apply
`collateral estoppel. Instead, given that we are already remanding
`this case with regard to the merits of the real-party-in-interest
`analysis, we find it appropriate to have the Board analyze in the
`first instance whether issue preclusion should apply under these
`particular circumstances. In doing so, the Board should develop
`a more complete record that explains the differences, if any,
`between the issues raised in present IPRs and the unappealed
`IPRs. The Board should also consider any relevant exceptions to
`issue preclusion raised by the parties and explain why such
`exceptions do or do not apply to these facts. See Restatement
`(Second) of Judgments § 28 (1982); see also In re Cygnus
`Telecomms. Tech., LLC, Patent Litig., 536 F.3d 1343, 1349–50
`(Fed. Cir. 2008) (regarding issue preclusion where a party did
`not appeal all cases consolidated in a multi-district litigation
`proceeding).
`Id. at 1247–1248.
`
`On November 7, 2018, Judges Easthom, Barrett, and J. Chung held a
`conference call with counsel2 for the parties to discuss the procedures for the
`
`
`2 During the call, Patent Owner noted that it had filed, earlier that day,
`powers of attorney for two new backup counsel along with updated
`mandatory notices. Tr. 5:8–11. Patent Owner’s counsel requested the
`removal from the cases of the prior backup counsel, indicating that at least
`3
`
`

`

`IPR2015-01264 (Patent 7,945,856 B2)
`IPR2015-01319 (Patent 8,082,501 B2)
`IPR2015-01321 (Patent 8,145,998 B2)
`
`consideration of issue preclusion and the reevaluation of the real-party-in-
`interest issue. Ex. 1051 (“Tr.”). The parties met and conferred prior to the
`call but were unable to reach agreement as to the procedures on remand.
`Discovery and the Evidentiary Record
`During the initial phases of these cases and prior to the issuance of the
`
`final written decisions and the corresponding appeals, Patent Owner moved
`for routine discovery or, alternatively, additional discovery concerning real-
`party-in-interest. Paper 9. Petitioner opposed the request for discovery.
`Paper 10. Patent Owner’s motion was denied because Patent Owner had
`“not shown more than a mere allegation that something useful will be found
`or that Petitioner’s RPI positions are inconsistent with record evidence that
`would justify additional or routine discovery on this record.” Paper 11, 8.
`Patent Owner did not appeal the denial of discovery. Worlds Inc. v. Bungie,
`Inc., 903 F.3d at 1241. As discussed below, both parties, during the post-
`remand conference call, argued that this earlier discovery motion practice
`supports a determination that further discovery should not be allowed.
`
`Patent Owner asserts that it prevails on the RPI issue based on the
`evidence currently in the record, and argues the evidentiary record should
`not be reopened. See Tr. 14:4–18:15; see id. at 17:18–25 (“And we think
`
`
`one attorney had left the firm. Id. at 5:12–19; see Paper 45 (updated
`mandatory disclosure listing as backup counsel Alan A. Wright and Aldo
`Noto, but not previously identified (Paper 6) backup counsel Donald Jackson
`and Michael Casey). During the call, we implicitly granted the request and
`authorized the prior backup counsel to withdraw. See id. at 5:20–24; 37
`C.F.R. 42.10(e). Patent Owner does not need to take any further action in
`this regard.
`
`4
`
`

`

`IPR2015-01264 (Patent 7,945,856 B2)
`IPR2015-01319 (Patent 8,082,501 B2)
`IPR2015-01321 (Patent 8,145,998 B2)
`
`with the evidence that we have here, we have shown and we have met what
`the Federal Circuit looks to for -- in the Applications in Internet Time v. RPX
`Corporation, that in fact Activision will benefit from these IPRs and
`Activision is within that flexible RPI view that the Federal Circuit wants to
`apply.”); id. at 13:10–16. Patent Owner (Tr. 16:3–6) contends that Petitioner
`cannot show good cause as to why more discovery should be allowed
`because Petitioner has taken the position that there is no relevant evidence to
`be discovered, pointing to Petitioner’s earlier opposition to Patent Owner’s
`request for discovery where Petitioner represented that “Bungie believes that
`it has already complied with its routine discovery obligations [concerning
`any evidence contradictory to its assertion that Bungie is the sole RPI]”
`(Paper 10, 5) and Petitioner’s counsel’s statement that Patent Owner’s
`request for discovery was “an exercise in futility” (Ex. 2001, 31:2–32:7).
`
`Similarly, Petitioner argues that it will prevail based on the evidence
`currently of record. See, e.g., Tr. 41:10–13 (“And there’s -- the evidence
`currently of record is -- weighs in one favor, and that is not a finding of
`inadequate RPI listing. That is evidence of record.”). Petitioner argues that
`Patent Owner should not be allowed any further discovery because Patent
`Owner did not appeal the denial of its earlier motion for discovery. Id.
`at 43:23–44:6 (“So as far as -- you know, and again, going back to the
`additional discovery decision, that has -- that ship has sailed. You know,
`any -- Worlds chose not to contest that decision on appeal, so that has sailed.
`I mean, if we're trying to wrap up the case in a cost efficient manner, the
`evidence itself right now points in one direction.”).
`
`5
`
`

`

`IPR2015-01264 (Patent 7,945,856 B2)
`IPR2015-01319 (Patent 8,082,501 B2)
`IPR2015-01321 (Patent 8,145,998 B2)
`
`Although Petitioner indicates contentment with the existing
`
`evidentiary record, it proposes to place into the record “further
`noncontroversial, non-testimonial evidence” that, along with the evidence of
`record, purportedly will allow the Board to reach the same decision as before
`on the real-party-in-interest issue. Tr. 55:6-12; see also id. at 44:12–22.
`Petitioner identifies three categories of “noncontroversial, non-testimonial
`evidence” that it wishes to enter into the record: 1) papers from the records
`of the related IPRs to show, for the collateral estoppel issue, that the same
`arguments were advanced in all the cases; 2) documents of record in the
`District Court ligation between Activision and Worlds to show that Bungie
`was never involved in that litigation; and 3) “basic press release
`information” or similar to show that the Destiny video game product was
`released after the asserted statutory bar date. Id. at 45:9–46:14, 47:10–48:4.
`During the call, Patent Owner did not indicate objection to the filing of the
`purported “noncontroversial, non-testimonial evidence.” See id. at 48:15–
`21. To the contrary, Patent Owner indicated that much of the facts sought to
`be proven by Petitioner, while viewed mostly as irrelevant by Patent Owner,
`likely could be the subject of agreement and stipulation. Id. at 48:15–50:11.
`
`In addition to the noncontroversial and non-testimonial evidence,
`Petitioner indicated a willingness to submit a declaration to attest “that
`Bungie was not filing things at the behest of Activision” and would allow a
`cross-examination of that declarant. Tr. 46:16–47. However, Petitioner’s
`willingness on this point was conditioned upon that cross-examination being
`the entire extent of discovery that Patent Owner would be allowed. See id.
`at 47:4–9 (“I would say it’s not necessary then to go through some invasive
`
`6
`
`

`

`IPR2015-01264 (Patent 7,945,856 B2)
`IPR2015-01319 (Patent 8,082,501 B2)
`IPR2015-01321 (Patent 8,145,998 B2)
`
`exploration or reopen the discovery requests that were denied and never
`appealed.”). After opposition from Patent Owner to the proposed limits on
`discovery and after Patent Owner’s identification of discovery it would seek
`if Petitioner opened the door via submission of a declaration (id. at 50:12–
`52:13), Petitioner stated that the evidence of record plus the
`“noncontroversial, non-testimonial evidence” would be adequate, id. at
`55:6–12. Specifically, Petitioner’s counsel stated “I think under the
`evidence that exists of the record and then any further noncontroversial, non-
`testimonial evidence, that there is more than adequate evidence to reach the
`same conclusions the Board had previously reached, and with that
`conclusion being supported by evidence of record.” Id.
`
`As both parties contend that discovery need not be reopened in order
`to resolve the dispositive issues remaining in these cases, we do not
`authorize any further discovery.
`
`Regarding the first category of Petitioner’s proposed noncontroversial
`evidence, the parties are authorized to file, as exhibits in these
`above-captioned cases, the papers in the records of the related IPRs that are
`necessary to “develop a more complete record that explains the differences,
`if any, between the issues raised in present IPRs and the unappealed IPRs.”
`Worlds Inc. v. Bungie, Inc., 903 F.3d at 1247. In selecting the papers to be
`filed, the parties should note that the Federal Circuit did not view necessarily
`the “issue” as the “ultimate determination of whether Activision is a real
`party in interest,” stating that “the determination of whether a party is a real
`party in interest may differ from one IPR to the next, even among a set of
`seemingly related IPRs.” Id.
`
`7
`
`

`

`IPR2015-01264 (Patent 7,945,856 B2)
`IPR2015-01319 (Patent 8,082,501 B2)
`IPR2015-01321 (Patent 8,145,998 B2)
`
`Regarding the second and third categories of Petitioner’s proposed
`
`noncontroversial evidence, we accept Patent Owner’s offer3 and opt to
`receive joint stipulations rather than fill the record unnecessarily with
`documents from the District Court record in PACER and with press releases
`and such. Accordingly, the parties shall file, prior to or concurrently with
`Petitioner’s opening brief, joint stipulations as to Petitioner’s categories 2
`and 3, namely information that otherwise would be reflected in documents
`from the District Court’s PACER record and information regarding the
`timing related to the Destiny video game product. The parties may, and are
`encouraged to, include additional stipulations as to factual matters pertaining
`to the collateral estoppel and RPI issues. We will not deem any stipulation
`as a waiver of a relevancy argument. In other words, the parties may argue
`later that a stipulated fact is irrelevant to the pertinent issues.
`
`With the exception of the filing of the above-discussed
`“noncontroversial evidence,” the evidentiary record remains closed.
`Briefing
`During the conference call, briefing of the issues was discussed. We
`
`agree with the parties that briefing regarding the collateral estoppel issue and
`
`
`3 Patent Owner’s counsel: “Well, Your Honor, I think on the
`noncontroversial evidence, just regarding the documents from PACER and
`Destiny being released, I recognize -- and in fact, I think we would agree, it
`may actually already be in the record in some form that Destiny was never
`added to the litigation” (Tr. 48:15–21), and “So I think that the details here
`about PACER, about Destiny, I think we could probably handle that stuff
`with a pretty simple stipulation about the timing of Destiny or the relevance
`here, but it doesn't have any importance, frankly, to the time bar” (id.
`at 49:25–50:7).
`
`8
`
`

`

`IPR2015-01264 (Patent 7,945,856 B2)
`IPR2015-01319 (Patent 8,082,501 B2)
`IPR2015-01321 (Patent 8,145,998 B2)
`
`the real-party-in-interest issue is desirable. See, e.g., Tr. 26:24–27:3
`(Petitioner: “I guess there’s some agreement between the parties that
`additional briefing would be in order.”); id. at 13:17–14:3 (Patent Owner);
`but see id. at 9:10–17 (Petitioner suggesting that the case would end without
`further briefing should Patent Owner fail to respond to the proposed rule to
`show cause); id. at 22:12–24 (Patent Owner suggesting that we could review
`only the prior briefing and the evidence currently of record and that the
`Board “would be justified in terminating the proceeding sua sponte without
`even issuing a final written decision.”).
`
`Patent Owner proposes that the two issues be briefed together by each
`respective party in a single paper (as opposed to a separate brief for each
`issue) and argues that Petitioner is the party with the burden and, therefore,
`should have to brief the issues first followed by Patent Owner’s response
`thereto. Id. at 10:2-11:5, 12:10–14:3, 30:13–19.
`
`Petitioner initially offered various proposals including: bifurcation of
`the briefing of the issues with the collateral estoppel issue briefed first4 and
`simultaneously by both parties, and for the Board to issue an order requiring
`Patent Owner to first show cause why the judgment should not be entered
`against it due to collateral estoppel. Id. at 8:14–9:9, 23:7–24:8, 27:5–28:4.
`
`
`4 Unlike Petitioner, we do not read the Federal Circuit’s instructions on
`remand as requiring the briefing to be bifurcated. See Tr. 9:3–22, 23:10–
`24:8. Rather, the Court merely indicated that the Board should, in reaching
`an ultimate determination, first address the collateral estoppel issue and then
`address the merits of the real-party-in-interest issue only if it is determined
`that collateral estoppel does not apply. Worlds Inc. v. Bungie, Inc., 903 F.3d
`at 1248. Our forthcoming decision shall comply with those instructions.
`9
`
`

`

`IPR2015-01264 (Patent 7,945,856 B2)
`IPR2015-01319 (Patent 8,082,501 B2)
`IPR2015-01321 (Patent 8,145,998 B2)
`
`Later in the call, Petitioner agreed to a briefing schedule of Petitioner’s
`opening brief followed by Patent Owner’s response followed by Petitioner’s
`reply. Id. at 31:11–13.
`
`On the circumstances of this case, we view it as appropriate and most
`efficient for Petitioner—the proponent of the collateral estoppel theory and
`the party with the ultimate burden of persuasion to show that its petitions are
`not time-barred due to the existence of a time-barred RPI—to brief both
`issues first. Patent Owner thereafter may file a response and Petitioner may
`file a reply to Patent Owner’s response.
`Order
`For the foregoing reasons, it is
`
`ORDERED that the evidentiary record in these cases remains closed
`
`except that the parties may file in the above-captioned cases, as exhibits and
`as outlined above, documents from the records of the related IPRs and joint
`stipulations of fact;
`
`FURTHER ORDERED that Petitioner is authorized to file in each
`captioned case, within one month of the filing date of this order, a brief
`addressing the issues of collateral estoppel and real-party-in-interest, and
`with the length of the brief not to exceed thirty (30) pages;
`
`FURTHER ORDERED that Patent Owner is authorized to file in each
`captioned case, within one month of the filing date of Petitioner’s brief, a
`Response addressing the same two issues, and with the length of the brief
`not to exceed thirty (30) pages;
`
`FURTHER ORDERED that Petitioner is authorized to file in each
`captioned case, within two weeks of the filing date of Patent Owner’s
`
`10
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`

`

`IPR2015-01264 (Patent 7,945,856 B2)
`IPR2015-01319 (Patent 8,082,501 B2)
`IPR2015-01321 (Patent 8,145,998 B2)
`
`Response, a Reply brief addressing only the arguments raised in Patent
`Owner’s Response, and with the length of the brief not to exceed twelve (12)
`pages; and
`
`FURTHER ORDERED that the parties are authorized to use the same
`caption of this order—namely a single caption listing all three cases—and
`shall file identical papers in each captioned case.
`
`
`
`
`
`
`
`11
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`

`

`IPR2015-01264 (Patent 7,945,856 B2)
`IPR2015-01319 (Patent 8,082,501 B2)
`IPR2015-01321 (Patent 8,145,998 B2)
`
`
`
`For PETITIONER:
`Michael T. Rosato
`Matthew A. Argenti
`Andrew Brown
`WILSON SONSINI GOODRICH & ROSATI
`mrosato@wsgr.com
`margenti@wsgr.com
`asbrown@wsgr.com
`
`
`For PATENT OWNER:
`Wayne M. Helge
`Alan A. Wright
`Aldo Noto
`DAVIDSON BERQUIST JACKSON & GOWDEY, LLP
`whelge@dbjg.com
`awright@dbjg.com
`anoto@dbjg.com
`
`
`
`
`
`
`12
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`