Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 1 of 28 PageID #: 36913
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`ACCELERATION BAY LLC,
`
`Plaintiff,
`
`v.
`
`C.A. No. 16-455 (RGA)
`
`))))))
`
`))
`
`TAKE-TWO INTERACTIVE SOFTWARE, ) REDACTED –
`) PUBLIC VERSION
`INC., ROCKSTAR GAMES, INC. and
`)
`2K SPORTS, INC.,
`
`Defendants.
`
`DEFENDANTS’ OPENING BRIEF IN SUPPORT OF
`THEIR MOTION FOR ATTORNEYS’ FEES AND COSTS
`
`OF COUNSEL:
`
`David P. Enzminger
`Michael A. Tomasulo
`Gino Cheng
`David K. Lin
`Joe S. Netikosol
`WINSTON & STRAWN LLP
`333 South Grand Avenue, 38th Floor
`Los Angeles, CA 90071
`(213) 615-1700
`
`MORRIS, NICHOLS, ARSHT & TUNNELL LLP
`Jack B. Blumenfeld (#1014)
`Cameron P. Clark (#6647)
`1201 North Market Street
`P.O. Box 1347
`Wilmington, DE 19899
`(302) 658-9200
`jblumenfeld@morrisnichols.com
`cclark@morrisnichols.com
`
`Attorneys for Defendants
`
`Louis L. Campbell
`WINSTON & STRAWN LLP
`255 Shoreline Drive, Suite 520
`Redwood City, CA 94065
`(650) 858-6500
`
`Dan K. Webb
`WINSTON & STRAWN LLP
`35 West Wacker Drive
`Chicago, IL 60601
`(312) 558-5600
`
`Original Filing Date: February 7, 2022
`Redacted Filing Date: February 15, 2022
`
`Joseph C. Masullo
`WINSTON & STRAWN LLP
`1700 K Street, N.W.
`Washington, DC 20006
`(202) 282-5000
`
`

`

`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 2 of 28 PageID #: 36914
`
`TABLE OF CONTENTS
`
`Page
`
`I.
`
`II.
`
`III.
`
`Nature and Stage of the Proceedings .................................................................................. 1
`
`Summary of the Argument .................................................................................................. 1
`
`Statement of the Facts ......................................................................................................... 2
`
`A.
`
`B.
`
`All Asserted Claims Were Decided in Take-Two’s Favor at Summary
`Judgment ................................................................................................................. 2
`
`Acceleration Did Not Appeal the M-Regular Noninfringement Holding
`and Lost the Issues It Did Raise on Appeal ............................................................ 2
`
`IV.
`
`This Was an Exceptional Case Warranting an Award of Attorneys’ Fees to
`Take-Two Under 35 U.S.C. § 285 ....................................................................................... 3
`
`A.
`
`B.
`
`C.
`
`Defendants Are the “Prevailing Parties” ................................................................. 3
`
`Take-Two Should Be Awarded All of Its Attorneys’ Fees in Defending
`This Case ................................................................................................................. 4
`
`Acceleration’s Substantive Litigation Positions Were Exceptionally Weak ........... 5
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`Acceleration’s infringement position for the “m-regular”
`limitation, which relied in part on falsified evidence, was
`exceptionally weak...................................................................................... 5
`
`Acceleration’s DOE arguments were exceptionally weak. ......................... 9
`
`Acceleration’s position that the CRM claims were not ineligible
`was exceptionally weak .............................................................................. 9
`
`Acceleration’s standing position as to Sony PlayStation games was
`exceptionally weak.................................................................................... 10
`
`Acceleration’s damages theories were exceptionally weak ...................... 11
`
`D.
`
`Acceleration’s Litigation Conduct Was Exceptional ............................................ 13
`
`1.
`
`2.
`
`3.
`
`Acceleration’s counsel’s lack of candor .................................................... 13
`
`Acceleration forced relitigation of issues it had already lost .................... 13
`
`Conduct in other cases supports a fee award here to deter such
`conduct ...................................................................................................... 14
`
`i
`
`

`

`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 3 of 28 PageID #: 36915
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`V.
`
`VI.
`
`It Is Necessary and Proper to Award Fees Against Acceleration Bay’s Principals,
`Alter Egos, and Attorneys ................................................................................................. 16
`
`Alternatively, the Court Should Award Defendants Their Fees and Costs Under Its
`Inherent Power .................................................................................................................. 19
`
`VII.
`
`Conclusion ........................................................................................................................ 20
`
`ii
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`

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`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 4 of 28 PageID #: 36916
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Acceleration Bay LLC v. 2K Sports, Inc.,
`15 F.4th 1069 (Fed. Cir. 2021) ..............................................................................................1, 3
`
`Acceleration Bay LLC v. Activision Blizzard, Inc.,
`324 F. Supp. 3d 470 (D. Del. 2018) ................................................................................. passim
`
`Acceleration Bay LLC v. Activision Blizzard, Inc.,
`C.A. No. 16-453-RGA, 2017 WL 3668597 (D. Del. Aug. 24, 2017)............................1, 10, 11
`
`Acceleration Bay LLC v. Elec. Arts Inc.,
`No. 16-454-RGA, 2019 WL 1376036 (D. Del. Mar. 27, 2019) ..............................................14
`
`Acceleration Bay LLC v. Take-Two Interactive Software, Inc.,
`No. 16-455-RGA, 2020 WL 1333131 (D. Del. Mar. 23, 2020) ...................................... passim
`
`AdjustaCam, LLC v. Newegg, Inc.,
`861 F.3d 1353 (Fed. Cir. 2017)..................................................................................................8
`
`Anderson Mfg. Inc. v. Wyers Prods. Grp., Inc.,
`18-0235-WJM, 2019 WL 4007772 (D. Colo. Aug. 23, 2019) .....................................4, 5, 6, 13
`
`Aptix Corp. v. Quickturn Design Sys., Inc.,
`269 F.3d 1369 (Fed. Cir. 2001)..................................................................................................8
`
`Bayer Cropscience AG v. Dow Agrosciences LLC,
`No. 12-256-RMB, 2015 WL 108415 (D. Del. Jan. 5, 2015) ...................................................11
`
`Chambers v. NASCO, Inc.,
`501 U.S. 32 (1991) ...................................................................................................................19
`
`Commil USA, LLC v. Cisco Sys., Inc.,
`575 U.S. 632 (2015) .................................................................................................................16
`
`CyberSource Corp. v. Retail Decisions, Inc.,
`654 F.3d 1366 (Fed. Cir. 2011)................................................................................................10
`
`Dragon Intellectual Prop. LLC v. DISH Network LLC,
`13-2066-RGA, 2021 WL 5177680 (D. Del. Nov. 8, 2021) .....................................................17
`
`Eon-Net LP v. Flagstar Bancorp,
`653 F.3d 1314 (Fed. Cir. 2011)..................................................................................................8
`
`iii
`
`

`

`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 5 of 28 PageID #: 36917
`
`Finjan, Inc. v. Juniper Networks, Inc.,
`No. 17-05659-WHA, 2021 WL 3140716 (N.D. Cal. July 26, 2021).................................13, 15
`
`Finjan, Inc. v. Juniper Networks, Inc.,
`No. 17-05659-WHA, 2021 WL 75735 (N.D. Cal. Jan. 9, 2021) .................................12, 13, 15
`
`Freshub, Inc. v. Amazon.com Inc.,
`6:21-cv-00511-ADA, 2021 WL 5987106 (W.D. Tex. Dec. 17, 2021) ....................................15
`
`Inland Steel Co. v. LTV Steel Co.,
`364 F.3d 1318 (Fed. Cir. 2004)..................................................................................................4
`
`Intamin Ltd. v. Magnetar Techs. Corp.,
`No. 04-0511-GAF, 2009 WL 10675581 (C.D. Cal. Oct. 8, 2009) ............................................8
`
`Intex Recreation Corp. v. Team Worldwide Corp.,
`77 F. Supp. 3d 212 (D.D.C. 2015) ...........................................................................................14
`
`Inventor Holdings, LLC v. Bed Bath & Beyond, Inc.,
`876 F.3d 1372 (Fed. Cir. 2017)..................................................................................................5
`
`Iris Connex, LLC v. Dell, Inc.,
`235 F. Supp. 2d 826 (E.D. Tex. 2017) ............................................................................. passim
`
`Kindred Studio Illustration & Design, LLC v. Elec. Commc’n Tech., LLC,
`No. 18-07661-GJS, 2019 WL 2064112 (C.D. Cal. May 23, 2019) ...........................................9
`
`Large Audience Display Sys., LLC v. Tennman Prods., LLC,
`745 F. App’x 153 (Fed. Cir. 2018) ............................................................................................4
`
`Machinery Corp. of America v. Gullfiber AB,
`774 F.2d 467 (Fed. Cir. 1985)..................................................................................................18
`
`Midwest Athletic & Sports Alliance LLC v. Ricoh USA, Inc.,
`No. 19-514, 2019 WL 3387061 (E.D. Pa. July 25, 2019) .................................................11, 15
`
`Midwest Athletic & Sports Alliance LLC v. Ricoh USA, Inc.,
`2021 WL 1907475 (E.D. Pa. May 12, 2021) ...........................................................................15
`
`Nelson v. Adams USA, Inc.,
`529 U.S. 460 (2000) .................................................................................................................18
`
`Octane Fitness, LLC v. ICON Health & Fitness, Inc.,
`572 U.S. 545 (2014) .....................................................................................................3, 5, 8, 13
`
`Ohio Cellular Products Corp. v. Adams USA, Inc.,
`175 F.3d 1343 (Fed. Cir. 1999)................................................................................................18
`
`iv
`
`

`

`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 6 of 28 PageID #: 36918
`
`Parallel Iron LLC v. NetApp, Inc.,
`84 F. Supp. 3d 352 (D. Del. 2015) ...........................................................................................19
`
`Phonometrics, Inc. v. Hyatt Corp.,
`89 F. App’x 738 (Fed. Cir. 2004) ............................................................................................19
`
`Ray v. Eyster,
`132 F.3d 152 (3rd Cir. 1997) ...................................................................................................19
`
`Takeda Chemical Industries, Ltd. v. Mylan Laboratories, Inc.,
`549 F.3d 1381 (Fed. Cir. 2008) .........................................................................................19, 20
`
`Taurus IP, LLC v. DaimlerChrysler Corp.,
`726 F.3d 1306 (Fed. Cir. 2013)................................................................................................16
`
`Wiav Sols. LLC v. Motorola, Inc.,
`631 F.3d 1257 (Fed. Cir. 2010)..........................................................................................10, 11
`
`Statutes
`
`28 U.S.C. § 1927 ......................................................................................................................19, 20
`
`35 U.S.C. § 101 ..............................................................................................................................10
`
`35 U.S.C. § 285 ...................................................................................................................... passim
`
`Other Authorities
`
`Fed. R. Civ. P. 11 .............................................................................................................................4
`
`v
`
`

`

`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 7 of 28 PageID #: 36919
`
`I.
`
`Nature and Stage of the Proceedings
`
`Acceleration asserted that Take-Two infringed claims from six patents (the ’344, ’966,
`
`’634, ’147, ’069, and ’497 patents). 455 DI 1.1 Take-Two has obtained complete victory on sum-
`
`mary judgment and on appeal of all asserted claims. Acceleration Bay LLC v. Activision Blizzard,
`
`Inc., 324 F. Supp. 3d 470, 478-79, 485-87 (D. Del. 2018) (“Activision”);2 Acceleration Bay LLC v.
`
`Take-Two Interactive Software, Inc., No. 16-455-RGA, 2020 WL 1333131 (D. Del. Mar. 23, 2020)
`
`(“Take-Two”); Acceleration Bay LLC v. 2K Sports, Inc., 15 F.4th 1069 (Fed. Cir. 2021) (“Acceler-
`
`ation Bay”). Defendants now move for an award of attorneys’ fees, costs, and other expenses
`
`against Acceleration and its principals, alter egos, and lead counsel.
`
`II.
`
`Summary of the Argument
`
`If any case stands out from others for substantive weakness and how it was litigated, this
`
`one does. The merits of the case were exceptionally weak. As to one accused game, Acceleration’s
`
`expert candidly admitted that the accused client-server network was not infringing. As to the other,
`
`not only was its infringement theory baseless, but its only evidence that the accused network was
`
`ever m-regular was a screenshot Acceleration found on YouTube, doctored to fit its infringement
`
`theory, and then gave to the experts without telling them the screenshot had been manipulated.
`
`Acceleration’s equivalents arguments for the central m-regular limitation were even worse because
`
`that limitation was added by amendment. Half of its damages base was tossed for lack of standing.
`
`The Court then excluded a remarkable four sets of damages theories, leaving Acceleration with no
`
`damages case at all. Shifty positions in discovery and claim construction caused the Court to state
`
`its concern that “Plaintiff’s national counsel cannot be relied upon for ‘candor to the tribunal.’” In
`
`1 “455 DI” refers to the docket of this case; “453 DI” refers to the docket of Acceleration Bay LLC
`v. Activision Blizzard, Inc., C.A. No. 16-453-RGA; and “311 DI” refers to the docket of Accelera-
`tion Bay LLC v. Take-Two Interactive Software, C.A. No. 15-311-RGA.
`2 All three defendants jointly moved on invalidity. Activision, 324 F. Supp. 3d at 475 n.1.
`
`1
`
`

`

`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 8 of 28 PageID #: 36920
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`an ordinary patent case, none of these things happens. In ordinary cases, plaintiffs advance credible
`
`infringement theories and do not give their experts phony evidence. They present an admissible
`
`damage case, and the court does not question the candor of their counsel. This case stands out.
`
`Acceleration’s lead counsel made the litigation decisions and should bear their conse-
`
`quences.
`
`
`
`
`
` and made all the myriad decisions that made this case so exceptional.
`
`Defendants respectfully ask that the Court find this case exceptional and award Take-Two its full
`
`fees against Acceleration, its principal(s), and its national counsel.
`
`III.
`
`Statement of the Facts
`
`A.
`
`All Asserted Claims Were Decided in Take-Two’s Favor at Summary Judg-
`ment
`
`All claims not already found invalid in the Activision case were disposed of in Take-Two
`
`by one of three rulings. First, the Court reiterated that making and selling video games is not mak-
`
`ing or selling the asserted ’344, ’966, and ’497 patent claims. Take-Two at *4-5. This holding was
`
`identical to those the Court had already reached in the Activision and EA cases. Id. Second, the
`
`Court held that Acceleration presented insufficient evidence that Take-Two had tested the accused
`
`games in the accused modes and therefore Take-Two could not be found to “use” the claims of the
`
`’344, ’966, and ’497 patents either. Id. at *5-7. Third, the Court held that Take-Two did not infringe
`
`the ’344, ’966, ’069, and ’147 patents either literally or by equivalents because the accused games
`
`did not meet the “m-regular” claim limitations. Id. at *7-10.
`
`B.
`
`Acceleration Did Not Appeal the M-Regular Noninfringement Holding and
`Lost the Issues It Did Raise on Appeal
`
`Acceleration did not appeal the central issue in this case: this Court’s judgment that the
`
`accused Take-Two networks are not m-regular. Instead, it appealed the holding that Take-Two did
`
`2
`
`

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`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 9 of 28 PageID #: 36921
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`not infringe the ’344, ’966, and ’497 patents by making, selling, or offering to sell and the Court’s
`
`construction that the ’069 claims contain an “m-regular” limitation. Acceleration Bay, 15 F.4th at
`
`1075-78. All but one issue was rejected as moot. The appeal as to the ’344 and ’966 patents was
`
`found moot because Acceleration did not appeal the m-regular holding, an independent ground for
`
`noninfringement. Id. at 1076-77. Acceleration’s appeal of the construction of the ’069 patent was
`
`found moot because Acceleration failed to challenge both relevant constructions. Id. at 1077-78.
`
`As to the ’497 patent, the Federal Circuit affirmed that making and selling video game software
`
`does not make or sell the hardware component of the asserted ’497 patent claims. Id.
`
`IV.
`
`This Was an Exceptional Case Warranting an Award of Attorneys’ Fees to Take-Two
`Under 35 U.S.C. § 285
`
`“The court in exceptional cases may award reasonable attorney fees to the prevailing
`
`party.” 35 U.S.C. § 285. An exceptional case “is one that stands out from others with respect to the
`
`substantive strength of a party’s litigation position” or “the unreasonable manner in which the case
`
`was litigated.” Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 554 (2014).
`
`“District courts may determine whether a case is ‘exceptional’ in the case-by-case exercise of their
`
`discretion, considering the totality of the circumstances.” Id. A district court may consider a “non-
`
`exclusive” list of “factors,” including “frivolousness, motivation, objective unreasonableness” and
`
`the “need in particular circumstances to advance considerations of compensation and deterrence.”
`
`Id. at 554 n.6. The exceptional-case inquiry “imposes no specific evidentiary burden, much less
`
`such a high one.” Octane Fitness, 572 U.S. at 557. A party must only show a fee award is warranted
`
`by a preponderance of the evidence. See id.
`
`A.
`
`Defendants Are the “Prevailing Parties”
`
`Take-Two is a “prevailing party” because it obtained a complete victory at summary judg-
`
`ment. See Inland Steel Co. v. LTV Steel Co., 364 F.3d 1318, 1320 (Fed. Cir. 2004).
`
`3
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`

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`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 10 of 28 PageID #: 36922
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`B.
`
`Take-Two Should Be Awarded All of Its Attorneys’ Fees in Defending This
`Case
`
`The Court may award attorneys’ fees for the entire litigation when the factual bases for the
`
`exceptional-case finding “permeate[] the entire litigation.” See Large Audience Display Sys., LLC
`
`v. Tennman Prods., LLC, 745 F. App’x 153 (Fed. Cir. 2018). That is the case here. As explained
`
`below, Acceleration took baseless positions on every issue in this case, including infringement,
`
`standing, damages, discovery, and claim construction. It relitigated issues it had already lost and
`
`failed in its obligation of candor to the tribunal. The case was baseless from the beginning.
`
`Take-Two wrote a “Rule 11” letter to Acceleration immediately because, even after spending doz-
`
`ens of hours reviewing Take-Two’s source code, Acceleration’s infringement contentions included
`
`no evidence at all for the m-regular limitations. Ex. A at 4-6; Ex. O (excerpts of Acceleration’s
`
`March 2016 infringement contentions). As the Court observed, a network with a central server is
`
`“fundamentally different” than the claimed network. Take-Two at *10. In fact, a network with a
`
`central server can never be m-regular and incomplete as the claims require. It is mathematically
`
`impossible. The baselessness of Acceleration’s infringement theories was the subject of special
`
`master orders across all three cases. See, e.g., 311 DI 125; 453 DI 155, at 6-7; 455 DI 150, at 6;
`
`455 DI 272, at 3-4.
`
`An award of full attorneys’ fees is, thus, appropriate here. Indeed, in a case with strikingly
`
`similar facts, the court awarded the defendants all their attorneys’ fees. See Anderson Mfg. Inc. v.
`
`Wyers Prods. Grp., Inc., 18-0235-WJM, 2019 WL 4007772, at *12 (D. Colo. Aug. 23, 2019)
`
`(awarding full attorneys’ fees based on “a number of objectively weak arguments … , one instance
`
`of probably falsified evidence, a pattern of exaggerating matters of record, and a lack of candor to
`
`the Court”). Thus, Take-Two requests that this Court award it all of the approximately $9 million
`
`in attorneys’ fees and costs it incurred from when the case was filed in 2015 through the end of the
`
`4
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`

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`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 11 of 28 PageID #: 36923
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`Federal Circuit appeal.3 Take-Two will submit whatever evidence the Court requires to verify these
`
`billings.
`
`C.
`
`Acceleration’s Substantive Litigation Positions Were Exceptionally Weak
`
`The substantive weakness of Acceleration’s substantive positions “stands out from others.”
`
`Octane Fitness, 572 U.S. at 554. Five examples highlight how the substantive weakness of Accel-
`
`eration’s positions permeated this entire case: (1) Acceleration’s literal infringement position for
`
`the “m-regular” claim limitation, (2) Acceleration’s assertion of infringement by equivalents,
`
`(3) Acceleration’s argument that the “computer readable medium claims” were invalid after Ac-
`
`celeration admitted they were not, (4) Acceleration’s position that it had standing to accuse games
`
`designed for the Sony PlayStation, and (5) Acceleration’s multiple failures to present an admissible
`
`damages theory. Each independently supports an exceptional-case finding.
`
`1.
`
`Acceleration’s infringement position for the “m-regular” limitation,
`which relied in part on falsified evidence, was exceptionally weak
`
`All of Acceleration’s infringement arguments lacked merit, but its arguments that the ac-
`
`cused video games utilized an m-regular network were particularly egregious. See Take-Two at
`
`*7-10. Amplifying the unreasonableness of these positions is that, for GTAO, its experts relied in
`
`their reports on falsified screenshots that neither expert could authenticate and that, for NBA 2K,
`
`its expert admitted that the accused network was not m-regular.
`
`For GTAO, Acceleration argued players in the virtual world become “connected” when
`
`they are near each other because more data is transmitted between players who are closer together
`
`in that world. Id. at *7. Acceleration then argued that GTAO met the m-regular limitation because,
`
`3 Attorneys’ fees for appeals may be awarded under Section 285. Inventor Holdings, LLC v. Bed
`Bath & Beyond, Inc., 876 F.3d 1372, 1380 (Fed. Cir. 2017).
`
`5
`
`

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`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 12 of 28 PageID #: 36924
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`when players positioned their avatars in the virtual world in just the right way, these alleged “con-
`
`nections” would supposedly “naturally” form an m-regular network. Id.
`
`The Court resoundingly rejected Acceleration’s infringement theory. Id. at *8. It observed
`
`that the “players control their own avatars and choose where to move throughout the game envi-
`
`ronment.” Thus, the fact that “players share more data when they are near each other does not
`
`suggest that the network is m-regular” but instead “suggests that the players’ actions determine
`
`how connections are formed, and the network is not ‘configured to maintain’ any particular state.”
`
`Id.
`
`Not only was the theory baseless, but Acceleration could find no evidence that such an
`
`m-regular network had ever actually occurred. Therefore, Acceleration took a screenshot from a
`
`gameplay video it found on YouTube, doctored the screenshot to support its infringement theory,
`
`and gave it to its experts to include in their reports. 455 DI 463, at 16-22; 455 DI 464, Ex. A-2
`
`(Mitz Rpt.) ¶ 129; 455 DI 464, Ex. A-1 (Med. Rpt.) ¶ 173. The screenshot purportedly shows a
`
`game where six players are each connected to exactly three other players, ostensibly making the
`
`network 3-regular. Id. And while their reports state the image was “modified,” both experts testi-
`
`fied that the only modifications were the red lines and blue, yellow, and green circles and squares
`
`that overlay the actual image. Ex. P (Med. Tr.) at 123:12–127:16; Ex. Q (Mitz. Tr.) at 58:2-10.
`
`Neither knew that the underlying image itself had been modified. Id.
`
`But the experts were wrong. Acceleration altered the underlying image, almost certainly
`
`because the original does not support the infringement theory. In the original, players 2–6 do not
`
`appear at all:
`
`6
`
`

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`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 13 of 28 PageID #: 36925
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`But adding the fictitious players was not the only alteration. As can be seen below, the
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`lower-left corner includes a “mini-map” that indicates the locations of other players in the virtual
`
`world. 455 DI 463, at 19-21. Acceleration altered the mini-map to suggest that players were ar-
`
`ranged in the allegedly infringing formation indicated by the overlay. Id.
`
`As can be seen, Acceleration altered the original screenshot by copying the center red and blue
`
`icon and pasting it four times so that the mini-map would falsely indicate that the screenshot in-
`
`cluded players 2, 4, 5, and 6 arranged in the allegedly infringing manner. Acceleration also re-
`
`moved the two blue dots in the lower-left corner of the mini-map, presumably because those play-
`
`ers did not fit the theory of infringement. Acceleration gave the doctored screenshot to its experts
`
`but did not tell them that the screenshot was altered. The experts did not take any screenshots, did
`
`7
`
`

`

`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 14 of 28 PageID #: 36926
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`not know that it had been altered, and suggested it had probably come from counsel. 455 DI 464,
`
`Ex. E-5 (Mitz. Tr.) at 56:23–57:8, 65:7-14; 455 DI 464, Ex. E-6 (Med. Tr.) at 36:24–37:1, 132:24–
`
`133:9.
`
`For NBA 2K, Acceleration’s infringement theory was similarly baseless. NBA 2K uses a
`
`client-server network. Take-Two at *9-10. Acceleration’s expert report stated that both the player
`
`clients and the “park-relay” server were network participants. Id. at *9. But if the server is a par-
`
`ticipant, then the network is not m-regular because the server is connected to all the other partici-
`
`pants, but each client is not. Id. This is why, as the Court observed, a client-server network is
`
`“fundamentally different” from the claimed m-regular network. Id. at *10. Acceleration’s expert
`
`candidly admitted that the accused client-server network was non-infringing. 455 DI 463, at 27-28.
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`Instead of withdrawing its literal-infringement claim, Acceleration changed theories and argued
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`that the server was not a network participant. Take-Two at *9. The Court found that this unsup-
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`ported attorney argument contradicted the expert and found no literal infringement. Id.
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`Baseless infringement theories such as these routinely form the basis for exceptional-case
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`findings. For example, even before Octane Fitness, the Federal Circuit had affirmed exceptional-
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`case findings for baseless infringement cases. See, e.g., Eon-Net LP v. Flagstar Bancorp, 653 F.3d
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`1314 (Fed. Cir. 2011); AdjustaCam, LLC v. Newegg, Inc., 861 F.3d 1353 (Fed. Cir. 2017). And of
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`course, presenting falsified evidence makes a case exceptional. See, e.g., Aptix Corp. v. Quickturn
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`Design Sys., Inc., 269 F.3d 1369, 1372-75 (Fed. Cir. 2001); Intamin Ltd. v. Magnetar Techs. Corp.,
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`No. 04-0511-GAF, 2009 WL 10675581 (C.D. Cal. Oct. 8, 2009) (finding case exceptional based
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`on the patentee’s forged chain of title). Moreover, there is no requirement that the patentee affirm-
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`atively rely on the doctored evidence at trial or in rebutting a summary-judgment motion. See
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`Kindred Studio Illustration & Design, LLC v. Elec. Commc’n Tech., LLC, No. 18-07661-GJS, 2019
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`8
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`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 15 of 28 PageID #: 36927
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`WL 2064112 (C.D. Cal. May 23, 2019) (finding case exceptional based on doctored claim chart
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`that the patentee sent as part of a pre-suit licensing demand).
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`2.
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`Acceleration’s DOE arguments were exceptionally weak.
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`Acceleration’s doctrine-of-equivalents infringement theories were even worse. For GTAO,
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`the Court noted that the theory makes “no mention of participants connecting to the same number
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`of other participants.” For NBA 2K, it found that “the architecture of the NBA 2K network, which
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`relies on a central relay server, is fundamentally different from the m-regular networks of the
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`asserted claims.” Take-Two at *10 (emphasis added). And for the three patents where applicants
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`added “m-regular” to the claims to avoid prior art, the Court held Acceleration’s equivalents argu-
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`ment was “especially weak” because of prosecution-history estoppel. Id. at *9. Acceleration was
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`advised early and often about these deficiencies. Ex. A at 4-6; Ex. B at 15-21; 24.
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`3.
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`Acceleration’s position that the CRM claims were not ineligible was ex-
`ceptionally weak
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`The Court construed the asserted “computer readable media” claims to include “carrier
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`waves.” See 455 DI 345, at 7. At the claim construction hearing, Acceleration agreed that if the
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`Court adopted this construction, it would make the claims patent ineligible: “THE COURT: Do
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`you agree [if] this includes fleeting medium such as carrier waves, that the claims are ineligible?
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`[PLAINTIFF COUNSEL]: The short answer is yes.” 453 DI 363, at 62:24–65:1. Despite this, Ac-
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`celeration refused to stipulate that the claims were ineligible, forcing defendants to move for sum-
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`mary judgment. Ex. C. The opposition to the summary judgment was exceptionally weak. Accel-
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`eration argued that the Court should ignore the preamble and treat these “as method claims for the
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`purposes of a § 101 analysis.” 453 DI 475, at 32 (citing CyberSource Corp. v. Retail Decisions,
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`Inc., 654 F.3d 1366 (Fed. Cir. 2011)). CyberSource had nothing to do with carrier waves and, as
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`the Court found, rejected Acceleration’s argument: “‘[r]egardless of what statutory category … a
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`9
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`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 16 of 28 PageID #: 36928
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`claim’s language is crafted in,’ the Court must evaluate the underlying invention for patent eligi-
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`bility.” Acceleration, 324 F. Supp. 3d at 485-86. Thus, the Court rejected Acceleration’s argument
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`and found the claims invalid because they were construed to cover fleeting media. This was the
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`very same holding Acceleration had agreed with at the claim construction hearing. Id.
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`4.
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`Acceleration’s standing position as to Sony PlayStation games was ex-
`ceptionally weak
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`To more than double the accused royalty base, Acceleration accused games operating on
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`the Sony PlayStation platform despite a plain lack of constitutional standing to do so. The Sony
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`PlayStation version of the accused games constitutes at least half the market. Ex. M (Excerpts of
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`Lawton Report) ¶¶ 115-128. But, years before Acceleration existed, Sony obtained a license to the
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`asserted patents from Boeing covering video games designed for the Sony PlayStation platform.
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`The Sony license granted Sony the right to grant sublicenses to third-party game developers and
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`publishers within a field of use that plainly included the accused games. Acceleration Bay LLC v.
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`Activision Blizzard, Inc., No. 16-453, 2017 WL 3668597 (“Standing Order”) at *1. It is blackletter
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`law that “a [plaintiff] lacks standing to sue a party who has the ability to obtain … a license from
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`another party with the right to grant it.” Wiav Sols. LLC v. Motorola, Inc., 631 F.3d 1257, 1266-67
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`(Fed. Cir. 2010); see also Standing Order at *2 (applying Wiav to this case). That was precisely
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`the situation with the Sony license. But Acceleration still asserted it had standing to seek damages
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`for accused games on the Sony PlayStation platform. See 455 DI 1-3, at 2, 65. In response, Accel-
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`eration argued that the Wiav rule was “dicta.” Standing Order at *3. The Court rejected that argu-
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`ment and granted Take-Two’s motion to dismiss the claims related to the Sony PlayStation video
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`games. Id. at *3-4.
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`Pursuing infringement claims with an obvious lack of standing can support a fee award. In
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`Bayer Cropscience AG v. Dow Agrosciences LLC, the court awarded fees where a prior license
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`10
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`Case 1:16-cv-00455-RGA Document 523 Filed 02/15/22 Page 17 of 28 PageID #: 36929
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`precluded an infringement finding and the plaintiff “knew or should have known that its patent
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`claim was undercut by
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`the plain and unambiguous
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`language
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`in
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`these agreements.”
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`No. 12-256-RMB, 2015 WL 108415, at *6 (D. Del. Jan. 5, 201