Acceleration Bay LLC v. Take-Two Interactive Software, Inc. et al DC CAFC

Acceleration Bay, LLC has resumed the litigation campaign that seemingly ended last fall with a Federal Circuit opinion that dispensed with an appeal from a judgment of noninfringement in a 2016 case against several game makers. The appeals court dismissed a portion of that appeal, refusing to provide an advisory opinion, and affirmed the rest, ending the litigation. Now, Acceleration Bay has accused Amazon (Amazon Web Services) (1:22-cv-00904) of infringing some of the same patents through the provision of the AWS platform, “alone or in combination with” a wide variety of services such as “Amazon Lumberyard, O3DE, Amazon Luna, Amazon Prime, Amazon Twitch, GameLift, Gridmate, EC2, EKS, CloudFront, VPC Peering, App Mesh, and Lambda”.

District Judge Yvonne Gonzalez Rogers has denied a motion brought by Acceleration Bay, LLC that exposes an “apparent loophole left by the statutory scheme governing [inter partes review (IPR)] availability”, as indicated by the court. In July 2019, Epic Games filed a complaint seeking declaratory judgments of noninfringement—but not of invalidity—of seven patents held by Acceleration Bay. The patentholder answered that complaint, bringing affirmative claims of infringement. Epic Games then replied to Acceleration Bay’s answer, joining the issue of the asserted patents’ invalidity for the first time, through affirmative defenses and counterclaims. Acceleration Bay moved to strike those “counterclaims-in-reply”, arguing that Epic Games “seeks an end-run around rules” governing the availability of IPR, but Judge Gonzalez Rogers denied the motion under current law, lamenting along the way that “[i]n theory, a declaratory judgment counterclaimant may fully litigate the issue of patent validity in the district court, lose on the issue, and then seek a ‘redo’ before the PTAB while being subject to no estoppel or time limit whatsoever”.

Bot M8 LLC, an NPE with apparent ties to Acceleration Bay, LLC, has filed suit against Sony (1:19-cv-07529) in the Southern District of New York over the provision of the PlayStation 4, PlayStation 4 Slim, and PlayStation 4 Pro consoles, the PlayStation Network online service, and Sony-developed video games that include “balanced multiplayer matchmaking or mutual authentication functionality”. The NPE asserts six gaming patents received, among several other US patents and international counterparts, from Japanese company Universal Entertainment in an assignment with effective date on October 13, 2016. The “confidential” patent purchase agreement, filed with the USPTO, identifies payment and timing terms that indicate a target of $96M to have been paid to Universal Entertainment months ago.

In September 2017, the Patent Trial and Appeal Board (PTAB) saw more than ten petitions filed in NPE campaigns involving networking and related technologies such as cybersecurity, including those waged by publicly traded Finjan Holdings, Inc.; prolific private litigant Realtime Data LLC; and Oyster Optics, LLC. Trial was instituted in September for an inter partes review (IPR) against Finjan and in IPRs against other frequent plaintiffs, including MyMail, Ltd. and Sound View Innovations, LLC. The Board issued final decisions in two covered business method (CBM) reviews against Uniloc Corporation Pty. Limited, the first AIA reviews against the NPE to reach final decisions since March 2016, and only the fourth to date. The PTAB also issued final decisions in IPRs against publicly traded Document Security Systems, Inc. as well as Acceleration Bay, LLC; Mobile Telecommunications Technologies, LLC; and Personalized Media Communications, LLC; among other NPEs.

The Patent Trial and Appeal Board (PTAB) saw petitions for AIA review filed against a variety of prolific litigants in June 2017, including General Patent Corporation, Intellectual Ventures LLC (IV), Quarterhill Inc. (f/k/a Wi-LAN Inc.), Realtime Data LLC, Uniloc Corporation Pty. Limited, and Xperi Corporation (f/k/a Tessera Holding Corporation). Also in June, the PTAB instituted trial for petitions brought against patents asserted in a variety of sprawling campaigns, including some waged by Acacia Research Corporation, IV, Papst Licensing, Quarterhill, and VirnetX Inc. The Board further issued final decisions throughout June in AIA reviews against patents involved in several notable campaigns, including some waged by Document Security Systems, Inc., Elm 3DS Innovations LLC, Empire IP LLC, and Quarterhill.

On June 3, 2016, District Judge Richard Andrews issued an order indicating that the court would dismiss three lawsuits brought by Acceleration Bay LLC against Activision Blizzard, Electronic Arts (EA), and Take-Two Interactive Software if Boeing, the original assignee of the patents-in-suit, did not join the cases within 14 days. The Delaware court ruled that the purchase agreement between Boeing and Acceleration Bay did not confer sufficient rights for the NPE to establish prudential standing to sue on its own. Although the defendants won the ensuing race to refile by one day, the Northern District of California has proclaimed Acceleration Bay the winner by applying the first-to-file rule to transfer the defendants’ declaratory judgment actions to the original forum.

On June 3, 2016, District Judge Richard Andrews issued an order indicating that the court would dismiss three lawsuits brought by Acceleration Bay LLC against Activision Blizzard, Electronic Arts, and Take-Two Interactive Software if Boeing, the original assignee of the patents-in-suit, did not join the cases within 14 days. The Delaware court ruled that the purchase agreement between Boeing and Acceleration Bay did not confer sufficient rights for the NPE to establish prudential standing to sue on its own. A race to refile began—a race that the defendants won by one day.