PATENT CASE OF THE WEEK 

Worlds Inc. v. Bungie, Inc., Appeal Nos. 2017-1481, -1546, -1583 (Fed. Cir. Sept. 7, 2018)

In appeals from three inter partes reviews, the Federal Circuit vacated the PTAB’s decision invalidating three patents and remanded for further consideration whether the petition was time barred under 35 U.S.C. § 315(b).  This is the second opinion in recent weeks to address the newly-developing framework for assessing whether a party is a “real party in interest” to an IPR petition.  See our write-up of Applications in Internet Time here.  Worlds Inc. largely addressed the framework for the burdens of production and persuasion as to real party in interest determinations.

The appeal involved three patents relating to “computer-generated display of avatars in a virtual world, including methods and systems to determine which particular avatars are displayed in a given situation.” Patent Owner Worlds Inc. asserted its patents against Activision Publishing, Inc., which develops and distributes video games such as Call of Duty.  Worlds added infringement claims against Destiny, a series of video game products distributed by Activision and developed by third-party Bungie, Inc.

More than a year after Worlds filed its complaint against Activision, Bungie filed IPR petitions seeking review of the patents-at-issue in the district court litigation.  In turn, Worlds sought discovery to determine whether the IPR petitions were time-barred under 35 U.S.C. § 315(b) owing to service of the prior complaint upon Activision.  Worlds alleged that Actavision was a real party in interest in the petitions.  In support, Worlds submitted evidence of a Software Publishing and Development Agreement between Bungie and Activision that entailed provisions regarding Bungie’s responsibilities to conduct “legal reviews,” representations and warranties, and indemnity.  The Board denied additional discovery and, in its decision to institute, concluded that “Patent Owner has not demonstrated that Activision is an unnamed real party in interest in this proceeding.”

On appeal, Worlds argued that the Board inappropriately placed the burden of persuasion on the patent owner to prove that the petitions were time-barred under § 315(b). The Federal Circuit agreed, relying on the real party in interest framework laid out in Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc., IPR2013-00453, Paper 88 (P.T.A.B. Jan. 6, 2015). 

The appellate court concluded that the IPR petitioner bears the ultimate burden of persuasion to show that its petitions are not time-barred under § 315(b) based on a complaint served on an alleged real party in interest more than a year earlier. While the petitioner’s initial identification of the real parties in interest does not amount to a “rebuttable presumption” that formally shifts the burden of production to the patent owner, the patent owner must present “some evidence” to support its challenge to the named real party in interest.

In light of this framework, the Federal Circuit held that the Board erred by assuming that the burden of persuasion rests with the patent owner, and remanded the Board’s decision for further consideration.

Opinion can be found here.

ALSO THIS WEEK

Intellectual Ventures I LLC v. T-Mobile USA, Inc., Appeal Nos. 2017-2434, -2435 (Fed. Cir. Sept. 4, 2018)

In an appeal from a district court grant of summary judgment of non-infringement, the Federal Circuit remanded based on an erroneous claim construction.  The Federal Circuit found that the district court’s construction was overly narrow and did not reflect the plain and ordinary meaning of the term within the context of the specification as a whole.  Finding no disavowal, the Federal Circuit remanded for further consideration with the correct construction.  With respect to a separate claim limitation, however, the Federal Circuit affirmed the district court’s construction of a means plus function term as being an indefinite “term of degree” that is “purely subjective.” 

Opinion can be found here.