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Worlds Wins Full Reversal of PTAB Invalidation Ruling from U.S. Court of Appeals for the Federal Circuit (CAFC)

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Vacating the Decision by the U.S. Patent & Trademark Office to Invalidate its Patent Claims and Remanding the Case to the PTAB for Reconsideration


BOSTON, MA, Sept. 10, 2018 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE - Worlds Inc. (OTCQB:WDDD), a leading intellectual property developer and licensee of patents related to 3D online virtual worlds, today announced that The United States Court of Appeals for the Federal Circuit (CAFC) on September 7th issued a favorable ruling on Worlds' behalf in the matter of Worlds Inc. v. Bungie, Inc.  The ruling, written by the Chief Judge of the CAFC, vacated the USPTO's Patent and Trial Board's (PTAB) invalidity rulings against three of Worlds' patents, and remanded these cases back to the PTAB with instructions to re-evaluate whether Bungie was permitted to even file its petitions for inter partes review (IPR) of Worlds' patents.  

Worlds had been litigating its patent infringement claims against Activision Publishing, Inc. since 2012, and petitions for IPR cannot be filed more than one year after a complaint for patent infringement is served on a defendant.  Under this law, Activision could not have filed its own petitions for IPR of Worlds' patents in 2015.  But after Worlds informed Activision that it planned to add Bungie's game, Destiny, to the lawsuit in late 2014, Bungie filed its petitions challenging the validity of Worlds' patents.  On remand, the PTAB must give fresh consideration to whether Activision is a real party-in-interest in Bungie's petitions, and therefore whether Bungie was prohibited from challenging Worlds' patents through the IPR process.

To read the full ruling, please click here: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/17-1481.Opinion.9-7-2018.pdf

The CAFC wrote, "PROST, Chief Judge. Appellant Worlds Inc. ("Worlds") appeals the final decisions of the Patent Trial and Appeal Board ("Board") invalidating three patents in three inter partes reviews ("IPRs"). Because we hold that the Board erred in its real-party-in-interest analysis, we vacate its decisions and remand for proceedings consistent with this opinion."

Instead of citing evidence to support this factual conclusion, the Board merely cited attorney argument from Bungie's briefing—attorney argument that itself failed to cite evidence, such as affidavits or declarations. See J.A. 510, 3877, 5095 (Institution Decisions); J.A. 409–10, 416 (Bungie's briefing).

In light of these concerns, we find it appropriate to remand this case to the Board for further consideration of the real-party-in-interest issue.

We note, however, that we have issued opinions since the Board issued its final written decisions that clarify the meaning of the term "real party in interest" in the context of § 315(b). See Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336, 1351 (Fed. Cir. 2018) (explaining that determining whether a party is a real party in interest "demands a flexible approach that takes into account both equitable and practical considerations, with an eye toward determining whether the non-party is a clear beneficiary that has a preexisting, established relationship with the petitioner"); Wi-Fi One, LLC v. Broadcom Corp., 887 F.3d 1329, 1336 (Fed. Cir. 2018) (noting that the Board, in rendering § 315(b) determinations, "seeks to determine whether some party other than the petitioner is the ‘party or parties at whose behest the petition has been filed'" (citing Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012))). We remand with instructions for the Board to weigh the evidence in a manner that places the ultimate burden of persuasion on Bungie, the IPR petitioner, and to do so in a manner consistent with our recent precedent.

Because of our conclusions with respect to the real- party-in-interest issue, we need not address the merits of the parties' invalidity arguments at this time. We therefore vacate the Board's merits decisions in their entirety, without speaking to the merits of the Board's analysis.  [WH1] 

Thom Kidrin, Worlds' Chief Executive Officer, commented, "We are quite pleased with the recent CAFC ruling and we are prepared to return to the PTAB for reconsideration of the Bungie-Activision relationship. The Court's decision demonstrates that the appellate judges on the CAFC are concerned about the PTAB's procedures for determining when IPR petitions are time-barred.  Also, as the CAFC has ruled, the real party-in-interest relationship must be interpreted in a broader framework than the PTAB applied when rejecting Worlds' argument that Activision's relationship with Bungie was close enough to require the Board to dismiss the Bungie IPRs.

It is critical for the PTAB decide this threshold question early and correctly, since time-barred petitions cannot be instituted.  Patent owners should not be forced to spend years, through the IPR process and subsequent appeals, fighting time-barred cases that should have been terminated in their initial stage.  For Worlds, this entire IPR challenge and subsequent appeal has been a time-consuming and expensive process, delaying Worlds' ability to seek compensation for infringement of our IP.  However, through perseverance of our legal team of Davidson Berquist Jackson & Gowdey, Worlds has prevailed in the CAFC appeal process.  I hope that we can reach a  favorable final outcome soon in this matter, so that we can return to our federal case against Activision and also proceed with addition litigation against other infringers." 

Kidrin added, "The company is financially well-positioned with ample capital through the sale of a portion of our equity shares in MariMed Inc. to sustain a prolonged litigation strategy."

Worlds, Inc.

Worlds, Inc. (OTCQB: WDDD), is a leading intellectual property developer and licensee of patents related to 3D online virtual worlds. The Company has a portfolio of 10 U.S. patents for multi-server technology for 3D applications. The earliest of these patents issued on an application filed November 12, 1996.  A provisional patent application, serial number 60/020,296, was filed on November 13, 1995.  These patents are related to each other and disclose and claim systems and methods for enabling users to interact in a virtual space. 

For additional information about Worlds, Inc., please visit: www.Worlds.com.

About Susman Godfrey L.L.P.
Susman Godfrey L.L.P., a law firm with more than 80 lawyers, was recently named one of the top litigation boutiques in the country by The American Lawyer. The firm represents plaintiffs and defendants in a broad range of commercial litigation matters, including antitrust, patent and intellectual property, securities and corporate governance litigation, energy, commercial and products liability, bankruptcy and financial restructuring, accounting malpractice, arbitration, climate change, and international litigation. The firm has offices in Houston, Dallas, Seattle, Los Angeles, and New York. For additional information, visit www.susmangodfrey.com.

About Davidson, Berquist, Jackson & Gowdey, LLP
DBJ+G ranked as one of the top 15 law firms or corporate legal departments measured by the number of representations in IPR, Covered Business Method, and Post-Grant Review proceedings before PTAB in 2015. Docket Navigator's 2015 Year in Review identified DBJ + G's Wayne Helge as a top 10 attorney in the PTAB. 

Forward-Looking Statements
This release contains certain forward-looking statements and information relating to Worlds Inc. that are based on the beliefs of Worlds' management, as well as assumptions made by and information currently available to the Company. Such statements reflect the current views of the Company with respect to future events including estimates and projections about its business based on certain assumptions of its management, including those described in this Release. These statements are not guarantees of future performance and involve risk and uncertainties that are difficult to predict. Additional risk factors are included in the Company's public filings with the SEC. Should one or more of these underlying assumptions prove incorrect, actual results may vary materially from those described herein as "hoped," "anticipated," "believed," "estimated," "should," "preparing," "expected" or words of a similar nature. The Company does not intend to update these forward-looking statements.

Contacts: 

Media Relations: 
Accentuate PR
Julie Shepherd
847-275-3643
Julie@accentuatepr.com
 
Investor Relations:
Hayden IR
917-658-7878
hart@haydenir.com

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