On April 11, 2018, Infernal Technology, LLC and Terminal Reality, Inc. (“Infernal”) filed a complaint for patent infringement against Microsoft Corporation (“Microsoft”). The asserted patents, U.S. 6,362,822 and U.S. 7,061,488, relate to lighting and shadowing methods for graphics simulation. According to Infernal, both patents have already survived an Inter Partes Review challenge filed by Electronic Arts in 2016.
According to the complaint, Terminal Reality was the developer of games such as Nocturne, Bloodrayne, Ghostbusters: The Video Game, Kinect Star Wars, The Walking Dead: Survival Instinct. As part of their game development work, Terminal Reality developed a graphics engine (“Infernal Engine”). Infernal Technology has an exclusive license to patents related to the Infernal Engine, including those asserted against Microsoft.
Infernal alleges that games developed by Microsoft on the Unreal Engine 4, CryEngine 3, CryEngine 4, Alan Wake Engine, Renderware Engine, Forge Engine Forzatech Engine, Northlight Engine, Unity Engine, Foundation Engine, Halo 4 Engine, Halo 5: Guardians Engine, and Halo: Reach Engine infringe the asserted patents. These allegations seem to include the lions’ share of games on Microsoft’s consoles, including but not limited to Alan Wake, Crackdown, Crackdown 2, Crackdown 3, Dead Rising 3, Fable Legends, Forza Motorsport 6, Forza Motorsport 7, Gears of War 4, Halo 4, Halo 5: Guardians, Halo: Reach, Kalimba, Ori and the Blind Forest, PlayerUnknown’s Battlegrounds, Quantum Break, ReCore, Rise of the Tomb Raider, Ryse: Son of Rome, Sea of Thieves, State of Decay, and Super Lucky’s Tale.
Interestingly, Infernal’s case was filed in the Eastern District of Texas. While that venue was once a hotbed of patent litigation, in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017), the Supreme Court limited venue in patent infringement actions to where (1) the defendant resides, or (2) the defendant has committed acts of infringement and has a regular and established place of business. This ruling has generally been seen as a significant limitation on bringing cases in the Eastern District of Texas. Nonetheless, Infernal alleges that Microsoft is a resident of the State of Texas, has a designated agent for service of process in the State of Texas, and has committed acts of infringement in the State of Texas. Whether the facts underlying these assertions are sufficient for venue in the Eastern District of Texas after TC Heartland remains to be seen.
We will monitor this case and keep our readers informed of any updates.