Treehouse Avatar LLC v. Valve Corporation

United States Court of Appeals
for the Federal Circuit
______________________
TREEHOUSE AVATAR LLC,
Plaintiff-Appellant
v.
VALVE CORPORATION,
Defendant-Appellee
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2022-1171
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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.
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Decided: November 30, 2022
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L AWRENCE D. G RAHAM , Lowe Graham Jones PLLC, Se-
attle, WA, argued for plaintiff-appellant. Also represented
by MARK P. WALTERS .
REYNALDO B ARCELO, Barcelo, Harrison & Walker, LLP,
Newport Beach, CA, argued for defendant-appellee. Also
represented by J OSHUA CHARLES H ARRISON; G AVIN W.
SKOK, Fox Rothschild LLP, Seattle, WA.
______________________
Before L OURIE, REYNA , and STOLL , Circuit Judges.
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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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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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TREEHOUSE AVATAR LLC v. VALVE CORPORATION 4
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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P ROCEDURAL H ISTORY
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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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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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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TREEHOUSE AVATAR LLC v. VALVE CORPORATION 8
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).
D ISCUSSION
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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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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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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AFFIRMED
COSTS
No costs.
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