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AM General LLC v Activision Blizzard Inc et al, 
FIled November 7, 2017, SDNY, No. 17-08644.

AM General—the maker of HUMVEE vehicles—has sued Activision over Call of Duty’s inclusion of HUMVEE vehicles in various Call of Duty games. AM General claims trademark and trade dress infringement, among others. The complaint specifically mentions eight Call of Duty games, including Modern Warfare, Black Ops II, Ghosts, and Heroes. In addition to the video games themselves, the complaint also alleges infringement by the Call of Duty series of Mega Bloks and BradyGames strategy guides.

Image source - wikia
According to the complaint, the use of HUMVEE vehicles throughout the Call of Duty series is unauthorized. There are several issues at play in a case like this. Trademark and trade dress rights—which AM General is asserting here—are often at issue in video games. If the use of a mark creates a likelihood of confusion or dilutes/tarnishes the mark, it may be trademark infringement.

Regarding likelihood of confusion, AM General claims that the appearance of their HUMVEE vehicles in Call of Duty games implies that AM General endorsed or sponsored the Call of Duty games. And for a massively successful franchise like this one—according to the complaint, the Call of Duty franchise has generated more than $5.2 billion in revenue—AM General obviously would be interested in the revenue generated by such a license. One issue may be whether in some cases consumers would be more likely to assume the mark owner endorses the mark’s use when the mark appears in a big budget AAA game—like Call of Duty—which might weigh in favor of likelihood of confusion.

Another typical issue in these types of cases is whether the use of a particular product—e.g., a real-life vehicle—in a video game might dilute or tarnish a trademark protecting that product. The threat of tarnishment arises when use of a mark “conjure[s] associations that clash with the associations generated by the owner’s lawful use of the mark.” L.L. Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26, 31 (1st Cir. 1987). For example, if players can use HUMVEE vehicles in the game to run people over, AM General might see that as tarnishing the HUMVEE mark.

Dilution occurs when a mark is used in a context other than the original context of the protected mark. Since real-life HUMVEE vehicles are specifically designed for use in war zones, Activision might argue that a video game depicting the use of HUMVEE vehicles in a war zone may not tarnish or dilute marks protecting those vehicles.

Another typical defense for video game developers is that the mark’s use is functional. When the mark’s use is functional or serving “other than a trade-mark purpose,” a mark holder might not have a winning infringement claim.

Activision’s lawyers have not yet responded to the call of duty—at least in answering AM General’s complaint. But when they do, some of these defenses will likely be weapons in their arsenal. In the meantime, let us know below whether you agree or disagree with AM General’s claims against Activision.

Thanks to Greg Israelsen for preparing this article.
On November 6, 2017, Activision Blizzard, Inc. (“Blizzard”) filed a petition for inter partes review (“IPR”) against Game and Technology Co. Ltd. (“GAT”).  Blizzard is challenging claims 1-7 of U.S. Patent No. 7,682,243 (the “’243 Patent”).  The same claims in the same patent were challenged by Wargaming Group Ltd. (“Wargaming”) in IPR2017-01082, which Blizzard plans to join.



Activision’s IPR petition is responsive to a lawsuit that GAT brought against Blizzard in the Eastern District of Texas on July 9, 2015 (No. 2:15-CV-1257, now 2:16-CV-6499 in the C.D. Cal.).  In that case, GAT has asserted that Blizzard’s World of Warcraft infringes three patents: the ’243 Patent, U.S. Patent No. 8,253,743, and U.S. Patent No. 8,035,649.  In separate suits, GAT has sued Wargaming, Valve Corporation, and Riot Games, Inc.

The ’243 Patent generally relates to a “pilot” and a “unit associated with the pilot,” such as a player character and an animal mount.  Claim 1 of the ’243 Patent reads:

1. An online game providing method for providing a pilot and a unit associated with the pilot at an online game, the method comprising the steps of:

controlling an online game such that a player can manipulate a pilot and a unit associated with said pilot, said pilot being a game character operated by a player, said pilot representing the player, said unit being a virtual object controlled by the player;

maintaining a unit information database, the unit information database recording unit information on said unit, in which the unit information includes ability of said unit and sync point information;

maintaining a pilot information database, the pilot information database recording pilot information on said pilot, in which the pilot information includes a unit identifier indicating said unit associated with said pilot, ability of said pilot and the ability of said unit associated with said pilot;

receiving a request for update on first pilot ability information of a first pilot;

searching for unit identifier information associated with the first pilot by referring to the pilot information database;

searching for sync point information associated with the searched unit identifier information by referring to the unit information database; and


updating and recording the first pilot ability information and unit ability information associated therewith in accordance with the searched sync point information such that said ability of unit is changed proportionally to changes in ability of the pilot by referring to said sync point,

wherein said sync point information is a ratio of which changes in said ability of pilot are applied to said ability of unit, and said steps of searching for unit identifier information and of searching for sync point information are performed by a processor.

Blizzard argues that the ’243 Patent’s “alleged novelty” relates to the “sync point,” bolded above.  Per Blizzard’s petition, the ’243 Patent is anticipated because the Dungeons and Dragons Player’s Handbook Core Rulebook I v. 3.5 (“D&D 3.5”) discloses “player characters with animals whose abilities are synchronized based on ratio relationships, so that increases to the character’s abilities are applied proportionally to the animal’s abilities.”  For instance, D&D 3.5 allegedly discloses that a druid’s animal companion’s abilities increase corresponding to the class level of the druid.

More information on the Inter Partes Review process is available here.
October 27, 2017, Epic Games, Inc. (“Epic”) sued three foreign individuals–James Mendes, Konstantin Vladimirovich Rak, and Oleksey Olekseevich Stegailo–for copyright infringement, trademark infringement, false designation of origin, breach of contract, and, under California law, unfair competition.  Epic alleges that the defendants were distributing and popularizing cheats for the game Fornite.  This suit may sound familiar: Epic filed similar suits against other alleged Fortnite hackers on October 11 and on October 17.


Epic’s strategy in this case is similar to its strategy in its suit against Philip Josefsson and Artem Yakovenko: file a DMCA complaint against a video demonstrating the hacks, wait for the defendant to file a counter-notification, and use the counter-notification as basis for suing the defendant in a U.S. court.  The timing of Epic’s lawsuits appears to be the result of the timing of the defendants’ counter-notification.
On October 17, 2017, Epic Games sued Philip Josefsson and Artem Yakovenko for copyright infringement, trademark infringement, false designation of origin, breach of contract, and, under California law, unfair competition. 



The allegations against Josefsson and Yakovenko are similar to those made against Brandon Broom and Charles Vraspir.  Specifically, Epic alleges that Josefsson and Yakovenko created, marketed, and distributed cheats for Fortnite

Interestingly, Epic claims that both defendants, who do not live in the United States, consented to venue in the United States by participating in the YouTube DMCA notification/counter-notification process.  Mr. Josefsson is a resident of Sweden, and Mr. Yakovenko is a resident of Russia.  Both defendants posted YouTube videos displaying their cheats, and Epic filed DMCA notifications against those videos to take them down.  Both Josefsson and Yakovenko filed counter-notifications against Epic’s DMCA notifications.  Because Josefsson and Yakovenko, per the terms of the counter-notification, thereby “consent[ed] to . . . if my address is outside of the United States, the judicial district in which YouTube is located,” Epic argues in its complaint that both parties consented to be sued in the Northern District of California. 

This suit appears to be the latest in a string of suits by Epic to take “every measure to ensure [that] cheaters are removed from Fortnite Battle Royale.
On October 11, Epic Games, Inc. and Epic Games International (“Epic”) sued individuals Brandon Broom and Charles Vraspir in two separate suits (5:17-CV-0511 and 5:17-CV-0512) for copyright infringement, circumvention of the Digital Millennium Copyright Act (“DMCA”), breach of contract, and intentional interference with contractual relations.  The suits, filed in the Eastern District of North Carolina, relate to Epic's game Fortnite.



Epic alleges that Broom and Vraspir not only cheated in Fortnite, but also assisted others in doing so on the website AddictedCheats.net.  When cheating themselves, Broom and Vraspir allegedly intentionally targeted Fortnite streamers (i.e. “stream sniping”) because, allegedly per Vrapsir, “its [sic] fun to rage and see streamers cry about how loaded they are and then get them stomped anyways.”  Epic’s complaints seem to suggest that Vraspir was particularly aggressive on cheating in Fortnite because he was banned from Fortnite: allegedly per Vraspir, his ban “unleash[ed] the beast” such that “Epic will have to take care or their game will die.”

Fortnite’s popularity in recent weeks has exploded since a recent free mode released which, some allege, provides a game mode duplicative of the massively popular PlayerUnknown’s BattlegroundsSome speculated that Bluehole, PlayerUnknown’s Battlegrounds’ developer, might explore a suit against Epic (indeed, Bluehole issued a public press release complaining about the similarities); however, Bluehole’s extensive reliance on Epic’s Unreal Engine 4 and ongoing licensing relationship with Epic makes such a suit seemingly unlikely.
On October 4, 2017, Landmark Networks, LLC (“Landmark”) sued Nintendo Co. and Nintendo of America (“Nintendo”) for alleged infringement of two networking patents: U.S. 6,856,966 and U.S. 6,018,720.  Landmark asserts that certain features of Nintendo’s eShop infringe its patents.


The patents asserted by Landmark originated from the Japanese company Universal Entertainment Corporation.  Landmark asserts that the patents relate to recording customer data to a “purchaser record medium,” on which both game software and “a predetermined amount of money” are written.

U.S. Pat. No. 6,018,720 Claim 1, for example, recites:

1. A data delivery method comprising:

providing a purchaser rewritable record medium having a primary data area for storing primary data including software, and an additional data area for storing additional data including purchaser inherent data, purchase data and accounting data therein;

recording historical data representing a history of the additional data in both of a computer of a software deliverer and said purchaser rewritable record medium, respectively; and

delivering the primary data, which is requested by a purchaser, from said computer of the software deliverer to said purchaser rewritable record medium when the historical data recorded in said computer of the software deliverer is matched with the historical data recorded in said purchaser rewritable record medium; and

performing an accounting operation.

The thrust of Landmark’s argument appears to be that, because the eShop entails both associating available funds and one or more games with an account, Nintendo infringes Landmark’s patents.

This case is remarkably similar to that filed by Landmark against Valve Corporation (“Valve”), Sony Corporation of America, Sony Interactive Entertainment America, and Sony Interactive Entertainment (collectively, “Sony”) in December of 2016.  The case, originally filed in the Eastern District of Texas as 2:17-CV-00855 but transferred to the Western District of Washington as 2:17-CV-00855, asserted the exact same patents against Valve’s Steam and Sony’s PlayStation Store.  That case was settled by the parties in July 2017.

One issue Landmark may need to overcome in this case is whether these claims are directed to an abstract idea.  Although Courts have begun to slightly relax the application of 35 USC § 101 in patent proceedings, § 101 remains an important threshold issue under Alice v. CLS Bank.

Also note that the '720 patent claims priority to November 7, 1997, and appears on its face to expire a month from now.  Nonetheless, patent law allows a patent owner to collect damages up to six years preceding a lawsuit.
On August 31, 2017, a Northern District of Texas jury awarded plaintiff iLife Technologies, Inc. (“iLife”) $10.1 million from Nintendo of America, Inc. (“Nintendo”) for patent infringement. The accused products included Wii and WiiU games, particularly Wii Sports, Wii Sports Resort, Wii Club Sports, and Mario Kart 8.


Back in 2013, iLife sued Nintendo over patents broadly relating to evaluating motions of a body. The asserted patents were U.S. Pat. No. 6,307,481, U.S. Pat. No. 6,703,939, U.S. Pat. No. 6,864,796, U.S. Pat. No. 7,095,331, U.S. Pat. No. 7,145,461, and U.S. Pat. No. 7,479,890.

Rolling Stone has reported that iLife’s body motion detecting technology is used to, among other things, monitor infants to prevent sudden infant death syndrome (“SIDS”).


U.S. Patent No. 8,000,581: Advertisement scheme for use with interactive content


Issued August 16, 2011, to Sony Computer
 Entertainment America LLC



Summary:

For anyone who’s ever been interrupted from playing a game by an advertisement, this patent at least tries to lessen the agony. Patent ‘581 describes a method to suspend gameplay, display an advertisement, and then resume the gameplay. After a game is initiated, the computer program will provide a player with an indication that the game will be suspended. This could include such indications as the game gradually slowing down, a warning indicating that game play is about to stop, or a visual signal such as a blinking light. A similar warning would indicate that the game is about to continue. The patent also describes the possibility of the program rewinding the game to some extent before resuming the gameplay. While advertisements are no one’s favorite thing to see while gaming, patent ‘581 at least allows free-to-play players to enjoy someone’s content without it impairing their ability to get that high score.


Abstract:


A method for use in advertising includes initiating playing of interactive content, suspending playing of the interactive content, displaying an advertisement, and resuming playing of the interactive content. A computer program product includes a medium embodying a computer program for causing a computer to perform these operations, and a system for use in advertising includes a display and a processing system configured to perform these operations.

 
Illustrative Claims:


1. A method comprising: initiating, through a processor based apparatus, playing of interactive content; suspending, through the processor based apparatus, playing of the interactive content; and displaying a different item of content; wherein the suspending playing of the interactive content comprises synchronizing the suspending playing of the interactive content among a plurality of users interacting with the interactive content.

Research By: Rachel Johns







We’ve previously written with updates about inter partes reviews (“IPRs”), where an accused infringer files a petition with the US Patent and Trademark Office arguing that the asserted patent should’ve never been granted in the first place.

A law passed by Congress in 2011 created, for use starting in 2012, this IPR procedure to allow for the challenge of issued patents. IPRs were designed as a low cost alternative to long, expensive lawsuits with patent owners who hold bad patents. Anyone bothered with a patent can bring an IPR challenge if they meet the standards of the law and regulations, by having a reasonable likelihood of cancelling the patent, acting within deadlines, and paying necessary (and not small!) fees.

The patent owner gets to respond, but the IPR will be decided by highly patent-and-technology-experienced Patent Trial and Appeal Board (“PTAB,” said “Pea-Tab”) administrative patent judges (“APJs”) in 3-judge panels. Once the IPR “petition” is accepted, which usually happens within 6 months, the IPR almost always ends within a year. Some features of IPR favor patent owners, but challengers get first and last briefs in IPR, have the right to use technology experts, get PTAB APJs who decide cases “by the book,” not like juries, and win IPRs at a rate of about 65%, cancelling patents. The procedure is so valued by challengers that they have filed thousands of IPRs, including 1,434 in USPTO fiscal year 2017 alone.

A quick search on Docket Navigator reveals that IPRs have been a popular option for game companies when faced with patent assertions. Since 2013, the top 50 game companies have filed over 250 IPR petitions. Some recognizable names using IPRs as part of their litigation strategy include Sony, Microsoft, Nintendo, Electronic Arts, Activision Blizzard, Valve, Bungie, Ubisoft, and Naughty Dog. Of the IPRs we found that reached a final decision, around 68% had claims of the challenged patent found unpatentable and cancelled. Not a bad success rate for accused infringers!

An interesting statistic close to home at our law firm, Banner & Witcoff, is that its lawyers, paralegals, and staff filed more IPR petitions than any law firm filed in the first half of 2017. We filed 45 IPR petitions for one client in those six months, as well as appearing in about double that number of proceedings when other petitions and appearances on behalf of patent owners as well as patent challengers are counted.

The constitutionality of the IPR process has recently been challenged at the Supreme Court. It remains to be seen whether this popular alternative to litigation will remain a useful option for defendants in patent matters. But what is clear is that IPRs have truly changed the current patent landscape and the dynamics of patent litigation.

We will continue to post updates about interesting IPRs that catch our attention.

Special thanks to Charles Shifley for his help in preparing this post.
Atari Interactive, Inc. v. Nestlé, SA

No. 3:17-CV-04803-SK (N.D. Cal. Aug. 17, 2017)

On August 17, 2017, Atari Interactive sued Nestlé, alleging that a Nestlé KIT KAT® advertisement titled “Kit Kat: Breakout” infringed Atari’s rights relating to the video game BreakoutSpecifically, Atari has sued Nestlé for trademark and copyright infringement, false designation of origin, dilution, and both state and common law unfair competition.

Like many early Atari games, Breakout has a storied history.  Atari founder Nolan Bushnell originally conceptualized Breakout.  As noted by Atari’s Complaint, Steve Jobs and (“[i]n reality”) Steve Wozniak reduced Breakout from 100-175 chips down to 20-30 chips, allowing Breakout to be produced much more cheaply.  Some of the reward money earned by Jobs and Wozniak by improving Breakout was used to form Apple, and many of Wozniak’s innovations from the Breakout circuit board were used in developing the Apple II personal computer.

Nestlé’s “Kit Kat: Breakout” advertisement depicts four adults on a couch holding video game controllers and playing what appears to be a Breakout-style video game on a television in a train station:


Per its complaint, Atari appears particularly worried that Nestlé’s association with various scandals may be falsely imputed to Atari.  This is particularly the case because Atari heavily relies on its brand recognition to expand into new markets.  For example, most recently, Atari has been heavily promoting both a new throwback console as well as Atari-branded “speakerhats” (which are exactly what the name suggests).

Ed. - I checked and it's too late to get into the speakerhats beta.

Thanks to Kirk Sigmon for preparing this post
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