patent – Page 7 – Patent Arcade

Jun

Case Analysis: Debonneville v. Pierce

Debonneville v. Pierce

United States District Court for C.D. Cal.

Case No. 2:07-CV-03776-R-MAN), Settled May 5, 2008

This wasn’t an IP lawsuit, but it was a bitter dispute between the owners of Internet Gaming Entertainment. IGE is a virtual property company that engages in buying and selling virtual currency and items in MMO games for real money. Even though these games prohibit real money trading, the virtual goods industry is booming – according to the amended complaint, Goldman-Sachs once valued IGE at $220 million.

Alan Debonneville, a Swiss citizen living in Hong Kong and co-founder of IGE, initially filed a complaint in June of 2007 against co-founder Brock Pierce. The original complaint was sealed three months later, but Virtually Blind, who saw the complaint before it was sealed, said it was full of scandalous accusations. For example, Kotaku said “the Complaint … includes third-hand allegations of cash from an earlier venture being spent on illegal drugs, a claim that Pierce’s dog was shot by the “Spanish FBI,” and allegations of minors being transported across state lines for sex. The complaint even takes a swipe at former-child-actor Pierce’s filmography (Pierce played a young Emilio Estevez in The Mighty Ducks and The Mighty Ducks 2, and the lead in First Kid). In short, this is not your average business spat.”

According to the amended complaint, filed in September 2007, Debonneville met Pierce while playing Everquest online. Debonneville was selling virtual goods in Everquest in 2000 and discussed his business plan with Pierce, who was living in Spain. Pierce requested that Debonneville come to Spain to negotiate a business arrangement. “Impressed with the promises of riches that Pierce made, in November of 2001, Debonneville traveled to Spain from Switzerland to meet with Pierce.” Following those talks, IGE was formed, allegedly with certain promises of profits and stock for Debonneville.

The amended complaint claimed, inter alia, breach of fiduciary duty, breach of contract and fraud. Virtually Blind said that allegedly “Pierce deprived Debonneville of millions of dollars Debonneville was owed under his agreements with IGE. Debonneville names an even dozen claims ranging from breach of fiduciary duty to fraud. Along the way he accuses Pierce of failing to pay taxes owed to the Spanish government, using corporate funds for personal expenses, falsely telling Debonneville that one of the other executives in IGE was blackmailing Pierce, and partnering with a third party, Jonathan Yantis, to exploit bugs in game software to make unauthorized duplicates of in-game items and currency to offer for sale via IGE.”

Pierce threw the accusations back at Debonneville in his answer and counterclaim by alleging, as Virtually Blind put it, that Debonneville, “while overseeing IGE’s trading arm, overpaid certain people for virtual goods bought on behalf of IGE — including one of the lawyers who now represents Debonneville on this case — in order to secure favor and personal benefits, in breach of Debonneville’s fiduciary duty to IGE.”

Minutes from March 2008 stated that the parties had reached a settlement on all essential terms and that the parties needed to file a stipulation of dismissal by April 14. But the hostilities continued and the settlement failed – no stipulation was filed by the deadline.

The judge ordered a status conference to see why the settlement hadn’t been finalized and the result of that conference was a temporary restraining order against Pierce. The TRO prevented Pierce from “failing to comply with the terms of the settlement” and specifically kept Pierce from “contacting any bank for Debonneville or his attorneys for purposes of reversing any payment Pierce made to Debonneville under the terms of the parties’ settlement agreement in this lawsuit […], attempting to reverse any payment made to Debonneville or his attorneys […], taking any action to sell, assign, [or] transfer […] any asset owned directly or indirectly by Pierce, unless such action is performed solely to raise funds to be paid to Debonneville, [or] filing any suit relating to the settlement, Debonneville or his attorneys, other than a personal bankruptcy suit.” The court granted the TRO because those acts would cause “irreparable injury” as they “would be part of a wrongful scheme by Pierce, already commenced, to attempt to illegally recover settlement payments already paid to Debonneville or to avoid paying Pierce’s settlement obligations.”

Another hearing was set for May 5 to determine whether the restraining order should be made permanent. The minutes from that hearing revealed that Pierce paid Debonneville the undisclosed settlement amount. After that hearing, a motion for sanctions against Pierce for his failure to attend a scheduled deposition remained (although it may have since been dropped because Pierce paid the settlement). But the emails contained in the exhibits to the motion and response show the hostility that existed between the lawyers and in this case overall.

Virtually Blind wasn’t surprised at the settlement given that the litigation would’ve likely become incredibly expensive and the parties probably wanted to avoid negative publicity. It’s still unfortunate because the issue of virtual property didn’t go in front of a judge. It would’ve been interesting to see how the judge would’ve acknowledged and responded to virtual property in a case concerning a business based on real money trading which violates the Terms of Service MMOs.

Check out Virtually Blind’s website for more extensive analysis of the case as it progressed.

Jun

Curtain Call on Gibson v. Harmonix

It seems that Gibson’s efforts to enforce its musical concert participation patent (U.S. Patent No. 5,990,405) have officially ended. Previously we told you that Gibson’s Tennessee case against Harmonix (and its “Rock Band” game) was on its way back on track after being on hold for a while. While it was on hold, a California court ruled that the same patent did not cover Activision’s “Guitar Hero” game, and it seemed likely that the Tennessee court would end up doing the same for “Rock Band.”

On Friday, the Tennessee court dismissed the case in view of a settlement that the parties had reached. This dismissal would appear to end the battle over this patent.

Settlement terms are confidential, although we can speculate that the things that happened while the case was on hold did not make Gibson’s life easy. First, proceedings at the Patent Office suggested that the “musical instrument” required by the Gibson patent had to be capable of making music. This may have caused Gibson to drop its claims against the “Guitar Hero” and “Rock Band” guitars (I’ve never been able to make actual music with those things), and the holdout claims may have been leveled against the drums in the “Rock Band” game (on the theory that the drums could at least still make music).

Second, when the California court ruled that the Activision “Guitar Hero” game was not covered by the patent, the California court doubted whether the patent covered any interactive video game at all (the patent’s description focuses on letting a user simulate participation in a musical concert, which arguably is not an interactive game type of thing). Even if Gibson was now only focusing on the “Rock Band” drums as being “musical instruments” to get around the first issue, this finding by the California court would still have been thorny for Gibson to get around.

The vast majority of cases settle before the end of trial and appeals. Mounting evidence and court rulings developed during the case help resolve points of contention, and make the chances of success clearer for both parties to see, and eventually the parties are able to make the business decision to end it at terms they can live with. With the settlement in this case, here’s hoping Gibson, Activision, Harmonix and the others can move on and give us all the next generation in great musical games!

Apr

Case Update: Anascape, Ltd. v. Nintendo of America Inc.

On Tuesday, April 13, 2010, the U.S. Court of Appeals for the Federal Circuit ruled in favor of Nintendo in Anascape, Ltd. v. Nintendo of America Inc. (Docket No. 2008-1500), a patent infringement case appealed to the Federal Circuit from the U.S. District Court for the Eastern District of Texas (Case No. 9:06-CV-158).

In 2008, the District Court ruled that certain Nintendo video game controllers infringed U.S. Patent No. 6,906,700 (“the ‘700 patent”), which was owned by Anascape. Nintendo subsequently appealed the District Court’s ruling to the Federal Circuit, resulting in this decision.

Writing for a three-judge panel of the Federal Circuit, Judge Newman explained that the controlling issue on appeal was whether the ‘700 patent could claim priority to an earlier Anascape patent, namely, U.S. Patent No. 6,222,525 (“the ‘525 patent”).

In particular, the ‘525 patent had a filing date of July 5, 1996, while the ‘700 patent had a filing date of November 16, 2000. Both patents deal with video game controllers that receive user input in six degrees of freedom (“DOF”), but the ‘525 patent describes a controller with a “single input member” (e.g., a single trackball), while the ‘700 patent concerns itself with a control with multiple input members (e.g., two trackballs).

The question of priority was at the core of the Federal Circuit’s decision in this case, however, because after the filing date of Anascape’s ‘525 patent but before the filing date of Anascape’s ‘700 patent, Sony released its DualShock (and DualShock 2) controller in the U.S. And as Anascape conceded, if the ‘700 patent could not claim priority to the ‘525 patent, then Sony’s DualShock controllers would be prior art to the ‘700 patent and render the ‘700 patent invalid.

Relying on established Federal Circuit precedent and a recent ruling concerning the “written description” requirement that U.S. patents must meet, Judge Newman explained that “[t]o obtain the benefit of the filing date of a parent application, the claims of the later-filed application must be supported by the written description in the parent ‘in sufficient detail that one skilled in the art can clearly conclude that the inventor invented the claimed invention as of the filing date sought.” Slip Op. at 3.

In deciding whether this requirement was met here, the court reviewed the claims, specification, and drawings of the ‘525 patent. In conducting this review, the court observed not only that the claims, specification, and drawings of the ‘525 patent focused solely on “single input member” controllers, but also that the specification of the ‘525 patent asserted that multiple input member controllers had “significant disadvantages.”

After discussing the differences between the ‘700 patent and the ‘525 patent in greater detail, the court ultimately decided that the Anascape’s ‘700 patent could not claim priority to its ‘525 patent. Based on this conclusion, the court ruled that Anascape’s ‘700 patent was invalid (as a result of Sony’s DualShock controllers counting as prior art) and accordingly reversed the lower court’s ruling that Nintendo infringed.

We will keep you posted of any further updates in this case.

May

New Case: Keller v. Electronic Arts [Publicity]

Samuel Michael Keller v. Electronic Arts inc. et al.
case number 09-cv-1967
U.S. District Court for the Northern District of California

From Law360:

Law360, New York (May 06, 2009) — A former quarterback for Arizona State University has filed a putative class action against Electronic Arts Inc. and the National Collegiate Athletics Association for appropriating and using the images and attributes of college sports players in its popular line of interactive video games in violation of NCAA rules, which prohibit commercialization of college players.Sam Keller, once a starting quarterback for ASU’s and University of Nebraska’s football teams, filed the lawsuit Tuesday in the U.S. District Court for the Northern District of California, claiming that EA video games like NCAA March Madness, NCAA Football and NCAA Basketball violate NCAA rules prohibiting the use of college athletes’ names and images in commercial ventures.

It looks like Mr. Keller is trying to get class action status, which could make this a huge case and a potential black eye for the NCAA and EA. Apparently EA has copied the appearance and likeness of players, down to their personal clothing choices and hairstyles, without actually using the players’ names. However, many of the games allow users to upload rosters that include the actual players’ names. This case just might have legs. We’ve added it to our tracking list and will keep you posted regarding substantive developments.

Feb

Case: Harmonix v. Konami (Mass.)

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.

Sep

Case: Aristocrat v. IGT (Fed. Cir. 2008)

Aristocrat v. IGT
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.

Read the Federal Circuit opinion here.

Feb

Case: Romantics v. Activision (E.D.Mich) – Publicity

The re-performance of a song for use in a video game pursuant to a non-exclusive synchronization license does not, without more, violate the original artists’ right of publicity, even if the artists are referenced, the U.S. District Court for the Eastern District of Michigan held Jan. 22 (Romantics v. Activision Publishing Inc., E.D. Mich., No. 07-14969, 1/22/08).Activision recorded a new version of the song for use within Guitar Hero. When players encountered the song, it came with the subtitle “as made famous by the Romantics.” The Romantics said that this was a violated their right of publicity, was unfair competition under the Lanham Act, and constituted unfair competition. The court disagreed.Read more here.

May

Case Update: Lucent v. Microsoft (MS fires back!)

We previously reported that Lucent sued Microsoft, alleging that the Xbox 360 infringes one of Lucent’s patents. Earlier this week Microsoft filed a counterclaim, accusing Lucent of infringing various Microsoft patents, as well as challenging the validity of the Lucent patent at issue. We will keep you posted as this case progresses.

Read more here.

May

Case: Ebay v. Mercexchange (2006) – Patents

Ebay Inc. v. Mercexchange LLC
United States Supreme Court
May 15, 2006

(Not exactly a video game case, but worth noting nonetheless, as it will apply to video game lawsuits.)

Today the United States Supreme Court reversed the Federal Circuit decision in Ebay Inc. v. Mercexchange LLC, holding that injunctive relief is to be granted in patent cases using the same traditional test as in any other case, i.e., by weighing the following four factors: (1) irreparable injury suffered by the plaintiff; (2) remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

The Court reversed the Federal Circuit’s previous “general rule” that permanent injunctions will issue once infringement and validity have been adjudged, indicating that “the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards.”

Interesting dicta indicates that the Court takes no position as to whether an injunction should issue in this case or any other case, and that there are circumstances where a patent owner who is not practicing his/her patent (patent troll?) may still be entitled to an injunction.

Read the full opinion.

Feb

Case Update: AVG v. Atari et al.

“Major U.S. game publisher and developer Atari has released the paperwork surrounding its latest financials, and embedded within the document is significant news on the firm’s $300,000 settlement of the American Video Graphics video game patent lawsuit, a suit which all parties have now apparently settled.

“The American Video Graphics suit was originally filed against game software publishers Electronic Arts, Take-Two, Ubisoft, Activision, THQ, Vivendi Universal Games, Sega, Square Enix, Tecmo, Lucasarts, and Namco in August 2004, and alleged infringement of US Patent No. 4,734,690: method and apparatus for spherical panning.

“The patent in question was originally filed in 1987 by William G. Waller of company Tektronix, Inc., and covers the situation when “a graphics display terminal performs a pan operation with respect to a view motion center to effectuate spherical panning, thereby providing perspective and non-perspective views”, in addition to a zoom feature. Taken in the context of video games, this would seem to mean that any 3D game engine that uses camera movement or zooming of any kind relative to a specific object would be liable, a description that encompasses the vast majority of current video games. …”

Read article: Gamasutra – Atari, Other Parties Settle Major Game Patent Suit

Oct

News: Int’l Gamco v. Multimedia Games (PENDING)

From Form 10-Q, dated 5/10/05, as filed with the SEC.

International Gamco, Inc. v. Multimedia Games (PENDING) S.D. Cal.

International Gamco, Inc. International Gamco, Inc., or Gamco, claiming certain rights in United States Patent No. 5,324,035, or the ‘035 Patent, brought suit on May 25, 2004 against the Company in the United States District Court for the Southern District of California, claiming that the Company’s central determinant system, as operated in the New York State Lottery, infringes the ‘035 Patent. The Company currently sublicenses the right to practice the technology stated in the ‘035 Patent in Native American gaming jurisdictions in the United States, pursuant to an agreement between it and Bally Gaming, Inc. Bally obtained the right to sublicense those rights to the Company from Oasis Technologies, Inc., or Oasis, a previous owner of the ‘035 Patent.

Oct

News: Sony and Immersion at it again…

As reported by the IP Law Bulletin, Sony and Immersion are back in court:

Sony has accused Immersion of fraud, alleging the company withheld statements from the inventor of the technology in question. Immersion fired back, saying Sony has initiated a smear campaign and accusing the company of misconduct.

In July, Sony Computer Entertainment filed a motion before Judge Wilken seeking relief from the final judgment on the grounds of alleged “fraud” and “newly discovered evidence” of purported prior art which Sony Computer Entertainment contends Immersion concealed and withheld.

“Immersion disputes and intends to vigorously defend itself against these allegations,” Immersion said in a recent Securities and Exchange Commission filing.

A hearing has been set for Nov. 4, at which time the various motions for discovery filed by both parties will be consolidated and heard by a California district court judge.

The misconduct allegations are the latest development in an extended legal battle that began over vibrating videogame controller technology.

In September 2004, a federal court awarded Immersion, a relatively unknown electronics developer, $84 million in damages after ruling that Sony infringed its patents for a technology that lets video game controllers vibrate in-sync with on-screen effects.

Sony appealed the decision, but the final judgment upheld both the infringement ruling and the monetary award. In addition, the court awarded Immersion $8.7 in prejudgment interest. The judge also ordered an injunction against Sony PlayStation controllers that used the infringing technology.

Sony appealed both the decision and the injunction in the U.S. District Court of Appeals for the Federal Circuit.

The lower court judge stayed the injunction while the federal appeals court processed Sony’s claim, ordering Sony to pay 1.37% in compulsory licensing fees for the duration of the stay.

Sony also appealed the compulsory licensing fee in federal appeals court.

Immersion had sued both Sony and Microsoft, claiming that Sony’s controllers for its PlayStation and PlayStation 2 console, as well as Microsoft’s Xbox controllers, infringe two of Immersion’s patents on its sensory feedback technology.

The Sony and Microsoft video game consoles have controllers that rumble and vibrate in conjunction with certain events, like explosions, in some of their video games.

Microsoft later settled the case out of court, agreeing to pay $26 million to Immersion.
In July of last year, Microsoft said it would pay Immersion $20 million to obtain licensing rights to the touch-based technology and $6.million to buy a 10% stake in the small company.

In 2001, Immersion settled another lawsuit over similar technology against InterAct Accessories, the largest distributor of gaming accessories in the U.S.

Immersion is represented in this matter by attorneys for Irell & Manella LLP. Sony is represented by Weil Gotshal & Manges.

The case is Immersion Corporation v. Sony Computer Entertainment America Inc. et al, case no. 4:02-cv-00710, U.S. District Court for the Northern District of California.

Oct

Case: JVW v. Interact (Fed. Cir. 2005) [P]

JVW Enterprises, Inc. v. Interact Accessories, Inc.
__ F.3d __ (Fed. Cir. 2005)

Interact Accessories Inc., a major video game accessories maker in the U.S., suffered a setback Monday after a lower court decision for the company was partially reversed by the U.S. Court of Appeals for the Federal Circuit.

Rival company JVW Enterprises Inc. sued Interact in September 1999 in the U.S. District Court for Maryland, asserting its patent for a video game accessory that reduces physical stress on hands and wrists while operating a control device. The Federal Circuit found the district court erred in its claims construction and, as a result of the lower court’s erroneous construction, Interact’s V3 and V4 racing-wheel products were cleared of infringement in a May 2003 judgment. The products simulate driving in certain games. The Federal Circuit determined, using revised claims construction on the adjustability of the devices, that the V3 product infringes JVW’s patent, while the V4 product still does not infringe (for different reasons).

JVW’s patent covers a controller-holding device that extends from a small base between the player’s legs to support a platform over the player’s lap. The platform holds the controller in place. That allows the player to use both hands to operate the game controls, rather than having to hold the controller itself.

The claims construction at the heart of the decision related to the patented device’s “lockability” feature for adjusting the controller’s position and allowing interchangeability of controllers on the mounting device. The district court’s bench trial focused on that feature, finding that Interact’s accused products cannot lock and unlock because they are sealed in place. JVW sought to eliminate the word “lockably” from its patent claim to more effectively assert it against Interact’s non-locking device, but the district court rejected the argument.

With the Federal Circuit’s new interpretation of the claims construction, the accused products are found to be lockable, even though tools would be required to unlock the controller from the mount to adjust it or attach a different controller. As a result, the V3 product was found to infringe JVW’s patent. “Neither of Interact’s alternative arguments to support the [district court] judgment are persuasive. Both would require us to limit claim language to the specific embodiment disclosed in the written description. This would be improper. We do not import limitations into claims from examples or embodiments appearing only in a patent’s written description,” the court wrote. The V4 product fared better, despite the new claims construction. The court ruled that even though the district court’s finding of non-infringement for the V4 was based on an incorrect claim construction, the product’s locking ability and interchangeability with other controllers was still not similar enough to the claims in the patent.

The patent in question was issued in 1985 to an inventor for JVW in, entitled “Apparatus for playing home video games”. It was intended to solve the problem of fatigue in the wrists, experienced after holding an Atari joystick. The patent at issues is U.S. Patent Number 4,494,754.

Read Opinion Here.

Sep

Case: Atari v. Sega (N.D. Cal. 1994) [P]

Atari Corp. v. Sega of America Inc.
869 F. Supp. 783 (N.D. Cal. 1994)

Atari brought a motion for a preliminarily injunction against the manufacture and distribution of Sega’s games on the basis of patent infringement regarding horizontal scrolling of a video game display. To obtain a preliminary injunction, the Atari had to show: (A) a reasonable likelihood that it would succeed on the merits, (B) that irreparable injury would result if the injunction was not granted, (C) that the balance of hardships weighed in Atari’s favor, and (D) that the granting of the injunction would not disserve the public interest. Hybritech Inc. v. Abbott Laboratories, 849 F.2d 1446 (Fed.Cir. 1987).

The analysis concerning a reasonable likelihood to succeed on the merits began with the scope of the patent, which hinged on the delay technology built within the horizontal scrolling. The delay means had to be positioned in the data stream between the memory and the display so as to operate on the data. On a motion for preliminary injunction, the alleged infringer had to come forward with clear and convincing evidence of defenses to the patent. If it did so, the burden then shifted to the patent owner to show that it was likely to overcome those defenses, that is, to show that the challenges to the patent lacked substantial merit. New England Braiding Co. v. AW Chesterson Co., 970 F.2d 878, 883 (Fed.Cir. 1992). Sega had only argued that the patent was not supported, but had not made a showing to overcome the presumption of validity, which was strengthened by the PTO’s consideration of all prior art. The presumption was sufficient at that stage to find that the Patent was likely to be found valid. Atari provided convincing expert testimony that Sega’s products performed the identical function claimed in the Patent, in that the Sega devices achieved fine scrolling by placing delay means in the data stream between the memory and the display. It was undisputed that Sega’s products implement fine scrolling with a structure that was different than that disclosed in the Patent. However, there was a disputed issue of fact as to whether the structures were equivalent. Given that the function was simply to impose a delay positioned between the memory and the display, there was no apparent reason why placement of the delay before rather than after the parallel-to-serial converter was a substantial change or added anything of significance. Sega raised the equitable defense of unenforceability of the Patent due to alleged inequitable conduct, but did not make a threshold showing of intent to deceive the PTO. For the reasons stated above, the Court found that Atari was likely to succeed on the merits in this action.

If both validity of the patent and its infringement were “clearly shown,” irreparable harm would be presumed. H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 390 (Fed.Cir. 1987). However, Atari’s showing, particularly with respect to whether the accused structure was equivalent to that disclosed in the Patent was not strong enough to merit a finding that infringement had been “clearly shown.” Accordingly, the presumption could not be applied in this case. See Nutrition 21 v. United States, 930 F.2d 867 (Fed.Cir. 1991). Irreparable harm may be shown if failure to issue the injunction would erode the patent owner’s market share. Hybritech, 849 F.2d at 1456. There were several indications that no irreparable harm would result from the denial of a preliminary injunction. First, when negotiations failed, Atari delayed more than three years before filing the action. The second indication of lack of irreparable harm was the fact that Atari had licensed Nintendo under the Patent. The third was the fact that Atari itself no longer used the Patent. The fourth was that it appeared likely that Sega would be able to satisfy any award of damages against it. Atari argued irreparable harm in Sega’s dominance in the market prevented Atari from attracting independent software designers, but it made no showing that Sega’s absence from the market would enable it to attract them. Sega’s showing that Nintendo, rather than Atari, was Sega’s relevant competitor undermined Atari’s unsupported argument. Accordingly, Atari’s showing was too speculative to support a finding of the likelihood of irreparable harm, particularly in light of the factors discussed above that weigh against Atari.

Concerning the balance of hardships, the certainty of harm to Sega and the non-party retailers, software developers and peripheral manufacturers outweighed the speculative possibility of irreparable harm to Atari. Thus, the balance tipped against issuance of a preliminary injunction. Atari did not make a sufficient showing of irreparable harm, especially in light of the countervailing factors, and the balance of hardships did not favor issuance of the injunction. Therefore, the motion was denied.

Aug

Case: Magnavox v. Activision (N.D. Cal. 1985) [P]

The Magnavox Co. v. Activision, Inc.
1985 WL 9469 (N.D. Cal. 1985)

In a case of infringement involving one of the earliest video game patents, Magnavox asserted its exclusive licensing rights on television console “ball and paddle” games like the classic PONG.

Pong:(Photo courtesy of David Winter, Pong Story; (c) David Winter)
The patent-in-suit was U.S. Letters Patent Re. 28,507, a reissue patent originally issued on April 25, 1972. The ‘507 reissue patent was one of several related patents obtained by Sanders Associates, another Plaintiff in this case. In 1967, Sanders became the first to combine toys, games, and television, defining the brand new art of television video games. Sanders’ subsequent patents claimed exclusive rights on a large variety of television games. Two of the asserted claims in the ‘507 patent read as follows:

51. Apparatus for generating symbols upon the screen of a television receiver to be manipulated by at least one participant, comprising:
means for generating a hitting symbol; and
means for generating a hit symbol including means for ascertaining coincidence between said hitting symbol and said hit symbol and means for imparting a distinct motion to said hit symbol upon coincidence.

52. The combination of claim 51 wherein said means for generating a hitting symbol includes means for providing horizontal and vertical control signals for varying the horizontal and vertical positions of said hitting symbol.

Deciphering the above legalese, the ‘507 patent described a common gaming scenario: a player (the hitting symbol) moving around the screen and making contact with a ball (the hit symbol), sending the ball off in a different direction. Sanders, having become a TV console gaming pioneer, had now secured the rights to a set of actions that countless video game designers would want when creating sports games, combat games, and puzzle games, etc.

In 1971, Sanders sold the exclusive licensing rights under the ‘507 patent to Magnavox, who shortly thereafter introduced the first of the ball and paddle, under the name “Odyssey.” It didn’t take long for other game designers to catch on. Atari released the television console classic “PONG” in 1975, after securing a license from Magnavox for the right to make and sell the ‘507-type ball-and-paddle game. More game designers flocked to this new market, and Activision was among the youngest and most ambitious of them.

Odyssey:
Activision designed and manufactured television console games for the Atari 2600, the Commodore 64, and for IBM and Apple computers. It produced a Tennis, Hockey, and Grand Prix game, among others, which followed the general ‘ball and paddle’ format covered by the ‘507 patent. When Activision failed to obtain a license from Magnavox before developing these games, Magnavox and Sanders filed this infringement suit.

Magnavox had much at stake in this case; they had already made approximately $40 million in licensing royalties based on the ‘507 patent and had no desire to be cut out of the loop. The stakes were raised even higher when Activision responded to the infringement action by promptly challenging the validity of the ‘507 patent with 9 pieces of prior art brought before the court. If the court invalidated the ‘507 patent, Magnavox risked losing its entire royalty stream, and being left completely behind by Atari and its television gaming competitors.

Fortunately for Magnavox, the ‘507 patent had previously endured and survived validity challenges in two previous cases. In, The Magnavox Co. v. Chicago Dynamic Industries, 201 U.S.P.Q. 25 (N.D.Ill.1977) and The Magnavox Co. v. Mattel, Inc., 216 U.S.P.Q. 28 (N.D.Ill.1982), ‘507 patent had been challenged against many of the same pieces of prior art offered by Activision. However, since Activision was not a party to those cases, the judge in this case performed an exhaustive review of the technology and the cited prior art references before making an independent decision. In the end, as in the previous cases, the court found that ‘507 patent was valid over the prior art.

Activision now faced an uphill battle, proving that its games did not infringe the claims of the ‘507 patent. Activision’s main argument was that the “means-plus-function” language of the claims (i.e. the means ascertaining coincidence, the means for imparting a distinct motion to said hit symbol, etc.) should be narrowly construed to apply ONLY to the circuitry described in the language of the ‘507 patent. Game circuitry had, of course, changed significantly in the last 10 years, and Activision wanted Magnavox’s claims to apply only to “slicer circuits that make sawtooth waveforms,” the dominant circuit technology of 1970. Most modern games, including Activision’s, now used a microprocessor design. The court, however, declined to limit ‘507 patent, “The use of the microprocessor technology, which became available only after the invention of the ‘507 reissue patent … does not alter the basic nature of those games or avoid the ‘507 reissue patent.”

After holding that Activision’s games did literally infringe, the court further noted that the Doctrine of Equivalents would have also applied in favor of Magnavox. Magnavox had enjoyed wide licensing and much commercial success based on the ‘507 patent. These facts justified a wide range of equivalents, and support the conclusion that Activision’s games were substantially the same as those claimed in the ‘507 patent.

Activision next argued that since Atari had acquired a license from Magnavox to develop games under the ‘507 patent, all purchasers of the Atari 2600 console had either an explicit or implied license to buy and use other games falling under the same patent. The court quickly rejected the explicit license argument, holding that Atari 2600 purchasers only had a license to use that gaming console, not to buy and use other infringing games. Similarly, Atari console buyers did not acquire an implicit license to buy and use Activision games. No evidence had been shown that any game purchasers relied on this legal theory of implicit licensing while purchasing an Activision game. Further, any thoughts by purchasers concerning their freedom to use Activision games came from Activision itself and not from statements or actions of the Plaintiffs. The court similarly dismissed Activision’s argument that using its games in an Atari console constituted a “permitted adaptation” of the license given to every purchaser.

The only minor victory for Activision came when the court found that its infringement of the ‘507 patent had not been willful. Activision’s founders, before starting the company, had brought their business plan to a patent attorney to seek legal advice regarding their proposed games. Since their counsel had failed to mention the ‘507 patent, Activision had acted reasonably in believing that there was no such patent.

Aug

Case: Atari v. Nintendo (Fed. Cir. 1992) [C]

Atari Games Corp. v. Nintendo of Am., Inc.
975 F.2d 832 (Fed. Cir. 1992)

I. Statement of Facts

Nintendo designed a program, the 10NES, for its Nintendo Entertain System (NES) to prevent the NES from accepting unauthorized game cartridges. The 10NES was programmed onto chips located in the NES console and in each game cartridge. Thus, only 10NES-enabled cartridges could “unlock” access to the NES console.

After a failed attempt to replicate the 10NES program, Atari, in December 1987, licensed the technology from Nintendo under strict licensing terms. Nintendo themselves placed Atari’s games in 10NES-enabled cartridges, and limited Atari, as well as other licensees, to five new NES games per year.

In early 1988, Atari applied to the Copyright Office for a reproduction of the 10NES source code, which the Copyright Office provided to Atari based on a false allegation by Atari that Atari needed the copy for pending litigation. There in fact was no pending litigation.

Based on the acquired source code, Atari developed its own program, the Rabbit program, which generated signals indistinguishable from the 10NES program and gave Atari access to the NES without Nintendo’s license conditions. The line-by-line instructions of the programs vary because Atari used a different microprocessor and programming language.

Nintendo brought suit against Atari alleging copyright infringement (and patent infringement, among other allegations). Atari brought several claims against Nintendo and asserted a copyright misuse defense. The United States District Court for the Northern District of California granted Nintendo’s request for a preliminary injunction based on copyright infringement. Atari appealed.

II. Argument

The Federal Circuit observed that while it had jurisdiction based on patent infringement claims included in the action, the court applies the law of the regional circuits, the Ninth Circuit in this case, to resolve issues of copyright law.

The Federal Circuit stated that “[t]o prevail on its copyright infringement claim, Nintendo must show ownership of the 10NES program copyright and copying by Atari of protectable expression from the 10NES program.” Ownership of the 10NES program was not in dispute, and thus, Nintendo had to prove only the copying of protectable expression.

A. Copyright Protection Extends to Computer Programs

The court determined that computer programs fall under the statutory definition of “literary works,” and thus copyright protection extends to computer programs and to instructions encoded on computer chips. “The expression adopted by the programmer is copyrightable element of a computer program,” but “the actual processes or methods embodied in the program are not within the scope of copyright law.” Thus, “[a]t a minimum, Nintendo may protect under copyright the unique and creative arrangement of instructions in the 10NES program.”

B. Reproduction of an Unauthorized Copy from the Copyright Office Is Infringement

Next, the court held that “Nintendo is likely to show successfully that Atari infringed the 10NES copyright by obtaining and copying the source code from the Copyright Office.” Atari obtained a copy from the Copyright Office by providing false information about a pending litigation, therefore obtaining an unauthorized reproduction. Thus, Atari infringed Nintendo’s copyright based on the reproduction of an unauthorized copy from the Copyright Office.

C. Efforts to Reverse Engineer Alone Do Not Support Copyright Infringement

Next, the court determined that the “Copyright Act permits an individual in rightful possession of a copy of a work to undertake necessary efforts to understand the work’s ideas, processes, and methods of operations.” Thus, “reverse engineering object code to discern the unprotectable ideas in a computer program is fair use.” This fair use, however, does not extend to commercial exploitation of protectable expression, and in addition, requires an individual to possess an authorized copy. The court thus held that reverse engineering of an authorized copy of the 10NES program that is necessary to understand 10NES is fair use, however, “Atari could not use reverse engineering as an excuse to exploit commercially or otherwise misappropriated protected expression.”

D. Substantial Similarity Exists Between Atari’s Rabbit Program and Nintendo’s 10NES Program

The court then also held that “Nintendo is likely to prove substantial similarity between the Rabbit and 10NES programs sufficient to support its infringement claims.” The court primarily relied on the fact that Rabbit incorporated unnecessary features, including features that were deleted from the original 10NES program. Thus, the court concluded that “copying of fully extraneous instructions unnecessary to the 10NES program’s functionality” suggests copying, not independent creation.

E. Copyright Misuse

Atari argued as a defense to copyright infringement that Nintendo misused its copyright. Because there was no statutory basis for the copyright misuse defense, the court determined that the defense was solely an equitable doctrine. Therefore, while copyright misuse may be a viable defense, any party seeking the defense must have clean hands. Atari was ineligible to invoke the defense because of its lie to the Copyright Office to obtain a copy of the 10NES program.

The court therefore held that the district court did not err by granting the preliminary injunction against Atari.

May

Case: Alpex v. Nintendo (Fed. Cir. 1996) [P]

Alpex Computer Corp. v. Nintendo Co.
102 F.3d 1214 (Fed. Cir. 1996)

I. Background

In the mid-1970’s, Alpex Computer Corporation developed and patented a new home video game system technology using removable, ROM-based cartridges, which was later commercialized by Atari, Mattel, and Coleco. Nintendo entered the video game system market in the early 1980’s with its popular Nintendo Entertainment System (NES). In February 1986, Alpex filed a lawsuit against Nintendo, alleging infringement of one of its video game system patents, U.S. Patent No. 4,026,555, relating to its video display system.

The ‘555 patent developed a process for generating video signals using RAM, controlled by a microprocessor, where the RAM contained a storage position corresponding to each pixel on the television screen, totaling approximately 32,000 pixels. As the cathode ray beam in the television scanned across each pixel on the screen, display data would be provided from the corresponding position in RAM. This video display system, referred to as “bit-mapping,” provided greater control and more flexibility than prior systems. Claims 12 and 13 of the ‘555 patent are reproduced below:

12. Apparatus for playing games by displaying and manipulating player and ball image devices on the screen of a display tube, comprising:
first means for generating a video signal representing a linear player image device aligned in a first direction,
second means for generating a video signal representing a ball image device,
manually operable game control means, and
means responsive to said manually operable game control means for causing said first means to generate a video signal representing the player image device rotated so that it is aligned in a second direction different from said first direction.

13. Apparatus according to claim 12, wherein said means for causing includes programmed microprocessor means and a replaceable memory having program game instructions stored therein for controlling said microprocessor means, whereby different games may be played with said apparatus by replacing said replaceable memory.

The NES video display system used what Nintendo called an “on-the-fly” technique. Instead of storing the display data for the entire screen in RAM, Nintendo’s system used eight shift registers, controlled by a picture processing unit (PPU), to alter a portion of the screen, up to 64 pixels, at a time. The NES PPU technology was faster and smoother than Alpex’s bit-mapping technology.

NES:

Alpex was successful at trial, where the jury determined that Nintendo’s technology infringed Alpex’s ‘555 patent and awarded Alpex damages totaling $253,641,445. The district court denied Nintendo’s post-trial motions and upheld the verdict. Nintendo appealed.

II. Issue

The primary issue before the Federal Circuit centered on the proper claim construction of two claims, claims 12 and 13, specifically focusing on the language “means for generating a video signal,” and whether those claims included the NES video display technology.

III. Analysis

A. Trial Court

Pursuant to 35 U.S.C. § 112 ¶ 6, the trial court interpreted “means for generating a video signal” based on the structure defined in the ‘555 patent specification and drawings. Specifically, the jury was instructed that claims 12 and 13 corresponded to the structure in Figure 2 of the ‘555 patent, which consisted of ROM memory, a microprocessor, display RAM, display RAM control, and a television interface.

Nintendo argued that the trial judge approved an erroneous claim construction. Nintendo reasoned that its use of shifting registers for changing up to 64 pixels at a time was different from Alpex’s use of a RAM-based, bit-mapping system for changing one or all of the 32,000 pixels on a screen at a time. Nintendo also argued that Alpex was barred from claiming that Nintendo’s technology infringes on the ‘555 patent, because during prosecution, Alpex distinguished its technology from a prior art patent using shifting registers. Alpex argued that Nintendo waived its right to use prosecution history for prosecution history estoppel purposes.

A. Federal Circuit

1. Literal Infringement

The Federal Circuit first recognized that claims 12 and 13 were means-plus-function claims, and thus § 112 ¶ 6 required interpreting those claims “in view of the structure disclosed in the specification of the patent.” The court held, however, that “positions taken before the PTO may bar an inconsistent position on claim construction under § 112 [¶ 6.]” Therefore, Alpex’s claims cannot be construed to cover a technology that has the same functional and structural traits as a prior art patent that Alpex admitted was not covered by its claims during prosecution. By allowing such a construction, the court concluded that the district court erred in sustaining the jury verdict of literal infringement.

2. Doctrine of Equivalents

The Federal Circuit then established that “equivalency under the doctrine of equivalents and equivalency under § 112 ¶ 6 . . . each has a separate origin, purpose, and application.” Under § 112, the concern is whether the structures of the claimed device and the accused device are equivalent, whereas under the doctrine of equivalents the concern is whether the devices are only “insubstantially different.” The court concluded that because Alpex’s expert made only conclusory statements regarding the substantial similarity in terms of function/way/result, the evidence “does not support a finding of infringement under the doctrine of equivalents.” Further, the court expressed that the purpose of the doctrine of equivalents is to “prevent others from avoiding the patent by merely making ‘unimportant and insubstantial changes and substitutions in the patent,’” and held that Nintendo’s use of shift registers instead of RAM was not “merely an unimportant and insubstantial change.”

Thus, the Federal Circuit reversed the district court’s judgment as to infringement and damages.

Thanks to Brandon Rash for his assistance in the preparation of this case summary.

May

Update: Home Gambling Network v. Piche et al. (P) [D.Nev.] NEW CASE

Home Gambling Network et al. v. Piche et al., CV-S-05-0610-KJD-LRL (D.Nev, filed May 16, 2005)

On May 14, 2012,
A federal judge in Nevada on May 14 reversed a magistrate judge’s recommendation to impose terminating sanctions against defendants in a patent infringement case and ordered the new magistrate judge in the case to conduct an evidentiary hearing based on evidence presented by the parties during the briefing on the defendants’ objection

It’s on the fringe as far as video game lawsuits go, but this new case filed on May 16, 2005, does allege patent infringement involving online video games… of the wagering type.

If the case caption didn’t already give it away, the patent (U.S. Pat. No. 5,800,268) is directed to a Method Of Participating In A Live Casino Game From A Remote Location. Fig. 1 of the ‘268 patent:

Representative claim 1 (also the shortest independent claim in the patent), recites:

1. A method for a player to remotely participating in a live casino game comprising:
(i) establishing a first information line between a player at an interface station located remotely from the casino for the transmission of live television signals and data signals to a player interface station located remote from the casino, said interface station including a player display to display a live television image of a live game to the player;
(ii) from said interface station, the player transmitting over said first information line to the casino account information related to an account maintained by the player at a third party financial institution;
(iii) the casino opening a second information line with the third party financial institution in response to receipt of said account information;
(iv) maintaining said second information line open with the first information line;
(v) the casino transmitting over the first information line data indicative that the player can make a bet;
(vi) the player from their interface station transmitting over the first information line to the casino bet information indicating a bet being made by the player on the live game;
(vii) in response to the transmitted bet, the casino over the second information line verifying the status of the player’s account, the casino accepting the bet if the player’s account has sufficient funds and otherwise denying the bet;
(viii) the casino transmitting data over the first information line data indicative that no more bets can be made, said data displayed at the display with the television signal;
(ix) the player over the first information line interacting with the casino to control the play of the game until an outcome is obtained;
(x) determining from the outcome whether the player’s bet is won or lost, said player viewing the live play of the game at the display to confirm the outcome;
(xi) in the event of interruption of said first information line, said casino completing the play of the game to determine the outcome pertaining to the player’s wager; and
(xii) the casino issuing instructions over the second information line to credit the player’s account if the player has won the bet in the amount of the bet and the player’s winnings and to debit the player’s account if the player’s bet is lost.

Home Gambling Network has named 18 defendants, each of which operate one or more online gambling web sites. In an interesting twist, it appears from the complaint that Home Gambling Network may have already provided a license to one or more of the defendants for certain games. However, in addition to alleging patent infringement, Home Gambling Network is attembling to nullify the license on the grounds that each of the defendants, by accepting a bet from the inventor of the ‘268 patent (who resides in Nevada), has allegedly committed a felony in the State of Nevada by accepting bets from within the State of Nevada while not being licensed by the Nevada Gaming Commission. Home Gambling Network’s argument is that any license granted thus has been used for unlawful purposes and is therefore null and void.

We’ll add this case the watch list, due to the online gaming nature of the ‘268 patent. I’m betting the case settles…

May

Update: Konami v. Roxor Games (P) [E.D.Tex]

Konami Corporation v. Roxor Games Inc., 2-05CV-173 (E.D.Tex), filed May 9, 2005.

Konami Corporation has filed a lawsuit against Roxor Games, Inc., in the Federal District Court for the Eastern District of Texas, alleging patent infringement, trademark infringement, unfair competition, trademark dilution, and trade dress infringement, under both Federal and Texas law. The issue: Konami’s game Dance Dance Revolution:

Konami alleges that Roxor sells and distributes an In The Groove (ITG) video arcade game kit, that a purchaser can use to retrofit one of Konami’s Dance Dance Revolution (DDR) arcade games. As alleged by Konami, the kit comes with instructions on how to remoce the original main circuit board from the DDR game and replace it with the ITG game circuit board. The following was clipped from the InTheGoove.biz web site earlier today:

The patent at issue is U.S. Pat. No. 6,410,835, entitled Dance Game Apparatus And Step-On Base For Dance Game, issued June 25, 2002. Figure 2 of the ‘835 patent is shown below:

While the Complaint does not specifically call out particular claims, claim 1 of the ‘835 patent is reproduced below:
1. A dance game apparatus comprising: music output means for outputting one piece of music from at least one stored piece of music; a floor panel having a step-on base section; said step-on base section comprising a top panel and a support member which supports the panel; detection means for detecting a stepping operation on said step-on base section; said detection means comprising stepping sensors interposed between said panel and said support member at mutually opposing positions of said panel; said stepping sensors comprising longitudinally extending conductive sections having a longitudinal length, one of said conductive sections being moveable laterally relative to another of said conductive sections at any one of a plurality of positions along the longitudinal length of said one conductive section to effect contact with said other conductive sections at any one of a plurality of corresponding contact positions such that said stepping sensors detect stepping on said step-on base sections at plural locations corresponding to said plurality of corresponding contact positions, guidance means for performing a stepping operation instruction to said step-on base section in time with said music; measurement means for measuring a time deviation between the timing of a stepping operation instruction and the time at which the fact that said step-on base section is stepped on is detected by said detection means; and evaluation means for providing a higher score the smaller the measurement result.

Read Konami’s press release here.

We’ll add this case to our watch list and keep you posted of future developments.

Apr

Update: Hasbro v. RADgames (P, TM) [TrialCt] 2005

Well not exactly a video game… yet, but it might apply sometime in the future. Hasbro sued RADgames in the Southern District of New York back in February for RADgames’ add-on to Monopoly. The court initially granted Hasbro a Temporary Restraining Order pending a hearing for a Preliminary Injunction. RADgames developed a modified version of Monopoly which uses a second game board in conjunction with the original. Figure 8 of U.S. Patent 5,810,359 is reproduced below:

On April 7, 2005, United States District Court Judge Hon. Gerard E. Lynch lifted the TRO and deined Hasbro’s request for a Preliminary Injunction, stating that “RADgames has added a new, original creation to the market which is designed for use with the plaintiff’s product but is distinctive in its own right.”

While RADgames patents are primarily directed to board games, the claims (at least on their face) are not all limited to physical creations, and could also apply to versions of the game implemented as a video game or computer game.

The case is Hasbro, Inc. v. Radgames, Inc., case no. 1:05-cv-02324-GEL, U.S. District Court for the Southern District of New York.

1 2 3 4 5 67

Subscribe