On April 17, 2018, Catherine Alexander, a tattoo artist from Illinois, sued Take-Two Interactive Software, Inc., 2K Games, Inc., 2K Sports, Inc., World Wrestling Entertainment, Inc. (the “WWE”), Visual Concepts Entertainment, Yuke’s Co., Ltd., and Yuke’s LA Inc. for copyright infringement relating to the tattoos on Randy Orton

Randy Orton is a 13-time world champion professional wrestler for the WWE whose arms are almost entirely covered by tattoos.  Between 2003 and 2008, Alexander tattooed Mr. Orton’s arms.  Alexander’s complaint alleges that various WWE-branded videogames, including WWE 2K16, WWE 2K17, and WWE 2K18, feature “meticulous reproduction[s]” of those tattoos.  Per Alexander, the WWE offered her $450 for the rights to Orton’s tattoos, which she declined.

This is far from the first time that the gaming industry has been involved in a copyright dispute over in-game tattoos.  One suit, still ongoing, involves various tattoo artists suing Take-Two Interactive over reproductions of the tattoos of professional basketball players such as Kobe Bryant and LeBron James.  Similarly, an Arizona tattoo artist once sued THQ over a tattoo in UFC Undisputed, though it appears that case was settled.  In the movie industry, a similar dispute arose over the depiction of Mike Tyson’s tattoo in the movie Hangover II, though the dispute was quickly settled.

One strategy, explored by companies like Electronic Arts, has been to require that athletes acquire the rights to their tattoos if they want them properly represented in-game.  Another option would be for athletes’ contracts to require that they acquire all rights to any tattoos they receive, such that the athletes may grant licenses to use the tattoos if necessary.

In any event, the outcome of these cases are likely to hinge on, among other arguments, whether tattooed individuals like Randy Orton have an implied license to their tattoos, and whether depiction of an individual’s tattoos is fair use.   Another potential issue is whether a tattoo is sufficiently “fixed” to warrant copyright protection in the first place (there is precedent that a living garden is not “fixed” and one might make the same argument about artwork on living skin).  We will monitor the cases and keep our readers informed of any updates.

Summer Intern - Patent Arcade *
Washington, DC

Banner & Witcoff, a recognized leader in the practice of intellectual property law, is seeking a summer intern to work in its Washington, DC office for the summer of 2018.

As a Summer Intern, the student will assist in researching new and historical video game IP lawsuits, writing content for publication on the blog, researching and updating our database of video game patents, working with attorneys to research developing areas of video game IP law, developing topics and potentially preparing a paper for submission to the Interactive Entertainment Law Review

Successful candidates:

Must be enrolled in an accredited US law school.
Must have an interest in video game and IP law.
Must not be eligible to take the patent bar (i.e., no candidates with engineering or science degrees.  It's an odd requirement, I know, but we have our reasons).

Please upload your resume with cover letter, law school and college transcripts, and a writing sample. Candidates should redact social security numbers and similar information before submitting materials. Electronic documents should be sent in Microsoft Word or PDF format.

*This is a paid position
Apply here.
On April 11, 2018, Infernal Technology, LLC and Terminal Reality, Inc. (“Infernal”) filed a complaint for patent infringement against Microsoft Corporation (“Microsoft”).  The asserted patents, U.S. 6,362,822 and U.S. 7,061,488, relate to lighting and shadowing methods for graphics simulation. According to Infernal, both patents have already survived an Inter Partes Review challenge filed by Electronic Arts in 2016.

According to the complaint, Terminal Reality was the developer of games such as Nocturne, Bloodrayne, Ghostbusters: The Video Game, Kinect Star Wars, The Walking Dead: Survival Instinct.  As part of their game development work, Terminal Reality developed a graphics engine (“Infernal Engine”).  Infernal Technology has an exclusive license to patents related to the Infernal Engine, including those asserted against Microsoft.

Infernal alleges that games developed by Microsoft on the Unreal Engine 4, CryEngine 3, CryEngine 4, Alan Wake Engine, Renderware Engine, Forge Engine Forzatech Engine, Northlight Engine, Unity Engine, Foundation Engine, Halo 4 Engine, Halo 5: Guardians Engine, and Halo: Reach Engine infringe the asserted patents.  These allegations seem to include the lions’ share of games on Microsoft’s consoles, including but not limited to Alan Wake, Crackdown, Crackdown 2, Crackdown 3, Dead Rising 3, Fable Legends, Forza Motorsport 6, Forza Motorsport 7, Gears of War 4, Halo 4, Halo 5: Guardians, Halo: Reach, Kalimba, Ori and the Blind Forest, PlayerUnknown’s Battlegrounds, Quantum Break, ReCore, Rise of the Tomb Raider, Ryse: Son of Rome, Sea of Thieves, State of Decay, and Super Lucky’s Tale.

Interestingly, Infernal’s case was filed in the Eastern District of Texas.  While that venue was once a hotbed of patent litigation, in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017), the Supreme Court limited venue in patent infringement actions to where (1) the defendant resides, or (2) the defendant has committed acts of infringement and has a regular and established place of business.  This ruling has generally been seen as a significant limitation on bringing cases in the Eastern District of Texas.  Nonetheless, Infernal alleges that Microsoft is a resident of the State of Texas, has a designated agent for service of process in the State of Texas, and has committed acts of infringement in the State of Texas.  Whether the facts underlying these assertions are sufficient for venue in the Eastern District of Texas after TC Heartland remains to be seen.

We will monitor this case and keep our readers informed of any updates.
On April 9, 2018, the Federal Circuit ruled in favor of defendants Microsoft Corporation, Ubisoft, Inc., Nintendo of America, Inc., Electronic Arts Inc., Harmonix Music Systems, Inc., and Majesco Entertainment in a patent infringement suit brought by Australian individual Richard J. Baker.   The suit relates to Baker’s U.S. Patent No. 5,486,001, which relates to an instructional aid for movements.  The accused products included video games that incorporated an image capturing device (like a camera) connected to a gaming console or personal computer.

The ’001 Patent reads, in claim 1 and as amended during prosecution:
capturing and storing initial visual image signals representative of a particular movement at a first location,

storing preferred image signals representative of a selected preferred movement at a second location remote from said first location in a data base of a computer,

transmitting said captured and stored visual image signals from said first location to said computer at said second location,

. . .

transmitting said regenerated signals from said computer at said remote second location to said first location and stored in image presentation means which permits viewing thereof with dialogue relating to said regenerated visual secondary image signals.

The Federal Circuit affirmed the district court’s finding that “remote,” as used above, requires “more than physical separation at the same location.”  The Federal Circuit found that this amendment prevented infringement by any of the defendants, both literally and under the doctrine of equivalents.

Cases like these emphasize the importance of careful patent prosecution.  Per the Federal Circuit, the “first location” and “second limitation” language used above was added to traverse a reference (U.S. Patent No. 5,184,295 to Mann).  Little changes like these, which invoke the doctrine of prosecution history estoppel, can have significant ramifications during litigation, as demonstrated here.  It’s game over for Mr. Baker in this case.
On April 2, 2018, PUBG Corporation and PUBG Santa Monica, Inc. (“PUBG”) sued NetEase, Inc. and NetEase Information Technology Corp. (“NetEase”) over alleged copyright infringement, trade dress infringement, and unfair competition.  The complaint alleges, in short, that NetEast’s titles Rules of Survival and Knives Out are knockoffs of PUBG’s massively popular Playerunknown’s Battlegrounds.

PUBG’s lengthy (155 page!) complaint provides a listing of all instances in which Rules of Survival and/or Knives Out allegedly copied Playerunknown’s Battlegrounds.  Some examples, as alleged by PUBG:
  • “Pre-Play Area” – Playerunknown’s Battlegrounds, Rules of Survival, and Knives Out feature a pre-play area “where players can meet each other and try out weapons while waiting for other players to join.”
  • Play Map – The layout of the maps in all three games are “strikingly similar.”
  • “Scenes and Locations” – Both Rules of Survival and Knives Out feature, like Playerunknown’s Battlegrounds, locations such as a shooting range, a rural aqueduct, a port with shipping containers, a farm area, two-story hexagonal towers, and the like.
  • Air Jump – In Rules of Survival and Knives Out, as in Playerunknown’s Battlegrounds, players jump at any point from an airplane onto various portions of a map.  Players may then descend in freefall and release a parachute. 
  • Weapons – For example, where Playerunknown’s Battlegrounds features a M416, Rules of Survival features an MA14.  Both games also feature, for example, red dot sights, vertical foregrips, bullet loops, and other similar accessories.
  • Frying Pans – Playerunknown’s Battlegrounds, Rules of Survival, and Knives Out feature frying pan weapons. 
  • “Winner Winner Chicken Dinner” – Both Playerunknown’s Battlegrounds and Rules of Survival use this phrase to indicate the winner of a match.  Rules of Survival also has a rubber chicken which may be used as a melee weapon. 
  • Shrinking Gameplay Area – Playerunknown’s Battlegrounds, Rules of Survival, and Knives Out have a progressively shrinking gameplay area and a timer which warns players when a next shrinking event will occur.
Individually, all of the above examples could arguably be found in other video games or in real life.  For example, the M416 in Playerunknown’s Battlegrounds is arguably a version of the Heckler & Koch HK416.  As another example, Playerunknown’s Battlegrounds is far from the progenitor of the term “Winner Winner Chicken Dinner,” as the term originated during the Depression. It seems likely that PUBG will argue that the combination of such elements, rather than the individual elements themselves, has been copied by NetEase.

PUBG is far from the first game company to sue creators of alleged copycat game titles.  Tetris Holding, the company that owns the rights to Tetris, won a battle against a copycat app.  In that case, the Court found that the fact that game mechanics and game rules are not entitled to protection “does not mean, and cannot mean, that any and all expression related to a game rule or game function is unprotectable” such that Tetris Holdings was “entitled to copyright protection for the way in which it [chose] to express game rules or game play as one would be to the way in which one chooses to express an idea.”  Similar battles occurred between the creators of The Sims Social and The Ville and between the creators of Triple Town and Yeti Town.  Our firm (Banner & Witcoff), for example, represented in a similar dispute against involving an alleged knockoff of Wargaming’s World of Tanks.
On March 30, 2018, Universal Entertainment Corporation (“Universal”) sued Aruze Gaming America, Inc. (“AGA”) and Japanese billionaire Kazuo Okada (“Okada”).  The asserted patents generally relate to slot machines.  The accused products include a wide variety of products made by AGA, including the G-SERIES, G-STATION, CUBE-X family of games (e.g., “Fire and Thunder,” “King of Dragons,” and “Mighty Lion”).

This case is interesting not necessarily because of the patents themselves, but rather because of the alleged corporate drama involving Okada, Universal, and AGA.  According to the complaint, Okada was the founder of Universal, which at one point owned AGA as a subsidiary.  Around 2008, Universal allegedly transferred all of its shares of AGA to Okada, spinning off AGA as an independent company.  Around 2009, Okada allegedly instructed Universal employees to license certain patents to AGA, though a license was never executed.  Around June of 2017, Universal purportedly discovered that Okada committed some form of “misconduct in relation to foreign business,” purportedly costing Universal around 2.2 billion Japanese Yen (around 20 million US dollars).  According to the complaint and other news sources, Okada was later voted out of Universal (by, among others, his son, daughter, and wife), and Okada appears to have turned his attention to AGA while he attempts to regain control of Universal.

This case is an excellent example of a danger commonly faced by many companies: founder overreach.  Savvy, charismatic leaders can enable companies to grow fast, but such founders can become overly powerful and dominate company decision-making.  In the intellectual property context, this can easily result in inventorship disputes, questionable licensing practices, and attempted theft of intellectual property (e.g., trade secrets) by departing founders.  Needless to say, such issues can easily be remedied through careful legal counsel.
On March 29, 2018, the New York State Court of Appeals, New York’s highest court of appeal, rejected actress Lindsay Lohan’s contention that the character “Lacey Jonas” from Grand Theft Auto V (“GTAV”) appropriated her likeness. A similar suit by Karen Gravano (a “Mob Wives” personality) regarding the “Andrea Bottino” character from GTAV was rejected on the same day.

Lohan alleged that at least two parts of GTAV unlawfully duplicated her likeness. First, in an “Escape Paparazzi” event, a female character named “Lacey Jonas” (who describes herself as a “really famous” “actress slash singer” and a “voice of a generation”) hides from the paparazzi. Second, a “Beach Weather” splash screen in GTAV allegedly duplicated Lohan’s likeness. That image is duplicated below.

The Court rejected Lohan’s argument, finding that both “Lacey Jonas” and the woman depicted in “Beach Weather” were “indistinct, satirical representations of the style, look, and persona of a modern, beach-going young woman that are not reasonably identifiable as [Lohan].” This is arguably a formal way of saying that self-important blonde actresses aren’t exactly in short supply in Los Angeles.

Karen Gravano similarly asserted that GTAV’s character “Antonia Bottino”–in the game, the daughter of a mobster planning to go on a television show–unlawfully duplicated her likeness. The Court similarly found that Gravano was “not recognizable from the images at issue.”

Though Lohan and Gravano lost, the Court’s ruling did hold that an avatar, such as a videogame character, may unlawfully misappropriate the likeness of an individual. Developers may want to be cautious in view of this holding–the wrong cutting edge satire could invite a lawsuit, no matter how poorly-founded.

On March 27, 2018, Hybrid Audio, LLC (“Hybrid Audio”) sued Nintendo of America Inc. and Nintendo Co., Ltd. (“Nintendo”) for alleged infringement of RE 40,281, a reissue of U.S. 6,252,909.  The allegedly infringing products include the Nintendo Wii and the Nintendo DS.  RE 40,281 generally relates to signal processing and is part of technology used for MP3 technology, and Hybrid Audio’s argument is that Nintendo infringes via practicing various parts of the MP3 technical standard (ISO/IEC 11172-3:1993).

As part of Hybrid Audio’s complaint, it notes that Nintendo may enter a Reasonable and Non-Discriminatory (“RAND”) agreement to license RE 40,281 as part of the MP3 Standards. Hybrid Audio also indicates that products supplied by Microsoft Corporation are not part of the allegedly infringing products, suggesting that Microsoft has possibly already entered into such an agreement.

RAND agreements, sometimes called FRAND agreements (for “Fair, Reasonable, and Non-Discriminatory”), are commonly used in patent pools. In industries where standards (e.g., audio standards like MP3 and cellular communications standards like 3G or LTE) are important, patent owners often collectively pool “standards-essential” patents and mutually agree to license those patents on FRAND/RAND terms. For patent owners, this can be a good deal: once their patents become standards-essential, users of the standard must license their patent, albeit on RAND/FRAND terms. For licensees, this can also be a good deal: because all patent owners must license their standards-essential patents on RAND/FRAND terms, they can usually acquire licenses to the standard fairly easily and with reasonable terms.

Strangely, Hybrid Audio's complaint specifically identifies the Nintendo Wii and Nintendo DS as infringing products.  The Nintendo Wii was launched in 2006, whereas the Nintendo DS was launched in 2004.  35 U.S.C. § 286 limits damages to six years prior to the filing of a complaint, meaning that Hybrid Audio's recovery will be limited to the period from 2012 to 2018.  During that period, Nintendo was marketing different a next generation of game consoles (the Wii U and the 3DS), which are not referenced in Hybrid Audio's complaint.  Potential damages related to sales of the Wii and DS are likely to be extremely small.
On Mar. 9, 2018, Epic Games, Inc. (“Epic”) sued Joseph Sperry (a/k/a “Spoezy”), yet another alleged distributor of cheats for the popular online game Fortnite.

Similar to previous cases (discussed here, herehere, and here), Epic alleges that Spoezy made, used, and sold cheating tools for Fortnite.  Much unlike previous cases, however, to acquire jurisdiction against Spoezy, Epic merely argues that Spoezy purposefully availed himself to the privileges of conducting activities and doing business in North Carolina, rather than using the YouTube DMCA process.  This may be because Spoezy is a resident of New York, unlike previous, non-American defendants.

As a fun side note, Spoezy’s website formerly listed him as a “Cheater[,] Designer[, and] Editor,” though it now lists him as a “Gamer[,] Designer[, and] Editor.” 
On January 29, 2018, FaZe Clan, Inc. (“FaZe Clan”) , an online gaming team, was sued by FAZE Apparel, LLC (“FAZE Apparel”) for trademark infringement, false designation of origin, and unfair competition.  The case, originally filed in the Northern District of California, was transferred to the Central District of California on Mar. 13, 2018.  The case is now undergoing court-directed alternative dispute resolution.

When FaZe Clan is not sponsoring energy drinks (“FaZeberry”) or awkwardly self-promoting in Gamestop stores, FaZe Clan sells merchandise promoting their brand.  FAZE Apparel asserts that FaZe Clan is an “admitted past infringer” of its marks which simply attempted to “steamroll [FAZE Apparel] and improperly profit off its brand.”  According to FAZE Apparel, FaZe Clan has been well aware of FAZE Apparel for at least four years: in 2013, the USPTO refused to register various trademarks for FaZe Clan, finding that such marks would be confusingly similar to those owned by FAZE Apparel.  Since then, per FAZE Apparel, FaZe Clan has repeatedly attempted to market “FaZe” materials, only to (allegedly) back off when confronted by FAZE Apparel.

Cases like these underscore the importance of careful brand planning.  FaZe Clan is now in an awkward position: if FAZE Apparel’s assertions have any merit, FaZe Clan will be forced to either re-brand or seek some form of license from FAZE Apparel.  Even if FAZE Apparel’s assertions are not meritorious, FaZe Clan will likely have to spend significant sums to defend themselves from this lawsuit. 

Either or both of these issues could have been avoided had FaZe Clan taken a more informed and/or conservative approach when selecting its name.  This case evidences that an ounce of prevention is worth a pound of cure.
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