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For those following the Apple v. Samsung design patent wars, here's a good synopsis of the oral arguments that were held this morning at the United States Supreme Court.

If the link doesn't work, cut and paste this in your browser:

Update: Full Transcript of Arguments:

Lindsay Lohan v. Take-Two Interactive Software Inc., 156443/2014, New York State Supreme Court, New York County (Manhattan).

In 2014 actress Lindsay Lohan filed suit against Take-Two Interactive Software Inc. claiming that the video game Grand Theft Auto V violated Lohan's privacy by using her likeness without her permission.  Lohan accused Take-Two of basing the GTA character Lacey Jonas after her with its similar style of dress and mannerisms. The Jonas character is a celebrity who enlists other players to help her dodge paparazzi in a race throughout Hollywood. Lohan alleged that the character had a similar voice and similar physical features. She also stated that Take-Two unlawfully used her signature peace sign pose.

Earlier this month, the lawsuit was tossed out by a New York state appeals court after the court found Lohan’s likeness was not used in the Grand Theft Auto video game. The court stated that the game’s characters and unique storyline rendered it a work of fiction and satire, and therefore the game was protectable by the First Amendment.

The court also dismissed Lohan’s claim that her image was used in the video game’s advertising materials despite Lohan’s claim that the avatar used in the advertisements was a depiction of her.

Lohan’s attorney stated that they planned to appeal and we will provide updates in the event an appeal is filed.

Oaklawn Jockey Club Inc. et al. v. Kentucky Downs LLC et al.
Case No. 16-5582, U.S. Court of Appeals for the Sixth Circuit

In their recent brief Appellees Kentucky Downs, LLC and Exacta Systems, LLC argued the Sixth Circuit should throw out the trademark suit brought by Appellants Oaklawn Jockey Club and Churchill Downs (“track owners”).
Kentucky Downs operates a facility that offers historical horse racing for play.  Kentucky Downs uses Exacta’s gaming system that allows people to place bets on historical horse races. The gaming system displays track owners’ names among other race information to its bettors. In 2010, Kentucky enacted a law requiring the location of the horse race be displayed after a wager is placed on a historical horse race. Kentucky Downs and Exacta state that the race location is most commonly identified using the track name and argue that the display of the track name does not suggest any sponsorship or affiliation with the track owners.
In October 2015, the track owners filed suit in U.S. District Court for the Western District of Kentucky arguing that the display of track names on the Exacta system constitutes trademark infringement. In April 2016, the District Court found that there was no trademark infringement and instead found that the Kentucky Downs and Exacta’s use of track names was both a non-trademark use and a fair use.  Following the District Court’s decision, the track owners filed their appeal in the Sixth Circuit on May 3, 2016.
A depiction of the Exacta screens displaying the track names is below:
Exacta argues that the display of the track names is in a small, generic font that does not make use of any logo or stylized font that would demonstrate trademark usage. Additionally, Exacta argues that the use of the track names is a fair use because it is merely descriptive of the racetrack location.
We will continue to provide updates as this case progresses.

We posted Tuesday about the McRO case, and here is some more commentary for consideration, which we posted on our firm's web site, too. One very notable point is that different from prior Federal Circuit decisions since Alice, here the claims were found patent eligible even where the claimed improvement was incorporated in software processed by a general purpose computer and did not result in an improvement in the technological performance of a computer, computer functionality, or computer network. Rather, even when the claimed improvement is not to the computer itself, a claim may still be patent eligible when the improvement allows computers to produce an outcome that previously only could be produced by an intuitive human process.

Our full analysis is here by Banner & Witcoff attorneys Ross A. Dannenberg, Aseet Patel and Peter Nigrelli.

If you are unable to access the hyperlink above, you may read the article on our website by pasting the following URL into your browser:

United States Court of Appeals for the Federal Circuit
Cases 2015-1080, -1081, -1082, -1083, -1084, -1085, -1086, -1087, -1088, -1089, -1090, -1092, -1093, -1094, -1095, -1096, -1097, -1098, -1099, -1100, -1101
Decided September 13, 2016

On September 13, 2016, Judges Reyna, Taranto, and Stoll reversed the District Court's grant of judgment on the pleadings under Fed. R. Civ. P. 12(c) that the asserted claims of U.S. Patent Nos. 6,307,576 (‘‘the ’576 patent’’) and 6,611,278 (‘‘the ’278 patent’’) are invalid, and remanded to the Central District of California for further proceedings.  (Read full decision here)

As previously reported, the patents in suit describe technology for automatically animating lip synchronization and facial expressions of animated characters, a technique commonly used in video game development.  Judge Wu of the Central District of California held the patents invalid as lacking patent eligible subject matter under 35 U.S.C. 101 in the wake of the Supreme Court's Alice v. CLS Bank decision.  McRo appealed, and the Federal Circuit now reverses that holding.

Claim 1, which is dispositive for purposes of this appeal, reads:
1.  A method for automatically animating lip synchronization and facial expression of three-dimensional characters comprising:
   obtaining a first set of rules that define output morph weight set stream as a function of phoneme sequence and time of said phoneme sequence;
   obtaining a timed data file of phonemes having a plurality of sub-sequences;
   generating an intermediate stream of output morph weight sets and a plurality of transition parameters between two adjacent morph weight sets by evaluating said plurality of sub-sequences against said first set of rules;
   generating a final stream of output morph weight sets at a desired frame rate from said intermediate stream of output morph weight sets and said plurality of transition parameters; and
   applying said final stream of output morph weight sets to a sequence of animated characters to produce lip synchronization and facial expression control of said animated characters.
To begin its analysis, the Court first performed some initial claim construction to help resolve the question of patentability under section 101, stating that the claims are limited to rules that evaluate subsequences consisting of multiple sequential phonemes.  Slip op. @ 19.  With this in mind, the Court then went on to analyze section 101 in more detail.

As stated by the Court, the abstract idea exception prevents patenting a result where it matters not by what process or machinery the result is accomplished.  Id. (citing O’Reilly v. Morse, 56 U.S. 62, 113 (1854)).  One should not assume that such claims are directed to patent ineligible subject matter, however, because all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.  Id. (citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012) (“Mayo”)).  Lastly, the Court compares and contrasts the Flook and Diehr decisions in the run up to its substantive analysis of the claims at hand.

Initially, the Court found that the District Court too broadly oversimplified the claims when stating the "idea" embodied by the claims.  Courts must be careful to avoid oversimplifying the claims by looking at them generally and failing to account for the specific requirements of the claims.  Id. @ 21.  Instead of being drawn to the abstract idea of "automated rules-based use of morph targets and delta sets for lipsynchronized three-dimensional animation” as alleged by the District Court, the Federal Circuit found the claims instead to be limited to rules with specific characteristics.  The claims themselves set out meaningful requirements that must be taken into account.  Id.  Interestingly, the Court further relied on the specification to confirm the idea of the claim.  Id. @ 22.  Because the claims are directed to rules with certain common characteristics, they are directed to a genus, and claims directed to the genus of an invention, rather than a particular species, have long been acknowledged as patentable.  See, e.g., Diamond v. Chakrabarty, 447 U.S. 303, 305 (1980).  

The Court next turns to the preemption issue, and looks to whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery.  Id.  @ 23.   

This is where we take a turn to the muddy.  In its attempt to articulate what the claims are actually directed to, the Court states "While the rules are embodied in computer software that is processed by general-purpose computers, Defendants provided no evidence that the process previously used by animators is the same as the process required by the claims."  Uh-oh.  Did you see it?  The Court conflates 101 with a prior art analysis that typically takes place under 35 USC 102-103, which hasn't happened yet in this case.  This is not the first time this has happened.  To be fair, the Supreme Court did it first, and the Federal Circuit appears ready to throw in the towel and follow suit.  Patent practitioners beware, it seems this technique of 101 analysis is here to stay.  If something is REALLY old, it's an abstract idea, but if it's instead just more recent than your own invention, it is just prior art.  In any event, the Court ultimately found that it is the incorporation of the claimed rules, not the use of the computer, that “improved [the] existing technological process” by allowing the automation of further tasks.  This is unlike Flook, Bilski, and Alice, the Court stated, where the claimed computer-automated process and the prior method were carried out in the same way (another conflation of 101 with 102 and 103).  Id. @ 24-25.  

Despite the fact that the court found that the claims do NOT preempt all processes for achieving automated lip-synchronization of 3-D characters, the Court takes it a step further.  The absence of preemption does not demonstrate patent eligibility.  Id. @ 25.  Rather, the Court confirms that the claims do not preempt all techniques for automating 3-D animation that rely on rules, because the claimed rules must be rendered in a specific way.  This is one point that the Defendants will be sure to hone in on when it comes time for the trier of fact to assess infringement in the first instance, as the Court goes into some detail on alternative types of rules that could, in theory, exist or be used and not infringement the claims.  Id. @ 26-27.  

Ultimately, the Court states that, when looked at as a whole, claim 1 is directed to a patentable, technological improvement over the existing, manual 3-D animation techniques. Id. @ 27.  The claim uses the limited rules in a process specifically designed to achieve an improved technological result in conventional industry practice. Id.  Claim 1 of the ’576 patent, therefore, is not directed to an abstract idea, and the Court need not address Alice step two.  Id.

The takeaway: SOFTWARE PATENTS LIVE ON!  Had these claims been struck down under 101, then thousands of other software patents would be of little more value than the paper they're printed on.


As you may recall, when we previously reported on this case after oral arguments, we stated: view of the overall tone of the questions, the panel seems more likely than not to reverse the district court’s holding of invalidity under Section 101, and remand this case for further proceedings to reassess 101 eligibility using the correct standard, and/or also to determine infringement and validity under 35 U.S.C. §§102-103 (novelty and obviousness).
We were mostly right.  The 101 issue appears to be resolved.
This just in.  McRO was reversed on appeal.  Decision is here.  More to follow.
From Konstantin Ewald & Felix Hilgert of Osborne Clarke:

Another year, another gamescom… This time, one of the hot topics we discussed a lot in individual meetings and at the VGBA European Summit was publishers' fight against "key selling", so we thought we would share some additional resources on the legal aspects of this practice that has German publishers up in arms.

Current press reports: Key selling illegal

The debate was fuelled in part by a publication in Handelsblatt, one of Germany's leading business dailies. One of their correspondents, specialized in white collar crime, reported extensively on the many ways in which key sellers like MMOGA are violating the law. You can find the article in English here and in German (behind a paywall) here.

Courts have been saying it since 2014

In the first landmark case in Germany to deal with key selling back in 2014, we were able to convince the Regional Court of Berlin that the common practice of buying boxed products, discarding the DVD and reselling the key only was in violation of copyright and trademark law. This decision, which has since been confirmed by other courts, is still the cornerstone of any legal strategy against key selling in Germany and beyond: Judgments are possible also against entities domiciled elsewhere, and enforcing them from within Germany, while not trivial, has proven a viable option. You can find a summary of the Berlin case in English here and in German here.

Only a myth: German Federal Court of Justice did NOT just authorize key selling

Finally, a recent decision by the German Federal Court of Justice has been flaunted by some as saying key selling is permitted after all. However, these commentators fail to take into account the very specific nature of video games, which are protected as "hybrid works" according to the case law of the CJEU, and that "usedSoft" principles do not apply to them. We dispel the myth in detail in a note available here.

In short, if key selling gives you a headache, remedies are available. Feel free to get in touch, and we would be happy to help.
There's an interesting article in Law360 today about a potential patent dispute surrounding No Man's Sky and the so-call Superformula.  From the article, and of interest to our readers:

Many video games have focused on space exploration; this premise is hardly unique. The novelty with "No Man’s Sky", and the reason for so much excitement and anticipation over its imminent release, lies primarily in the ambitious size of the universe available for exploration in the game. In traditional video game programming, objects that make up the in-game environments must be created individually by writing numerous lines of code into the game for each asset or piece of art — a labor-intensive and time-consuming process limiting the number of objects that can be included in one game.
Hello Games ostensibly avoids these issues by using a programming technique known as procedural generation. Rather than drafting unique lines of code to create each game asset, procedural generation provides a computer with a system of rules and parameters for the game universe, and then relies upon the computer to create in-game assets in accordance with those rules. In other words, each object in "No Man’s Sky" is created not by individual lines of code written specifically for that asset by a programmer, but instead is created by the computer applying algorithms created by the programming team. These procedural rules could cover everything from the way interstellar and spaceship physics work, to the way vegetation looks on planets with particular climates, to the types and behaviors of wildlife. Using this technique, Hello Games has created an in-game universe of unprecedented size and scope, containing 18,446,744,073,709,551,616 accessible planets.[5]
In late July, the media began to report that a company called Genicap had raised the possibility that "No Man’s Sky" might be running afoul of Genicap’s patent rights in the Superformula. The Superformula is a modified version of the equation that describes a circle, and it was discovered by Johan Gielis around the turn of the 21st Century. Changing particular variables within the Superformula causes the equation to describe all manner of geometric shapes and natural forms.[6] Genicap (Gielis’ employer) received U.S. patent No. 9,317,627 (the “‘627 patent”) on April 19, 2016. The ‘627 patent’s primary claim describes the Superformula as “a method for creating timewise display of widely variable naturalistic scenery ... on an amusement device with minimized data storage and processing requirements ... ”
Click the link above for the entire article.  We'll keep you posted of any developments in this area.
As previously reported, Ed Sheeran was sued back in June for copyright infringement.  Well either the sharks smell blood, or perhaps there's something in the water, but be's been sued again based on another of his songs, as reported by CNN.

This time Ed Sheeran has been sued by the estate of Marvin Gaye, the same folks who sued (and won, pending appeal) Robin Thicke in the Blurred Lines case.  The allegation?  That Ed Sheeran's Thinking Out Loud infringes the copyright in Marvin Gaye's "Let's Get It On."  First, listen for yourself:

Ed Sheeran, Thinking Out Loud:

Marvin Gaye, Let's Get It On:

What do you think?  Does this case have legs?
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