Worlds Inc. v. Bungie, Inc.
903 F.3d 1237
| Fed. Cir. | 2018Background
- Worlds, Inc. sued Activision in district court for infringement of three patents covering avatar display in virtual worlds; Worlds later indicated intent to add Bungie’s Destiny products as accused products.
- Bungie (game developer) filed six IPR petitions, including three at issue here, more than one year after Activision had been served with Worlds’s complaint. Bungie identified only itself as the real party in interest.
- Worlds sought discovery and argued Bungie should have named Activision as a real party in interest, which would render the petitions time-barred under 35 U.S.C. § 315(b). The Board denied discovery and instituted the IPRs, finding Activision was not an unnamed real party in interest.
- The Board’s final written decisions invalidated claims; Worlds appealed, challenging (1) the Board’s real-party-in-interest analysis and burden allocation and (2) the Board’s merits obviousness rulings.
- The Federal Circuit held the Board erred in its real-party-in-interest analysis (including uncertainty about who bore the burden of persuasion and possible reliance on attorney argument as evidence), vacated the Board’s decisions, and remanded for further proceedings focusing first on real-party-in-interest and potential collateral estoppel.
Issues
| Issue | Plaintiff's Argument (Worlds) | Defendant's Argument (Bungie) | Held |
|---|---|---|---|
| Proper burden allocation for real-party-in-interest/time-bar under § 315(b) | Board placed burden on Worlds to prove Activision was a real party in interest; Worlds says petitioner (Bungie) should bear burden of persuasion | Bungie relied on Board practice accepting petitioner’s initial listing and argued Worlds bore the burden to rebut | Court: ultimate burden of persuasion rests with IPR petitioner (Bungie) under APA § 556(d); petitioner must prove petitions are not time-barred |
| What showing must patent owner make to put real-party-in-interest into dispute | Worlds: its evidence (DevPub Agreement, notice letter, same patents asserted) was sufficient to require deeper factual inquiry | Bungie: initial identification of itself as sole real party in interest sufficed; DevPub Agreement doesn’t show control/funding of IPRs | Court: Worlds produced enough evidence to put the issue in dispute; once disputed, Board had to make factual findings and require Bungie to carry its burden of persuasion |
| Use of attorney argument vs. evidence in Board factfinding | Worlds: Board improperly relied on Bungie’s counsel statements (no supporting evidence) to accept lack of control/funding by Activision | Bungie: relied on its briefing statements denying Activision control/funding | Held: Board may not treat attorney argument as evidence; reliance on uncited counsel statements was improper and counsels remand for factual development |
| Issue preclusion based on other IPRs where Worlds did not appeal | Bungie: prior unappealed Board decisions preclude Worlds from relitigating real-party-in-interest here | Worlds: disputes differences among proceedings; limited record | Held: Court declined to apply collateral estoppel on this record and instructed Board to consider estoppel on remand with fuller record |
Key Cases Cited
- Wi‑Fi One, LLC v. Broadcom Corp., 878 F.3d 1364 (Fed. Cir. 2018) (time-bar § 315(b) determinations reviewable; timely filing is condition precedent to Director’s authority)
- Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336 (Fed. Cir. 2018) (flexible, fact-sensitive approach to real-party-in-interest inquiry)
- Schaffer ex rel. Schaffer v. Weast, 546 U.S. 49 (U.S. 2005) (general rule that party seeking relief bears burden of persuasion)
- Dir., Office of Workers’ Comp. Programs v. Greenwich Collieries, 512 U.S. 267 (U.S. 1994) (APA § 556(d) burden of proof refers to burden of persuasion)
- A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020 (Fed. Cir. 1992) (discussion of presumptions and need for proof of basic facts)
- Icon Health & Fitness, Inc. v. Strava, Inc., 849 F.3d 1034 (Fed. Cir. 2017) (attorney argument is not evidence)
- B & B Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293 (U.S. 2015) (issue preclusion requires identical issue actually litigated and decided)
- In re Cygnus Telecomms. Tech., LLC, Patent Litig., 536 F.3d 1343 (Fed. Cir. 2008) (considerations for preclusion when party did not appeal all consolidated cases)
- WesternGeco LLC v. ION Geophysical Corp., 889 F.3d 1308 (Fed. Cir. 2018) (post‑remand guidance cited for Board’s discretion in handling related procedures)