Law 360 article on ruling.
Years After Axing Game IP, PTAB Junks IPRs As Time-Barred
By Tiffany Hu
Law360 (January 15, 2020, 8:41 PM EST) --
The Patent Trial and Appeal Board is throwing out inter partes reviews on patents on “virtual world” technology, finding that the maker of the video game Destiny is time-barred from challenging the patents due to previous litigation involving its former collaborator Activision.
The PTAB on Tuesday issued a nonpublic order that terminated review proceedings against three Worlds Inc. patents, which had been challenged by video game developer Bungie Inc. The PTAB had previously reviewed and invalidated the patents, but the Federal Circuit in 2018 ruled that the board did not properly analyze whether Bungie’s petitions for inter partes review were filed too late under the America Invents Act’s time-bar provision.
The appeals court said the PTAB may have erred in rejecting Worlds’ argument that an agreement between Bungie and Activision, which was sued by Worlds in 2012 over the patents, could have made Activision an interested party in Bungie’s petitions. Bungie and Activision reportedly ended their longtime business relationship early last year.
More than a year after the Federal Circuit ruling, the PTAB on Tuesday agreed with the appeals court and dismissed the reviews, a decision that Worlds CEO Thom Kidrin said was prompted by evidence revealing that the relationship between Bungie and Activision prevented Bungie from challenging the patents at issue under the AIA.
“Worlds has had to endure the legal and financial gauntlet at the PTAB and Federal Circuit for over 4½ years while combating the challenges brought by Bungie, but we have ultimately prevailed with important claims intact in each challenged patent,” Kidrin said in a statement.
Kidrin said Worlds’ infringement suit against Activision, which has been stayed pending the board’s review of the disputed patents, will now proceed in district court. With Bungie’s remaining petitions for review now dismissed, he added, Worlds plans to assert its patents against “all parties that are infringing upon them.”
Representatives for Bungie and Activision did not immediately respond to requests for comment Wednesday.
The AIA's time-bar provision states that petitions for inter partes review must be filed within one year of the date the petitioner or its real party in interest is served with a complaint alleging infringement. The Federal Circuit held for the first time in January 2018 that whether a petition is time-barred is an appealable issue.
Worlds sued Activision in 2012, alleging that the company's Call of Duty games infringed its patents on computer-generated display of avatars in a virtual world. In 2014, Worlds notified Activision that it intended to add Destiny, which was developed by Bungie and is published by Activision, as an additional accused product in the case. Bungie then challenged Worlds' patents in inter partes review petitions.
Bungie told the PTAB that it was the sole real party in interest in the petition. However, Worlds argued that the publishing and development agreement between Bungie and Activision meant that Activision is an interested party, which would mean that Bungie's petitions were filed too late. The PTAB rejected that argument and ultimately invalidated Worlds’ patents.
In its September 2018 ruling, the Federal Circuit noted that the PTAB did not state which party it viewed as having the burden of persuasion on whether Activision was a real party in interest to Bungie's petitions, though the board appeared to place it on Worlds by saying it was not persuaded Activision was an interested party. The appeals court began its opinion by analyzing whether that was correct.
It concluded that "there can be no doubt that the IPR petitioner bears the ultimate burden of persuasion to show that its petitions are not time-barred." The court then said the petitioner's identification of the real parties in interest should be accepted "unless and until it is disputed by the patent owner" and that the patent owner must produce some evidence that shows a third party should be named a real party in interest, beyond a mere assertion.
The Federal Circuit said that Worlds had produced such evidence in this case by pointing to the development and publishing agreement between Bungie and Activision. The agreement states that Bungie is responsible for conducting "legal reviews of the products" to ensure that all intellectual property is cleared for use, and that such reviews are subject to approval by Activision.
The patents-in-suit are U.S. Patent Nos. 7,945,856, 8,082,501and 8,145,998.
Bungie is represented by Michael T. Rosato, Matthew A. Argenti and Jad Mills of Wilson Sonsini Goodrich & Rosati PC.
Worlds is represented by Wayne M. Helge and Aldo Noto of Davidson Berquist Jackson & Gowdey LLP.
The case is Bungie Inc. v. Worlds Inc., case numbers IPR2015-01264, IPR2015-01319 and IPR2015-01321, before the Patent Trial and Appeal Board.
--Additional reporting by Ryan Davis. Editing by John Campbell.
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