Treehouse Avatar LLC v. Valve Corp.: District Court Did Not Abuse Its Discretion in Striking Expert Testimony That Failed to Rely on the Court’s Claim Construction

I. Introduction

In Treehouse Avatar LLC v. Valve Corp., the Federal Circuit affirmed the Western District of Washington’s decisions to (i) strike portions of an expert report that failed to apply the parties agreed upon claim construction and (ii) grant summary judgment of noninfringement.1  This recent decision highlights the importance of ensuring that experts adhere to a court’s claim construction.  As demonstrated here, the application of a claim construction that differed from the court’s definition resulted in the striking of an expert’s opinions and summary judgment of no infringement.

II. Background

Treehouse Avatar LLC (“Treehouse”) owns U.S. Patent No. 8,180,858 (“the ’858 patent”), which is directed to “to an apparatus and method that employs selectable and modifiable animation to collect data related to the choices made by the users of an information network.”2  At issue in this case was the term “character-enabled (CE) network site,” which appears in independent claims 1 and 21 of the ’858 patent.  Independent claim 1 of the ’858 patent reads as follows:3

  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 network and navigating character-enabled (CE) network sites on said information network, said method comprising:

storing a plurality of character data in a database 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;

presenting to a user interface, one or more character data defining one or more characters for selection by the user;

upon selection of a character by the user, presenting in real time to the user interface, the selected character along with at least one of the character-attribute data linked to the selected character for selection 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.

In May 2015, Treehouse sued Valve Corporation (“Valve”), a video game developer and distributor, in the District of Delaware alleging infringement of its ’858 patent based on a number of Valve’s video games.4  In May 2016, while the district court action was pending, Valve filed a petition for inter partes review of the ’858 patent.5  In its IPR petition, Valve proposed that the claim term “character-enabled network site” be defined as “network sites that are able to present a ‘character, object or scene.’”6  Treehouse proposed the following definition: “software operating on a server accessible by one or more user interfaces, wherein said server provides to a user interface audio presentations and/or visual image presentations tailored to the ‘persona’ of a character, as defined by a network user.”7  The Patent Trial & Appeal Board (“the Board”) settled on a different definition, and construed the term to mean “a network location, other than a user device, operating under control of a site program to present a character, object, or scene to a user interface.”8  The district court action was later transferred to the Western District of Washington, where the court adopted the Board’s construction of the term “character-enabled network site” at the request of the parties.9

During expert discovery, Treehouse’s infringement expert proceeded to submit a report which listed construed terms, but failed to disclose the “character-enabled network site” claim term.10  Instead, Treehouse’s expert provided that for all other claim terms not listed, he would conduct his analyses according to the plain and ordinary meaning of those terms.11  Treehouse’s expert later filed a supplemental report, acknowledging the agreed upon construction of “character-enabled network sites” which he opined was also the plain and ordinary meaning of the term and stated that his opinions were unchanged.12

Valve filed a motion to the strike portions of Treehouse’s expert report that relied on the plain and ordinary meaning of “character-enabled network site.”13  While the motion to strike was pending, Valve filed a motion for summary judgment of noninfringement, arguing that its accused products cannot meet the “character enabled network site” limitation and relying on the testimony of its own expert.14  Treehouse’s opposition to Valve’s summary judgment motion was limited to two paragraphs that referenced its expert report, and further stated that assuming its expert’s testimony was not stricken, Valve’s summary judgment motion should be denied.15

Eventually the district court granted both Valve’s motion to strike and motion for summary judgement.16  As to the motion to strike, the district court found that Valve demonstrated that the  “plain and ordinary” meaning of the term “character enabled network site” was inconsistent with the parties’ agreed construction and therefore struck the portions of Treehouse’s expert’s report that relied on the expert’s own interpretation of the term.17  In granting summary judgment, the court credited Valve’s expert’s testimony and held that Valve’s video games did not meet the “character-enabled network site” term.  Specifically, the Court opined that Treehouse’s expert had “not proffered any admissible evidence” that the claim term was met by the accused video games.18

III. Federal Circuit Decision Affirming the District Court

A. Motion to Strike

On appeal, Treehouse argued that an expert need not recite an agreed upon claim construction for an opinion to be admissible.19  According to Treehouse, an expert’s opinions could differ from an agreed upon claim construction so long as they were not inconsistent with the claim construction.20  Valve pointed out that Treehouse’s expert’s opinion used a construction of the term which materially differed from the court’s construction and omitted several agreed upon requirements.21

The Federal Circuit noted that Treehouse’s expert failed to address the district court’s construction of the “character-enabled network site” claim limitation in his expert report in any way.22 Moreover, the Federal Circuit stated 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.”23  The Federal Circuit further explained that “any expert theory that does not rely upon that agreed-upon construction is suspect.”24  On this basis, the Federal Circuit held that Treehouse had not shown that the district court had abused its discretion in striking the portions of Treehouse’s expert report that did not rely on the agreed upon claim construction.25

B. Motion for Summary Judgment

Treehouse argued that even if portions of its expert’s testimony are stricken, the district court’s grant of summary judgment was improper.26  However, the Federal Circuit noted that to survive summary judgment, Treehouse had to establish a genuine issue of material fact that Valve’s accused products met the “character-enabled network site” limitation.27  As the district court had properly struck portions of Treehouse’s expert’s report, Treehouse was left without any admissible evidence that Valve’s products met the limitation.28  On the other hand, Valve’s expert had provided significant evidence that that Valve’s products did not meet the limitation.29  Therefore, the Federal Circuit agreed with the district court that because Treehouse had failed to provide admissible evidence that Valve’s products met the “character-enabled network site” limitation, that summary judgment was proper.30

IV. Conclusion

The Federal Circuit’s recent decision in Treehouse Avatar LLC v. Valve Corp. underscores the importance of parties adhering to a court’s claim construction.  If a party, through its expert, applies a claim construction that materially differs from the court’s, the party runs the risk of having its expert’s opinion stricken.  As demonstrated, this may leave a party without expert testimony as to whether a claim term is met, which can ultimately lead to a summary judgment decision against them.  Thus, parties seeking to advance a claim construction that differs from the court’s should consider providing alternate opinions that adhere to the court’s construction.

1 Treehouse Avatar LLC v. Valve Corp., No. 2022-1171, 2022 WL 17332613 (Fed. Cir. Nov. 30, 2022).
2 ’858 patent, col. 2, ll. 55-58 .
3 Id. col. 13, ll. 23-44 (emphasis added).
4 Treehouse Avatar, 2022 WL 17332613, at *1-2.
5 Valve Corp. v. Treehouse Avatar LLC, IPR2016-01069, Paper 1 (P.T.A.B. May 19, 2016).
6 Id. at 9.
7 Valve Corp. v. Treehouse Avatar LLC, IPR2016-01069, Paper 6 at 13 (P.T.A.B. Aug. 25, 2016).
8 Valve Corp. v. Treehouse Avatar LLC, IPR2016-01069, Paper 8 at 11 (P.T.A.B. Nov. 23, 2016).
9 Treehouse Avatar, 2022 WL 17332613, at *2.
10 Id.
11 Id.
12 Id.
13 Id.
14 Id.
15 Id. at *3.
16 Id.
17 Treehouse Avatar LLC v. Valve Corp., 2021 WL 4503453, at *2 (W.D. Wash. Oct. 1, 2021).
18 See Treehouse Avatar LLC v. Valve Corp., 570 F. Supp. 3d 1005, 1009-10 (W.D. Wash. Nov. 4, 2021).
19 Treehouse Avatar, 2022 WL 17332613, at *4.
20 Id.
21 Id.
22 Id. at *3.
23 Id. at *4.
24 Id.
25 Id.
26 Id.
27 Id.
28 Id.
29 Id. at *5.
30 Id.