Worlds v. Bungie APPELLATE Full Filing

Case: 17-1546 Document: 6 Page: 1 Filed: 03/20/2017
UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT
WORLDS INC.,
Patent Owner/Appellant
v. Appeal Nos. 2017-14811

2017-15462
2017-15833
BUNGIE, INC.,
Petitioner/Appellee
Proceeding Nos.: IPR2015-01264, IPR2015-01321 and IPR2015-01319
NOTICE FORWARDING CERTIFIED LIST
A Notice of Appeal to the United States Court of Appeals for the Federal Circuit was
timely filed January 12, 2017; January 30, 2017; and February 7, 2017, in the United States
Patent and Trademark Office in connection with the above identified Inter Partes Review
proceedings. Pursuant to 35 U.S.C. 143, a Certified List is this day being forwarded to the
Federal Circuit.
Respectfully submitted,
Date: March 20, 2017
Under Secretary of Commerce for Intellectual Property and

Director of the United States
Patent and Trademark Office
1 Notice of Appeal for 2017-1481 was filed January 12, 2017.

2 Notice of Appeal for 2017-1546 was filed January 30, 2017.
3 Notice of Appeal for 2017-1583 was filed February 7, 2017.
CERTIFICATE OF SERVICE
The undersigned hereby certifies that a true and correct copy of the foregoing NOTICE
FORWARDING CERTIFIED LIST has been served, via electronic mail, on counsel for
Appellant and Appellee this 20th day of March, 2017, as follows:
PATENT OWNER:
Wayne Michael Helge

Gregory A. Krauss
Aldo Noto
DAVIDSON BERQUIST JACKSON & GOWDEY, LLP
whelge@dbjg.com
gkrauss@dbjg.com
anoto@dbjg.com
PETITIONER:
Michael T. Rosato
Matthew A. Argenti
Andrew Swanson Brown
Richard Torczon
WILSON, SONSINI, GOODRICH & ROSATI, PC
mrosato@wsgr.com
margenti@wsgr.com
asbrown@wsgr.com
rtorczon@wsgr.com
U.S. DEPARTMENT OF COMMERCE

United States Patent and Trademark Office
March 20, 2017

(Date)
THIS IS TO CERTIFY that the attached document is a list of the papers that comprise
the record before the Patent Trial and Appeal Board (PTAB) for the Inter Partes Review
proceeding identified below.
BUNGIE, INC.,
Petitioner,
v.
WORLDS INC.,
Patent Owner.
Case: IPR2015-01264
Patent No. 7,945,856 B2
By authority of the
DIRECTOR OF THE UNITED STATES

PATENT AND TRADEMARK OFFICE
Certifying Officer
Prosecution History IPR2015-01264
Date Document
5/26/2015 Petition for Inter Partes Review
5/26/2015 Petitioners Power of Attorney
5/26/2015 Petitioners Mandatory Notice
6/8/2015 Notice of Filing Date Accorded to Petition
7/1/2015 Patent Owners Power of Attorney
7/1/2015 Patent Owners Mandatory Notices
7/27/2015 Patent Owners Notice of Conference Call Transcript
7/30/2015 Order - Authorizing Patent Owners Motion for Routine or Additional Discovery
8/6/2015 Patent Owners Motion for Routine or Additional Discovery
8/13/2015 Petitioners Opposition to Motion for Routine or Additional Discovery
9/4/2015 Order - Motion for Routine or Additional Discovery
9/8/2015 Patent Owners Preliminary Response
11/30/2015 Decision - Institution of Inter Partes Review
11/30/2015 Scheduling Order
12/2/2015 Petitioners Mandatory Change-of-Information Notices
12/14/2015 Patent Owners Objections to Petitioners Evidence
1/29/2016 Notice of Deposition - Zyda
2/8/2016 Joint Stipulation to Modify the Scheduling Order
2/19/2016 Patent Owners Objections to Petitioners Exhibit
3/15/2016 Patent Owners Response
4/4/2016 Notice of Deposition - Pesce
4/22/2016 Patent Owners Supplement to Response
4/25/2016 Notice of Deposition - Kidrin
4/25/2016 Notice of Deposition of Ken Locker
4/25/2016 Notice of Deposition - Laffan
5/3/2016 Order - Update to Scheduling Order
5/5/2016 Notice of Cancellation of Deposition - Laffan
5/10/2016 Notice of Cancellation of Deposition - Locker
5/23/2016 Patent Owners Objections to Petitioners Evidence Served May 16, 2016
6/24/2016 Petitioners Reply to Patent Owners Response
7/1/2016 Patent Owners Objections to Petitioners Reply Evidence
7/18/2016 Patent Owners Motion to Exclude Petitioners Evidence
7/18/2016 Patent Owners Request for Oral Hearing
7/18/2016 Petitioners Request for Oral Argument
7/25/2016 Petitioners Opposition to Motion to Exclude
7/28/2016 Order - Trial Hearing
7/29/2016 Patent Owners Reply in Support of Its Motion to Exclude
7/29/2016 Patent Owners Updated Exhibit List
9/12/2016 Oral Hearing Transcript
11/10/2016 Final Written Decision

March 20, 2017

(Date)
BUNGIE, INC.,
Petitioner,
v.
WORLDS INC.,
Patent Owner.
Case: IPR2015-01321
Patent No. 8,145,998 B2
By authority of the

Certifying Officer
Date Document
6/12/2015 Notice of Filing Data Accorded to Petition
4/25/2016 Notice of Deposition - Locker
12/8/2016 Errata

March 20, 2017

(Date)
BUNGIE, INC.,
Petitioner,
v.
WORLDS INC.,
Patent Owner.
Case: IPR2015-01319
Patent No. 8,082,501 B2
By authority of the

Certifying Officer
Date Document
6/12/2015 Notice of Filing Date Accorded to Petition
4/25/2016 Notice of Deposition - Locker
Trials@uspto.gov Paper No. 42
571.272.7822 Entered: November 10, 2016
UNITED STATES PATENT AND TRADEMARK OFFICE

____________
BEFORE THE PATENT TRIAL AND APPEAL BOARD

____________
BUNGIE, INC.,
Petitioner,
v.
WORLDS INC.,
Patent Owner.
____________
Case IPR2015-01264
Patent 7,945,856 B2
____________
Before KARL D. EASTHOM, KERRY BEGLEY, and JASON J. CHUNG,

Administrative Patent Judges.
BEGLEY, Administrative Patent Judge.
FINAL WRITTEN DECISION

35 U.S.C. 318(a) and 37 C.F.R. 42.73
Bungie, Inc. (Petitioner) filed a Petition requesting inter partes

review of claim 1 of U.S. Patent No. 7,945,856 B2 (Ex. 1001, the
856 patent). Paper 3 (Pet.). Pursuant to 35 U.S.C. 314(a), we
determined the Petition showed a reasonable likelihood that Petitioner would
prevail in establishing the unpatentability of the claim and instituted an inter
partes review. Paper 13 (Inst. Dec.).
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Patent 7,945,856 B2
After institution, Patent Owner Worlds Inc. (Patent Owner) filed a
Patent Owner Response (Paper 20 (Resp.)) and a Supplement to the
Response (Paper 22 (Supp. Resp.)). Petitioner filed a Reply to Patent
Owners Response. Paper 31 (Reply).
Patent Owner filed a Motion to Exclude. Paper 33 (Mot.).
Petitioner filed an Opposition to the Motion (Paper 36 (Oppn)), to which
Patent Owner filed a Reply (Paper 38 (Mot. Reply)).
An oral hearing was held before the Board. Paper 41 (Tr.).
We issue this Final Written Decision pursuant to 35 U.S.C. 318(a)
and 37 C.F.R. 42.73. Having considered the record before us, we
determine Petitioner has shown by a preponderance of the evidence that
claim 1 of the 856 patent is unpatentable. See 35 U.S.C. 316(e).
I. BACKGROUND
A. RELATED PROCEEDINGS
The parties indicate that Patent Owner has asserted the 856 patent in
a case before the U.S. District Court for the District of Massachusetts (the
District Court), Worlds, Inc. v. Activision Blizzard, Inc., Case No. 1:12-cv-
10576-DJC (D. Mass.) (District Court Case). Pet. 10; Paper 6. In
addition, patents related to the 856 patent are the subject of pending inter
partes reviews, based on petitions filed by Petitioner: IPR2015-01268,
challenging U.S. Patent No. 7,181,690 B1 (690 patent); IPR2015-01269,
challenging U.S. Patent No. 7,493,558 B2 (558 patent); IPR2015-01319,
challenging U.S. Patent No. 8,082,501 B2 (501 patent); IPR2015-01321
and IPR2015-01325, challenging U.S. Patent No. 8,145,998 B2
(998 patent). See Pet. 10; Paper 6.
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B. THE 856 PATENT
The 856 patent discloses a highly-scalable client-server
architecture for a three-dimensional graphical, multi-user, interactive
virtual world system. Ex. 1001, [57], 2:3133, 3:13. In the preferred
embodiment, each user chooses an avatar to represent the user in the virtual
world, id. at 3:2022, and interacts with a client system, which is
networked to a virtual world server, id. at 3:910. [E]ach client . . . sends
its current location, or changes in its current location, to the server. Id. at
3:3639; see id. at 2:4043.
In the preferred embodiment, the system implements a crowd
control function, which determines [w]hether another avatar is in range
and is needed in some cases to ensure that neither client 60 nor user A get
overwhelmed by the crowds of avatars likely to occur in a popular virtual
world. Id. at 5:3236; see id. at 2:6264. Server 61 maintains a variable,
N, which sets the maximum number of other avatars [user] A will see,
whereas client 60 maintains a variable, N, which might be less than N,
indicating the maximum number of avatars client 60 wants to see and/or
hear. Id. at 5:3741; see id. at 13:1821. These limits of N and N avatars
[g]enerally control how many avatars [user] A sees. Id. at 5:5558.
Server 61 tracks the location and orientation of each users avatar and
maintains a list of the N nearest neighboring remote avatars for each
users avatar. Id. at 5:4549, 13:2123, 14:2732. [A]s part of crowd
control, the server notifies client 60 for a user regarding changes in the N
closest remote avatars and their locations. Id. at 14:3238. On the
client-side, [w]here N is less than N, the client also uses position data to
select N avatars from the N provided by the server. Id. at 6:68.
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The specification explains that in the preferred embodiment, client 60,
used by user A, features remote avatar position table 112 and current avatar
position register 114. Id. at 2:6264, 4:5265, Fig. 4. Current avatar
position register 114 contains the current position and orientation of [user]
As avatar in the virtual world. Id. at 5:2223. Remote avatar position
table 112, in turn, contains the current positions of the in range avatars
near [user] As avatar. Id. at 5:3132; see id. at 5:5354, 6:16.
The client executes a process to render a view of the virtual world
from the perspective of the avatar for that . . . user. Id. at [57], 2:3537,
3:2528, 4:4551, 7:5052. In the preferred embodiment, client system 60
executes a graphical rendering engine program to generate[] the users view
of the virtual world. Id. at 2:6264, 4:4551. In rendering a view,
client 60 requests the locations, orientations and avatar image pointers of
neighboring remote avatars from server 61 and the servers responses are
stored in remote avatar position table 112. Id. at 7:4043. Rendering
engine 120 then reads register 114 [and] remote avatar position table 112,
as well as databases holding avatar images and the layout of the virtual
world, and renders a view of the virtual world from the view point (position
and orientation) of [user] As avatar. Id. at 7:4856; see id. at 6:3941,
7:3439.
C. CHALLENGED CLAIM
Claim 1 of the 856 patent, the only challenged claim, is
reproduced below.
1. A method for enabling a first user to interact with second
users in a virtual space, wherein the first user is associated with
at first avatar and a first client process, the first client process
being configured for communication with a server process, and
each second user is associated with a different second avatar
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Patent 7,945,856 B2
and a second client process configured for communication with
the server process, at least one second client process per second
user, the method comprising:
(a) receiving by the first client process from the server
process received positions of selected second avatars;
and
(b) determining, from the received positions, a set of the
second avatars that are to be displayed to the first user;
wherein the first client process receives positions of fewer
than all of the second avatars.
Id. at 21:722. Throughout this Decision, we refer to step (a) as the
receiving step, step (b) as the determining step, and the claim language
following steps (a) and (b), beginning with wherein, as the wherein
limitation.
D. INSTITUTED GROUNDS OF UNPATENTABILITY
We instituted inter partes review of claim 1 of the 856 patent on the
following grounds of unpatentability asserted in the Petition. Inst. Dec. 33.
Basis Reference
1
102 Thomas A. Funkhouser, RING: A Client-Server System
for Multi-User Virtual Environments, in 1995
SYMPOSIUM ON INTERACTIVE 3D GRAPHICS 85 (1995)
(Ex. 1005, Funkhouser)
102 U.S. Patent No. 5,659,691 (filed Sept. 23, 1993) (issued
Aug. 19, 1997) (Ex. 1008, Durward)
Funkhouser and Durward were listed in an Information Disclosure Statement
filed during prosecution of the 856 patent. Pet. 4; Ex. 1004, 243, 246.
Petitioner supports its challenge with a Declaration executed by
Michael Zyda, D.Sc. on May 26, 2015 (Ex. 1002) and a Second Declaration
1
The Leahy-Smith America Invents Act (AIA), Pub. L. No. 11229
(2011), revised 35 U.S.C. 102, effective March 16, 2013. Because the
856 patent has an effective filing date before this date, we refer to the
pre-AIA version of 102 throughout this Decision.
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Patent 7,945,856 B2
executed by Dr. Zyda on March 4, 2016 (Ex. 1038). Patent Owner relies on
a Declaration executed by Mr. Mark D. Pesce on March 15, 2016
(Ex. 2017).
II. ANALYSIS
A. LEVEL OF ORDINARY SKILL IN THE ART
We begin our analysis by addressing the level of ordinary skill in the
art. Petitioner argues, and Dr. Zyda opines, that a person of ordinary skill in
the art relevant to the 856 patent would have had through education or
practical experience, the equivalent of a bachelors degree in computer
science or a related field and at least an additional two years of work
experience developing or implementing networked virtual environments.
Pet. 9; Ex. 1002 53. Mr. Pesce similarly testifies that a person of ordinary
skill in the art would have had at least a bachelors degree or equivalent in
computer science, with two or more years of experience in coding related to
both virtual environments and computer networking. Ex. 2017 33.
The parties proposals for the level of ordinary skill in the art have
slight differences in wording, yet we do not find them to have meaningful
distinctions (e.g., at least two years versus two or more years,
networked virtual environments versus virtual environments and
computer networking). Neither party asserted that there is any such
distinction. Based on the testimony of the parties experts as well as our
review of the 856 patent, the types of problems and solutions described
therein, and the prior art involved in this proceeding, we adopt the following
as the level of ordinary skill in the art: the equivalent, through education or
practical experience, of a bachelors degree in computer science or a related
field, and at least two years of experience developing, coding, or
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Patent 7,945,856 B2
implementing networked virtual environments, or virtual environments and
computer networking.
B. MR. PESCES QUALIFICATION AS AN EXPERT
Petitioner argues the testimony of Mr. Pesce, Patent Owners
declarant, should be given no weight because it often is inconsistent, lacks
objective support, and/or was incapable of being substantiated during . . .
cross-examination, providing examples of these alleged deficiencies in
Mr. Pesces testimony regarding claim construction and the timing of the
invention of the 856 patent. Reply 13. Petitioner further argues that [i]t
is not clear how Mr. Pesce qualifies as an expert in this field, citing
Mr. Pesces deposition testimony regarding the amount of experience he had
in 1995 2 and his lack of an educational degree beyond high school. Reply 3
(citing Ex. 1046, 18:1219:2, 21:815, 40:1020; Ex. 2017 35). Petitioner
also asserts that Mr. Pesce was unwilling to address his . . . use of
psychedelic drugs during the 1990s (Ex. 1041) and whether that drug use
2
The 856 patent claims priority to provisional application no. 60/020,296
(296 provisional), filed on November 13, 1995. Ex. 1001, [60].
Petitioner uses the provisional filing date in its analysis in its briefing and
Dr. Zydas declaration, see, e.g., Pet. 3, 9; Reply 6; Ex. 1002 5051, and
represented at the hearing that it does not contest, for purposes of this
proceeding, priority to the provisional, Tr. 195:17. Patent Owner also takes
the position that the 856 patent is entitled to priority to the provisional and
represented at the hearing that its specification is nearly identical to that of
the 856 patent. See, e.g., id. at 90:591:3, 92:1015; Ex. 2017 34. Based
on our review of the 296 provisional, we agree with Patent Owners
representations that its specification is nearly identical to the 856 patent
specification, and we accept the parties agreement that the 856 patent is
entitled to priority to the 296 provisional. See Ex. 2020. None of our
determinations in this Decision would change if the 856 patent were not
entitled to this priority date.
7
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Patent 7,945,856 B2
affected his recollection of events during the period relevant to the
[856] patent[]. See also, Ex. 1046 at 46:11-47:21, 50:25-53. Reply 3.
Here, Petitioner has not moved to exclude Mr. Pesces testimony. Nor
has Petitioner taken an express and affirmative position that Mr. Pesce is not
qualified as an expert. See id. (It is not clear how Mr. Pesce qualifies as an
expert in this field.) (emphasis added). To the extent Petitioner is
suggesting as much, we disagree.
Federal Rule of Evidence (Rule) 702 provides that a witness who
is qualified as an expert by knowledge, skill, experience, training, or
education may testify in the form of an opinion if (a) the experts knowledge
will help the trier of fact to understand the evidence or to determine a fact in
issue; (b) the testimony is based upon sufficient facts or data; (c) the
testimony is the product of reliable principles and methods; and (d) the
witness has applied the principles and methods reliably to the facts of the
case. Fed. R. Evid. 702. Under this standard, testimony on the issue of
unpatentability proffered by a witness who is not qualified in the pertinent
art generally is not admissible. Sundance Inc. v. DeMonte Fabricating
Ltd., 550 F.3d 1356, 136364 (Fed. Cir. 2008). Rule 702, however, does not
require[] a witness to possess something more than ordinary skill in the art
to testify as an expert and a witness possessing merely ordinary skill will
often be qualified to present expert testimony. Id. at 1363. Nor does the
Rule require a perfect match or complete overlap between the witnesss
technical qualifications and the field of the invention. See SEB S.A. v.
Montgomery Ward & Co., 594 F.3d 1360, 137273 (Fed. Cir. 2010).
In his declaration and attached curriculum vitae, Mr. Pesce details his
relevant work experience from 1984 to the present as well as his teaching
experience and numerous technical publications and presentations. See
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Ex. 2017 319, 3542, pp. 6782; see also Ex. 1046, 19:821:16, 39:11
40:20. Having reviewed this experience and Mr. Pesces technical
testimony, we find his knowledge, skill, and experience in the relevant field
of networked virtual environments, as well as computer networking and
virtual reality more generally, sufficient to render him qualified to offer
expert testimony in this proceeding under Rule 702.
We do not find the evidence to which Petitioner points persuasive on
this issue. First, Petitioner refers to Mr. Pesces declaration testimony that
as of 1995, [he] possessed more than 5 years of experience in the computer
graphics industry with an emphasis on virtual reality and his admission
during his deposition that he was working in the field from 1991 so five
years is accurate, rather than more than five years as he stated in his
declaration. Ex. 2017 33; Ex. 1046, 39:1340:20; see Reply 3. We do not
find this admitted minor misstatement of Mr. Pesces experience to
undermine his qualifications, or credibility, as an expert. Mr. Pesce worked
on virtual reality environments beginning in 1991 and continuing through
the relevant time of invention of the 856 patent, and for many years
thereafter. See, e.g., Ex. 2017 519, 3542, pp. 6782; Ex. 1046, 39:13
40:20. Second, as to Mr. Pesces lack of an educational degree beyond high
school, Petitioner and Dr. Zyda, as well as Mr. Pesce, agree that experience
can overcome a lack of a formal technical education in satisfying the
standard for a person of ordinary skill in the art, and we have so determined
in our finding in II.A regarding the level of ordinary skill in the art. Pet. 9
(proffering definition of one of ordinary skill in the art as someone who
had, through education or practical experience, the equivalent of a
bachelors degree in computer science or a related field) (emphasis added);
Ex. 1002 53 (same); Ex. 2017 33; see id. 3, 35; Reply 3; Oppn 7. We
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note that Mr. Pesce did attend the Massachusetts Institute Technology
(MIT) for four semesters. Ex. 2017 3; Ex. 1046, 19:814; see id.
at 19:1521:16. As we explain above, we find Mr. Pesces experience, skill,
and knowledge in the relevant field sufficient to render him qualified to offer
expert testimony in this proceeding.
Third, we turn to Petitioners citation and reference to Exhibit 1041,3
an excerpt from a 1999 interview of Mr. Pesce at the AllChemical Arts
conference in which he discusses how his use of psychedelic drugs,
beginning in college, has impacted and facilitated his career and work, and
Mr. Pesces related deposition testimony in which he states he does not
recall the interview and the specific contents thereof. Reply 3 (citing
Ex. 1041; Ex. 1046, 46:11-47:21, 50:2553); Ex. 1041; Ex. 1046, 46:11
47:21, 50:2557:10. We have considered Exhibit 1041 in assessing
Mr. Pesces capacity to perceive and recall developments and details from
the relevant art in the 1990s about which he testifies, as well as the reliability
of his perception and recollection. See infra II.H; see, e.g., Ex. 2017
3644, 49.a.iv, 59; Ex. 1046, 85:421, 89:1090:7, 204:12205:20,
222:1223:6. We do not find Exhibit 1041, which lacks detailed
information regarding the extent and regularity of any drug use, to
undermine Mr. Pesces capacity to perceive and recall such events or the
reliability of his relevant testimony. Nor do we find his inability to
remember the specifics of this one particular interview given nearly twenty
years ago to undermine his credibility, reliability, or qualifications as a
witness. Having carefully reviewed his testimony in this proceeding, we
3
Exhibit 1041 is a subject of Patent Owners motion to exclude, which we
address below in II.H. We consider Exhibit 1041 here only for the limited
purpose for which we find it relevant and admissible in II.H.
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find his technical testimony, and particularly his testimony on issues related
to the development of the art in the early to mid-1990s, cogent. We consider
Mr. Pesces testimony throughout our analysis below and where we discount
or disagree with his testimony, it is for reasons other than the contents of
Exhibit 1041 and his deposition testimony regarding this exhibit.
Petitioners remaining arguments regarding specific alleged
deficiencies in Mr. Pesces testimony on claim construction and the date of
invention of claim 1 of the 856 patent go to the weight to be accorded to
Mr. Pesces testimony on these particular substantive issues. See Reply 13.
We have considered these alleged deficiencies and address them, as
appropriate, in our analysis below of the issues to which they pertain.
C. CLAIM INTERPRETATION
We now consider the meaning of the claim language.
1. Applicable Legal Standards
In our Institution Decision, we raised the issue of the impending
expiration of the 856 patent and its potential impact on the applicable claim
construction standard, given that the Board construes unexpired patents
under the broadest reasonable interpretation standard but expired patents
under the standard articulated in Phillips v. AWH Corp., 415 F.3d 1303 (Fed.
Cir. 2005). See Inst. Dec. 4 n.1; 37 C.F.R. 42.100(b) (2012)4; Cuozzo
Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 214446 (2016) (holding that
4
The Office amended rule 37 C.F.R. 42.100(b) after the Institution
Decision in this proceeding. The amended rule, however, does not apply to
this proceeding, because it applies only to petitions filed on or after May 2,
2016. See Amendments to the Rules of Practice for Trials Before the Patent
Trial and Appeal Board, 81 Fed. Reg. 18,750, 18,766 (Apr. 1, 2016).
Moreover, we note that neither party requested permission to file a motion
contemplated by the amended rule. See Reply 4.
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37 C.F.R. 42.100(b), under which the Board applies the broadest
reasonable interpretation standard to unexpired patents, represents a
reasonable exercise of the rulemaking authority that Congress delegated to
the . . . Office); Black & Decker, Inc. v. Positec USA, Inc., RW, 646 Fed.
Appx 1019, 1024 (Fed. Cir. 2016) (holding that in an inter partes review,
[c]laims of an expired patent are given their ordinary and customary
meaning in accordance with our opinion in Phillips v. AWH Corp., 415 F.3d
1303 (Fed.Cir.2005) (en banc)). Because neither party had addressed this
issue, we stated that we expect the parties to address, with particularity, in
their future briefing the expiration date of claim 1 of the 856 patent. Inst.
Dec. 4 n.1.
In its Response and the Supplement to its Response, Patent Owner
represented that the 856 patent expires on November 12, 2016, with an
explanation supporting the calculation of this expiration date. See Resp. 8
10; Supp. Resp. At the oral hearing, Patent Owner confirmed this expiration
date and Petitioner indicated that it agrees with and does not challenge this
date. See Tr. 14:116, 88:889:7. Based on the parties agreement and our
review of the record, we agree that the 856 patent expires on November 12,
2016 and, therefore, has not yet expired. See, e.g., Ex. 1001, [22], [60], [63];
Ex. 1004, 277289, 294303, 34748.
Because the 856 patent is unexpired, we interpret claim 1 using the
broadest reasonable construction in light of the specification of the
patent.5 37 C.F.R. 42.100(b) (2012); Cuozzo, 136 S. Ct. at 214446. The
5
Although we apply the broadest reasonable interpretation standard in this
Decision, our claim interpretations would not differ under the Phillips
standard, applicable to expired patents. Rather, having considered the issue,
we would reach the same claim interpretations under the Phillips standard.
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broadest reasonable construction of a claim term cannot be so broad that the
construction is unreasonable under general claim construction principles.
Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1298 (Fed. Cir. 2015)
(emphasis omitted). Rather, the claims must be read in light of the
specification, and the prosecution history should [be] consult[ed], to
reach a construction consistent with the one that those skilled in the art
would reach. Id. (internal citations and quotations omitted).
Under the broadest reasonable interpretation standard, we presume a
claim term carries its ordinary and customary meaning, which is the
meaning that the term would have to a person of ordinary skill in the art at
the time of the invention. In re Translogic Tech., Inc., 504 F.3d 1249, 1257
(Fed. Cir. 2007). A claim term will be interpreted more narrowly than its
ordinary and customary meaning only under two circumstances: (1) the
patentee sets out a definition and acts as [its] own lexicographer, or (2) the
patentee disavows the full scope of a claim term either in the specification
or during prosecution. Aventis Pharma S.A. v. Hospira, Inc., 675 F.3d
1324, 1330 (Fed. Cir. 2012). To act as a lexicographer, the patentee must
clearly set forth a definition of the disputed claim term other than its plain
and ordinary meaning, or in other words, must clearly express an intent to
redefine the term. Id. at 1330 (internal citations and quotations omitted).
This clear expression . . . may be inferred from clear limiting descriptions
of the invention in the specification or prosecution history. Id.
Similarly, to disavow claim scope, the specification or prosecution
history [must] make clear that the invention does not include a particular
feature. GE Lighting Sols., LLC v. AgiLight, Inc., 750 F.3d 1304, 1309
(Fed. Cir. 2014) (internal citation, quotation, and alterations omitted). To do
so, the patentee may include[] in the specification expressions of manifest
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exclusion or restriction, representing a clear disavowal of claim scope.
Aventis, 675 F.3d at 1330 (internal quotations omitted). Ambiguous
language does not constitute disavowal. Omega Engg, Inc. v. Raytek Corp.,
334 F.3d 1314, 132326 (Fed. Cir. 2003). Nor is it sufficient that the only
embodiments, or all of the embodiments, contain a particular limitation.
Aventis, 675 F.3d at 1330.
A patent that discloses only one embodiment is not necessarily
limited to that embodiment. GE Lighting, 750 F.3d at 1309. It is
improper to read limitations from a preferred embodiment described in the
specificationeven if it is the only embodimentinto the claims absent a
clear indication in the intrinsic record that the patentee intended the claims
to be so limited. Id.
Here, both parties address the scope of the determining step and the
construction of the term avatar. Pet. 1113; Resp. 725; Reply 412.
Petitioner also proffers a construction for the recited server process and
client process. Pet. 1314. Based on our review of the arguments and
evidence of record, we determine that we must address only the issues of
claim interpretation discussed below. See Vivid Techs., Inc. v. Am. Sci. &
Engg, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999) (holding that only claim
terms that are in controversy need to be construed and only to the extent
necessary to resolve the controversy).
2. The Determining Step
The determining step of claim 1 of the 856 patent, as noted above,
recites determining, from the received positions, a set of the second avatars
that are to be displayed to the first user. Ex. 1001, 21:1920. We consider
two aspects of the scope of this step.
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a.
In the Institution Decision, we explained that the parties arguments in
their pre-institution filings either assumed or represented that the recited
client process performs the determining step of claim 1, yet neither party
had analyzed whether claim 1 requires that the client process perform the
step. Inst. Dec. 45. Based on our review and analysis of the claim
language and written description, as well as differentiation of the language
of the determining step from that of similar steps in independent claims of
the related 690, 558, and 501 patents, we concluded that the determining
step of claim 1 of the 856 patent need not be performed by the first client
process and, [i]nstead, . . . is broad enough to encompass the
determining being performed by at least the first client process, the
server process, or both. Id. at 48.
Patent Owner, in its Response, disputes this conclusion, arguing that
the recited server process cannot be interpreted as performing the step.
Resp. 7. Specifically, Patent Owner argues that the receiving step of claim 1
requires that the first client process receives received positions. Id.
Patent Owner contends that the natural reading of this language indicates
that the server process sends positions to the first client process, and those
positions are received as received positions by the first client process,
citing as support Mr. Pesces declaration testimony in which he opines that
the claim language suggest[s] as much. Id. (citing Ex. 2017 52.a);
Ex. 2017 52.a.iii. In other words, as Patent Owner explained at the
hearing, Patent Owners position is that the received positions do[ ]n[o]t
become received until they have been received by the client. Tr. 118:12
19. Patent Owner, however, acknowledged that the recited positions
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becoming received when they [are] received by the server may be a
broadest reasonable interpretation. Id. at 118:12119:8.
Petitioner, for its part, did not comment on this issue of claim scope in
its Reply. See generally Reply. At the hearing, Petitioner characterized the
Boards interpretation in the Institution Decision as a good and astute
observation and not an unreasonable construction, and noted that the
Board is correct that the determining step does[ ]n[o]t specifically require
the client process to perform that step. Tr. 23:1324:12. Nonetheless,
Petitioner argued that this issue of claim scope is not necessary to
Petitioners analysis of the instituted grounds because Petitioner makes a
showing that the prior art discloses the client process performing the
determining step. Id. at 23:2024:2, 24:1017, 183:21184:7.
As an initial matter, we agree with Petitioner that the outcome of this
proceeding does not turn on this issue of claim scopei.e., whether the
determining step must be performed by the first client process, as Patent
Owner argues in its Response (Resp. 7), or instead can be performed by the
first client process, the server process or both, as we determined in the
Institution Decision (Inst. Dec. 48). See Tr. 23:2024:2, 24:1017,
183:21184:7. Rather, as we explain in our analysis of the instituted
grounds below, the preponderance of the evidence before us demonstrates
that in both asserted prior art references, Funkhouser and Durward, the client
performs the determining step. See infra II.D.3.a, II.E.2.a.
Turning to the merits of the issue, having reconsidered the issue in
light of the argument and evidence adduced during trial, we maintain our
conclusion, as well as our reasoning and analysis, in the Institution Decision
that the determining step need not be performed by the first client
process and is broad enough to encompass the determining being
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performed by at least the first client process, the server process, or both.
Inst. Dec. 48. We incorporate our full analysis and reasoning on this issue
from the Institution Decision into this Decision. Id. ( II.A). In addition, we
address below the parties arguments raised during the trial.
Beginning with the claim language, we stated in the Institution
Decision that the language of claim 1, including the determining and
receiving steps, supports an interpretation that permits the first client
process, the server process, or both to perform the determining step. Id.
at 5 (citing and quoting Ex. 1001, 21:1522). We reasoned that the language
of the determining step, including its requirement that the determining
must be from the received positions, does not identify or specify the
performing entity because, based on the language of the receiving step, at
least the first client process and the server process have access to the
received positions. Id. Although Patent Owner now argues, and
Mr. Pesce opines, that the natural reading or suggest[ion] from the
receiving step is that the client must perform the determining because the
recited positions are received as received positions by the first client
process or, in other words, the recited received positions do not become
received until they are received by the clientwe do not agree that the
claim language is so limited.6 Resp. 7; Tr. 118:1319; Ex. 2019 52.a.
Rather, the language of the receiving stepreceiving by the first client
process from the server process received positions of selected second
avatars (Ex. 1001, 21:1518 (emphases added))is broad enough to
6
Nor do we find persuasive Dr. Zydas deposition testimony on the issue, to
which Patent Owner cites, as he provided no explanation other than reading
the claim and his opinion switched from assum[ing] the client performed
the step, to it could be either the client or server, and back to the client.
Ex. 2016, 255:16256:16; see Resp. 7; Tr. 115:1720, 116:1719.
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encompass the positions of the second avatars becoming received, and
thus received positions, upon receipt by the server process, e.g., from
the recited second client process or processes. Id. at 21:621. Even
Patent Owner conceded, at oral hearing, that this may be a broadest
reasonable interpretation (i.e., the applicable claim construction standard)
of the language. Tr. 118:13119:8; see also Ex. 2017 50.d.x (To the
extent that the receiving step of the Worlds patents . . . require a server to
receive user position updates . . . .).
Moreover, the written description supports this understanding of the
claim language, as the 856 patent specification repeatedly refers to the
clients sending their positions to the server. E.g., Ex. 1001, 3:3439, 6:62
65, 11:3155, 12:2834, 12:4352; see also, e.g., id. at [57], 2:4043. For
example, the specification states each client machine sends its current
location, or changes in its current location, to the server. Id. at 3:3439.
The specification also discusses specific location commands that clients send
the server when moving. Id. at 11:3155, 12:2834, 12:4352.
As we explained in our analysis in the Institution Decision, the
specification further explains that the server sends each client the position of
the N7 nearest remote avatars, where N, set by the server, is the maximum
7
We note that Patent Owner, in addressing its argument regarding this issue
of claim scope at oral hearing, referred to the specifications discussion of
crowd control and specifically, that the server doesnt necessarily have to
know the value of N[] (set by the client) and can simply know N (set by
the server). Tr. 119:1920, 119:2425. Yet Patent Owner acknowledged
that the specification discloses the possibil[ity] of sending N[] back up
to the server. Id. at 119:2123. The specification expressly states that the
value of N can be sent by client [6]0 to server 61. Ex. 1001, 5:41; see
Inst. Dec. 7 (citing, inter alia, Ex. 1001, 5:3841). For at least this reason,
Patent Owners reference to situations where the server is not informed of
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number of other avatars a user will see. Ex. 1001, 5:3738, 5:4649, 6:78,
8:669:1, 13:1823, 14:3034; see Inst. Dec. 78. The specification states
server 61 determines which N avatars are closest to [user] As avatar, based
on which room of the world [user] As avatar is in and the coordinates of the
avatars. Ex. 1001, 5:4649. N, the variable set and maintained by the
server, can be less than or equal to N, the variable set by the client
indicating how many avatars it wants to see. Id. at 5:376:8 (explaining that
N might be less than N and [w]here N is less than N, the client . . .
selects N avatars from the N avatars provided by the server) (emphases
added); see Inst. Dec. 78; Ex. 2006, 12 (The specification allows for the
possibility that the number N set by the client might be less than N or
greater than N.); Ex. 1009, 7 (Patent Owner arguing before the District
Court that this embodiment only selects in the specific instance [w]here
N is less than N). Also, the client can send the server the value of N.
Ex. 1001, 5:3841. These passages of the specification reflect that the
server sets Nwhich may be a small value and less than or equal to N set
by the client; determines the N avatars nearest each client, filtering out other
avatars based on position; and sends the locations of only those N avatars to
the client, which ultimately displays avatars to the user.
Accordingly, for the reasons given in II.A of the Institution Decision
in addition to those provided in this Decision addressing the parties
arguments after institution, we reaffirm our determination that the
determining step of claim 1 of the 856 patent need not be performed by the
first client process and, [i]nstead, the step is broad enough to encompass
N does not show any lack of support in the specification for the server
performing or co-performing the determining step.
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the determining being performed by at least the first client process, the
server process, or both (Inst. Dec. 8).
b.
The parties dispute another aspect of the scope of the determining step
of claim 1 of the 856 patent. See Pet. 1113; Resp. 1324; Reply 410.
Petitioner argues that, under either the broadest reasonable interpretation or
Phillips standard, the step encompasses executing a client process to
determine, from user positions received from the server, other users
avatar(s) located within a point of view or perspective (e.g., field of view) of
the first user. See Pet. 1213; Reply 4. Patent Owner does not proffer a
construction of the determining step, see Resp. 1324; Tr. 96:1497:8, yet
disputes Petitioners proposal regarding its scope. Patent Owner argues that
Petitioners proposal is not supported by and is inconsistent with the
specification . . . , which does not correlate the determining step with a
field of view. Resp. 13, 15. According to Patent Owner, the determining
step, when read consistent with the 856 patent specification, is properly
interpreted as a step separate from the view point rendering/display process
of the rendering engine. Id. at 2324; see Tr. 96:1497:22.
As an initial matter, we note that in the District Court Case, Patent
Owner argued that the determining step required no construction, because
the claim language was written in plain English, with common and
simple terms, and the presumption that the claim language carries its
ordinary meaning had not been overcome by a showing of lexicography or
relinquishment of claim scope. Ex. 1009, 67, 11 & n.3. The District Court
agreed, concluding that there is nothing in the patent record to suggest that
the determining step was meant to carry anything but its ordinary meaning
and, thus, determined no construction was necessary. Ex. 2006, 910, 14.
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For the reasons given below, we agree with the District Court that the
856 patent specification and prosecution history do not evidence any intent
to stray from the ordinary meaning of the claim language. We further
conclude that this ordinary meaning, in light of the specification, is broad
enough to include a client performing a field of view determination using the
positions of other users avatars received from the server, as Petitioner
argues in this proceeding.
We first consider the claim language. Petitioner argues that its
proffered claim scope is consistent with the plain meaning of the claim
language and Patent Owners position to the contrary is at odds with this
plain meaning, which Patent Owner argued was the proper understanding
before the District Court. Pet. 1213; Reply 56; Tr. 8:36, 17:625. Patent
Owner contends that because the claim language recites that the
determining is of avatars that are to be displayed to the user, the claimed
determining is distinguished from, and must be performed in advance of, the
display. Resp. 1718. Petitioner responds that this is a distinction of no
moment because [Petitioner]s proposed construction is consistent with the
determining being performed before the displayi.e., the client may
determine the avatars in the field of view and then display those avatars.
Reply 8; see Pet. 12; Tr. 20:1423, 185:38.
We agree with Petitioner that the plain meaning of the determining
stepdetermining, from the received positions, a set of the second avatars
that are to be displayed to the first useris, on its face, broad enough to
include a client process determining, from the positions it received from the
server (in the receiving step), other users avatars that are within the users
field of view. Such a determination conforms with the plain meaning of the
to be displayed claim language, given that the other users avatars
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determined to be within the users field of view can then be displayed to the
user, as Petitioner argues. Pet. 12; Reply 8; Tr. 20:1423, 185:38.
In addition to the language of claim 1 of the 856 patent, the parties
raise arguments regarding similar determining language in the related 501
and 690 patents, challenged in IPR2015-01319 and IPR2015-01268,
respectively. See, e.g., Resp. 1924; Reply 5, 910; Tr. 111:57. These
patents share a specification with the 856 patent and like the 856 patent,
issued from a continuation application of U.S. Application No. 08/747,420
and claim priority to the 296 provisional. See Ex. 1001, [60], [63];
Ex. 2041, [63], Cert. of Corr.; Ex. 2043, [60], [63]; see generally Ex. 1001;
Ex. 2041; Ex. 2043. Therefore, common claim language should be
interpreted consistently across these patents, unless otherwise compelled and
absent evidence to the contrary, and we consider the parties arguments
regarding similar claim limitations in these patents to ensure such
consistency. See NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282,
1293 (Fed. Cir. 2005) (Where patents all derive from the same parent
application and share many common terms, we must interpret the claims
consistently across [the] patents.); Omega Engg, 334 F.3d at 1334 ([W]e
presume, unless otherwise compelled, that the same claim term in the same
patent or related patents carries the same construed meaning.); Reply 5
(citing NTP, 418 F.3d at 1293); Tr. 111:57.
Petitioner contends its proposed scope of the determining step is
supported by claim 2 of the 501 patent, which it argues claims a field of
view determination as expressly falling within the scope of the determining
step of . . . independent claim 1, from which the claim depends. Reply 45
(emphasis omitted); Tr. 19:2220:17. In response, Patent Owner, at oral
hearing, acknowledged that the determining steps of claims 1 and 2 of the
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Patent 7,945,856 B2
501 patent refer to the specifications disclosure regarding the rendering
engines filtering of avatars and this filtering of other avatars and rendering
the view from the viewpoint of the user[] is part of the determining step.
Tr. 105:24106:13. Patent Owner, however, argues that differences in
language between the determining steps of claim 1 of the 501 and
856 patentsincluding that the 501 patent recites determining a
displayable set of avatars instead of avatars that are to be displayed like
the 856 patentindicate that whatever [Patent Owner was] trying to reach
in the 501 patent with claim 1, it was different than what [it was] trying to
do with the 856 [patent]. Id. at 106:23108:2; see Resp. 23 n.5.
Independent claim 1 of the 501 patent features a step similar to the
determining step of claim 1 of the 856 patent as well as a displaying step:
determining, by the client device, a displayable set of the other user avatars
associated with the client device display; and displaying, on the client device
display, the displayable set of the other user avatars associated with the
client device display. Ex. 2043, 19:3438. Claim 2, which depends from
claim 1, further compris[es] the step of: monitoring an orientation of the
first user avatar and adds the limitation wherein the step of determining
comprises filtering the other user avatars based on the monitored
orientation of the first user avatar. Id. at 19:4144 (emphasis added).
We agree with Petitioner that the determining step in dependent
claim 2 of the 501 patent features a client-side field of view determination
and, therefore, makes clear that such a determination falls within the scope
of the determining step of independent claim 1 of the 501 patentas Patent
Owner appears to likewise acknowledge. See, e.g., Ex. 1001, 7:4056;
Reply 45 (emphasis omitted); Tr. 19:2220:17, 105:24106:13; Resp. 20;
AK Steel Corp. v. Sollac, 344 F.3d 1234, 1242 (Fed. Cir. 2003) (recognizing
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Patent 7,945,856 B2
that independent claims are presumed to be at least as broad as the claims
that depend from them). We recognize, as Patent Owner points out, that
the language of the determining steps of claim 1 of the 501 and 856 patents
is not identical, but we find the similarities in the claim language, along with
the common specification of the patents, sufficient to lend support to
Petitioners position on the specific issue of whether the scope of the
determining step of claim 1 of the 856 patent encompasses a client-side
field of view determination. Patent Owner points out that there are
differences in the claim languagebut does not articulate clearly any means
by which claim 1 of the 501 patents alternative displayable set language
and lack of language corresponding to from the received positions in
claim 1 of the 856 patent impact the particular issue of claim scope before
us, and we see no such impact. See Tr. 105:24108:2; Ex. 1001, 7:4056;
see generally Resp. 1324; see also Ex. 2017 49.b.xviixix (Mr. Pesces
testimony, not cited or referenced in the Response, explaining that the
determining step of claim 1 of the 501 patent is not recited to be based on
positions and is not performed to determine avatars to be displayed but not
explaining how these differences impact the meaning of the claim language).
Patent Owner, however, looks to the dependent claims of the
690 patent, arguing that claims 2 and 4 confirm that Petitioners proposed
interpretation of the determining step of claim 1 of the 856 patent cannot be
correct. See Resp. 1923. In particular, Patent Owner argues that claim 1 of
the 690 patent includes a similar determining step and dependent claim 2
features additional steps regarding monitoring an orientation (step c) and
displaying avatars based on the [monitored] orientation (step d), which
make clear that monitoring orientation and displaying avatars based on
orientation are separate from, not subsumed into, the determining step of
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Patent 7,945,856 B2
claim 1 of both the 856 and 690 patents. Id. at 1920. Patent Owner
contends that, in contrast to the displaying step of claim 2 of the 690 patent,
which is based on orientation, the determining steps of claim 1 of the 856
and 690 patents are performed based on received positions. Id. at 19.
Yet, according to Patent Owner, Petitioners proposed interpretation
incorrectly makes orientation a necessary pre-condition to the determining
step, because, as Dr. Zyda confirmed at his deposition, orientation must be
known for a field of view determination. Id. at 20. Petitioner responds that
monitoring the orientation of the users avatar is facially not the same thing
as determining which remote users fall within a field of view, even if that
field of view is based on orientation; for example, the content for a field of
view can be calculated or determined at a particular point in time but
monitored for a period of time. Reply 9. Petitioner argues that its position is
consistent with claim 2 of the 501 patent, which features monitoring
orientation as a separate step from determining, yet the determining is
expressly based on the monitored orientation. Id.
Independent claim 1 of the 690 patent includes a determining step
with language nearly identical to that recited in claim 1 of the 856 patent,
and adds that the step is performed by the client process associated with the
first user. Ex. 2041, 19:3843. Claim 2 depends from claim 1 and further
compris[es] the steps of (c) monitoring an orientation of the first users
avatar; and (d) displaying the set of the other users avatars from based on
the orientation of the first users avatar as monitored is step (c), both of
which must be performed by the client process. Id. at 19:4350.
We disagree with Patent Owner that the additional steps in dependent
claim 2 of the 690 patent undermine Petitioners proposed interpretation of
the determining step. Step (c) of claim 2 of the 690 patent (monitoring
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Patent 7,945,856 B2
step) requires that the client monitor[] the orientation of the users avatar.
Even if the orientation, as well as the position, of the users avatar is used in
a field of view determination, Petitioners proposed interpretation of the
determining step as encompassing such a field of view determination does
not mandate that the client monitor that orientation, as the client would only
need the orientation at the precise time of the field of view determination
and also could obtain it from a source other than its monitoring. See
Reply 9. In other words, we agree with Petitioner that the field of view
determination can be made at a particular point in time whereas monitoring
orientation can occur over a duration of time. We likewise agree with
Petitioner that the separate monitoring and determining steps of claim 2
of the 501 patent demonstrate that monitoring the orientation of the users
avatar remains distinct from the determining stepeven if the users
orientation is used in the determining process. See Ex. 2043, 19:3444. In
addition, step (d) of claim 2 of the 690 patent (displaying step) does not
conflict with Petitioners proposed interpretation of the determining step
because even under Petitioners proposed scope of the determining steps of
claim 1 of the 856 and 690 patents as including a field of view
determination, step (d) adds additional, distinct requirements that the avatars
are actually display[ed] and that the display uses the orientation of the
users avatar that the client is monitoring. See Ex. 2041, 19:3848.
Accordingly, contrary to Patent Owners arguments, Petitioners proposed
interpretation does not render steps (c) and (d) of claim 2 of the 690 patent
sub-steps of, or otherwise indistinct from, the determining step.
Patent Owner also cites to dependent claim 4 of the 690 patent to
dispute Petitioners proposed interpretation, arguing claim 4 clarifie[s] the
determining step of claim 1 of the 690 patent and finds written description
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Patent 7,945,856 B2
support in the concept of crowd control described in the specification.
Resp. 2022. Patent Owner contends claim 4 makes sense as a sub-step of
claim 1s determining step only when claim 1 is construed in a manner
consistent with the specification. Id. at 22. Yet, according to Patent
Owner, Dr. Zydas deposition testimony demonstrates that Dr. Zyda and
Petitioner have not done so. Id. at 21 (citing Ex. 2016, 206:1324).
Petitioner responds that Patent Owners argument is misplaced, because that
claim 4 narrows the determining step to specifically recite aspects similar to
the crowd control embodiment in the specification does not mean that the
determining step in claim 1 is not so broad as to encompass field of view
filtering and crowd control based on a maximum number of avatars.
Reply 10. Petitioner also contends that Patent Owner mischaracterizes
Dr. Zydas testimony on this point. Id. (citing Ex. 2016, 207:1321).
Claim 4 of the 690 patent depends from claim 1 and recites that the
determining step of claim 1 comprises determining an actual number of
other avatars, determining a maximum number of other avatars to be
displayed, and comparing these numbers. Ex. 2041, 19:5464. We agree
with Petitioner that claim 4 of the 690 patent does not conflict with its
proposed construction of the determining step of claim 1 of the 856 patent
as well as the 690 patent. It is undisputed that the client-side crowd control
function of the preferred embodiment disclosed in the specification provides
written description support for claims 1 and 4 of the 690 patent and claim 1
of the 856 patent. See, e.g., Pet. 12; Resp. 18 n.2, 22; Reply 7; Tr. 95:14
21. That dependent claim 4 of the 690 patent narrows the determining step
of claim 1 to recite particular aspects of that disclosed crowd control
function does not contradict Petitioners position that the determining steps
of independent claim 1 of the 690 and 856 patents are broaderand also
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Patent 7,945,856 B2
encompass a field of view determination (which, as discussed below, the
specification describes as part of the rendering engine). See AK Steel, 344
F.3d at 1242 ([D]ependent claims are presumed to be of narrower scope
than the independent claims from which they depend . . . .); 35 U.S.C.
112 4. Indeed, the recitations in claim 1 and claim 4 of the 690 patent
that the method of claim 1 comprises and the determining step of claim 1
(step (1b)) further comprises, respectively, indicate the open-ended nature
of the determining step of claim 1 of the 690 patent. See Ex. 2041, 19:35
40, 19:5152 (emphasis added). Also, we do not find the deposition
testimony of Dr. Zyda cited by Patent Owner to support persuasively Patent
Owners position because, as Petitioner points out, Dr. Zyda immediately
and expressly change[d] what he said and clarified that claim 4 adds
certain aspects to the determining step of claim 1. See Ex. 2016, 206:13
207:21.
Turning to the written description of the 856 patent, we find that the
description supports and is consistent with Petitioners proffered scope of
the determining step of claim 1 as encompassing executing a client process
to determine, based on the positions of other avatars it receives from the
server, other avatars within the clients point of view or perspective (e.g.,
field of view). Pet. 1213; Reply 6, 9. As Petitioner points out, the
specification explains that each user executes a client process to view a
virtual world from the perspective of that user. Ex. 1001, [57], 2:3537;
see Pet. 12. More specifically, the specification discusses a graphical
rendering engine, which is a program executed by client system 60 that
generates the users view of the virtual world. Ex. 1001, 4:4551; see
Reply 9. The specification further explains that in the preferred
embodiment, the clients rendering engine 120 reads its current avatar
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Patent 7,945,856 B2
position register 114, which contains the current position and orientation
of the users avatar, and remote avatar position table 112, which contains the
position and orientationreceived from the serverof avatars near the
users avatar, to render[] a view of the virtual world from the view point
(position and orientation) of [the user]s avatar. Ex. 1001, 5:2223, 5:28
36, 6:111, 7:4043, 7:4852, Fig. 4; see Pet. 12.
These disclosures indicate that the clients rendering engine 120
determines which avatars are displayed to the user based on the users view
point, which may include filtering or culling other users avatars that, based
on their positions received from the server, are not located within the users
view. See Ex. 1001, 5:2223, 5:2836, 6:111, 7:4043, 7:4852; see also
Ex. 1046, 241:1824 ([T]he rendering engine . . . cull[s] objects that dont
fall into the field of view.). For example, in the crowd control function of
the preferred embodiment disclosed in the specification, if N, the servers
variable for the maximum number of other avatars [the user] will see, and
N, the clients variable for the maximum number of avatars [it] wants to
see are larger than the number of avatars in the users view point, such that
the client receives from the server positions of avatars that are outside the
users view point, the clients rendering engine 120 will determine, using the
positions of the other avatars as well as the users position and orientation,
the subset of avatars that are within the users view point and only those
avatars are displayed to the useras Patent Owner acknowledges. See
Ex. 1001, 5:3141, 6:111, 7:4052; Tr. 102:520; see id. at 7:178:18,
113:1924.
In addition, the specification demonstrates that the avatars the clients
rendering engine 120 determines to be within the view point of the users
avatar are displayed on display 122. Specifically, Figure 4, a block diagram
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Patent 7,945,856 B2
of a client system, depicts rendering engine 120 separate from and with an
arrow connecting to display 122, thereby indicating that rendering
engine 120 sends its output to display 122. See Ex. 1001, 2:5960, 4:5254,
Fig. 4; Tr. 103:1419 (Patent Owner acknowledging that Figure 4 shows that
field of view filtering is the first stage of the rendering engine and the
display is the output . . . of the rendering engine), 184:14186:14. The
specification also explains that means for displaying graphical results of
programs, such as the graphical rendering engine, were well known in the
art. Ex. 1001, 4:4651; see Reply 9.
Based on the analysis above, we agree with Petitioner that the
disclosures of the 856 patent specification regarding the rendering engine
support Petitioners proposed scope of the determining step of claim 1 as
encompassing a client-side field of view determination. See Pet. 12;
Reply 79. We again note that Patent Owner acknowledged that the
determining steps of claims 1 and 2 of the 501 patent includes the rendering
engines filtering of other avatars and rendering the view from the
viewpoint of the user, as disclosed in the specification, Tr. 105:24106:13,
and we see no good reason to conclude to the contrary for the determining
step of claim 1 of the 856 patent.
Patent Owners assertions regarding the written description of the
856 patent are unpersuasive. Patent Owner conceded at oral hearing that
Patent Owner did not act as a lexicographer with respect to the determining
step. See Tr. 94:2495:3; see also id. at 18:15; Ex. 1009, 67; Resp. 13
24. Patent Owner does not argue expressly that Patent Owner disavowed or
disclaimed the broader meaning of the determining step to a narrower scope
or that the claim language should be limited to particular aspects of the
preferred embodiment, namely the client-side crowd control functionbut
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as we explain below, Patent Owners arguments imply as much. 8 See, e.g.,
Resp. 13, 1518, 2123; Reply 68. Patent Owners arguments regarding
the written description of the 856 patent divide into two categories, which
we address in turn.
First, Patent Owner refers to the specifications disclosures regarding
client-side crowd control, which, according to Patent Owner, can further
limit the avatars being displayed to the user from the limit set by the server,
i.e., down from the servers N avatars to N avatars. Resp. 1517 (citing
Ex. 1001, 5:3249, 6:68, 7:4043). From the cited disclosures of the
specification, Patent Owner argues that this client-side crowd control
occurs prior to processing and rendering of the virtual world. Id. at 1617,
2223. Patent Owner further posits that the claimed determining must be
performed in advance of the display, just as the [856] patent clearly
discloses that the client-side crowd control occurs prior to rendering. Id. at
18. According to Patent Owner, the specification never discloses client-side
crowd control as establishing and displaying the field of view during the
rendering process. Id. at 23.
Petitioner replies that the disclosed crowd control function is distinct
from a field of view determination and [t]o the extent [Patent Owner] seeks
to exclude field of view determinations from the scope of the determining
step of claim 1 of the 856 patent based on an example of crowd control,
[Patent Owner] would be improperly reading an exemplary embodiment as
limiting a claim. Reply 78; see Pet. 12; Tr. 18:114. Petitioner contends
8
Accordingly, Patent Owners implicit arguments appear to conflict with the
position it took before the District Court, specifically that Patent Owner had
not acted as a lexicographer or relinquished claim scope to depart from the
common, ordinary meaning of the determining step. Ex. 1009, 67, 11.
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Patent Owner cites nothing in the specification that limits determining to
pre-rendering crowd control filtering or that specifically excludes a
field of view determination. Reply 8; see Tr. 18:114.
We find Patent Owners arguments regarding client-side crowd
control to lack clarity as to their proposed impact on the particular issue of
claim scope before us, but we agree with Petitioner that Patent Owner
appears to seek to improperly limit the determining step to the client-side
crowd control function, particularly the client selecting N avatars from the
N avatars provided by the server, described in the preferred embodiment of
the specification. See Reply 78. [I]t is improper to read limitations from a
preferred embodiment described in the specificationeven if it is the only
embodimentinto the claims absent a clear indication in the intrinsic record
that the patentee intended the claims to be so limited. GE Lighting, 750
F.3d at 1309 (internal citation omitted). Here, the specification does not
include clear statements or indications that Patent Owner sought to limit the
claims to the client-side crowd control function of the preferred embodiment
that would support limiting the language of the determining step to this
feature pursuant to disclaimer or disavowal. See id. (outlining exemplary
circumstances where disavowal or disclaimer has been found to, e.g., limit a
claim element to a feature of the preferred embodiment).
Instead, the specification indicates to the contrary. As Patent Owner
notes, the specification states that a crowd control function . . . is needed
in some cases to ensure that neither client 60 nor user A get overwhelmed by
the crowds of avatars likely to occur in a popular virtual world. Ex. 1001,
5:3136 (emphasis added); see Resp. 16; Pet. 12. The specification further
explains that the server maintains N, a variable indicating the maximum
number of other avatars [user] A will see, and client 60 maintains N, a
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variable indicating the maximum number of avatars client 60 wants to see,
which might be less than N. Ex. 1001, 5:3745 (emphasis added); see
Resp. 16. Further, according to the specification, [o]ne reason for setting
N less than N is where client 60 is executed by a computer with less
computing power than an average machine and tracking N avatars would
make processing and rendering of the virtual world too slow. Ex. 1001,
5:3745 (emphasis added); see Resp. 16. The specification continues:
Where N is less than N, the client also uses the position data to select N
avatars from the N avatars provided by the server. Ex. 1001, 6:68
(emphasis added); Resp. 17.
Thus, the specification makes clear that the crowd control function is
not always necessary and that the client-side aspect of the disclosed
function, in which the client selects avatars from the N sent by the server,
occurs only when N is less than N. Further, the specifications non-limiting
references to N being less than N (e.g., might be, where) allow for N
to be equal to or greater than N. See Ex. 1001, 5:326:8; Inst. Dec. 78;
Ex. 2006, 12 (The specification allows for the possibility that the number
N set by the client might be less than N or greater than N.); Ex. 1009, 7
(Patent Owner arguing before the District Court that this embodiment only
selects in the specific instance [w]here N is less than N and
acknowledging, [t]hus, when N is equal to or greater than N, no selection
is needed) (internal citations omitted). Accordingly, even within the
disclosed crowd control function, the client does not always select N
avatars from the N provided by the server.
In light of these disclosures, we do not find the specification to
support restricting the scope of the determining step of claim 1 of the
856 patent to the client-side crowd control function, and more particularly,
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the selection of N avatars from the N provided by the server. See, e.g.,
Ex. 1001, 5:326:8; see also id. at 16:1622 (The above description is
illustrative and not restrictive.). Even Patent Owners Response supports
the non-limiting nature of the client-side crowd control function, as it uses
permissive language, such as may, can, and [i]n this case, to describe
the function. Resp. 1516; see id. at 18 n.2 (Patent Owner does not
contend that selecting N avatars is the sole disclosed mechanism of
client-side crowd control in the challenged patent.); Tr. 18:1025. Given
the absence of clear evidence supporting such an intent as well as other
aspects of the preferred embodiment that support the broader claim language
(rendering engine 120), we will not limit the determining step of claim 1 to
this particular feature of the preferred embodiment disclosed in the
specification. See, e.g., Golight, Inc. v. Wal-Mart Stores, Inc., 355 F.3d
1327, 133032 (Fed. Cir. 2004) (refusing to import a requirement into claim,
reasoning that this particular advantage described in the written
description is but one feature, among other disclosed significant features
of the invention and each claim is not required to include or be limited
to each such disclosed advantage[] or feature[]).
Second, Patent Owner argues that Petitioners proposed construction
fails to differentiate between determining and the act of displaying the
view point of an avatar as described in the [856] patent. Resp. 1718; see
Tr. 96:1719, 97:13, 98:1314. Patent Owner, implicitly in its Response
and explicitly at oral argument, equates rendering with displayingoften
making consolidated references to rendering/displaying or the
rendering/display process in the Response, Resp. 18, 24, and arguing at
the oral hearing that display . . . is what is happening in the rendering
engine, displaying includes what is happening at the rendering engine,
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and [r]endering is part of the display process, Tr. 97:1422, 99:47,
99:1924, 102:24103:4. From this premise, Patent Owner then argues that
the 856 patent specification discloses the view point (position and
orientation) of As avatar solely as part of the process of rendering the view
of the virtual world or the rendering/display process at the rendering
engine. Resp. 18 (quoting Ex. 1001, 7:5052); see id. at 24. Therefore,
according to Patent Owner, the field of view filtering at the rendering engine
is part of the displaynot determiningand Petitioner is wrong and
contradict[s] the specification in arguing that the determining step can
include a field of view determination. Resp. 18; Tr. 100:36, 102:24103:3.
Instead, Patent Owner argues that the determining step should be interpreted
as separate from and before the view point rendering/display process of
the rendering engine. Resp. 2324; Tr. 97:13, 101:1216.
Petitioner responds that Patent Owner improperly seeks to
characterize the entire graphics pipeline or rendering process as a single
component corresponding to the claimed display, but the specification
instead supports interpreting the rendering process as separate from the act
of displaying. Reply 89 (quoting Ex. 1001, 4:4851); see Tr. 21:121,
184:11186:14 (referring to Figure 4 of the 856 patent). According to
Petitioner, Patent Owner appears to improperly conflate data processing
aspects of the rendering process, such as the activities at rendering
engine 120 in the specification, with the separate act of displaying.
Reply 9; Tr. 184:11186:14.
Patent Owners arguments regarding the rendering engine again
appear to be improperly attempting to limit the broader language of the
determining step to the precise way the specification describes the preferred
embodimentwithout sufficient supporting evidence that the claim
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language is intended to be so limited. See, e.g., GE Lighting, 750 F.3d at
1309. Moreover, we agree with Petitioner that the specification does not
support the fundamental premise of Patent Owners argumentsthat the
entire rendering process at the rendering engine, including the field of view
determination, must constitute display, within the meaning of the claim
language. See Reply 89; Resp. 18, 24; Tr. 21:121, 97:1422, 99:47,
99:1924, 102:24103:4, 184:11186:14. The specification instead supports
understanding display as the output of the disclosed rendering engine and,
at minimum, a step distinct from the field of view filtering determination.
For example, as Petitioner points out, the specification states that
methods and means for executing programs and displaying graphical results
thereof were well known in the art and [o]ne such program executed by
client system 60 is a graphical rendering engine which generates the users
view of the virtual world. Ex. 1001, 4:4651; Reply 9. This passage refers
to the rendering engine as an executed program and also distinctly refers to
displaying the graphical results of such a program, which contradicts
Patent Owners attempt to classify all of the activities of the rendering
engine as display. Also, Patent Owner acknowledged at the oral hearing that
Figure 4 of the 856 patent shows that field of view is the first stage of the
rendering engine and the display is the output . . . of the rendering
engine. Tr. 103:1419; see id. at 184:14186:14; Ex. 1001, Fig. 4. As
Petitioner argues, these disclosures and Figure 4 contradict Patent Owners
attempts to classify all of the activities of the rendering engine as display,
within the meaning of the claim language and thus, exclude the field of view
determination of the rendering engine from the scope of the determining
step. See Reply 89; Tr. 184:14186:14. Accordingly, we find Patent
Owners arguments to lack merit.
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The parties do not rely on the prosecution history of the 856 patent,
or related patents, to support their arguments regarding the scope of the
determining step. See Pet. 1113; Resp. 1324; Reply 410. Having
reviewed the 856 patent prosecution history, we do not see any amendments
or arguments that would demonstrate an intent by Patent Owner to narrow
the meaning of the claim language or otherwise inform the resolution of the
parties dispute regarding the scope of the step. See generally Ex. 1004.
In sum, the intrinsic evidence of record demonstrates that the
determining step should be given its ordinary meaning and this meaning
encompasses Petitioners proposed claim scope.
As to the extrinsic evidence, we also agree with Petitioner that the
portions of Mr. Pesces testimony cited in the Reply support Petitioners
position that the determining step encompasses a field of view
determination. See Reply 69; Tr. 21:121. First, Mr. Pesce testified that
determining had no special meaning and was not a term of art in the
relevant field in 1995 and described the term as vague and a catchall.
Ex. 1046, 240:1724, 242:719, 243:11244:9. He further explained that
the rendering engine . . . cull[s] objects that dont fall into the field of view
and characterized this culling as a calculation. Id. at 241:1424. And he
agreed that one of the purposes of the rendering pipeline is to calculate
what will be displayed to the user. Id. at 242:16. He further agreed that a
calculation would fall under th[e] loose or vague use of determining,
which he explained to be you can do this to determine this result. Id. at
243:23244:15. Together, this testimony of Mr. Pesce demonstrably
supports understanding field of view filtering, including by the rendering
engine, to fall under the plain meaning of the determining step,
determining the avatars to be displayed to the . . . user. See Reply 67.
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Second, Mr. Pesces testimony undermines Patent Owners attempts
to treat the entire rendering process, or graphics pipeline, as corresponding
to displayand therefore, not determiningwithin the meaning of the
claim language. See id. at 89. Mr. Pesce testified that field of view filtering
or culling is generally the first stage in a graphics pipeline. Ex. 1046,
215:19216:2 (emphasis added); see id. at 311:17312:6; Tr. 114:14.
According to Mr. Pesce, however, the display has always been the last
stage in a rendering pipeline. Ex. 1046, 318:16319:4 (emphasis added);
see id. at 317:20318:7. He further explained that the display is the
end-stage output device of the graphics pipeline. Id. at 318:913. Thus,
according to Mr. Pesce, the rendering pipeline is a multi-stage process, of
which field of view filtering and display are distinct stagesfield of view
filtering is an initial stage, whereas the display is the last stage or output.
We agree with Petitioner that this testimony supports Petitioners position
that the determining step can encompass a field of view determination (an
initial stage of the rendering pipeline) without overlapping with or having
the same meaning as display (the last stage or output of the rendering
pipeline). Reply 89; Tr. 20:2421:21.
Finally, Patent Owner argued at the oral hearing that Dr. Zydas
testimony supported its arguments regarding rendering and display,
contending that Dr. Zyda testified that display means or refers to the
whole concept of send[ing] geometry through the graphics pipeline,
including render[ing] into pixels and frame buffer and drawing
something to a display. Tr. 98:3100:2, 112:24113:2. Petitioner asserts
Patent Owners argument takes Dr. Zydas testimony out of context. See id.
at 181:19182:9.
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Dr. Zyda testified that display is an overloaded word that can
mean many, many things, for example, a graphics display just might be a
screen to display something, might be showing you this picture. Ex. 2016,
114:210. He then stated, In the technical computer graphics sense, display
is not a word that people use that much. They would typically say were
going to send this geometry through the graphics pipeline where it would be
rendered into pixels and frame buffer. Id. at 114:1017. He also testified
that render means [s]end through the graphics pipeline so that you have
finished pixels at the end. Id. at 113:711; see id. at 113:2225; Resp. 17
(citing Ex. 2016, 113:911).
We do not find Dr. Zydas testimony to support Patent Owners
arguments. Dr. Zyda refers to various meanings for display. Yet we do
not agree with Patent Owners implication that Dr. Zyda defined display
as referring to the entire rendering pipeline, and instead understand his
testimony to offer alternative terminology related to the graphics pipeline
and rendering that is more common in the art than display. We find his
testimony regarding display and rendering to be consistent with
rendering being a multi-step process that ends with or outputs a display, as
Mr. Pesce testified. See Reply 9. Moreover, even if Dr. Zydas testimony
were to lend support to Patent Owners arguments, we do not find it to have
sufficient clarity and weight to overcome the contrary intrinsic and extrinsic
evidence on this issue.
In sum, for the reasons given above, we agree with Petitioner that the
ordinary meaning of the determining step of claim 1 of the 856 patent
determining, from the received positions, a set of the second avatars that
are to be displayed to the first userread in light of the specification,
encompasses executing a client process to determine, from user positions
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received from the server, other user avatar(s) located within a point of view
or perspective (e.g., field of view) of the first user.
3. Avatar
The parties post-institution arguments require that we address the
proper scope of the claim term avatar. Pet. 11; Paper 12 (Prelim.
Resp.), 8 (explaining that Patent Owner used Petitioners proposed
construction of avatar in its Preliminary Response); Resp. 2425, 3335;
Reply 1012. In the Petition, Petitioner argues that avatar should be
construed to mean a graphical representation of a user, citing as support
the 856 patent specifications explanation that [t]he virtual world shows
avatars representing the other users who are neighbors of the user viewing
the virtual world. Pet. 11 (quoting Ex. 1001, 2:3638). With supporting
testimony from Dr. Zyda as well as a definition from the MICROSOFT PRESS
COMPUTER DICTIONARY (3d. ed. 1997), Petitioner contends that its proposed
construction is consistent with how one of ordinary skill would have
understood the term. Id. (citing Ex. 1002 57; Ex. 1010).
In its Response, Patent Owner argues that the proper construction of
avatar, under either the broadest reasonable interpretation or the Phillips
standard, is a three-dimensional graphical representation of a user.
Resp. 25, 33 (emphasis added). Patent Owner directs our attention to the
District Courts construction of avatar as a graphical representation of the
user in three-dimensional form. Id. at 24 (citing Ex. 2006, 2024);
Tr. 126:1720. Patent Owner, with supporting testimony from Mr. Pesce,
contends that a construction limiting an avatar to a three-dimensional form
is consistent with the [856 patent] specification . . . and the interpretation
that would be reached by a person of ordinary skill in the art. Resp. 24
(citing Ex. 2017 49.a). Patent Owner asserts that the 856 patent is
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consistent in its description of an avatar as three-dimensional. Id.
(citing Ex. 1001, 3:2022, 6:811, 7:3639). Moreover, at the hearing,
Patent Owner argued that column 3, lines 2022 of the 856 patent
specification 9 comes fairly close to and is practically lexicography,
given the quotation marks around the term avatar. Tr. 127:17129:6,
130:1415, 135:1619, 140:712. In addition, Patent Owner argues that the
District Court properly recognized that the crowd control issue at the
heart of [the 856] patent is an issue implicated by the more complex
three-dimensional system. Resp. 2425 (quoting Ex. 2006, 21); see
Tr. 130:1521, 140:1421.
Petitioner responds that its proposed construction of avatar is proper
under both the broadest reasonable interpretation and the Phillips standards.
Reply 4, 1012. Petitioner contends Patent Owners attempt to limit the
term to three-dimensional representations improperly import[s] a term
from the specification that could have been recited in the claims, but was
not. Id. at 10; Tr. 174:20175:2, 180:1618. Petitioner asserts that the
856 patent does not define an avatar to be three-dimensional and the
specification is explicit that column 3, lines 2022, to which Patent Owner
cites, is referring to a specific example in Figure 1, which is illustrative
and not restrictivenot a fundamental aspect of the invention. Reply 10
11 (quoting Ex. 1001, 3:18, 3:1720, 16:1622); see Tr. 39:1115.
9
We held a consolidated hearing on this and the other inter partes reviews
listed in I.A involving related patents with specifications nearly identical
to the 856 patent. As a result, the hearing arguments sometimes refer to the
specification of one of the related patents, rather than to the 856 patent.
Throughout this Decision, we have adjusted relevant citations from the
hearing to refer to the specification of the 856 patent.
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Moreover, Petitioner contends that the specification, even when
describing avatars that it refers to as three-dimensional, does not describe
true-three dimensional renderings, which contradicts Patent Owners
attempt to limit the term to precisely three-dimensional figures. Reply 11;
Tr. 43:845:10, 164:1725. According to Petitioner, the specifications
explanation that an avatar comprises N two-dimensional panels, where the
i-th panel is the view of the avatar from an angle of 360*i/N degrees
demonstrates that the avatars are two-dimensional panels and the panel
displayed depends on the users viewing angle, a technique similar to that
which Mr. Pesce described as quasi-3D. Reply 11 (quoting Ex. 1001,
7:3439; Ex. 1046, 204:12205:20); Tr. 43:845:10, 164:1725.
Petitioner also proffers a claim differentiation argument, asserting that
the related 501 patent includes a claim, for example, that expressly recites a
three dimensional avatar and, thus, construing the term avatar alone to
require three-dimensional would render meaningless the additional claim
language in violation of governing precedent. Reply 12 (emphasis added);
Tr. 37:2025, 39:540:11, 41:35, 43:17, 178:47. According to
Petitioner, Patent Owners decision to include three dimensional before
avatar in some claims reflects that the plain and ordinary meaning of
avatar is not so limited. See Reply 10, 12; Tr. 39:1640:11.
In addition, Petitioner argues that Mr. Pesces testimony in support of
Patent Owners attempt to limit avatar to be three-dimensional is not
credible, unsubstantiated, inconsistent, and in conflict with the record,
including the MICROSOFT PRESS COMPUTER DICTIONARYs definition.
Reply 23, 1112; Tr. 45:1346:9.
Here, both Petitioner and Patent Owners proposed constructions
represent that an avatar is a graphical representation of a user. Pet. 11;
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Resp. 25, 33. The parties dispute only whether that representation must be
three-dimensional, as Patent Owner urges. See Pet. 11; Resp. 2425, 33
35; Reply 1012; Tr. 127:611. We address each issue in turn.
First, as noted above, there is no dispute in the record that an avatar
is a graphical representation of a user, as the parties, their experts, and the
construction adopted by the District Court are in agreement on this point.
See, e.g., Pet. 11; Resp. 25; Ex. 2006, 24; Tr. 127:611; see also Ex. 1002
57; Ex. 2017 49.a.iiiii. Having reviewed the intrinsic record of the
856 patent, we agree that avatar refers to a graphical representation of a
user. Challenged claim 1 recites [a] method for enabling users to interact
in a virtual space, wherein the first user is associated with at first avatar
and each second user is associated with a different second avatar, which
involves determining . . . a set of the second avatars that are to be displayed
to the first user. Ex. 1001, 21:622. Independent claim 6, in turn, provides
for a client device, with each user being associated with an avatar
representing said each user in the virtual space, which displays other users
avatars to a first user. Id. at 22:521. The written description explains that
in the preferred embodiment, [t]he virtual world shows avatars representing
other users who are neighbors of the user viewing the virtual wor[l]d and
each avatar is a figure chosen by the user to represent the user in the virtual
world. Id. at [57], 2:3338, 3:2022, Fig. 1. This claim language and
description demonstrate that an avatar represents a particular user in a
graphical virtual space. Neither party points us to any relevant prosecution
history, nor do we see any. See generally Pet.; Resp.; Reply; Ex. 1004.
Accordingly, the intrinsic record demonstrably supports the parties
positions that an avatar is a graphical representation of a user.
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Considering the submitted extrinsic evidence, we find it to
persuasively support that avatar refers to a graphical representation of a
user. MICROSOFT PRESS COMPUTER DICTIONARY (3d. ed. 1997), 10 proffered
by Petitioner, defines avatar as: In virtual-reality environments such as
certain types of Internet chat rooms, a graphical representation of a user.
Ex. 1010, 38 (emphasis added); see Pet. 11. Moreover, Dr. Zyda and
Mr. Pesce testify in agreement on this issue. Ex. 1002 57; Ex. 2017
49.a.iiiii.
Second, we consider the contested issue of whether the graphical
representation of a user must be three-dimensional to come within the
meaning of avatar. We conclude the broadest reasonable interpretation of
the term, in light of the 856 patent specification, is not so limited.
We acknowledge that the District Court, applying the Phillips
standard, answered this disputed question in the affirmative, determining
that the patent limits the meaning of avatar to three-dimensional graphical
representations. Ex. 2006, 2024; see Resp. 2425. Although the District
Courts interpretation is informative, we are not bound by that construction.
See Power Integrations, Inc. v. Lee, 797 F.3d 1318, 1326 (Fed. Cir. 2015)
(There is no dispute that the board is not generally bound by a prior judicial
construction of a claim term.). We note that applicable legal standards
differ; for example, a district court applies the Phillips claim construction
10
The MICROSOFT PRESS COMPUTER DICTIONARY has a copyright date of
1997, which is after the filing of the 296 provisional, to which the parties
agree, for purposes of this proceeding, the 856 patent is entitled to priority.
See Ex. 1001, [60]; supra n.2. Neither party raised this issue. Nonetheless,
we determine that the 1997 dictionary is sufficiently contemporaneous to the
filing date of the 296 provisional, November 13, 1995, to inform the
ordinary meaning of the term at the relevant time period.
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standard and a presumption of validity, neither of which apply in an inter
partes review of an unexpired patent. See, e.g., Ex. 2006, 23, 56, 2224.
Moreover, Petitioner is not a named party in the District Court Case and the
supporting arguments and evidence in the record before us are not identical
to those proffered to the District Court. See, e.g., id. at 1, 2024; Pet. 11;
Resp. 2425, 3335; Reply 1012. We have considered carefully the
District Courts claim construction, see Power Integrations, 797 F.3d at
132427, but for the reasons given below, we determine that avatar,
particularly the broadest reasonable interpretation thereof, is not restricted to
three-dimensional.
We begin our analysis with the language of the claims. We see
nothing in challenged independent claim 1, as well as the other claims of the
856 patent, that would require or even suggest that a representation of a
user must be three-dimensional to be an avatar within the meaning of the
claim language. See Ex. 1001, 21:622:59. We note that in arguing that the
meaning of avatar is so limited, Patent Owner does not cite or refer to any
supporting claim language. See, e.g., Resp. 2425.
In light of Petitioners claim differentiation argument, we also
consider the claim language of other patents in the same family, including
the 501 patent and the 998 patent. See, e.g., Reply 5, 12. [W]e presume,
unless otherwise compelled, that the same claim term in the same patent or
related patents carries the same construed meaning. Omega Engg, 334
F.3d at 1334. More specifically, where patents all derive from the same
parent application and share many common terms, we must interpret the
claims consistently across the patents. NTP, 418 F.3d at 1293.
The doctrine of claim differentiation applies across related patents but
is not as strong as within the same patent. Clare v. Chrysler Group LLC,
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819 F.3d 1323, 1330 (Fed. Cir. 2016); see In re Rambus Inc., 694 F.3d 42,
48 (Fed. Cir. 2012) (applying claim differentiation across related patents).
The doctrine creates a presumption that two independent claims have
different scope when different words or phrases are used in those claims.
Seachange Intl, Inc. v. C-COR, Inc., 413 F.3d 1361, 136869 (Fed. Cir.
2005) (citations omitted). The doctrine takes on relevance in the context of
a claim construction that would render additional, or different, language in
another independent claim superfluous. Arlington Indus., Inc. v.
Bridgeport Fittings, Inc., 632 F.3d 1246, 1254 (Fed. Cir. 2011) (internal
citation and quotations omitted).
Here, the 856, 501, and 998 patents share a common specification
and many claim terms, including avatar, and each patent claims priority to
the 296 provisional and issued from three common continuation
applications. See Ex. 1001, [60], [63]; Ex. 2043, [60], [63]; Ex. 2044, [60],
[63]; see generally Ex. 1001; Ex. 2043; Ex. 2044. Accordingly, in the
absence of evidence compelling otherwiseof which, as explained below,
we see none in the recordavatar has the same meaning in these patents.
In contrast to the 856 patent claims, which recite avatar,
independent claims 1, 12, and 14 of the 501 patent and independent
claims 2, 18, and 19 of the 998 patent specifically recite a three
dimensional avatar. See Ex. 1001, 21:622:59; Ex. 2043, 19:1938, 20:14
52 (emphasis added); Ex. 2044, 19:3156, 20:4522:13 (emphasis added);
Reply 12. Like the 856 patent claims, however, independent claim 1 of the
998 patent recites the term avatar alone, without the three dimensional
modifier. See Ex. 2044, 19:1130.
We agree with Petitioner that adopting Patent Owners proposed
construction of avatarwhich requires the graphical representation to be
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three-dimensionalwould render the additional modifying limitation three
dimensional in claims 1, 12, and 14 of the 501 patent and claims 2, 18,
and 19 of the 998 patent meaningless or superfluous. See Reply 2, 12;
Tr. 37:2025, 39:540:11, 41:35, 43:17, 178:47. Patent Owner
acknowledged this at the oral hearing. Tr. 129:22130:12 (Patent Owner
responding to question regarding whether its proposed construction, when
plugged into the 501 and other patent claims requiring a
three-dimensional avatar would render three-dimensional superfluous
with I think it has to, Your Honor. I think it has to.); see also Ex. 1046,
100:119, 104:13105:4. Such a result weighs against adopting Patent
Owners proffered three-dimensional requirement. Arlington Indus., 632
F.3d at 125455 (reasoning that [r]eading . . . limitation[s], which are
included in some claims but not others, into another claim term would
render these additional modifiers superfluous, which weighs against doing
so); Cat Tech LLC v. TubeMaster, Inc., 528 F.3d 871, 885 (Fed. Cir. 2008)
(refusing to adopt a construction that would render a claim limitation
meaningless). If avatar, alone, required a three-dimensional graphical
representation, as Patent Owner argues, there would be no need for the
additional three dimensional claim language in the 501 and 998 patents.
See Rambus, 694 F.3d at 48 (rejecting argument that claim term memory
device requires a single chip, where dependent claim of related patent
added limitation requiring a single chip, because if a memory device were
always a single chip[,] there would be no need to use the word single in
the dependent claim); Phillips, 415 F.3d at 1314, 1325 (explaining that claim
language steel baffles strongly implies that the term baffles does not
inherently mean objects made of steel and similarly, claim language
providing baffles are placed projecting inwardly from the outer shell at
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angles tending to deflect projectiles[] . . . would be unnecessary if persons
of skill in the art understood that the baffles inherently served such a
function).
Accordingly, we agree with Petitioner that the differentiation in the
claim languageavatar versus three dimensional avatarsupports that
the ordinary and customary meaning of the term avatar is not limited to
three-dimensional, and neither is any potential more specific meaning of
the term in the context of these patents (which we determine below there is
not). See Reply 12; Tr. 39:2440:2; see also id. at 37:2025, 39:540:11,
41:35, 43:17, 178:47. Moreover, if the patentee intended to require that
avatar, as recited in claim 1 of the 856 patent, be limited to
three-dimensional, it could have included such an express limitation in the
claim as it did in the 501 and 998 patentsbut notably did not. We are
cognizant that the force of claim differentiation is less across related patents
and the doctrine creates only a presumption, not a hard and fast rule of
claim construction, e.g., Clare, 819 F.3d at 1330; Seachange, 413 F.3d at
136869, but as we explain below, nothing in the remainder of the intrinsic
record of the 856 patent dictates to the contrary.
We next consider the written description of the 856 patent. We agree
with Patent Owner that the written description refers to avatars as
three-dimensional figuresbut we do not find these descriptions of the
preferred embodiment, and specific examples thereof, to be limiting or
restrictive. Patent Owner supports its position that an avatar must be
three-dimensional with citations to column 3, lines 2022 and column 6,
lines 811 of the 856 patent specificationwhich state, respectively, that
Figure 1 shows two avatars 18. Each avatar 18 is a three-dimensional
figure chosen by a user to represent the user in the virtual world and that
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[t]he orientation is needed for rendering because the avatar images are
three-dimensional and look different (in most cases) from different angles.
See Ex. 1001, 3:1722, 6:811; Resp. 24. Yet as Petitioner points out, the
specification makes clear that these disclosures are describing the preferred
embodiment, using the example of a client-server architecture for use in a
virtual world chat system. Ex. 1001, 2:623:3 (emphasis added); see
Reply 1011. In addition, regarding the discussion at column 3, lines 2022
in particular, the specification further explains that it is discussing Figure 1
as an example and illustration of what such a client might display.
Ex. 1001, 3:8, 3:1718 (emphases added); see Reply 1011. Even Patent
Owner acknowledges that Figure 1 is merely exemplary. See Tr. 129:121
(Im not saying that figure 1 is the invention . . . . I think [figure 1] has to
be an example, yes.). Moreover, the specification expressly instructs that
the disclosed preferred embodiment and examples are illustrative and not
restrictive. Ex. 1001, 16:1622 (emphasis added); see Reply 11. 11 These
references to avatars as three-dimensional in the preferred embodiment,
including specific examples thereof, do not suffice to limit the claim term
avatar. See Aventis, 675 F.3d at 133031 ([I]t is . . . not enough that the
only embodiments, or all of the embodiments, contain a particular limitation
to limit a claim term beyond its ordinary meaning.) (internal citations and
quotations omitted).
11
Neither party cites to the disclosure, but we note that the Brief
Description of the Drawings refers to Figure 1 as a client screen view in a
virtual world system according to the present invention. Ex. 1001, 2:50
53. We do not find this statement in the overview of the drawings to
overcome the express statements in the detailed description explaining that
the figure is an example and illustration that is not restrictive. Id. at
3:818, 16:1622; see Tr. 41:1642:25, 129:121.
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With regard to Patent Owners argument raised at oral hearing that
column 3, lines 2022 of the specification comes awfully and fairly close
to and is practically lexicography, we first note that Patent Owner
repeatedly used hedging phrasesawfully close, fairly close, fairly
clear, and practicallyand also offered modifications to the
specifications language that might have clarified that the disclosure was
intended to be definitionalsuggesting that Patent Owner itself does not
view the statement, as written, as sufficiently clear to constitute
lexicography. Tr. 127:17129:6 ([I]f we didnt have 18 in the following
sentence, if it just said each avatar, instead of each avatar 18, I think there
would be very little question of whether it is definitional.); id. at 130:14
15, 135:1619, 140:712. To the extent Patent Owner intended to argue that
this statement constitutes lexicography, we disagree and find to the contrary.
The quotation marks around avatar, on which Patent Owner focuses, are
insufficient to clearly demonstrate an intent to limit or redefine the term
avatar, particularly given the express statements in the specification that
this disclosure regarding Figure 1 is exemplary and illustrative, outlined
above. See Ex. 1001, 2:623:3, 3:8, 3:1722; Tr. 127:1719, 128:811,
129:26. We also agree with Petitioner that the explanation that [e]ach
avatar 18 is a three-dimensional figure relates to the two figures depicted in
Figure 1. Ex. 1001, 3:2021, Fig. 1; see Reply 1011.
Moreover, turning to column 7, lines 3439 of the specification, to
which both parties cite in support of their positions, we agree with Petitioner
that this disclosure undermines Patent Owners position that avatar should
be limited to three-dimensional representations. See Resp. 24; Reply 11.
This portion of the specification explains that an avatar, stored in the
relevant database, comprises N two-dimensional panels, where the i-th
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panel is the view of the avatar from an angle of 360*i/N degrees. Ex. 1001,
7:3439 (emphasis added); see id. at 6:1317. The arguments and evidence
before us support Petitioners assertion that this passage, describing avatars
in the preferred embodiment that the specification refers to as
three-dimensional, are not true three-dimensional renderings and instead can
be created using shortcuts designed to create the illusion of
three-dimensional renderings, which were known in the art. See Reply 11
(citing Ex. 1046, 204:12205:20); Tr. 43:845:10, 50:913, 164:1725
(Petitioner); id. at 132:25133:23, 143:23144:5 (Patent Owner); see also
Ex. 2017 40 (Mr. Pesce testifying that the 1992 game Wolfstein 3D used
a variety of mathematical cheats to produce the illusion of a full 3D
environment); Ex. 1046, 204:12205:20 (Mr. Pesce testifying that
Wolfstein 3D used cheats in the art[] to produce the effect of 3-D and the
appear[ance of] three-dimensional figures but he believes the figures were
actually draw[n] or handled . . . mathematically as two-dimensional in a
quasi-3D technique).12 At the hearing, Patent Owner similarly explained
12
Neither party cites to the specifications references to a three-dimensional
. . . system and space (Ex. 1001, [57], 2:3135) on the issue of whether
an avatar must be three-dimensional, but we note that the evidence before
us shows that these references do not operate to limit avatar to be
three-dimensional. As we explain, the record arguments and evidence
demonstrate that there were known techniques to create the illusion of a
three-dimensional graphical rendering in a three-dimensional environment,
without the rendering being truly three-dimensional. Similarly, the evidence
before us shows, and Patent Owner acknowledges, that there can be virtual
beings in less than three-dimensions within a three-dimensional
environment. See, e.g., Resp. 3334 (arguing that despite Durwards
disclosure of a three-dimensional virtual space, its virtual entities would
have been understood to be two-dimensional); Tr. 134:8135:6 (asserting
the same); see also, e.g., Ex. 2017 40, 59 (opining the same); Ex. 1046,
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that this passage involves a shortcut aimed to try[] to achieve that the
appearance of the[] panels to a user is a 3-D avatar. Tr. 132:2133:23; see
id. at 143:23144:5; Resp. 24. In sum, this passage further supports
concluding that avatar, in light of the specification, cannot be limited
exclusively to three-dimensional representations, as Patent Owner urges.
Finally, we do not find Patent Owners assertion that [t]he District
Court . . . correctly stated that the crowd control issue at the heart of this
patent is an issue implicated by the more complex-three dimensional system,
as opposed to the two-dimensional systems that did not require as much
strain on computing resources to support limiting the meaning of avatar
to three-dimensional. Resp. 2425 (quoting Ex. 2006, 21); Tr. 130:1621,
140:1421; see Ex. 2017 49.a.v; Ex. 2006, 21. That the crowd control
functionality discussed in the specification may be better suited to, or useful
for, three-dimensional systems with three-dimensional virtual beings does
not operate to limit the invention to virtual beings, or avatars, in
three-dimensional form. See, e.g., Rambus, 694 F.3d at 47 (determining that
preferred embodiments and goals of the invention that [patentee] argues are
better met by single chip devices did not restrict the invention to single
chip memory devices).
In conclusion, we agree with Petitioner that Patent Owners attempt to
limit avatar to three-dimensional representations improperly seeks to
import a limitationthree-dimensionalfrom the specification, including
the preferred embodiment and specific examples thereof, into the claims.
See Reply 1011; Tr. 174:20175:2, 180:1618; GE Lighting, 750 F.3d at
1309. We find that the specifications references to avatars as
85:886:11 (explaining that it is possible to have entities that are 2-D

representations in a 3-D world); id. at 204:12205:20.
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three-dimensional in its preferred embodiment, and examples thereof, do not
rise to the level of either lexicography or disavowalwhether express or
implicit. There is not a clear indication of an intent to define avatar or to
restrict the term to three-dimensional representations. Nor is there any
language of manifest exclusion or restriction. Nothing in the specification
indicates that an avatar being three-dimensional is an essential feature of, or
a required limitation of, the claimed method or an advantage of the recited
method over the prior art. See, e.g., GE Lighting, 750 F.3d at 1309; Aventis,
675 F.3d at 1331; Seachange, 413 F.3d at 1370.
The prosecution history of the 856 patent likewise does not evidence
a disavowal of claim scope or redefinition of avatar. Neither party refers
to prosecution history for the construction of avatar, yet based on our
review, we see no amendments or arguments that would show an intent to
define or narrow the term. See Ex. 1004.
In sum, based on the intrinsic record of the 856 patent, as well as
closely related patents sharing the same specification and common
ancestors, we conclude that the ordinary and customary meaning of the term
avatar, as used in the specification, is not limited to three-dimensional
graphical representations, and the patentee did not narrow this ordinary
meaning by acting as a lexicographer or disavowing claim scope.
This conclusion is supported by the extrinsic evidence of record,
which is less significant than the intrinsic record in determining the legally
operative meaning of claim language. Phillips, 415 F.3d at 1317 (internal
citations and quotations omitted). As we explain above, the MICROSOFT
PRESS COMPUTER DICTIONARY (3d. ed. 1997) defines avatar as a
graphical representation of a user. Ex. 1010, 38; see Pet. 11; Reply 12.
Notably, this definition does not restrict the graphical representation to
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three-dimensionalwhich supports Petitioners position that the ordinary
meaning of the term in November 1995, the effective filing date of the
patent, was not so limited. See Tr. 46:1017; Reply 12.
As to Mr. Pesces testimony on the issue, Mr. Pesce provides, in his
declaration, a general overview of the development of virtual environments
from early 1991 through 1996, including challenges and advancements
during an alleged transition from two-dimensional to three-dimensional
techniques. See Ex. 2017 3644, 49.a.iv, 59. Mr. Pesce testifies that in
September 1993, virtual entities, including those in a three-dimensional
virtual space[], would have been understood by a [person of ordinary skill
in the art] to be two-dimensional given the limitations of available software
to render a three-dimensional entity, even in very high end computers and
implementations. Ex. 2017 59; see Ex. 1008 [22]; Ex. 1046, 85:486:11.
He also testifies that 19941996 represent a fulcrum, as real-time
computer graphics switched from 2D to 3D techniques and that reading the
856 patent in this context makes clear that the term avatar, as used in the
patent, is a three-dimensional graphical representation of a user.
Ex. 2017 44, 49.a.iv. At his deposition, Mr. Pesce further testified that,
although he did not know that [he] could be definitive, he is fairly
positive that by 95, late 95, sort of around the frame of these patents, that
avatar would have necessarily implied 3-D. Ex. 1046, 89:1090:1.
We find Mr. Pesces testimony, outlined above, that from late 1993
when an avatar referred to a two-dimensional virtual entity and such a
representation was used even in high end technologyto 1995, the effective
filing date of the 856 patent, virtual reality changed so rapidly that the
ordinary meaning of avatar no longer encompassed two-dimensional
entities and instead required three-dimensionality to be unsupported and
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internally inconsistent. This testimony is contradicted by Mr. Pesces own
testimony that [t]hree-dimensional user representations were only
starting to become known in the art by 1995. Id. at 222:14 (emphasis
added). Mr. Pesce also testified that the first time he saw an avatar in
Virtual Reality Modeling Language (VRML)which he worked on
beginning in December 1993 and describes as a standard for the
presentation of three-dimensional worldswas [s]omewhere between
late 1995 and early 1996. Id. at 41:1842:15, 222:9223:6; Ex. 2017
4142.
Moreover, as Petitioner points out and Patent Owner explicitly
acknowledged at the hearing, Mr. Pesces testimony on this issue wholly
lacks supporting or corroborating evidence. See Reply 23, 1112; Ex. 2017
3644, 49.a.iv, 59; Tr. 45:1346:9, 138:911, 138:19139:7. In addition,
it conflicts with the definition from the MICROSOFT PRESS COMPUTER
DICTIONARY, which, despite being published in 1997well after the alleged
shift in the art, according to Mr. Pesce, that restricted an avatar to
three-dimensional formdoes not require three-dimensionality. See
Ex. 1010, 38; Tr. 46:1217.
We find Mr. Pesces inconsistent and unsupported testimony, which
contradicts other record evidence, unpersuasive. Accordingly, we accord
minimal probative weight to his opinion that in late 1995, the effective filing
date of the 856 patent, the ordinary meaning of the term avatar to one of
ordinary skill was restricted to three-dimensional representations. See
37 C.F.R. 42.65(a); In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1368
(Fed. Cir. 2004) (explaining that the Board has broad discretion to weigh
declarations and to conclude that the lack of factual corroboration warrants
discounting the opinions expressed in the declarations); Rohm & Haas Co.
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v. Brotech Corp., 127 F.3d 1089, 1092 (Fed. Cir. 1997) (Nothing in the
[federal] rules [of evidence] or in our jurisprudence requires the fact finder
to credit the unsupported assertions of an expert witness.).
Accordingly, based on the record before us, we agree with both
parties that avatar, as recited in claim 1 of the 856 patent, refers to a
graphical representation of a user, and further determine that its broadest
reasonable interpretation, in light of the specification, is not limited to
three-dimensional graphical representations.
D. ANTICIPATION BY FUNKHOUSER
We turn to the instituted grounds. We first address Petitioners
assertion that Funkhouser anticipates claim 1 of the 856 patent and Patent
Owners responsive arguments.
1. Funkhousers Status as Prior Art
In this inter partes review, Petitioner has the burden of persuasion to
establish unpatentabilityincluding all issues relating to the status of
[Funkhouser] as prior art, Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572,
157678 (Fed. Cir. 1996)by a preponderance of the evidence, see 35
U.S.C. 316(e); Dynamic Drinkware, LLC v. Natl Graphics, Inc., 800 F.3d
1375, 137879 (Fed. Cir. 2015). This burden of persuasion remains with
and never shifts from Petitioner, while the burden of productionthe burden
of going forward with evidence, which may entail producing additional
evidence and presenting persuasive argument based on new evidence or
evidence already of recordshifts between the parties. Dynamic
Drinkware, 800 F.3d at 137880 (internal quotations and citation omitted);
see Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 132729
(Fed. Cir. 2008); Mahurkar, 79 F.3d at 157677.
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Here, the parties dispute whether Funkhouser qualifies as prior art to
claim 1 of the 856 patent under 35 U.S.C. 102(a). Pet. 67, 1415;
Resp. 30 n.6, 4447; Reply 1519. Section 102(a) provides, in relevant part,
[a] person shall be entitled to a patent unless . . . the invention was . . .
described in a printed publication in this or a foreign country, before the
invention thereof by the applicant for patent. 35 U.S.C. 102(a). In the
Petition, Petitioner argues that Funkhouser constitutes prior art under
102(a), because Funkhouser was published no later than April 12, 1995
before the earliest possible effective filing date of the 856 patent, the
November 13, 1995 filing date of the 296 provisional. See Pet. 67, 1415;
Ex. 1001, [60]. In Response, Patent Owner does not dispute Petitioners
position that Funkhouser constituted a printed publication by April 12, 1995
but instead argues that under Petitioners proposed interpretation of the
determining step of claim 1 of the 856 patentwhich we have adopted
abovethe subject matter of claim 1 was invented before Funkhousers
publication. See Resp. 30 n.6, 4447. Specifically, Patent Owner contends,
with documentary and testimonial evidence proffered in support of its
assertions, that (1) the inventors actually reduced to practice the subject
matter recited in claim 1 of the 856 patent no later than April 11, 1995, or
alternatively, (2) the inventors conceived of [the recited subject matter] no
later than April 11, 1995 and th[r]ough reasonable diligence, actually
reduced them to practice no later than April 25, 1995. Id. at 4447. In
Reply, Petitioner contests Patent Owners proffered arguments and evidence
of prior conception and reduction to practice. See Reply 1519.
As we explain below, based on the argument and evidence before us,
we determine that Petitioner has met its ultimate burden of persuasion to
establish by a preponderance of the evidence that Funkhouser is prior art to
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claim 1 of the 856 patent under 102(a). See Dynamic Drinkware, 800
F.3d at 137880; Mahurkar, 79 F.3d at 1578.
a. Publication of Funkhouser
First, Petitioner argues Funkhouser constitutes a printed publication
under 102(a) and was published no later than April 12, 1995. Pet. 67,
1415. Patent Owner does not contest, and appears to accept, Petitioners
position. See Resp. 4447 (referring to April 12, 1995 as the effective
publication date of Funkhouser); see generally id.
In determining whether a reference is a printed publication, the key
inquiry is whether or not [the] reference has been made publicly
accessible. In re Klopfenstein, 380 F.3d 1345, 1348 (Fed. Cir. 2004). A
reference is publicly accessible if the reference has been disseminated or
otherwise made available to the extent that persons interested and ordinarily
skilled in the subject matter . . . exercising reasonable diligence, can locate it
and recognize and comprehend therefrom the essentials of the claimed
invention without need of further research or experimentation.
Bruckelmyer v. Ground Heaters, Inc., 445 F.3d 1374, 1378 (Fed. Cir. 2006)
(internal citations omitted).
Funkhouser (Ex. 1005) is an article that appears in a collection of
articles, titled 1995 SYMPOSIUM ON INTERACTIVE 3D GRAPHICS (Ex. 1006)
(1995 Symposium Book). Ex. 1005; Ex. 1006, cover, 13, 85; Ex. 1002
40. The 1995 Symposium Book was compiled for a symposium sponsored
by the Association for Computing Machinery (ACM), held on April 912,
1995 (1995 Symposium). Ex. 1006, cover, 13, 85; Ex. 1002 4041.
The 1995 Symposium Book indicates that Funkhouser was scheduled to be
presented on April 11, 1995. Ex. 1006, 2. Dr. Zydawho was the
chairperson of the 1995 Symposiumtestifies that Funkhousers author,
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Thomas Funkhouser, was a well-known researcher at the time and that the
symposium gathered many of the top researchers in the fields of virtual
reality systems, computer graphics, and real-time interactive 3D. Ex. 1002
4041; Ex. 1006, cover. According to Dr. Zyda, [o]ver 250 participants
attended the 1995 [S]ymposium and each was provided with a copy of the
1995 [Symposium Book]. Ex. 1002 41. In addition, Dr. Zyda testifies
that copies of the book were available from the ACM. Id.; see Ex. 1006,
copyright page (A limited number of copies are available at the ACM
member discount.); see also id. at 4. The 1995 Symposium Book and
Funkhouser feature a 1995 copyright date and permit copying, generally
without a fee and with a fee and/or specific permission if for direct
commercial advantage. Ex. 1006, copyright page, 85; Ex. 1005, 85.
In light of this evidence of Funkhousers distribution and accessibility,
Petitioner has demonstrated that an interested ordinarily skilled artisan,
exercising reasonable diligence, could have obtained Funkhouser no later
than April 12, 1995the last day of the 1995 Symposium. See, e.g., Mass.
Inst. of Tech. v. Ab Fortia, 774 F.2d 1104, 1109 (Fed. Cir. 1985) (holding a
paper to be a prior art printed publication where the paper was disseminated
without restriction to at least six persons and between 50 and 500
ordinary artisans were informed of its contents by [an] oral presentation
before the critical date). Accordingly, Petitioner has shown that Funkhouser
was a printed publication no later than April 12, 1995.
b. Alleged Invention Before Funkhousers Publication
Patent Owner argues that under Petitioners interpretation of the
determining step of claim 1 of the 856 patentwhich we have adopted in
II.C.2.bclaim 1 was invented before Funkhousers publication.
Resp. 4447. In support of this argument, Patent Owner asserts two
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alternative theories: (1) the inventors actually reduced to practice the subject
matter of claim no later than April 11, 1995, or (2) the inventors
conceived of [the recited subject matter] no later than April 11, 1995 and
th[r]ough reasonable diligence, actually reduced them to practice no later
than April 25, 1995. Id. Under the first theory, Patent Owner contends that
the inventors, who were employed by Patent Owner, developed a program
called Worlds Chat, which implemented the elements of claim 1 by no later
than April 11, 1995. Id. at 44. With regard to the determining step of
claim 1, Patent Owner asserts that Worlds Chat implemented pre-existing
client-side software that allowed a client to establish a field of view, and to
display those elements that were within the field of view of an avatar. Id.
at 4446. With respect to the receiving step and wherein limitation of
claim 1, Patent Owner argues that [t]he Worlds Chat code included server-
side code, which was modified on April 11, 1995 to implement the crowd
control concept developed by the inventors prior to that date and this code
caused the server to select a set number of closest avatars, and to send
positions of only those closest avatars to a client. Id. at 45. Alternatively,
in its second theory, Patent Owner asserts that even if there is insufficient
evidence of the code being implemented (i.e., actual reduction to practice)
by April 11, 1995, Funkhouser is still antedated through conception of
claim 1 by no later than April 11, 1995, combined with reasonable diligence
leading to actual reduction to practice by April 25, 1995when Patent
Owner publicly released Worlds Chat. Id. at 4647.
Petitioner argues Patent Owners attempt to antedate Funkhouser fails
because Patent Owner proffers no testimony from any named inventor and
instead relies entirely on secondhand accounts and hearsay from financially
interested witnesses, whose testimony should be treated with skepticism.
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Reply 1517; Tr. 25:127:14. Petitioner contends that inventor testimony is
critical to conception and the absence of such testimony in this case is
particularly pertinent given that one of the inventors, S. Mitra Ardon,
refused to sign the inventors oath and notified Patent Owner as to his belief
that the claims in a parent application to the 856 patent did not recite
patentable subject matter. Reply 1516 (citing Ex. 1048); Tr. 25:1426:18.
Petitioner also questions Patent Owners diligence in contacting Mr. Ardon
and another inventor, Judith Challinger. See Reply 16. According to
Petitioner, in light of these circumstances, it is fair to infer that Patent Owner
would be unable to obtain useful testimony from the inventors. See id.;
Tr. 26:2127:2, 35:1013.
Petitioner also contends that the general assertions of Patent Owner
and its declarants, which fail to provide any claim mapping, are insufficient
to demonstrate prior conception and reduction to practice. Reply 18;
Tr. 27:1425, 28:15. Moreover, Petitioner argues that the source code
proffered by Patent Owner does not support its assertions because the claim
elements are not embodied in the submitted source code. Reply 1718;
Tr. 28:14. According to Petitioner, Mr. Pesce, during cross-examination,
admitted that none of the code he identifies in his declaration sends
positional updates from the server to the client, nor does he point to any code
that shows what the client receives from a server. Reply 18 (citing
Ex. 1046, 283:1624, 288:2290:14). In addition, Petitioner argues that the
RSRoom.cc code (Exhibit 2035) that Patent Owner proffered is post-critical
date code, which includes numerous modifications to the crowd control
feature subsequent to April 1995, and therefore, cannot support Patent
Owners antedating argument. Reply 19; Tr. 28:1619, 34:1722, 35:2023,
158:5159:12. As support for this assertion, Petitioner argues that the
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proffered CHANGELOG file (Exhibit 2036) demonstrates that the
RSRoom.cc file uses a RS naming convention that was not implemented
until 1996 and, thus, did not exist until 1996. Reply 19; Tr. 35:1423.
Further, Petitioner contends that the CHANGELOG also indicates that any
crowd-control related code implemented on April 11, 1995 was later
changed and ultimately replaced with something elseas Mr. Pesce
conceded. Reply 3, 1819; Tr. 28:2029:25, 31:2132:23.
Prior invention can be established either by (1) prior reduction to
practice of the invention, or (2) prior conception of the invention and
reasonable diligence in reducing that invention to practice. Teva Pharm.
Indus. Ltd. v. AstraZeneca Pharms. LP, 661 F.3d 1378, 1383 (Fed. Cir.
2011); see Mahurkar, 79 F.3d at 1577. Conception is the formation in the
mind of the inventor[] of a definite and permanent idea of the complete and
operative invention, as it is hereafter to be applied in practice. Dawson v.
Dawson, 710 F.3d 1347, 1352 (Fed. Cir. 2013) (internal citations and
quotations omitted). An idea is definite and permanent when the inventor
has a specific, settled idea, a particular solution to the problem at hand. Id.
(internal citations and quotations omitted). A conception must encompass
all limitations of the claimed invention. Brown v. Barbacid, 276 F.3d 1327,
1336 (Fed. Cir. 2002).
Reduction to practice follows conception. Mahurkar, 79 F.3d at
1578. To establish actual reduction to practice, an inventor must have
(1) constructed an embodiment or performed a process that met all the
claim limitations and (2) determined that the invention would work for its
intended purpose. Teva, 661 F.3d at 1383; see Mahurkar, 79 F.3d at 1578.
Documentation of prior reduction to practice need not be in the exact
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language given in the claims. Teva, 661 F.3d at 1384 (quoting Mycogen
Plant Science, Inc. v. Monsanto Co., 243 F.3d 1316, 1336 (Fed. Cir. 2001)).
Here, as an initial matter, we note that there is no inventor testimony
proffered in support of Patent Owners prior invention arguments. As
explanation, Patent Owner offers the testimony of Mr. Thom Kidrin,
President and CEO of Patent Owner since 1997, who testifies that Patent
Owner no longer employs the four inventors of the 856 patent and he
attempted to contact each, yet was unable to contact Mitra Ardon and
Judith Challinger and was able to contact David Leahy and Bo Adler, but
they were unwilling or unable to assist in this defense due to their current
employment situations. Ex. 2018 1, 4, 13; see Ex. 1047, 38:1942:18.
In his deposition, Mr. Kidrin testified that his effort to contact Mr. Ardon
was limited to one call and voicemail and his attempt to contact
Ms. Challinger was restricted to a single e-mail. See Ex. 1047, 38:1940:22.
Although we are not persuaded that Patent Owners explanation reflects
reasonably diligent efforts to obtain testimony from the inventors, we do not
draw any negative inference against Patent Owner from the lack of inventor
testimony before usas Petitioner has urged us to do. See Reply 1516
(citing Borror v. Hertz, 666 F.2d 569, 57374 (CCPA 1981)); Tr. 26:21
27:2, 35:1013; see also id. at 148:123.
Moreover, we acknowledge the attorney declaration regarding
Mr. Ardons refusal to sign the inventors oath in a parent application to the
856 patent based on his belief that the claims did not recite patentable
subject matter. Ex. 1048 3; Reply 1516 (citing Ex. 1048); Tr. 25:14
26:18. Yet we do not find this declaration directed to Mr. Ardons beliefs as
to the patentability of different patent claims of much, if any, value on the
specific issue of conception and reduction to practice, and the timing thereof,
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of claim 1 of the 856 patent. See, e.g., Ex. 1048 7. Also, as Patent Owner
noted at the hearing, the declaration explains that Mr. Ardon was employed
by a competitor of Patent Owner, thus giving a potential motivation for his
statements. See Ex. 1048 47; Tr. 145:21146:17.
In the absence of inventor testimony, Patent Owner submits
documentary evidence, such as Worlds Chat source code, and testimony
from Mr. Pescewho has no personal knowledge of the inventors work
and testifies based on his review of documentary evidenceas well as
current and former employees of Patent Owner, including Mr. Kidrin,
Mr. Ron Britvich, Mr. Conor Laffan, Mr. Ken Locker, and Mr. David
Marvitnone of whom actually worked on the Worlds Chat program with
the inventors and several of whom joined Patent Owner after the alleged
invention in April 1995. See Exs. 203436; Ex. 2017 50; Ex. 2018 1, 3;
Ex. 2019 5; Ex. 2025 36; Ex. 2027 34; Ex. 2038 3.
Mr. Britvich 13 does testify that, though he did not personally work on
Worlds Chat, he occasionally collaborate[d] with the team developing
the Worlds Chat program. Ex. 2019 59, 14. Of the proffered
declarants, only Mr. Britvich and Mr. Pesce offer testimony substantively
related to the content of the Worlds Chat source code relevant to the
limitations of claim 1 of the 856 patent. See Ex. 2017 50; Ex. 2019
1819; Resp. 4446; Reply 17. As we explain below, we agree with
Petitioner that this argument and evidence offered in support of Patent
Owners antedating arguments has gaps and suffers from a number of
13
As Petitioner points out, Mr. Britvich is a paid consultant, who received
1 million shares of Patent Owner stock for his work in connection with this
proceeding and the District Court Case. See Ex. 2019 3; Ex. 1047, 18:2
19:3; Reply 17; Tr. 152:14153:3. Again, however, we draw no negative
inference therefrom.
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deficiencies. See, e.g., Borror, 666 F.2d at 573 (A partys case may have
gaps or lack persuasiveness without the inventors testimony . . . .).
With this background, we address Patent Owners first theory of
alleged actual reduction to practice by April 11, 1995. Beginning with the
receiving step and the wherein limitation of claim 1 of the 856 patent,
Patent Owner proffers two documentary exhibits regarding the Worlds Chat
code relevant to these limitationsthe CHANGELOG (Exhibit 2036) and
the RSRoom.cc (Exhibit 2035)and the two witnesses who address these
claim limitations, Mr. Pesce and Mr. Britvich, rely upon these documents in
reaching their conclusions. See Ex. 2035; Ex. 2036; Ex. 2019 19;
Ex. 2017 50.d. Each of these exhibits, however, suffers from deficiencies
that limit its probative value as evidence of conception and reduction to
practice in April 1995. First, Patent Owner submits a CHANGELOG for the
Worlds Chat code (Exhibit 2036), which includes dated entries with brief
descriptions of alleged modifications and additions to the code. See
Ex. 2036. We note that the brief snippets describing changes to the Worlds
Chat code in the CHANGELOG often lack adequate detail regarding the
change to allow for sufficient understanding of what was purportedly added
or modified. See generally id. Mr. Britvich and Mr. Pesce testify that it is
consistent with the business habits (Mr. Britvich) and common practice
among coders (Mr. Pesce) that a programmer who has written code and
recorded it in a CHANGELOG has already compiled the code and tested its
function. Ex. 2017 50.d.viii; Ex. 2019 19.e; see Resp. 46 (citing
Ex. 2019 19); see Tr. 150:1418. Accepted practices and habits, however,
are not always followed. And neither Mr. Pesce nor Mr. Britvich nor any
other declarant purports to have personal knowledge of the preparation of
this CHANGELOG or such practice specific to this CHANGELOG and its
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author(s). See, e.g., Ex. 2017 50.d.viii; Ex. 2019 56, 19.e. Rather, the
author(s) of the CHANGELOG are unidentified and have not provided
testimony. Accordingly, we do not find the CHANGELOG (Exhibit 2036)
to be persuasive evidence of what was actually implemented in the code and
functioning for purposes of reduction to practice.
Second, Patent Owner proffers the RSRoom.cc file (Exhibit 2035),
which it alleges is Worlds Chat code that implements the server-side
filtering of the receiving step and wherein limitation of claim 1 of the
856 patent. See, e.g., Resp. 4546; Ex. 2019 1517, 19; Ex. 2018 6
10. The code itself is undated. See Ex. 2035; Ex. 1046, 296:57; Reply 19.
Moreover, no declarant in this case identified the RSRoom.cc file as the
version of the code that existed in April 1995 and Mr. Pesce, during his
deposition, admitted that he did not know whether the RSRoom.cc file
existed in the form he reviewed prior to 1996. Ex. 1046, 295:1520; see
Reply 19; Tr. 28:1115. In addition, as Petitioner points out, the
CHANGELOG indicates that the RS naming convention of the
RSRoom.cc file was not implemented until 1996. See Ex. 2036, 79
(describing changes put online for WC x/xx/96 v8.10, after entries listed
for multiple dates from February 117, 1996, as [b]reak server class into a
base class and two derived classes one for the RoomServer (RServer) and
one for the user server (UServer) and [r]enamed some room server
specific files to begin with RS); Reply 19. Even Patent Owner conceded at
oral hearing that the RSRoom.cc file is a later version of code, given the
CHANGELOGs reference to the change in code nomenclature that appears
to have been made in 1996. Tr. 151:314. In light of the evidence before us
and the parties agreement on the issue, the RSRoom.cc file (Exhibit 2035),
which uses the RS naming convention that the CHANGELOG indicates
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was not implemented until 1996, is not the version of the code that existed in
April 1995the critical time period for Patent Owners alleged conception
and reduction to practice. Rather, based on the CHANGELOG, the
RSRoom.cc file (Exhibit 2035) appears to be from 1996 at the earliest. See
Ex. 2036, 79; Reply 19; Tr. 151:314; see also id. at 28:1619, 34:1722,
35:2023, 158:524.
Moreover, we agree with Petitioner that the later date of the
RSRoom.cc file is particularly significant for Patent Owners conception and
reduction to practice arguments, because, as Mr. Pesce acknowledged at his
deposition, the CHANGELOG reflects several changes relevant to the
RSRoom.cc and server-side crowd control code between April 11, 1995 and
the creation of the RS naming convention in 1996. See Reply 1819;
Tr. 158:5159:12. For example, the April 24, 1995 entry indicates
processing was added to User.cc that will absolutely limit the number of
updates that get sent to a Client. Ex. 2036, 2; see Reply 18. Mr. Pesce
acknowledged that this entry appears to implicate, and indicate a
modification of, server-side filtering and the updates a client receives from
the server. See Ex. 1046, 299:7301:11. In addition, the April 28, 1995
entry provides: Implemented a modified crowd control algorithm that is
room-based. Ex. 2036, 23 (emphasis added); see Reply 18. Mr. Pesce
acknowledged that this entry indicates a modification of the Worlds Chat
crowd control feature and also that the described modification is consistent
with his understanding of the modules of the RSRoom.cc file that he
discusses in his declaration regarding the receiving step of claim 1, thereby
indicat[ing] the functionality of those modules was changed after April 11,
1995. Ex. 1046, 302:15303:3; Ex. 2017 50.d; see Reply 18. Moreover,
the October 18, 1995 entry states: Replaced brute-force search for nearest
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neighbors with a cell-based algorithm (Room.cc). Ex. 2036, 4 (emphases
added); see id. at 1; Reply 1819. Mr. Pesce acknowledged that this entry
appears to indicate that by October 1995, the crowd control implemented in
April 11, 1995 had been taken out and replaced . . . with different code.
Ex. 1046, 303:522.
These entries in the CHANGELOGafter April 11, 1995 but before
1996reflect modifications to and even replacement of code regarding
server-side crowd control filtering in or at least related to the RSRoom.cc
code. Given that the proffered version of the RSRoom.cc code
(Exhibit 2035) did not exist in its submitted form until after April 1995 in
1996, the CHANGELOGs indications of alterations to the Worlds Chat
code implemented in or at least related to the RSRoom.cc code (and its
apparent predecessor, Room.cc) between April 11, 1995 and 1996, and the
lack of evidence or testimony laying out, with precision and detail, all
changes specific to the Room.cc or RSRoom.cc code from April 1995 until
the version of the RSRoom.cc code submitted as Exhibit 2035, we find the
submitted RSRoom.cc code (Exhibit 2035) to be unreliable and
unpersuasive evidence as to what was implemented in the Worlds Chat code
in April 1995 for purposes of reduction to practice as well as what was in the
inventors minds in April 1995 for purposes of conception.
This documentary evidencetogether with the relevant declaration
and deposition testimonyis insufficient to show actual reduction to
practice of the receiving step and the wherein limitation of claim 1 by April
11, 1995. In arguing that Worlds Chat implemented the receiving step by
April 11, 1995, Patent Owner cites to the testimony of Mr. Pesce and
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Mr. Britvich, 14 who, in turn, rely on an April 11, 1995 entry of the
CHANGELOG. See Resp. 4546 (citing Ex. 2019 19; Ex. 2017 50.d;
Ex. 2018 6, 8, 9, 10). This April 11, 1995 entry of the CHANGELOG
states: Added brute force crowd control. In Room.cc, compute a list of
users proximate to a given location by estimating the distance to every user
in the room. Ex. 2036, 1. This description only explicitly refers to
comput[ing] a list of users near a given locationit does not reflect that
these locations actually are sent to a client or that these locations reflect the
positions of less than all of the other avatars, as claim 1 requires. See, e.g.,
Mahurkar, 79 F.3d at 157778 (The trier of fact can conclude for itself
what documents show, aided by testimony as to what the exhibit would
mean to one skilled in the art.).
Moreover, on the record before us, the reference to brute force crowd
control is insufficient to fill in these gaps. Specifically, the record lacks
adequate evidence of what the inventors meant by the term crowd control,
and more specifically, brute force crowd control, in April 1995.
Submitted declarations from Mr. Marvit and Mr. Britvich, individuals who
worked with the inventors at this time period and, therefore, might have
knowledge of the inventors usage of this terminology at the time refer to
crowd control, but provide only vague, general descriptions of the
concept. See Ex. 2019 7, 14, 19.c; Ex. 2027 5. Mr. Marvit testifies that
[d]uring January 1995, the Worlds Chat team was working on the problem
of crowd control in the virtual world experience, explaining that limited
processing power and memory of servers and clients at the time meant that
14
The relevant portion of the Response also cites Mr. Kidrins declaration
but the cited paragraphs refer only to the handling and possession of the
Worlds Chat code. See Resp. 45 (citing Ex. 2018 6, 8, 9, 10).
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too many avatars on a screen could bog down the system, either in the
transmission of position/orientation updates from the server to the clients, or
in graphics processing by the clients. Ex. 2027 5 (emphasis added). This
testimony merely states, in general terms, the problemnot the solution
which the inventors allegedly conceived and reduced to practice in
April 1995. In addition, Mr. Britvich makes a brief, unexplained, reference
to him learning how the [inventors] implemented certain solutions
including their crowd control feature. Ex. 2019 14. He also testifies
regarding a concept that appears to relate to crowd control, though not using
that precise terminology, explaining that [d]uring his meetings with th[e]
Worlds Chat team, he learned that this team developed a solution to the
potential crowding problem that can occur in a virtual world, which
involved limiting or reducing the data transmitted from the server
down to a particular client, with the benefit of reducing the processing
burden on the client and the time required to transmit the updates. Id. 7.
This testimony, however, is not specific regarding the timing of these
meetings. See id.; see also id. 45. Moreover, the testimony is vague in
describing the alleged solution, for example, lacking specifics regarding the
type of data whose transmittal is limited or reduced and how the
transmitted data are limited or reduced. Thus, these general testimonial
descriptions lack specifics regarding the crowd control concept,
particularly as it relates to the receiving step and wherein limitation of
claim 1, which require that a client receive received positions from the
server and that these positions be of fewer than all of the second avatars.
Patent Owner, at oral hearing, argued that the 856 patent
specification uses the crowd control terminology consistent with the
CHANGELOG and, therefore, the specification can be used to inform the
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meaning of brute force crowd control as used in the CHANGELOG and as
evidence that Worlds Chat performed the receiving step and wherein
limitation of claim 1 in April 1995. See Tr. 153:8155:21. We disagree.
The later-filed specification does not use the terminology brute force crowd
control, nor does its usage of crowd control necessarily reflect the
meaning the inventors ascribed to the term in April 1995. The record before
us lacks evidence to show that there was no development in meaning of the
terminology from April 1995 until the specification was drafted. If
anything, there is evidence suggesting to the contrary, given that the
CHANGELOG reflects modifications to and replacement of the crowd
control code after April 11, 1995, as explained above. See Ex. 2036, 24.
Even if we were to consider the usage of crowd control in the
specification, this term is used to refer to a variety of concepts on the server
side, including maintaining a variable N, determining and maintaining a list
of the N nearest avatars for a client, and notifying the client of changes in
the location of the N closest remote avatars. See Ex. 1001, 5:226:10,
13:1414:38. The CHANGELOGs reference to brute force crowd
control and comput[ing] a list of proximate users may be consistent with
some of these aspects (e.g., determining a list of the N nearest avatars), but
there is insufficient evidence, on the record before us, that the reference to
brute-force crowd control means that the particular requirements of the
receiving step and wherein limitation that a client receive received
positions from the server and that these positions be of fewer than all of
the second avatars had been implemented by April 11, 1995. Accordingly,
we find the CHANGELOG entry from April 11, 1995 inadequate to
demonstrate that the inventors had performed the receiving step and wherein
limitation of claim 1 in Worlds Chat by April 11, 1995. See Ex. 2036, 1.
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Moreover, we find Mr. Pesce and Mr. Britvichs testimony relying on
this CHANGELOG entry, as well as the RSRoom.cc file, unpersuasive on
this issue. In addressing the receiving step and wherein limitation of
claim 1, both Mr. Pesce and Mr. Britvich refer to the April 11, 1995 note in
the CHANGELOG (Exhibit 2036) and to the RSRoom.cc file (Exhibit 2035)
and testify to their conclusion that the appearance of this note in the
CHANGELOG indicates that the server sending selected positional
updates, rather than all positional updates, to a client was implemented
in Worlds Chat no later than April 11, 1995. Ex. 2017 50.d; Ex. 2019
19. Yet, as we explain above, both the CHANGELOG and the
RSRoom.cc file are unreliable evidence of what was in the Worlds Chat
code at the relevant time in April 1995. Moreover, as also explained above,
the CHANGELOG entry from April 11, 1995 omits key details regarding
the receiving step and wherein limitation of claim 1. Therefore, we find
Mr. Pesces and Mr. Britvichs testimony based on these documentsrather
than personal knowledge of the alleged reduction to practice by April 11,
1995to be unpersuasive on the issue of whether the Worlds Chat code
included and performed the full receiving step and wherein limitation on or
before April 11, 1995.
In sum, the record before us lacks adequate and persuasive evidence
that the inventors had implemented or performed the full receiving step and
wherein limitation of claim 1 of the 856 patentas required for actual
reduction to practiceby April 11, 1995.
To address the determining step of claim 1 of the 856 patent, Patent
Owner proffers client-side source code allegedly implemented in Worlds
Chat before April 1995, titled FROBVPLA.CPP (Exhibit 2034). See
Resp. 4445 (citing Ex. 2017 18, Ex. 2019 50.c); Ex. 2034. Patent
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Owner argues that this code allows a client to establish a field of view, and
to display those other elements that were within the field of view of an
avatar and, therefore, meets the determining step of claim 1 of the
856 patent under Petitioners proposed claim scopewhich we have
addressed and agreed with in II.C.2.b. Resp. 4445 (citing Ex. 2017 18,
Ex. 2019 50.c); see Ex. 2019 18. FROBVPLA.CPP (Exhibit 2034)
appears, on its face, to involve a field of view determination. See, e.g.,
Ex. 2034, 2. From our review of the code, however, it is not clear that this
determination is made based on the received positions, as claim 1 requires
(or as featured in Petitioners proposed claim scope, with which we have
agreed, from user positions received from the server). Neither Mr. Pesce
nor Mr. Britvichthe only declarants who address the determining step
fill this gap. See Ex. 2017 50.c; Ex. 2019 18. Rather, they testify only
that the code allows a client to establish a field of view of an avatar and
to display the virtual world from that field of viewwithout specifying or
addressing what information the client uses to make this determination, i.e.,
whether it is based on the recited received positions. Ex. 2017 50.c.ii;
Ex. 2019 18.b; see Ex. 2017 50.c.iv. Moreover, at his deposition,
Mr. Pesce acknowledged that his declaration testimony does not identify
any file that shows what the client receives from a server or any file that
shows what the client does with that information after receiving it from a
serverfurther demonstrating the absence of evidence showing that the
client-side field of view determination in the FROBVPLA.CPP code
(Exhibit 2034) is based on received positions, as claim 1 requires.
Ex. 1046, 290:114; see also id. at 282:20289:24; Reply 18.
In addition, Mr. Britvich testifies that he observed demos of Worlds
Chat, before the official public release of the Worlds Chat program on
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April 25, 1995, that was run on personal computers, acting as clients and
the view displayed on each personal computer was a perspective or point of
view of an avatar associated with that particular personal computer.
Ex. 2019 810; see Resp. 44. Like his testimony regarding the client-side
FROBVLA.CPP code, this description of the Worlds Chat demo does not
indicate whether the clients were determining the field of view based on
received positions. In addition, the timing of the demo before the official
public release on April 25, 1995 does not demonstrate actual reduction to
practice before April 11, 1995. See Ex. 2019 410.
Accordingly, there is insufficient evidence in the record to show that
proffered client-side code of Worlds Chat implemented the determining step
of claim 1 of the 856 patent by April 11, 1995. For the reasons given, we
determine that the record lacks evidence adequate to demonstrate actual
reduction to practice of claim 1 by April 11, 1995. See Brown, 276 F.3d at
1336 (holding that physical and testimonial evidence of experiment, which
did not show that the experiment satisfied every limitation of the count,
failed to show conception or reduction to practice).
We turn to Patent Owners alternative theory that the inventors
conceived of the subject matter of claim 1 by April 11, 1995 and reasonable
diligence led to actual reduction to practice by April 25, 1995, when Words
Chat was officially released. See Resp. 4647. The only additional
evidence that Patent Owner cites for this theory is documentary and
testimonial evidence regarding Worlds Chats public release on April 25,
1995 and testimony of Mr. Locker and Mr. Marvit regarding the alleged
diligence of the inventors, who worked on Worlds Chat daily leading up to
this release on April 25, 1995. See id. (citing Ex. 2021; Ex. 2025 6, 89;
Ex. 2027 9, 1112; Ex. 2019 1012).
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For substantially the same reasons given above, with only minor
exceptions, that the evidence before us does not demonstrate sufficiently that
the inventors implemented the limitations recited in claim 1and thus, show
actual reduction to practiceby April 11, 1995, that same evidence likewise
does not show actual reduction to practice of each limitation of claim 1 by
April 25, 1995, when Worlds Chat was publicly released. Such minor
exceptions include, for example, that the lack of specificity in Mr. Britvichs
testimony regarding the timing of the Worlds Chat demo before the public
release on April 25, 1995 renders the testimony of little probative value for
reduction to practice by April 11, 1995, but not for reduction to practice by
April 25, 1995. See Ex. 2019 810.
The additional testimonial and documentary evidence that Patent
Owner offers regarding the public release of Worlds Chat on April 25, 1995
does not specify or indicate that Worlds Chat implemented the recited
limitations of claim 1. See, e.g., Ex. 2021; Ex. 2025 6, 89; Ex. 2027
9, 1112; Ex. 2019 1012. In addition, we note that the only
CHANGELOG entry between April 11 and April 25, 1995 that is potentially
relevant to the implementation of claim 1 in Worlds Chat is the April 24,
1995 entry indicating processing was added to User.cc that will
absolutely limit the number of updates that get sent to a Client.
Ex. 2036, 2. Not only is the CHANGELOG itself unpersuasive evidence, as
explained above, but also this entry, alone, is insufficient to address the
specific limitations (e.g., receiving . . . received positions of fewer than
all of the second avatars) of claim 1 and show that the code implemented
these limitations. Neither Mr. Pesce nor Mr. Britvich addressed this
CHANGELOG entry or the User.cc code in their declarations. See, e.g.,
Ex. 1046, 299:7301:11. And the User.cc code is not in the record before
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us. Without the relevant code or supporting testimony, we cannot conclude
from this intervening CHANGELOG entry that Worlds Chat implemented
the limitations of claim 1 before April 25, 1995.
Moreover, as to conception before April 11, 1995, we agree with
Petitioner that the absence of inventor testimony in this case presents a
larger hurdle for conception because we must consider what was in the mind
of the inventors of the 856 patent, and specifically whether they had a
definite and permanent idea of the method recited in claim 1but without
the testimony of any inventor. See Dawson, 710 F.3d at 135354; see also
Reply 1516; Tr. 25:113, 36:518. For substantially the same reasons
explained above that the documentary evidence, including the
CHANGELOG (Exhibit 2036), RSRoom.cc (Exhibit 2035), and
FROBVPLA.CPP (Exhibit 2034), and testimonial evidence from
non-inventors fails to demonstrate actual reduction to practice of the full
method recited in claim 1 by April 11, 1995, it also is inadequate to show
that the inventors had a definite and permanent idea of each limitationas
required for conception.
The only sentence of Patent Owners Response that appears to address
conception refers to the crowd control concept developed by the inventors
prior to [April 11, 1995], citing as support paragraphs of Mr. Kidrins and
Mr. Britvichs declarations. Resp. 45 (citing Ex. 2018 6, 8, 9, 10;
Ex. 2019 19); see Reply 1819. But, as we note above, cited paragraphs 6,
8, 9, and 10 of Mr. Kidrins declaration refer only to possession and
handling of the Worlds Chat code. See Ex. 2018 6, 8, 9, 10. Moreover,
cited paragraph 19 of Mr. Britvichs declaration relies on the CHANGELOG
entry of April 11, 1995 and RSRoom.cc file to conclude that the server
sending selected positional updates to a client had been implemented in the
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code by that date. See Ex. 2019 19. As we explain above, this testimony
and the evidence upon which it relies is not persuasive in showing actual
reduction to practice by April 11, 1995, and it fares no better in showing
conception by that date.
Based on our review of the record, the only declaration testimony
potentially more relevant to conception than reduction to practice that we see
are paragraph 5 of Mr. Marvits declaration and paragraph 7 of
Mr. Britvichs declaration. See Ex. 2019 7; Ex. 2027 5. The deficiencies
we explain above regarding this testimony in the context of reduction to
practice, including its generality and vagueness regarding the alleged crowd
control concept of the inventors, applies equally to conception. Thus, the
testimonial evidence before us is insufficient to show that by April 11, 1995,
the inventors had a definite and permanent idea of the subject matter of
claim 1, with a specific solution, as required for conception.
Accordingly, the evidence before us is insufficient to demonstrate
conception of each limitation of claim 1 of the 856 patent by April 11, 1995
as well as actual reduction to practice by April 25, 1995as Patent Owner
argues in its second theory for antedating Funkhouser. Therefore, as
Petitioner argues, the record evidence and argument lacks adequate support
for both theories of Patent Owners assertion that claim 1 of the 856 patent
was invented before Funkhouser was published on April 12, 1995.
c. Conclusion
For the reasons given, Petitioner has shown by a preponderance of the
evidence that Funkhouser is prior art to claim 1 of the 856 patent under
35 U.S.C. 102(a).
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2. Funkhouser
Funkhouser discloses a system, with a client-server design, that
supports real-time visual interaction between a large number of users in a
shared 3D virtual environment. Ex. 1005, 85. In the system, each user is
represented by an entity, and each entity is managed by a client
workstation. Id. at 85, 87. Servers manage the communication between
clients. Id. at 87. Specifically, [c]lients do not send messages directly to
other clients, but instead send [messages] to servers[,] which forward them
to other client and server workstations. Id. These update messages include
changes in entity position. Id. at 89 (Clients sent update messages only for
changes in derivatives of entity position and/or orientation . . . .); id. at 87
(referring to exchanging update messages when entities cross cell
boundaries).
The key feature of [Funkhousers] system is its [s]erver-based
message culling, which is based on precomputed [c]ell-to-cell
visibility. Id. at 85, 87. Before the simulation, the virtual environment is
partitioned into a spatial subdivision of cells and [a] visibility
precomputation is performed in which the set of cells potentially visible to
each cell is determined. Id. at 87 (emphasis omitted). Figure 6 of
Funkhouser is reproduced below.
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Figure 6 depicts a source cell, in a dark box, and shows, in stipple,15 the
[c]ell-to-cell visibility of the source cell, i.e., the set of cells reached by
some sight-line from anywhere in the source cell. Id. As shown in
Figure 6, this cell-to-cell visibility overestimate[s] . . . the visibility of any
entity resident in the source cell. Id. In other words, an entitys visibility is
conservatively over-estimated by the precomputed visibility of its
containing cell. Id.
Then, during the simulation, servers use the precomputed cell-to-cell
visibility to process update messages, using cell visibility look-ups, rather
than more exact real-time entity visibility computations which would be too
expensive on currently available workstations. Id. The servers forward
update messages only to servers and clients containing entities inside some
cell visible to the [cell] containing the updated entity. Id.
Clients, in turn, use the update messages to maintain updated
surrogates for remote entities visible to at least one entity local to the
client. Id. at 8788; see id. at 92. Surrogates contain (often simplified)
representations for the entitys geometry and behavior. Id. at 87. When a
client receives an update message for an entity managed by another client, it
updates the geometric and behavioral models for the entitys local
surrogate. Id. Between update[] messages, each client simulate[s] the
behavior of its surrogates. Id.
In addition, [c]lients execute the programs necessary to generate
behavior for their entities and [t]hey may . . . include viewing capabilities
15
We have reproduced Figure 6 from Exhibit 1006, the 1995 Symposium
Book. In Exhibit 1005, Funkhouser, the stipple is not visible. To the extent
it remains difficult to see, page 16 of the Petition includes an annotated
version of Figure 6 in which the stipple is defined with blue annotations.
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in which the virtual environment is displayed on the client workstation
screen from the point of view of one or more of its entities. Id.; see id.
at 85, 209 (Plate II).
Figures 4 and 7 of Funkhouser are reproduced below.
Figure 4 Figure 7
Figure 4 shows the visual interactions of entities A, B, C, and D in a virtual
environment. Id. at 86, Fig. 4. Figure 7 depicts clients A, B, C, and D for
these entities, as arranged in Figure 4, with arrows to show the flow of
update messages and small squares to depict surrogates of these clients.
Id. at 87, Fig. 7. As Figure 4 depicts, only one visual interaction is possible
entity A can see entity B. Id. at 86. Figure 7 shows that the forwarding
of update messages to clients is not limited by the visibility of the entities
managed by the clients. See id. at 8688, Figs. 4, 7. As shown in Figure 7,
[i]f entity A is modified, the servers forward the update message to
client B; [i]f entity B is modified, the servers forward the update message
to clients A and C; [i]f entity C is modified, the servers forward the update
message to client B; and [i]f entity D is modified, server Z does not
forward the message to any other server or client because no other entity
can potentially see entity D. Id. at 88, Fig. 7 (emphases omitted).
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3. Discussion
Anticipation under 35 U.S.C. 102 requires the presence in a single
prior art disclosure of all elements of a claimed invention arranged as in the
claim. Therasense, Inc. v. Becton, Dickinson & Co., 593 F.3d 1325, 1332
(Fed. Cir. 2010). Specifically, [f]or a claim to be anticipated, each claim
element must be disclosed, either expressly or inherently, in a single prior art
reference, and the claimed arrangement or combination of those elements
must also be disclosed, either expressly or inherently, in that same prior art
reference. Id. at 133233. Inherent disclosure is established where the
reference must necessarily include the unstated limitation. Id. (emphasis
omitted); see Contl Can Co. USA v. Monsanto Co., 948 F.2d 1264, 1268
(Fed. Cir. 1991) (holding that inherency can be established by extrinsic
evidence that make[s] clear that the missing descriptive matter is
necessarily present in the thing described in the reference, and that it would
be so recognized by persons of ordinary skill).
a. The Determining Step
Petitioner and Patent Owner dispute whether Funkhouser discloses the
determining step of claim 1 of the 856 patent. See Pet. 2125; Resp. 2532;
Reply 1214. According to Petitioner, Funkhousers clients perform the
determining step. See Pet. 1517, 2125. As support for this assertion,
Petitioner points to Funkhousers disclosures that its clients receive from the
server update messages with positional information based on a cell-based
precomputed visibility determination that conservatively over-estimate[s]
what is within the view of entities managed by the client. Pet. 2324
(quoting Ex. 1005, 87); see id. at 15, 2122. Petitioner further asserts that
Funkhousers client, upon receiving this updated positional information,
processes the information, including performing calculations to update[]
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geometric and behavioral models to maintain and update its surrogates of
remote entities. Id. at 24 (quoting Ex. 1005, 87); see id. at 1516, 2122. In
addition, Petitioner refers to Funkhousers disclosures that clients contain
programs to display[] the virtual environment . . . on the client
workstation screen from the point of view of one or more of its entities. Id.
at 2425 (quoting Ex. 1005, 87); see id. at 1516, 2122. Thus, according to
Petitioner and Dr. Zyda, Funkhousers disclosures make clear that upon
receiving the filtered positional updates from the server, the client performs
its own calculations . . . in order to determine which of the remote entities to
display within the clients field of view. Id. at 2425; Ex. 1002 81; see
Pet. 1617. As we explain below, we agree with Petitioner that
Funkhousers client performs the determining step.
As Petitioner points out, in Funkhousers [s]erver-based message
culling, servers cull update messages based on precomputed [c]ell-to-cell
visibility, which determines the set of cells potentially visible to each cell
or, in other words, the set of cells reached by some sight-line from
anywhere in the source cell. Ex. 1005, 87 (emphases added). Thus, servers
forward an update message regarding an entitys change in position,
received from another client, to a client if that client contains an entity
inside some cell visible to the [cell] containing the updated entity. Id.
(emphasis added); see id. (referring to exchanging update messages when
entities cross cell boundaries); id. at 89 (Clients sent update messages only
for changes in derivatives of entity position and/or orientation . . . .).
Because this culling is based on the precomputed visibility of [an entitys]
containing cellrather than more exact real-time entity visibility
computationsit conservatively over-estimate[s] the visibility of any
entity resident in the . . . cell. Id. at 87, Fig. 6 (emphases added).
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As Petitioner argues and Dr. Zyda testifies, these disclosures of
Funkhouser make clear that servers send update messages to clients for more
entities than are presently visible to, and within the field of view of, any
entity managed by the client. Pet. 23; Ex. 1002 78. For example, entity B
in Funkhousers Figures 4 and 6 is not visible to entity C, because entity C is
facing away from entity B. See Ex. 1005, 86, Figs. 4, 6; Ex. 1002 78.
Thus, at the point in time depicted in these figures, entity C will not actually
see any change in position of entity B or, in other words, entity B will not be
displayed to entity C. See Ex. 1005, 86, Figs. 4, 6; Ex. 1002 78.
Nonetheless, Funkhouser explains that when entity B is modified, the
server forward[s] an update message to client C, because entity C is in a
cell potentially visible to the cell where entity B is located. Ex. 1005, 87
88, Fig. 7 (emphasis omitted). As a further example, as illustrated in
Figure 6, the client managing entity A, in the source cell represented by
the dark box in Figure 6, receives updates on entities within the [c]ell-to-
cell visibility of this source cell, represented by the stipple in Figure 6.
Id. at 87, Figs. 4, 6. But as Figures 4 and 6 illustrate, entity As visibility,
represented by the cross-hatch emerging from entity A, is significantly
narrower than the cell-to-cell visibility (stipple) of its source cell shown in
Figure 6. See id.; see also Ex. 1002 69. Accordingly, the client managing
entity A will receive updates from the server for any change in position of
any entity within the wider cell-to-cell visibility (stipple) of the cell where
entity A is located, even though only positional changes for entities within
entity As narrower visibility (cross-hatch) are visible to, and will be
displayed to, entity As user. See Ex. 1005, 8788; Ex. 1002 69.
In addition, Funkhousers clientafter receiving positional update
messages that may relate to entities outside the field of view of any entity it
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managesprocesses the messages to maintain updated surrogates of remote
entities visible to any of the clients entities and executes programs to
display the environment from a particular entitys viewpoint. In particular,
Funkhouser discloses that the client maintain[s] surrogates for remote
entities visible to at least one entity local to the client (Ex. 1005, 88; see id.
at 87) and upon receiv[ing] an update message for an entity managed by
another client (i.e., a remote entity), uses the message to update[] the
geometric and behavioral models for the entitys local surrogate (id. at 87).
Moreover, Funkhouser discloses that [b]etween updates, the client
simulate[s] surrogate behavior. Id.
Funkhouser also explains that its clients execute . . . programs
necessary to generate behavior for their entities and that [t]hey . . . may
include viewing capabilities in which the virtual environment is displayed on
the client workstation screen from the point of view of one or more of its
entities. Id.; see id. at 85 ([U]sers run an interactive interface program . . .
[that] simulates the experience of immersion in a virtual environment by
rendering images of the environment as perceived from the users . . .
viewpoint.). Funkhouser includes Plate II, which shows an environment
rendered from [the] viewpoint of one entity, omitting many other entities in
the environment. 16 Ex. 1005, 209.
16
We note, as we did in the Institution Decision, that the Petition and
Dr. Zydas testimony refer to an alleged number of remote entities for which
the client managing the entity from whose viewpoint Plate II depicts the
environment received and processed updates, but these numbers are not
supported by Funkhouser. See Pet. 8, 2223, 25; Ex. 1002 81; Inst.
Dec. 15 n.4; Ex. 1005, 209. Again, as in the Institution Decision, we do not
rely on these numbers. The parties agree that these numbers have no impact
on their positions or the proper determination as to whether Funkhouser
discloses the determining step. For example, Dr. Zyda testifies that the
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Based on these disclosures of Funkhouser, we determine Petitioner
has demonstrated that Funkhouser discloses that its client performs the
determining step of claim 1 of the 856 patent by determining, based on
filtered positional update messages received from the server, the other
entities (avatars) to be displayed to a particular useri.e., the other
entities that are within the viewpoint of the users entity. Such a field of
view determination falls within the scope of the ordinary meaning of the
determining step, as we determined above in II.C.2.b.
As additional support for our finding, we credit and find persuasive
Dr. Zydas testimony that Funkhousers disclosures demonstrate that [a]fter
receiving the filtered positional updates from the server based on what is
potentially visible to a particular entity, the client responsible for [that
entity] will determine which, if any, remote [entities] fall within [the
entity]s field of view in order to display the perspective from that entity.
Ex. 1002 69; see id. 78; Ex. 2016, 243:817. As Dr. Zyda more
specifically explains, upon receiving such filtered positional updates,
Funkhousers client processes the information and performs its own
calculations to identify[] which of the received positions falls within the
[entity]s field of view to determine a set of the other [entities] to display to
the user. Ex. 1002 7981.
erroneous numbers are not material and do[] not change [his] opinions
with respect to unpatentability. Ex. 1038 4. Patent Owner asserts and
Mr. Pesce opines similarly. See Resp. 31 (noting that the numbers are not
supported and representing that even assuming that Funkhouser[] did
support these numbers, it would not change the outcome here.); Ex. 2017
54 (opining that Funkhouser does not support Petitioners statement
regarding the numbers, but it would not change my opinion even if true).
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We disagree with Patent Owners arguments to the contrary. Patent
Owners arguments focus on an assertion that Funkhouser fails to disclose
the determining step, as properly construed to be separate from (and prior
to) the rendering/display process. Resp. 26; see id. at 2932. In other
words, according to Patent Owner, no pre-rendering determining occurs
in Funkhouser. Id. at 31. Patent Owner similarly asserts that Funkhouser
lacks any crowd control that is separate from the perspective/point-of-
view determination. Id. at 30. Patent Owner faults Petitioner and Dr. Zyda
for allegedly not advanc[ing] any theory that Funkhouser . . . discloses such
a crowd control function, and more specifically, filtering other users
avatars separately from the rendering process, and instead looking to
Funkhousers graphics pipeline, or visibility algorithm as disclosing the
determining step. Id. at 26, 2829, 3132.
These arguments are premised on Patent Owners claim construction
arguments disputing Petitioners proposed claim interpretation, including
Patent Owners attempt to narrow the recited determining to be distinct
from and before what it refers to as the rendering/display process and to
limit the step to the client-side crowd control feature of the preferred
embodiment in the 856 patent specificationwhich we have not adopted.
See supra II.C.2.b; Reply 13 (asserting that Patent Owners contention that
Funkhouser does not disclose the determining step is entirely based on its
claim construction); Tr. 21:2322:6. These arguments are misplaced, and
without merit, under the claim scope proposed by Petitioner, with which we
agree, as explained above in II.C.2.b. Although we need not reach these
arguments, we note that we agree with Petitioner that Patent Owners
arguments that Funkhouser allegedly lacks pre-rendering determining and
determining separate from, and prior to, the rendering/display process
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overlook, and fail to address persuasively, Funkhousers disclosures,
detailed above as well as in the Institution Decision and the Petition,
regarding its clients processing positional update messages from the server
to maintain updated surrogates of remote entitieswhich Funkhouser
describes distinctly from the clients display[] of the virtual environment
from the point of view of a particular entity. E.g., Ex. 1005, 87 (When a
client receives an update message for an entity managed by another client, it
updates the geometric and behavioral models for the entitys local surrogate.
Between updates, surrogate behavior is simulated by every client.), 8788,
209; Inst. Dec. 12, 15; Pet. 22, 24; Ex. 1002 7981; Reply 1314;
Tr. 22:723:2; see e.g., Ex. 1005, 8687, Figs. 5, 7 (illustrating and
discussing a system in which each client (A, B, C, D) manages one entity);
Ex. 1002 71.
In addition, Patent Owner, after acknowledging Funkhousers
disclosure that a client receives update messages if it contain[s] entities
inside some cell visible to the one containing the updated entityi.e.,
Funkhousers server-based message culling based on precomputed
cell-to-cell visibility (see Ex. 1005, 87)asserts that Funkhouser is silent
regarding how the client workstation generates the resulting image displayed
on the workstation. Resp. 26 (quoting Ex. 1005, 87) (emphasis added).
This argument is undeveloped and lacks clarity. And we disagree that
Funkhouser is silent regarding the client-side processing that results in the
display. As detailed above, Funkhouser discloses client-side processing,
including using update messages to maintain updated surrogates as well as
executing programs to display the environment from a particular entitys
point of view. See, e.g., Ex. 1005, 8788; Pet. 2124; Inst. Dec. 12, 1415.
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This argument of Patent Owner does not address or respond to these
disclosures regarding Funkhousers client.
Accordingly, based on our review of the record arguments and
evidence as well as our analysis above, Petitioner has shown by a
preponderance of the evidence that Funkhouser discloses the determining
step of claim 1 of the 856 patent and in particular, that Funkhousers client
performs this step.
Moreover, we note that under the interpretation of the determining
step that we adopted in the Institution Decision and maintain in this
Decision, the first client process recited in claim 1 need not perform the
determining step; rather, the step is broad enough to encompass the
determining being performed by the recited first client process, the
server process, or both. See supra II.C.2.a. As we explained in the
Institution Decision, there was no dispute before institution that Funkhouser
discloses the determining step under this interpretation. Inst. Dec. 13. Nor
does Patent Owner clearly articulate such a dispute in the Response,
because, as we explain above, Patent Owner contests this interpretation of
the claim language (see supra II.C.2.a) and its arguments disputing that
Funkhouser discloses the determining step are repeatedly premised on the
step as allegedly properly construed. Resp. 7, 2532; Ex. 2017 52.a
(explaining that, in addressing Funkhouser, Mr. Pesce interpreted claim 1 of
the 856 patent as requiring the first client process to perform the
determining step); Reply 13. The preponderance of the evidence before us
likewise demonstrates that Funkhouser discloses the determining step under
this broader interpretation, in which the client need not perform the step
alone, for the reasons given above in support of our determination that the
record evidence supports Petitioners showing that Funkhousers client
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performs the step. In addition, even if Funkhousers server were considered
to play a role in determining which entities are to be displayed to a user,
based on positional update messages it receives that originate from other
clients, Funkhouser would still fall within the scope of the determining step
under this broader interpretation. E.g., Ex. 1005, 8789; Pet. 2025;
Resp. 26, 3132; Inst. Dec. 1017.
In conclusion, for the reasons given above, the preponderance of the
evidence before us demonstrates that Funkhouser discloses the determining
step of claim 1 of the 856 patent.
b. Undisputed Limitations
We have reviewed the arguments and evidence presented in the
Petition as to Funkhousers disclosure of the remaining limitations of
claim 1. Pet. 8, 1421, 2526. Patent Owner does not contest that
Funkhouser discloses these limitations. See Resp. 2532; see also Ex. 2017
5354; Reply 13. Based on our review of the Petition, we find persuasive
Petitioners arguments and evidence, including citations to Funkhousers
disclosures and Dr. Zydas supporting testimony, and we adopt them as the
basis for our determination that Funkhouser discloses these limitations of
claim 1. Pet. 8, 1421, 2526.
For example, we agree with Petitioners showing for claim 1s
receiving step and wherein limitation. See id. at 1421, 2526. Funkhouser
discloses that its clients send messages, including positional information, to
servers, which forward them to other client and server workstations.
Ex. 1005, 87, 89. Further, Funkhouser implements [s]erver-based message
culling such that the servers do not send the positional updates to all clients,
but only to clients with entities that can potentially perceive the effects of
the update. Id. at 85, 87. For example, in Figures 4 and 7 of Funkhouser,
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there are four clients A, B, C, and D, yet client A only receives updates on
entity B, client B only receives updates on entities A and C, and client C
only receives updates on entity B. Id. at 8788, Figs. 4, 7.
In addition, we agree with Petitioner that Funkhousers entities
constitute avatars, within the meaning of the 856 patenta graphical
representation of a userand that each user is associated with such an
avatar or entity, as claim 1 requires. Ex. 1001, 21:821. As Petitioner
points out, Funkhouser explains that in its shared 3D virtual environment,
each user is represented . . . by an entity rendered on every other users
workstation. Ex. 1005, 85; see id. at 209 (Plates I & II); Pet. 1718;
Ex. 1002 71. Moreover, we note that Patent Owner does not dispute that
Funkhouser discloses an avatar even under its proposed narrower
construction, which would require the graphical representation to be
three-dimensional. Tr. 67:1268:2; Resp. 2632; see supra II.C.3; cf.
Resp. 3233 (contesting that Durward discloses an avatar under the
proper construction as a three-dimensional graphic[al] representation of a
user). The record before us supports that Funkhouser discloses an avatar
even under this narrower proposed construction, which we have not adopted,
because Funkhouser depicts its entities as three-dimensional graphical
representations. See Ex. 1005, 209 (Plates I & II); see also id. at 89
(explaining that Plates I & II contain images captured during tests); Pet. 8,
23, 25 (citing Ex. 1005, 209 (Plate II)).
4. Conclusion
Based on our review of the record arguments and evidence and our
analysis above, Petitioner has demonstrated by a preponderance of the
evidence that Funkhouser anticipates claim 1 of the 856 patent.
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E. ANTICIPATION BY DURWARD
We now consider the instituted ground in which Petitioner asserts that
Durward anticipates claim 1 of the 856 patent and Patent Owners
arguments contesting Petitioners assertion.
We first assess Durwards prior art status. Petitioner argues Durward
is prior art under 35 U.S.C. 102(e), and Patent Owner has not disputed
Petitioners position. Pet. 26; see generally Resp. We agree with Petitioner
that Durward, a U.S. patent that was filed on September 23, 1993before
the earliest possible effective filing date of the 856 patent, November 13,
1995, as well as Patent Owners alleged date of invention in April 1995 (see
supra II.D.1.b)and issued on August 19, 1997 constitutes 102(e) prior
art. See 35 U.S.C. 102(e); Ex. 1001, [60], [63]; Ex. 1008, [22], [45].
1. Durward
Durward describes a virtual reality network in which multiple users
. . . may communicate with the network and participate in a virtual reality
experience. Ex. 1008, 1:611, 1:4551. The disclosed network includes
central control unit 14 for communicating with a plurality of users, which, in
a particular embodiment, includes processor 100 as well as perspective
monitor 132 for monitoring the visual perspectives, or fields of view, of
virtual beings. See id. at 2:5052, 3:584:4, 6:5355, Fig. 2.
Durward explains that [t]ypically, each user is equipped with
computer 42, head-mounted display 46, and head position sensor 53. Id.
at 2:663:2. The user communicates its positional data to computer 42
which, in turn, communicates the data to central control unit 14. Id. at
3:1526; see id. at 1:5961. Central control unit 14 uses this data to define
a virtual being within the virtual space for the user, which may emulate
the users position, orientation, and/or flexure. Id. at 3:2736; see 1:59
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64, 2:13, 7:2934. The virtual being may take the form of another human
being, an animal, machine, tool, inanimate object, etc. Id. at 3:3032.
In the preferred embodiment, each users computer has a copy of the
entire virtual space (e.g., background, objects and primitives). Id. at 4:19
21; see id. at 6:5557. Central control unit 14 communicates only position,
motion, control, and sound data to users. Id. at 3:5863, 4:1223, 5:510.
After initial position, motion, control[,] and sound data is communicated to
the users, only changes in this data are communicated. Id. at 4:2326; see
id. at 6:5562. According to Durward, [t]his dramatically reduces
bandwidth requirements and allows the system to operate with many
concurrent users without sacrificing real-time realism. Id. at 4:2629.
Durward explains that each virtual being, and hence each user, is
assigned a visual relevant space. Id. at 4:5054. In the context of the
preferred embodiment, visual relevant spaces determine which state changes
are communicated to (or perceivable by) the users. Id. at 4:5456.
Figure 5, a diagram illustrating the concepts of visual relevant spaces, is
reproduced below. Id. at 2:3940.
Figure 5 depicts virtual space 169, with virtual beings 182, 183, and 184.
Id. at 4:4445, 4:5961. Virtual being 182 is assigned visual relevant
space 200; virtual being 184 is assigned visual relevant space 204. Id. at
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4:6163. As shown in Figure 5 for virtual being 182, [t]he visual relevant
space may be fixed. Id. at 5:1213. Alternatively, as depicted for virtual
being 184, the users visual relevant space may be defined by the field of
view of the virtual being and areas in close proximity to it, such that the
visual relevant space may move about the virtual space as the perspective or
position of the virtual being changes. Id. at 5:1318. Durward also
discloses that [v]isual relevant spaces need not be contiguous and need not
have a direct spatial relationship to the virtual space. Id. at 5:1820.
Durward explains that in its preferred embodiment, the positional
and sound data . . . within the users visual relevant space or field of view
that central control unit 14 periodically sends to the user allow the users
computer [to] update the images viewed and sounds heard with the new
positional and sound data. Id. at 6:5562. The users head[-]mounted
display 46, in turn, displays the portion of the virtual space viewed from
the perspective of the virtual being defined for [the] user . . . together with
all other defined virtual beings and objects within its field of vision. Id.
at 3:5054; see id. at [57], 1:5759 ([T]he users computer may display a
portion of a selected virtual space on the users head mounted display.).
2. Discussion
a. The Determining Step
Petitioner and Patent Owner dispute whether Durward discloses the
determining step of claim 1 of the 856 patent. See Pet. 89, 2636;
Resp. 3236; Reply 1415. According to Petitioner, Durward discloses that
its client performs this step. Pet. 89, 2728, 3335. Petitioner refers to
Durwards disclosures regarding assigning users visual relevant spaces,
which determine which state changes are communicated to users by the
server. Id. at 8, 27 (quoting Ex. 1008, 4:5456); see id. at 34. Petitioner
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points out that Durward explains, and illustrates in Figure 5, that visual
relevant spaces may include the field of view of the [users] virtual being
and areas in close proximity to it, and thus, according to Petitioner, the
visual relevant space may be broader than the clients field of view such
that the client would receive information regarding more remote users than
would actually be displayed to the user. Id. at 89, 28, 34 (quoting and
citing, inter alia, Ex. 1008, 4:435:22, 5:1227, Fig. 5). Petitioner asserts
that Durward further discloses that the client workstation uses the positional
data from the server to update the images viewed and sounds heard and
that this update includes a client-side determination of the set of other
users avatars to be displayed to the first user, by identifying which of the
received positions of the other defined virtual beings are within the [users]
field of vision in order to display the portion of the virtual space viewed
from the perspective of the [users] virtual being . . . with all other defined
virtual beings and objects within its field of vision. Id. at 27, 34 (quoting
Ex. 1008, 3:5054, 6:6062). As we explain below, we agree with
Petitioners showing that Durward discloses that its client performs the
determining step recited in claim 1.
As Petitioner argues, in Durwards preferred embodiment, each
users computer has a copy of the entire virtual space. Ex. 1008, 4:1921;
see id. at 6:5557 ([I]n the preferred embodiment, each user has a copy of
the selected virtual space in his or her computer.); Pet. 34. Central control
unit 14 (server process), after sending initial position data, sends the
user updated positional data based on the assigned visual relevant space of
the users virtual being (avatar). Ex. 1008, 4:1826, 4:5056 (In the . . .
preferred embodiment, visual relevant spaces determine which state changes
are communicated to . . . the users.), 6:5662; see id. at 3:5963.
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Durward explains that the visual relevant space of a virtual being, and
its corresponding user, need not equate to the virtual beings field of view.
Id. at 4:5056, 5:520, Fig. 5. Rather, for example, Durward discloses that
the users visual relevant space may be defined by the field of view of the
virtual being and areas in close proximity to it. Id. at 5:1318 (emphases
added). Durward explains that this is illustrated by its Figure 5, in which
visual relevant space 204 assigned to virtual being 184 is depicted as wider
than virtual being 184s field of view, represented by the dashed lines
emerging from virtual being 184. Id. at 5:1318, Fig. 5; see id. at 4:4446,
4:5964; Ex. 1002 90, 107. Thus, we agree with Petitioners argument
and Dr. Zydas supporting testimony that Durward makes clear that a virtual
beings visual relevant space may be broader than the clients field of
view. Pet. 34; see id. at 89, 28; see Ex. 1002 90, 105, 107; Ex. 1008,
5:1120, Fig. 5. In addition, Durward explains that visual relevant
space 200 of virtual being 182 is fixed and Figure 5 illustrates that this
visual relevant space 200 does not correspond to a field of view for virtual
being 182. Ex. 1008, 4:5963, 5:1020 (The visual relevant space may be
fixed as shown for virtual being 182.), Fig. 5; see Ex. 1002 107.
Durward discloses thatregardless of the breadth of the assigned
visual relevant space (and thus, for example, whether the user receives
positional updates for virtual beings outside the users field of view)the
users computer uses the positional data received from central control
unit 14 to update the images displayed to the user and displays only the
virtual beings and objects within the users field of view. Ex. 1008, 3:50
54, 4:5456, 5:1220, 6:5562, Fig. 5; see id. at [57], 1:5759. In particular,
Durward explains that the users computer uses the new positional . . .
data sent by central control unit 14 to update the images viewed. Id.
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at 6:5562; see id. at 3:5960. Further, Durward discloses that the users
head[-]mounted display 46 displays the portion of the virtual space viewed
from the perspective of the virtual being defined for user 18 together with all
other defined virtual beings and objects within its field of vision. Id. at
3:5054; see id. at [57], 1:5759 ([T]he users computer may display a
portion of a selected virtual space on the users head mounted display.).
These disclosures of Durward make clear that where the visual
relevant space of a virtual being, and its corresponding user, is wider than its
field of view, the user receives positional updates from central control
unit 14 for virtual beings (and other objects) that are within the virtual
beings assigned visual relevant spacebut that may not be within its field
of view. Id. at 4:5456, 5:518, Fig. 5. The users computer, however,
displays only those virtual beings (and objects) within the virtual beings
field of vision. Id. at 3:5054; see id. at [57], 1:5759. Durwards
Figure 5 illustrates this because, based on Durwards disclosures, the user
corresponding to virtual being 184 receives updated positional data for all
virtual beings (and objects) in its assigned visual relevant space 204but
the users computer displays only those virtual beings (and objects) within
its narrower field of vision. Id. at 3:5054, 4:5456, 5:518; see id. at [57],
1:5759; Ex. 1002 8990, 10607.
Based on these disclosures of Durward, we determine that Petitioner
has shown that Durwards user computer determines, from the positional
data received from central control unit 14 (server process), which virtual
beings (avatars) to display to the user, i.e., which virtual beings are within
its virtual beings field of view. More specifically, in using the updated
positional . . . data from central control unit 14 to update the images
viewed in the display, the users computer determines which virtual beings
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are within the users field of view and, thus, to be displayed to the user, such
that the head-mounted display depicts the portion of the virtual space
viewed from the perspective of [its] virtual being . . . together with all other
defined virtual beings and objects within its field of vision. Ex. 1008,
3:5054, 6:5562, Fig. 5; see id. at [57], 1:5759. This client-side field of
view determination falls within the scope of the ordinary meaning of the
determining step of claim 1, as we have determined above in II.C.2.b.
Accordingly, we agree with Petitioners showing that Durwards client
performs the determining step of claim 1 of the 856 patent.
In further support of this finding, we credit and find persuasive
Dr. Zydas testimony that the client workstations update [of] images
viewed with the new positional . . . data from the server includes a
determination of which user avatars are within the users field of vision to
display the portion of the virtual space viewed from the perspective of the
virtual being defined for user 18 together with all other defined virtual
beings and objects within its field of vision. Ex. 1002 89 (quoting
Ex. 1008, 3:5054, 6:6062). As Dr. Zyda further testifies, [u]pon receipt
of the position information from the server, the client determines a set of
other users avatars to be displayed to the first user, by identifying which of
the received positions fall within the users field of view. Id. 106; see id.
103. Dr. Zyda explains that virtual beings 182 and 184 in Figure 5
demonstrate this client-side determining, as virtual being 184s visual
relevant space 204 follows but is broader than virtual being 184s field of
vision (represented by dashed lines) and virtual being 182s visual
relevant space 200 is not connected to virtual being 182s field of vision,
yet the clients for these beings determine[] which avatars are within their
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respective fields of vision to display the avatars to their respective users.
Id. 107; see id. 8990; Ex. 1008, Fig. 5.
We disagree with Patent Owners arguments asserting that Durward
does not disclose the determining step of claim 1. Patent Owner contends
that Durward fails to disclose the claimed determining step as properly
construed to require determining separate from (and prior to) the
graphics pipeline. Resp. 32, 3536. As support, Patent Owner points to
Durwards disclosures regarding central control unit 14, particularly the
explanation that its perspective monitor 132 monitors the defined field of
view of each virtual being and that this information allows processor 100,
another component of central control unit 14, to send positional and sound
data assigned to points within the users relevant space or field of view to
the user so that the users computer may update the images viewed . . . with
the new positional . . . data. Id. at 35 (quoting Ex. 1008, 6:5362). Patent
Owner further argues that in one embodiment, the [p]erspective
monitor . . . instructs update communication control unit 148 [of central
control unit 14] to communicate the graphical data for the update[d] field of
view to the user. Id. (quoting Ex. 1008, 7:1518 (alterations other than
last in Patent Owner Response)). Patent Owner also refers to deposition
testimony from Dr. Zyda in which he agrees that Durwards perspective
monitor 132 of central control unit 14 will know what [is] inside of the
field of view and can be seen by the virtual being. Id. at 3536 (citing
and quoting Ex. 2016, 84:2485:17); Ex. 2016, 84:2485:10.
Patent Owners dispute as to whether Durward discloses the
determining step is premised on its proffered claim construction arguments
disputing Petitioners proposed claim scope, which we have addressed above
and found unpersuasive. See supra II.C.2.b; see Reply 14; Tr. 23:29.
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Patent Owners arguments are misplaced under the ordinary meaning of the
claim language and Petitioners proposed claim scope, with which we agree,
as explained above in II.C.2.b.
Moreover, the passages of Durward regarding perspective
monitor 132 of central control unit 14 and Dr. Zydas related deposition
testimony, to which Patent Owner directs our attention, do not contradict
Petitioners position or our analysis above. As explained above, Petitioners
argument and our analysis regarding Durwards disclosure of the
determining step recognize that Durwards central control unit 14 sends the
updated positional data for a virtual beings visual relevant space to its user
and this visual relevant space can correlate to the field of view of the virtual
being. See, e.g., Ex. 1008, 3:5863, 4:1826, 4:5056, 5:1318 ([T]he
users visual relevant space may be defined by the field of view of the virtual
being and areas in close proximity to it . . . in which case the visual relevant
space may move about the virtual space as the perspective or position of the
virtual being changes.) (emphasis added), 6:5662, Fig. 5; Pet. 34. Thus,
Durwards disclosures that central control unit 14 monitors virtual beings
field of view to determine which updated positional data to transmit to each
user, as well as Dr. Zydas related testimony acknowledging that this unit
will know what is in a virtual beings field of view, are fully consistent with
and do not contravene Petitioners position or our analysis above. See
Ex. 1008, 6:5262; Ex. 2016, 84:2485:14.
In addition, column 7, lines 1518 of Durward, to which Patent
Owner cites, refers to an example of an embodiment distinct from that on
which Petitioners anticipation argument relies. Ex. 1008, 7:324 (In
another embodiment of the invention . . . For example) (emphases added);
Resp. 35 (in one embodiment followed by quotation of Ex. 1008, 7:15
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18). Therefore, this passage does not negate Petitioners showing regarding
Durwards disclosure of the determining step. In addition, Durward explains
that in this embodiment, processor 100 of central control unit 14 may
communicate all graphical data associated with the relevant space or field of
view of the virtual being to the corresponding user and then instruct update
communication control unit 148 to send updated data as appropriate, e.g.,
upon the occurrence of a specified triggering event. Ex. 1008, 7:325
(emphasis added). Durward also provides an example in which the
components of central control unit 14 determine the position of the virtual
beings head, send graphical data for that portion of the relevant space to
the user, and when a selected event is detected, communicate the graphical
data for the updated field of view to the user. Id. Thus, Durwards
disclosure that in this particular example provided of this embodiment,
central control unit 14 communicates the graphical data for the updated
field of view does not contradict Petitioners position and our analysis
above that, particularly in light of Durwards disclosures that the users
computer displays only the virtual beings in the users field of view even
though its assigned visual relevant space and, therefore, the positional
updates it receives need not equate to the users field of view, Durwards
client performs the determining step.
Accordingly, Petitioner has shown by a preponderance of the evidence
that Durward discloses the determining step of claim 1 of the 856 patent
and in particular, that Durwards client performs this step.
Moreover, we note that under the claim interpretation we adopted in
the Institution Decision and maintain in this Decision, the recited first client
process need not perform the determining step and, instead, the step can be
performed by the first client process, the server process, or both. See
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supra II.C.2.a. As we explained in the Institution Decision, there was no
dispute at that stage of the proceeding that Durward discloses the
determining step under this broader interpretation. Inst. Dec. 20. There
remains no such dispute in the record, because, as explained above, Patent
Owner contests this interpretation of the claim language (see supra
II.C.2.a), and argues only that Durward does not disclose the determining
step as allegedly properly construed. Resp. 7, 25, 32, 3536; Ex. 2017
52.a.iiiv, 56.a (explaining that, in addressing Durward, Mr. Pesce
interpreted claim 1 of the 856 patent as requiring the first client process to
perform the determining step). The preponderance of the evidence before us
likewise demonstrates that Durward discloses the determining step under
this broader interpretation, in which the client alone need not perform the
step, for the reasons given above in support of our determination that the
record evidence supports Petitioners showing that the client performs the
step. In addition, even if central control unit 14 (server process), including
processor 100 and perspective monitor 132to which Patent Owner directs
our attention in its arguments in the Responsewere considered to play a
role in determining which virtual beings are to be displayed to the user,
using the positions it receives from other clients, Durward would still meet
the determining step under this broader interpretation. E.g., Ex. 1008, 1:59
61, 2:13, 4:2126, 4:5456, 6:5262; see, e.g., id. at 3:1520, 3:584:5;
Pet. 2833; Resp. 32, 3536; Inst. Dec. 1825.
In conclusion, the preponderance of the evidence before us shows that
Durward discloses the determining step of claim 1 of the 856 patent.
b. Avatar
Patent Owner also contests Petitioners showing that Durward
discloses an avatar, as recited in claim 1 of the 856 patent. See Resp. 32
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35. Petitioner argues, and Dr. Zyda opines, that Durward discloses an
avatar based on its disclosures regarding defining a virtual being for
each user within a virtual space using position, orientation, and movement
data received from each user. See Pet. 1112 (citing, inter alia, Ex. 1008,
1:5964, 2:13, 3:3032; Ex. 1002 9193); Ex. 1002 92.
Patent Owner disputes that Durward discloses an avatar under its
proposed construction of the term, requiring a three-dimensional graphical
representation of a user. Resp. 3235. In particular, Patent Owner, with
supporting testimony from Mr. Pesce, asserts that Durward, despite
disclosing three-dimensional virtual spaces, does not disclose or suggest
that the virtual entities within those spaces are three-dimensional and a
person of ordinary skill in the art instead would have understood the entities
to be two-dimensional. Id. at 3234 (citing Ex. 2017 59); Ex. 2017 59;
see Tr. 134:10135:6, 145:516. Patent Owner points out that Petitioner
presents no argument or theory that Durward discloses, either inherently or
expressly, three-dimensional virtual entities. Resp. 33. In addition, Patent
Owner argues that Dr. Zydas testimony offered in IPR2015-01319, which
challenges the 501 patent, opining that Durwards virtual beings are
three-dimensional is conclusory and contradicted by Mr. Pesces testimony.
Id. at 34 (citing IPR2015-01319, Ex. 1002 167); Tr. 135:815, 145:516.
In Reply, Petitioner notes that Patent Owner does not present any
arguments regarding whether Durward discloses an avatar under
[Petitioner]s proposed construction and, thus, Patent Owners dispute is
entirely dependent on its proposed construction of the term. Reply 14.
Moreover, Petitioner asserts that Durward discloses an avatar even under
Patent Owners proposed construction limiting the term to
three-dimensional representations, in light of Durwards disclosures that
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its virtual beings are in a three-dimensional virtual space and emulate the
gestures of the user based on data designating flexure and position of the
users legs, arms, fingers, etc. Id. at 1415 (quoting Ex. 1008, 1:5264,
7:2934); Tr. 47:917, 166:1023, 169:37, 170:16171:7. According to
Petitioner, Patent Owner does not explain how such a correlation between a
users three dimensional-movement in the real world and a virtual being in a
three-dimensional virtual world would be restricted to two-dimensions and
Mr. Pesces testimony on the issue is unsubstantiated and not credible.
Reply 15; see Tr. 47:917, 166:1023, 169:37, 169:1922, 170:16171:7.
Here, Patent Owners dispute regarding whether Durward discloses an
avatar, as recited in claim 1 of the 856 patent, expressly relies and rests
on its proposed construction limiting the term to three-dimensional
graphical representations of a user, as Patent Owner contests Petitioners
showing only as to whether Durwards virtual entities are three-dimensional.
Resp. 3235 (arguing that Durward fails to disclose avatar under the
proper construction requiring three-dimensional); Ex. 2017 59;
Tr. 127:611 (Patent Owner agreeing that the only dispute that must be
resolved on the construction of avatar is whether an avatar is required to
be three-dimensional); Reply 14 (asserting that Patent Owners dispute is
entirely dependent on its . . . flawed claim construction[] and Patent
Owner does not present any argument regarding whether Durward discloses
an avatar under [Petitioner]s proposed construction). We have
determined above, however, that avatar is not limited to three-dimensional
graphical representations, as Patent Owner urges in its proposed claim
construction. See supra II.C.3. Accordingly, in the absence of a three-
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dimensional requirement for the term avatar, there is no dispute in the
record that Durward discloses an avatar. 17
On the record before us, Petitioner has demonstrated that Durward
discloses an avatar, within the meaning of the 856 patent. As Petitioner
points out and as outlined above, Durward discloses that within a virtual
space, the communications unit, or central control unit 14, define[s] a
virtual being for a particular user and defines other virtual beings for
other users based on the position, orientation, and/or movement data
received for each user. Ex. 1008, 1:54, 1:5964, 2:13; see id. at 2:663:1,
3:1520, 3:2735, 7:2934; Pet. 2829; Ex. 1002 92; Reply 1415; Inst.
Dec. 18. Durward further explains that these virtual beings may be visible
17
We note that if an avatar were required to be three-dimensional, as
Patent Owner argues, we would agree with Patent Owner that Petitioner fails
to show by a preponderance of the evidence that Durward discloses an
avatar. Durwards disclosures of a three-dimensional virtual space[] and
that virtual beings therein may emulate the gestures of the user based on
the users flexure and positionto which Petitioner refers in response to
Patent Owners argumentsare insufficient to demonstrate that Durwards
virtual beings are three-dimensional. See Ex. 1008, 1:5264, 7:2934;
Reply 1415; Tr. 47:917, 166:1023, 169:322, 170:16171:7. Petitioner
has not explained or argued persuasively, or proffered evidence sufficient to
show, that such descriptions disclose or necessarily require the virtual beings
to be three-dimensional, rather than, for example, two-dimensional.
Mr. Pesce testifies that these disclosures do not recite three-dimensional
virtual entities and are entirely consistent with two-dimensional entities.
Ex. 2017 59. Dr. Zyda has not offered testimony to the contrary in this
case. See Tr. 47:1848:12; Ex. 1002. We do not find it appropriate to
consider in this case Dr. Zydas testimony in IPR2015-01319 opining that
Durwards virtual beings are three-dimensional. See IPR2015-01319,
Ex. 1002 167. Even if we were to consider the testimony, we find it
wholly conclusory and lacking explanation and, thus, entitled to little weight
and insufficient to overcome Patent Owners arguments and showing to the
contrary, including Mr. Pesces testimony on the issue. See id.; 37 C.F.R.
42.65(a); Ex. 2017 59.
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within the virtual space and may take the form of another human being, an
animal, machine, tool, inanimate object, etc. Ex. 1008, 3:3032; Pet. 29;
Ex. 1002 92. We agree with Petitioner that these passages evidence that
each of Durwards virtual beings is a graphical representation of a user
and that each user is associated with a virtual being, or avatar, as
claim 1 requires. See Ex. 1001, 21:814.
c. Undisputed Limitations
We have reviewed the evidence and arguments presented in the
Petition as to Durwards disclosure of the remaining limitations of claim 1 of
the 856 patent. Pet. 89, 2636. Patent Owner does not contest that
Durward discloses these limitations. See Resp. 3236; see also Ex. 2017
5659; Reply 1415. Based on our review of the Petition, we find
persuasive Petitioners arguments and evidence, including citations to
Durwards disclosures and Dr. Zydas supporting testimony, and we adopt
them as the basis for our determination that Durward discloses these
limitations of claim 1. Pet. 89, 2636.
For example, we agree with Petitioners showing that Durward
discloses the receiving step and wherein limitation of claim 1. In Durward,
users communicate their positions to the communications unit, or central
control unit 14, and central control unit 14 periodically communicates
changes in position . . . data to the users based on their assigned visual
relevant space. Ex. 1008, 1:5961, 2:13, 2:59, 4:1226, 4:5056; 6:55
62; see id. at 3:1520, 3:5864. Moreover, Durward makes clear that in the
preferred embodiment, users do not receive positional updates on virtual
beings outside their visual relevant space, because the visual relevant space
determine[s] which state changes are communicated to users. Id. at 4:50
56; see Ex. 1002 10102. For example, in Durwards Figure 5, virtual
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being 184 does not receive a positional update on virtual being 183, because
virtual being 183 is not within visual relevant space 204 of virtual being 184.
See Ex. 1008, 4:4345, 4:5456, 4:6163, 5:1213, Fig. 5; Ex. 1002 102.
3. Conclusion
Based on our review of the arguments and evidence of record and for
the reasons given above, Petitioner has shown by a preponderance of the
evidence that Durward anticipates claim 1 of the 856 patent.
F. REAL PARTY IN INTEREST
Patent Owner argues Activision Publishing, Inc. (Activision) is an
unnamed real party in interest, who was served with a complaint in the
District Court Case more than one year before the Petition was filed.
Resp. 3642. Thus, according to Patent Owner, the Petition fails to comply
with 35 U.S.C. 312(a)(2) and 37 C.F.R. 42.8 and institution of review
was barred under 35 U.S.C. 315(b). Resp. 3642. Patent Owner argues
the Board erred in denying its Motion for Routine or Additional Discovery
related to this issue (Paper 9) and in instituting review despite Patent
Owners assertions of Activisions status as a real party in interest.
Resp. 3642.
The Response repeats largely the same arguments Patent Owner
raised in its discovery motion and Preliminary Response, for example,
relying on the same provisions of the Software Publishing and Development
Agreement between Activision and Petitioner to support its assertion that
Activision had the opportunity to control and is funding this inter partes
review. See, e.g., id.; Prelim. Resp. 3039; Reply 20. We addressed Patent
Owners arguments and evidence in detail in our pre-institution order
denying Patent Owners Motion for Routine or Additional Discovery and the
Institution Decision. See Inst. Dec. 2633 ( II.E); Paper 11. We note that
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Patent Owner did not seek rehearing of the Institution Decision or
permission for a renewed request for discovery after institution.
Nonetheless, having reconsidered the issue in light of Patent Owners
arguments in the Response, we remain unpersuaded that there is sufficient
evidence that Activision is an unnamed real party in interest for the reasons
given in the Institution Decision. Inst. Dec. 2633 ( II.E).
In addition, the only argument in the Response that is meaningfully
distinct from arguments previously raised and considered is Patent Owners
assertion that it produced in the District Court Case evidence corroborating
its conception arguments and Activisions counsel in that case has refused to
de-designate this evidence as confidential, thereby preventing Patent Owner
from producing the evidence in this proceeding and showing that Activision
has exercised control over the proceeding. Resp. 40 n.10, 45 n.11. We do
not find these allegations related to a discovery dispute between Patent
Owner and Activision in the District Court Case to support Patent Owners
allegations that Activision is a real party in interest in this proceeding.
G. ALLEGED UNCONSTITUTIONALITY OF THIS PROCEEDING
Patent Owner argues that an unpatentability ruling in this inter partes
review proceeding constitutes an impermissible taking of a private right
without Article III oversight. Id. at 4244. Petitioner responds that the U.S.
Court of Appeals for the Federal Circuit has addressed such arguments and
held that the inter partes review process is not unconstitutional. Reply 20.
Petitioner is correct that the Federal Circuit has addressed the issue and
rejected a challenge to the constitutionality of inter partes reviews as
violative of Article III. See MCM Portfolio LLC v. Hewlett-Packard Co.,
812 F.3d 1284, 128992 (Fed. Cir. 2015), cert. denied, 2016 WL 1724103
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(S.C. Oct. 11, 2016). Accordingly, we disagree with Patent Owners
arguments on this issue.
H. PATENT OWNERS MOTION TO EXCLUDE
In its Motion to Exclude, Patent Owner seeks to exclude five exhibits,
specifically Exhibits 1033, 1034, 1037, 1041, and 1042. See generally Mot.
We have not relied on four of these exhibitsExhibits 1033, 1034, 1037,
and 1042in reaching our decision and, therefore, Patent Owners
arguments as to these exhibits are moot. For Exhibit 1042, in particular, we
note that Petitioner does not cite this exhibit in its Petition or its Reply and,
thus, has not proffered any argument relying on this exhibit. See id. at 9;
Oppn 11; see generally Pet.; Reply. Accordingly, Patent Owners Motion
to Exclude is dismissed as moot as to Exhibits 1033, 1034, 1037, and 1042.
The remaining exhibit, Exhibit 1041, is an excerpt from an interview
of Mr. Pesce at the 1999 AllChemical Arts conference in which Mr. Pesce
discusses his use of psychedelic drugs beginning in college and how this
usage has affected and facilitated his work and career. Ex. 1041. Patent
Owner objects to its admissibility under Rules 402, 403, 404, 405, and 608.
Mot. 7. Specifically, Patent Owner argues Petitioner uses the exhibit to
attack Mr. Pesce through irrelevant and improper evidence directed to
general character and specific instances of conduct, rather than to his
qualifications to testify on the knowledge and understanding of a person of
ordinary skill in the art. See Fed. R. Evid. 402, 404, 405, 608. Mot. 8; see
Mot. Reply 6. In addition, Patent Owner asserts that even if the Board were
to conclude that Exhibit 1041 is relevant to any issue in this proceeding,
the exhibit should be excluded under Rule 403 because any probative
value is substantially outweighed by the risk of unfair prejudice,
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namely, that Mr. Pesces entire testimony would be entitled to no weight
due to any use of psychedelics. Mot. 8.
Petitioner contends Exhibit 1041 is relevant and admissible because it
bears on the credibility of Patent Owners expert and the reliability of his
testimony in this proceeding, including his ability to accurately recall details
from the relevant time period. Oppn 67; see id. at 10. In other words,
according to Petitioner, Exhibit 1041 is relevant to Mr. Pesces capacity to
remember details and recall events from the 1990s, including virtual
reality technology, as well as the quality of any such recollections. Id.
at 79. Petitioner contends Exhibit 1041 is not submitted to attack
Mr. Pesces character and thus, Patent Owners citations to [Rules] 404,
405, and 608 are misplaced. Id. at 7 & n.1. Petitioner also asserts Patent
Owners argument regarding Rule 403 should be denied, because the only
unfair prejudice Patent Owner alleges is that the Board will give Mr. Pesces
testimony little or no weight but this would be the correct outcome for the
reasons identified in its Reply. Id. at 10.
Patent Owner responds Petitioner has no basis to argue that the
contents of Exhibit 1041 weigh on Mr. Pesces memory of events in the
mid-1990s. Mot. Reply 5. As support, Patent Owner argues that even
Petitioners counsel acknowledged in referring to events in April 1993 that it
is hard to remember events from such a long time ago. Id. at 56
(quoting Ex. 1046, 28:813).
We first address Exhibit 1041s admissibility as to Mr. Pesces
capacity to recall events from the 1990s as well as the reliability of such
recollections. As part of his testimony regarding claim construction and
unpatentability in this proceeding, Mr. Pesce offers testimony, both in his
declaration and at his deposition, regarding developments in virtual reality
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from approximately 1991 through 1996 and the status of the art at various
points of that time period. See, e.g., Ex. 2017 3644, 49.a.iv, 59;
Ex. 1046, 85:421, 89:1090:7, 204:12205:20, 222:1223:6. Therefore,
Exhibit 1041, featuring excerpts of an interview of Mr. Pesce from 1999
documenting his drug use beginning in college 18 and how this usage
facilitated and impacted his work, is relevant to his capacity to perceive and
recall these details and events on which he testifies, and the reliability of
such perceptions and recollections. See, e.g., Jarrett v. United States, 822
F.2d 1438, 144546 (7th Cir. 1987) (holding that a witnesss use of drugs
is relevant to, and may be used to attack, the witnesss ability to perceive
the underlying events); United States v. Apperson, 441 F.3d 1162, 119596
(10th Cir. 2006) (quoting Jarrett, 822 F.2d at 1446); United States v.
Robertson, 583 F.3d 1365, 1272 (10th Cir. 2009) (recognizing that drug use
bears on a witnesss capacity, which is significant at the time of the
event, and that [a] witnesss credibility may always be attacked by
showing that his or her capacity to observe, remember, or narrate is
impaired) (internal citations and quotations omitted); United States v.
Dixon, 38 Fed. Appx 543, 548 (10th Cir. 2002) (unpublished) (Evidence of
a witnesss drug use may be admitted to show the effect of the drug use on
the witnesss memory or recollection of events.); United States v. Smith,
156 F.3d 1046, 1055 (10th Cir. 1998) (upholding allowance of witness
questioning regarding drug use twenty years earlier as relevant to her
ability to remember the [relevant] events or her recall and recollection).
When offered for this purpose, Rules 404, 405, and 608 do not
prohibit Exhibit 1041s admissibility. Rule 404, and related Rule 405, do
18
According to his declaration, Mr. Pesce left MIT in 1982. Ex. 2017 3.
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not bar admission of Exhibit 1041 for this purpose because it is not being
offered as character evidence to show that on a particular occasion
[Mr. Pesce] acted in accordance with a particular character or trait.
Fed. R. Evid. 404(a)(1), (b)(1); see Fed. R. Evid. 405 (providing for
allowable methods of proving a persons character when such evidence is
admissible); see also United States v. Skelton, 514 F.3d 433, 441 (5th Cir.
2008) (concluding that Rule 404(b) does not bar the evidence at issue
because it is not being offered as character evidence to show action in
conformity therewith). Nor does Rule 608(b) apply. Rule 608(b) provides,
in pertinent part, that [e]xcept for a criminal conviction under Rule 609,
extrinsic evidence is not admissible to prove specific instances of a witnesss
conduct in order to attack or support the witnesss character for
truthfulness. Fed. R. Evid. 608(b) (emphasis added). Therefore, by its
express terms, [t]he application of Rule 608(b) to exclude extrinsic
evidence of a witnesss conduct is limited to instances where the evidence is
introduced to show a witnesss general character for truthfulness. Skelton,
514 F.3d at 44142; see United States v. Taylor, 426 Fed. Appx 702, 705
06 (11th Cir. 2011) (unpublished). In other words, the Rule acts as an
absolute prohibition on extrinsic evidence . . . only when the sole reason for
proffering that evidence is to attack or support the witness character for
truthfulness or veracity. United States v. Epstein, 426 F.3d 431, 439 n.4
(1st Cir. 2005); Fed. R. Evid. 608(b) advisory committees note to 2003
amendments (emphasis added). Accordingly, Rule 608(b) does not bar the
admissibility of Exhibit 1041 because it is being offered as evidence of
Mr. Pesces capacity and reliability in perceiving and recalling events from
the 1990s.
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Given that Exhibit 1041 is relevant for this purpose and its admission
is not barred by Rules 404, 405, and 608, we turn to Rule 403 to consider
whether it should nonetheless be excluded because its probative value is
substantially outweighed by a danger of . . . unfair prejudice. Fed. R.
Evid. 403.19 Here, the probative value of Exhibit 1041 as to Mr. Pesces
ability to perceive and recall events and details from the art in the early to
mid-1990s is limited as, for example, it lacks specific details regarding the
extent and regularity of his drug use. Yet, on the other hand, the risk of
unfair prejudice is minimal. To begin with, an unfair prejudice analysis is
not well suited to a bench trial, such as this. See, e.g., Schultz v. Butcher,
24 F.3d 626, 632 (4th Cir. 1994) ([I]n the context of a bench trial, evidence
should not be excluded under 403 on the ground that it is unfairly
prejudicial.); Gulf States Utilities Co. v. Ecodyne Corp., 635 F.2d 517, 519
(5th Cir.1981) (holding that exclusion of evidence under Rule 403s
weighing of probative value against prejudice was improper and was a
useless procedure because [t]his portion of Rule 403 has no logical
application to bench trials). Moreover, the only unfair prejudice that
Patent Owner alleges is that all of Mr. Pesces testimony will be given
little to no weightwhich is not accurate, as we are considering the
admissibility of Exhibit 1041 only for its relevance to his capacity and
reliability in perceiving and recalling events and other details from the early
to mid-1990s, on which he offers testimony. Although we are cognizant of
the sensitive nature of evidence of drug use, there is minimal risk of any
unfair prejudice from considering Exhibit 1041 for this limited purpose. In
sum, the probative value of Exhibit 1041 for this limited purpose is not
19
Rule 403 lists other considerations but Patent Owner does not argue that
any of these apply and we conclude that they do not. See id.; Mot. 78.
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substantially outweighed by any danger of unfair prejudice and, thus,
exclusion under Rule 403 is not warranted.
We turn to the alleged relevance and admissibility of Exhibit 1041
regarding Mr. Pesces credibility generally. Oppn 7; see id. at 6, 10.
Petitioner, in addition to specifying that Exhibit 1041 is relevant to
Mr. Pesces capacity and ability to accurately recall details from the
relevant time period and the quality of any such recollections, makes
more general references to the exhibits alleged relevance to his
credibility. Id. at 610. To the extent Petitioner is suggesting that we
consider Exhibit 1041 to assess Mr. Pesces truthfulness, Rule 608(b) bars
the admissibility of extrinsic evidence to attack a witnesss character for
truthfulness, as explained above. Fed. R. Evid. 608(b). Also, evidence of
drug use generally is not considered relevant to or probative of truthfulness.
See United States v. Tanksley, 35 F.3d 567, 1250 (6th Cir. 1997)
(unpublished) (Evidence of prior drug use generally is not relevant to the
issue of truthfulness . . . .).
We recognize a witnesss credibility may involve aspects beyond
truthfulness. For example, Rule 608(b) was amended by substituting
character for truthfulness in place of credibility, Epstein, 426 F.3d at
439 n.4, because, as the advisory committee explains, use of the overbroad
term credibility had been read to bar extrinsic evidence for bias,
competency and contradiction impeachment since they too deal with
credibility, Fed. R. Evid. 608(b) advisory committees note to 2003
amendments (emphasis added); see also Skelton, 514 F.3d at 44142;
Taylor, 426 Fed. Appx at 705. Petitioner, however, in discussing
Exhibit 1041 in its Reply and in opposing Patent Owners Motion to
Exclude, does not articulate any relevance of Exhibit 1041 as to Mr. Pesces
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credibility that is distinct from his truthfulness, for which its admission is
barred under Rule 608(b), and his capacity and reliability in recalling events
in the art in the 1990s, for which we have determined above the evidence is
relevant and admissible. See Reply 3; Oppn 610. Nor do we see any such
relevance. In addition, courts have often held that evidence of a witnesss
drug use, though relevant to the witnesss capacity to perceive and recall
relevant events, cannot be used to attack the witnesss general credibility.
E,g., Jarrett, 822 F.2d at 1446 (A witnesss use of drugs may not be used to
attack his or her general credibility but only his or her ability to perceive the
underlying events and testify lucidly at trial.); Apperson, 441 F.3d at 1195
96 (quoting Jarrett, 822 F.2d at 1446) (holding that the district court
correctly concluded that evidence of [the witnesss] alleged prior drug use
could not be used to attack [his] general credibility); see also, e.g., United
States v. Cousins, 842 F.2d 1245, 1249 (11th Cir. 1988) ([A]lthough
extrinsic evidence of prior drug use could not properly be used just to attack
[defendant]s credibility, such evidence could be used to refute the specifics
to which [defendant] had previously testified.).
Accordingly, we admit Exhibit 1041 and consider it for the limited
purpose of assessing Mr. Pesces capacity to perceive and recall events and
details from the relevant art from the 1990s about which he testifies, as well
as the reliability of such perceptions and recollections. We do not, however,
consider Exhibit 1041 for Mr. Pesces credibility more generally and
particularly, his truthfulness. Thus, Patent Owners Motion to Exclude is
denied as to Exhibit 1041.
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III. CONCLUSION
In conclusion, Petitioner has shown by a preponderance of the
evidence that claim 1 of the 856 patent is unpatentable as anticipated under
35 U.S.C. 102 by Funkhouser and by Durward.
IV. ORDER
In consideration of the foregoing, it is hereby:
ORDERED that Petitioner has shown by a preponderance of the
evidence that claim 1 of the 856 patent is unpatentable;
FURTHER ORDERED that Patent Owners motion to exclude
(Paper 33) is dismissed as moot as to Exhibits 1033, 1034, 1037, and 1042
and denied as to Exhibit 1041; and
FURTHER ORDERED that, because this is a Final Written Decision,
the parties to the proceeding seeking judicial review of the decision must
comply with the notice and service requirements of 37 C.F.R. 90.2.
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PETITIONER
Michael T. Rosato
Matthew A. Argenti
Andrew Brown
WILSON SONSINI GOODRICH & ROSATI
mrosato@wsgr.com
margenti@wsgr.com
asbrown@wsgr.com
PATENT OWNER:
Wayne M. Helge
Donald L. Jackson
Michael R. Casey
whelge@dbjg.com
djackson@dbjg.com
mcasey@dbjg.com
116
Trials@uspto.gov Paper 42
571-272-7822 Date: November 28, 2016

____________

____________
BUNGIE, INC.,
Petitioner,
v.
WORLDS INC.,
Patent Owner.
____________
Case IPR2015-01321
Patent 8,145,998 B2
____________
Before KARL D. EASTHOM, KERRY BEGLEY, and

JASON J. CHUNG, Administrative Patent Judges.
CHUNG, Administrative Patent Judge.

Inter Partes Review
35 U.S.C. 318(a) and 37 C.F.R. 42.73
IPR2015-01321
Patent 8,145,998 B2
I. INTRODUCTION
Petitioner, Bungie, Inc., filed a Petition to institute an inter partes

review of claims 13, 7, 8, and 1120 (the challenged claims) of U.S.
Patent No. 8,145,998 B2 (the 998 patent). Paper 3 (Pet.). Patent
Owner, Worlds Inc., filed a Preliminary Response pursuant to
35 U.S.C. 313. Paper 12 (Prelim. Resp.). Upon consideration of the
Petition and Preliminary Response, on November 30, 2015, we instituted an
inter partes review of claims 13, 7, 8, 1218, and 20 (instituted claims),
pursuant to 35 U.S.C. 314. Paper 13 (Dec.).
Subsequent to institution, Patent Owner filed a Patent Owner
Response (Paper 20 (PO Resp.)) and a Supplement to the Response (Paper
22 (Supp. Resp.)). Petitioner filed a Reply to Patent Owners Response
(Paper 31 (Reply)). Patent Owner filed a Motion to Exclude (Paper 33
(Mot.) and Petitioner filed an Opposition to the Motion to Exclude (Paper
36 (Opp.)), to which Patent Owner filed a Reply (Paper 38 (Mot.
Reply)). An oral hearing was held on August 17, 2016, and a transcript of
the hearing is included in the record (Paper 41 (Tr.)).
and 37 C.F.R. 42.73. For the reasons discussed herein, Petitioner has
shown by a preponderance of the evidence that the instituted claims of the
998 patent are unpatentable. See 35 U.S.C. 316(e).
A. Related Matters
The 998 patent is involved in a district court proceeding, Worlds Inc.

v. Activision Blizzard, Inc., Case No. 1:12-cv-10576 (D. Mass.) (District
Court Case). Paper 6. In addition, the 998 patent is the subject of
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IPR2015-01325 and related to the patents at issue in IPR2015-01264,

IPR2015-01268, IPR2015-01269, and IPR2015-01319. Id.
B. The Asserted Grounds
We instituted inter partes review on the following grounds of

unpatentability asserted by Petitioner:
Reference(s) Basis Instituted Claim(s)

Funkhouser
1, 2, 7, 8, 12, 16, 18,
(Ex. 1005)1 and 103(a)3
and 20
Marathon (Ex. 1021)2
Funkhouser,
Marathon, and Sitrick 103(a) 3
(Ex. 1013)4
Funkhouser,
Marathon, and
103(a) 1315
Funkhouser 93
(Ex. 1017)5
Funkhouser,
Marathon, and 103(a) 17
Wexelblat (Ex. 1020)6
1
Thomas A. Funkhouser, RING: A Client-Server System for Multi-User
Virtual Environments, in 1995 SYMPOSIUM ON INTERACTIVE 3D GRAPHICS
(1995).
2
Marathon, Bungie Products Software Corporation (1994).
3
The Leahy-Smith America Invents Act (AIA), Pub. L. No. 11229,
revised 35 U.S.C. 103 and the relevant sections took effect on March 16,
2013. Because the application from which the 998 patent issued was filed
before that date, our citations to Title 35 are to its pre-AIA version.
4
U.S. Patent No. 4,521,014, issued June 4, 1985.
5
Thomas A. Funkhouser & Carlo H. Squin, Adaptive Display Algorithm
for Interactive Frame Rates During Visualization of Complex Virtual
Environments, in COMPUTER GRAPHICS PROCEEDINGS: ANNUAL
CONFERENCE SERIES (1993).
6
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C. The 998 Patent
The 998 patent is directed to a graphical, multi-user, interactive

virtual world system that includes highly scalable architecture. Ex. 1001,
Abs. The system disclosed in the 998 patent displays avatars representing
other users neighboring the user viewing the virtual world. Id. Motion
information from the remote users avatars is transmitted to a central server
process that provides positions updates to client processes for neighbors of
the user at that client process. Id. The client process also determines which
background objects to render. Id.
D. The Instituted Claims

Of the instituted claims 13, 7, 8, 1218, and 20, claims 1, 2, and 18
are independent claims. Claim 1 is illustrative and reproduced below:
1. A method for displaying interactions of a local user
avatar of a local user and a plurality of remote user avatars of
remote users interacting in a virtual environment, the method
comprising:
receiving, at a client processor associated with the local
user, positions associated with less than all of the remote user
avatars in one or more interaction rooms of the virtual
environment, wherein the client processor does not receive
position information associated with at least some of the remote
user avatars in the one or more rooms of the virtual environment,
each avatar of the at least some of the remote user avatars failing
to satisfy a condition imposed on displaying remote avatars to
the local user;
generating, on a graphic display associated with the client
processor, a rendering showing position of at least one remote
user avatar; and switching between a rendering on the graphic
display that shows at least a portion of the virtual environment to
the local user from a perspective of one of the remote user avatars
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and a rendering that allows the local user to view the local user
avatar in the virtual environment.
II. ANALYSIS
A. Level of Ordinary Skill in the Art

Pet. 11; Ex. 1002 58. Mr. Pesce similarly testifies that a person of
ordinary skill in the art would have had at least a bachelors degree or
equivalent in computer science, with two or more years of experience in
coding related to both virtual environments and computer networking.
Ex. 2017 33.
computer networking). Neither party asserted that there is any such
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B. Mr. Pesces Qualifications as an Expert

cross examination, providing examples of these alleged deficiencies in
is not clear how Mr. Pesce qualifies as an expert in this field, citing Mr.
Pesces deposition testimony regarding the amount of experience he had in
19957 and his lack of an educational degree beyond high school. Reply 3
also asserts that Mr. Pesce was unwilling to address his documented . . . use
7
Dr. Zydas declaration (see, e.g., Pet. 411; Reply 25; Ex. 1002 5658),
and represented at the hearing that it does not contest, for purposes of this
proceeding, priority to the provisional (Tr. 195:17). Patent Owner also
takes the position that the 998 patent is entitled to priority to the provisional
and represented at the hearing that its specification is nearly identical to that
of the 998 patent. See, e.g., id. at 90:591:3, 92:1015; Ex. 2017 34.
Based on our review of the 296 provisional, we agree with Patent Owners
representation that its specification is nearly identical to the 998 patent
6
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of psychedelic drugs during the 1990s (Ex. 1041) and whether that drug use
affected his recollection of events during the period relevant to the [998]
patent[]. See also, Ex. 1046 at 46:1147:21, 50:2553. Reply 3.
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In his declaration and curriculum vitae, Mr. Pesce details his relevant
work experience from 1984 to the present as well as his teaching experience
and numerous technical publications and presentations. See Ex. 2017 3
19, 3542, pp. 6782; see also Ex. 1046, 19:821:16, 39:1140:20. Having
reviewed this experience and Mr. Pesces technical testimony, we find his
knowledge, skill, and experience in the relevant field of networked virtual
environments, as well as computer networking and virtual reality more
generally, sufficient to render him qualified to offer expert testimony in this
proceeding under Rule 702.
in our finding in II.A regarding the level of ordinary skill in the art.
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Pet. 11 (proffering definition of one of ordinary skill in the art as someone

who had, through education or practical experience, the equivalent of a
Ex. 1002 58 (same); Ex. 2017 33; see id. 3, 35; Reply 3; Opp. 7. We
note that Mr. Pesce did attend the Massachusetts Institute of Technology
(MIT) for four semesters. Ex. 2017 3; Ex. 1046, 19:814; see id. at
19:1521:16. As we explain above, we find Mr. Pesces experience, skill,
Ex. 1041; Ex. 1046, 46:11-47:21, 50:2553); Ex. 1041; Ex. 1046, 46:11
of his perception and recollection. See infra II.K; see, e.g., Ex. 2017
3644, 49.a.iv, 59; Ex. 1046, 85:421, 89:1090:7, 204:12205:20,
8
address below in II.K. We consider Exhibit 1041 here only for the limited
purpose for which we find it relevant and admissible in II.K.
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deficiencies in Mr. Pesces testimony on claim construction go to the weight
to be accorded to Mr. Pesces testimony on these particular substantive
issues. See Reply 13. We have considered these alleged deficiencies and
address them, as appropriate, in our analysis below of the issues to which
they pertain.
C. Claim Construction

9
Decision in this proceeding. The amended rule does not apply to this
10
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the . . . Office); Black & Decker, Inc. v. Positec USA, Inc., 646 Fed. Appx
1019, 1024 (Fed. Cir. 2016) (holding that in an inter partes review,
1303 (Fed. Cir. 2005) (en banc)). Because neither party had addressed this
their future briefing the expiration date of claim 13, 7, 8, 1218, and 20 of
the 998 patent. Inst. Dec. 5 n.8.
In its Response, Patent Owner represented that the 998 patent expires
on June 8, 2017, with an explanation supporting the calculation of this
expiration date. See PO Resp. 1012. In its Supplement to its Response,
Patent Owner changed the expiration date of the 998 patent to
November 12, 2016 because it inadvertently did not account for a terminal
disclaimer when initially calculating the expiration date. See Supp. Resp.;
Tr. 89:17. At the oral hearing, Patent Owner confirmed this expiration date
and Petitioner indicated that it agrees with and does not challenge this date.
See Tr. 14:116, 88:889:7. Based on the parties agreement and our review
of the record, we agree that the 998 patent expired on November 12, 2016.
See, e.g., Ex. 1001, [22], [60], [63]; Ex. 1004, 322, 339.
proceeding, because it applies only to petitions filed on or after May 2, 2016.

See Amendments to the Rules of Practice for Trials Before the Patent Trial
and Appeal Board, 81 Fed. Reg. 18,750, 18,766 (Apr. 1, 2016).
11
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Patent 8,145,998 B2
The 998 patent is now expired.10 In an inter partes review, the

proper claim construction standard in an expired patent is set forth in
Phillips, 415 F.3d 1303 (Fed. Cir. 2005) (en banc). See In re Rambus Inc.,
694 F.3d 42, 46 (Fed. Cir. 2012) ([T]he Boards review of the claims of an
expired patent is similar to that of a district courts review.). Under the
Phillips standard, claim terms are given their ordinary and customary
meaning, as would be understood by one of ordinary skill in the art in the
context of the entire patent disclosure. Thorner v. Sony Comput. Entmt Am.
LLC, 669 F.3d 1362, 1365-66 (Fed. Cir. 2012).
A claim term will be interpreted more narrowly than its ordinary and
customary meaning only under two circumstances: (1) the patentee sets out
a definition and acts as [its] own lexicographer, or (2) the patentee
disavows the full scope of a claim term either in the specification or during
prosecution. Aventis Pharma S.A. v. Hospira, Inc., 675 F.3d 1324, 1330
(Fed. Cir. 2012). To act as a lexicographer, the patentee must clearly set
forth a definition of the disputed claim term other than its plain and ordinary
meaning, or in other words, must clearly express an intent to redefine the
term. Id. at 1330 (internal citations and quotations omitted). This clear
expression . . . may be inferred from clear limiting descriptions of the
invention in the specification or prosecution history. Id.
10
Although we apply the Phillips standard in this Decision, our claim
interpretation would not differ under the broadest reasonable interpretation
standard, applicable to unexpired patents. Rather, having considered the
issue, we would reach the same claim interpretation under the broadest
reasonable interpretation standard.
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Similarly, to disavow claim scope, the specification or prosecution

history [must] make clear that the invention does not include a particular
feature. GE Lighting Sols., LLC v. AgiLight, Inc., 750 F.3d 1304, 1309
(Fed. Cir. 2014) (internal citation, quotation, and alterations omitted). To do
so, the patentee may include[] in the specification expressions of manifest
exclusion or restriction, representing a clear disavowal of claim scope.
Aventis, 675 F.3d at 1330 (internal quotations omitted). Ambiguous
language does not constitute disavowal. Omega Engg, Inc. v. Raytek Corp.,
334 F.3d 1314, 132326 (Fed. Cir. 2003). Nor is it sufficient that the only
embodiments, or all of the embodiments, contain a particular limitation.
Aventis, 675 F.3d at 1330.
A patent that discloses only one embodiment is not necessarily
limited to that embodiment. GE Lighting, 750 F.3d at 1309. It is
improper to read limitations from a preferred embodiment described in the
specificationeven if it is the only embodimentinto the claims absent a
clear indication in the intrinsic record that the patentee intended the claims
to be so limited. Id.
Here, both parties address the construction of the term avatar.
Pet. 13; PO Resp. 1416; Reply 46. Petitioner also proffers a construction
for the recited rendering and third user perspective. Pet. 1315. Based
on our review of the arguments and evidence of record, we determine that
we must address only the interpretation of avatar, discussed below. See
Vivid Techs., Inc. v. Am. Sci. & Engg, Inc., 200 F.3d 795, 803 (Fed. Cir.
1999) (holding that only claim terms that are in controversy need to be
construed and only to the extent necessary to resolve the controversy).
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Patent 8,145,998 B2
The parties post-institution arguments require that we address the

proper scope of the claim term avatar. Pet. 13; PO Resp. 1416; Reply 4
6. In the Petition, Petitioner argues that avatar should be construed to
mean a graphical representation of a user, citing as support the 998 patent
specifications explanation that [t]he virtual word shows avatars
representing the other users who are neighbors of the user viewing the
virtual world. Pet. 11 (quoting Ex. 1001, 2:4244). With supporting
testimony from Dr. Zyda as well as a definition from THE MICROSOFT
COMPUTER DICTIONARY (3d. ed. 1997), Petitioner contends that its proposed
construction is consistent with how one of ordinary skill would have
understood the term. Id. (citing Ex. 1002 62; Ex. 1010).
In its Response, Patent Owner argues that the proper construction of
avatar, under either the broadest reasonable interpretation or the Phillips
standard, is a three-dimensional graphical representation of a user.
PO Resp. 14 (emphasis added). Patent Owner directs our attention to the
District Courts construction of avatar as a graphical representation of the
user in three-dimensional form. Id. at 14 (citing Ex. 2006, 2024);
Tr. 126:1720. Patent Owner, with supporting testimony from Mr. Pesce,
contends that a construction limiting an avatar to a three-dimensional form
is consistent with the [998 patent] specification . . . and the interpretation
that would be reached by a person of ordinary skill in the art. PO
Resp. 1415 (citing Ex. 2017 49.a). Patent Owner asserts that the 998
patent is consistent in its description of an avatar as three-dimensional.
Id. at 15 (citing Ex. 1001, 3:2527, 6:1316, 7:4144). Moreover, at the
hearing, Patent Owner argued that column 3, lines 2527 of the 998 patent
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specification11 comes fairly close to and is practically lexicography,

given the quotation marks around the term avatar. Tr. 127:17129:6,
130:1415, 135:1619, 140:712. In addition, Patent Owner argues that the
District Court properly recognized that the crowd control issue at the
heart of [the 998] patent is an issue implicated by the more complex
three-dimensional system. PO Resp. 15 (quoting Ex. 2006, 21); see
Tr. 130:1521, 140:1421.
Petitioner responds that its proposed construction of avatar is proper
under both the broadest reasonable interpretation and the Phillips standards.
Reply 36. Petitioner contends Patent Owners attempt to limit the term to
three-dimensional representations improperly import[s] a term from the
specification that could have been recited in the claims, but was not. Id.
at 4; Tr. 174:20175:2, 180:1618. Petitioner asserts that the 998 patent
does not define an avatar to be three-dimensional and the specification is
explicit that column 3, lines 2225, to which Patent Owner cites, is referring
to a specific example in Figure 1, which is illustrative and not
restrictivenot a fundamental aspect of the invention. Reply 4 (quoting
Ex. 1001, 3:18, 3:1720, 16:1622); see Tr. 39:1115.
Moreover, Petitioner contends that the specification, even when
describing avatars that it refers to as three-dimensional, does not describe
true-three dimensional renderingswhich contradicts Patent Owners
11
We held a consolidated hearing on this and the other inter partes reviews
listed in II.A involving related patents with specifications nearly identical
to the 998 patent. As a result, the hearing arguments sometimes refer to the
specification of one of the related patents, rather than to the 998 patent.
Throughout this Decision, we have adjusted relevant citations from the
hearing to refer to the specification of the 998 patent.
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attempt to limit the term to precisely three-dimensional figures. Reply 4;

Tr. 43:845:10, 164:1725. According to Petitioner, the specifications
explanation that an avatar comprises N two-dimensional panels, where the
i-th panel is the view of the avatar from an angle of 360*i/N degrees
demonstrates that the avatars are two-dimensional panels and the panel
displayed depends on the users viewing angle, a technique similar to that
which Mr. Pesce described as quasi-3D. Reply 45 (quoting Ex. 1001,
7:3944; Ex. 1046, 204:12205:20); Tr. 43:845:10, 164:1725.
In addition, Petitioner proffers a claim differentiation argument,
asserting that the related 501 patent includes a claim, for example, that
expressly recites a three dimensional avatar and, thus, construing the term
avatar alone to require three-dimensional would render meaningless the
additional claim language in violation of governing precedent. Reply 56
(emphasis added); Tr. 37:2025, 39:540:11, 41:35, 43:17, 178:47.
According to Petitioner, Patent Owners decision to include the term three
dimensional before avatar in some claims reflects that the plain and
ordinary meaning of avatar is not so limited. See Reply 10, 12; Tr. 39:16
40:11.
Petitioner also argues that Mr. Pesces testimony in support of Patent
Owners attempt to limit the term avatar to be three-dimensional is not
credible, unsubstantiated, inconsistent, and in conflict with the record,
including the THE MICROSOFT COMPUTER DICTIONARYs definition.
Reply 5; Tr. 45:1346:9.
Here, both Petitioner and Patent Owners proposed constructions
represent that an avatar is a graphical representation of a user. Pet. 13;
PO Resp. 1415. The parties dispute only whether that representation must
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be three-dimensional, as Patent Owner urges. See Pet. 13; PO Resp. 14

15; Reply 46; Tr. 127:611. We address each issue in turn.
First, as noted above, there is no dispute in the record that an avatar
is a graphical representation of a user, as the parties, their experts, and the
construction adopted by the District Court are in agreement on this point.
See, e.g., Pet. 13; PO Resp. 1415; Ex. 2006, 24; Tr. 127:611; see also
Ex. 1002 62; Ex. 2017 49.a.iiiii. Having reviewed the intrinsic record
of the 998 patent, we agree that avatar refers to a graphical
representation of a user. Instituted claim 1 recites [a] method for
displaying interactions, which involves a plurality of remote user avatars
of remote users interacting in a virtual environment and receiving . . .
positions associated with less than all of the remote user avatars . . . [and]
generating, on a graphic display . . . the local user avatar. Ex. 1001, 19:12
30. Independent claims 2 and 18, in turn, each provides for a system, which
displays at least one remote user avatar. Id. at 19:3156, 20:4521:5. The
written description explains that in the preferred embodiment, [t]he virtual
world shows avatars representing other users who are neighbors of the user
viewing the virtual world and each avatar is a figure chosen by the user to
represent the user in the virtual world. Id. at [57], 2:4247, 3:2527, Fig. 1.
This claim language and description demonstrate that an avatar represents a
particular user in a graphical virtual space. Neither party points us to any
relevant prosecution history, nor do we see any. See generally Pet.; Resp.;
Reply; Ex. 1004. Accordingly, the intrinsic record demonstrably supports
the parties positions that an avatar is a graphical representation of a user.
Considering the submitted extrinsic evidence, we find it to
persuasively support that avatar refers to a graphical representation of a
17
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user. THE MICROSOFT COMPUTER DICTIONARY (3d. ed. 1997),12 proffered

by Petitioner, defines avatar as: In virtual-reality environments such as
certain types of Internet chat rooms, a graphical representation of a user.
Ex. 1010, 38 (emphasis added); see Pet. 13. Moreover, Dr. Zyda and
Mr. Pesce testify in agreement on this issue. Ex. 1002 63; Ex. 2017
49.a.iiiii.
Second, we consider the contested issue of whether the graphical
representation of a user must be three-dimensional to come within the
meaning of avatar. We conclude, under the Phillips standard, the ordinary
and customary meaning of the term, in the context of the 998 patent
specification, is not so limited.
We acknowledge that the District Court, applying the Phillips
standard, answered this disputed question in the affirmative, determining
that the patent limits the meaning of avatar to three-dimensional graphical
representations. Ex. 2006, 2024; see PO Resp. 1415. Although the
District Courts interpretation is informative, we are not bound by that
construction. See Power Integrations, Inc. v. Lee, 797 F.3d 1318, 1326
(Fed. Cir. 2015) (There is no dispute that the board is not generally bound
by a prior judicial construction of a claim term.). Moreover, Petitioner is
not a named party in the District Court Case and the supporting arguments
12
THE MICROSOFT COMPUTER DICTIONARY has a copyright date of 1997,
which is after the filing of the 296 provisional, to which the parties agree,
for purposes of this proceeding, the 998 patent is entitled to priority. See
Ex. 1001, [60]; supra n.7. Neither party raised this issue. Nonetheless, we
determine that the 1997 dictionary is sufficiently contemporaneous to the
filing date of the 296 provisional, November 13, 1995, to inform the
ordinary meaning of the term at the relevant time period.
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and evidence in the record before us are not identical to those proffered to
the District Court. See, e.g., Ex. 2006, 1, 2024; Pet. 13; PO Resp. 1415;
Reply 36. We have considered carefully the District Courts claim
construction, see Power Integrations, 797 F.3d at 132427, but for the
reasons given below, we determine that avatar is not restricted to three-
dimensional.
We begin our analysis with the language of the claims. We see
nothing in the instituted claims, as well as the other claims of the
998 patent, that would require or even suggest that a representation of a
user must be three-dimensional to be an avatar within the meaning of the
claim language. See Ex. 1001, 19:1230. We note that in arguing that the
meaning of avatar is so limited, Patent Owner does not cite or refer to any
supporting claim language. See, e.g., Resp. 1415.
In light of Petitioners claim differentiation argument, we also
consider the claim language of other patents in the same family, including
the 501 patent. See, e.g., Reply 56. [W]e presume, unless otherwise
compelled, that the same claim term in the same patent or related patent
carries the same construed meaning. Omega Engg, 334 F.3d at 1334.
More specifically, where patents all derive from the same parent
application and share many common terms, we must interpret the claims
consistently across the patents. NTP, 418 F.3d at 1293.
The doctrine of claim differentiation applies across related patents but
is not as strong as within the same patent. Clare v. Chrysler Group LLC,
819 F.3d 1323, 1330 (Fed. Cir. 2016); see In re Rambus Inc., 694 F.3d 42,
48 (Fed. Cir. 2003) (applying claim differentiation across related patents).
The doctrine creates a presumption that two independent claims have
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different scope when different words or phrases are used in those claims.
Seachange Intl, Inc. v. C-COR, Inc., 413 F.3d 1361, 136869 (Fed. Cir.
2005) (citations omitted). The doctrine takes on relevance in the context of
a claim construction that would render additional, or different, language in
another independent claim superfluous. Arlington Indus., Inc. v.
Bridgeport Fittings, Inc., 632 F.3d 1246, 1254 (Fed. Cir. 2011) (internal
citation and quotations omitted).
Here, the 501 and 998 patents share a common specification and
many claim terms, including avatar, and each patent claims priority to the
296 provisional and issued from three common continuation applications.
See Ex. 1001, [60], [63]; Ex. 2043, [60], [63]; see generally Ex. 1001;
Ex. 2043. Accordingly, in the absence of evidence compelling otherwise
of which, as explain below, we see none in the recordavatar has the
same meaning in these patents.
In contrast to claim 1 of the 998 patent, which recites avatar alone,
without the three dimensional modifier, independent claims 2, 18, and 19
of the 998 patent and independent claims 1, 12, and 14 of the 501 patent
specifically recite a three dimensional avatar. See Ex. 1001, 19:1256,
22:4522:13; Ex. 2043, 19:1938, 20:1452 (emphasis added); Reply 56.
We agree with Petitioner that adopting Patent Owners proposed
construction of avatarwhich requires the graphical representation to be
three-dimensionalwould render the additional modifying limitation three
dimensional in claims 2, 18, and 19 of the 998 patent and claims 1, 12, and
14 of the 501 patent meaningless or superfluous. See Reply 12; Tr. 37:20
25, 39:540:11, 41:35, 43:17, 178:47. Patent Owner acknowledged this
at the oral hearing. Tr. 129:22130:12 (Patent Owner responding to
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question regarding whether its proposed construction, when plugged into

the 501 and other patent claims requiring a three-dimensional avatar
would render three-dimensional superfluous with I think it has to, Your
Honor. I think it has to.); see also Ex. 1046, 100:119, 104:13105:4.
Such a result weighs against adopting Patent Owners proffered three
dimensional requirement. Arlington Indus., 632 F.3d at 125455
(reasoning that [r]eading . . . limitation[s], which are included in some
claims but not others, into another claim term would render these additional
modifiers superfluous, which weighs against doing so); Cat Tech LLC v.
TubeMaster, Inc., 528 F.3d 871, 885 (Fed. Cir. 2008) (refusing to adopt a
construction that would render a claim limitation meaningless). If avatar,
alone, required a three-dimensional graphical representation, as Patent
Owner argues, there would be no need for the additional three dimensional
claim language in the 998 and 501 patents. See Rambus, 694 F.3d at 48
(rejecting argument that claim term memory device requires a single chip,
where dependent claim of related patent added limitation requiring a single
chip, because if a memory device were always a single chip[,] there would
be no need to use the word single in the dependent claim); Phillips, 415
F.3d at 1314 (explaining that claim language steel baffles strongly
implies that the term baffles does not inherently mean objects made of
steel and similarly, claim language providing baffles are placed
projecting inwardly from the outer shell at angles tending to deflect
projectiles[] . . . would be unnecessary if persons of skill in the art
understood that the baffles inherently served such a function).
Accordingly, we agree with Petitioner that the differentiation in the
claim languageavatar versus three dimensional avatarsupports that
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the ordinary and customary meaning of the term avatar is not limited to
three-dimensional, and neither is any potential more specific meaning of
the term in the context of these patents (which we determine below there is
not). See Reply 12; Tr. 39:2440:2; see also id. at Tr. 37:2025, 39:5
40:11, 41:35, 43:17, 178:47. Moreover, if the patentee intended to
require that avatar, as recited in independent claim 1 of the 998 patent
and its dependent claims, be limited to three-dimensional, it could have
included such an express limitation as it did in other claims of the same
patent, claims 2, 18, and 19, as well as claims 1, 12, and 14 of the related
501 patentbut notably did not. We are cognizant that claim
differentiation creates only a presumption, not a hard and fast rule of claim
construction, e.g., Seachange, 413 F.3d at 136869, but as we explain
below, nothing in the remainder of the intrinsic record of the 998 patent
dictates to the contrary.
We next consider the written description of the 998 patent. We agree
with Patent Owner that the written description refers to avatars as
three-dimensional figuresbut we determine these descriptions of the
preferred embodiment, and specific examples thereof, are not limiting or
restrictive. Patent Owner supports its position that an avatar must be
three-dimensional with citations to column 3, lines 2527 and column 6,
lines 1316 of the 998 patent specificationwhich state, respectively, that
Figure 1 shows two avatars 18. Each avatar 18 is a three-dimensional
figure chosen by a user to represent the user in the virtual world and that
[t]he orientation is needed for rendering because the avatar images are
three-dimensional and look different (in most cases) from different angles.
See Ex. 1001, 3:2227, 6:1318; Resp. 24. Yet as Petitioner points out, the
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specification makes clear that these disclosures are describing the preferred
embodiment, using the example of a client-server architecture for use in a
virtual world chat system. Ex. 1001, 3:48 (emphasis added); see
Reply 45. In addition, regarding the discussion at column 3, lines 2527 in
particular, the specification further explains that it is discussing Figure 1 as
an example and illustration of what such a client might display.
Ex. 1001, 3:13, 3:2223 (emphases added); see Reply 45. Even Patent
Owner acknowledges that Figure 1 is merely exemplary. See Tr. 129:121
(Im not saying that figure 1 is the invention . . . . I think [figure 1] has to
be an example, yes.). Moreover, the specification expressly instructs that
the disclosed preferred embodiment and examples are illustrative and not
restrictive. Ex. 1001, 15:6416:3 (emphasis added); see Reply 4.13 These
references to avatars as three-dimensional in the preferred embodiment,
including specific examples thereof, do not suffice to limit the claim term
avatar. See Aventis, 675 F.3d at 133031 ([I]t is . . . not enough that the
only embodiments, or all of the embodiments, contain a particular limitation
to limit a claim term beyond its ordinary meaning.) (internal citations and
quotations omitted).
With regard to Patent Owners argument raised at oral hearing that
column 3, lines 2527 of the specification comes awfully and fairly close
13
Neither party cites to the disclosure, but we note that the Brief
Description of the Drawings refers to Figure 1 as a client screen view in a
virtual world system according to the present invention. Ex. 1001, 2:58
59. We do not find this statement in the overview of the drawings to
overcome the express statements in the detailed description explaining that
the figure is an example and illustration that is not restrictive. Id. at
3:1323, 15:6416:3; see Tr. 41:1642:25, 129:121.
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to and is practically lexicography, we first note that Patent Owner

repeatedly used hedging phrasesawfully close, fairly close, fairly
clear, and practicallyand also offered modifications to the
specifications language that might have clarified that the disclosure was
intended to be definitionalsuggesting that Patent Owner itself does not
view the statement, as written, as sufficiently clear to constitute
lexicography. Tr. 127:17129:6 ([I]f we didnt have 18 in the following
sentence, if it just said each avatar, instead of each avatar 18, I think there
would be very little question of whether it is definitional.); id. at 130:14
15, 135:1619, 140:712. To the extent Patent Owner intended to argue that
this statement constitutes lexicography, we disagree and determine to the
contrary. The quotation marks around avatar, on which Patent Owner
focuses, are insufficient to demonstrate clearly an intent to limit or redefine
the term avatar, particularly given the express statements in the
specification that this disclosure regarding Figure 1 is exemplary and
illustrative, outlined above. See Ex. 1001, 3:48, 3:13, 3:2227; Tr. 127:17
19, 128:811, 129:46. We also agree with Petitioner that the explanation
that [e]ach avatar 18 is a three-dimensional figure relates to the two
figures depicted in Figure 1. Ex. 1001, 3:2526, Fig. 1; see Reply 45.
Moreover, turning to column 7, lines 3944 of the specification, to
which both parties cite in support of their positions, we agree with Petitioner
that this disclosure undermines Patent Owners position that avatar should
be limited to three-dimensional representations. See PO Resp. 14; Reply 4
5. This portion of the specification explains that an avatar, stored in the
relevant database, comprises N two-dimensional panels, where the i-th
panel is the view of the avatar from an angle of 360*i/N degrees. Ex. 1001,
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7:3944 (emphasis added); see id. at 6:1822. The arguments and evidence
before us support Petitioners assertion that this passage, describing avatars
in the preferred embodiment that the specification refers to as
three-dimensional, are not true three-dimensional renderings and instead can
be created using shortcuts designed to create the illusion of
three-dimensional renderings, which were known in the art. See Reply 45
(citing Ex. 1046, 204:12205:20); Tr. 43:845:10, 50:913, 164:1725
(Petitioner); id. at 132:25133:23, 143:23144:5 (Patent Owner); see also
Ex. 2017 40 (Mr. Pesce testifying that the 1992 game Wolfenstein 3D
used a variety of mathematical cheats to produce the illusion of a full 3D
environment); Ex. 1046, 204:12205:20 (Mr. Pesce testifying that
Wolfenstein 3D used cheats in the art[] to produce the effect of 3-D and
the appear[ance of] three-dimensional figures but he believes the figures
were actually draw[n] or handled . . . mathematically as
two-dimensional in a quasi-3D technique).14 At the hearing, Patent
14
Neither party cites to the specifications references to a three-dimensional
. . . system and space (Ex. 1001, [57], 2:3742) on the issue of whether
an avatar must be three-dimensional, but we note that the evidence before
us shows that these references do not operate to limit avatar to
three-dimensional. As we explain, the record arguments and evidence
demonstrate that there were known techniques to create the illusion of a
three-dimensional graphical rendering in a three-dimensional environment,
without the rendering being truly three-dimensional. Similarly, the evidence
before us shows, and Patent Owner acknowledges, that there can be virtual
beings in less than three-dimensions within a three-dimensional
environment. See, e.g., Tr. 134:8135:6 (arguing that despite Durwards
disclosure of a three-dimensional virtual space, its virtual entities would
have been understood to be two-dimensional); see also, e.g., Ex. 2017 40,
59 (opining the same); Ex. 1046, 85:886:11 (explaining that it is possible to
have entities that are 2-D representations in a 3-D world); id. at 204:12
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Owner similarly explained that this passage involves a shortcut aimed to

try[] to achieve that the appearance of the[] panels to a user is a 3-D
avatar. Tr. 132:2133:23; see id. at 143:23144:5; PO Resp. 15. In sum,
this passage further supports concluding that avatar, in light of the
specification, cannot be limited exclusively to three-dimensional
representations, as Patent Owner urges.
Finally, Patent Owners assertion that [t]he District Court . . .
correctly stated that the crowd control issue at the heart of this patent is
an issue implicated by the more complex-three dimensional system, as
opposed to the two-dimensional systems that did not require as much strain
on computing resources does not support limiting the meaning of avatar
to three-dimensional. PO Resp. 1415 (quoting Ex. 2006, 21); Tr. 130:15
21, 140:1421; see Ex. 2017 49.a.v; Ex. 2006, 21. That the crowd control
functionality discussed in the specification may be better suited to, or useful
for, three-dimensional systems with three-dimensional virtual beings does
not operate to limit the invention to virtual beings, or avatars, in
three-dimensional form. See, e.g., Rambus, 694 F.3d at 47 (determining that
preferred embodiments and goals of the invention that [patentee] argues are
better met by single chip devices did not restrict the invention to single
chip memory devices).
In conclusion, we agree with Petitioner that Patent Owners attempt to
limit avatar to three-dimensional representations improperly seeks to
import a limitationthree-dimensionalfrom the specification, including
the preferred embodiment and specific examples thereof, into the claims.
205:20.
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See Reply 45; Tr. 174:20175:2, 180:1618; GE Lighting, 750 F.3d at

1309. We determine that the specifications references to avatars as
three-dimensional in its preferred embodiment, and examples thereof, do not
rise to the level of either lexicography or disavowalwhether express or
implicit. There is not a clear indication of an intent to define avatar or to
restrict the term to three-dimensional representations. Nor is there any
language of manifest exclusion or restriction. Nothing in the specification
indicates that an avatar being three-dimensional is an essential feature of, or
a required limitation of, the claimed method or an advantage of the recited
method over the prior art. See, e.g., GE Lighting, 750 F.3d at 1309; Aventis,
675 F.3d at 1331; Seachange, 413 F.3d at 1370.
The prosecution history of the 998 patent likewise does not evidence
a disavowal of claim scope or redefinition of avatar. Neither party refers
to prosecution history for the construction of avatar, yet based on our
review, we see no amendments or arguments that would show an intent to
define or narrow the term. See Ex. 1004.
In sum, based on the intrinsic record of the 998 patent, as well as
closely related patents sharing the same specification and common
ancestors, we conclude that the ordinary and customary meaning of the term
avatar, as used in the specification, is not limited to three-dimensional
graphical representations, and the patentee did not narrow this ordinary
meaning by acting as a lexicographer or disavowing claim scope.
This conclusion is supported by the extrinsic evidence of record,
which is less significant than the intrinsic record in determining the legally
operative meaning of claim language. Phillips, 415 F.3d at 1317 (internal
citations and quotations omitted). As we explain above, THE MICROSOFT
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COMPUTER DICTIONARY (3d. ed. 1997) defines avatar as a graphical

representation of a user. Ex. 1010, 38; see Pet. 13; Reply 45. Notably,
this definition does not restrict the graphical representation to
three-dimensionalwhich supports Petitioners position that the ordinary
meaning of the term in November 1995, the effective filing date of the
patent, was not so limited. See Tr. 46:1017; Reply 5.
As to Mr. Pesces testimony on the issue, Mr. Pesce provides, in his
declaration, a general overview of the development of virtual environments
from early 1991 through 1996, including challenges and advancements
during an alleged transition from two-dimensional to three-dimensional
techniques. See Ex. 2017 3644, 49.a.iv, 59. Mr. Pesce testifies that in
September 1993, virtual entities, including those in a three-dimensional
virtual space[], would have been understood by a [person of ordinary skill
in the art] to be two-dimensional given the limitations of available software
to render a three-dimensional entity, even in very high end computers and
implementations. Ex. 2017 59; see Ex. 1008 [22]; Ex. 1046, 85:486:11.
He also testifies that 19941996 represent a fulcrum, as real-time
computer graphics switched from 2D to 3D techniques and that reading the
998 patent in this context makes clear that the term avatar, as used in the
patent, is a three-dimensional graphical representation of a user.
Ex. 2017 44, 49.a.iv. At his deposition, Mr. Pesce further testified that,
although he did not know that [he] could be definitive, he is fairly
positive that by 95, late 95, sort of around the frame of these patents, that
avatar would have necessarily implied 3-D. Ex. 1046, 89:1090:1.
We find Mr. Pesces testimony, outlined above, that from late 1993
when an avatar referred to a two-dimensional virtual entity and such a
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representation was used even in high end technologyto 1995, the effective
filing date of the 998 patent, virtual reality changed so rapidly that the
ordinary meaning of avatar no longer encompassed two-dimensional
entities and instead required three-dimensionality to be unsupported and
internally inconsistent. This testimony is contradicted by Mr. Pesces own
testimony that [t]hree-dimensional user representations were only
starting to become known in the art by 1995. Id. at 222:14 (emphasis
added). Mr. Pesce also testified that the first time he saw an avatar in
Virtual Reality Modeling Language (VRML)which he worked on
beginning in December 1993 and describes as a standard for the
presentation of three-dimensional worldswas [s]omewhere between
late 1995 and early 1996. Id. at 41:1842:15, 222:9223:6; Ex. 2017
4142.
Moreover, as Petitioner points out and Patent Owner explicitly
acknowledged at the hearing, Mr. Pesces testimony on this issue wholly
lacks supporting or corroborating evidence. See Reply 56; Ex. 2017 36
44, 49.a.iv, 59; Tr. 45:1346:9, 138:911, 138:19139:7. In addition, it
conflicts with the definition from the MICROSOFT COMPUTER DICTIONARY,
which, despite being published in 1997well after the alleged shift in the
art that restricted an avatar to three-dimensional formdoes not require
three-dimensionality. See Ex. 1010, 38; Tr. 46:1217.
We find Mr. Pesces inconsistent and unsupported testimony, which
contradicts other record evidence, unpersuasive. Accordingly, we accord
minimal probative weight to his opinion that in late 1995, the effective filing
date of the 998 patent, the ordinary meaning of the term avatar to one of
ordinary skill was restricted to three-dimensional representations. See
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37 C.F.R. 42.65(a); In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1368
(Fed. Cir. 2004) (explaining that the Board has broad discretion to weigh
declarations and to conclude that the lack of factual corroboration warrants
discounting the opinions expressed in the declarations); Rohm & Haas Co.
v. Brotech Corp., 127 F.3d 1089, 1092 (Fed. Cir. 1997) (Nothing in the
[federal] rules [of evidence] or in our jurisprudence requires the fact finder
to credit the unsupported assertions of an expert witness.). Accordingly,
based on the record before us, we agree with both parties that avatar, as
recited in the instituted claims of the 998 patent, refers to a graphical
representation of a user, and further determine that its ordinary and
customary meaning, in the context of the specification, is not limited to
three-dimensional graphical representations.
E. Obviousness of Claims 1, 2, 7, 8, 12, 16, 18, and 20 in View of

Funkhouser and Marathon
1. Funkhouser (Ex. 1005)
Petitioner argues Funkhouser constitutes a printed publication under

102(a) and was published no later than April 12, 1995. Pet. 67, 15.
Patent Owner does not contest, and appears to accept, Petitioners position.
See IPR2015-01264, Paper 20, 4447 (referring to April 12, 1995 as the
effective publication date of Funkhouser); see generally id.
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before the critical date). Accordingly, Petitioner has submitted evidence
sufficient to show that Funkhouser was a printed publication no later than
April 12, 1995. Patent Owner does not dispute the publication date of
Funkhouser. See generally PO Resp.; Tr. Based on the record before us,
Petitioner has shown by a preponderance of the evidence that Funkhouser
qualifies as prior art under 35 U.S.C. 102(a).
Funkhouser describes providing a three-dimensional virtual
environment between entities representing users. Ex. 1005, 85. In addition,
Funkhouser discusses when an entity changes state, sending update
messages to workstations with entities that can potentially perceive the
change. Id. Figure 12 is reproduced below.
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Figure 12 illustrates user A can see both users B and E and user B is
closer to user A than user E. Id. at 91. Because the cell in which user A is
located is potentially visible to the cells in which users B and E are located,
user A receives updates regarding users B and E. See id. at 87. Moreover,
updates regarding user B could be sent to A at a finer resolution because
user B may be more important than user E to user A. Id. at 91.
2. Marathon (Ex. 1021)
According to the Declaration of Michael Durkin filed by Petitioner,

Marathon is a computer game software instruction manual that was included
with each copy of software that Petitioner sold and distributed beginning in
December 1994. Pet. 8; Ex. 1022 12. Mr. Durkin, an employee of
Petitioner since August 2010, also declares that Marathon was obtained from
one of the originally packaged boxes available for sale by Petitioner in
December 1994. Ex. 1022 13. In addition, Mr. Durkin declares the box
was stored, unopened, and in its original shrink wrap until it was opened on
May 22, 2015. Id. 3. Mr. Durkin personally witnessed the opening of the
box, Marathons removal from the box, and photocopying Marathon as
Exhibit 1021. Id. Accordingly, Petitioner has submitted evidence sufficient
to show that Marathon was a printed publication no later than
December 1994 because Petitioner has proffered adequate evidence that an
interested ordinarily skilled artisan, exercising reasonable diligence, could
have obtained Marathon no later than December 1994. See Bruckelmyer,
445 F.3d at 1378. Patent Owner does not dispute the publication date of
Marathon. See generally PO Resp.; Tr. Based on the record before us,
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Petitioner has shown by a preponderance of the evidence that Marathon

Marathon discusses playing a video game over a network with other
players. Ex. 1021, 17. A setup network game menu is reproduced below.
The figure illustrates setting up teams, colors, etc. in an options menu.

Id. In addition, Marathon shows an overhead map of all players and using
the delete key to switch views to other players in the game. Id. at 18.
3. Discussion
Petitioner asserts that the subject matter of claims 1, 2, 7, 8, 12, 16,
18, and 20 would have been obvious in view of Funkhouser and Marathon
under 35 U.S.C. 103(a). Pet. 1536. Petitioner provides a limitation by
limitation analysis as to how the combination of Funkhouser and Marathon
allegedly teaches or suggests the subject matter of claims 1, 2, 7, 8, 12, 16,
18, and 20. Id. Patent Owner contests Petitioners obviousness assertions.
PO Resp. 2537.
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a. Funkhouser and Marathon Teach the Limitation [R]endering that

[A]llows the [L]ocal [U]ser to [V]iew the [L]ocal [U]ser [A]vatar
in the [V]irtual [E]nvironment
The parties disagree as to whether the combination of Funkhouser and

Marathon teaches or suggests the limitation rendering that allows the local
user to view the local user avatar in the virtual environment, as recited
claims 1, 2, and 18. PO Resp. 3537; Reply 78. Because Petitioner has the
burden of proof (see 35 U.S.C. 316(e), 37 C.F.R. 42.20(c)), we begin
with Petitioners arguments.
Petitioner argues Funkhouser teaches clients include viewing
capabilities displaying the virtual environment on the client workstation
screen from the perspective of one or more of its entities and a top-down
view of a multi-user environment rendered from the perspective of one
entity. Pet. 25 (citing Ex. 1004, 3, 9, Plates I and II). Petitioner also argues
Marathon teaches switching between two viewpoints (i.e., a viewpoint from
the perspective of the local user avatar and a perspective of a remote user
avatar) by pressing the delete key. Pet. 2527 (citing Ex 1021, 10, 12, 18,
19).
In response, Patent Owner argues Petitioner incorrectly argues that
Funkhousers Plate I displays a [t]op-down view that shows an overhead
view of dozens of user avatars. PO Resp. 35 (quoting Pet. 26). Patent
Owner further argues Petitioners reliance on Funkhouser to teach the
claimed limitation rendering that allows the local user to view the local user
avatar in the virtual environment is undermined because Funkhouser fails
to teach that Plate I is a rendering of a local user avatar of a local user, as
recited in claims 1, 2, and 18. PO Resp. 3536. In particular, Patent Owner
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argues Funkhouser teaches that Plate I includes an image captured during

tests with 512 entities in a 400 room environment. Id. at 36 (quoting Ex.
1005, 5).
Patent Owner argues Funkhouser does not teach that Plate I is an
image generated and displayed at a client because if a client were to display
a top-down view such as the view shown in Plate I, this would pose the same
difficulty as Marathons perspective-switching, which is each client would
need to maintain a surrogate for every entity viewable using the top-down
perspective view, or would incur undesirable effects during the perspective
change. Id. Patent Owner further argues Funkhousers Plate I cannot be
relied upon to teach the claimed limitation rendering that allows the local
user to view the local user avatar in the virtual environment because
Funkhouser merely teaches avatar visibility solely according to its point-of-
view line of sight, such as what is illustrated in Figure 6. Id.
In reply, Petitioner argues Patent Owner acknowledged that
Funkhouser teaches server-based message culling and Mr. Pesce confirms
there was no rebuttal of Dr. Zydas opinion that Funkhouser teaches server-
side filtering. Reply 7 (citing PO Resp. 30; Ex. 1046, 176:1116).
Petitioner further argues Patent Owner focuses entirely on whether
Funkhouser alone [teaches] this limitation while ignor[ing] [Petitioners]
reliance on the combined teachings of Funkhouser and Marathon for this
aspect of the claims. Reply 7 (citing PO Resp. 3536).
According to Petitioner, Patent Owners argument that Funkhouser
does not teach this limitation is based on the assumption that Funkhousers
Plate [I] is not an image displayed at a client (i.e., to a local user). Reply 7
(citing PO Resp. 36). Petitioner further argues the petition cites numerous
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aspects of Funkhouser for this limitation, including the fact that [c]lients . . .
may include viewing capabilities in which the virtual environment is
displayed on the client workstation screen from the point of view of one or
more of its entities. Reply 7 (citing Pet. 2526; quoting Ex. 1005, 3).
Petitioner also refers to Funkhousers teaching that a client may map user
input to control of particular entities. Reply 78 (quoting Ex. 1005, 3).
Furthermore, Petitioner argues Funkhouser teaches displaying its
virtual environment at a client to a user controlling an avatar, and Plate II
further teaches that the virtual environment can be displayed from a
perspective that is not associated with the viewpoint of a particular avatar
and therefore could include the local avatar in the display. Reply 8.
Petitioner further argues the combination of Funkhousers Plates I and II
teaches this with the display of the avatar in Plate II and the avatars
perspective in Plate I. Id. (citing Ex. 1005, 9). Moreover, Petitioner argues
Patent Owner ignores Marathons teaching of switching between two
viewpoints (i.e., a viewpoint from the perspective of the local user avatar
and a perspective of a remote user avatar). Id. (citing Pet. 2527). That is,
according to Petitioner, Patent Owner does not rebut or address this showing
and Petitioners reliance on the combination of Funkhouser and Marathon as
teaching or suggesting switching between a display that allows the local user
to view the local user avatar and a display from the perspective of a remote
user avatar. Id.
We agree with Petitioners showing that the combination of
Funkhouser and Marathon teaches or suggests the limitation rendering that
allows the local user to view the local user avatar in the virtual
environment, as recited claims 1, 2, and 18. We disagree with Patent
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Owners arguments disputing Petitioners showing. As Petitioner argues,

Patent Owner acknowledges that Funkhouser teaches server-based message
culling and Mr. Pesce confirms there was no rebuttal of Dr. Zydas opinion
that Funkhouser teaches server-side filtering. Reply 7 (citing PO Resp. 30;
Ex. 1046, 176:1116).
We also disagree with Patent Owner because its argument narrowly
focuses on whether Funkhouser alone teaches the limitation rendering that
allows the local user to view the local user avatar in the virtual environment
while ignoring Petitioners reliance on the combination of Funkhouser and
Marathon. Reply 7 (citing PO Resp. 3536). Patent Owners argument that
Funkhouser does not teach this limitation is based improperly on the
assumption that Funkhousers Plate I is not an image displayed at a client
(i.e., to a local user). Reply 7 (citing PO Resp. 36).
The Petition cites numerous excerpts of Funkhouser, including
[c]lients . . . may include viewing capabilities in which the virtual
environment is played on the client workstation screen from the point of
view of one or more of its entities. Pet. 2526 (quoting Ex. 1005, 3). The
cited portions of Funkhouser relied upon by Petitioner also teach that a
client may map user input to control of particular entities. Reply 78
(quoting Ex. 1005, 3). Furthermore, the cited portions of Funkhouser relied
upon by Petitioner also teach displaying at a client station a user controlling
an avatar, and as Petitioner argues, Plate II further teaches a display from a
perspective that is not associated with the viewpoint of a particular avatar
and therefore, could include the local avatar in the display. Reply 8 (citing
Ex. 1005, 9).
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We, therefore, agree with Petitioners argument that the combination

of Funkhousers Plates I and II teaches a rendering that allows the local
user to view the local user avatar in the virtual environment with
Funkhousers display of the avatar in Plate II and the avatars perspective in
Plate I. Id. (citing Ex. 1005, 9). Moreover, Patent Owners argument
ignores Marathons teaching of switching between two viewpoints (i.e., a
viewpoint from the perspective of the local user avatar and a perspective of a
remote user avatar). Id.; Ex. 1021, 18. That is, Patent Owner does not rebut
or address Marathons switching between a viewpoint from the perspective
of the local user avatar and a perspective of a remote user avatar, while
Petitioner relied on the combination of Funkhouser and Marathon as
teaching or suggesting switching between a display that allows the local user
to view the local user avatar and a display from the perspective of a remote
user avatar. Reply 8.
Accordingly, for the reasons stated above, we agree with Petitioner
that the combination of Funkhouser and Marathon teaches or suggests the
limitation rendering that allows the local user to view the local user avatar
in the virtual environment, as recited claims 1, 2, and 18.
b. Funkhouser Is Compatible with Marathon

We next consider the parties dispute as to whether modifying
Funkhouser would be detrimental to the user experience because Funkhouser
teaches to limit sending messages to only a small subset of clients to which
the update is relevant. PO Resp. 2526; Reply 89; Pet. 4043. We begin
with Petitioners arguments.
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Petitioner argues there is nothing precluding the combination of

Funkhouser and Marathon because Marathons perspective-switching
feature pertains to client processing and is complementary to the server-
based disclosure in Funkhouser. Pet. 42 (citing Ex. 1002 81). Petitioner
further argues applying Marathons perspective-switching would not affect
Funkhousers server-based message culling because the message culling
could still be applied prior to the client determining which remote avatar
perspective to display and what should be included in that display. Pet. 42
(citing Ex. 1002 81). Petitioner additionally argues combining Funkhouser
and Marathon would represent combining familiar elements according to
known methods, yielding the predictable results of increasing a users
enjoyment and reducing the number of transmitted and processed audio
messages. Pet. 4243 (citing Ex. 1002 117).
Patent Owner argues Funkhousers background discusses the
problem caused by distributing every entitys state change to every
workstation participating in the virtual environment. PO Resp. 25. Patent
Owner further argues Funkhouser states it is necessary to develop a system
design and communication protocol that does not require sending update
messages to all participating hosts for every entity state change. Id.
(quoting Ex. 1005, 2). Patent Owner further argues that Funkhousers
intended purpose is to limit sending messages to only a small subset of
clients to which the update is relevant. PO Resp. 26. Patent Owner
additionally argues this means that entities do not receive real-time update
messages for other entities that are not visible, and therefore cannot display
the virtual environment from another entitys perspective. Id.
We agree with Petitioners showing that Marathons perspective-
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switching feature is compatible with, and would have been obvious to

combine with, Funkhousers system. We disagree with Patent Owners
argument that modifying Funkhouser would have been detrimental to the
user experience because of Funkhousers teaching to limit sending messages
to only a small subset of clients to which the update is relevant.
Funkhousers statement that it is necessary to develop a system design and
communication protocol that does not require sending update messages to all
participating hosts for every entity state change (Ex. 1005, 2) does not
imply that Funkhouser is incompatible with Marathon because this
implication focuses too narrowly on Funkhouser. Rather, a broad approach
should be taken. Indeed, the Supreme Court provided guidance in
determining the applicability of a references teachings in an obviousness
inquiry. In KSR International Co. v. Teleflex Inc., the Court explained that if
a feature has been used to improve one device, and a person of ordinary skill
in the art would have recognized that it would improve a similar device in
that field or another, implementing that feature on the similar device is likely
obvious. KSR Intl Co. v. Teleflex Inc., 550 U.S. 398, 417 (2007).
Here, the cited portions of Dr. Zydas testimony relied upon by
Petitioner explain that Marathons teaching of the perspective-switching
feature pertaining to client processing is complementary to the server-based
message culling disclosed in Funkhouser. Pet. 42 (citing Ex. 1002 81). In
addition, the cited portions of Dr. Zydas testimony relied upon by Petitioner
show that perspective-switching would not affect Funkhousers server-based
message culling because the message culling could still be applied prior to
the client determining which remote avatar perspective to display and what
should be included in that display. Pet. 42 (citing Ex. 1002 81).
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Accordingly, we find persuasive Petitioners showing and Dr. Zydas

supporting testimony that combining Funkhouser and Marathon would
represent combining familiar elements according to known methods that
yield the predictable results of increasing a users enjoyment and reducing
the number of transmitted and processed audio messages. Pet. 4243 (citing
Ex. 1002 117). We, therefore, agree with Petitioners showing on this
issue and disagree with Patent Owners argument that modifying
Funkhouser would be detrimental to the user experience.
c. Petitioners Proposed Combination Is Supported by the Record

Evidence
The parties next dispute focuses on whether Petitioners proposed
combination is supported by evidence. PO Resp. 2729; Reply 810. We
begin with Petitioners arguments.
Petitioner argues nothing precludes the combining Funkhouser and
Marathon because Marathons perspective-switching feature pertains to
client processing and complements the server-based disclosure in
Funkhouser. Pet. 42 (citing Ex. 1002 81). Petitioner further argues
applying Marathons perspective-switching would not affect Funkhousers
server-based message culling because the message culling could still be
applied prior to the client determining which remote avatar perspective to
display and what should be included in that display. Pet. 42 (citing Ex. 1002
81). Petitioner additionally argues combining Funkhouser and Marathon
would represent combining familiar elements according to known methods,
yielding the predictable results of increasing a users enjoyment and
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reducing the number of transmitted and processed audio messages. Pet. 42

43 (citing Ex. 1002 117).
In response, Patent Owner argues Petitioners rationale for
Funkhousers modification, namely that Marathon teaches a multiplayer
game that includes features designed to increase user enjoyment and use of
the virtual environment product, is not supported by evidence. PO Resp.
2728. Specifically, Patent Owner argues paragraph 79 of Dr. Zydas
declaration lacks evidence to support Petitioners characterizations of
Marathons view-switching feature. Id. at 28. In addition, Patent Owner
argues this paragraph of Dr. Zydas declaration parrots the exact same
statement as the Petition without presenting any evidence to substantiate it,
thus rendering it worthy of little to no weight under 37 C.F.R. 42.65(a).
Id. Furthermore, Patent Owner argues Dr. Zyda fails to explain if this
conclusion is his own or it would have been reached by a person having
ordinary skill in the art. Id. According to Patent Owner, Dr. Zyda fails to
establish how the conclusion pertaining to increasing a users enjoyment and
using the virtual environment system would have been known to a person
having ordinary skill in the art. Id.
In its reply, Petitioner argues Patent Owner does not rebut Petitioners
showing that adding Marathons perspective-switching feature to
Funkhousers virtual environment system would have been consumer-
friendly or increased a users enjoyment. Reply 9. In response to Patent
Owners argument that Petitioner provides no supporting evidence,
Petitioner argues that Dr. Zydas testimony itself is evidence because his
credentials (e.g., he is the Founding Director of the University of Southern
California (USC) GamePipe Laboratory and a USC professor responsible
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for developing games, and he has decades of experience researching

computer graphics and virtual environments) qualify him to opine on what a
person of ordinary skill in the art would have understood. Id. (citing
Ex. 1002 110). Petitioner also argues Marathon itself is evidence of two
benefits to a user of its perspective-switching capability that permits a user
to see your team-members screens when playing a multiplayer network
game and also allows a user to change to a different players point of
view when viewing a replay of the game after its conclusion. Id. at 910
(quoting Ex. 1021, 19, 20).
We are persuaded that the record evidence supports Petitioners
showing and are not persuaded by Patent Owners argument to the contrary.
Patent Owner does not rebut Petitioners showing that adding Marathons
perspective-switching feature to Funkhousers virtual environment system
would have been consumer-friendly or increased a users enjoyment.
Reply 9. In addition, we find Dr. Zydas testimony on this issue persuasive,
and sufficiently explained and supported. Ex. 1002 79; see Reply 9 (citing
Ex. 1002 110). The cited portions of Marathon relied upon by Petitioner
provide evidence of two benefits to a user of its perspective-switching
capability that permits a user to see your team-members screens when
playing a multiplayer network game and also allows a user to change to a
different players point of view when viewing a replay of the game after its
conclusion. Reply 910.
For the reasons stated above, record evidence supports Petitioners
proposed combination.
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d. Marathons Perspective-Switching Feature Is Compatible with

Funkhousers Message Culling System
The parties dispute whether adding Marathons perspective-switching

feature to Funkhousers message culling system would be compatible. PO
Resp. 2930; Pet. 4043. We begin with Petitioners arguments.
As we explain above, Petitioner argues nothing precludes combining
Funkhouser and Marathon because Marathons perspective-switching
feature pertains to client processing and complements the server-based
disclosure in Funkhouser. Pet. 42 (citing Ex. 1002 81). Petitioner further
argues applying Marathons perspective-switching would not affect
Funkhousers server-based message culling because the message culling
could still be applied prior to the client determining which remote avatar
perspective to display and what should be included in that display. Pet. 42
(citing Ex. 1002 81). Petitioner additionally argues combining Funkhouser
and Marathon would represent combining familiar elements according to
known methods yielding the predictable results of increasing user enjoyment
and reducing the number of transmitted and processed audio messages. Pet.
4243 (citing Ex. 1002 117).
In response, Patent Owner argues that adding Marathons perspective-
switching feature to Funkhouser message culling system would not have
been compatible. PO Resp. 2930. Patent Owner further argues that
Petitioners argument that nothing precludes the combination Funkhouser
and Marathon fails to address properly the legal requirements of
obviousness; that is, the law of obviousness does not presume references to
be combinable in every instance unless rebutted by some reason precluding
the combination. Id. at 29. In addition, Patent Owner argues even if all
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elements of the challenged claims were in existence prior to the earliest

effective filing date of the 998 patent, the law of obviousness states the
existence of all the claimed elements is not enough to establish obviousness
of the challenged claims. Id. at 2930.
We find persuasive Petitioners arguments and evidence supporting
the addition of Marathons perspective-switching feature to Funkhousers
system, and are not persuaded by Patent Owners contrary argument that
Marathons perspective-switching feature would have been incompatible
with Funkhouser message culling system. The cited portions of Dr. Zydas
testimony relied upon by Petitioner explain that Marathons perspective-
switching feature pertaining to client processing is complementary to the
server-based disclosure in Funkhouser. Pet. 42 (citing Ex. 1002 81). In
addition, the cited portions of Dr. Zydas testimony relied upon by Petitioner
show perspective-switching would not affect Funkhousers server-based
Accordingly, we agree with Petitioner and Dr. Zyda that combining
Funkhouser and Marathon would represent combining familiar elements
according to known methods that yield the predictable results of increasing a
users enjoyment and reducing the number of transmitted and processed
audio messages. Pet. 4243 (citing Ex. 1002 117). Thus, we disagree with
Patent Owners dispute of Petitioners obviousness showing because
Petitioner provides articulated reasoning with rational underpinning to
support the rationale to combine the teachings of Funkhouser and Marathon.
See KSR, 550 U.S. at 418.
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e. Adding Marathons Perspective-Switching Feature to

Funkhousers Message Culling System Would Not Create an
Unacceptable Delay
The parties also contest whether adding Marathons perspective-

switching feature to Funkhouser would create an unacceptable delay while
the information for the new perspective is sent from the server to the client.
PO Resp. 3033; Reply 1011, 1314. We begin with Petitioners
arguments.
As stated supra in Part II.E.3.b., Petitioner argues Marathons
perspective-switching feature would not affect Funkhousers server-based
should be included in that display.
In response, Patent Owner argues that adding a perspective-switching
feature results in an unacceptable delay. PO Resp. 3033. In response,
Petitioner argues Patent Owners argument that adding a perspective-
switching feature results in an unacceptable delay is not supported by the
record. Reply 1011. Petitioner further argues Patent Owner
mischaracterizes Dr. Zydas testimony, exaggerating both the amount of
delay and the effect of this delay on a users experience. Id. at 11.
According to Petitioner, although Dr. Zyda acknowledged that a teleport
feature could result in a system stalling from one frame to four frames while
the information is being loaded, Dr. Zyda explained that [i]t may not be
noticeable. Id. (quoting Ex. 2016, 164:8165:17). According to
Petitioner, even at the largest delay Dr. Zyda identified, four frames, and the
lowest framerate the NPS system on which Dr. Zyda worked in the early
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1990s, three frames per second, the largest delay would have been 1.33
seconds. Id. (citing Ex. 2016, 164:8165:17). In addition, Petitioner argues
Mr. Pesce acknowledged that a one or two second delay would not have
been irritating to a user and would have been below the threshold of
acceptability. Id. (citing Ex. 1046, 260:18261:19). Petitioner also argues
the alleged unacceptable lag to a user is undermined by the fact that [Patent
Owners] patents themselves provide no solution to this alleged problem
and would also have been an issue in the system described in [Patent
Owners] patents, which similarly perform computations in the servers
before messages are propagated. Reply 1314.
Patent Owner argues applying Funkhousers message culling
immediately prior to the client determining which remote user perspective
to display and what should be included in that display would have
introduced a significant delay in the teleportation/perspective change, while
the new information is downloaded and processed. PO Resp. 3031
(emphasis omitted) (citing Ex. 2017 9697, 100). In support of its
argument, Patent Owner refers to Dr. Zydas testimony that users would
think a teleport delay is sluggish, which causes users to get pretty
unhappy, and argues that this contradicts Dr. Zydas declaration.
PO Resp. 3132 (quoting Ex. 2016, 164:819, 165:214, 166:1316, 163:8
12, 163:2223). Patent Owner further argues Funkhouser discusses the need
for near real-time updates since large variances or delays in updates can
result in visually perceptible jerky or latent motion, and thus may be
disturbing to users and Funkhousers solution for limiting messages has
some built-in latency. PO Resp. 33 (quoting Ex. 1005, 1). Patent Owner
also argues Funkhouser states that the disadvantage of the RING system
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design is that extra latency is introduced when messages are routed through
servers, and [c]omputations are performed in the servers before messages
are propagated further adding to latency. PO Resp. 33 (quoting Ex. 1005,
4). According to Patent Owner, adding latency that is undesirable to users or
disturbing runs contrary to Funkhouser. PO Resp. 33 (citing Ex. 2017
104).
We agree with Petitioners showing that adding Marathons
perspective-switching feature to Funkhouser would have not created an
unacceptable delay while the information for the new perspective is sent
from the server to the client. We disagree with Patent Owners argument
that adding Marathons perspective-switching feature to Funkhouser would
have created such an unacceptable delay, thereby allegedly undermining
Petitioners proposed combination of Funkhouser and Marathon. Regarding
Dr. Zydas testimony, Patent Owner takes his testimony out of context.
Although Dr. Zyda testified that a one to four frame delay may occur and
users may be unhappy, Dr. Zyda explained that [i]t may not be noticeable.
Ex. 2016, 164:8165:17. That is, as Petitioner points out, the largest delay
Dr. Zyda identified was four frames and the lowest framerate his NPS
system displayed was three frames per second, which translates to the largest
delay being 1.33 seconds. Ex. 2016, 164:8165:17; see Reply 11. In
addition, Mr. Pesce acknowledged that a one or two second delay would not
have been irritating to a user and would be below the threshold of
acceptability. Ex. 1046, 260:18261:19. In addition, the alleged
unacceptable lag to a user is undermined by the fact that the 998 patent fails
to provide a solution to this alleged lag, which also would have been an issue
in the system described in the 998 patent that similarly performs
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computations in the servers before messages are propagated. Reply 13

14; see, e.g., Ex. 1001, 12:4663.
As for Patent Owners argument that adding latency that is
undesirable to users or disturbing runs contrary to Funkhouser, this does not
imply that Funkhouser is incompatible with Marathon. In KSR, the Court
explained that if a feature has been used to improve one device, and a person
of ordinary skill in the art would have recognized that it would improve a
similar device in that field or another, implementing that feature on the
similar device is likely obvious. 550 U.S. at 417.
Petitioner explain that Marathons teaching of perspective-switching feature
pertaining to client processing complements the server-based disclosure in
Funkhouser. Pet. 42 (citing Ex. 1002 81). In addition, the cited portions
of Dr. Zydas testimony relied upon by Petitioner show that perspective-
switching would not affect Funkhousers server-based message culling
because the message culling could still be applied prior to the client
determining which remote avatar perspective to display and what should be
included in that display. Id. (citing Ex. 1002 81). Accordingly, we are
persuaded by Petitioners showing and Dr. Zydas supporting testimony that
combining Funkhouser and Marathon would represent combining familiar
elements according to known methods that yield the predictable results of
increasing user enjoyment and reducing the number of transmitted and
processed audio messages. Id. at 4243 (citing Ex. 1002 117).
For the reasons given, we agree with Petitioner that its proposed
combination of Funkhouser and Marathon would not have created an
unacceptable delay.
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f. Any Delay from the Addition of Marathons Perspective-Switching

Feature to Funkhousers System Would Not Have Been
Detrimental to a Users Experience
The parties next dispute focuses on whether the speed of networks in

1995 was sufficiently slow that the delay caused by adding Marathons
perspective-switching feature to Funkhousers system would have been
detrimental to a users experience and would have undermined Funkhousers
teaching of providing a real virtual world experience, as Patent Owner
argues. PO Resp. 31; Reply 1113. We begin with Petitioners arguments.
In response, Patent Owner argues [t]he speed of network connections
were sufficiently slow that the lag caused by incorporating Marathons
perspective change into Funkhousers system would have been detrimental
to a users virtual world experience and would have undermined
Funkhousers purpose of providing a more real virtual world experience.
PO Resp. 31 (citing Ex. 2017 100). Furthermore, Mr. Pesces declaration
states [i]n the 1995 time period, the speed of network connections were
sufficiently slow that this lag would have been detrimental to a users virtual
world experience anywhere from several seconds to as much as a few
minutes and would have undermined [Funkhousers] purpose of providing
a more real virtual world experience. Ex. 2017 100.
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In reply, Petitioner argues Mr. Pesce acknowledged he only

considered network transmissions over a 14.4 kilobits per second modem or
possibly a 9600 bits per second modem (i.e., the slowest type of network
mentioned in Patent Owners patents) because all of [Patent Owners]
patents talk about using dial-up systems, not using Ethernet. Reply 12
(quoting Ex 1046, 256:20257:10, 264:17265:14; Ex. 2017 101).
Petitioner further argues the challenged claims of the 998 patent are not
limited to a slow dial-up modem and neither are Funkhouser or Marathon.
Reply 12. In support of its argument, Petitioner refers to Mr. Pesces
testimony, in which Mr. Pesce acknowledged that Funkhouser and Marathon
both teach faster network transmissions. Id. (citing Ex. 1046, 266:615,
268:22270:2; Ex. 1005, 5; Ex. 1021, 5, 17). Petitioner also refers to
Mr. Pesces acknowledgement that he failed to analyze if adding a
perspective-switching feature would have been feasible in a system with
higher transmission speeds, which, according to Petitioner, illustrates that
Patent Owners argument that the proposed combination would result in
unacceptable system lag is based on Mr. Pesces misconception the system
must utilize a dial-up network, rather than the faster networks actually in use
at the time and disclosed in the prior art. Id. at 1213 (citing Ex. 1046,
266:1623, 270:919). In addition, Petitioner refers to Mr. Pesces
testimony on re-direct that his opinions regarding the potential lag only
apply to the limited number of dependent claims that require multiple rooms
in the virtual space, and argues that Mr. Pesces opinions only apply to
claims of Patent Owners patents that exclude single-room environments.
Id. at 13 (citing Ex. 1046, 314:8315:20).
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As above, we find persuasive Petitioners evidence and reasoning

supporting its proposed combination of Marathons perspective-switching
feature with Funkhousers system. We disagree with Patent Owners
argument that the network speed was sufficiently slow that any delay caused
by this addition would have been detrimental to a users experience and
would have undermined Funkhousers teaching of providing a real virtual
world experience. Mr. Pesce acknowledges he only considered network
transmissions over a 14.4 kilobits per second modem or possibly a 9600 bits
per second modem (i.e., the slowest type of network mentioned in Patent
Owners patents), because all of [Patent Owners] patents talk about using
dial-up systems, not using Ethernet. Ex 1046, 256:20257:10, 264:17
265:14; Ex. 2017 101.
The instituted claims of the 998 patent, however, are not limited to a
slow dial-up modem and neither are Funkhouser or Marathon. Reply 12. In
particular, Mr. Pesce acknowledges that Funkhouser and Marathon both
teach faster network transmissions compared to a dial-up modem. Ex. 1046,
266:615, 268:22270:2; Ex. 1005, 5; Ex. 1021, 5, 17. Mr. Pesce also
acknowledges that he failed to analyze if adding a perspective-switching
feature would have been feasible in a system with higher transmission
speeds, which illustrates that Patent Owners argument that the combination
of Funkhouser and Marathon would have resulted in unacceptable system
delay is based on Mr. Pesces flawed premise that the system must utilize a
slower dial-up network, rather than the faster networks in use at the time and
taught in Funkhouser and Marathon. Ex. 1046, 266:1623, 270:919.
Accordingly, we disagree with Mr. Pesces testimony on this point.
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Moreover, although we disagree with Patent Owners argument and

Mr. Pesces testimony as to all claims of the 998 patent for the reasons
given above, we further note that on re-direct examination, Mr. Pesce
indicates that his opinions regarding the potential delay only apply to the
limited number of dependent claims (i.e., claims 7 and 16) that require
multiple rooms in the virtual world. Ex. 1046, 314:8315:20. That is, Mr.
Pesces opinions only apply to claims of Patent Owners patents that exclude
single-room environments. Id.
We, therefore, agree with Petitioners showing that the speed of the
networks in 1995 would not have created an unacceptable system delay that
would have prevented or undermined Petitioners proposed combination.
g. Marathons Perspective-Switching Would Not Expand the

Potentially Visible Area to the Entire Virtual Environment
The parties final dispute centers on whether Marathons perspective-
switching would have expanded the potentially visible area to the entire
virtual environment, thus requiring the server to send positional updates for
all users in the entire virtual environment and negating Funkhousers
message culling, as Patent Owner argues. PO Resp. 3335; Reply 10. We
begin with Petitioners arguments.
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In response, Patent Owner argues another option for combining

Funkhouser and Marathon is for the entities to maintain all the surrogates for
all other entities, which comports with Dr. Zydas interpretation of
Funkhouser sending updates for all entities that are potentially visible in the
next couple frames. PO Resp. 33 (citing Ex. 2017 108). Patent Owner
refers to Dr. Zyda testifying from reading the [Funkhouser] paper, youll
notice that it sends more stuff than just exactly what the client can see. So it
might it will send things that could potentially become visible, say, in the
next couple of frames. PO Resp. 3334 (quoting Ex. 2016, 43:215).
According to Patent Owner, Dr. Zyda also testified that something is
[p]otentially visible [if] its not in the field of view, but it could be in the
field of view in a frame or two. PO Resp. 34 (quoting Ex. 2016, 57:26).
Patent Owner also argues that Dr. Zyda testified that every other avatar
could potentially be visible in the next frame or two if an avatar has the
ability to teleport. PO Resp. 34 (citing Ex. 2016, 162:912). According to
Patent Owner, Dr. Zydas testimony implies requiring Funkhouser in the
proposed combination with Marathon to provide each entity with updates
from all other entities because, under Patent Owners interpretation of
Dr. Zydas testimony, they are all potentially visible in the next frame or two
and if the updates are not provided, this will lead to undesirable effects of
perspective-switching. PO Resp. 34 (citing Ex. 2016, 34:1015). Patent
Owner further argues Dr. Zydas testimony implies that each client
workstation would waste storage space [and] behavior simulation
processing for all remote entities and increase[es] the client workstation
processing burden, which frustrates the teaching of Funkhouser. PO Resp.
3435 (citing Ex. 1005, 3, 4; quoting Ex. 2017 108). Patent Owner argues
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Petitioner does not recognize nor reconcile the inconsistency between

Funkhouser and Marathon. PO Resp. 35.
In reply, Petitioner argues Patent Owners argument that Marathons
perspective-switching would have expanded the potentially visible area to
the entire virtual environment, thus requiring the server to send positional
updates for all users in the entire virtual environment and negating
Funkhousers message culling, is mutually exclusive from Patent Owners
argument that adding Marathons perspective-switching feature to
Funkhouser would have created an unacceptable delay while the information
for the new perspective is sent from the server to the client. Reply 10.
According to Petitioner, Patent Owners two arguments are mutually
exclusive because [i]f the server sends updates for the entire virtual space
there would be no possibility of additional lag as it downloads updates for a
specific location after a perspective switch and [c]onversely, if the server
sends updates for only a limited portion of the environment potentially
visible to a user avatar based on its location (as Funkhouser discloses) there
would be no need to send updates for the entire space as the potentially
visible region could be recalculated after a perspective switch. Id.
Petitioner further argues Patent Owners argument that Marathons
perspective-switching would have expanded the potentially visible area to
the entire virtual environment, thus requiring the server to send positional
updates for all users in the entire virtual environment and negating
Funkhousers message culling, can be dismissed easily. Id. Petitioner
explains Patent Owners argument depends on eliminating server-side
message culling, which runs contrary to both Funkhousers teaching and
Petitioners ground of unpatentability that was instituted by the Board. Id.
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We agree with Petitioner that Patent Owners argument depends on

eliminating server-side message culling, which runs contrary to both
Funkhousers server-side message culling and Petitioners asserted ground
of unpatentability. Reply 10. We disagree with Patent Owners argument
that Marathons perspective-switching would expand the potentially visible
area of Funkhousers clients to the entire virtual environment, thus requiring
the server to send positional updates for all users in the entire virtual
environment and negating Funkhousers message culling. In addition, the
cited portions of Dr. Zydas testimony relied upon by Petitioner demonstrate
that perspective-switching would not affect Funkhousers server-based
Accordingly, combining Funkhouser and Marathon would represent
combining familiar elements according to known methods that yield the
predictable results of increasing a users enjoyment and reducing the number
of transmitted and processed audio messages. Pet. 4243 (citing Ex. 1002
117).
Thus, Petitioner provides articulated reasoning with rational
underpinning to support the rationale to combine the teachings of
Funkhouser and Marathon. See KSR Intl, 550 U.S. at 418 (quoting Kahn,
441 F.3d at 989).
h. Undisputed Limitations of Claims 1, 2, 7, 8, 12, 16, 18, and 20

Petition regarding how the combination of Funkhouser and Marathon
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teaches or suggests the remaining limitations of claims 1, 2, 7, 8, 12, 16, 18,

and 20.15 Pet. 1543. Patent Owner does not contest that the combination of
Funkhouser and Marathon teaches or suggests these limitations. See PO
Resp. 2537; see also Reply 613. Based on our review of the Petition and
the supporting evidence, we find persuasive Petitioners arguments and
evidence, including citations to the references and Dr. Zydas testimony, and
we adopt them as the basis for our determination that the combination of
Funkhouser and Marathon teaches or suggests these limitations, thereby
rendering unpatentable for obviousness claims 1, 2, 7, 8, 12, 16, 18, and 20.
Pet. 1543.
i. Conclusion
In conclusion, for the reasons given above and based on our review of
the arguments and evidence of record, Petitioner has shown by a
preponderance of the evidence that the subject matter of claims 1, 2, 7, 8, 12,
16, 18, and 20 of the 998 patent would have been obvious over Funkhouser
and Marathon.
15
We note that claim 20 states displaying the plurality of avatars. [T]he
plurality of avatars lacks explicit antecedence. [T]he plurality of avatars
may refer to either: 1) both the local user avatar and the remote user
avatars, or 2) as merely the remote user avatars. We are persuaded that
Marathon teaches the claim limitation under either reading. Ex. 1021, 18.
Specifically, Marathon teaches an overhead map of all players and using the
delete key to switch views to other players in the game. Id.
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F. Obviousness of Claim 3 in View of Funkhouser, Marathon, and Sitrick
1. Sitrick (Ex. 1013)
We first assess Sitricks prior art status. Petitioner argues Sitrick is

prior art under 35 U.S.C. 102(b), and Patent Owner has not disputed
Petitioners position. Pet. 43; see generally PO Resp.; Tr. We agree with
Petitioner that Sitrick, a U.S. patent that was issued on June 4, 1985, more
than one year before the earliest possible effective filing date of the 998
patent, constitutes 102(b) prior art. See 35 U.S.C. 102(b); Ex. 1001,
[60], [63]; Ex. 1013, [22], [45].
Sitrick describes providing a multi-player gaming system on a
network. Ex. 1013, Abs., 1:45, 3:5657, 4:4851. In addition, Sitrick
discusses a user selecting a distinguishable visual image as her or his avatar.
Id. at Abs., 1:45, 3:5657, 4:4851. The user selection includes the color,
size, shape, or a digitized image of the users face. Id. at Abs.
2. Discussion
The parties dispute regarding the instituted ground challenging

claim 3 as obvious over Funkhouser, Marathon, and Sitrick focuses on
whether the cited prior art teaches a custom avatar. PO Resp. 3839; Reply
38. We begin with Petitioners arguments.
Petitioner argues the combination of Funkhousers avatars having a
geometric description and behavior, Marathons team color selection or
unique color selection in a multi-player game, and Sitricks selection of a
distinguishable visual image representation by which a user is identified
teaches the claimed custom avatar. Pet. 4344.
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In response, Patent Owner argues the combination of Funkhouser,

Marathon, and Sitrick fails to teach or suggest a custom avatar. PO Resp.
3839. Patent Owner also argues Petitioner acknowledged that the
combination of Funkhouser and Marathon fails to teach the claimed
limitation the local user is associated with a custom avatar created based on
input from the local user (see Pet. 3334), because Funkhousers spheres
that appear identical regardless of orientation fail to teach or suggest any
customization of entities and Marathons team color selection fails to teach a
custom avatar. PO Resp. 38. Patent Owner further argues Petitioner relies
on Sitrick to teach the claimed avatar; however, according to Patent
Owner, Sitrick fails to teach avatar as properly construed (i.e., Sitricks
avatar is not three-dimensional). Id.
Patent Owner also highlights that Sitrick was first filed on
September 30, 1982. Id. (citing Ex. 1013, 1). Patent Owner argues Sitricks
teaching of a user selecting a distinguishable image representation to
identify themselves is a two-dimensional image and, therefore, insufficient
to teach the three-dimensional custom avatar limitation recited in claim 3.
Id. According to Patent Owner, the 998 patent describes N
two-dimensional panels, which the combination of Sitrick, Marathon, and
Funkhouser fails to teach or suggest. Id. at 39. Patent Owner concludes its
argument by explaining the combination of Funkhouser, Marathon, and
Sitrick fails to teach or suggest avatar as properly construed. Id.
In reply, Petitioner argues Patent Owners argument attacks Sitrick for
its failure to teach customization of a three-dimensional avatar. Reply 14.
Petitioner further argues Patent Owner is left with no recourse should the
Board reject Patent Owners construction of avatar and adopt the
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construction proposed by Petitioner. Id. Petitioner argues Patent Owner

focuses too narrowly on whether Sitrick alone teaches customizable avatar
while failing to address the teaching of the combination of Funkhouser,
Marathon, and Sitrick. Id.
Petitioner argues even if we applied Patent Owners proposed
construction, Sitrick teaches a customizable user representation and
Funkhouser teaches three-dimensional avatars. Id. (citing Ex. 1013,
Abstract, 11:4145; Ex. 1005, 1, Plates I and II). In addition, Petitioner
argues Marathon teaches customizable avatars using its color-selection
feature. Id. (citing Ex. 1021, 1719). According to Petitioner, Dr. Zyda
explains that a person having ordinary skill in the art would have understood
this feature to permit users to customize the appearance of avatars such that
players may identify teammates and opponents in multiplayer games
visually. Id. at 1415 (citing Ex. 1002 147).
Petitioner argues Patent Owner merely argues that Marathons
choosing a team color fails to teach a custom avatar under its three-
dimensional construction without any explanation. Id. at 15. Petitioner
further argues it cannot respond to Patent Owners conclusory argument
other than to point out it is insufficient to rebut the showing in the Petition.
Id. Petitioner also argues aside from asserting that Sitrick teaches
customizable two-dimensional avatars rather than three dimensional avatars,
Patent Owner did not identify why these differences would have rendered
claim 3 non-obvious in view of the combination of Funkhouser, Marathon,
and Sitrick. Id. Petitioner concludes its argument by explaining Patent
Owner failed to rebut the obviousness challenge in the Petition. Id.
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We find persuasive Petitioners argument and evidence that the

combination of Funkhouser, Marathon, and Sitrick teaches or suggests
customization of an avatar, and are not persuaded by Patent Owners
arguments disputing Petitioners showing on this issue. As discussed supra
in Part II.C, we construed the claimed avatar as a graphical representation
of a user. The portions of Sitrick cited by Petitioner teach a customizable
user representation and Funkhouser teaches three-dimensional avatars.
Reply 14 (citing Ex. 1013, Abs., 11:4145; Ex. 1005, 1, Plates I and II).
Moreover, we note that Patent Owner, during the oral hearing, explicitly
stated that it does not dispute that Funkhouser teaches an avatar even
under its proposed narrower construction, which would require the graphical
representation to be three-dimensional. Tr. 67:1268:2. In addition, the
cited portions of Marathon relied upon by Petitioner teach customizable
avatars using its color-selection feature. Id. (citing Ex. 1021, 1719). Dr.
Zyda explains that a person having ordinary skill in the art would have
understood this feature to permit users to customize their appearance of
avatars such that players may identify teammates and opponents in
multiplayer games visually. Id. at 1415 (citing Ex. 1002 147).
As for Patent Owners argument that Sitrick was filed on September
30, 1982, to the extent that Patent Owner is suggesting a 1982 filing date
proves Sitrick does not teach avatars, we disagree with Patent Owner. As
discussed supra in Part II.C., we construed avatar as a graphical
representation of a user. Using our definition of avatar and Patent
Owners acknowledgement that Sitrick teaches a user selecting a
distinguishable image representation to identify themselves is a
two-dimensional image (PO Resp. 38), Sitrick teaches a custom avatar.
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Moreover, as we note above, Funkhouser teaches three-dimensional avatars,

and Petitioners obviousness arguments are based on a combination of
Funkhouser, Marathon, and Sitrick. See Ex. 1005, Plates I & II; Tr. 67:12
68:2.
Accordingly, for the reasons given, Petitioner has shown persuasively
that the combination of Funkhouser, Marathon, and Sitrick teaches a custom
avatar.
3. Undisputed Limitations of Claim 3

Petition regarding how the combination of Funkhouser, Marathon, and
Sitrick teaches or suggests the remaining limitations of claim 3. Pet. 4346.
Patent Owner does not contest that the combination of Funkhouser,
Marathon, and Sitrick teaches or suggests these limitations. See PO Resp.
3839; see also Reply 1415. Based on our review of the Petition and the
supporting evidence, we find persuasive Petitioners arguments and
Funkhouser, Marathon, and Sitrick teaches or suggests these limitations of
claim 3, thereby rendering it unpatentable for obviousness. Pet. 4346.
4. Conclusion
preponderance of the evidence that the subject matter of claim 3 of the
998 patent would have been obvious over Funkhouser, Marathon, and
Sitrick.
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G. Obviousness of Claims 1315 in View of Funkhouser, Marathon, and

Funkhouser 93
1. Funkhouser 93 (Ex. 1017)
Petitioner has submitted evidence to show that Funkhouser 93 was a

printed publication by August 6, 1993 and, thus, constitutes prior art to the
998 patent under 102(b). Pet. 910. Funkhouser 93 is an article included
in a collection of presentation materials (Ex. 1018, 1993 Conference
Book), compiled for a conference sponsored by the ACM held on August
16, 1993. Ex. 1018, cover, 18, 247; Ex. 1002 51. Dr. Zyda testifies that
all participants in the conference, including Dr. Zyda, received a copy of the
1993 Conference Book. Ex. 1002 51. The 1993 Conference Book and
Funkhouser 93 feature a 1993 copyright date and permit copying, generally
commercial advantage. Ex. 1018, 2, 247; Ex. 1017, 247. The 1993
Conference Book also provides information for ACM and non-ACM
members to order the 1993 Conference Book. Ex. 1018, 2. Accordingly,
Petitioner has submitted evidence sufficient to show that Funkhouser 93
was a printed publication by August 6, 1993the last day of the conference.
See Mass. Inst. of Tech., 774 F.2d at 1109. Patent Owner does not dispute
the publication date of Funkhouser 93. See generally PO Resp.; Tr. Based
on the record before us, Petitioner has shown by a preponderance of the
evidence that Funkhouser 93 qualifies as prior art under 35 U.S.C. 102(b).
Funkhouser 93 discusses an adaptive display algorithm that allows
users to set target frame rates. Ex. 1017, 247. In addition, Funkhouser 93
discusses workstations rendering image quality at less than full detail in
exchange for faster target frame rates when rendering complex images. Id.
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Funkhouser 93 also describes the omission of books in bookshelves when

applying the faster target frame rate. Id. at 25354.
2. Discussion
a. Funkhouser Teaches the Claimed First Processor

The parties dispute whether the claimed first processor is located on
a client side that produces a graphics display. Pet. 78, 1617; PO Resp.
1617 (citing Ex. 2017 90). We first discuss Petitioners arguments.
Petitioner argues Funkhouser teaches both a server-based
determination and a client-based determination of which avatars to display
to the client user. Pet. 1617 (citing Ex. 1005, 3, 4, 8). In response, Patent
Owner argues the claimed first processor is on a client side that includes a
graphics display and relies on Mr. Pesces testimony that U.S. Patent No.
5,659,691 (Ex. 1008, Durward) does not teach this limitation. PO Resp.
1617 (citing Ex. 2017 90).
We agree with Petitioners showing (see Pet. 1617 (citing Ex. 1005,
3, 4, 8)) that Funkhouser teaches both a server-based determination and a
client-based determination of which avatars to display to the client user. We
disagree with Patent Owners argument that the claimed first processor is
located on a client side because claim 2, from which claims 1315 depend
directly or indirectly, is silent as to where the processor is located. That is,
claim 2 simply recites [a] system . . . comprising . . . a first processor
absent of any language that the processor must be located on a client side.
Ex. 1001, 19:3156. In addition, even if the first processor were required
to be on the client side, as Patent Owner argues, the cited portions of
Funkhouser relied upon by Petitioner teach both a server-based
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determination and a client-based determination of which avatars to display

to the client user. Pet. 1617 (citing Ex. 1005, 3, 4, 8).
Furthermore, Patent Owners reliance on paragraph 90 of Mr. Pesces
Declaration is misplaced. Paragraph 90 refers to Durward and opines that
Durward fails to teach any avatars as construed by Patent Owner.
Ex. 2017 90. Durward, however, is not relied upon by Petitioner in this
alleged ground of unpatentability. Rather, Petitioner relies upon the
combination of Funkhouser, Marathon, and Funkhouser 93 to teach the
limitations of claims 1315.
Accordingly, for the reasons stated above, Petitioner has shown that
Funkhouser teaches the recited first processor, and we are not persuaded
by Patent Owners argument contesting this showing.
b. Funkhouser 93 Teaches Omitting Objects
The parties disagree over whether the combination of Funkhouser

93s omitting objects and Funkhousers avatars teaches or suggests
programmed to limit the number of remote user avatars, as recited in
claims 1315. PO Resp. 1720; Reply 1617. We begin with Petitioners
arguments.
Petitioner argues Funkhouser 93s teaching of levels of detail
representing no polygons at all teaches omitting objects. See Pet. 48
(citing Ex. 1017, 249). Petitioner also argues Funkhouser teaches remote
user avatars. Pet. 2324.
In response, Patent Owner argues Petitioner misstates Funkhouser
93s teachings. PO Resp. 17. In particular, Patent Owner disputes
Petitioners assertion that Funkhouser 93 teaches an optimization algorithm
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that generates and displays virtual environments that may cause the omission
of some objects within the environment if the objects exceed a maximum
number determined based on the result of a cost/benefit analysis and the
performance capabilities of the computer generating and displaying the
virtual environment. Id. That is, Patent Owner argues Funkhouser 93
teaches omission of books on bookshelves and texture on doors rather than
omitting objects or avatars. Id. at 1718. Patent Owner refers to Dr. Zydas
testimony to support its argument that Funkhouser 93 does not teach
avatars. Id. at 1820 (citing Ex. 2016, 259:16260:13, 260:17261:8).
According to Patent Owner, in Funkhouser 93, the bookshelf in Figure 11 is
the object and the books reflect a texture that can be adjusted to reach a
uniform frame rate.
In reply, Petitioner argues that the issue we should focus on is whether
the combination of Funkhouser, Marathon, and Funkhouser 93 teaches the
limitations of claims 1315 not whether Funkhouser 93 alone teaches
claims 1315. Reply 15 (citing PO Resp. 3537). Furthermore, Petitioner
argues Patent Owner does not rebut the fact that Funkhouser teaches avatars.
Reply 15 (citing PO Resp. 3537). Petitioner argues that Funkhouser 93
distinguishes between textures and omitted books, which teaches both
omission of books on bookshelves and omission of texture. Reply 16 (citing
Ex. 1017, 253). Petitioner also argues Funkhouser 93s disclosure of
levels of detail representing no polygons at all expressly refers to
omitting entire objects, and a no polygons at all detail level . . . will result
in [objects] being omitted from the display once the maximum number of
objects displayable within the maximum cost is exceeded. Id. at 16
(quoting Ex. 1017, 249, 251).
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We find persuasive Petitioners showing that the combination of

Funkhouser, Marathon, and Funkhouser 93 teaches or suggests
programmed to limit the number of remote user avatars, as recited in
claims 1315. We are not persuaded by Patent Owners argument that
Funkhouser 93 fails to teach omitting objects or avatars because one cannot
show nonobviousness by attacking references individually where the
challenges are based on combinations of references. See In re Merck & Co.,
800 F.2d 1091, 1097 (Fed. Cir. 1986) (citing In re Keller, 642 F.2d 413, 426
(CCPA 1981)). In this case, Funkhouser teaches the claimed avatar,
explaining, for example, that [c]lients execute the programs necessary to
generate behavior for their entities and [t]hey may . . . include viewing
capabilities in which the virtual environment is displayed on the client
workstation screen from the point of view of one or more of its entities and
depicting its entities as three-dimensional graphical representations. Ex.
1005, 85, 209 (Plate II). Petitioners showing that Funkhouser teaches
avatars is unrebutted. See generally PO Resp.; Tr. Patent Owner, during the
oral hearing, explicitly stated that it does not dispute that Funkhouser
teaches an avatar even under its proposed narrower construction, which
would require the graphical representation to be three-dimensional. Tr.
67:1268:2.
We agree with Petitioners showing that Funkhouser 93 teaches
omitting objects from the display under certain circumstances. As Petitioner
points out, Funkhouser 93 makes clear the possibility that the target frame
time [may] not [be] long enough to render all potentially visible objects even
at the lowest level of detail and explains that its approach can handle such a
situation if levels of detail representing no polygons at all are allowed,
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such that only the most valuable objects are rendered. Id. at 249; see id.
at 253, Fig. 11. Even Patent Owner acknowledged at the oral hearing that
Funkhouser 93s reference to levels of detail representing no polygons at
all means no object or, in other words, exclud[ing] objects. Tr. 69:11
20, 71:822, 74:2225; see id. at 189:35. These disclosures demonstrate
that Funkhouser 93 teaches that objects that cannot be rendered within the
target frame rate, even at the lowest detail or accuracy level, may be
excluded or omitted from the display. See Reply 16; Tr. 55:17, 191:14
192:12.
In addition, in discussing Figure 11, Funkhouser 93 distinguishes
between textures and omitted books, i.e., omission of texture on the
bookshelves in Figure 11b1 . . . and omission of books on bookshelves and
texture on doors in Figure 11 c1. Reply 16 (citing Ex. 1017, 253). We find
these disclosures regarding Figure 11 and the figure itself to lend additional
support to Funkhouser 93 teaching or at least suggesting omitting objects
where they cannot be rendered at the target frame rate.
For the reasons given, we agree with Petitioners showing that the
combination of Funkhouser, Marathon, and Funkhouser 93 teaches or
suggests programmed to limit the number of remote user avatars as recited
in claims 1315.
c. Funkhouser 93 Teaches a Limit of Remote User Objects Shown
Regarding the next dispute, the parties contest whether

Funkhouser 93 teaches limit[ing] the number of remote user objects
shown on the graphic display, as recited in claims 1315. PO Resp. 20
22; Reply 1617. We start with Petitioners arguments.
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Petitioner relies on pages 249 and 251 of Funkhouser 93, which,

according to Petitioner, teaches that objects can be assigned a no polygons
at all detail level that results in objects being omitted from the display once
the maximum number of objects displayable within the maximum cost is
exceeded. Pet. 10, 48 (citing Ex. 1017, 249, 251).
In response, Patent Owner argues that Funkhouser 93 does not
feature a limit of the remote user avatars that are shown. PO Resp. 20.
Rather, according to Patent Owner, Funkhouser 93s optimization algorithm
renders each object at the level of detail chosen by the cost/benefit
optimization algorithm of Funkhouser 93 such that cost heuristic represents
an estimate of the time required to render an object and the benefit
heuristic represents an estimate of the contribution to model perception
of an object. Id. Patent Owner argues Funkhouser 93 does not teach
excluding a number of objects after the maximum cost is claimed; rather,
according to Patent Owner, Funkhouser 93 teaches an algorithm for each
potentially visible object based on value, but does not teach omitting
objects/avatars having lower value once the maximum cumulative benefit is
reached. PO Resp. 20. According to Patent Owner, this may result in
objects having a lower value (i.e., a bookshelf reduced texture and a lower
accuracy level), which results in books being omitted, which is not the same
as filtering objects based on computing resources or user selection. Id. at
2122.
In reply, Petitioner argues that Funkhouser 93 teaches that objects
can be assigned a no polygons at all detail level that results in objects
being omitted from the display once the maximum number of objects
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displayable within the maximum cost is exceeded. Reply 16 (citing

Ex. 1017, 249, 251).
limit[ing] the number of remote user objects shown on the graphics
display, as recited in claims 1315. We are not persuaded by Patent
Owners argument that Funkhouser 93 fails to teach or suggest a limit of
remote user avatars shown because, as explained above, Funkhouser 93
teaches a level of detail representing no polygons and refers to using such
a detail level where the target frame time is not long enough to render all
potentially visible objects even at the lowest level of detail, such that only
the most valuable objects are rendered. Ex. 1017, 249. And Patent
Owner acknowledged at the hearing that this disclosure refers to the
possibility of omitting objects. Tr. 69:1120, 71:822, 74:2225; see id. at
189:35. Moreover, Funkhouser 93 teaches that its optimization algorithm
results in books on a bookshelf being omitted (i.e., limit the number of
remote user objects) as a result of a selection made by the local user (i.e.,
user selection) and the optimization algorithm (i.e., based on computing
resources or user selection). Pet. 50 (citing Ex. 1017, 247); Reply 16 (citing
Ex. 1017, 253).
As for the avatar limitation, as stated supra in Part II.C, we
construed avatar as a graphical representation of a user without the
three-dimensional modifier proposed by Patent Owner. In addition, Patent
Owner explicitly stated that it does not dispute that Funkhouser teaches an
avatar even under its proposed narrower construction, which would
require the graphical representation to be three-dimensional. Tr. 67:12
68:2.
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Accordingly, Petitioner has shown that the combination of

Funkhouser, Marathon, and Funkhouser 93 teaches or suggests to limit the
number of remote user avatars, as recited in claims 1214. We disagree
with Patent Owners arguments disputing this showing.
d. The Combination of Funkhouser, Marathon, and Funkhouser 93

Does Not Lack Motivation
The parties next arguments focus on whether the combination of

Funkhouser, Marathon, and Funkhouser 93 lack motivation. PO Resp. 22
25; Reply 17. We begin with Petitioners arguments.
Petitioner argues it would have been obvious to a person having
ordinary skill in the art to combine Funkhouser 93s optimization algorithm
with Funkhousers system. Pet. 5053. Petitioner advances specific
rationale for the combination in its Petition as discussed further below. See
id.
In response, Patent Owner argues although Funkhouser cross-
references Funkhouser 93, Petitioner and Dr. Zyda fail to provide an
explanation as to what Funkhousers cross-reference to Funkhouser 93
means. PO Resp. 22. In particular, Patent Owner argues that Petitioner and
Dr. Zyda each fail to provide any explanation as to how this reference means
that Funkhouser 93s optimization algorithm directed to a level of detail
selection would have been used to modify Funkhousers message scheme.
Id at 2223. Moreover, Patent Owner argues that Dr. Zydas inconsistent
testimony should be disregarded or entitled to little weight. PO Resp. 23
25. According to Patent Owner, Mr. Pesce opines the cross-reference of
Funkhouser 93 in Funkhouser does not support Petitioners proposed
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combination and it should be limited to explaining that an algorithm for

determining the optimal set of messages can be based on factors that affects
frames-per-second, such as in Funkhouser 93. Id. at 25 (citing Ex. 2017
6970).
In reply, Petitioner argues that Funkhouser 93s level of detail
determination occurs separately from the field of view calculation taught in
both Funkhouser and Funkhouser 93, and therefore, it would have been a
simple matter to add the process taught in Funkhouser 93 to the system
described in Funkhouser. Reply 17 (citing Ex. 1002 162, 164).
Petitioner refers to Mr. Pesces testimony that a field of view determination
occurs in a first step, and then an optimization algorithm is applied and that
the optimization objectives of both Funkhouser 93 and Funkhouser are not
incompatible. Reply 17 (citing Ex. 1046, 215:19216:7, 216:825).
We agree with Petitioner. Petitioner articulates a sufficient rationale
to combine Funkhouser 93s optimization algorithm and Funkhousers
system, and we do not find persuasive Patent Owners argument that there is
no motivation to combine Funkhouser, Funkhouser 93, and Marathon. Pet.
5051. In particular, Petitioner argues that it would have been obvious to
one of ordinary skill in the art to combine Funkhouser 93s optimization
approach with the system taught in Funkhouser, and with Marathons
perspective-switching feature, resulting in the client determining which
objects, including other user avatars, to display based on the orientation of
the client avatar, on the performance capabilities of the client computer, and
desired frame rate of the displayed environment as selected by the user. Id.
(citing Ex. 1002 162163). Although Dr. Zydas testimony regarding
Funkhousers cross-reference to Funkhouser 93 is inconsistent in that he
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initially did not recall this cross-reference referenced in his declaration, this
inconsistency does not persuade us to disregard or entitle little weight to his
testimony. Even Mr. Pesce acknowledges that field of view is the first step
(i.e., in both Funkhouser 93 and Funkhouser), then the next step would be
to take everything that was in the field of view and run the [Funkhouser 93]
benefit heuristic on it, and he also acknowledges the optimization goals of
both Funkhouser 93 and Funkhouser are not incompatible. Ex. 1046,
215:19216:25.
We, therefore, do not disregard or givelittle weight to paragraphs 162
163 of Dr. Zydas testimony because we determine paragraphs 162163
provide sufficient support for Petitioners articulated reasoning with rational
underpinnings to support the motivation to combine the teachings of
Funkhouser 93, Funkhouser, and Marathon. Kahn, 441 F.3d at 989.
e. Undisputed Limitations of Claims 1315

Funkhouser 93 teaches or suggests the remaining limitations of claims 13
15. Pet. 4653. Patent Owner does not contest that the combination of
Funkhouser, Marathon, and Funkhouser 93 teaches or suggests these
limitations. See PO Resp. 1625; see also Reply 1517. Based on our
review of the Petition and the supporting evidence, we find persuasive
Petitioners arguments and evidence, including citations to the references
and Dr. Zydas testimony, and we adopt them as the basis for our
determination that the combination of Funkhouser, Marathon, and
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Funkhouser 93 teaches or suggests these limitations of claims 1315,

thereby rendering claims 1315 unpatentable for obviousness. Pet. 4653.
f. Conclusion
preponderance of the evidence that the subject matter of claims 1315 of the
998 patent would have been obvious over Funkhouser, Marathon, and
Funkhouser 93.
H. Obviousness of Claim 17 in View of Funkhouser, Marathon, and

Wexelblat
1. Wexelblat (Ex. 1020)

We first assess Wexelblats prior art status. Petitioner argues
Wexelblat is prior art under 35 U.S.C. 102(b), and Patent Owner has not
disputed Petitioners position. Pet. 54; see generally PO Resp.; Tr. We
agree with Petitioner that Wexelblat, a U.S. patent that issued on June 4,
1991more than one year before the earliest possible effective filing date of
the 998 patent, constitutes 102(b) prior art. See 35 U.S.C. 102(b); Ex.
1001, [60], [63]; Ex. 1020, [22], [45].
Wexelblat discusses an artificial reality with interacting users.
Ex. 1020, 6:617:10. In addition, Wexelblat discusses a user teleporting
from a current location to another location. Id.
2. Discussion
The parties dispute on this ground focuses on whether it would have
been obvious to combine Wexelblats teleportation feature with
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Funkhousers system, as Petitioner proposes. PO Resp. 3738; Reply 18.

We begin with Petitioners arguments.
Petitioner argues combining Funkhouser, Marathon, and Wexelblat
would represent combining familiar elements according to known methods,
yielding the predictable results of returning to a location of interest after an
initial visit to another location. Pet. 5455 (citing Ex. 1002 177178).
Patent Owner responds by arguing incorporating Wexelblats
teleportation into Funkhousers system poses the same unresolved
problems as incorporating perspective changes discussed above with
respect to the combination of Funkhousers system and Marathons
perspective-switching. PO Resp. 37 (citing Ex. 2017 94, 101, 104, 108).
According to Patent Owner, in one scenario, a users experience is harmed
because of delays in switching to a new perspective view or avatars popping
up out of nowhere in the new view while the client is downloading the
avatars. PO Resp. 37 (citing Ex. 2017 100101). According to Patent
Owner, in other scenarios, Dr. Zydas interpretation implies the client
processes data for all other avatars could be potentially visible, i.e. visible
in the next couple of frames. PO Resp. 3738 (citing Ex. 2017 108).
Patent Owner concludes its argument by explaining that one of ordinary
skill in the art would not have been motivated to implement Wexelblats
teleportation into Funkhouser. PO Resp. 38 (citing Ex. 2017 110).
In response, Petitioner argues because Patent Owner relies on the
same rationale as it does for the combination of Funkhousers system and
Marathons perspective-switching, Patent Owners arguments fail for the
same reasons explained with respect to the rationale for combining
Funkhouser and Marathon. Reply 18.
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Here, we agree with Petitioners showing regarding its proffered

addition of Wexelblats teleportation feature to the combination of
Funkhouser and Marathon. In particular, we agree with Petitioners showing
that applying Wexelblats teaching that allows users to navigate from room
to room in a virtual environment with Marathons perspective-switching and
Funkhousers system would allow users to return quickly to a location of
interest after an initial visit. Pet. 5455 (citing Ex. 1002 177; Ex. 1020,
6:677:5). Furthermore, we agree with Petitioners showing that combining
Funkhouser, Marathon, and Wexelblat would represent combining familiar
elements according to known methods, yielding the predictable results of
returning to a location of interest after an initial visit to another location.
Pet. 5455 (citing Ex. 1002 177178). We are not persuaded by Patent
Owners argument because Patent Owner largely repeats the same
arguments against the combination of Funkhouser and Wexelblat as what
was argued already against the combination of Funkhousers system and
Marathons perspective-switching. See supra Part II.E; PO Resp. 3738.
Accordingly, for the reasons discussed supra in Part II.E, we disagree with
Patent Owners argument that it would not have been obvious to combine
Wexelblats teleportation feature with Funkhousers system.
3. Undisputed Limitations of Claim 17

Wexelblat teaches or suggests the remaining limitations of claim 17.
Pet. 5355. Patent Owner does not contest that the combination of
Funkhouser, Marathon, and Wexelblat teaches or suggests these limitations.
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See PO Resp. 3738; see also Reply 1718. Based on our review of the
Petition and the supporting evidence, we find persuasive Petitioners
arguments and evidence, including citations to the references and Dr. Zydas
testimony, and we adopt them as the basis for our determination that the
combination of Funkhouser, Marathon, and Wexelblat teaches or suggests
these limitations of claim 17. Pet. 5355.
4. Conclusion
preponderance of the evidence that the subject matter of claim 17 of the 998
patent would have been obvious over Funkhouser, Marathon, and Wexelblat.
I. Real Parties-in-Interest
District Court Case more than one year before the Petition was filed. PO
with 35 U.S.C. 312(a)(2) and 37 C.F.R. 42.8, and institution of review
was barred under 35 U.S.C. 315(b). PO Resp. 3945. Patent Owner
argues the Board erred in denying its Motion for Routine or Additional
Discovery related to this issue (Paper 9) and in instituting review despite
Patent Owners assertions of Activisions status as a real party in interest.
PO Resp. 3945.
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Institution Decision. See Inst. Dec. 2128 ( II.H); Paper 11. We note that
given in the Institution Decision. Inst. Dec. 2128 ( II.H).
J. Alleged Unconstitutionality

without Article III oversight. PO Resp. 4547. Petitioner responds that the
U.S. Court of Appeals for the Federal Circuit has addressed such arguments
and held that the inter partes review process is not unconstitutional. Reply
1819. Petitioner is correct that the Federal Circuit has addressed the issue
and rejected a challenge to the constitutionality of inter partes reviews as
violative of Article III. See MCM Portfolio LLC v. Hewlett-Packard Co.,
(U.S. Oct. 11, 2016). Accordingly, we disagree with Patent Owners
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K. Patent Owners Motion to Exclude

Opp. 11; see generally Pet.; Reply. Accordingly, Patent Owners Motion to
Exclude is dismissed as moot as to Exhibits 1033, 1034, 1037, and 1042.
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from the relevant time period. Opp. 67; see id. at 10. In other words,
Owners argument regarding Rule 403 should . . . be denied, because the
only unfair prejudice Patent Owner alleges is that the Board will give Mr.
Pesces testimony little or no weight but this would be the correct outcome
for the reasons identified in its Reply. Id. at 10.
Patent Owner responds that Petitioner has no basis to argue that the
(quoting Ex. 1046, 28:813).
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Ex. 1046, 85:421, 89:1090:7, 204:12205:20, 222:1223:6. Therefore,
documenting his drug use beginning in college16 and how this usage
Robinson, 583 F.3d 1265, 1272 (10th Cir. 2009) (recognizing that drug use
16
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the 1990s.
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(5th Cir. 1981) (holding that exclusion of evidence under Rule 403s
Patent Owner alleges is that all of Mr. Pesces testimony will be given little
to no weightwhich is not accurate, as we are considering the admissibility
of Exhibit 1041 only for its relevance to his capacity and reliability in
perceiving and recalling events and other details from the early to mid-
1990s, on which he offers testimony. See Mot. 8. Although we are
cognizant of the sensitive nature of evidence of drug use, there is minimal
17
any of these apply, and we conclude that they do not. See id.; Mot. 78.
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risk of any unfair prejudice from considering Exhibit 1041 for this limited
purpose. In sum, the probative value of Exhibit 1041 for this limited
purpose is not substantially outweighed by any danger of unfair prejudice
and, thus, exclusion under Rule 403 is not warranted.
regarding Mr. Pesces credibility generally. Opp. 7; see id. at 6, 10.
See United States v. Tanksley, No. 93-6346, 2016 WL 502659, at *3 (6th
Cir. 1997) (unpublished) (Evidence of prior drug use generally is not
relevant to the issue of truthfulness . . . .).
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relevant and admissible. See Reply 3; Opp. 610. Nor do we see any such
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III. CONCLUSION

evidence that: claims 1, 2, 7, 8, 12, 16, 18, and 20 of the 998 patent are
unpatentable under 35 U.S.C. 103(a) in view of Funkhouser and Marathon;
claim 3 is unpatentable under 35 U.S.C. 103(a) in view of Funkhouser,
Marathon, and Sitrick; claims 1315 are unpatentable under 35 U.S.C.
103(a) in view of Funkhouser, Marathon, and Funkhouser 93; and
claim 17 is unpatentable under 35 U.S.C. 103(a) in view of Funkhouser,
Marathon, and Wexelblat.
IV. ORDER
evidence that claims 1, 2, 7, 8, 1218, and 20 of the 998 patent are
unpatentable;
(Paper 33) is dismissed as to Exhibits 1033, 1034, 1037, and 1042 and
denied as to Exhibit 1041; and
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PETITIONER:
Michael T. Rosato
Matthew A. Argenti
Andrew Brown
mrosato@wsgr.com
margenti@wsgr.com
asbrown@wsgr.com
PATENT OWNER:
Wayne M. Helge
Michael R. Casey
whelge@dbjg.com
mcasey@dbjg.com
88
571-272-7822 Date: December 6, 2016

____________

____________
BUNGIE, INC.,
Petitioner,
v.
WORLDS INC.,
Patent Owner.
____________
Case IPR2015-01319
Patent 8,082,501 B2
____________


Inter Partes Review
35 U.S.C. 318(a) and 37 C.F.R. 42.73
IPR2015-01319
Patent 8,082,501 B2
I. INTRODUCTION

review of claims 18, 10, 12, and 1416 of U.S. Patent No. 8,082,501 B2
(the 501 patent). Paper 3 (Pet.). Patent Owner, Worlds Inc., filed a
Preliminary Response pursuant to 35 U.S.C. 313. Paper 12 (Prelim.
Resp.). Upon consideration of the Petition and Preliminary Response, on
November 30, 2015, we instituted an inter partes review of claims 18, 10,
12, and 1416 (instituted claims), pursuant to 35 U.S.C. 314. Paper 14
(Dec.).
Subsequent to institution, Patent Owner filed a Patent Owner
Response (Paper 20 (PO Resp.)) and a Supplement to the Response
(Paper 22 (Supp. Resp.)). Petitioner filed a Reply to Patent Owners
Response. Paper 31 (Reply). Patent Owner filed a Motion to Exclude
(Paper 33 (Mot.) and Petitioner filed an Opposition to the Motion to
Exclude (Paper 36 (Opp.)), to which Patent Owner filed a Reply (Paper 38
(Mot. Reply)). An oral hearing was held on August 17, 2016, and a
transcript of the hearing is included in the record. Paper 41(Tr.).
and 37 C.F.R. 42.73. For the reasons discussed herein, Petitioner has
shown by a preponderance of the evidence that claims 18, 10, 12, and 14
16 of the 501 patent are unpatentable. See 35 U.S.C. 316(e).
A. Related Matters

v. Activision Blizzard, Inc., Case No. 1:12-cv-10576 (D. Mass.) (District
Court Case). Paper 5. In addition, the 501 patent is related to the patents
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at issue in IPR2015-01264, IPR2015-01268, IPR2015-01269,

IPR2015-01321, and IPR2015-01325. Id.

We instituted inter partes review on the following grounds of
unpatentability asserted by Petitioner:

Funkhouser
(Ex. 1005)1 and Sitrick 103(a)3 16, 12, 14, and 15
(Ex. 1013)2
Funkhouser, Sitrick,
and Wexelblat 103(a) 7 and 16
4
(Ex. 1020)
Funkhouser, Sitrick,
and Funkhouser 93 103(a) 8 and 10
5
(Ex. 1017)
Durward (Ex. 1008)6 102(a) 16, 12, 14, and 15
Durward and
103(a) 7 and 16
Wexelblat
1
(1995).
2
3
The Leahy-Smith America Invents Act (AIA), Pub. L. No. 11229,
revised 35 U.S.C. 103 and the relevant sections took effect on March 16,
2013. Because the application from which the 501 patent issued was filed
before that date, our citations to Title 35 are to its pre-AIA version.
4
5
6
U.S. Patent No. 5,659,691, filed Sept. 23, 1993, issued Aug. 19, 1997.
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Patent 8,082,501 B2

Durward and
103(a) 8 and 10
Schneider (Ex. 1019)7
C. The 501 Patent
The 501 patent discloses a client-server architecture for a

graphical, multi-user, interactive virtual world system. Ex. 1001, [57],
3:68. In the preferred embodiment, each user chooses an avatar to
represent the user in the virtual world, id. at 3:2527, and interacts with a
client system, which is networked to a virtual world server, id. at 3:14
15. [E]ach client . . . sends its current location, or changes in its current
location, to the server. Id. at 3:4044; see id. at 2:4447. The server, in
turn, sends each client updated position information for neighbors of the
clients user. Id. at [57], 2:4449, 3:4044, 14:2832.
3:3035, 4:5456, 7:5557. This view shows avatars representing the other
users who are neighbors of the user. Id. at [57], 2:4244.
D. The Instituted Claims
Of the instituted claims 18, 10, 12, and 1416, claims 1, 12, and 14
are independent claims. Id. at 19:2020:65. Claim 1 is illustrative and
reproduced below:
1. A method for enabling a first user to interact with other users
in a virtual space, each user of the first user and the other users
7
U.S. Patent No. 5,777,621, filed June 7, 1995, issued July 7, 1998.
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Patent 8,082,501 B2
being associated with a three dimensional avatar representing

said each user in the virtual space, the method comprising the
steps of:
customizing, using a processor of a client device, an avatar in
response to input by the first user;
receiving, by the client device, position information
associated with fewer than all of the other user avatars in
an interaction room of the virtual space, from a server
process, wherein the client device does not receive
position information of at least some avatars that fail to
satisfy a participant condition imposed on avatars
displayable on a client device display of the client device;
determining, by the client device, a displayable set of the
other user avatars associated with the client device
display; and
displaying, on the client device display, the displayable set of
the other user avatars associated with the client device
display.
II. ANALYSIS
A. Level of Ordinary Skill in the Art

Pet. 7; Ex. 1002 55. Mr. Pesce similarly testifies that a person of ordinary
skill in the art would have had at least a bachelors degree or equivalent in
computer science, with two or more years of experience in coding related to
both virtual environments and computer networking. Ex. 2017 33.
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Patent 8,082,501 B2
computer networking). Neither party asserts that there is any such
B. Mr. Pesces Qualifications as an Expert

cross examination, providing examples of these alleged deficiencies in
is not clear how Mr. Pesce qualifies as an expert in this field, citing
Mr. Pesces deposition testimony regarding the amount of experience he had
in 19958 and his lack of an educational degree beyond high school. Reply 3
8
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Patent 8,082,501 B2
also asserts that Mr. Pesce was unwilling to address his documented . . . use
of psychedelic drugs during the 1990s (Ex. 1041) and whether that drug use
affected his recollection of events during the period relevant to the [501]
patent[]. See also, Ex. 1046 at 46:1147:21, 50:2553. Reply 3.
Dr. Zydas declaration (see, e.g., Pet. 411; Reply 25; Ex. 1002 5355),
and represented at the hearing that it does not contest, for purposes of this
proceeding, priority to the provisional (Tr. 195:17). Patent Owner also
takes the position that the 501 patent is entitled to priority to the provisional
and represented at the hearing that its specification is nearly identical to that
of the 501 patent. See, e.g., id. at 90:591:3, 92:1015; Ex. 2017 34.
Based on our review of the 296 provisional, we agree with Patent Owners
representation that its specification is nearly identical to the 501 patent
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Patent 8,082,501 B2
In his declaration and curriculum vitae, Mr. Pesce details his relevant
work experience from 1984 to the present as well as his teaching experience
and numerous technical publications and presentations. See Ex. 2017 3
19, 3542, pp. 6782; see also Ex. 1046, 19:821:16, 39:1140:20. Having
reviewed this experience and Mr. Pesces technical testimony, we find his
knowledge, skill, and experience in the relevant field of networked virtual
environments, as well as computer networking and virtual reality more
generally, sufficient to render him qualified to offer expert testimony in this
proceeding under Rule 702.
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Patent 8,082,501 B2
in our finding in II.A regarding the level of ordinary skill in the art.
Pet. 11 (proffering definition of one of ordinary skill in the art as someone
who had, through education or practical experience, the equivalent of a
Ex. 1002 55 (same); Ex. 2017 33; see id. 3, 35; Reply 3; Opp. 7. We
note that Mr. Pesce did attend the Massachusetts Institute of Technology
(MIT) for four semesters. Ex. 2017 3; Ex. 1046, 19:814; see id. at
19:1521:16. As we explain above, we find Mr. Pesces experience, skill,
9
address below in II.M. We consider Exhibit 1041 here only for the limited
purpose for which we find it relevant and admissible in II.M.
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Patent 8,082,501 B2
Ex. 1041; Ex. 1046, 46:11-47:21, 50:2553); Ex. 1041; Ex. 1046, 46:11
of his perception and recollection. See infra II.M; see, e.g., Ex. 2017
3644, 49.a.iv, 59; Ex. 1046, 85:421, 89:1090:7, 204:12205:20,
deficiencies in Mr. Pesces testimony on claim construction go to the weight
to be accorded to Mr. Pesces testimony on these particular substantive
issues. See Reply 13. We have considered these alleged deficiencies and
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Patent 8,082,501 B2
address them, as appropriate, in our analysis below of the issues to which

they pertain.
C. Claim Construction
the . . . Office); Black & Decker, Inc. v. Positec USA, Inc., 646 Fed. Appx
1019, 1024 (Fed. Cir. 2016) (holding that in an inter partes review,
1303 (Fed. Cir. 2005) (en banc)). Because neither party had addressed this
their future briefing the expiration date of the 501 patent claims on which
we institute inter partes review. Inst. Dec. 4 n.1.
10
Decision in this proceeding. The amended rule does not apply to this
proceeding, because it applies only to petitions filed on or after May 2, 2016.
See Amendments to the Rules of Practice for Trials Before the Patent Trial
and Appeal Board, 81 Fed. Reg. 18,750, 18,766 (Apr. 1, 2016).
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Patent 8,082,501 B2
In its Response, Patent Owner represented that the 501 patent expires
on November 12, 2016, with an explanation supporting the calculation of
this expiration date. See PO Resp. 712. In its Supplement to the Response,
Patent Owner reiterated the expiration date of the 501 patent to be
November 12, 2016. See Supp. Resp. At the oral hearing, Patent Owner
confirmed this expiration date and Petitioner indicated that it agrees with and
does not challenge this date. See Tr. 14:116, 88:889:7. Based on the
parties agreement and our review of the record, we agree that the
501 patent expired on November 12, 2016. See, e.g., Ex. 1001, [22], [60],
[63]; Ex. 1004, 322, 339.
The 501 patent is now expired.11 In an inter partes review, the
proper claim construction standard in an expired patent is set forth in
Phillips, 415 F.3d 1303 (Fed. Cir. 2005) (en banc). See In re Rambus Inc.,
694 F.3d 42, 46 (Fed. Cir. 2012) ([T]he Boards review of the claims of an
expired patent is similar to that of a district courts review.). Under the
Phillips standard, claim terms are given their ordinary and customary
meaning, as would be understood by one of ordinary skill in the art in the
context of the entire patent disclosure. Thorner v. Sony Comput. Entmt Am.
LLC, 669 F.3d 1362, 136566 (Fed. Cir. 2012).
11
Although we apply the Phillips standard in this Decision, our claim
interpretation would not differ under the broadest reasonable interpretation
standard, applicable to unexpired patents. Rather, having considered the
issue, we would reach the same claim interpretation under the broadest
reasonable interpretation standard.
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1. Determining
In the Petition, Petitioner argues the scope of the determining step
of claims 1 and 14 and the determine limitation of claim 12 (collectively,
the determining limitations) at least includes executing a client process to
determine, from user positions received from the server, other users
avatar(s) located within a point of view or perspective (e.g., field of view) of
the first user. Pet. 10 (citing Ex. 1002 61).
In response, Patent Owner advances several arguments as to why
Petitioners proposed claim scope is incorrect (see PO Resp. 1217), but
ultimately submits that no construction is necessary for the full
determining steps of claims 1, 12, and 14 (id. at 17).
In reply, Petitioner recognizes that Patent Owner argues the
determining limitations need no construction and points out that Patent
Owner does not contest disclosure of this element in the prior art
(Reply 4), but Petitioner still provides several arguments as to why its
proffered scope of the determining limitations is correct. Id. at 46.
The parties arguments regarding the instituted grounds, however, do
not hinge on the Board resolving the proper interpretation of the determining
limitations of claims 1, 12, and 14, and in particular, the issue of claim scope
raised by Petitioner. See, e.g., Resp. 2036; Reply 4 ([Patent Owner] does
not contest disclosure of this element in the prior art.). Accordingly, based
on our review of the arguments and evidence of record, we need not address
Petitioners proposed scope of the determining limitations or otherwise
construe these limitations to resolve the issues presented in this case. See
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Patent 8,082,501 B2
2. Avatar
Independent claims 1, 12, and 14 of the 501 patent recite avatar in
several contexts. For instance, claims 1 and 14 recite in their preambles
each user of the first user and the other users being associated with a three
dimensional avatar (emphasis added), and claim 12 includes a similar
recitation in its preamble. Ex. 1001, 19:2023, 20:1516, 20:3436. As
another example, claims 1 and 14 recite in their bodies customizing, using a
processor of a client device, an avatar in response to input by the first user
(emphasis added), and the body of claim 12 features a similar limitation. Id.
at 19:25, 20:20, 20:38. In addition, claims 1, 12, and 14 recite the other
user avatars. Id. at 19:28, 19:35, 19:38, 20:23, 20:26, 20:41, 20:4748,
20:51. Claims 1, 12, and 14 additionally recite in their bodies avatars, by
itself, without the other user modifier. Id. at 19:3132, 20:27, 20:4445.
Claim 12 also recites in its body the other users avatars. Id. at 20:28.
The parties only dispute whether avatar must be
three-dimensional, as Patent Owner urges. See Pet. 10; PO Resp. 1719;
Reply 79; Tr. 127:611. Specifically, Petitioner proposes avatar is a
graphical representation of a user (see Pet. 10; Reply 79), whereas Patent
Owner proposes avatar is a three-dimensional graphical representation of
a user (see PO Resp. 1719).
To resolve the parties dispute, we consider whether the phrases each
user of the first user and the other users being associated with a three
dimensional avatar recited in the preamble of claims 1 and 14 and each
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Patent 8,082,501 B2
user being associated with a three dimensional avatar recited in the

preamble of claim 12 are limiting. Petitioner assumes but does not concede
that the preamble is limiting. Pet. 40; see also Pet. 15.
In response, although Patent Owner does not argue affirmatively
whether the preamble is limiting (see generally PO Resp.), Patent Owner
states [i]ndeed, to remove all doubt, the preambles of claims 1, 12, and 14
expressly recite that the claims avatar is three-dimensional (id. at 18).
Moreover, during the oral hearing, Patent Owner acknowledged that three
dimensional as recited in claims 1, 12, and 14 of the preamble of the
501 patent rendered superfluous the additional three-dimensional
requirement of its proposed construction of avatar. Tr. 129:22130:12
(Patent Owner responding to question regarding whether its proposed
construction, when plugged into claims of the 501 patent and other patent
claims requiring a three-dimensional avatar would render
three-dimensional superfluous with I think it has to, Your Honor.); see
also Ex. 1046, 100:119, 104:13105:4.
The determination of whether a preamble limits a claim is made on a
case-by-case basis in light of the facts in each case; there is no litmus test
defining when a preamble limits the scope of a claim. Catalina Mktg. Intl
v. Coolsavings.com, Inc., 289 F.3d 801, 808 (Fed. Cir. 2002). Preamble
language that merely states the purpose or intended use of an invention is
generally not treated as limiting the scope of the claim. Bicon, Inc. v.
Straumann Co., 441 F.3d 945, 952 (Fed. Cir. 2006). However, [w]hen
limitations in the body of the claim rely upon and derive antecedent basis
from the preamble, then the preamble may act as a necessary component of
the claimed invention. Eaton Corp. v. Rockwell Intl Corp., 323 F.3d 1332,
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Patent 8,082,501 B2
1339 (Fed. Cir. 2003) (citing e.g., Electro Sci. Indus. v. Dynamic Details,
Inc., 307 F.3d 1343, 1348 (Fed. Cir. 2002)). Also, a claim preamble has
the import that the claim as a whole suggests for it. In other words, when
the claim drafter chooses to use both the preamble and the body to define the
subject matter of the claimed invention, the invention so defined, and not
some other, is the one the patent protects. Bell Commcns Research, Inc. v.
Vitalink Commcns Corp., 55 F.3d 615, 620 (Fed. Cir. 1995).
Here, the body of claims 1, 12, and 14 recite the first user and the
other user avatars. Ex. 1001, 19:26, 20:2122, 20:39, 19:28, 19:35, 19:38,
20:23, 20:26, 20:41, 20:4748, 20:51. The phrases the first user and the
other user avatars have antecedence, by implication, to each user of the
first user and the other users being associated with a three dimensional
avatar (emphasis added) recited in the preamble of claims 1 and 14 and
similarly recited in the preamble of claim 12. Compare e.g., id. at 19:2122,
with id. at 19:26, 19:28, 19:3435, 19:38. Moreover, the phrases the first
user and the other user avatars have antecedence, by implication, to
each user being associated with a three dimensional avatar (emphasis
added) recited in the preamble of claim 12. Compare, e.g., id. at 20:1516,
with id. at 20:2021, 20:23, 20:26. In addition, the body of claim 12 recites
the other users avatars that, by implication, has antecedence to each user
being associated with a three dimensional avatar as recited in the preamble
of claim 12. Compare id. at 20:28, with id. at 20:1516.
Although the antecedent from the body of the claim is not a verbatim
recitation of the preamble in every instance, antecedent basis can be present
by implication. Slimfold Mfg. Co. v. Kinkead Indus., Inc., 810 F.2d 1113,
1116 (Fed. Cir. 1987). In this case, we determine the antecedent basis for
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the first user and the other user avatars recited in the body of claims 1,
12, and 14 of the 501 patent refers to, by implication, each user of the first
user and the other users being associated with a three dimensional avatar
(emphasis added) as recited in the preamble of claims 1 and 14 and as
similarly recited in the preamble of claim 12. Compare, e.g., Ex. 1001,
19:2122, with id. at 19:26, 19:28, 19:3435, 19:38. Moreover, we
determine the antecedent basis for the phrases the first user and the other
user avatars recited in the body of claim 12 refers to, by implication, each
user being associated with a three dimensional avatar (emphasis added)
recited in the preamble of claim 12. Compare, e.g., id. at 20:1516, with id.
at 20:2021, 20:23, 20:26. We also determine the antecedent basis for the
other users avatars recited in the body of claim 12 refers to, by implication,
each user being associated with a three dimensional avatar as recited in the
preamble of claim 12. Compare id. at 20:28, with id. at 20:1516.
Accordingly, the phrases each user of the first user and the other users
being associated with a three dimensional avatar recited in the preamble of
claims 1 and 14 and each user being associated with a three dimensional
avatar recited in the preamble of claim 12 are limiting.
In the 501 patent, by using antecedent basis as determined above, the
inventors chose to use both the preamble and the body to define the subject
matter of the claimed invention, the invention so defined, and not some
other, is the one the patent protects. See Bell, 55 F.3d at 620. The
501 patent describes a three dimensional figure chosen by the user as a
preferred embodiment. Ex. 1001, 3:2527. In contrast, in related cases
involving patents related to the 501 patent, the Board determined the
inventors sought broader protection for a more generic avatar not limited to
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three dimensions. See infra note 12; Pitney Bowes, Inc. v. Hewlett-Packard
Co., 182 F.3d 1298, 1305 (Fed. Cir. 1999); Jansen v. Rexall Sundown, Inc.,
342 F.3d 1329, 1333 (Fed. Cir. 2003). Here, however, the existence of
antecedent basis from the body of the 501 patent claims for the phrase
each user of the first user and the other users being associated with a three
dimensional avatar (emphasis added) (Ex. 1001, 19:2122, 20:3436)
recited in the preamble of claims 1 and 14 and similarly recited in claim 12,
and defining the invention in terms of the preamble and body of the claim,
also shows that the preamble is necessary to give life, meaning, and vitality
into the claims.
Therefore, because the phrases each user of the first user and the
other users being associated with a three dimensional avatar (emphasis
added) (id. at 19:2122, 20:3436) recited in the preamble of claims 1
and 14 and each user being associated with a three dimensional avatar
(emphasis added) (id. at 20:1516) recited in the preamble of claim 12 are
limiting, the terms an avatar (id. at 19:25, 20:20, 20:38), the other user
avatars (id. at19:28, 19:35, 19:38, 20:23, 20:26, 20:41, 20:4748, 20:51),
avatars (id. at 19:3132, 20:27, 20:4445), and the other users avatars
(id. at 20:28) must be three-dimensional.12
12
If the phrases each user of the first user and the other users being
associated with a three dimensional avatar (emphasis added) (Ex. 1001,
19:2122, 20:3436) recited in the preamble of claims 1 and 14 and each
user being associated with a three dimensional avatar (emphasis added)
(Ex. 1001, 20:1516) recited in the preamble of claim 12 were not limiting,
then we would agree with Petitioner that an avatar is a graphical
representation of a user without a three-dimensional requirement, as the
Board has determined in related cases involving related patents. See
IPR2015-01264, slip op. at 4056 (PTAB Nov. 10, 2016) (Paper 42);
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E. Obviousness of Claims 16, 12, 14, and 15 in View of Funkhouser and

Sitrick

102(a) and was published no later than April 12, 1995. Pet. 6, 13.
Patent Owner does not contest, and appears to accept, Petitioners position.
See IPR2015-01264, Paper 20, 4447 (referring to April 12, 1995 as the
IPR2015-01325, slip op. at 1330 (PTAB Nov. 28, 2016) (Paper 42).
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before the critical date). Accordingly, Petitioner has submitted evidence
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sufficient to show that Funkhouser was a printed publication no later than

April 12, 1995. Patent Owner does not dispute the publication date of
Funkhouser. See generally PO Resp.; Tr. Based on the record before us,
Petitioner has shown by a preponderance of the evidence that Funkhouser
closer to user A than user E is. Id. at 91. Because the cell in which user A is
located is potentially visible to the cells in which users B and E are located,
user A receives updates regarding users B and E. See id. at 87. Moreover,
updates regarding user B could be sent to A at a finer resolution because
user B may be more important than user E to user A. Id. at 91.

We first assess Sitricks prior art status. Petitioner argues Sitrick is
prior art under 35 U.S.C. 102(b), and Patent Owner has not disputed
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Petitioners position. Pet. 13; see generally PO Resp.; Tr. We agree with
Petitioner that Sitrick, a U.S. patent that issued on June 4, 1985, more than
one year before the earliest possible effective filing date of the 501 patent,
constitutes 102(b) prior art. See 35 U.S.C. 102(b); Ex. 1001, [60], [63];
Ex. 1013, [22], [45].
network. Ex. 1013, Abs., 1:45, 3:5657, 4:4851. In addition, Sitrick
discusses a user selecting a distinguishable visual image as her or his avatar.
Id. at Abs., 1:45, 3:5657, 4:4851. The user selection includes the color,
size, shape, or a digitized image of the users face. Id. at Abs.
3. Discussion
Petitioner asserts that the subject matter of claims 16, 12, 14, and 15
would have been obvious in view of Funkhouser and Sitrick under 35 U.S.C.
103(a). Pet. 1536. Petitioner provides a limitation by limitation analysis
as to how the combination of Funkhouser and Sitrick allegedly teaches or
suggests the subject matter of claims 16, 12, 14, and 15. Id. Patent Owner
contests Petitioners obviousness assertions. PO Resp. 1331.
a. The Combination of Funkhouser and Sitrick Teaches a Custom

Avatar
The parties disagree as to whether the combination of Funkhouser and
Sitrick teaches or suggests the limitation customizing . . . an avatar, as
recited in claim 1 and similarly recited in claims 12 and 14. PO Resp. 20
22; Reply 910. Because Petitioner has the burden of proof (see 35 U.S.C.
316(e), 37 C.F.R. 42.20(c)), we begin with Petitioners arguments.
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Petitioner argues the combination of Funkhousers avatars having a

geometric description and behavior and Sitricks selection of a
distinguishable visual image representation by which a user is identified
teaches the claimed customizing. Pet. 1618, 26.
In response, Patent Owner argues Petitioner acknowledges that
Funkhouser fails to teach customizing . . . an avatar in response to input by
the first user and relies on Sitrick to remedy this shortcoming. Id. at 21
(citing Pet. 17). According to Patent Owner, Sitrick fails to teach avatar
as properly construed (i.e., Sitricks avatar is not three-dimensional). Id.
Patent Owner also highlights that Sitrick was first filed on
September 30, 1982. Id. (citing Ex. 1013, 1). Patent Owner argues Sitrick
teaches a user selecting a distinguishable image representation to identify
themselves as a two-dimensional image and, therefore, does not teach the
three-dimensional custom avatar. Id. According to Patent Owner, the
501 patent describes N two-dimensional panels, which the combination
of Sitrick and Funkhouser fails to teach or suggest. Id. Patent Owner argues
the combination of Funkhouser and Sitrick fails to reconcile the differences
between selecting a two-dimensional representation and customizing a
three-dimensional avatar as properly construed. Id. Patent Owner concludes
its argument by explaining the combination of Funkhouser and Sitrick fails
to teach or suggest avatar, customizing, or creating a custom avatar as
properly construed. Id. at 2122.
In reply, Petitioner argues Patent Owners argument attacks Sitrick
individually for its failure to teach customization of a three-dimensional
avatar. Reply 9. Petitioner argues Patent Owner focuses too narrowly on
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whether Sitrick alone teaches customizable avatar while failing to address

the teaching of the combination of Funkhouser and Sitrick. Id. at 910.
Petitioner argues even if we applied Patent Owners proposed
construction, Sitrick teaches a customizable user representation and
Funkhouser teaches three-dimensional avatars. Id. at 10 (citing Ex. 1013,
Abstract, 11:4145; Ex. 1005, 85, Plates I and II). According to Petitioner,
Dr. Zyda explains that a person having ordinary skill in the art would have
understood Sitrick to teach multiple avatar customizing methods, and that
the combination of Funkhouser and Sitrick teaches custom avatar. Id.
(citing Ex. 1002 8385).
Petitioner also argues aside from asserting that Sitrick teaches
customizable two-dimensional avatars rather than three-dimensional avatars,
Patent Owner does not identify why these differences would have rendered
claims 1, 12, and 14 non-obvious in view of the combination of Funkhouser
and Sitrick. Id. Petitioner concludes its argument by asserting Patent Owner
fails to rebut the obviousness challenge in the Petition. Id.
We find persuasive Petitioners argument and evidence that the
combination of Funkhouser and Sitrick teaches or suggests customization of
an avatar, and are not persuaded by Patent Owners arguments disputing
Petitioners showing on this issue. As explained supra in Part II.C.2, we
agree with Patent Owner that an avatar is three-dimensional, yet we
agree with Petitioners showing that Funkhousers virtual environment
displayed on a client workstation from the perspective of one or more
entities and depicting entities as a three-dimensional graphical representation
teaches three-dimensional avatars. Ex. 1005, 85, Plates I and II.
Moreover, we note that Patent Owner, during the oral hearing, explicitly
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Patent 8,082,501 B2
stated that it does not dispute that Funkhouser teaches an avatar even
under its proposed narrower construction, which includes a
three-dimensional requirement. Tr. 67:1268:2. Dr. Zyda explains that a
person having ordinary skill in the art would have understood Sitrick to
teach multiple avatar customizing methods, and that the combination of
Funkhouser and Sitrick teaches custom avatar. Id. (citing Ex. 1002 83
85). The portions of Sitrick cited by Petitioner teach a customizable user
representation. Ex. 1013, Abs., 11:4145.
As for Patent Owners argument that Sitrick was filed on
September 30, 1982, to the extent that Patent Owner is suggesting a 1982
filing date proves Sitrick cannot teach customization of a graphical
representation of a user, we disagree with Patent Owner. Patent Owner
acknowledges that Sitrick teaches a user selecting a distinguishable image
representation to identify themselves as a two-dimensional image
(PO Resp. 21); therefore, Sitrick teaches customizing a graphical
representation of a user. Moreover, as we note above, Funkhouser teaches
three-dimensional avatars, and Petitioners obviousness arguments are based
on a combination of Funkhouser and Sitrick. See Pet. 1618, 26; Ex. 1005,
Plates I & II; Tr. 67:1268:2.
Accordingly, for the reasons given, Petitioner has shown persuasively
that the combination of Funkhouser and Sitrick teaches customizing . . . an
avatar in response to input by the first user, as recited in claim 1 of the
501 patent and the corresponding limitations of claims 12 and 14.
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Patent 8,082,501 B2
b. Undisputed Limitations of Claims 16, 12, 14, and 15

Petition regarding how the combination of Funkhouser and Sitrick teaches or
suggests the remaining limitations of claim 16, 12, 14, and 15. Pet. 1331.
Patent Owner does not contest that the combination of Funkhouser and
Sitrick teaches or suggests these limitations. See PO Resp. 2036; see also
Reply 914. Based on our review of the Petition and the supporting
evidence, we find persuasive Petitioners arguments and evidence, including
citations to the references and Dr. Zydas testimony, and we adopt them as
the basis for our determination that the combination of Funkhouser and
Sitrick teaches or suggests these limitations of claims 16, 12, 14, and 15,
thereby rendering these claims unpatentable for obviousness. Pet. 1331.
c. Conclusion
preponderance of the evidence that the subject matter of claims 16, 12, 14,
and 15 of the 501 patent would have been obvious over Funkhouser and
Sitrick.
F. Obviousness of Claims 8 and 10 in View of Funkhouser, Sitrick, and

Funkhouser 93

102(a) and was published no later than April 12, 1995. Pet. 6, 9. Patent
Owner does not contest, and appears to accept, Petitioners position. See
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IPR2015-01264, Paper 20, 4447 (referring to April 12, 1995 as the

Petitioner has submitted evidence to show that Funkhouser 93 was a
501 patent under 102(b). Pet. 6. Funkhouser 93 is an article included in
a collection of presentation materials (Ex. 1018, 1993 Conference Book),
compiled for a conference sponsored by the ACM held on August 16,
1993. Ex. 1018, cover, 18, 247; Ex. 1002 51. Dr. Zyda testifies that all
participants in the conference, including Dr. Zyda, received a copy of the
1993 Conference Book. Ex. 1002 51. The 1993 Conference Book and
Funkhouser 93 feature a 1993 copyright date and permit copying, generally
commercial advantage. Ex. 1018, 2, 247; Ex. 1017, 247. The 1993
members to order the 1993 Conference Book. Ex. 1018, 2. Accordingly,
Petitioner has submitted evidence sufficient to show that Funkhouser 93
was a printed publication by August 6, 1993the last day of the conference.
See Mass. Inst. of Tech., 774 F.2d at 1109. Patent Owner does not dispute
the publication date of Funkhouser 93. See generally PO Resp.; Tr. Based
on the record before us, Petitioner has shown by a preponderance of the
evidence that Funkhouser 93 qualifies as prior art under 35 U.S.C. 102(b).
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Patent 8,082,501 B2

applying the faster target frame rate. Id. at 25354, Fig. 11.
2. Discussion
Petitioner asserts that the subject matter of claims 8 and 10 would
have been obvious in view of Funkhouser, Sitrick, and Funkhouser 93
under 35 U.S.C. 103(a). Pet. 3339. Petitioner provides a limitation by
limitation analysis as to how the combination of Funkhouser, Sitrick, and
Funkhouser 93 allegedly teaches or suggests the subject matter of claims 8
and 10. Id. Patent Owner contests Petitioners obviousness assertions.
PO Resp. 2428.
a. Funkhouser 93 Teaches Omitting Objects

The parties disagree over whether the combination of
Funkhouser 93s omitting objects and Funkhousers avatars teaches or
suggests filtering the other user avatars, as recited in claims 8 and 10.
PO Resp. 2428; Reply 1415. We begin with Petitioners arguments.
Petitioner argues Funkhouser 93s teaching of levels of detail
representing no polygons at all teaches omitting objects. See Pet. 34
(citing Ex. 1017, 249). Petitioner also argues Funkhouser teaches other user
avatars. Pet. 1623.
In response, Patent Owner argues Funkhouser 93 teaches omission
of books on bookshelves and texture on doors rather than omitting objects
or avatars. PO Resp. 2425. Patent Owner refers to Dr. Zydas testimony to
support its argument that Funkhouser 93 does not teach avatars. Id. at 25
27 (citing Ex. 2016, 259:16260:13, 260:17261:8). According to Patent
Owner, in Funkhouser 93, the bookshelf in Figure 11 is the object and the
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Patent 8,082,501 B2
books reflect a texture that can be adjusted to reach a uniform frame rate. Id.
at 26.
In reply, Petitioner argues that the issue we should focus on is whether
the combination of Funkhouser and Funkhouser 93 teaches the limitations
of claims 8 and 10, not whether Funkhouser 93 alone teaches claims 8
and 10. Reply 14 (citing PO Resp. 2526). Petitioner argues that
Funkhouser 93 distinguishes between textures and omitted books, which
teaches both omission of books on bookshelves and omission of texture.
Reply 1415 (citing Ex. 1017, 253). Petitioner also argues Funkhouser 93s
disclosure of levels of detail representing no polygons at all expressly
refers to omitting entire objects, and a no polygons at all detail level . . .
will result in [objects] being omitted from the display once the maximum
number of objects displayable within the maximum cost is exceeded.
Reply 16 (quoting Ex. 1017, 249, 251).
We find persuasive Petitioners showing that the combination of
Funkhouser and Funkhouser 93 teaches or suggests filtering the other user
avatars, as recited in claims 8 and 10. We are not persuaded by Patent
Owners argument that Funkhouser 93 fails to teach omitting objects or
avatars because one cannot show nonobviousness by attacking references
individually where the challenge is based on a combination of references.
See In re Merck & Co., 800 F.2d 1091, 1097 (Fed. Cir. 1986) (citing In re
Keller, 642 F.2d 413, 426 (CCPA 1981)). In this case, Petitioner has shown
that Funkhouser teaches the claimed other user avatars, which as we
explain above in II.C.2 must be three-dimensional in light of the limiting
preamble language of independent claim 1, from which claims 8 and 10
depend. For example, Funkhouser explains that [c]lients execute the
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programs necessary to generate behavior for their entities and [t]hey may
. . . include viewing capabilities in which the virtual environment is
more of its entities and depicts its entities as three-dimensional graphical
representations. Ex. 1005, 85, 209 (Plate II). In addition, Patent Owner,
during the oral hearing, explicitly stated that it does not dispute that
Funkhouser teaches an avatar even under its proposed narrower
construction of the term, which includes a three-dimensional requirement.
Tr. 67:1268:2.
omitting objects from the display under certain circumstances. As Petitioner
points out, Funkhouser 93 makes clear the possibility that the target frame
time [may] not [be] long enough to render all potentially visible objects even
at the lowest level of detail and explains that its approach can handle such a
situation if levels of detail representing no polygons at all are allowed,
such that only the most valuable objects are rendered. Ex. 1017, 249;
see id. at 253, Fig. 11. Even Patent Owner acknowledged at the oral hearing
that Funkhouser 93s reference to levels of detail representing no
polygons at all means no object or, in other words, exclud[ing]
objects. Tr. 69:1120, 71:822, 74:2225; see id. at 189:35. These
disclosures demonstrate that Funkhouser 93 teaches that objects that cannot
be rendered within the target frame rate, even at the lowest detail or
accuracy level, may be excluded or omitted from the display. See Reply 16;
Tr. 55:17, 191:14192:12.
In addition, in discussing Figure 11, Funkhouser 93 distinguishes
between textures and omitted books, i.e., omission of texture on the
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bookshelves in Figure 11b1 . . . and omission of books on bookshelves and

texture on doors in Figure 11 c1. Reply 15 (citing Ex. 1017, 253). We find
these disclosures regarding Figure 11 and the figure itself to support
Funkhouser 93 teaching or at least suggesting filtering objects where they
cannot be rendered at the target frame rate.
For the reasons given, we agree with Petitioners showing that the
combination of Funkhouser and Funkhouser 93 teaches or suggests
filtering the other user avatars as recited in claims 8 and 10.
b. Funkhouser 93 Teaches a Limit of Other User Objects Displayed

Regarding the next dispute, the parties contest whether
Funkhouser 93 teaches a filtering the other user objects displayed on the
client device display, as recited in claim 10. PO Resp. 2728; Reply 14
15.
Petitioner relies on pages 249 and 251 of Funkhouser 93, which,
according to Petitioner, teaches that objects can be assigned a no polygons
at all detail level that results in objects being omitted from the display once
the maximum number of objects displayable within the maximum cost is
exceeded. Pet. 6, 34 (citing Ex. 1017, 249, 251).
In response, Patent Owner argues that Funkhouser 93 does not
feature a limit of the other user avatars that are displayed. PO Resp. 27.
Rather, according to Patent Owner, Funkhouser 93 teaches a selection of
objects in descending order of value until a maximum cost is reached. Id.
Patent Owner argues Funkhouser 93 does not teach excluding a number of
objects after the maximum cost is claimed; rather, according to Patent
Owner, Funkhouser 93 teaches an algorithm for each potentially visible
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object based on value, but does not teach omitting objects/avatars having
lower value once the maximum cumulative benefit is reached. Id. at 2728
(citing Ex. 1017, 251; Ex. 2017 53). According to Patent Owner, this may
result in objects having a lower value (i.e., a bookshelf with reduced texture
and a lower accuracy level), which results in books being omitted, which is
not the same as filtering objects based on computing resources or user
selection. Id. at 28.
In reply, Petitioner argues that Funkhouser 93 teaches that objects
can be assigned a no polygons at all detail level that results in objects
being omitted from the display once the maximum number of objects
displayable within the maximum cost is exceeded. Reply 15 (citing
Ex. 1017, 249, 251).
filtering the other user objects displayed on the client device display, as
recited in claim 10. We are not persuaded by Patent Owners argument that
Funkhouser 93 fails to teach or suggest a limit of other user objects
displayed because, as explained above, Funkhouser 93 teaches a level of
detail representing no polygons and refers to using such a detail level
where the target frame time is not long enough to render all potentially
visible objects even at the lowest level of detail, such that only the most
valuable objects are rendered. Ex. 1017, 249. And Patent Owner
acknowledged at the hearing that this disclosure refers to the possibility of
omitting objects. Tr. 69:1120, 71:822, 74:2225; see id. at 189:35.
Moreover, Funkhouser 93 teaches that its optimization algorithm results in
books on a bookshelf being omitted (i.e., limit of the other user objects) as a
result of a selection made by the local user (i.e., user selection) and the
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optimization algorithm (i.e., based on computing resources or user

selection). Pet. 34, 36, 38 (citing Ex. 1017, 247); Reply 15 (citing Ex. 1017,
253).
As for the avatar limitation, as stated supra in Part II.C.2, a three
dimensional avatar recited in the preamble of independent claim 1, from
which claim 10 depends, is limiting. As stated supra in Part II.E.3.a, we
agree with Petitioners showing that Funkhousers virtual environment
displayed on a client workstation from the perspective of one or more entity
and depicting entities as a three-dimensional graphical representation
teaches avatars. In addition, Patent Owner explicitly stated that it does not
dispute that Funkhouser teaches an avatar even under its proposed
narrower construction, which features a three-dimensional requirement.
Tr. 67:1268:2.
Accordingly, Petitioner has shown that the combination of
Funkhouser, Sitrick, and Funkhouser 93 teaches or suggests limit of the
other user avatars displayed on the client device display, as recited in
claim 10. We disagree with Patent Owners arguments disputing this
showing.
c. Undisputed Limitations of Claims 8 and 10

Petition regarding how the combination of Funkhouser, Sitrick, and
Funkhouser 93 teaches or suggests the remaining limitations of claim 8
and 10. Pet. 3339. Patent Owner does not contest that the combination of
Funkhouser, Sitrick, and Funkhouser 93 teaches or suggests these
limitations. See PO Resp. 2428; see also Reply 1415. Based on our
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review of the Petition and the supporting evidence, we find persuasive

Petitioners arguments and evidence, including citations to the references
and Dr. Zydas testimony, and we adopt them as the basis for our
determination that the combination of Funkhouser, Sitrick, and
Funkhouser 93 teaches or suggests these limitations of claims 8 and 10,
thereby rendering them unpatentable for obviousness. Pet. 3339.
d. Conclusion
preponderance of the evidence that the subject matter of claims 8 and 10 of
the 501 patent would have been obvious over Funkhouser, Sitrick, and
Funkhouser 93.
G. Obviousness of Claims 7 and 16 in View of Funkhouser, Sitrick, and

Wexelblat

We first assess Wexelblats prior art status. Petitioner argues
Wexelblat is prior art under 35 U.S.C. 102(b), and Patent Owner has not
disputed Petitioners position. Pet. 32; see generally PO Resp.; Tr. We
agree with Petitioner that Wexelblat, a U.S. patent that issued on June 4,
1991, more than one year before the earliest possible effective filing date of
the 501 patent, constitutes 102(b) prior art. See 35 U.S.C. 102(b);
Ex. 1001, [60], [63]; Ex. 1020, [22], [45].
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2. Discussion
Petitioner asserts that the subject matter of claims 7 and 16 would
have been obvious in view of Funkhouser, Sitrick, and Wexelblat under
35 U.S.C. 103(a). Pet. 3339. Petitioner provides a limitation by
limitation analysis as to how the combination of Funkhouser, Sitrick, and
Wexelblat allegedly teaches or suggests the subject matter of claims 8
and 10. Id. Patent Owner contests Petitioners obviousness assertions.
PO Resp. 2428.
a. Funkhouser Is Compatible with Wexelblat
The parties dispute whether Funkhouser and Wexelblat are

compatible. Pet. 3233; PO Resp. 3134; Reply 1011.
Petitioner argues it would have been obvious to combine Wexelblats
navigating from room to room in a virtual environment with Funkhousers
system in order to provide entities within a virtual environment with a
method to return quickly to a location of interest after an initial visit.
Pet. 3233 (citing Ex. 1020, 6:677:5; Ex. 1002 138).
In response, Patent Owner argues Funkhousers background
discusses the problem caused by distributing every entitys state change to
every workstation participating in the virtual environment. PO Resp. 31.
Patent Owner further argues Funkhouser states that it is necessary to
develop a system design and communication protocol that does not require
sending update messages to all participating hosts for every entity state
change. Id. (quoting Ex. 1005, 86). Patent Owner further argues that
Funkhousers intended purpose is to limit sending messages to only a small
subset of clients to which the update is relevant. Id. at 32. Patent Owner
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additionally argues this means that entities do not receive real-time update
messages for other entities that are not visible, and therefore cannot display
the virtual environment from another entitys perspective. Id.
Patent Owner also argues Dr. Zyda acknowledged that incorporating
Wexelblats teleportation feature into Funkhousers message culling system
would detract from, rather than enhance, the users virtual world experience.
Id. at 33 (citing Ex. 2016, 164:1166:15). Patent Owner argues Dr. Zydas
testimony illustrates that Wexelblats teleportation, within a virtual world,
has the effect of making all of the other avatars potentially visible in the
next couple of frames. Id. (quoting Ex. 2017 108). In particular,
according to Patent Owner, Dr. Zyda testified that Funkhouser provides
more messages about other user avatars than what a client can see. Id. at 34
(citing Ex. 2016, 43:215, 57:26, 162:912). Patent Owner argues that
because Funkhouser only sends messages of other avatars that are
potentially visible or audible, incorporating Wexelblats teleportation into
Funkhouser requires the server to provide each client with updates from all
other entities since they are potentially visible. Id. (citing Ex. 2017 108).
In reply, Petitioner argues Patent Owners argument that Wexelblats
teleportation would have expanded the potentially visible area to the entire
virtual environment, thus requiring the server to send positional updates for
all users in the entire virtual environment and negating Funkhousers
message culling, is mutually exclusive from Patent Owners argument that
adding Wexelblats teleportation feature to Funkhouser would have created
an unacceptable delay while the information for the new perspective is sent
from the server to the client. Reply 11. According to Petitioner, Patent
Owners two arguments are mutually exclusive because [i]f the server
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sends updates for the entire virtual space there would be no possibility of
additional lag as it downloads updates for a specific location after a
teleportation and [c]onversely, if the server sends updates for only a
limited portion of the environment potentially visible to a user avatar based
on its location (as Funkhouser discloses) there would be no need to send
updates for the entire space as the potentially visible region could be
recalculated after a perspective switch. Id. Petitioner further argues Patent
Owners argument that Wexelblats teleportation would have expanded the
potentially visible area to the entire virtual environment, thus, requiring the
server to send positional updates for all users in the entire virtual
environment and negating Funkhousers message culling, can be dismissed
easily. Id. According to Petitioner, Patent Owners argument depends on
Funkhousers teaching and Petitioners ground of unpatentability that was
instituted by the Board. Id.
We agree with Petitioner that Patent Owners argument depends on
Funkhousers server-side message culling and Petitioners asserted ground
of unpatentability. We disagree with Patent Owners argument that
Wexelblats teleportation would expand the potentially visible area of
Funkhousers clients to the entire virtual environment, thus requiring the
server to send positional updates for all users in the entire virtual
environment and negating Funkhousers message culling. In addition, the
cited portions of Dr. Zydas testimony relied upon by Petitioner demonstrate
that Wexelblats teleportation would not affect Funkhousers server-based
message culling because the combination of Funkhouser and Wexelblat
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would provide entities within a virtual environment with a method to return

quickly to a location of interest after an initial visit. Pet. 3132 (citing
Ex. 1002 134141).
Moreover, we agree with Petitioner that Funkhousers statement that
it is necessary to develop a system design and communication protocol that
does not require sending update messages to all participating hosts for every
entity state change (Ex. 1005, 86) does not imply that Funkhouser is
incompatible with Wexelblat because this implication focuses too narrowly
on Funkhouser. Rather, a broad approach should be taken. Indeed, the
Supreme Court provided guidance in determining the applicability of a
references teachings in an obviousness inquiry. In KSR International Co. v.
Teleflex Inc., the Court explained that if a feature has been used to improve
one device, and a person of ordinary skill in the art would have recognized
that it would improve a similar device in that field or another, implementing
that feature on the similar device is likely obvious. 550 U.S. at 417.
Accordingly, we find persuasive Petitioners showing and Dr. Zydas
supporting testimony that combining Funkhouser and Wexelblat would
yield the predictable results of navigating from room to room. Pet. 3132
(citing Ex. 1002 134141). We, therefore, agree with Petitioners
showing on this issue and disagree with Patent Owners argument that
Funkhouser and Wexelblat are incompatible.
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b. Combining Wexelblats Teleportation Feature with Funkhousers

Message Culling System Would Not Create an Unacceptable Delay
The parties also contest whether adding Wexelblats teleportation

feature to Funkhousers system would create an unacceptable delay while
the information for the new perspective is sent from the server to the client.
PO Resp. 3436; Reply 1114, 1314.
As stated supra in Part II.G.2.a, Petitioner argues that it would have
been obvious to combine Wexelblats navigating from room to room in a
virtual environment with Funkhousers system in order to provide entities
within a virtual environment with a method to return quickly to a location of
interest after an initial visit.
In response, Patent Owner argues that combining Wexelblats
teleportation feature and Funkhousers system results in an unacceptable
delay. PO Resp. 3436. In support of its argument, Patent Owner refers to
Dr. Zydas testimony that users would think a teleport delay is sluggish,
which causes users to get pretty unhappy, and argues that this contradicts
Dr. Zydas declaration. PO Resp. 3132 (quoting Ex. 2016, 164:819,
165:214, 166:1316, 163:812, 163:2223). Patent Owner further argues
Funkhouser discusses the need for near real-time updates since large
variances or delays in updates can result in visually perceptible jerky or
latent motion, and thus may be disturbing to users and Funkhousers
solution for limiting messages has some built-in latency. PO Resp. 33
(quoting Ex. 1005, 85). Patent Owner also argues Funkhouser states that the
disadvantage of the RING system design is that extra latency is introduced
when messages are routed through servers, and [c]omputations are
performed in the servers before messages are propagated further adding to
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latency. PO Resp. 33 (quoting Ex. 1005, 88). According to Patent Owner,

adding latency that is undesirable to users or disturbing runs contrary to
Funkhouser. PO Resp. 33 (citing Ex. 2017 104). According to Patent
Owner, Petitioner and Dr. Zyda failed to recognize and reconcile the
inconsistency between Funkhouser and Durward. Id. at 36 (citing 2017
120).
In reply, Petitioner argues Patent Owners argument that adding a
teleportation feature results in an unacceptable delay is not supported by the
record. Reply 1112. Petitioner further argues Patent Owner
mischaracterizes Dr. Zydas testimony, exaggerating both the amount of
delay and the effect of this delay on a users experience. Id. at 12.
According to Petitioner, although Dr. Zyda acknowledged that a teleport
feature could result in a system stalling from one frame to four frames while
the information is being loaded, Dr. Zyda explained that [i]t may not be
noticeable. Id. (quoting Ex. 2016, 164:8165:17). According to
Petitioner, even at the largest delay Dr. Zyda identified, four frames, and the
lowest framerate the NPS system on which Dr. Zyda worked in the early
1990s, three frames per second, the largest delay would have been 1.33
seconds. Id. (citing Ex. 2016, 166:412). In addition, Petitioner argues
been irritating to a user and would have been below the threshold of
acceptability. Id. (citing Ex. 1046, 260:18261:19). Petitioner also argues
the alleged unacceptable lag to a user is undermined by the fact that [Patent
Owners] patents themselves provide no solution to this alleged problem
and would also have been an issue in the system described in [Patent
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Owners] patents, which similarly perform computations in the servers

before messages are propagated. Reply 1314.
We agree with Petitioners showing that adding Wexelblats
teleportation feature to Funkhouser would have not created an unacceptable
delay while the information for the new location is sent from the server to
the client. We disagree with Patent Owners argument that adding
Wexelblats teleportation feature to Funkhousers system would have
created such an unacceptable delay, thereby allegedly undermining
Petitioners proposed combination of Funkhouser and Wexelblat. Regarding
Dr. Zydas testimony, Patent Owner takes his testimony out of context.
Although Dr. Zyda testified that a one to four frame delay may occur and
users may be unhappy, Dr. Zyda explained that [i]t may not be noticeable.
Ex. 2016, 164:8165:17. That is, as Petitioner points out, the largest delay
Dr. Zyda identified was four frames and the lowest framerate his NPS
system displayed was three frames per second, which translates to the largest
delay being 1.33 seconds. Ex. 2016, 166:412; see Reply 12. In addition,
been irritating to a user and would be below the threshold of acceptability.
Ex. 1046, 260:18261:19. In addition, the alleged unacceptable lag to a user
is undermined by the fact that the 501 patent fails to provide a solution to
this alleged lag, which also would have been an issue in the system
described in the 501 patent that similarly performs computations in the
servers before messages are propagated. Reply 1314; see, e.g., Ex. 1001,
12:4259.
As for Patent Owners argument that adding latency that is
undesirable to users or disturbing runs contrary to Funkhouser, this does not
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imply that Funkhouser is incompatible with Wexelblat. In KSR, the Court

explained that if a feature has been used to improve one device, and a person
of ordinary skill in the art would have recognized that it would improve a
similar device in that field or another, implementing that feature on the
similar device is likely obvious. 550 U.S. at 417.
Petitioner explain that it would have been obvious to a person having
ordinary skill in the art to combine Wexelblats navigating from room to
room in a virtual environment with Funkhousers system in order to provide
entities within a virtual environment with a method to return quickly to a
location of interest after an initial visit. Pet. 32 (citing Ex. 1002 138).
Accordingly, we are persuaded by Petitioners showing and Dr. Zydas
supporting testimony that combining Funkhouser and Wexelblat would
yield the predictable results of providing entities within a virtual
environment with a method to return quickly to a location of interest after an
initial visit. Id. at 3132 (citing Ex. 1002 138).
For the reasons given, we agree with Petitioner that its proposed
combination of Funkhouser and Wexelblat would not have created an
unacceptable delay.
c. Any Delay from the Addition of Wexelblats Teleportation Feature

to Funkhousers System Would Not Have Been Detrimental to a
Users Experience
The parties next dispute focuses on whether the speed of networks in

1995 was sufficiently slow that the delay caused by adding Wexelblats
perspective-switching feature to Funkhousers system would have been
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detrimental to a users experience and would have undermined Funkhousers

teaching of providing a real virtual world experience, as Patent Owner
argues. PO Resp. 3536; Reply 1214.
As stated supra in Part II.G.2.a, Petitioner argues it would have been
obvious to combine Wexelblats navigating from room to room in a virtual
environment with Funkhousers system in order to provide entities within a
virtual environment with a method to return quickly to a location of interest
after an initial visit.
In response, Patent Owner argues the limitations of network speeds
and hardware in 1995 could result in a delay of several seconds to as much
as a few minutes. PO Resp. 3536 (citing Ex. 2017 100; Ex. 2016,
166:1315). Furthermore, Mr. Pesces declaration states [i]n the 1995 time
period, the speed of network connections were sufficiently slow that this lag
would have been detrimental to a users virtual world experience anywhere
from several seconds to as much as a few minutes and would have
undermined [Funkhousers] purpose of providing a more real virtual world
experience. Ex. 2017 100.
In reply, Petitioner argues Mr. Pesce acknowledged he only
considered network transmissions over a 14.4 kilobits per second modem or
possibly a 9600 bits per second modem (i.e., the slowest type of network
mentioned in Patent Owners patents) because all of [Patent Owners]
patents talk about using dial-up systems, not using Ethernet. Reply 13
(quoting Ex 1046, 256:20257:10, 264:17265:14; Ex. 2017 101).
Petitioner further argues the challenged claims of the 501 patent are not
limited to a slow dial-up modem and neither is Funkhouser. Reply 13. In
support of its argument, Petitioner refers to Mr. Pesces testimony, in which
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Mr. Pesce acknowledged that Funkhouser teaches faster network

transmissions. Id. (citing Ex. 1046, 266:615; Ex. 1005, 89). Petitioner also
refers to Mr. Pesces acknowledgement that he failed to analyze if adding a
higher transmission speeds, which, according to Petitioner, illustrates that
Patent Owners argument that the proposed combination would result in
unacceptable system lag is based on Mr. Pesces misconception the system
must utilize a dial-up network, rather than the faster networks actually in use
at the time and disclosed in the prior art. Id. at 13 (citing Ex. 1046,
266:1623).
As above, we find persuasive Petitioners evidence and reasoning
supporting its proposed combination of Wexelblats perspective-switching
feature with Funkhousers system. We disagree with Patent Owners
argument that the network speed was sufficiently slow that any delay caused
by this addition would have been detrimental to a users experience and
would have undermined Funkhousers teaching of providing a real virtual
world experience. Mr. Pesce acknowledges he only considered network
transmissions over a 14.4 kilobits per second modem or possibly a 9600 bits
per second modem (i.e., the slowest type of network mentioned in Patent
Owners patents), because all of [Patent Owners] patents talk about using
dial-up systems, not using Ethernet. Ex 1046, 256:20257:10, 264:17
265:14; Ex. 2017 101.
The instituted claims of the 501 patent, however, are not limited to a
slow dial-up modem and neither is Funkhouser. Reply 13. In particular,
Mr. Pesce acknowledges that Funkhouser teaches faster network
transmissions compared to a dial-up modem. Ex. 1046, 266:615; Ex. 1005,
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5. Mr. Pesce also acknowledges that he failed to analyze if adding a

higher transmission speeds, which illustrates that Patent Owners argument
that the combination of Funkhouser and Wexelblat would have resulted in
unacceptable system delay is based on Mr. Pesces flawed premise that the
system must utilize a slower dial-up network, rather than the faster networks
in use at the time and taught in Funkhouser. Ex. 1046, 266:1623.
Accordingly, we disagree with Mr. Pesces testimony on this point.
We, therefore, agree with Petitioners showing that the speed of the
networks in 1995 would not have created an unacceptable system delay that
would have prevented or undermined Petitioners proposed combination.
d. Undisputed Limitations of Claims 7 and 16

Petition regarding how the combination of Funkhouser, Sitrick, and
Wexelblat teaches or suggests the remaining limitations of claims 7 and 16.
Pet. 3233. Patent Owner does not contest that the combination of
Funkhouser, Sitrick and Wexelblat teaches or suggests these limitations. See
PO Resp. 3136; see also Reply 1014. Based on our review of the Petition
and the supporting evidence, we find persuasive Petitioners arguments and
Funkhouser, Sitrick, and Wexelblat teaches or suggests these limitations,
thereby rendering claims 7 and 16 unpatentable for obviousness. Pet. 3233.
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e. Conclusion
preponderance of the evidence that the subject matter of claims 7 and 16 of
the 501 patent would have been obvious over Funkhouser and Wexelblat.
H. Anticipation by Durward of Claims 16, 12, 14, and 15
1. Durward (Ex. 1008)

We turn to the instituted ground of anticipation by Durward and first
assess Durwards prior art status. Petitioner argues Durward is prior art
under 35 U.S.C. 102(e), and Patent Owner has not disputed Petitioners
position. Pet. 39; see generally PO Resp. We agree with Petitioner that
Durward, a U.S. patent that was filed on September 23, 1993, more than one
year before the earliest possible effective filing date of the 501 patent,
constitutes 102(e) prior art. See 35 U.S.C. 102(e); Ex. 1001, [60], [63];
Ex. 1008, [22], [45].
Durward describes a virtual reality system with a database defining
three-dimensional virtual spaces. Ex. 1008, Abs. Figure 5 is reproduced
below.
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Durwards Figure 5 illustrates assigning visual relevant spaces 200

and 204 to virtual beings 182 and 184, respectively. Id. at 4:5963.
Durward describes only communicating to a user the position, orientation,
and/or movement of elements within the visual relevant space of a virtual
being defining the user and those elements outside of the visual relevant
space may or may not be visible to the user. Id. at 5:520.
2. Discussion
Petitioner asserts that the subject matter of claims 16, 12, 14, and 15
are anticipated under 35 U.S.C. 102(e). Pet. 3952. Petitioner provides a
limitation by limitation analysis as to how the combination of Durward
allegedly discloses the subject matter of claims 16, 12, 14, and 15. Id.
Patent Owner contests Petitioners obviousness assertions. PO Resp. 2223.
a. Durward Fails to Disclose three dimensional avatar as Recited

in Claims 1, 12, and 14
The parties dispute whether Funkhouser discloses a three
dimensional avatar as recited in claims 1, 12, and 14. PO Resp. 2223;
Reply 1011; Pet. 3233.
Petitioner argues Durward discloses virtual beings representing users
in a virtual space and the virtual beings interacting with other virtual beings
in a virtual reality world. Pet. 4041 (citing Ex. 1008, 1:711, 1:5964, 2:1
3, 2:5152). Petitioner also refers to Durwards disclosure that the virtual
beings may take the form of a human being, an animal, etc. that is visible
within the virtual space. Id. at 41 (citing Ex. 1008, 3:3032, 1:5254, 7:29
34). According to Petitioner, Durwards avatars are three-dimensional. Id.
at 41 (citing Ex. 1008, 1:5254, 7:2934, Ex. 1002 167).
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In response, Patent Owner argues that although Durward discloses

three-dimensional virtual spaces, Durward does not disclose the virtual
entities are three-dimensional nor use the term avatar. PO Resp. 22.
Patent Owner further argues that at the time of Durwards filing in 1993, a
person having ordinary skill in the art would have understood Durwards
virtual entities to be two-dimensional, given the software limitations that
precluded a three-dimensional rendering of an entity during the 1993 time
period. Id. (citing Ex. 2017 59).
Moreover, Patent Owner argues Petitioner refers to Durward as
disclosing three-dimensional virtual entities based on Durwards disclosures
in column 1, lines 5254, column 7, lines 2934, and paragraph 167 of
Dr. Zydas declaration. Id. According to Patent Owner, neither of the two
cited portions of Durward disclose avatars, or three-dimensional graphical
representations, as the term is construed properly by Patent Owner. Id.
at 2223 (citing Ex. 2017 59). Specifically, Patent Owner argues
column 1, lines 5254 of Durward discloses three-dimensional virtual
spaces, and column 7, lines 2934 discloses data designating flexure and
position of the users legs, arms, fingers, etc. may be assigned to the virtual
beings legs, arms, fingers etc. so that the virtual being may emulate the
gestures of the user for running, kicking, catching virtual balls, painting,
writing, etc. Id. (quoting Ex. 1008, 1:5254, 7:2934). Patent Owner
further argues that paragraph 167 of Dr. Zydas declaration is conclusory
and entitled little to no weight under 37 C.F.R. 42.65(a) because it is
devoid of any factual underpinning and is contradicted by Mr. Pesce, who
confirms that Durward neither teaches nor suggests a three-dimensional
virtual entity. Id. at 23 (citing Ex. 2017 59). Moreover, Patent Owner
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argues even with local area networks and high end computers, the best
virtual worlds in 1993 implemented merely two-dimensional virtual entities.
Id.
In reply, Petitioner argues Durward discloses three-dimensional
avatars. Reply 16. In particular, Petitioner argues Durward discloses a user
representation in a three-dimensional virtual space in which a virtual being
within the virtual space represents a user. Id. (citing Ex. 1008, 1:5264).
Petitioner argues Durward discloses the virtual being within the
three-dimensional space matches the users three-dimensional movements in
the real world closely. Id. (citing Ex. 1008, 7:2934). Petitioner also argues
Patent Owner attempts to trivialize the virtual beings disclosed in Durward
but does not explain how the complex correlation between a users three
dimensional-movement in the real world and a virtual being in a
three-dimensional virtual world would be restricted to two-dimensions. Id.
Petitioner argues Durward does not disclose such a restriction and Patent
Owners arguments do not comport with Durwards disclosure of a
three-dimensional virtual reality system. Id.
Petitioner further argues Patent Owner relies on Mr. Pesces
unsubstantiated and incredible testimony regarding the artthat the state of
computer graphics advanced so dramatically in two years that a person of
skill in 1995 would necessarily understand that an avatar must be
three-dimensional. Id. at 17 (citing PO Resp. 22; Ex. 2017 59).
Petitioner concludes its argument by arguing it is unreasonable to conclude
that a person having ordinary skill in the art would have understood
Durwards three-dimensional virtual world beings to be limited to
two-dimensional objects. Id.
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We disagree with Petitioners showing that Durward discloses a

three dimensional avatar as recited in independent claims 1, 12, and 14 as
well as dependent claims 26 and 15, which depend from claims 1 and 14.
Petitioners argument relies on Durward as allegedly disclosing the claimed
three dimensional avatar recited in claims 1, 12, and 14. See Pet. 3132,
34.
As explained supra in Part II.C.2, we determined that the three
dimensional avatar recited in the preamble of claims 1, 12, and 14 is
limiting.13 In an attempt to carry its burden of proving unpatentability,
Petitioner relies on column 1, lines 5254 of Durward, but this disclosure
falls short of disclosing a three dimensional avatar because column 1,
lines 5254 merely discloses three-dimensional virtual spaces. Pet. 41,
4849; Ex. 1008, 1:5254. Moreover, Petitioner refers to column 1, lines 7
11 of Durward, which merely discloses multiple users at remote locations
participating in a virtual reality network experience; this disclosure,
however, fails to disclose a three dimensional avatar as recited in claims 1,
12, and 14. Pet. 40, 4849; Ex. 1008, 1:711. Petitioner additionally points
to column 1, lines 5964 of Durward, which discloses correlating a position,
orientation, and/or movements of a virtual being to the received data; again,
this excerpt fails to disclose a three dimensional avatar as recited in
claims 1, 12 and 14. Pet. 4041, 4849; Ex. 1008, 1:5964. Petitioner also
13
In the event that the three dimensional avatar recited in the preamble is
not limiting, then Durwards disclosure of data designating flexure and
position of the users legs, arms, fingers, etc. may be assigned to the virtual
beings legs, arms, fingers etc. so that the virtual being may emulate the
gestures of the user for running, kicking, catching virtual balls, painting,
writing, etc. discloses avatar as recited in claims 1, 12, and 14.
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refers to column 2, lines 13 of Durward, which merely discloses defining

other virtual beings within a database in response to position, orientation,
and/or movement, and again, fails to disclose a three dimensional avatar as
recited in claims 1, 12, and 14. Pet. 41, 4849; Ex. 1008, 2:13. In addition,
Petitioner cites column 2, lines 5152 of Durward, which merely discloses a
network including a central control unit that communicates with users.
Pet. 41, 4849; Ex. 1008, 2:5152. Yet, this disclosure also fails to disclose
a three dimensional avatar as required by claims 1, 12, and 14. Petitioner
also relies on Durwards Figure 1, which illustrates users represented by
stick figures; these stick figures, however, are two-dimensional. Pet. 41, 48
49; Ex. 1008, Fig. 1.
Moreover, Petitioner refers to column 3, lines 3032 of Durward,
which merely discloses a user may take the form of a human being, animal,
object, etc. and be visible within a virtual space. Pet. 41, 4849; Ex. 1008,
3:3032. This disclosure also does not disclose three dimensional avatar
as required by claims 1, 12, and 14. Having considered the cited disclosures
of Durward and Petitioners arguments regarding these disclosures,
Petitioner has not demonstrated that these disclosures disclose a three
dimensional avatar, as claims 1, 12, and 14 require.
Furthermore, we do not find Dr. Zydas opinion on this issue
persuasive. See Pet. 32, 34 (citing Ex. 1002 165168). The cited
portions of Dr. Zydas declaration relied upon by Petitioner to teach three
dimensional avatar merely parrot the cited portions of Durward relied upon
by Petitioner and are devoid of any explanation as to how Durward discloses
a three dimensional avatar. See Ex. 1002 165168.
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Nor do we find Petitioners reliance on Durwards teachings recited in

column 7, lines 2934 persuasive. Reply 67 (citing Ex. 1008, 7:2934);
see also Tr. 166:5171:21. Column 7, lines 2934 of Durward states data
designating flexure and position of the users legs, arms, fingers, etc. may be
assigned to the virtual beings legs, arms, fingers etc. so that the virtual
being may emulate the gestures of the user for running, kicking, catching
virtual balls, painting, writing, etc. Although Durward teaches assigning
data designating flexure and position of the users legs, arms, fingers, etc.
to the virtual beings legs, arms, fingers etc., Petitioner does not
demonstrate sufficiently that such movement teaches or suggests
three-dimensional virtual beings or avatars. Rather, such movement could
be performed by two-dimensional entities. Indeed, Figures 1 and 4 of
Durward illustrate movement of two-dimensional stick figures. Ex. 1008,
Figs. 1 and 4. On this point, we find persuasive Mr. Pesces opinion that
Durwards disclosures do not disclose three-dimensional virtual entities and
are entirely consistent with two-dimensional entities. Ex. 2017 59. We
likewise find persuasive Patent Owners argument and Mr. Pesces
testimony that there can be virtual beings in less than three-dimensions
within a three-dimensional environment. See, e.g., Tr. 134:8135:6 (arguing
that despite Durwards disclosure of a three-dimensional virtual space, its
virtual entities would have been understood to be two-dimensional); see
also, e.g., Ex. 2017 40, 59 (opining the same); Ex. 1046, 204:12205:20;
PO Resp. 2223.
Accordingly, based on the arguments and evidence in the record
before us, Petitioner has not shown that the cited portions of Durward
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disclose a three dimensional avatar as required by claims 1, 12, and 14 and

dependent claims 26, and 15, which depend from claims 1 and 14.
b. Conclusion
Petitioner has not shown that Durward discloses the subject matter of
claims 16, 12, 14, and 15 of the 501 patent and, thus, has not shown that
Durward anticipates these claims.
I. Obviousness of Claims 7 and 16 in View of Durward and Wexelblat
The parties argue whether the combination of Durward and

Wexelblat teaches the limitations recited in claims 7 and 16. PO Resp. 31
36; Reply 17. Claims 7 and 16 directly depend from claims 1 and 14,
respectively. Claims 1 and 14 recite three dimensional avatar. Ex. 1001,
19:22, 20:17. Similar to the anticipation ground relying on Durward
discussed supra in Part II.H.2.a, Petitioner relies on Dr. Zydas opinion and
Durward to teach or suggest a three dimensional avatar. We are
unpersuaded by Petitioners argument and evidence that Durward teaches or
suggests a three dimensional avatar for the same reasons we find
unpersuasive Petitioners showing that Durward discloses this limitation.
Accordingly, for at least the reasons stated supra in Part II.H.2.a, Petitioner
has not shown that the combination of Durward and Wexelblat teaches or
suggests each limitation recited in claims 7 and 16.
J. Obviousness of Claims 8 and 10 in View of Durward and Schneider
The parties argue whether the combination of Durward and

Wexelblat teaches the limitations recited in claims 7 and 16. PO Resp. 21
31; Reply 1719. Claims 8 and 10 directly depend from claim 1. Claim 1
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recites three dimensional avatar. Ex. 1001, 19:22. Similar to the

anticipation ground based on Durward discussed supra in Part II.H.2.a,
Petitioner relies on Dr. Zydas opinion and Durward to teach or suggest a
three dimensional avatar. We are unpersuaded by Petitioners argument
and evidence that Durward teaches or suggests a three dimensional avatar
for the same reasons we find unpersuasive Petitioners showing that
Durward discloses this limitation. Accordingly, for at least the reasons
stated supra in Part II.H.2.a, Petitioner has not shown that the combination
of Durward and Schneider teaches or suggests each limitation recited in
claims 8 and 10.
K. Real Parties-in-Interest
District Court Case more than one year before the Petition was filed. PO
with 35 U.S.C. 312(a)(2) and 37 C.F.R. 42.8, and institution of review
was barred under 35 U.S.C. 315(b). PO Resp. 3642. Patent Owner
argues the Board erred in denying its Motion for Routine or Additional
Discovery related to this issue (Paper 9) and in instituting review despite
Patent Owners assertions of Activisions status as a real party in interest.
PO Resp. 3642.
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Institution Decision. See Inst. Dec. 3137 ( II.I); Paper 14. We note that
given in the Institution Decision. Inst. Dec. 3137 ( II.I).
L. Alleged Unconstitutionality

without Article III oversight. PO Resp. 4244. Petitioner responds that the
U.S. Court of Appeals for the Federal Circuit has addressed such arguments
and held that the inter partes review process is not unconstitutional.
Reply 20. Petitioner is correct that the Federal Circuit has addressed the
issue and rejected a challenge to the constitutionality of inter partes reviews
as violative of Article III. See MCM Portfolio LLC v. Hewlett-Packard Co.,
(U.S. Oct. 11, 2016). Accordingly, we disagree with Patent Owners
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M. Patent Owners Motion to Exclude

Opp. 11; see generally Pet.; Reply. Accordingly, Patent Owners Motion to
Exclude is dismissed as moot as to Exhibits 1033, 1034, 1037, and 1042.
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from the relevant time period. Opp. 67; see id. at 10. In other words,
Owners argument regarding Rule 403 should . . . be denied, because the
only unfair prejudice Patent Owner alleges is that the Board will give Mr.
Pesces testimony little or no weight but this would be the correct outcome
for the reasons identified in its Reply. Id. at 10.
Patent Owner responds that Petitioner has no basis to argue that the
(quoting Ex. 1046, 28:813).
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Ex. 1046, 85:421, 89:1090:7, 204:12205:20, 222:1223:6. Therefore,
documenting his drug use beginning in college14 and how this usage
Robinson, 583 F.3d 1265, 1272 (10th Cir. 2009) (recognizing that drug use
14
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the 1990s.
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(5th Cir. 1981) (holding that exclusion of evidence under Rule 403s
Patent Owner alleges is that all of Mr. Pesces testimony will be given little
to no weightwhich is not accurate, as we are considering the admissibility
of Exhibit 1041 only for its relevance to his capacity and reliability in
perceiving and recalling events and other details from the early to mid-
1990s, on which he offers testimony. See Mot. 8. Although we are
cognizant of the sensitive nature of evidence of drug use, there is minimal
15
any of these apply, and we conclude that they do not. See id.; Mot. 78.
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risk of any unfair prejudice from considering Exhibit 1041 for this limited
purpose. In sum, the probative value of Exhibit 1041 for this limited
purpose is not substantially outweighed by any danger of unfair prejudice
and, thus, exclusion under Rule 403 is not warranted.
regarding Mr. Pesces credibility generally. Opp. 7; see id. at 6, 10.
See United States v. Tanksley, No. 93-6346, 2016 WL 502659, at *3 (6th
Cir. 1997) (unpublished) (Evidence of prior drug use generally is not
relevant to the issue of truthfulness . . . .).
61
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relevant and admissible. See Reply 3; Opp. 610. Nor do we see any such
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III. CONCLUSION

evidence that: claims 16, 12, 14, and 15 of the 501 patent are unpatentable
under 35 U.S.C. 103(a) in view of Funkhouser and Sitrick; claims 7 and 16
are unpatentable under 35 U.S.C. 103(a) in view of Funkhouser, Sitrick,
and Wexelblat; and claims 8 and 10 are unpatentable under 35 U.S.C.
103(a) in view of Funkhouser, Sitrick, and Funkhouser 93.
Petitioner, however, has not shown by a preponderance of the
evidence that: claims 16, 12, 14, and 15 are anticipated by Durward under
35 U.S.C. 102(e); claims 7 and 16 are unpatentable under 35 U.S.C.
103(a) in view of Durward and Wexelblat; and claims 8 and 10 are
unpatentable under 35 U.S.C. 103(a) in view of Durward and Schneider.
IV. ORDER

evidence that claims 18, 10, 12, and 1416 of the 501 patent are
unpatentable;
(Paper 33) is dismissed as to Exhibits 1033, 1034, 1037, and 1042 and
denied as to Exhibit 1041; and
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PETITIONER:
Michael T. Rosato
Matthew A. Argenti
Andrew Brown
mrosato@wsgr.com
margenti@wsgr.com
asbrown@wsgr.com
PATENT OWNER:
Wayne M. Helge
Michael R. Casey
whelge@dbjg.com
mcasey@dbjg.com
64
571.272.7822 Entered: November 30, 2015

____________

____________
BUNGIE, INC.,
Petitioner,
v.
WORLDS INC.,
Patent Owner.
____________
Case IPR2015-01264
Patent 7,945,856 B2
____________

DECISION
Institution of Inter Partes Review
37 C.F.R. 42.108

review of claim 1 of U.S. Patent No. 7,945,856 B2 (Ex. 1001, the
856 patent). Paper 3 (Pet.). Worlds Inc. (Patent Owner) filed a
Preliminary Response to the Petition. Paper 12 (Prelim. Resp.).
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Patent 7,945,856 B2
Pursuant to 35 U.S.C. 314(a), an inter partes review may not be

instituted unless the information presented in the petition . . . and any
response . . . shows that there is a reasonable likelihood that the petitioner
would prevail with respect to at least 1 of the claims challenged in the
petition. Having considered the Petition and the Preliminary Response, we
conclude that there is a reasonable likelihood that Petitioner would prevail in
establishing the unpatentability of claim 1 of the 856 patent.
I. BACKGROUND
A. THE 856 PATENT
The 856 patent discloses a client-server architecture for a three-
dimensional graphical, multi-user, interactive virtual world system.
Ex. 1001, [57], 3:13. In the preferred embodiment, each user chooses an
avatar to represent the user in the virtual world, id. at 3:2022, and
interacts with a client system, which is networked to a virtual world
server, id. at 3:910. [E]ach client . . . sends its current location, or
changes in its current location, to the server. Id. at 3:3639; see id. at 2:40
43. The server, in turn, sends each client updated position information for
neighbors of the clients user. Id. at [57], 2:4043, 3:3639, 14:2734.
B. CHALLENGED CLAIM
Claim 1 of the 856 patentthe only challenged claimis
reproduced below.
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1. A method for enabling a first user to interact with second

users in a virtual space, wherein the first user is associated with
at first avatar and a first client process, the first client process
being configured for communication with a server process, and
each second user is associated with a different second avatar
and a second client process configured for communication with
the server process, at least one second client process per second
user, the method comprising:
(a) receiving by the first client process from the server
process received positions of selected second avatars;
and
(b) determining, from the received positions, a set of the
second avatars that are to be displayed to the first user;
wherein the first client process receives positions of fewer
than all of the second avatars.
Id. at 21:722.
C. ASSERTED PRIOR ART
The Petition relies upon the following references, as well as the
supporting Declaration of Michael Zyda, D.Sc. (Ex. 1002):
U.S. Patent No. 5,659,691 (filed Sept. 23, 1993) (issued Aug. 19, 1997)
(Ex. 1008, Durward); and

Virtual Environments, in 1995 SYMPOSIUM ON INTERACTIVE 3D
GRAPHICS 85 (1995) (Ex. 1005, Funkhouser).
D. ASSERTED GROUNDS OF UNPATENTABILITY

Petitioner challenges claim 1 with two asserted grounds under
35 U.S.C. 102anticipation by Funkhouser and by Durward. Pet. 10.
II. ANALYSIS
A. CLAIM INTERPRETATION
The Board interprets claims in an unexpired patent using the broadest
reasonable construction in light of the specification of the patent in which
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[they] appear[].1 37 C.F.R. 42.100(b); see In re Cuozzo Speed Techs.,

LLC, 793 F.3d 1268, 127579 (Fed. Cir. 2015). Under this standard, we
presume a claim term carries its ordinary and customary meaning, which
is the meaning that the term would have to a person of ordinary skill in the
art in question at the time of the invention. In re Translogic Tech., Inc.,
504 F.3d 1249, 1257 (Fed. Cir. 2007) (citation and quotations omitted).
Here, Petitioner proffers claim terms for construction. Pet. 1114.
Patent Owner responds to the asserted grounds of unpatentability using
Petitioners proposed constructions. Prelim. Resp. 8. For purposes of this
Decision, we determine that only one aspect of the scope of determining,
from the received positions, a set of the second avatars that are to be
displayed to the first user (the determining step) of claim 1 requires an
express construction. See Vivid Techs., Inc. v. Am. Sci. & Engg, Inc., 200
F.3d 795, 803 (Fed. Cir. 1999) (holding that only claim terms that are in
controversy need to be construed and only to the extent necessary to
resolve the controversy).
Petitioner represents that [c]laim 1 requires that the claimed client
process associated with a first user performs the step of determining and
1
The parties agree that the broadest reasonable interpretation standard
applies to the 856 patent. See id.; Prelim. Resp. 7. Based on our review of
the patent, however, the patent may have expired recently or may be
expiring shortly. See Ex. 1001, [60], [63]. For expired patents, we apply the
claim construction standard in Phillips v. AWH Corp., 415 F.3d 1303 (Fed.
Cir. 2005). Our analysis in this Decision is not impacted by whether we
apply the broadest reasonable interpretation or the Phillips standard. We,
however, expect the parties to address, with particularity, in their future
briefing the expiration date of claim 1 of the 856 patent and if necessary to
address this issue, to file Provisional Application No. 60/020,296 as an
exhibit.
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argues its asserted grounds of unpatentability assuming this requirement.

Pet. 11 (emphases added); see id. at 2125, 3335. Patent Owner responds
to the asserted grounds under Petitioners interpretationbut [w]ithout
conceding that Petitioners interpretation is strictly required according to the
express language of [the] claim. Prelim. Resp. 12. Patent Owner disputes
that the client in each of the asserted prior art references performs the
determining step. Id. at 1330. Yet neither Petitioner nor Patent Owner
analyzes whether claim 1 requires that the determining step be performed
by the first client process. We address this issue below.
On its face, the language of the determining stepdetermining,
from the received positions, a set of the second avatars that are to be
displayed to the first userdoes not identify or specify the performing
entity. Ex. 1001, 21:1820. That the determining must be from the
received positions does not identify or specify the performing entity.
Rather, based on the claim language, at least the first client process and
the server process have access to the received positions, because the
first client process receiv[es] the received positions from the server
process. Id. at 21:1522. Therefore, the claim language supports an
interpretation that permits the first client process, the server process, or
both to perform the determining step.
In contrast, the other step of the method recited in claim 1 explicitly
identifies the performing entity. Specifically, the step of receiving by the
first client process from the server process received positions of selected
second avatars, expressly recites that the first client process performs the
receiving, and that the receiving is from the server process. Id. at 21:15
18 (emphasis added).
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In addition, patents related to the 856 patent feature independent

claims that recite a determining limitation similar to the determining
step in claim 1 of the 856 patent. These patents include U.S. Patent Nos.
7,181,690 B1 (the 690 patent), 7,493,558 B2 (the 558 patent), and
8,082,501 B2 (the 501 patent), which, together with the 856 patent, are
continuations of U.S. Application No. 08/747,420 that share a common
specification. In contrast with claim 1 of the 856 patent, each of these
claims expressly recites that the client (client process or client device)
determines the avatars to be displayed. 690 patent, [63], 19:3842, 20:17
19, 20:4749, 21:15, 21:1219, 22:1113, 22:4042; 558 patent, [63],
22:1113, 22:4042; 501 patent, [63], 19:3436, 20:1430, 20:4749. For
example, claim 4 of the 558 patent recites: determining, from the
positions received in step (C), by said each client process, avatars that are to
be displayed to the user associated with said each client process.
558 patent, 22:1113 (emphasis added). Similarly, claim 6 of the
690 patent requires: determining, from the positions transmitted in step
(c), by each client process, a set of the avatars that are to be displayed.
690 patent, 20:1719 (emphasis added). Accordingly, the doctrine of claim
differentiationwhich creates a presumption that two independent claims
have different scope when different words or phrases are used in those
claimssupports an interpretation of the determining step of claim 1 of
the 856 patent that does not require the first client process to perform the
step. Seachange Intl, Inc. v. C-COR, Inc., 413 F.3d 1361, 136869 (Fed.
Cir. 2005) (citations omitted); see also InterDigital Commcns, Inc. v. U.S.
Intl Trade Commn, 601 Fed. Appx 972, 97879 (Fed. Cir. 2015)
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Patent 7,945,856 B2
(recognizing that in the context of related patents, rather than the same
patent, the force of the claim differentiation doctrine is diminished).
Moreover, the written description of the 856 patent also supports
interpreting the determining step such that the step can be performed at the
first client process, the server process, or both. The written description
discloses a virtual system in which server 61 sets and maintains variable N,
which specifies the maximum number of other avatars [user] A will see.
Ex. 1001, 5:3738, 13:1819. Client 60 also maintains a variable, N, . . .
which indicates the maximum number of avatars client 60 wants to see
and/or hear. Id. at 5:3841.
The written description refers to N being less than Nbut uses non-
limiting language, such as might be, [i]f, and [w]here, to describe this
situation. Id. at 5:3739, 5:5758, 6:68. Specifically, the written
description states that N . . . might be less than N, id. at 5:3841
(emphasis added), and that [i]f server 61 sets a very high value for N, then
the limit set by client 60 is the only controlling factor, id. at 5:5758
(emphasis added). In addition, the written description explains that
[w]here N is less than N, the client also uses position data to select N
avatars from the N avatars provided by the server. Id. at 6:68 (emphasis
added). In other words, where N is less than N, the client must determine
which N avatars to display from the larger number of avatars, N, sent by the
server.
These non-limiting references to N being less than N do not exclude
the possibility that N, set by the client, could be equal to or greater than N,
set by the server. See Ex. 2006, 12 (The specification allows for the
possibility that the number N set by the client might be less than N or
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Patent 7,945,856 B2
greater than N.). Where N is equal to or greater than N, the serverwhich

maintains a list of the N nearest neighboring remote avatars to each avatar
and sends the client this list, as well as changes in the N closest remote
avatars and their locationswould send the client positions of a number of
avatars that is equal to or less than the maximum number of avatars the
client wants to see. Ex. 1001, 14:2734; see id. at 5:4547, 6:78, 8:669:1,
13:2023. In these circumstances, the server could be considered to perform
or co-perform the act of determining which avatars to display to the user.
Accordingly, on this record, we determine that the determining step
need not be performed by the first client process. Instead, the step is
broad enough to encompass the determining being performed by at least
the first client process, the server process, or both.
B. ANTICIPATION BY FUNKHOUSER
We turn to Petitioners assertion that Funkhouser anticipates claim 1.
1. Printed Publication
Petitioner has made a sufficient showing that Funkhouser qualifies as
prior art under 35 U.S.C. 102(a),2 because Funkhouser was a printed
publication by April 12, 1995before the earliest priority date of the
856 patent, November 13, 1995. Pet. 67; Ex. 1001, [60]. In determining
whether a reference is a printed publication, the key inquiry is whether or
not [the] reference has been made publicly accessible. In re Klopfenstein,
380 F.3d 1345, 1348 (Fed. Cir. 2004). A reference is publicly accessible
if the reference has been disseminated or otherwise made available to the
2
The Leahy Smith America Invents Act (AIA), Pub. L. No. 11229
(2011), revised 35 U.S.C. 102, effective March 16, 2013. Because the
856 patent has an effective filing date before March 16, 2013, our
references to 102 are to its pre-AIA version.
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Patent 7,945,856 B2
extent that persons interested and ordinarily skilled in the subject matter . . .
exercising reasonable diligence, can locate it and recognize and comprehend
therefrom the essentials of the claimed invention without need of further
research or experimentation. Bruckelmyer v. Ground Heaters, Inc., 445
F.3d 1374, 1378 (Fed. Cir. 2006) (citations omitted).
Dr. Zydawho was the chairperson of the 1995 Symposiumtestifies that
the symposium gathered many of the top researchers in the fields of virtual
member discount.). The 1995 Symposium Book and Funkhouser feature a
1995 copyright date and permit copying, generally without a fee and with a
fee and/or specific permission if for direct commercial advantage.
Ex. 1006, copyright page, 85; Ex. 1005, 85.
Petitioner has proffered adequate evidence that an interested ordinarily
skilled artisan, exercising reasonable diligence, could have obtained
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Funkhouser no later than April 12, 1995the last day of the 1995
Symposium. See Mass. Inst. of Tech. v. Ab Fortia, 774 F.2d 1104, 1109
(Fed. Cir. 1985) (holding paper to be a prior art printed publication where
the paper was disseminated without restriction to at least six persons and
between 50 and 500 ordinary artisans were informed of its contents by
[an] oral presentation before the critical date).
Patent Owner denies that Funkhouser was published before the date
of invention of claim 1 of the 856 patent, as it must have been to qualify as
prior art under 35 U.S.C. 102(a). Prelim. Resp. 14 & n.3. Patent Owner
appears to take the position that the subject matter recited in the 856 patent
claims was conceived and reduced to practice before Funkhouser was
published, arguing that by April 12, 1995, its Worlds Chat was released to
the public and [was] already drawing . . . attention, with a supporting
citation to two articles. Id. (citing Ex. 2008, 2009). These articles, however,
were published in May 1995 and June 1995after April 12, 1995.
Ex. 2008; Ex. 2009, 3. Moreover, Patent Owner fails to make any showing
regarding how these articles or Worlds Chat connect to the claim language.
Thus, on the present record, there is insufficient evidence that the subject
matter of claim 1 of the 856 patent was invented before April 12, 1995.
2. Funkhouser
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to other client and server workstations. Id.
Figure 6 depicts a source cell, in a dark box, and shows, in stipple, the
some sight-line from anywhere in the source cell.3 Id. As shown in
entity resident in the source cell. Id.
visibility to process update messages, using cell visibility look-ups,
rather than more exact real-time entity visibility computations. Id. The
servers forward update messages only to servers and clients containing
entities inside some cell visible to the one containing the updated entity. Id.
3
Book. In Exhibit 1005, Funkhouser, the stipple is not visible.
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Clients, in turn, use the update messages to maintain and update

client. Id. at 8788; see id. at 92, 209. Surrogates contain (often
simplified) representations for the entitys geometry and behavior. Id.
at 87. When a client receives an update message for an entity managed by
another client, it updates the geometric and behavioral models for the
entitys local surrogate. Id. Between update messages, each client
simulates the behavior of its surrogates. Id.
at 85, 209.
Figure 4 Figure 7
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3. Discussion
a. Determining Step
Petitioner and Patent Owner dispute whether Funkhouser discloses the
determining step of claim 1 of the 856 patent. See Pet. 2125; Prelim.
Resp. 1322. As an initial matter, we note that Patent Owner contests only
whether the client workstations in Funkhouser perform this step. See Prelim.
Resp. 1322. Accordingly, under our interpretation of the determining
step in II.A of this Decisionwherein the step may be performed by the
recited first client process, the server process, or boththere is no
dispute, at this stage of the proceeding, that Funkhouser discloses the
limitation.
Under our construction of the determining step, we are persuaded
by Petitioners showing that Funkhouser discloses the limitation. In
addition, even if the determining step of claim 1 is narrower than our
construction and must be performed by the recited first client processas
both parties assume in their briefingPetitioner has made a sufficient
showing that Funkhouser discloses the limitation, i.e., that Funkhousers
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client determines which avatars to display to the user. See Pet. 2125;
Prelim. Resp. 1322.
visibility, which determines the set of cells potentially visible to each
cell. Ex. 1005, 87 (emphases added). Thus, servers forward an update
message, received from another client, to a client if that client contains an
entity inside some cell visible to the [cell] containing the updated entity.
Id. (emphasis added). Because this culling is based on pre-computed
visibility of the cell in which the entity residesrather than more exact
real-time entity visibility computationsit conservatively over-
estimate[s] the visibility of any entity resident in the . . . cell. Id.
(emphases added).
As a result, as Petitioner argues and Dr. Zyda testifies, the servers
may send update messages to clients for more entities than are presently
visible to, and within the . . . field of view of, any entity managed by the
client. Pet. 23; Ex. 1002 78. For example, entity B in Figures 4 and 6 is
not visible to entity C, because entity C is facing away from entity B.
Ex. 1002 78; Ex. 1005, 86, Figs. 4, 6. Thus, entity C will not actually
see any change in position of entity B. Ex. 1002 78. Nonetheless, when
entity B is modified, the server forward[s] an update message to
client C, because entity C is in a cell potentially visible to the cell where
entity B is located. Ex. 1005, 8788, Fig. 7 (emphasis omitted).
The clientafter receiving update messages that may relate to entities
outside the field of view of any entity it managesprocesses the messages
for remote entities visible to any of the clients entities and executes
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programs to display the environment from a particular entitys point of view.

Each client maintain[s] surrogates for remote entities visible to at least
one entity local to the client, id. at 88, and uses the messages it receives to
update[] the geometric and behavioral models for the entitys local
surrogate, id. at 87; see id. at 209. Funkhouser explains that its clients
execute . . . programs necessary to generate behavior for their entities and
that [t]hey . . . may include viewing capabilities in which the virtual
environment is displayed on the client workstation screen from the point of
view of one or more of its entities. Id. at 87; see id. at 85 ([U]sers run an
interactive interface program . . . [that] simulates the experience of
immersion in a virtual environment by rendering images of the environment
as perceived from the users . . . viewpoint.). Funkhouser also includes
Plate II, which shows an environment rendered from [the] viewpoint of one
entity, omitting many other entities in the environment.4 Ex. 1005, 209.
Dr. Zyda testifies that after receiving the filtered positional updates from
the server, the client performs its own calculations, including updating the
surrogates of the remote entities, in order to determine which of the remote
entities to display within the clients field of view. Ex. 1002 81.
Based on these disclosures of Funkhouser and Dr. Zydas supporting
testimony, Petitioner has shown sufficiently that in Funkhouser, the client
performs the determining step. At this stage of the proceeding, we are not
persuaded by Patent Owners arguments to the contrary.
4
We agree with Patent Owner that the Petition and Dr. Zydas testimony
lack persuasive support regarding the precise number of remote entities for
which the entity from whose viewpoint Plate II depicts the environment
receives updates. See Pet. 8, 25; Ex. 1002 81; Prelim. Resp. 1617, 20. In
this Decision, we do not rely on these numbers.
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Patent Owner asserts that Petitioner relies on an inherency theory

because Funkhouser fails to expressly disclose client-side determining,
including how or whether the client workstation determines which entities to
display on the workstation. Prelim. Resp. 13, 2021. Patent Owner argues
that this theory is deficient because Petitioner has not shown that
Funkhouser necessarily discloses the client performing the determining
step. Id. at 1316, 2021. Moreover, Patent Owner disputes Petitioners
arguments relying on Funkhousers update messages to support the client
performing the determining step, asserting that Funkhouser does not
disclose a client using an update message for anything other than updating
the geometric and behavioral models for the entitys local surrogate. Id.
at 1415. Patent Owner also contends that Funkhouser may use the
updated geometric and behavioral models of the surrogate stored by the
client, rather than any received positionsas required by claim 1 of the
856 patentto determine which entities to display. Id. at 22.
Patent Owner does not persuasively respond to or address the
disclosures in Funkhouser to which Petitioner cites, particularly those
referring to the client executing programs and including viewing capabilities
to display the environment from an entitys point of view: [c]lients execute
the programs necessary to generate behavior for their entities and [t]hey
. . . may include viewing capabilities in which the virtual environment is
more of its entities. Ex. 1005, 87; see id. at 85; Pet. 2224; Prelim.
Resp. 1322. As outlined above, we are persuaded that this discussion in
Funkhousercombined with Funkhousers disclosures that the servers send
positional update messages to clients based on an overestimate of the
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visibility of the clients entities and that the clients process the messages to
maintain and update their surrogates of remote entitiessufficiently
discloses that the client in Funkhouser determines which remote entities to
display to the user.
Moreover, we are not persuaded by Patent Owners speculation that
Funkhouser could use the updated geometric and behavioral models of
the surrogate stored by the client, rather than any received positions to
determine entities to display. Prelim. Resp. 22. In Funkhouser, the update
messages, which the server forwards to clients, include positional updates.
See Ex. 1005, 87, 89. The clients use these messages to update[] the
geometric and behavioral models for the surrogates they maintain. Id.
at 87. Thus, even if Funkhousers clients use these models to determine
which entities to display, as Patent Owner posits, this determining still
would be from the received positions received from the server, as the
claim requires.
On the record before us, Petitioner has made a sufficient showing that
Funkhouser discloses the remaining limitations of claim 1 of the 856 patent,
which Patent Owner does not contest. See Pet. 1426; Prelim. Resp. 1322.
In particular, Petitioner has made an adequate showing regarding receiving
by the first client process from the server process received positions of
selected second avatars and wherein the first client process receives
positions of fewer than all of the second avatars, as recited in claim 1. As
Petitioner points out, Funkhousers clients send messages, including
positional information, to servers, which forward them to other client and
server workstations. Ex. 1005, 87, 89. Further, Funkhouser implements
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server-based message culling such that the servers do not send the positional
updates to all clients, but only to clients with entities that can potentially
perceive the effects of the update. Id. at 85, 87. For example, in
Figures 4 and 7, there are four clients A, B, C, and D yet client A only
receives updates on entity B; client B only receives updates on entities A and
C; and client C only receives updates on entity B. Id. at 8788, Figs. 4, 7.
4. Conclusion
Based on our review of the parties arguments and evidence and our
analysis above, Petitioner has shown a reasonable likelihood that it would
prevail in showing that Funkhouser anticipates claim 1 of the 856 patent.
C. ANTICIPATION BY DURWARD
Petitioner also argues Durward anticipates claim 1 of the 856 patent.
1. Durward
central control unit 14, with processor 100, for communicating with a
plurality of users. Id. at 2:5052, 3:5860.
Each user [t]ypically is equipped with computer 42 and head-
mounted display 46. Id. at 2:6667. The user communicates its positional
data to computer 42 which, in turn, communicates the data to central control
unit 14. Id. at 3:1526. Central control unit 14 uses this data to define a
virtual being within the virtual space for the user. Id. at 3:2729.
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motion, control, and sound data to the users. Id. at 3:5863, 4:1223.
the users, only changes in th[is] . . . data is communicated. Id. at 4:2326.
This updated data allow the users computer [to] update the images
viewed and sounds heard. Id. at 6:6062. The users head[-]mounted
the perspective of the virtual being defined for [the] user [] together with all
other defined virtual beings and objects within its field of vision. Id. at
3:5054; see id. at [57], 1:5759.
[E]ach virtual being, and hence each user, is assigned a visual
relevant space . . . . Id. at 4:5054. [V]isual relevant spaces determine
which state changes are communicated to (or perceivable by) the users. Id.
at 4:5456. Figure 5 is reproduced below.
Figure 5 depicts virtual space 169, with virtual beings 182, 183, and 184. Id.
at 4:4345, 4:5961. Virtual being 182 is assigned visual relevant space
200; virtual being 184 is assigned visual relevant space 204. Id. at 4:6163.
As shown in Figure 5 for virtual being 182, [t]he visual relevant
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position of the virtual being changes. Id. at 5:1318.
In the preferred embodiment, in which only position, motion, control,
and sound data are communicated to the user, elements outside of a visual
relevant space may be visible to the user, but any real-time or program
controlled position/motion associated with the element is not processed for
that user. Id. at 5:512. As a result, the element appears stationary in a
fixed position, or . . . moves in accordance with a fixed script. Id.
2. Discussion
a. Determining Step
Petitioner and Patent Owner dispute whether Durward discloses the
determining step of claim 1 of the 856 patent. See Pet. 3335; Prelim.
Resp. 2229. Like the asserted ground of anticipation by Funkhouser,
Patent Owners dispute that Durward discloses this limitation rests on an
argument that Petitioner has not demonstrated that the client in Durward
performs the recited determining. See Prelim. Resp. 2229. Therefore,
under our interpretation of the determining step in II.A of this
Decisionwherein the step may be performed by the recited first client
process, the server process, or boththere is no dispute, on the record
before us, that Durward discloses the limitation.
Based on our review of the arguments and evidence of record,
Petitioner has shown sufficiently that Durward discloses the determining
step under our construction. Moreover, even if claim 1 requires that the
determining step be performed by the first client process, as the parties
arguments in the Petition and Preliminary Response assume, we are
persuaded that Petitioner has put forward evidence that sufficiently
20
IPR2015-01264
Patent 7,945,856 B2
demonstrates that Durward discloses the step under this narrower

interpretation.
the selected virtual space in his or her computer.); Pet. 34. Central control
unit 14 (server process) sends the user updated positional data based on
the assigned visual relevant space of the users virtual being (avatar).
Ex. 1008, 3:5863, 4:1226, 4:5056.
As Petitioner argues and Dr. Zyda testifies, the visual relevant space
may be broader than the clients field of view, as exemplified by visual
relevant space 204 for virtual being 184 in Figure 5. Pet. 34; see Ex. 1002
105; Ex. 1008, 4:5759, 5:1318, Fig. 5. Durward explains that, as shown
by virtual being 184, the users visual relevant space may be defined by the
field of view of the virtual being and areas in close proximity to it.
Ex. 1008, 5:1318 (emphases added). In addition, the visual relevant space
may be narrower than the clients field of view. As Durward states,
elements outside of a visual relevant space may be visible to the user, but
because updated positional data for those elements are not transmitted to the
user, any real-time or program controlled position/motion associated with
the element is not processed for that user. Id. at 5:512. As a result, the
element [either] appears stationary in a fixed position, or . . . moves in
accordance with a fixed script. Id.
Regardless of the scope of the assigned visual relevant space and,
thus, the positional updates received by the user, the users head-mounted
display shows only the virtual beings and objects within the users field of
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Patent 7,945,856 B2
view. As Durward explains, the users computer uses the updated

positional data received from central control unit 14 to update the images
viewed. Id. at 6:6062. Further, Durward discloses that the users
from the perspective of the virtual being defined for [the] user [] together
with all other defined virtual beings and objects within its field of vision.
Id. at 3:5054; see id. at [57], 1:5759 ([T]he users computer may display
a portion of a selected virtual space on the users head mounted display.).
Dr. Zyda testifies that [u]pon receipt of the position information from
central control unit 14 (server process), the client determines a set of
the received positions fall within the users field of view. Ex. 1002 106.
Based on Petitioners arguments and Dr. Zydas testimony regarding
these disclosures of Durward, we are persuaded that Petitioner has made a
sufficient showing that Durwards user determines which virtual beings
(avatars) to display from the positional data received from central control
unit 14 (server process), which may include the positions of more or less
virtual beings than those within the users field of view. In other words,
Petitioner has adduced adequate evidence that Durward performs the
determining step of claim 1 of the 856 patent, and that this determining is
performed by the recited first client processthereby disclosing the
limitation under our construction as well as the narrower construction
assumed by the parties.
On this record, we do not agree with Patent Owners arguments to the
contrary. As with the asserted ground of anticipation by Funkhouser, Patent
Owner contends that Petitioners assertions sound[] of inherency, but fail[]
22
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Patent 7,945,856 B2
to meet the requisite showing that the clients in Durward must

necessarily perform the determining step. Prelim. Resp. 24 (emphasis
omitted). Patent Owner argues Petitioner misinterpret[s] and fails to
consider the activity of Durwards central control unit 14, which receive[s]
and monitor[s] the orientation and field of view of the virtual beings. Id.
at 2425, 29 (quoting Ex. 1008, 3:1620, 4:24, 6:5355). In column 8,
lines 5155, for example, Durward explains that central control unit 14 uses
such information to determine[] locations of the other users and their
defined virtual objects within and without the relevant and priority spaces,
which then are used to ascertain which position, motion and sound data is
transmitted to which user. Id. at 27 (quoting Ex. 1008, 8:5155). Patent
Owner also cites column 7, lines 815 of Durward, which explain that as a
user moves, central control unit 14 update[s] the position (and hence the
field of view) of the corresponding virtual being and communicate[s] the
graphical data for the updated field of view to the user. Id. at 24, 2627
(quoting Ex. 1008, 7:815). In addition, Patent Owner cites claim 4 of
Durward, which recites that each users visual relevant space is defined by
a portion of the virtual space viewed from the perspective of that users
virtual being. Ex. 1008, 9:6467; Prelim. Resp. 2829.
We are not persuaded that the passages of Durward to which Patent
Owner directs our attention undermine Petitioners position. First, Patent
Owner has not addressed sufficiently whether the passages and claim it cites
relate to the embodiment on which Petitioners argument relies. See, e.g.,
Ex. 1008, 7:3 (referring to another embodiment of the invention).
Second, as explained above, Petitioners argument recognizes that in
Durward, the visual relevant spacewhich determines what positional data
23
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Patent 7,945,856 B2
are communicated to the userneed not be fixed and can correspond to the
field of view of the virtual being. See id. at 4:5056, 5:1318 ([T]he users
visual relevant space may be defined by the field of view of the virtual being
and areas in close proximity to it . . . in which case the visual relevant space
may move about the virtual space as the perspective or position of the
virtual being changes.) (emphasis added). Thus, Durwards disclosures
that central control unit 14 monitors and tracks virtual beings locations and
orientations to determine which updated positional data to transmit to each
user is consistent with, and does not undermine, Petitioners position.
Third, Durwards disclosure regarding situations where central control
unit 14 communicates only the graphical data for the updated field of
view, as referenced in column 7, lines 318, does not address situations
where the visual relevant space, and thus the positional data communicated
to the user, is wider or narrower than the virtual beings field of view. As
we explain above, we are persuaded that at least in these situations,
Durwards client determines which virtual beings to display to the user.
In addition, the Petition makes a sufficient showing that Durward
discloses the remaining limitations of claim 1 of the 856 patent, which
Patent Owner has not disputed. See Pet. 2636; Prelim. Resp. 2229.
Specifically, we are persuaded by Petitioners showing that Durward
discloses receiving by the first client process from the server process
received positions of selected second avatars and wherein the first client
process receives positions of fewer than all of the second avatars, as recited
in claim 1. In Durward, each user communicates its positional data to
central control unit 14, Ex. 1008, 3:1526; see id. at 2:59, and central
24
IPR2015-01264
Patent 7,945,856 B2
control unit 14 communicates changes in position, motion, control, and

sound data to the users based on their assigned visual relevant space. Id. at
3:5863, 4:1226, 4:5056; see id. at 5:5562. Moreover, as explained by
Durward and Dr. Zyda, users do not receive updates on virtual beings
outside their visual relevant space, because the visual relevant space
determine[s] which state changes are communicated to users. See id. at
4:5056; Ex. 1002 10102. For example, in Figure 5, virtual being 184
does not receive a positional update on virtual being 183, because virtual
being 183 is not within visual relevant space 204 of virtual being 184. See
Ex. 1008, 4:4345, 4:6163, 5:23, Fig. 5; Ex. 1002 102.
3. Conclusion
Based on our review of the Petition and Preliminary Response as well
as our analysis above, Petitioner has shown a reasonable likelihood that it
would prevail in establishing that Durward anticipates claim 1.
D. SECTION 325(D) DISCRETION TO DECLINE TO INSTITUTE
Patent Owner urges us to decline to institute the Petition, under
35 U.S.C. 325(d), because the same or substantially the same prior art or
arguments were presented during examination of the 856 patent. Prelim.
Resp. 1112 (emphasis omitted). Petitioner explains that Funkhouser and
Durward were listed in an Information Disclosure Statement (IDS).
Pet. 4; Ex. 1004, 242, 246.
Section 325(d) provides: [i]n determining whether to institute . . . a
proceeding . . ., the Director may take into account whether, and reject the
petition or request because, the same or substantially the same prior art or
arguments previously were presented to the Office. Having considered the
parties arguments and the citations to Funkhouser and Durward in an IDS
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Patent 7,945,856 B2
during prosecution, we decline to exercise our discretion to decline to

institute inter partes review. See 37 C.F.R. 42.108(a).
E. REAL PARTY IN INTEREST
unnamed real party in interest. Thus, according to Patent Owner, the
Petition fails to comply with 35 U.S.C. 312(a)(2) and institution of review
is barred under 35 U.S.C. 315(b). Prelim. Resp. 3039.
1. Factual Background
Petitioner and Activision entered into a Software Publishing and
Development Agreement (the Agreement), effective April 16, 2010.
Ex. 2002, 1. Under the Agreement, Petitioner agreed to develop a series
of software products with the title Destiny (the Destiny Products or the
Products), to be exclusively published and distributed by Activision. Id.
In 2012, Patent Owner filed and served a complaint against Activision
alleging infringement of the 856 patent in the U.S. District Court for the
District of Massachusetts (Activision Case). Ex. 2007; Ex. 2003. The
complaint alleges infringement by various productsbut not any Destiny
Products. See Ex. 2007.
In a letter dated November 13, 2014 (the Letter), Patent Owner
informed Activision that Patent Owner intend[s] to add . . . Destiny to the
Activision Case. Ex. 2004, 1. Patent Owner, however, has not added any of
the Destiny Products as an accused product in the case. Ex. 2001, 16:910;
Prelim. Resp. 35.
2. Discussion
Courts traditionally have invoked the term real party in interest to
describe a relationship sufficient to justify applying conventional principles
26
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Patent 7,945,856 B2
of estoppel and preclusion to non-parties. Office Patent Trial Practice

Guide, 77 Fed. Reg. 48,756, 48,75960 (Aug. 14, 2012) (Practice Guide).
The factors courts consider in analyzing these issues inform our analysis. Id.
In Taylor v. Sturgell, the Supreme Court reaffirmed the fundamental
nature of the rule that a non-party is not estopped, precluded, or otherwise
bound by litigation. 553 U.S. 880, 893, 898 (2008). The Court explained
that this rule is subject to six categories of exceptions that apply in limited
circumstances, namely where: (1) the non-party agrees to be bound; (2) a
pre-existing substantive legal relationship[] with the named party justifies
binding the non-party; (3) the non-party, in certain limited circumstances,
is adequately represented by a party with the same interests; (4) the non-
party assume[d] control over the proceeding; (5) the non-party is bound by
a prior decision and is attempting to rehear the matter through a proxy; and
(6) a special statutory scheme . . . expressly foreclos[es] successive
hearing by non-parties. Id. at 89298 (citations and quotations omitted).
Here, Patent Owner argues that Activision is a real party in interest
because the second and fourth categories in Taylora pre-existing
substantive legal relationship[] and controlare satisfied. Prelim.
Resp. 30. Patent Owner argues that the Letter, indicating an intent to add a
Destiny Product as an accused product in the Activision Case, triggered
[Petitioner]s duties under the Agreement. Id. at 34. Moreover, according
to Patent Owner, [b]y the express terms of the Agreement, Activision had
at minimum an opportunity to control this [inter partes review] through its
contractual right to review and approve [Petitioner]s legal reviews
underlying this [inter partes review], its participation in the meetings of
27
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Patent 7,945,856 B2
[Petitioner]s Board of Directors, and its funding of th[is inter partes review]
indirectly through payment of Development Advances. Id. at 3637.
We disagree. Even assuming that Petitioners obligations under the
Agreement were triggered by Patent Owners mere representation to
Activision of an intent to accuse a Destiny Product in the Activision Case,
Patent Owner has not shown that Activision has an opportunity to control
this inter partes review. Instead, we agree with Petitioner that Patent
Owners arguments are based on unreasonable assumptions and
interpretations of various sections of the Agreement. See Paper 10.
The concept of control generally means that the non[-]party has the
actual measure of control or opportunity to control that might reasonably be
expected between two formal coparties in a proceeding. Practice Guide, at
48,759 (citation omitted). In other words, the non-party had the
opportunity to present proofs and argument, Taylor, 553 U.S. at 895
(citation omitted), or to direct or control the content of the filing, In re
Guan Inter Partes Reexamination Proceeding, Control No. 95/001,045,
Decision Vacating Filing Date, at 8 (Aug. 25, 2008).
Patent Owner fails to show that Activision satisfies these standards.
First, Patent Owner argues that Activision has at least the opportunity to
control this proceeding based on Petitioners obligation to conduct legal
reviews, with Activisions review and approval, under 7A.15(j) of the
Agreement. Prelim. Resp. 32, 34, 36. Section 7A.15(j) states that
Petitionersubject to prior review and approval of Activisionmust
manage and is responsible for [c]onducting legal reviews of the Products to
ensure that all Intellectual Property and other rights are fully cleared for
use. Ex. 2002, 10 (emphasis added). According to Patent Owner,
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Patent 7,945,856 B2
Petitioners obligation to conduct legal reviews is pursuant to its warranty of

non-infringement in 14.1.2. Id. at 19; Prelim. Resp. 32.
We, however, agree with Petitioner that Patent Owners argument is
misplaced because it is premised on a faulty assumption, namely that this
proceeding constitutes a legal review[] of the Products under 7A.15(j).
Paper 10, 6 (emphasis omitted). The only subject of this proceeding is the
856 patent; this proceeding does not involve any product. Id. Thus, Patent
Owner has not shown that this proceeding falls within the scope of a legal
review[] of the Products under 7A.15(j), such that the Agreement would
give Activision a right of review and approval related to this proceeding.
Second, Patent Owner asserts Petitioner has at minimum the
opportunity to control th[is] . . . proceeding[] as a result of Activisions
contractual oversights of [Petitioner]s management pursuant to 18.1
and 18.2 of the Agreement. Prelim. Resp. 36. Section 18.1 gives Activision
a right of approval, which . . . may be withheld in Activisions sole
discretion, over any Change in Control of [Petitioner], which is defined as
a merger or consolidation . . . with another company, sale or transfer of any
. . . significant and/or material assets, or a transaction or series of related
transactions resulting in the transfer of fifty percent (50%) or more of the
equity ownership. Ex. 2002, 24. Under 18.2, Activision has the right to
designate one person to attend and participate as a non-voting observer in all
meetings of the Board of Directors of [Petitioner]. Id.
Neither of these provisions shows that Activision has an opportunity
to control this proceeding. Regarding 18.1, Patent Owner fails to show
any relationship between Activisions right of approval of a Change in
Control of Petitioner, such as a merger or transfer of majority ownership,
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Patent 7,945,856 B2
and the control of this proceeding. See Aruze Gaming Macau, Ltd. v. MGT
Gaming, Inc., Case IPR2014-01288, slip op. at 11 (PTAB Feb. 20, 2015)
(Paper 13) ([Real party in interest] is the relationship between a party and a
proceeding[,] . . . not . . . the relationship between parties, and, thus, the
inquiry focus[es] . . . on the degree of control the nonparty could exert over
the inter partes review, not the petitioner.). Similarly, even if Activision
invoked its right to designate one . . . non-voting observer in Petitioners
Board of Director meetings, pursuant to 18.2, one persons attendance at
meetings, without any voting rights, fails to rise to an opportunity to control
this proceeding. Ex. 2002, 24 (emphasis added). The limited involvement
in Petitioners management that these provisions afford Activision falls far
from any opportunity to control this proceeding that might reasonably be
expected between two formal coparties, Practice Guide, at 48,759, such as
the opportunity to present proofs and argument, Taylor, 553 U.S. at 895
Guan, No. 95/001,045, at 8 (Aug. 25, 2008).
Third, Patent Owner points to 10.1 and 14.1.4 of the Agreement as
evidence that Activision is funding this proceeding. Prelim. Resp. 33, 35
36. Under 10.1, Activision must pay development advances
(Development Advances) to [Petitioner] for the development of each of the
Products, which shall fully fund [Petitioner]s operations directly related
to the development of the Products (including overhead costs associated
therewith, but excluding any built-in profit margin). Ex. 2002, 1415.
Section 14.1.4 specifies that the Development Advances shall be utilized by
[Petitioner] solely to fund the costs of creation and development of the
Products and otherwise cover day-to-day overhead and operational expenses
30
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Patent 7,945,856 B2
that are reasonably necessary and related to the creation and development of
the Products (e.g., office lease, computers[,] employee salaries, etc.), but
excluding any built-in profit margin. Id. at 20 (emphasis added).
Patent Owner argues that the operations and operational expenses in
10.1 and 14.1.4 include the funding of the legal reviews required under
[] 7A.15(j), which were intended by [Petitioner] and Activision to come
from the Development Advances paid by Activision for development of the
Destiny [P]roducts. Prelim. Resp. 33; see id. at 3536. In other words,
Patent Owner argues that the legal reviews of the Products in 7A.15(j) is
a permissible use of the Development Advances. As we explain above,
Patent Owner has not demonstrated that this proceeding constitutes a legal
review[] of the Products under 7A.15. Therefore, even if Patent Owner
were to show that the Agreement allows Petitioner to use Development
Advances for such legal reviews of the Products, this would not establish
that the Agreement allows Petitioner to use Development Advances to fund
this proceeding. Moreover, Patent Owner also has not shown that legal
reviews of the Products under 7A.15(j) or this proceeding fall within the
categories of permissible uses of Development Advances: (1) creation and
development of the Products and (2) day-to-day overhead and operational
expenses that are reasonably necessary and related to the creation and
development of the Products. Ex. 2002, 20 (emphases added). Notably,
the examples of overhead and operational expenses included 14.1.4
office lease, computers[,] employee salariesare disparate from the legal
reviews required by 7A.15(j) and from the filing of this Petition.
Accordingly, Patent Owner has not demonstrated that the Agreement
gives Activision any opportunity to control this proceeding. In addition, we
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Patent 7,945,856 B2
note that Petitioner has expressly denied any control or funding of this
proceeding by Activision. Paper 10, 12, 8. Petitioner represents to the
Board that [Petitioner] is solely responsible for the cost and control of the
[inter partes review] against [Patent Owner]s patents, and [n]othing in the
. . . Agreement allows any party other than [Petitioner] to control th[is] . . .
proceeding[]. Id. at 12. Similarly, Petitioner states that Activisions
payment of [D]evelopment [A]dvances to [Petitioner] funded the
development of the [Destiny Products], not these [inter partes reviews]. Id.
at 8. On this record, we accept Petitioners express representations that
Activision is not controlling or funding this proceeding.
Moreover, Patent Owner has not shown that the second category
outlined by the Supreme Court in Taylora pre-existing substantive legal
relationshipjustifies finding Activision to be a real party in interest.
Prelim. Resp. 3031, 37. Not all pre-existing relationships are sufficient to
satisfy this category. The Taylor Court provided a non-exclusive list of
[q]ualifying relationships, namely preceding and succeeding owners of
property, bailee and bailor, and assignee and assignor. 553 U.S. at 894.
Patent Owner has not shown that the relationship between Petitioner and
Activision meets any of these examples. In addition, beyond stating that
Petitioner and Activision had a preexisting relationship, Patent Owner has
not made any arguments regarding this relationship distinct from its
arguments addressed above regarding control. For the reasons explained
above, we likewise are not persuaded that the relationship between Petitioner
and Activision, resulting from the Agreement, is sufficient to justify finding
Activision to be a real party in interest in this proceeding.
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Patent 7,945,856 B2
In conclusion, Patent Owner has not demonstrated that Activision is

an unnamed real party in interest in this proceeding. Accordingly, Patent
Owner has not established that the Petition violates 35 U.S.C. 312(a)(2) or
that institution of review is barred under 35 U.S.C. 315(b).
III. CONCLUSION
For the reasons given, we determine that the information in the
Petition establishes a reasonable likelihood that Petitioner would prevail in
showing that claim 1 of the 856 patent is unpatentable.
Any discussion of facts in this Decision is made only for the purpose
of institution of inter partes review. The Boards final determination will be
based on the record as fully developed during trial.
IV. ORDER
Accordingly, it is:
ORDERED that pursuant to 35 U.S.C. 314(a), an inter partes
review of claim 1 of the 856 patent is instituted, commencing on the entry
date of this Decision;
FURTHER ORDERED that pursuant to 35 U.S.C. 314(c) and
37 C.F.R. 42.4, notice is hereby given of the institution of a trial; and
FURTHER ORDERED that the trial is limited to the following
grounds of unpatentability:
Claim 1 under 35 U.S.C. 102 as anticipated by Funkhouser; and
Claim 1 under 35 U.S.C. 102 as anticipated by Durward.
33
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Patent 7,945,856 B2
PETITIONER
Michael T. Rosato
Matthew A. Argenti
mrosato@wsgr.com
margenti@wsgr.com
PATENT OWNER:
Wayne M. Helge
Michael R. Casey
Donald L. Jackson
whelge@dbjg.com
mcasey@dbjg.com
djackson@dbjg.com
34
571-272-7822 Date: November 30, 2015

____________

____________
BUNGIE, INC.,
Petitioner,
v.
WORLDS INC.,
Patent Owner.
____________
Case IPR2015-01321
Patent 8,145,998 B2
____________

DECISION
37 C.F.R. 42.108
I. INTRODUCTION

review of claims 13, 7, 8, and 1120 (the challenged claims) of
IPR2015-01321
Patent 8,145,998 B2
U.S. Patent No. 8,145,998 B2 (the 998 patent). Paper 3 (Pet.). Patent
Owner, Worlds Inc., filed a Preliminary Response pursuant to
35 U.S.C. 313. Paper 12 (Prelim. Resp.).
We have authority to determine whether to institute an inter partes
review. 35 U.S.C. 314; 37 C.F.R. 42.4(a). Upon consideration of the
Petition and the Preliminary Response, and for the reasons explained below,
we determine that the information presented shows a reasonable likelihood
that Petitioner would prevail with respect to claims 13, 7, 8, 1218, and 20.
See 35 U.S.C. 314(a). Accordingly, we institute an inter partes review of
these claims.
A. Related Matters
v. Activision Blizzard, Inc., Case No. 1:12-cv-10576 (D. Mass.). Paper 6. In
addition, the 998 patent is the subject of IPR2015-01325 and related to the
patents at issue in IPR2015-01264, IPR2015-01268, IPR2015-01269, and
IPR2015-01319. Id.

Petitioner identifies the following as asserted grounds of
unpatentability:
2
IPR2015-01321
Patent 8,145,998 B2
Reference(s) Basis Challenged Claim(s)

Funkhouser
1, 2, 7, 8, 11, 12, 16,
(Ex. 1005)1 and 103(a)3
18, and 20
Marathon (Ex. 1021)2
Funkhouser,
Marathon, and Sitrick 103(a) 3
(Ex. 1013)4
Funkhouser,
Marathon, and
103(a) 1315
Funkhouser 93
(Ex. 1017)5
Funkhouser,
Marathon, and 103(a) 17
Wexelblat (Ex. 1020)6
Funkhouser and Pratt
103(a) 19
(Ex. 1027)7
1
(1995).
2
Marathon, Bungie Products Software Corporation, 1994.
3
The relevant sections of the Leahy-Smith America Invents Act (AIA),
Pub. L. No. 11229, took effect on March 16, 2013. Because the application
from which the 998 patent issued was filed before that date, our citations to
Title 35 are to its pre-AIA version.
4
5
6
7
David R. Pratt, A Software Architecture for the Construction and
Management of Real-Time Virtual Worlds (1993) (unpublished doctoral
dissertation, Naval Postgraduate School).
3
IPR2015-01321
Patent 8,145,998 B2
C. The 998 Patent
The 998 patent is directed to a three-dimensional graphical, multi-

user, interactive virtual world system that includes highly scalable
architecture. Ex. 1001, Abs. The system disclosed in the 998 patent
displays avatars representing other users neighboring the user viewing the
virtual world. Id. Motion information from the remote users avatars is
transmitted to a central server process that provides positions updates to
client processes for neighbors of the user at that client process. Id. The
client process also determines which background objects to render. Id.
D. The Challenged Claims

Petitioner challenges claims 13, 7, 8, and 1120. Pet. 4. Claims 1, 2,
18, and 19 are independent. Claim 1 is illustrative and reproduced below:
1. A method for displaying interactions of a local
user avatar of a local user and a plurality of remote user avatars
of remote users interacting in a virtual environment, the method
comprising: receiving, at a client processor associated with the
local user, positions associated with less than all of the remote
user avatars in one or more interaction rooms of the virtual
environment, wherein the client processor does not receive
position information associated with at least some of the remote
user avatars in the one or more rooms of the virtual
environment, each avatar of the at least some of the remote user
avatars failing to satisfy a condition imposed on displaying
remote avatars to the local user; generating, on a graphic
display associated with the client processor, a rendering
showing position of at least one remote user avatar; and
switching between a rendering on the graphic display that
shows at least a portion of the virtual environment to the local
user from a perspective of one of the remote user avatars and a
rendering that allows the local user to view the local user avatar
in the virtual environment.
4
IPR2015-01321
Patent 8,145,998 B2
II. ANALYSIS
A. Claim Construction
In an inter partes review, the Board construes claim terms in an

unexpired patent using their broadest reasonable construction in light of the
specification of the patent in which they appear.8 37 C.F.R. 42.100(b);
In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 127579 (Fed. Cir. 2015).
The claim language should be read in light of the specification as it would be
interpreted by one of ordinary skill in the art. In re Am. Acad. of Sci. Tech.
Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). We must apply the broadest
reasonable meaning to the claim language, taking into account any
definitions presented in the specification. Id. (citing In re Bass, 314 F.3d
575, 577 (Fed. Cir. 2002)). The ordinary and customary meaning is that
which the term would have to a person of ordinary skill in the art in
question. In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir.
2007).
Petitioner proffers proposed constructions of several claim
terms. Pet. 1315. At this stage of the proceeding, Patent Owner does not
8
applies to the 998 patent. See Pet. 13; Prelim. Resp. 910. Based on our
review of the patent, however, the patent may have expired recently or may
be expiring shortly. See Ex. 1001, [60], [63]. For expired patents, we apply
the claim construction standard outlined in Phillips v. AWH Corp., 415 F.3d
1303 (Fed. Cir. 2005). Our analysis in this Decision is not impacted by
whether we apply the broadest reasonable interpretation or the Phillips
standard. We, however, expect the parties to address, with particularity, in
their future briefing the expiration date of claims 13, 7, 8, 1218, and 20 of
the 998 patent, and if necessary to address this issue, to file a copy of
Provisional Application No. 60/020,296, as an exhibit in this case.
5
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challenge Petitioners construction. Prelim. Resp. 910. For the purposes of

this Decision, and on this record, we determine that no claim term needs
express construction. See Vivid Techs., Inc. v. Am. Sci. & Engg, Inc., 200
F.3d 795, 803 (Fed. Cir. 1999) (only those claim terms that are in
controversy need to be construed and only to the extent necessary to resolve
the controversy).
B. Obviousness of Claims 1, 2, 7, 8, 11, 12, 16, 18, and 20 in View of

Funkhouser and Marathon
We have considered Petitioners argument that Funkhouser has a
publication and distribution date no later than April 12, 1995. Pet. 6. In
determining whether a reference is a printed publication, the key inquiry
is whether or not [the] reference has been made publicly accessible. In re
Klopfenstein, 380 F.3d 1345, 1348 (Fed. Cir. 2004). A reference is
publicly accessible if the reference has been disseminated or otherwise
made available to the extent that persons interested and ordinarily skilled in
the subject matter . . . exercising reasonable diligence, can locate it and
recognize and comprehend therefrom the essentials of the claimed invention
without need of further research or experimentation. Bruckelmyer v.
Ground Heaters, Inc., 445 F.3d 1374, 1378 (Fed. Cir. 2006) (citations
omitted).
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According to the Declaration of Michael Zyda, D.Sc. (Ex. 1002) filed by
Petitioner, Dr. Zyda served as the chair of the 1995 Symposium. Ex. 1002
4445; see Ex. 1006, 1, 46. Dr. Zyda has personal knowledge that
copies of Funkhouser were distributed to approximately 250 attendees at the
1995 Symposium, who were many of the top researchers in the fields of
virtual reality systems, computer graphics, and real-time interactive 3D.
Pet. 6; Ex. 1002 4445. In addition, Dr. Zyda testifies that copies of the
book were available from the ACM. Ex. 1006, cover, 13, 85; Ex. 1002
45. The 1995 Symposium Book and Funkhouser feature a 1995 copyright
date and permit copying, generally without a fee, or with a fee and/or
specific permission if for direct commercial advantage. Ex. 1006,
copyright page, 85; Ex. 1005, 85.
Accordingly, we are persuaded, at this juncture of the proceeding, that
Petitioner has established adequately that Funkhouser qualifies as prior art
under 35 U.S.C. 102(a) because Petitioner has proffered adequate evidence
that an interested ordinarily skilled artisan, exercising reasonable
diligence, could have obtained Funkhouser no later than April 12, 1995
the last day of the 1995 Symposium. See Mass. Inst. of Tech. v. Ab Fortia,
774 F.2d 1104, 1109 (Fed. Cir. 1985) (holding paper to be a prior art printed
publication where the paper was disseminated without restriction to at least
six persons and between 50 and 500 ordinary artisans were informed of
its contents by [an] oral presentation before the critical date).
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closer to user A than user E. Because the cells in which user A is located is
potentially visible to the cells in which users B and E are located, user A
receives updates from users B and E. See id. at 87. Moreover, updates to
user B could be sent to A at a finer resolution because user B may be
more important than user E to user A. Id. at 91.
2. Marathon (Ex. 1021)

According to the Declaration of Michael Durkin filed by Petitioner,
Marathon is a computer game software instruction manual that was included
with each copy of the software that Petitioner sold and distributed beginning
in December 1994. Pet. 8; Ex. 1022 12. Mr. Durkin, an employee of
Petitioner since August 2010, also declares that Marathon was obtained from
one of the originally packaged boxes available for sale by Petitioner in
December 1994. Ex. 1022 13. In addition, Mr. Durkin declares the box
was stored, unopened, and in its original shrink wrap until it was opened on
May 22, 2015. Id. 3. Mr. Durkin personally witnessed the opening of the
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box, Marathons removal from the box, and photocopying Marathon as

Exhibit 1021. Id. Accordingly, we are persuaded, at this juncture of the
proceeding, that Petitioner has made a sufficient showing that Marathon
qualifies as prior art under 35 U.S.C. 102(a) because Petitioner has
proffered adequate evidence that an interested ordinarily skilled artisan,
exercising reasonable diligence, could have obtained Marathon no later
than December 1994when Marathon began sales. See Bruckelmyer, 445
F.3d at 1378.
Marathon discusses playing a video game over a network with other
players. Ex. 1021, 17. A setup network game menu is reproduced below.
The figure illustrates setting up teams, colors, etc. in an options menu.

Id. In addition, Marathon shows an overhead map of all players and using
the delete key to switch views to other players in the game. Id. at 18.
3. The Parties Contentions for Claims 1, 2, 7, 8, 12, 16, 18, and 20

Petitioner asserts that the subject matter of claims 1, 2, 7, 8, 12, 16,
18, and 20 would have been obvious in view of Funkhouser and Marathon
under 35 U.S.C. 103(a). Pet. 1536. Petitioner provides a limitation-by-
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limitation analysis of where each limitation of claims 1, 2, 7, 8, 12, 16, 18,

and 20 is allegedly taught in Funkhouser and Marathon. Id.
The present record supports the contention that Funkhouser teaches a
local user receiving position information associated with less than all of the
remote user avatars in one or more rooms of a virtual environment because
some of the avatars that do not send position information fail to satisfy a
condition, as required in claims 1, 2, and 18. Pet. 1836 (citing Ex. 1005)
(pinpoint citations omitted). The present record also supports the contention
that Funkhouser teaches displaying some of the remote user avatars
representing other users to the local user viewing the virtual environment, as
required in claims 1, 2, and 18. Pet. 1836 (citing Ex. 1005) (pinpoint
citations omitted). The present record likewise supports the contention that
Marathon teaches switching between a rendering on a display that shows the
virtual environment to the local user from a perspective of one of the remote
user avatars and a rendering that allows the local user to view the local user
avatar in the virtual environment. Pet. 2527, 3132, 3436 (citing Ex.
1021) (pinpoint citations omitted).
Petitioner relies on Marathons sending a voice message to other
players in a game using a microphone to teach or suggest the limitations of
claim 7. Pet. 3637 (citing Ex. 1021, 9, 11, 19).
Petitioner relies on Funkhousers client workstation storing display
data such as polygons, textures, etc. to teach or suggest the limitations of
claim 8. Pet. 37 (citing Ex. 1005, 88).
Petitioner relies on Funkhousers client workstation screen displaying
the point of view of one or more of its entities to teach or suggest the
limitations of claim 12. Pet. 3738 (citing Ex. 1005, 87).
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Petitioner relies on Funkhousers geometric database storing room

information to teach or suggest the limitations of claim 16. Pet. 3940
(citing Ex. 1005, 85, 89).
Petitioner relies on Funkhousers client workstation screen displaying
the point of view of one or more of its entities to teach or suggest the
limitations of claim 20.9 Pet. 40 (citing Ex. 1005, 87).
Petitioner concludes that one of ordinary skill in the art would have
combined Funkhousers interacting users in a three-dimensional virtual
environment using server-based message culling and Marathons interacting
users in a three-dimensional virtual environment switching their perspective
to another players perspective in order to shift processing burden away from
client workstations, thereby increasing a users enjoyment. Pet. 4043
(citing Exs. 1005 and 1021) (pinpoint citations omitted).
Patent Owner argues that there is no rationale to combine Funkhouser
and Marathon because Funkhouser maintains surrogates for only a subset of
remote avatars visible to at least one avatar local to the client, whereas
Marathon provides perspective switching of multiple users. Prelim.
Resp. 1320. Moreover, Patent Owner contends the combination would
require each client to waste storage space for all other remote entities and
increase client workstation processing burdens, which would frustrate the
9
We note that claim 20 states displaying the plurality of avatars. [T]he
plurality of avatars lacks explicit antecedence. We can construe the
plurality of avatars as either: 1) displaying both the local user avatar and
the remote user avatars; or 2) as merely displaying the remote user
avatars. We are persuaded that Marathon teaches both constructions.
Ex. 1021, 18. Specifically, Marathon teaches an overhead map of all players
and using the delete key to switch views to other players in the game,
thereby teaching the limitations in claim 20 under either construction. Id.
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entire purpose of Funkhouser. Id. On this record, we disagree with Patent

Owner.
Marathons perspective switching would not necessarily affect
Funkhousers server-based message culling because Funkhousers message
culling could be applied immediately prior to the client determining which
remote user perspective to display and what should be included in that
display. Pet. 42. Thus, Petitioner provides articulated reasoning with
rational underpinning to support the rationale to combine the teachings of
Funkhouser and Marathon. See KSR Intl Co. v. Teleflex Inc., 550 U.S. 398,
418 (2007) (quoting In re Kahn, 441 F.3d 977, 989 (Fed. Cir. 2006)).
We have reviewed the proposed ground of obviousness over
Funkhouser and Marathon against claims 1, 2, 7, 8, 12, 16, 18, and 20, and
we are persuaded, at this juncture of the proceeding, that Petitioner has
established a reasonable likelihood of prevailing in its challenge to claims 1,
2, 7, 8, 12, 16, 18, and 20 on this ground.
4. Claim 11
In concurrent Case IPR2015-01325, we institute review of claim 11.
Based on the record before us, we exercise our discretion to expedite the
proceedings and decline to institute review in this proceeding of claim 11
based on the asserted ground of obviousness over Funkhouser and Marathon.
See, e.g., Pet. 6; 37 C.F.R. 42.108(a).
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C. Obviousness of Claim 3 in View of Funkhouser, Marathon, and Sitrick

network. Ex. 1013, Abs, 1:45, 3:5657, 4:4851. In addition, Sitrick
discusses a user selecting a distinguishable visual image as their avatar. Id.
at Abs, 1:45, 3:5657, 4:4851. The user selection includes the color, size,
shape, or a digitized image of the users face. Id. at Abs.
2. The Parties Contentions for Claim 3
Petitioner asserts that the subject matter of claim 3 would have been
obvious in view of Funkhouser, Marathon, and Sitrick under 35 U.S.C.
103(a). Pet. 4346. Petitioner provides a limitation-by-limitation analysis
of where each limitation of claim 3 is allegedly taught in Funkhouser,
Marathon, and Sitrick. Id.
The present record supports Petitioners contention that Marathon
teaches a user selecting their own teach color or unique color when setting
up a multi-player game, as required by the limitations of claim 3. Pet. 43;
Ex. 1021, 1719. The present record also supports the contention that
Sitrick teaches a user selecting a distinguishable visual image as their avatar,
as required by the limitations of claim 3. Pet. 44; Ex. 1013, Abs., 1:45,
3:5657, 4:4851.
combined Funkhouser and Marathons interacting users in a three-
dimensional virtual environment using server-based message culling and
Sitricks avatar customization in order to permit the user to modify the
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appearance of their avatar in the virtual world while using the performance
improvements of the server-based message culling. Pet. 4446.
Patent Owner argues that the combination of Funkhouser, Marathon,
and Sitrick suffer from the same shortcomings as Funkhouser and Marathon.
Prelim. Resp. 20. On the present record, we disagree with Patent Owner for
the same reasons discussed supra in Part II.B.3.
We have reviewed the proposed ground challenging claim 3 as
obvious over Funkhouser, Marathon, and Sitrick, and we are persuaded, at
this juncture of the proceeding, that Petitioner has established a reasonable
likelihood of prevailing in its challenge to claim 3 on this ground.
D. Obviousness of Claims 1315 in View of Funkhouser, Marathon, and

Funkhouser 93
Petitioner has made an adequate showing that Funkhouser 93 was a
998 patent under 102(b). Pet. 910. Funkhouser 93 is an article included
in a collection of presentation materials (Ex. 1018, 1993 Conference
Book), compiled for a conference sponsored by the ACM and held on
August 16, 1993. Ex. 1018, cover, 18, 247; Ex. 1002 51. Dr. Zyda
testifies that all participants in the conference, including Dr. Zyda, received
a copy of the 1993 Conference Book. Ex. 1002 51. The 1993 Conference
Book and Funkhouser 93 feature a 1993 copyright date and permit copying,
generally without a fee and with a fee and/or specific permission if for
direct commercial advantage. Ex. 1018, 2, 247; Ex. 1017, 247. The 1993
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members to order the 1993 Conference Book. Ex. 1018, 2. We are

persuaded that this evidence sufficiently shows that an interested ordinarily
Funkhouser 93 by August 6, 1993the last day of the conference. See
Mass. Inst. of Tech., 774 F.2d at 1109.
applying the faster target frame rate. Id. at 25354.
2. The Parties Contentions for Claims 1315

Petitioner relies on Funkhouser displaying user avatars and
Funkhouser 93 omitting display of books in bookshelves when applying the
users selection of a faster target frame rate to teach or suggest the
limitations of claims 1315. Pet. 4650.
Funkhouser 93s omitting objects in the display in order to further reduce
processing requirements of client workstations. Id. at 5053.
and Funkhouser 93 suffer from the same shortcomings as Funkhouser and
Marathon. Prelim. Resp. 20. At this stage of the proceeding, we disagree
with Patent Owner for the same reasons discussed supra in Part II.B.3.
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We have reviewed the proposed ground challenging claims 1315 as

obvious over Funkhouser, Marathon, and Funkhouser 93, and we are
persuaded, at this juncture of the proceeding, that Petitioner has established a
reasonable likelihood of prevailing in its challenge to claims 1315 on this
ground.
E. Obviousness of Claim 17 in View of Funkhouser, Marathon, and

Wexelblat

2. The Parties Contentions for Claim 17

Petitioner relies on Wexelblats user teleporting from a current
location to a library to meet the limitations of claim 17. Pet. 5355.
Wexelblats teleportation in order to allow the users to navigate from room
to room with greater ease. Pet. 5455.
and Wexelblat suffer from the same shortcomings as Funkhouser and
Marathon. Prelim. Resp. 20. On this record, we disagree with Patent Owner
for the same reasons discussed supra in Part II.B.3.
We have reviewed the proposed ground challenging claim 17 as
obvious over Funkhouser, Marathon, and Wexelblat, and we are persuaded,
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at this juncture of the proceeding, that Petitioner has established a reasonable

likelihood of prevailing in its challenge to claim 17 on this ground.
F. Obviousness of Claim 19 in View of Funkhouser and Pratt
1. Pratt (Ex. 1027)
We have considered Petitioners argument that Pratt has a printed

publication date no later than October 26, 1993. Pet. 5657. Petitioner
relies on the title page of Pratt that is dated June 1993 and states [a]pproved
for public release; distribution is unlimited. Ex. 1027, Title Page.
In addition, Petitioner relies on Dr. Zydas Declaration. Pet. 56.
According to the Declaration, Dr. Zyda was an advisor to David Pratt on the
dissertation shown as Exhibit 1027. Ex. 1002 180. Dr. Zyda kept two
copies, distributed two copies to the Defense Technical Information Center
(DTIC), two copies to the library at the Naval Postgraduate School, one
copy to the Director of Research Administration, four copies to the author,
David. R. Pratt, one copy to Major David Neyland, and one copy to
Lieutenant Colonel Michael D. Proctor. Pet. 56; Ex. 1002 180; Ex. 1027,
147.
In addition, Petitioner states the
DTIC provide[s] the general public and industry with access to
unclassified, unlimited information to meet its responsibility to
[s]timulate innovation with public and industry access to DoD
(Department of Defense) funded research and digital data.
Ex. 1028. A pre-1995 document describing the use of DTIC
information, products and services states that DTIC also
provides some limited services to the general public and foreign
requestors. Unclassified and unlimited DoD documents are
announced and made generally available through a contractual
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arrangement with NTIS [National Technical Information

Service].
Pet. 5657; Exs. 1028 and 1029. We disagree with Petitioner.
Public accessibility is the touchstone for determining whether a
reference constitutes a printed publication. In re Hall, 781 F. 2d 897, 898
99 (Fed. Cir. 1986). A reference is publicly accessible upon a satisfactory
showing that such document has been disseminated or otherwise made
available to the extent that persons interested and ordinarily skilled in the
subject matter or art exercising reasonable diligence, can locate it.
Bruckelmyer, 445 F.3d at 1378. In this case, Petitioners reliance on the
June 1993 date and [a]pproved for public release; distribution is unlimited
language in Pratt is not sufficient to show that the thesis was publicly
accessible in June 1993 because Petitioner has not shown sufficiently that
such document was disseminated or otherwise made available to the extent
that persons interested and ordinarily skilled in the subject matter or art
exercising reasonable diligence, could have located it in June 1993. Id.
Next, although Dr. Zyda states (Ex. 1002 180 (citing Ex. 1027, 147,
title page)) copies of Pratt were disseminated to other parties on the list
shown on page 147 of Exhibit 1027, Petitioner has not alleged or shown that
the listed parties were persons interested and ordinarily skilled in the subject
matter or art. We are not persuaded that distribution to these individuals is
sufficient to demonstrate that persons interested and ordinarily skilled in the
subject matter exercising reasonable diligence, could have located Pratt
before the earliest priority date of the 998 patent. Bruckelmyer, 445 F.3d at
1378.
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Regarding Petitioners contention that DTICs website shows public

accessibility, we note DTICs website states [m]ore than 50 percent of the
research records in the collection are available . . . and provid[ing] the
general public and industry with access to unclassified, unlimited
information, including many full text downloadable documents (emphasis
added). Pet. 5657; Ex. 1028, 1; Ex. 1029. Petitioner has not shown
sufficiently that Pratt is among the set of 50 percent of the available research
records or among the set of the full text downloadable documents. In
addition, although Exhibit 1027 features an October 26, 1993 date from the
DTIC and an October 21, 1993 date on the title page, these dates do not
show that the DTIC made Pratt publicly accessible. Specifically, Petitioner
has not shown what these dates represent, i.e., whether the October 26, 1993
date from the DTIC and the October 21, 1993 date represent a receipt date,
partial text availability date, public accessibility date, etc.
As for Petitioners argument that Pratt was publicly accessible
because it was sent to the library at the Naval Postgraduate School (Pet. 56;
Ex. 1002 180), Petitioner has not shown sufficiently that Pratt was
catalogued, indexed, or shelved. See In re Hall, 781 F. 2d 897, 89899 (Fed.
Cir. 1986) (In the present case, Dr. Wills affidavits give a rather general
library procedure as to indexing, cataloging, and shelving of theses); Voter
Verified, Inc. v. Premier Election Solutions, Inc., 698 F.3d 1374, 1380 (Fed.
Cir. 2012) ([I]ndexing is a relevant factor in determining accessibility of
potential prior art, particularly library-based references); In re Bayer, 568
F.2d 1357 (CCPA 1978) (holding that a thesis housed, but neither shelved
nor catalogued, within a university library was not publicly accessible).
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Even if Petitioner was able to show that Pratt was catalogued,

indexed, or shelved, which it has not, Petitioner has not shown Pratt was
catalogued, indexed, or shelved in a meaningful way such that Pratt was
publicly accessible. In In re Cronyn, 890 F.2d 1161 (Fed. Cir. 1989), for
example, a thesis was catalogued and indexed in a colleges main library
using thousands of individual cards that contained only a students name and
the title of their thesis, which was searchable by the students name. The
actual theses themselves, however, were not included in the index. The
Federal Circuit held that because the theses were only presented to a handful
of faculty members and had not been cataloged or indexed in a meaningful
way, they were not sufficiently publicly accessible to constitute prior art.
Accordingly, Petitioner has not shown sufficiently that Pratt was
publicly accessible before the earliest priority date of the 998 patent.
Because Petitioner has not made a sufficient showing that Pratt is prior art to
the 998 patent, Petitioner has not demonstrated a reasonable likelihood that
it would succeed in showing that claim 19 of the 998 patent would have
been obvious over Funkhouser and Pratt.
G. Patent Owners 35 U.S.C. 325(d) Arguments
We have considered Patent Owners argument that the Petition should

be denied under 35 U.S.C. 325(d) because Funkhouser was previously
presented to the Patent Office. Prelim. Resp. 12. Although 35 U.S.C.
325(d) permits the Board to reject a petition merely for the reason that the
same or substantially the same prior art or arguments were considered
previously in another proceeding before the Office, it does not require the
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Board to do so. In this case, we decline to exercise our discretion to reject

the Petition under 35 U.S.C. 325(d).
H. Real Parties-in-Interest
Patent Owner argues that Activision Publishing, Inc. (Activision) is

an unnamed real party in interest in this proceeding. Prelim. Resp. 2330.
Thus, according to Patent Owner, the Petition fails to name all real parties in
interest as required by 35 U.S.C. 312(a)(2) and institution of review is
barred under 35 U.S.C. 315(b). Id.
District of Massachusetts (Activision Case). Ex. 2010; Ex. 2003. The
Prelim. Resp. 27.
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2. Discussion
nature of the general rule that a non-party is not estopped, precluded, or
otherwise bound by litigation. 553 U.S. 880, 893, 898 (2008). The Court,
however, explained that this rule is subject to six categories of exceptions
that apply in limited circumstances, namely where: (1) the non-party
agrees to be bound; (2) a pre-existing substantive legal relationship[]
with the named party justifies binding the non-party; (3) the non-party, in
certain limited circumstances, is adequately represented by a party with
the same interests (e.g., class actions); (4) the non-party assume[d] control
over the proceeding; (5) the non-party is bound by a prior decision and is
attempting to rehear the matter through a proxy; and (6) a special statutory
scheme . . . expressly foreclos[es] successive hearing by non-parties. Id. at
89298 (citations and quotations omitted).
22
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underlying this [inter partes review], its participation in the meetings of
23
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856 patent; this proceeding does not involve any product. Id. Accordingly,
Patent Owner has failed to show that this proceeding falls within the scope
of a legal review[] of the Products under 7A.15(j), such that the
Agreement would give Activision a right of review and approval related to
this proceeding.
Second, Patent Owner asserts Petitioner has at minimum the
opportunity to control this . . . proceeding[] as a result of Activisions
contractual oversights of [Petitioner]s management pursuant to 18.1
and 18.2 of the Agreement. Prelim. Resp. 29. Section 18.1 gives Activision
a right of approval, which . . . may be withheld in Activisions sole
discretion, over any Change in Control of [Petitioner], which is defined as
a merger or consolidation . . . with another company, sale or transfer of any
. . . significant and/or material assets, or a transaction or series of related
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Guan, No. 95/001,045, at 8 (Aug. 25, 2008).
evidence that Activision is funding this proceeding. Prelim. Resp. 24, 26
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Destiny [P]roducts. Prelim. Resp. 24; see id. at 2627. In other words,
Patent Owner argues that the legal reviews of the Products in 7A.15(j) is
a permissible use of the Development Advances. As we explain above,
Patent Owner has not demonstrated that this proceeding constitutes a legal
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Prelim. Resp. 2324, 2930. Not all pre-existing relationships are sufficient
to satisfy this category. The Taylor Court provided a non-exclusive list of
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III. CONCLUSION
For the foregoing reasons, based on the information presented in the
Petition and the Preliminary Response, we are persuaded that there is a
reasonable likelihood that Petitioner would prevail in showing the
unpatentability of claims 13, 7, 8, 1218, and 20 of the 998 patent. We are
not persuaded, however, that there is a reasonable likelihood that Petitioner
would prevail in showing the unpatentability of claim 19 of the 998 patent.
In addition, we exercise our discretion and decline to institute review based
on the asserted grounds advanced by Petitioner regarding claim 11 of the
998 patent.
At this stage of the proceeding, we have not made a final
determination on the patentability of the challenged claims.
IV. ORDER
Accordingly, it is
ORDERED that, pursuant to 35 U.S.C. 314, an inter partes review
of U.S. Patent No. 8,145,998 B2 is hereby instituted on the grounds that
claims 1, 2, 7, 8, 12, 16, 18, and 20 are asserted to be unpatentable under
35 U.S.C. 103(a) in view of Funkhouser and Marathon; claim 3 is asserted
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to be unpatentable under 35 U.S.C. 103(a) in view of Funkhouser,

Marathon, and Sitrick; claims 1315 are asserted to be unpatentable under
35 U.S.C. 103(a) in view of Funkhouser, Marathon, and Funkhouser 93;
and claim 17 is asserted to be unpatentable under 35 U.S.C. 103(a) in view
of Funkhouser, Marathon, and Wexelblat;
FURTHER ORDERED that no other ground of unpatentability

alleged in the Petition for any claim is authorized for this inter partes
review; and
37 C.F.R. 42.4, notice is hereby given of the institution of a trial; the trial
commences on the entry date of this decision.
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PETITIONER:
Michael T. Rosato
Matthew A. Argenti
mrosato@wsgr.com
margenti@wsgr.com
PATENT OWNER:
Wayne Helge
Michael Casey
whelge@dbjg.com
mcasey@dbjg.com
30
571.272.7822 Entered: December 7, 2015

____________

____________
BUNGIE, INC.,
Petitioner,
v.
WORLDS INC.,
Patent Owner.
____________
Case IPR2015-01319
Patent 8,082,501 B2
____________

DECISION
37 C.F.R. 42.108

review of claims 18, 10, 12, and 1416 of U.S. Patent No. 8,082,501 B2
(Ex. 1001, the 501 patent). Paper 3 (Pet.). Worlds Inc. (Patent
Owner) filed a Preliminary Response. Paper 12 (Prelim. Resp.).
Under 35 U.S.C. 314(a), an inter partes review may not be instituted
unless the information presented in the petition . . . and any response
. . . shows that there is a reasonable likelihood that the petitioner would
IPR2015-01319
Patent 8,082,501 B2
prevail with respect to at least 1 of the claims challenged in the petition.
Having considered the Petition and the Preliminary Response, we conclude
that there is a reasonable likelihood that Petitioner would prevail in showing
that claims 18, 10, 12, and 1416 of the 501 patent are unpatentable.
I. BACKGROUND
A. THE 501 PATENT
The 501 patent discloses a client-server architecture for a three-
dimensional graphical, multi-user, interactive virtual world system.
Ex. 1001, [57], 3:68. In the preferred embodiment, each user chooses an
avatar to represent the user in the virtual world, id. at 3:2527, and
interacts with a client system, which is networked to a virtual world
server, id. at 3:1415. [E]ach client . . . sends its current location, or
changes in its current location, to the server. Id. at 3:4044; see id. at 2:44
47. The server, in turn, sends each client updated position information for
neighbors of the clients user. Id. at [57], 2:4449, 3:4044, 14:2832.
B. ILLUSTRATIVE CLAIM
Claims 1, 12, and 14 of the 501 patent are independent claims.
Id. at 19:2020:65. Claim 1 is illustrative:
1. A method for enabling a first user to interact with other
users in a virtual space, each user of the first user and the other
users being associated with a three dimensional avatar
representing said each user in the virtual space, the method
comprising the steps of:
customizing, using a processor of a client device, an avatar
in response to input by the first user;
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receiving, by the client device, position information
associated with fewer than all of the other user avatars in
an interaction room of the virtual space, from a server
process, wherein the client device does not receive
position information of at least some avatars that fail to
satisfy a participant condition imposed on avatars
displayable on a client device display of the client device;
determining, by the client device, a displayable set of the
other user avatars associated with the client device
display; and
displaying, on the client device display, the displayable set
of the other user avatars associated with the client device
display.
C. ASSERTED PRIOR ART

The Petition relies upon the following references, as well as the
Declaration of Michael Zyda, D.Sc. (Ex. 1002):
U.S. Patent No. 4,521,014 (issued June 4, 1985) (Ex. 1013, Sitrick);
U.S. Patent No. 5,021,976 (issued June 4, 1991) (Ex. 1020, Wexelblat);
U.S. Patent No. 5,659,691 (filed Sept. 23, 1993) (issued Aug. 19, 1997)
(Ex. 1008, Durward);
U.S. Patent No. 5,777,621 (filed June 7, 1995) (issued July 7, 1998)
(Ex. 1019, Schneider);
Thomas A. Funkhouser & Carlo H. Squin, Adaptive Display Algorithm for

Interactive Frame Rates During Visualization of Complex Virtual
CONFERENCE SERIES 247 (1993) (Ex. 1017, Funkhouser 93); and

Virtual Environments, in 1995 SYMPOSIUM ON INTERACTIVE 3D
GRAPHICS 85 (1995) (Ex. 1005, Funkhouser).
D. ASSERTED GROUNDS OF UNPATENTABILITY

Petitioner asserts the following grounds of unpatentability. Pet. 9.
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Challenged Claims Basis Reference(s)
16, 12, 14, and 15 103 Funkhouser and Sitrick
7 and 16 103 Funkhouser, Sitrick, and Wexelblat
8 and 10 103 Funkhouser, Sitrick, and Funkhouser 93
16, 12, 14, and 15 102 Durward
7 and 16 103 Durward and Wexelblat
8 and 10 103 Durward and Schneider
II. ANALYSIS
A. CLAIM INTERPRETATION
We interpret claims in an unexpired patent using the broadest
reasonable construction in light of the specification of the patent in which
[they] appear[].1 37 C.F.R. 42.100(b); see In re Cuozzo Speed Techs.,
LLC, 793 F.3d 1268, 127579 (Fed. Cir. 2015). Under this standard, we
presume a claim term carries its ordinary and customary meaning. In re
Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007).
Here, Petitioner proffers claim terms for construction. Pet. 912.
Patent Owner responds to the asserted grounds using Petitioners proposed
constructions. Prelim. Resp. 910. For purposes of this Decision, we
determine that none of the claim terms requires an express construction to
resolve the issues currently presented by the patentability challenges. See
1
applies to the 501 patent. See id.; Prelim. Resp. 9. Based on our review of
the patent, however, the patent may have expired recently or may be
expiring shortly. See Ex. 1001, [60], [63]. For expired patents, we apply the
claim construction standard in Phillips v. AWH Corp., 415 F.3d 1303 (Fed.
Cir. 2005). Our analysis in this Decision is not impacted by whether we
apply the broadest reasonable interpretation or the Phillips standard. We,
however, expect the parties to address, with particularity, in their future
briefing the expiration date of the 501 patent claims on which we institute
inter partes review and if necessary to address this issue, to file Provisional
Application No. 60/020,296 as an exhibit.
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B. OBVIOUSNESS OVER FUNKHOUSER AND SITRICK
1. Funkhouser Printed Publication
Petitioner has shown sufficiently that Funkhouser qualifies as prior art
under 35 U.S.C. 102(a), because Funkhouser was a printed publication by
April 12, 1995before the earliest priority date of the 501 patent,
November 13, 1995. Pet. 45; Ex. 1001, [60]. In determining whether a
reference is a printed publication, the key inquiry is whether or not [the]
reference has been made publicly accessible. In re Klopfenstein, 380 F.3d
1345, 1348 (Fed. Cir. 2004). A reference is publicly accessible if the
reference has been disseminated or otherwise made available to the extent
that persons interested and ordinarily skilled in the subject matter . . .
exercising reasonable diligence, can locate it and recognize and comprehend
therefrom the essentials of the claimed invention without need of further
research or experimentation. Bruckelmyer v. Ground Heaters, Inc., 445
F.3d 1374, 1378 (Fed. Cir. 2006) (citations omitted).
Dr. Zydawho was the chairperson of the 1995 Symposiumtestifies that
the symposium gathered many of the top researchers in the fields of virtual
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member discount.). The 1995 Symposium Book and Funkhouser feature a
1995 copyright date and permit copying, generally without a fee and with a
fee and/or specific permission if for direct commercial advantage.
Ex. 1006, copyright page, 85; Ex. 1005, 85.
Petitioner has proffered adequate evidence that an interested ordinarily
Funkhouser no later than April 12, 1995the last day of the 1995
Symposium. See Mass. Inst. of Tech. v. Ab Fortia, 774 F.2d 1104, 1109
(Fed. Cir. 1985) (holding paper to be a prior art printed publication where
the paper was disseminated without restriction to at least six persons and
between 50 and 500 ordinary artisans were informed of its contents by
[an] oral presentation before the critical date).
Patent Owner denies that Funkhouser was published before the date
of invention of the challenged claims of the 501 patent, as it must have been
to qualify as prior art under 35 U.S.C. 102(a). Prelim. Resp. 15 & n.3.
Patent Owner appears to take the position that the subject matter recited in
the 501 patent claims was conceived and reduced to practice before
Funkhouser was published, arguing that by April 12, 1995, its Worlds Chat
was released to the public and [was] drawing . . . attention, with a
supporting citation to two articles. Id. (citing Ex. 2008, 2009). These
articles, however, were published in May 1995 and June 1995after
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April 12, 1995. Ex. 2008; Ex. 2009, 3. In addition, Patent Owner fails to
make any showing regarding how these articles or Worlds Chat connect to
the claim language. Thus, on the present record, there is insufficient
evidence that the subject matter recited in the challenged claims of the 501
patent was invented before April 12, 1995.
2. Funkhouser
to other client and server workstations. Id.
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Figure 6 depicts a source cell, in a dark box, and shows, in stipple, the
some sight-line from anywhere in the source cell.2 Id. As shown in
entity resident in the source cell. Id.
visibility to process update messages, using cell visibility look-ups,
rather than more exact real-time entity visibility computations. Id. The
servers forward update messages only to servers and clients containing
entities inside some cell visible to the one containing the updated entity. Id.
Clients, in turn, use the update messages to maintain and update
client. Id. at 8788; see id. at 92, 209. Surrogates contain (often
simplified) representations for the entitys geometry and behavior. Id.
at 87. When a client receives an update message for an entity managed by
another client, it updates the geometric and behavioral models for the
entitys local surrogate. Id. Between update messages, each client
simulates the behavior of its surrogates. Id.
at 85, 209.
2
Book. In Exhibit 1005, Funkhouser, the stipple is not visible.
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Figure 4 Figure 7
3. Sitrick
Sitrick describes a multi-player video gaming system in which each
user can create and select[], by input from a video, keyboard, joy stick,
or switch, a distinguishable visual image . . . by which that user is
identified. Ex. 1013, [57], 11:3550. The user may create and select
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color, size[,] or shape as well as imagery, such as a digitized image of the
users face, spacecraft, or race car. Id. at [57], 11:4547.
4. Claim 1
a. Determining Step
Turning to claim 1 of the 501 patent, the parties dispute whether
Funkhouser teaches or suggests determining, by the client device, a
displayable set of the other user avatars associated with the client device
display (the determining step). Ex. 1001, 19:3436. Based on our
review of the record, Petitioner has shown sufficiently that Funkhouser
teaches this step. See Pet. 2023; Prelim. Resp. 1424.
visibility, which determines the set of cells potentially visible to each
cell. Ex. 1005, 87 (emphases added). Thus, servers forward an update
message, received from another client, to a client if that client contains an
entity inside some cell visible to the [cell] containing the updated entity.
Id. (emphasis added). Because this culling is based on pre-computed
visibility of the cell in which the entity residesrather than more exact
real-time entity visibility computationsit conservatively over-
estimate[s] the visibility of any entity resident in the . . . cell. Id.
(emphases added).
As a result, as Petitioner argues and Dr. Zyda testifies, the servers
may send update messages to clients for more entities than are presently
visible to, and within the . . . field of view of, any entity managed by the
client. Pet. 21; Ex. 1002 93. For example, entity B in Figures 4 and 6 is
not visible to entity C, because entity C is facing away from entity B.
Ex. 1002 93; Ex. 1005, 86, Figs. 4, 6. Thus, entity C will not actually
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see any change in position of entity B. Ex. 1002 93. Nonetheless, when
entity B is modified, the server forward[s] an update message to
client C, because entity C is in a cell potentially visible to the cell where
entity B is located. Ex. 1005, 8788, Fig. 7 (emphasis omitted).
The clientafter receiving update messages that may relate to entities
outside the field of view of any entity it managesprocesses the messages
for remote entities visible to any of the clients entities and executes
programs to display the environment from a particular entitys point of view.
Each client maintain[s] surrogates for remote entities visible to at least
one entity local to the client, id. at 88, and uses the messages it receives to
update[] the geometric and behavioral models for the entitys local
surrogate, id. at 87; see id. at 209. Funkhouser explains that its clients
execute . . . programs necessary to generate behavior for their entities and
that [t]hey . . . may include viewing capabilities in which the virtual
environment is displayed on the client workstation screen from the point of
view of one or more of its entities. Id. at 87; see id. at 85 ([U]sers run an
interactive interface program . . . [that] simulates the experience of
immersion in a virtual environment by rendering images of the environment
as perceived from the users . . . viewpoint.). Funkhouser also includes
Plate II, which shows an environment rendered from [the] viewpoint of one
entity, omitting many other entities in the environment.3 Ex. 1005, 209.
Dr. Zyda testifies that after receiving the filtered positional updates from
the server, the client performs its own calculations, including updating the
3
We agree with Patent Owner that the Petition and Dr. Zydas testimony
lack persuasive support regarding the precise number of remote entities for
which the entity from whose viewpoint Plate II depicts the environment
receives updates. See Pet. 21, 23; Ex. 1002 96; Prelim. Resp. 1718, 22.
In this Decision, we do not rely on these numbers.
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surrogates of the remote entities, in order to determine which of the remote
entities to display within the clients field of view. Ex. 1002 96.
Based on Petitioners arguments and Dr. Zydas testimony, we are
persuaded that Petitioner has shown sufficiently that Funkhousers client
determines which entities (other user avatars) to display, namely those
entities that are within the field of view of a particular entity managed by the
client, based on positional updates received from the servers, which may
include the positions of entities outside the field of view of any entity
managed by the client. Thus, Petitioner has shown adequately that
Funkhouser teaches the client determining a displayable set of the other
user avatars associated with the client device display, as claim 1 requires.
On this record, we are not persuaded by Patent Owners arguments
disputing Petitioners showing. Patent Owner asserts that Petitioner relies
on an inherency theory because Funkhouser fails to expressly disclose
client-side determining, including how or whether the client workstation
determines which entities to display on the workstation. Prelim. Resp. 15
16, 1819, 2223. Patent Owner argues that this theory is deficient because
Petitioner has not shown that Funkhouser necessarily discloses the client
performing the determining step. Id. at 1516, 2224. Moreover, Patent
Owner disputes Petitioners arguments relying on Funkhousers update
messages to support the client performing the determining step, asserting
that Funkhouser does not disclose a client using an update message for
anything other than updating the geometric and behavioral models for the
entitys local surrogate. Id. at 1617. Patent Owner also contends that
the surrogate stored by the client, rather than the positions received from the
server, to determine which entities to display. Id. at 24.
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Patent Owners arguments generally overlook that because this is an
obviousness ground, Petitioner need not show that Funkhouser expressly
disclose[s] the client performing the determining step and instead must
establish only that Funkhouser teaches or suggests these actions. Id.
at 17, 19; see generally id. at 1424. Moreover, Patent Owner does not
persuasively respond to or address the disclosures in Funkhouser to which
Petitioner cites, particularly those referring to the clients executing programs
and including viewing capabilities to display the environment from an
entitys point of view: [c]lients execute the programs necessary to generate
behavior for their entities and [t]hey . . . may include viewing capabilities
screen from the point of view of one or more of its entities. Ex. 1005, 87;
see id. at 85; Pet. 2023; Prelim. Resp. 1424. As outlined above, we are
persuaded that this discussion in Funkhousercombined with Funkhousers
disclosures that the servers send positional update messages to clients based
on an overestimate of the visibility of the clients entities and that the
clients process the messages to maintain and update their surrogates of
remote entitiessufficiently teaches that the client in Funkhouser
determines which remote entities to display to the user.
In addition, we are not persuaded by Patent Owners speculation that
the surrogate stored by the client, rather than any received positions, to
determine entities to display. Prelim. Resp. 24. Patent Owner has not
addressed whether the determining step requires that the recited client
device perform the determining based on the position information
receiv[ed] from the server process. Ex. 1001, 19:2733. Having
considered the language of claim 1, we are not persuaded that this is a
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requirement of the claim. Even if it were, Patent Owners assertions are
unpersuasive. In Funkhouser, the update messages, which the server
forwards to clients, include positional updates. See Ex. 1005, 87, 89. The
clients use these messages to update[] the geometric and behavioral
models for the surrogates they maintain. Id. at 87. Thus, even if
Funkhousers clients use these models to determine which entities to display,
as Patent Owner posits, this determining still would be from the positions
received from the server.
b. Customizing Step
Petitioner argues the combination of Funkhouser and Sitrick teaches
or suggests customizing, using a processor of a client device, an avatar in
response to input by the first user (the customizing step) of claim 1.
Ex. 1001, 19:2526; Pet. 17. Patent Owner has not disputed this assertion.
We are persuaded that Sitricks disclosures, outlined above, regarding
a user creating and selecting a customized image, by input from a video,
keyboard, joy stick, or switch, teaches customizing . . . an avatar in
response to input by the user. See Ex. 1013, [57], 11:3547. In addition,
Dr. Zyda testifies that Funkhousers client workstations contain a
processor. See Ex. 1002 81 (citing Ex. 1005, 87)). Thus, Petitioner has
shown sufficiently that the combination of Funkhouser and Sitrick teaches or
suggests the customizing step.
In addition, Petitioner has proffered sufficient evidence that a person
of ordinary skill in the art would have had reason to add Sitricks
customization feature to Funkhousers system, with a reasonable expectation
of success. See Pet. 3031; Ex. 1002 7677. In particular, Dr. Zyda
testifies that a skilled artisan would have recognized that Sitricks
customization feature is consumer-friendly and would have added this
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feature to Funkhousers system to increase system functionality and user
enjoyment. Ex. 1002 7677. According to Dr. Zyda, this addition to
Funkhouser would have been nothing more than a combination of known
elements . . . according to known methods to yield predictable results. Id.
c. Remaining Limitations
On this record, we are persuaded by the Petitions argument and
evidence regarding the additional limitations of claim 1, which includes a
limitation-by-limitation analysis of where Funkhouser allegedly teaches or
suggests each limitation. Pet. 1324. Patent Owner has not disputed
Petitioners showing regarding these limitations. See Prelim. Resp. 1424.
5. Claims 26, 12, 14, and 15
For independent claims 12 and 14, the Petition addresses similarities
and differences between these claims and independent claim 1. The Petition
also features a claim chart, with citations to Funkhouser and Sitrick, the
Petitions analysis of claim 1, and Dr. Zydas testimony, to support
Petitioners position that the claims would have been obvious in view of
Funkhouser and Sitrick. Pet. 2427. For dependent claims 26 and 15, the
Petition features a limitation-by-limitation analysis addressing where
Funkhouser and Sitrick allegedly teach or suggest each limitation. Id. at 27
30. In response, Patent Owner disputes that Funkhouser teaches the
determining limitations of claims 12 and 14 based on the same arguments
as the determining step of claim 1. Prelim. Resp. 1424.
Based on our review of the Petition and its supporting evidence, we
are persuaded that the Petition sufficiently supports Petitioners position that
Funkhouser and Sitrick teach or suggest each limitation of claims 26, 12,
14, and 15. See Pet. 2430. For claims 12 and 14, Petitioner has adduced
adequate evidence that Funkhouser teaches the determining limitations of
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these claims for the reasons explained above for the corresponding
determining step of claim 1. See supra II.B.4.a.
6. Conclusion
Based on our review of the record and our analysis above, Petitioner
has shown a reasonable likelihood that it would prevail in establishing that
Funkhouser and Sitrick render obvious claims 16, 12, 14, and 15.
C. OBVIOUSNESS OVER FUNKHOUSER, SITRICK, AND WEXELBLAT
1. Wexelblat
Wexelblat discusses an artificial reality in which users may teleport
instantly from one location to another. Ex. 1020, 6:6167. For example,
the user could move from his current location within a cyberspace to a
library . . . and then teleport back to the original location. Id. at 7:510.
2. Discussion
Petitioner asserts that claims 7 and 16 of the 501 patent would have
been obvious in view of Funkhouser, Sitrick, and Wexelblat. Pet. 3233.
Patent Owner has not contested this assertion, beyond disputing that claim 1
would have been obvious over Funkhouser and Sitrick.
Claims 7 and 16 depend from claims 1 and 14, respectively, and
include limitations regarding two (or more) virtual rooms and teleporting
an avatar from the first room to the second room. Ex. 1001, 19:6164,
20:5963. On this record, we are persuaded that both Funkhouser and
Wexelblat teach or suggest two or more virtual rooms, and that Wexelblat
teaches or suggests teleporting an avatar between rooms, as claims 7 and 16
require. In particular, Funkhouser discloses separate regions of the virtual
environment and partition[ing] a virtual environment into a spatial
subdivision of cells. Ex. 1005, 87, 91 (emphasis omitted); Ex. 1002 135;
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Pet. 19. Wexelblat refers to teleporting a user from one location to
another, e.g., from a current location to a library. Ex. 1020, 6:617:10.
We also are persuaded by Dr. Zydas testimony that a person of
ordinary skill would have incorporated Wexelblats teleportation feature into
Funkhousers system, modified to include the customization feature of
Sitrick as explained supra in II.B.4.b, to allow users to navigate the virtual
environment with greater ease. Ex. 1002 138. In addition, according to
Dr. Zyda, adding Wexelblats teleportation feature to Funkhouser would
have been nothing more than the predictable use of known elements
according to their established functions. Id.
Thus, Petitioner has shown a reasonable likelihood that it would
prevail in establishing that claims 7 and 16 would have been obvious in view
of Funkhouser, Sitrick, and Wexelblat.
D. OBVIOUSNESS OVER FUNKHOUSER, SITRICK, AND FUNKHOUSER 93
1. Funkhouser 93 Printed Publication
Petitioner has shown adequately that Funkhouser 93 was a printed
publication by August 6, 1993 and, thus, constitutes 102(b) prior art to the
501 patent. See Pet. 6. Funkhouser 93 (Ex. 1017) is an article included in
a collection of presentation materials (Ex. 1018, 1993 Conference Book),
compiled for a conference sponsored by the ACM and held on August 16,
1993. Ex. 1018, cover, 18, 247; Ex. 1002 48. Dr. Zyda testifies that all
conference participants, including Dr. Zyda, received a copy of the 1993
Conference Book. Ex. 1002 48. Funkhouser 93 and the 1993 Conference
Book feature a 1993 copyright date and permit copying, generally without a
fee and with a fee and/or specific permission if for direct commercial
advantage. Ex. 1018, 2, 247; Ex. 1017, 247. The 1993 Conference Book
also provides ordering information for ACM and non-ACM members.
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Ex. 1018, 2. We are persuaded that this evidence sufficiently shows that an
interested ordinarily skilled artisan, exercising reasonable diligence, could
have obtained Funkhouser 93 by August 6, 1993the last day of the
conference. See Mass. Inst. of Tech., 774 F.2d at 1109.
2. Funkhouser 93
Funkhouser 93 discloses an optimization algorithm that produces the
best image possible within a user-specified target frame rate.
Ex. 1017, 247, 251. The algorithm choos[es] a set of object tuples to
render each frame by add[ing] object tuples . . . in descending order of
value (benefit/cost) until the maximum cost is completely claimed. Id. at
25051. Figure 11 features images of a library rendered at different target
frame rates, with the benefit heuristic limited to object size. Id. at 25354,
Fig. 11. The image rendered at the lowest target frame rate, Figure 11c,
shows the omission of books on bookshelves. Id.
3. Discussion
Claims 8 and 10 of the 501 patent depend from claim 1. Claim 8
recites the step of monitoring an orientation of the first user avatar and
specifies that the determining step of claim 1 comprises filtering the other
user avatars based on at least one variable other than (1) positions of the
other user avatars, and (2) orientation of the first user avatar. Ex. 1001,
19:6520:4. Claim 10 recites that the determining step comprises
filtering the other user avatars based on a limit of the other user avatars that
may be displayed on the client device display, the limit being set at the client
device. Id. at 20:812. Petitioner asserts that a person of ordinary skill
would have had reason to combine Funkhouser, Sitrick, and Funkhouser 93,
and that the combination of these references teaches or suggests each
limitation of claims 8 and 10. Pet. 3339; Ex. 1002 14252.
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In response, Patent Owner argues that the cost-benefit heuristics in
Funkhouser 93s optimization algorithm, including the object size benefit
heuristic used to generate Figure 11c, do not include a maximum number
of objects or a comparison of the number of objects to be displayed relative
to a maximum number. Prelim. Resp. 34 (emphasis omitted). Claims 8
and 10, however, do not recite a maximum number or any comparison to a
maximum number, as Patent Owners argument appears to assume.
On this record, we agree with Petitioner that Funkhousers disclosures
regarding clients sending update messages that include their position and/or
orientation teach or suggest monitoring an orientation of the first user
avatar, as recited in claim 8. See Pet. 33, 27; Ex. 1005, 89; see also id. at
87, 209. We also are persuaded that the user-specified target frame rate
in Funkhouser 93 teaches or suggests a variable other than position and
orientation that is used to filter objects for display, as claim 8 requires, given
that the specified target frame rate may result in omission of objects from
a display, because objects are selected to render the best possible image
within the target frame rate. Ex. 1005, 247, 251, 253, Fig. 11; see Ex. 1002
154. For the same reasons, we likewise are persuaded that this user-
specified target frame time in Funkhouser 93 results in a limit, set at the
client, on the objects that may be displayed, as recited by claim 10.
Ex. 1005, 247, 253, Fig. 11; see Ex. 1002 156.
In addition, on the record before us, we are persuaded that a person of
ordinary skill would have had reason to combine the teachings of
Funkhouser 93 with Funkhouser, modified to include Sitricks
customization feature as discussed supra in II.B.4.b, with a reasonable
expectation of success. Pet. 3639; Ex. 1002 151; see id. 14652.
Dr. Zyda explains that Funkhouser and Funkhouser 93 were written by the
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same author, a well-known researcher in the field of virtual reality and
graphical displays, and teach complementary ways to minimize data
processing and the burden on a computer displaying a virtual environment.
Ex. 1002 14750. In the combined system, the client would determine
which objects to display based on the orientation of the object, as taught in
Funkhouser, and the clients performance capabilities and the target frame
rate, as taught in Funkhouser 93. Id. 146.
Accordingly, Petitioner has shown a reasonable likelihood it would
prevail in establishing that claims 8 and 10 of the 501 patent would have
been obvious over Funkhouser, Sitrick, and Funkhouser 93.
E. ANTICIPATION BY DURWARD
1. Durward
central control unit 14, with processor 100, for communicating with a
plurality of users. Id. at 2:5052, 3:5860.
Each user [t]ypically is equipped with computer 42 and head-
mounted display 46. Id. at 2:6667. The user communicates its positional
data to computer 42 which, in turn, communicates the data to central control
unit 14. Id. at 3:1526. Central control unit 14 uses this data to define a
virtual being within the virtual space for the user. Id. at 3:2729.
motion, control, and sound data to the users. Id. at 3:5863, 4:1223.
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the users, only changes in th[is] . . . data is communicated. Id. at 4:2326.
This updated data allow the users computer [to] update the images
viewed and sounds heard. Id. at 6:6062. The users head[-]mounted
the perspective of the virtual being defined for [the] user [] together with all
other defined virtual beings and objects within its field of vision. Id.
at 3:5054; see id. at [57], 1:5759.
[E]ach virtual being, and hence each user, is assigned a visual
relevant space . . . . Id. at 4:5054. [V]isual relevant spaces determine
which state changes are communicated to (or perceivable by) the users. Id.
at 4:5456. Figure 5 is reproduced below.
Figure 5 depicts virtual space 169, with virtual beings 182, 183, and 184. Id.
at 4:4345, 4:5961. Virtual being 182 is assigned visual relevant space
200; virtual being 184 is assigned visual relevant space 204. Id. at 4:6163.
As shown in Figure 5 for virtual being 182, [t]he visual relevant
position of the virtual being changes. Id. at 5:1318.
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In the preferred embodiment, in which only position, motion, control,
and sound data are communicated to the user, elements outside of a visual
relevant space may be visible to the user, but any real-time or program
controlled position/motion associated with the element is not processed for
that user. Id. at 5:512. As a result, the element appears stationary in a
fixed position, or . . . moves in accordance with a fixed script. Id.
2. Claim 1
a. Determining Step
Turning to claim 1 of the 501 patent, the parties dispute whether
Durward discloses the determining step of claim 1. Pet. 4547; Prelim.
Resp. 2532. Based on our review of the arguments and evidence of record,
we are persuaded by Petitioners showing that Durward discloses the step.
the selected virtual space in his or her computer.); Pet. 4546. Central
control unit 14 (server process) sends the user updated positional data
based on the assigned visual relevant space of the users virtual being
(avatar). Ex. 1008, 3:5863, 4:1226, 4:5056.
As Petitioner argues and Dr. Zyda testifies, the visual relevant space
may be broader than the clients field of view, as exemplified by visual
relevant space 204 for virtual being 184 in Figure 5. Pet. 46; see Ex. 1002
18587; Ex. 1008, 4:5759, 5:1318, Fig. 5. Durward explains that, as
shown by virtual being 184, the users visual relevant space may be defined
by the field of view of the virtual being and areas in close proximity to it.
Ex. 1008, 5:1318 (emphases added). In addition, the visual relevant space
may be narrower than the clients field of view. As Durward states,
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Patent 8,082,501 B2
elements outside of a visual relevant space may be visible to the user, but
because updated positional data for those elements are not transmitted to the
user, any real-time or program controlled position/motion associated with
the element is not processed for that user. Id. at 5:512. As a result, the
element [either] appears stationary in a fixed position, or . . . moves in
accordance with a fixed script. Id.
Regardless of the scope of the assigned visual relevant space and,
thus, the positional updates received by the user, the users head-mounted
display shows only the virtual beings and objects within the users field of
view. As Durward explains, the users computer uses the updated
positional data received from central control unit 14 to update the images
viewed. Id. at 6:6062. Further, Durward discloses that the users
from the perspective of the virtual being defined for [the] user [] together
with all other defined virtual beings and objects within its field of vision.
Id. at 3:5054; see id. at [57], 1:5759 ([T]he users computer may display
a portion of a selected virtual space on the users head mounted display.).
Dr. Zyda testifies that [u]pon receipt of the position information from
central control unit 14 (server process), the client determines a set of
the received positions fall within the users field of view. Ex. 1002 186.
Based on Petitioners arguments and Dr. Zydas testimony, we are
persuaded that Petitioner has shown sufficiently that Durwards user
determines which other virtual beings (other user avatars) to display,
namely those virtual beings that are within the field of view of its virtual
being, based on the positional data received from central control unit 14,
which may include the positions of more or less virtual beings than those
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within its field of view. Thus, Petitioner has made an adequate showing that
Durward discloses the client determining a displayable set of the other
user avatars associated with the client device display, as claim 1 requires.
On this record, we do not agree with Patent Owners arguments to the
contrary. Patent Owner contends Petitioners assertions sound[] of
inherency, but fail[] to meet the requisite showing that the determining
step must necessarily be present in Durward. Prelim. Resp. 2627
(emphasis omitted). Patent Owner argues Petitioner misinterpret[s] and
fails to consider the activity of Durwards central control unit 14, which
receive[s] and monitor[s] the orientation and field of view of the virtual
beings. Id. at 2731 (quoting Ex. 1008, 3:1620, 4:24, 6:5355). In
column 8, lines 5155, for example, Durward explains that central control
unit 14 uses such information to determine[] locations of the other users
and their defined virtual objects within and without the relevant and priority
spaces, which then are used to ascertain which position, motion and sound
data is transmitted to which user. Id. at 29 (quoting Ex. 1008, 8:5155).
Patent Owner also cites column 7, lines 815 of Durward, which explain that
as a user moves, central control unit 14 update[s] the position (and hence
the field of view) of the corresponding virtual being and communicate[s]
the graphical data for the updated field of view to the user. Id. at 26, 2829
(quoting Ex. 1008, 7:815). In addition, Patent Owner cites claim 4 of
Durward, which recites that each users visual relevant space is defined by
a portion of the virtual space viewed from the perspective of that users
virtual being. Ex. 1008, 9:6467; Prelim. Resp. 31.
We are not persuaded that the passages of Durward to which Patent
Owner directs our attention undermine Petitioners position. First, Patent
Owner has not addressed sufficiently whether the passages and claim it cites
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Patent 8,082,501 B2
relate to the embodiment on which Petitioners argument relies. See, e.g.,
Ex. 1008, 7:3 (referring to another embodiment of the invention).
Second, as explained above, Petitioners argument recognizes that in
Durward, the visual relevant spacewhich determines what positional data
are communicated to the userneed not be fixed and can correspond to the
field of view of the virtual being. See id. at 4:5056, 5:1318 ([T]he users
visual relevant space may be defined by the field of view of the virtual being
and areas in close proximity to it . . . in which case the visual relevant space
may move about the virtual space as the perspective or position of the
virtual being changes.) (emphasis added). Thus, Durwards disclosures
that central control unit 14 monitors and tracks virtual beings locations and
orientations to determine which updated positional data to transmit to each
user is consistent with, and does not undermine, Petitioners position.
Third, Durwards disclosure regarding situations where central control
unit 14 communicates only the graphical data for the updated field of
view, as referenced in column 7, lines 318, does not address situations
where the visual relevant space, and thus the positional data communicated
to the user, is wider or narrower than the virtual beings field of view. As
we explain above, we are persuaded that at least in these situations,
Durwards client determines the displayable set of other virtual beings.
Patent Owner does not contest Petitioners showing for the remaining
limitations of claim 1. Having reviewed the Petitions analysis of each
limitation, we are persuaded by Petitioners showing. Pet. 3947.
3. Claims 26, 12, 14, and 15
For independent claims 12 and 14, the Petition addresses similarities
and differences between the claims and independent claim 1. The Petition
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also features a claim chart with citations to Durward, the Petitions analysis
of claim 1, and Dr. Zydas testimony, to support Petitioners position that
Durward is anticipatory. Id. at 4750. For dependent claims 26 and 15, the
Petition addresses where Durward allegedly discloses each limitation. Id.
at 5052. Patent Owner responds by arguing that Durward fails to disclose
the determining limitations of independent claims 12 and 14 for the[]
same reasons that Durward fails to disclose claim 1s determining step.
Prelim. Resp. 3132.
Based on our review of the Petition, we are persuaded that the
evidence sufficiently supports Petitioners position that Funkhouser
discloses each limitation of claims 26, 12, 14, and 15. See Pet. 4752.
Petitioner has adduced adequate evidence that Durward discloses the
determining limitations of claims 12 and 14 for the reasons we explain
above for the determining step of claim 1. See supra II.E.2.a.
4. Conclusion
Based on our review of the record and our analysis above, Petitioner
has shown a reasonable likelihood that it would prevail in establishing that
Durward anticipates claims 16, 12, 14, and 15 of the 501 patent.
F. OBVIOUSNESS OVER DURWARD AND WEXELBLAT
Petitioner asserts that claims 7 and 16 would have been obvious over
Durward and Wexelblat. Pet. 5254. As explained supra in II.C.2,
claims 7 and 16 depend from claims 1 and 14, respectively, and include
limitations regarding two (or more) virtual rooms and teleporting an avatar
from the first room to the second room. Ex. 1001, 19:6164, 20:5963.
On this record, we are persuaded that Wexelblat teaches or suggests
two or more virtual rooms and teleporting an avatar between rooms, as
explained supra in II.C.2. We also are persuaded that Durwards
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disclosure regarding multiple virtual spaces and a user specify[ing] which
virtual space they intend to interact with, teaches or suggests two or more
virtual rooms. Ex. 1008, 4:3042; Ex. 1002 243; Pet. 43.
At this stage of the proceeding, we credit Dr. Zydas testimony that a
person of ordinary skill would have incorporated Wexelblats teleportation
feature into Durwards system to allow users to navigate the virtual
environment with greater ease. Ex. 1002 246. According to Dr. Zyda, this
would have been nothing more than the predictable use of known elements
according to their established functions. Id.
Patent Owner argues that Petitioners proposed combination of
Durward and Wexelblat lacks any logical explanation, because it involves
having users switch between Durwards multiple virtual spaces, which
correspond to different applications (i.e., computer aided design (CAD),
gaming virtual space, task virtual space, etc.) with different functions and
activities. Prelim. Resp. 3637; Ex. 1020, Fig. 3, 4:3042. On the present
record, we are not persuaded by Patent Owners argument.
First, Durward does not preclude virtual spaces with the same or
similar functions and activities. Ex. 1020, 4:3042. Specifically, Durward
states [d]atabase 104 may contain a CAD virtual space, a gaming virtual
space, a task virtual space . . . and other virtual spaces. Id. at 4:3237
(emphases added). This permissive language allows for other virtual spaces
that could have the same or similar functions and activities. Second, Patent
Owners argument focuses on Durward, yet we are persuaded, as noted
above, that Wexelblat teaches or suggests different rooms and teleportation.
In addition, Patent Owner argues that combining Wexelblats
teleportation feature with Durward would frustrate the entire purpose of
Durward. Prelim. Resp. 38. According to Patent Owner, incorporating
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Patent 8,082,501 B2
teleportation would require Durwards users to receive positional data for
all possible teleportation locationsnot just the users visual relevant
spacethereby drastically increasing the data transmitted to the users. Id.
On this record, we disagree. Durward expressly contemplates a
virtual being moving to different parts of the virtual space and changing
perspective, e.g., turning its head, which could change the users visual
relevant space and, therefore, require receipt of new positional data. See,
e.g., Ex. 1008, 5:1518 ([T]he visual relevant space may move about the
virtual space as the perspective or position of the virtual being changes.);
id. at 5:3740 (Since many virtual objects are designed to move about the
virtual space, they may cross into different priority spaces over time and be
processed accordingly.); id. at 7:2934 (discussing virtual being running,
kicking, catching virtual balls, etc.). Under Patent Owners logic, any such
movements causing a sudden change in a users visual relevant space would
frustrate Durwards purpose. At this stage of the proceeding, we are
persuaded that upon teleportation, Durwards central control unit 14 could
communicate data to the user, which the user could use to display the
environment, thereby avoiding the negative consequences Patent Owner
alleges would result from adding teleportation to Durward.
Accordingly, Petitioner has shown a reasonable likelihood that it
would prevail in establishing that claims 7 and 16 would have been obvious
in view of Durward and Wexelblat.
G. OBVIOUSNESS OVER DURWARD AND SCHNEIDER
1. Schneider
Schneider discusses the trade-off between rendering quality and
rendering speed in graphics rendering. Ex. 1019, [57]. Schneider refers to
programs that provide users with control over parameters that impact this
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Patent 8,082,501 B2
speed/quality trade-off. Id. at 5:2731. For example, Schneider explains
that by culling objects from the scene before rendering, a user can hasten
the rendering process at the expense of quality. Id. at 5:3135.
2. Discussion
To support its argument that the combination of Durward and
Schneider renders claims 8 and 10 obvious, Petitioner argues that [i]t would
have been obvious to one of ordinary skill to apply Schneiders teaching of
culling objects to Durwards system and that this combination teaches or
suggests each limitation of claims 8 and 10. Pet. 5458. Patent Owner
counters that neither Schneider nor the combination of Durward and
Schneider disclose[s] any consideration of a limit of the other user avatars
that may be displayed or a comparison of the displayable number to the
limit of avatars that may be displayed. Prelim. Resp. 3536.
We first note that neither claim 8 nor claim 10 of the 501 patent
recites any comparison of the displayable number to the limit of avatars
that may be displayed and, thus, Patent Owners argument on this point
appears to be misplaced. Moreover, at this stage of the proceeding, we are
persuaded that Schneider teaches or suggests a variable other than position
and orientation that is used to filter objects to determine a displayable set, as
claim 8 requires, and a limit, set at the client, of the other user avatars that
may be displayed, as claim 10 requires. See Ex. 1002 264, 271.
Specifically, Schneider discusses a user culling objects from the scene
before rendering or in other words, selecting objects not to display, thereby
limiting the objects to display. Ex. 1018, 5:3135; Ex. 1002 254. In
addition, we are persuaded that Durwards disclosures relating to the users
head position sensor 53 sens[ing] the position and/or orientation of the
user teach or suggest the additional limitation of claim 8, monitoring an
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orientation of the first user avatar. See Pet. 50, 54; Ex. 1008, 2:663:1,
3:1520, 2:3235.
Petitioner also has proffered adequate evidence to support the
proposed combination of Durward and Schneider. Pet. 5658. Dr. Zyda
testifies that an ordinary artisan would have integrated Schneiders culling
techniques into Durward to improve rendering speed and to reduce the
burden on the computer displaying the virtual environment. Ex. 1002
25659. According to Dr. Zyda, Schneiders culling techniques are
applicable to rendering systems generally and their incorporation into
Durward would have been routine, expected, and nothing more than a
combination of known elements according to known methods, yielding
predictable results. Id. 257.
For the reasons given, Petitioner has shown a reasonable likelihood it
would prevail in establishing that claims 8 and 10 of the 501 patent would
have been obvious over Durward and Schneider.
H. SECTION 325(D) DISCRETION TO DECLINE TO INSTITUTE
Patent Owner urges us to decline to institute, under 35 U.S.C.
325(d), because the same or substantially the same prior art or
arguments were presented during examination of the 501 patent. Prelim.
Resp. 1314 (emphasis omitted). Petitioner explains that Funkhouser,
Durward, and another asserted prior art reference were listed in Information
Disclosure Statement (IDS) forms. See Pet. 3; Ex. 1004, 231, 252.
Section 325(d) provides: [i]n determining whether to institute . . . a
proceeding . . ., the Director may take into account whether, and reject the
petition or request because, the same or substantially the same prior art or
arguments previously were presented to the Office. Having considered the
citations to the asserted prior art references in IDS forms during prosecution
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Patent 8,082,501 B2
of the 501 patent, we decline to exercise our discretion to decline to
institute inter partes review. See 37 C.F.R. 42.108(a).
I. REAL PARTY IN INTEREST
unnamed real party in interest. Thus, according to Patent Owner, the
Petition fails to comply with 35 U.S.C. 312(a)(2) and institution of review
is barred under 35 U.S.C. 315(b). Prelim. Resp. 3948.
District of Massachusetts in the Activision Case. Ex. 2007; Ex. 2003. The
Prelim. Resp. 44.
2. Discussion
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Patent 8,082,501 B2
nature of the rule that a non-party is not estopped, precluded, or otherwise
bound by litigation. 553 U.S. 880, 893, 898 (2008). The Court explained
that this rule is subject to six categories of exceptions that apply in limited
circumstances, namely where: (1) the non-party agrees to be bound; (2) a
pre-existing substantive legal relationship[] with the named party justifies
binding the non-party; (3) the non-party, in certain limited circumstances,
is adequately represented by a party with the same interests; (4) the non-
party assume[d] control over the proceeding; (5) the non-party is bound by
a prior decision and is attempting to rehear the matter through a proxy; and
(6) a special statutory scheme . . . expressly foreclos[es] successive
hearing by non-parties. Id. at 89298 (citations and quotations omitted).
underlying the [inter partes review], its participation in the meetings of
32
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501 patent; this proceeding does not involve any product. Id. Thus, Patent
Owner has not shown that this proceeding falls within the scope of a legal
review[] of the Products under 7A.15(j), such that the Agreement would
give Activision a right of review and approval related to this proceeding.
Second, Patent Owner asserts Petitioner has the opportunity to
control th[is] . . . proceeding[] as a result of Activisions contractual
oversights of [Petitioner]s management pursuant to 18.1 and 18.2 of the
Agreement. Prelim. Resp. 4546. Section 18.1 gives Activision a right of
approval, which . . . may be withheld in Activisions sole discretion, over
any Change in Control of [Petitioner], which is defined as a merger or
consolidation . . . with another company, sale or transfer of any . . .
significant and/or material assets, or a transaction or series of related
34
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Patent 8,082,501 B2
Guan, No. 95/001,045, at 8 (Aug. 25, 2008).
evidence that Activision is funding this proceeding. Prelim. Resp. 4243,
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Patent 8,082,501 B2
Destiny [P]roducts. Prelim. Resp. 42; see id. at 45. In other words, Patent
Owner argues that the legal reviews of the Products in 7A.15(j) is a
permissible use of the Development Advances. As we explain above, Patent
Owner has not demonstrated that this proceeding constitutes a legal
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Patent 8,082,501 B2
Prelim. Resp. 40, 46. Not all pre-existing relationships are sufficient to
satisfy this category. The Taylor Court provided a non-exclusive list of
37
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Patent 8,082,501 B2
III. ORDER
Accordingly, it is:
ORDERED that pursuant to 35 U.S.C. 314(a), an inter partes
review of claims 18, 10, 12, and 1416 of the 501 patent is instituted,
commencing on the entry date of this Decision;
37 C.F.R. 42.4, notice is hereby given of the institution of a trial; and
FURTHER ORDERED that the trial is limited to the following
grounds of unpatentability:
Claims 16, 12, 14, and 15 under 35 U.S.C. 103 as obvious over
Funkhouser and Sitrick;
Claims 7 and 16 under 35 U.S.C. 103 as obvious over Funkhouser,
Sitrick, and Wexelblat;
Claims 8 and 10 under 35 U.S.C. 103 as obvious over Funkhouser,
Sitrick, and Funkhouser 93;
Claims 16, 12, 14, and 15 under 35 U.S.C. 102 as anticipated by
Durward;
Claims 7 and 16 under 35 U.S.C. 103 as obvious over Durward and
Wexelblat; and
Claims 8 and 10 under 35 U.S.C. 103 as obvious over Durward and
Schneider.
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Patent 8,082,501 B2
PETITIONER:
Michael T. Rosato
Matthew A. Argenti
Andrew S. Brown
mrosato@wsgr.com
margenti@wsgr.com
PATENT OWNER:
Wayne M. Helge
Michael R. Casey
Donald L. Jackson
whelge@dbjg.com
mcasey@dbjg.com
djackson@dbjg.com
39
571.272.7822 Entered: September 4, 2015

____________

____________
BUNGIE, INC.,
Petitioner,
v.
WORLDS INC.,
Patent Owner.
____________
Case IPR2015-01264, Patent 7,945,856 B21

Case IPR2015-01268, Patent 7,181,690 B1
Case IPR2015-01269, Patent 7,493,558 B2
Case IPR2015-01319, Patent 8,082,501 B2
Case IPR2015-01321, Patent 8,145,998 B2
Case IPR2015-01325, Patent 8,145,998 B2
____________

EASTHOM, Administrative Patent Judge.
ORDER
Patent Owners Motion for Routine or Additional Discovery
37 C.F.R. 42.51
1
This Decision is filed in each of the listed cases. The parties are not
authorized to use this heading style. Paper and Exhibit numbers herein refer
to Case IPR2015-01264, which is representative of the other cases for the
issues addressed in this Decision.
IPR2015-01264, -01268, -01269,
-01319, -01321, and -01325
Patent Owner (Worlds) filed a motion for routine or additional

discovery in the instant proceedings (Paper 9, Mot. or Motion), and
Petitioner (Bungie) filed an opposition (Paper 10, Opp. or
Opposition).
In Patent Owners view, the requested discovery may lead to evidence
showing that Activision Publishing, Inc. (Activision) is an unnamed real
party-in-interest (RPI) in this proceedingpreventing institution of inter
partes review (IPR) under 35 U.S.C. 312(a)(2) and 35 U.S.C. 315(b).
Mot. 24. Patent Owner asserts that it filed a complaint alleging
infringement of its patents by Activision (Worlds/Activision Lawsuit)
over a year prior to the filing of the instant Petitions challenging the patents.
Id. at 4.
Petitioner describes Activision as a software publisher and distributer
that publishes third-party video games, including a videogame that Petitioner
created, Destiny, pursuant to an Agreement (Ex. 2002) discussed further
below. Opp. 3 (citing Ex. 2002, 910; Ex. 1031 615). Petitioner
describes itself as a private, independent video game developer in the
business of designing and creating video games. Opp. 3 (citing Ex. 2002,
78). According to Petitioner, it has a duty to indemnify Activision only if a
third party (such as Patent Owner) serves a complaint asserting that Destiny
infringes a patent. See Opp. 78; Ex. 2002 15.115.2. Even in that
instance, Petitioner asserts that it would be solely responsible for all costs
of defense, and has the right to assume control of any such defense, which
2
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-01319, -01321, and -01325
would encompass both invalidity and noninfringement defenses. Opp. 7

(citing Ex. 2002, 21).2
The record indicates that Patent Owner wrote a letter (on November
13, 2014) to Activisions counsel identifying Destiny as an intended
product-at-issue in the Worlds/Activision lawsuit, and [Petitioner]s IPR
petitions followed in 2015. Mot. 4 (citing Ex. 2004). Petitioner counters
that [n]either Destiny nor any other [Petitioner] product has ever been
added to that lawsuit. Opp. 3 (emphasis omitted). Patent Owner and
Petitioner, therefore, agree that Patent Owner did not serve a complaint
alleging that Petitioners Destiny product infringes a patent (in the
Worlds/Activision lawsuit or otherwise).
We deny the Motion for the reasons stated below.
BACKGROUND
According to Patent Owner:
On April 16, 2010, Activision Publishing, Inc. and
[Petitioner] entered into a Software Development and
Publishing Agreement (Agreement), under which [Petitioner]
developed a game (Destiny) published by Activision. Ex. 2002.
Under this Agreement, [Petitioner] is obligated to conduct
legal reviews of the Products to ensure that all Intellectual
Property and other rights are fully cleared for use.
Mot. 23 (quoting Ex. 2002, 10, 7A.15j).
In other words, Patent Owner contends that the Agreement obligates
Petitioner to perform legal reviews for IP clearance that are subject to
Activisions prior review and approval. Id. (citing Ex. 2002 7A.15,
14.1.2). Patent Owner also contends that the Agreement shows that
2
Page 21 of the Agreement, Exhibit 2002, includes the Indemnity
provisions, 15.115.3.
3
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-01319, -01321, and -01325
Petitioner and Activision agreed that Activision would advance payments to

Petitioner to develop Petitioners products, including operations directly
related to the development of the Products and that [t]hese operations
include the legal reviews required under Sec. 7A.15(j). Mot. 3 (quoting
Ex. 2002 10.1). According to Patent Owner, legal reviews include the
filing of the instant IPRs. Mot. 45.
Regarding the letter asserting infringement (Ex. 2004), Patent Owner
contends that after litigation counsel notified Activision that Destiny was
an intended product-at-issue in the litigation, [Petitioner]s obligation to
conduct legal reviews was triggered. Further, there is no dispute that
[Petitioner] possesses an indemnification obligation under the Agreement.
Id. at 9. Patent Owner also contends that [t]he Agreement conditions
[Petitioner]s indemnification of Activision on notice and an opportunity for
[Petitioner] to control the litigation. Id. (citing Ex. 2002 15.3).
Patent Owner reasons that the Agreement, letter, and other evidence
show that Petitioner must provide routine or additional discovery because
Activision has the ability to exercise control over the IPR proceedings;
and therefore, Petitioners RPI assertions are inconsistent with the record,
and/or the record shows that there is more than a possibility that discovery
will lead to evidence of actual exercise of control. See Mot. 8.
Accordingly, Patent Owner identifies five discovery categories, which
it summarizes as
discovery directed toward Activisions actual exercise of

control over [Petitioner]s legal reviews and IPR petitions by
way of correspondence about [Petitioner]s legal reviews of
[Patent Owners] patents, [Petitioner]s preparation of the IPR
petitions, [Petitioner]s direct or indirect use of Activisions
Development Advances, and Activisions demand for
4
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-01319, -01321, and -01325
indemnification by [Petitioner]. Each of these categories

indicates actual control, and is inconsistent with [Petitioner]s
position that it is the sole RPI (i.e. the sole party having
opportunity or actual control of the IPR petitions)
Id. at 5.
Based on its showing, Patent Owner lists the following requests for
production (RFP):
RFP NO. 1 - Documents identifying the [Petitioner] account(s)
from which payment was tendered for all legal reviews
associated with [Patent Owners] Patent(s), including legal
analysis of [Patent Owners] Patent(s), drafting the [Petitioner]
IPR petitions, and paying the USPTO filing fees for the IPRs.
RFP NO. 2 - Documents identifying all [Petitioner] account(s)

into which Activisions Development Advances are or were
held or deposited, directly or indirectly, for the purpose of
developing the Destiny Products.
RFP NO. 3 - Documents showing that funds received from

Activision were used, directly or indirectly, to pay for, or co-
mingled with funds used to pay for [Petitioner]s legal
review(s) relating to any [of Patent Owners] Patent(s).
RFP NO. 4 - Communications between [Petitioner] and

Activision concerning legal review of any [of Patent Owners]
Patent(s), including Activisions review or approval, or
opportunity to review or approve [Petitioner]s legal reviews of
any [of Patent Owners] Patent(s) or any version(s) of an IPR
Petition associated with any of [Patent Owners] Patent(s).
RFP NO. 5 - Communications between [Petitioner] and

Activision related to [Petitioner]s indemnification of or
obligation to indemnify Activision based on any of [Patent
Owners] Patent(s).
RFP NO. 6 - For all Communications/Documents responsive to

RFPs Nos. 15 but withheld on privilege, a privilege log
5
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-01319, -01321, and -01325
identifying the Communication/Document being withheld, the

author or sender, recipient(s), subject matter, date, and the RFP
to which the Communication/Document is responsive.
Id. at 12.
By way of summary, the first three requests seek discovery involving
account and payment information for legal reviews and/or the development
of Destiny products. The fourth request seeks discovery concerning legal
review of any of Patent Owners patents, the fifth request seeks discovery
related to indemnification based on the patents, and the last request seeks
privilege logs related to the first five requests.
Petitioner acknowledges that it is responsible for defense of
intellectual property claims against Destiny, but contends that Destiny was
never added to the Worlds/Activision Lawsuit. Opp. 1. Petitioner also
asserts that the Agreement does not allow[] any other party other than
[Petitioner] to control these IPR proceedings and that Petitioner is solely
responsible for the cost and control of the IPRs. Id. at 12.
Petitioner also contends that Patent Owners motion is premised on a
faulty assumption, namely that this IPR is a legal review under Section
7A.15(j) of the . . . Agreement. Id. at 6. According to Petitioner, the
subject of these IPRs is P[atent] O[wner]s patents, not any Destiny
product. Id. at 7. As noted above, Petitioner also asserts that absent a
complaint asserting infringement by the Destiny product, Petitioner has no
indemnity obligation, and even if it did, the Agreement makes Petitioner
solely responsible for costs and control of any defense. See id.
The record shows Petitioners position is more persuasive than Patent
OwnersPatent Owner has not met its burden on the Motion. As
Petitioner contends, Patent Owners theory hinges on the assertion that the
6
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-01319, -01321, and -01325
Agreement allows Activision to control the IPRs, because legal reviews for
IP clearance and a warranty of non-infringement, as set forth in the
Agreement, include the filing of IPRs. See Mot. 4. As Petitioner also
contends, Section 7A.15(j) of the Agreement specifies that Patent Owner
may review Petitioners legal reviews of the Products to ensure that all
Intellectual Property and other rights are fully cleared for use. Ex. 2002
(emphasis added); Opp. 7.
A legal review of a Product under the Agreement and other
provisions do not specify, require, or necessarily include filing an IPR
against a patent. In addition, Patent Owner did not file a complaint asserting
that Destiny infringes its patents; therefore, even if the indemnity provisions
( 15.115.3) somehow relate to the legal review provisions ( 7A.15) of
the Agreement, Patent Owner fails to explain persuasively how the
Agreement requires either indemnity or the filing of IPRs. In other words,
that the Agreement requires Petitioner to conduct legal reviews to ensure
that Destiny does not infringe a patent, trademark, copyright, and the other
listed intellectual property rights in Section 6.1 of the Agreement, does not
rise to more than a mere possibility that such a legal review includes filing
IPRs that Activision could or does control.
Patent Owner also alleges discovery would show that Petitioner
commingled or used some of its advances from Activision to pay for
[Petitioner]s legal reviews related to [Patent Owners] Patents(s) with
funds for development of Destiny. Mot. 2. Patent Owner reasons that
because the Agreement obligates financial support from Activision to
[Petitioner] for development of Destiny, this development includes legal
reviews under 7A.15j of the Agreement.
7
IPR2015-01264, -01268, -01269,
-01319, -01321, and -01325
Patent Owners theory for discovery to show control by Activision of

the IPRs makes several assumptions under the Agreement: 1) Petitioner
treated the filing of IPRs as legal reviews subject to Activisions review;
2) Petitioner treated legal reviews as product development funded by
advances from Activision; 3) the letter by Patent Owner to Activisions
counsel discussing Destiny (Ex. 2004) triggered the indemnity provisions;
and 4) indemnity somehow relates to control by Activision of the IPRs.
Based on the foregoing discussion, there is insufficient or no evidence on
this record to support any of the assumptions. In addition, Patent Owner
characterizes advances by Activision as co-mingled by Petitioner, and at
the same time, characterizes the Agreements as requiring Activision to make
the advances to Petitioner for legal reviews as product development. See
Mot. 23. Both cannot be correct, and it is not clear how product
development includes legal reviews under the Agreement. For its part,
Petitioner counters that development advances to [Petitioner] funded the
development of the Destiny videogame, not these IPRs. Opp. 8.
It follows that Patent Owner has not shown more than a mere
allegation that something useful will be found or that Petitioners RPI
positions are inconsistent with record evidence that would justify additional
or routine discovery on this record. See Garmin Intl, Inc. v. Cuozzo Speed
Techs. LLC, Case IPR2012-00001, slip op. at 67 (PTAB Mar. 5, 2013)
(Paper 26) (informative) (explaining that [t]he mere possibility of finding
something useful, and mere allegation that something useful will be found,
are insufficient to demonstrate that the requested discovery is necessary in
the interest of justice). We are not persuaded that Patent Owner has shown
that Petitioner failed to comply with routine discovery under 37 C.F.R.
8
IPR2015-01264, -01268, -01269,
-01319, -01321, and -01325
41.51(b)(1), or that the requested discovery is in the interests of justice,

as required for additional discovery under 37.C.F.R. 42.51(b)(2)(i).
According to long-standing persuasive precedent, Bros, Inc. v. W.E.
Grace Mfg. Co., 261 F.2d 428, 429 (5th Cir. 1958), when a patent holder
sues a dealer, seller, or distributer of an accused product, as is the case with
Activision (i.e., the World/Activision lawsuit), indemnity payments and
minor participation in a trial are not sufficient to bind (by estoppel) a non-
party manufacturer of the accused device:
While the mere payment of counsel fees or participation in a
trial by one not a named party to it would not alone be
sufficient, cf. I.T.S. Rubber Co. v. Essex Co., [] 272 U.S. 429
[(1926)]. . . Restatement, Judgment 84, comment e (1942),
the extent and nature of that participation may completely alter
the consequences. This is particularly so in patent infringement
cases in which, from tactical or strategic considerations relating
to venue, desirability of a particular forum and the like, such
cases are so often filed and tried against a dealer, a seller, a
distributor, or a user of the accused device manufactured by
another. If the manufacturer stands aloof, he risks a judgment
adverse to his interest resulting perhaps from inadequate or
incompetent defense by one who has a secondary interest. Such
judgment, to be sure, would normall[y] not be binding by
estoppel or res judicata, but it would take its place in the
jurisprudence where its practical effect as stare decisis might be
as decisive. The alternative, of course, is to jump in and give
the case full and active defense as though the manufacturer
were the real named party. This assures that the issues will be
presented and contested in a way deemed most effective by the
nominally remote, but practically immediate, party at interest.
261 F.2d at 429 (emphasis added); cited with approval by Emerson Elec. Co.
v. Black and Decker Mfg. Co., 606 F.2d 234, 242, n. 20 (8th Cir. 1979) (If
Emerson does control the Maryland suit, the outcome will be binding on, or
inure to the benefit of, Emerson under principles of res judicata.); see also
9
IPR2015-01264, -01268, -01269,
-01319, -01321, and -01325
United States v. Webber, 396 F.2d 381, 387 (3d Cir.1968) (finding that
appellants were privies because of their control over and interest in the
earlier litigation).
In contrast to the manufacturer and distributor relationship as
described supra in Bros, Inc., Destiny is not an accused product in any
litigation Patent Owner identifies. Even if Activision has an interest in the
IPR outcome, the Worlds/Activision lawsuit shows that Activision
distributes multiple software products, including Destiny. The evidence
asserted does not arise to more than a mere allegation that something useful
to establishing that Activision controlled or even could have controlled the
IPRs that Petitioner filed.
ORDER
Accordingly, the Motion is denied.
10
IPR2015-01264, -01268, -01269,
-01319, -01321, and -01325
PETITIONER:
Michael Rosato
mrosato@wsgr.com
Matthew Argenti
margenti@wsgr.com
PATENT OWNER:
Wayne Helge
whelge@dbjg.com
Michael Casey
mcasey@dbjg.com
11
BUNGIE, INC.,
Petitioner
v.
WORLDS INC.,
Patent Owner
Case IPR2015-01264
Patent 7,945,856
PATENT OWNER WORLDS INC.'S

NOTICE OF APPEAL
Case No. IPR2015-01264
Patent No. 7,945,856
Notice is hereby given, pursuant to 37 C.F.R. 90.2(a), that Patent Owner
Worlds Inc. appeals under 35 U.S.C. 141 to the United States Court of Appeals
for the Federal Circuit from the Final Written Decision entered on November 10,
2016 (Paper 42) and from all underlying orders, decisions, rulings and opinions
regarding U.S. Patent No. 7,945,856 ("the '856 Patent") including the DECISION
- Institution of Inter Partes Review entered on November 30, 2015 (Paper 13), and
the ORDER denying Patent Owner's Motion for Routine or Additional Discovery
entered on September 4, 2015 (Paper 11).
For the limited purpose of providing the Director with the information
requested in 37 C.F.R. 90.2(a)(3)(ii), Patent Owner anticipates that the issues on
appeal may include, but are not limited to, the following, as well as any underlying
findings, determinations, rulings, decisions, opinions, or other related issues:
Whether judicial review is available for a patent owner to challenge
the Patent Trial and Appeal Board's determination that a petition
satisfied the statutory requirements of 35 U.S.C. 312(a)(2);
the Patent Trial and Appeal Board's determination that a petitioner
satisfied the statutory timeliness requirements of 35 U.S.C. 315(b);
Whether the Patent Trial and Appeal Board made an error of law by
applying the incorrect legal standard to the review of Patent Owner's

r
1
evidence rebutting the Petition's identification of all Real Parties-in-
Interest as required under 35 U.S.C. 312(a)(2);
Whether the Patent Trial and Appeal Board's decision on the
correctness and completeness of Petition's identification of all Real
Parties-in-Interest was based upon no evidence and was therefore
"arbitrary, capricious, an abuse of discretion, or . . . unsupported by
substantial evidence .... " 5 U.S.C. 706(2)(A)-(E);
Whether according a filing date to a Petition that was incomplete for
failure to name all Real Parties-in-Interest under 35 U.S.C. 312(a)(2)
was an error of law;
Whether the Patent Trial and Appeal Board's decision not to dismiss .
the Petition as time-barred under 35 U.S.C. 315(b) was "arbitrary,
capricious, an abuse of discretion, . . . in excess of statutory
jurisdiction, authority or limitations, or ... unsupported by substantial
evidence .... " 5 U.S.C. 706(2)(A)-(E);
Whether the Patent Trial and Appeal Board's decision denying Patent
Owner's Motion for Routine or Additional Discovery (Paper 9) was
"not in accordance with law; [or] an abuse of discretion .... " 5 U.S.C.
706(2)(A)-(E); and
2
Whether the Patent Trial and Appeal Board's decision finding that
claim 1 of the patent is unpatentable was "arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law; [or] ...
unsupported by substantial evidence .... " 5 U.S.C. 706(2)(A)-(E).
Simultaneous with the electronic submission of this Notice of Appeal to the
Patent Trial and Appeal Board, a copy of this Notice of Appeal is being filed with
the United States Patent and Trademark Office by way of hand delivery to the
Office of General Counsel to:
Office of the General Counsel

Madison East
1OB20 600 Dulany Street
Alexandria, Virginia 22314
In addition, consistent with Federal Circuit Rules 15(a)(l) and 25(b)(l), this
Notice of Appeal, along with the required docketing fees and a copy of the
decision and order of the agency for which review is sought, are being filed
electronically with the United States Court of Appeals for the Federal Circuit, and
one paper copy of the Notice of Appeal is being provided to the Clerk's Office:
Clerk of Court
United States Court of Appeals for the Federal Circuit
71 7 Madison Place, NW, Room 401
Washington, DC 20439
Any required fees to the United States Patent and Trademark Office may be
charged to Deposit Account No. 50-1860.
3
Dated: January 12, 2017 Respectfully submitted,
By: Isl Wayne M Helge

Wayne M. Helge (Reg. No. 56,905)
Aldo Noto (Reg. No. 35,628)
Davidson Berquist Jackson & Gowdey, LLP
8300 Greensboro Drive, Suite 500
McLean, VA 22102
Telephone: 571-765-7700
Fax: 571-765-7200
Email: whelge@dbjg.com
Email: anoto@dbjg.com
Counsel for Patent Owner
4
I hereby certify that on January 12, 2017, a true and correct copy of the
foregoing Patent Owner's Notice of Appeal was served via email, by consent, to
Petitioner by serving the correspondence email addresses of record as follows:
Michael T. Rosato Matthew A. Argenti

Reg. No. 52, 182 Reg. No. 61,836
Andrew S. Brown Wilson Sonsini Goodrich & Rosati
Reg. No. 74,177 650 Page Mill Road
Wilson Sonsini Goodrich & Rosati Palo Alto, CA 94304
701 Fifth Ave. Telephone: (650) 354-4154
Suite 5100 Facsimile: (650) 493-6811
Seattle, WA 98104-7036 E-mail: margenti@wsgr.com
Telephone: (206) 883-2529
Facsimile: (206) 883-2699
E-mail: mrosato@wsgr.com
E-mail: asbrown@wsgr.com
By: Isl Wayne M Helge

Registration No. 56,905
5
_______________
_______________
BUNGIE, INC.,
Petitioner
v.
WORLDS INC.,
Patent Owner
_______________
Case IPR2015-01321
Patent 8,145,998
_______________
PATENT OWNER WORLDS INC.S

NOTICE OF APPEAL
for the Federal Circuit from the Final Written Decision entered on November 28,
regarding U.S. Patent No. 8,145,998 (the 998 Patent) including the DECISION
- Institution of Inter Partes Review entered on November 30, 2015 (Paper 13), and
the ORDER denying Patent Owners Motion for Routine or Additional Discovery
the Patent Trial and Appeal Boards determination that a petition
satisfied the statutory requirements of 35 U.S.C. 312(a)(2);
the Patent Trial and Appeal Boards determination that a petitioner
satisfied the statutory timeliness requirements of 35 U.S.C. 315(b);
applying the incorrect legal standard to the review of Patent Owners
1
evidence rebutting the Petitions identification of all Real Parties-in-
Whether the Patent Trial and Appeal Boards decision on the
correctness and completeness of Petitions identification of all Real
arbitrary, capricious, an abuse of discretion, or unsupported by
substantial evidence . 5 U.S.C. 706(2)(A)-(E);
Whether the Patent Trial and Appeal Boards decision not to dismiss
the Petition as time-barred under 35 U.S.C. 315(b) was arbitrary,
capricious, an abuse of discretion, in excess of statutory
jurisdiction, authority or limitations, or unsupported by substantial
evidence . 5 U.S.C. 706(2)(A)-(E);
Whether the Patent Trial and Appeal Boards decision denying Patent
Owners Motion for Routine or Additional Discovery (Paper 9) was
not in accordance with law; [or] an abuse of discretion . 5 U.S.C.
706(2)(A)-(E); and
2
Whether the Patent Trial and Appeal Boards decision finding that
claims 1-3, 7-8, 12-18, and 20 of the 998 patent are unpatentable was
arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law; [or] unsupported by substantial evidence
. 5 U.S.C. 706(2)(A)-(E).

Madison East
10B20 600 Dulany Street
In addition, consistent with Federal Circuit Rules 15(a)(1) and 25(b)(1), this
one paper copy of the Notice of Appeal is being provided to the Clerks Office:
Clerk of Court
717 Madison Place, NW, Room 401
3
Dated: January 30, 2017 Respectfully submitted,
By: /s/ Wayne M. Helge

McLean, VA 22102
Telephone: 571-765-7700
Fax: 571-765-7200
4
I hereby certify that on January 30, 2017, a true and correct copy of the
foregoing Patent Owners Notice of Appeal was served via email, by consent, to

Reg. No. 52,182 Reg. No. 61,836
Suite 5100 Facsimile: (650) 493-6811
Telephone: (206) 883-2529
Facsimile: (206) 883-2699
By: /s/ Wayne M. Helge

5
BUNGIE, INC.,
Petitioner
v.
WORLDS INC.,
Patent Owner
Case IPR2015-01319
Patent 8,082,501
a"\ 11 ' PATENT OWNER WORLDS INC.'S

0 <...(
.. J
N ,,. NOTICE OF APPEAL
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:-
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for the Federal Circuit from the Final Written Decision entered on December 6,
regarding U.S. Patent No. 8,082,501 ("the '501 Patent") including the DECISION
- Institution of Inter Partes Review entered on December 7, 2015 (Paper 14), and
the ORDER denying Patent Owner's Motion for Routine or Additional Discovery
Whether judicial review is available, including under 5 U.S.C. 704
& 706, for a patent owner to challenge the Patent Trial and Appeal
Board's determination that a petition satisfied the statutory
requirements of 35 U.S.C. 312(a)(2);
Whether judicial review is available, including under 5 U.S.C. 704
& 706, for a patent owner to challenge the Patent Trial and Appeal
Board's determination that a petitioner satisfied the statutory
timeliness requirements of 35 U.S.C. 315(b );
1

applying the incorrect legal standard to the review of Patent Owner's
evidence rebutting the Petition's identification of all Real Parties-in-
Whether - the Patent Trial and Appeal Board's decision on the
correctness and completeness of Petition's identification of all Real
"arbitrary, capricious, an abuse of discretion, or . . . without
observance of procedure required by law; [or] unsupported by
substantial evidence .... " 5 U.S.C. 706(2)(A)-(E);
Whether the Patent Trial and Appeal Board's decision not to dismiss
the Petition as time-barred under 35 U.S.C. 3 l 5(b) was "arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with
law; ... in excess of statutory jurisdiction, authority or limitations, or
... without observance of procedure required by law; [or] unsupported
by substantial evidence .... " 5 U.S.C. 706(2)(A)-(E);
2

Whether the Patent Trial and Appeal Board's decision denying Patent
Owner's Motion for Routine or Additional Discovery (Paper 9) was
"an abuse of discretion, or otherwise not in accordance with law; ....
[or] without observance of procedure required by law .... " 5 U.S.C.
706(2)(A)-(E); and
Whether the Patent Trial and Appeal Board's decision finding that
claims 1-8, 10, 12, and 14-16 of the '501 patent are unpatentable was
"arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law; ... in excess of statutory jurisdiction, authority
or limitations, or ... without observance of procedure required by law;
[or] unsupported by substantial evidence .... " 5 U.S.C. 706(2)(A)-
(E).

Madison East
1OB20 600 Dulany Street
3

In addition, consistent with Federal Circuit Rules 15(a)(l) and 25(b)(l), this
one paper copy of the Notice of Appeal is being provided to the Clerk's Office:
Clerk of Court
717 Madison Place, NW, Room 401
Dated: February 7, 2017 Respectfully submitted,
By: /s/ Wayne M Helge

McLean, VA 22102
Telephone: 571-765-7700
Fax: 571-765-7200
4

I hereby certify that on February 7, 2017, a true and correct copy of the
foregoing Patent Owner's Notice of Appeal was served via email, by consent, to

Reg. No. 52,182 Reg. No. 61,836
Suite 5100 Facsimile: (650) 493-6811
Telephone: (206) 883-2529
Facsimile: (206) 883-2699
By: /s/ Wayne M Helge


Worlds v. Bungie APPELLATE Full Filing

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Case: 17-1546 Document: 6 Page: 1 Filed: 03/20/2017

UNITED STATES COURT OF APPEALS

v. Appeal Nos. 2017-14811

Proceeding Nos.: IPR2015-01264, IPR2015-01321 and IPR2015-01319

NOTICE FORWARDING CERTIFIED LIST

Date: March 20, 2017

Under Secretary of Commerce for Intellectual Property and

1 Notice of Appeal for 2017-1481 was filed January 12, 2017.

Appellant and Appellee this 20th day of March, 2017, as follows:

Wayne Michael Helge

U.S. DEPARTMENT OF COMMERCE

March 20, 2017

DIRECTOR OF THE UNITED STATES

U.S. DEPARTMENT OF COMMERCE

March 20, 2017

DIRECTOR OF THE UNITED STATES

U.S. DEPARTMENT OF COMMERCE

March 20, 2017

DIRECTOR OF THE UNITED STATES

UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

Before KARL D. EASTHOM, KERRY BEGLEY, and JASON J. CHUNG,

BEGLEY, Administrative Patent Judge.

FINAL WRITTEN DECISION

Bungie, Inc. (Petitioner) filed a Petition requesting inter partes

85:886:11 (explaining that it is possible to have entities that are 2-D

UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

Before KARL D. EASTHOM, KERRY BEGLEY, and

CHUNG, Administrative Patent Judge.

FINAL WRITTEN DECISION

Petitioner, Bungie, Inc., filed a Petition to institute an inter partes

The 998 patent is involved in a district court proceeding, Worlds Inc.

IPR2015-01325 and related to the patents at issue in IPR2015-01264,

B. The Asserted Grounds

We instituted inter partes review on the following grounds of

Reference(s) Basis Instituted Claim(s)

C. The 998 Patent

The 998 patent is directed to a graphical, multi-user, interactive

D. The Instituted Claims

A. Level of Ordinary Skill in the Art

We begin our analysis by addressing the level of ordinary skill in the

implementing networked virtual environments, or virtual environments and

B. Mr. Pesces Qualifications as an Expert

Petitioner argues the testimony of Mr. Pesce, Patent Owners

Pet. 11 (proffering definition of one of ordinary skill in the art as someone

In our Institution Decision, we raised the issue of the impending

proceeding, because it applies only to petitions filed on or after May 2, 2016.

The 998 patent is now expired.10 In an inter partes review, the

Similarly, to disavow claim scope, the specification or prosecution

The parties post-institution arguments require that we address the

specification11 comes fairly close to and is practically lexicography,

attempt to limit the term to precisely three-dimensional figures. Reply 4;

be three-dimensional, as Patent Owner urges. See Pet. 13; PO Resp. 14

user. THE MICROSOFT COMPUTER DICTIONARY (3d. ed. 1997),12 proffered

question regarding whether its proposed construction, when plugged into

to and is practically lexicography, we first note that Patent Owner

Owner similarly explained that this passage involves a shortcut aimed to

See Reply 45; Tr. 174:20175:2, 180:1618; GE Lighting, 750 F.3d at

COMPUTER DICTIONARY (3d. ed. 1997) defines avatar as a graphical

E. Obviousness of Claims 1, 2, 7, 8, 12, 16, 18, and 20 in View of

1. Funkhouser (Ex. 1005)

Petitioner argues Funkhouser constitutes a printed publication under

skilled in the subject matter . . . exercising reasonable diligence, can locate it