Court Opinion

ID: 9297327
Source: CourtListenerOpinion
Date Created: 2022-11-30 15:00:37.768547+00
Date Added: 2024-06-11T17:13:25.636682
License: Public Domain

Case: 22-1171     Document: 34    Page: 1   Filed: 11/30/2022

    United States Court of Appeals
       for the Federal Circuit
                  ______________________

                TREEHOUSE AVATAR LLC,
                    Plaintiff-Appellant

                             v.

                 VALVE CORPORATION,
                    Defendant-Appellee
                  ______________________

                        2022-1171
                  ______________________

    Appeal from the United States District Court for the
 Western District of Washington in Nos. 1:15-cv-00427-
 JFB-SRF, 2:17-cv-01860-RAJ, Judge Richard A. Jones.
                 ______________________

                Decided: November 30, 2022
                  ______________________

     LAWRENCE D. GRAHAM, Lowe Graham Jones PLLC, Se-
 attle, WA, argued for plaintiff-appellant. Also represented
 by MARK P. WALTERS.

     REYNALDO BARCELO, Barcelo, Harrison & Walker, LLP,
 Newport Beach, CA, argued for defendant-appellee. Also
 represented by JOSHUA CHARLES HARRISON; GAVIN W.
 SKOK, Fox Rothschild LLP, Seattle, WA.
                 ______________________

     Before LOURIE, REYNA, and STOLL, Circuit Judges.
Case: 22-1171     Document: 34     Page: 2    Filed: 11/30/2022

 2              TREEHOUSE AVATAR LLC     v. VALVE CORPORATION

 REYNA, Circuit Judge.
     Appellant Treehouse Avatar LLC appeals the grant of
 a motion to strike portions of an infringement expert report
 by the U.S. District Court for the Western District of Wash-
 ington. Appellant also appeals the court’s grant of sum-
 mary judgment of noninfringement. We conclude that the
 district court did not abuse its discretion in striking expert
 testimony that did not rely upon the parties’ own agreed-
 upon construction and that the court adopted, nor erred in
 finding that Treehouse failed to rebut Valve’s evidence of
 noninfringement. We affirm.
                         BACKGROUND
                       Asserted Patent
     Appellant Treehouse Avatar LLC (“Treehouse”) owns
 U.S. Patent 8,180,858 (“the ’858 Patent”), which discloses
 a method of collecting data from an information network in
 response to user choices of a plurality of users navigating
 character-enabled network sites on the network. J.A. 1, 24;
 ’858 Patent col. 1 ll. 19–22.
     As shown in Figure 1 below, a user interface interacts
 with a network browser to access a network such as the
 Internet, and character-enabled network sites are accessi-
 ble through a server on the network. Appellant’s Br. 3–4.
 These sites have access to a database that contains charac-
 ter data such as a base character and its clothing options.
 Id. at 4–5. The characters are presented to the user inter-
 face of the user’s computer through the network browser to
 access the sites.
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 TREEHOUSE AVATAR LLC    v. VALVE CORPORATION                  3

      The issue before us concerns the meaning of “character-
 enabled (CE) network sites” (“CE limitation”). That term
 appears in each of the asserted independent claims 1 and
 21. J.A. 25; ’858 Patent col. 13 l. 26, col. 15 ll. 36–37. Claim
 1 is representative:
     1. A method of collecting data from an information
     network in response to user choices of a plurality of
     users made while accessing said information net-
     work and navigating character-enabled (CE) net-
     work sites on said information network, said
     method comprising:
         storing a plurality of character data in a da-
         tabase accessible by said CE network site;
         storing a plurality of character-attribute
         data in said database;
         linking the character attribute data with
         one or more of the character data;
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 4              TREEHOUSE AVATAR LLC   v. VALVE CORPORATION

        presenting to a user interface, one or more
        character data defining one or more char-
        acters for selection by the user;
        upon selection of a character by the user,
        presenting in real time to the user inter-
        face, the selected character along with at
        least one of the character-attribute data
        linked to the selected character for selec-
        tion by the user;
        upon selection of a character attribute by
        the user, presenting in real time to the user
        interface, the selected character including
        the selected character attribute; and
        tallying the number of times the selected
        character attribute has been selected by a
        plurality of users.
 ’858 Patent col.13 ll. 23–44 (emphases added).
                    Accused Technology
     Appellee Valve Corporation (“Valve”) owns the two ac-
 cused video games: Dota 2 and Team Fortress 2 (“TF2”).
 Appellee’s Br. 6. Dota 2 is a multiplayer team-based game
 where the teams try to destroy the other’s base, and TF2 is
 a team-based first-person shooter game. Id. To play either
 game, a user downloads the software onto the user’s own
 computer. The download contains data, including images,
 sounds, text, and characters or “heroes.” Id. at 6–7. A user
 can select from heroes with varying combat abilities and
 customize their hero’s appearance by purchasing clothes or
 weapons for them. Id. Valve or third parties can create
 these additional items that can be purchased over the In-
 ternet through Valve’s online marketplace. Appellant’s Br.
 9, 11.
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 TREEHOUSE AVATAR LLC    v. VALVE CORPORATION                 5

                    PROCEDURAL HISTORY
      In May 2015, Treehouse sued Valve in the U.S. District
 Court for the District of Delaware for infringement of the
 ’858 Patent. Treehouse accused Valve of infringement
 based on the operation of the accused video games. Appel-
 lant’s Br. 12. The case was transferred to the Western Dis-
 trict of Washington, where the parties submitted a joint
 claim construction brief.
     The parties adopted the interpretation of the CE limi-
 tation that the Patent Trial and Appeal Board (“Board”)
 reached in a previous inter partes review. J.A. 25. In the
 inter partes review proceeding, Valve contended that the
 CE limitation means “encompassing ‘network sites that are
 able to present a character, object, or scene.’” Id. at 569.
 Treehouse asserted that the correct interpretation of the
 CE limitation was “software operating on a server accessi-
 ble by one or more user interfaces, wherein said server pro-
 vides to a user interface audio presentations and/or visual
 image presentations tailored to the ‘persona’ of a character,
 as defined by a network user.” Id. at 569–570. Neither
 party argued before the Board that the plain and ordinary
 meaning of the CE limitation should apply. Id. The
 Board’s ultimate interpretation differed from both parties’
 proposals. Id. at 25. The Board construed the CE limita-
 tion to mean “a network location, other than a user device,
 operating under control of a site program to present a char-
 acter, object, or scene to a user interface.” J.A. 20, 25, 569–
 72. As requested by the parties, the district court adopted
 the Board’s construction of the CE limitation. J.A. 20.
     On December 4, 2020, Treehouse’s infringement ex-
 pert, Mr. Friedman, submitted a report that applied the
 plain and ordinary meaning for the CE limitation rather
 than the agreed-upon construction. J.A. 20. Specifically,
 Mr. Friedman opined that: “[i]n some instances, the parties
 agreed on the construction of a term and the Court adopted
 that agreed meaning as part of its construction order . . . .
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 6              TREEHOUSE AVATAR LLC    v. VALVE CORPORATION

 I will use the interpretation of the claim terms recited
 above in my analysis.” J.A. 775–776, ¶¶ 30–31. None of
 the terms “recited above” included the CE limitation. Id.
 Mr. Friedman then explained: “[i]n all other instances, I
 will apply claim terms in accordance with their plain and
 ordinary meaning.” Id. Thus, Mr. Friedman did not apply
 the meaning of CE limitation that was adopted by the dis-
 trict court.
     On December 22, 2020, Mr. Friedman submitted a one-
 page “Supplement to Expert Report” that was intended to
 “clarify” his initial report, stating:
     I recognize that the term “character-enabled net-
     work site” was agreed to be construed as “a net-
     work location, other than a user device, operating
     under control of a site program to present a char-
     acter, object, or scene to a user interface.” This is
     the ordinary meaning, and thus my opinions ap-
     plied this meaning and are unchanged.
 J.A. 817, ¶ 3; see also Appellant’s Br. 13, 26–27. Valve filed
 a motion to strike portions of Mr. Friedman’s testimony
 that relied on the plain and ordinary meaning of the term.
 Appellant’s Br. 13. Valve argued that Mr. Friedman’s con-
 struction was “overbroad and inapplicable” for “allow[ing]
 the use of characters on the network sites,” and failed to
 address or apply the construction agreed-upon by the par-
 ties that was used by the court. J.A. 761, 763.
     On July 19, 2021, while Valve’s motion to strike was
 pending, Valve filed a motion for summary judgment of
 noninfringement. Appellant’s Br. 13–14. Valve asserted
 that, for the accused video games to meet the CE limita-
 tion, the user device cannot be the CE network that pre-
 sents a character, object, or scene to the user interface.
 Appellee’s Br. 7, 39. Valve relied on the testimony of its
 noninfringement expert, Dr. Zydus, to show that Valve’s
 servers are not “character-enabled network sites.” J.A. 28–
 30. Dr. Zydus testified that the program’s large file size is
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 TREEHOUSE AVATAR LLC   v. VALVE CORPORATION               7

 evidence that the downloaded video game software resides
 on the user’s computer—not Valve’s servers—and includes
 the characters and attributes, presented and displayed on
 the user interface. J.A. 29–30.
     Treehouse’s opposition to Valve’s motion for summary
 judgment consisted of two paragraphs that referred to Mr.
 Friedman’s report. J.A. 1219–20. In these cited portions,
 Mr. Friedman asserts that item purchase is available when
 the game is played online and must infringe. J.A. 821–22,
 839. Treehouse appeared to concede that Valve was enti-
 tled to summary judgment to the extent Valve’s motion to
 strike Treehouse’s expert report was granted. J.A. 26
 (“Thus, assuming that [Mr. Friedman’s] testimony is not
 stricken, this portion of Valve’s motion should be denied”).
     The district court granted both motions in favor of
 Valve, striking every paragraph of Mr. Friedman’s report
 that Valve requested1 and finding noninfringement be-
 cause Treehouse failed to offer admissible evidence show-
 ing that Valve’s video games operated the CE limitation.
 J.A. 22, 31.
     Treehouse timely appeals the district court’s determi-
 nations. We have jurisdiction pursuant to 28 U.S.C.
 § 1295(a)(1).
                    STANDARD OF REVIEW
     The grant or denial of motions to strike an expert re-
 port is not an issue unique to patent law. As such, we re-
 view such issues under the law of the applicable regional
 circuit, in this case the Ninth Circuit. Anchor Wall Sys.,

    1    Valve requested that the district court strike para-
 graphs 67–69, 76–77, 80–81, 140, 141, 143, 146–147, 156,
 158–159, 165–166, 168–169, 179–181, 187–188, 191, 193–
 194, 203, 205–206, 212–213, 215–216, 226–228, Appendix
 2, and Appendix 3 from Mr. Friedman’s report.
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 8              TREEHOUSE AVATAR LLC      v. VALVE CORPORATION

 Inc. v. Rockwood Retaining Walls Inc., 340 F.3d 1298, 1313
 (Fed. Cir. 2003). In the Ninth Circuit, district court rulings
 on the admissibility of expert testimony are reviewed for
 abuse of discretion, reversible only if manifestly erroneous.
 United States v. Hinkson, 585 F.3d 1247, 1261–62 (9th Cir.
 2009) (en banc); United States v. Hankey, 203 F.3d 1160,
 1166–67 (9th Cir. 2000).
      Similarly, this court reviews a grant of summary judg-
 ment under the law of the regional circuit. Acceleration
 Bay LLC v. 2K Sports, Inc., 15 F.4th 1069, 1075 (Fed. Cir.
 2021). The Ninth Circuit conducts a de novo review and
 affirms summary judgment if, after viewing the evidence
 in the light most favorable to the non-movant, there is no
 genuine dispute of material fact. Fed. R. Civ. P. 56(a); San
 Diego Police Officers’ Ass’n v. San Diego City Emps.’ Ret.
 Sys., 568 F.3d 725, 733 (9th Cir. 2009); see also Anderson
 v. Liberty Lobby, Inc., 477 U.S. 242, 255, 257 (1986) (find-
 ing that, to survive a motion for summary judgment, the
 adverse party must present affirmative evidence which is
 to be believed and from which all justifiable inferences are
 to be favorably drawn). A party appealing a summary judg-
 ment motion must cite to evidence submitted in connection
 with the motion. In re Cygnus Telecomm. Tech., LLC, Pa-
 tent Litig., 536 F.3d 1343, 1351–52 (Fed. Cir. 2008);
 Taybron v. City & Cnty. of San Francisco, 341 F.3d 957,
 960 (9th Cir. 2003).
                         DISCUSSION
     On appeal, Treehouse argues that the district court
 erred in striking portions of its infringement expert’s testi-
 mony, which gave basis for granting Valve’s motion for
 summary judgment of noninfringement.
                       Motion to Strike
     We first address whether the district court abused its
 discretion by striking portions of Treehouse’s infringement
 expert’s report. Appellant’s Br. 22.
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      There is no dispute that Mr. Friedman failed to address
 the construction of the CE limitation in his report. Appel-
 lant’s Br. 21, 26; Appellee’s Br. 8–9. Mr. Friedman also
 failed to include the construction of the disputed term in
 either the Agreed Claim Term or the Disputed Claim Term
 tables. J.A. 775. He did not acknowledge or recite the dis-
 trict court’s construction of the CE limitation in his report.
     Treehouse argues that an expert report that does not
 recite an agreed claim construction remains admissible so
 long as the opinions expressed in the report are not
 inconsistent with that construction. Appellant’s Br. 22–23.
 According to Treehouse, expert reports should only be
 stricken where the application of the construction is
 inconsistent with, not merely different from, the agreed-
 upon construction. Appellant’s Br. 22, 24–25 (citing
 Skedco, Inc. v. Strategic Operations, Inc., 287 F. Supp. 3d
 1100, 1115 (D. Or. 2018) (denying a motion to strike where
 the expert’s opinions remained consistent with the
 clarified, not altered, claim construction of the Federal
 Circuit on remand)); see also Oral Arg. at 1:23–1:30,
 https://oralarguments.cafc.uscourts.gov/default.aspx?fl=22
 -1171_08022022.mp3        (Treehouse    submitting     that
 inconsistency is “something more” than different).
     In its motion to strike, Valve argued that Mr. Fried-
 man’s overbroad construction of the CE limitation materi-
 ally differed from the agreed-upon construction, omitting
 several agreed requirements. J.A. 907–08. Specifically,
 the parties had agreed that the CE limitation was required
 “to present a character, object, or scene to a user interface,”
 be “other than a user device,” and “operat[e] under control
 of a site program.” Id. These elements, Valve argued, are
 “not redundant” of other language in the claim or the plain
 and ordinary meaning of “character-enabled network site.”
 Id. The district court agreed with Valve, finding that Valve
 “has demonstrated how the ‘plain and ordinary’ meaning of
 the term ‘character enabled network site’ is inconsistent
 with the parties’ agreed construction.” J.A. 22.
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 10              TREEHOUSE AVATAR LLC   v. VALVE CORPORATION

     We affirm that the grant of a motion to strike expert
 testimony is not improper when such testimony is based on
 a claim construction that is materially different from the
 construction adopted by the parties and the court. See, e.g.,
 Cordis Corp. v. Boston Sci. Corp., 658 F.3d 1347, 1357–58
 (Fed. Cir. 2011) (affirming the district court’s disregard of
 expert testimony based on an incorrect understanding of
 the claim construction); Frank’s Casing Crew & Rental
 Tools Inc. v. PMR Techs., Ltd., 292 F.3d 1363, 1375 (Fed.
 Cir. 2002) (affirming rejection of testimony that was con-
 trary to the claim construction and affirming noninfringe-
 ment since the limitation was not satisfied); see also Liquid
 Dynamics Corp. v. Vaughan Co., 449 F.3d 1209, 1224 n.2
 (Fed. Cir. 2006) (approving the district court’s exclusion of
 expert testimony based on an impermissible construction).
     When the court has adopted a construction that the
 parties requested and agreed upon, any expert theory that
 does not rely upon that agreed-upon construction is sus-
 pect. Here, Mr. Friedman’s report undisputedly applied
 the “plain and ordinary meaning” of the CE limitation, not
 the parties’ agreed-upon construction. J.A. 775–776, ¶¶
 30–31. Under these circumstances, Treehouse has failed
 to demonstrate that the district court abused its discretion
 by striking portions of Mr. Friedman’s report that did not
 rely on the claim construction agreed to by the parties. Ac-
 cordingly, the district court did not abuse its discretion in
 granting Valve’s motion to strike portions of Mr. Fried-
 man’s report.
    Next, we address whether the district court erred in
 granting summary judgment of noninfringement.
                Motion for Summary Judgment
     On appeal, Treehouse argues that, even if portions of
 Mr. Friedman’s testimony are stricken, the district court’s
 grant of summary judgment is improper. Appellant’s Br.
 46.
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 TREEHOUSE AVATAR LLC   v. VALVE CORPORATION               11

      In order to avoid summary judgment of noninfringe-
 ment, Treehouse must establish a genuine issue of mate-
 rial fact that Valve’s servers qualify as “character-enabled
 network sites” and, thus, perform every step of the asserted
 claims, particularly the CE limitation. J.A. 28–30; see Ak-
 amai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d
 1020, 1022–24 (Fed. Cir. 2015). As a result of the district
 court properly striking portions of Mr. Friedman’s testi-
 mony, Treehouse did not provide admissible evidence to
 support that the accused video games satisfy the CE limi-
 tation. J.A. 26; Appellee’s Br. 37–39.
     On the other hand, Valve provided significant evidence
 that Valve’s servers do not satisfy the CE limitation. Ap-
 pellee’s Br. 39–40. For example, Dr. Zydus analyzed the
 games’ source code and conducted tests, the results of
 which demonstrated that the user’s own software and
 hardware presents the game. J.A. 30, 1162, 1272–83; Ap-
 pellee’s Br. 40, 44–45, 48.
     The district court granted Valve’s motion for summary
 judgment of noninfringement because it found that Tree-
 house failed to proffer admissible evidence that the CE lim-
 itation is met by the accused products. J.A. 31. We agree
 that, in the absence of Mr. Friedman’s testimony, Tree-
 house has not presented evidence that creates a genuine
 issue of material fact regarding infringement. We affirm
 the district court’s judgment.
                        CONCLUSION
      We affirm that the district court did not abuse its dis-
 cretion in striking portions of Treehouse’s expert report
 that did not address the claim construction of the CE limi-
 tation agreed upon by the parties and the court. Because
 Treehouse has not presented evidence that raises a genu-
 ine issue of material fact regarding infringement, we affirm
 the district court’s grant of summary judgment in favor of
 Valve.
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 12             TREEHOUSE AVATAR LLC   v. VALVE CORPORATION

                       AFFIRMED
                          COSTS
 No costs.