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Worlds Reply
UNITED STATES PATENT AND TRADEMARK OFFICE
____________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________
BUNGIE, INC.,
Petitioner,
v.
WORLDS INC.,
Patent Owner.
_______________
Case IPR2015-01264 (Patent 7,945,856 B2)
Case IPR2015-01319 (Patent 8,082,501 B2)
Case IPR2015-01321 (Patent 8,145,998 B2)
____________
PATENT OWNER WORLDS INC.’S
RESPONSE ON REMAND FROM CAFC
- i -
TABLE OF CONTENTS
I. INTRODUCTION ........................................................................................... 1
II. ISSUE PRECLUSION DOES NOT BAR WORLDS’ ARGUMENTS ON
REAL PARTY IN INTEREST ........................................................................ 2
A. The Identification of All RPIs to Each Petition is Not an Identical
Issue Among the Appealed and Non-Appealed IPRs ........................... 2
1. Federal Circuit Cases Applying Issue Preclusion to Board
Decisions are Not On Point to the Differing Issues Here ................ 6
2. Identity of Issue Does Not Exist Where the Burden of Proof is
Different Between a First Action and a Second Action ................... 7
3. Bungie’s Argument for Issue Preclusion on the RPI Issue Would
Lead to Absurd Results .................................................................... 8
B. Bungie Fails to Meaningfully Address B&B Hardware’s Concern for
Quality, Extensiveness, and Fairness of Procedures Followed ............. 9
C. The Policy Behind Cygnus’s Exemplary Exception Applies Here ..... 11
D. The Solicitor’s Office Agrees That Common Law-Based Issue
Preclusion Does Not Apply at the PTAB ............................................ 12
III. BUNGIE FAILS TO CARRY ITS BURDEN OF ESTABLISHING THAT
ACTIVSION IS NOT AN RPI TO BUNGIE’S PETITIONS ...................... 14
A. Bungie Has No Relevant Evidence to Carry Its Burden ..................... 15
1. The Agreement Executed in 2010 Cannot Prove That Activision is
Not an RPI in 2015 ......................................................................... 16
2. The Timing of Bungie’s Petitions Does Not Establish That
Activision is Not an RPI .............................................
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B. Bungie Ignores the Federal Circuit’s Specific Instructions and Fails to
Apply the Legal Test for RPI Set Forth in AIT ................................... 20
C. Bungie Attempts to Avoid the Proper RPI Conclusion By Invoking
Due Process Without Any Evidence ................................................... 24
D. Activision is also a Privy of Bungie in These IPR Petitions ............... 26
E. Bungie’s Refusal to Submit Evidence Should Not Create an Equitable
Escape from the Statutory Requirement to Name all RPIs ................. 28
IV. CONCLUSION .............................................................................................. 30
- iii -
TABLE OF AUTHORITIES
Cases
A.B. Dick Co. v. Burroughs Corp.,
713 F.2d 700 (Fed. Cir. 1983), cert. denied, 464 U.S. 1042 (1984) ...........3, 9
Applications in Internet Time, LLC v. RPX Corp.,
897 F.3d 1336 (Fed. Cir. 2018) ............................................................. passim
Aruze Gaming Macau, Ltd. v. MGT Gaming, Inc.,
IPR2014-01288, Paper 13 (PTAB Feb. 20, 2015) .......................................... 5
Astoria Fed. Sav. & Loan Ass’n v. Solimino,
501 U.S. 104 (1991)....................................................................................... 13
Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc.,
IPR2013-00453, Paper 88 (PTAB Jan. 6, 2015) ........................................... 29
B&B Hardware, Inc. v. Hargis Indus., Inc.,
135 S.Ct. 1293 (2015) ............................................................................... 9, 10
Clark v. Bear Stearns & Co.,
966 F.2d 1318 (9th Cir. 1992) ......................................................................... 7
Cobb v. Pozzi,
363 F.3d 89 (2d Cir. 2004) .............................................................................. 7
Commil USA, LLC v. Cisco Sys., Inc.,
135 S. Ct. 1920 (2015) ................................................................................... 16
FCC v. Schreiber,
381 U.S. 279 (1965)....................................................................................... 13
Guenther v. Holmgreen,
738 F.2d 879 (7th Cir. 1984) ........................................................................... 7
In re Cygnus Telecom. Tech., LLC Patent Litig.,
536 F.3d 1343 (Fed. Cir. 2008) .......................................................... 9, 11, 12
Intel Corp. v. U.S. Int’l Trade Comm’n,
946 F.2d 821 (Fed. Cir. 1991) ....................................................................... 28
- iv -
Johnson v. Whitehead,
647 F.3d 120 (4th Cir. 2011) .......................................................................... 13
Killep v. Office of Personnel Mgmt.,
991 F.2d 1564 (Fed. Cir. 1991) ..................................................................... 13
Litttlejohn v. United States,
321 F.3d 915 (9th Cir. 2003) ........................................................................... 7
MaxLinear, Inc. v. CF Crespe LLC,
880 F.3d 1373 (Fed. Cir. 2018) ....................................................................... 6
Nestle USA Inc. v. Steuben Food, Inc.,
884 F.3d 1350 (Fed. Cir. 2018) ...................................................................6, 7
Unified Patents v. Realtime Adaptive Streaming, LLC,
IPR2018-00883, Paper 29 (PTAB Oct. 11, 2018) ......................................... 25
VirnetX Inc. v. Apple, Inc.,
909 F.3d 1375 (Fed. Cir. 2018) ...................................................................2, 4
WesternGeco LLC v. ION Geophysical Corp.,
889 F.3d 1308 (Fed. Cir. 2018) ........................................................ 20, 26, 27
WiFi One LLC v. Broadcom Corp.,
887 F.3d 1329 (Fed. Cir. 2018) ..................................................................... 10
Worlds Inc. v. Bungie, Inc.,
903 F.3d 1237 (Fed. Cir. 2018) ............................................................. passim
XY, LLC v. Trans Ova Genetics, L.C.,
890 F.3d 1282 (Fed. Cir. 2018) ....................................................................... 6
Statutes
15 U.S.C. § 1069 ...................................................................................................... 14
35 U.S.C. § 312(a)(2) .............................................................................................3, 5
35 U.S.C. § 315(b) ........................................................................................... passim
35 U.S.C. § 315(d) ................................................................................................... 13
35 U.S.C. § 315(e) ...................................................................................... 13, 14, 30
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35 U.S.C. § 315(e)(1) ............................................................................................... 13
35 U.S.C. § 325(d) ............................................................................................ 13, 14
Rules
37 C.F.R. § 42.8(b)(1) ................................................................................................ 3
37 C.F.R. § 42.20(c) ................................................................................................... 4
37 C.F.R. § 42.24(b) .................................................................................................. 2
37 C.F.R. § 42.51(b)(2)(i) ........................................................................................ 10
Other Authorities
157 Cong. Rec. S1376 (daily ed. March 8, 2011) (statement of Sen. Kyl) ............. 26
157 Cong. Rec. S5432 (Sept. 8, 2011) (statement of Sen. Schumer) ...................... 26
18 Charles Alan Wright, et al., Federal Practice and Procedure § 4422 (2d ed.
2002) ................................................................................................................ 8
18 James Wm. Moore, et al., Moore’s Federal Practice § 132.02[4][e] (3d ed.
1997) ................................................................................................................ 8
Brief for Intervenor, Biodelivery Sciences Int’l, Inc. v. Monosol RX, LLC,
2017 WL 2666499 (Fed. Cir. 2017) .............................................................. 12
Federal Rule of Civil Procedure 26 .................................................................... 9, 10
Restatement (Second) of Judgments § 27 .................................................................. 9
Restatement (Second) of Judgments § 28(4) (1982) ................................................. 7
Worlds Inc. v. Bungie, Inc. Oral Argument Recording (Mar. 9, 2018), available at
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2017-1481.mp3 ....10,
17, 29
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I. INTRODUCTION
Bungie’s opening sentence in its Brief (“Bungie Br.”) raises the ultimate
question here: what communications from Activision caused Bungie to file six
different IPR petitions against Worlds’ patents, challenging the very claims at issue
in the Activision Litigation? Bungie all but admits the communications occurred,
but without evidence, it cannot carry its burden of proving that Activision is not an
unnamed real party in interest (“RPI”) to Bungie’s petitions under the Federal
Circuit’s test in Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336
(Fed. Cir. 2018) (“AIT”). Because Worlds served Activision with a complaint for
infringement of the challenged patents more than a year before Bungie’s petitions
were filed, Bungie’s petitions are time-barred due to Activision’s RPI status. See
Ex. 2007 at 4-7; Ex. 2003; Ex. 2010 at 10-13; Ex. 2011.
Evidence of Bungie and Activision’s pre-existing legal relationship is
established by the DevPub Agreement (Ex. 2002, “Agreement”) dated April 16,
2010, under which Bungie developed “Destiny,” a game published by Activision in
2014. Ex. 2002 at 1 (Recital B), Ex. 1064, ¶¶2-3. On its face, the Agreement
establishes that Activision had at least the opportunity to review and approve
arguments advanced in this IPR.
This evidence includes Section 7A.15(j) (Bungie must conduct “legal
reviews” of Destiny to “ensure that all Intellectual Property and other rights are
IPR2015-01264, -01319, -01321 Patent Owner’s Response on Remand
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fully cleared for use”1
and such legal reviews are subject to “prior review and
approval by Activision, (budget to [be] mutually approved).”); Section 14.1.2
(Bungie warrants that “the use, development, distribution and publishing” of the
product intellectual property “shall not infringe upon or violate the rights of, nor
require consent of, any other party”); and Section 15.1, which requires Bungie to
indemnify Activision for “Claims” (not just lawsuits, see Section 15.1) of patent
infringement against Destiny.
Bungie’s Brief fails to establish that Worlds is estopped from raising this
RPI dispute on remand, fails to carry its burden of establishing that Activision is
not an RPI to Bungie’s petitions, and fails to meaningfully address key points
required by the Federal Circuit decision. Further, it would be improper for Bungie
to raise its leading arguments on these issues for the first time on Reply. See 37
C.F.R. § 42.24(b).
II. ISSUE PRECLUSION DOES NOT BAR WORLDS’ ARGUMENTS
ON REAL PARTY IN INTEREST
A. The Identification of All RPIs to Each Petition is Not an Identical
Issue Among the Appealed and Non-Appealed IPRs
It has been long-held that for issue preclusion to apply, the law requires that
the issues be identical. VirnetX Inc. v. Apple, Inc., 909 F.3d 1375, 1377 (Fed. Cir.
2018); see also A.B. Dick Co. v. Burroughs Corp., 713 F.2d 700, 702 (Fed. Cir.
1
“Intellectual Property” includes patents and patent rights. Ex. 2002, Sec. 6.1.
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1983), cert. denied, 464 U.S. 1042 (1984). As a critical defect in its argument for
issue preclusion, Bungie fails to establish that the issue of whether Activision was
an RPI to each petition was an identical issue among all petitions.
In its opinion remanding these IPRs back to the Board, the Federal Circuit
took the view that the RPI determination may be unique to each petition. Worlds
Inc. v. Bungie, Inc., 903 F.3d 1237, 1247 (Fed. Cir. 2018) (“But in our view, the
determination of whether a party is a real party in interest may differ from one IPR
to the next, even among a set of seemingly related IPRs.”). Bungie fails to deal
with this statement, and instead glosses over the identical issue requirement by
concluding without analysis that “[t]he RPI issue in the final IPRs was identical to
the RPI issue in the appealed IPRs.” Bungie Br., 3. It goes on to say that “n
each IPR, Worlds argued that each petition was barred by 35 U.S.C. §§ 312(a)(2),
315(b), and 37 C.F.R. § 42.8(b)(1) because the petition did not list Activision as an
RPI.” Id. But just as the Federal Circuit acknowledged, the identification of a
petition’s RPIs is specific to that petition. This is in accordance with governing
statute. See 35 U.S.C. § 312(a)(2) (requiring each petition to identify all real
parties in interest to that petition). The Federal Circuit similarly explained that
“[c]orrectly identifying all real parties in interest with respect to each petition is
important, as the determination may impact whether a petition may be instituted.”
Worlds, Inc., 903 F.3d at 1240 (emphasis added).
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Indeed, the Federal Circuit’s view was correct under the law: the questions
of whether Activision was an RPI to the petitions in IPR2015-01268, -01269, and -
01325 are not identical to whether Activision was an RPI to the petition in
IPR2015-01264, the petition in IPR2015-01319, or the petition in IPR2015-01321.
More precisely, the issue in IPR2015-01264 is whether Activision was an RPI to
the petition filed in IPR2015-01264. The issue in IPR2015-01319 is whether
Activision was an RPI to the petition filed in IPR2015-01319. The issue in
IPR2015-01321 is whether Activision was an RPI to the petition filed in IPR2015-
01321. These are not identical issues to issues in the unappealed IPRs.
This is logical. Two petitions filed by the same petitioner could have
different RPIs. For example, a non-party who neither funds nor controls a first
petition could later fund and exert control over a second petition filed by the same
petitioner. The RPI question in the second proceeding is unique to that proceeding.
Moreover, it is Bungie’s burden to set-out in its opening brief how the RPI
issue is identical between IPR2015-01268, -01269 and -01325 and the appealed
IPRs. Bungie avoids such a comparison, and instead argues that since Worlds’ RPI
arguments were the same in each IPR and the result was the same, issue preclusion
applies. Bungie Br., 3-5. That is not the law. In order to apply issue preclusion,
the burden is on Bungie to affirmatively show that the legal issue was identical.
See VirnetX Inc., 909 F.3d at 1377; 37 C.F.R. § 42.20(c).
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Bungie confuses the legal issue with the outcome reached by the Board in
each IPR, but later acknowledges that each final written decision was specific to
that IPR, stating that the “Board entered a different final written decision … in
each case.” Bungie Br., 5. Bungie made similar concessions regarding the
Board’s institution decision issued in “each case.” Id. at 4. More precisely, the
Board concluded in each IPR that Activision was not an unnamed RPI to that IPR
petition. That does not mean that the legal issue—whether Activision was an RPI
to any petition—was identical for all petitions. See Worlds Inc., 903 F.3d at 1247
(“[I]n our view, … a real party in interest may differ from one IPR to the next …
.”). Statute requires that the issues are different. 35 U.S.C. § 312(a)(2).
This result squares with the Board’s prior analysis. As the Board has
previously held, “RPI is the relationship between a party and a proceeding.” Aruze
Gaming Macau, Ltd. v. MGT Gaming, Inc., IPR2014-01288, Paper 13 at 11 (PTAB
Feb. 20, 2015) (emphasis in original). Whether Activision has a relationship to
each proceeding is a unique question for each proceeding (see 35 U.S.C. §
312(a)(2)), and issue preclusion cannot attach to any one proceeding based on a
relationship (or lack thereof) between Activision and a separate proceeding.
This outcome is also wholly consistent with the statute and with the Federal
Circuit’s observation that the determination of whether a party is an RPI in one
IPR may differ from whether that party is an RPI in the next IPR, even where the
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IPRs appear to be related. Worlds Inc., 903 F.3d at 1247. Because the RPI
analysis is specific to each petition, there is no identical issue against which issue
preclusion would apply here. The Board should evaluate these separate issues and
determine that Activision is an RPI to each petition currently before it.
1. Federal Circuit Cases Applying Issue Preclusion to Board
Decisions are Not On Point to the Differing Issues Here
Bungie identifies cases where issue preclusion has been applied by the
Federal Circuit to Board decisions. See Bungie Br., 7. Unlike this proceeding,
those cases actually involved identical issues and are therefore distinguishable.
See XY, LLC v. Trans Ova Genetics, L.C., 890 F.3d 1282, 1294 (Fed. Cir. 2018)
(identical issue was patent invalidity); MaxLinear, Inc. v. CF Crespe LLC, 880
F.3d 1373, 1376-77 (Fed. Cir. 2018) (“the collateral-estoppel effect of an
administrative decision of unpatentability generally requires the invalidation of
related claims that present identical issues of patentability.”) (emphasis added).
In Nestle USA Inc. v. Steuben Food, Inc., 884 F.3d 1350 (Fed. Cir. 2018),
the common issue was construction of “aseptic,” where the claims at issue in two
commonly owned patents used the term “aseptic” “in a similar fashion.” Id. at
1351. “More critically, the two patents also provide[d] identical lexicography for
the term ‘aseptic’ in their specifications.” Id. at 1352 (emphasis added). Ensuring
that the issue was identical across two patents, the Federal Circuit noted that
“[n]either party has pointed to any material different between the two patents or
IPR2015-01264, -01319, -01321 Patent Owner’s Response on Remand
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their prosecution histories that would give rise to claim construction issues in this
appeal different from those raised in the prior appeal.” Id.
Unlike in XY, MaxLinear, and Nestle, the statutory RPI analysis is specific to
each petition, and there is no identical issue against which preclusion can apply.
2. Identity of Issue Does Not Exist Where the Burden of Proof
is Different Between a First Action and a Second Action
The Board’s previous handling of Bungie’s burden to prove RPI also bars
issue preclusion. Relitigating an issue is not precluded where the “adversary has a
significantly heavier burden [in the second action] than he had in the first action.”
Restatement (Second) of Judgments § 28(4) (1982). “To apply issue preclusion
[when the burden of proof is different in the second action] would be to hold, in
effect, that the losing party in the first action would also have lost had a
significantly different burden [been] imposed.” Id. at § 28, cmt. f.
Logically, “a shift or change in the burden of proof can render the issues in
two different proceedings non-identical,” thereby barring issue preclusion. Cobb v.
Pozzi, 363 F.3d 89, 113-14 (2d Cir. 2004) (citations omitted); Litttlejohn v. United
States, 321 F.3d 915, 923-24 (9th Cir. 2003); see also Clark v. Bear Stearns & Co.,
966 F.2d 1318, 1322 (9th Cir. 1992) (“estoppel does not preclude claims that have
a different burden of proof”); Guenther v. Holmgreen, 738 F.2d 879, 888 (7th Cir.
1984) (“issue preclusion may be defeated by shifts in the burden of persuasion or
by changes in the degree of persuasion required.”) (citation omitted)); see also 18
IPR2015-01264, -01319, -01321 Patent Owner’s Response on Remand
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Charles Alan Wright, et al., Federal Practice and Procedure § 4422 (2d ed. 2002);
18 James Wm. Moore, et al., Moore’s Federal Practice § 132.02[4][e] (3d ed.
1997) ( “issue preclusion does not apply when the party seeking to benefit from
preclusion has a significantly heavier burden in the subsequent action”).
Per the Federal Circuit, the Board’s prior decision put the burden of proof on
Worlds, or at best, was unknown, thus confirming that Bungie’s burden was
incorrectly low. Worlds Inc., 903 F.d at 1246. On remand, Bungie must carry the
burden. Under these facts, issue identity cannot be established, and issue
preclusion cannot apply based on the Board’s decisions in the unappealed IPRs.
3. Bungie’s Argument for Issue Preclusion on the RPI Issue
Would Lead to Absurd Results
Bungie also fails to recognize, as the Federal Circuit did, that different IPR
petitions could have different RPIs. Bungie’s argument—that the correct naming
of all RPIs to a petition is a common issue across multiple petitions—would lead to
absurd results. Consider a scenario where a petitioner fails to name a time-barred
party as an RPI to a first petition. If the Board denies the first petition as timebarred under § 315(b), the Board would deny subsequent petitions from that
petitioner without regard to the time-barred party’s relationship to those
subsequent petitions. This result cannot be correct, and Bungie offers no
explanation how the Board would avoid this absurd result.
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B. Bungie Fails to Meaningfully Address B&B Hardware’s Concern
for Quality, Extensiveness, and Fairness of Procedures Followed
Even if the RPI issue were common among all IPRs (which it isn’t), this
issue has not been fully and fairly litigated, another requisite of issue preclusion.
See A.B. Dick Co., 713 F.2d at 702; In re Cygnus Telecom. Tech., LLC Patent
Litig., 536 F.3d 1343, 1349 (Fed. Cir. 2008). Bungie characterizes Worlds’
dissatisfaction with the original Board decision as “disagreement with the
decision” (Bungie Br., 8), but the Federal Circuit itself recognized the defect in the
Board’s weighing of argument over evidence. Worlds Inc., 903 F.3d at 1246
(Board may have placed the burden on Worlds, and its reliance on attorney
argument “seemed to outweigh the actual evidence presented by Worlds.”).
This defect implicates a concern raised by the Supreme Court in B&B
Hardware, Inc. v. Hargis Indus., Inc., 135 S.Ct. 1293 (2015). There, the Court
considered whether a TTAB finding in an opposition proceeding has preclusive
effect on a later federal court proceeding. Citing to the Restatement (Second) of
Judgments § 27, the Supreme Court recognized an exception to issue preclusion
where there were “differences in the quality or extensiveness of the procedures
followed” in a prior suit. Id. at 1303. In holding that estoppel applied to TTAB
proceedings, the Court emphasized the similar discovery procedures before the
TTAB and before federal district courts. Id. at 1300. In particular, noting that the
TTAB has adopted “almost the whole of Federal Rule of Civil Procedure 26,”
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(“FRCP 26”) the Court stated there was no “reason to doubt the quality,
extensiveness, or fairness” of the TTAB’s procedures because they were, for the
most part, exactly the same as a federal court’s. Id. at 1309.
Unlike in the TTAB, a clear distinction in procedures exists between the
PTAB and federal court. When Congress established the PTAB, it did not adopt
the broad discovery rules of FRCP 26; rather, “[d]iscovery in inter partes review
proceedings is more limited than in proceedings before district courts or even other
proceedings before the PTO. ” WiFi One LLC v. Broadcom Corp., 887 F.3d 1329,
1338 (Fed. Cir. 2018). Unlike the broad discovery standard of FRCP 26, “[t]he
Board’s rules provide that a party seeking additional discovery ‘must show that
such additional discovery is in the interest of justice.’” Id. (citing 37 C.F.R. §
42.51(b)(2)(i)). Here, the Board denied Worlds’ request for routine/additional
discovery despite Worlds having placed the RPI issue in dispute. Worlds Inc., 903
F.3d at 1244 n.8. This implicates questions of quality, extensiveness, and fairness,
particularly since it was Bungie’s burden to refute Activision’s status as RPI, not
Worlds’ burden to seek discovery to prove that status. See Oral Arg. at 47:31-
47:46 (Mar. 9, 2018), available at
http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2017-1481.mp3 (Judge
O’Malley stating, “But there’s a difference between allowing them discovery and
probing your position beyond attorney argument to require you to submit proofs…
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or additional proofs. There’s a difference between that.”).
Further, the Federal Circuit has already spoken on the quality, extensiveness,
and fairness of the Board’s RPI findings below, noting its “concern that the Board
may have relied on attorney argument as evidence that Activision was not
controlling or funding these IPRs” and “the Board’s apparent reliance on such
statements seemed to outweigh the actual evidence presented by Worlds.” Worlds,
Inc., 903 F.3d at 1246. If the Board were to apply issue preclusion on remand, it
would perpetuate this improper reliance on Bungie’s attorney argument over the
actual evidence presented by Worlds despite this clear defect in “quality,
extensiveness, or fairness” of procedures followed below.
C. The Policy Behind Cygnus’s Exemplary Exception Applies Here
Bungie also buries its discussion of In re Cygnus Telecom. Tech., which the
Federal Circuit cited as an exemplary exception to issue preclusion “where a party
did not appeal all cases consolidated in a multi-district litigation proceeding.”
Worlds, Inc., 903 F.3d at 1248. Bungie attempts to distinguish Cygnus on the basis
that the six IPRs here were not consolidated below at the Board. Bungie Br., 14.
Notwithstanding that this argument reinforces that the RPI question is unique to
each petition, Bungie overlooks that the six IPRs below had common schedules,
consolidated depositions, and a single, consolidated hearing.
More importantly, Bungie fails to address the underlying policy reason for
IPR2015-01264, -01319, -01321 Patent Owner’s Response on Remand
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the issue preclusion exception stated in Cygnus. As the Federal Circuit explained,
“[t]o adopt the defendants’ rule would promote judicial inefficiency and waste the
litigants’ resources, as it would require appellants to prosecute appeals against
every defendant in a multi-defendant case, even if there were strong practical or
legal reasons for narrowing the scope of the appeal.” Cygnus, 536 F.3d at 1350.
Here, in the three unappealed IPRs, Worlds successfully convinced the Board to
rule claims not unpatentable in final written decisions. See Ex. 1061, 135-36; Ex.
1062, 134; Ex. 1063, 70. Under Bungie’s theory, Worlds would have had to
appeal these decisions for the sole purpose of appealing RPI or risk application of
issue preclusion, even if Worlds was satisfied with its victorious defense of the
patentable claims. That Worlds is not pursuing its appellate rights against all
challenged patents should be no basis for preventing Worlds from pursuing those
rights against any of them. Under Cygnus, Bungie’s attempt to “promote judicial
inefficiency and waste the litigants’ resources” should be rejected.
D. The Solicitor’s Office Agrees That Common Law-Based Issue
Preclusion Does Not Apply at the PTAB
In its Brief as intervenor in Biodelivery Sciences Int’l, Inc. v. Monosol RX,
LLC, Case Nos. 2017-1265, -1266, -1268, 2017 WL 2666499 (Fed. Cir. 2017), the
USPTO Solicitor argued against common law issue preclusion at the Board. “[A]ll
authority pursuant to which an agency may act ultimately must be grounded in an
express grant from Congress.” Killep v. Office of Personnel Mgmt., 991 F.2d
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1564, 1569 (Fed. Cir. 1991). “While judicial preclusion rules ordinarily reflect the
common law, agency preclusion rules are creatures of statute. Courts must thus
refrain from imposing judge-made preclusion principles on agencies unless such a
course is dictated by statute.” Johnson v. Whitehead, 647 F.3d 120, 129 (4th Cir.
2011) (citing Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 108
(1991); FCC v. Schreiber, 381 U.S. 279, 290-91 (1965)). Congress, through the
America Invents Act (“AIA”), expressly established the bounds of issue preclusion
to be applied by the USPTO based on prior PTAB decisions. See 35 U.S.C. §§
315(d), 315(e), 325(d). Under the AIA, Congress mandated the instance where
issue preclusion is to be applied by the Board—preclusive effect is given to final
decisions on the same claim of the same patent. 35 U.S.C. § 315(e).2
Beyond that application of statutory estoppel, the AIA gives the agency
discretion whether to apply estoppel in other limited situations. For example, the
AIA permits simultaneous IPR proceedings by a petitioner, and the Director has
discretion to manage co-pending matters. 35 U.S.C. § 315(d). Moreover,
2
Bungie failed to establish unpatentability of claims 2, 3, 7, 8, 12-18, and 20 of the
’998 patent in IPR2015-01325, and did not appeal this final written decision. See
Ex. 1063, 70. Should the Board conclude that these proceedings are not timebarred, it should conclude that Bungie is estopped under 35 U.S.C. § 315(e)(1)
from maintaining its challenges of these claims on remand in IPR2015-01321.
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Congress gave the USPTO authority to determine when and whether to give
preclusive effect to its own prior decisions. See 35 U.S.C. § 325(d). But the
USPTO has not implemented any rule or issued any precedential decisions on the
application of estoppel to situations other than those mandated in § 315(e).
Without rulemaking or other guidance to implement non-statutory estoppel, the
Director has not authorized use of issue preclusion by the Board.
In contrast, Congress expressly provided for broad application of commonlaw estoppel principles in the context of the trademark statute, specifically in 15
U.S.C. § 1069 which states “n all inter partes proceedings equitable principles of
laches, estoppel, and acquiescence, where applicable may be considered and
applied.” No statutory analogue exists for the PTAB during inter partes reviews.
Had Congress intended the AIA to require broader application of common-law
issue preclusion principles beyond § 315(e), it could have provided the PTAB with
the same statutory authority to do so as the trademark statute. It did not.
III. BUNGIE FAILS TO CARRY ITS BURDEN OF ESTABLISHING
THAT ACTIVSION IS NOT AN RPI TO BUNGIE’S PETITIONS
With no relevant evidence to refute Worlds’ RPI challenge, Bungie cannot
carry its burden of establishing that it was the sole RPI. As the Federal Circuit
acknowledged, “Worlds presented more than enough evidence to sufficiently put
this issue into dispute.” Worlds Inc., 903 F.3d at 1244 n.8. With this issue
squarely in dispute, “the Board was required to make any factual determinations
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necessary to evaluate whether Bungie had satisfied its burden to demonstrate that
its petition was not time-barred based on the complaints served upon Activision,
the alleged real party in interest.” Id. at 1246. Bungie cannot prevail.
A. Bungie Has No Relevant Evidence to Carry Its Burden
On remand, Bungie came forward with no additional evidence, and in fact
blames the Board for the lack of record evidence, stating the “Board declined
Bungie’s offer to provide additional evidence that Activision did not fund or
control the IPRs.” Bungie Br., 21 n.3. But Bungie steadfastly refused to provide
such evidence while the record was open, and failed to establish “good cause”
under the Board’s Standard Operating Procedure 9 to reopen the record on remand.
Moreover, Bungie argued on remand that no further testimonial evidence was
necessary for the Board to decide the issues before it. See Paper 48, 7.
Bungie now points to three pieces of “evidence” that allegedly show that
“Bungie acted independently in filing the IPRs for its own benefit.” Bungie Br.,
15. Bungie relies upon (1) the Agreement, executed in 2010, (2) “the timing of
Bungie’s filings, and [3] Bungie’s independent settlement efforts.” Bungie Br., 22;
but see Ex. 3001, 1 (conceding that this third category of “evidence” is actually
attorney argument). No record evidence disproves Activision’s status as an RPI,
and Bungie cannot carry its burden of proof.
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1. The Agreement Executed in 2010 Cannot Prove That
Activision is Not an RPI in 2015
The 2010 Agreement cannot prove that Activision imparted no influence
over Bungie’s IPR petitions in 2015. Bungie states that the “[A]greement did not
provide Activision the opportunity to control Bungie’s IPRs.” Bungie Br., 20. But
this argument assumes without evidence that the parties treated these IPRs (or their
preparations) in 2015 as outside the scope of the Agreement. Without evidence
establishing the contrary, the sole supportable finding is that the Agreement
offered Activision at least an opportunity to review and approve Bungie’s IPR
petition work before the petitions were filed. Hence, Activision was an RPI, and
Bungie’s IPR petitions are time-barred under 35 U.S.C. § 315(b).
As before, Bungie’s Brief relies heavily on unsupported argument regarding
how Bungie interprets the Agreement. Bungie argues that “these IPRs are not
legal clearance reviews of a product during development as provided for in the
DevPub Agreement.” Bungie Br., 20 (emphasis in original). That argument has
no evidentiary support, and overlooks that clearance reviews of the Destiny
product vis-à-vis the Worlds patents include an infringement analysis of Destiny,
and a validity analysis of the Worlds patents. See Commil USA, LLC v. Cisco Sys.,
Inc., 135 S. Ct. 1920, 1929 (2015) (“To say that an invalid patent cannot be
infringed . . . is in one sense a simple truth, both as a matter of logic and
semantics.”). Indeed, Bungie’s underlying validity analysis leading to these IPR
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petitions would have constituted “legal reviews” under Section 7A.15(j) of the
Agreement, as the reviews were conducted to clear Destiny from Worlds’ patents.
See Oral Arg. at 28:46-29:01 (Judge Taranto noting that killing a patent is one of
three ways to “clear” intellectual property). Bungie has never introduced evidence
to contradict this reasonable and supportable interpretation of the Agreement.
Further, there is no evidence that Activision and Bungie elected (or agreed)
not to treat any IPR preparation—such as prior art searches, claim construction and
invalidity analyses, claim charts, expert consulting, and formulating and drafting
the petition’s challenges—as “legal reviews” under Section 7A.15(j) of the
Agreement. The Agreement executed in 2010 cannot affirmatively prove how the
parties behaved, or what interpretation they gave to the Agreement, in 2015.
Addressing the Agreement’s indemnification clause, Bungie states that this
does not give Activision the right to control Bungie’s IPRs. Without evidence
establishing whether indemnification was actually demanded by Activision or
accepted by Bungie,3
Bungie states that the Agreement “provides Bungie with the
right to assume the defense of claims arising out of ‘any infringement of a third
party’s rights in Intellectual Property cause’ by a Destiny videogame and provides
3
Activision withheld discovery until Worlds would state whether it intended to add
additional products, including Destiny, as accused products. See Ex. 2004, 1. It
has not been rebutted that Activision communicated Worlds’ letter to Bungie.
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that Bungie is solely responsible for any of its costs relating to such defense.”
Bungie Br., 20-21. But an indemnification clause written in 2010 does not explain
the nature of Activision and Bungie’s communications regarding Destiny, the
Worlds patents, or these IPRs.
Executed five years before Bungie’s IPRs were filed, the Agreement does
not affirmatively disprove Activision’s status as an RPI. Rather, the correct
Agreement interpretation confirms that Activision had the opportunity to review
and approve Bungie’s “legal reviews” of Destiny “to ensure that all Intellectual
Property [including the Worlds patents] and other rights are fully cleared for use.”
See Ex. 2002, Section 7A.15(j); Worlds Inc., 903 F.3d at 1244 n.8.
2. The Timing of Bungie’s Petitions Does Not Establish That
Activision is Not an RPI
Bungie also argues that the timing of its petitions “indicates that Bungie did
not file IPR petitions at Activision’s behest, whose non-Bungie products had been
accused years before, but filed its petitions to further Bungie’s own interests.”
Bungie Br., 22. Bungie correctly places focus on the timing of its petitions, but
draws the wrong conclusion. The petition timing, coming after Worlds’ letter,
indicates that Activision’s communications to Bungie triggered Bungie’s filings.
But Bungie fails to address the looming questions that have never been answered:
how did Bungie learn of Worlds’ letter, and what communications occurred
between Activision and Bungie leading up to Bungie’s petition filings? Even the
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Federal Circuit included the date of Worlds’ litigation letter, before the filing of
Bungie’s petitions, among the evidence that “sufficiently put this issue [of RPI]
into dispute.” Worlds Inc., 903 F.3d at 1244, 1244 n.8.
3. The Board Should Ignore Bungie’s Attorney Argument
Regarding a Self-Serving Settlement Attempt
Bungie’s improper attempt to enter settlement discussions into the record
has numerous problems. First, Bungie’s attorneys represent that settlement
discussions occurred in late 2018. Any such discussions have no probative value
on whether Activision was an RPI to petitions filed in 2015. Second, with the
exception of limited “noncontroversial evidence,” the Board has ordered that “the
evidentiary record remains closed.” Paper 48, 8. Bungie’s inclusion of what they
contend are independent settlement efforts should be disregarded. Third, Bungie
has confirmed that its statements on settlement discussions are, in fact, attorney
argument, not evidence. Ex. 3001, 1.4
Finally, such self-serving statements, timed
after the Federal Circuit’s decision and presumably made in anticipation of
Bungie’s remand arguments, have no probative weight. Collectively, Bungie’s
4
Even Bungie seems confused by what it is trying to accomplish with Statement of
Material Facts (SMF) Nos. 7-11, having improperly argued that those statements
are evidence in its Brief (Bungie Br., 22), yet characterizing them as attorney
argument in a separate communication to the Board. See Ex. 3001 at 1.
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argument based on settlement attempts in late 2018 cannot establish that Activision
was not an RPI to petitions filed in 2015.
B. Bungie Ignores the Federal Circuit’s Specific Instructions and
Fails to Apply the Legal Test for RPI Set Forth in AIT
Snubbing the Federal Circuit’s instructions and focusing its analysis on
WesternGeco, Bungie repeatedly and inaccurately addresses the “privy” factor
rather than the RPI question. See, e.g., Bungie’s Brief at 25-26. As the Federal
Circuit has explained, “n WesternGeco LLC v. ION Geophysical Corp., we shed
additional light on the meaning of ‘privy’ in the context of § 315(b), but did not
elaborate on the scope of ‘real party in interest’ because the patent owner focused
on privity as the key basis of its time-bar challenge.” AIT, 897 F.3d at 1347
(emphasis added). AIT is the leading case on RPI. Under AIT’s test, Bungie
cannot refute that Activision was an RPI.
AIT discusses many relevant facets of the RPI analysis. The “focus of the
[RPI] inquiry is on the patentability of the claims challenged in the IPR petition,
bearing in mind who will benefit from having those claims canceled or
invalidated.” AIT, 897 F.3d at 1348 (emphasis added); see also id., 1349 (“the
common law seeks to ascertain who, from a ‘practical and equitable’ standpoint,
will benefit from the redress that the chosen tribunal might provide.”). As Bungie
noted, Bungie was never a named party to the Activision Litigation, and its Destiny
product was never formally added as an accused product. Ex. 1064, 1-2; Bungie
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Br., 17-18. Clearly Activision, having been time-barred from filing IPRs against
the Worlds patents, would benefit more than Bungie from Bungie’s IPRs.
AIT also states that determining “whether a non-party is [an RPI] demands a
flexible approach that takes into account both equitable and practical
considerations, with an eye toward determining whether the non-party is a clear
beneficiary that has a preexisting, established relationship with the petitioner.”
AIT, 897 F.3d at 1351. The evidence here shows that Activision is a clear
beneficiary having a preexisting commercial relationship with Bungie to develop
and publish the Destiny game, the common property covered by the Agreement
and also identified in Worlds’ letter to Activision. See Ex. 2002, Ex. 2004.
Further, looking only to Bungie’s own interest in filing the IPRs is too
narrow. Section 315(b) “bars petitions where proxies or privies [or RPIs] would
benefit from an instituted IPR, even where the petitioning party might separately
have its own interest in initiating an IPR.” AIT, 897 F.3d at 1347 (emphasis
added). AIT also looks to other evidence establishing a petitioner’s motivation for
filing an IPR. AIT, 897 F.3d at 1352 n.4. There, facts in evidence spoke “directly
on the issue of whether, and under what circumstances” RPX took its client’s
interests “into account when determining whether to file IPR petitions.” Id. at
1353. Here, Bungie is on worse footing than RPX—there is no evidence to refute
that Bungie was motivated by its commercial relationship, an indemnification
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obligation, and/or communications with Activision when filing its IPR petitions.
Indeed, the Federal Circuit reversed the Board in AIT, noting that the point
of the RPI analysis is to “probe the extent to which [the unnamed party] has an
interest in and will benefit from [the petitioner’s] actions, and inquire whether [the
petitioner] can be said to be representing that interest after examining its
relationship with” the unnamed party. AIT, 897 F.3d at 1353. Bungie’s refusal to
introduce evidence in the record has impeded the Board’s ability to probe that
relationship. The remaining evidence—the Agreement and Bungie’s timing for
filing its petitions—favors Worlds, not Bungie. Worlds Inc., 903 F.3d at 1244 n.8.
Additional AIT factors also exist here. In AIT, “Salesforce and RPX had
overlapping members on their respective boards of directors.” AIT, 897 F.3d at
1354. Here, Activision has “the right to designate one person to attend and
participate as a non-voting observer in all meetings of the Board of Directors of”
Bungie during the Agreement’s Development Term. Ex. 2002, Sec. 18.2.
Moreover, the absence of any express agreement by Bungie to file IPR petitions on
Activision’s behalf is not conclusive that Activision was not an RPI. AIT, 897 F.3d
at 1354 (“a non-party to an IPR can be a real party in interest even without entering
into an express or implied agreement with the petitioner to file an IPR petition.”).
In AIT, the Federal Circuit concluded that the evidence indicates “that the
very challenges to validity included in the IPR petitions were challenges Salesforce
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would like to have made if not time-barred from doing so.” AIT, 897 F.3d at 1355.
The overlap between Bungie’s challenged claims and the claims at issue in the
Activision Litigation here confirm the same conclusion vis-à-vis Bungie and
Activision. See, e.g., Ex. 2006, 1 (identifying the asserted claims in litigation as
’856 patent claim 1; ’690 patent claims 1-20; ’558 patent claims 4-9; ’501 patent
claims 1-8, 10, 12, 14-16; and ’998 patent claims 1-3, 7, 8, 11-20).
Finally, Bungie’s actions before the Board suggest that Bungie, at best,
engaged in willful blindness by ascertaining Activision’s desire to have the
asserted patents challenged in IPR by Bungie, while taking “efforts to avoid
obtaining an express statement of such desires.” AIT, 897 F.3d at 1355. This
would explain Bungie’s counsel’s unsworn statement that any efforts into
discovery would have been “an exercise in futility.” Ex. 2001, 32:5-7.
In AIT, the Federal Circuit reversed the Board’s decision on RPI because
nothing in that case’s evidence contradicted “AIT’s theory that RPX filed IPR
petitions challenging the two patents asserted in the Salesforce action to benefit
Salesforce, where Salesforce itself was time-barred from filing petitions.” AIT,
897 F.3d at 1356. The same can be said in this proceeding; nothing in the record
contradicts the evidence that Bungie challenged the Worlds patents that were
asserted against Activision, knowing that Activision would benefit, and where
Activision itself was time-barred from filing its own petitions.
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C. Bungie Attempts to Avoid the Proper RPI Conclusion By
Invoking Due Process Without Any Evidence
Although not transparent about its strategy, Bungie casts aspersions on the
AIT test as if it were Worlds’ own creation rather than the Federal Circuit’s.
Bungie argues, “Worlds apparently argues that Activision is an RPI in Bungie’s
IPRs simply if Activision and Bungie have a preexisting relationship and if
Activision would benefit from Bungie’s IPRs.” Bungie Br., 25. But this is the AIT
test that the Federal Circuit has instructed the Board to apply here. Worlds, 903
F.3d at 1248. Further, AIT makes clear that the six Taylor categories are not the
exclusive ways to determine whether a non-petitioner is an RPI; a more “flexible
approach” must be used. AIT, 897 F.3d at 1342-43, 1351. It would be a direct
violation of the Federal Circuit’s order not to apply AIT’s test to this case.
Perhaps because the AIT test conclusively establishes Activision to be an
RPI, Bungie advances a due process argument, stating that RPI cannot be applied
without a due process exception under common law. Bungie Br., 25-26. This
argument has many flaws. First, Bungie bears the burden of proof, and no
evidence exists to protect Bungie under due process. In other words, the lack of
record evidence, which prohibits Bungie from refuting that Activision is an RPI,
cannot simultaneously create a due process exception to the AIT test, particularly
since any requisite evidence is in Bungie’s control. Bungie Br., 16-17.
Second, Bungie cites to Unified Patents v. Realtime Adaptive Streaming,
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LLC, IPR2018-00883, Paper 29 (PTAB Oct. 11, 2018), relying on the Board’s
conclusion there that was “no evidence of control, direction, or direct financing of
the IPR” by Unified’s client. Bungie Br., 26. But Bungie’s manner of raising this
case overlooks the clear distinction. In Unified, the Board had evidence to reach
its conclusion. Id. at 12-16. Here, there is no such evidence to support a similar
finding. Additionally, unlike in Unified, there is a time-barred party here, and at
least circumstantial evidence that the time-barred party communicated with Bungie
regarding the challenged patents prior to the petition filings. See id. at 17.
Third, Bungie argues that its relationship with Activision “is directed to
selling videogames, not filing IPRs or circumventing the one-year bar.” Bungie
Br., 26. But the 2010 Agreement does not prove the nature of communications
between Bungie and Activision related to the IPR petition filings in 2015. Unlike
in Unified, there is no evidence here to conclude that Activision had no control,
direction, or financing of the IPR petitions. To the contrary, the Agreement
establishes conclusively that Activision possessed at least an opportunity to review
and approve/influence Bungie’s IPRs based on, for example, Section 7A.15(j).
Bungie has no evidence that Activision rejected this opportunity.
Fourth and finally, Bungie’s argument based on its indemnification
obligation (see Bungie Br., 27) is misplaced, as its indemnification clause supports
the existence of “privity” here. See Section III.D, infra.
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D. Activision is also a Privy of Bungie in These IPR Petitions
Bungie’s relationship with Activision also supports a finding that Activision
is a privy of Bungie’s for the purposes of these IPR petitions. As Senator Schumer
stated in Senate debates, “[a] ‘privy’ is a party that has a direct relationship to the
petitioner with respect to the allegedly infringing product or service.” 157 Cong.
Rec. S5432 (Sept. 8, 2011) (statement of Sen. Schumer); see also AIT, 897 F.3d at
1347; WesternGeco LLC, 889 F.3d at 1318 (“privity, as used in the AIA, ‘takes
into account the “practical situation,” and should extend to parties to transactions
and other activities relating to the property in question.’”) (quoting 157 Cong. Rec.
S1376 (daily ed. March 8, 2011) (statement of Sen. Kyl). Activision and Bungie
are both parties to the Agreement, which covers their development, marketing, and
publication of the Destiny game, and Activision received Worlds’ letter identifying
Destiny as a potentially infringing product in the Activision Litigation. These facts
confirm that Senator Schumer’s and Senator Kyl’s statements describe the
relationship between Activision and Bungie here, with the focus squarely on
Destiny as the common property in question.
Focusing exclusively on control, Bungie argues that “[p]reclusion from a
suit thus attaches to an indemnitor who controls that suit.” Bungie Br., 28
(emphasis in original). But even WesternGeco states that “‘control’ is not the
exclusive analytical pathway for analyzing privity.” WesternGeco, 889 F.3d at
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1320. “[P]re-existing legal relationships” are “additional considerations” to the
privity analysis. Id. The Agreement between Bungie and Activision constitutes
such a legal relationship weighing in favor of Activision as privy.
WesternGeco’s discussion of indemnification is also relevant. There, the
Federal Circuit deferred to the Board’s finding that the indemnification provisions
in that case were “non-specific,” as “[n]one of the correspondence relating to the
indemnity provision shows an expectation that ION would be responsible for
stepping in, or otherwise protecting PGS from a patent infringement suit.”
WesternGeco, 889 F.3d at 1321. Unlike the indemnification provisions in
WesternGeco, which “included options by the ION subsidiary to [only] modify or
replace the equipment if an infringement claim was made against PGS,” (id. at
1321), Bungie admits that “nder the DevPub Agreement, Bungie, the developer
of the Destiny videogame, is responsible for defense of intellectual property claims
against Destiny.” Bungie Br., 20. Bungie also admits that the “Agreement
provides Bungie with the right to assume the defense of claims arising out of ‘any
infringement of a third party’s rights in Intellectual Property caused’ by a Destiny
videogame and provides that Bungie is solely responsible for any of its costs
relating to such defense.” Bungie Br., 20-21.5
This establishes privity between
5
Under Section 15.1 of the Agreement, Bungie’s indemnification obligation is not
triggered only by formal additions to lawsuits, but by “Claims,” which are defined
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Activision and Bungie here. See Intel Corp. v. U.S. Int’l Trade Comm’n, 946 F.2d
821, 839 (Fed. Cir. 1991) (holding that “an indemnification agreement, in other
cases, has alone been enough to find privity.”).
Under WesternGeco, Intel, and according to Bungie’s own admissions
regarding the indemnification provisions of the Agreement, Activision is a privy of
Bungie. For this reason as well, Bungie’s petitions were time-barred due to
Activision’s status as a privy.
E. Bungie’s Refusal to Submit Evidence Should Not Create an
Equitable Escape from the Statutory Requirement to Name all RPIs
Finally, Worlds understands that the Board is concerned about the equity of
Worlds’ litigation letter establishing Activision as an RPI to Bungie’s petitions.
Ex. 1051, 63:12-64:3. Initially, the letter itself reveals that Worlds’ intent in
sending it was not for nefarious purposes. Activision was “unwilling to go forward
with technical 30(b)(6) depositions or … complete their document production until
Defendants know whether Worlds intends to add additional accused products to the
lawsuit.” Ex. 2004, 1. Thus, when prodded by Activision to take a position on
accused products, Worlds identified Destiny only to Activision’s counsel (not to
to include “liabilities,” “claims,” “costs and expenses, including reasonable
attorney’s fees . . . arising out of or related to (i) any breach . . . of its
representations or warranties . . . or (ii) any infringement . . .”
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Bungie or Bungie’s counsel). Id. Any step to alert Bungie of this letter was solely
Activision’s doing. It was this step, not Worlds’ letter sent to Activision, that
cemented Activision’s relationship to these proceedings, and thereby confirmed
Activision’s status as an RPI to Bungie’s petitions.
Also weighing heavily in Worlds’ favor is that Bungie has the burden of
proof and burden of production, as a “petitioner is far more likely to be in
possession of, or to have access to, evidence relevant to the [RPI] issue than is a
patent owner.” Atlanta Gas Light Co, IPR2013-00453, Paper 88 at 8 (PTAB Jan. 6,
2015). Bungie has never denied that Activision alerted Bungie of Worlds’ letter or
that Activision’s communications led to Bungie’s decision to file its IPR petitions
against the Worlds patents. But the timing and contents of their communications
remain a black box. Arguing for equitable relief, Bungie also alleges that it “never
participated in or controlled any party’s participation in Worlds’s litigation against
Activision and, indeed, never had any opportunity to do so … .” Bungie Br., 29.
But this is also unsupported attorney argument. Had any evidence actually proven
that Activision was not an RPI to these IPRs, Bungie would have introduced it
below, or would have asked to reopen the record on remand. As Judge O’Malley
asked Bungie’s counsel during oral argument, “If this was such a pristine thing on
your part, and Activision had nothing to do with it, why was there no declaration?”
See Oral Arg. at 45:49-45:56. Now on remand, this question is still unanswered.
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On the question of equity, the Board should also consider the equity of
Worlds having to defend patent validity in both District Court and before the
Board, despite the estoppel provisions of § 315(e). See AIT, 897 F.3d at 1349.
Further, the Destiny product had been in development since 2010 with an earliest
anticipated release date of 2013. Ex. 2002, 1-2. Served with Worlds’ initial
complaint in 2012, Activision chose to pursue its invalidity challenges against the
Worlds patents in District Court rather than at the Board.
Under these circumstances, Bungie’s refusal to enter evidence into the
record on Activision’s communications and involvement in the petitions should not
provide an equitable escape from the statutory requirement to identify all RPIs,
including those who are time-barred under § 315(b). Such a result would frustrate
future panels from making evidence-based determinations whether unnamed
parties are an RPI under the Federal Circuit’s “flexible approach.” See AIT, 897
F.3d at 1351. Rewarding Bungie’s withholding of evidence on RPI here can only
encourage future petitioners to do the same, and should not be tacitly endorsed as a
viable strategy.
IV. CONCLUSION
For these reasons, the Board should dismiss these proceedings.
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Dated: February 4, 2019 /s/ Wayne M. Helge
Wayne M. Helge (Reg. No. 56,905)
Bungie redacted intital brief
Filed: January 4, 2019
UNITED STATES PATENT AND TRADEMARK OFFICE
_____________________________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
_____________________________
BUNGIE, INC.,
Bungie,
v.
WORLDS INC.,
Patent Owner.
_____________________________
Case IPR2015-01264 (Patent No. 7,945,856)
Case IPR2015-01319 (Patent No. 8,082,501)
Case IPR2015-01321 (Patent No. 8,145,998)1
_____________________________
PETITIONER BUNGIE’S BRIEF ON REMAND FROM CAFC
1
This caption is used and identical papers are being filed in each captioned case
pursuant to the Board’s November 29, 2018 order (Paper 48).
Patent Owner's Exhibit 2101
Page 1 of 35
-iTABLE OF CONTENTS
I. INTRODUCTION ................................................................................................. 1
II. ISSUE PRECLUSION BARS WORLDS’S RPI ARGUMENTS. .................................... 3
A. Worlds litigated the same issue in the final and appealed IPRs. .......... 3
B. The Board’s RPI determinations were essential to the judgment. ........ 5
C. The appealed IPRs are subsequent actions to the valid final
written decisions in the final IPRs. ....................................................... 6
III. NO EXCEPTION APPLIES HERE. ........................................................................... 8
A. Worlds’s disagreement with the decision does not create an
exception to issue preclusion. ................................................................ 8
B. Worlds waived any challenge to the denial of discovery
motions. ............................................................................................... 11
C. Worlds proposed “issue of law” exception does not exist. ................. 12
D. The Board did not consolidate the appealed and final IPRs. .............. 14
IV. THE BOARD SHOULD REINSTATE ITS FINDING THAT ACTIVISION IS NOT
AN RPI. ........................................................................................................... 15
A. Legal Standards ................................................................................... 15
B. Statements of Material Fact (“SMF”) ................................................. 17
C. The evidence demonstrates Activision is not an RPI. ......................... 19
i. Lack of control supports finding Activision is not an RPI. ...... 19
ii. Bungie is not Activision’s proxy. ............................................. 22
iii. Bungie’s relationship with Activision does not make
Activision a RPI in Bungie’s IPRs. .......................................... 25
D. Equities ................................................................................................ 28
V. CONCLUSION ................................................................................................... 30
Patent Owner's Exhibit 2101
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Page
CASES
Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336 (Fed.
Cir. 2018) ............................................................................................. 2, 13, 16
23, 26
B &B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293 (2015) .................. 3, 6,
8, 11, 14
Cisco Sys., Inc. v. Hewlett Packard Enter. Co., IPR2017-01933,
Paper 9 ........................................................................................................... 23
-iiiUniv. of Tenn. v. Elliott, 478 U.S. 788 (1986) ....................................................... 8, 9
WesternGeco LLC v. Ion Geophysical Corp., 889 F.3d 1308 (Fed. Cir.
2018) ............................................................................................ 13, 16, 21, 25
Wi-Fi One, LLC v. Broadcom Corp., 887 F.3d 1329 (Fed. Cir. 2018) ........... 2, 9, 12
13, 21
25
Wickham Contracting Co. Inc. v. Board of Educ. of City of New York,
715 F.2d 21 (2d Cir. 1983) ............................................................................ 12
Worlds Inc. v. Bungie, Inc., 903 F.3d. 1237 (Fed. Cir. 2018) ........................... 1, 2, 3
11, 12
XY, LLC v. Trans Ova Genetics, L.C., 890 F.3d 1282 (Fed. Cir. 2018) .............. 7, 13
STATUTES
35 U.S.C. §§ 312(a)(2), 315(b) .................................................................................. 3
35 U.S.C. § 315 ........................................................................................................ 30
35 U.S.C. § 318(a) ..................................................................................................... 5
35 U.S.C. §§ 319, 141-144 ........................................................................................ 6
42 U.S.C. § 1983 ........................................................................................................ 9
RULES
37 C.F.R. § 42.2 ......................................................................................................... 7
37 C.F.R. § 42.8(b)(1) ................................................................................................ 3
37 C.F.R. § 42.73 ....................................................................................................... 5
37 C.F.R. § 42.73(a) ................................................................................................... 7
37 C.F.R. § 42.73(d)(3) .............................................................................................. 7
37 C.F.R. § 90.3(a)(1) ................................................................................................ 6
77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012) ............................................... 2, 13, 15
MISCELLANEOUS
18A Wright & Miller, Fed. Prac. & Proc. (3d ed. 2002) .............6, 15, 16, 28, 29, 30
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I. Introduction
After Worlds first threatened to accuse Bungie’s Destiny product of
infringement in November 2014, Bungie independently decided to file six different
IPR challenges to Worlds’s patents to protect Bungie’s own interests as a video
game developer. Worlds separately opposed each of the IPRs, arguing with almost
identical language and evidence that Activision was an unnamed real party-ininterest (“RPI”) in Bungie’s IPRs. The Board determined the issue adversely to
Worlds each time as a prerequisite to finding claims of the involved patents
unpatentable. Worlds failed to exercise its right to appeal the decisions in
IPR2015-01268, IPR2015-01269, IPR2015-01325 (hereinafter, the “final IPRs”).
The other three IPRs are now remanded to “first address whether Worlds is
estopped from arguing the real-party-in-interest issue.” Worlds Inc. v. Bungie, Inc.,
903 F.3d. 1237, 1248 (Fed. Cir. 2018). The Federal Circuit remanded for
consideration whether “the ‘issue’ is the same between the now-final IPRs and the
IPRs currently on appeal” because “[t]he record before us is scant on details
regarding the [RPI] issues raised in the three unappealed IPRs.” Id. at 1247. As
explained above, the RPI issue Worlds litigated in the appealed IPRs is identical to
what Worlds litigated in the final IPRs. The Board should find Worlds estopped
from relitigating the RPI issue and re-instate its decisions of unpatentability.
Alternatively, the Board should reinstate its decisions of unpatentability
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because the evidence supports the Board’s original finding that Activision is not an
RPI in Bungie’s IPRs. The Board’s decisions did not turn on placing a burden of
proof on Worlds, but on its correct evaluation of the evidence. The Board’s
interpretation of the DevPub Agreement was correct and contradicts Worlds’s
argument that Activision controlled Bungie’s IPRs.
It is well-settled that determining whether a party is an RPI demands a
flexible approach that must take into account equitable considerations and the
practical situation. Worlds Inc., 903 F.3d. at 1246-47; Applications in Internet
Time, LLC v. RPX Corp., 897 F.3d 1336, 1351 (Fed. Cir. 2018) (“AIT”); Wi-Fi
One, LLC v. Broadcom Corp., 887 F.3d 1329, 1349 (Fed. Cir. 2018); Trial Practice
Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012). Here, there simply is no
scenario in which it would be equitable or sensible to subject Bungie to a standing
bar based on a litigation matter in which Bungie has never been involved.
Moreover, the Activision Litigation Worlds identifies as barring Bungie’s standing
in these IPR’s was filed years before Bungie’s product was even released.
Worlds’s attempt to retroactively subject Bungie to the one-year bar is an unjust
attempt to game the estoppel system and is fundamentally incompatible with the
common law embodied in the AIA’s estoppel provisions. Based on the facts of this
case, the Board should reinstate its findings that Activision is not an RPI in the
IPRs.
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II. Issue preclusion bars Worlds’s RPI Arguments.
“The general rule for issue preclusion (also called collateral estoppel) is
‘[w]hen an issue of fact or law is actually litigated and determined by a valid and
final judgment, and the determination is essential to the judgment, the
determination is conclusive in subsequent action between the parties, whether on
the same or a different claim.’” Worlds Inc., 903 F.3d at 1247 (quoting B &B
Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293, 1303 (2015). Each of these
requirements is satisfied here, as discussed in detail below.
A. Worlds litigated the same issue in the final and appealed IPRs.
The RPI issue in the final IPRs was identical to the RPI issue in the appealed
IPRs. In each IPR, Worlds argued that each petition was barred by 35 U.S.C.
§§ 312(a)(2), 315(b) and 37 C.F.R. § 42.8(b)(1) because the petition did not list
Activision as an RPI. Worlds argued that, in a November 2014 letter to Activision,
Worlds triggered indemnification and warranty obligations of Bungie under a
DevPub Agreement (Ex. 2002), that the obligations allegedly required Bungie to
file the IPRs as “legal reviews” of Bungie’s products under Sec. 7A.15(j), and that
Activision allegedly funded and had the opportunity to control the IPRs under Sec.
7A.15(j). Compare Ex. 1052 at 2-3, 41-50; Ex. 1053 at 2-3, 40-49; Ex. 1054 at 3,
24-31 with IPR2015-01264, Paper 12, at 2-3, 30-39; IPR2015-01319, Paper 12, at
3, 39-48; IPR2015-01321, Paper 12, at 3, 23-30. Although some of the preliminary
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responses have minor wording differences, Worlds made and cited all arguments
and evidence in the final IPRs that it made in the appealed IPRs.
The Board entered a different institution decision in each case, in which it
considered and rejected each of Worlds’s RPI allegations. Compare Ex. 1055 at
32-38; Ex. 1056 at 28-35; Ex. 1057 at 20-27 with IPR2015-01264, Paper 13, at 26-
33; IPR2015-01319, Paper 14, at 31-37; IPR2015-01321, Paper 13, at 21-28. The
Board concluded that each of Bungie’s IPRs was not a “legal review of the
Products” under Section 7A.15(j) of the DevPub agreement, and that neither
Section 7A.15(j) nor Sections 18.1-18.2 gave Activision an opportunity to direct or
control Bungie’s IPRs. Id. The Board rejected Worlds’s RPI allegations because
Worlds’s “arguments are based on unreasonable assumptions and interpretations of
various sections of the Agreement.” Compare Ex. 1055 at 34; Ex. 1056 at 30; Ex.
1057 at 22-23 with IPR2015-01264, Paper 13, at 28; IPR2015-01319, Paper 14, at
33; IPR2015-01321, Paper 13, at 23.
In its patent owner responses in each case, Worlds re-asserted the arguments
from its preliminary responses and also argued that the DevPub agreement
establishes that Activision was “unjustly circumventing” the RPI identification
requirements by using a “proxy petitioner.” Compare Ex. 1058 at 47-52; Ex. 1059
at 49-55; Ex. 1060 at 39-44 with IPR2015-01264, Paper 20, at 2-3, 36-42;
IPR2015-01319, Paper 20, at 36-42; IPR2015-01321, Paper 20, at 39-45. Worlds’s
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patent owner responses each argued that Bungie’s opportunity to file an IPR for
each patent expired on April 4, 2013, more than 18 months before Worlds sent the
November 2014 letter to Activision about Bungie’s product. Id. The simple fact is,
there were no arguments or evidence asserted in the appealed IPRs that were not
also asserted in the final IPRs. Id.
The Board entered a different final written decision under 35 U.S.C. §
318(a) and 37 C.F.R. § 42.73 in each case. In each of these decisions, the Board
concluded that the DevPub agreement and Worlds’s November 2014 letter did not
support Worlds’s allegation that Activision was an unnamed RPI. Compare Ex.
1061 at 127-28; Ex. 1062 at 125-26; Ex. 1063 at 61-62 with IPR2015-01264, Paper
42, at 106-07; IPR2015-01319, Paper 42, at 54-55; IPR2015-01321, Paper 42, at
78-79. As the above discussion demonstrates, Worlds actually litigated the exact
same RPI issue in the final and appealed IPRs.
B. The Board’s RPI determinations were essential to the judgment.
The Board’s final written decisions in the final IPRs each found that claims
Bungie challenged were unpatentable. Ex. 1061 at 135-36; Ex. 1062 at 134; Ex.
1063 at 70. As discussed above in Section II.A, Worlds argued that Activision’s
alleged status as an RPI precluded the Board from instituting each IPR and finding
claims unpatentable. The Board’s RPI determination was thus a prerequisite for
finding the claims unpatentable and essential to the judgment in each final IPR.
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C. The appealed IPRs are subsequent actions to the valid final
written decisions in the final IPRs.
“Ordinary preclusion law teaches that if a party to a court proceeding does
not challenge an adverse decision, that decision can have preclusive effect in other
cases, even if it would have been reviewed de novo.” B&B Hardware, 135 S. Ct. at
1305; 18A Wright & Miller, Fed. Prac. & Proc. § 4433, at 71 (3d ed. 2002)
(“FPP”) (“preclusion cannot be defeated by electing to forgo an available
opportunity to appeal”)); id. (“[O]nce the time for appeal has run, a final
judgment...is res judicata without regard to the fact that appeal might have been
taken to a higher court.”). The final written decisions issued on November 28 and
30, 2016. Exs. 1061-1063. Worlds had a right, for a time, to appeal each of these
decisions to the Federal Circuit. 35 U.S.C. §§ 319, 141-144; 37 C.F.R.
§ 90.3(a)(1). Worlds elected not to appeal. The time for appeal for all three final
IPRs had expired by February 3, 2017. The USPTO thereafter cancelled claims it
found unpatentable in the final IPRs. Worlds’s decision to forgo appeal forever
waived any opportunity to contest their validity and removes any doubt as to their
finality. See B&B Hardware, 135 S. Ct. at 1299, 1302 (holding “a court should
give preclusive effect to TTAB decisions if the ordinary elements of issue
preclusion are met” where, “[d]espite a right to do so, Hargis did not seek judicial
review [of the TTAB decision] in either the Federal Circuit or District Court”);
United States v. Munsingwear, Inc., 340 U.S. 36, 39 (1950) (“Concededly the
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judgment in the first suit would be binding in the subsequent ones if an appeal,
though available, had not been taken or perfected.”).
The Federal Circuit has repeatedly held IPR final written decisions to be
valid and final judgments entitled to issue preclusive effect, including when
deciding issues of law. See, e.g., XY, LLC v. Trans Ova Genetics, L.C., 890 F.3d
1282, 1294 (Fed. Cir. 2018) (exhaustion of appeal rights over final written decision
“renders final a judgment on the invalidity of the Freezing Patent and has an
immediate issue-preclusive effect on any pending or co-pending actions involving
the patent”); Nestle USA Inc. v. Steuben Food, Inc., 884 F.3d 1350, 1351 (Fed. Cir.
2018) (issue preclusion requires applying claim construction from final IPR in IPR
on a related patent); Maxlinear, Inc. v. CF Crespe LLC, 880 F.3d 1373, 1376-77
(Fed. Cir. 2018) (vacating IPR decision based on collateral estoppel effect of other
IPR decisions that became final through exhaustion of appeal rights).
As outlined above, the final written decisions in the final IPRs are now each
a valid, final judgment entitled to issue preclusive effect under common law
principles of issue preclusion applicable in the appealed IPRs. Preclusion is also
required by the Board’s own rules. See 37 C.F.R. § 42.73(a) (“A judgment, except
in the case of a termination, disposes of all issues that were, or by motion
reasonably could have been, raised and decided.”); 37 C.F.R. § 42.2 (“Judgment
means a final written decision by the Board....”); 37 C.F.R. § 42.73(d)(3) (“A
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patent applicant or owner is precluded from taking action inconsistent with the
adverse judgment”). For the reasons discussed above, Worlds is precluded from
arguing in the appealed IPRs that Activision is an RPI.
III. No exception applies here.
A. Worlds’s disagreement with the decision does not create an
exception to issue preclusion.
Worlds argued on appeal that no issue preclusion arises from the final IPRs
because issue preclusion allegedly attaches to an agency decision only when the
agency “properly resolve[s] the dispute before it.” Appeal Rply Br. at 30-31 (citing
United States v. Utah Construction & Mining Co., 384 U.S. 394, 422 (1966));
Univ. of Tenn. v. Elliott, 478 U.S. 788, 799 (1986)). Worlds’s proposed exception
does not exist and would turn issue preclusion doctrine squarely on its head.
General principles of collateral estoppel apply to Board determinations and the
issue preclusive effects of such determinations are not limited to when a
subsequent tribunal believes they were decided correctly. B&B Hardware, 135 S.
Ct. at 1299 (“[W]e hold that a court should give preclusive effect to TTAB
decisions if the ordinary elements of issue preclusion are met.”); id. at 1308 (“The
fact that the TTAB may have erred, however, does not prevent preclusion.”).
Worlds’s argument also is not supported by the Supreme Court precedent it
cites. The Court in Utah Construction held, based upon the parties’ contract as
modified by the Wunderlich Act and “general principles of collateral estoppel,”
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that a federal administrative board’s fact-finding of no delay precluded a breach of
contract action for delay over which the board would not have had jurisdiction.
Utah Construction, 384 U.S. at 418-19 (“Although the Board lacked authority to
consider delay damages under these two claims, it did have authority to consider
the requests for extensions of time under Articles 4 and 9, and these requests called
for an administrative determination of the facts.”). The Court did not inquire
whether the board’s finding was made correctly; preclusion applied because “the
factual disputes resolved were clearly relevant to issues properly before” the board.
Id. at 422. Worlds’s proposed rule also finds no support in Elliott, in which the
Supreme Court held that “federal courts must give the [state] agency’s factfinding
the same preclusive effect [in an action under 42 U.S.C. § 1983] to which it would
be entitled in the State’s courts.” 478 U.S. at 798-99.
Worlds is also incorrect in the errors it assigns the final IPR decisions.
Worlds argued on appeal that the Board allegedly shifted the burden of proof and
interpreted the Agreement “not in accordance with law.” Appeal Rply Br. at 30-31.
But the Board’s contract interpretation was correct, as demonstrated in the original
briefing and the Board’s decisions. The Board’s RPI determination was also
correct and was supported by substantial evidence. See, e.g., Wi-Fi One, LLC, 887
F.3d at 1339-41 (affirming finding petitioner-manufacturer’s time-barred
customers were not RPIs despite petitioner’s indemnity agreements and litigation
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coordination with them where petitioner clearly had its own interest in challenging
the patent and there was no evidence customers actually controlled the IPR or
petitioner controlled the litigation).
Further, the Board did not improperly shift the burden of proof to Worlds.
Although the Board’s final IPR decisions might have been phrased more expressly
to emphasize the Board was not imposing any burden of persuasion on Worlds,
statements in the final IPR decisions that Worlds had “not shown” that Activision
was an RPI simply reflected the fact that the Board was evaluating the RPI
arguments that Worlds raised. The Board did not err by focusing on the RPI
arguments Worlds raised. See, e.g., Wi-Fi One, 887 F.3d at 1337-38 & n.3 (“[T]he
Board properly focused on the factors that Wi-Fi raised in its argument.”).
Having considered each of Worlds’s arguments, the Board found them to be
erroneous in light of the record evidence. See, e.g., Ex. 1055 at 33-34 (“Patent
Owner argues that Activision is a real party in interest because the second and
fourth categories in Taylor-a ‘pre-existing substantive legal relationship[]’ and
control—are satisfied....We disagree....Instead, we agree with Petitioner that Patent
Owner’s arguments are based on unreasonable assumptions and interpretations of
various sections of the Agreement.”); Ex. 1056 at 30 (same); Ex. 1057 at 22-23
(same); Ex. 1061 at 127-28 (rejecting RPI argument based on Worlds’s discovery
dispute with Activision); Ex. 1062 at 125-26 (same); Ex. 1063 at 61-62 (evidence
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did not support Worlds’s argument that Activision is an unnamed RPI). This was
not an issue that turned on an erroneous burden shift by the Board. Worlds Inc.,
903 F.3d at 1246 (“There is a complete absence of any statement as to which party
should bear the burden of persuasion.”). Instead, it turned on the erroneousness of
Worlds’s speculative and unfounded arguments and the persuasive evidence
establishing Bungie acted for its own benefit, not at Activision’s behest.
Worlds also argued that collateral estoppel does not apply to the Board’s
RPI determinations because “matters must be ‘properly before’ the Board.” Appeal
Rply Br. at 30. But whether Activision was an RPI in the final IPRs was a disputed
issue “properly before” the Board. If Worlds is correct that the Board lacked
jurisdiction to resolve the RPI question in the final IPRs, then the Board would
have no jurisdiction to reach a different RPI conclusion here. Clearly the Board
had jurisdiction as the Patent Office cancelled Worlds’s claims. SMF Nos. 5-6.
B. Worlds waived any challenge to the denial of discovery motions.
Worlds also does not establish that a relitigation is warranted by “differences
in the quality or extensiveness of the procedures” between the original forum and
the later forum. B&B Hardware, 135 S. Ct. at 1303. The discovery procedures
available in the final IPRs were identical to those available in the appealed IPRs.
Worlds did not make any RPI discovery requests after institution and did not
request rehearing from the Board. Worlds also did not seek review of the Board’s
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discovery orders. Worlds Inc., 903 F.3d at 1241. The Board’s denial of Worlds’s
discovery requests was not an abuse of discretion. See Wi-Fi One, 887 F.3d at
1338-39 (denial of RPI discovery was not abuse of discretion). Worlds has
abandoned its discovery requests on remand. Ex. 1051 at 14:4-17:25 (arguing
against opening the evidentiary record). Worlds certainly may not justify
relitigating the RPI issue based on its abandoned discovery requests.
C. Worlds proposed “issue of law” exception does not exist.
On appeal, Worlds also argued for an exception from issue preclusion based
on its assertion that the Board’s RPI determination was a pure question of law.
Appeal Rply Br. at 31-32 (citing Fifth Circuit cases). The Federal Circuit provided
the law of the case to apply on remand in this regard: issue preclusion applies
whether the issue is “an issue of fact or law.” Worlds Inc., 903 F.3d at 1247.
There is no “legal issue” exception to issue preclusion that applies here.
Worlds acknowledged in its brief that courts give preclusive effect to agency
determinations of law. Appeal Rply Br. at 31-32 (citing Wickham Contracting Co.
Inc. v. Board of Educ. of City of New York, 715 F.2d 21, 26 (2d Cir. 1983).
Wickham explains that the Second Circuit joined the Third, Fifth, and Sixth Circuit
in following the general rule that administrative decisions may be “binding as to
fact and law.” 715 F.2d at 26. The Federal Circuit has repeatedly held
administrative decisions binding as to both fact and law. See, e.g., Nestle, 884 F.3d
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at 1351 (IPR decision preclusive on legal question of claim construction); see also
XY, LLC, 890 F.3d at 1294 (IPR decision of obviousness preclusive); Maxlinear,
880 F.3d at 1376-77 (same).
Moreover, RPI determinations are factual determinations. See Wi-Fi One,
887 F.3d at 1340-41 (RPI determinations reviewed for substantial evidence); 77
Fed. Reg. at 48759 (Aug. 14, 2012) (“a highly fact-dependent question”). The
Board’s RPI analysis made a factual determination that Activision was not an RPI
based on the practical and equitable situation.
Finally, no change in the applicable law justifies revisiting the Board’s RPI
decisions. Recent Federal Circuit decisions have reaffirmed the common law
principles outlined in the Trial Practice Guide and have not announced a new legal
standard. See AIT, 897 F.3d at 1344 n.2 (“[W]e do not believe that any of the
general legal principles expressed in the Trial Practice Guide cited by the Board
here run contrary to the common-law understanding of ‘real party in interest.’”);
Wi-Fi One, 887 F.3d at 1336 (“The interpretation of the concepts of privity and
real party in interest set forth in the PTO's Office Trial Practice Guide and applied
by the Board is consistent with general legal principles.”); id. at 1340;
WesternGeco LLC v. Ion Geophysical Corp., 889 F.3d 1308, 1317-19 (Fed. Cir.
2018) (“[T]hese descriptions of the privity analysis in the Trial Practice Guide
accurately reflect the common law considerations for a privity inquiry.”). The
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Board applied these accepted principles when evaluating Worlds’s arguments in
the final IPRs. Worlds’s argument against repose on the RPI question should be
rejected. See B&B Hardware, 135 S. Ct. at 1307 (“[I]f federal law provides a
single standard, parties cannot escape preclusion simply by litigating anew in
tribunals that apply that one standard differently. A contrary rule would encourage
the very evils that issue preclusion helps to prevent.”).
D. The Board did not consolidate the appealed and final IPRs.
Worlds falsely argued that the appealed IPRs were “consolidated” by the
Board with the final IPRs. Appeal Rply Br. at 32. As discussed above in Section
II.A, Worlds submitted separate briefs in each case and the Board entered separate
decisions in each case. Although the Board coordinated some schedules for
convenience, the cases themselves were never consolidated. The fact that Worlds
filed separate notices of appeal in the cases it appealed and that the Office has
already cancelled claims from the final IPRs confirms they were not consolidated.
The Federal Circuit recognizes that when cases are not consolidated one of
the actions might go “to judgment before the others, resulting in a judgment
adverse to” a party. In re Cygnus Telecom. Tech., LLC, Patent Litig., 536 F.3d
1343, 1349-50 & n.1 (Fed. Cir. 2008). The court recognized that a party’s “failure
to appeal the first judgment could result in the application of collateral estoppel
against it in each of the other cases.” Id. (holding collateral estoppel did not divest
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patent owner of right to appeal decision in consolidated multi-district litigation
based on owner’s decision to settle with one of many defendants). As discussed
above in Section II.C, Worlds’s decision to forgo appeal of the final IPRs removes
any doubt as to their finality and preclusive effect here.
IV. The Board should reinstate its finding that Activision is not an RPI.
If the Board revisits its RPI determinations, it should reinstate its decisions
of unpatentability. The evidence shows Bungie acted independently in filing the
IPRs for its own benefit, not at Activision’s behest. Worlds’s RPI allegations are
nothing more than gamesmanship.
A. Legal Standards
An RPI determination is made “on a case-by-case basis taking into
consideration how courts have viewed” the term. Trial Practice Guide, 77 Fed.
Reg. at 48,759 (citing Taylor v. Sturgell, 553 U.S. 880, 893-95 (2008); FPP, §§
4449, 4451). “[T]he real party-in-interest may be the petitioner itself, and/or it may
be the party or parties at whose behest the petition has been filed.” Id. The Board
“will apply traditional common-law principles” of estoppel and preclusion to
evaluate an RPI allegation. Id. “A common consideration is whether the non-party
exercised or could have exercised control over the proceeding.” Id. (citing FPP §
4451). “Determining whether a non-party is a ‘real party in interest’ demands a
flexible approach that takes into account both equitable and practical
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considerations, with an eye toward determining whether the non-party is a clear
beneficiary that has a preexisting, established relationship with the petitioner." AIT,
897F.3d at 1351.
The RPI inquiry is bounded, however, by the demands of due process. See
Taylor, 553 U.S. at 891 (“The federal common law of preclusion is, of course,
subject to due process limitations.”). “Because nonparty preclusion risks binding
those who have not had a full and fair opportunity to litigate, the Supreme Court
has cautioned that there is a general rule against nonparty preclusion, subject to
certain exceptions.” WesternGeco, 889 F.3d at 1319; FPP §4449 (“The basic
premise of preclusion is that parties to a prior action are bound and nonparties are
not bound.”). The “recognized exceptions” to “the rule against nonparty
preclusion” are (1) when the nonparty stipulates it will be bound by the judgment;
(2) where a qualifying, pre-existing “substantive legal relationship” (e.g.,
successive owner of property, bailee-bailor, or assignee-assignor) justifies nonparty preclusion; (3) when the nonparty enjoyed adequate representation “in
certain limited circumstances” in the prior litigation (i.e., suits brought as class
actions and those brought by trustees, guardians, and other fiduciaries); (4) when a
nonparty assumed control over the prior litigation and thereby had “the opportunity
to present proofs and argument”; (5) when the nonparty in the prior suit is a mere
“proxy” (i.e., “designated representative”) to or agent for a party bound by the
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prior judgment; and (6) bankruptcy or probate proceedings that operate against the
world but are consistent with due process. Taylor, 553 U.S. at 893-95.
The Due Process Clause requires tribunals to limit non-party preclusion to
“discrete exceptions that apply in limited circumstances” to preserve “the general
rule that a litigant is not bound by a judgment to which she was not a party.” Id. at
896-98, 905 (rejecting “virtual representation” doctrine as inconsistent with due
process to the extent it did “not fit within any of the established exceptions”).
Although “the established grounds for nonparty preclusion could be organized
differently” and the Court did not purport to establish “a definitive taxonomy,” the
fact that privity turns on the facts of the particular case “scarcely implies that
privity is governed by a diffuse balancing test.” Id. at 893 n.6, 899. “The Board
must be careful in making its RPI determination that it does not ‘run afoul of’ the
general rule that a litigant is not bound by a judgment to which she was not a party
except in discrete and limited circumstances.” Unified Patents, Inc. v. Realtime
Adaptive Streaming, LLC, IPR2018-00883, Paper 29 at 15-16.
B. Statements of Material Fact (“SMF”)
1. Neither Bungie nor any Bungie product is identified in Ex. 2007.
2. Neither Bungie nor any Bungie product is identified in Ex. 1031.
3. Neither Bungie nor any Bungie product is identified in Ex. 1036.
4. Bungie’s Destiny product was never added to the Activision Litigation. Ex.
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1051 at 39:7-9; Ex. 1036 at 1-4.
5. On February 9, 2018, the USPTO cancelled the claims found unpatentable
based on the final written decision in IPR No. 2015-01268.2
6. On February 20, 2018, the USPTO cancelled the claims found unpatentable
based on the final written decision in IPR No. 2015-01269.
7. Bungie’s counsel sent an email to counsel for Worlds on October 18, 2018
(“the October 18, 2018 email from M. Rosato”), stating, in part:
2
IPR Certificates are available in the file history kept by the Patent Office for
each involved patent, available at https://portal.uspto.gov/pair/PublicPair.
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8. On October 19, 2018, a telephonic conference occurred (“the October 19,
2018 teleconference”) including counsel for Bungie and counsel for Worlds.
9. During the October 19, 2018 teleconference, the parties discussed that the
settlement terms identified in the October 18, 2018 email from M. Rosato would be
communicated to Worlds by Worlds’ counsel.
10. On November 6, 2018, counsel for Bungie sent an email to counsel for
Worlds (“the November 6, 2018 email from counsel for Bungie”), stating, in part:
11. On November 6, 2018, counsel for Worlds responded to the November 6,
2018 email from counsel for Bungie stating:
C. The evidence demonstrates Activision is not an RPI.
i. Lack of control supports finding Activision is not an RPI.
In each of the appealed IPRs, the evidentiary record as a whole demonstrates
Bungie brought and controlled the IPRs independently of Activision and for its
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own benefit. Worlds premised its RPI arguments on Activision’s alleged
opportunity to fund and control the IPRs as “legal clearance reviews” Activision
allegedly could require Bungie to conduct under Section 7A.15(j) of the DevPub
Agreement (Ex. 2002). See Section II.A, supra. Worlds relied on warranty and
indemnification provisions in the DevPub agreement that Worlds alleged it
triggered in November 2014, allegedly granting Activision control or an
opportunity to control the IPRs as legal clearance reviews. Worlds argued that its
interpretation of the DevPub Agreement satisfied the second and fourth categories
outlined in Taylor. See, e.g., IPR2015-01264, Paper 12, at 32-38; Paper 20 at 36-
38. Worlds did not make any arguments regarding the preexisting relationship
distinct from its arguments regarding control. See, e.g., IPR2015-01264, Paper 13,
at 32. As explained in Bungie’s briefing and in the Board’s decisions, however,
these IPRs are not legal clearance reviews of a product during development as
provided for in the DevPub Agreement. See, e.g., IPR2015-01264, Paper 10, at 6-
7; Paper 13 at 26-32; Paper 31 at 20; Paper 42 at 106-07. The DevPub agreement
did not provide Activision the opportunity to control Bungie’s IPRs.
Under the DevPub Agreement, Bungie, the developer of the Destiny
videogame, is responsible for defense of intellectual property claims against
Destiny. Ex. 2002 at 21. The DevPub Agreement provides Bungie with the right to
assume the defense of claims arising out of “any infringement of a third party’s
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rights in Intellectual Property caused” by a Destiny videogame and provides that
Bungie is solely responsible for any of its costs relating to such defense. See, e.g.,
IPR2015-01264, Paper 10, at 6-7; Ex. 2002 at 21. Nothing in the DevPub
Agreement allows any party other than Bungie to control Bungie’s IPRs. The
Board correctly found the DevPub Agreement does not make Activision an RPI in
Bungie’s IPRs.3 Cf. Wi-Fi One, 887 F.3d at 1340-41 (“On the issue of privity, the
Board reasonably concluded that the evidence failed to show that Broadcom had
sufficient control over the district court litigation to justify treating Broadcom as a
virtual party to that proceeding.”); WesternGeco, 889 F.3d at 1320 (“Substantial
evidence supports the Board’s finding that ION [manufacturer of accused products
and indemnitor] lacked the opportunity to control PGS’s [buyer of accused
products and indemnitee] IPR petitions.”).
In addition to the DevPub agreement, other evidence confirms Activision is
not an RPI in Bungie’s IPRs. This evidence includes the timing of Bungie’s IPR
filings in relation to the Activision litigation. As discussed above, Worlds’s
3
The Board declined Bungie’s offer to provide additional evidence that
Activision did not fund or control the IPRs. Ex. 1051 at 34:18-24 (“[W]e are happy
and perfectly willing to submit testimonial evidence supporting that point.”),
37:14-19, 41:16-18, 46:18-47:2).
Patent Owner's Exhibit 2101
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litigation with Activision had been ongoing for years before Bungie filed its IPRs.
Worlds argued that it initiated that litigation in March 2012 and served Activision
with the complaint on April 4, 2012, barring Activision from filing any IPR
petition after April 4, 2013. See, e.g., IPR2015-01264, Ex. 2007; Paper 20, at 37.
Worlds concedes that Bungie’s products were never added to the Activision
Litigation and that Worlds threatened to accuse Bungie’s product of infringement
on November 13, 2014. See e.g., Ex. 1051 at 39:7-9; Ex. 1036 at 1-4; Ex. 2004;
SMF Nos. 1-4 ; Ex. 1064, Stipulations 4-5. If anything, the timing of Bungie’s
filing indicates that Bungie did not file IPR petitions at Activision’s behest, whose
non-Bungie products had been accused years before, but filed its petitions to
further Bungie’s own interests. Moreover, communications between Bungie and
Worlds have repeatedly confirmed Bungie’s independence in the IPRs. SMF Nos.
7-11.
ii. Bungie is not Activision’s proxy.
Activision’s lack of control over Bungie’s IPRs, as demonstrated by the
DevPub agreement, the timing of Bungie’s filings, and Bungie’s independent
settlement efforts, also confirms that Bungie is not Activision’s proxy. When
evaluating preclusion of a non-party as an alleged proxy of a bound party, “courts
should be cautious about finding preclusion on this basis” because “principles of
agency law...indicate that preclusion is appropriate only if the putative agent’s
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conduct of the suit is subject to the control of the party who is bound by the prior
adjudication.” Taylor, 553 U.S. at 906. Bungie, not Activision controlled the IPRs.
Some decisions have found that a time-barred entity that expressly, tacitly,
or through “willful blindness” engages an agent or proxy who has only a derivative
interest in invalidating the patent to file an IPR may be an RPI even though the
entity has relinquished control over the IPR to the petitioner in order to circumvent
the one-year time bar. See AIT, 897 F.3d at1338-42, 1347-53, 1355-56; RPX Corp.
v. Virnetx Inc., IPR2014-00171, Paper 49, at 7-10, 17 (“RPX’s actions appeared
tailored to benefit [time-barred client] specifically” offering its services as an
attorney-in-fact on behalf of time-barred client); Cisco Sys., Inc. v. Hewlett
Packard Enter. Co., IPR2017-01933, Paper 9, at 10-15 (concluding Petitioner
Cisco’s “interest in this proceeding is derived from that of Springpath” and that
Petitioner was “pursuing its Petition as a proxy for Springpath where Cisco had no
potential infringement liability of its own, timed its investment of $34 million to
acquire Springpath just after it filed its petition, and “failed to explain adequately
what ‘independent reason’ it had to file the IPR petition”); see also United States v.
Des Moines Valley R. Co., 84 F. 40, 44–45 (8th Cir. 1897) (non-party precluded
because it “had no substantial interest in the controversy, and was merely a
nominal plaintiff.”). None of these cases apply here.
Bungie is not an entity engaged in marketing a workaround for the one-year
Patent Owner's Exhibit 2101
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-24-
bar; nor is it an Activision entity. Bungie is a private, independent videogame
developer in the business of designing and creating videogames. See, e.g., Ex.
2002 at 7-8. Bungie has developed numerous videogames since the company was
established in 1991, including the highly successful Halo franchise in conjunction
with Microsoft. As such, Bungie has its own interest in developing and selling its
videogames free from threat of infringement litigation.
Unlike each of the proxy cases discussed above, Bungie is not a nominal
petitioner or a petitioner with an interest that is wholly derivative of Activision’s
interests. Bungie serves its own substantial interests in challenging the patents.
After filing its suit against Activision, the CEO of Worlds proclaimed that Worlds
intended to sue any company that made a successful massively-multiplayer
videogame. Ex. 1034. Worlds stated that it “intends to continue to increase and to
more aggressively enforce against alleged infringers.” Ex. 1035 at 8. Over 2.5
years into its litigation with Activision, Worlds threatened to accuse Bungie’s
Destiny videogame of infringing the involved patents. Ex. 2004; Ex. 2007. Under
the DevPub agreement, Bungie remains the owner of the Destiny intellectual
property. Ex. 2002 at 6. Of course, Bungie has its own interest in defending itself,
its intellectual property, and its current and future games from threats of patent
infringement litigation. It is appropriate for the Board to give weight to the fact that
petitioner has a strong and independent interest in challenging the patents that is
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not merely derivative of the alleged RPI’s interests. See Wi-Fi One, 887 F.3d at
1340 (“Broadcom clearly has an interest of its own in challenging the ’215 patent,
based on its manufacture of the allegedly infringing chips.”).
Bungie’s settlement efforts with Worlds similarly demonstrate that Bungie is
not Worlds’s proxy. Bungie has pursued its own interests in conflict with
Activision’s, as Worlds well knows, by, among other things, offering to settle with
Worlds independently of Activision. SMF Nos. 7-11. The evidence as a whole
confirms that Bungie is not a proxy for Activision.
iii. Bungie’s relationship with Activision does not make
Activision an RPI in Bungie’s IPRs.
Worlds apparently argues that Activision is an RPI in Bungie’s IPRs simply
if Activision and Bungie have a preexisting relationship and if Activision would
benefit from Bungie’s IPRs. As discussed above, however, this rule would
contravene binding Supreme Court precedent governing common law principles
for applying preclusion to a non-party. See WesternGeco, 889 F.3d at 1319
(discussing the six Taylor categories and noting that, “importantly, the reach of
privity cannot extend beyond the limits of due process”). The Federal Circuit has
repeatedly and correctly held that Congress adopted these common law preclusion
principles for IPRs. See Wi-Fi One, 887 F.3d at 1335 (“The use of the familiar
common law terms ‘privy’ and ‘real party in interest’ indicate that Congressed
intended to adopt common law principles to govern the scope of the section
Patent Owner's Exhibit 2101
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315(b)-one-year bar.”); see also AIT, 897 F.3d at 1357 (same); WesternGeco, 889
F.3d at 1317 (same).
The Board has thus correctly recognized that “[t]he RPI analysis set out in
AIT and the common law require[s] more than simply confining the analysis to
determining whether a [non]-party benefits generally from the filing of this Petition
and also has a relationship with the Petitioner.” Unified Patents, IPR2018-00883,
Paper 29 at 12-16 (petitioner’s client not an RPI even though it funded petitioner
with full knowledge that most of its fees will be used to file petitions to reduce its
own litigation risk where there was no evidence of control, direction, or direct
financing of the IPR). Indeed, “a common desire among multiple parties to see a
patent invalidated, without more, does not establish privity.” WesternGeco, 889
F.3d at 1321 (“pre-existing business alliance between ION and PGS before the
ION lawsuit commenced” and “indemnity provisions contained in the purchase
agreements for the products accused of infringing WesternGeco’s patents” were
“insufficient to make PGS and ION privies within the meaning of the statute”).
Here, the DevPub agreement is directed to the development and publication of a
videogame that was never added to the Activision litigation. SMF Nos. 1-4; Ex.
1064, Stipulations 4-5; Ex. 2007; Ex. 1031; Ex. 1036. The parties’ relationship is
directed to selling videogames, not filing IPRs or circumventing the one-year bar.
There is no basis to bind Bungie to Worlds’s Activision Litigation complaints.
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A distinct legal entity that does business with another legal entity is not
precluded by judgments binding its business partners, even where the transaction
involves an indemnification agreement. For example, a supplier and customer may
both stand accused of infringing the same patent over the supplied product, even
cooperate in attempting to invalidate the patent to permit their use and sale of the
product, and mutually benefit from invalidation of the patent, but this does not
make the customer an RPI in an IPR brought independently by the supplier where
the non-party customer “is not indemnifying” the supplier and “is not involved in”
the supplier’s IPR. Samsung Electronics Co., Ltd et al. v. Seven Networks, LLC,
IPR2018-01106, Paper 21, at 11; see also id. at 14-15, 17 (Google’s
indemnification obligations to petitioner Samsung did not give Google control over
the IPRs and petitioner Samsung’s indemnity obligations to Google did not give it
control of the related infringement action; each party retained its own counsel and
maintained control over its own case); id. at 16 (no evidence petitioner Samsung
was “subjugat[ed] to Google in either the litigation or the IPRs”). Similarly, here,
the DevPub agreement confirms that Activision is not indemnifying Bungie, has no
right to control Bungie’s IPRs, and is not an RPI.
To the extent Worlds argues that a patent owner may bind an indemnitor to a
prior lawsuit in which the indemnitor never participated nor ever had any
opportunity to participate in or control, this argument is also incorrect. The
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existence of an indemnity agreement does not automatically bind an indemnitor to
a prior action because the indemnitee must both “give notice of the action to the
indemnitor and to tender an opportunity to control the defense,” at which point the
indemnitor “can be precluded from relitigating matters determined in the [prior]
action under the control principle explored in [Section 4451].” FPP, §4452.
Preclusion from a suit thus attaches to an indemnitor who controls that suit. Here,
Worlds argues that Bungie is the indemnitor, but that Activision (as the
indemnitee) controls the IPRs. This argument is simply contradictory to the terms
of the DevPub agreement and the particular facts of this case, as discussed above in
Section IV.C.i-ii. Common law principles of estoppel and preclusion incorporated
by the statutory terms privy and RPI do not bind an indemnitor to a litigation
which it never had an opportunity to participate in or control. The substantive legal
relationship between Activision and Bungie does not support finding Activision to
be an RPI in Bungie’s IPRs.
D. Equities
As discussed in Section IV.A above, the common law principles of estoppel
and preclusion adopted by the AIA’s use of the terms privy and RPI require an
equitable analysis of whether preclusion is appropriate consistent with the due
process right of a nonparty to have its opportunity to be heard. The RPI analysis
may not be expanded to swallow the rule that nonparties to a suit generally are not
Patent Owner's Exhibit 2101
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subject to preclusion based on that suit. Here, Bungie never participated in or
controlled any party’s participation in Worlds’s litigation against Activision and,
indeed, never had any opportunity to do so because its products were never
accused in that litigation and were not even released or mentioned by Worlds until
more than a year after Worlds alleges the time-bar went into effect. SMF Nos. 1-4;
Ex. 1064, Stipulations 1-5; Ex. 2007; Ex. 1031; Ex. 1036; Ex. 1032 (product
release) ; Ex. 2004 (Nov. 2014 letter). Worlds’s alleged “notice” came well after it
says the one-year bar expired. It would be inequitable to bind Bungie to the
Activision Litigation without timely notice. See, e.g., Jennings v. United States,
374 F.2d 983 (4th Cir. 1967) (“Lack of notice, however, destroys the consensual
element, vitiates the binding effect of the judgment, and entitled the indemnitor to
be heard on the issue of the indemnitee’s liability.”). Like any non-party, an
indemnitor is not precluded by occurrences that predate its notice of and ability to
control the action. FPP, § 4449 (“[A] party is bound only as to matters properly
raised during the period in which he is a party, and litigated as to him....”).
Worlds’s allegation that Activision is an RPI has always been fundamentally
wrong because it is based on the idea that Worlds can unilaterally and retroactively
prohibit Bungie from launching an independent challenge to Worlds’s patents by
threatening to add Bungie’s product to a litigation in which Bungie was never
involved, more than a year after Worlds asserts the one-year bar under 35 U.S.C.
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§ 315 had already expired. This is directly contradictory to well-established
estoppel principles. FPP, § 4448 (“Some substantial justification must be found to
justify preclusion of a nonparty.”); id. § 4449 (“The basic premise of preclusion is
that parties to a prior action are bound and nonparties are not bound...This
presumption [that nonparties are not bound] draws from the due process right to be
heard[.]”); id., § 4449 (“If there is no actual notice to a real defendant, there can be
no preclusion.”); FPP, § 4451 (“Preclusion by participation and control may be
denied more readily than party preclusion by concern that the nature and
consequences on later litigation were not foreseeable at the time of the first
action.”). Applying the equitable principles protecting nonparties from being
precluded without notice and opportunity to participate to the practical situation
here, the Board should find Bungie did not bring the IPRs at Activision’s behest
and Activision is not an RPI.
V. Conclusion
As discussed above, the Board should reinstate its final written decisions
finding Worlds’s claims unpatentable.
Respectfully submitted,
Dated: January 4, 2019 / Michael T. Rosato /
Michael T. Rosato, Lead Counsel
Reg. No. 52,182
I forgot. 100% correct- I think that was a mistake myself.
B. Worlds waived any challenge to the denial of discovery motions.
Worlds also does not establish that a relitigation is warranted by “differences
in the quality or extensiveness of the procedures” between the original forum and
the later forum. B&B Hardware, 135 S. Ct. at 1303. The discovery procedures
available in the final IPRs were identical to those available in the appealed IPRs.
Worlds did not make any RPI discovery requests after institution and did not
request rehearing from the Board. Worlds also did not seek review of the Board’s
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discovery orders. Worlds Inc., 903 F.3d at 1241. The Board’s denial of Worlds’s
discovery requests was not an abuse of discretion. See Wi-Fi One, 887 F.3d at
1338-39 (denial of RPI discovery was not abuse of discretion). Worlds has
abandoned its discovery requests on remand. Ex. 1051 at 14:4-17:25 (arguing
against opening the evidentiary record). Worlds certainly may not justify
relitigating the RPI issue based on its abandoned discovery requests.
A whole new angle to think about.
Columbia is now going after the guys who funded the false IPR claims for racketeering and fraud.
Think about that. If WDDD wins at PTAB, and can prove that ATVI actually is the culprit behind this IPR case filed by BUngie. Fraud and racketeering lawsuit as well? The link below is the fraud and racketeering complaint/lawsuit filed by Columbia.
Just some new possible revenue that has never been discussed.
https://www.scribd.com/document/398884350/Columbia-v-Seirus-II-Complaint
When you dig a little deeper into this you will see it is a bit different than the worlds case. It is still nice they won, but Columbia Sportswear and WDDD are 2 very different types of companies. Columbia has been making billions on their patents and they found serious proof that one company was actually paying for the other to pursue the IPR. WDDD was not allowed discovery for the 2nd time! Regardless we will see what the PTAB says soon enough. March-May
I didn't get a chance to review it as much as I wanted. Went out of town for mother's birthday. Had to go visit the parental units.
Not me..not yet
Somebody didn't like the brief. Sell 100k today- big block
That is the real question.
EVerything is submitted I believe, so now its the Judges going through all of it and giving a decision.
The CE issue comes first. Again this is one area that is a bit murky if you ask me, comes down to what the Judges interpret and no idea on what they will do. Other people more legal minded seem to think it is a non issue. I have no idea.
RPi issue- as abcd12 stated it is again Judges making their own determinations as to the meanings of words privy vs control. Some here seem to think WDDD has proven their case and the PTAB should rule in our favor.
I have concerns that the PTAB will just do what the PTAB does and the track record on that is not good. It might be irrational, not based in what the law says, and so may not even be valid.
Bungie didn't really argue much for themselves. They simply went with we won the first time, so right now what you got is good enough. They simply went full throttle attacking WDDD arguments as to why the PTAB got it wrong the first time. Once I get through it all if you care to read what I think, ask me after the weekend. I should have time to sort through all of it before Monday and see if I am buying again or waiting a little longer.
The window of opportunity opens now. Eithere can get out if feel strongly PTAB will rule in Bungie favor or start loading up adding or buying if think the PTAB will rule in WDDD favor. I do think the upcoming PTAB decision is the most important one to date though. Represents the best buying opportunity win or lose.
Win its on to district maybe Bungie appeals to CAFC, but I doubt it
lose its back to CAFC for a win.
CAFC will not take kindly to the PTAB ignoring them basically.
Before I can give you what I feel is accurate guesstimation on decision I need to read those other cases cited in all of the briefs. See how apples to apples they are. Without looking I really have no idea if they are clear cut or easy cases decision BEFORE end of March.
I know a few of the cases I have looked at before the Vringo, Maxlinear, and a couple of others but those 2 from the BUngie brief I recall top of the head, if more esoteric on the others could be longer as someone else put down recently may be into May.
So my early guess is still 1-3 months. Could take up to 6 months, but since it is a remand, and no new evidence was allowed I can't imagine it will take 6 months.
Best early guess from me is March 29th give or take 2 weeks.
Being as the PTAB I would think want to clear this mess up.
And it is a legal mess right now.
100% agree with you on what the PTAB should do, but what will they do is the question. PTAB is sketchy, yes there are signs things are changing overall. That defining of privy vs control you would think is not subjective, but we both know in the PTAB things are not so clear.
The PTAB past record for companies they consider NPE's and companies very similar in situation as WDDD is not good. I need to read through all of this again with the previous briefs before I read into anything further. which I have not done yet.
The Bungie reply is strong, now I need to go through the cases cited though and see how it applies here and how strong those citations actually are, how they might be applied, and how relevant.
Bungie came out guns a blazing.
My first take is this-
It will come down to whether PTAB adopts privy vs control.
CAFC favors privy, PTAB first go round was focused on control.
As was Worlds. CAFC kept hammering privy and thus Worlds has adopted that.
It is one of the reasons why I think if t goes back to CAFC its a slam dunk. Worlds can prove privy as it is much more broad, they are having a real hard time proving control with existing evidence. PTAB did not allow new evidence, so that is why this issue is the biggest concern for me.
I have not looked at the cited cases yet, so haven't dug into it.
Just my first take.
Now that s pretty strong.
I need to read through that a few times and look up those other cases cited.
Reread through all of the filings and then formulate what I think.
Looks likeI have some light reading to do the next few days...lol
I do like the timeline based on max time at PTAB.
March-may is the window, I would not expect it to be that far into May
if the all the briefs aren't filled with a ton of citations and references to esoteric case law that will be truly hard to correlate to the current case. This should be fast tracked, I know real fast track so far, but doubt it will extend into May. Which is what I said back in Sept and October- thought it might take longer if new evidence was allowed, it was not.
March and beyond and was shouted down time and again. And it could be up to 2 years before we get back to Casper's Court if we have to go back to CAFC. Not saying it will go back to CAFC, but it us possible.
I will say this I have gone back and read Septembers messages recently Quilt you were spot on when you said March of 2019.
My current timeline thoughts-
IF PTAB WIN-
MArch to May for decision in PTAB- outs us in Casper's Court earliest in July starting proceedings, but more likely Sept-Oct.
If PTAB LOSS AND RETURN TO CAFC-
MArch to May for decision-
then ---- CAFC process begins May to July
12 months puts us in Casper's Court if a win at CAFC which I think is a slam dunk if we have to go that route fall or winter of 2020.
#2 100% There is no real selling or buying going on. Still a lot of people with big positions who are good traders who still slowly accumulating as money and volume allows.
Nobody is trying to get out of WDDD anytime soon. Any news hits a few buy a few sell. Volume spikes, vast majority are waiting for real news.
I.E.. settlement or PTAB decision. till then unless some bombshell drops don't expect trading to make a whole lot of sense.
I highly doubt any settlement will be reached with anyone BEFORE a PTAB decision. PTAB past track record is not encouraging Bungie to settle. We will see if the PTAB is truly changing. Lots of talk that it is, some evidence shows it, but till I see it here...wont believe it.
It is more of starting a position just in case.
Free up some dry powder next week.
Targeting the 22nd of Feb and beyond as WDDD more on my full time radar again.
Not doing anything major till all the briefs are in and I get a better idea of timeline and my own thoughts on which way the PTAB will lean.
Someone asked about me, so I replied. I just don't share much of what I think or find here anymore. Got tirred of the he said she said and drama when I don't tow the company line all the way.
Said CAFC would NOT rule in our favor, they did not regardless of how anyone spins it.
Said would take about 6 months or more for PTAB to get a decision in...it will...
Said I could buy in Feb lower than what I sold out at 6 months ago, the price is below what I sold all of my shares for, quite substantially for most of my shares, just a little for some, but still cheaper.
I tripled the money I out into WDDD, and fully expect to get better results on the next go round. was over 1 milllion stong pre-split so sold over 200k shares post split. Have none now, people said I was buying still own none, , wasn't trying to drive the price down, just calling it like I see it.
Still think no matter which way it goes at PTAB, if goes back to CAFC, and that is an IF, we crush it at 2nd try at CAFc. Won't post my odds on what I think the chance of a return to CAFC is, wouldn't be realistic till all the briefs are in. Nor would people want to hear it as it stands, as I lean towards a return to CAFC BEFORE Casper's court. and as I have stated all along..Casper's court is where the big pay day comes. I WILL BE IN BEFORE THAT ..as i think that is really going to happen, just a matter of timeline..as to when..not if...
The board now is mostly pie in the sky guy. Some really good posters though too. They stand out. Overall a great board with a lot of very smart people. I am one of the people more focused on both the upside and the downside. SO I am not so popular as I once was. I had a really large position for a very long time, sold due to the 6 month at least wait going through the PTAB process. I still think as of right now, PTAB will rule as is, nothing changes, go back to CAFC for the win. That might change once all of the briefings are in and I get to review them all. Then I can make a more educated decision based on all of that.
Long term, right now timeline is still March for a PTAB decision, but that might stretch out to April or May depending on all of the briefs and cases they site. So no change till all of that is in.
IF PTAB rules in our favor put us back in Capser's court Late pretty fast, I would say stat that process beginning of summer, but how long before actual trial...that is more tricky. Just won't matter though as the price will climb very quickly, and you will not wantto be on the sidelines watching.
IF PTAB goes against us, its back to CAFC, puts in Casper's court in 2020.
So if think the PTAB is on our side, get in now, BEFORE decision.
If think goes against buy in a after as the price should fall dramatically. Once it does, buy in all you can, as CAFC will be a slam dunk.
I am still on the bench, watching. Price will go down further if you ask me. BUt will look to stat rebuilding a position BEFORE March 1st. I made a ton of money on this, and plan on making more.
GLTA
I'm still around. Told you guys 5 months ago, no reason to buy or do anything with until March, being as that would be earliest we would see a PTAB decision.
Most laughed, said no way take that long. I suggested it might even be longer than that, Timeline hasn''t changed.
I haven't really reviewed much, or paid much attention to this at all, will read through everything once BUngie files their reply.
Once I do that will be happy to share my thoughts.
But for now...just checking in occasionally.Seemed like the vast majority of people here didn't want o hear what I have to say.
I repeat myself too often, and nothing really new to say. Other than I can still buy shares for less than what I sold them for.
I have no idea at the moment what is going on. I have not been keeping up with this much at all. We shall see it is the hurry up and wait game going on still.
Will check in occasionally, but nothing really new yet.
I just saw everyone got excited, was some buying and selling going on with decent volume, now its back to low volume drifting up or down slightly but hovering in the same range as it has for a long time now.
February is right around the corner. I still don't expect anything going on here till March. Nobody posted any links or copy and paste about the briefs I have seen. SO I have not read them, or went and looked. If something great was in there it would have been posted here already.
Always settlement talks, everyone gets so excited. If an actual settlement happens with Bungie, it would be after the PTAB decision, before they go back to CAFC IMHO.
I still think we lose here at PTAB, go back to CAFC and clean up there.
SO I am still out, and will continue to be so until PTAB decision or the price drops down low enough (WHICH I DOUBT IT WILL)
As always good luck to all of you in. I will be again, just not yet.
Have a great week!
March is not far away..and March is the earliest we see a PTAB decision
The briefs will go a long way for me in determining if its a new PTAb or its the same old same old.
PTAB win we golden, PTAB loss PPS fAlls and then we go back to CAFC where we win this time.
ACB earnings are early Feb, and I am waiting on that before doing anything
here. Loaded up on it while it was down, and earnings should push it back up pretty far...So I will have money to play with
I'm here...just nit all that active around this right now. Got other stuff going on. once we get to see some briefs, I will be active again.
So Bungie still hasn't filed their brief?
I think it is really interesting, but what does it actually mean?
I am sure there have been settlement talks along the way, but how close are those talks to being enacted?
Wow... really good commentary you add so much.
I just read over it...reading through all the posts over the last few weeks. Once I get done, will get back with you.
I am happy where my money is...the math will win out...
but the whole market is crazy right now
MJ stocks are down...BIG...
I'm all right, its after the first of the year, the bext 2 quarters
is when they will move forward.
However the whole market is down.
I have till March till I have to worry about this as we won''t get
a PTAB decision until then.
I simply haven't been commenting as most of you have no interest in what I have to say.
My position is clear. Be back after the PTAB decision since no new evidence is allowed. Will see what the briefs say, but I would put my money on the PTAB coming back saying pretty much what they said last time WDDD was here, heading back to CAFC where they will get the RPI.
Just my 2 cents since you asked how I was doing.
I said before at least 6 months to get out of PTAB.
Sept, Oct, Nov, Dec, Jan, Feb, March
The contract is in evidence if I am not mistaken, meaning it is already there and can/will be used or relevant. The onus was on Bungie before, that has not changed. WDDD entered the agreement as evidence, PTAB did not find it convincing the first go round. Maybe you are right, maybe the 2nd time around it will be different. Without new evidence the briefs will be very important. I have no skin in the game currently, so sitting out till the PTAB rules. I know what should happen, we all do.
The question is does the PTAB?
I have no faith in them at all.
SO wishing current holders the best of luck.
I will pick up shares after it gets out of PTAB...not before.
It is still the PTAB, we may have a new panel, or at least 1 member changed for the panel, but these are still PTAB panel members.
That s possible or the other thing possible is PTAB says, we already ruled on this and no new evidence has been presented to change it.
Which means PTAB loss for WDDD, appeal to CAFC and they say WDDD you got hosed, pass go collect $200.00.
Simply do not trust the PTAB at all...not at all...
I know I am Captain spin, but I do not see No New Evidence as a win for WDDD.
The PTAB has already ruled on the existing evidence and did not go WDDD way. Everyone says the PTAB is changing, but not to the so called NPE's.
I will wait it out, was getting back in on new evidence or PTAB decision.
So now just will wait for PTAB to rule...
I am not fan of the ruling at all.
Hmmmm...
Very odd no new evidence. I mean if it goes back to CAFC its a win for WDDD, they won't like that at all. Not at all....
PTAB doing PTAB stuff.
1 month or so to brief, another month to reply. Thats 4-5 months down already and if the PTAB is on their game, another month for the decision.
6 months-7 months total from CAFC decision, and I owuldn't bat an eye if the PTAB comes back and says we got it right the first time and go back to CAFC exactly how they went in the first round. I have stated this before.
Man really thought they would allow new evidence, but its the PTAB.
I know it is suppose to be changing...but this sure looks like more
of the same.
think both plays will be money makers.
:)
Join the club...was killing it in the Canada pot stocks...
then the correction, and now its algorithm trading with big boys walking it up and down every day loading up. The Vanguard Index fund back in Spet had 41 mil shares of ACB, and millions of shares of CGC and APHA as well.
ACb and APHA now trading on NYSE, and institutions and the likes are loading up with very organized trading....
its driving me bonkers, but next 2 quarters after the revenues come in from Oct on....and ACB should be up to about 150,000 kg capacity making more than $5 a gram of profit, margins up to 70% ---hopefully will get all the big boys loaded up and they will let it run so I can move profit from there here as we get PTAB decision.
Haven't been so pumped about the stock market in a while.
Could work out to some really good timing for me here...
skimming profits there to bring here as the PTAB decision is due about that time. Have a much better idea if it is more PTAB as usual or they will get it right once we see what new evidence they let in, and what that evidence tells us. Hopefully there is a smoking gun somewhere..but I doubt it.
Either way PTAB kills the RPI suit, and if it doesn't and it has o go back to CAFC, they sure will with the current Judge Panel we have...
WDDD has never looked brighter, for me its just a time issue and a fear of PTAB not having a smoking gun to put the Ki-bosh on on the RPI.
Good luck to both of us
Thank you Data..
That seemed very much like WDDD did rather well in the call.
The PTAB Judges did not seem to be siding with Bungie on anything.
Very strong for WDDD in my honest opinion. Very good sign...
As far as timeline?
Reading through it, will go back later and read through a second time,
but the short of it.
once they get things started.
Bungie gets a month to file their briefs,
Worlds wants 2 months from then to file their eply brief.
There is a question of if they will open the record
and allow new evidence, and if so then that will take even more time.
Allow time for the decision.
Sure doesn't look like my call of 6 months or more is far off.
Still a lot to hash out, but I would be surprised t get a PTAB decision before May of 2019.
I know many of you don't care if it takes a month, 6 months, or even longer. I will be back in, but not before I see new evidence or PTAB gives its ruling. As I have stated many times.
Will be interesting to see how I get characterized as spinning this.
Just read the transcripts, its in there.
Anybody have access to the transcript of teleconference call?
https://seekingalpha.com/pr/17333413-worlds-provides-update-patent-trial-appeal-board-ptab
The actual link from that just takes you to a ptab login page.
uring the call, the Board considered a number of items, including the briefing schedule for the remanded issues of: (1) whether Bungie is time-barred from petitioning for review of the Worlds patents in IPRs 2015-01264, -01319, and -01321 because of their pre-existing relationship with Activision, a time-barred entity; and (2) whether collateral estoppel prohibits Worlds from arguing that Bungie is time-barred on remand. See Transcript at pages 6-7. The Board also considered whether the evidentiary record should be reopened to allow for submission of new evidence on Bungie’s relationship with Activision. See Transcript at page 14.
Although the Board did not issue any rulings during the teleconference, it appeared to reject Bungie’s proposal to bifurcate the briefing of the two issues on remand. Instead, the Board seemed inclined to require the parties to brief both issues together. See Transcript at page 23. Further, the Board seemed to reject Bungie’s proposal for the parties’ simultaneous exchange of briefs, in favor of Worlds’ proposal of having Bungie file its briefing first, since Bungie has the burden of proving that Activision was not a real party in interest to the three prior-filed inter partes review petitions, and that Worlds should be prohibited from arguing that Bungie is time-barred on remand. See Transcript at pages 27-31.
Further, while the Board did not decide whether to open the evidentiary record during the teleconference, the Board did indicate that if it permits further evidence to be submitted, the evidence would not be limited to only the evidence Bungie voluntarily offers. See Transcript pages 41-42. Rather, if the record is re-opened, the Board will permit Worlds to test Bungie’s evidence, and seek broader discovery on Bungie’s relationship with Activision. See Transcript pages 42, 53-54.
Worlds is currently awaiting an Order from the Board to finalize the procedures on remand, and intends to vigorously defend its patents when that Order issues. A copy of the teleconference’s transcript of the can be found via the PTAB’s End to End (E2E) system, accessible here: https://ptab.uspto.gov/#/login
They are literally giving away Destiny 2 for 2 weeks for free to battlenet members.
https://variety.com/2018/gaming/news/destiny-2-giveaway-why-1203024289/
As per the Call- the record date is the date which the list of BioTime shareholders eligible for the distribution is set, is scheduled for November 16th 2018. The distribution of AgeX shares themselves is planned for November 28th, 2018. After the record date, BioTime shares will trade with two bills attached, which means that if you sell your BioTime share after the record date, you are also selling your right to receive the distribution of AgeX shares. Likewise, if you buy shares of BioTime after the record date, you will also be buying the seller's right to receive the distribution.
Vanguard has picked up a variety of cannabis stocks. Just looking at the most recent holdings of the Developed Markets Index Fund as of Sept. 30 shows the following:
Roughly 4.28 million shares of Aurora Cannabis (NYSE: ACB), with a reported value of $41 million at the time.
About 1.14 million shares of Aphria (NYSE: APHA), worth almost $16 million.
The fund's shares of Vanguard's total Canopy Growth holdings amounted to almost 1 million shares, worth $48 million at the time.
https://finance.yahoo.com/news/unlikely-buyer-grabbing-cannabis-stocks-113200360.html