Northern District of California – Page 2

Aug

2012

New Case: Technology Properties Limited LLC et al v. Nintendo Co., Ltd et al

Technology Properties Limited LLC et al v. Nintendo Co., Ltd et al

U.S. District Court, Northern District of California
Case no. 5:2012cv03881 , Filed on July 24, 2012

On July 24, 2012, Plaintiffs filed a complaint alleging Defendants Nintendo Co., LTD and Nintendo of America, Inc. infringe upon three of its patents: Patent No. 5,440,749 (“the ‘749 Patent”) entitled “High Performance, Low Cost Microprocessor Architecture,” Patent No. 5,530,890 (“the ‘890 Patent”) entitled “High Performance, Low Cost Microprocessor,” and Patent No. 5,809,336 (“the ‘336 Patent”), entitled “High Performance Microprocessor having Variable Speed System Clock.” Plaintiffs allege that Nintendo has infringed upon these patents through its products such as the DSi. More specifically, Plaintiffs allege in their complaint that Defendants “encourag[e] and facilitat[e] others to perform actions known by Defendants to infringe with the intent that performance of the actions will infringe” by providing the DSi with a USB input/output interface. This allows peripheral devices to be connected to the DSi that may have “a clock independent of the CPU clock connected to the central processing unit on the microprocessors of the DSi.” Plaintiffs also allege that Defendants have instructed consumers to connect the DSi and peripheral devices in such a way that infringes upon Plaintiffs’ patents. Plaintiffs ask for damages in an amount to compensate Plaintiffs for infringement of the patents and an award of enhanced damages from Defendants’ “willful” infringement, among other things.

This case will be updated as new information becomes available.

Aug

2012

Electronic Arts Reaches $27 Million Settlement in Antitrust Suit

Pecover et al v. Electronic Arts Inc.

U.S. District Court, Northern District of California

Case No. 08-cv-02820 CW, Filed June 5, 2008

A settlement has finally been reached in the lengthy battle over Electronic Arts’ football video games. In 2008, plaintiffs sued Electronic Arts alleging that Electronic Arts violated several antitrust and restraint of trade laws by entering into exclusive licensing agreements with the NFL, NFL Players Association, AFL, NCAA, CLC, and ESPN. Through these licensing agreements, the plaintiffs alleged that Electronic Arts excluded competitors from entering the football video game market and was able to inflate prices due to its monopoly in violation of several antitrust and fair trade laws including California’s Cartwright Act, Cal. Bus. & Prof. Code Sec. 16720, et seq., California’s unfair Compettiion Law, Cal. Bus. & Prof. Code Sec. 17200, et seq., and the federal Sherman Act, 15 U.S.C. Sec. 2. Plaintiffs claimed that Electronic Arts entered into exclusive licensing agreements as a response to competition from Take-Two Interactive Software, Inc. that offered discount pricing. In December 2009, Plaintiffs filled a motion to certify the class that was granted by Chief Judge Walker who certified a nationwide class that includes “[a]ll persons in the United States who purchased Electronic Arts’ Madden NFL, NCAA or Arena Football League brand interactive football software, excluding software for mobile devices…with a release date of January 1, 2005.”

To give you an idea of how extensive this case became, Class Counsel analyzed and reviewed more than 2 million pages of documents produced by Electronic Arts and third parties and took 22 depositions, and responded to 1,295 requests for admission during discovery. Experts were brought in by both parties who produced “two lengthy reports involving economic analyses of the parties’ claims and defenses” exploring such topics as the economic implications of Electronic Arts’ exclusive licenses. During this discovery period, Plaintiffs and Defendants participated in the first of two mediations, however no agreement was made. During the second mediation that took place on May 4, 2012, the parties reached this settlement agreement. As part of the settlement agreement, Electronic Arts agreed to pay $27 million into a settlement fund. In addition, Electronic Arts can no longer enter or renew an exclusive trademark license with the AFL for 5 years, nor can Electronic Arts renew an exclusive collegiate football trademark license with the CLC that is set to expire in 2014. Part of this settlement agreement also prohibits Electronic Arts from entering any new exclusive trademark license with the NCAA, CLC, or NCAA member institution covered by the exclusive license for “a period of 5 years thereafter.” The agreement also allows counsel for plaintiffs to request fees up to 30 percent of the fund not exceeding $2,000,000, and that Electronic Arts would not “oppose a request for attorney’s fees and costs within these limits.”

For Class Members seeking to get compensation out of the Net Settlement Fund (the amount left over in the fund after other costs have been deducted), they can expect payments according to the type of video game purchased. For example, after filing a claim form, a class member who purchased a Sixth Generation Title is entitled to a cash payment of “up to $6.79 per unit purchased, up to a maximum of eight units ($54.32).” Comparatively, a purchaser of a Seventh Generation Title is only entitled to $1.95 per unit up to $15.60 for 8 units. If the Net Settlement Fund does run out, then the parties will identify other Sixth Generation purchasers who have not filed a claim form through addresses that they had provided to Electronic Arts.

If you are seeking more information on this case or the settlement agreement, you can visit www.easportslitigation.com.

Jun

2012

New Case: OG International, LTD. et al v. Ubisoft Entertainment et al

OG International, LTD. et al v. Ubisoft Entertainment et al

United States District Court, Northern District of California

Case No. 3:2011cv04980, Filed On October 7, 2011

Both OG International and Ubisoft create games that focus upon the user performing dance steps. Using dance in games is not a new concept and it has been featured in games such as Konami’s “Dance Dance Revolution.” OG developed its own dancing game, “Get up and Dance,” in 2011. This game taught users how to perform dance steps through an avatar displayed upon the screen, similar to Ubisoft’s “Just Dance” series. After OG’s game debut at the Electronic Entertainment Expo, Ubisoft contacted OG claiming it had infringed upon its copyright and trade dress. Ubisoft asserted that OG’s avatars infringed upon its copyrights, however OG countered that these avatars were generic and not entitled to protection.On October 7, 2011, OG filed a suit for declaratory judgment. Ubisoft followed by filing a motion for a temporary restraining order and preliminary injunction. The court refused Ubisoft’s motion, however, stating that Ubisoft “failed to make a clear showing that it is entitled to [a restraining order and preliminary injunction]…[and] has not demonstrated a clear likelihood of success on the merits, nor a clear showing of irreparable harm.”

This page will be updated when we receive new information.

Jun

2012

New Case: Shared Memory Graphics, LLC v. Apple Inc.

Shared Memory Graphics, LLC v. Apple Inc. et al

United States District Court,Northern District of California

Case No. 3:10-cv-02475, Filed On June 4, 2010

In June of 2010, Shared Memory Graphics, LLC initiated a lawsuit against Apple, Nintendo, Samsung, and Sony for infringing upon two of its patents. The patents in question, the ‘644 and ‘279 patent, describe a “Shared Memory Graphics Accelerator System.” According to the complaint, the patented graphics accelerator system “enhances performance…by utilizing fast embedded memory in conjunction with off-chip memory without sacrificing the ability to expand the frame buffer size, if desired.” Shared Memory claimed that products such as the Apple iPhone, Nintendo Wii, and Sony PS2, included the infringing technology. For example, Shared Memory asserted that the graphics accelerator systems in Sony products infringe upon its patents because they “incorporate one or more on-chip frame buffer memory elements as well as one or more off-chip frame buffer memory elements.”

In 2011, Sony and Apple reached a settlement with Shared Memory. According to Law360, Shared Memory voluntarily agreed to drop all charges against Nintendo and the judge issued an order granting joint stipulation for dismissal with prejudice on January 11, 2012.

Jul

2011

Online Social Gaming Suits Abound

Zynga Inc. v. Vostu USA Inc.
United States District Court, Northern District of California
Case No. 3:11-cv-02959-MEJ, Filed June 16, 2011

Zynga, arguably the largest presence in online social gaming today (and who recently filed for a $1B IPO!), has sued the Brazilian social gaming company Vostu for copyright infringement of its CityVille game. According to Zynga’s complaint, Vostu’s MegaCity blatantly copies every aspect of CityVille… right down to the mistakes and bugs in the game that Zynga never got around to correcting! Zynga also alleges that Vostu exists almost solely for the purpose of copying every Zynga game down to every game mechanic, virtual item, and storyline. The complaint says “Vostu’s business model is simple: copy Zynga’s successful games. While imitation may be the sincerest form of flattery, the copying of valuable intellectual property rights is theft.” Zynga even submitted a side by side comparison of a number of games for which it alleges infringement in the lawsuit.

Zynga itself is no stranger to defending allegations of copyright infringement from other game developers (we recently posted on a lawsuit brought by SocialApps accusing Zynga of having copied source code for games like FarmVille and CityVille) Zynga alleges here though, that Vostu’s infringement crosses the line from “inspiration” to copying every detail of the games. Vostu, in a sharply worded response, appeared to view this as hypocrisy. According to Vostu spokesman, Davidson Goldin, “Zynga has been accused of copying so many games that they’ve sadly lost the ability to recognize games like ours that are chock full of original content and have been independently created.”

You can read more of Vostu’s public statement here. No response has yet been filed in court, but we’ll monitor the case and keep you updated.

Jul

2011

Case Update: Keller v. Electronic Arts, Inc.

Keller et al. v. Electronic Arts, Inc. et al.

U.S. District Court, Northern District of California

Case No. 09-cv-1967

Case Update:

When last we checked in on this case (02/08/2010), plaintiffs had survived motions to dismiss the case from both EA and the NCAA. On May 2, 2011, Judge Wilken dismissed claims that EA, along with the NCAA, conspired to avoid paying student basketball and football players for the use and sale of their likenesses in popular NCAA-themed video games. However, plaintiffs were given two weeks to amend their anti-trust allegations, and the court refused to throw out any right-of-publicity claims.

The publicity claims accuse EA of using the players’ images without their permission, and the NCAA of turning a blind eye to EA’s actions in order to reap substantially higher royalty rates, given the greater popularity of games showing players that look like the real student-athletes. These claims are now set to move forward into discovery.

For more details on developments on both the antitrust and rights of publicity fronts, see Law360.

Original Post:

On Monday, February 8, 2010, the U.S. District for the Northern District of California ruled on a motion to dismiss filed by Electronic Arts (“EA”), the National Collegiate Athletics Association (“NCAA”), and the Collegiate Licensing Company (“CLC”) in Keller v. Electronic Arts, Inc., Case No. 09-cv-01967-CW.

While the court granted the defendants’ motion to dismiss as to some of Keller’s claims, the court denied the motion to dismiss as to some of Keller’s claims against EA.

Keller, a former starting quarterback for the Arizona State University (“ASU”), filed this lawsuit last May against EA and the other defendants, alleging that EA used his likeness without his consent and that the NCAA enabled this use. Among the various claims that Keller asserted against the defendants is a claim against EA for alleged violations of California’s statutory and common law rights of publicity.

In this round of motions, EA argued that Keller’s claims were barred by the First Amendment and other possible defenses under California law.

As to EA’s First Amendment argument, the court stated that “[a] defendant may raise an affirmative defense that the challenged work is protected by the First Amendment inasmuch as it contains significant transformative elements or that the value of the work does not derive primarily from the celebrity’s fame. . . . The defense poses what is essentially a balancing test between the First Amendment and the right of publicity.” Slip. Op. at 6-7 (internal quotes and citations omitted).

With this standard in mind, the court determined that “EA’s depiction of [Keller] in ‘NCAA Football’ is not sufficiently transformative to bar his California right of publicity claims as a matter of law.” Slip. Op. at 9. In arriving at this conclusion, the court noted that the quarterback for ASU in the game shares many of Keller’s characteristics, as the in-game ASU quarterback wears Keller’s jersey number, has the same height and weight, and is purportedly from the same home state. Id.

In addition, in ruling that EA was not entitled to the “public interest” and “public affairs” defenses, which EA asserted under California law, the court noted that EA’s game goes beyond mere reporting of “just the players’ names and statistics; it offers a depiction of the student athletes’ physical characteristics and, as noted, enables consumers to control the virtual players on a simulated football field.” Slip Op. at 13; see id. at 13-15.

We will continue to follow this case.

Jul

2011

EFF Files Amicus Brief in support of Datel in case against Microsoft

Datel Holdings Ltd. v. Microsoft Corporation
United States District Court, Northern District of California
Case No. 2009-cv-05535, Filed November 20, 2009

Back in 2009, Microsoft issued a remote update that stopped third-party accessory maker, Datel’s, memory cards from working on Xbox consoles. These cards are used to store game data when gamers play online. Microsoft sells its own line of data cards for Xbox. Datel sued and in its complaint alleged that Microsoft’s actions were anticompetitive because the disabling of the cards was intended “to perpetuate Microsoft’s market power.” Microsoft response countered that its actions were protected by the Digital Millennium Copyright Act because Datel’s memory cards were circumventing an Xbox memory card authentication sequence—a sequence that allows limited access to copyright game data such as gamer profiles and Xbox Live achievements.

This case concerns an area of law in relation to the DMCA that it still in flux—can there be a breach of the DMCA even though the circumvention in question had no infringing intent or purpose? One major case on point is the Lexmark decision coming out of the Sixth Circuit, where the court found that a company that made microchips unlocking Lexmark printers to enable them to use unauthorized ink cartridges, was not liable under the DMCA. Another major case, going in the opposite direction, was the World of Warcraft case coming out of the Ninth Circuit where the court found that a bot that automatically played the lower levels of WWC for the user was a violation of the DMCA because the bot circumvented a measure that “effectively controls access to a copyrighted work” even though the circumvention had no infringing purpose. The distinction, however, is that in Lexmark the alleged infringer was producing a compatible product, whereas in the WoW case the alleged infringer only produced software that allowed you to cheat the game.

On June 15, 2011, the Electronic Frontier Foundation filed an amicus brief in support of Datel. EFF believes that letting users use a third party memory card does not put Microsoft at risk of copyright infringement, and their brief alleges that Microsoft is misusing the DMCA to quash competition in the Xbox 360 memory card market.

For its part, Microsoft indicated in its filings that Datel’s source code used for the chip authentication is strikingly similar to Microsoft’s, and that if the Datel devices are found to be infringing, “Datel can claim no antitrust injury with respect to them.” In a related suit, Microsoft is also suing Datel for patent infringement over an Xbox accessory controller.

Jul

2011

CASE UPDATE: Zynga v. John Does 1-5

Zynga Game Network, Inc. v. John Does 1-5
U.S. District Court, Northern District of California
Case No. 09-cv-02441, Filed June 2, 2009

Final Update:

This case was voluntarily dismissed without prejudice on October 26, 2009, pursuant to FRCP 41(a). Rule 41(a)(1) allows for the plaintiff to dismiss an action without a court order by filing a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment. In this case it appears that Zynga had some difficulty in finding the defendants to serve with process, and may have ultimately decided the effort was not worth the cost.

Case Update:

After getting our hands on the complaint for this case, we can update our previous entry concerning a suit brought by Zynga, a successful online social gaming company with over 75 million registered users.

Zynga filed the complaint against the registrants (of currently unknown identity, thus the John Doe aliases) of the website domain name zyngachips.com for trademark infringement and unfair competition. Zynga has been using the trademark and service mark ZYNGA since its founding in 2007 and claims that the mark has become well-known by social gamers as a source identifier for Zynga’s games. Zynga currently has a trademark application for the mark. The complaint also notes that Zynga operates a Texas Hold’Em Poker game which uses virtual poker “chips.”

Zynga claims that the domain name is confusingly similar to the ZYNGA mark since it has no relation to Zynga and instead goes to a website that advertises for and/or hyperlinks to a variety of products and services. Zynga claims that a user looking for Zynga may land on the defendants’ website instead and click one of the links listed, thereby diverting the user’s attention from Zynga and costing Zynga an opportunity to interact with the user. Zynga further alleges that the defendants acted in bad faith, intending to profit from use of the ZYNGA mark.

Here are the specifics of the five counts of the complaint:

1. False designation of origin regarding the mark ZYNGA (15 U.S.C. § 1125(a)):
  Here Zynga alleges that the defendants have used the mark to falsely represent that the defendants are affiliated with Zynga in a way that’s likely to cause confusion as to Zynga’s true association with the defendants and/or their products.

1. Federal cybersquatting regarding the mark ZYNGA (15 U.S.C. § 1125(d)):
  Under this claim, Zynga alleges the defendants are liable because the ZYNGA mark is distinctive, zyngachips.com is confusingly similar to that mark, and the defendants had a bad faith intent to profit from using the mark.

1. California statutory unfair competition:
  Zynga claims that the defendants have acquired an unfair competitive advantage through the unauthorized commercial use of the mark in a willful attempt to trade on Zynga’s goodwill gained from the mark.

1. California common law trademark infringement:
  Zynga claims that the defendants’ unauthorized use of the mark is trademark infringement likely to cause confusion, deception and mistake as to the source of, and authorization for the products and/or services sold by the defendants.

California common law passing off and unfair competition:
Lastly, Zynga alleges that the defendants’ actions constitute intentional attempts to pass off its products and/or services in such a way as to deceive the public into thinking they’re being offered by, or are affiliated with, Zynga in order to obtain an unfair advantage over Zynga.

Zynga is seeking equitable relief (including an injunction to prohibit defendants from using the ZYNGA mark in a way that may cause confusion as well as transfer of the zyngachips.com domain name to Zynga) and monetary damages.

This appears to be a fairly straightforward trademark/domain name dispute, but we’ll keep you updated as the case progresses in case anything interesting happens.

Read the full complaint here.

Jul

2011

Zynga Files Two New Cases

Zynga Game Network, Inc. v. Duc Doan
U.S. District Court, Northern District of California
Case No. 09-cv-02958, Filed July 1, 2009

Case Update:

This case was dismissed on September 25, 2009, following a final judgment upon consent. Zynga received $45,000 in judgment, plus attorney’s fees and costs. The judgment has been satisfied as of September 29, 2009.

Original Post:

Zynga, the social game developer, filed two more lawsuits last week, both practically identical to Zynga v. John Does 1-50.

On Wednesday, July 1 the company brought suit against defendant Labrasca for infringement of its trademark ZYNGA and violation of its Terms of Service for its Texas Hold ‘Em Poker game. The complaint alleges that Labrasca owns and operates thirteen websites using or connected to the ZYNGA mark in order to sell virtual poker chips to be used in its online poker game. The case is Zynga Game Network, Inc. v. Labrasca, N.D. Cal., Case No. 5:09-cv-02957-HRL. Read the full complaint here.

Zynga brought the exact same allegations on Thursday, July 2 against Duc Doan for his operation of two similar websites. That case is Zynga Game Network, Inc. v. Doan, N.D. Cal., Case No. 5:09-cv-02958-PVT. Read the full complaint here.

The seven counts of action Zynga alleges in each of these cases are the same as in John Does 1-50:

Trademark Infringement – False Designation of Origin Regarding the Mark ZYNGA: The complaint alleges that consumers may be confused or misled into thinking a connection exists between Zynga and the defendants by the defendants’ use of the ZYNGA mark.
Trademark Infringement – Federal Cybersquatting Regarding the Mark ZYNGA: The complaint alleges that the defendants registered domain names with the bad faith intent to profit from use of the ZYNGA mark.
California Statutory Unfair Competition: The complaint alleges that by using the ZYNGA mark and selling the virtual chips required for the game the defendants are attempting to trade on Zynga’s goodwill and have gained an unfair advantage.
Common Law Trademark Infringement of the Mark ZYNGA: The complaint alleges that the defendants’ use of the ZYNGA mark causes confusion or deception as to the source of, and authorization for, the defendants’ products in violation of California common law.
California Common Law Passing Off and Unfair Competition: Zynga is seeking punitive damages for the defendants’ allegedly intentional and malicious actions which Zynga says resulted in an unfair advantage.
Breach of Contract: Zynga claims the defendants agreed to be bound by the game’s Terms of Service by participating in the poker game. “By selling ‘chips’ for use in the Game through the Infringing Websites, and by using the Game itself to transfer the ‘chips’ they sell, Defendants have breached the Terms of Service, which specifically prohibit Game users from exchanging ‘chips’ “for ‘real-world’ money or otherwise exchange items for value outside of the Game.”
Intentional Interference with Contractual Relations: Zynga alleges that the defendants intentionally acted to induce consumers to breach their contracts with Zynga by selling chips without authorization at a lower price than Zynga offered and by distributing the chips in a manner prohibited by the Terms of Service.

Zynga is certainly making its intentions known, i.e., they take IP rights seriously! and they will protect their IP!

Jun

2011

CASE UPDATE: Eros LLC v. Linden Research, Inc.

Eros, LLC et al v. Linden Research, Inc. et al
U.S. District Court, Northern District of California
Case No. 09-cv-04269, Filed September 15, 2009

Final Update:

This case was moved from court to private mediation on October 7, 2010 and plaintiffs filed for voluntary dismissal of the charges on March 15, 2011 under FRCP 41(a). Rule 41(a)(1) allows for the plaintiff to dismiss an action without a court order by filing a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment. In this case it appears that a satisfactory solution was reached in ADR leading the plaintiffs to end their civil court case. The court dismissed the case on March 16, 2011.

Case Update:

As many of you know, and as was discussed in our previous post, Linden Labs runs and operates the internet-based interactive computer simulation Second Life which allows participants to see, hear, use, and modify the simulated objects in the computer-generated environment. Second Life is famous for its free-market economy. Players of Second Life, called “Residents,” can buy and sell goods with Second Life currency (“L$”). L$ can be exchanged for real currency.

Eros, LLC (“Eros”) and Shannon Grei (“Grei”) have filed an Amended Complaint against Linden Research Inc. and Linden Research Int’l., Inc. (“Linden”) alleging violation of real-world intellectual property rights and infringement of the trademarks and copyrights owned by the Plaintiffs. Eros markets a line of erotic items within Second Life under the mark SexGen® (See U.S. Reg. No.3483253, registered on August 12, 2008). According to Eros, over 100,000 active Second Life Residents are customers. In the Amended Complaint, Eros alleges that its SexGen® products have been “counterfeited, cloned, and ripped off countless times by a multitude of Second Life Residents.” Similarly, Shannon Grei markets clothing and other coverings, including “skins” for Residents to wear within Second Life. The Amended Complaint indicates that since 2004, Grei has sold hundreds of thousands of her products within Second Life, making her one of the most popular and successful sellers in the game. Ms. Grei has allegedly suffered financial loss at the hand of pirates who have made and sold copies of her “skins” for real-world profit, and infringement of her rights in the copyright to “Nomine Araignee Set,” which was registered on September 24, 2007 as VAu000958340. Similarly to Eros, Ms. Grei alleges that the Defendant, Linden, has profited off of these pirates with each transaction.

The Amended Complaint reiterates many aspects of the original Complaint. It alleges that Linden “knowingly and willingly profits” from infringing activities through several mechanisms. As asserted by Eros and Grei “pirates must rent (for real-world currency) virtual world ‘locations.’ …Second, pirates must then ‘upload’ their infringing work, products or services into the Second Life virtual world, for which Defendants impose a fee. Third, all inworld transactions on Second Life are made through the exchange of Linden Dollars. …Not surprisingly, Linden Lab also operates the most widely used currency exchange platform in the Second Life community, LindeX, for use at which it imposes an exchange fee of 3.5%. Fourth, Linden Lab operates the website XStreetSL.com, which is an online marketplace for goods and services to be used in Second Life. Fifth, Linden Lab also operates an in-world classified ads system. Pirated works are available both on XStreetSL.com and the in-world classifieds system.”

Eros and Grei acknowledge that “[t]he Second Life Grid utilizes what is effectively a Digital Rights Management (‘DRM’) scheme,” but allege that “the nature of the system allows third-party programs to bypass the DRM.” The Amended Complaint further alleges that “Linden Lab conducts little supervision or enforcement to insure that such content copying is eliminated, minimized, or detected. Moreover, whatever DRM-type protection Linden Lab offers against such piracy-enabling programs is easily circumvented and hopelessly ineffective.” The Plaintiffs acknowledge that use of such programs is against Linden’s Terms of Service and that may result in the Resident being banded, but according to the Complaint, Linden “will not ban a user for simply uploading or even selling copied content [and t]hese actions evidence that Linden Lab limits its enforcement of intellectual property law to that required by the ‘safe harbor’ provisions of the Digital Millennium Copyright Act, therefore filing a real-world lawsuit is necessary to protect ones interests.”

The Plaintiffs have alleged twelve (12) causes of action:

Trademark Infringement, 15 U.S.C. § 1114(1) (on behalf of Eros)
False Designation of Trademark Origin, 15 U.S.C. §1125 (on behalf of Eros)
Contributory Trademark Infringement, 15 U.S.C. §114 (on behalf of Eros)
Vicarious Trademark Infringement, 15 U.S.C. §1114 (on behalf of Eros)
Direct Copyright Infringement—Public Display, 17 U.S.C. §501 (on behalf of Grei)
Direct Copyright Infringement—Reproduction, 17 U.S.C. §501 (on behalf of Grei)
Contributory Copyright Infringement, 17 U.S.C. §501 (on behalf of Grei)
Vicarious Copyright Infringement, 17 U.S.C. §501 (on behalf of Grei)
Violation of Cal. Bus. Prof. Code §17200 (on behalf of all Plaintiffs)
Violation of Cal. Bus. Prof. Code §17500 (on behalf of all Plaintiffs)
Intentional Interference with Economic Relations (on behalf of all Plaintiffs)
Negligent Interferences with Economic Relations (on behalf of all Plaintiffs)

The Plaintiffs also allege that Linden’s acts of infringement have been willful, intentional, and purposeful, and that the Defendants have caused injury to both Plaintiffs in the form of lost sales and revenue, lost business reputation, and consumer confusion.

We will continue to monitor this case.

Jun

2011

News: Forterra Systems sues Avatar Factory

Forterra Systems, Inc. v. Avatar Factory
case 5:05-cv-04472-PVT, N.D. Cal

Case Update:
Following a confidential settlement by the parties, this case was dismissed with prejudice on January 17, 2008.

Original Post:
Forterra Systems, Inc. on November 3, 2005, filed a patent infringement lawsuit against the Avatar Factory for infringement of U.S. Patent No. 6,784,901, entitled “Method, System and Computer Program Product for the Delivery of a Chat Message in a 3D Multi-User Environment.” Claim 1 of the ‘901 patent reads as follows:

1. A system for delivering a message between a sender and a recipient in a three-dimensional multi-user environment, wherein said three-dimensional multi-user environment maintains respective digital representations of the sender and the recipient, comprising:
a sender interface; and
a recipient interface, including a recipient viewport;
wherein said recipient interface receives the message from said sender interface, maps the message to a texture to generate a textured message, and renders said textured message at locations along a path in the three-dimensional multi-user environment, whereby the recipient can visually ascertain at least portions of the path of the textured message through said recipient viewport.

The lawsuit was filed in the Northern District of California, and is docketed as case no. 5:05-cv-04472-PVT. We will add this case to our tracking list and update of any significant developments.

Jul

2010

Case Update: Miller v. Facebook

Miller v. Facebook Inc. et. al.
N.D.Cal., Case no. 10-cv-00264

Facebook’s attempts to end a lawsuit with Daniel Miller before trial has again apparently failed. On July 23, 2010, the United States District Court for the Northern District of California denied Facebook’s second motion to dismiss and vacating hearing proceedings. Nearly two months ago Facebook alleged that Miller’s complaint did not meet “the minimum pleading requirements set forth in Iqbal” for allegations of direct and indirect copyright infringement.

In 2007, Plaintiff Daniel Miller authored Boomshine, a video game where players click on a floating circle which then expands and causes other contacted floating circles to expand. The game has twelve levels. Each level sets a minimum number of circles that must be contacted in order to advance the game. Every time a circle is contacted it expands for a limited period until it disappears. Thus, players must time their contacts just right before all the circles disappear. Mr. Miller owns a registered copyright for the Boomshine video game source code (i.e., as a literary work).

Sometime in 2009 defendant Yao Wei Yeo authored his own, allegedly similar, game ChainRxn. ChainRxn, like Boomshine, is played over the internet and also involves expanding circles that cause other circles to expand. The Defendant’s game is a Facebook software application written using the Facebook Developer Platform. The game appeared in Facebook’s “Application Directory” which allowed members of Facebook to download and enjoy the game.

According to the Plaintiff, ChainRxn shares the same “look and feel” of Boomshine and incorporates almost every visual element of the game. Miller filed a suit alleging direct copyright infringement based upon these allegations, but has since amended the complaint to allege only contributory infringement. Facebook countered that Miller could not state a plausible claim under Iqbal for direct copyright infringement because Boomshine is not registered with the Copyright Office as an “audiovisual” work, but as a literary work. Thus, Facebook alleges that only the source code for Boomshine is registered, not the game itself. According to Facebook, the non-literal audiovisual elements of Boomshine are not protected by Miller’s copyright, and any unlawful copying of the source code cannot be plausibly inferred from the allegedly identical look and feel of the two software programs.

In a recent decision, William Alsup, United States district judge for the Northern District of California, rejected Facebook’s allegations that the lawsuit could not proceed for two reasons:

First, because it would be “unreasonable, if not impossible” for the plaintiff to know in detail, “how defendant Yeo copied his computer code” at the pleading stage. Judge Alsup went one to state that all Miller could know at this stage of the proceedings is that sometime after he published his copyrighted work a copycat version appeared on Facebook bearing all readily observable similarities. The Judge continued by arguing that the plaintiff could make a reasonable inference that the underlying source code (which he holds a copyright to) was copied. The discovery stage will reveal whether or not this inference is false, and Judge Alsup intends to move the lawsuit toward that stage.

Second, the prior order did not hold that copyright protection for source code was limited to the literal elements of the work. Rather, it stated that “plaintiff’s copyright appears to be limited to the source code rather than the audiovisual aspects of Boomshine” to set the proper starting point for the analysis. Judge Alsup stresses that the prior order did not make any determination either way as to whether the various audiovisual aspects of the Boomshine software program were unprotected.

Its worth noting that, according to the United States Copyright Office, a copyright registration in the computer program also protects the resulting output generated by the program:

[A] single registration is sufficient to protect the copyright in a computer program and related screen displays, including videogames, without a separate registration for the screen displays or a specific reference to them on the application for the computer program. An application may give a general description in the “Author Created” space, such as “computer program.” This description will cover any copyrightable authorship contained in the computer program and screen displays, regardless of whether identifying material for the screens is deposited. (From Circular 61, emphasis added)

So, we will continue to monitor this case as it is likely heading to the latter stages of litigation. If you are interested, you can read the full order here. Also, for anyone looking to waste a little time, be sure and check out Mr. Miller’s game Boomshine [Author’s warning: The game is very addictive!].

Lastly, a big thanks to Josh Mosley, from the University of Miami Law School, for all his help, research, and assistance with the blog this summer (including this post). The posts by “Patent Arcade Staff” this summer were principally researched and written by him, and he also did 99% of the legwork for a new forthcoming section of the blog on issued video game patents. Thanks Josh, and best of luck in your last two years of law school!

Mar

2010

Case Update: Bissoon-Dath v. Sony Computer Entertainment of America, Inc.

On Friday, March 5, 2010, the U.S. District Court for the Northern District of California granted Sony’s motion for summary judgment in Bissoon-Dath v. Sony Computer Entertainment of America, Inc., Case No. 08-cv-012350MHP.

Bissoon-Dath and a fellow plaintiff are screenwriters who previously accused Sony of copying elements of several of the plaintiff’s stories in developing Sony’s God of War video game.

In considering this motion for summary judgment, the court evaluated the plaintiffs’ claims for copyright infringement to determine whether “no reasonable juror could find substantial similarity of ideas and expression” between the plaintiffs’ stories and God of War. In particular, the court explained that the legal standard for copyright infringement required a plaintiff to show ownership of the copyright and copying of protected elements.

This case turned on the issue of copying, and the court evaluated whether the plaintiffs’ stories and God of War were “substantially similar,” which the plaintiffs had to establish to prove copying. In doing this, the court compared the plot, themes, dialogue, mood, settings, pace, characters, and sequence of events of the works.

In addition, the court noted that general plot ideas and other scenes that flow naturally from “unprotectable basic plot premises” are not protected by copyright law and thus not considered when the works are compared. As the court put it:

“In such a case, it is particularly important for the court to use its own ‘Blade of Chaos’ to slice or filter out the unprotectable elements. Greek gods, dialogues among them about mortal affairs, rivalries among the gods, and mythical beasts such as the Hydra or the Nemean Lion are unprotectable elements; it is uncontroversial that they have been used widely in both ancient and modern artistic works, in the naming of astronomical bodies and spacecraft, and in other fields.” Slip Op. at 19-20.

Ultimately, after comparing all of the elements listed above (i.e., the plot, themes, dialogue, mood, settings, pace, characters, and sequence of events of the works), the court concluded that no reasonable juror could find substantial similarity between the plaintiff’s stories and God of War, and the court therefore ruled in favor of Sony.

Oct

2009

Copyright in Screen Shots – Sony v. Bleem (9th Cir. 2000)

Sony Computer Entertainment America v. Bleem, LLC

214 F.3d 1022 (9th Cir. 2000)

Background

Bleem marketed a software emulator that allowed users to play Sony Playstation games on their personal computers. Bleem’s emulator appealed both to gamers who did not want to buy a Playstation console and to those who sought the enhanced graphics and higher resolution offered by PC graphics cards. The program was written and marketed by two men who reverse-engineered the code in the Playstation’s components in order to mimic its functions on a PC.

While Sony would undoubtedly have liked to strike down Bleem’s software itself, the legality of emulation was not an issue before the court. See Sony v. Connectix Corp., 203 F.3d 596, 607 (9th Cir. 2000) (ruling that emulators are not a violation of the copyright laws). The court noted that the availability of emulators such as Bleem may actually increase the sales of games though it hurts the sale of consoles. With most consoles being sold at a loss, one has to wonder if Sony would have been better off with the competition.

The issue before the court was whether the use of screen shots showing scenes from Playstation games in Bleem’s advertising amounted to copyright infringement. Screen shots are often included in video game advertisements in order to convey to a purchaser what the game will look like on-screen. Bleem included screen shots in its advertising and packaging comparing games played on the Playstation console and games played using the Bleem emulator on a PC. The comparison was intended to show that the games looked better when played on a PC.

The district court in the Northern District of California ruled in favor of Sony and entered an injunction against Bleem’s use of the screen shots. Bleem appealed to the Ninth Circuit.

Fair Use

Sony alleged that Bleem’s use of screen shots violated Sony’s copyrighted material. Bleem admitted that its screen shots fell under Sony’s copyright but argued that their use fell under the fair use exception.

Under 17 U.S.C. § 107, the “fair use” of a copyrighted work is not an infringement. The statute provides four factors to be considered in determining fair use:

(a) the purpose and character of the use, including whether such use is of a commercial nature…;

(b) the nature of the copyrighted work;

(d) the effect of the use upon the potential market for or value of the copyrighted work.

17 U.S.C. § 107. The purpose of the fair use doctrine is to permit “courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577 (1994). Although the fourth factor is sometimes thought to be the most important, each factor must be considered, and no single factor is dispositive. See id.

1. Character of the Use

In analyzing the first factor, the court determined that Bleem’s use of the screen shots represented comparative advertising. Bleem’s emulator directly competed with Sony’s Playstation console and the screen shots compared the user experience on the two platforms. Noting that the Ninth Circuit had not dealt with comparative advertising, the court referenced a Fifth Circuit opinion finding fair use where a newspaper displayed a cover of TV Guide for the purpose of comparing it to an analogous publication. Triangle Publications, Inc. v. Knight-Ridder Newspapers, Inc., 626 F.2d 1171 (5th Cir. 1980). The court also cited the FTC’s stance that comparative advertising is an important source of information to consumers. According to the court, Bleem’s use here helped consumers make rational purchasing decisions and could inspire Sony to improve their product.

Due to the nature of Bleem’s use as comparative advertising, the court found that the first factor favored Bleem. Bleem’s use provided great benefits to the public without a substantial impact on the integrity of Sony’s copyrighted work.

2. Nature of the Copyrighted Work

The second factor is often less important than the others; indeed, the Supreme Court has stated that the second factor is often “not much help.” Campbell, 510 U.S. at 586. The Ninth Circuit found that the copyrighted work here was generally creative in nature, but that screen shots were merely inanimate slivers of the game. Without much discussion, the court decided that this factor neither supported nor detracted from Bleem’s claim of fair use.

3. Degree of Copying Involved

The third factor recognizes that the closer the copied portion gets to the whole of the copyrighted work, the less likely it is to be fair use. The court analogized video games to motion pictures and characterized a screen shot as representing 1/30th of a second’s worth of the video game. The court determined that a screen shot was of little substance to the overall copyrighted work.

The court stated that “the third factor will almost always weigh against the video game manufacturer because a screen shot is such an insignificant portion of the complex copyrighted work as a whole.” Op. at 1028. Here, the third factor supported Bleem’s fair use claims.

4. Effect Upon the Potential Market for the Copyrighted Work

The fourth factor, often the most important factor, looks to the impact of the use upon the market for the copyrighted work. Beyond just the defendant’s use, the fourth factor considers the impact of unrestricted and widespread conduct of the sort engaged in by the defendant. Campbell, 510 U.S. at 590. The court questioned the existence of a market for screen shots but found that, even if such a market existed, any harm to the market would be the result of critique or have a de minimis effect in light of the comparative nature of Bleem’s advertising. Any losses suffered by Sony would not be in the market for its copyrighted material but in its console business.

Finding that Bleem’s use would have no effect on Sony’s ability to do with its screen shots as it pleased, the court ruled that the fourth factor favored Bleem.

Holding and Conclusion

The court, seeing that on balance the four factors favored Bleem, held that Bleem’s use was a fair use and vacated the preliminary injunction imposed by the district court, remanding for further proceedings. The holding was qualified by a caveat that the finding of fair use only applied insofar as the screen shots accurately represented how games looked on the Playstation console. The court made clear that they were persuaded by “the need for Bleem to impose minimally upon Sony’s copyright with respect to these screen shots because there is no other way to create a truly accurate comparison for the user.” Op. at 1030.

This case is a good example and good precedent for the use of comparative advertising with respect to audiovisual works, and video games in particular.

Thanks to Scott Kelly for his assistance with the preparation of this case summary

Sep

2009

Case Update: Worlds.com v. NCSoft (E.D.Tex., filed Dec. 24, 2008)

This litigation has been transferred to the Northern District of California (San Francisco Division). Specifically, NCSoft filed a motion in the Eastern District of Texas alleging that, other than the marketing and sales of the allegedly infringing video games, neither party had any significant connections with the district. NCSoft’s motion noted that these actions were conducted throughout the country and additionally, Worlds.com did not oppose the motion.

The case was subsequently transferred to the Northern District of California. Worlds.com, however, declined to have the case proceed before a Magistrate Judge. The case was assigned to Judge Patel, who conducted a Management Conference held on September 14, 2009. At the Conference, Judge Patel scheduled a Status Conference for March 1, 2010, and ordered the parties to file a joint status report one week before the March 2010 Conference. Judge Patel also reserved June 6, 2010, for conducting the Markman hearing. We will follow this case and provide updates as they occur.

May

2009

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.

Apr

2009

Case Update: Worlds.com v. NCSoft

You may recall that Worlds.com sued NCSoft last Christmas Eve in the Eastern District of Texas. In an interesting development, the case has been transferred to the Northern District of California. On April 13, 2009, NCSoft filed an unopposed motion to transfer the case to California, and the judge signed the order on April 14, 2009, to transfer the case on or after May 4, 2009.

This is likely the result of recent court decisions putting the breaks on plaintiffs forum shopping into the Eastern District of Texas. However, in view of the fact that Worlds.com did not oppose the motion, the court did not need to make any independent analysis of whether the Eastern Texas wsa proper or not in this case.

We will continue to monitor developments in this case.

Mar

2009

Case: Zynga v. CLZ Concepts (filed 2/27/09, ND Cal.) [copyright]

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.

Oct

2005

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.

Aug

2005

Case: Atari v. Nintendo (N.D. Cal. 1993) [C,P]

Atari Games Corp. v. Nintendo of America, Inc.
30 U.S.P.Q.2d 1401 (N.D. Cal. 1993)
(Atari II)

Following a 1992 Federal Circuit ruling upholding a preliminary injunction in favor of Nintendo (see Atari Games Corp. v. Nintendo of America, Inc., 975 F.2d 832 (Fed. Cir. 1992) (Atari I)), the District Court for the Northern District of California now settled several summary judgment motions in the quarrel over Atari’s alleged infringement of Nintendo’s 10NES security program.

As described in Atari I, the 10NES program is a combination of “lock” software embedded into a chip in the NES gaming console, and “key” software in each Nintendo game cartridge. The lock and key send synchronized encoded data streams back and forth which unlock the console when an authorized game is inserted. When an unauthorized game is inserted, the console remains locked, thus preventing game manufacturers for designing NES-compatible games without receiving keys from Nintendo.

In 1986, Atari began efforts to replicate the 10NES program, hoping to make its own games compatible with Nintendo’s more popular console. When Atari’s attempts to dissect the microchips and reverse engineer the program failed, Atari obtained the source code from the United States Copyright Office. Using this copy of the source code, Atari successfully created its own “Rabbit” program, to mimic the interactions of the Nintendo games / console. Although the Rabbit was developed using a different microprocessor and different computer language, it sent data streams to the Nintendo console identical to those sent by Nintendo games. Since Nintendo could no longer stop Atari from building Nintendo-compatible games technologically, it was determined to stop them legally. This lawsuit followed; Nintendo filed for copyright infringement of the 10NES security program and infringement of U.S. Patent No. 4,799,635 (“the ‘635 patent”).

Copyright Infringement
The Court first took on the issue of whether the data streams sent from the game cartridges to the gaming console constituted copyrightable expression. Nintendo argued that these “data songs,” were copyrightable, since Congress had explicitly extended copyright protection to computer software. The Court disagreed, drawing the distinction between a copyrightable computer program and mere computer data which was not eligible for copyright protection. Computer statements that manipulate data fall within the definition of computer program, but the data being manipulated does not. Likewise, the periods of “silence” in communication between the game cartridge and the console are not protectable by copyright. The Court noted that while data notes and variable silences might be copyrightable within a musical composition, they are not copyrightable as a means to enable data communication. Accordingly, the Court granted Atari’s summary judgment motion on the issue of copyrightable expression.

However, the Court limited Atari to copying only the portions of the 10NES program required to send the correct data sequence to the Nintendo console. Atari sought to copy the entire 10NES program to ensure compatibility with future versions of the Nintendo console. Atari feared that if it didn’t copy the entire 10NES program, Nintendo may update the next version of the console to monitor portions of the data stream that are currently unmonitored, allowing the console to once again distinguish between Nintendo and Atari games. The Court sided with Nintendo on this issue, holding that Atari may not copy portions of the program needed only for future compatibility. The Court noted the importance of the balance in public policy between the dissemination of valuable ideas within an industry and the protection of a manufacturer’s “lead time” in the market. In other words, Atari has the right to adopt Nintendo’s technology, but only after Nintendo presents it to the marketplace. If Atari could copy present code for future compatibility, it could drastically reduce the time needed to reverse engineer Nintendo’s next version of the 10NES. This would tip the balance in favor of game developers, and inhibit the market for new gaming consoles.

Patent Infringement
Nintendo, largely unable to avail itself of copyright protection for its 10NES data stream sequences, also relied on a traditional patent infringement claim. The key issue in the infringement of Nintendo’s ‘635 patent, covering the 10NES program, was largely one of claim construction. Claim 1 of the ‘635 patent recited, in part:
“[R]esetting said main data processor unit unless the execution of said first authenticating program by said first processor device exhibits a predetermined relationship to the execution of said second authenticating program by said second processor device” (emphasis added).

The Court faced a problem with claim 1, namely that a predetermined relationship between the execution of programs is an inherently ambiguous statement. Treating Nintendo as its own lexicographer, the Court relied on the specification and prosecution history of the ‘635 patent to hold that claim 1 requires a predetermined relationship between the data exchanged by the programs, rather than just a predetermined relationship between the programs themselves.

Having determined the meaning of the ‘635 patent claims, the Court held that the data output by Atari’s Rabbit program did indeed have a predetermined relationship to the data output by Nintendo’s gaming console. The Court points out that Atari does not manufacture both the games and the console, and therefore cannot literally infringe on the language of claim 1, which requires two devices. However, Atari’s accused Rabbit program has no other use besides interaction with the NES console; therefore Atari’s liability may be based on contributory infringement. Accordingly, the Court granted Nintendo’s summary judgment motion for patent infringement on this claim.

Nintendo also moved for dismissal of Atari’s anticipation and obviousness defenses to infringement. The Court examined the standards for anticipation and obviousness, then examined U.S. Patent No. 4,736,419 (“the Roe patent”) under both of these standards. Indeed, the Roe patent, which described an electronic locking system based on physically implanted electronic keys, resembled the ‘635 patent in many respects. The abstract of Roe even notes, “[T]his lock system may be used in video game hardware, personal computers, and the like to prevent use of copied or ‘pirated’ software programs.”

The Court noted that despite many similarities, Roe fails to teach the use of reset pins which generate RESET signals to prevent unauthorized chip use. Accordingly, the Court holds that the ‘635 patent is not anticipated by Roe, and grants summary judgment on this issue to Nintendo.

However, the Court denied Nintendo’s summary judgment motion with respect to obviousness. The Court noted that reset pins were common in the microprocessor field at the time of the invention, referring specifically to the Famicom home computer system (“Famicom”), designed in part by the inventor of the ‘635 patent, which uses reset pins to disable a microprocessor. The Court reasons that the combination of these references likely makes the ‘635 patent obvious. Further, the motivation to combine these references can be found in the Roe patent itself, which mentions its possible adaptation to video games. Although the Court stopped short of granting summary judgment to Atari on the issue of obviousness, it noted that Atari would likely prevail at trial. The Court reasoned that Atari would likely succeed in showing that there are no significant differences between the usage of the reset pins in the ‘635 patent and the usage of the reset pins in the Famicom system. Two months later, however, an eight-member jury rejected Atari’s position, and found that the infringed claims of the ‘635 patent were not invalid for obviousness.

Nintendo had won on patent infringement, but before they enforce this ruling they would also need to address Atari’s patent misuse defense and antitrust counterclaims. In March 1994, before the adjudication of these issues, the two sides settled.

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