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`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 SUR-REPLY IN SUPPORT OF ITS
`PRELIMINARY RESPONSE
`
`
`
`TABLE OF CONTENTS
`
`
`
`I.
`
`II.
`
`
`
`LIKE BUNGIE’S PRIOR IPR PETITION, MICROSOFT’S
`PETITION IS TIME-BARRED ...................................................................... 1
`A.
`The RPI Test is Flexible and Case-Specific .......................................... 1
`B. Microsoft Has No Answer to the Theory of Acquiescence .................. 3
`C.
`In Replicating Bungie’s Defective Petition, Microsoft Benefits
`Only Activision and Acquiesces to Activision’s RPI Status ................ 4
`CONCLUSION ................................................................................................ 5
`
`
`
`
`- i -
`
`
`
`TABLE OF AUTHORITIES
`
`Cases
`Applications in Internet Time, LLC v. RPX Corp.,
`897 F.3d 1336 (Fed. Cir. 2018) .............................................................. 1, 2, 3
`Taylor v. Sturgell,
`553 U.S. 880 (2008)......................................................................................... 2
`Statutes
`35 U.S.C. § 315(b) ............................................................................................ 1, 3, 5
`
`Other Authorities
`18A Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal
`Practice & Procedure (2d ed. 2011) ............................................................2, 3
`Trial Practice Guide, 74 Fed. Reg. 48756 (Aug. 14, 2012) ....................................... 2
`
`
`
`- 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
`
`Exhibit Description
`
`2010
`
`2011
`
`
`
`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.)
`
`Ex. V (Claim Chart) to the Complaint in Worlds Inc. v.
`Microsoft Corp., Case No. 6:20-cv-872 (W.D. Tex.)
`
`- iv -
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`
`
`IPR2021-00277 Patent Owner’s Sur-Reply in support of its Preliminary Response
`
`Microsoft’s Reply does not and cannot wipe away the influence of the time-
`
`barred party’s control, direction, and funding over Microsoft’s Petition. Instead,
`
`Microsoft seeks to cabin the RPI analysis to discrete factors, while ignoring those
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`that weigh on the RPI analysis, and improperly fails to treat the RPI analysis as
`
`fact-dependent as required by Federal Circuit precedent. Microsoft’s Reply even
`
`fails to rebut that it acquiesced to be treated like Bungie by filing a copycat Petition
`
`containing and relying on the time-barred party’s work product. Nothing about
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`Microsoft’s submission of the same defective petition, along with the expert
`
`declaration paid for and previously submitted by a time-barred party, cleanses the
`
`statutory bar under 35 U.S.C. § 315(b).
`
`I.
`
`LIKE BUNGIE’S PRIOR IPR PETITION, MICROSOFT’S
`PETITION IS TIME-BARRED
`A. The RPI Test is Flexible and Case-Specific
`Petitioner’s Reply wrongly contends that there is a two-question test for
`
`determining whether a non-party should be deemed a real party-in-interest (“RPI”)
`
`to an IPR petition. Reply, 1 (citing Applications in Internet Time, LLC v. RPX
`
`Corp., 897 F.3d 1336, 1351 (Fed. Cir. 2018) (hereinafter “AIT”)). Unless both
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`questions are “answered in the affirmative,” Petitioner argues, the rule against non-
`
`party preclusion is not satisfied. Id. This is wrong, and Petitioner invites the very
`
`error found by the Federal Circuit in AIT, namely taking an unduly restrictive view
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`of the RPI analysis.
`
`-1-
`
`
`
`IPR2021-00277 Patent Owner’s Sur-Reply in support of its Preliminary Response
`
`In AIT, the Federal Circuit confirmed that “[d]etermining whether a non-
`
`party is [an RPI] demands a flexible approach that takes into account both
`
`equitable and practical considerations.” AIT, 897 F.3d at 1351. That flexible
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`approach is consistent with the USPTO’s regulations, where the USPTO stressed a
`
`case-by-case analysis on the facts surrounding the RPI analysis. “Whether a party
`
`who is not a named participant in a given proceeding nonetheless constitutes a ‘real
`
`party-in-interest’ … to that proceeding is a highly fact-dependent question.” See
`
`Trial Practice Guide, 74 Fed. Reg. 48756, 48759 (Aug. 14, 2012) (citing Taylor v.
`
`Sturgell, 553 U.S. 880 (2008); 18A Charles Alan Wright, Arthur R. Miller &
`
`Edward H. Cooper, Federal Practice & Procedure §§ 4449, 4451 (2d ed. 2011)
`
`(hereinafter, “FP&P”)). The USPTO further explained that “a party that funds and
`
`directs and controls an IPR or PGR petition or proceeding constitutes a ‘real party-
`
`in-interest,’ even if that party is not a ‘privy’ of the petitioner.” Trial Practice
`
`Guide, 74 Fed. Reg. at 48760; see also id. (“Relevant factors [to an RPI analysis]
`
`include … “Party A’s relationship to the petition itself.”) (emphasis added).
`
`Here, the time-barred party’s relationship to Microsoft’s Petition is not in
`
`dispute. Microsoft copied its challenges from the statutorily-defective petition, and
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`even used the expert witness’s 2015 declaration to support its copy-cat petition,
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`despite the fact that that declaration was prepared in conjunction with and paid for
`
`by the time-barred party. See Ex. 1002, ¶12 (“I have been retained by Bungie Inc.
`
`-2-
`
`
`
`IPR2021-00277 Patent Owner’s Sur-Reply in support of its Preliminary Response
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`(‘Bungie’) to offer an expert opinion on the validity of the claims of the ’501
`
`patent.”); see also Pet., 3-47 (citing Ex. 1002 extensively).
`
`The time-barred party selected Microsoft’s art, combined Microsoft’s art in
`
`the manner asserted in the Petition, drafted the substantive challenges, and paid for
`
`Microsoft’s expert to prepare his declaration. By copying Bungie’s petition and
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`resubmitting Bungie’s expert declaration, Microsoft has acquiesced to the time-
`
`barred party’s direction and control over Microsoft’s challenges. Further, there is
`
`no dispute that the time-barred party funded at least the 2015 expert declaration
`
`upon which Microsoft now relies. Applying the USPTO’s regulations on RPI
`
`analysis, Microsoft’s copycat Petition is time-barred, just as Bungie’s was.
`
`B. Microsoft Has No Answer to the Theory of Acquiescence
`Microsoft also fails to answer why estoppel should not apply under the law.
`
`As explained in the POPR, 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. See AIT, 897
`
`F.3d at 1357 (noting that a party is a real party in interest “for reasons of
`
`acquiescence”); see also FP&P § 4453 (2d ed. 2018) (…“acquiescence in a
`
`situation that has been created by a prior judgment”…)). Microsoft’s Reply
`
`includes no rebuttal under the law for honoring the Board’s prior determination of
`
`a statutory bar under 35 U.S.C. § 315(b) due to a time-barred party’s involvement.
`
`-3-
`
`
`
`IPR2021-00277 Patent Owner’s Sur-Reply in support of its Preliminary Response
`
`Microsoft also makes the incorrect claim that “Worlds does not dispute
`
`Microsoft’s evidence related to the” RPI question. Reply, 1. To the contrary, the
`
`POPR explained that 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. POPR, 8-11. Microsoft also has no
`
`response to the fact that it is using and relying on the same expert declaration paid
`
`for and submitted by a time-barred party to support its challenges. Ex. 1002, ¶12.
`
`The taint of a time-barred party’s selection of art, formation of challenges, and
`
`expense of preparing the 2015 Declaration of Dr. Zyda is not extinguished by
`
`swapping out Bungie’s name from the cover of the petition with Microsoft’s.
`
`C.
`
`In Replicating Bungie’s Defective Petition, Microsoft Benefits
`Only Activision and Acquiesces to Activision’s RPI Status
`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 claims challenged in the time-barred petition
`
`filed by Bungie. Microsoft’s Reply is full of wild and illogical theories about how
`
`Worlds somehow orchestrated Microsoft’s decision to challenge more claims than
`
`were asserted in the Complaint and charted in Ex. V to the Complaint. Reply, 4-5;
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`see also Ex. 2011. But Microsoft could have selected its challenged claims based
`
`on its own evaluation of the Microsoft product identified in the Complaint. Rather,
`
`Microsoft tacitly admits that it used Bungie’s petition as the sole source for its
`
`-4-
`
`
`
`IPR2021-00277 Patent Owner’s Sur-Reply in support of its Preliminary Response
`
`selection of claims and merely speculates that it would be “reasonable to expect”
`
`that its product would be accused of infringing the same claims as the time-barred
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`party. Reply, 5. Microsoft’s bizarre rationalization is laid bare when it illogically
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`contends that it over-selected the challenged claims because it feared Worlds
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`would “manufacture good cause” and “add [additional] claims back” after an
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`institution decision on fewer claims. Id. If Microsoft truly believed that, logic
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`would dictate that it would have filed an IPR challenging all 17 claims of the ’501
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`patent, rather than only the claims challenged by Bungie and asserted against
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`Activision. Instead, it chose to mirror its petition with Bungie’s in a manner that
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`benefits only Activision.
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`Finally, despite Microsoft’s game-like decision to copy and refile a petition
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`(and expert declaration) that the Federal Circuit already remanded once as raising
`
`significant RPI questions, Microsoft warns that denying its Petition as time-barred
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`is what could lead to “[g]amesmanship.” Reply, 3.
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`II. CONCLUSION
`Microsoft allowed a time-barred party to guide its hand in the Petition,
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`having taken work product attributable to and paid for by a time-barred party.
`
`Under the Board’s Rules, Microsoft’s Petition is barred under 35 U.S.C. § 315(b).
`
`For the reasons presented in Patent Owner’s Preliminary Response and above, the
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`Petition should be denied without institution.
`
`-5-
`
`
`
`IPR2021-00277 Patent Owner’s Sur-Reply in support of its Preliminary Response
`
`
`Dated: May 5, 2021
`
`
`
`
`
`
`/s/ Wayne M. Helge
`Wayne M. Helge (Reg. No. 56,905)
`James T. Wilson (Reg. No. 41,439)
`DAVIDSON BERQUIST JACKSON &
`GOWDEY, LLP
`8300 Greensboro Dr., Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7700
`Fax : (571) 765-7200
`Email: whelge@dbjg.com
`Email: jwilson@dbjg.com
`
`Counsel for Patent Owner
`
`-6-
`
`
`
`IPR2021-00277 Patent Owner’s Sur-Reply in support of its Preliminary Response
`
`CERTIFICATE OF SERVICE
`The undersigned hereby certifies that this PATENT OWNER’S SUR-
`
`REPLY IN SUPPORT OF ITS PRELIMINARY RESPONSE and Exhibit 2011
`
`was served to Petitioner by serving the correspondence email addresses of record
`
`as follows:
`
`W. Karl Renner, Reg. No. 41,265
`Fish & Richardson P.C.
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`Tel: 202-783-5070
`Fax: 877-769-7945
`Email: IPR42342-0086IP1@fr.com
`
`
`
`
`
`Dated: May 5, 2021
`
`
`
`
`David L. Holt, Reg. No. 65,161
`Fish & Richardson P.C.
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`Tel: 202-783-5070
`Fax: 877-769-7945
`PTABInbound@fr.com
`axfptab@fr.com
`holt2@fr.com
`
`
`/s/ Wayne M. Helge
`Wayne M. Helge (Reg. No. 56,905)
`Attorney for Patent Owner
`
`-7-
`
`
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