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As previously reported, Nintendo sued Nyko for design patent infringement and trademark infringement over the Wii's nunchuk controller. On Wednesday, Dec. 17, 2008, the parties filed a STIPULATION for Dismissal of Action by parties, indicating the case has been settled. Under the setlement agreement, Nyko can continue to sell a redesigned version of its controller. Other details remain undisclosed. We're closing the books on this one.

The Patent Arcade is sad to report that we have lost one of our own. Steve Davidson, a friend, colleague, and groundbreaking attorney in the video game and virtual world fields, passed away unexpectedly this morning, December 2, 2008. Steve completed 35 years as an attorney at Leonard, Street and Deinard law firm where he was a pioneer of technology law, speaker at law conferences around the world and arbitrator and mediator for intellectual property disputes. He was a past president of the International Technology Law Association and an adjunct professor at the University of Minnesota Law School. Steve and I worked together on the American Bar Association's Special Committee for Computer Gaming and Virtual Worlds, and we valued highly his insight, suggestions, leadership, and support.

Funeral service THURSDAY (12/4/08) at 1 PM, BETH EL SYNAGOGUE, 5224 W. 26th St., St. Louis Park. In lieu of flowers, memorials are preferred to Sholom Home Auxiliary or donor's choice. SHIVA at the family residence Thursday evening at 7 PM. Hodroff-Epstein 612 871-1234.

Our thoughts go out to Steve's family. He will be missed by us all.
Capcom Co., Ltd. et. al. v. The MKR Group
N.D. Cal. 2008
(by Shawn Gorman)

While relatively short lived, this legal battle provides several insights for both video game producers and their legal teams. At issue was whether Capcom’s “Dead Rising” video game infringed any copyright, trademark, or other intellectual property rights of MKR, the owner of the copyrights and trademarks to the 1979 motion picture "George A. Romero's Dawn of the Dead.” Capcom, a well-established video game developer, contacted MKR in 2004 for potential licensing of the rights. The licensing effort, however, was not pursued further and Capcom developed and released “Dead Rising” in 2006. The box containing the game included a disclaimer reading: "THIS GAME WAS NOT DEVELOPED, APPROVED OR LICENSED BY THE OWNERS OR CREATORS OF GEORGE A. ROMERO'S DAWN OF THE DEAD™[.]" That same year, MKR discovered that Capcom applied to register "Dead Rising" as a trademark with the U.S. Patent and Trademark Office. A dispute ensued and Capcom filed a complaint for declaratory relief on February 12, 2008, seeking a declaration that its video game does not infringe any copyright, trademark, or other intellectual property rights belonging to MKR and subsequently filed a Motion to Dismiss MKR’s claims on June 11, 2008.

In a rare instance, the court dismissed MKR’s allegations against Capcom under Federal Rule 12(b)6. Citing prior precedent, the court understood the rarity in which such motions should be granted, stating that motions to dismiss “generally are viewed with disfavor and are to be granted rarely.” Indeed, such motions are only granted if “it appears beyond doubt the plaintiff can prove no set of facts in support of his claim that would entitle him to relief." As discussed below, the court granted the motion and dismissed the claims of copyright and trademark infringement, as well as claims under California state law with prejudice (meaning that Capcom cannot refile with respect to these issues).

Copyright Infringement

Capcom did not contest MKR's copyright to “Dawn of the Dead.” Therefore, the sole issue was whether “Dawn of the Dead” and “Dead Rising” were substantially similar in their protected elements. The court again reiterated its understanding that motions to dismiss should rarely be granted, stating “MKR understandably invokes case precedent that calls into question the propriety of resolving the issue even on summary judgment let alone on an initial pleading motion.” Nonetheless, the court cites prior case law that “[t]here is ample authority for holding that when the copyrighted work and the alleged infringement are both before the court, capable of examination and comparison, non-infringement can be determined on a motion to dismiss.”

The court, however, recognizes that only one prong of the test may be determined by the court. Specifically, the substantial similarity inquiry is comprised of an objective extrinsic test and a subjective intrinsic test, both of which the copyright holder must ultimately establish. “Only in the event that the claim fails when analyzed under the objective "extrinsic" prong is it subject to dismissal, for the intrinsic test, which ‘examines an ordinary person's subjective impressions of the similarities between two works,’ is exclusively within the province of the jury.”

Under the analysis, the court considers the actual concrete elements that make up the total sequence of events and the relationships between the major characters rather than plot ideas for stories.” As a comparison, the court discussed a prior dispute regarding a motion picture set in the Bronx:

There, the court held that because elements such as derelict cars, drunks, prostitutes, vermin, morale problems of police officers, and the familiar figure of an Irish cop would appear in any realistic work about police officers in the Bronx, those elements represented unprotectable scenes a faire.
Scenes a fair is “where events flow naturally from generic plot-lines or sequences of events necessarily resulting from the choice of a setting or situation constitute one type of unprotectable idea.” Thus, elements relating to “humans battling zombies in a mall during a zombie outbreak” were unprotectable.

The court also found several differences between the sequence of events, characters, setting, and mood of the two works of art. Considerations relating to the “theme” and “pace” may be of special importance to video games developers. First, by its very nature, the “pace” of an allegedly infringing video game may rarely be a factor in determining infringement. Indeed, the pace is often set by the player. As noted by the court:
The pace in Dead Rising is one of constant, fast-paced action depending on the player's preference. If the player follows the game storyline cues, a fast pace ensues to facilitate completion of the game with the rescue of all survivors within the three day window. By the same token, if the player chooses not to follow the storyline cues, then the pace slackens and the player wanders the mall and confronts zombies. Even if this is viewed as presenting some superficial similarity, "pace, without more, does not create an issue of overall substantial similarity between the works."
The court also noted the differences in the “theme” of the two works of art. Specifically, as argued by MKR, “Dawn of the Dead” relates to “a satirical social commentary on the excesses of consumerism,” while “[t]o the extent that Dead Rising may be deemed to posses a theme, it is confined to the killing of zombies in the process of attempting to unlock the cause of the zombie infestation.” The court appears to recognize that often players will play a game merely to play it, not for any social commentary. Furthermore, a game that sells for $60 to be played on a console that costs several hundred dollars was unlikely a social commentary of the excesses of consumerism.

The court swiftly addresses MKR’s allegations that the game industry perceives Dead Rising to be an obvious "rip-off" of Dawn of the Dead. The court reiterates that:
the ultimate issue on this motion is whether or not the allegedly infringing work implicates protectable elements under copyright law, regardless of whether or not it is, in fact, a "rip-off." Moreover, to the extent that the argument eventually would become relevant, it would arise only in the application of the "intrinsic" test, the second prong of the copyright analysis. As MKR must first successfully pass through the extrinsic test, which as set forth above it does not accomplish, the perception in the marketplace that a work has been lifted, accurate or otherwise, simply does not come into play.
Lanham Act Claim

MKR plead that Capcom sought to capitalize on: (1) Romero's name on a disclaimer; (2) the term "dead" in its title; (3) the zombie head design trademark on Dead Rising's packaging; and (4) the "plaid boy" costume consisting of a blood stained, plaid shirt, and a zombie mask. The court swiftly rejects each of the arguments.

First, the court finds that Romero’s name on the disclaimer is mere nominative use. Specifically, there is no other way to refer to the movie than by its title, the use of the full title is necessary to identify the movie and differentiating between other different movie titles, and, nothing about using a mark in a disclaimer denying affiliation gives rise to confusion.

Regarding the use of “dead,” the court held that the “shared use of one word and the idea of zombies awakening is not enough to sustain a charge of infringement.” Lastly, the court found that the “zombie presented also appears to be much more lifelike than the half of the zombie head on the cover of Dawn of the Dead.” Regarding the plaid shirts, the court points back to its copyright analysis, in which it found the zombies in Dead Rising “to be stock elements with largely generic attire. While Dead Rising does sport some zombies in plaid and covered in blood, those attributes are too hazy to amount to substantial similarity.”

On November 14, 2008, the parties filed a stipulated agreement with the court. As part of the agreement, Capcom waives its right to seek attorneys’ fees, expenses and costs incurred in relation to the above titled actions and MKR waives its right to appeal the court’s ruling. MKR further agreed to withdrawal its opposition to Capcom’s trademark for “DEAD RISING.” (So far, the court has not approved the agreement)

As discussed below, this case had some interesting points regarding judicial notice.

Judicial Notice

As video game development continues to increase and thus have issued litigated in court, the concept of judicial notice will need to be addressed. Specifically, courts can take as true those facts which are generally known within the court's territorial jurisdiction; and those that are “capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned, for example, almanac, dictionary, calendar or similar sources.” In this case, the court took judicial notice of the contents of “Dawn of the Dead” and “Dead Rising,” however, the court did not take judicial notice of the script of “Dead Rising.” The court reasoned that the scripts “authenticity cannot be determined by resort to irrefutable sources because it does not reflect who wrote it, nor when and for what purpose it was written, it was not filed with Capcom's pending copyright for Dead Rising, and by its nature it may not track exactly how the game itself appears to the player.” Therefore, video game developers may consider indicating the authors on scripts and copyrighting at least portions of the game as they would appear to a player, such as select animations and introduction screens.

The court also did not take judicial notice of several prior movies and video games relating to zombies “especially in light of the fact that many of these movies were made long ago, indeed in some instances as far back as 1932.” Lastly, citing prior precedent that “Wikipedia may not be a reliable source of information,” the court declined to extend judicial notice to Wikipedia articles that allegedly provided synopses of these movies and video games. This is similar to the stance taken by the U.S. Patent & Trademark Office when examining patent applications. Specifically, in 2006 the USPTO indicated that Wikipedia would no longer be used as an accepted source of information. It appears that Wikipedia articles carry little, if any, weight in legal environments.
I recently wrote a series of short articles for LinuxInsider regarding IP issues as they arise in virtual worlds and video games. Each article was necessarily short, so there wasn't room to go into a lot of detail, but it provides some basic IP information regarding patents, copyrights, and trademarks for those that are interested:

The Rocky Legal Landscape of Virtual Worlds, Part 1: Trademarks
(Nov. 12, 2008)
The Rocky Legal Landscape of Virtual Worlds, Part 2: Patents (Nov. 19, 2008)
The Rocky Legal Landscape of Virtual Worlds, Part 3: Copyrights (Nov. 26, 2008)

Well, as is often the case, the cost to settle far outweighs the cost to litigate to prove a point. It appears that is true here. As we previously reported, THQ sued Activision over the cover artwork that Activision was going to use for its baja racing game. Instead of litigating to determine whether it was copyright infringement (or trade dress infringement) or not, Activision appears to have agreed to simply change the artwork, shown at left. The artwork was taken from a court filing by Activision, after which THQ filed papers on Nov. 18, 2008, dismissing the lawsuit with prejudice (meaning they cannot refile with respect to this issue).

Would it have been infringement by Activision? Who knows. But reasonable minds definitely prevailed in this case, as both sides realized that litigation would have far outweighed the cost to simply change the artwork before the game is released. Case closed.
Its not every day that we get to report TRADEMARK news, so this is a refreshing change from the norm. On Nov. 11, 2008, the United States Patent & Trademark Office granted what is believed to be the first trademark registration for a user's avatar as an indication of the source of goods & services. Registration number 3,531,683 is for Computer programming services, namely, content creation for virtual worlds and three dimensional platforms. The interesting part, however, is the mark itself (pictured at left), which is an actual avatar in the virtual world of Second Life. The mark was registered on the Principal Register, meaning that the mark inherently has secondary meaning as a source of origin of goods and/or services (i.e., the mark is not generic or descriptive). The description of the mark reads: "The color(s) black, white, green, peach and blue is/are claimed as a feature of the mark. The color blue appears in the wings and the hair accessories. The color green appears in the shirt and skirt. The color black appears in the hair, eyes, eyebrows, lips, glasses, necklace, bra, waistband, in the striped pattern on the arms and stockings, as well as the toe and calf areas of the boots. All the elements of the drawing are also outlined in black. The color white appears in the eyes, the striped pattern on the arms and legs, as highlights on the black toes of the boots, on the front of the boots, and in the laces. The color peach appears in the skin."

As the boundary between virtual world and real world continues to blur, trademark owners are now more likely than ever to consider enforcing trademark rights across real/virtual world boundaries. It's also nice that the USPTO considers use of a trademark in a virtual world to be a use in interstate commerce (a requirement for obtaining a federal trademark registration, because federal trademark rights originate under the commerce clause of the United States Constitution).

Score 1 for virtual world IP rights.
Well, it looks like Nintendo has been sued for patent infringement again. This time by Motiva LLC, for infringement of U.S. Pat. No. 7,292,151, which is directed to a "Human Movement Measurement System." The patent appears to relate to "a system and methods for setup and measuring the position and orientation (pose) of transponders. More specifically, for training the user to manipulate the pose of the transponders through a movement trajectory, while guided by interactive and sensory feedback means, for the purposes of functional movement assessment for exercise, and physical medicine and rehabilitation." The '151 patent has 91 claims, so there might be a bit of work to do in this case, unless Motiva only asserts a few claims.

The title and above description would make one think this has something to do with Wii Fit, but the claims are not so limited. For example, claim 1 recites:

1. A system for tracking movement of a user, comprising: a first communication device comprising a transmitter for transmitting signals, a receiver for receiving signals and an output device, said first communication device adapted to be hand-held; a processing system, remote from the first communication device, for wirelessly receiving said transmitted signals from said first communication device, said processing system adapted to determine movement information for said first communication device and sending data signals to said first communication device for providing feedback or control data; and wherein said first communication device receives and processes said data signals from said processing system and wherein the output device provides sensory stimuli according to the received data signals.

Claim 1 indicates that the first communication device is hand-held, which would appear to relate most closely with the Wiimote, not the Wii Fit. Claim 50 (the only other independent claim), also appears to be describing the Wiimote:

50. An apparatus for use in tracking movement of a user, comprising: a transmitter for transmitting signals; a receiver for receiving signals wirelessly from a remote processing system; wherein the apparatus is hand-held; wherein the receiver is adapted to receive feedback or control data signals from the processing system, the feedback or control data signals derived from processed information including movement information of the apparatus; and wherein the receiver receives the data signals from the processing system and wherein the apparatus processes the received data signals to provide feedback or control information to the user.

The '151 patent was filed July 22, 2005, and the earliest possible priority date of the '151 patent is July 29, 2004. The Nintendo Wii was launched November 19, 2006, and was certainly in development for quite some time before that, so I am willing to bet that the validity of the '151 patent is a major issue in this case (in addition to the alleged infringement). Nintendo is sure to argue that the independent claims read on any motion sensor system, and Nintendo was not the first to use such a system (although Nintendo was arguably the first to "successfully" incorporate such a system into a popular game console, which is why they are being sued).

Here is a representative figure from the patent:


The case is Motiva, LLC v. Nintendo Co. Ltd. et al., docket 6:08-cv-429, filed Nov. 10, 2008, in the Eastern District of Texas (Tyler Division). We will add the case to our tracker list and keep you posted.
E.S.S. Entertainment 2000 v. Rock Star Video
__ F.3d __ (9th Cir. 2008)
(by Shawn Gorman)

The (in)famous Grand Theft Auto series, produced by Rock Star Games, has become synonymous with legal entanglement. As noted by the appeals court, the series “is known for an irreverent and sometimes crass brand of humor, gratuitous violence and sex, and overall seediness.” The latest installment of the Series, San Andreas, is centered in East Los Santos, a fictional urban environment that depicts Los Angeles, California. The environment is populated with “virtual liquor stores, ammunition dealers, casinos, pawn shops, tattoo parlors, bars, and strip clubs. The brand names, business names, and other aspects of the locations [were] changed to fit the irreverent ‘Los Santos’ tone.” One such virtual business was a strip club named “Pig Pen,” in which players could interact with strippers.

ESS operates a real-life strip club in East Los Angeles under the name Play Pen Gentlemen’s Club. ESS claimed that San Andreas’ Pig Pen infringed its trademark and trade dress associated with the Play Pen. Rock Star denied infringement and further argued that any infringement would be protected under the First Amendment. The lower court granted summary judgment in favor of Rock Star based upon the First Amendment. The appeals court affirmed the lower courts ruling.

While the ruling was based upon the First Amendment defense, the opinion seemed to focus on whether infringement existed. Setting a humorous tone, the opinion noted that “besides this general similarity, they have nothing in common. The San Andreas Game is not complementary to the Play Pen; video games and strip clubs do not go together like a horse and carriage or, perish the thought, love and marriage. Nothing indicates that the buying public would reasonably have believed that ESS produced the video game or, for that matter, that Rockstar operated a strip club.”

ESS argued that because San Andreas players could spend as much time as they wanted at the Pig Pen virtual strip club, it could be considered a significant part of the Game, thereby leading to confusion. The court rejected the argument with the observation that:

fans can spend all nine innings of a baseball game at the hot dog stand; that hardly makes Dodger Stadium a butcher’s shop. In other words, the chance to attend a virtual strip club is unambiguously not the main selling point of the Game.

It is interesting to note that the test for determining whether the trademark or trade dress rights were trumped by First Amendment considerations has been traditionally applied by the court in instances where trademarks were used in the titles of artistic works, not to alleged use of a trademark in the body of the work. Nonetheless, the court thought that such an application logically followed and the parties did not dispute it.

Further to the previous post, here is a more comprehensive write-up prepared by Brad Wright, a partner of mine at Banner & Witcoff, Ltd.:

Intellectual Property Advisory:

Court Limits Patents on Business Methods

By Bradley C. Wright

On October 30, 2008, the U.S. Court of Appeals for the Federal Circuit issued a rare full-court opinion that may limit the ability of companies to obtain patents on methods of doing business. The appeal was from the U.S. Patent and Trademark Office (PTO), which had rejected Bernard Bilski’s patent application for a method of managing consumption risk. Bilski sought to patent a series of transactions between a commodity provider and market participants in a way that balanced risk. The PTO rejected the patent application on the basis that it was not a “process” as that term is understood in patent law. According to the PTO, in order to be patentable, a process must either be tied to a particular machine or it must transform something tangible. Because Bilski’s invention did neither, it did not meet the definition of a “process.”

Following Earlier U.S. Supreme Court Direction

A majority of the Federal Circuit agreed, concluding that a process is not eligible for patent protection unless it either involves a physical transformation or it is tied to a particular machine – essentially the same test applied by the PTO in rejecting Bilski’s patent application. Chief Judge Paul Michel, writing for the majority of the court, relied on several 1970s-era U.S. Supreme Court decisions in finding that the invention was not patentable. The court distinguished an earlier U.S. Supreme Court case involving the patentability of a process performed on a computer, concluding that the earlier decision presented “a difficult case under its own test.” In that earlier case, the only possible use of the process was on a digital computer, which the U.S. Supreme Court found wholly preempted the use of the process. Chief Judge Michel stated that while the Supreme Court might ultimately decide to change the test for patentability, “we see no need for such a departure and reaffirm that the machine-or-transformation test, properly applied, is the governing test for determining patent eligibility of a process.” In this case, the process did not involve any transformation nor was it tied to any particular machine.

Impact on Computer-Related Inventions

Chief Judge Michel also noted that clever patent attorneys might try to avoid the patentability test by adding some type of insignificant physical steps or features to the patent, and warned that “even if a claim recites a specific machine or a particular transformation of a specific article, the recited machine or transformation must not constitute mere ‘insignificant postsolution activity.’” This warning could present problems for the insurance, banking, consulting, medical, and computer industries, which frequently rely on patents involving a new way of processing information or analyzing data. Merely implementing a new algorithm on a computer might not meet the court’s requirement that even if the invention involves “physical steps” it would not be patentable unless it is limited to a particular machine or transforms something.

Court Rejects “Technology” Requirement

The majority also distanced itself from the Federal Circuit’s earlier 1998 decision in State Street Bank & Trust Co. v. Signature Financial Group, which had seemingly opened the door to business method patents as long as the invention involved a “useful, concrete and tangible result.” The court stated that portions of that earlier opinion should no longer be relied on in deciding whether a process-related invention is eligible for a patent. According to Chief Judge Michel, “we also conclude that the ‘useful, concrete and tangible result’ inquiry is inadequate and reaffirm that the machine-or-transformation test outline by the Supreme Court is the proper test to apply.” The court did, however, reject the suggestion that a patent must involve “technology,” a position advanced by several amicus parties and urged by Judge Mayer in dissenting from the majority opinion. According to Judge Mayer’s dissent, the majority opinion’s test could be circumvented through clever patent drafting, and, citing numerous articles critical of business method patents, he argued that “the patent system has run amok.” The majority also rejected the argument that merely because a patent related to a method of doing business it should not be patentable.

Different Industries Affected

In possibly reassuring industries that rely on computer-related patents, such as medical imaging devices, the majority explained that a process directed to transforming data representing physical things, such as X-rays, would meet the “transformation” test. Yet possibly unsettling for other industries that rely on business method patents to protect their business models, the court stated that “We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine.” Given that companies already have pending thousands of patents in areas likely to be curtailed by the opinion, the added uncertainty of the court’s ruling may last years into the future.

Two judges filed lengthy dissenting opinions, arguing that the settled business expectations of numerous industries would be disrupted, and that wide-ranging areas of the information economy would suddenly become off-limits to patenting. Judge Newman pointed out that more than 15,000 computer-related business method patents had issued in such fields as banking and finance, insurance, data processing, industrial engineering, and medicine. She complained that “I don’t know how much human creativity and commercial activity will be devalued by today’s change in law; but neither do my colleagues.”

Click here for the full opinion: http://www.cafc.uscourts.gov/opinions/07-1130.pdf


Mr. Wright is a shareholder of Banner & Witcoff, Ltd. in Washington, D.C., where he practices intellectual property law with a concentration on prosecution, litigation and counseling in patent and copyright matters, especially in the electrical and computer areas, including Internet and e-commerce. Banner & Witcoff, Ltd. is dedicated to excellence in the specialized practice of intellectual property law, including patent, trademark, copyright, trade secret, computer, franchise and unfair competition law. The firm has over 90 attorneys and agents in its Chicago, Washington, DC, Boston and Portland, OR offices.


www.bannerwitcoff.com

© Copyright 2008 Banner & Witcoff, Ltd. All Rights Reserved. No distribution or reproduction of this issue or any portion thereof is allowed without written permission of the publisher except by recipient for internal use only within recipient's own organization. The opinions expressed in this publication are for the purpose of fostering productive discussions of legal issues and do not constitute the rendering of legal counseling or other professional services. No attorney-client relationship is created, nor is there any offer to provide legal services, by the publication and distribution of this advisory. This publication is designed to provide reasonably accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, counseling, accounting or other professional services. If legal advice or other professional assistance is required, the services of a competent professional person in the relevant area should be sought.

While not strictly a video game case, the Federal Circuit today (October 30, 2008) released its decision in In re Bilski regarding the limits on patentable subject matter, which could certainly affect patentability of some video game patents. In its decision, the Federal Circuit reaffirms that the proper test for patentability of processes is the "machine or transformation" test as set forth by the United States Supreme Court.

The Federal Circuit states: "at present...we...reaffirm that the machine-or-transformation test, properly applied, is the governing test for determining patent eligibility of a process under § 101." Slip op. at 15.

The machine-or-transformation test can be summarized as follows: "A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing." In re Bilski, slip op at 10.

Because most patentability issues could be avoided by crafty claimdrafting, the court provides guidance regarding two "corollaries" to the above test:
1) Mere field-of-use limitations are generally insufficient to render an otherwise ineligible process claim patent-eligible. Slip op. at 15.
2) Insignificant postsolution activity will not transform an unpatentable principle into a patentable process. Slip op. at 16.

I am sure that much more commentary will be available soon, but this at least provides some high points. Oh yeah, the ultimate decision was to AFFIRM the rejection by the Board of Patent Appeals and Interferences. The complete opinion is here: Bilski.pdf

Feel free to contact me if you have questions regarding the applicability of this case to video games and virtual worlds as patentable subject matter.
On October 23, 2008, THQ filed a new lawsuit against Activision Blizzard for trade dress and copyright infringement regarding Activision's planned release of "SCORE International Baja 1000 The Official Game" in late October 2008. THQ alleges that Activision's game infringes the trade dress and copyrights in THQ's game "Baja Edge of Control," which was released in September 2008 (with package art available since June 2008).

Here is an image of THQ's cover art:



And here is the cover art for Activision's game:



We'll add this lawsuit to our tracking system and keep you posted as things progress.
The case is THQ Inc. v. Activision Blizzard, Inc. in the Central District of California, case number CV08-06999, filed October 23, 2008. A copy of the complaint may be downloaded here:
thq-activision.pdf
The stories just keep on flowing. Who knew that divorce could lead to a virtual killing, and subsequent arrest for hacking? Read the story here. In short, a 43-year-old Japanese woman killed her online husband's digital persona because she was so angry that his avatar "divorced" her avatar in the online game Maple Story. The woman obtained the man's login credentials while their avatars were happily "married," and she allegedly logged in with his credentials and killed off his avatar after learning of the virtual "divorce." She has been arrested on suspicion of hacking (i.e., logging in to a computer system without authorization).
From the AP wire:

October 21, 2008. AMSTERDAM, Netherlands - A Dutch court has convicted two youths of theft for stealing virtual items in a computer game and sentenced them to community service.

Only a handful of such cases have been heard in the world, and they have reached varying conclusions about the legal status of "virtual goods."

The Leeuwarden District Court says the culprits, 15 and 14 years old, coerced a 13-year-old boy into transferring a "virtual amulet and a virtual mask" from the online adventure game RuneScape to their game accounts.

"These virtual goods are goods (under Dutch law), so this is theft," the court said Tuesday in a summary of its ruling.

Identities of the minors were not released.

The 15-year-old was sentenced to 200 hours service, and the 14-year-old to 160 hours.

MDY Industries, LLC v. Blizzard Entertainment, Inc., et al. (D. Ariz. 2008)

Update on October 2, 2008:

On Sept. 26, 2008, the court ruled that MDY must pay Blizzard damages in the amount of $6M, i.e, $6,000,000.00. At the next hearing, scheduled for January 2009, the judge will determine whether MDY founder Michael Donnelly is personally liable for damages and whether MDY violated the DMCA when it manipulated codes to keep Glider under WoW’s radar.

Posted on July 15, 2008:

Looks like Blizzard has won round 1 of the WoWGlider/MMOGlider lawsuit, with the District Court ruling that MDY's bot application violates Blizzard's copyrights, and also causes tortious interference with Blizzard's other paying customers.

On July 14, 2008, the U.S. District Court in Arizona issued an order granting summary judgment for Blizzard, developers of the World of Warcraft (WoW) massively-multiplayer online role-playing game, on their tortious interference, contributory copyright infringement, and vicarious copyright infringement claims against MDY, developers of a “bot” known as Glider that allows players to cheat in WoW. We had previously commented on this case when Blizzard initially filed this lawsuit against MDY.

As to its copyright infringement claims, Blizzard prevailed on the argument that while WoW users are given a license to play the game (and thus are given a license to cause digital copies of Blizzard’s copyright content to be made in RAM so that the WoW source code may be executed), the scope of this license is limited by the End User License Agreement (“EULA”) and the Terms of Use Agreement (“TOU”), such that breaching these agreements amounts to copyright infringement. In adopting Blizzard’s argument on this point, the district court rejected the argument advanced by MDY and amicus party Public Knowledge that WoW users are “owners” of copies of the software who are permitted to copy the WoW software into RAM irrespective of the restrictions in the EULA, rather than mere “licensees” who are not. Because the district court found that using MDY’s Glider constitutes a breach of WoW’s EULA and TOU, it accordingly held that users of MDY’s Glider were committing direct copyright infringement. However, this lawsuit was not against individual users of Glider—rather, Blizzard was trying to stop the problem at its source namely, MDY. Since it was MDY that was facilitating this direct copyright infringement (which is the requirement for contributory copyright infringement) and MDY that derived a financial benefit from this direct copyright infringement and had the ability to stop it (which are the requirements for vicarious copyright infringement), the district court held that MDY was guilty of both contributory copyright infringement and vicarious copyright infringement.

As to their tortious interference claim (which admittedly sounds more exciting than copyright infringement), Blizzard prevailed on the argument that MDY’s development of Glider induces WoW users to breach WoW’s EULA and TOU. Unlike copyright infringement, tortious interference with contract is a question of state law rather than federal law, and in applying Arizona law, the district court found it particularly significant that MDY “actively promotes the use of Glider even though it knows that using Glider breaches the TOU.” See Order at 22. In addition, the district court noted that “MDY does not dispute that Glider consumes more Blizzard resources than any other bot because of its sophisticated anti-detection features, that Blizzard must divert resources from game development to combat Glider, and that Blizzard has received numerous complaints from WoW players regarding other players’ use of Glider.” Id. at 23. Finally, the district court found that MDY’s conduct amounted to improper interference within the meaning of Arizona law. Id. at 26. Considering all these factors together, the district court concluded that MDY’s distribution of the Glider bot indeed constituted tortious interference with Blizzard’s TOU for WoW.

But putting aside tortious interference, the real significance of this case appears to be that a district court has allowed a software developer to enforce its EULA by characterizing exceeding the scope of the EULA as an act of copyright infringement rather than a mere breach of contract. While this tactic is not new in the copyright license/copyright infringement context, this is a novel approach in the enforcement of EULAs and TOU. As the district court itself acknowledged, copyright infringement is a “more powerful claim” than breach of contract because damages for copyright infringement are typically far greater than damages for breach of contract. See Order at 6. Indeed, damages for copyright infringement account for actual damages to the copyright owner (e.g., Blizzard’s expenses in fighting Glider, lost revenue from players who stopped playing WoW because of bots, etc.) and the infringer’s profits (i.e., MDY’s revenue from selling Glider), or alternatively, may include statutory damages up to $150,000 per infringed work (if willful). Id. Thus, if courts continue to apply this rationale in future cases, copyright infringement lawsuits could become effective weapons for video game developers in their quest to enforce EULAs and thereby limit the use of their creations to their own rules. But this future is only an “if,” as this case is only the opinion of a trial court, and an appeal is sure to follow (i.e., this ruling could be reversed (or affirmed) on appeal to the Ninth Circuit). Stay tuned...

(Thanks for Rajit Kapur for his assistance with the creation of this post)
Willis v. Electronic Arts


U.S. District Court, District of Nevada


Case No. 08-cv-01311, Filed September, 29, 2008

Case Update:

This case was closed on November 18, 2009, following notice of voluntary dismissal by the plaintiff.

Original Post:

This is really more of a straight copyright case than a video game case, so we won't be actively following it. However, if anyone is interested, Gerald Willis (composer of the UNLV fight song Win With The Rebels), has sued EA for inclusion of the song in a slew of EA Sports titles. This looks like a straight copyright infringement issue. If I were a betting man (this case IS in Nevada, after all), I would bet that EA will claim it has some sort of license from UNLV. The license may or may not be valid, and EA and Mr. Willis will settle for a reasonable amount of money in view of the validity of the license. If you're interested in tracking the case yourself, it is Geral Willis v. Eletronic Arts, Inc., case no. 2:08-cv-01311-KJD-LRL, filed Monday, September 29, 2008, in the United States District Court for the District of Nevada.

Win With The Rebels lyrics.
Aristocrat v. IGT
United States Court of Appeals for the Federal Circuit
Decided Sep. 22, 2008

At this stage, this case is more about an esoteric legal issue, rather than any substantive issue of infringement regarding slot machine games or video games, so I will keep it brief. Suffice it to say, the District Court (N.D. Cal.) held that Arisocrat's patent was invalid because Aristocrat did not properly revive the patent after it accidentally went abandoned during prosecution at the USPTO. Specifically, Aristocrat, pursuant to USPTO rules, requested revival because the abandonment was unintentional. U.S. Laws, however, require that the delay be unavoidable. On appeal, the Federal Circuit held that "improper revival" is not a defense to patent infrginement, and that the District Court erred by holding the patent invalid on such grounds. So it's back to the District Court for these two to now get into some substantive issues regarding patent infringements.

Read the Federal Circuit opinion here.
Villian... I suspect.

Its not every day that we see a video game embrace an attorney as a central character. Normally the attorneys are the ridicule of the game, but one game did just that: Phoenix Wright: Ace Attorney. Hollywood, on the other hand, embraces the legal profession almost all too often, whether for ridicule, storytelling, murder, suspense, education, or just plain fun. What Hollywood doesn't do too often is highlight the role that patents play in our society, so it is with some interest that I am awaiting a new film starring Greg Kinnear, Flash of Genius, that tells the story of Robert Kearns' (Kinnear) fight against the auto industry after Mr. Kearns invented the intermittent windshield wiper. I've spoken with people involved on behalf of the auto industry, and suffice it to say that their side of the story comes across as markedly different than I suspect Mr. Kearns' side of it is portrayed in the movie. Nonetheless, it's nice to see Hollywood depicting patent attorneys in film, even if we are most likely the "bad guys" in the movie. Here is some more info from the film's marketing folks. Go and check it out for yourself:

Website

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Synopsis:

Based on the true story of college professor and part-time inventor Robert Kearns’s (Greg Kinnear) long battle with the U.S. automobile industry, Flash of Genius tells the tale of one man whose fight to receive recognition for his ingenuity would come at a heavy price. But this determined engineer refused to be silenced, and he took on the corporate titans in a battle that nobody thought he could win.

The Kearns were a typical 1960s Detroit family, trying to live their version of the American Dream. Local university professor Bob married teacher Phyllis (Lauren Graham) and, by their mid-thirties, had six kids who brought them a hectic but satisfying Midwestern existence. When Bob invents a device that would eventually be used by every car in the world, the Kearns think they have struck gold. But their aspirations are dashed after the auto giants who embraced Bob’s creation unceremoniously shunned the man who invented it.

Ignored, threatened and then buried in years of litigation, Bob is haunted by what was done to his family and their future. He becomes a man obsessed with justice and the conviction that his life’s work -- or for that matter, anyone’s work -- be acknowledged by those who stood to benefit. And while paying the toll for refusing to compromise his dignity, this everyday David will try the unthinkable: to bring Goliath to his knees.

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Official Trailer in Mobile, HD, Quicktime and Windows

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Official One-sheet

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Now the only question that remains is this: How do they turn this movie into a video game???
As previously reported, Gibson asserts that Activision's Guitar Hero franchise infringes on some Gibson patents. Gibson's patent claims a "musical instrument" that produces an "instrument audio signal." Naturally, in view of Guitar Hero only useing a controller SHAPED like a musical instrument, and only producing inputs based on button presses, construction of these terms is critical to this case. Well the claim construction order is in.

Gibson proposes a broad construction of the terms that would require that a “musical instrument” need only “indirectly produce music” and perhaps have no more than a mere appearance “that corresponds to a specific type of instrument used in the musical performance.” In Gibson’s view, the musical instrument need only be capable of producing an “instrument audio signal” that is “representative of the sounds intended to be made by operating the musical instrument” or “corresponds to the instrument used to create a separated soundtrack.”

Activision proposes a much narrower construction. It would define “musical instrument” as a “traditional musical instrument,” though Activision never provides a coherent definition of “traditional.” Under Activision’s construction, an “instrument audio signal” must be both “audible” and representative of the sounds made by the instrument.

The Court held that the patent requires that a “musical instrument” must be capable of (1) making “musical sounds,” (“musical sounds that would be made . . . by a specific musical instrument”); and (2) either directly, or indirectly through an interface device, producing an instrument audio signal representative of those sounds. (“musical instruments which either directly, or indirectly through an interface device, will produce electrical audio signals”). The Court also determined that the patent establishes that the two requirements are distinct; and, in particular, that the instrument must be capable of making musical sounds independent of the mechanism that outputs the instrument audio signal.

Given this detailed definition of “musical instrument” (and its inherent constraint on the signals produced), the Court found that an “instrument audio signal” need only be construed as “an electrical signal output by a musical instrument.”

Unless Gibson can get this claim construction overturned, or unless they can prove that a Guitar Hero controller makes ACTUAL SOUND, this case appears to be effectively over.

Here is a copy of the claim construction order: 146.pdf
In Bally Gaming Inc. v. IGT, case number 3:06-cv-00483, in the U.S. District Court for the District of Nevada, Bally Sued International Game Technology (IGT) for infringement of U.S. Pat. No. 7,100,916. Claim 1 of the '916 patent reads:

1. An electromechanical indicator comprising: a rotary body having an axis of rotation and which is provided with a plurality of segments radiating from said axis of rotation, wherein said segments are associated with at least two different indicia; a motor coupled to said rotary body such that said rotary body is adapted for a rotating mode and a stationary mode about said axis of rotation; a pointer associated with said rotary body to point to a predetermined segment of said plurality of segments when said rotary body is in said stationary mode; and a segment detector for detecting a rotary position of each of said plurality of segments whereby said motor rotates said rotary body to point said pointer to said predetermined segment which is determined before said rotary body enters a stationary mode.

The Judge (Edward C. Reed, Jr.) found all but one of the 22 claims of Bally's slot-machine patent to be prima facie obvious, based on a summary judgment motion filed by IGT. The judge apparently gave little consideration to secondary factors of nonobviousness, such as the huge commercial success of the patent in games like Wheel of Fortune. That could be a wedge to hammer in on appeal. But this case definitely demonstrates a post-KSR casualty. We'll watch this case and let you know whether it gets a final judgment or a settlement (my money is on settlement, because there is other patent litigation between these two companies, and IGT might want to save its own patents from a similar fate).
Merit Industries Inc. v. JVL Corp.
case number 03-1618 (E.D. Penn - Settled)

Merit Industries and JVL Corp. have settled their ongoing litigation over countertop arcade games. Merit sued JVL back in 2003 for patent infringement of U.S. Pat. Nos. 5,575,717; 5,743,799 and 6,082,887. Fastforward to June 2008, where a jury held that all of the asserted claims of the '799 patent (claims 1,3, and 7) were invalid, both for anticipation and obviousness. The jury judged five of the seven asserted claims in the '717 patent to be invalid, but rejected JVL's contention that four claims of the '887 patent were invalid due to indefiniteness. Thus, although the jury found infringement with respect to all three patents, JVL was liable only for infringement of the two valid claims of the '717 patent and the four asserted claims of the '887 patent.

The jury awarded Merit $1,616,123 in royalties for willful infringement of the patents, but denied the request for an injunction and $24 million in lost-profits on the ground that JVL discontinued the infringing products when the suit was filed in 2003. However, facing the possibility of treble damages (for willful infringement) anda demand for $6M in attorney fees, JVL settled with Merit for an undisclosed sum, and the case was dismissed on Sept. 8, 2008. The case is Merit Industries Inc. v. JVL Corp., case number 03-1618, in the U.S. District Court for the Eastern District of Pennsylvania.

The patents in suit covered a variety of features. For example, claim 1 of the '717 patent (
System for creating menu choices of video games on a display) reads:
1. An apparatus for providing menu choices of video games on a display, the apparatus comprising:

(a) a mode selector for setting the apparatus in one of either a programming mode for selecting video game menu options or a menu choice selection mode for selecting video game menu choices for game activation;

(b) a video display for displaying and selecting the video game menu options and video game menu choices, the video game menu options being available for selection as video game menu choices; and

(c) a display controller for simultaneously displaying video game menu options and video game menu choices on the video display when the mode selector is in the programming mode, and for displaying video game menu choices when the mode selector is in the menu choice selection mode.


Claim 1 of the '799 patent (
Method for setting game credits in a gaming machine and tallying a total currency amount fed into the machine) reads:
1. A method for tallying a total currency amount fed into a gaming machine which accepts a plurality of different types of coins, each coin type representing a different number of currency units, the method comprising the steps of:

(a) displaying a setup screen on a video display showing a representation of the plurality of different coin types and the total number of currency units associated with each coin type;

(b) selecting the total number of currency units to be associated with each coin type while displaying the setup screen, wherein the selection is made individually for each coin type, a coin type/currency unit ratio being established for each different type of coin; and

(c) tallying the total currency amount fed into the machine based upon the number of coins deposited in the gaming machine and the total number of currency units selected for each coin type.


And claim 1 of the '887 patent (
Game machine with automated tournament mode) reads:
1. An automated tournament system for use with a game machine, the game machine implementing the system when placed in a tournament mode, the system comprising:

(a) a plurality of tournament games playable by a plurality of players on the game machine, each of the plurality of tournament games generating a total player score upon completion of game play, the player scores being used to determine the tournament winners;

(b) means for preprogramming at least one sequence of tournament games from the plurality of tournament games; and

(c) means for programming a tournament period for each tournament game, the preprogrammed tournament game for each sequence being playable during the programmed tournament period for the respective sequence.


While the jury ultimately decided that some of the claims were invalid, without a final judgment in this case Merit's claims may just very well live to fight another day...
In a move reminiscent of the CBC v. MLB case over use of baseball players' names and statistics in fantasy football leagues, CBS Interactive sued the NFL Players' Association over the rights to use NFL players' names and statistics without having to pay a license fee. As you may recall, CBC Marketing and Distribution recently won a lawsuit against Major League Baseball on what appears to be a very similar, if not identical, issue. I would love to know what arguments the NFL is making as a basis for still being able to charge licensing fees. The lawsuit was filed Wednesday, September 3, 2008, as CBS Interactive Inc. v. National Football League Players Association, case number 08-cv-05097, in U.S. District Court for the District of Minnesota.

My gut reaction is that NFL will lose this one, regardless of being in a court that has, in the past, been very favorable to NFL players. But if there is one thing I have learned over the years, its that trying to predict the outcome of litigation has about the same success rate as trying to predict the weather. Stay tuned...

Sep. 12, 2008 UPDATE: On Sep. 9, 2008, the NFLPA fought back, filing its own suit in the Southern District of Florida, asserting that CBS forum shopped to get in Minnesota in the first place. (Recall that Minnesota is in the 8th Circuit, which gave the favorable ruling to CBC Marketing regarding similar facts for fantasy baseball). The NFL Players disagreed with the Eight Circuit's reading of the [fantasy baseball] case, calling it “unique and erroneous.” The new case is National Football League Players Inc. v. CBS Interactive Inc., case number 1:08-cv-22504, in the U.S. District Court for the Southern District of Florida. We'll keep you posted.
Frybarger v. Int'l Business Mach. Corp.
812 F.2d 525 (9th Cir. 1987)

Before the introduction of sprawling virtual environments, ragdoll physics, and parallel GPUs, the video game industry lived in an 8-bit world. As is still the case, the creative content of games was and is limited by the machines of the day. If multiple developers wanted to bring an alien-invasion game to the market in the early 80’s, there was a high likelihood that they would all resemble something close to a Space Invaders “clone” due to the restrictive 8-bit, 2D video game capabilities. Examples of Space Invader “clones” include games like Galaga, Galaxian, and Gaplus.

One of the legal doctrines that allowed game to coexist is the scenes a faire principle of copyright law. This doctrine states that the expression of an idea that is “as a practical matter indispensible, or at least standard, in the treatment of a given [idea],”[1] is not protectable under copyright law. When applied to Space Invaders and its so called “clones”, the “clones” can make a case for not infringing on Space Invader copyright because the idea of an alien-invasion game includes scenes of a protagonist firing weapons towards incoming alien antagonists. Thus, it’s easy to see how strikingly similar games were able to go to market without copyright liability issues. Scenes a faire protects the indispensible aspects of creative expression because indispensible aspects of a topic do not bring anything new to the topic, and therefore do not warrant protection under copyright laws.

An explicit example of the scenes a faire principle was seen in the case of Frybarger v. IBM, in which a former employee, Anthony Frybarger, of the Gebelli game development company sued the company for infringing the copyright of his creative work, the game Tricky Trapper. IBM contracted with Gebelli to develop video games for the IBM PC Jr. computer. Mr. Frybarger had the idea for a game called Tricky Trapper in 1982, and constructed a working copy, which he demonstrated to his company that same year. Gebelli later released a similar game, Mouser, which Frybarger believed was copied from his original plans for Tricky Trapper. Once Frybarger registered the copyright to his Tricky Trapper game, he brought a lawsuit against IBM and Gebelli for copyright infringement.

According to the Ninth Circuit Court of Appeals, “[t]o establish a claim for copyright infringement, plaintiff must show that 1) she owns the copyright in the allegedly copied work; 2) defendant had access to the work; and 3) plaintiff's and defendant's works are substantially similar.” IBM conceded that Frybarger owned the copyright to Tricky Trapper and that Frybarger had shown IBM the plans to Tricky Trapper before Mouser was released. However, IBM was confidant that the court would not find Mouser and Tricky Trapper to be substantially similar. After the court was presented with the two works, the court concluded that the two games had “numerous” similarities, but that each similar feature “constitutes a basic idea of the videogames,” and the expression of these basic ideas are precluded from copyright protection under the scenes a faire principle. The similarities found by the court include there being a single protagonist that has legs and a face, and that the single protagonist moves vertically and horizontally between rows of pivot points. Also, the two games have more than one antagonist, and each antagonist moves toward the general location of the protagonist. These similarities seem basic and simple, but in an 8-bit environment, these similarities are necessary to making an a mousetrap game in a two-dimensional maze. The Circuit Court sided with IBM and dismissed Frybarger’s copyright infringement claims on summary judgment.

With the advent of modern graphics, developers nowadays have to be more careful to respect copyrights. The amount of new features added to games in the past two decades and the potential to create unique three-dimensional universes makes it very hard to copy the premise of another game and claim the similarities are scenes a faire. Nevertheless, the scenes a faire principle has been brought up in modern court cases and still applies today. As a result, it is good practice for developers to understand that scenes a faire may limit the scope of copyright protection that video game content may receive.


[1] Atari, Inc. v. North American Philips Consumer Elecs. Corp., 672 F.2d 607, 616 (7th Cir. 1982) (quoting Alexander v. Haley, 460 F.Supp. 40, 45 (S.D.N.Y. 1978))

Thanks to Mike Harkness for his assistance with this post.
Incredible Technologies, Inc. v. Virtual Technologies, Inc.

400 F.3d 1007 (7th Cir. 2005)


If someone familiar with Golden Tee, the ubiquitous pub golf video game, was asked to describe its unique characteristics, he or she would undoubtedly mention the giant trackball that sits in the center of the game board. This ball is rolled forwards and backwards with the palm of your hand to swing your virtual golf club and sink shots only Tiger Woods could make in real life. Golden Tee, made by Incredible Technologies, Inc., has achieved massive success based on this gameplay, and this detail has not eluded Incredible Tech’s competitors.

Due to the integral function of the trackball in Golden Tee’s gameplay, if a competitor released a golf game that also used a trackball with the same function as in Golden Tee, an ordinary observer might think the competitor’s game infringes on Incredible Tech’s rights. However, this scenario did occur and was determined not to be infringement in the lawsuit of Incredible Tech, Inc. v. Virtual Technologies, Inc. (7th Cir. 2005). This particular case is an important study of the different protections offered to video game developers under copyright law versus patent law.

After witnessing the sensation caused by Golden Tee and the profits that accompanied the game, Virtual Technologies developed a similar game that used the same entertaining controls as Golden Tee. Virtual did this specifically to make it easy for players to switch from one game to the other. Virtual Tech’s product, PGA Tour Golf, was released as an alternative bar golf game to Golden Tee, with licensed players and famous courses (Golden Tee used generic golfers and courses). Incredible Tech sued Virtual Tech in 2003 for copyright infringement, asking for a preliminary junction to stop the sales of PGA Tour Golf.

In determining copyright infringement, a court must decide “whether the accused work is so similar to the plaintiff’s work that an ordinary reasonable person would conclude that the defendant unlawfully appropriated the plaintiff’s protectable expression by taking material of substance and value.” The 7th Circuit court initially decided to check whether Incredible Tech’s argument included copyright claims that are legally protectable.

Because Golden Tee and PGA Tour Golf are both golf games, it was unavoidable that a majority of the game content would be exactly the same or at least very similar, i.e., golf! Each game must include a golfer trying to hit a golf ball into a hole on a golf course for the game to be a golf game. In the legal world, the scènes à faire doctrine holds “incidents, characters, or settings which are as a practical matter indispensable, or at least standard, in the treatment of a given topic” as not protectable content under copyright law. Therefore, the content of PGA Tour Golf does not infringe on Golden Tee, unless there is near exact copying of the specific artwork used.

The real substance of Incredible Tech’s argument called for the protection of Golden Tee’s unique trackball system under copyright law. The trackball embodied Golden Tee’s ease of play and separated the game from other golf games. However, under copyright law, functional elements of a work are not protectable. Also, the “method of operations” detailing how to use the trackball and dictating how the trackball is to be used to play golf are not protectable under copyright law. The court did note, though, that the function of using the trackball to play Golden Tee is patentable subject matter, and the patent laws are the mechanism through which Incredible Tech would get the protection they desire. But, because Incredible Tech did not have a patent, they were forced to make their argument with respect to copyright law. The court determined that Incredible Tech’s argument had little merit under copyright law, and the court would not grant a preliminary injunction against Virtual Tech.

As the creative owner of a work, such as a video game, it is never safe to assume your complete work is protected by copyright. Although copyrights are automatic—copyrights exist as soon as you fix your original work in a tangible medium of expression—the extent of protection afforded to you may vary, depending on the nature of the copyrighted work. What Incredible Tech thought was protected by copyright was determined by the 7th Circuit to be ineligible for copyright protection—only patent law would suffice. Incredible Tech failed to realize that the idea behind its trackball Golden Tee game was not protected under copyright law, because only the expression of ideas are eligible for copyright protection. Had Incredible Tech patented the functional process of using a trackball to swing a virtual club in a golf video game, it might have been able to defend their product in litigation. This case serves as an invaluable lesson for copyright owners in computer software and shows the power of patent laws compared to copyright laws for protecting software functionality.

Thanks to Mike Harkness for his assistance in the preparation of this post.
In the ongoing dispute between Anascape, Ltd., an invention and license-holding company, against Nintendo of America regarding Nintendo's use of three patents a jury had found the video game company to infringe, the judge on July 23, 2008, granted a permanent injunction in his final decision. The injunction was stayed with certain conditions.

The injunction prevents Nintendo from selling its Wii Classic controller, GameCube controller and GameCube Wavebird wireless controller in the U.S. until the expiration of the earliest of the three patents, at least through 2012.

Judge Clark stayed the injunction, however, pending appeal, but Nintendo must deposit 7% of the sales price of each of the three controllers sold and 5% of the sales price of each Wii Remote sold into an escrow account. The number of Wii Remotes that Nintendo must deposit money for the sales of maxes out at twice the number Wii Classic controllers sold. Nintendo must deposit the funds for the controllers regardless of whether they're sold individually or bundled with other products. The money can be released to either party by either a court order or a settlement between the two companies. Clark also awarded costs to Anascape and denied all other pending motions.

Judge Clark had indicated that the case "presented the classic 'battle of the experts,' and the jury clearly chose to believe Anascape’s infringement expert.”

The patents in the case were U.S. Patent Numbers 5,999,084; 6,102,802; 6,135,886; 6,208,271; 6,222,525; 6,343,991; 6,344,791; 6,347,997; 6,351,205; 6,400,303; 6,563,415; and 6,906,700.

The case is Anascape Ltd. v. Microsoft Corp. et al., case number 9:06-cv-158, in the U.S. District Court for the Eastern District of Texas.

An appeal is sure to follow.

Banner & Witcoff Secures Favorable Settlement for Client Regarding Intellectual Property and Land Dispute in Second Life

(Washington, D.C., July 22, 2008) - Banner & Witcoff Ltd., one of the largest law firms in the United States dedicated solely to the practice of intellectual property law, is pleased to announce they have secured a favorable settlement on behalf of its client regarding a dispute in Second Life regarding ownership of regions of virtual land, and associated intellectual property. Second Life is an online virtual world, owned by Linden Research, Inc., and created by its millions of residents around the world.

The land in dispute is Sailor’s Cove, a collection of twenty-one regions (private islands) within the virtual world of Second Life. Sailor’s Cove was developed by three parties and designed as a waterfront community that allows avatars to purchase land, participate in virtual yachting and sailing events, and become active in the community of residents of Sailor’s Cove.

The property and ownership dispute was between Patrick Leavitt, owner of record of Sailor’s Cove with Linden Research, Inc., and Izabella Bentham and Tasha Kostolany. While not owners of record with Linden Research, Inc., Bentham and Kostolany were each publicly acknowledged within Sailor’s Cove as “Owner and Sailor’s Cove Partner,” and were instrumental in the development and success of Sailor’s Cove. Patrick Leavitt had subsequently asserted sole ownership of Sailor’s Cove.

Ross A. Dannenberg, partner at Banner & Witcoff, represented Bentham and Kostolany. Dannenberg successfully avoided litigation and secured financial compensation for Bentham’s and Kostolany’s contributions to Sailor’s Cove. Dannenberg states “while Second Life may be a virtual world, the intellectual property is real, the contracts are real, and residents are still subject to real world laws.”

Dannenberg is one of several attorneys at Banner & Witcoff that specializes in protecting intellectual property rights for clients in the video game, virtual world, and computer industries. Collectively, Banner & Witcoff attorneys have decades of experience counseling clients and litigating cases involving computers, video gaming and virtual worlds, and electronic arts. Please visit our website at www.bannerwitcoff.com for more information regarding Ross Dannenberg and Banner & Witcoff.

*Please note: to protect individual privacy, all parties involved in the case are referred to by their Second Life avatar name, except Ross Dannenberg (SL avatar: Aviator Kidd).

Please direct all media inquires to Colleen Strasser at cstrasser@bannerwitcoff.com or 312.463.5465

About Banner & Witcoff, Ltd.

Banner & Witcoff, Ltd. is dedicated to excellence in the specialized practice of intellectual property law, including patent, trademark, copyright, trade secret, computer, franchise and unfair competition law. The firm actively engages in the procurement, enforcement and litigation of intellectual property rights throughout the world, including all federal and state agencies, and the distribution of such rights through licensing and franchising. The firm has over 90 attorneys and agents in its Chicago, Washington, DC, Boston and Portland, OR offices.

Please note, the facts of every case are different. Prior results don't guarantee future success.

Konami Digital Entertainment Co. v. Harmonix Music Systems, Inc.
No. 6:08-CV-286, (E.D. Tx, Filed July 9, 2008)
Summary by Steve Chang, Esq.

If you build it, they will come. The tagline from Kevin Costner’s baseball film “Field of Dreams” seems appropriate to describe patent litigation. If the industry builds a successful product type, in this case, music-based rhythm games, then competitors will inevitably jockey for position. Patents, being a quintessential tool for protecting innovative market space, are a classic approach to this jockeying.

This jockeying took another step forward this week when Konami, makers of the upcoming Rock Revolution® musical group rhythm game, filed suit against Harmonix, makers of the popular Rock Band® musical group rhythm game, accusing Harmonix of infringing three of Konami’s patents.

Perhaps because Konami has already established itself in the general rhythm game space, with the popular Dance Dance Revolution® and Karaoke Revolution® series of games, Konami appears to have entered the musical group rhythm game space with patents in mind, filing early patent applications on its concepts, and the three in suit are directed to fairly straightforward elements of such games.

The first, U.S. Patent No. 6,390,923, is entitled “Music Playing Game Apparatus, Performance Guiding Image Display Method, and Readable Storage Medium Storing Performance Guiding Image Forming Program,” and generally appears (reading claim 10 of this patent) directed to dividing the game play screen into sections for different instruments, displaying instruction patterns for each instrument, and outputting a sound corresponding to operation of the instrument. Figure 15 from the '923 patent shows an example screen.


The second, U.S. Patent No. 6,425,822, is entitled “Music Game Machine with Selectable Controller Inputs,” and (from a short read of claim 1) appears directed to setting different difficulty modes by restricting the number of instrument buttons that will be used to play the game. The cover figure of the '822 patent shows an example of changing modes.


The third patent, U.S. Patent No. 6,645,067, is entitled “Music Staging Device Apparatus, Music Staging Game Method, and Readable Storage Medium,” and appears (from a quick read of claim 21) directed towards percussion instrument timing in the game, and to a method of providing players with real-time feedback regarding how well they are doing. The cover image from the '067 patent shows the drums and displayed feedback:



Of course, the lawsuit will have to resolve the details of the proper scope of these patents, and Harmonix will certainly seek to challenge the patents’ validity (the patents seem to be based on applications filed as early as 1998). Updates will follow as the case progresses. Formal interpretation of the patent will require a more thorough legal analysis of the patent and its history. The summaries here are just from my initial read.


NOTE: Formal interpretation of the patents will require a more thorough legal analysis of the patent and its history. The initial summaries here should not be construed as formal legal opinions of any kind.

Copies of the patents in suit (6,390,923, 6,425,822, and 6,645,067) are available for free from the USPTO web site or from Google patent search.

Copy of the complaint: KonamiComplaint.pdf

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