League of Legends – Patent Arcade

May

2020

PalTalk Heads to the Federal Circuit

PalTalk Holdings Inc. v. Riot Games Inc. et al.
United States Court of Appeals for the Federal Circuit
Case Nos.: 19-2035, 19-2036, 19-2037, and 19-2038
Filed June 17, 2019

Video game chat company PalTalk Holdings Inc. (“PalTalk”) has appealed a Patent Trial and Appeal Board (“PTAB”) ruling to the Federal Circuit. The PTAB’s ruling invalidated two PalTalk patents, 5,822,523 (the “’523 Patent”) and 6,226,686 (the “’686 Patent”), as being obvious over prior art references including WO 94/11814 to Aldred et al. (“Aldred”). This PTAB ruling is related to a lawsuit that PalTalk filed against video game developers Riot Games and Valve Corp. relating to Riot Games’ League of Legends game and Valve’s Dota 2.

The ’523 and ’686 Patents relate to in-game messaging as applied to video games. In the PTAB’s ruling, the PTAB rejected PalTalk’s argument that the ’523 Patent requires a “player’s computer to send a message to the server to create, join, or leave a group” and that Aldred did not render obvious the ’523 or ’686 Patents because Aldred did not require the sending of requests to a server. PalTalk has appealed the PTAB’s rulings as to both the ’523 and ’686 Patents.

Earlier suits instituted by PalTalk alleged infringement of these two patents by Sony Computer Entertainment America Inc. and Activision Blizzard Inc. Both of those earlier suits were resolved when the companies agreed to license the infringed patents from PalTalk.

We will continue to provide updates when they become available.

May

2020

Blizzard Takes New Stance on Custom Game IP

Following the release of the remastered edition of Blizzard Entertainment’s classic real-time strategy game “Warcraft 3” as “Warcraft 3: Reforged,” Blizzard also updated its Custom Game Acceptable Use Policy. There were two notable changes to this policy that has caused a reaction among long-time fans of the franchise.

The new policy bans any custom games that use copyright material. This is not an unusual requirement in games which permit users to submit in-game modifications, but fans have reacted negatively to the change given the history of Warcraft 3. Originally, Warcraft 3’s map editor was heralded as revolutionary, as it allowed users to creative complex and breathtaking scenarios using the Warcraft 3 engine. Warcraft 3’s map editor also allowed users to modify the textures of the game, and users quickly began to add content from their favorite franchises, such as Super Mario, Dragon Ball Z, and Lord of the Rings. While Blizzard’s approach to protect itself from intellectual property infringement liability is not surprising, it is notable that when Warcraft 3: Reforged was announced at Blizzcon a few years ago, it was announced that all custom maps compatible with the original game (that is, Warcraft 3) would be playable in the remastered version of the game (that is, in Warcraft 3: Reforged). In practice, users’ experiences have been quite different: any users that dare play maps comprising content from other franchises (e.g., Nintendo games) is swiftly banned, even if those maps had previously been playable in Warcraft 3.

Furthermore, the much larger issue that has drawn the ire of Blizzard fans online has been the change to Blizzard’s policy detailing the ownership of custom games in the Warcraft 3: Reforged engine. According to the new policy, all custom games created in Warcraft 3: Reforged belong to Blizzard, not the creators. In the same vein, Blizzard has stated that they own an instant and total copyright ownership of all custom games created in Warcraft 3: Reforged. While this move is also unsurprising, it does mark a distinct shift from Blizzard’s more relaxed attitude with respect to original Warcraft 3 custom games.

The latter policy change may be the direct result of the overwhelming success of the Defense of the Ancients custom games in Warcraft 3, which later became the wildly successful stand-alone MOBA games Dota 2 and League of Legends. Because Blizzard did not maintain a property right over the original Defense of the Ancients custom games, competing developers Valve and Riot Games both made monumental profits from these games while Blizzard was left with nothing. Going forward, it appears Blizzard does not want to lose out on the battle for new and hugely profitable game designs that emerge using their tools.

While it does not appear any new legal issues will emerge from this change, it will be fascinating to see how video game companies adjust to the new IPs their games create and how they can try to monetize the inventions they helped make possible.

Apr

2020

Video Game Chic

In a totally unexpected twist, luxury fashion brand Louis Vuitton has announced a partnership with video game developer Riot Games to design in-game champion skins for the game League of Legends.

In addition to the in-game champion skins, Louis Vuitton will be releasing a capsule collection designed by director Nicolas Ghesquiere and a Louis Vuitton-designed traveling case for the League of Legend’s World’s Championship trophy. This is not the first time Louis Vuitton has designed a trophy traveling case: they also designed a traveling case for the World Cup soccer trophy.

Riot Games stated that eSports is “the next frontier for a lot of brands who have been in the traditional sport space.” This partnership is planned ahead of the upcoming League of Legends World Championship, which ends on November 10 in Paris this year.

This is not the first partnership Riot Games has engaged with outside the video game space. Earlier this past year, Riot partnered with a number of K-Pop stars to release a music video called K/DA – POP/STARS. That music video has already achieved more than 260 million views on YouTube. Riot has also partnered with other music celebrities, such as Imagine Dragons and Zedd.

This is far from the first major partnership in the video game world. For example, recently, Epic Games’ Fortnite featured NFL-branded content. As eSports continues to gain prominence and popularity, it seems only natural for partnerships with brands hoping to reach new consumers will begin to emerge and become more common.

Developments like these are exciting: the video game industry has expanded into many new and unfamiliar areas over the past couple years! Of course, game companies and potential sponsors should still exercise caution: even the best-intentioned brand deals require careful negotiation and thoughtful contracts.

Feb

2020

Riot Games Rioting Over Esports Team’s Trademark Infringement

Riot Games Inc. v. Riot Squad Esports LLC
United States District Court for the Central District of California
Case No. 2:19-cv-08626
Filed October 7, 2019

Video game company and developer of popular MOBA video game League of Legends, Riot Games Inc., has filed a trademark suit in California’s Central District against “Riot Squad,” an eSports team.

Riot Games’ complaint alleges that Riot Squad chose this name to confuse consumers into believing that the eSports team is associated with the developer. In the complaint, Riot Games states it owns trademark registrations on the names “Riot” and “Riot Games” that relate to entertainment services, clothing, toys and games, and arranging and conducting esports competitions.

The eSports team Riot Squad identifies itself as a professional eSports organization with teams that compete in Epic Games’ Fortnite, Valve’s Counter-Strike, and Electronic Arts’ Apex Legends. Amusingly, Riot Squad doesn’t compete in Riot Games’ League of Legends.

Riot Games has stated causes of action for Lanham Act trademark infringement and false designation of origin, as well as California unfair competition law. Riot Games is seeking injunctive relief and damages for this infringement.

We will continue to update this story as the case unfolds.

Jun

2019

Bots and Cheaters Lose as League of Legends is awarded a $10 Million Payout

Riot Games, Inc. v. Stefan Delgado Argote et al
Case number 2:16-cv-05871
District Court for the Central District of California
Decided: March 1st 2017

In August 2016, California-based Riot Games, Inc. sued the makers of a service called LeagueSharp. LeagueSharp was a software product that was designed to allow players to hack Riot’s game “League of Legends.” The complaint claimed that the software allowed players to see hidden information, play an automated version of their game and accelerate through the game faster than would be otherwise possible for a human player. Riot alleged that selling the product violated the Digital Millennium Copyright Act because it was technology that was specifically designed to dodge Riot’s anti-cheat software. The suit was filed against three individuals as well as Chachani Mistie y Pichu Pichu SRI, which is a Peru-based company. It was allegedly a shell company formed by the makers of LeagueSharp in order to evade liability. Alleged violations included trafficking in circumvention devices, an unfair competition claim, and intentional interference with contractual relations.

The complaint alleged that LeagueSharp charged customers a $15 fee per month in order to obtain and use its service. The complaint alleges that LeagueSharp also offered a separate “botting service” for $50 per month which allowed users to automate multiple accounts simultaneously.“League of Legends” is free to play, but players win in-game currency in successful matches that can be used to purchase new characters. Players can also purchase “skins” for their characters, giving them a new look or new phrases to say with some themed according to holidays or fictional works. In addition to harming the gaming community, Riot Games claimed that the operators of LeagueSharp attacked its servers and advised customers to dispute in-game transactions fraudulently. When Riot tried to resolve these problems by reaching out directly to LeagueSharp’s creators, the creators allegedly didn’t respond and then leaked an employee’s private information.

On March 1st, 2017, Riot received both a $10 million payout and a court-ordered ban on the makers of LeagueSharp. The parties reached a confidential settlement that will govern the release of the $10 million judgment, but the judgment amount was made public by U.S. District Judge Ronald S.W. Lew during the March 1st filing. Judge Lew signed off on the injunction and settlement, which call for the makers of the software to never play a Riot game again and relinquish control over the websites used to sell the software, among other provisions. The terms of settlement appear similar to a previous cases, MDY v. Donnely, and Jagex Limited v. Impulse Software et al.

Like countless other video games – whether on a PC, gaming console, or mobile device – League of Legends has been plagued with cheaters and bots. On top of causing unfairness in the game, aggressive botting and cheating third party software can take up large amounts of precious server resources. Freeing those resources can potentially allow increased reliability and performance benefits. Dealing with this issue can also have an opportunity cost. Developers could possibly have to spend time dealing with cheaters that they could have spent developing new features. While motives leading to cheating in games can vary from competitive gaming to exploitative commercial ventures, cases such as these indicate that there is a substantial amount of money on the line to control the rampant spread of third party software.

Additional Research By: Rachel Johns

Jun

2019

Federal Circuit Affirms PTAB Obviousness Ruling

Game and Technology Co. Ltd. v. Activision Blizzard Inc. et al.
Case Number 18-1981
U.S. Court of Appeals for the Federal Circuit, June 21, 2019

To wrap-up our earlier posts on this case: On Friday, June 21, 2019, the Federal Circuit affirmed that a Game and Technology Co. patent relating to technology for customizing characters in an online game is invalid. This decision affirms the earlier PTAB decision on the 8,253,743 Patent.

The Court’s opinion stated that there was substantial evidence to support the Patent Trial and Appeal Board’s finding that the Game and Technology Co. patent was obvious based on prior art. The prior art cited was a user manual for the Blizzard Entertainment video game Diablo II.

The suit was first filed by Game and Tech against Blizzard in 2015 and separately filed against Riot Games Inc as well. The complaint alleged that the video games World of Warcraft and League of Legends had incorporated Game and Tech’s patented technology relating to customizable game avatars. However, the suit was stalled when Activision Blizzard and Riot Games asked for PTAB review.

During the PTAB inter partes review (IPR) it was found that Game and Tech’s patent was obvious based on the Diablo II manual alone. Game and Tech suggested a general rule that a single reference, such as this manual, could not alone support obviousness. However, the Federal Circuit reiterated its position and affirmed the PTAB by stating that “a patent can be obvious in light of a single prior art reference if it would have been obvious to modify that reference to arrive at the patented invention.” As such, obviousness can be found even without a secondary reference.

Jun

2019

Riot Games Gender Discrimination Investigation Accelerating

The State of California Department of Fair Employment and Housing made a statement, on Wednesday, June 12th, that it would be progressing forward in its investigation of popular video game developer Riot Games, Inc., known for producing the MOBA League of Legends. The state is filing an investigation enforcement suit as part of its investigation into gender discrimination at Riot. The Department of Fair Employment and Housing (DFEH) has asked the courts to compel Riot to provide employees’ pay information for the ongoing investigation.

The statement further included that DFEH was looking into “alleged unequal pay, sexual harassment, sexual assault, and gender discrimination in selection and promotion.” The investigation originally began in October 2018, and according to DFEH, Riot has so far been uncooperative with the State.

Because this is not an IP issue we likely will not provide further coverage, but this litigation could have a wide-ranging impact on the entire video game industry. This litigation could further bolster the popular grassroots movements for developer unionization and labor rights in the video game industry that has been gaining momentum the past couple years.

May

2018

PTAB Institutes Inter Partes Review of Group Messaging Patent

On May 15, 2018, the Patent Trial and Appeal Board (the “PTAB”) instituted two Inter Partes Review (“IPR”) proceedings against U.S. 5,822,523 (the “’523 Patent”). The ’523 Patent generally relates to group messaging in interactive applications. The petitioner is Riot Games, Inc. (“Riot Games”), maker of popular titles like League of Legends The patent owner is Paltalk Holdings, Inc. (“Paltalk”). From 2006-2009, the ’523 Patent was asserted by Paltalk in patent infringement cases against Microsoft, Sony, Activision Blizzard, NCsoft, Jagex, and Turbine Inc., among others.

Claim 1 of the ’523 Patent reads:

1. A method for providing group messages to a plurality of host computers connected over a unicast wide area communication network, comprising the steps of:

providing a group messaging server coupled to said network, said server communicating with said plurality of host computers using said unicast network and maintaining a list of message groups, each message group containing at least one host computer;

sending, by a plurality of host computers belonging to a first message group, messages to said server via said unicast
network, said messages containing a payload portion and a portion for identifying said first message group;

aggregating, by said server in a time interval determined in accordance with a predefined criterion, said payload portions of said messages to create an aggregated payload;

forming an aggregated message using said aggregated payload; and

transmitting, by said server via said unicast network, said aggregated message to a recipient host computer belonging to said first message group.

Both Riot Games and Paltalk agree that the ’523 Patent expired. While it might seem strange for Riot Games to attack the validity of an expired patent, a patent owner may sue for damages that were incurred when their now-expired patent was valid, though they cannot recover damages that were incurred more than six years prior to the filing of the lawsuit. As it appears that the ’523 Patent expired in 2016, Paltalk could potentially file patent infringement lawsuits up until around 2022, but only for damages that they incurred prior to 2016, and only so long as their damages were in the six years before they filed the lawsuits. For example, if Paltalk sued a game company for patent infringement on Jan. 1, 2021, they could recover damages from Jan. 1, 2015, up until the date the ’523 Patent expired in 2016.

Jun

2013

Parallel Networks, LLC v. Riot Games, Inc.

Parallel Networks, LLC v. Riot Games, Inc.
United States District Court for the District of Delaware
Case No.: 13-183 (RGA); filed on February 1, 2013.

This is a patent infringement case in which Parallel Network (“Plaintiff”) is suing Riot Games (“Defendant”) for direct infringement, inducing infringement, or contributing to an infringing use. The patents in question are United States Patent No: 7,188,145 (“the ‘145 patent”) and divisional U.S. Pat. No: 7,730,262 (“the ‘262 patent”). These patents were issued to Plaintiff on March 6, 2007, and June 1, 2010, respectively.

The patents are for a “method and system for dynamic distributed data caching”. Specifically, these patents are for software that allows for peer-to-peer data caching to enable more effective use of bandwidth as well increasing download speeds. The software utilizes the “always-on” nature of computers and unused processor power to create a “cache community”. This allows users to access stored content without having to retrieve it from a potentially overly burdened origin server.

Plaintiff alleges that Riot Games is infringing upon its patent through its products, specifically the online game “League of Legends”. Plaintiff further alleges that the League of Legends download client utilizes the patents in question which causes Defendant’s customers to infringe upon Plaintiff’s patents. In this way, Defendant is directly infringing upon Plaintiff’s patents as well as inducing and contributing to the infringement of said patents.

On March 28, 2013, Defendant filed a motion to dismiss Plaintiff’s inducement and contributory infringement claims. In an Opening Brief in Support of Motion to Dismiss, Defendant alleges that Plaintiff has not sufficiently alleged facts to show that there was intent on the part of Riot Games to infringe the patents in question. Defendant alleges that Plaintiff simply makes a recitation of the elements necessary for an infringement action rather than actually detailing how Defendant’s conduct infringed upon its patents. Furthermore, Defendant alleges that it did not have pre-suit knowledge of the patents, and even if it did infringe upon the patents, it should not be open to any pre-suit damages. On April 15, 2013, Plaintiff filed an Answering Brief in Opposition to Defendant’s Motion to Dismiss. In its brief, Plaintiff cites case law which states that, “‘if a complaint sufficiently identifies . . . the patent at issue and the allegedly infringing conduct, a defendant’s receipt of the complaint and decision to continue its conduct despite the knowledge gleaned from the complaint’ sufficiently pleads a prospective claim of indirect infringement.” (Walker Digital, LLC v. Facebook, Inc., 852 F. Supp. 2d, 559, 565 (D. Del. 2012). Furthermore, Plaintiff alleges that Defendant’s conduct of making its website available to customers to download its product by using the patents in question sufficiently shows intent.

This case displays just how significant the method of delivery can become for video game publishers and developers, especially in light of the ever-increasing use of digital distribution for games. Although both parties have filed briefs regarding the Motion to Dismiss, a hearing has yet to be held, and the case has a long way to go.We will update when more information becomes available.

PalTalk Heads to the Federal Circuit

Blizzard Takes New Stance on Custom Game IP

Video Game Chic

Riot Games Rioting Over Esports Team’s Trademark Infringement

Federal Circuit Affirms PTAB Obviousness Ruling

Riot Games Gender Discrimination Investigation Accelerating

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