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Judge Robinson Denies Section 101 Motion to Dismiss and Motion to Transfer to the Western District of Washington

This case involves an assertion of U.S. Patent No. 8,180,858, titled “Method and System for Presenting Data Over A Network Based On Network User Choices and Collecting Real-Time Data Related to Said Choices,” against Valve, a company that makes and sells video games and runs a digital distribution platform for video games. The Plaintiff accused three of Valve’s games of infringing the patent-in-suit by running in-game “shops” that “allow[] users to select virtual items and in-game features.” Treehouse Avatar LLC v. Valve Corp., C.A. No. 15-427-SLR, Memo. Op. at 22 (D. Del. Mar. 22, 2016). Valve is incorporated in the State of Washington and has its principal place of business in Washington. Valve moved to transfer to the Western District of Washington, which both parties agreed would be a proper venue. Id. at 1-3.

Valve argued that the choice of forum in Delaware should be given less deference because the Plaintiff “incorporated in Delaware weeks before filing the action at bar” and the plaintiff’s “home turf” should therefore be deemed its principal place of business in Ottawa. Judge Robinson denied the motion to transfer, explaining that “[b]usiness entities choose their situs of incorporation for varied reasons, including the ability to sue and be sued in that venue. . . . It is of no consequence that plaintiff appears to be a non-practicing entity; such a business strategy is not nefarious. The court declines to treat such non-practicing entities as anything less than holders of constitutionally protected property rights, those rights having been legitimized by the [PTO].” Additionally, “Defendant [had] not indicated that any particular witness who may be called upon to testify at trial would be unwilling to do so. . . . [and] this court’s view is that virtually all businesses maintain their books and records in electronic format readily available for review and use at any location.” Id. at 4-8. Moreover, Judge Robinson explained, “because very few cases are resolved through trial, and because trials in most busy districts are of limited duration, this factor should not be accorded significant weight. It certainly should not become the tail that wags the dog.” Id. at 6-7.

Valve also filed a motion to dismiss on Section 101 grounds, which Judge Robinson denied. On the first step of the Alice analysis, Judge Robinson found that “the claims at bar are directed to users selecting and modifying customizable characters (avatars) in real time on CE sites, as well as storing and retrieving such characters within an information network. The human analogy is not representative of the claims as a whole, which describe more than the pre-Internet business concept of ‘tallying’ choices applied in a computer setting. Instead, the claims are . . . ‘necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.’” Id. at 23. On the second step of the Alice analysis, Judge Robinson found that the patent seeks “to address the problem of ‘network site loyalty’ by providing the network user ‘audio data and visual image data that is indicative of the individuality of the network user’ . . . [which is achieved by] provid[ing] a specific series of steps used to customize a character to users’ choices in real time . . . communicate with other users through an information network including CE sites . . . navigate to a different site with the customized character . . . and operate CE sites for a plurality of users . . . .” The Court therefore concluded that “the claims are innovative, i.e., do not represent the ‘routine and conventional’ use of a computer.” Id. at 23-24.

https://www.scribd.com/doc/306174558/Treehouse-Avatar-LLC-v-Valve-Corp-C-A-No-15-427-SLR-D-Del-Mar-22-2016

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