Riot Games and Valve Win Over PalTalk’s Invalidated Patent Affirmed

PalTalk Holdings, Inc. v. Riot Games, Inc.
Case No: 19-2035
United States Court of Appeals for the Federal Circuit
Decided June 16, 2020

PalTalk Holdings, Inc. (“PalTalk”) lost its appeal (which we previously covered) of the U.S. Patent Trial and Appeal Board (“PTAB”) rulings invalidating U.S. Patent Nos. 5,822,523 (“the ’523 Patent”) and 6,226,686 (“the ’686 Patent”), (together “the Asserted Patents”) as obvious over the cited prior art. The invalidations stemmed from inter partes reviews requested by Riot Games, which Valve joined, after PalTalk alleged that Riot Games’ League of Legends and Valve’s Defense of the Ancients 2 (Dota 2) infringed the Asserted Patents. PalTalk previously also sued Sony Computer Entertainment America Inc. and Activision Blizzard Inc., alleging that they infringed the Asserted Patents, but those lawsuits were resolved when (according to the defendants agreed to license the Asserted Patents. Jagex, Ltd., represented by Banner Witcoff, was also named in the prior suit. However, Banner Witcoff successfully proved that Jagex did not infringe the Asserted Patents.

The ’523 and ’686 Patents relate to in-game messaging between players in video games. PalTalk appealed the PTAB’s obviousness determination with respect to dependent claims requiring a group messaging server. The Court found that substantial evidence “supports the Board’s conclusion that the claimed “server” is disclosed [by the prior art] and that the claims are rendered obvious.”  In its appeal, PalTalk also argued that dependent claims requiring the group messaging server to use echo suppression so “that a host does not receive copies of the messages it is sent” were not rendered obvious by prior art. However, the Court found that the prior art does disclose echo suppression, rendering the dependent claims obvious as well.

The Court’s affirmation of the PTAB’s obviousness determination is nonprecedential.

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