`MICHELLE L. MARRIOTT (pro hac vice)
`michelle.marriott@eriseip.com
`ERIC A. BURESH (pro hac vice)
`eric.buresh@eriseip.com
`MARK C. LANG (pro hac vice)
`mark.lang@eriseip.com
`CHRIS R. SCHMIDT (SBN 298761)
` chris.schmidt@eriseip.com
`ERISE IP, P.A.
`7015 College Blvd, Suite 700
`Overland Park, Kansas 66211
`Telephone: 913.777.5600
`Facsimile: 913.777.5601
`
`Stephen S. Smith
`Law Offices of Stephen S. Smith, P.C.
`303 North Glenoaks Blvd., Suite 200
`Burbank, CA 91502
`Phone: (310)955-5824
`
`Attorneys for Ubisoft, Inc.
`
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`SOUTHERN DIVISION
` CASE NO. 8:19-cv-01150-DOC-KES
`(CONSOLIDATED)
`
`UNILOC 2017 LLC,
`Plaintiff,
`
`v.
`INFOR, Inc.,
`
`Defendant.
`________________________________
`UBISOFT, INC.
`
`Plaintiff,
`
`v.
`UNILOC 2017, LLC,
`Defendant.
`
`
`
`UBISOFT’S REPLY IN SUPPORT OF
`UBISOFT’S MOTION FOR
`JUDGMENT ON THE PLEADINGS
`AS TO UNILOC’S
`COUNTERCLAIMS OF
`INFRINGEMENT
`
`Judge: Hon. David O. Carter
`Date Filed: November 23, 2020
`Hearing Date: December 21, 2020
`Time: 8:30 AM
`Location: Ronald Reagan Federal
` Building, Courtroom 9D
`
`
`
`
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`TABLE OF CONTENTS
`ARGUMENT ....................................................................................................... 2
`CONCLUSION .................................................................................................... 6
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`I.
`II.
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`TABLE OF AUTHORITIES
`
`Cases
`Adaptix, Inc. v. Amazon.com, Inc., No. 5:14-cv-01379-PSG, 2015 WL 4999944
`(N.D. Cal. Aug. 21, 2015) ......................................................................................... 4
`Brain Life, LLC v. Elekta Inc., 746 F.3d 1045 (Fed. Cir. 2014) ..................................... 3
`D-Beam v. Roller Derby Skate Corp., 316 F. App’x 966 (Fed. Cir. 2008) .................... 2
`Impression Prods., Inc. v. Lexmark Int’l, Inc., 137 S.Ct. 1523 (2017) .......................... 4
`In re PersonalWeb Techs., LLC, No. 18-md-02834-BLF, 2019 WL 1455332
`(N.D. Cal. Mar. 13, 2019) ............................................................................. 1, 3, 4, 5
`MGA, Inc. v. Gen. Motors Corp., 827 F.2d 729 (Fed. Cir. 1987) .................................. 2
`Shaw v. Hahn, 56 F.3d 1128 (9th Cir. 1995) .................................................................. 3
`SpeedTrack, Inc. v. Office Depot, Inc., 791 F.3d 1317 (Fed. Cir. 2015) ........................ 4
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`The core facts are undisputed. Uniloc repeatedly sued Akamai for infringement
`of the same two patents that are at issue in this case and lost. The dismissal of Uniloc’s
`claim against Akamai was with prejudice, an “adjudication on the merits.” Uniloc did
`not appeal. And now, Uniloc is suing Akamai’s customer, Ubisoft, for infringement of
`the same patents based on its use of the same Akamai technology at issue in the Akamai
`case. This is barred by the doctrine of preclusion and the Kessler doctrine—the final
`adjudication on the merits against Akamai itself bars Uniloc from pursuing Akamai’s
`customers (such as Ubisoft) for alleged infringement based on their use of the same
`Akamai technology at issue in the Akamai litigation. The Federal Circuit’s decision in
`PersonalWeb on nearly identical facts confirms that the dismissal with prejudice
`conferred upon Akamai the right to continue producing, using, and selling its CDN
`services without further harassment from Uniloc, “either directly or through suits
`against [Akamai’s] customers for using that product.” In re PersonalWeb Techs. LLC,
`961 F.3d 1365, 1379 (Fed. Cir. 2020).
`None of Uniloc’s attempts to end-run the Akamai ruling aid its cause. Although
`Uniloc dusts off the Restatement to suggest that the Akamai ruling might not completely
`bar its case here, the Federal Circuit’s PersonalWeb decision holds otherwise. Uniloc’s
`assertion that Ubisoft and Akamai may not be in privity, when it is undisputed that
`Ubisoft is Akamai’s customer with respect to the allegedly-infringing technology,
`strains credibility. And when all of that fails, Uniloc suggests—without any showing of
`good faith analysis—that maybe Ubisoft uses a CDN other than Akamai (it does not),
`and maybe that other CDN could be at issue in the case (it should not). By this point,
`Uniloc should know its infringement theory, and should have investigated whatever
`technology it is accusing. And the only CDN that Uniloc has accused of infringement in
`this case is the one provided by Akamai, which has already been adjudicated to be non-
`infringing. This case should be dismissed with prejudice.
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`I.
`
`ARGUMENT
`Uniloc’s infringement claim against Ubisoft accuses Ubisoft’s use of Akamai’s
`Content Delivery Network (“CDN”) of infringement. Uniloc accuses Ubisoft of
`infringing certain claims of the ’578 and ’293 Patents. Dkt. 29 (Uniloc’s Counterclaims,
`Consolidated Case No. 8:19-cv-1062). More particularly, Uniloc’s counterclaims allege
`infringement because “Ubisoft distributes software” (Dkt. 29, ¶ 8 regarding the ’578
`Patent) and Ubisoft “uses on-demand servers” (Dkt. 29, ¶ 21 regarding the ’293 Patent),
`and Uniloc contends that the server that performs the accused distribution of software is
`the Akamai Content Distribution Network (“CDN”):
`
`
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`Dkt. 67-3 (Uniloc’s Infringement Contentions, p. 1-2). In short, Ubisoft’s use of
`Akamai’s CDN is squarely alleged of infringement in this case with respect to both
`Asserted Patents.
`Uniloc has already sued Akamai for infringement of the ’578 and ’293 Patents
`and is barred from pursuing yet another infringement lawsuit against Akamai’s
`customer, Ubisoft. The District of Massachusetts dismissed Uniloc’s prior case against
`Akamai with prejudice, over Uniloc’s objection, and made clear that it operated as an
`“adjudication on the merits.” Dkt. 67-9. As explained in the dismissal, Uniloc is “barred
`from asserting infringement claims against Akamai.” Id. A dismissal with prejudice is
`“considered a judgment on the merits,” and “a final judgment on the merits precludes
`the parties or their privies from relitigating claims that were or could have been raised
`in that action.” D-Beam v. Roller Derby Skate Corp., 316 F. App’x 966, 968-969 (Fed.
`Cir. 2008). Further, the Kessler doctrine “bars a patent infringement action against a
`customer of a seller who has previously prevailed against the patentee. . .” MGA, Inc. v.
`Gen. Motors Corp., 827 F.2d 729, 734 (Fed. Cir. 1987).
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`Pursuant to the District of Massachusetts’ dismissal of Uniloc’s patent
`infringement claims against Akamai, the Akamai CDN “acquired a status as
`noninfringing devices, and [Uniloc] is barred from asserting that they infringe the same
`patent claims a second time.” Brain Life, LLC v. Elekta Inc., 746 F.3d 1045, 1058 (Fed.
`Cir. 2014). The adjudication and dismissal of Uniloc’s claims against Akamai bars
`Uniloc’s attempt to assert the same patents against customer use of the Akamai CDN in
`this case.
`In an effort to circumvent this outcome, Uniloc primarily argues that Ubisoft is
`not “a privy” to the Akamai action just because it is Akamai’s customer. According to
`Uniloc, in order for Ubisoft to be in privity with Akamai, Ubisoft would have had to
`have controlled the prior Akamai litigation (Dkt. 76 at 7), or Ubisoft would have had to
`make a formal indemnification claim against Akamai in this second lawsuit (Dkt. 76 at
`8-9). Not so. Privity merely requires “sufficient commonality of interest” between the
`parties:
`In the Ninth Circuit, ‘privity may exist … when there is sufficient
`commonality of interest’ between the parties” such that “the interests of the
`party in the subsequent action were shared with and adequately represented
`by the party in the former action.”
`In re PersonalWeb Techs., LLC, No. 18-md-02834-BLF, 2019 WL 1455332, at *8 (N.D.
`Cal. Mar. 13, 2019). Specifically, privity exists “when the interests of the party in the
`subsequent action [here, Ubisoft] were shared with and adequately represented by the
`party in the former action [here, Akamai].” Id. (citing Shaw v. Hahn, 56 F.3d 1128,
`1131-32 (9th Cir. 1995)). As a counter-defendant, a “lesser degree of privity is required”
`in order for Ubisoft “to benefit from claim preclusion.” Id. Just as in PersonalWeb,
`where Amazon and its customers “share[d] the same interest in the unfettered use of
`Amazon’s web services, and Amazon adequately represented this interest in the [prior
`case],” here Ubisoft and Akamai’s shared interest in the unfettered use of Akamai’s
`CDN coupled with Akamai successfully representing that interest in the Akamai
`Litigation establish the privity. Id. at *8.
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`Contrary to Uniloc’s suggestion, there is no “rule” that privity cannot exist
`between a seller and a customer. Dkt. 76 at 6 (citing Transclean Corp., 474 F.3d at
`1306). Numerous cases have found privity in a seller/customer relationship. See, e.g.,
`PersonalWeb, 2019 WL 1455332, at *8; Adaptix, Inc. v. Amazon.com, Inc., No. 5:14-
`cv-01379-PSG, 2015 WL 4999944, at *6 (N.D. Cal. Aug. 21, 2015). As noted in
`PersonalWeb, the Transclean decision cited by Uniloc merely “recognizes that privity
`exists between a manufacturer and customer ‘when the parties are so closely related and
`their interests are so nearly identical that it is fair to treat them as the same parties for
`purposes of determining the preclusive effect of the first judgment.’” PersonalWeb,
`2019 WL 1455332, at *8 (emphasis added). Moreover, the Federal Circuit has expressly
`held that customers may independently “assert a Kessler defense” on their own—
`without the manufacturer/seller—because it “is consistent with the Court’s goal of
`protecting the manufacturer’s right to sell an exonerated product free from interference
`or restraint. A manufacturer cannot sell freely if it has no customers who can buy freely.”
`SpeedTrack, Inc. v. Office Depot, Inc., 791 F.3d 1317, 1326-27 (Fed. Cir. 2015).1
`There is also no rule that privity requires an indemnification claim. While an
`indemnification claim may serve as an “additional basis” for privity between a seller and
`customer, it is not a prerequisite for privity. See PersonalWeb, 2019 WL 1455332, at *9.
`Uniloc does not cite any authority for such a rule, either. Instead, Uniloc merely argues
`that PersonalWeb is distinguishable from this case because Amazon had agreed to
`indemnify its customers. Dkt. 76 at 8. This is a distinction without a difference, as the
`
`
`1 Akamai can sell its CDN freely as a result of the District of Massachusetts’ dismissal
`with prejudice. Likewise, Akamai’s authorized sale of its CDN exhausts whatever patent
`rights Uniloc may have had downstream. See, e.g., Impression Prods., Inc. v. Lexmark
`Int’l, Inc., 137 S.Ct. 1523, 1531 (2017). This is an additional reason why Uniloc is barred
`from maintaining this lawsuit against Ubisoft.
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`PersonalWeb court found that privity existed solely based on the seller/customer
`relationship, in “addition” to indemnification.2 PersonalWeb, 2019 WL 1455332, at *9.
`Uniloc’s argument that the events leading up to the Akamai dismissal somehow
`impact whether or not the adjudication extends to its customers (such as Ubisoft) also
`fails. As a preliminary matter, the fact that Uniloc opposed the Akamai dismissal does
`not change the fact that it operated as a judgment on the merits. There is no legal
`distinction between a voluntary dismissal and a Court-ordered dismissal when it comes
`to claim preclusion/Kessler, and Uniloc’s hindsight complaint that because it chose to
`fight Akamai it was “not free to preserve its rights to sue other parties” through a
`settlement agreement is entirely irrelevant. Dkt. 76 at 9. There is also no valid distinction
`to be drawn based on Akamai’s status as an IBM Strategic Partner. Uniloc is “barred
`from asserting infringement claims against Akamai,” and its claims accusing the Akamai
`CDN of infringement were dismissed with prejudice. Dkt. 67-9. While the reason why
`Uniloc’s claims against Akamai are barred may be “personal to Akamai” (Dkt. 76 at 7),
`the result of the “adjudication on the merits” of Uniloc’s claims against Akamai is not
`personal to Akamai. The patent infringement claims against Akamai were adjudicated,
`and that adjudication extends to Akamai’s customers. To hold otherwise would be to
`allow Uniloc to ensnare Akamai in a fourth round of litigation, as Akamai could once
`again be called on to defend its CDN against infringement of the ’578 and ’293 Patents—
`either directly or through third-party discovery—despite the fact that Uniloc is barred
`from asserting infringement claims against Akamai.
`Its legal arguments having failed, Uniloc suggests that perhaps Ubisoft is using a
`CDN other than the Akamai CDN, pointing to i3D.net. Dkt. 76 at 4. But Uniloc has not
`accused Ubisoft’s use of i3D.net of infringement, and it is difficult to see how it could
`
`
`2 Nevertheless, Ubisoft notes that Akamai’s “Terms and Conditions” contain an
`indemnification clause. See
`https://www.akamai.com/us/en/multimedia/documents/akamai/akamai-terms-
`conditions-2019.pdf, Section 7.1.
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`ever do so given that Akamai is the sole CDN used by Ubisoft to distribute content in
`the United States. Thus, all of Uniloc’s accusations that Ubisoft’s distribution of
`software infringes the claims of the ’578 and ’293 Patents necessarily involve the
`Akamai CDN and are barred by the prior ruling that the Akamai CDN does not infringe.
`The Akamai lawsuit cleared Akamai’s CDN of infringement, and the Akamai
`CDN is thus a non-infringing product. Ubisoft’s use of the Akamai CDN, therefore,
`cannot constitute a separate infringement claim, and this case should similarly be
`dismissed with prejudice.
`II. CONCLUSION
`For the foregoing reasons, Ubisoft respectfully requests this Court grant its motion
`for judgment on the pleadings.
`
`Dated: December 14, 2020
`
`
`
`
`Respectfully submitted,
`
`
`
`
`
`
`
`/s/Michelle L. Marriott
`Michelle L. Marriott (pro hac vice)
`michelle.marriott@eriseip.com
`Eric A. Buresh (pro hac vice)
`eric.buresh@eriseip.com
`Mark C. Lang (pro hac vice)
`mark.lang@eriseip.com
`Chris R. Schmidt (SBN 298761)
`chris.schmidt@eriseip.com
`ERISE IP, P.A.
`7015 College Blvd., Suite 700
`Overland Park, KS 66211
`Phone: (913)777-5600
`Fax: (913)777-5601
`
`Stephen S. Smith (SBN 166539)
`ssmith@stephensmithlaw.com
`LAW OFFICES OF STEPHEN S. SMITH, P.C.
`303 North Glenoaks Blvd., Suite 200
`Burbank, CA 91502
`
`
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`Phone: (310)955-5824
`Fax: (310)955-5824
`
`Attorneys for Ubisoft, Inc.
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