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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`MICROSOFT CORPORATION,
`Petitioner,
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`v.
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`WORLDS INC.,
`Patent Owner.
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`_______________
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`Case IPR2021-00277
`Patent 8,082,501
`____________
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`
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`PATENT OWNER’S REQUEST FOR REHEARING UNDER
`37 C.F.R. § 42.71(d) ON THE TIME BAR UNDER 35 U.S.C. § 315(b)
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`
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`Patent Owner timely and respectfully seeks rehearing under 37 C.F.R. §
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`42.71(d) of the Board’s decision to institute this proceeding. Patent Owner is
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`simultaneously requesting a Precedential Opinion Panel by contacting the
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`appropriate e-mail address, as instructed in the relevant Standard Operating
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`Procedure.
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`This request seeks rehearing to address the proper application of the one-
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`year time bar under 35 U.S.C. § 315(b). The statutory time bar in this case is
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`triggered by Petitioner’s substantial use of challenges and an expert declaration
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`authored and funded by a prior petitioner for use in a petition that was itself
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`dismissed as time-barred under § 315(b). The proper application of the one-year
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`time bar under § 315(b) is of such extraordinary and recurring importance to the
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`PTAB and its participants that a precedential panel is requested to correct the
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`Institution Decision here, and to supply uniform guidance for future cases.
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`I.
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`LEGAL STANDARD FOR REHEARING
`Pursuant to 37 C.F.R. § 42.71(d), a party may request rehearing of an
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`institution decision by the Board. The movant has the burden of showing that the
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`institution decision should be modified, and “[t]he request must specifically
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`identify all matters the party believes the Board misapprehended or overlooked,
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`and the place where each matter was previously addressed in a motion, an
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`-1-
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`opposition, or a reply.” See 37 C.F.R. § 42.71(d); Apple Inc., et al. v. Uniloc
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`Luxembourg S.A., IPR2017-00225, Paper 31 at 2 (P.T.A.B. Sept. 6, 2018).
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`Patent Owner respectfully submits that the Board overlooked certain
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`evidence in deciding that this Petition was not subject to the time bar of § 315(b).
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`Properly considered in view of the record evidence, Patent Owner respectfully
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`submits that § 315(b) requires denial where, as here, the petitioner asserts
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`challenges and submits an expert declaration prepared and funded by a prior
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`petitioner for a petition that was established to be time-barred under that statute.
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`II. THE PETITION SHOULD HAVE BEEN DENIED AS TIME
`BARRED UNDER § 315(b)
`Petitioner Microsoft openly admits that its Petition against the ’501 Patent
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`copies grounds from a prior petition filed by Bungie Inc. in IPR2015-01319, and
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`Microsoft resubmitted the very same expert declaration prepared—and paid for—
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`by Bungie in 2015 to support that prior petition. Further, there is no dispute that at
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`the time Bungie filed its prior petition, Activision Publishing, Inc. (“Activision”)
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`was time-barred from filing its own IPR under 35 U.S.C. § 315(b). In IPR2015-
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`01319, Worlds presented evidence in the form of an agreement that provided
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`Activision with contractual rights of oversight and budgetary review over Bungie’s
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`prior petition. As a result of that evidence, the Federal Circuit confirmed that
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`Worlds provided sufficient evidence to dispute Bungie’s identification of RPIs to
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`its petition. Worlds Inc. v. Bungie, Inc., 903 F.3d 1237, 1246-47 (Fed. Cir. 2018).
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`-2-
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`Bungie presented no evidence to the contrary on remand before the Board, and its
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`petition was denied and terminated by the Board. See IPR2015-01319, Papers 62-
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`64. Further confirming that Worlds’ evidence of Activision’s RPI status was
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`correct, Activision recently conceded it was an RPI to Bungie’s IPRs. This
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`background for the current Petition was addressed in Patent Owner’s Preliminary
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`Response (“POPR” or Paper 6) at pp. 3-7.
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`Bungie’s petition in IPR2015-01319 was terminated because Activision was
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`treated as an RPI, and because Activision had been served with a complaint
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`asserting infringement of the ’501 Patent more than one year before Bungie’s
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`petition was filed. See POPR, 6-7 (“Because of Activision’s contractually ability
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`to orchestrate the substance of Bungie’s IPR petition, and because Bungie offered
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`no evidence to disprove Activision’s involvement, Bungie’s petition against the
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`’501 patent was dismissed as time-barred, and the Board terminated the inter
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`partes review without rendering a final written decision.”) (citing IPR2015-01319,
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`Paper 62 at 45). However, despite Microsoft’s decision to copy grounds from the
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`time-barred petition in IPR2015-01319 and to submit the very same expert
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`declaration prepared and funded by Bungie for that case, Microsoft named neither
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`Bungie nor Activision as RPIs to its Petition.
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`The question presented in this Request is whether 35 U.S.C. § 315(b)
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`requires denial where Microsoft’s Petition asserts challenges and submits an expert
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`declaration prepared and funded by Bungie—with Activision’s right to review and
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`approve Bungie’s work—for use in a petition that was previously terminated as
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`time-barred under § 315(b). Patent Owner respectfully submits that under those
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`facts, Bungie and Activision must be named as RPIs to Microsoft’s Petition, which
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`therefore must also be denied under § 315(b).
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`As Worlds argued in the POPR, the test for RPI is “flexible.” See POPR at
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`13 (citing Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336, 1351
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`(Fed. Cir. 2018)); see also Paper 8 at 2. The Consolidated Trial Practice Guide of
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`Nov. 2019 (https://www.uspto.gov/TrialPracticeGuideConsolidated) confirms that
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`the RPI determination includes the non-petitioner’s “relationship to the petition
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`itself, including the nature and/or degree of involvement in the filing.” Id. at 17.
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`This point was also raised in Patent Owner’s authorized sur-reply. See Paper 8 at
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`2. The Board’s Institution Decision recognized that a party funding an IPR is an
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`RPI. Paper 11 at 13 (citing Trial Practice Guide, 17); see also Paper 8 at 2.
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`Here, the strategic decisions behind Microsoft’s Petition were not made by
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`Microsoft. Instead, as Patent Owner argued, they are attributed to Bungie and,
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`through the Activision-Bungie agreement presented by Worlds, to Activision. See
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`POPR, 8. Indeed, the underlying prior art searches and review, the formulation of
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`the asserted challenges, preparation of Dr. Zyda’s declaration, and authorship of
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`the Petition itself are also attributed to Bungie and Activision. Id. Moreover, the
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`-4-
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`very substantial costs of those steps leading up to the IPR2015-01319 petition were
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`borne by Bungie (with a budget reviewable by Activision), not Microsoft. Id. at
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`10; id. at 6 (quoting the Board’s finding from IPR2015-01319 that “Bungie’s ‘legal
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`reviews including budgeting) [were] subject to Activision’s review and
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`approval.’”); see also Paper 8 at 3 (addressing Bungie’s funding of Dr. Zyda’s
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`declaration). Microsoft’s claim that it solely funded the current Petition is refuted
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`by its very decision to resubmit the work product prepared and funded by Bungie
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`with Activision oversight, and submitted in IPR2015-01319.
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`As discussed in more detail below, the Board overlooked two critical
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`evidentiary issues supporting Patent Owner’s argument that the Petition is time-
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`barred under § 315(b).
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`A. The Board Overlooks the Record Evidence Tying Activision to
`Bungie’s Prior Petition
`First, the Board’s Institution Decision overlooks the record evidence tying
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`Activision to Bungie’s prior petition. In addressing Patent Owner’s argument, the
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`Board states “[t]o the extent that Activision’s alleged involvement in the Prior IPR
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`is relevant, Patent Owner cannot convert a lack of evidence into a basis to find that
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`Activision was involved in the filing of the prior petition.” Paper 11 at 16
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`(emphasis added).
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`But this statement overlooks that Bungie’s prior petition was terminated
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`under Section 315(b) precisely because of the sufficient evidence produced by
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`-5-
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`Patent Owner, establishing Activision’s contractual oversight over Bungie’s prior
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`petition. See Worlds, 903 F.3d at 1246-47. This evidence was discussed and relied
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`upon in Worlds’ POPR. See POPR at 6 (discussing the Board’s prior findings of
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`Activision’s right to oversee Bungie’s prior petition); see also id. at 8-10. Indeed,
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`while terminating IPR2015-01319, the Board noted that Worlds’ evidence
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`established Activision’s contractual right to review and approve Bungie’s work to
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`clear its products from intellectual property claims: Bungie pledged to “‘conduct[]
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`legal reviews of the [Destiny] Products to ensure that all Intellectual Property and
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`other rights are fully cleared for use,’” with Bungie’s “legal reviews (including
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`budgeting) being subject to Activision’s review and approval.” Id. (quoting
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`IPR2015-01319, Paper 62 at 39).
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`In addition to overlooking the record evidence tying Activision to Bungie’s
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`prior petition, the Board overlooks that the prior petition was terminated because of
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`Activision’s status as an RPI. The Board states in its Institution Decision here that
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`“even if Petitioner Microsoft’s use of arguments from the Prior IPR resulted in
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`Bungie being an RPI of Microsoft, Bungie would not be a ‘real party in interest . . .
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`served with a complaint alleging infringement of the patent’ under the time-bar
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`provision of Section 315(b).” Paper 11 at 15 (emphasis added). But this statement
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`overlooks that the IPR2015-01319 petition was dismissed under § 315(b) not
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`because of Bungie’s status but because of Activision’s status as an RPI. See
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`-6-
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`IPR2015-01319, Paper 62 at 45; id. at 39 (“We find that the Agreement evidences,
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`at least: … Bungie’s pledge to ‘conduct[] legal reviews of the [Destiny] Products to
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`ensure that all Intellectual Property and other rights are fully cleared for use’ with
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`such legal reviews (including budgeting) being subject to Activision’s review and
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`approval.”). Bungie could not rebut the evidence establishing Activision’s
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`contractual right to participate in the review and budgeting for Bungie’s petition.
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`The Institution Decision faults Worlds for not providing new evidence of
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`exactly how Activision was involved in “the filing of the prior petition.” Paper 11
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`at 16. The Board also states that “the Prior IPR was terminated because there was
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`a lack of evidence regarding Activision’s alleged involvement.” Paper 11 at 18.1
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`But Worlds’ evidence submitted in that prior case was sufficient to raise
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`Activision’s involvement, and Bungie was required to prove that its petition was
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`not time-barred due to Activision’s involvement. It could not do so in IPR2015-
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`01319, resulting in Activision being an RPI to that petition.
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`Here Worlds submitted this same record evidence of Activision’s role in
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`Bungie’s prior petition, along with Activision’s admission that it was an RPI to
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`1 Indeed, the Institution Decision’s questioning whether Activision was involved in
`Bungie’s prior petition cannot square with the Board’s handling of IPR2015-
`01319, which was terminated precisely because Worlds’ evidence identified
`Activision’s contractual right to be involved, and that evidence went unrebutted.
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`-7-
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`Bungie’s prior petition.2 Under the law, this required Microsoft to prove that
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`Activision had no involvement in the challenges and work product it copied from
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`Bungie’s prior petition. But as Worlds argued in the POPR, under the record
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`evidence, Microsoft cannot prove that Activision had no role in the work product it
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`copied from IPR2015-01319. See POPR at 9. Specifically, just as in IPR2015-
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`01319, in the face of Worlds’ sufficient evidence, the Petitioner here cannot carry
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`its burden of proof that the Petition is not time-barred because “Nothing about
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`Microsoft’s Petition disproves Activision’s involvement in the selection of prior
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`art, and formulation of asserted grounds first asserted by Bungie and now adopted
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`by Microsoft.” POPR, 8-9.3
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`Under Worlds’ record evidence overlooked by the Board, Bungie’s prior
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`petition is attributed to both Bungie and Activision, and Microsoft has failed to
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`carry its burden of proving Activision’s lack of involvement in Bungie’s prior
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`petition. Bungie and Activision must be treated as RPIs to Microsoft’s Petition,
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`and this requires denial of institution under § 315(b).
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`2 The Board erred in discounting Activision’s recent admission that it was an RPI
`to Bungie’s prior petition. See Paper 11 at 18 n.2. There is no evidence that
`Activision’s admission lacked factual basis.
`3 Under Federal Circuit law, the “petitioner bears the ultimate burden of persuasion
`to show that its petitions are not time-barred under § 315(b).” Worlds, 903 F.3d at
`1242.
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`-8-
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`B.
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`The Board Also Overlooks the Record Evidence Showing that
`Microsoft was Not the Sole Funder of its IPR Petition
`The Board also overlooks the evidence addressed by Worlds in its POPR
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`that refutes Microsoft’s claim that no other entities contributed to the funding of its
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`Petition.
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`The Institution Decision confirms that a party funding an IPR is an RPI.
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`Paper 11 at 13 (citing Trial Practice Guide, 17). In addressing this funding aspect
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`of the RPI analysis, the Board’s Institution Decision cites to the declaration of
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`Microsoft’s Assistant General Counsel, who testified that his “‘investigation did
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`not identify any evidence that either Bungie or Activision … funded the IPR
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`petition that is being filed by Microsoft against Worlds.’” Paper 11 at 19 (quoting
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`Ex. 1026 ¶ 6). But this evidence was refuted cleanly by Worlds.
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`Microsoft used Bungie’s work product, including the results of Activision’s
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`review of that work product, to challenge Worlds’ patent. As discussed in the
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`POPR, Microsoft introduced and relied on art selected by Bungie, as combined in
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`the manner prepared by Bungie, and supported by an expert declaration that was
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`prepared and funded by Bungie and signed in 2015, in conjunction with Bungie’s
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`earlier IPR. POPR at 8-10. This work was funded not by Microsoft, but by
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`Bungie (with the budget to be reviewed and approved by Activision per Bungie’s
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`agreement with Activision). Id.; see also id. at 6 (discussing Activision’s
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`contractual rights to oversee Bungie’s IP defense and budget); id. at 10 (noting
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`-9-
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`Microsoft’s reuse of Dr. Zyda’s declaration and work paid for by Bungie and
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`discussing Ex. 1002 ¶ 12); Paper 8 at 2-3.
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`However, the Board overlooked Patent Owner’s argument regarding
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`Microsoft’s use of Bungie’s work product and payment to Dr. Zyda for his
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`declaration work. See, e.g., Paper 11 at 14-19. In particular, the Board overlooked
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`that the funding of Microsoft’s Petition does not merely include the payments that
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`Microsoft made to its own counsel and to the USPTO for petition filing fees.
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`Rather, the funding of the Petition also includes the work surrounding the prior art
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`review, the selection of prior art to assert in the Petition and the specific manner in
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`which that art is combined, and the expense of Dr. Zyda, working at $600 per hour
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`to prepare a 104-page declaration (see Ex. 1002, ¶ 12). See POPR at 8-10; Paper 8
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`at 2-3. Indeed, Bungie (with Activision’s oversight) prepared and funded that
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`work. This evidence also sufficiently raises that Bungie and Activision are RPIs to
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`Microsoft’s Petition, and Microsoft was unable to refute this.
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`Based on the clear evidence of Microsoft’s use of work product previously
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`prepared and paid for by Bungie (with Activision’s oversight), the Institution
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`Decision’s conclusion that Bungie and Activision had no role in the funding of
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`Microsoft’s Petition was plainly incorrect.
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`-10-
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`C. The Overlooked Evidence Establishes the Bungie and Activision
`are RPIs to Microsoft’s Petition
`In summary, the Board overlooked the evidence establishing Activision’s
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`contractual rights to oversee and review Bungie’s prior petition, and therefore,
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`Activision’s involvement in the challenges and declaration presented in Bungie’s
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`prior petition and now copied into Microsoft’s Petition. IPR2015-01319 was
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`terminated precisely because of that unrebutted evidence. Here, Microsoft also
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`failed to rebut that evidence, and therefore cannot carry its burden of proving that
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`its Petition is not time-barred.
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`The Board also overlooked that Microsoft’s use of Bungie’s work product
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`contradicts Microsoft’s declaration claiming that neither Bungie nor Activision had
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`any role in funding the IPR petition. Microsoft presents no basis why a third-party
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`who actually formulates the challenges, drafts the petition, and pays for the
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`supporting expert declaration is not named as an RPI to the Petition.
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`For all these reasons, Microsoft’s Petition bears the same characteristics that
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`required termination of Bungie’s petition, and Microsoft’s Petition should be
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`terminated under 35 U.S.C. § 315(b).
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`III. CONCLUSION
`For the reasons presented above, Patent Owner respectfully submits that the
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`Board overlooked critical record evidence in concluding that the Petition is not
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`time-barred under § 315(b). Patent seeks reconsideration of that decision, and
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`-11-
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`submits that when the evidence is fully considered, the Petition’s challenge of the
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`’501 patent should be denied without institution.
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`Dated: June 30, 2021
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`
`
`/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
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`-12-
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`IPR2021-00277 Patent Owner’s Request for Rehearing
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`CERTIFICATE OF SERVICE
`The undersigned hereby certifies that this PATENT OWNER’S REQUEST
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`FOR REHEARING was served to Petitioner by serving the correspondence email
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`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: June 30, 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
`
`-13-
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`
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