wk reply brief fed cir - final

PLAINTIFF-APPELLANT WHITE KNUCKLE GAMING, LLC’S

REPLY BRIEF

ANDREW S. HANSEN

HANSEN IP, LLC

Bountiful, Utah, 84010

282 Maxine Circle

Telephone: (801) 671-3621

DAVID A. JONES

ALPINE IP, PLLC

3450 N Triumph Blvd., Suite 102

Lehi, Utah 84043

Telephone: (801) 631-3496

Attorneys for Plaintiff-Appellant

2016-2286

WHITE KNUCKLE GAMING, LLC, a Utah limited liability company,

Plaintiff – Appellant,

—v.—

ELECTRONIC ARTS, INC., a Delaware corporation,

Defendant – Appellee.

Appeal from the United Stated District Court for the

Northern Division of Utah in No. 1:15-cv-00150

Judge Jill N. Parrish

PLAINTIFF-APPELLANT WHITE KNUCKLE GAMING, LLC’S

CORRECTED PRINCIPAL BRIEF

ANDREW S. HANSEN

HANSEN IP, LLC

282 Maxine Circle

Bountiful, Utah, 84010

Telephone: (801) 671-3621

DAVID A. JONES

ALPINE IP, PLLC


Lehi, Utah 84043

Telephone: (801) 631-3496


i

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

WHITE KNUCKLE GAMING, LLC v. ELECTRONIC ARTS, INC.

Appeal No. 16-2286

CERTIFICATE OF INTEREST

The undersigned counsel certifies the following:

1. The full name of every party represented by the undersigned is:

White Knuckle Gaming, LLC

2. The real party in interest represented by the undersigned is:

N/A

3. All parent companies and any publicly held companies that own 10

percent

or more of the stock of the party represented by me are:

Voodoo Gaming, LLC

4. The names of all law firms and the partners or associates that

appeared for the party now represented by the undersigned in the

trial court or are expected to appear in this court are:

DATED: November 22, 2016 Respectfully submitted,

By: /s/Andrew S. Hansen

ANDREW S HANSEN


ANDREW S. HANSEN

HANSEN IP, LLC

282 Maxine Circle

Bountiful, Utah 84010

Telephone: (801) 671-3621

DAVID A. JONES

ALPINE IP, PLLC


Lehi, Utah 84043

Telephone: (801) 631-3496

ii

TABLE OF CONTENTS

Page(s)

I. REPLY ARGUMENT .................................................................................... 1

A. At step one, the claims of the ‘575 patent are not abstract ........... 2

1. The district court failed to follow the common law approach

used in Alice to determine whether “updating software in

sports video games” is a “patent-eligible concept” .................... 2

2. There is no evidence that the claim element, “receiving a

series of updated player performance parameters during a

single sports season” is conventional ........................................... 8

3. The patent ineligible concept of “collection and analysis of

information” is unlike “updating software in sports video

games” ............................................................................................... 11

4. The ‘575 claims are not “drawn to an idea itself” because they

recite technological means for effecting the video game

“updating” ......................................................................................... 14

B. At Step 2, the claims are not abstract. ............................................. 16

1. EA fails to address the new and non-conventional elements of

the claims related to “a series of updated video game character

performance parameters” received “during a single sports

season” .............................................................................................. 16

II. CONCLUSION .............................................................................................. 17

iii

TABLE OF AUTHORITIES

Page(s)

CASES

Affinity Labs of Texas, LLC v. DirecTV, LLC,

838 F.3d 1253 (Fed. Cir. 2016) ........................................................... 7, 14, 15

Alice Corp. Pty. Ltd. v CLS Bank Int’l,

134 S.Ct. 2347 (2014) ........................................................................................ 1

Amdocs (Israel) Limited v. Openet Telecom,

No. 2015-1180, 2016 WL 6440387 (Fed. Cir. Nov. 1, 2016).................. 3, 7

Bascom Glob. Internet Servs., Inc. v. ATT Mobility LLC,

827 F.3d 1241 (Fed. Cir. 2016) ....................................................................... 8

Content Extraction and Transmission LLC v. Wells Fargo Bank, N.A.,

776 F.3d 1343 (Fed. Cir. 2014) ..................................................................... 12

DDR Holdings, LLC v. Hotels.Com, LP,

773 F.3d 1245 (Fed. Cir. 2014) ....................................................................... 5

Diamond v. Diehr,

450 U.S. 175 (1981) ....................................................................................... 1, 8

Elec. Power Grp., LLC v. Alstom S.A.,

830 F.3d 1350 (Fed. Cir. 2016) ..................................................................... 12

Enfish, LLC v. Microsoft Corp.,

822 F.3d 1327 (Fed. Cir. 2016) ..................................................................... 15

FairWarning IP, LLC v. Iatric Systems, Inc.,

No. 2015-1985, 2016 WL 5899185 (Fed. Cir. Oct. 11, 2016) .................. 13

In re TLI Commc'ns LLC Patent Litig.,

823 F.3d 607 (Fed. Cir. 2016) ........................................................... 1, 6, 8, 12

Intellectual Ventures, LLC v. Capital One Bank,

792 F.3d 1363 (Fed. Cir. 2015) ................................................................... 4, 5

Ultramercial Inc. v. Hulu, LLC,

772 F.3d 1335 (Fed. Cir. 2013) ....................................................................... 5

STATUTES

35 U.S.C § 101…………………………………………………………….passim

iv

ABBREVIATIONS

“’575 patent” refers to the patent-in-suit, U.S. Patent No. 8,540,575.

“BB” refers to White Knuckle’s opening brief (Blue Brief).

“RB” refers to EA’s response brief (Red Brief).

1

I. REPLY ARGUMENT

EA argues that the ‘575 patent addresses the abstract concept of

“updating software in a sports video game.” (RB16). To reach this

conclusion EA must ignore meaningful elements of the claims in both

step one and step two of the Alice analysis. In particular, neither EA nor

the court gave any weight to the claim elements related to “during a

single sports season, receiving a series of updated video game character

performance parameters.” (Appx122 at col. 8, ll. 33-34).

This claim element is a meaningful component of the improvement

to the prior art and EA generalizes the claim to avoid addressing it. This

Court’s precedence dictates that courts “‘must be careful to avoid

oversimplifying the claims’ by looking at them generally and failing to

account for the specific requirements of the claims.” In re TLI Commc'ns

LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016) (citing Alice Corp.

Pty. Ltd. v CLS Bank Int’l, 134 S.Ct. 2347, 2354 (2014); see also Diamond

v. Diehr, 450 U.S. 175, 189 n.12 (1981).

EA has not, and cannot, provide a sufficient rationale under Alice,

or a common law framework, for why “updating software in a sports video

game” is abstract. EA attempts to show that “updating software in a

2

sports video game” is “indistinguishable from the process of information

collection and analysis” (RB18). However, the claims of the ‘575 patent

are easily distinguished based on the data types it claims and the

particular application of those data types. In the present case, the “data”

type claimed is a video game character performance parameters, which

is not information that is to be understood or used by humans. Rather,

the parameters are data structures that are functionally incorporated

within a video game machine and are used by the video game machine to

render a new video game that performs differently than before. (see

Appx119 at col. 5, l. 51 – col. 6, l. 3).

At the second step of Alice, the claims are patent-eligible because

they include meaningful non-conventional elements that improve the

functioning of the video game software itself. Importantly, these unique

improvements to the annually produced video games lifts a sports video

game’s realism and authenticity by causing the video game to simulate

changes in real-life athletic performance throughout a sports season.

A. At step one, the claims of the ‘575 patent are not

abstract

1. The district court failed to follow the common law

approach used in Alice to determine whether

3

“updating software in sports video games” is a

“patent-eligible concept”

The Supreme Court in Alice applied common law to determine

whether the claims were directed to a “patent ineligible concept.” Alice

134 S. Ct. at 2355. This Court recently affirmed the common law

methodology in Amdocs (Israel) Limited v. Openet Telecom, holding:

[A] search for a single test or definition in the decided cases

concerning § 101 from this court, and indeed from the

Supreme Court, reveals that at present there is no such

single, succinct, usable definition or test…. Instead of a

definition, then, the decisional mechanism courts now apply

is to examine earlier cases in which a similar or parallel

descriptive nature can be seen—what prior cases were about,

and which way they were decided. That is the classic common

law methodology for creating law….

No. 2015-1180, 2016 WL 6440387 (Fed. Cir. Nov. 1, 2016).

(internal citations omitted)

When determining whether “updating software in sports video

games” is abstract, the district court omitted an examination of earlier

cases in which a similar or parallel descriptive nature could be found.

4

While EA and the district court cite to several cases, the court’s order is

not clear as to which if any of the cases it relies on have a claimed concept

similar in nature to “updating software in sports video games.” (Appx5-

7). In its step-one analysis, the only authorities for which the district

court mentions the nature of the claimed concepts are Bilski and Alice

(“risk hedging” and “computeriz[ing] the use of a third-party

intermediary,” respectively) (Appx5). However, the district court does not

provide any analysis for why the claimed concepts in Bilski/Alice could

or would serve as a basis for finding “updating software in sports video

games” abstract. The citation to Bilski and Alice merely followed with a

conclusion that the claims in this case “recite a simple internet-based

method of updating software in sports video games” and that “This is an

abstract idea—updating software in sports video games—and it is

performed on a conventional computer, serer, and network.” (Appx6).

The concept of “updating software in sports video games” is

fundamentally unrelated to the “fundamental economic practices” found

to be abstract in Bilski and Alice. As such, the district courts reliance on

Bilski and Alice does not fulfill the Alice requirement of a common law

approach to finding an abstract idea under § 101.

5

The district court’s step-one analysis cites Intellectual Ventures,

LLC v. Capital One Bank, 792 F.3d 1363, 1366 (Fed. Cir. 2015) for its

statement that “[an]n abstract idea does not become non-abstract by

limiting the invention to a particular field.” (Appx5). However, the court

does not discuss the nature of the Intellectual Ventures’ claimed concept

nor does it provide a justification for why “updating software in sports

video games” is similar in nature. The claimed concept in Intellectual

Ventures was “tracking financial transactions to determine whether they

exceed a pre-set spending limited (i.e., budgeting).” Id. at 1367. The

“budgeting” claimed in Intellectual Ventures shows no resemblance to the

claimed concept, “updating software in sports video games.”

The district court also cites DDR Holdings, LLC v. Hotels.Com, LP,

773 F.3d 1245, 1258 (Fed. Cir. 2014); however, here again, the court does

not discuss the nature of the claimed concepts in the case. Moreover, the

claims in DDR Holdings were found to be patent eligible and the quoted

material relates to the claimed concept in Ultramercial Inc. v. Hulu, LLC,

which the DDR Holdings court distinguished. DDR Holdings, LLC, 773

F.3d at 1258 (citing Ultramercial Inc. v. Hulu, LLC, 772 F.3d 1335 (Fed.

Cir. 2013) (claimed concept directed to “a method of using advertising as

6

an exchange or currency,” which is not relevant to “updating software in

sports video games.”). Thus, the district court’s reliance on DDR Holdings

also fails to provide a common law basis for finding “updating software

in sports video games” to be a patent ineligible concept at step one.

EA attempts to buttress the district court’s ruling by citing In re

TLI. (RB13). EA alleges, “the [TLI] Court observed at step one that

tangible claim components such as a telephone unit and server ‘merely

provide[d] a generic environment in which to carry out the abstract idea

of classifying and storing digital images in an organized manner’ and

thus did not save the claim from abstraction.” Id. (citing In re TLI, 823

F.3d at 611).

The implication of EA’s argument is that “updating software in a

sports video game” is abstract simply because the patent describes

generic components such as a server. However, the “generic

environment” in TLI did not make the claims abstract; rather the TLI

claims were abstract because they were directed to a human activity —

“classifying and storing digital images in an organized manner.”

EA has failed to make the relevant functional comparison between

the concepts in the ‘575 claims and TLI. Instead of comparing “updating

7

software in sports video games” to “classifying and storing digital

images,” EA compares the server in the ‘575 patent to the “generic server”

in TLI to arrive at the incorrect conclusion that this case and TLI are

factually similar.

EA repeats the same error when citing to DirecTV, LLC. EA

contends, “a generic depiction, as this Court found, supports the

conclusion that the claim is directed to an abstract idea.” (RB13) (citing

Affinity Labs of Texas, LLC v. DirecTV, LLC, No. 15-1845, 2016 WL

5335501, at *6 (Fed. Cir. Sept. 23, 2016). Here again there is no

functional comparison between the concepts of the ‘575 patent and the

claimed concept in DirectTV. Rather EA merely correlates the

overlapping disclosure of a generic component and relies on the existence

of that generic component to argue the claimed concepts are factually

similar.

This Court’s recent decision in Amdocs warns against a § 101

analysis based on generalizations and words out of context. see Amdocs,

No. 2015-1180, 2016 WL 6440387 (Fed. Cir. Nov. 1, 2016) at fn 4 (“In the

complexities of § 101, the law is evolving into greater certitude based on

8

experience, not on generalizations. Words out of context are less useful—

especially if inapt.”)

2. There is no evidence that the claim element,

“receiving a series of updated player performance

parameters during a single sports season” is

conventional

At step one, the district court’s determination that the claims are

directed to “updating software in sports video games” ignores the

concrete tangible elements related to “receiving a series of updated player

performance parameters” “during the single sports season” and updating

the sports video game with “each of the updated video game character

performance parameters received” in the series. (Appx5-7; Appx121, col.

8, ll. 33-48).

As previously held, courts “must be careful to avoid oversimplifying

the claims” by looking at them generally and failing to account for the

specific requirements of the claims. TLI Commc'ns, 823 F.3d at 611; see

also Diehr, 450 U.S. at 189 n.12, 101 S.Ct. 1048. The flexible approach

set forth in Bascom Glob. Internet Servs., Inc. v. ATT Mobility LLC, is not

a license to ignore the salient elements of the claims altogether. 827 F.3d

1241 (Fed. Cir. 2016) (the two stages [of Alice] involve overlapping

9

scrutiny of the content of the claims … [and] there can be close questions

about when the inquiry should proceed from the first stage to the second).

Here, there is no evidence that at the time of the invention, it was

conventional to configure a sports video game to “receive a series of

updated player performance parameters.” Nor was it conventional to

receive such updates in a series “during a single sports season.” Rather,

as stated in the ‘575 patent, the convention at that time was to develop

new video games “once a year” using “averages” from “the most recent

year” or “season”. (Appx117 at col. 1, ll. 23-33). These “seasonal averages”

were akin to the seasonal stats on a baseball card. Video game producers

typically released a new video game once per year and used “averages”

from “the most recent year.” Id.

The time-based context of the ‘575 patent itself describes the

following improvements:

As events occur in the real world that may influence a game

attribute, a parameter is recorded on a server. A video game

player may connect to the server and download the

parameter. The parameter is stored by the video game and

changes an attribute of the video game…. Instead of playing

10

with last season’s teams, video gamers get a simulation of the

fresh new events of the week, day, or hour.

(Appx117, col. 2, ll. 11-15, 25-27).

Thus, upon waiting until the next seasonal release of data, the

opportunity to relive a “fresh new event[] of the week, day, or hour” has

expressly come-and-gone as recognized by the ‘575 patent. Updated

parameters received “during the season” and based on sporting events

from “that season” cannot be “seasonal” or “yearly” averages since the

season/year is not over “during a single sports season.” Therefore, as

compared to a “seasonal average,” a “during season” character

performance parameter is different in kind. In particular, the shorter

duration creates more variability or randomness that is inherent in

performances based on real life athletes. The simulation based on “new

events of the week, day, or hour” are therefore inherently “dynamic” like

real life. In contrast, a seasonal average smooths out the variability that

occurs in real life.

EA’s allegation that the claims require nothing more than

“accelerating” “routine conventional activity” is simply not true. (see

RB9). The ‘575 patent is concerned with creating video game characters

11

that reflect the day-to-day or week-to week changes of the real-life

players. (Appx117, col. 2, lines 21-26). The claimed video games include

data structures—namely a “series of updated character performance

parameters” associated with “video game characters” to “change the

manner in which the video game characters perform in the video game.”

EA’s arguments fails to appreciate the difference between “a series of

video games” and “a single video game configured to receive a series of

updated character performance parameters.” The claims of the ‘575

patent are direct to the latter (i.e., a single game configured to receive a

series of parameters). (compare Appx117 col. 1, ll. 23-31 with Appx117,

col. 8, ll. 33-48). The data structures recited in the claims and their

arrangement (i.e., a series during the season) are non-conventional and

create a new and useful video game that improves upon the “series of

video games” described in the background of the ‘575 patent.

3. The patent ineligible concept of “collection and

analysis of information” is unlike “updating

software in sports video games”

EA agrees with the district court that the claimed concept is

“updating software in sports video games.” (RB17). However, EA

attempts to supplement the basis of the district court’s Order by citing to

12

recent cases from this Court that have found the concept of collecting and

analyzing information to be patent ineligible. Id.

EA incorrectly generalizes the phrase “updating software in sports

video games” to mean “collecting and analyzing information,” when a

plain reading of the phrase “updating software in sports video games”

simply does not convey such meaning. When this Court has found patent

ineligible concepts to be based on human activities such as merely

“collecting information,” “organizing information,” “analyzing

information,” or “displaying information” the court identifies the claimed

concept as being so. (see Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d

1350, 1352 (Fed. Cir. 2016) (claimed concept directed to “collecting

information, analyzing it, and displaying certain results of the collection

and analysis”); Content Extraction and Transmission LLC v. Wells Fargo

Bank, N.A., 776 F.3d 1343, 1347 (Fed. Cir. 2014) (claimed concept

directed to “1) collecting data, 2) recognizing certain data within the

collected data set, and 3) storing that recognized data in a memory”); In

re TLI Commc’ns, 823 at 613 (concept directed to “classifying and storing

digital images in an organized manner”); Amazon.com Inc., No. 2015-

2080, 2016 WL 5335502, at *2 (Fed. Cir. Sept. 23, 2016) (claimed concept

13

directed to “a method for recording, communicating and administering

[a] digital image.”), and FairWarning IP, LLC v. Iatric Systems, Inc., No.

2015-1985, 2016 WL 5899185 (Fed. Cir. Oct. 11, 2016) (concept directed

to “analyzing records of human activity to detect suspicious behavior.”).

In each of these cases, there is clear language connecting the

“claimed concept” to a well-recognized human activity performed on mere

information (i.e., organizing, recording, analyzing, and/or displaying the

information). And, the processed information is used in the same way

that a human would use the information (i.e., recorded, analyzed,

displayed, organized, etc.).

The activity, “updating software in a sports video game” is not one

of the recognized patent-ineligible concepts. Moreover, this activity is not

performed on information to be understood or used by a human. The data

structures in the claimed video game software (e.g., the “series of video

game character performance parameters”) are in machine language to be

understood by a video game machine—a special purpose computer. The

video game character parameter changes how the machine generates the

video game characters in the sports video game.

14

The claims of the present invention are distinguished from the

foregoing cases that describe human activities performed on mere

information to be understood by a human. Humans are not capable of

processing video game character performance parameters in association

with video game characters to produce a sports video game.

Consequently, the “data” or information used in the claimed invention is

non-analogous to the information used in human activities that this

Court has, in many cases, found to be an ineligible concept.

4. The ‘575 claims are not “drawn to an idea itself”

because they recite technological means for

effecting the video game “updating”

The case law under § 101 also includes instances where a claim has

been found abstract for being “drawn to an idea itself.” see Affinity Labs

of Texas, LLC v. DirecTV, LLC, 838 F.3d 1253, 1258 (Fed. Cir. 2016). In

DirecTV, the court found the claims to be directed to the concept of

“providing out-of-region access to regional broadcast content.” Id. The

claims recite general components, “cellular telephone, a graphical user

interface, and a downloadable application.” The court found the claimed

invention to be “entirely functional in nature” and “drawn to the idea

itself.” Id.

15

The claims of the present invention are distinguished from the

claims in DirecTV because unlike that case, the ‘575 claims recite non-

conventional data structures such as “a series of video game character

performance parameters” “associated with individual video game

characters” that are used by the video game machine to “affect the

manner in which the video game characters perform in the video game.”

(Appx120, col. 8, ll. 33-48). These structures are not used as “tool” to

carry out an otherwise abstract idea. see Enfish, LLC v. Microsoft Corp.,

822 F.3d 1327, 1336 (Fed. Cir. 2016). Rather, the data structures are the

features that produce the improvement (i.e., a sports video game that

simulates the day-to-day or week-to-week changes in the performance of

real-life players).

The claims also require the updated parameters to be received in “a

series” and “during a single sports season,” which further defines the

relationship between the data structures in the video game. The data

structures and the relationships between different data structures are a

“technological means” for how the video game is updated, which makes

the claims patent eligible and not an “idea itself.” see DirecTV, 838 F.3d

at 1262.

16

B. At Step 2, the claims are not abstract.

1. EA fails to address the new and non-conventional

elements of the claims related to “a series of

updated video game character performance

parameters” received “during a single sports

season”

EA’s allegations that the ‘575 patent “merely accelerates” a known

process relies on an assumption that the claimed “updating” is no

different than the kind of “updating” to the previous video games. (Appx9,

31). As discussed above, the ‘575 claims are not directed towards

producing new installments of the game only to make them update faster.

Indeed, the accused products in this case NBA Live 14, NBA Live 15, and

NBA Live 16 were produced in successive years (2014, 2015, and 2016),

yet they allegedly receive “a series of updated character performance

parameters during a single sports season,” which the complaint identifies

as EA’s “Live Seasons technology.” (Appx134).

EA’s continued practice of selling annual releases of its video

games, despite these video games allegedly having during season updates

(i.e., Live Seasons technology), is evidence that the two features are

distinct. In other words, during season updates of character performance

17

parameters is not a substitute for creating a new video games once per

year.

Thus, when properly analyzed, the purpose of the invention is not

to speed up the delivery of video games produced annually; rather the

claims are directed to “receiving updated character performance

parameters” in “a series” “during the season” to “affect[]the manner in

which the video game characters perform in the video game” (Appx120,

col. 8, 33-48). These limitations add substantially more than just

“updating software in a sports video game.” These features are

meaningful data structures that change how the video game behaves and

are therefore not abstract at step two of Alice.

II. CONCLUSION

For the foregoing reasons, the judgment of the district court should

be reversed and the case remanded for trial.


By: /s/Andrew S Hansen

ANDREW S HANSEN

CERTIFICATE OF SERVICE

I hereby certify that on November 22, 2016, a copy of the following

document:

• White Knuckle Gaming, LLC’s REPLY BRIEF

Was filed electronically with the Clerk of Court using the CM/ECF

system. Notice of this filling will be sent by operation of the ECF system

to all counsel of record. Parties may access this filing through the Court’s

ECF system.



ANDREW S HANSEN

Attorney for Plaintiff-Appellant

CERTIFICATE OF COMPLIANCE

PURSUANT TO FED. R. APP. P. 32(A)(7)(C), I certify that

according to the word-processing system used in preparing it, the

foregoing REPLY BRIEF is 3,315 words in length, excluding those

portions exempted by Fed. R. App. P. 32(a)(7)(B)(iii) and Fed. Cir. R. 32(b)

and therefore complies with the type-volume limitation set forth in Fed.

R. App. P. 28.1(e)(2)(C).



ANDREW S HANSEN

Attorney for Plaintiff-Appellant

wk reply brief fed cir - final

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