1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7

NORTHERN DISTRICT OF CALIFORNIA

8

9

10 BOT M8 LLC, 11 Plaintiff, No. C 19-07027 WHA

12 v.

13 SONY CORPORATION OF AMERICA, et ORDER GRANTING IN PART AND al., DENYING IN PART MOTION TO 14

DISMISS

Defendants. 15

16 17 INTRODUCTION 18 In this patent infringement suit, defendants move to dismiss the amended complaint. For 19 the following reasons, the motion is GRANTED IN PART and DENIED IN PART. 20 STATEMENT 21 Patent owner asserts six patents against defendants: U.S. Patent Nos. 8,078,540 (“the ’540 22 patent”); 8,095,990 (“the ’990 patent”); 7,664,988 (“the ’988 patent”); 8,112,670 (“the ’670 23 patent”); 7,338,363 (“the ’363 patent”); and 7,497,777 (“the ’777 patent”). The asserted patents 24 are directed toward casino, arcade, and video games generally (Dkt. No. 79 at 2). The ’540, 25 ’990, ’988, and ’670 patents are asserted against the Sony Play Station 4. The ’363 patent is 26 asserted against both the Sony PlayStation 4 and three video games: MLB The Show 19; 27 Uncharted 4; and Uncharted: the Lost Legacy (Dkt. No. 75 at 18). And, the ’777 patent is 1 At a November 21 case management conference, plaintiff was directed to file an amended 2 complaint by December 5 specifying “every element of every claim that [patent owner] say[s] is 3 infringed and/or explain why it can’t be done [and] if this is a product you can buy on the 4 market and reverse engineer, you have got to do that.” Plaintiff obliged, stating “[w]e have torn 5 down the Sony PlayStation” (Dkt. No. 67 at 2–3). On December 5, patent owner timely filed its 6 amended complaint (Dkt. No. 68) and defendants moved to dismiss (Dkt. No. 75). Now, it’s 7 showtime. 8 Unsurprisingly, with six patents in suit and 25-page briefs, the parties’ briefs do not 9 expand on the technology at issue, or its alleged impact. Instead, they jump right into the merits 10 of infringement. Defendants challenge a key aspect of the infringement allegations for each 11 patent. Thus, this order does not evaluate the sufficiency of the pleadings in their entirety. 12 Rather, it decides only whether patent owner’s complaint is deficient on the challenged grounds. 13 ANALYSIS 14 To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain sufficient 15 factual matter, accepted as true, to state a claim for relief that is plausible on its face. Ashcroft 16 v. Iqbal, 556 U.S. 662, 678 (2009). A claim is facially plausible when there are sufficient 17 factual allegations to draw a reasonable inference that defendants are liable for the misconduct 18 alleged. While a court must take all of the factual allegations in the complaint as true, it is “not 19 bound to accept as true a legal conclusion couched as a factual allegation.” Bell Atl. Corp. v. 20 Twombly, 550 U.S. 544, 555 (2007). “Factual allegations must be enough to raise a right to 21 relief above the speculative level.” Ibid. Of particular importance below, in both Twombly and 22 Iqbal the Court made plain: allegations merely consistent with liability are not enough. 550 23 U.S. at 556–57; 556 U.S. at 678. Allegations of infringement “without explanation as to the 24 how or why these products infringe . . . do[] not lead to any inference that plaintiff may be 25 entitled to relief.” PageMelding, Inc. v. ESPN, Inc., No. C 11-06263 WHA, 2012 WL 851574, 26 at *2 (N.D. Cal. Mar. 13, 2012). 27 1. THE ’540 PATENT. 1 The ’540 patent describes an authentication mechanism for video games. Defendants 2 challenge the sufficiency of the complaint as to the limitations: 3 • [A] board including a memory in which a game program 4 for executing a game and an authentication program for authenticating the game program are stored. 5 • [A] motherboard which is different from the board and 6 connects to the board . . . .

7 (’540 patent, cl. 1). Specifically, defendants argue the complaint fails to sufficiently allege that 8 a game program and authentication program are stored together in a memory on a board other 9 than the motherboard (Dkt. No. 75 at 6–9). Patent owner offers four responses. 10 First, the complaint alleges that when a PlayStation 4 operates games offline, i.e. while 11 not connected to the internet, an authentication program checks if the PlayStation 4 is 12 designated the “primary” station for the user account. Patent owner, in its opposition brief, also 13 points in the complaint to three different “board[s]” with memory that are not the 14 “motherboard” (Dkt. No. 79 at 3–4). But, even accepting the pled program is an acceptable 15 “authentication program,” the complaint fails to allege when or where the game program and 16 authentication program are stored together on the same memory board. The complaint’s 17 allegation that the PlayStation 4 “hard drive includes an authentication program for verifying 18 that the PS4 is allowed to the play the game” is: (1) a conclusion unsupported by the allegations 19 offered, which merely allege an authentication program’s existence and not its storage location 20 (Dkt. No. 68, ¶ 80(b)–(d)); and (2) does not mean the game program is also stored on that same 21 hard drive, given the three memory boards patent owner notes (Dkt. No. 79 at 3). Moreover, 22 the picture of an alleged hard drive in the complaint (Dkt. No. 68 at ¶ 80(b)) provides no basis 23 to infer what is stored on that drive. Despite patent owner proclaiming “we have torn down the 24 Sony PlayStation,” the complaint does not allege what programs were found on the hard drive 25 or what, if anything, prevented such access. 26 Second, the complaint alleges each Blu-ray game disc includes a “ROM Mark” to confirm 27 the disc is an authentic copy of a game and that “[t]he PlayStation 4 includes an authentication 1 program to authenticate the game program on the Blu-ray discs.” But alleging the “PlayStation 2 4 includes an authentication program” indicates that the program is not stored on the Blu-ray 3 disc with the game program. And the complaint describes the ROM Mark as a key, or “Volume 4 ID,” required to “decrypt” the disc content, not an executable computer program that itself 5 authenticates the disc (Dkt. Nos. 68 at ¶ 80(e), 79 at 4) (emphasis added). 6 Third, the complaint alleges an authentication program which displays error codes if a 7 game program fails (Dkt. No. 79 at 5, 68 at ¶ 80(f)). But the existence of an authentication 8 program alone does not plausibly indicate the authentication program is stored together with the 9 game program. Again, despite patent owner proclaiming the reverse engineerability of the 10 PlayStation 4, the complaint does not explain what or where programs were found, or what 11 prevented such discovery. 12 Fourth, the complaint alleges the PlayStation Network servers authenticate game 13 programs when users connect. Indeed, it alleges the servers contain both game programs and 14 authentication programs (ibid.). But storage on the same server does not mean the game and 15 authentication programs are stored together on a memory board. Moreover, the complaint then 16 alleges the authentication program is within the PlayStation 4, not on the server: “[t]he 17 PlayStation 4 uses 2-step verification and a Cryptography algorithm as an authentication 18 program . . .” (Dkt. No. 68 at ¶ 80(i)). 19 Thus, the complaint fails to plausibly plead the shared location of the game and 20 authentication programs according to claim 1 of the ’540 patent. As patent infringement 21 requires the practice of every claim limitation, the failure to allege one limitation precludes 22 liability. The claim for infringement of the ’540 patent fails. 23 2. THE ’990 PATENT. 24 The ’990 patent describes a mutual authentication mechanism for video games. 25 Defendants challenge the limitations:

26 • [A] removable storage medium storing therein gaming information including a mutual authentication program. 27 program to check that the authentication program is a 1 legitimate program according to the mutual authentication program included in the gaming information authenticated 2 by the authentication unit. 3 (’990 patent, cl. 1, 5, 9). Specifically, defendants contend the complaint fails to allege that the 4 mutual authentication program and game program are stored together (Dkt. No. 75 at 10–12). 5 Patent owner offers three responses. 6 First, the complaint alleges the authentication program referenced above regarding the 7 ’540 patent is a mutual authentication program (Dkt. No. 79 at 7). But, as noted above, 8 accepting as true that the authentication program suffices, the complaint fails to allege when or 9 where the game program and mutual authentication program are stored together. 10 Second, the complaint alleges the PlayStation 4 “NOR flash memory chip includes 11 authentication functionality, as confirmed by the fact that the NOR chip must be removed in 12 order to play pirated (non-authentic) games” (ibid.). But, again as above, taking the NOR chip 13 authentication functionality as sufficient pleading of the mutual authentication program, the 14 complaint does not plead when or where the mutual authentication program and “gaming 15 information” are stored together. 16 Third, the complaint alleges a mutual authentication program facilitates communication 17 between the PlayStation 4 and the PlayStation Network Server (ibid.). Patent owner points to 18 the assertion in the complaint that “[t]he game program on the hard drive or disc contains a 19 mutual authentication process . . . .” But allegations that track the claim language that closely 20 are conclusory and require support not found in the substantive allegations (Dkt. Nos. 79 at 8, 21 68 at ¶ 106(o)). So the allegations still fail to allege where or when the game program and the 22 mutual authentication program are stored together. 23 Patent owner finally contends the complaint states “evidence that the flash memory 24 contains a mutual authentication program and that the game program is stored in the flash 25 memory when the game is loaded” (Dkt. No. 79 at 8) (citing Dkt. No. 68 at ¶ 106(e), 106(q)). 26 The cited allegations do not support this assertion because they do not address where the game 27 program is stored. Moreover, the complaint appears to indicate there are multiple flash memory 1 game program are each stored on flash memory at some point hardly leads to the plausible 2 inference that they are stored together. This necessary limitation of the ’990 patent not 3 plausibly plead, the claims for infringement of the ’990 patent fail. 4 3. THE ’988 AND ’670 PATENTS. 5 The ’988 and ’670 patents describe computer program fault inspection. Defendants 6 challenge the ’988 patent limitations:

7 • [A] control device for executing a fault inspection program for the gaming device to inspect whether or not a fault 8 occurs in the second memory device and the game application program stored therein. 9 • [T]he control device executes the fault inspection program 10 when the gaming device is started to operate and completes the execution of the fault inspection program before the 11 game is started. 12 (’988 patent, cl. 1, 6, 10). Defendants also challenge similar limitations from the ’670 patent:

13 • [A] second memory device configured to store a game application program. 14 • [A] control device for executing a fault inspection program 15 for the second memory to inspect whether or not a fault occurs in the second memory device. 16 • [T]he control device completes the execution of the fault 17 inspection program before the game is started. 18 (’670 patent, cl. 1). Specifically, defendants argue the complaint fails to plausibly allege an 19 inspection, completed before the game starts, of both the second memory device and game 20 program (Dkt. No. 75 at 13–17). 21 The complaint does plausibly allege the inspection for both the memory device and the 22 game stored therein. Specifically, it alleges the PlayStation 4 reports various error codes, 23 including “Error occurred while accessing the Hard Disk Drive (‘HDD’) or Blue-ray/DVD 24 Drive” and “The system cannot read the disc” (Dkt. No. 68 at ¶ 128(k)). Given the complaint 25 also alleges games can be stored on the hard drive and on Blu-ray discs (Dkt. No. 68 at ¶ 26 128(e)–(f)), the inspection of the memory plausibly includes inspection of the game program as 27 well. 1 But the complaint provides no basis to infer the proper timing of the inspection. The 2 allegation too closely tracks the claim language to be entitled to the presumption of truth:

3 The PlayStation CPU will execute the fault [T]he control device executes the fault inspection program when the gaming device inspection program when the gaming device 4 is started to operate[] and completed before is started to operate and completes the the game is started (Dkt. No. 68 at ¶ 128(n)). execution of the fault inspection program 5 before the game is started (’988 patent, cl. 1). 6 No underlying allegations of fact are offered. Thus, the complaint fails to plausibly allege an 7 essential element in the claim for infringement of the ’988 and ’670 patents. 8 4. THE ’363 PATENT. 9 The ’363 patent describes gathering and using game result data from multiple networked 10 gaming devices. Defendants challenge the limitation:

11 • [A] total result data receiving device for receiving from the server data of a total game result achieved by the first 12 gaming machine and the second gaming machine.

13 • [D]etermining a specification value based on the data of the total game result received by the total result data receiving 14 device. 15 (’363 patent, cl. 1). Specifically, defendants contend the complaint fails to plausibly allege the 16 receipt of game results from a server (Dkt. No. 75 at 18–19). 17 The complaint alleges that multiple PlayStation 4 consoles connect via the PlayStation 18 Network server for online multiplayer gaming and specifies the hardware that connects the 19 PlayStation 4 to the network (Dkt. No. 68 at ¶ 48(a)–(f), (m)). For the Uncharted Games, the 20 complaint offers game screenshots: (1) explaining that player game performance is graded; and 21 (2) showing the summary of multiplayer grades (id. at ¶ 48(p), (r), (t), (u)). For MLB: The 22 Show 19, the complaint also includes screenshots: (1) explaining player performance ratings; 23 and (2) displaying player ratings and multiplayer game results (Dkt. No. 68 at ¶ 51(s)–(u)). The 24 allegations may be slim (Dkt. No. 81 at 12–13), but the game consoles plainly communicate 25 player performance data across the PlayStation Network server, from which individual consoles 26 receive the game result data. 27 Defendants also challenge the limitation: • [T]otaliz[ing] the game result of the first gaming machine 1 and the game result of the second gaming machine on the basis of data of the game result transmitted from the first 2 gaming machine and the data of the game result transmitted from the second gaming machine so as to calculate a total 3 result.

4 • [R]eceiving data of a game result from the first gaming machine and data of a game result transmitted from the 5 second gaming machine.

6 (’363 patent, cl. 8). Here, defendants argue the complaint fails to plausibly allege the 7 totalization of game data. 8 The complaint includes screenshots explaining how player performance is evaluated in the 9 Uncharted games, on a graded scale from S to C, and for MLB: The Show 19, with baseball’s 10 standard runs-per-inning scorecard (Dkt. No. 68 at ¶ 49(n)–(p), ¶ 52(o)). Such data compilation 11 is a plausible allegation of post-game data totalization. And because defendants challenge the 12 infringement of claim 11 on similar grounds, the motion fails for the same reasons. Defendants’ 13 motion to dismiss as to the ’363 patent is DENIED. 14 5. THE ’777 PATENT. 15 The ’777 patent describes the calculation, display, and execution of game characters’ 16 order of action. Defendants challenge the limitations: 17 • [A]n execution order calculation section that calculates an 18 execution order of actions of a plurality of characters in the battle. 19 • [T]he display control section displays the execution order 20 calculated by the execution order calculation section on the display. 21 • [W]hen a predetermined combination condition . . . is 22 satisfied, when executing an action of the predetermined ally character, the action execution section also executes an 23 action of the different ally character without following the execution order calculated by the execution order 24 calculation section.

25 (’777 patent, cl. 1, 12). Defendants contend the complaint fails to plausibly plead the 26 PlayStation 4 and video games calculate and display an execution order that is then disregarded 27 if a condition is met (Dkt. No. 75 at 22–24). 1 The complaint explains that both the Uncharted games and God of War enable player 2 interaction with non-player allied characters. In Uncharted, these are called “Sidekicks;” in 3 God of War the character is named Atreus. In both games, when a player gives an order to an 4 ally, the order displays on the video screen (Dkt. No. 68 at ¶ 174(n)–(o), ¶ 179(b)–(c), (h)). 5 Defendants argue the execution order must be displayed in advance, i.e. for future actions (Dkt. 6 No. 81 at 14). This claim interpretation is appropriate at summary judgment, not at a motion to 7 dismiss. 8 In each game, the complaint alleges allied characters can deviate from the initial execution 9 order under various circumstances. For example, for the Uncharted games, the complaint 10 shows a screenshot of an allied medic with orders to assist a wounded comrade. But, subjected 11 to enemy gunfire (the predetermined condition), the medic hides behind a wall and shoots back, 12 rather than simply running out and assisting the wounded as initially ordered (Dkt. No. 68 ¶ 13 174(p)). 14 In God of War, the complaint offers a screenshot of instructions showing how a player 15 may instruct the ally character Atreus to fire arrows from his bow and how to change Atreus’ 16 target (Dkt. No. 179(i)). The trigger, though, is the player’s command. Though in the above 17 example an aversion to gunfire may be a predetermined condition, the player’s real-time 18 command is not a predetermined condition causing a change in execution order. Thus, while 19 the claim for infringement of the ’777 patent may proceed against the two Uncharted games, the 20 claim against God of War fails. 21 CONCLUSION 22 For the above reasons, defendants’ motion to dismiss, as to the ’363 patent and the ’777 23 patent claim against the Uncharted games, is DENIED. The motion, to the remainder of the 24 claims, is GRANTED. The claims for infringement of the ’540, ’990, ’988, ’670, and (as to God 25 of War only) ’777 patents are DISMISSED. 26 Patent owner has already enjoyed its one free amendment under the rules and was given 27 clear directions to plead well, element-by-element. Patent owner does not deserve yet another 1 complaint, it may do so by FEBRUARY 13 AT NOON on the condition that it pay all reasonable 2 fees and expenses incurred by defendants in responding to yet another amended complaint. 3 Any such motion must include as an exhibit a redlined version of the proposed amendment that 4 clearly identifies all changes from the amended complaint. This order highlighted certain 5 deficiencies in the amended complaint, but it will not necessarily be enough to add sentences 6 parroting each missing item identified herein. If patent owner moves for leave to file yet 7 another amended complaint, it should be sure to plead its best case and take into account all 8 criticisms made by defendants, including those not reached by this order. 9 10 IT IS SO ORDERED. 11 a 12 Dated: January 27, 2020.

14

ILLIAM ALSUP

IS UNITED STATES DISTRICT JUDGE

16

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