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Totally respect your knowledge. I'll check with my Schwab broker later this week and find out his take on loaning shares.
How to Prevent Your Shares from Being Shorted
"There are two things you can do, the first is to certificate them but this is not obviously to everyone’s advantage but the alternative solution is simple. All you do is to phone your broker and put an order in saying that you wish to place your shares for sale at, for arguments sake, double today’s price. As they are ‘on order’ they cannot be lent out by your broker and in turn you are reducing the amount of ‘free shares’ out there that can be used for shorting purposes."
https://www.contracts-for-difference.com/borrowing-lending-shares.html
Not sure how up-to-date this is but my opinion is this is true. Would just advise to put your sell limit much higher than double for this stock as you could find yourself selling too soon lol.
Do you have a news source that makes you comfortable shorting just days before the LPC announcement? Inquiring minds want to know.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=166199261
Nice find. They are also claiming "Very high volume" in the Market Volume category, and "First Products 2021". Silicon photonics is rated only "High volume."
https://www.polariton.ch/highlights
LWLG: Materials sector weekly round-up: Lightwave Logic becomes top gainer; Nexa Resources at bottom.
https://seekingalpha.com/news/3740992-materials-sector-weekly-round-up-lightwave-logic-becomes-top-gainer-nexa-resources-at-bottom?mail_subject=lwlg-materials-sector-weekly-round-up-lightwave-logic-becomes-top-gainer-nexa-resources-at-bottom&utm_campaign=rta-stock-news&utm_content=link-3&utm_medium=email&utm_source=seeking_alpha
No high level explanation here, sorry. The interest rate to borrow stocks for shorting is generally based on supply and demand. The fewer shares available "hard to borrow" vs the demand from shorters. I've seen the rate as high as 62.5% at Schwab on stocks I've owned.
Schwab asks if you want to lend shares and pays you for the privilege. My understanding is that there are brokerages that don't even ask and pocket the interest for their firm. If you have shares in one of those firms, simply enter a GTC order at a high limit price and they become unavailable. Investors working in concert in a highly shorted security can use this to precipitate a short squeeze.
Any "high level" person care to comment on the actual percentage rate as compared with NASDAQ stocks in general?
Here's as short (no pun intended) explanation: https://questrade-support.secure.force.com/mylearning/view/h/Investing/Borrow+rates+for+short+selling
White Owl, thank you for your explanation. I'm soo sorry and can only imagine your disappointment and pain. And you feel you're still owed an apology which hasn't come? Now I have a deeper understanding of where you're coming from. I would have posted differently had I known that earlier. - IBB
"During the six months ended June 30, 2021 the Company generated gross proceeds of $350,000 and net cash of $315,000 from a settlement of litigation."
From the latest 10Q. Hopefully this will be evergreen. We'll have to wait to find out. I see some of you are upset that his just about covers Thom's salary and a few expenses. Look at the bright side. It would sure be nice to keep the company funded through the long appeals and ongoing litigation process without toxic dilution. If memory serves correctly Thom has even postponed salary or raises in the past to help keep the company afloat. I'm not mad at Thom. I'll reserve my anger toward the stacked system and the political process that put it in place.
H.C. Wainwright & Co. is one of the country’s oldest and most trusted financial institutions.
https://hcwco.com/about-us/our-history/
Fruno, I could have been more clear. Poor wording on my part. I was simply comparing the average investment value per company in Cathies's ARK Innovation fund (Market Value column) to LWLG market cap. If LWLG were an average holding at present value Cathie's ETF would own about half of the shares. Of course her attempting to buy that many shares plus her followers would drive the price up to make that impossible.
https://ark-funds.com/wp-content/fundsiteliterature/holdings/ARK_INNOVATION_ETF_ARKK_HOLDINGS.pdf
Looks like Cathie's Innovation themed investments each average about half the market cap of LWLG.
https://ark-funds.com/wp-content/fundsiteliterature/holdings/ARK_INNOVATION_ETF_ARKK_HOLDINGS.pdf
Two Cents, you've become somewhat of legend around here. How do we know it's really you?
Oh, yeah, post history...
https://investorshub.advfn.com/boards/Profile.aspx?user=762157
There's a little competition for LWLG's iHub PlusOneCoin Top Posts. 4 LWLG posters are now listed in Top PlusOneCoin Posters.
https://investorshub.advfn.com/boards/top_plusone_posters.aspx
The posts vying for the top spot presently are #76858, #76844, #76779, and #76439.
X-ter, agreed. White Diamond may have gone into this with the intention of being long, but wanted in at a lower price. Or maybe they really are that shallow in their DD and just wanted the short term profit. But they could flip and join the longs anytime.
My belief is that they first front load their position, and then hit us with FUD which includes negative posters and self-proclaimed longs who seemingly show concern over obscure questions that no one had considered before. Then the SA articles come out. Also likely collusion with MM's to walk it down.
Legitimate longs often join in the selling as initially they were skeptical but after seeing someone else is driving the bus and they really have little control they too bail often at the least opportune time.
Should be an interesting week ahead. If they are still short and playing with fire, I hope they get burned big time. - IBB
Proto, what makes you think shorts are still short? From the White Diamond website I find this:
"We intend to continue transacting in the securities of issuers covered on this site for an indefinite period after our first report, and we may be long, short, or neutral at any time hereafter regardless of our initial recommendation."
https://whitediamondresearch.com/disclaimer/
You might be able to gauge shorting activities from the number of negative posters and posts recently.
-IBB
Let me know if you want more. The brief continues on with similar material and ends with IPR cert, cert of filing and compliance. You have more than 100 pages.
Continued...
A. Patents-In-Suit
At this juncture, Worlds presses that Activision infringes the following twenty-one claims
of the Patents-In-Suit: ‘690 claims 4, 8, 13 and 16; ‘558 claims 5 and 7; ‘856 claim 1; ‘501 claims
1-8, 10, 12 and 14-16; and ‘998 claim 18. D. 269 at 2; D. 283 at 10. As Worlds has explained,
the Patents-In-Suit resolve bandwidth issues with multiplayer games through “multi-criteria
filtering of avatar position and state information, but at the client side and the server side,” i.e.,
“crowd control.” D. 183 at 5. The remaining claims at issue achieve crowd control by some form
of filtering of information, D. 183 at 8, but in slightly different ways: i.e., by “fewer than all” in
the ‘856 patent; a “maximum number” in the ‘690 patent and ‘558 patent; and by “condition” in
the ‘501 patent and the ‘998 patent. D. 273 at 6.
U.S. Patent No. 7,181,690 (“the’690 patent”)
The ‘690 patent, “a system and method for enabling users to interact in a virtual space,”
was filed on August 3, 2000 and issued on February 20, 2007. D. 275 ¶ 1; D. 274-1 at 2. It
provides a “highly scalable architecture for a three-dimensional, graphical, multi-user, interactive
virtual world system.” Id. So that a user’s view “can be updated to reflect the motion of the remote
user’s avatars, motion, information is transmitted to a central server process which provides
positions updates to client processes for neighbors of the user at that client process.” Id. “The
client process also uses an environment database to determine which background objects to render
as well as to limit the movement of the user’s avatar.” Id.
Claims 4, 8, 13 and 16 of the ‘690 patent are currently at issue. Claim 4 (incorporating
the method of claim 1 which is a “method for enabling a first user to interact with other users in a
virtual space”) involves determining the maximum number of the other users’ avatars to be
displayed by comparing the actual number to the maximum number of other users’ avatars to be
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displayed. D. 274-01 at 13. Claim 8 (incorporating the method of claim 6 which is a “method for
enabling a plurality of users to interact in a virtual space”) also involves a maximum number of
avatars by comparing the actual number of avatars that are not associated with the client process
based on the positions transmitted by the server process to the maximum number of avatars that
can be displayed. D. 274-1 at 13. Claim 13 (incorporating the software program of claim 11)
provides instructions for determining the other users’ avatars to be displayed by comparing the
actual number of the other users’ avatars (from the received positions) to the maximum number of
the other users’ avatars to be displayed. D. 274-1 at 14. Claim 16 (incorporating the software
program of claim 15) provides instructions for determining which avatars to be displayed from
comparing the determination of the actual number of avatars that are not associated with the client
process based on the positions transmitted by the server process to the maximum number of avatars
that can be displayed. D. 274-1 at 14.
U.S. Patent No. 7,493,558 (“the ‘558 patent”)
The ‘558 patent, a “system and method for enabling users to interact in a virtual space,”
was filed on November 2, 2006 and issued on February 17, 2009. D. 275 ¶ 22; D. 274-2 at 1.
Worlds continues to assert claims 5 and 7 of the ‘558 patent in this litigation. Similar to the claims
in the ‘690 patent, these claims achieve crowd control by filtering through a maximum number.
Claim 5 (incorporates the machine-readable medium of claim 40) provides that the avatars to be
displayed is determined by comparing “an actual number of avatars in the set associated said each
client process based on the positions transmitted by the server process” to “a maximum number of
avatars that can be displayed to the user associated with said each client process.” D. 274-2 at 14.
Claim 7 (incorporates the computer readable medium of claim 6) determines the avatars to be
displayed by comparing “an actual number of avatars that are not associated with the client process
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based on the positions transmitted by the server process” with “a maximum number of avatars that
can be displayed.” D. 274-2 at 14.
U.S. Patent No. 7,945,856 (“the ‘856 patent”)
The ‘856 patent, a “system and method for enabling users to interact in a virtual space.”
was filed on January 13, 2009 and issued on May 17, 2011. D. 275 ¶ 36; D. 274-3 at 1. This
patent serves to achieve crowd control by filtering information by “fewer than all” methods.
Worlds presses claim 1 of the ‘856 patent. Claim 1 is a “method for enabling a first user to interact
with second users in a virtual space . . . , the method comprising: (a) receiving by the first client
process from the server process received positions of selected second avatars; and (b) determining,
from the received positions, a set of the second avatars that are to be displayed to the first user,
wherein the first client process receives positions of fewer than all of the second avatars. D. 274-
3 at 24.
U.S. Patent No. 8,082, 501 (“the ‘501 patent”)
The ‘501 patent, a “system and method for enabling users to interact in a virtual space,”
was filed on March 19, 2009 and issued on December 20, 2011. D. 275 ¶ 52; D. 274-4 at 1. This
patent also achieves crowd control through filtering information by a condition or conditions.
Worlds asserts claims 1-8, 10, 12, and 14-16 of the ‘501 patent.
Claim 1-8 concern a “method for enabling a first user to interact with other users in a virtual
space, . . ., the method comprising the steps” that vary with each claim. D. 274-4 at 23. In claim
one, the steps involve customizing “an avatar in response to input by the first user,” receiving
“position information associated with fewer than all of the other user avatars in an interaction room
of the virtual space, from a server process, wherein the client device does not receive position
information of at least some avatars that fail to satisfy a participant condition imposed on avatars
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displayable on a client device display of the client device; determining, . . . a displayable set of the
other user avatars associated with the client device displayed; and displaying, . . . the displayable
set of the other user avatars associated with the client device display.” Id. Claims 2-8 and 10 add
or alter the conditions of the method in Claim 1. Id.
Claim 12 is a “client device for enabling a first user to interact with other users in a virtual
space” and is comprised of “a memory storing instructions” and “a processor programmed using
the instructions” for various conditions for “determin[ing] a set of the other users’ avatars
displayable on a screen associated with the client device.” Id. at 23. Claim 14 is an “article of
manufacture comprising at least one memory storing computer code for enabling a first user to
interact with other users in a virtual space, . . . the computer code comprising instructions for
conditions for customizing, receiving, determining and then displaying the other user avatars.” Id.
Claims 15 and 16 incorporate the article of manufacture in Claim 14 and add or alter the conditions
for displaying the other user avatars. Id.
U.S. Patent No. 8,145,998 (“the ‘998 patent”)
The ‘998 patent, a “system and method for enabling users to interact in a virtual space, was
filed on March 19, 2009 and issued on March 27, 2012. D. 275 ¶ 92; D. 274-5 at 1. Similar to
claims in the ‘501 patent, the claims in this patent achieve crowd control through filtering
information by conditions. Worlds asserts Claim 18 here. D. 283 at 10. Claim 18 is a “system
for displaying interactions in a virtual world among a local user and a plurality of remote users,
comprising a database . . .; a memory storing instructions and a processor programmed using
instructions to receive position information [based on certain conditions], receive orientation
information [based on certain conditions], generate on a graphic display a rendering of a
perspective view of the virtual world in three dimensions [based on certain conditions], and change
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in three dimensions the perspective view of the rendering of the graphic display of the virtual world
in response to user input.” D. 274-5 at 22-23.
B. Inter Partes Review before the PTAB
In May and June 2015, a third party, Bungie, Inc., filed a series of IPR petitions challenging
the validity of the asserted claims of the Patents-In-Suit under 35 U.S.C. § 102 and 103. The Patent
Trial and Appeal Board (“PTAB”) held six IPRs covering all forty claims asserted in this lawsuit
before the stay, issuing final written decisions in all six proceedings. The PTAB determined that
34 of the claims were unpatentable: claim 1 of the ‘856 patent, claims 1-3, 5-7, 10-12, 14, 15, 17
and 19 of the ‘690 patent, claims 4, 6, 8 and 9 of the ‘558 patent, claims 1, 18 and 20 of the ‘998
patent, and claims 1-8, 10, 12, 14-16 of the ‘501 patent. D. 273 at 8-9.
The PTAB determined that the petitioner did not demonstrate by a preponderance of
evidence that claims 4, 8, 13 and 16 of the ‘690 patent and claims 5 and 7 of the ‘558 patent were
invalid based on the evidence and arguments presented in the proceedings. Id. at 9. Worlds
appealed the PTAB’s decisions regarding the ‘856 patent (IPR2015-01264), the ‘501 patent
(IPR2015-01319) and the ‘998 patent (IPR2015-01321). In Worlds Inc. v. Bungie, Inc., 903 F.3d
1237 (Fed. Cir. 2018), the Federal Circuit vacated and remanded these final written decisions on
procedural grounds, and without addressing the PTAB’s substantive findings. Id. On September
7, 2018, the Federal Circuit vacated and remanded Final Written Decisions in IPR2015-01264
(related to ‘856 patent), IPR2015-01319 (related to ‘501 patent) and IPR2015-01321 (related to
‘998 patent) back to the PTAB. D. 283 at 15 (citing Worlds, 903 F.3d at 1237). On January 14,
2020, the PTAB issued a Termination Vacating Institutions and Dismissing Proceedings on
Remand in IPR2015-01264 (related to ‘856 patent), IPT2015-01319 (related to ‘501 patent) and
IPR2015-01321 (related to ‘998 patent). Id.
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1. PTAB findings
The PTAB’s IPR decision may be relied upon as persuasive authority before this Court.
Ultratec, Inc. v. Sorenson Comms., Inc., No 14-cv-66-jdp, 2015 WL 5330284, at *14 (W.D. Wis.
Sept. 11, 2015) (noting that the court was “not bound by the PTAB decision, but its reasoning is
persuasive”); DSS Tech. Mgmt., Inc. v. Apple, Inc., No. 14-cv-05330-HSG, 2015 WL 1967878,
at *4 (N.D. Cal. May 1, 2015) (observing that “PTAB's invalidity analyses ‘would likely prove
helpful to this Court,’ whether or not the standard applied is identical to the one this Court must
apply in the litigation.”) (quoting Black Hills Media, LLC v. Pioneer Electronics (USA) Inc., No.
CV 14-00471 SJO (PJWx), 2014 WL 4638170, at *6 (C.D. Cal. May 8, 2014)); Black Hills, 2014
WL 4638170, at *6 (noting that the “Court may also derive benefit from the PTAB's claim
construction for the patents under review” and that “[w]hile the PTAB interprets claim terms using
the ‘broadest reasonable construction,’ 37 C.F.R. § 42.100(b), its analysis would likely prove
helpful to this Court, no matter its final determination”); CANVS Corp. v. United States, 118 Fed.
Cl. 587, 593 (2014) (observing that “even if [certain claims] were to survive PTAB review, the
PTAB's final decision sustaining these claims would contain analysis that would be helpful to the
court”). Accordingly, although not bound by its findings or rulings, this Court may consider the
PTAB findings as persuasive authority in determining whether the Patents-In-Suit are patent
eligible.
With nineteen of the forty original asserted claims having been fully adjudicated, Worlds
is asserting the remaining twenty-one claims in this suit: claim 1 of the ‘856 patent, claims 4, 8,
13 and 16 of the ‘690 patent, claims 5 and 7 of the ‘558 patent, claims 1-8, 10, 12 and 14-16 of the
‘501 patent and claim 18 of the ‘998 patent. D. 269 at 2. Although now vacated, the substance of
the PTAB’s prior rulings serves to support the Court’s analysis below that the client-side and
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server-side filtering of position information is not inventive. D. 274-7 (PTAB’s Final Written
Decision on the ‘856 patent); D. 274-8 (PTAB’s Final Written Decision on the ‘501 patent); D.
274-9 (PTAB’s Final Written Decision on the ‘998 patent).
C. Relevant Procedural History
On March 30, 2012, Worlds initiated this action. D. 1. The Court allowed Defendants’
motion for summary judgment as to invalidity, D. 83, concluding that the Patents-In-Suit were not
entitled to claim priority on November 13, 1995, the filing date of Worlds’ Provisional
Application. D. 124. Worlds has pressed the remaining infringement claims as to infringement
from the issuance of the certificates of correction by the PTO. D. 127 at 2. After a Markman
hearing, the Court constructed disputed claim terms in an Order issued June 26, 2015. D. 153.
The parties then exchanged updated infringement and invalidity contentions. D. 160, 164. The
Court issued a Scheduling Order on September 16, 2015, adopting the pretrial schedule proposed
by the parties. D. 181. On December 16, 2015, the parties jointly moved to stay this proceeding
pending resolution of the IPR petitions before the PTAB. D. 198. The Court allowed that motion
and issued a stay and ordered periodic status updates. D. 201. Over the course of the next few
years, while the IPR proceedings were ongoing, the parties filed periodic status reports and
requests to extend the stay, which the Court allowed. See D. 201 to 235. At the request of Worlds
seeking a status conference, D. 239, and after briefing from the parties regarding the status of the
matter, the Court held a status conference on April 16, 2020 and then set a further schedule for this
case, including a deadline by which Activision could file the now pending motion. D. 262, 264.
On May 19, 2020, Activision filed this motion for summary judgment that the remaining patent
claims are invalid under 35 U.S.C § 101. D. 272. The Court heard arguments and took the matter
under advisement. D. 286.
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III. Standard of Review
A court will grant a moving party’s motion for summary judgment when there is no genuine
dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(a). A dispute is genuine if “the evidence about the fact is such that a reasonable jury
could resolve the point in favor of the nonmoving party,” Vélez–Rivera v. Agosto–Alicea, 437
F.3d 145, 150 (1st Cir. 2006) (quoting United States v. One Parcel of Real Prop., 960 F.2d 200,
204 (1st Cir. 1992)) (internal quotation marks omitted), and a fact is material if it is “one that might
affect the outcome of the suit under the governing law.” Id. (quoting Morris v. Gov’t Dev. Bank
of P.R., 27 F.3d 746, 748 (1st Cir. 1994)) (internal quotation marks omitted). In resolving a motion
for summary judgment, the Court scrutinizes the record in the light most favorable to the summary
judgment opponent and draws all reasonable inferences to that party’s advantage. Alliance of
Auto. Mfrs. v. Gwadosky, 430 F.3d 30, 34 (1st Cir. 2005).
An issued patent is presumed valid. 35 U.S.C. § 282. This “statutory presumption of
validity” applies when a party challenges a patent under 35 U.S.C. § 101. CLS Bank Intern. V.
Alice Corp. Pty. Ltd., 717 F.3d 1269, 1284 (Fed. Cir. 2013). “[T]he burden is on the party
challenging the validity of a patent to show that it is invalid by clear and convincing evidence.”
Minnesota Min. & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1301 (Fed. Cir. 2002); see Budde
v. Harley-Davidson, Inc., 250 F.3d 1369, 1376 (Fed. Cir. 2001). Consequently, “a moving party
seeking to invalidate a patent at summary judgment must submit such clear and convincing
evidence of invalidity so that no reasonable jury could find otherwise.” Eli Lilly Co. v. Barr Labs.,
Inc., 251 F.3d 955, 962 (Fed. Cir. 2001). When facts associated with a patent invalidity are not in
dispute, the court determines “whether summary judgment of invalidity is correct by applying the
law to the undisputed facts.” Myspace, Inc. v. GraphOn Corp., 672 F.3d 1250, 1257 (Fed. Cir.
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2012) (citing Tokai Corp. v. Easton Enters., Inc., 632 F.3d 1358, 1366 (Fed. Cir. 2011)). For the
reasons stated below, the Court concludes, on this undisputed record, that the remaining patent
claims are invalid as a matter of law under §101.
IV. Discussion
A. Patent Eligibility Under 35 U.S.C. § 101
1. Legal Framework
Under the Patent Act, “[w]hoever invents or discovers any new and useful process,
machine, manufacture, or composition of matter, or any new and useful improvement thereof, may
obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C. § 101.
The claims asserted here as to the Patents-In-Suit describe a “process,” defined as a “process, art
or method, and includ[ing] a new use of a known process, machine, manufacture, composition of
matter, or material.” Id. § 100(b). Activision challenges that this process is patentable under §
101.
Under § 101, certain categories are not eligible for patent protection. Diamond v.
Chakrabarty, 447 U.S. 303, 308 (1980). “Phenomena of nature, though just discovered, mental
processes, and abstract intellectual concepts are not patentable, as they are the basic tools of
scientific and technological work.” Gottschalk v. Benson, 409 U.S. 63, 67 (1972). Although “too
broad an interpretation of this exclusionary principle could eviscerate patent law,” since “all
inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural
phenomena, or abstract ideas,” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66,
71 (2012), “monopolization of those tools [of scientific and technological work] through the grant
of a patent might tend to impede innovation more than it would tend to promote it.” Id.
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Mayo is instructive in this regard. In that case, the Supreme Court addressed the patent
eligibility of claims covering processes that help doctors determine the appropriate dosage of
thiopurine drugs for patients with autoimmune diseases. Mayo, 566 U.S. at 74-75. The claims
described the relationships between the quantity of certain thiopurine metabolites in the blood and
the likelihood that a drug would be ineffective or produce unwanted side effects. Id. at 74. More
specifically, the patent claimed a process of administering a drug containing a metabolite to a
subject and determining the subject's level of that metabolite, where a certain reading of the
metabolite would indicate the need to change the dose of the drug. Id. at 75.
The Supreme Court concluded that the patent was invalid under § 101 because the patent
effectively claimed a law of nature, “namely, relationships between concentrations of certain
metabolites in the blood and the likelihood that a dosage of a thiopurine drug will prove ineffective
or cause harm.” Id. at 75. The Supreme Court reviewed each element in the patent beyond the
recitation of this natural chemical relationship and then all the elements together to determine
whether the claims added enough to qualify as a patent-eligible process “applying” a natural law.
The “administering” step simply referred to a pre-existing audience of doctors treating patients
with certain diseases. Id. at 77. The “wherein” clauses informed the doctor of the relevant natural
laws: the relationships between the metabolite concentration in the blood and the necessary drug
dosage adjustment. Id. The “determining” step instructed the doctor to measure the level of the
relevant metabolite through any process of the doctor's choosing. Id. Finally, the steps together
amounted to “nothing significantly more than an instruction to doctors to apply the applicable laws
when treating their patients.” Id. at 78. Mayo ruled each of these elements insufficient to transform
the underlying natural law into something patentable: “the claims inform a relevant audience about
certain laws of nature; any additional steps consist of well-understood, routine, conventional
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activity already engaged in by the scientific community; and those steps, when viewed as a whole,
add nothing significant beyond the sum of their parts taken separately.” Id. at 80.
Even when a process involves a computer-generated process, it still may not be patenteligible
under § 101. In Alice Corp. v. CLS Bank Int'l, 573 U.S. 208 (2014), the Supreme Court
ruled that a computerized scheme for mitigating settlement risk was not patent eligible under §
101. As Alice framed the analysis in Mayo, a patent that claims a law of nature, natural
phenomenon or an abstract idea is not patent eligible unless it has an element or combination of
elements that provide an “inventive concept” beyond that law, phenomenon or abstract idea. Id.
at 216. If in the first step, the patent claims a law of nature, natural phenomenon or an abstract
idea, in the second step, a court proceeds to the “search for an ‘inventive concept’—i.e., an element
or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the ineligible concept itself.’” Id. at 217-18 (quoting Mayo,
566 U.S. at 74–77). In Alice, the Supreme Court applied this two-step analysis to a patent claiming
a method of using a third party to mitigate settlement risk. Id. at 213–214. In doing so, the court
concluded that the claims were directed to the abstract idea of intermediated settlement and
proceeded to consider whether the elements of the claim, either individually or in combination,
were sufficient to transform the claims into a patentable invention. Id. at 216–218. Ruling that
the “claims at issue amount to nothing significantly more than an instruction to apply the abstract
idea of intermediated settlement using some unspecified, generic computer,” the Supreme Court
held the patent invalid for want of an inventive concept. Id. at 225. Like Mayo, the claim elements
were well-understood, routine and conventional activities known in the industry. Id. “[E]ach step
does no more than require a generic computer to perform generic computer functions.” Id. The
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claims do “nothing significantly more” than “instruct to apply the abstract idea of intermediated
settlement using some unspecified, generic computer.” Id. at 226.
Also as in Mayo, Alice distinguished the patent held to be patent eligible in Diamond v.
Diehr, 450 U.S. at 175 (1981). The patent in Diehr claimed a method for molding raw rubber into
cured products using a mathematical formula. Alice, 573 U.S. at 223 (citing Diehr, 450 U.S. at
177-78). The rubber-molding method in Diehr was patentable: because it employed a “wellknown”
mathematical equation, but it used that equation in a process designed to solve a
technological problem in “conventional industry practice.” Id. (quoting Diehr, 450 U.S. at 177-
178). The invention in Diehr used a “thermocouple” to record constant temperature measurements
inside the rubber mold—something “the industry ha[d] not been able to obtain.” Id. at 178. The
temperature measurements were then fed into a computer, which repeatedly recalculated the
remaining cure time by using the mathematical equation. Id. at 178–79. These additional steps,
“transformed the process into an inventive application of the formula.” Alice, 573 U.S. at 223
(quoting Mayo, 566 U.S. at 76).
The parties do not dispute that the claims that Activision focuses upon in its motions, claim
1 of ‘856 patent, claim 4 of the ‘690 patent, claim 1 of the ‘501 patent, and claim 18 of the ‘998
patent are representative claims of those that remain. D. 281 at 7 n.3; see D. 276 at 8. Since
Worlds in its opposition focuses on claim 4 of the ‘690 patent, D. 276 at 8, the Court does so here.
Claim 4 of the ‘690 patent, D. 274-01, provides as follows:
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2. Step One: Claims are Directed to an Abstract Idea
As noted above, the first step in the § 101 analysis asks, “whether the claims at issue are
directed to one of [the] patent-ineligible concepts,” namely laws of nature, natural phenomena, or
abstract ideas. Alice, 573 U.S. 208, 216. The parties dispute whether World’s patents are directed
to patent-ineligible concepts, namely the abstract idea of “filtering” (here of “position
information”) which amounts to “crowd control.” D. 276 at 6; D. 281 at 2 n.2. Worlds contends
that their claims are “directed to a novel client-server computer network architecture for 3-D virtual
worlds.” Id. This description alone does not convert the patents into patent-eligible inventions.
This Court’s Markman Order acknowledged that the claims, including the representative ‘690
patent claim, are designed to accomplish crowd control through filtering (i.e., the “determining”
and “receiving” steps), D. 153 at 8-10, See. e.g., D. 274-1 at 5, 13. Worlds maintained its position
in this case, D. 281 at 5 (citing Worlds in D. 68 at 4) and in the IPR proceedings that its patents
were directed at a method of “crowd control” and that these claims are the filtering function to do
so. D. 273 at 15-16 (citing Worlds’ statements and filings before PTAB).
Such filtering is, as Activision asserts, “a fundamental and well-known concept for
organizing human activity,” and is patent ineligible. D. 273 at 16; see Bascom Global Internet
Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1348 (Fed. Cir. 2016) (agreeing, under step
one of the Mayo/Alice analysis that “filtering content is an abstract idea because it is a
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longstanding, well-known method of organizing human behavior, similar to concepts previously
found to be abstract”). That is, “the claims do nothing more than recite a general client-server
computer architecture to perform routine functions of filtering information to address the generic
problem of crowd control.” D. 281 at 2.
Such conclusion is consistent with the first-step analysis in Mayo and Alice and the rulings
in other patent cases involving filtering information claims. These claims, like those in Mayo,
involve a natural phenomenon, that is achieving crowd control thru the filtering of information.
As the representative claim, the receiving step of claim 4 of the ‘690 patent is about receiving
position information and the determining step tells the relevant audience to determine the
maximum number by whatever method and the comparing is to compare the actual number to the
determined maximum number to determine which of the other users’ avatars are displayed. The
steps are open-ended and instruct the audience to “engage in well-understood, routine,
conventional activity.” Mayo, 566 U.S. at 79. That is, “to consider the three steps as an ordered
combination adds nothing to the laws of nature that is not already present when the steps are
considered separately.” Id. This is true whether focusing on the “maximum number” claims as in
the ‘690 patent and ‘558 patent, or the “fewer than all” claim in the ‘856 patent or the “condition”
steps in the ‘501 patent and the ‘998 patent.
The rulings in other cases support this conclusion as well. For one example, in Fuzzysharp
Techs. Inc. v. Intel Corp., No. 12-cv-4413, 2013 WL 5955668, at *13 (N.D. Cal. Nov. 6, 2013),
aff’d, 595 F. Appx 996 (Fed. Cir. 2015), the court addressed claims that stated a method “for
reducing the visibility related computation calculations in a certain field of use (such as ‘3-D
computer graphics’) followed by method steps to perform the reduction.” Id. at *11. The court
there held that the claims were directed to an abstract idea as the patent purported to cover all
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applications of such filtering in the field of 3D computer graphics. Id. at *11. For another example,
in Intellectual Ventures II LLC v. JP Morgan Chase & Co., No. 13-cv-3777, 2015 WL 1941331,
at *8 (S.D.N.Y. Apr. 28, 2015), the court considered a patent for a method for filtering a packet of
information based upon the contents of two or more such packets. Id. at *1. The court in that case
concluded that the asserted claims were patent ineligible at step 1 of the Mayo/Alice analysis for
three reasons. First, the claim amounted to a “mental process” for filtering a packet of information
and does not provide anything “concrete” to make it patent eligible. Id. Second, the claim was
broad enough to raise “concerns of preemption.” Id. Since it is not limited to a particular
application, but “covers all network filtering by any firewall on any computer network where an
access rule is chosen based upon the data of multiple packets. Id. (emphasis in original). Third,
the patent fails the “machine-or-transformation” test as it is “neither limited to a particular machine
or apparatus, nor does it result in the transformation or creation of an article.” Id. at 9. Crowd
control in the claims here is an abstract idea similar to those abstract ideas found to be patent
ineligible in step one of the Mayo/Alice analysis in these cases. The type of “maximum capacity”
filter employed in claim 4 of the ‘690 patent, the representative claim,1 is directed to solving the
problem of crowd control by teaching a computer network architecture to enable multiple users to
interact, D. 276 at 7, is an abstract idea, analogous to real-world maximum capacity limits on
elevators, at restaurants and other physical spaces typically open to the public.
1This is true of all of the remaining claims. Claim 1 of the ‘856 patent filters position
information for “fewer than all” of the avatars, D. 274-3 at 24. Like claim 4 of the ‘690 patent,
the remaining claims of the ‘558 patent are directed to filtering information at a maximum value.
D. 274-2 at 14. The claims in the ‘501 patent and the ‘998 patent achieve the filtering by a set of
conditions that governs what position information the client receives. D. 274-4 at 23 (‘501 patent);
D. 274-5 at 22-23 (‘998 patent). The use of “fewer than all” or “conditions” for the filtering in
these claims, however, does not make the claims any less of an abstract idea than the claim 4 of
the ‘690 claim as discussed above.
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3. Step Two: Inventive Concept
Accordingly, the dispositive issue here is at step 2 of the Mayo/Alice analysis: “do the
patent claims add enough to their statements of the [natural laws and phenomena] to allow the
processes they describe to qualify as patent-eligible processes that apply natural laws?” Mayo, 566
U.S. at 74 (emphasis in original). The Court must consider the elements of each asserted claim
individually and as an ordered combination of elements to determine if the claim contains a
patentable inventive concept. Id. at 74–75. The asserted claims are said to “teach a multistep
process whereby a server receives position information of avatars associated with network clients;
the server filters the received positions and then sends selected packets to each client,” whereby a
client can then further determine which avatars to display. See D. 276 at 18. Worlds argues that
the Patents-In-Suit teach a specific approach to a computer network architecture that includes an
inventive concept. D. 276 at 17.
The Court does not agree with Worlds that the Patents-In-Suit add the requisite inventive
concept even when considering the elements or the ordered combination of elements of each claim.
As in Fuzzysharp, 2013 WL 5955668, at *11-12, the claims lack limitation to any specific
application, do not add any steps other than “conventional ‘post-solution’ activity to the abstract
formula described” and “that the method is to be used on conventional computer components does
not make the abstract formula patentable.” Id. Similarly, in Intellectual Ventures II LLC, 2015
WL 1941331, at *9, even considering each of the elements of one of the patents at issue there, the
first step merely described the form of information “conventionally sent to a firewall” and the
second step “simply calls for ‘generic computer implementation’ of the process,” id., neither of
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which provide the inventive concept to convert the abstract idea into a patent eligible process.2
The steps of the claims here use only “generic functional language to achieve the purported
solution” of filtering of position information for crowd control. See Two-way Media, Ltd. V.
Comcast Cable Comms. LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017). None of the remaining claims
are limited to “any specific form or implementation of filtering,” D. 281 at 6, and involve generic
computer components, D. 281 at 12. Moreover, there is nothing in the ordering of the steps in the
claims (i.e., receiving, determining, comparing) that make them inventive; the “steps are organized
in a completely conventional way.” Id. at 1341; see Glasswall Solutions Ltd. v. Clearswift Ltd.,
754 F. Appx. 996, 999 (Fed. Cir. 2018) (concluding under step 2 of the Mayo/Alice analysis that
the claims “recite steps that do not amount to anything more than an instruction to apply the
abstract idea of filtering nonconforming data and regenerating a file without it, plus the generic
steps needed to implement the idea”).
Contrary to Worlds’ suggestion otherwise, the restriction against patenting abstract
concepts “cannot be circumvented by attempting to limit the use of the formula to a particular
technological environment.” Mayo, 566 U.S. at 79. That is, the fact that the claims at issue relate
2 The ruling as in Bascom, 827 F.3d at 1350, does not warrant another result here. There,
the Federal Circuit ruled at step 2 of the Mayo/Alice analysis that the “installation of a filtering
tool at a specific location, remote from the end-users, with customizable filtering features specific
to each end user” provided the necessary, inventive concept. Id. That is not the case here. The
method outlined here, as represented by claim 4 of the ‘690 patent, cannot be said to be as specific.
Particularly, claim 4 provides for a method performed by the client process associated with the
first user that receives a position of less than all of the other users, determines “a maximum number
of the other users’ avatars to be displayed,” and then compares “the actual number to the maximum
number to determine which of the other users’ avatars are to be displayed.” D. 274-1. While the
“filtering” of the maximum number of other users’ avatars to be displayed involves the client
process associated with the first user, no language in the claim suggests that this is done through
any sort of “customizable filtering features specific to each end user,” but rather through a
generically stated determination of the maximum number of the other users’ avatars to be
displayed. This claim, like the other remaining claims, is distinguishable from the inventive
concept that the court found in Bascom.
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and apply to the technological environment of a three-dimensional virtual world, does not
necessarily make the process inventive. See Bascom, 827 F.3d at 1349 (noting that the requisite
inventive concept “cannot simply be an instruction to implement or apply the abstract idea on a
computer”). Client-server networks, virtual worlds, avatars, or position and orientation
information are not inventions of Worlds but rather, their patents seek to demonstrate their use in
a technological environment. D. 273 at 13; see Accenture Global Servs., GmbH v. Guidewire
Software, Inc., 728 F.3d 1336, 1338 (Fed. Cir. 2013) (involving claims with generic computer
elements found to be invalid). That is, Worlds’ asserted claims use a general-purpose computer to
employ well known filtering or crowd control methods and means that ultimately use same to
display graphical results and generate a view of the virtual world, none of which is inherently
inventive or sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application.
Alice, 573 U.S. at 211. For all these reasons, the remaining claims do not involve the inventive
concept necessary to convert the abstract idea into a patent eligible process,3 and they are,
therefore, invalid as a matter of law under 35 U.S.C. § 101.
V. Conclusion
For the foregoing reasons, the Court ALLOWS Activision’s motion for summary
judgment, D. 272.
So Ordered.
/s/ Denise J. Casper
United States District Judge
3 This is true not just true of claim 4 of the ‘690 as the representative claim, but also of the
other remaining claims including those claims that teach filtering of position information by
“fewer than all” or conditions on the filtering which, when considered per claim as individual
elements or an ordered combination of elements, do not provide the necessary inventive concept.
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UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
_________________________________________
WORLDS, INC.,
Plaintiff,
v.
ACTIVISION BLIZZARD, INC.,
BLIZZARD ENTERTAINMENT, INC. and
ACTIVISION PUBLISHING, INC.,
Defendants.
_________________________________________
)
)
)
)
)
)
)
)
)
)
)
)
)
Civil Action No. 12-10576-DJC
MEMORANDUM AND ORDER
CASPER, J. June 26, 2015
I. Introduction
Plaintiff Worlds, Inc., (“Worlds”) alleges that Activision Blizzard, Inc., Blizzard
Entertainment, Inc. and Activision Publishing, Inc. (collectively, the “Defendants”) infringe
certain claims of United States Patents Nos. 7,181,690 (“‘690”), 7,493,558 (“‘558”), 7,945,856
(“‘856”), 8,082,501 (“‘501”) and 8,145,998 (“‘998”) (collectively, the “Patents-In-Suit”). The
parties now seek construction of eleven disputed claims terms. After extensive briefing and a
Markman hearing, the Court’s claim construction follows.
II. Patents-in-Suit
This lawsuit involves patents that are directed to a client-server network that enables
large numbers of computer users to interact in a “virtual world” displayed on a computer screen.
D. 62-2, 62-3, 62-4, 62-5, 62-6. Worlds alleges that Defendants infringe the following patent
claims: ‘690 claims 1-20; ‘558 claims 4-9; ‘856 claim 1; ‘501 claims 1-8, 10, 12, 14-16; ‘998
claims 1-3, 7, 8, 11-20. See Worlds, Inc. v. Activision Blizzard, Inc., No. 12-cv-10576-DJC,
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2014 WL 972135, at *1 (D. Mass. Mar. 13, 2014). The Patents-in-Suit are all part of the same
patent family and share a common specification. D. 62-2, 62-3, 62-4, 62-5, 62-6.1 The ‘690
patent was filed on August 3, 2000 and issued on February 20, 2007. Worlds, Inc., 2014 WL
972135, at *1. The ‘558 patent was filed on November 2, 2006 and issued on February 17, 2009.
Id. The ‘856 patent was filed on January 13, 2009 and issued on May 17, 2011. Id. The ‘501
patent was filed on March 19, 2009 and issued on December 20, 2011. Id. at *2. The ‘998
patent was filed on March 19, 2009 and issued on March 27, 2012. Id.
III. Procedural History
Worlds instituted this action on March 30, 2012, D. 1, and later filed an amended
complaint. D. 32. The Defendants moved for summary judgment on June 18, 2013. D. 83. The
Court subsequently allowed the Defendants’ motion for summary judgment, concluding that the
Patents-in-Suit were not entitled to claim priority to November 13, 1995, the filing date of
Worlds’s Provisional Application. D. 124. Worlds, however, has continued to allege
infringement as from the issuance of the certificates of correction by the PTO on September 24,
2013 for the ‘045 and ‘690 patents (of which the ‘558, ‘856, ‘501 and ‘998 are continuations)
through the lives of the Patents-in-Suit. D. 127. After claim construction briefing, the Court
held a Markman hearing and took the matter under advisement. D. 147.
IV. Standard of Review
The construction of disputed claim terms is a question of law. Markman v. Westview
Instruments, 517 U.S. 370, 372 (1996). For claim construction, a court must construe “the
meaning that the term would have to a person of ordinary skill in the art in question at the time of
. . . the effective filing date of the patent application.” Phillips v. AWH Corp., 415 F.3d 1303,
1 As all of the patents share a common specification, when citing the specification the
Court will cite to the ‘690 patent, D. 62-2.
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1313 (Fed. Cir. 2005). To do so, the Court must look to “the words of the claims themselves,
the remainder of the specification, the prosecution history, and extrinsic evidence concerning
relevant scientific principles, the meaning of technical terms, and the state of the art.” Id. at
1314 (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1116
(Fed. Cir. 2004)).
A. The Claims
The analysis must always begin with the language of the claim, which “define[s] the
invention to which the patentee is entitled the right to exclude.” Id. at 1312 (citing Innova, 381
F.3d at 1115). “[T]he context in which a term is used in the asserted claim can be highly
instructive.” Id. at 1314. Courts may find that the claim itself provides the means for construing
the term where, for example, the claim term is used consistently throughout the patent. Id. In
that case, “the meaning of a term in one claim is likely the meaning of that same term in
another.” Abbott GmbH & Co., KG v. Centocor Ortho Biotech, Inc., No. 09-11340-FDS, 2011
WL 948403, at *3 (D. Mass. Mar. 15, 2011) (citing Phillips, 415 F.3d at 1314). Furthermore,
“the presence of a dependent claim that adds a particular limitation gives rise to a presumption
that the limitation in question is not present in the independent claim.” Phillips, 415 F.3d at
1315.
B. The Specification
Nevertheless, the claims “do not stand alone” but “are part of a fully integrated written
instrument, consisting principally of a specification,” which “is always highly relevant to the
claim construction analysis.” Id. “Usually, [the specification] is dispositive; it is the single best
guide to the meaning of a disputed term.” Id. (citing Vitronics Corp. v. Conceptronic, Inc., 90
F.3d 1576, 1582 (Fed. Cir. 1996)). “[T]he scope and outer boundary of claims is set by the
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patentee’s description of his invention” and, therefore, “claims cannot be of broader scope than
the invention that is set forth in the specification.” On Demand Mach. Corp. v. Ingram Indus.,
Inc., 442 F.3d 1331, 1338-40 (Fed. Cir. 2006); see also Phillips, 415 F.3d at 1315–17, 1323
(noting that “the interpretation to be given a term can only be determined and confirmed with a
full understanding of what the inventors actually invented and intended to envelop with the
claim,” but “expressly reject[ing] the contention that if a patent describes only a single
embodiment, the claims of the patent must be construed as being limited to that embodiment”).
The Court must “us[e] the specification [only] to interpret the meaning of a claim,” and must be
careful not to “import[ ] limitations from the specification into the claim.” Phillips, 415 F.3d at
1323. This standard may “be a difficult one to apply in practice,” id., but “[t]he construction that
stays true to the claim language and most naturally aligns with the patent’s description of the
invention will be, in the end, the correct construction.” Id. at 1316 (citing Renishaw PLC v.
Marposs Societa’ per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 1998)).
C. The Prosecution History
After the claims themselves and the specification, “a court should also consider the
patent’s prosecution history, if it is in evidence.” Id. at 1317 (quoting Markman, 52 F.3d at 980)
(internal quotation mark omitted). “Like the specification, the prosecution history provides
evidence of how the [United States Patent and Trademark Office] and the inventor understood
the patent” and “can often inform the meaning of the claim language by demonstrating how the
inventor understood the invention and whether the inventor limited the invention in the course of
prosecution, making the claim scope narrower than it would otherwise be.” Id. (citing Vitronics,
90 F.3d at 1582–83). The prosecution history should be given less weight than the claims and
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the specification, however, because “it often lacks [] clarity . . . and thus is less useful for claim
construction purposes.” Id.
D. Extrinsic Evidence
Courts may also consider extrinsic sources, which “can help educate the court regarding
the field of the invention and can help the court determine what a person of ordinary skill in the
art would understand claim terms to mean.” Id. at 1319. In particular, “dictionaries and treatises
can be useful in claim construction” as they may assist the court in understanding the underlying
technology and “can assist the court in determining the meaning of particular terminology to
those of skill in the art of the invention.” Id. at 1318. “[W]hile extrinsic evidence can shed
useful light on the relevant art,” however, “it is less significant than the intrinsic record in
determining the legally operative meaning of claim language.” Id. at 1317 (citations and internal
quotation marks omitted). In general, extrinsic evidence is viewed “as less reliable than the
patent and its prosecution history in determining how to read claim terms . . . .” Id. at 1318.
Therefore, extrinsic evidence is “unlikely to result in a reliable interpretation of patent claim
scope unless considered in the context of the intrinsic evidence.” Id. at 1319.
E. Indefiniteness
A patent claim is invalid for indefiniteness if its claims, when read in light of the
specification and the prosecution history, “fail to inform, with reasonable certainty, those skilled
in the art about the scope of the invention.” Nautilus, Inc. v. Biosig Instruments, Inc., ___ U.S.
___, 134 S. Ct. 2120, 2124 (2014). “The definiteness requirement must take into account the
inherent limitations of language, but at the same time, the patent must be precise enough to
afford clear notice of what is claimed, thereby apprising the public of what is still open to them.”
Fairfield Indus., Inc. v. Wireless Seismic, Inc., No. 4:14-CV-2972, 2015 WL 1034275, at *4
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(S.D. Tex. Mar. 10, 2015) (quoting Nautilus, 134 S. Ct. at 2128–29). Patents are presumed to be
valid, 35 U.S.C. § 282, and indefiniteness must be proved by the more demanding standard of
clear and convincing evidence. Microsoft Corp. v. i4i Ltd. P’ship, ___ U.S. ___, 131 S. Ct.
2238, 2242 (2011).
V. Construction of Disputed Claims
The parties dispute the meaning of the following terms and the Court resolves these
disputes as discussed below:
A. “Position of Less than All of the Other Users’ Avatars”
Term Worlds’s Proposed
Construction
Activision’s Proposed
Construction
position of less than all of
the other users’ avatars
No construction necessary positions for up to a set maximum
number of the other users’ avatars,
which is less than the total number
of other users’ avatars
The phrase “position of less than all of the other users’ avatars,” or one of its eleven
variations, appears in all of the asserted claims. D. 71 at 5 n.2. For example, claim 1 of the ‘690
patent provides:
A method for enabling a first user to interact with other users in a virtual space,
wherein the first user and the other users each have an avatar and a client process
associated therewith, and wherein each client process is in communication with a
server process, wherein the method comprises:
(a) receiving a position of less than all of the other users’ avatars from the
server process; and
(b) determining, from the received positions, a set of the other users’
avatars that are to be displayed to the first user,
wherein steps (a) and (b) are performed by the client process associated
with the first user.
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‘690, D. 62-2 at 17. In other words, subpart (a) describes a method of communication where a
client receives a “position of less than all of the other users’ avatars” from the server and subpart
(b) explains that after receiving “less than all of the other users’ avatars,” the client determines
which of the received avatars to display to the user. The Court focuses here on subpart (a),
which the parties agree should be construed in the same manner across all claims. D. 71 at 5 n.2.
To begin, Worlds emphasizes the “heavy presumption that claim terms carry their full
ordinary and customary meaning” that a person of ordinary skill in the art would understand,
Epistar Corp. v. Int’l Trade Comm’n, 566 F.3d 1321, 1334 (Fed. Cir. 2009), and argues that
Defendants are improperly “seek[ing] to import an entirely new limitation – up to a set
maximum number” into the claim language. D. 62 at 16 (internal quotations omitted). Worlds
argues that this limiting language “is untethered to (and in many ways, expressly contrary to)
language from the patents’ claims, specifications, or prosecution histories.” Id. In fact, Worlds
points out that “the specification never uses the phrase ‘up to a set maximum number of other
users’ avatars,’ never says ‘a set maximum number’ is the determining factor for positions the
server sends, and never focuses on a ‘set maximum number’ when describing how the server
sends client positions.” D. 68 at 9 (emphasis in original).
Worlds readily agrees with Defendants’ argument that under a plain reading of the claim
language “if a client receives positions for 999 out of 1000 other users, this would literally
constitute receiving a position of ‘less than all of the other users,’ even though the client has
received positions for the vast majority of other users.” Id. at 11 (quoting D. 63 at 16-17). In
fact, Worlds argues that Defendants’ argument itself shows that the ordinary meaning of “less
than all” is clear. Id. Further, Worlds contends that nothing in its patents or specifications
excludes the system from sending the positions of a “vast majority of the other users” if the
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various factors allow and that these factors also prevent the claims from being too broad because
the claims are “defined (or confined) by proximity, orientation, filtering conditions, computing
resources, user selections, and other filtering factors disclosed in the Worlds Patents and claims.”
Id. at 12.
The Defendants argue, however, that “when the claims are read in light of the invention
described in the specification, it is apparent that ‘less than all’ must refer to the set maximum
number of other users that each client receives from the server.” D. 63 at 17. Noting that claims
“must be read in view of the specification, of which they are a part,” Philips, 415 F.3d at 1315,
Defendants point out that the specification never uses the term “less than all” and directs the
Court to several sections of the specification that they argue support their proposed construction.
D. 63 at 17 (noting, for example, that “[s]erver 61 maintains a variable, N, which sets the
maximum number of other avatars A will see”) (citing ‘690 patent, D. 62-2 at 10, 14-15).
At oral argument, Worlds did not deny that a maximum filter is one way that the server or
the client could filter avatars, but argued that the specification is not restrictive in what sorts of
filtering criteria can be applied. Worlds acknowledged that the invention is designed to
accomplish crowd control, but argued that this crowd control function can be accomplished in a
flexible and variable manner.
After review of the specification, the Court agrees that the specification discloses an
invention to solve the problem of “crowd control.” See, e.g., ‘690, D. 62-2 at 10, 14 (explaining
that “[w]hether another avatar is in range is determined a ‘crowd control’ function” and that
“[c]rowd control is one of the tougher problems solved by the present system”). Contrary to
Defendants arguments, however, the Court does not read the specification to require that this
“crowd control” function must be accomplished by sending the client positions for up to a set
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maximum number of avatars. Indeed, the specification explains that at “a ‘crowd control’
function” is only “needed in some cases.” Id. at 10. For instance, the specification explains that
the server can set the “variable N, which sets the maximum number of other avatars” at a “very
high value.” Id. “If server 61 sets a very high value for N, then the limit set by client 60 is the
only controlling factor,” and “client 60” is not required to limit the view. Id. Therefore, the
specification makes clear that if “client 60 has not limited the view to less than N avatars” and
the server has set the variable N at a “very high value,” the client will in fact receive the position
for a vast majority of the other users (for example, 999 out of 1000). Id.
Moreover, the specification makes clear that the system contemplates proximity filters
that do not require a maximum number limit on the amount of other users that would be
displayed. See, e.g., id. (explaining that the “[r]emote avatar position table 112 contains the
current positions of the ‘in range’ avatars” and that “[w]hether another avatar is in range is
determined [by] a crowd control function” “needed in some cases,” but that “n any case,
remote avatar position table 112 contains an entry for each neighboring avatar . . .”).
Consequently, filters applied to display only “neighboring” avatars, for example, may display
two avatars or twenty – there is no “set maximum.”
Accordingly, based on a review of patent record, the Court concludes that there is nothing
to suggest that the term “position of less than all of the other users’ avatars” was meant to carry
anything but its ordinary meaning and the Court concludes that no construction is necessary.
B. “Determining, from the Received Positions, [a/the] Set of the Other Users’
Avatars that are to be Displayed”
Term Worlds’s Proposed
Construction
Activision’s Proposed
Construction
determining, from the
received positions, [a/the]
No construction necessary selecting [a/the] set consisting of
up to a set maximum number of
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set of the other users’
avatars that are to be
displayed
the other users’ avatars to be
displayed based on the received
positions
The parties similarly dispute the meaning of the phrase “determining, from the received
positions, [a/the] set of the other users’ avatars that are to be displayed.” D. 62 at 10; D. 63 at
20. This term implicates client-side filtering, as opposed to the server-side filtering discussed
above, and the language, or a variation thereof, appears in a number of claims, including claim 1
of the ‘690 patent, quoted in full above, which provides, in part:
A method for enabling a first user to interact with other users in a virtual space,
wherein the first user and the other users each have an avatar and a client process
associated therewith, and wherein each client process is in communication with a
server process, wherein the method comprises . . .
(b) determining, from the received positions, a set of the other users’
avatars that are to be displayed to the first user . . .
‘690, D. 62-2 at 17. As with the above, the parties agree the phrase should be construed in the
same manner across all claims. D. 71 at 6 n.4.
1. Determining versus Selecting
The language at issue here provides that the client “determin[es]” from the positions that
it has received from the server, which avatars to display. If the client receives twenty positions
from the server, the client will use criteria to decide which of those twenty avatars to display.
The Defendants first argue that the word “determining” should be replaced with “selecting.” D.
63 at 21. In support, Defendants point out that while claim 1 of ‘690 requires “determining, from
the received positions, a set of the other users’ avatars that are to be displayed to the first user,”
dependent claim 2 requires an additional step of “displaying the set of the other users’ avatars
from based on the orientation of the first user’s avatar . . . .” Id. (quoting ‘690, D. 64-1 at 18).
Therefore, the Defendants assert that “determining” and “displaying” must be distinct, and argue
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that while the specification explains that “displaying” requires the “rendering engine” to read
“[1] register 114, [2] remote avatar position table 112, [3] rooms database 70 and [4] avatar
image databases” to “render[] a view of the virtual world from the view point (position and
orientation) of A’s avatar,” the specification discloses only one “determining” function – the
selection of the other user’s avatars to include in “remote avatar position table 112.” Id.
(quoting ‘690, D. 64-1 at 12). To support this reading, Defendants argue that because the
specification states that “[w]here N’ is less than N, the client also uses position data to select N’
avatars from the N avatars provided by the server,” ‘690, D. 62-2 at 10, that “determining”
necessarily means that the client is “selecting a set consisting of up to a set maximum number of
the other users’ avatars to be displayed based on the received positions.” D. 63 at 22.
Worlds argues, however, that the Defendants’ construction would require “selecting” in
every instance, while the specification requires selection to occur only in some instances, D. 62
at 11 (quoting ‘690, D. 62-2 at 10). As noted above, the specification details that the “remote
avatar position table 112” “contains the current positions of the ‘in range’ avatars near A’s
avatar” and “[w]hether another avatar is in range is determined [by] a ‘crowd control’ function,”
but “user A might have a way to filter out avatars on other variables in addition to proximity,
such as user ID.” ‘690, D. 62-2 at 10. In fact, the specification notes that the “remote avatar
position table 112” contains a number of entry data points, including position, orientation and
user identification, which the client uses to determine which avatar images to display. Id. So,
each entry in the “remote avatar position table” provides a variety of data points that may be
used in various combinations to determine which avatars will ultimately be displayed.
Furthermore, while the specification states that the client “also uses position data to select N’
avatars,” that phrasing necessarily implies that the client “also uses” other data to select the
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avatars. If the client only considered one metric, such as position, to determine which avatars
would be displayed, then the Defendants’ construction might be more appropriate. Here,
however, it seems clear that the client considers a number of factors to determine the avatars to
display and therefore is not making necessarily making a simple selection, but is potentially
considering various information points and making a determination. Accordingly, without more,
the Court will not replace the word “determining” with the word “selecting.”
2. Set Maximum Number
As discussed above, the specification provides that “[c]lient 60” maintains a variable N’
which represents the maximum number of avatars the client wants to view. ‘690, D. 62-2 at 10.
The specification allows for the possibility that the number N’ set by the client might be less than
N or greater than N. If N’ is greater than N, the number of avatars – N – will be used. If,
however, the server sets a very high value for N, the limit set by the client, N’, if lower, will be
the main controlling factor on the number of avatars displayed. See id. The question here is
whether N’ is a hard coded number – i.e., a set maximum – or whether N’ is variable. Based
upon a review of the specification, the Court concludes that N’ is intended to be flexible and user
specific.
Indeed, at oral argument the Defendants conceded that N’ is not a hard coded number for
all applications and can be user specific. Defendants further acknowledge that N’ is variable to
the extent that the number can be chosen from application to application. Nevertheless, the
Defendants argue that even though N’ is variable between applications, “for the system to work
N and N’ must at some point be assigned actual values (i.e., definable numbers, such as N = 2).”
D. 69 at 11. In essence, Defendants make a temporal argument – that the variable limit must at
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some point become a specific number and, at that point, the system is necessarily selecting a “set
maximum number” when it determines “a set of the other users’ avatars that are to be displayed.”
As Worlds argues, however, the Defendants’ construction would put the disputed claims
directly at odds with several of the Defendants’ claims, for example, dependent claim 4 of ‘690.
See ‘690, D. 62-2 at 17; see also ‘690 claims 8, 13, 16, D. 62-2 at 17-18. Indeed, “the presence
of a dependent claim that adds a particular limitation gives rise to a presumption that the
limitation in question is not present in the independent claim.” Philips, 415 F.3d. at 1315. The
Defendants contend, however, that claim 4 merely provides a specific way of selecting a set
maximum number that involves comparison (of an actual and maximum number), and that
because claim 1 could be practiced without comparison at all, claim 1 is still broader than claim
4 even incorporating the set maximum number language. D. 69 at 10. Contrary to the
Defendants’ arguments that claim 4 “is in complete alignment” with Defendants’ construction,
however, the Court reads claim 4 as plainly providing for a narrower method of claim 1 that
explicitly requires the client to determine a maximum number limit. Claim differentiation must
apply where, as here, “there is a dispute over whether a limitation found in a dependent claim
should be read into an independent claim, and that limitation is the only meaningful difference
between the two claims.” Wenger Mfg., Inc. v. Coating Mach. Sys., Inc., 239 F.3d 1225, 1233
(Fed. Cir. 2001).
Finally, the Defendants argue that its proposed construction is supported by the
prosecution history. D. 69 at 9. They contend that during the prosecution of the ‘045 patent,
unasserted here, “the applicants explained that ‘determining’ required limiting the number of
avatars displayed.” Id.; see also, D. 64-7 at 6 (providing that “claim 8 includes a ‘means for
determining from said list of avatars a set of avatars to be displayed at each client process,
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wherein said means for determining is located at each client process.’ Thus, each target client
limits the number [of] avatars displayed at that target client based on, for example, target client
processing capacity”). The prosecution history cited by the Defendants does not use the “set
maximum number” language, however, and does not provide that the client is limiting the
number of avatars displayed to a “set maximum number.” The prosecution history also does not
clearly disavow an invention that omits the “set maximum” limit. See GE Lighting Solutions,
LLC v. AgiLight, Inc., 750 F.3d 1304, 1309 (Fed. Cir. 2014) (noting that “[t]he standards for
finding lexicography and disavowal are exacting” and “[t]o act as its own lexicographer, a
patentee must ‘clearly set forth a definition of the disputed claim term,’ and ‘clearly express an
intent to define the term,’” while “disavowal requires that ‘the specification [or prosecution
history] make[] clear that the invention does not include a particular feature’” (citations
omitted)).
Accordingly, the Court concludes that there is nothing in the patent record to suggest that
the phrase “determining, from the received positions, [a/the] set of the other users’ avatars that
are to be displayed” was meant to carry anything but its ordinary meaning and the Court
concludes that no construction is necessary.
C. “A Participant Condition” / “A Condition”
Term Worlds’s Proposed
Construction
Activision’s Proposed
Construction
A participant condition No construction necessary
Or, alternatively,
A condition imposed on an
avatar, its controlling user, or
its associated client device that
affects the status or display of
an avatar
A condition set by the client
Or, alternatively,
Indefinite under 35 U.S.C. § 112,
¶ 2
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A condition No construction necessary
Or, alternatively,
An expression in a software
program that affects the status
or display of an avatar
A condition set by the client
Or, alternatively,
Indefinite under 35 U.S.C. § 112,
¶ 2
The term “participant condition” appears in all of the claims of the ‘501 patent. For
example, claim 1 of the ‘501 patent provides:
A method for enabling a first user to interact with other users in a virtual space,
each user of the first user and the other users being associated with a three
dimensional avatar representing said each user in the virtual space, the method
comprising the steps of:
customizing, using a processor of a client device, an avatar in response to
input by the first user;
receiving, by the client device, position information associated with fewer
than all of the other user avatars in an interaction room of the virtual
space, from a server process, wherein the client device does not receive
position information of at least some avatars that fail to satisfy a
participant condition imposed on avatars displayable on a client device
display of the client device;
‘501, D. 62-5 at 22. The term “condition” appears in several of the claims of the ‘998 patent.
For example, claim 1 of the ‘998 patent provides, in part:
A method for displaying interactions of a local user avatar of a local user and a
plurality of remote user avatars of remote users interacting in a virtual
environment, the method comprising: receiving, at a client processor associated
with the local user, positions associated with less than all of the remote user
avatars in one or more interaction rooms of the virtual environment, wherein the
client processor does not receive position information associated with at least
some of the remote user avatars in the one or more rooms of the virtual
environment, each avatar of the at least some of the remote user avatars failing to
satisfy a condition imposed on displaying remote avatars to the local user;
‘998, D. 62-6 at 22. The terms “participant condition” and “condition” do not appear in the
specification of the Patents-in-Suit. Nor do these terms appear in any of the claims of the earlier
filed patents.
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In brief, the parties’ dispute centers on whether “a condition” may be set by the server.
Worlds does not dispute that a condition may be set by the client, but argues that the condition
may be set by the server as well. D. 68 at 17. Worlds contends that, contrary to the Defendants’
proposed construction, nothing in the patents and specification suggests “that the client must
‘set’ anything, or that any setting must be made ‘by the client,’” D. 62 at 26, or that the patentees
sought to give “condition” or “participant condition” any special meaning inconsistent with the
ordinary understanding of those terms. Id. at 25. Worlds further argues that its proposed
constructions reflect the “dictionary-based meanings” of the words and captures the words “plain
and ordinary meanings.” Id. at 25; see also D. 146 at 5 (noting that “[a]ccording to the IBM
Dictionary of Computing, a ‘condition’ is ‘[a]n expression in a program or procedure that can be
evaluated as either true or false when the program or procedure is running’” (citation omitted)).
In contrast, the Defendants argue that nothing in the specification suggests that the condition can
be set by the server. D. 69 at 20-22.
It is not disputed that the “condition” limitations at issue here concern “what information
the server will send to each client.” D. 63 at 25. The Defendants further concede that
“[a]lthough the specification gives only a few examples of conditions that may be imposed on
avatars displayable on a client device display, [they] [do] not seek to limit the types of conditions
that may be used.” D. 69 at 22. Indeed, the specification clearly contemplates that the client
“‘might have a way to filter out avatars on other variables in addition to proximity.’” Id.
(emphasis in original) (quoting ‘690, D. 62-2 at 10) (explaining that “user A might have a way to
filter out avatars on other variables in addition to proximity, such as user ID”). Instead, the
Defendants argue that the context of the claims and the specification indicates that the conditions
must be set by the client. D. 63 at 25-27. For example, the Defendants point out that it is “the
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client” that “may set a value of N’, which is less than N, and send that value to the server” and
that it is “the client” that “may send specific user IDs to the server to identify specific avatars
that the client wants to block (so that the client does not receive any position information for
such avatars) because those avatars are ‘unfriendly.’” Id. at 27 (citations omitted).
All of the claims of the Patents-in-Suit require that the client receive position information
of “fewer than all” or “less than all” of the other users avatars. Specifically, the claims of the
‘501 and ‘998 patents require that the client device receive “position information associated with
fewer than all of the other user avatars.” See ‘501, D. 64-4 at 23. While the claims of the ‘690,
‘558 and ‘856 patents require the client to receive positions for “less than all” of the other users.
See ‘690, D. 62-2 at 17. The claims of the ‘501 and ‘998 patents, at issue here, then further
require that “at least some” of the avatars for which the client does not receive position
information “fail to satisfy” “a condition” or “a participant condition.” See ‘501, D. 64-4 at 23.
Claim 1 of ‘501 details, for example, that “the client device” receives “position information”
from the “server process” and that “the client device does not receive position information of at
least some avatars that fail to satisfy a ‘participant condition.’” Id. Claim 1 does not explicitly
indicate whether “the server process” or the “client device” imposes the condition, id., and the
specification does suggest that the server has the ability to filter avatars in order to determine the
other avatars a user will see. See, e.g., ‘690, D. 62-2 at 10 (explaining the “‘crowd control’
function”). Nevertheless, read in context, the “at least some” language appears to represent an
additional limitation – beyond the selection of the N avatars by the server – to determine whether
or not avatar position information will be sent to the client.
The Court agrees with the Defendants, therefore, that the “conditions” constitute
additional limits and that in the ‘501 and ‘998 patents: “(1) the client receives position
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information for less than all of the other users’ avatars, and (2) at least some, but not necessarily
all, of the avatars for which the client does not receive position information are ones that failed to
satisfy a ‘participant condition’ or ‘condition.’” D. 63 at 25-26. The “conditions” contemplated
in the ‘501 and ‘998 patents then must be distinct from the server conditions described in the
specification and are properly construed to be consistent with the user or client conditions
contemplated by the specification, including user ID and “other variables in addition to
proximity.” ‘690, D. 62-2 at 10. And while the specification explicitly considers that there may
be a wide range of variables that a client might set, nothing in the patent record suggests that the
server will set these additional conditions.
Accordingly, the Court construes the terms “participant condition” and “condition” to
mean “a condition set by the client.”2
D. “Programmed to Limit the Number of Remote User Avatars Shown on the
Graphic Display”
Term Worlds’s Proposed
Construction
Activision’s Proposed
Construction
programmed to limit the
number of remote user
avatars shown on the
graphic display
No construction necessary programmed to restrict the number
of remote user avatars shown on
the graphic display to a maximum
number of avatars allowed
This term appears in claims 11-15 of the ‘998 patent. ‘998, D. 64-5 at 23. These claims
address the ways in which the system limits the avatars displayed:
11. The system according to claim 2, wherein the first processor is further
programmed to limit the number of remote user avatars shown on the graphic
2 Because the Court adopts Defendants’ proposed construction, the Court need not
address the Defendants’ separate argument that the terms are indefinite under 35 U.S.C. § 112,
¶ 2. Energizer Holdings v. Int’l Trade Comm’n, 435 F.3d 1366, 1370 (Fed. Cir. 2006) (noting
that “[a] claim that is amenable to construction is not invalid on the ground of indefiniteness”).
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display based on the proximity of the remote user avatars relative to the local user
avatar.
12. The system according to claim 2, wherein the first processor is further
programmed to limit the number of remote user avatars shown on the graphic
display based on the orientation of the remote user avatars relative to the local
user avatar.
13. The system according to claim 2, wherein the first processor is further
programmed to limit the number of remote user avatars shown on the graphic
display based on computing resources available to the local user graphic display.
14. The system according to claim 2, wherein the first processor is further
programmed to limit the number of remote user avatars shown on the graphic
display based on a selection made by the local user.
15. The system according to claim 14, wherein the selection is independent of the
relative position of the local avatar and the remote user avatars not shown on the
graphic display.
Id.
Here, the Defendants argue that the phrase “limit the number,” which is contained in the
disputed phrase, “should be construed to mean ‘restrict the number . . . to a maximum number . .
. allowed.’” D. 69 at 17.3 The Defendants contend that the ordinary meaning of “limit the
number” necessarily “imposes a maximum number limit” in to the claim. Id. Worlds argues,
however, that claims 11-15 of ‘998 are particularly “clear, precise, and easily understood” and
that “[e]verything in these claims suggests that the ‘limit’ applies in the express manner
disclosed.” D. 68 at 20.
3 To the extent that the Defendants also argue that the word “limit” is consistent with the
word “restrict,” D. 63 at 30-31, the Court agrees with Worlds that “[s]wapping one common,
ordinary word for its synonym adds no clarity to the meaning” and provides no basis for the
Defendants proposed substitution. D. 62 at 20 (noting that the word “restrict” does not appear in
the ‘998 patent at all while the word “limit” is used consistently throughout all of the Patents-In-
Suit). Regardless, in the Defendants’ Reply Claim Construction Brief, Defendants concede that
they do not actually “propose that ‘limit’ means ‘restrict,’” rather Defendants propose only “that
‘limit the number’ should be construed to mean ‘restrict . . . to the maximum number . . .
allowed.’” D. 69 at 17 n.6. Therefore, the Court will focus on this argument.
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The independent claim 2 details “[a] system for displaying interactions in a virtual world
among a local user avatar of a local user and a plurality of remote user avatars . . . .” ‘998, D.
64-5 at 23. Based on a plain reading, then, it is clear that the system will display the plurality of
remote user avatars. Each of the dependent claims, at issue here, then explicitly set forth precise
limiting criteria. The claims unambiguously provide that the limits are based on “‘the proximity
of the remote user avatars relative to the local user avatar’ (claim 11); ‘the orientation of the
remote user avatars relative to the local user avatar’ (claim 12); ‘computing resources available
to the local user graphic display’ (claim 13); ‘a selection made by the local user’ (claim 14); and
‘a selection made by the local user,’ wherein ‘the selection is independent of the relative position
of the local avatar and the remote user avatars not shown on the graphic displays’ (claim 15).”
D. 62 at 20-21 (quoting ‘998, D. 62-6 at 23). Nothing in these claims suggest that an additional
“maximum number” limit is necessary or implied. If, as in claim 12, the first processor limits the
number of avatars shown based on the “orientation of the remote user avatars relative to the local
user avatar” the only articulated limit to the system displaying a plurality of the remote user
avatars – no matter that number – is their orientation relative to the local use avatar. Nowhere
does the Court detect an additional “maximum number” limit.
Accordingly, the Court concludes that the phrase “programmed to limit the number of
remote user avatars shown on the graphic display” is unambiguous and that no construction is
necessary.
E. “Avatar”
Term Worlds’s Proposed
Construction
Activision’s Proposed
Construction
avatar graphical representation of a
user in three-dimensional form
a graphical representation of a
user
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The parties agree that the term “avatar” should be construed, in part, as “a graphical
representation of the user.” D. 62 at 27; D. 63 at 32. The parties dispute, however, whether the
term avatar is properly construed as “a graphical representation of the user in three-dimensional
form,” or whether the “graphical form” could be represented in two-dimensions. D. 62 at 27; D.
63 at 32. Review of the specification suggests, however, that the patentees sought to limit their
patent to three-dimensional virtual worlds and, correspondingly, three-dimensional avatars. For
example, the first sentences of the “Abstract” and the “Summary of the Invention” for each of
the Patents-In-Suit provide that “[t]he present invention provides a highly scalable architecture
for a three-dimensional graphical, multi-user, interactive virtual world system” and in the
“preferred embodiment” users would “interact in the three-dimensional, computer-generated
graphical space . . . .” ‘690, D. 62-2 at 1, 8. The specification also explains that the avatar’s
orientation “is needed for rendering because the avatar images are three-dimensional and look
different (in most cases) from different angles.” Id. at 10. Further, the specification provides an
illustration of a client screen display, describing the illustrative avatar as “a three dimensional
figure chosen by a user to represent the user in the virtual world.” Id. at 9. Moreover, as both
parties acknowledged at oral argument, the “crowd control” issue at the heart of this patent is an
issue implicated by the more complex three-dimensional system, as opposed to the twodimensional
systems that did not require as much strain on computing resources.
In response, the Defendants make three main arguments for their proposed construction.
First, the Defendants note that the ordinary meaning of avatar to a person of ordinary skill in the
art is not limited to a graphical representation in three-dimensional form. D. 63 at 32 (citing
Webster’s New World Dictionary of Computing Terms (6th ed. 1997), D. 64-12 at 4 (defining
avatar as “[a] graphical representation of a person that appears on the computer screen in an
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interactive game or communication system”); Microsoft Computer Dictionary (4th ed. 1999), D.
64-13 at 4 (defining avatar, in part, as “a graphical representation of a user” that is typically “a
generic picture or animation of a human of either gender, a photograph or caricature of the user,
a picture or animation of an animal, or an object chosen by the user to depict his or her virtualreality
‘identity’”)). As the Defendants acknowledge, however, a person of ordinary skill in the
art is not meant to determine the ordinary meaning of a disputed term in a vacuum. See D. 63 at
12. Rather, “[t]he person of ordinary skill in the art is deemed to read the claim term not only in
the context of the particular claim in which the disputed term appears, but in the context of the
entire patent, including the specification.” Phillips, 415 F.3d at 1313. The proper inquiry then is
to determine the meaning of avatar “to the ordinary artisan after reading the patent,” id. at 1321,
and the Court will focus its analysis on Defendants’ contextual arguments.
Second, the Defendants point out that particular claims of the ‘501 and ‘998 patents
“expressly require that the avatars are three-dimensional.” D. 63 at 32 (internal quotation mark
omitted). For example, claim 1 of ‘501 reads: “A method for enabling a first user to interact
with other users in a virtual space, each user of the first user and the other users being associated
with a three dimensional avatar representing said each user in the virtual space . . . .” D. 62-5 at
22. While claim 1 of ‘690 provides, for example: “A method for enabling a first user to interact
with other users in a virtual space, wherein the first user and the other users each have an avatar .
. . .” D. 62-2 at 17. The Defendants argue that “construing the term avatar to require a threedimensional
form” across all the Patents-In-Suit “would improperly render this language in the
claims of the ‘501 and ‘998 patents superfluous.” D. 63 at 32-33 (citing Bicon, Inc. v. The
Straumann Co., 441 F.3d 945, 950 (Fed. Cir. 2006); Merck & Co. v. Teva Pharm. USA, Inc., 395
F.3d 1364, 1372 (Fed. Cir. 2005)). Construing the term “avatar” to include two-dimensional
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graphical representations, however, would improperly read the three-dimensional limiting
language out of the patent record. Claims “must be read in view of the specification, of which
they are a part.” Phillips, 415 F.3d at 1315. And while the Court must be careful to distinguish
“between using the specification to interpret the meaning of a claim and importing limitations
from the specification into the claim,” id. at 1323, “where the specification makes clear at
various points that the claimed invention is narrower than the claim language might imply, it is
entirely permissible and proper to limit the claims.” Alloc, Inc. v. Int’l Trade Comm’n, 342 F.3d
1361, 1370 (Fed. Cir. 2003) (citing SciMed Life Sys., Inc. v. Advanced Cardiovascular Sys.,
Inc., 242 F.3d 1337, 1345 (Fed. Cir. 2001)).
Here, the specification consistently refers to a three-dimensional virtual world, ‘690, D.
62-2 at 1, 8, where the users choose a “three-dimensional figure” as their “avatar.” Id. at 9. The
“construction that stays true to the claim language and most naturally aligns with the patent’s
description,” Phillips, 415 F.3d at 1316, is, therefore, “a graphical representation of the user in
three-dimensional form.” See SanDisk Corp. v. Memorex Products, Inc., 415 F.3d 1278, 1285
(Fed. Cir. 2005) (noting that “[a] claim construction that excludes a preferred embodiment,
moreover, “‘is rarely, if ever, correct’”) (citing Vitronics, 90 F.3d at 1583). Another construction
would improperly divorce the claim “from the context of the written description.” Cf. Nystrom
v. Trex Co. Inc., 424 F.3d 1136, 1144-45 (Fed. Cir. 2005); see also Curtiss-Wright Flow Control
Corp. v. Velan, Inc., 438 F.3d 1374 (Fed. Cir. 2006) (rejecting district court’s broad construction
of the term “adjustable” because it placed too much emphasis on the ordinary meaning without
adequate grounding within the context of the specification).
Third, and finally, the Defendants argue that “the term ‘three-dimensional’ is used in the
specification to refer to an avatar that is actually comprised of multiple two-dimensional panels,”
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which the Defendants contend shows that – if based solely on the specification – a proper
construction of the term avatar “would be a graphical representation made from two-dimensional
panels that looks different from different angles.”4 D. 63 at 33 (quoting ‘690, D. 62-2 at 10
(explaining that “[t]he orientation is needed for rendering because the avatar images are threedimensional
and look different (in most cases) from different angles. . . . n a simple
embodiment, each avatar image comprises M panels (where M is greater than two with eight
being a suitable number) and the i-th panel is the view of the avatar at an angle of 360*i/M
degrees”)); see also ‘690, D. 62-2 at 11 (explaining that “[t]he avatars in fixed avatar image
database or custom avatar images database contain entries which are used to render the[] avatars.
A typical entry in the database comprises N two-dimensional panels, where the i-th panel is the
view of the avatar from an angle of 360*i/N degrees”). The specification language relied on by
the Defendants explicitly states, however, that even in a “simple embodiment” “the avatar
images are three-dimensional” and explains that when the “three-dimensional” “avatar images”
are rendered the “simple embodiment” comprises at least three panels “with eight being a
suitable number.” ‘690, D. 62-2 at 10. The specification makes clear then that even a simple
embodiment requires at least three panels. The specification also explains that the avatar
database contains entries that are used to render the avatars and that some of these entries are
comprised of “N two-dimensional panels.” Id. at 11. The specification only states, however,
that these entries are used to render the avatars, the avatars themselves are consistently described
as “three-dimensional” images. See id.
Accordingly, the Court construes the term “avatar” to mean “a graphical representation of
the user in three-dimensional form.”
4 Defendants nevertheless argue that when avatar is construed in accordance with its
ordinary meaning it means “a graphical representation of a user.” Id. at 33-34.
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F. “Client Process” / “Server Process”
Term Worlds’s Proposed
Construction
Activision’s Proposed
Construction
client process a program executed, stored, or
accessible on a user’s
computer to provide access to
a server
a program being executed by a
user’s computer that receives
services from a server
server process a program executed, stored, or
accessible by one or more
computers that provide one or
more services to users of
computers across a network
a program being executed by a
computer that provides services to
a client
The dispute regarding the terms “client process” and “server process” concerns the proper
construction of the word “process.” The question is whether a “client process” or a “server
process” refers to: (1) a program being executed; or (2) a program executed, stored, or
accessible. In other words, the question is whether a program must be in the state of being
executed to be considered a “process.”
Worlds argues that “to qualify as a ‘client process’ or a ‘server process,’ a program . . .
must only be capable of being executed (e.g., ‘executed, stored, or accessible,’)” and contends
that its construction is consistent with the ordinary meaning of “process.” D. 62 at 22 (emphasis
in original); see D. 68 at 24 (citing The IEEE Standard Dictionary of Electrical and Electronics
Terms (6th ed. 1996), D. 68-2 at 3 (defining “process” to mean “[a]n executable unit managed by
an operating system scheduler”)). The Defendants counter though that under its ordinary
meaning “‘process’ refers to a software program that is being executed on a processor” and that
Worlds’s construction improperly equates “process” with “software.” D. 63 at 34; see also D.
64-14 at 4, The Dictionary of Computer Graphics and Virtual Reality (2d ed. 1995) (defining
“process” as “a program while being executed, usually as one of several in a multiprogramming
environment”).
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In support of their proposed constructions, the parties rely upon the same language from
the specification. D. 62 at 22-23; D. 63 at 34. The relevant section reads:
A person of ordinary skill in the art of computer programming will also
understand that where a process is described with reference to a client or server,
that process could be a program executed by a CPU in that client or server system
and the program could be stored in a permanent memory, such as a hard drive or
read-only memory (ROM), or in temporary memory, such as random access
memory (RAM). A person of ordinary skill in the art of computer programming
will also understand how to store, modify and access data structures which are
shown to be accessible by a client or server.
‘690, D. 64-1 at 10. Worlds argues that this language should be read as defining “client process”
and “server process” broadly and reads the passage as indicating that the patentees viewed the
“client process” and “server process” as flexible – as “a program executed by a CPU” or as a
program “stored in a permanent memory.” D. 62 at 22-23. The Court agrees with the
Defendants, however, that, under a plain reading, the description of how “the program could be
stored” is only meant to refer to the program just referenced. ‘690, D. 64-1 at 10; D. 69 at 18-19.
Therefore, the above section only confirms that “process could be a program executed by a
CPU” and that the “program executed by a CPU” could be stored in “permanent memory” or in
“temporary memory.” ‘690, D. 64-1 at 10. Nevertheless, the Court does not read the cited
passage as dispositive to the meaning of the term since it provides only that a process “could be a
program executed by a CPU.” Id. The passage is, therefore, only illustrative of one example of
what a process “could be,” but does not necessarily disallow that a process could also be stored
or accessible. The Court, therefore, examined other claims and the rest of the specification for
guidance.
On this point, the Defendants argue that the Patents-In-Suit use the words “process,”
“processor,” “software program” and “program stored” in distinct ways, D. 63 at 35, and that the
use of the word “process” in the claims makes clear that a program that stored is different than a
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“process.” D. 69 at 19. Specifically, the Defendants point to claim 4 of ‘558, which reads, in
part:
A machine-readable medium having a program stored in the medium, the program
enabling a plurality of users to interact in a virtual space, wherein each user of the
plurality of users is associated with a different client process on a different
computer, wherein each client process has an avatar associated with said each
client process, and wherein said each client process is configured for
communication with a server process, wherein the program comprises instructions
for: (a) monitoring, by said each client process, a position of the avatar associated
with said each client process; (b) transmitting, by said client process to the server
process, the position of the avatar associated with said each client process;
‘558, D. 64-2 at 19. The Defendants argue that claim 4 of ‘558 makes clear that: (1) “a
program” is “stored” in the medium and (2) this stored program comprises the instructions for
the “client process” to carry out (e.g.., “monitoring,” “transmitting,” etc.). D. 69 at 19.
Therefore, the Defendants argue that “[t]he program is what is stored in memory” and “[t]he
process is the active execution of the program by a computer.” Id. This argument is persuasive
in so far as the text cited above does refer to a client process in its active state and to a stored
program. Like the first passage cited, however, it is not clear that the above section requires the
client process to be an active program at all times.
While the word “process” is often used in an active context throughout the specification,
see, e.g., ‘690, D. 62-2 at 8 (explaining that “where many client machines or processes are
communicating with each other in real-time through the server, several problems arise” and
noting that “n order that the view can be updated to reflect the motion of the remote user’s
avatars, motion information is transmitted to a central server process which provides positions
updates to client processes for neighbors of the user at that client process. The client process also
uses an environment database to determine which background objects to render as well as to
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limit the movement of the user’s avatar”), the patent never explicitly disallows the alternate
“capable of being executed” construction of “client process” and “server process.”
In contrast, the “Abstract” and the “Summary of the Invention” provides that “n a
preferred embodiment a plurality of users interact in the three-dimensional, computer-generated
graphical space where each user executes a client process to view a virtual world from the
perspective of that user.” See, e.g., ‘690, D. 62-2 at 1, 8. The Court reads this language as
allowing for the possibility of a non-executing “client process.” If the “client process” was only
“a program being executed” it would be circular to say that the user “executes” a “program being
executed by the user.” This language makes eminently more sense if the user executes the
program that is “capable of being executed” and is otherwise “stored, or accessible on the user’s
computer.”
Accordingly, the Court construes the term “client process” to mean “a program executed,
stored, or accessible on a user’s computer to provide access to a server” and construes the term
“server process” to mean “a program executed, stored, or accessible by one or more computers
that provide one or more services to users of computers across a network.”
G. “Synchronously Disseminating . . . Positions”
Term Worlds’s Proposed
Construction
Activision’s Proposed
Construction
synchronously
disseminating . . .
positions
No construction necessary
Or, alternatively,
Transmitting in a manner that
is synchronized or coordinated
Indefinite under 35 U.S.C. § 112,
¶ 2
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Claims 9 and 18 of the ‘690 patent contain the term “synchronously disseminating.” For
example, claim 9 provides:
A method for operating a server to enable a plurality of users to interact in a
virtual space, wherein each user has a computer associated therewith, wherein
each computer has a client process associated therewith, wherein each client
process has an avatar associated therewith, wherein the server has a process
associated therewith, and wherein each client process is in communication with
the server process, comprising:
(a) receiving, from each client process by the server process, data
indicating a position of the avatar associated with the client process; and
(b) synchronously disseminating less than all of the positions of the
avatars not associated with a particular client process to each of the other
client processes so that the particular client process can determine from
the positions a set of avatars that are to be displayed.
D. 62-2 at 17.
In Nautilus, the Supreme Court recently clarified “the proper reading of the [Patent Act’s]
clarity and precision demand.”5 Nautilus, 134 S. Ct. at 2124. Overturning the previous
“insolubly ambiguous” standard, the Supreme Court held “that a patent is invalid for
indefiniteness if its claims, read in light of the specification delineating the patent, and the
prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the
scope of the invention.” Id. “The definiteness requirement, so understood, mandates clarity,
while recognizing that absolute precision is unattainable.” Id. at 2129. “The Supreme Court
explained that a patent does not satisfy the definiteness requirement of § 112 merely because ‘a
court can ascribe some meaning to a patent’s claims.’” Interval Licensing LLC v. AOL, Inc.,
766 F.3d 1364, 1371 (Fed. Cir. 2014) (quoting Nautilus, 134 S. Ct. at 2130). Rather, “[t]he
5 The parties requested, and were granted, the opportunity to submit supplemental briefs
addressing the impact of Nautilus in this case.
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claims, when read in light of the specification and the prosecution history, must provide
objective boundaries for those of skill in the art.” Id.
Here, the Defendants argue that the term “synchronously disseminating” does not have
any “ordinary meaning” and, in fact, may have different meanings depending on its context. D.
63 at 36. They cite to a variety of dictionaries to show that “‘synchronously disseminating’
could mean disseminating positions (1) at the same time, (2) at equal time intervals, (3) with a
predictable time relationship, (4) upon the occurrence of a specific event, (5) only after a specific
activity is completed, (6) at the same rate while maintaining a desired phase relationship, or (7)
one exchange at a time.” D. 69 at 28; see also D. 63 at 36 (quoting Webster’s II New College
Dictionary, D. 64-9 at 5 (defining “synchronous” to mean both “[h]appening at the same time”
and “[h]aving identical periods”)). The Defendants acknowledge that ambiguity of the term does
not necessarily render the term indefinite as long as the specification clarifies the meaning of the
term. D. 63 at 37 (noting that “[a]s a general matter, a claim that contains an ambiguous term is
not indefinite when the meaning of the term may be readily ascertained from the description in
the specification” (citing Energizer Holdings, Inc. v. Int’l Trade Comm’n, 435 F.3d 1366, 1369
(Fed. Cir. 2006)). They argue, however, that the specification does not provide clarity here. Id.
In response, Worlds argues that its construction reflects the ordinary, dictionary-based
meaning of the term that a person of ordinary skill in the art would understand. D. 68 at 25-26;
see D. 62-11 at 2, IBM Dictionary of Computing (defining “synchronous” as “[p]ertaining to two
or more processes that depend upon the occurrence of specific events such as common timing
signals”); D. 62-12 at 2, Computer Dictionary (defining “synchronous operation” as “[g]enerally,
any operation that proceeds under control of a clock or timing mechanism”); D. 62-13 at 2, The
IEEE Standard Dictionary (defining “synchronous” as “[a] mode of transmission in which the
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sending and receiving terminal equipment are operating continuously at the same rate and are
maintained in a desired phase relationship by an appropriate means”). Worlds also contends that
the patent “more than sufficiently discloses the scope and meaning of the term” so that a person
of ordinary skill in the art would understand the term to be consistent with Worlds proposed
construction. D. 62 at 34. For instance, Worlds notes that the specification “details the
mechanics of data transmissions across multiple client and server machines,” providing that:
where a client-server system is used for real-time exchange of information, such
as a distributed virtual reality network where users at client machines visually and
aurally interact with other users at other client machines, communication is much
more difficult, especially where the information is high-bandwidth data such as
audio streams, graphic images and image streams. One application of such a
client-server system is for game playing, where the positions and actions of each
user need to be communicated between all the players to inform each client of the
state changes (position, actions, etc.) which occurred at the other clients. The
server might maintain global state information and serve as a data server for the
clients as they request visual, program and other data as the game progresses.
D. 62 at 34-35 (emphases omitted) (quoting ‘690, D. 62-2 at 8); see also ‘690, D. 62-2 at 9
(addressing how the system works to communicate position information). Worlds argues that
this language from the specification provides the appropriate context to conclude that “[a]
method for operating a server to enable a plurality of users to interact in a virtual space,” ‘690,
D. 62-2 at 17, must occur in a “coordinated and synchronized” manner. See D. 62 at 34-35; D.
68 at 25. In contrast, the Defendants rely upon the specification’s use of the term
“asynchronously” to argue that the meaning of the claim term is ambiguous. The specification
provides that:
In rendering a view, client 60 requests the locations, orientations and avatar image
pointers of neighboring remote avatars from server 61 and the server’s responses
are stored in remote avatar position table 112. Server 61 might also respond with
entries for short object ID lookup table 110. Alternatively, the updates can be
done asynchronously, with server 61 sending periodic updates in response to a
client request or automatically without request.
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D. 62-2 at 11. The Defendants assert that this disclosure “is nonsensical” because “both
descriptions refer to updates made by a server in response to a client request” and, therefore, the
sections “shed[] no light on the meaning of ‘synchronously disseminating.’” D. 63 at 37.
After a careful review of the specification, the Court agrees with the Defendants that the
specification does not sufficiently clarify the meaning of the term. For synchronization to have
any reasonably certain meaning, see Nautilus, 134 S. Ct. at 2124, at the very least, it must be
apparent what is being synchronized to (e.g., timing signals or a clock). Here, it is unclear how
the data transmission is being synchronized and with what it is being coordinated. The sections
of the specification cited by Worlds indicate only the importance of the server and the client
communicating with each other, but do not assist in determining how this communication might
be “coordinated” and to what it would be “synchronized.” Moreover, the passage highlighted by
the Defendants indicates that asynchronous communications happen periodically, but provides
no guidance in determining how synchronous communications might happen.
Accordingly, the Courts concludes by clear and convincing evidence that the term
“synchronously disseminating . . . positions” is indefinite under 35 U.S.C. § 112, ¶ 2.
H. “Third User Perspective”
Term Worlds’s Proposed
Construction
Activision’s Proposed
Construction
third user perspective View from the perspective of
the user
Indefinite under 35 U.S.C. § 112,
¶ 2
The term “third user perspective” appears in claim 2 of the ‘998 patent, which provides,
in part:
switch between a rendering on the graphic display that shows the virtual world to
the local user from a third user perspective and a rendering that allows the local
user to view the local user avatar in the virtual world
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‘998, D. 62-6 at 22. It is not disputed that the claim describes a switch between two renderings:
(1) “a rendering . . . that shows the virtual world to the local user from a third user perspective”;
and (2) “a rendering . . . that allows the local user to view the local user avatar.” Id. The parties
also seem to agree that the latter rendering allows the user to view her own avatar. See D. 63 at
40 (noting that “it would be nonsensical to switch from an ‘out of body’ view to a view that
allows the local user to see his avatar”); D. 68 at 27 (noting that “the specification makes clear
that . . . an ‘out of body’ viewing corresponds to a view or ‘rendering that allows the local user to
view the local user avatar in the virtual world’”) (citations omitted). The Defendants argue,
however, that the term “third user perspective” is indefinite under 35 U.S.C. § 112, ¶ 2 because
“there is no way for a person of ordinary skill in the art to determine what perspective constitutes
a ‘third user perspective.’” D. 145 at 8.
In response, Worlds asserts that a person of ordinary skill in the art would understand the
term to mean “a view from the perspective of the user.” D. 146 at 7. And the specification does
explain that the preferred embodiment allows the user to view the virtual world “from the
perspective of that user.” ‘690, D. 62-2 at 8. For instance, the specification provides that:
In a preferred embodiment a plurality of users interact in the three-dimensional,
computer-generated graphical space where each user executes a client process to
view a virtual world from the perspective of that user.
Id. Worlds also argues that the term “third user perspective” is clearly shown in Figure 1 of the
specification:
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D. 62 at 29; see also ‘690, D. 62-2 at 3. The specification explains that:
FIG. 1 is an illustration of a client screen display 10 seen by one user in the chat
system. Screen display 10 is shown with several stationary objects (wall, floor,
ceiling and clickable object 13) and two ‘avatars’ 18. Each avatar 18 is a three
dimensional figure chosen by a user to represent the user in the virtual world.
Each avatar 18 optionally includes a label chosen by the user. In this example,
two users are shown: ‘Paula’ and ‘Ken’, who have chosen the ‘robot’ avatar and
the penguin avatar, respectively. Each user interacts with a client machine (not
shown) which produces a display similar to screen display 10, but from the
perspective of the avatar for that client/user. Screen display 10 is the view from
the perspective of a third user, D, whose avatar is not shown since D’s avatar is
not within D’s own view. Typically, a user cannot see his or her own avatar
unless the chat system allows ‘[out] of body’ viewing or the avatar's image is
reflected in a mirrored object in the virtual world.
‘690, D. 62-2 at 9. Worlds argues that this explanation “makes abundantly clear the term ‘third
user perspective’ means a ‘view from the perspective of the user’” or what is commonly
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35
understood to be a first-person view. D. 68 at 26. To be sure, the view in Figure 1, shown
above, is described as “the perspective of the third user.” It is not clear to the Court, however,
that the above passage actually defines “third user.” Rather, as the Defendants point out, the
description appears to refer “to a ‘third user’ simply because it has already referred to a first and
second user (i.e., the two users shown in the display).” D. 69 at 25. If the figure had shown four
users, it seems entirely possible that the specification would have said that “[s]creen display 10 is
the view from the perspective of a [fifth] user, D, whose avatar is not shown since D’s avatar is
not within D’s own view.” ‘690, D. 62-2 at 9.
Defendants further argue that the claim language itself shows that when the patentees
wanted to reference a “local user” they did so explicitly, and that “it makes no sense that the
patentees would claim a ‘third user perspective’ instead of simply claiming a ‘local user
perspective.’” D. 69 at 25; see, e.g., ‘998, claim 2, D. 64-5 at 23 (describing a “switch between a
rendering on the graphic display that shows the virtual world to the local user from a third user
perspective and a rendering that allows the local user to view the local user avatar in the virtual
world”). Based on a review of the claims and the specification, the Court agrees that it is not
clear that the patentees consistently use “third user” to mean “local user.” See, e.g., ‘998, D. 64-
5 at 23 (describing “a rendering that allows the local user to view the local user avatar in the
virtual world”). Moreover, the term “third user perspective” does not ordinarily hold the
customary meaning of, essentially, first-person view. In fact, based on its ordinary meaning and
when read in light of the specification, it seems equally likely that the term could refer to: (1) the
perspective of an avatar other than the local user; or (2) a third-person perspective. In the
context of the specific claim at issue, however, these definitions make little sense since claim 1
of the ‘998 patent explicitly refers to “a perspective of one of the remote user avatars” and since
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“third-person” perspective is the view described in the latter, undisputed portion of claim 2. See
‘998, D. 64-5 at 23.
Admittedly, Worlds construction could make sense in the context of claim 2, but it is at
odds with the patentees’ use of the terms “third user” and “local user” elsewhere in the
specification and is therefore not reasonably certain. See Nautilus, 134 S. Ct. at 2124. Without
more, the Court cannot convert the term “third user perspective” into, essentially, “first-person
view.” See id. (holding “that a patent is invalid for indefiniteness if its claims, read in light of
the specification delineating the patent, and the prosecution history, fail to inform, with
reasonable certainty, those skilled in the art about the scope of the invention”).
Given this ambiguity, the Court concludes by clear and convincing evidence that the term
“third user perspective” is indefinite as the patent record would not convey to one of skill in the
art with reasonable certainty the meaning of the term.
I. “Switch Between a Rending in which All of a Perspective View of a Local
User Avatar of the Local User is Displayed and a Rendering in which Less
than All of the Perspective View is Displayed”
Term Worlds’s Proposed
Construction
Activision’s Proposed
Construction
switch between a
rendering in which all of
a perspective view of a
local user avatar of the
local user is displayed
and a rendering in which
less than all of the
perspective view is
displayed
No construction necessary
Or, alternatively,
Switch between a graphical
representation in which all of a
local user’s field of view is
displayed, and a graphical
representation in which less
than all of a local user’s field
of view is displayed
Indefinite under 35 U.S.C. § 112,
¶ 2
The final disputed claim appears in claim 19 of the ‘998 patent, which provides, in part:
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switch between a rendering in which all of a perspective view of a local user
avatar of the local user is displayed and a rendering in which less than all of the
perspective view is displayed.
‘998, D. 62-6 at 23. Here, the Defendants argue that the patent does not make clear what the
term “perspective view” means, how “all of a perspective view is displayed” or how “less than
all of a perspective view is displayed” and, as a result, the term is indefinite under 35 U.S.C.
§ 112, ¶ 2. D. 63 at 40-41.
First, the Defendants argue that the term “perspective view” is ambiguous. Id. at 40. The
Had some difficulty downloading and copying so I hope most of it's there. Let me know what you think. Document is 239 pages.
REPRESENTATIVE CLAIM - CLAIM 4 OF U.S. PATENT NO. 7,181,690
1. A method for enabling a first user to interact with other users in a virtual
space, wherein the first user and the other users each have an avatar and a client
process associated therewith, and wherein each client process is in communication
with a server process, wherein the method comprises:
(a) receiving a position of less than all of the other users’ avatars from the
server process; and
(b) determining, from the received positions, a set of the other users’ avatars
that are to be displayed to the first user,
wherein steps (a) and (b) are performed by the client process associated with
the first user.
4. The method of claim 1, wherein step (1b) comprises
(b)(1) determining from the received positions an actual number of the other
users’ avatars;
(b)(2) determining a maximum number of the other users’ avatars to be
displayed; and
(b)(3) comparing the actual number to the maximum number to determine
which of the other users’ avatars are to be displayed
wherein steps (b)(1)–(b)(3) are performed by the client process associated
with the first user.
Case: 21-1990 Document: 11 Page: 2 Filed: 08/04/2021
i
CERTIFICATE OF INTEREST
In accordance with Federal Circuit Rule 47.4(a) and (b), counsel for
Appellant Worlds Inc. certifies the following:
1. Represented Entities (Fed. Cir. R. 47.4(a)(1)): Worlds Inc.
2. The real party in interest (Fed. Cir. R. 47.4(a)(2)): None/Not
Applicable
3. Parent Corporations and Stockholders (Fed. Cir. R. 47.4(a)(3)):
None/Not Applicable
4. Legal Representatives (Fed. Cir. R. 47.4(a)(4)):
Alan A. Wright, Gregory A. Krauss, Donald L. Jackson, Walter D.
Davis. Jr. of DAVIDSON BERQUIST JACKSON & GOWDEY, LLP;
Max L. Tribble, Chanler Langham, Ryan Caughey, Brian D.
Melton, Joseph S. Grinstein, Sandeep Seth of SUSMAN GODFREY
LLP; and
Joel R. Leeman, Jack C. Schecter, Meredith L. Ainbinder of
SUNSTEIN LLP
5. Statement of Related Cases (Fed. Cir. R. 47.4(a)(5) and 47.5)
(Fed. Cir. R. 47.5(a)):
(1) Worlds Inc. v. Bungie, Inc., Case Nos. 2017-1481, 2017-1546, and
2017-1583 (consolidated).
Case: 21-1990 Document: 11 Page: 3 Filed: 08/04/2021
ii
(2) September 7, 2018.
(3) Chief Judge Prost, Circuit Judge O’Malley, and Circuit Judge
Taranto.
(4) Worlds Inc. v. Bungie, Inc., 903 F.3d 1237 (Fed. Cir. 2018).
(Fed. Cir. R. 47.4(b)):
Worlds Inc. v. Microsoft Corporation, 6:20-cv-00872 (W.D. Tex.)
Microsoft Corporation v. Worlds Inc., IPR2021-00277 (PTAB)
6. Organizational Victims and Bankruptcy Cases (Fed. Cir. R.
47.4(a)(6)):
None/Not Applicable
August 4, 2021 /s/ wayne m. helge
WAYNE M. HELGE
DAVIDSON BERQUIST JACKSON
& GOWDEY, LLP
8300 Greensboro Drive, Suite 500
McLean, VA 22102
(571) 765-7700
whelge@dbjg.com
Counsel for Appellant Worlds Inc.
Case: 21-1990 Document: 11 Page: 4 Filed: 08/04/2021
iii
TABLE OF CONTENTS
CERTIFICATE OF INTEREST .......................................................................... i
TABLE OF CONTENTS ................................................................................... iii
TABLE OF AUTHORITIES ............................................................................... v
STATEMENT OF RELATED CASES ........................................................... viii
I. JURISDICTIONAL STATEMENT .......................................................... 1
II. STATEMENT OF THE ISSUES .............................................................. 1
III. STATEMENT OF THE CASE ................................................................. 3
A. Preliminary Statement ..................................................................... 3
B. The Development of Virtual World Technology By
Worlds Led to the Innovations Disclosed in its Patents ................. 3
C. Problems with Prior Computer Network Architectures
for Three-Dimensional Virtual Worlds ........................................... 4
D. The Patents-In-Suit Disclose and Claim a Novel
Client-Server Architecture .............................................................. 7
E. The Six IPRs Filed Against the Patents-In-Suit and
Activision’s Role in Those IPRs ................................................... 12
F. The District Court’s Ruling on Patent-Ineligible
Subject Matter ............................................................................... 14
IV. SUMMARY OF THE ARGUMENT ...................................................... 21
V. ARGUMENT ........................................................................................... 23
A. Standard of Review ....................................................................... 24
B. Step One: Worlds’ Patents Are “Directed To” a Patent-
Eligible Improvement to a Problem Specific to
Computer-Based Virtual Worlds ................................................... 25
Case: 21-1990 Document: 11 Page: 5 Filed: 08/04/2021
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1. Worlds’ Claims Focus on Specific Improvements in
Client-Server Architecture for Three-Dimensional Virtual
Worlds, Addressing Problems Specifically Arising in
Three-Dimensional Virtual Worlds ......................................... 26
2. The District Court Erred in Ruling the Claims “Directed
To” a Patent-Ineligible Abstract Idea ...................................... 29
a) The District Court Erred in Ruling the Claims Directed
to the Abstract Idea of “Filtering” ...................................... 32
b) The District Court Erred By Failing to Account for
This Court’s Precedent Directed to Claims Necessarily
Rooted in Computer Technology ........................................ 34
3. Properly Considered, Worlds’ Patents Are “Directed To”
a Patent-Eligible Improvement to a Problem Unique to
Computer-Based Virtual Worlds, and Satisfy Step One
Under This Court’s Precedent .................................................. 41
C. Step Two: The Asserted Claims Include an Inventive
Concept .......................................................................................... 41
1. The Recitations in Worlds’ Claims Impart Novelty and
Are Not “Well Understood, Routine, and Conventional” ....... 42
2. The District Court’s Step Two Analysis Also Ran Afoul
of Summary Judgment Standards ............................................ 43
3. The District Court’s Step Two Analysis was also Based
on an Erroneous Analysis of Precedent ................................... 47
4. The Record Evidence and This Court’s Precedent
Confirm that Worlds’ Claims Satisfy Step Two ...................... 53
VI. CONCLUSION AND RELIEF REQUESTED ....................................... 53
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v
TABLE OF AUTHORITIES
Page(s)
Cases
Accenture Global Servs., GmbH v. Guidewire Software, Inc.,
728 F.3d 1336 (Fed. Cir. 2013) ................................................................ 20
Alice Corp. v. CLS Bank Int’l,
573 U.S. 208 (2014) ................................................................................. 22
Alliance of Auto. Mfrs. v. Gwadosky,
430 F.3d 30 (1st Cir. 2005) ................................................................ 16, 43
Amdocs (Israel) Ltd. v. Openet Telecom, Inc.,
841 F.3d 1288 (Fed. Cir. 2016) ................................................................ 48
Ancora Techs., Inc. v. HTC America, Inc.,
908 F.3d 1343 (Fed. Cir. 2018) ................................................................ 28
Anderson v. Liberty Lobby, Inc.,
477 U.S. 242 (1986) ................................................................................. 24
Bascom Global Internet Servs., Inc. v. AT&T Mobility LLC,
827 F.3d 1341 (Fed. Cir. 2016) ......................................................... passim
Berkheimer v. HP Inc.,
881 F.3d 1360 (Fed. Cir. 2018) .......................................................... 24, 41
Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc.,
880 F.3d 1356 (Fed. Cir. 2018) ......................................................... passim
County of Los Angeles v. Davis,
440 U.S. 625 (1979) ................................................................................. 44
Data Engine Technologies LLC v. Google LLC,
906 F.3d 999 (Fed. Cir. 2018) .................................................................. 28
DDR Holdings, LLC v. Hotels.com, L.P.,
773 F.3d 1245 (Fed. Cir. 2014) ......................................................... passim
Ellis v. Fid. Mgmt. Tr. Co.,
883 F.3d 1 (1st Cir. 2018) ........................................................................ 24
Enfish, LLC v. Microsoft Corp.,
822 F.3d 1327 (Fed. Cir. 2016) .................................................... 37, 40, 41
Case: 21-1990 Document: 11 Page: 7 Filed: 08/04/2021
vi
Finjan, Inc. v. Blue Coat Systems, Inc.,
879 F.3d 1299 (Fed. Cir. 2018) ................................................................ 28
Fuzzysharp Techs. Inc. v. Intel Corp.,
2013 WL 5955668 (N.D. Cal. Nov. 6, 2013) ..................................... 17, 39
Fuzzysharp Techs. Inc. v. Intel Corp.,
595 F. App’x 996 (Fed. Cir. 2015) ........................................................... 39
Glasswall Solutions Ltd. v. Clearswift Ltd.,
754 F. App’x 996 (Fed. Cir. 2018) ........................................................... 20
Ineos USA LLC v. Berry Plastics Corp.,
783 F.3d 865 (Fed. Cir. 2015) .................................................................. 24
Intellectual Ventures II LLC v. JP Morgan Chase & Co.,
2015 WL 1941331 (S.D.N.Y. Apr. 28, 2015) .............................. 17, 39, 48
Johnson v. Gordon,
409 F.3d 12 (1st Cir. 2005) ...................................................................... 24
McRO, Inc. v. Bandai Namco Games Am. Inc.,
837 F.3d 1299 (Fed. Cir. 2016) ................................................................ 38
O’Connor v. Donaldson,
422 U.S. 563 (1975) ................................................................................. 44
Packet Intelligence LLC v. NetScout Systems, Inc.,
965 F.3d 1299 (Fed. Cir. 2020) .............................................. 30, 31, 36, 41
Pérez–Cordero v. Wal–Mart P.R., Inc.,
656 F.3d 19 (1st Cir. 2011) ...................................................................... 25
Precision Instrument Mfg. Co. v. Automotive Co.,
324 U.S. 806 (1945) ................................................................................. 45
SRI Int’l, Inc. v. Cisco Systems, Inc.,
930 F.3d 1295 (Fed. Cir. 2019) ................................................................ 28
TecSec, Inc. v. Adobe Inc.,
978 F.3d 1278 (Fed. Cir. 2020) ......................................................... passim
Tollett v. City of Kemah,
285 F.3d 357 (5th Cir. 2002) .................................................................... 44
Two-way Media, Ltd. v. Comcast Cable Comms. LLC,
874 F.3d 1329 (Fed. Cir. 2017) .................................................... 19, 20, 51
Case: 21-1990 Document: 11 Page: 8 Filed: 08/04/2021
vii
Uniloc USA, Inc. v. LG Elecs. USA, Inc.,
957 F.3d 1303 (Fed. Cir. 2020) .............................................. 29, 30, 31, 33
Visual Memory LLC v. NVIDIA Corp.,
867 F.3d 1253 (Fed. Cir. 2017) .......................................................... 28, 38
Walsh v. TelTech Sys., Inc.,
821 F.3d 155 (1st Cir. 2016) .................................................................... 24
Worlds Inc. v. Bungie, Inc.,
903 F.3d 1237 (Fed. Cir. 2018) .......................................................... 12, 13
Xiaoyan Tang v. Citizens Bank, N.A.,
821 F.3d 206 (1st Cir. 2016) .................................................................... 25
Statutes
28 U.S.C. § 1295(a)(1) .......................................................................................... 1
28 U.S.C. § 1338(a) .............................................................................................. 1
28 U.S.C. § 2107 ................................................................................................... 1
35 U.S.C. § 101 ............................................................................................. 1, 2, 3
35 U.S.C. § 102 ..................................................................................................... 2
35 U.S.C. § 103 ..................................................................................................... 2
35 U.S.C. § 315(b) ........................................................................................ 12, 45
35 U.S.C. § 315(e)(2) .......................................................................................... 47
Rules
Fed. R. Civ. P. 56(a) ........................................................................................... 24
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viii
STATEMENT OF RELATED CASES
In accordance with Federal Circuit Rule 47.5(a) and (b), Appellant states:
A prior appeal was taken by Worlds Inc. from adverse decisions related to
the Patents-In-Suit from the United States Patent and Trademark Office, Patent
Trial Appeal Board in IPR2015-01264, IPR2015-01319, and IPR2015-01321, and
heard by this Court in Worlds Inc. v. Bungie, Inc., Case Nos. 2017-1481, 2017-
1546, and 2017-1583 (consolidated). The panel included Chief Judge Prost,
Circuit Judge O’Malley, and Circuit Judge Taranto. This Court issued its decision
on September 7, 2018. The decision was reported in the Federal Reporter as
Worlds Inc. v. Bungie, Inc., 903 F.3d 1237 (Fed. Cir. 2018).
There are no other pending cases pending before this Court that will directly
affect or be directly affected by this Court’s decision in this appeal.
The following pending cases in the lower court or agency will directly
affect or be directly affected by this Court’s decision in this appeal:
- Worlds Inc. v. Microsoft Corporation, 6:20-cv-00872 (W.D. Tex.)
- Microsoft Corporation v. Worlds Inc., IPR2021-00277 (PTAB)
Case: 21-1990 Document: 11 Page: 10 Filed: 08/04/2021
1
I. JURISDICTIONAL STATEMENT
(a) The statutory basis for jurisdiction of the trial court was 28 U.S.C. §
1338(a).
(b) The statutory basis for jurisdiction of this Court to hear the appeal is 28
U.S.C. § 1295(a)(1).
(c) This appeal was timely filed in accordance with 28 U.S.C. § 2107 and
Federal Rule of Appellate Procedure 4(a), as the District Court entered a final
Judgment on April 30, 2021, and Worlds timely filed its Notice of Appeal on
May 28, 2021.
II. STATEMENT OF THE ISSUES
1. Whether the District Court erred in concluding that the representative
claim of the Patents-In-Suit was directed to an abstract idea under Step One of
Alice, instead of patent-eligible under 35 U.S.C. § 101, where that claim solves a
specific problem in the field of computer-based virtual worlds—how to enable a
server and a client to implement the virtual world for an increased number of users,
each with equipment having different capabilities—and is directed to a solution
having a specific computer network architecture with requirements on how the
server provides avatar position information to a client and how the client uses that
position information to render the virtual world.
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2. Whether the District Court erred by granting summary judgment under
35 U.S.C. § 101 despite Step Two evidence demonstrating that the combination
recited in the Representative Claim of the Patents-In-Suit was not well-known,
routine, and conventional, and the PTAB found the Representative Claim to be
patentable under 35 U.S.C. §§ 102 and 103 in an inter partes review in which
Activision was a real-party-in-interest.
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III. STATEMENT OF THE CASE
A. Preliminary Statement
This is an appeal from a summary judgment ruling entered in favor of
Appellees Activision Blizzard Inc., Blizzard Entertainment, Inc., and Activision
Publishing, Inc. (collectively, “Activision”) that each Asserted Claim of the Patents-
In-Suit is directed to patent-ineligible subject matter under 35 U.S.C. § 101.
Appellant Worlds Inc. (“Worlds”) seeks a de novo review of the District Court’s
ruling because it is predicated on legal error, fails to account for this Court’s
jurisprudence regarding the patent-eligibility of improvements to technology that
exist specifically in the realm of computer networks, and overlooks evidence that
clearly establishes a disputed material fact on Step Two in Worlds’ favor.
B. The Development of Virtual World Technology By Worlds Led to
the Innovations Disclosed in its Patents
In the mid-1990s, Worlds’ business involved the creation of computer
software enabling players to interact via internet-based, multiplayer, threedimensional
virtual worlds. Appx1492-1500; Appx1501, Appx1543-1545. Two
computer programs developed by Worlds—Worlds Chat and AlphaWorld—enabled
remote users to chat and interact, over the internet, in graphically-rich threedimensional
virtual environments. Appx1489. Released in 1995, Worlds Chat was
acclaimed in the press as “the hottest innovation the Internet will see this year,” and
it was deemed noteworthy for “the potential it brings to cyberspace.” Appx1496-
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4
1497. The San Francisco Examiner called Worlds Chat “one of the first examples
of virtual reality on the Internet.” Appx1492-1495. Worlds also drew the attention
of Steven Spielberg, who announced a partnership with Worlds and other entities to
“create a 3-D environment where hospitalized children can play and socialize with
each other.” Id.
In connection with the development of these products, four Worlds
employees explored how to make interactive three-dimensional virtual worlds
operate more efficiently across a network and discovered specific, novel network
architecture solutions that allowed many users to interact without the bottlenecks
and restrictions present in prior computer network architectures in that field.1
These specific improvements in network architecture solutions—previously
unknown to the virtual world industry—are the focus of the Patents-In-Suit, which
were and are assigned to Worlds, Inc.
C. Problems with Prior Computer Network Architectures for Three-
Dimensional Virtual Worlds
Prior to Worlds’ technical innovations, computer network architectures for
game systems included conventional peer-to-peer architectures, where a copy of
data common to all avatars—or three-dimensional graphical representations of the
1 A “computer network architecture” can be defined as the “logical
structure and the operating principles, including those concerning services,
functions, and protocols, of a computer network.” Appx1552.
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users2—populating the virtual world was maintained by each player’s own client
device. Appx0145 at 1:56-59. Each client device would broadcast its gameplay
information, such as its corresponding avatar’s position in the game, to all other
client devices over their shared network connection. Id. As discussed in the
specification of the Patents-In-Suit, the technical problem with such a conventional
peer-to-peer architecture was that it “limits the number of clients which can be
connected to the network, because the number of messages passing between clients
is on the order of the square of the number of clients.” Id. at 1:60-2:3.
An alternative to the conventional peer-to-peer architecture was a clientserver
architecture, which can alleviate some limitations of conventional peer-topeer
architectures. Id. at 1:42-55. In a conventional client-server architecture, the
server running a server process3 maintains global state information of all avatars
moving and interacting in the virtual world, and serves as a data server to receive
and distribute state information updates via messages exchanged with individual
client processes4 as the game progresses. Id. at 1:48-55. In a conventional client-
2 Appx0047 (construing “avatar” to mean “a graphical representation of the
user in three-dimensional form.”).
3 Appx0051 (construing “server process” to mean “a program executed,
stored, or accessible by one or more computers that provide one or more services
to users of computers across a network.”).
4 Appx0051 (construing “client process” to mean “a program executed,
stored, or accessible on a user’s computer to provide access to a server.”).
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server architecture for a virtual world, the positions and actions of each avatar need
to be communicated to all the other client processes. Id. But where the server
process is receiving and reporting real-time updates to all the client processes
accessing the virtual world, communication can still overtax the network capacity,
especially because in such virtual worlds the information can include highbandwidth
data such as audio streams, graphic images and image streams. Id. at
1:38-41, 1:42-48.
While it would be conceptually possible for the limitations of these
architectures to be mitigated, such as by limiting the number of players who could
play at a given time or by ensuring that each client and server has sufficient
processing capabilities to communicate and process updates for all players who
could enter the virtual world at a single time, such mitigation strategies placed
practical limits on the growth potential of a virtual world.
The purpose of Worlds’ invention was to improve the capability, efficiency,
and scalability of a client-server network architecture for a three-dimensional virtual
world. Appx0138 at Abst. (“The present invention provides a highly scalable
architecture for a three-dimensional graphical, multi-user, interactive virtual world
system.”); Appx0145 at 1:10-13; 2:17-20; 2:24-38.
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D. The Patents-In-Suit Disclose and Claim a Novel Client-Server
Architecture
The Worlds Patents-In-Suit are U.S. Patent Nos. 7,181,690 (the “’690
Patent”); 7,493,558 (the “’558 Patent”); 8,082,501 (the “’501 Patent”); and
8,145,998 (the “’998 Patent”) (collectively, the “Patents-In-Suit”).5 These patents
share a common specification and are all titled “System and Method for Enabling
Users to Interact in a Virtual Space.” Per the specification, these patents address the
disclosed problem present in implementing networked three-dimensional virtual
worlds: how to enable interaction among an uncertain number of remote users in a
three-dimensional world, given the restrictions in network capacity and varying
processing capabilities of client computers. Appx0145 at 1:14–2:20 (“While such a
system may have only one server, it typically has many clients.”); Appx0147 at
5:41-45 (disclosing that a user may use “a computer with less computer power than
the average machine” such that “tracking N avatars would make processing and
rendering of the virtual world too slow.”).6
The improvements disclosed in the Patents-In-Suit were directed to a clientserver
architecture for a virtual world and provided a more efficient and scalable
5 U.S. Patent No. 7,945,856 (the “’856 Patent”) was dropped as an asserted
patent from the District Court lawsuit on February 25, 2021. Appx1716-1719.
6 While all Patents-In-Suit share a common specification, citations to the
specification will be limited to the ’690 Patent, as the District Court focused its §
101 analysis on claim 4 of the ’690 Patent. See § III.F, infra.
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8
system for communication where many client systems are able to access the virtual
world simultaneously. Appx0138 at Abst. (“The present invention provides a
highly scalable architecture for a three-dimensional graphical, multi-user,
interactive virtual world system.”); Appx0145 at 2:17-20. Through the disclosed
architecture, the server communicates game information updates to user’s client
devices on a restricted basis to avoid both overloading the network with updates,
and to avoid overloading individual client devices, which process those updates to
render a view of the virtual world. See, e.g., Appx0146 at 3:41-44 (indicating that
scalability to “a large number of clients” requires the server to be “much more
discriminating as to what data is provided to each client[]”); Appx0147 at 5:41-45
(discussing measures to allow “a computer with less computing power than an
average machine” to participate in the virtual world). These mechanisms improved
the capabilities of the virtual world’s client-server architecture, and permitted the
number of virtual world occupants to increase relative to a prior art architecture that
provided all game updates to all client devices connected to the server.
In particular, the Patents-In-Suit allowed for increased participation in the
virtual world by, counterintuitively, placing restrictions at key locations in the
network architecture. Appx0146 at 3:44-46 (“In the example of FIG. 1, although a
status panel 17 indicates that six other avatars are present, many other avatars are
in the room, but are filtered out for crowd control.”) (emphasis added); Appx0147
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at 5:31-35 (discussing a “crowd control” function to ensure that a client and user do
not “get overwhelmed by the crowds of avatars likely to occur in a popular virtual
world.”). In the novel network architecture disclosed in the specification, a server
sends a client fewer than all positions of the other clients’ avatars (id. at 5:36-37),
and a client can choose conditions for which positions of other clients it will process
when playing the game and rending the virtual world (id. at 5:36-41).
These features are embodied in the Worlds claims, including dependent claim
4 of the ’690 Patent, reproduced below along with its respective independent claim
1:
Appx0154 at 19:31-43, 19:55-64. As recited in claim 1, step (a) is “performed by
the client process associated with the first user” and recites “receiving a position
of less than all of the other user’ avatars from the server process.” Step (b), also
performed by the client process, involves determining “a set of the other users’
avatars that are to be displayed to the first user.” And through claim 4’s steps, the
determining step of step (b) also includes accounting for the client process’s
“maximum number of the other users’ avatars to be displayed” and comparing
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this “maximum number” to the number of position updates received from the
server process. Claims 13 and 16 of the ’690 Patent, and claims 5 and 7 of the
’558 Patent include substantially similar features as those described above,
including the client process accounting for the “maximum number” of other
users’ avatars to display based on limited positions received from the server
process.7 Appx0155 at 21:6-19, 21:28-36, 21:43-22:23; Appx0176 at 21:58-
22:51.
Through these steps, the Worlds patents claim a technique for managing
network and processing loads on a client-server architecture to allow something
more than merely restricting additional users from accessing the virtual world
once a global limit is reached. Instead, the Worlds patents increase the number of
users who can participate in the virtual world by placing restrictions on what
position information is transmitted to each client process, and what position
information is processed by each client to render a view of the virtual world. Id.
Take for example a virtual world where 100 players wish to participate. A
server could provide position information regarding only ten of those 100 player
avatars to any individual player’s client device, such that sets of ten avatar
7 The asserted claims also cover other innovations, including: (1) avatar
customization (’501 Patent, claim 14), Appx0225 at 20:32-51; and (2) client-set
“conditions”/“participant conditions,” which affect which avatar updates are
selected by the server for transmission to client processes (’501 Patent, claim 14,
’998 Pat., claim 18), Appx0225 at 20:32-51, Appx0247-0248 at 20:45-21:5.
Case: 21-1990 Document: 11 Page: 20 Filed: 08/04/2021
11
positions can be sent to each of the other players’ client devices. Through this
mechanism, the server process is not sending updates on all 100 player avatars to
all 100 of the client devices, and instead can reduce network traffic by 90%.
Further, under this scenario, should the processing load to render ten avatars
exceed a particular client device’s processor capabilities, that client device’s
processor could set a local maximum number of other user avatars to display to a
value below ten, and compare this local maximum number against the position
updates sent by the server.
As a result, even if the server’s network limitations can support only ten
players in the game, and even if certain client devices can only render fewer than
ten updates, all 100 players can access the virtual world using Worlds’ invention.
Everyone plays. These specific improvements in client-server architecture may
not guarantee that Player 1 will interact with Player 100 at all times, but Players 1
and 100 may still access the virtual world and interact with a subset of other
players. Cf. Appx0147 at 5:62-67 (discussing measures to allow players to play
with friendly avatars). Additionally, the disclosed and claimed client-side
measures allow a user to access the virtual world via a client computer with a
less-powerful processor, as the client-side protocols for receiving and processing
position updates can prevent it from being overburdened. Appx0147 at 5:41-45;
Appx0154 at 19:55-64.
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E. The Six IPRs Filed Against the Patents-In-Suit and Activision’s
Role in Those IPRs
In May and June 2015, long after the expiration of Activision’s statutory
time bar to file an IPR against the Patents-In-Suit, third party Bungie, Inc. filed
six IPR petitions challenging the validity of the asserted claims of the same
Patents-In-Suit asserted against Activision. After uncovering a commercial
agreement between Bungie and Activision, Worlds requested additional discovery
from the PTAB into the Bungie-Activision relationship and asked the PTAB to
terminate these IPRs under 35 U.S.C. § 315(b) based on Activision’s status as a
time-barred party. See Worlds Inc. v. Bungie, Inc., 903 F.3d 1237, 1239-40 (Fed.
Cir. 2018). The PTAB refused to order the discovery, and instituted the IPRs
despite Worlds’ evidence of Activision’s RPI status. Id.
Ultimately, Worlds prevailed on the merits in three of the IPRs. In an IPR
challenging the ’690 patent, the PTAB found that claim 4, which the District
Court considered to be the representative claim for its § 101 inquiry (hereinafter,
“Representative Claim”), and claims 8, 13, and 16 of the ’690 patent were
patentable. Appx1383-1384. Similarly, in an IPR concerning the ’558 patent,
Worlds demonstrated that claims 5 and 7 were patentable over Bungie’s
challenges. Appx1386-1387. In an IPR concerning the ’998 patent, Worlds
demonstrated that claims 2, 3, 7, 8, and 11-18 of the ’998 patent were patentable
over Bungie’s challenges. Appx1389-1390. Neither Bungie nor Worlds appealed
Case: 21-1990 Document: 11 Page: 22 Filed: 08/04/2021
13
these final written decisions, and these claims are included among the Asserted
Claims at issue here.
Worlds also prevailed on the remaining three IPRs—one against the ’856
Patent, one against the ’501 Patent, and a second IPR against the ’998 Patent.
Although the PTAB initially issued final written decisions ruling challenged
claims unpatentable, Worlds appealed those three final written decisions to this
Court on both procedural grounds and the merits of the PTAB’s decisions. Based
on the evidence raised by Worlds at the PTAB regarding Bungie and Activision’s
commercial relationship, this Court held that “the Board was required to make
any factual determinations 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.” Worlds,
903 F.3d at 1246. Without addressing Worlds’ merits arguments, this Court
vacated and remanded the three appealed IPR decisions to the PTAB to consider,
inter alia, the merits of Worlds’ real-party-in-interest arguments. Id. at 1248.
On remand, the PTAB then ruled that Bungie’s IPRs could not be
maintained, as it found that Activision was a time-barred real-party-in-interest to
the IPRs. Appx1392-1395, Appx1436-1437. Accordingly, the PTAB terminated
the three remanded proceedings without issuing final written decisions. Id. Thus,
claims in each of the five Patents-In-Suit survived the IPR proceedings.
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14
Worlds’ litigation with Activision was stayed pending the outcome of these
IPRs. After the IPRs concluded and the stay was lifted by the District Court,
Activision admitted to the District Court that it was a real-party-in-interest to
Bungie’s IPRs in lieu of producing discovery on this issue. Appx1720-1726.
F. The District Court’s Ruling on Patent-Ineligible Subject Matter
On April 30, 2021, the District Court issued its Memorandum and Order
(“Order”) granting Activision’s motion for summary judgment and holding the
Asserted Claims8 of the Patents-In-Suit to be directed to patent-ineligible subject
matter under § 101.
Initially the District Court recognized that “the Patents-In-Suit resolve
bandwidth issues with multiplayer games through ‘multi-criteria filtering of
avatar position and state information, but at the client side and the server side,’
i.e., ‘crowd control.’” Appx0003. The District Court also observed that the
Asserted Claims “achieve crowd control by some form of filtering of information,
… but in slightly different ways: i.e., by ‘fewer than all’ in the ‘856 patent; a
“maximum number” in the ‘690 patent and ‘558 patent; and by “condition” in the
‘501 patent and the ‘998 patent.” Id.
8 The claims subject to the District Court’s Order are identified at
Appx0003. However, Worlds reduced the “Asserted Claims” on February 25,
2021. Appx1716-1719. For the purposes of this appeal, the “Asserted Claims”
include claims 4, 13, and 16 of the ’690 Patent, claims 5 and 7 of the ’558 Patent,
claims 14, 15, and 16 of the ’501 Patent, and claim 18 of the ’998 Patent. Id.
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The District Court then recounted details concerning the five Patents-In-
Suit (Appx0003-0007) before turning to the outcomes of the six IPRs attributable
to Bungie and Activision. Addressing the IPRs, the District Court acknowledged
that “[t]he PTAB determined that the petitioner did not demonstrate by a
preponderance of evidence that claims 4, 8, 13 and 16 of the ‘690 patent and
claims 5 and 7 of the ‘558 patent were invalid based on the evidence and
arguments presented in the proceedings.” Appx0007. The District Court also
noted that “the PTAB issued a Termination Vacating Institutions and Dismissing
Proceedings on Remand in IPR2015-01264 (related to ‘856 patent), IPR2015-
01319 (related to ‘501 patent) and IPR2015-01321 (related to ‘998 patent).” Id.
The District Court cited to cases issued from other district courts and the
U.S. Court of Federal Claims for its belief that “although not bound by its
findings or rulings, this Court may consider the PTAB findings as persuasive
authority in determining whether the Patents-In-Suit are patent eligible.”
Appx0008. Despite its earlier acknowledgement of the PTAB decisions affirming
patentability of the Representative Claim and other Asserted Claims, the District
Court was persuaded by and cited only to the PTAB’s vacated rulings, stating
“[a]lthough now vacated, the substance of the PTAB’s prior rulings serves to
support the Court’s analysis below that the client-side and server-side filtering of
position information is not inventive.” See Appx0008-0009 (citing Appx0538-
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0540 (PTAB’s Final Written Decision on the ‘856 patent); Appx0656-0657
(PTAB’s Final Written Decision on the ‘501 patent); Appx0721-0722 (PTAB’s
Final Written Decision on the ‘998 patent)); see also Appx0014 (identifying
claim 4 of the ’690 Patent as a “representative claim” and focusing on this claim
for its analysis).
The District Court acknowledged First Circuit law that states “n
resolving a motion for summary judgment, the Court scrutinizes the record in the
light most favorable to the summary judgment opponent and draws all reasonable
inferences to that party’s advantage.” Appx0010 (citing Alliance of Auto. Mfrs. v.
Gwadosky, 430 F.3d 30, 34 (1st Cir. 2005)). Despite this standard and its prior
recounting of the outcomes in the six IPRs, the District Court stated that its
conclusion of patent ineligibility was based on an “undisputed record.”
Appx0011.
At Step One of the two-step framework of Alice/Mayo, the District Court
asked “whether World’s patents are directed to patent-ineligible concepts, namely
the abstract idea of ‘filtering’ … which amounts to ‘crowd control’” or whether
“the claims are ‘directed to a novel client-server computer network architecture
for 3-D virtual worlds,’” as Worlds contended. Appx0015. Without closely
analyzing the language of the representative claim, the District Court held that
being directed to “‘a novel client-server computer network architecture for 3-D
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virtual worlds’ . . . alone does not convert the patents into patent-eligible
inventions.” Id.
Citing to Worlds’ prior discussions of “filtering” as an aspect of the
Asserted Claims, the District Court cited to Bascom Global Internet Servs., Inc. v.
AT&T Mobility LLC, 827 F.3d 1341, 1348 (Fed. Cir. 2016) and concluded that
“the claims do nothing more than recite a general client-server computer
architecture to perform routine functions of filtering information to address the
generic problem of crowd control.” Appx0015-0016 (quotation and citation
omitted).
Though the District Court did not account for this Court’s § 101 precedent
holding inventions “directed to” specific asserted improvements in computer
capabilities patent eligible under Step One, it did cite to older cases from district
courts involving “filtering.” The District Court noted that in Fuzzysharp Techs.
Inc. v. Intel Corp., No. 12-cv-4413, 2013 WL 5955668, at *13 (N.D. Cal. Nov. 6,
2013), a case that pre-dated Alice, “the court there held that the claims were
directed to an abstract idea as the patent purported to cover all applications of
such filtering in the field of 3D computer graphics.” Appx0016-17. Similarly,
the District Court looked to Intellectual Ventures II LLC v. JP Morgan Chase &
Co., No. 13-cv-3777, 2015 WL 1941331, at *8 (S.D.N.Y. Apr. 28, 2015),
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involving “a method for filtering a packet of information based upon the contents
of two or more such packets.” Appx0017 (citation omitted).
The District Court compared Worlds’ claims to “real-world maximum
capacity limits on elevators, at restaurants and other physical spaces typically
open to the public.” Id. And concluding its Step One analysis, the District Court
held that the other Asserted Claims were not less abstract than the Representative
Claim. Appx0017 n.1.
Turning to Step Two of the Alice/Mayo analysis, the District Court rejected
Worlds’ position that “the Patents-In-Suit teach a specific approach to a computer
network architecture that includes an inventive concept.” Appx0018. The
District Court relied on the same two district court cases, Fuzzysharp and
Intellectual Ventures II, that it looked to for Step One. The District Court
contended that “the claims lack limitation to any specific application, do not add
any steps other than conventional post-solution activity to the abstract formula
described.” Appx0018 (quotation and citation omitted). The District Court also
noted “that the method is to be used on conventional computer components does
not make the abstract formula patentable.” Id. (citation omitted).
Concerning this Court’s precedent, the District Court held that the Step-
Two Compliance found in “Bascom, 827 F.3d at 1350, does not warrant another
result here.” Appx0019 n.2. First, the District Court stated that the necessary,
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19
inventive concept in Bascom was “installation of a filtering tool at a specific
location, remote from the end-users, with customizable filtering features specific
to each end user” and then concluded that Worlds’ Representative Claim “cannot
be said to be as specific.” Id. The District Court reasoned Bascom was
distinguishable because, in the Worlds claims, “[w]hile the ‘filtering’ of the
maximum number of other users’ avatars to be displayed involves the client
process associated with the first user, no language in the claim suggests that this
is done through any sort of ‘customizable filtering features specific to each end
user,’ but rather through a generically stated determination of the maximum
number of the other users’ avatars to be displayed.” Id.
The District Court also held that “[t]he steps of the claims here use only
‘generic functional language to achieve the purported solution’ of filtering of
position information for crowd control.” Appx0019 (citing Two-way Media, Ltd.
v. Comcast Cable Comms. LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017)).
Distinguishing Two-way Media, the District Court held that none of the Asserted
Claims “are limited to ‘any specific form or implementation of filtering,’ … and
involve generic computer components.” Appx00019 (citing Appx1598,
Appx1604).
Without providing a direct citation of undisputed material facts for the
proposition and without noting the PTAB’s determination of patentability for the
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Representative Claim, the District Court held that “there is nothing in the ordering
of the steps in the claims (i.e., receiving, determining, comparing) that make them
inventive; the ‘steps are organized in a completely conventional way.’”
Appx0019 (citing Two-way Media, 874 F.3d at 1341 and Glasswall Solutions Ltd.
v. Clearswift Ltd., 754 F. App’x 996, 999 (Fed. Cir. 2018)).
The District Court then noted that “the restriction against patenting abstract
concepts cannot be circumvented by attempting to limit the use of the formula to
a particular technological environment,” Appx0019 (quotation and citation
omitted), and stated that where “the claims at issue relate and apply to the
technological environment of a three-dimensional virtual world,” it does not
necessarily make the process inventive. Appx0020 (citing Bascom, 827 F.3d at
1349).
More specifically, the District Court held that “[c]lient-server networks,
virtual worlds, avatars, or position and orientation information are not inventions
of Worlds but rather, their patents seek to demonstrate their use in a technological
environment.” Id. (citing Appx0454 and Accenture Global Servs., GmbH v.
Guidewire Software, Inc., 728 F.3d 1336, 1338 (Fed. Cir. 2013)). Without citing
to record evidence, the District Court held that the claims were not “inherently
inventive or sufficient to ‘transform’ the claimed abstract idea into a patenteligible
application” because “Worlds’ asserted claims use a general-purpose
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computer to employ well known filtering or crowd control methods and means
that ultimately use same to display graphical results and generate a view of the
virtual world.” Appx0020.
IV. SUMMARY OF THE ARGUMENT
The Patents-In-Suit claim patent-eligible improvements to computer network
architectures for virtual worlds by using a unique architecture that enables many
users to participate in a virtual world without overloading the network and by
accommodating a user’s choice to use less-powerful, legacy equipment or a more
powerful system. The District Court, however, committed legal error in ruling that
Worlds’ claims are directed to an abstract idea, and also in holding that the claims
did not add an inventive concept under Step Two of the Alice test despite
undisputed evidence to the contrary.
Under Step One, the District Court incorrectly held that Worlds’ claims are
directed to the abstract idea of “filtering,” comparing Worlds’ invention to capacity
limits in restaurants and elevators. But this comparison confirmed the District
Court’s misunderstanding of the Asserted Claims; rather than capping participation
in a virtual world, the District Court failed to appreciate that Worlds’ claims enable
more players to enter the virtual world without overloading the network, while also
permitting players to participate in the virtual world even if they use less-powerful,
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22
legacy equipment. Viewed through the correct lens of this Court’s post-Alice9
jurisprudence, the Patents-In-Suit are directed to specific asserted improvements in
computer capabilities, not an abstract idea, and thus are patent-eligible under Step
One without needing to proceed to Step Two of Alice.
The District Court did proceed to Step Two of Alice and erred there as well
because it overlooked evidence establishing that the Representative Claim is
directed to subject matter that was not well-known, routine, or conventional in the
virtual world industry. In particular, the District Court wrongly held that the
evidentiary record was “undisputed” (Appx0011) that “there is nothing in the
ordering of the steps in the claims … that make them inventive.” Appx0019. But
the evidentiary record on summary judgment included the Inter Partes Review
Certificates for the three Patents-In-Suit that went to IPR final written decisions,
confirming that numerous claims—including the Representative Claim—in each of
those three patents were found patentable by the PTAB over IPR challenges in
which Activision was a real-party-in-interest. Not only did this evidence contradict
the Court’s holding on Step Two of Alice, it also created a disputed material fact
that should have been viewed in the light most favorable to nonmovant Worlds.
The District Court’s granting of summary judgment despite the disputed facts was
legal error and should be reversed.
9 Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014).
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V. ARGUMENT
Under this Court’s § 101 jurisprudence, claims directed to specific
improvements in the functionality of a computer are patent-eligible. As such,
Worlds’ claims are patent-eligible as they are directed to a specific network
architecture for three-dimensional virtual worlds and provide improvements over
previously-known computer network architectures. In holding the contrary, the
District Court failed to follow this Court’s jurisprudence on § 101. The District
Court erred by ignoring the combination of claim elements designed to improve
system performance through multi-criteria information management at both a
server and a client, thus increasing the opportunities for participants and
equipment to access the virtual world. The District Court also erred by
misapprehending that improvements to legacy computer systems can be patenteligible.
Additionally, the District Court incorrectly ruled that Worlds’ claims were
well-known, routine, and conventional without clear and convincing evidence to
establish that fact, and without viewing the record evidence in the light most
favorable to Worlds. This evidence demonstrated at minimum a disputed
material fact concerning whether the Representative Claim recited well-known,
routine, and conventional features previously unknown to the virtual world
industry. Under the record evidence, the District Court should have denied
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Activision’s motion for summary judgment. As such, Worlds respectfully asks
that this Court reverse the District Court’s ruling under § 101.
A. Standard of Review
This Court reviews a district court’s determination of patent-eligibility
under § 101 de novo, though the “patent eligibility inquiry may contain
underlying issues of fact.” DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d
1245, 1255 (Fed. Cir. 2014); Berkheimer v. HP Inc., 881 F.3d 1360, 1365 (Fed.
Cir. 2018). Summary judgment decisions are reviewed in accordance with the
law of the appropriate regional circuit. Ineos USA LLC v. Berry Plastics Corp.,
783 F.3d 865, 868 (Fed. Cir. 2015). The First Circuit “afford[s] de novo review to
the district court’s grant of summary judgment.” Johnson v. Gordon, 409 F.3d 12,
16 (1st Cir. 2005) and considers the facts “‘in the light most favorable to the
nonmoving party’ to the extent that they are supported by competent evidence.”
Ellis v. Fid. Mgmt. Tr. Co., 883 F.3d 1, 3 (1st Cir. 2018) (quoting Walsh v.
TelTech Sys., Inc., 821 F.3d 155, 157-58 (1st Cir. 2016)).
Summary judgment is only appropriate when, drawing all justifiable
inferences in the nonmovant’s favor, “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). “An
issue is genuine if it can be resolved in favor of either party, and a fact is material
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if it has the potential of affecting the outcome of the case.” Xiaoyan Tang v.
Citizens Bank, N.A., 821 F.3d 206, 215 (1st Cir. 2016) (internal quotation marks
omitted) (quoting Pérez–Cordero v. Wal–Mart P.R., Inc., 656 F.3d 19, 25 (1st
Cir. 2011)).
B. Step One: Worlds’ Patents Are “Directed To” a Patent-Eligible
Improvement to a Problem Specific to Computer-Based Virtual
Worlds
This Court has “approached the Step 1 ‘directed to’ inquiry by asking ‘what
the patent asserts to be the focus of the claimed advance over the prior art.’” TecSec,
Inc. v. Adobe Inc., 978 F.3d 1278, 1292 (Fed. Cir. 2020) (quotation and citation
omitted). In conducting that inquiry, a court should focus on the language of the
claims themselves considered in light of the specification, taking caution against
overgeneralizing claims. Id. at 1292-93.
In cases involving software innovations, like those embodied in the Worlds
claims, the “directed to” “inquiry often turns on whether the claims focus on
specific asserted improvements in computer capabilities or instead on a process or
system that qualifies an abstract idea for which computers are invoked merely as a
tool.” Id. at 1293 (citation and quotation omitted) (collecting cases). As explained
in TecSec, “[s]oftware can make patent-eligible improvements to computer
technology, and related claims are eligible as long as they are directed to nonabstract
improvements to the functionality of a computer or network platform
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itself.” TecSec, 978 F.3d at 1293 (quotation and citation omitted). In this regard,
two inquiries may be significant: “whether the focus of the claimed advance is on a
solution to a problem specifically arising in the realm of computer networks or
computers, and whether the claim is properly characterized as identifying a
‘specific’ improvement in computer capabilities or network functionality, rather
than only claiming a desirable result or function.” Id. (citation and quotation
omitted).
1. Worlds’ Claims Focus on Specific Improvements in Client-
Server Architecture for Three-Dimensional Virtual
Worlds, Addressing Problems Specifically Arising in
Three-Dimensional Virtual Worlds
As described throughout the specification and as recited in the claims of the
Patents-In-Suit, in the mid-1990s, the implementation of a computer-based threedimensional
virtual world posed many challenges that restricted the number of users
who could interact in the virtual world. See § III.C, supra. These challenges
included the risk of overloading the network bandwidth through the ongoing
distribution of positional updates reflecting the current state of the virtual world’s
users, and the varying capabilities of the user equipment accessing the virtual world.
Id. Worlds’ patents describe and claim aspects of a network architecture specific to
solving these problems in virtual worlds, and therefore are directed to the
quintessential example of a patent-eligible software invention under TecSec.
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As disclosed and claimed, Worlds improved three-dimensional virtual world
games in a manner that allows more users to participate in a game at any given time
without overburdening the system network, and allows users with more capable
equipment to play the game alongside users having less capable equipment. See §
III.D, supra. The specification and claims achieve that solution by restricting the
transmission of certain avatar position information from the server process to the
client devices populating the virtual world, and by permitting each client device to
further restrict which other user avatar information is processed while rendering the
virtual world. Id.
For example, the Representative Claim specifically recites that a client
process associated with a client device receives position information for fewer “than
all of the other users’ avatars” from the server process. Appx0154 at 19:37-38.
Also, in determining the view of the virtual world to display, the client process
checks the received positional updates received from the server and compares them
against a maximum number for that client. Appx0154 at 19:56-64. The express
claim language implements this check by performing the steps of “determining
from the received positions an actual number of the other users’ avatars;”
“determining a maximum number of the other users avatars to be displayed;” and
“comparing the actual number to the maximum number to determine which of the
other users’ avatars are to be displayed.” Id.
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Worlds’ claimed client-server architecture enables an increase in the number
of users who can participate in the virtual world at a given time (Appx0146 at 3:45-
46 (“many other avatars are in the room”)), and also permits users with less capable
computers to operate in the virtual world alongside users having more capable
computers (Appx0147 at 5:37-44). And its claims are directed to a specific
improvement in virtual world network functionality, not just a desirable result or
function.
These computer-specific improvements are the same types of problems and
solutions that this Court has previously found in patent-eligible claims, including
TecSec, 978 F.3d at 1294-97 (holding claims patent-eligible where claims required
more than an abstract idea and where “[t]he specification elaborates in a way that
simultaneously shows that the claims at issue are directed at solving a problem
specific to computer data networks.”); Visual Memory LLC v. NVIDIA Corp., 867
F.3d 1253 (Fed. Cir. 2017) (a patent-eligible solution obviated the need to design a
separate memory system for each type of processor); SRI Int’l, Inc. v. Cisco
Systems, Inc., 930 F.3d 1295, 1303 (Fed. Cir. 2019); Ancora Techs., Inc. v. HTC
America, Inc., 908 F.3d 1343, 1348 (Fed. Cir. 2018); Data Engine Technologies
LLC v. Google LLC, 906 F.3d 999, 1007–08 (Fed. Cir. 2018); and Finjan, Inc. v.
Blue Coat Systems, Inc., 879 F.3d 1299, 1304–05 (Fed. Cir. 2018), thus placing
Worlds’ claimed invention squarely in the realm of patent eligibility.
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Further, by counterintuitively restricting the quantity of avatar position
information communicated from the server to each client, Worlds’ invention
removed a bottleneck restriction on the total number of users who could access
the virtual world. And by permitting client processes to restrict the number of
avatar positions that must be processed to render other avatars in the virtual
world, Worlds’ invention also made the virtual world available to users with
varying client device capabilities. This solution enabled management of both
networking and client-side processing limitations, preventing potential virtual
world lock-out from too many users or less capable equipment.
Properly considered, Worlds’ claims satisfy § 101 because they are
“directed to non-abstract improvements to the functionality of a computer or
network platform itself.” Uniloc USA, Inc. v. LG Elecs. USA, Inc., 957 F.3d
1303, 1309 (Fed. Cir. 2020); see also DDR Holdings, 773 F.3d at 1257; Core
Wireless Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356 (Fed. Cir. 2018).
By failing to properly perform the “directed to” inquiry under Step One in
accordance with Court’s precedent, the District Court erred.
2. The District Court Erred in Ruling the Claims “Directed
To” a Patent-Ineligible Abstract Idea
The District Court made findings of fact consistent with patent-eligibility
under this Court’s precedent, but ultimately drew the incorrect legal conclusion.
Specifically, the District Court agreed with Worlds’ explanation that “the Patents-
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In-Suit resolve bandwidth issues with multiplayer games through multi-criteria
filtering of avatar position and state information, but at the client side and the server
side.” Appx0003. This finding should have squarely defined Worlds’ claims as
“directed to” a computer network improvement and thus patent-eligible subject
matter. See Packet Intelligence LLC v. NetScout Systems, Inc., 965 F.3d 1299,
1309-10 (Fed. Cir. 2020) (upholding patent eligibility where the claim “purports to
meet a challenge unique to computer networks” and “solves a technological
problem by identifying and refining a conversational flow such that different
connection flows can be associated with each other and ultimately with an
underlying application or protocol”); see also Uniloc USA, 957 F.3d at 1307-08
(claims that enable a “communication system to accommodate additional devices
… without compromising performance” are “directed to a patent-eligible
improvement to computer functionality, namely the reduction of latency
experienced by parked secondary stations in communication systems”).
In the context of the Worlds patents, the challenges of both increasing the
number of users who can simultaneously access the virtual world, and permitting
users with less capable equipment to participate, without compromising
performance, are analogous to the technical challenges in Packet Intelligence and
Uniloc USA. And Worlds’ invention solves those technical challenges “through
multi-criteria filtering of avatar position and state information, but at the client side
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and the server side,” as the District Court found. See Appx0003. Accordingly, the
representative claim is not directed to an abstract idea. See Packet Intelligence, 965
F.3d at 1310; Uniloc USA, 957 F.3d at 1307.
The District Court, however, required more of Worlds, incorrectly stating
that “[t]his description [that the claim is “directed to a novel client-server
computer network architecture for 3-D virtual worlds”] alone does not convert the
patents into patent-eligible inventions.” Appx0015. This was reversible error
because claims directed to non-abstract improvements to a computer network
architecture avoid § 101. See Uniloc USA, 957 F.3d at 1307-08 (“The claimed
invention’s compatibility with conventional communication systems does not
render it abstract.”); TecSec, 978 F.3d at 1293 (“Software can make patenteligible
improvements to computer technology, and related claims are eligible as
long as they are directed to non-abstract improvements to the functionality of a
computer or network platform itself.”) (citation and quotation omitted) (collecting
cases). Moreover, as will be discussed in more detail in the Step Two analysis
below, the specific steps recited in the Representative Claim, including its
claimed structure and features of a client-server architecture of a virtual world,
were confirmed patentable by the PTAB over IPR challenges in which Activision
was a real-party-in-interest. See § III.E, supra; Appx1384; Appx1621
(“Activision further does not dispute that, in IPR2015-01268, claims 4, 8, 13, and
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16 of the ’690 Patent were found patentable over the specific invalidity grounds
raised in IPR2015-01268.”). Therefore, the computer network architecture
defined by the Representative Claim not only improved the functionality of prior
virtual gaming systems, it did so in a novel and inventive way. See §§ III.C-D,
supra.
a) The District Court Erred in Ruling the Claims Directed
to the Abstract Idea of “Filtering”
As noted in TecSec, the Step One “directed to” analysis “depends on an
accurate characterization of what the claims require and of what the patent asserts
to be the claimed advance.” TecSec, 978 F.3d at 1294 (“The accuracy of those
characterizations is crucial to the sound conduct of the inquiries into the problem
being addressed and whether the line of specificity of solution has been crossed”).
For the reasons discussed in Section V.B.1 above, the proper Step One analysis
confirms that Worlds’ claims are directed to patent-eligible subject matter that
solve a technological problem to improve computer network functionality.
Nevertheless, the District Court incorrectly ruled that Worlds’
Representative Claim is “directed to” the abstract idea of achieving crowd control
through “filtering.” Appx0016 (“the claims do nothing more than recite a general
client-server computer architecture to perform routine functions of filtering
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information to address the generic problem of crowd control.”).10 The District
Court also equated Worlds’ invention to “real-world maximum capacity limits on
elevators, at restaurants and other physical spaces typically open to the public.”
Appx0017. But Worlds’ claims are not analogous to a capacity limit, which
would simply limit the number of users who could access a virtual world at a
given time and turn away all other potential users seeking entry. The Worlds
patents allow something different—they place restrictions on what is
communicated from the server to each user, and what each user must process to
render a view of the virtual world, in order to permit more users, rather than
fewer users, to access and interact in the virtual world.
Indeed, the District Court did not appreciate that the management of clientserver
communications and client processing burdens as recited in the
Representative Claim constituted specific improvements to the computer network
architecture by permitting the virtual world to become more crowded while still
appearing to be less crowded to the individual users. Appx0146 at 3:45-46
(“many other avatars are in the room”); Uniloc USA, 957 F.3d at 1307-08 (patenteligible
claims enable a “communication system to accommodate additional
devices … without compromising performance”); see also TecSec, 978 F.3d at
10 In certain instances, the District Court refers to the claims as being
directed to a “natural phenomenon,” namely “achieving crowd control thru the
filtering of information.” Appx0016.
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1295 (“[t]he specification elaborates in a way that simultaneously shows that the
claims at issue are directed at solving a problem specific to computer data
networks.”); DDR, 773 F.3d at 1257 (holding claims patent-eligible where “they
do not merely recite the performance of some business practice known from the
pre-Internet world along with the requirement to perform it on the Internet.”).
Contrary to the District Court’s incorrect Step One analysis, the Representative
Claim does not simply use a computer as a tool to achieve “filtering.”
b) The District Court Erred By Failing to Account for This
Court’s Precedent Directed to Claims Necessarily
Rooted in Computer Technology
As introduced above, the District Court found that “the Patents-In-Suit
resolve bandwidth issues with multiplayer games through multi-criteria filtering
of avatar position and state information, but at the client side and the server side.”
Appx0003. But the District Court failed to apply this finding of fact to this
Court’s body of law addressing similar claims necessarily rooted in computer
technology. This is reversible error.
In Core Wireless Licensing , the asserted claims were “directed to an
improved interface for computing devices, not to the abstract idea of an index.”
880 F.3d at 1362. Rather than distilling the technical invention down to an
abstract idea achieved by the computer device’s interface (i.e., an index), the
Federal Circuit recognized that the claims were “directed to a particular manner
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of summarizing and presenting information in electronic devices.” Id. This Court
interpreted this concept as “a specific manner of displaying a limited set of
information to the user, rather than using conventional user interface methods to
display a generic index on a computer.” Id. at 1363. This Court also looked to the
specification of the patent-at-issue, noting that the “claims disclose an improved
user interface for electronic devices, particularly those with small screens.” Id.
After discussing numerous improvements in speed and efficiency resulting from
the claimed invention, this Court concluded that the “claims are directed to an
improvement in the functioning of computers, particularly those with small
screens” and held that the claims satisfied step one of Alice. Id. As Worlds
argued to the District Court, the reasoning in Core Wireless confirms that the
Worlds claims satisfy Step One of Alice.
First, Core Wireless confirms that solutions to technical limitations in
electronic devices are patent-eligible. That patent-at-issue was directed to solving
user interface complexities for devices with small screens by limiting the lists of
commonly-accessed functions available to the user through a main menu. Id. Just
because that patent-at-issue used filtering to generate the list of commonlyaccessed
functions did not mean that it was “directed to” filtering or
summarizing. Packet Intelligence similarly counsels against focusing on an
aspect of the claim rather than the claim as a whole during the Step One inquiry.
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Packet Intelligence, 965 F.3d at 1309 (where “identifying and refining a
conversational flow” were not what the claims were “directed to” but instead how
the claims solved a technological problem); see also TecSec, 978 F.3d at 1296
(“although the patent involves multilevel security, that does not negate the
conclusion that the patent is aimed at solving a particular problem of multicasting
computer networks”). Similarly, the Worlds patents are directed to solving the
network and processing requirements for client devices accessing an online
virtual world by providing two opportunities working in tandem to limit the data
that must be processed and rendered by a client computer. This does not mean
that the Worlds patents are directed to filtering.
Like the patent-at-issue in Core Wireless, Worlds’ improvement in the
management of three-dimensional virtual worlds allowed access to even those
users using less-powerful legacy equipment. The District Court viewed Worlds’
improvements to benefit legacy equipment as a negative factor for eligibility,
stating that “[c]lient-server networks, virtual worlds, avatars, or position and
orientation information are not inventions of Worlds.” Appx0020. But that logic
failed to give proper consideration to the combination recited in Worlds’ claims,
and the technical improvements in even legacy equipment resulting therefrom.
See TecSec, 978 F.3d at 1297. Just as a small-screen device in Core Wireless
might benefit the most from the invention at issue there, a user accessing a virtual
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world with an aged or overburdened processor might benefit the most from
Worlds’ claimed invention. As discussed previously, the client-side recitations in
the Representative Claim include a client device’s consideration of the
“maximum number” of other user avatars to display, which may be lower than the
number of positional updates sent from the server process. See § III.D, supra.
Therefore, the less-capable client device can still access the virtual world.
Second, as Worlds pointed out to the District Court, Core Wireless refused
to interpret the claims as an “‘abstract idea’ for which computers are invoked
merely as a tool.” Core Wireless, 880 F.3d at 1362 (citing Enfish, LLC v.
Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016)). Although LG argued that
Core Wireless’s invention was the “generic idea of summarizing information”
with a computer invoked as a tool, this Court recognized that the claims were
“directed to a particular manner of summarizing and presenting information in
electronic devices” and therefore patent-eligible. Id.; see also TecSec, 978 F.3d at
1293. Similarly, Worlds’ claims are not merely directed to the abstract idea of
filtering information using a computer, but to specific aspects of filtering at
specific locations in the client-server network architecture to improve the speed,
efficiency, and scalability of a three-dimensional virtual world experience for its
users.
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The Worlds claims are also comparable to another case involving a patent
directed to a flexible solution for interacting with hardware of varying
capabilities. In Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253 (Fed. Circ.
2017), the patent-at-issue was directed to an improved memory system that could
be tailored to different processor types. Id. at 1259. This patent-eligible solution
“obviated the need to design a separate memory system for each type of
processor.” Core Wireless, 880 F.3d at 1362 (discussing Visual Memory, 867
F.3d at 1259). Under this reasoning, there are clear parallels to Worlds’ claims,
which set forth a computer network architecture having flexible protocols to
enable client devices with varying capabilities to manage network and processing
loads while accessing a largely-populated, online three-dimensional virtual world.
Additionally, this Court has also held as patent-eligible a process that “uses a
combined order of specific rules that renders information into a specific format that
is then used and applied to create desired results: a sequence of synchronized,
animated characters.” McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d
1299, 1315 (Fed. Cir. 2016). Once again, this reasoning leads to clear parallels with
the Worlds patents, which also implement an improved computer network
architecture with protocols to provide user devices with position information
sufficient to render other avatars in the virtual world, while still safeguarding the
burdens on network traffic and client processors.
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Like in DDR, Worlds’ claims “specify how interactions with [clients and
servers] are manipulated to yield a desired result—a result that overrides the
routine and conventional sequence of events ordinarily [involved in client-server
architecture].” DDR, 773 F.3d at 1258. Where a conventional client-server
architecture would broadcast all avatar position and state information to all users,
the asserted claims provide a computer network architecture that minimizes
network loads, allows for client processing burdens to be reduced, and improves
the user experience. Like the asserted claims of DDR, Core Wireless, Visual
Memory, McRo, TecSec, Packet Intelligence, Uniloc USA and their progeny, the
asserted Worlds claims are not directed to an abstract idea under step one of
Alice. Rather, they are patent-eligible under § 101 because they solve problems
necessarily routed in computer technology and improve computer network
functionality for virtual worlds.
Despite this robust body of applicable Federal Circuit precedent, the
District Court limited its Step One analysis to Fuzzysharp Techs. Inc. v. Intel
Corp., No. 12-cv-4413, 2013 WL 5955668, at *13 (N.D. Cal. Nov. 6, 2013),
aff’d, 595 F. App’x 996 (Fed. Cir. 2015), Intellectual Ventures II LLC v. JP
Morgan Chase & Co., No. 13-cv-3777, 2015 WL 1941331, at *8 (S.D.N.Y. Apr.
28, 2015), and Bascom. Appx0015-0017.
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But Bascom is inapplicable as to Step One, because the Worlds claims are
not simply directed to “filtering” using a computer as discussed throughout this
Section V.B. Moreover, Bascom did not establish a rule that the use of filtering
in a claim causes that claim to fail the Step One inquiry. This Court agreed that
“filtering content is an abstract idea” (Bascom, 827 F.3 at 1348) and noted that
the patent-at-issue in Bascom included filtering content, but also found that the
claims-at-issue presented a “‘close call[ ] about how to characterize what the
claims are directed to’” before holding there was insufficient evidence to find the
claims patent-ineligible. Id. at 1349 (quoting Enfish, 822 F.3d at 1339); Id. at
1353.
Similarly, Fuzzysharp is also inapplicable. In discussing that case, the
District Court noted that the patent at issue there “purported to cover all
applications of such filtering in the field of 3D computer graphics.” Appx0016-
0017. No such statement can be made about Worlds’ claims, which do not
preempt all computer-based filtering in virtual world technology. Indeed,
characterizing the claims as a raw virtual world “maximum capacity limit[],” such
as was envisioned by the District Court (Appx0017), completely overlooks that
the Worlds claims increase the capacity of the virtual world, as noted above in
Section V.B.2.a.
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3. Properly Considered, Worlds’ Patents Are “Directed To” a
Patent-Eligible Improvement to a Problem Unique to
Computer-Based Virtual Worlds, and Satisfy Step One
Under This Court’s Precedent
The District Court erred by concluding that the Worlds claims are directed
to patent-ineligible subject matter. As addressed above, Worlds’ claims address
problems unique to computer networks by disclosing a client-server architecture
that uses specific protocols including filtering, but this does not mean that
Worlds’ claims are simply directed to filtering using a computer. Packet
Intelligence LLC, 965 F.3d at 1309-10; TecSec, 978 F.3d at 1296; Core Wireless,
880 F.3d at 1363. Under this Court’s precedent, Worlds’ claims are not directed
to an abstract idea and are patent-eligible under Step One, and this Court does not
need to analyze the claims under Step Two of Alice. Enfish, 822 F.3d at 1339.
C. Step Two: The Asserted Claims Include an Inventive Concept
Whether a claimed invention involves “well-understood, routine, and
conventional activities previously known to the industry” under the
second Alice step is a question of fact. Berkheimer, 881 F.3d at 1368. This Court
has found Step Two satisfied where the limitations of the claims, taken together as
an ordered combination, “recite an invention that is not merely the routine or
conventional use of the Internet.” DDR, 773 F.3d at 1259.
In conducting this second step inquiry, the District Court erred by
misapplying the evidence before it, failing to view the evidence in the light most
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favorable to Worlds, and failing to conduct a proper legal analysis according to this
Court’s binding precedent. Evaluated properly, the District Court could not
conclude, based on clear and convincing evidence, that elements of the
representative claim, whether considered individually or in combination, were wellknown,
routine, and conventional. Appx0018-0020.
Viewing the evidence presented in the light most favorable to nonmovant
Worlds, the only conclusion that could be reached is that the claims include an
inventive concept that was not well-known, routine, and conventional in the
industry. At a minimum, the evidence reflects clear factual disputes regarding what
was well-known, routine, and conventional, thus making the issue inappropriate for
resolution on summary judgment.
1. The Recitations in Worlds’ Claims Impart Novelty and Are
Not “Well Understood, Routine, and Conventional”
The District Court’s Step Two analysis concludes by stating that “Worlds’
asserted claims use a general-purpose computer to employ well known filtering or
crowd control methods and means that ultimately use [the] same to display
graphical results and generate a view of the virtual world, none of which is
inherently inventive … .” Appx0020. But the evidence does not support this
conclusion. In particular, a key fact was earlier noted by the District Court, but
absent from the District Court’s Step Two analysis. Namely, the Representative
Claim evaluated by the District Court survived IPR and was found patentable by
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the PTAB over IPR challenges in which Activision was a real-party-in-interest. See
§ III.E, supra; Appx1384; Appx1621 (Activision admitting that the Representative
Claim was found patentable in IRP2015-01268). This undisputed fact confirms that
the Representative Claim’s elements, taken together as an ordered combination,
“recite an invention that is not merely the routine or conventional use of [a clientserver
computer network architecture for a virtual world].” See DDR, 773 F.3d at
1259.
As Worlds contended, the claims are “directed to a novel client-server
computer network architecture for 3-D virtual worlds.” Appx0015. Moreover, the
District Court held that “the Patents-In-Suit resolve bandwidth issues with
multiplayer games through multi-criteria filtering of avatar position and state
information, but at the client side and the server side.” Appx0003. In other words,
the specific arrangement or combination of multi-criteria filtering not only
improved multiplayer games, it is novel. Under Berkheimer, such undisputed facts
should have led to a holding of patent eligibility rather than ineligibility.
2. The District Court’s Step Two Analysis Also Ran Afoul of
Summary Judgment Standards
Under the summary judgment standard, the District Court should have
considered the record evidence in the light most favorable to nonmovant Worlds,
and drawn all reasonable inferences in Worlds’ favor. Alliance of Auto. Mfrs. v.
Gwadosky, 430 F.3d 30, 34 (1st Cir. 2005). Here, that record included the
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PTAB’s determination that the Representative Claim was patentable in IPR2015-
01268, and Activision’s admission of that finding. See Appx1384; Appx1621.
Instead of crediting that evidence, the District Court failed to address it. See
Appx0018-0020. As a result, the District Court’s characterization of the record as
“undisputed” is reversible error. Appx0011. This record evidence should have
been viewed in the light most favorable to Worlds, and summary judgment should
have been denied.
Moreover, the District Court foreshadowed its erroneous Step Two analysis
early in its Opinion, where it stated that the PTAB’s vacated decisions “support
the Court’s analysis below that the client-side and server-side filtering of position
information is not inventive.” Appx0009. The Court then cited to the three
vacated decisions of the PTAB, respectively directed to the ’856 patent, the ’501
patent, and the ’998 patent. This reasoning suffers numerous flaws.
First is the District Court’s willingness to rely upon PTAB decisions that
were vacated by this Court and no longer possess any authority. See County of
Los Angeles v. Davis, 440 U.S. 625, 634 n. 6 (1979) (“Of necessity our decision
‘vacating the judgment of the Court of Appeals deprives that court’s opinion of
precedential effect … .’”) (quoting O’Connor v. Donaldson, 422 U.S. 563, 577-
78 n. 12 (1975)); see also Tollett v. City of Kemah, 285 F.3d 357, 366 (5th Cir.
2002) (“It goes without saying that, as a result of the revised sanctions [order]
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being vacated, the findings of fact and conclusions of law in the district court’s
post-remand orders, . . . are vacated as well.”). It was error for the District Court
to look to those vacated decisions for support on whether the three patents
addressed in those decisions recite inventive claims, particularly where another
non-vacated decision confirms the patentability of the Representative Claim.
Appx1384.
Second, the District Court’s reliance on the vacated IPR decisions unjustly
rewards prior concealment of Activision’s status as a real-party-in-interest to
Bungie’s IPRs. See § III.E, supra. The doctrine of unclean hands requires a
litigant to have “acted fairly and without fraud or deceit as to the controversy in
issue” and provides a “wide range to the equity court’s use of discretion in
refusing to aid the unclean litigant.” Precision Instrument Mfg. Co. v. Automotive
Co., 324 U.S. 806, 814-15 (1945). Had Activision informed the District Court or
the PTAB of its real-party-in-interest status when Bungie’s IPRs were filed, the
IPRs would have been terminated at institution phase under 35 U.S.C. § 315(b)
and no IPR decisions would have been issued. Under those circumstances, there
would have been no need for this Court to vacate the improperly-issued decisions.
See § III.E, supra.
Further, after having wrongfully obtained those vacated decisions from the
PTAB, Activision admitted it was a real-party-in-interest to them. See § III.E,
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supra. Activision admitted its real-party-in-interest status to avoid discovery into
the details of its pre-IPR cooperation with Bungie, id., and that unqualified
admission precludes Activision from benefiting from the vacated decisions as if
they had been correctly issued by the PTAB.
Third, the District Court’s willingness to consider the vacated decisions
failed to view all the evidence, including the PTAB’s decision of patentability for
the Representative Claim, in the light most favorable to nonmovant Worlds.
Indeed, the Court’s step two analysis, spanning pages 17 to 19 of its Opinion,
cites to no evidence to show what was well-known, routine, and conventional.
Appx0018-20. There is no evidence that a virtual world network system
architecture for avatars with multi-criteria filtering occurring at both the server
and client, when taken together as the ordered combination claimed in the
Representative Claim, was well-known, routine, and conventional in the industry.
To the contrary, Worlds cited to articles applauding Worlds’ virtual reality
development in early 1995, thus confirming that Worlds’ technology was not
previously known to the industry. See § III.B, supra; Appx1492-1500;
Appx1501, Appx1543-1545. Further, as addressed above, the IPR against the
Representative Claim was resolved with a final written decision from the PTAB
confirming the patentability of the Representative Claim, and that final written
decision was neither vacated nor appealed. The absence of evidence in
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Activision’s favor is even more pronounced considering that Activision was a
real-party-in-interest to the IPR filed against the Representative Claim, and
therefore is estopped under 35 U.S.C. § 315(e)(2) from raising “any ground that
the petitioner raised or reasonably could have raised during that inter partes
review.” While Activision could not have raised a § 101 challenge in the IPR, it
is notable that the Representative Claim survived the best novelty challenges
asserted against it under 35 U.S.C. §§ 102 and 103, and against a lower burden of
proof relative to the demanding “well-known, routine, and conventional” showing
based on clear and convincing evidence as required in District Court.
Thus, the record evidence flatly contradicts the District Court’s conclusion
that “there is nothing in the ordering of the steps in the claims (i.e., receiving,
determining, comparing) that make them inventive” and that the “‘steps are
organized in a completely conventional way.’” Appx0019. When the record
evidence is viewed in the manner most favorable to Worlds, it was legal error for
the District Court to grant summary judgment against Worlds.
3. The District Court’s Step Two Analysis was also Based on
an Erroneous Analysis of Precedent
Finally, rather than conducting an evidence-based analysis under Step Two,
the District Court conducted a purely legal analysis of those cases it found to be
analogous. Appx0018-0020. However, that analysis was conclusory and failed
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to appreciate the distinctions between Worlds’ claims and technology addressed
in those cases.
Like its Step One analysis, the District Court supports its Step Two
conclusion with additional citations to Fuzzysharp, a 2013 case from the Northern
District of California. Appx0018.11 The District Court’s analysis of the
Fuzzysharp case concludes that Worlds’ “claims lack limitation to any specific
application.” Id. But this conclusion is directly contradicted by the language of
the claims, which are expressly directed to a specific improvement in computer
network architecture. See § III.D, supra. Similar improvements to a computer
architecture have been found by this Court to satisfy Step Two of Alice. See
Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1301 (Fed. Cir.
2016) (holding that a claim involving a distributed architecture of components is
patent-eligible where the claim “purposefully arranges the components in a
distributed architecture to achieve a technological solution to a technological
problem specific to computer networks” even though the components “may be
generic”).
Also, without explanation, the District Court concludes that the Worlds
claims “do not add any steps other than ‘conventional “post-solution” activity to
11 The District Court’s discussion of Intellectual Ventures II LLC, 2015 WL
1941331, at *9, includes no application to the present case, and instead merely
restates the holding of that case. Appx0018-0019.
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the abstract formula described.’” Appx0018. But characterizing Worlds’ claims
as “conventional” is contradicted by the PTAB decisions confirming patentability
of the Representative Claim and other claims of the ’690 patent, the ’558 patent,
and the ’998 patent. See § III.E, supra; Appx1383-1384; Appx1386-1387;
Appx1389-1390. This evidence establishes—at minimum—a genuine issue of
material fact whether the claims simply recite conventional features. Granting
summary judgment where this genuine issue of material fact exists is legally
improper and reversible error.
The District Court’s Step Two analysis also applies Bascom in a legally
erroneous manner. In Bascom, this Court confirmed that an inventive concept,
searched for under Step Two of the Alice test, “may arise in one or more of the
individual claim limitations or in the ordered combination of the limitations.”
Bascom, 827 F.3d at 1349. Further, the inventive concept inquiry under Step Two
“requires more than recognizing that each claim element, by itself, was known in
the art.” Id. at 1350. An “inventive concept can be found in the nonconventional
and non-generic arrangement of known, conventional pieces.” Id. at
1350.
The District Court noted that in Bascom, “the ‘installation of a filtering tool
at a specific location, remote from the end-users, with customizable filtering
features specific to each end user’ provided the necessary, inventive concept.”
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Appx0019 n.2. But the District Court failed to see the clear parallels with that
description and the Worlds claims, and concluded that Bascom’s analysis “is not
the case here.” Id.
Like the claims at issue in Bascom, here Worlds’ claims define a specific
location, including both the server-side and client-side, for omitting certain avatar
position information from client-server communications and client-side
processing for rendering a view of the virtual world. The Representative Claim
expressly recites method steps to be performed by a client process, including
consideration of that client process’s “maximum number” of avatars to be
displayed, and reduction of client-server communications through the client
receiving “a position of less than all of the other users’ avatars from the server
process.” Appx0154 at 19:36-37, 19:55-64.
Instead of crediting the express language of this claim, which does allow
for client-specific consideration of its own “maximum number,” the District
Court held that “no language in the claim suggests that this is done through any
sort of ‘customizable filtering features specific to each end user,’ but rather
through a generically stated determination of the maximum number of the other
users’ avatars to be displayed.” Appx0019 n.2. This conclusion is simply
incorrect in view of the claimed features of the Representative Claim.
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In Bascom, the patentee explained to this Court that its “inventive concept
[harnessed the] technical feature of network technology in a filtering system by
associating individual accounts with their own filtering scheme and elements
while locating the filtering system on an ISP server.” Bascom, 827 F.3d at 1350.
This Court held that on the limited record before it, “this specific method of
filtering Internet content cannot be said, as a matter of law, to have been
conventional or generic.” Id. For the same reasons here, the Representative
Claim includes the very type of inventive concept that this Court found in
Bascom, and in fact here the evidence before the District Court was even stronger
than in Bascom. Specifically, the record evidence here established conclusively
that the specific method claimed by Worlds was not conventional or generic. See
Appx1384. Activision’s motion for summary judgment should have been denied.
The District Court also relied on this Court’s opinion in Two-way Media,
Ltd. v. Comcast Cable Comms. LLC, 874 F.3d 1329, 1339 (Fed. Cir. 2017) to
support its Step Two analysis. Citing Two-way Media, the District Court wrongly
concluded that “[t]he steps of the claims here use only ‘generic functional
language to achieve the purported solution’ of filtering of position information for
crowd control.” But in Two-way Media, the claims required nothing “other than
conventional computer and network components operating according to their
ordinary functions.” Two-way Media, 874 F.3d 1341. It is legally incorrect to
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read Worlds’ claims as directed to nothing more than filtering position
information using a computer.
The invention claimed in the Representative Claim decidedly does not
operate conventionally. It may employ omission of certain avatar position
information from transmissions and display-rendering as part of the client-server
network architecture protocols, but its specific way of doing so allows more users
to play instead of fewer users. By restricting the transmission and processing of
avatar position information in the manner set forth in Worlds’ Representative
Claim, the resulting “crowd control” actually permits more users than would be
admitted in a conventional “capacity limit” solution that imposes a hard limit on
the total number of game-players.
Accordingly, it was error for the Court to hold that “[n]one of the
remaining claims are limited to ‘any specific form or implementation of
filtering.’” Appx0019. Moreover, as noted above, the fact that Worlds’ claims
are directed to inventive solutions that can permit more game-players to enter the
virtual world while still using “generic computer components,” (Appx0013),
stands as a testament to their eligibility under Step Two (see Bascom, 827 F.3d at
1350) rather than the contrary.
Despite the claimed features of the Representative Claim and the technical
solution reached by those claims, the District Court held that the “[t]he method
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outlined here, as represented by claim 4 of the ‘690 patent, cannot be said to be as
specific” as Bascom’s claims. Appx0019 n.2. This was legal error.
4. The Record Evidence and This Court’s Precedent Confirm
that Worlds’ Claims Satisfy Step Two
Under Step Two, the District Court should have denied summary judgment
of invalidity under § 101, and instead confirmed that the Worlds’ claims satisfy §
101.
VI. CONCLUSION AND RELIEF REQUESTED
For the foregoing reasons, Worlds’ asserted claims are patent-eligible, and
Worlds respectfully asks that the Court reverse, or alternatively remand the
District Court’s Summary Judgment for Invalidity Under § 101.
August 4, 2021 Respectfully submitted,
/s/ wayne m. helge
WAYNE M. HELGE
JAMES T. WILSON
ALDO NOTO
DAVIDSON BERQUIST JACKSON
& GOWDEY, LLP
8300 Greensboro Drive, Suite 500
McLean, VA 22102
(571) 765-7700
whelge@dbjg.com
jwilson@dbjg.com
anoto@dbjg.com
Counsel for Appellant Worlds Inc.
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ADDENDUM
Case: 21-1990 Document: 11 Page: 64 Filed: 08/04/2021
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
WORLDS, INC.
Plaintiff(s)
v. CIVIL ACTION NO. 12-10576-DJC
ACTIVISION BLIZZARD, INC., ET AL
Defendant(s)
JUDGMENT IN A CIVIL CASE
CASPER, D.J.
G Jury Verdict. This action came before the court for a trial by jury. The issues have been tried and the jury
has rendered its verdict.
X Decision by the Court In accordance with the Memorandum and Order dated April 30, 2021;
IT IS ORDERED AND ADJUDGED
Judgment for the defendants.
Robert M. Farrell, Clerk
Dated: April 30, 2021 /s/ Lisa M. Hourihan
( By ) Deputy Clerk
Case 1:12-cv-10576-DJC Document 359 Filed 04/30/21 Page 1 of 1
Appx0001
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1
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
_________________________________________
WORLDS, INC.,
Plaintiff
v.
ACTIVISION BLIZZARD, INC.,
BLIZZARD ENTERTAINMENT, INC. and
ACTIVISION PUBLISHING, INC.,
Defendants.
_________________________________________
)
)
)
)
)
)
)
)
)
)
)
)
)
Civil Action No. 12-10576-DJC
MEMORANDUM AND ORDER
CASPER, J. April 30, 2021
I. Introduction
Plaintiff Worlds, Inc., (“Worlds”) alleges that Defendants Activision Blizzard, Inc.,
Blizzard Entertainment, Inc. and Activision Publishing, Inc. (collectively, “Activision”) infringe
United States Patents Nos. 7,181,690 (“‘690”), 7,493,558 (“‘558”), 7,945,856 (“‘856”), 8,082,501
(“‘501”) and 8,145,998 (“‘998”) (collectively, the “Patents-In-Suit”). Activision has moved for
summary judgment seeking a ruling that the remaining claims of the Patents-In-Suit at issue are
invalid as a matter of law. D. 272. For the following reasons, the Court ALLOWS Activision’s
motion.
II. Factual Background
The following material facts are based upon Activision’s Statement of Material Facts, D.
177, Worlds’ Statement of Material Facts, D. 185, and/or the documents referenced in same and
are undisputed.
Case 1:12-cv-10576-DJC Document 358 Filed 04/30/21 Page 1 of 19
Appx0002
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2
A.
I'll look Friday AM since I downloaded it at work. It was about 137 pages if I remember correctly so won't be able to do the whole thing. Should be able to get the full argument for you and leave out WDDD patent details and maybe some of the supporting cases.
Per Form 4 Box 9 for Michael Lebby 4/20/2021:
Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 1,000,000
https://dd7pmep5szm19.cloudfront.net/2586/0001553350-21-000312.htm
Lebby for sure has a vested interest in increasing shareholder value! Also, think of the volatility he gets to deal with. Makes those 5 and 6 figure moves I deal with seem like nothing. - IBB
IV. SUMMARY OF THE ARGUMENT (Filed 8/4/2021)
The Patents-In-Suit claim patent-eligible improvements to computer network architectures for virtual worlds by using a unique architecture that enables many users to participate in a virtual world without overloading the network and by accommodating a user’s choice to use less-powerful, legacy equipment or a more powerful system. The District Court, however, committed legal error in ruling that Worlds’ claims are directed to an abstract idea, and also in holding that the claims did not add an inventive concept under Step Two of the Alice test despite undisputed evidence to the contrary.
Under Step One, the District Court incorrectly held that Worlds’ claims are directed to the abstract idea of “filtering,” comparing Worlds’ invention to capacity limits in restaurants and elevators. But this comparison confirmed the District Court’s misunderstanding of the asserted Claims; rather than capping participation in a virtual world, the District Court failed to appreciate that Worlds’ claims enable more players to enter the virtual world without overloading the network, while also permitting players to participate in the virtual world even if they use less-powerful, legacy equipment. Viewed through the correct lens of this Court’s post-Alice9 jurisprudence, the Patents-In-Suit are directed to specific asserted improvements in computer capabilities, not an abstract idea, and thus are patent-eligible under Step One without needing to proceed to Step Two of Alice.
The District Court did proceed to Step Two of Alice and erred there as well because it overlooked evidence establishing that the Representative Claim is directed to subject matter that was not well-known, routine, or conventional in the virtual world industry. In particular, the District Court wrongly held that the evidentiary record was “undisputed” (Appx0011) that “there is nothing in the ordering of the steps in the claims … that make them inventive.” Appx0019. But the evidentiary record on summary judgment included the Inter Partes Review Certificates for the three Patents-In-Suit that went to IPR final written decisions, confirming that numerous claims—including the Representative Claim—in each of those three patents were found patentable by the PTAB over IPR challenges in which Activision was a real-party-in-interest. Not only did this evidence contradict the Court’s holding on Step Two of Alice, it also created a disputed material fact that should have been viewed in the light most favorable to nonmovant Worlds.
The District Court’s granting of summary judgment despite the disputed facts was legal error and should be reversed.
Pacer link to U.S. Court Of Appeals, Federal Circuit
Worlds Inc. v. Activision Blizzard Inc.
0:2021cvpri01990
https://ecf.cafc.uscourts.gov/n/beam/servlet/TransportRoom?servlet=CaseSummary.jsp?caseNum=21-1990&dktType=dktPublic&incOrigDkt=Y&incDktEntries=Y
06/16/2021 2 Entry of appearance for Sonal N. Mehta; Kevin S. Prussia; Jennifer J. John as counsel for Appellees Activision Blizzard Inc., Activision Publishing, Inc. and Blizzard Entertainment, Inc.. Service: 06/16/2021 by email. [780704] [21-1990] [Sonal Mehta] [Entered: 06/16/2021 01:21 PM]
06/16/2021 3 Certificate of Interest for Appellees Activision Blizzard Inc., Activision Publishing, Inc. and Blizzard Entertainment, Inc.. Service: 06/16/2021 by email. [780705] [21-1990] [Sonal Mehta] [Entered: 06/16/2021 01:23 PM]
06/16/2021 4 Docketing Statement for the Appellees Activision Blizzard Inc., Activision Publishing, Inc. and Blizzard Entertainment, Inc.. Service: 06/16/2021 by email. [780706] [21-1990] [Sonal Mehta] [Entered: 06/16/2021 01:24 PM]
06/16/2021 5 Entry of appearance for Wayne M. Helge; James T. Wilson; Aldo Noto as counsel for Appellant Worlds Inc.. Service: 06/16/2021 by email. [780733] [21-1990] [Wayne Helge] [Entered: 06/16/2021 03:06 PM]
06/16/2021 6 Certificate of Interest for Appellant Worlds Inc.. Service: 06/16/2021 by email. [780734] [21-1990] [Wayne Helge] [Entered: 06/16/2021 03:08 PM]
06/16/2021 7 Docketing Statement for the Appellant Worlds Inc.. Service: 06/16/2021 by email. [780737] [21-1990] [Wayne Helge] [Entered: 06/16/2021 03:09 PM]
08/02/2021 8 OPENING BRIEF FILED by Appellant Worlds Inc. Service: 08/02/2021 by email. [789983] [21-1990] This document is non-compliant. See Doc No. [9] [Wayne Helge] [Entered: 08/02/2021 03:15 PM]
08/03/2021 9 NOTICE OF NON-COMPLIANCE: The submission of Appellant Worlds Inc., Opening Brief [8], is not in compliance with the rules of this court (see attached). Compliant document is due on 08/10/2021. Unless ordered otherwise, the deadline for any responsive filing runs from service of the original version. Service as of this date by the Clerk of Court. [790233] [EKD] [Entered: 08/03/2021 10:29 AM]
08/04/2021 10 Amended Certificate of Interest for Appellant Worlds Inc.. Service: 08/04/2021 by email. [790561] [21-1990] [Wayne Helge] [Entered: 08/04/2021 10:57 AM]
08/04/2021 11 MODIFIED ENTRY: CORRECTED OPENING BRIEF FILED by Appellant Worlds Inc. Service: 08/04/2021 by email. [790570] --[Edited 08/04/2021 by EKD - compliance review complete] [Wayne Helge] [Entered: 08/04/2021 11:17 AM]
For those of you trying to time the stock:
"Our system’s recommendation today is to STAY LONG. The previous BUY signal was issued on 08/03/2021, 1 day ago, when the stock price was 7.9275. Since then LWLG has risen by +8.48%."
https://www.americanbulls.com/SignalPage.aspx?lang=en&Ticker=LWLG
Not sure if this got mentioned or not but while we're guessing, here's mine: JV between GF and LWLG for a new foundry announced and branded today with Michael Lebby, Thomas Caulfield, and Chuck Schumer in attendance and beaming like proud new parents. GF and LWLG continue on as separate companies. LWLG required to come up with over half of the funding from their new shelf. Investors scramble to balance the weight of dilution with the value of projected eventual revenue, which will be a few years down the road. They also throw us a bone and announce pending production in the Malta Fab using LWLG polymers. - IBB
Steve, it IS 2 orange squares. Here's the Twitter link:
#WatchThisSpace #GF0719 #ONEGF #GFNewEra pic.twitter.com/TB4W2yDVrb
— GlobalFoundries (@GlobalFoundries) July 14, 2021
GlobalFoundries to make quantum photonic chips in Dresden, New York. May 06, 2021.
https://www.eenewseurope.com/news/globalfoundries-make-quantum-photonic-chips-dresden-new-york
Just wondering is this an application where light needs to be switched, really, really, really, really quickly? I didn't see any information in the article that hinted at polymer photonics but can't help but wonder if there may be a connection to LWLG. - IBB
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The distribution of the securities may be affected from time to time in one or more transactions:
at a fixed price or prices that may be changed from time to time;
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Each prospectus supplement will describe the method of distribution of the securities and any applicable restrictions.
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If any underwriters or agents are utilized in the sale of the securities in respect of which this prospectus is delivered, we will enter into an underwriting agreement or other agreement with them at the time of sale to them, and we will set forth in the prospectus supplement relating to such offering the names of the underwriters or agents and the terms of the related agreement with them.
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It's nice to get both sides lol. Bar, I've got the passive indexing covered already and that remains untouched. So I know you'll be happy. And gfp thanks for your help! IBB
4000 shares at $7.98 pre-market. MMs making a strong signal about today's action? Added to my stash today in the 7's.
Thank you! I was able to more confidently pick up more shares in the mid 7's today based on your insights. I'd also like to get better at TA. Where would be a good place to pick up more information? IBB
FLOAT SQUEEZE. I've never seen anything like it. Time for a new phrase. I'll call it "float squeeze". Don't look for it in Investopedia, it's not there. So may investors holding on tightly to shares that the practical float is reduced to a tiny amount. Look at the result. IBB
I was thinking you might check my post history so I would stay "on topic". Thom's IP expertise might be quite useful over there as they have 70+ patents to protect. Go WDDD!!!
Thank you Patience, and that's why we're still here, waiting for Thom to telegraph his next move. Also to find out what we got in settlement from Linden Labs. IBB
Choo choo could you please post a link to 29640? I'm now a free member here so search function is disabled. Much appreciated! BTW re discussion of investing strategies and emotion. Another is to diversify. After WDDD tanked one of my other specs took off and has the potential to be the stock of the year. I've never made so much (paper) profits so quickly. The future is looking so bright you need a welding helmet lol.
Lightwave Logic gains after securing patent for new device design. Seeking Alpha Article.
Jun. 24, 2021 10:16 AM ETLightwave Logic, Inc. (LWLG)By: Preeti Singh, SA News Editor2 Comments
Technology platform company Lightwave Logic (OTCQX:LWLG +6.4%) has been assigned U.S. patent number 11,042,051 for a invention that facilitates mass-volume manufacturing when designed into advanced integrated photonic platforms.
The patent, entitled "Direct drive region-less polymer modulator methods of fabricating and materials therefor," relates to a device design that improves optical mode control and lowers power consumption through the use of direct-drive, low-voltage operation.
The patent supports the development of low power consumption electro-optic polymers in large foundry PDKs (process development kits).
Press Release
Now read: Lightwave Logic reports FY results
https://seekingalpha.com/news/3709616-lightwave-logic-gains-on-being-assigned-patent-for-new-device-design?mail_subject=lwlg-lightwave-logic-gains-on-being-assigned-patent-for-new-device-design&utm_campaign=rta-stock-news&utm_content=link-3&utm_medium=email&utm_source=seeking_alpha
Just one word---plastics.
All this posting and we are now surprisingly #21 on the Breakout Boards. Is anyone "shaking the tree" for more shares in anticipation of something I don't know about? The thought crossed my mind.
https://investorshub.advfn.com/boards/breakoutboards.aspx
Cadillac said: "There will be a big reward in her future somewhere down the road. She will get elevated to Court of Appeals or Supreme Court."
IMO can't happen soon enough . Good riddance and then we get a fresh set of eyes on our case if it makes it that far. Better yet a commission to expose and eliminate corruption. Not holding my breath.
hotstock_be_007 said: Market maker WABR is all the time on the ask, trying to keep a lid on it it seems. I'm not familiar with this market maker.
A google search reveals these search terms: Wall Street Access | Institutional Sales & Trading, Outsourced ...
...and link: https://wsaccess.com/#s1
Could be institutional buyers or a whale trying to keep a lid on the price while loading?
That even way more hilarious.