The creator of a software bot designed to allow users of Blizzard Entertainment Inc.’s World of Warcraft to continue playing the online role-playing game while away from their computers remains on the hook for a $6.5 million judgment, although Blizzard’s request to have MDY Industries LLC pay significantly more in damages was denied.Judge David G. Campbell of the U.S. District Court for the District of Arizona ruled Wednesday, April 1, 2009, that the $6.5 million judgment that had been stipulated following a bench trial was the maximum damages MDY’s founder Michael Donnelly would have to pay the video game giant. That decision, along with a permanent injunction on the sale of the software bot on tortious interference grounds, was reached at the end of January.More info at Law360.The case is MDY Industries LLC v. Blizzard Entertainment Inc. and Vivendi Games Inc., case number 2:06-cv-02555-DGC, in the U.S. District Court for the District of Arizona.
In a previous post, we reported on the filing of this patent lawsuit regarding pay-for-download software over a computer network, e.g., including games. Well it appears that Sony is out of the lawsuit, and Microsoft & Nintendo remain. The dismissal was voluntary by ADC, as Sony never made an appearance in the lawsuit. The dismissal is also without prejudice, which means that ADC could refile a lawsuit against Sony regarding these same patents in the future. In interesting twist, to be sure. If we find out more, we’ll let you know.
March 16, 2009
Ok, the case isn’t REALLY Peter Griffin versus a cricket, but it made you look, right? The case is really Bourne Co. v. 20th Century Fox. Bourne is the owner of the copyrights to “When You Wish Upon A Star,” the song made famous by Jiminy Cricket in Walt Disney’s Pinnochio. In an episode of The Family Guy (aptly titled “When you wish upon a Weinstein”), Peter Griffin sings a song called “I need a jew.” Bourne was nonplussed, and sued for copyright infringement.
Because the facts were largely undisputed, the court decided the case at the summary judgment level. Holding that Fox’s use was fair use, the court stated “Defendants have established that their song ‘I Need a Jew’ contains several layers of parody of plaintiff’s copyrighted work ‘When You Wish Upon a Star.’”
According to Fox and “Family Guy” head honcho Seth MacFarlane, also named as a defendant, the song was created as a commentary on the wholesome, “saccharine sweet” lyrics to “When You Wish Upon a Star” and further commented on allegations that Walt Disney was anti-Semitic. In the parody, Peter Griffin sings about “needing a Jew” to help him with his finances to the tune of “When You Wish Upon a Star,” which was originally written for “Pinocchio.”
The court agreed with Fox that “I Need a Jew” was a parody protected by fair use because it was a social commentary on the idealism portrayed by the original song in addition to taking a jab at Walt Disney’s alleged anti-Semitism.“By pairing Peter’s ‘positive,’ though racist, stereotypes of Jewish people with that fairy tale worldview, ‘I Need a Jew’ comments both on the original work’s fantasy of stardust and magic, as well as Peter’s fantasy of the ‘superiority’ of Jews,” wrote the court. “The song can be ‘reasonably perceived’ to be commenting that any categorical view of a race of people is childish and simplistic, just like wishing upon a star.”Bourne argued that the commentary about Disney was weak and far fetched, because Disney did not actually own the song. However, the court’s ruling adhere’s to the principle that it is not for courts to determine whether art is “good” or “bad,” but rather a court need only find that the defendants have demonstrated that “a parodic character may be reasonably perceived” regardless of the strength or clarity of the joke.“Although this joke may not be an obvious one, defendants have established sufficient facts for the court to find that one of their intended comments in parodying ‘When You Wish Upon a Star’ related to the repudiation of Walt Disney as an anti-Semite and that such a comment may be ‘reasonably perceived,’”While not a video game case directly, I find this case interesting from the standpoint that it deals with media and audiovisual works. The case is Bourne Co. v. Twentieth Century Fox Film Corp. et al., case number 1:07-cv-08580, in the U.S. District Court for the Southern District of New York.The entire opinion can be downloaded here.
This isn’t exactly video game related, so I won’t take up much of your time, but if anyone was looking for a side-by-side comparison of the Shepherd Farey Obama poster next to the photo that AP alleges it infringes, here you go. Farey and AP have fired countersuits against each other to try to resolve whether this is copyright infringement or fair use. You decide.
Zynga Game Network on February 27, 2009, filed suit against CLZ Concepts, Jeff Chen, and James Zhang asserting copyright infringement. The case is 3:09-cv-00854-EMC in the District Court for the Northern District of California. We are obtaining a copy of the complaint and have added this case to our watch list. More details to follow.
On February 24, 2009, Square Enix settled another lawsuit. According to its press release, the lawsuit named at least four national wholesalers of unlicensed sword replicas and their principals that have infringed Square Enix’s FINAL FANTASY® franchise of videogames and CG-animated film, specifically its copyright and trademark rights in the swords.
My personal favorite quote is where the defendants issued a statement as follows: “We regret having sold unauthorized replica merchandise based on the Final Fantasy franchise to our customers. We would not have begun importing and selling these swords if we knew that Square Enix would respond so aggressively to stop us. We will never make this mistake again.”
WHAT?!?! They are actually admitting to the “I wouldn’t have done it if I knew I would have been caught” defense?!?! So it’s ok to infringe other’s intellectual property rights as long as you’re not caught? Great. Nice one. Way to fall on that sword you were selling. In any event, the consent judgment includes $600k payment to Square Enix, so yes, the infringers WILL think twice about doing this again.
In another press release dated Feb. 12, 2008, the lawsuit was noted to have been filed and was “a result of cooperation with the United States Department of Homeland Security and Customs and Border Patrol, whose agents seized a crate of counterfeit replica swords.” Nice to hear our DHS guys are on the job. Keep up the good work.
(Thanks to Tim Hsieh at Greenberg Traurig for bringing this to my attention.)
Harmonix and Viacom jointly filed suit in the District of Massachusetts against Konami for patent infringement. The lawsuit alleges Konami’s “ROCK REVOLUTION” video game infringes U.S. Pat. No., 7,459,624 entitled “Game controller simulating a musical instrument.” The patent issued December 2, 2008 and consists of two independent claims, both of which are methods “for providing [a] realistic interaction by a player with a music-based video game using a game controller simulating a guitar.” The claims appear to relate to music-based video games that simulate a hammer-on or pull-off technique of playing a musical instrument. Specifically, claims 1 recites:
1. A method for providing realistic interaction by a player with a music-based video game using a game controller simulating a guitar and having a strum bar and a plurality of fret buttons, the method comprising: a) displaying to a player first target musical data associated with a musical composition; b) receiving first music performance input from the player comprising activation of a first one of a plurality of fret buttons and a strum bar; c) displaying to a player second target musical data associated with the musical composition, the second target musical data visually indicating to a player that the musical event represented by the second target musical data is amenable to a hammer-on technique; [and] d) receiving second music performance input from the player consisting essentially of activation of a second one of a plurality of fret buttons.
Claim 15, the other independent claim, is similar to claim 1, however, differs in regards to elements (c) and (d), which recite:
c) displaying to a player second target musical data associated with the musical composition, the second target musical data visually indicating to a player that the musical event represented by the second target musical data is amenable to a pull-off technique; [and] d) receiving second music performance input from the player consisting essentially of deactivation of one of a plurality of fret buttons.
The lawsuit is Harmonix Music Systems, Inc. et al. v. Konami Digital Entertainment Co., Ltd et. al., Case No. 1:09-cv-10206-RWZ, U.S. District Court of Massachusetts. We will continue to monitor the lawsuit.
Merry Christmas, you’ve been sued. It’s not uncommon for plaintiffs to file lawsuits around the holidays in order to “turn the screws” on defendants, and that appears to be the case here. Worlds.com sued NCSoft (maker of City of Heroes, City of Villains, Tabula Rasa) on December 24, 2008, in the Eastern District of Texas over alleged infringement of U.S. Pat. No. 7,181,690, titled “System and method for enabling users to interact in a virtual space.” Representative claim 1 reads as follows:
- A method for enabling a first user to interact with other users in a virtual space, wherein the first user and the other users each have an avatar and a client process associated therewith, and wherein each client process is in communication with a server process, wherein the method comprises: (a) receiving a position of less than all of the other users’ avatars from the server process; and (b) determining, from the received positions, a set of the other users’ avatars that are to be displayed to the first user, wherein steps (a) and (b) are performed by the client process associated with the first user.
While this claim may seem rather broad, it would appear that it has priority back to Nov. 12, 1996, so to invalidate the patent you would need to demonstrate that you did this before Nov. 12, 1996. This also means, however, that the patent will expire on November 16, 2016 (plus any patent term extension), so Worlds.com is likely trying to maximize their enforceable duration for this patent.
The case is Worlds.com Inc. v. NCSoft Corp., case number 08-508, in the U.S. District Court for the Eastern District of Texas. We have added it to our watch list and will keep you updated of any significant progress in the case.
As previously reported, Nintendo sued Nyko for design patent infringement and trademark infringement over the Wii’s nunchuk controller. On Wednesday, Dec. 17, 2008, the parties filed a STIPULATION for Dismissal of Action by parties, indicating the case has been settled. Under the setlement agreement, Nyko can continue to sell a redesigned version of its controller. Other details remain undisclosed. We’re closing the books on this one.
N.D. Cal. 2008
(by Shawn Gorman)
While relatively short lived, this legal battle provides several insights for both video game producers and their legal teams. At issue was whether Capcom’s “Dead Rising” video game infringed any copyright, trademark, or other intellectual property rights of MKR, the owner of the copyrights and trademarks to the 1979 motion picture “George A. Romero’s Dawn of the Dead.” Capcom, a well-established video game developer, contacted MKR in 2004 for potential licensing of the rights. The licensing effort, however, was not pursued further and Capcom developed and released “Dead Rising” in 2006. The box containing the game included a disclaimer reading: “THIS GAME WAS NOT DEVELOPED, APPROVED OR LICENSED BY THE OWNERS OR CREATORS OF GEORGE A. ROMERO’S DAWN OF THE DEAD™[.]” That same year, MKR discovered that Capcom applied to register “Dead Rising” as a trademark with the U.S. Patent and Trademark Office. A dispute ensued and Capcom filed a complaint for declaratory relief on February 12, 2008, seeking a declaration that its video game does not infringe any copyright, trademark, or other intellectual property rights belonging to MKR and subsequently filed a Motion to Dismiss MKR’s claims on June 11, 2008.
In a rare instance, the court dismissed MKR’s allegations against Capcom under Federal Rule 12(b)6. Citing prior precedent, the court understood the rarity in which such motions should be granted, stating that motions to dismiss “generally are viewed with disfavor and are to be granted rarely.” Indeed, such motions are only granted if “it appears beyond doubt the plaintiff can prove no set of facts in support of his claim that would entitle him to relief.” As discussed below, the court granted the motion and dismissed the claims of copyright and trademark infringement, as well as claims under California state law with prejudice (meaning that Capcom cannot refile with respect to these issues).
Capcom did not contest MKR’s copyright to “Dawn of the Dead.” Therefore, the sole issue was whether “Dawn of the Dead” and “Dead Rising” were substantially similar in their protected elements. The court again reiterated its understanding that motions to dismiss should rarely be granted, stating “MKR understandably invokes case precedent that calls into question the propriety of resolving the issue even on summary judgment let alone on an initial pleading motion.” Nonetheless, the court cites prior case law that “[t]here is ample authority for holding that when the copyrighted work and the alleged infringement are both before the court, capable of examination and comparison, non-infringement can be determined on a motion to dismiss.”
The court, however, recognizes that only one prong of the test may be determined by the court. Specifically, the substantial similarity inquiry is comprised of an objective extrinsic test and a subjective intrinsic test, both of which the copyright holder must ultimately establish. “Only in the event that the claim fails when analyzed under the objective “extrinsic” prong is it subject to dismissal, for the intrinsic test, which ‘examines an ordinary person’s subjective impressions of the similarities between two works,’ is exclusively within the province of the jury.”
Under the analysis, the court considers the actual concrete elements that make up the total sequence of events and the relationships between the major characters rather than plot ideas for stories.” As a comparison, the court discussed a prior dispute regarding a motion picture set in the Bronx:
There, the court held that because elements such as derelict cars, drunks, prostitutes, vermin, morale problems of police officers, and the familiar figure of an Irish cop would appear in any realistic work about police officers in the Bronx, those elements represented unprotectable scenes a faire.
Scenes a fair is “where events flow naturally from generic plot-lines or sequences of events necessarily resulting from the choice of a setting or situation constitute one type of unprotectable idea.” Thus, elements relating to “humans battling zombies in a mall during a zombie outbreak” were unprotectable.
The court also found several differences between the sequence of events, characters, setting, and mood of the two works of art. Considerations relating to the “theme” and “pace” may be of special importance to video games developers. First, by its very nature, the “pace” of an allegedly infringing video game may rarely be a factor in determining infringement. Indeed, the pace is often set by the player. As noted by the court:
The pace in Dead Rising is one of constant, fast-paced action depending on the player’s preference. If the player follows the game storyline cues, a fast pace ensues to facilitate completion of the game with the rescue of all survivors within the three day window. By the same token, if the player chooses not to follow the storyline cues, then the pace slackens and the player wanders the mall and confronts zombies. Even if this is viewed as presenting some superficial similarity, “pace, without more, does not create an issue of overall substantial similarity between the works.”
The court also noted the differences in the “theme” of the two works of art. Specifically, as argued by MKR, “Dawn of the Dead” relates to “a satirical social commentary on the excesses of consumerism,” while “[t]o the extent that Dead Rising may be deemed to posses a theme, it is confined to the killing of zombies in the process of attempting to unlock the cause of the zombie infestation.” The court appears to recognize that often players will play a game merely to play it, not for any social commentary. Furthermore, a game that sells for $60 to be played on a console that costs several hundred dollars was unlikely a social commentary of the excesses of consumerism.
The court swiftly addresses MKR’s allegations that the game industry perceives Dead Rising to be an obvious “rip-off” of Dawn of the Dead. The court reiterates that:
the ultimate issue on this motion is whether or not the allegedly infringing work implicates protectable elements under copyright law, regardless of whether or not it is, in fact, a “rip-off.” Moreover, to the extent that the argument eventually would become relevant, it would arise only in the application of the “intrinsic” test, the second prong of the copyright analysis. As MKR must first successfully pass through the extrinsic test, which as set forth above it does not accomplish, the perception in the marketplace that a work has been lifted, accurate or otherwise, simply does not come into play.
Lanham Act Claim
MKR plead that Capcom sought to capitalize on: (1) Romero’s name on a disclaimer; (2) the term “dead” in its title; (3) the zombie head design trademark on Dead Rising’s packaging; and (4) the “plaid boy” costume consisting of a blood stained, plaid shirt, and a zombie mask. The court swiftly rejects each of the arguments.
First, the court finds that Romero’s name on the disclaimer is mere nominative use. Specifically, there is no other way to refer to the movie than by its title, the use of the full title is necessary to identify the movie and differentiating between other different movie titles, and, nothing about using a mark in a disclaimer denying affiliation gives rise to confusion.
Regarding the use of “dead,” the court held that the “shared use of one word and the idea of zombies awakening is not enough to sustain a charge of infringement.” Lastly, the court found that the “zombie presented also appears to be much more lifelike than the half of the zombie head on the cover of Dawn of the Dead.” Regarding the plaid shirts, the court points back to its copyright analysis, in which it found the zombies in Dead Rising “to be stock elements with largely generic attire. While Dead Rising does sport some zombies in plaid and covered in blood, those attributes are too hazy to amount to substantial similarity.”
On November 14, 2008, the parties filed a stipulated agreement with the court. As part of the agreement, Capcom waives its right to seek attorneys’ fees, expenses and costs incurred in relation to the above titled actions and MKR waives its right to appeal the court’s ruling. MKR further agreed to withdrawal its opposition to Capcom’s trademark for “DEAD RISING.” (So far, the court has not approved the agreement)
As discussed below, this case had some interesting points regarding judicial notice.
As video game development continues to increase and thus have issued litigated in court, the concept of judicial notice will need to be addressed. Specifically, courts can take as true those facts which are generally known within the court’s territorial jurisdiction; and those that are “capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned, for example, almanac, dictionary, calendar or similar sources.” In this case, the court took judicial notice of the contents of “Dawn of the Dead” and “Dead Rising,” however, the court did not take judicial notice of the script of “Dead Rising.” The court reasoned that the scripts “authenticity cannot be determined by resort to irrefutable sources because it does not reflect who wrote it, nor when and for what purpose it was written, it was not filed with Capcom’s pending copyright for Dead Rising, and by its nature it may not track exactly how the game itself appears to the player.” Therefore, video game developers may consider indicating the authors on scripts and copyrighting at least portions of the game as they would appear to a player, such as select animations and introduction screens.
The court also did not take judicial notice of several prior movies and video games relating to zombies “especially in light of the fact that many of these movies were made long ago, indeed in some instances as far back as 1932.” Lastly, citing prior precedent that “Wikipedia may not be a reliable source of information,” the court declined to extend judicial notice to Wikipedia articles that allegedly provided synopses of these movies and video games. This is similar to the stance taken by the U.S. Patent & Trademark Office when examining patent applications. Specifically, in 2006 the USPTO indicated that Wikipedia would no longer be used as an accepted source of information. It appears that Wikipedia articles carry little, if any, weight in legal environments.
Well, as is often the case, the cost to settle far outweighs the cost to litigate to prove a point. It appears that is true here. As we previously reported, THQ sued Activision over the cover artwork that Activision was going to use for its baja racing game. Instead of litigating to determine whether it was copyright infringement (or trade dress infringement) or not, Activision appears to have agreed to simply change the artwork, shown at left. The artwork was taken from a court filing by Activision, after which THQ filed papers on Nov. 18, 2008, dismissing the lawsuit with prejudice (meaning they cannot refile with respect to this issue).
Would it have been infringement by Activision? Who knows. But reasonable minds definitely prevailed in this case, as both sides realized that litigation would have far outweighed the cost to simply change the artwork before the game is released. Case closed.
Well, it looks like Nintendo has been sued for patent infringement again. This time by Motiva LLC, for infringement of U.S. Pat. No. 7,292,151, which is directed to a “Human Movement Measurement System.” The patent appears to relate to “a system and methods for setup and measuring the position and orientation (pose) of transponders. More specifically, for training the user to manipulate the pose of the transponders through a movement trajectory, while guided by interactive and sensory feedback means, for the purposes of functional movement assessment for exercise, and physical medicine and rehabilitation.” The ‘151 patent has 91 claims, so there might be a bit of work to do in this case, unless Motiva only asserts a few claims.
The title and above description would make one think this has something to do with Wii Fit, but the claims are not so limited. For example, claim 1 recites:
1. A system for tracking movement of a user, comprising: a first communication device comprising a transmitter for transmitting signals, a receiver for receiving signals and an output device, said first communication device adapted to be hand-held; a processing system, remote from the first communication device, for wirelessly receiving said transmitted signals from said first communication device, said processing system adapted to determine movement information for said first communication device and sending data signals to said first communication device for providing feedback or control data; and wherein said first communication device receives and processes said data signals from said processing system and wherein the output device provides sensory stimuli according to the received data signals.
Claim 1 indicates that the first communication device is hand-held, which would appear to relate most closely with the Wiimote, not the Wii Fit. Claim 50 (the only other independent claim), also appears to be describing the Wiimote:
50. An apparatus for use in tracking movement of a user, comprising: a transmitter for transmitting signals; a receiver for receiving signals wirelessly from a remote processing system; wherein the apparatus is hand-held; wherein the receiver is adapted to receive feedback or control data signals from the processing system, the feedback or control data signals derived from processed information including movement information of the apparatus; and wherein the receiver receives the data signals from the processing system and wherein the apparatus processes the received data signals to provide feedback or control information to the user.
The ‘151 patent was filed July 22, 2005, and the earliest possible priority date of the ‘151 patent is July 29, 2004. The Nintendo Wii was launched November 19, 2006, and was certainly in development for quite some time before that, so I am willing to bet that the validity of the ‘151 patent is a major issue in this case (in addition to the alleged infringement). Nintendo is sure to argue that the independent claims read on any motion sensor system, and Nintendo was not the first to use such a system (although Nintendo was arguably the first to “successfully” incorporate such a system into a popular game console, which is why they are being sued).
The case is Motiva, LLC v. Nintendo Co. Ltd. et al., docket 6:08-cv-429, filed Nov. 10, 2008, in the Eastern District of Texas (Tyler Division). We will add the case to our tracker list and keep you posted.
__ F.3d __ (9th Cir. 2008)
(by Shawn Gorman)
The (in)famous Grand Theft Auto series, produced by Rock Star Games, has become synonymous with legal entanglement. As noted by the appeals court, the series “is known for an irreverent and sometimes crass brand of humor, gratuitous violence and sex, and overall seediness.” The latest installment of the Series, San Andreas, is centered in East Los Santos, a fictional urban environment that depicts Los Angeles, California. The environment is populated with “virtual liquor stores, ammunition dealers, casinos, pawn shops, tattoo parlors, bars, and strip clubs. The brand names, business names, and other aspects of the locations [were] changed to fit the irreverent ‘Los Santos’ tone.” One such virtual business was a strip club named “Pig Pen,” in which players could interact with strippers. ESS operates a real-life strip club in East Los Angeles under the name Play Pen Gentlemen’s Club. ESS claimed that San Andreas’ Pig Pen infringed its trademark and trade dress associated with the Play Pen. Rock Star denied infringement and further argued that any infringement would be protected under the First Amendment. The lower court granted summary judgment in favor of Rock Star based upon the First Amendment. The appeals court affirmed the lower courts ruling. While the ruling was based upon the First Amendment defense, the opinion seemed to focus on whether infringement existed. Setting a humorous tone, the opinion noted that “besides this general similarity, they have nothing in common. The San Andreas Game is not complementary to the Play Pen; video games and strip clubs do not go together like a horse and carriage or, perish the thought, love and marriage. Nothing indicates that the buying public would reasonably have believed that ESS produced the video game or, for that matter, that Rockstar operated a strip club.” ESS argued that because San Andreas players could spend as much time as they wanted at the Pig Pen virtual strip club, it could be considered a significant part of the Game, thereby leading to confusion. The court rejected the argument with the observation that: fans can spend all nine innings of a baseball game at the hot dog stand; that hardly makes Dodger Stadium a butcher’s shop. In other words, the chance to attend a virtual strip club is unambiguously not the main selling point of the Game. It is interesting to note that the test for determining whether the trademark or trade dress rights were trumped by First Amendment considerations has been traditionally applied by the court in instances where trademarks were used in the titles of artistic works, not to alleged use of a trademark in the body of the work. Nonetheless, the court thought that such an application logically followed and the parties did not dispute it.
Further to the previous post, here is a more comprehensive write-up prepared by Brad Wright, a partner of mine at Banner & Witcoff, Ltd.:
Intellectual Property Advisory: Court Limits Patents on Business Methods By Bradley C. Wright On October 30, 2008, the U.S. Court of Appeals for the Federal Circuit issued a rare full-court opinion that may limit the ability of companies to obtain patents on methods of doing business. The appeal was from the U.S. Patent and Trademark Office (PTO), which had rejected Bernard Bilski’s patent application for a method of managing consumption risk. Bilski sought to patent a series of transactions between a commodity provider and market participants in a way that balanced risk. The PTO rejected the patent application on the basis that it was not a “process” as that term is understood in patent law. According to the PTO, in order to be patentable, a process must either be tied to a particular machine or it must transform something tangible. Because Bilski’s invention did neither, it did not meet the definition of a “process.” Following Earlier U.S. Supreme Court Direction A majority of the Federal Circuit agreed, concluding that a process is not eligible for patent protection unless it either involves a physical transformation or it is tied to a particular machine – essentially the same test applied by the PTO in rejecting Bilski’s patent application. Chief Judge Paul Michel, writing for the majority of the court, relied on several 1970s-era U.S. Supreme Court decisions in finding that the invention was not patentable. The court distinguished an earlier U.S. Supreme Court case involving the patentability of a process performed on a computer, concluding that the earlier decision presented “a difficult case under its own test.” In that earlier case, the only possible use of the process was on a digital computer, which the U.S. Supreme Court found wholly preempted the use of the process. Chief Judge Michel stated that while the Supreme Court might ultimately decide to change the test for patentability, “we see no need for such a departure and reaffirm that the machine-or-transformation test, properly applied, is the governing test for determining patent eligibility of a process.” In this case, the process did not involve any transformation nor was it tied to any particular machine. Impact on Computer-Related Inventions Chief Judge Michel also noted that clever patent attorneys might try to avoid the patentability test by adding some type of insignificant physical steps or features to the patent, and warned that “even if a claim recites a specific machine or a particular transformation of a specific article, the recited machine or transformation must not constitute mere ‘insignificant postsolution activity.’” This warning could present problems for the insurance, banking, consulting, medical, and computer industries, which frequently rely on patents involving a new way of processing information or analyzing data. Merely implementing a new algorithm on a computer might not meet the court’s requirement that even if the invention involves “physical steps” it would not be patentable unless it is limited to a particular machine or transforms something. Court Rejects “Technology” Requirement The majority also distanced itself from the Federal Circuit’s earlier 1998 decision in State Street Bank & Trust Co. v. Signature Financial Group, which had seemingly opened the door to business method patents as long as the invention involved a “useful, concrete and tangible result.” The court stated that portions of that earlier opinion should no longer be relied on in deciding whether a process-related invention is eligible for a patent. According to Chief Judge Michel, “we also conclude that the ‘useful, concrete and tangible result’ inquiry is inadequate and reaffirm that the machine-or-transformation test outline by the Supreme Court is the proper test to apply.” The court did, however, reject the suggestion that a patent must involve “technology,” a position advanced by several amicus parties and urged by Judge Mayer in dissenting from the majority opinion. According to Judge Mayer’s dissent, the majority opinion’s test could be circumvented through clever patent drafting, and, citing numerous articles critical of business method patents, he argued that “the patent system has run amok.” The majority also rejected the argument that merely because a patent related to a method of doing business it should not be patentable. Different Industries Affected In possibly reassuring industries that rely on computer-related patents, such as medical imaging devices, the majority explained that a process directed to transforming data representing physical things, such as X-rays, would meet the “transformation” test. Yet possibly unsettling for other industries that rely on business method patents to protect their business models, the court stated that “We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine.” Given that companies already have pending thousands of patents in areas likely to be curtailed by the opinion, the added uncertainty of the court’s ruling may last years into the future. Two judges filed lengthy dissenting opinions, arguing that the settled business expectations of numerous industries would be disrupted, and that wide-ranging areas of the information economy would suddenly become off-limits to patenting. Judge Newman pointed out that more than 15,000 computer-related business method patents had issued in such fields as banking and finance, insurance, data processing, industrial engineering, and medicine. She complained that “I don’t know how much human creativity and commercial activity will be devalued by today’s change in law; but neither do my colleagues.” Click here for the full opinion: http://www.cafc.uscourts.gov/opinions/07-1130.pdf
Mr. Wright is a shareholder of Banner & Witcoff, Ltd. in Washington, D.C., where he practices intellectual property law with a concentration on prosecution, litigation and counseling in patent and copyright matters, especially in the electrical and computer areas, including Internet and e-commerce. Banner & Witcoff, Ltd. is dedicated to excellence in the specialized practice of intellectual property law, including patent, trademark, copyright, trade secret, computer, franchise and unfair competition law. The firm has over 90 attorneys and agents in its Chicago, Washington, DC, Boston and Portland, OR offices.
www.bannerwitcoff.com © Copyright 2008 Banner & Witcoff, Ltd. All Rights Reserved. No distribution or reproduction of this issue or any portion thereof is allowed without written permission of the publisher except by recipient for internal use only within recipient’s own organization. The opinions expressed in this publication are for the purpose of fostering productive discussions of legal issues and do not constitute the rendering of legal counseling or other professional services. No attorney-client relationship is created, nor is there any offer to provide legal services, by the publication and distribution of this advisory. This publication is designed to provide reasonably accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, counseling, accounting or other professional services. If legal advice or other professional assistance is required, the services of a competent professional person in the relevant area should be sought.
While not strictly a video game case, the Federal Circuit today (October 30, 2008) released its decision in In re Bilski regarding the limits on patentable subject matter, which could certainly affect patentability of some video game patents. In its decision, the Federal Circuit reaffirms that the proper test for patentability of processes is the “machine or transformation” test as set forth by the United States Supreme Court.
The Federal Circuit states: “at present…we…reaffirm that the machine-or-transformation test, properly applied, is the governing test for determining patent eligibility of a process under § 101.” Slip op. at 15.
The machine-or-transformation test can be summarized as follows: “A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” In re Bilski, slip op at 10.
Because most patentability issues could be avoided by crafty claimdrafting, the court provides guidance regarding two “corollaries” to the above test:
1) Mere field-of-use limitations are generally insufficient to render an otherwise ineligible process claim patent-eligible. Slip op. at 15.
2) Insignificant postsolution activity will not transform an unpatentable principle into a patentable process. Slip op. at 16.
I am sure that much more commentary will be available soon, but this at least provides some high points. Oh yeah, the ultimate decision was to AFFIRM the rejection by the Board of Patent Appeals and Interferences. The complete opinion is here: Bilski.pdf
Feel free to contact me if you have questions regarding the applicability of this case to video games and virtual worlds as patentable subject matter.
On October 23, 2008, THQ filed a new lawsuit against Activision Blizzard for trade dress and copyright infringement regarding Activision’s planned release of “SCORE International Baja 1000 The Official Game” in late October 2008. THQ alleges that Activision’s game infringes the trade dress and copyrights in THQ’s game “Baja Edge of Control,” which was released in September 2008 (with package art available since June 2008).
Here is an image of THQ’s cover art:
And here is the cover art for Activision’s game:
We’ll add this lawsuit to our tracking system and keep you posted as things progress.
The case is THQ Inc. v. Activision Blizzard, Inc. in the Central District of California, case number CV08-06999, filed October 23, 2008. A copy of the complaint may be downloaded here:
MDY Industries, LLC v. Blizzard Entertainment, Inc., et al. (D. Ariz. 2008)
Update on December 14, 2010:
The 9th U.S. Circuit Court of Appeals upheld a lower court’s 2009 injunction barring the distribution of the Glider computer program that automatically plays the lower levels of World of Warcraft. The Court held that MDY was liable under the DMCA § 1201(a)(2) with respect to World of Warcraft‘s non-literal elements.
Update on April 1, 2009:
Judge David G. Campbell of the U.S. District Court for the District of Arizona ruled that the $6.5 million judgment that had been stipulated following a bench trial was the maximum damages MDY’s founder Michael Donnelly would have to pay the video game giant. That decision, along with a permanent injunction on the sale of the software bot on tortious interference grounds, was reached at the end of January.
Update on October 2, 2008:
On Sept. 26, 2008, the court ruled that MDY must pay Blizzard damages in the amount of $6M, i.e, $6,000,000.00. At the next hearing, scheduled for January 2009, the judge will determine whether MDY founder Michael Donnelly is personally liable for damages and whether MDY violated the DMCA when it manipulated codes to keep Glider under WoW’s radar.
Posted on July 15, 2008:
Looks like Blizzard has won round 1 of the WoWGlider/MMOGlider lawsuit, with the District Court ruling that MDY’s bot application violates Blizzard’s copyrights, and also causes tortious interference with Blizzard’s other paying customers.
On July 14, 2008, the U.S. District Court in Arizona issued an order granting summary judgment for Blizzard, developers of the World of Warcraft (WoW) massively-multiplayer online role-playing game, on their tortious interference, contributory copyright infringement, and vicarious copyright infringement claims against MDY, developers of a “bot” known as Glider that allows players to cheat in WoW. We had previously commented on this case when Blizzard initially filed this lawsuit against MDY.
As to their tortious interference claim (which admittedly sounds more exciting than copyright infringement), Blizzard prevailed on the argument that MDY’s development of Glider induces WoW users to breach WoW’s EULA and TOU. Unlike copyright infringement, tortious interference with contract is a question of state law rather than federal law, and in applying Arizona law, the district court found it particularly significant that MDY “actively promotes the use of Glider even though it knows that using Glider breaches the TOU.” See Order at 22. In addition, the district court noted that “MDY does not dispute that Glider consumes more Blizzard resources than any other bot because of its sophisticated anti-detection features, that Blizzard must divert resources from game development to combat Glider, and that Blizzard has received numerous complaints from WoW players regarding other players’ use of Glider.” Id. at 23. Finally, the district court found that MDY’s conduct amounted to improper interference within the meaning of Arizona law. Id. at 26. Considering all these factors together, the district court concluded that MDY’s distribution of the Glider bot indeed constituted tortious interference with Blizzard’s TOU for WoW.
But putting aside tortious interference, the real significance of this case appears to be that a district court has allowed a software developer to enforce its EULA by characterizing exceeding the scope of the EULA as an act of copyright infringement rather than a mere breach of contract. While this tactic is not new in the copyright license/copyright infringement context, this is a novel approach in the enforcement of EULAs and TOU. As the district court itself acknowledged, copyright infringement is a “more powerful claim” than breach of contract because damages for copyright infringement are typically far greater than damages for breach of contract. See Order at 6. Indeed, damages for copyright infringement account for actual damages to the copyright owner (e.g., Blizzard’s expenses in fighting Glider, lost revenue from players who stopped playing WoW because of bots, etc.) and the infringer’s profits (i.e., MDY’s revenue from selling Glider), or alternatively, may include statutory damages up to $150,000 per infringed work (if willful). Id. Thus, if courts continue to apply this rationale in future cases, copyright infringement lawsuits could become effective weapons for video game developers in their quest to enforce EULAs and thereby limit the use of their creations to their own rules. But this future is only an “if,” as this case is only the opinion of a trial court, and an appeal is sure to follow (i.e., this ruling could be reversed (or affirmed) on appeal to the Ninth Circuit). Stay tuned…
(Thanks for Rajit Kapur for his assistance with the creation of this post)
This case was closed on November 18, 2009, following notice of voluntary dismissal by the plaintiff.
This is really more of a straight copyright case than a video game case, so we won’t be actively following it. However, if anyone is interested, Gerald Willis (composer of the UNLV fight song Win With The Rebels), has sued EA for inclusion of the song in a slew of EA Sports titles. This looks like a straight copyright infringement issue. If I were a betting man (this case IS in Nevada, after all), I would bet that EA will claim it has some sort of license from UNLV. The license may or may not be valid, and EA and Mr. Willis will settle for a reasonable amount of money in view of the validity of the license. If you’re interested in tracking the case yourself, it is Geral Willis v. Eletronic Arts, Inc., case no. 2:08-cv-01311-KJD-LRL, filed Monday, September 29, 2008, in the United States District Court for the District of Nevada.
Win With The Rebels lyrics.
United States Court of Appeals for the Federal Circuit
Decided Sep. 22, 2008
At this stage, this case is more about an esoteric legal issue, rather than any substantive issue of infringement regarding slot machine games or video games, so I will keep it brief. Suffice it to say, the District Court (N.D. Cal.) held that Arisocrat’s patent was invalid because Aristocrat did not properly revive the patent after it accidentally went abandoned during prosecution at the USPTO. Specifically, Aristocrat, pursuant to USPTO rules, requested revival because the abandonment was unintentional. U.S. Laws, however, require that the delay be unavoidable. On appeal, the Federal Circuit held that “improper revival” is not a defense to patent infrginement, and that the District Court erred by holding the patent invalid on such grounds. So it’s back to the District Court for these two to now get into some substantive issues regarding patent infringements.