`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`MICROSOFT CORPORATION,
`Petitioner,
`
`v.
`
`WORLDS INC.,
`Patent Owner.
`
`_______________
`
`Case IPR2021-00277
`Patent 8,082,501
`____________
`
`
`
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`
`
`
`TABLE OF CONTENTS
`
`
`
`I.
`II.
`
`B.
`
`E.
`
`INTRODUCTION ........................................................................................... 1
`LIKE BUNGIE’S PRIOR IPR PETITION, MICROSOFT’S
`PETITION IS TIME-BARRED ...................................................................... 3
`A.
`Bungie’s Prior IPR Petition Was Time-Barred Under 35 U.S.C.
`§ 315(b) ................................................................................................. 3
`Activision Has Now Consented to its RPI Status to Bungie’s
`Petitions ................................................................................................. 7
`C. Microsoft Cannot Disprove Activision’s Influence on the
`Grounds Asserted in the Petition ........................................................... 8
`D. Microsoft’s Evidence Cannot Refute Activision’s Involvement
`in Microsoft’s Grounds ....................................................................... 10
`In Replicating Bungie’s Defective Petition, Microsoft Benefits
`Only Activision and Acquiesces to Activision’s RPI Status .............. 12
`35 U.S.C. § 315(b) Bars Institution of Microsoft’s Petition ............... 12
`F.
`III. THE FINTIV FACTORS ALSO SUPPORT DISCRETIONARY
`DENIAL......................................................................................................... 15
`IV. CONCLUSION .............................................................................................. 21
`
`
`
`
`
`
`- i -
`
`
`
`TABLE OF AUTHORITIES
`
`Cases
`Apple, Inc. v. Fintiv, Inc.,
`IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential) ......... 15, 19
`Applications in Internet Time, LLC v. RPX Corporation,
`897 F.3d 1336 (Fed. Cir. 2018) .............................................................. 13, 14
`County of Los Angeles v. Davis,
`440 U.S. 625 (1979)....................................................................................... 19
`O’Connor v. Donaldson,
`422 U.S. 563 (1975)....................................................................................... 20
`Unified Patents Inc. v. Bradium Technologies LLC,
`IPR2018-00952, Paper 31 (PTAB Dec. 20, 2018) ........................................ 11
`Worlds Inc. v. Bungie, Inc.,
`903 F.3d 1237 (Fed. Cir. 2018) .......................................................... 5, 13, 20
`Statutes
`35 U.S.C. § 286 ........................................................................................................ 19
`35 U.S.C. § 315(b) ........................................................................................... passim
`
`Other Authorities
`77 Fed. Reg. 48680-01 (Aug. 14, 2012) .................................................................. 18
`Federal Practice & Procedure § 4453 (2d ed. 2018) ................................................ 14
`Rules
`37 C.F.R. § 42.107 ..................................................................................................... 1
`37 C.F.R. § 42.120(a) ................................................................................................. 1
`
`
`
`- ii -
`
`
`
`PATENT OWNER’S LIST OF EXHIBITS
`
`
`Exhibit Number
`
`Exhibit Description
`
`2001
`
`2002
`
`2003
`
`2004
`
`2005
`
`2006
`
`2007
`
`2008
`
`2009
`
`Software Publishing and Development Agreement between
`Bungie, Inc. and Activision Publishing, Inc., dated April
`16, 2010
`
`Complaint in Worlds Inc. v. Activision Blizzard, Inc., et al.,
`Case No. 1:12-cv-10576 (D. Mass.)
`
`Proof of Service in Worlds Inc. v. Activision Blizzard, Inc.,
`et al., Case No. 1:12-cv-10576 (D. Mass.)
`
`Discovery Order on Activision’s Admission of Real Party-
`in-Interest Status to IPR petitions filed by Bungie, Inc. in
`Worlds Inc. v. Activision Blizzard, Inc., et al., Case No.
`1:12-cv-10576 (D. Mass.)
`
`Complaint in Worlds Inc. v. Microsoft Corp., Case No.
`6:20-cv-872 (W.D. Tex.)
`
`Plaintiff Worlds Inc.’s Preliminary Infringement
`Contentions in Worlds Inc. v. Microsoft Corp., Case No.
`6:20-cv-872 (W.D. Tex.)
`
`Plaintiff Worlds Inc.’s Opposition to Microsoft’s Motion to
`Stay Pending IPR in Worlds Inc. v. Microsoft Corp., Case
`No. 6:20-cv-872 (W.D. Tex.)
`
`Scheduling Order in Worlds Inc. v. Microsoft Corp., Case
`No. 6:20-cv-872 (W.D. Tex.)
`
`Electronic Scheduling Order in Worlds Inc. v. Activision
`Blizzard, Inc., et al., Case No. 1:12-cv-10576 (D. Mass.)
`
`- iii -
`
`
`
`Exhibit Number
`
`2010
`
`
`
`Exhibit Description
`
`Defendants’ Notice of Narrowed Election of Prior Art in
`Worlds Inc. v. Activision Blizzard, Inc., et al., Case No.
`1:12-cv-10576 (D. Mass.)
`
`- iv -
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`Pursuant to 37 C.F.R. § 42.107, Patent Owner Worlds Inc. (“Worlds” or
`
`“Patent Owner”) files this preliminary response to the Petition, setting forth
`
`reasons why the Petition for inter partes review (“IPR”) of U.S. Patent 8,082,501
`
`(the “’501 patent”), as requested by Microsoft Corporation (“Microsoft” or
`
`“Petitioner”), should be denied. Arguments presented herein are made without
`
`prejudice to any additional arguments that may be presented in a later response
`
`should the Board institute IPR review.1
`
`I.
`
`INTRODUCTION
`Microsoft admits that its Petition advances “the same grounds that were
`
`previously presented” in a prior petition filed against the ’501 patent by Bungie,
`
`Inc. Pet., 1. Microsoft also admits that Bungie’s petition was terminated as time-
`
`barred under 35 U.S.C. § 315(b) because Bungie failed to present evidence
`
`disproving a time-barred party’s involvement in the preparation of its petition. But
`
`Microsoft does not and cannot demonstrate that it cleansed the impact of the time-
`
`barred party’s involvement from its Petition. To the contrary, Microsoft adopts the
`
`time-barred party’s and time-barred petition’s work as if it were its own, and
`
`
`1 By submitting this Preliminary Response, no waiver of any argument is intended
`by Patent Owner. Patent Owner will have a right to file “a response to the petition
`addressing any ground for unpatentability not already denied” should the Board
`institute inter partes review. 37 C.F.R. § 42.120(a).
`
`-1-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`stresses the overlap between its own Petition and the time-barred and terminated
`
`petition. Microsoft confirms that it copied the challenges from the time-barred
`
`petition, and even used the same expert witness to present its copy-cat petition.
`
`Additionally, even though only claims 1, 2, 5, and 10 of the ’501 patent are at issue
`
`in the co-pending litigation between Worlds and Microsoft, the Petition has a one-
`
`to-one correspondence with the additional claims challenged in the time-barred
`
`petition. As a result, Microsoft presents challenges to certain claims that are only
`
`at issue in Worlds’ lawsuit against Activision, the time-barred party.
`
`Microsoft leans into its decision to reassert the substance of the time-barred
`
`petition by arguing that the Board should treat its Petition in the same manner as
`
`the time-barred petition. Microsoft is only correct to the extent that its own
`
`Petition is also time-barred and filed beyond the time permitted under 35 U.S.C. §
`
`315(b), which states that an “inter partes review may not be instituted if the
`
`petition requesting the proceeding is filed more than 1 year after the date on which
`
`the petitioner, real party in interest, or privy of the petitioner is served with a
`
`complaint alleging infringement of the patent.” (emphasis added). The Board
`
`should, in fact, find Microsoft’s Petition time-barred and deny institution of the
`
`copy-cat petition.
`
`Further, the Board should note the great efforts Patent Owner had to
`
`undertake to obtain the correct result of termination of Bungie’s petition under 35
`
`-2-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`U.S.C. § 315(b), including Patent Owner’s successful appeal to the U.S. Court of
`
`Appeals for the Federal Circuit and a lengthy remand before the Board.
`
`Microsoft’s approach of refiling a petition tainted by a time-barred party’s
`
`involvement, as if that statutory defect could be sidestepped so easily, makes a
`
`mockery of the statutory time bar found by the Board in the prior IPR.
`
`Finally, while the Board can and should find Microsoft’s Petition to be time-
`
`barred under 35 U.S.C. § 315(b), the Petition also warrants dismissal on
`
`discretionary grounds due to co-pending litigations that will address the validity of
`
`the ’501 patent significantly earlier than any final written decision in this
`
`proceeding.
`
`II. LIKE BUNGIE’S PRIOR IPR PETITION, MICROSOFT’S
`PETITION IS TIME-BARRED
`A. Bungie’s Prior IPR Petition Was Time-Barred Under 35 U.S.C. §
`315(b)
`The ’501 patent’s history before this forum is extensive. On June 1, 2015,
`
`Bungie, Inc. (“Bungie”) filed a petition requesting inter partes review of the ’501
`
`patent. IPR2015-01319, Paper 3. In the petition, Bungie identified itself as the
`
`sole “real party-in-interest” (hereinafter, “RPI”). IPR2015-01319, Paper 3 at 8.
`
`However, more than one year before Bungie’s petition was filed, Worlds had
`
`served third parties Activision Blizzard, Inc., Activision Publishing, Inc., and
`
`Blizzard Entertainment, Inc. (collectively, “Activision”) with a complaint alleging
`
`-3-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`infringement of the ’501 patent. Ex. 2002, Ex. 2003. Further, it was known from a
`
`publicly available contract between Activision and Bungie that those parties had a
`
`commercial relationship with indemnification obligations and obligations to defend
`
`certain products against intellectual property infringement allegations. Ex. 2001.
`
`Pursuant to that contract, Bungie was obligated to conduct “legal reviews of the
`
`Products to ensure that all Intellectual Property and other rights are fully cleared
`
`for use.” See Ex. 2001 at 10 (Sec. 7A.15(j)). These legal reviews were subject to
`
`Activision’s prior oversight, review, and approval. Id. at 10 (Sec. 7A.15).
`
`As a result of this commercial relationship, the timing of Bungie’s late IPR
`
`petition filing, and the overlap between Bungie’s challenged patents and the
`
`asserted patents in the Activision litigation, Patent Owner Worlds sought discovery
`
`into Bungie’s pre-petition communications with Activision. IPR2015-01319,
`
`Paper 9. But Bungie was unwilling to disclose any such communications to the
`
`Board, and would not reveal to the Board whether discoverable communications
`
`existed, how it obtained the prior art it asserted against the ’501 patent, or how it
`
`decided upon the particular combinations asserted against the ’501 patent. See,
`
`e.g., IPR2015-01319, Ex. 2001 (transcript of conference call between the Board,
`
`Bungie, and Worlds); see also IPR2015-01319, Paper 10. The Board denied
`
`Worlds’ request for discovery. IPR2015-01319, Paper 11. Despite this denial and
`
`Bungie’s refusal to introduce record evidence on Activision’s involvement in
`
`-4-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`Bungie’s IPRs, Worlds relied upon the agreement between Bungie and Activision
`
`to maintain that Bungie’s petition was time-barred under 35 U.S.C. § 315(b). In its
`
`preliminary response, Worlds argued that Activision was an RPI to Bungie’s
`
`petition, and because Activision was served with a complaint alleging infringement
`
`of Worlds’ patent more than one year before Bungie’s petition was filed, Bungie’s
`
`petition was time-barred under 35 U.S.C. § 315(b). IPR2015-01319, Paper 12 at
`
`39-48.
`
`Incorrectly, the Board rejected Worlds’ argument, instituted Bungie’s
`
`petition against the ’501 patent, and issued a final written decision. IPR2015-
`
`01319, Paper 42. Worlds appealed to the U.S. Court of Appeals for the Federal
`
`Circuit, who vacated the Board’s final written decision against the ’501 patent, and
`
`remanded with instructions to the Board to consider certain issues unrelated to the
`
`current Petition, but also to reconsider the merits of Worlds’ RPI argument. See
`
`Worlds Inc. v. Bungie, Inc., 903 F.3d 1237, 1248 (Fed. Cir. 2018). In particular, the
`
`Federal Circuit confirmed that it is the petitioner, not the patent owner, who has the
`
`“ultimate burden of persuasion,” and concluded that Worlds’ evidence raised a
`
`substantial—and unanswered—question about Activision’s involvement in
`
`Bungie’s petition. Id. at 1246–47.
`
`On remand, with very limited and pointed exceptions, the Board “ordered
`
`[that] the evidentiary record remain closed.” IPR2015-01319, Paper 62, 4. Bungie
`
`-5-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`submitted no additional declarations or evidence to disprove Activision’s
`
`involvement in Bungie’s selection of prior art, or arrangement of the prior art into
`
`the asserted grounds in the -01319 petition.
`
`The Board then conducted a detailed evaluation of the record evidence. On
`
`the basis of the agreement between Bungie and Activision, the Board found that
`
`“Activision, by virtue of its pre-existing relationship with Petitioner Bungie, was a
`
`beneficiary of the filing of the Petitions against the five patents involved in the
`
`infringement suit. And, the evidence at least suggests that Activision desired the
`
`Board’s review of the patents in the IPRs.” IPR2015-01319, Paper 62, 30.
`
`Relevant to this proceeding, the Board looked to the Bungie-Activision agreement
`
`and noted Activision’s contractual right to review and approve Bungie’s work to
`
`clear its products from intellectual property claims: Bungie pledged to “‘conduct[]
`
`legal reviews of the [Destiny] Products to ensure that all Intellectual Property and
`
`other rights are fully cleared for use,’” with Bungie’s “legal reviews (including
`
`budgeting) being subject to Activision’s review and approval.” Id. at 39 (quoting
`
`the Activision-Bungie agreement) (emphasis added). Critically, the Board found
`
`that based on record evidence, “we cannot determine Activision’s involvement, if
`
`any, in the filing of the Petitions.” Id. at 35 (emphasis added).
`
`Because of Activision’s contractually ability to orchestrate the substance of
`
`Bungie’s IPR petition, and because Bungie offered no evidence to disprove
`
`-6-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`Activision’s involvement, Bungie’s petition against the ’501 patent was dismissed
`
`as time-barred, and the Board terminated the inter partes review without rendering
`
`a final written decision. Id. at 45.
`
`B. Activision Has Now Consented to its RPI Status to Bungie’s
`Petitions
`If there was any dispute as to Activision’s status as an RPI upon the
`
`conclusion of Bungie’s IPRs, that dispute is resolved. In the ongoing litigation
`
`with Worlds, Activision has consented to its status as an RPI to Bungie’s IPRs.
`
`Specifically, in response to Activision’s offer to concede its RPI status, the District
`
`Court ruled:
`
`Activision Blizzard, Inc., Blizzard Entertainment, Inc., and Activision
`
`Publishing, Inc., admit for purposes of the present action that they were
`
`real-parties-in-interest to the inter partes review petitions filed in May
`
`and June of 2015 by Bungie, Inc., concerning patents held by Worlds
`
`Inc.
`
`Ex. 2004, 7. Further, the Court stated that it “will assume that Activision assents to
`
`this concession as worded if no objection is made within five (5) days of this
`
`Order.” Id. No objection was made by Activision.
`
`
`
`
`
`
`
`-7-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`C. Microsoft Cannot Disprove Activision’s Influence on the Grounds
`Asserted in the Petition
`This backdrop for the current Petition is critical because Microsoft cannot
`
`wipe away Activision’s fingerprints from the prior art and grounds first asserted in
`
`Bungie’s petition, and now re-asserted in Microsoft’s Petition.
`
`In particular, Microsoft asserts grounds that were first advanced by Bungie,
`
`in the same way that those grounds were fashioned by Bungie, and even re-uses
`
`Bungie’s 2015 expert declaration of Dr. Michael Zyda in support of its petition.
`
`Pet., 1; see also Ex. 1002 at 1 (reusing the cover page from Dr. Zyda’s declaration
`
`in Bungie’s submission in IPR2015-01319), id. at 102 (signature page dated June
`
`1, 2015 from IPR2015-01319). Microsoft does not hide from its decision to pick
`
`up the baton dropped by Bungie. Rather, Microsoft admits that it is “advanc[ing] a
`
`subset of the same grounds that were previously presented and finally decided in
`
`IPR2015-01319.” Pet., 1. Indeed, Microsoft even admits that the Board’s prior
`
`termination in IPR2015-01319 depended upon the lack of evidence necessary to
`
`disprove Activision’s involvement in Bungie’s petition. Pet., 7 (“‘we cannot
`
`determine Activision’s involvement’”) (quoting IPR2015-01319, Paper 62, 30).
`
`Microsoft then claims that its Petition “addresses the very issues for which
`
`the Board previously found Bungie’s record lacking.” Pet., 8. This is false.
`
`Nothing about Microsoft’s Petition disproves Activision’s involvement in the
`
`-8-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`selection of prior art, and formulation of asserted grounds first asserted by Bungie
`
`and now adopted by Microsoft.
`
`Microsoft overlooks the Board’s specific findings in the termination decision
`
`in IPR2015-01319. Specifically, the Board noted that Activision had the right to
`
`review and approve Bungie’s legal reviews relating to intellectual property,
`
`including the work leading to Bungie’s IPR petitions, and the Board had no
`
`evidence to determine Activision’s involvement, if any, in the filing of Bungie’s
`
`petitions. IPR2015-01319, Paper 62 at 35, 39. This factor is critical and extends
`
`to Microsoft’s Petition.
`
`In particular, Microsoft does not and cannot come forward with evidence to
`
`disprove Activision’s hand in the substantive grounds first asserted by Bungie and
`
`now reasserted in Microsoft’s Petition. The taint of Activision’s role in Bungie’s
`
`selection of art and formation of challenges is not extinguished simply by
`
`swapping out Bungie’s name from the cover of the petition with Microsoft’s. The
`
`Board terminated IPR2015-01319 due to its inability to determine Activision’s
`
`involvement in the substance of Bungie’s petition. This Petition possesses the
`
`same statutory defect, and is time-barred under 35 U.S.C. § 315(b).
`
`
`
`
`
`
`
`-9-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`D. Microsoft’s Evidence Cannot Refute Activision’s Involvement in
`Microsoft’s Grounds
`Microsoft tries to distance itself from Bungie’s and Activision’s involvement
`
`in its Petition by submitting declarations in an attempt to prove its own
`
`independence in deciding to file an IPR against the ’501 patent:
`
`Microsoft provides declarations that attest to its complete
`lack of control in the prior proceedings involving the ’501
`patent, the absence of an opportunity to control them, and
`that neither Activision nor Bungie are controlling or have
`had the opportunity to control Microsoft’s co-pending
`litigation or this IPR petition.
`
`
`Pet., 8. But these claims ring hollow, because Microsoft has wedded itself to
`
`Bungie’s decisions on selection of prior art, arrangement of prior art combinations,
`
`and even its re-use of Dr. Michael Zyda’s declaration prepared for Bungie. See,
`
`e.g., Ex. 1002, ¶12 (“I have been retained by Bungie Inc. (‘Bungie’) to offer an
`
`expert opinion on the validity of the claims of the ’501 patent.”). Further, given
`
`Activision’s contractual right to review and approve Bungie’s decisions on this
`
`point, and the Board’s prior decision on these very grounds, Microsoft’s
`
`declarations do not insulate its Petition from the underlying statutory defect that
`
`required termination of the IPR2015-01319 petition.
`
`
`
`Indeed, Microsoft’s legal arguments regarding why it believes its Petition is
`
`not time-barred under 35 U.S.C. § 315(b) improperly focus on whether Bungie or
`
`-10-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`Activision controlled or funded Microsoft’s Petition. Pet., 11. But the RPI
`
`analysis does not need to delve into that question here. It is much simpler.
`
`Microsoft has picked up a time-barred and terminated petition, without any way to
`
`disprove the time-barred party’s involvement in how the asserted prior art was
`
`selected, how the asserted combinations were arranged, or how the expert’s
`
`testimony was developed. That lack of evidence doomed Bungie’s petition, as
`
`Bungie could not disprove Activision’s hand in its petition, and the lack of
`
`evidence dooms Microsoft’s Petition for the same reason.
`
`Microsoft also cites to Unified Patents Inc. v. Bradium Technologies LLC,
`
`IPR2018-00952, Paper 31, 15-16 (PTAB Dec. 20, 2018) to argue in favor of
`
`allowing a new petitioner to copy a prior petitioner’s grounds. Pet., 60. In that
`
`case, Unified filed a “Petition obviously copied from a prior Petition and used that
`
`prior Petition as a roadmap to improve and file [its new] Petition.” Unified,
`
`IPR2018-00952, Paper 31 at 16. Here, Microsoft is replicating an earlier petition
`
`that was denied due to a statutory defect. Microsoft’s decision to replicate that
`
`earlier petition also has the effect of replicating Activision’s involvement in
`
`Bungie’s prior petition, and perpetuates the statutory defect of the petition, rather
`
`than cleansing it. The Unified decision does not alter that outcome.
`
`
`
`
`
`-11-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`In Replicating Bungie’s Defective Petition, Microsoft Benefits
`E.
`Only Activision and Acquiesces to Activision’s RPI Status
`Microsoft also fails to explain why it is challenging the same claims
`
`challenged by Bungie on behalf of Activision, rather than only the claims at issue
`
`in the co-pending litigation between Worlds and Microsoft. In the litigation
`
`between Patent Owner and Microsoft, Patent Owner is only asserting claims 1, 2,
`
`5, and 10 of the ’501 patent. Ex. 2005, Ex. 2006. But on the critical issue of
`
`selecting the claims to be challenged by Microsoft, the evidence shows
`
`Activision’s fingerprints and not Microsoft’s. Microsoft’s IPR repeats Bungie’s
`
`strategy on a one-to-one basis, challenging claims 1-8, 10, 12, and 14-16 of the
`
`’501 patent, just like Bungie did. These are the very claims asserted against
`
`Activision.
`
`Microsoft’s decision to file an expansive Petition further ties Activision to
`
`this Petition because only Activision—not Microsoft—will benefit from
`
`Microsoft’s challenge of claims at issue only in the Activision litigation. And
`
`there is no other rational explanation for Microsoft’s inclusion of these claims.
`
`35 U.S.C. § 315(b) Bars Institution of Microsoft’s Petition
`F.
`Under governing law, Activision has the same interest in Microsoft’s
`
`Petition as it had in Bungie’s Petition. “[T]he focus of the real-party-in-interest
`
`inquiry is on the patentability of the claims challenged in the IPR petition, bearing
`
`in mind who will benefit from having those claims canceled or invalidated.”).
`
`-12-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`Applications in Internet Time, LLC v. RPX Corporation, 897 F.3d 1336, 1348
`
`(Fed. Cir. 2018); see also id. at 1349 (“Thus, when it comes to evaluating the
`
`relationship between a party bringing a suit and a non-party, the common law
`
`seeks to ascertain who, from a ‘practical and equitable’ standpoint, will benefit
`
`from the redress that the chosen tribunal might provide.”). As noted above,
`
`Activision’s interest in Bungie’s Petition was confirmed by Bungie’s decision to
`
`challenge the very claims and patents being asserted against Activision in
`
`litigation. IPR2015-01319, Paper 62 at 27; see also Worlds, 903 F.3d at 1244
`
`(noting as relevant to the RPI analysis that “the five patents asserted in the
`
`Activision litigation were the same five patents Bungie challenged in its IPR
`
`petitions.”) Microsoft’s Petition also advances Activision’s interest.
`
`Indeed, Activision could obtain a greater benefit from Microsoft’s Petition
`
`than Microsoft itself. Microsoft’s decision to challenge claims that are only
`
`asserted against Activision ably demonstrates that it is not acting solely on its own
`
`behalf but on behalf of Activision as well. Accordingly, under the fact-specific
`
`analysis of the RPI inquiry, Microsoft is improperly advancing the interests of
`
`Bungie and Activision by taking their preexisting Petition and refiling it to seek
`
`Board review. See Applications in Internet Time, 897 F.3d at 1351 (“Determining
`
`whether a non-party is a ‘real party in interest’ demands a flexible approach that
`
`takes into account both equitable and practical considerations, with an eye toward
`
`-13-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`determining whether the non-party is a clear beneficiary that has a preexisting,
`
`established relationship with the petitioner.”). Microsoft’s joint interest in
`
`invalidating claims 1, 2, 5, and 10 does nothing to alter or negate Activision’s RPI
`
`status. See Applications in Internet Time, 897 F.3d 1336 at 1346-1347 (“Congress
`
`did not speak of there being only one interested party in each case; instead, it chose
`
`language that bars petitions where proxies or privies would benefit from an
`
`instituted IPR, even where the petitioning party might separately have its own
`
`interest in initiating an IPR.”)
`
`In addition, the odd reality is that Microsoft acquiesced to the fate of
`
`Bungie’s petition—denial due to the RPI status of Activision—by copying
`
`Bungie’s petition and re-submitting Dr. Zyda’s June 2015 declaration from
`
`IPR2015-01319, rather than creating a petition that was not already determined to
`
`bear the influence of a time-barred party. See Applications in Internet Time, 897
`
`F.3d at 1357 (noting that a party is a real party in interest “for reasons of
`
`acquiescence” and citing 18A Charles Alan Wright, Arthur R. Miller, & Edward
`
`H. Cooper, Federal Practice & Procedure § 4453 (2d ed. 2018) (…“acquiescence in
`
`a situation that has been created by a prior judgment”…)).
`
`For all these reasons, Microsoft’s Petition bears the same characteristics that
`
`doomed Bungie’s time-barred petition, and it should be denied as failing to comply
`
`with 35 U.S.C. § 315(b).
`
`-14-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`III. THE FINTIV FACTORS ALSO SUPPORT DISCRETIONARY
`DENIAL
`Microsoft’s Petition also warrants discretionary denial under the schedule in
`
`the Worlds-Microsoft co-pending litigation and the Worlds-Activision litigation, in
`
`which the ’501 patent is at issue.
`
`The Board’s Fintiv2 factors inform the Board’s exercise of discretion where
`
`institution of a trial at the PTAB represents an inefficient use of Board resources in
`
`light of parallel district court litigation. Here, Microsoft speculates on a variety of
`
`hypothetical scenarios about how the parallel district court litigation may
`
`ultimately proceed between Worlds and Microsoft. But those speculative views do
`
`not correspond to the objective, real-world facts, which confirm the likelihood for
`
`inefficiency and duplication of effort and therefore strongly favor denial of review.
`
`
`
`The first Fintiv factor addresses the likelihood of a stay if this proceeding is
`
`instituted. Microsoft has moved for a stay in the co-pending litigation, though that
`
`stay has not been granted. Further, as will be discussed in the second Fintiv factor
`
`analysis below, considering the earlier trial date relative to any final written
`
`decision that might issue in this proceeding, it is unlikely that a stay would issue
`
`even if this proceeding is instituted. Finally, Microsoft argues that the “Activision
`
`litigation was previously stayed during the period of the pendency of the Bungie
`
`
`2 Apple, Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020)
`(precedential) (“Fintiv Order”).
`
`-15-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`IPRs, demonstrating the likelihood of a stay.” Pet., 53. But unlike in the
`
`Activision litigation, where the stay was negotiated and stipulated to by the parties,
`
`here Microsoft’s motion for stay in the co-pending litigation was opposed by
`
`Worlds. Ex. 2007. Moreover, the Worlds-Activision litigation schedule is further
`
`along than the Microsoft case, with briefing for dispositive motions scheduled to
`
`be completed shortly after an institution decision is due in this case, and a final
`
`pretrial conference to be set thereafter. Ex. 2009. No further stay motions are
`
`anticipated in that litigation. Thus, it is inefficient for the Board to duplicate the
`
`efforts of parallel district court proceedings, and this factor favors denial of
`
`institution.
`
`The second Fintiv factor addresses the relative proximity of the Court’s trial
`
`date to the Board’s projected statutory deadline for a final written decision. In the
`
`corresponding litigation against Microsoft over the ’501 patent, jury selection is
`
`currently scheduled for March 14, 2022, approximately three months before a final
`
`written decision may issue in this proceeding. Ex. 2008 at 9; see also Pet., 54
`
`(estimating a final written decision date of June, 2022). Petitioner’s analysis
`
`regarding the scheduled trial date for the co-pending litigation is filled with wild
`
`speculation about what might happen in that case. Pet., 53 (characterizing the
`
`scheduled trial date as “unpredictable,” and “inherently unreliable.”). Setting aside
`
`any speculation, “Jury Selection/Trial” in co-pending litigation between Petitioner
`
`-16-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`and Patent Owner is currently scheduled for March 14, 2022, and this date would
`
`need to slip over three months before it approaches the Board’s statutory deadline
`
`for a final written decision.3 Moreover, as noted above, the Worlds-Activision
`
`litigation schedule is further along than the Microsoft case, with briefing for
`
`dispositive motions scheduled to be completed shortly after an institution decision
`
`is due in this case, and a final pretrial conference occurring thereafter. Ex. 2009.
`
`Therefore, this factor also favors denial of institution.
`
`As to the third Fintiv factor addressing the District Court’s and parties’
`
`investments into the parallel proceeding, by the time the Board may issue an
`
`Institution Decision in this proceeding, the parties and Court will have completed a
`
`claim construction hearing, and commenced fact discovery. Ex. 2008 at 8. While
`
`Microsoft’s IPR filing was early in the case, Microsoft was only able to file so
`
`early by copying the substance of a time-barred petition tainted by the influence of
`
`a time-barred party. And in the Worlds-Activision case, all pretrial activities,
`
`including any dispositive motions related to the ’501 patent, are scheduled to be
`
`complete by July 29, 2021. Ex. 2009. Therefore, this factor also favors denial of
`
`institution.
`
`
`3 Microsoft’s evidence acknowledges that the maximum slide in the Western
`District of Texas is only 42 days, not three months. See Ex. 1040 at 3.
`
`-17-
`
`
`
`IPR2021-00277 Patent Owner’s Preliminary Response
`
`The fourth and fifth Fintiv factors, directed to the overlap between the co-
`
`pending litigation and this proceeding, also weigh in favor of denial. Patent Owner
`
`and Petitioner are both parties to the litigation, and Petitioner has conditionally
`
`offered to reduce its invalidity assertions in that case depending on the Board’s
`
`institution decision. Pet., 57. That offer to reduce its invalidity assertions based on
`
`this outcome of the Board’s institution decision rings hollow, however, as
`
`Petitioner has sought two bites at the invalidity apple, and is only offering to
`
`discard one of its attempts where the other shows particular promise. This violates
`
`the fundamental tenet of inter partes reviews, which is that a litigant will not
`
`simply hedge its bets on where to pursue invalidity until it can better weigh its
`
`chances, but instead will make a concerted decision where it wishes to litigate its
`
`invalidity challenges and then honor that decision. See 77 Fed. Reg. 48680-01
`
`(Aug. 14, 2012) (IPRs are intended “to create a timely, cost-effective alt
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
