Bot M8 LLC v. Sony Corp. of Am.

465 F.Supp.3d 1013

BOT M8 LLC, Plaintiff,

v.SONY CORPORATION OF AMERICA, et al., Defendants.

No. C 19-07027 WHA

United States District Court, N.D. California.

Signed June 10, 2020

Paul J. Andre, Gregory Carl Proctor, James R. Hannah, Lisa Kobialka, Paul Joseph Andre, Kramer Levin Naftalis & Frankel LLP, Menlo Park, CA, Aaron M. Frankel, Pro Hac Vice, Aaron Mark Frankel, Jeffrey G. Eng, Pro Hac Vice, Kramer Levin Naftalis & Frankel LLP, New York, NY, for Plaintiff.

Gregory S. Arovas, Pro Hac Vice, Patricia A. Carson, Pro Hac Vice, Gregory Steven Arovas, Kirkland & Ellis LLP, Jeffrey J. Amato, Winston Strawn LLP, New York, NY, Alan Y. Fu, Brandon Hugh Brown, Kirkland and Ellis LLP, San Francisco, CA, David Rokach, Pro Hac Vice, George William Foster, Pro Hac Vice, Kirkland and Ellis LLP, Chicago, IL, for Defendant Sony Corporation of America.

Gregory S. Arovas, Pro Hac Vice, Patricia A. Carson, Pro Hac Vice, Kirkland & Ellis LLP, New York, NY, Alan Y. Fu, Brandon Hugh Brown, Kirkland and Ellis LLP, San Francisco, CA, David Rokach, Pro Hac Vice, George William Foster, Pro Hac Vice, Kirkland and Ellis LLP, Chicago, IL, for Defendant Sony Corporation.

Gregory S. Arovas, Patricia A. Carson, Pro Hac Vice, Gregory Steven Arovas, Kirkland & Ellis LLP, Jeffrey J. Amato, Winston Strawn LLP, New York, NY, Alan Y. Fu, Brandon Hugh Brown, Kirkland and Ellis LLP, San Francisco, CA, David Rokach, George William Foster, Kirkland and Ellis LLP, Chicago, IL, for Defendant Sony Interactive Entertainment LLC.

ORDER RE SUMMARY JUDGMENT

William Alsup, United States District Judge

INTRODUCTION

Dueling summary judgment motions contest a patent's validity under 35 U.S.C. § 101 and its infringement by certain videogame systems. The asserted claim is invalid for reciting an abstract idea, failing to describe a specific technological improvement, and including no further inventive concept. Defendants’ motion is GRANTED IN PART ; the remainder is DENIED AS MOOT .

STATEMENT

Patent owner Bot M8 LLC asserts two patents against Sony Corporation of America, Sony Corporation, and Sony Interactive Entertainment, LLC, U.S. Patent Nos. 7,338,363 and 7,497,777. Only claim 1 of the ’363 patent remains relevant here.

The ’363 patent purports to disclose an improved gaming machine. Different game players seek different entertainment, so the patent teaches that a "gaming machine [should] be designed to satisfy different game motives of various game players." For example, games played under the same conditions risk losing player engagement, because they do not "provide[ ] the game player with a varying sense of anticipation to the game." Thus, "it is desirable to provide a gaming machine with which the specification values are changed by each game player in an enjoyable manner" ( ’363 patent at 1:32–34, 1:47–48, 1:67–2:2).

So, the ’363 patent discloses a game machine wherein the "a game result achieved by a game player and a game result achieved by another game player are totalized and the specification value is changed in accordance with the total result." As a result, "exciting gaming machines which give the game players incentive to play the game can be provided" (id. at 2:41–45, 2:54–56).

The ’363 patent embodies this invention in an improved slot machine. Simply, two or more of these slots machines connect to a server, transmit and aggregate individual game results, and then update the individual game conditions based on the aggregate result.

Accordingly, even when the number of medals paid out to one of [the] jointly-played gaming machines is large, the specification values would be reduced (or depreciated) if the number of medals paid out to the other gaming machine is small, so that the next game play must be carried out under a more unfavorable condition than the preceding game play. Conversely, even when the number of medals paid out for one of the jointly-played gaming machines is small, the specification values would be increased (or improved) if the number of medals paid out to the other gaming machine is large, so that the next game play could be carried out under a more favorable condition that the preceding game play.

In one example, the specification explains that two players’ aggregate winnings above a certain threshold result in better or more exciting jackpot odds. And, conversely, if the two players lose enough, the jackpot odds diminish (id. at 19:64–20:12, 22:8–27).

Of course, the ’363 patent claims this principle more broadly than just updating slot machine odds. Rather, it claims a gaming machine which curates conditions based upon prior results. Relevant here, the asserted claim 1 recites:

A first gaming machine for transmitting and receiving data to and from a server, comprising:

a specification value setting device that sets at least one specification value as a control condition for game control;

a transmitting device that transmits data of a game result to the server;

a gaming machine determining device that determines a second gaming machine operated by a co-player;

a total result data receiving device that receives from the server data of a total game result achieved by the first gaming machine and the second gaming machine based on the data of the game result transmitted by the transmitting device;

a specification value determining device that determines a specification value based on the data of the total game result received by the total result data receiving device; and

a specification value renewing device that renews to replace the specification value set by the specification value setting device with the specification value determined by the specification value determining device.

Patent owner asserts claim 1 against Sony's PlayStation 4 and three video games: MLB The Show 19; Uncharted 4: A Thief's End; and Uncharted: Lost Legacy, but only moves for summary judgment of infringement against the Uncharted games. In these games, players step into the shoes of swashbuckling treasure hunters, searching exotic locales for long-lost treasure and evading enemies via a combination of wit, physicality, and (most relevant for patent owner's purposes) guns — lots of them. The games’ online multiplayer modes pit two teams of five against each other in a variety of exciting gunfights. In the Deathmatch mode, teams simply try to kill each other. In Plunder, they fight for possession of a large idol. Victory in online multiplayer or other challenges unlocks new weapons or weapon upgrades, which players can use to compete more effectively in future multiplayer matches (Dkt. No. 142-4 at 3–5).

Patent owner says these unlockable weapons constitute the games’ "specification value[s]" because a player's arsenal directly influences her competitive advantage (or disadvantage) in multiplayer rounds. Players unlock new weapons or weapon improvements by spending Relics, an in-game currency which players earn by accomplishing in-game challenges, winning matches, and advancing through the games’ player rankings of Apprentice, Bronze, Silver, Gold, Platinum, and Diamond. Simply, prior individual and team match results drive player access to the weapons and improvements which define the game conditions of future multiplayer rounds (id. at 13–16).

Sony rates patent owner's assertions as a new infringement theory not disclosed in the prior infringement contentions, mandated by Patent Local Rule 3-1. In its opposition and its cross motion for summary judgment, Sony asserts the Uncharted games and MLB (each along with the PlayStation 4 of course) do not infringe claim 1. More important for our present purposes, however, Sony also argues claim 1 recites a patent-ineligible abstract concept without including an inventive concept. This order follows full briefing of both motions and a hearing (held telephonically due to COVID-19).

ANALYSIS

Summary judgment is appropriate if there is no genuine dispute of material fact, those facts "that might affect the outcome of the suit." "[T]he substantive law's identification of which facts are critical and which facts are irrelevant ... governs." A genuine dispute contains "sufficient evidence" such that a "reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby , 477 U.S. 242, 248–49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "In judging evidence at the summary judgment stage, the court does not make credibility determinations or weigh conflicting evidence. Rather, it draws all inferences in the light most favorable to the nonmoving party." Soremekun v. Thrifty Payless, Inc. , 509 F.3d 978, 984 (9th Cir. 2007). If "a proper jury question" remains, summary judgment is inappropriate. See Anderson , 477 U.S. at 249, 106 S.Ct. 2505.

A defendant may only infringe a valid patent. Thus, before addressing infringement, this order must address Sony's challenge to claim 1's subject-matter eligibility. Because this order finds claim 1 ineligible, it does not reach other infringement issues.

1. PATENTABLE SUBJECT MATTER GENERALLY .

A patent can cover "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." 35 U.S.C. § 101. But 150 years of precedent exclude laws of nature, natural phenomena, and abstract ideas — "the basic tools of scientific and technological work." Tying these up in patents "might tend to impede innovation," thus undermining the constitutional purpose of patents — "[t]o promote" progress. Alice Corp. v. CLS Bank Int'l , 573 U.S. 208, 216, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014) ; U.S. CONST ., art. I, § 8, cl. 8.

To distinguish the abstract from the patentable, the Supreme Court has provided a two-step framework. "First, we determine whether the claims are directed to a ‘patent-ineligible concept,’ such as an abstract idea. If so, we ‘consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible...