Case 4:19-cv-04133-YGR Document 53 Filed 12/17/19 Page 1 of 5
`
`
`
`
`PAUL J. ANDRE (State Bar No. 196585)
`pandre@kramerlevin.com
`LISA KOBIALKA (State Bar No. 191404)
`lkobialka@kramerlevin.com
`JAMES HANNAH (State Bar No. 237978)
`jhannah@kramerlevin.com
`KRAMER LEVIN NAFTALIS
`& FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`Telephone: (650) 752-1700
`Facsimile: (650) 752-1800
`
`Aaron M. Frankel (pro hac vice)
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
`(212) 715-9100
`afrankel@kramerlevin.com
`
`Attorneys for Defendant and Counterclaim-Plaintiff
`ACCELERATION BAY LLC
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`OAKLAND DIVISION
`
`EPIC GAMES, INC., a Maryland Corporation,
`
`
`Plaintiff,
`
`v.
`
`ACCELERATION BAY LLC, a Delaware
`Corporation,
`
`
`
`Defendant.
`
`
`
`Case No.: 4:19-cv-04133-YGR
`
`ACCELERATION BAY, LLC’S NOTICE
`OF MOTION AND MOTION TO STRIKE
`EPIC GAMES, INC.’S
`COUNTERCLAIMS-IN-REPLY
`
`Date:
`February 11, 2020
`Time:
`2:00 pm
`Courtroom: 1, 4th Floor
`Judge:
`Hon. Yvonne Gonzalez Rogers
`
`
`
`
`
`
`
`
`Case No. 4:19-cv-04133-YGR
`ACCELERATION BAY’S NOTICE OF MOTION AND
`MOTION TO STRIKE EPIC GAMES’ COUNTERCLAIMS-IN-REPLY
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 4:19-cv-04133-YGR Document 53 Filed 12/17/19 Page 2 of 5
`
`
`
`NOTICE OF MOTION
`TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
`NOTICE IS HEREBY GIVEN that on February 11, 2020, at 2:00 p.m., or as soon thereafter
`as counsel may be heard by the Honorable Yvonne Gonzalez Rogers in Courtroom 1, 4th Floor,
`United States District Court of California, 1301 Clay Street, Oakland, CA 94612, Defendant and
`Counterclaim-Plaintiff Acceleration Bay, LLC will and hereby does move the court for an order
`granting Acceleration Bay’s Motion to Strike Epic Games, Inc.’s Counterclaims-in-Reply.
`This motion is based on this Notice of Motion, the following Memorandum of Points and
`Authorities, the proposed order submitted herewith, the pleadings and papers on file in this action, any
`evidence and argument presented to the Court at or before the hearing on this motion, and all matters
`of which the Court may take judicial notice.
`I.
`INTRODUCTION
`The Court should strike Epic Games’ invalidity counterclaims-in-reply because they are, in
`reality, affirmative invalidity claims that could and should have been asserted in Epic Games’
`Complaint. This is a critical distinction because if Epic Games had properly plead invalidity in its
`declaratory judgment Complaint, 35 U.S.C. § 315 would bar Epic Games from filing a petition for
`inter partes review (IPR) of the validity of those claims.
`Epic Games cannot have it both ways. It chose to file a declaratory judgment action. Now,
`under the Congressional scheme for IPRs, Epic Games must decide to limit this case to infringement
`or pursue an affirmative invalidity claim in this case and waive the right to also file an IPR.
`Accordingly, the Court should either strike Epic Games’ invalidity counterclaims (with leave to refile
`as affirmative invalidity claims in an amended complaint) or deem the invalidity counterclaims as
`affirmative claims.
`II.
`BACKGROUND
`This is a straightforward declaratory judgment case. In July 2019, Epic Games filed a
`complaint for declaratory judgment of non-infringement U.S. Patent Nos. 6,701,344, 6,714,966,
`6,829,634, 6,732,147, 6,910,069, 6,920,497, and 7,412,537. Dkt. 1, Complaint ¶¶ 79, 97, 117, 133,
`152, 170, 181. Epic Games chose not to include any claims for invalidity in the Complaint,
`
`1
`Case No. 4:19-cv-04133-YGR
`ACCELERATION BAY’S NOTICE OF MOTION AND
`MOTION TO STRIKE EPIC GAMES’ COUNTERCLAIMS-IN-REPLY
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 4:19-cv-04133-YGR Document 53 Filed 12/17/19 Page 3 of 5
`
`
`
`presumably to avoid triggering the IPR bar of 35 U.S.C. § 315.
`Acceleration Bay answered the complaint, denying non-infringement and asserting compulsory
`counterclaims of infringement as to specific claims of six of the seven patents that Epic Games
`included in the complaint: U.S. Patent Nos. 6,701,344, 6,714,966, 6,829,634, 6,732,147, 6,910,069,
`and 6,920,497 (collectively, the “Asserted Patents”). Dkt. 41, Counterclaim ¶¶ 17–61. Thus,
`Acceleration Bay did not inject any new patents, claims or infringement issues in the case. To the
`contrary, its infringement counterclaims were only a small subset of the non-infringement claims Epic
`Games asserted in its complaint.
`Epic Games answered Acceleration Bay’s counterclaims. In its answer, Epic Games included
`six purported “counterclaims-in-reply” seeking a declaratory judgment of invalidity for each of the
`Asserted Patents (the “Invalidity Counterclaims-in-Reply”). Dkt. 45, Counterclaim in Reply ¶¶ 18–
`93. The Invalidity Counterclaims-in-Reply are not directed to any new material in Acceleration Bay’s
`Counterclaims, and Epic Games could have included them as affirmative claims in its complaint.
`
`III. EPIC GAMES’ INVALIDITY COUNTERCLAIMS-IN-REPLY ARE IN FACT
`AFFIRMATIVE INVALIDITY CLAIMS AND SHOULD BE CHARACTERIZED
`AS SUCH
`Epic Games is attempting to make an end-run around the Congressional scheme for IPRs. In
`creating IPRs and balancing the rights of patent owners and accused infringers and attempting to
`conserve the resources of the courts, the USPTO and litigants, Congress struck a balance. Under 35
`U.S.C. § 315, “[a]n inter partes review may not be instituted if, before the date on which the petition
`for such a review is filed, the petitioner or real party in interest filed a civil action challenging the
`validity of a claim of the patent.” 35 U.S.C. § 315(a)(1) (2018) (emphasis added). The purpose of this
`provision is to “bar a party from seeking or maintaining [an inter partes] review if [the party] has
`sought declaratory judgment that [a] patent is invalid.” 157 Cong. Rec. S1375 (daily ed. March 8,
`2011) (Statement of Sen. Leahy).
`There is no dispute that Epic Games “filed a civil action” within the meaning of Section
`315(a)(1). A “civil action” merely refers to a claim in a federal court instituted by a complaint. Fed.
`R. Civ. P. 3 (“A civil action is commenced by filing a complaint with the court.”); see also Fed. R.
`Civ. P. 2 (“There is one form of action—the civil action.”). There is also no dispute that Epic Games
`
`2
`Case No. 4:19-cv-04133-YGR
`ACCELERATION BAY’S NOTICE OF MOTION AND
`MOTION TO STRIKE EPIC GAMES’ COUNTERCLAIMS-IN-REPLY
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 4:19-cv-04133-YGR Document 53 Filed 12/17/19 Page 4 of 5
`
`
`
`“filed a civil action” containing claims challenging the validity of the Asserted Patents. Therefore,
`Epic Games should not be permitted to pursue parallel claims of invalidity in an IPR.
`Epic Games appears to be attempting to evade this statutory scheme by withholding its
`invalidity claims from its complaint and characterizing them as Counterclaims-in-Reply. The Court
`should not permit Epic Games to rely on this distinction without a difference. This Court has long
`recognized that that counterclaims-in-reply that could have been asserted in a complaint, to the extent
`even permitted, are deemed effectively claims asserted in the complaint. Fujitsu Ltd. v. Nanya Tech.
`Corp., No. C 06-6613 CW, 2007 U.S. Dist. LEXIS 44386, at *2 (N.D. Ca. June 6, 2007) (requiring
`Fujitsu to amend its complaint to add its counterclaims-in-reply as causes of actions in its complaint);
`Electroglas, Inc. v. Dynatex Corp., 473 F. Supp. 1167, 1171 (N.D. Cal. 1979) (Counterclaims in
`reply are treated “as an amendment to the complaint.”).
`Other courts similarly treat counterclaims-in-reply as claims asserted in the complaint. See,
`e.g., Century Pac., Inc. v. Hilton Hotels Corp., 528 F. Supp. 2d 206, 213 n.3 (S.D.N.Y. 2007) (“[A]
`reply counterclaim is to be treated as a motion to amend the complaint under Rule 15(a)”);
`Southeastern Indus. Tire Co., Inc., v. Duraprene Corp., 70 F.R.D. 585, 588 (E.D. Pa. 1976)
`(“counterclaim in reply [treated] as an amendment to the complaint”); Heath v. Audatex N. Am., Inc.,
`2012 WL 177413, at *3 (E.D. Pa. Jan. 23, 2012) (“Rather than require Heath to file an amended
`answer to Audatex’s counterclaim, however, I will simply construe Heath's motion for leave to file a
`counterclaim as a motion to amend the Complaint.”).
`There is no reason Epic Games could not have asserted its Invalidity Counterclaims-in-Reply
`in its complaint and there is nothing new in Acceleration Bay’s counterclaims beyond the infringement
`issues Epic Games already raised in its declaratory judgment complaint. Accordingly, the Court
`should either strike the Invalidity Counterclaims-in-Reply (with Epic Games having leave to include
`them in an amended complaint should it chose to do so) or reclassify them as affirmative claims in the
`complaint, including for purposes of 35 U.S.C. § 315. To do otherwise would permit Epic Games and
`any other patent infringer who files a declaratory judgment action to sidestep the choice imposed by
`Congress and pursue invalidity in both a declaratory judgment action and an IPR, frustrating
`Congress’ plain intent.
`3
`
`Case No. 4:19-cv-04133-YGR
`ACCELERATION BAY’S NOTICE OF MOTION AND
`MOTION TO STRIKE EPIC GAMES’ COUNTERCLAIMS-IN-REPLY
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`

`

`Case 4:19-cv-04133-YGR Document 53 Filed 12/17/19 Page 5 of 5
`
`
`
`IV. CONCLUSION
`For the reasons set forth above, Acceleration Bay respectfully requests that the Court strike
`Epic Games’ Invalidity Counterclaims-in-Reply without prejudice in order to be reasserted as claims
`in an amended complaint or, in the alternative, deem the Invalidity Counterclaims-in-Reply to be
`affirmative claims.
`
`
`
`
`
`
`Respectfully submitted,
`
`
`
`
`
`
`By: /s/ Paul J. Andre
`Paul J. Andre (SBN 196585)
`Lisa Kobialka (SBN 191404)
`James Hannah (SBN 237978)
`KRAMER LEVIN NAFTALIS
`& FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`Telephone: (650) 752-1700
`Facsimile: (650) 752-1800
`pandre@kramerlevin.com
`lkobialka@kramerlevin.com
`jhannah@kramerlevin.com
`
`Aaron M. Frankel (pro hac vice)
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`1177 Avenue of the Americas
`New York, NY 10036
`(212) 715-9100
`afrankel@kramerlevin.com
`
`Attorneys for Defendant and
`Counterclaim-Plaintiff
`ACCELERATION BAY LLC
`
`
`
`Dated: December 17, 2019
`
`
`
`
`
`
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`4
`
`Case No. 4:19-cv-04133-YGR
`ACCELERATION BAY’S NOTICE OF MOTION AND
`MOTION TO STRIKE EPIC GAMES’ COUNTERCLAIMS-IN-REPLY
`
`