A panel of the 9th Circuit on Tuesday upheld a lower court’s 2009 injunction barring the distribution of the Glider computer program that automatically plays the lower levels of World of Warcraft. Read more about it here.
If you're looking for some good visualization data of the USPTO backlog, pendency times, and other interesting statistics, check out the USPTO Patent Dashboard, it provides some very useful and interesting metrics.

As we last reported here, Motiva LLC has previously accused Nintendo Co., Ltd of infringing U.S. Patent No. 7,292,151 (‘151 Patent). The ‘151 Patent, entitled “Human Movement Measurement System,” is generally directed to a system for measuring human body movements for exercise and physical rehabilitation, and Motiva alleged that Nintendo’s Wii Fit product was an infringement.

Its previous efforts at enforcement stalled when the patent underwent reexamination at the PTO, but Motiva has just added a new chapter to the story. Last week, Motiva filed a complaint with the International Trade Commission (ITC), accusing Nintendo of infringing both the ‘151 Patent and a continuation application (U.S. Patent No. 7,492,268). The essential claims remain the same. Motiva claims that its patents cover the human movement tracking employed by the Wii Fit.

The alternative venue is not an uncommon one for asserting patents, and does not rule out or obviate parallel district court proceedings (although one can be stayed for the other).

In an ITC action such as this, a complainant alleges that some other person (a respondent) is importing goods that is otherwise harming an existing U.S. (domestic) industry. If the ITC concludes that such harm is being done, the ITC can issue an Exclusion Order, instructing U.S. Customs to block the future importation of goods that do the harm. To a company whose manufacturing facilities are located outside the U.S. (true for many consumer products companies these days), such an Exclusion Order can be every bit as painful as a district court injunction.

An ITC action is similar to a district court action in many ways. There is a complaint, there will be discovery (the Federal Rules of Civil Procedure are adopted at the ITC for many aspects of case management), there are motions, and there will be a hearing that is conducted much like a trial.

There are differences as well. Most notably, an ITC action is much faster than a typical district court action. In the ITC, a typical proceeding is scheduled for completion in just over a year (can be a bit longer for "complex" cases). The compressed schedule puts pressure on everyone, but the pressure usually affects the accused infringer more, since they do not control the timing of when the complaint is filed.

Another difference is the presence of a third party in the case. Unlike a district court action, an ITC investigation will also have an Investigative Staff Attorney, who is there to represent the interests of the citizens of the U.S. The Investigative Staff can participate in the case much like a party, reviewing discovery, asking questions, and filing responses to motions and objections.

Another difference is at the outcome of the case. The ITC cannot award monetary damages, and cannot redress past infringement. Instead, the remedy is the Exclusion Order, which will only affect attempted importations after the Order takes effect. Additionally, when an Exclusion Order is issued, the President of the United States has a period of time in which to review the case and reject it. Such a rejection is not common, but it can be made, for example, if the President deems that excluding the importation would unduly harm international relations.

We'll keep you posted as to further developments, and in the meantime, please drop us a line if you have any questions about the case or the ITC.

Well, it looks like Facebook’s attempt to have its lawsuit with Daniel Miller dismissed has failed again. The diligent reader will remember from our previous post that Miller brought a claim against Facebook alleging that the social website was in violation of copyright infringement by allowing the game ChainRX to be posted on its site. ChainRX is facially similar to Miller’s game Boomshine. Facebook has tried to have the lawsuit thrown out, claiming that Miller had not alleged a sufficient claim. The judge did not agree, saying that the threshold to have the case move forward was low and that Miller satisfied that low threshold.

In the present decision, on Sep. 22, 2010, the judge denied Facebook’s claims that Miller had failed to prosecute the case because Miller did not serve the co-defendant Yao Wei Yeo. In a previous court order, Miller was told that he had until July 30 to serve Yeo with a complaint. Miller took subsequent steps to locate Yeo: he subpoenaed the website that hosts Yeo’s website, but was only able to obtain a UPS Store address for Yeo. Miller subsequently sent a complaint to the UPS address. Even though Yeo has yet to appear in the actual lawsuit, the federal judge has ruled that Miller has met the due process requirement for service of process.

The federal judge, in his ruling, states that “[i]ndeed, it appears that defendant Yeo did in fact receive notice of this action.” After receiving the complaint in his mailbox, Yeo even contacted Facebook’s in-house counsel and discussed the case with him.

It appears that the lawsuit will continue to go forward against Facebook. We will, as always, stay on top of the action and keep you as updated as we can.

*Thanks to Josh Mosley for his continued help with this post and with the blog

In the beginning of June, Patent Arcade reported that Harmonix Music Systems, Inc. and Viacom Inc. were close to settlement in the Harmonix v. Konami case (one of two Harmonix/Konami cases). At that time, it was unclear whether the progress toward settlement in the Harmonix v. Konami case would affect sister case Konami v. Harmonix. It appears now that the two sides have reached an agreement in Konami v. Harmonix and filed a Motion to Dismiss in the Eastern District of Texas on September 15, 2010. The following day Harmonix filed a motion to dismiss a similar and concurrent case in Massachusetts.

The Motion to Dismiss indicates that:

Pursuant to the terms of a separate agreement, Plaintiffs Konami Digital Entertainment Co., Ltd. and Konami Digital Entertainment, Inc. (“Plaintiffs”) and Defendants Harmonix Music Systems Inc., MTV Networks Co., Viacom International Inc. and Viacom Inc. (“Defendants”), have agreed to settle, release, adjust and compromise all claims and counterclaims in the above-captioned action. The parties, therefore, move this Court under Rule 41(a) of the Federal Rules of Civil Procedure to dismiss the above-entitled cause and all claims by Plaintiffs against Defendants and all claims by Defendants against Plaintiffs made therein with prejudice.
Terms of the settlement have not been disclosed.
Lucasfilm Ltd (Lucasfilm) has sensed a disturbance. They filed suit last week against “Jedi Mind, Inc.” (Jedi Mind) accusing the Nevada company of infringing Lucasfilm’s rights in the “Jedi” trademark (among other things). According to the complaint, Jedi Mind markets and sells a line of games and software that are controlled by users’ thoughts. The named products are “Master Mind”, “Jedi Mouse” and “Think Tac Toe,” and Lucasfilm wants Jedi Mind’s use of the “Jedi” name to stop.

In addition to the trademark infringement claims, the complaint includes allegations of false designation of origin, trademark dilution by blurring, breach of contract and violation of California’s unfair competition law. Basically, Jedi Mind is going to have a headache.

Time will tell how this one turns out, and we’ll keep you posted. The case caption is Lucasfilm LTD et al. v. Jedi Mind, Inc. and Brent Fouch, No. 10-3632 (N.D.Cal, filed 8/17/2010).

Update: Just a few days after this original post, the court entered a stipulation, permanent injunction and judgment pursuant to a settlement reached by the parties. Looks like the product is now called "Mind Mouse."
I am not sure how this case missed our radar, but here goes...

As reported at

A federal judge is allowing a negligence lawsuit to proceed against the publisher of the online virtual-world game Lineage II, amid allegations that a Hawaii man became so addicted he is “unable to function independently in usual daily activities such as getting up, getting dressed, bathing or communicating with family and friends.”

Craig Smallwood, the plaintiff, claims NCsoft of South Korea should pay unspecified monetary damages because of the addictive nature of the game. Smallwood claims to have played Lineage II for 20,000 hours between 2004 and 2009. Among other things, he alleges he would not have begun playing if he was aware “that he would become addicted to the game.”

Smallwood, who did not immediately respond for comment, alleged that the company “acted negligently in failing to warn or instruct or adequately warn or instruct plaintiff and other players of Lineage II of its dangerous and defective characteristics, and of the safe and proper method of using the game.”

Released in 2003 as a sequel to the original Lineage game, which was a national phenomenon in South Korea, Lineage II is an immersion 3-D MMORPG that gained a reported 600,000 users within a few years, and is still being regularly expanded and updated six years later — all the better to turn more vulnerable Americans into bleary-eyed shut-ins.

U.S. District Judge Alan Kay refused to dismiss parts of Smallwood’s complaint this month, possibly clearing the way for a trial. ”In light of plaintiff’s allegations, the court finds that plaintiff has stated a claim for both negligence and gross negligence,” Kay ruled (.pdf).

An attorney for the company was not immediately prepared to comment on Kay’s August 4 decision. But in a Tuesday court filing, NCsoft again urged the judge to dismiss the case.


We'll continue to monitor the case and keep you posted.

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

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

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

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

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

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

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

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

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

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

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

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

203 F.3d 596 (9th Cir. 2000)

I. Background

Connectix Corporation created and sold a software program called “Virtual Game Station” (VGS), an emulator of the Sony PlayStation, which allowed users to play PlayStation games on their computers. Sony brought this lawsuit alleging trademark infringement and copyright infringement of BIOS, its software program which operates the PlayStation. Connectix’s VGS didn’t contain any of Sony’s copyrighted material, but Connectix did use that material during VGS production, when it reverse-engineered the PlayStation to discover how it worked.

Connectix reverse-engineered Sony BIOS by observing how the BIOS chip functioned and copying that functionality. The BIOS was downloaded into the RAM of the developers’ computers as they observed how it worked. Connectix did not use any of the copyrighted material from BIOS in the final version of the VGS. The court relied on prior case law and concluded that functional elements of a product aren’t copyrightable. Sega v. Accolade; 17 U.S.C. § 102 (b).

The district court granted an injunction keeping Connectix: “(1) from copying or using the Sony BIOS code in the development of the Virtual Game Station for Windows; and (2) from selling the Virtual Game Station for Macintosh or the Virtual Game Station for Windows... The district court also impounded all Connectix’s copies of the Sony BIOS and all copies of works based upon or incorporating Sony BIOS.”

Connectix appealed to the Ninth Circuit, admitting it copied Sony’s copyrighted BIOS software in developing the VGS but arguing that doing so was protected as a fair use. Connectix also contended that its VGS didn't tarnish Sony's PlayStation trademark.

A. Fair Use Analysis

According to 17 U.S.C. § 107, the factors for determining fair use are:

1. The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

2. The nature of the copyrighted work;

3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

4. The effect of the use upon the potential market for or value of the copyrighted work.

The court relied on Sega v. Accolade, which held that “where disassembly is the only way to gain access to the ideas and functional elements embodied in a copyrighted computer program and where there is a legitimate reason for seeking such access, disassembly is a fair use of the copyrighted work, as a matter of law.” Since object code, which contains some uncopyrightable functional elements, is not readable by humans, reverse-engineering may be necessary to disassemble the code to find the source code and discover those elements. So even though intermediate copying may constitute copyright infringement, that copying may be protected by a fair use defense, based on the outcome of an analysis of the factors listed above.

1. Nature of the copyrighted work

The court granted BIOS a lower level of protection because it contained unprotectable aspects that could only be examined through copying. The court felt that its methods of observing and disassembly, including intermediate copying, were required to get to the unprotected functional aspects of the software. The court noted that Sega expressly allows disassembly and then refused to distinguish Connectix’s methods of reverse-engineering.

The court rejected Sony’s argument that Connectix could have just copied BIOS once and disassembled it from that copy, rather than copying it over and over again. The court said that Sega never specified that copying could only occur a certain number of times, but rather covered what could or couldn’t be copied. The court refused to “supervise the engineering solutions of software companies in minute detail” and added that what Sony proposed would be a less efficient path of reverse-engineering anyway. Copyright rules are created to prevent authors from wasting effort. The court noted that if Sony wanted to erect a barrier keeping others from the intermediate copying of BIOS and finding the functional aspects in BIOS, it should have applied for a patent, which it failed to do.

2. Amount and substantiality of the portion used

Although Connectix copied BIOS many times and disassembled parts of it, this factor weighs little when it is only intermediate copying and the copied parts aren’t used in the final product. Since the VGS didn’t contain any infringing material, this factor didn’t weigh against Connectix.

3. Purpose and character of the use

With this factor, the court looked at whether the alleged infringing product was transformative and provided something new or “merely supersede[d] the objects of the original creation.” The Ninth Circuit held that the district court was wrong to immediately hold a “presumption of unfairness” just because Connectix had a commercial purpose in copying BIOS. Because the commercial use of the copyrighted material was intermediate, and therefore indirect or derivative, and because the reverse-engineering still led to producing a product that was compatible with PlayStation games, the court found that the commercial purpose didn’t weigh against Connectix.

The court found that the VGS was transformative because it created a new platform for playing PlayStation games and because VGS was a completely separate product from the PlayStation, with new object code, “despite the similarities in function and screen output.” The VGS did more than just supplant the PlayStation; it allowed for playing on a computer and the software was expressed differently through unique object code. Because the court deemed the copying to be for a transformative, intermediate commercial use, this factor weighed in favor of Connectix.

4. Effect of the use on the potential market

Here the court considered “not only the extent of market harm caused by the particular actions of the alleged infringer, but also whether unrestricted and widespread conduct of the sort engaged in by the defendant . . . would result in a substantially adverse impact on the potential market for the original.” Transformative works don’t have as negative an impact on the potential market as a product that completely copies and supplants the original. While Sony likely lost some console sales because of the VGS, the court found the VGS to be a “legitimate competitor” and that Sony did not hold a monopoly for platforms that can play Sony games. The desire to promote creative expression and competition in the marketplace trumped Sony’s claim of unfair copying.

Based on its findings for these four factors, the court determined that Connectix’s copying of Sony’s BIOS during its reverse-engineering was an allowable fair use and so Connectix wasn’t liable for copyright infringement.

B. Tarnishment Analysis

Sony also claimed that Connectix’s sale of the VGS tarnished Sony’s PlayStation trademark under 15 U.S.C. Section 1125(c)(1). For that claim to succeed, Sony needed to show that: (1) the PlayStation mark was famous; (2) Connectix was making a commercial use of the mark; (3) Connectix’s use began after the mark became famous; and (4) Connectix’s use of the mark diluted the quality of the mark by diminishing the capacity of the mark to identify and distinguish goods and services. The court focused on the fourth factor.

The district court found that negative associations occurred because the VGS didn’t play PlayStation games as well as the PlayStation console and consumers got confused about the distinction between VGS and PlayStation. While this court recognized the difference in quality between the two game platforms, there was no reliable proof that consumers misattributed the lower quality VGS to Sony. The court also rejected Sony’s argument that Sony’s trademark was tarnished simply by being linked to the VGS. There was not enough evidence to show that the VGS was much lower quality or that consumers thought negatively of Sony because its games were being played on the VGS.

Click here to read the opinion online.
In an interesting turn of events, on July 22, 2010, requested that the court reopen its case against NCSoft. The dismissal of the case on April 23, 2010, was conditional on settlement, and the court explicitly stated:
IT IS HEREBY ORDERED that this action is dismissed with prejudice; provided,
however, that if any party hereto shall certify to this Court, with a proof of service of a copy on opposing counsel, within 90 days from the date hereof, that the agreed consideration for the settlement has not been delivered over, this Order shall stand vacated, and the action shall be restored to the calendar to be set for trial.

So it appears that, at least, believes that the settlement conditions haven't been satisfied. Still waiting to get a copy of's request to reopen the case, and will update accordingly.
Pikachu may be cute, but he’s got teeth. The Pokémon Company Int’l. Inc. (“Pokémon”) filed suit last Friday against Beckett Media LLC (“Beckett”), accusing Beckett of copyright infringement. Specifically, Pokémon alleges that Beckett’s monthly publication of the “Beckett Pokémon Unofficial Collector!” magazine unlawfully reproduces copyrighted images of Pokémon’s cards without Pokémon’s (or Pikachu’s) consent. According to the complaint, Beckett’s guide lists price values for the various Pokémon cards (the cards are valued as collector’s items, based on rarity and awesomeness), and reproduces full images of selected ones of the cards each month.

The complaint further alleges that when Pokémon previously asked Beckett to stop reproducing the images, Beckett responded by alleging that Pokémon had granted an implied license and/or consented, based on the fact that Pokémon had actually purchased advertising space in the monthly publication after seeing the publication’s format (and by extension, the occasional image reproduction), and that they did not complain about it before. The complaint also notes that Beckett’s more recent responses appeared to back down, with offers to stop the reproductions.

Time will tell how this one turns out, and we’ll keep you posted. The case caption is The Pokémon Company Int’l, Inc. v. Beckett Media LLC, No. 3-10cv1392 (N.D.Tx, filed 7/16/2010).

On a related note, who knew that Pokémon is coming up on 15 years of collecting card and monster frenzy? I wonder how the old standbys like Pikachu, Charizard, JigglyPuff and Shoe actually age over 15 years. Ok, one of those four is from South Park, not Pokémon. Thanks for reading!
Sony Computer Entm't America, Inc. v. Steven Filipiak, et al.

406 F. Supp. 2d 1068 (N.D. Cal. 2005)

In this case decided in 2005, Sony received over $6 million in a copyright infringement judgment against a small online retailer who violated the Digital Millennium Copyright Act (DMCA), 17 U.S.C. §§ 1201 et seq., by selling computer chips that allowed unauthorized copies of PlayStation games to be played on the PlayStation console.

I. Background

In 2002, Filipiak opened an online store and began selling modification chips (“mod chips”), which were “computer chips that circumvent the technological copyright protection measures in PlayStation consoles.” Using these mod chips, a user could play pirated video games which would otherwise not function on PlayStations.

On June 11, 2004, after learning about Filipiak’s business, Sony sent him a cease-and-desist letter ordering him to agree to an injunction. Filipiak signed it on June 12 and took the unauthorized devices off his website but continued to sell them anyway, communicating directly with customers via email instead of through the website.

Sony brought suit on June 14 seeking injunctive relief and damages for alleged copyright infringement. On June 16, Filipiak signed a stipulated consent judgment saying he marketed and sold his devices in violation of the DMCA. Sony agreed not to execute the consent judgment as long as Filipiak complied with an injunction to refrain from further sales and pay $50,000 in damages. However, Filipiak continued selling the mod chips privately. Sony found out about Filipiak’s continued sales on June 22 (Filipiak didn’t bother denying it – he just said “Yeah, I shouldn’t have done that”) and rescinded its consent from the consent judgment. The two parties executed a new consent judgment containing provisions requiring that Filipiak turn over relevant information related to his mod chip sales without destroying any such data. Specifying the amount of damages was left for after discovery.

Filipiak then proceeded to provide incomplete data and a computer forensics expert determined that thousands of relevant files had been erased from the hard drive right before it was turned over to Sony. Looking at the available sales records and Filipiak’s testimony, the court estimated that 7,039 circumvention devices were sold before June 12 and 155 were sold after June 12.

II. Assessment of Damages

Since Filipiak had already admitted his liability under the DMCA in the consent judgment, the court needed only to resolve the amount of damages. According to § 1203(c)(3)(A) of the DMCA, damages from $200 up to $2500 may be awarded for each violation, or device sold, “as the court considers just.”

To determine what was just, the court considered factors including “the expense saved by the defendant in avoiding a licensing agreement; profits reaped by defendant in connection with the infringement; revenues lost to the plaintiff; and the willfulness of the infringement. . . . The Court can also consider the goal of discouraging wrongful conduct.” The last factor considered was “whether a defendant has cooperated in providing particular records from which to assess the value of the infringing material produced.”

Filipiak’s willful conduct had a big impact on the court’s decision. Filipiak’s violation of the DMCA was considered willful because Filipiak knew the mod chips were illegal. He had trouble with suppliers who had similarly been shut down and PayPal terminated his account because its agreement prohibited illegal mod chip sales. His violation of Sony’s cease-and-desist order by continuing sales after signing the agreement was also willful. So, as to the devices sold after June 12, 2004, the court concluded that Filipiak was “even more culpable than he was with respect to previous sales because, as found above, he signed an agreement with Sony that he would immediately discontinue selling and distributing circumvention devices without intending to abide by it and proceeded to engage in the exact behavior he had promised Sony he would not, albeit surreptitiously.” Filipiak couldn't complain about any inaccuracies in the estimate of devices sold because he failed to provide complete records and destroyed records, intentionally and in bad faith, violating the consent judgment and discovery obligations.

The court granted Sony’s request that Filipiak pay $800 for each device sold prior to June 12 and the maximum of $2500 for each device sold after June 12. The total award of $6,018,700.00 was considered reasonable, in line with congressional intent, and necessary to discourage wrongful conduct by others who may be tempted to sell illegal contravention devices.

III. Filipiak’s Motions to Dismiss

Filipiak filed two motions to dismiss but the court denied both of them. First, Filipiak claimed that he shouldn’t owe damages because he made charitable contributions and he sold legal products in addition to the mod chips on his website. He also alleged litigation misconduct by Sony. But the court said his arguments had no merit and there was no evidence to back up the allegation of misconduct by Sony, so vacating the consent judgment wasn’t justified.

Second, Filipiak asked the judge to dismiss this case because in another case Sony’s PlayStation and PlayStation 2 were found to infringe on Immersion Corp.’s patents. The court quickly dismissed this motion saying “[t]he fact that components of PlayStation and PlayStation 2 may infringe patents owned by a third party has no bearing on the issues raised in this action.”

Read the complete court order here.
Sega of America v. Fox Interactive et al.
N.D. Cal., Filed Dec. 4, 2003, Settled in 2004

In December of 2003, Sega brought a lawsuit against video game publishers Fox Interactive (now part of Vivendi Universal) and Electronic Arts and developer Radical Entertainment for allegedly using technology from Sega’s U.S. Patent No. 6,200,138 (“the ‘138 patent’) in their video game The Simpsons: Road Rage.

The ‘138 patent, which was issued in 2001, claims a “game display method, moving direction indicating method, game apparatus and drive simulating apparatus.” Below are a couple representative claims:

1. A game display method for displaying a game in which a movable object is moved in a virtual space, comprising the steps of: setting a dangerous area around the movable object; and when a character enters the dangerous area, moving the character in a direction in which the character is moved away from the movable object.

7. A game display method for moving to a destination in a virtual space a movable object which is moved in the virtual space, comprising the step of: displaying at a prescribed position in the virtual space a virtual object which indicates a direction from the prescribed position to the destination.

The main concepts of the patent include:
  • A video game design where the player uses a map to drive around in a city, rather than a race track, and doesn’t have to stay on roads.

  • Cars surrounded by an invisible smaller "danger zone" and larger “caution zone." Virtual people in the danger zone jump out of the way. Virtual people in the caution zone stop walking, rather than walk into the danger zone. The patent says this is so virtual collisions won’t occur, “because recently it is strongly required to avoid cruel game images.”

  • Arrows hover showing which direction to go to reach the destination. Here’s a figure from the patent illustrating how an arrow can point out the correct direction to the player:

Sega's game Crazy Taxi, released in 2000, required players to act as a taxi driver and earn money by performing extreme stunts and shuttling passengers to their destinations as quickly as possible. The Simpsons: Road Rage was released in 2001 and features similar game play of racing to get passengers to destinations and completing missions to collect money. Sega brought this lawsuit at the end of 2003 claiming the defendants’ game was an obvious rip-off of Crazy Taxi because it copied certain gameplay elements such as using arrows to direct the player where to go and having pedestrian characters jump out of the way of cars.

Sega alleged the game was designed to “deliberately copy and imitate” Crazy Taxi and cited game reviews that noted the similarities between the games to support its accusation. One such review called Road Rage a “shameless incident of design burglary.” An author from noted that many lawsuits complaining about knock-off video games are “groundless” but that he knew “several people who said that Road Rage is so much like Crazy Taxi that until [he] told them otherwise, they assumed it was licensed from Sega.” Look at the screenshots below to compare the games yourself:

Sega asked the court for an injunction to stop the sale of Road Rage and for lost profits, which would have been a substantial figure given that Road Rage had sold over a million copies since its launch. The parties settled during private mediation soon after the case was filed, before any claim construction, for an undisclosed amount. Therefore this case set no precedent, which is unfortunate because it would be interesting to see how the court would have interpreted Sega’s patent claims.

Other Opinions

GamesIndustry recognized the effects a court ruling may have had on the gaming industry: “Gameplay patents could arguably encourage more innovation in games and stem the flow of staid clones which follow on from every successful original title, which would certainly be a good thing. However, certain other less pleasant possibilities also arise from a verdict in Sega's favour in this case. Imagine a world where Bungie had patented the Halo control system - generally agreed as the logical best solution to controlling FPS games on console joypads. Other developers would be forced to adopt different and almost certainly inferior control mechanisms; and the person who really lost out in the end would be the consumer.”

GameSpy had similar concerns: “The bigger question, I think, is whether a company can lock down a game-design style for its own… The implications could be staggering, though. Imagine if the maker of the premiere first-person shooter claimed that id Software's Wolfenstein/Doom/Quake games and Epic Games' Unreal (Tournament/Championship/et al) were ripoffs and had to pay. Countless such suits could be filed against every genre going back to Pong.”

So it’s interesting to consider if claims like those found in the ‘138 patent are really what patents were really meant to protect. GamaSutra says otherwise. Even though the two games are undoubtedly similar, “the concept of driving around in a city where virtual people jump out of the way of your car is not exactly what Thomas Jefferson had in mind when he said that patentable inventions were to be new and useful, and you can forget about non-obvious. I also don’t think he’d be too happy that no one can make a game where you drive a car around a city with virtual people who jump out of the way…FOR TWENTY YEARS. The big picture of protecting the R&D of entrepreneurs is certainly not served by patents like [the] ‘138 [patent].” The author doesn’t see “how they could stand up in court because they blatantly fail the test of ‘non-obvious to a person of average skill working in the field at the time.’”

If I (Ross) were a betting man (oh yeah... I AM a betting man), my money would be on invalidity. Just take a look at the last independent claim in the patent:

25. An electronic device for displaying a game in which a movable object which is movable in a virtual space gets a specific object at a prescribed position in the virtual space and is moved to a destination in the virtual space, comprising:
display means for emphatically displaying a position of the specific object.
Really? Really?!?! Does Sega believe it is the first game to "emphatically display" an object to which another movable object can navigate? Yeah, I bet Fox settled cheap...
A pretty funny comic from Scott Johnson at Extra Life:

Further to the previous post on the Supreme Court’s decision in Bilski v. Kappos, here is a link to an article discussing potential impacts of the decision on the gambling industry. The article quotes Shawn Gorman and Charles Miller of Banner & Witcoff, LTD’s Chicago Office. Free registration at is required to view the article.
In its long awaited decision, the United States Supreme Court has ruled in the Bilski case. The Supreme Court affirmed the Federal Circuit's decision, but on different grounds, holding that Mr. Bilski's invention, a method of hedging investment risk, is unpatentable because he is trying to patent an "abstract idea."

Here is a comprehensive writeup by one of my colleagues, Brad Wright.

Download the full decision here.
Minsky v. Linden Research, Inc.

United States District Court for N.D.N.Y.

Case No. 1:08-cv-819-LEK-DRH, Settled January 22, 2009

In July 2008, Richard Minsky filed a trademark infringement lawsuit against Linden Research and an avatar in Linden’s virtual world Second Life raising issues of virtual intellectual property rights.

Minsky, an artist and reviewer involved in the art business for over 35 years who is “recognized internationally as a leader in the field of Book Art,” wanted to establish an online presence. According to his complaint, he joined Second Life with the avatar ArtWorld Market in 2006. Shortly after joining, Minsky decided to open a gallery in Second Life to resell artwork he had acquired from other Second Life users. He also decided to start a critical review of the arts that would be published as a website, a real life magazine and a magazine inside Second Life. Minsky came up with the name SLART for his gallery and art review magazine.

Minsky claimed he chose “SLART” because of its “great sound” and because of the funny “colloquial meanings it has, including a slut’s fart, a fart made while sleeping, and someone who is between a slut and a tart.” After searching Second Life and Google and finding no other meanings or uses of SLART, Minsky decided to use it as his brand name. Minsky filed for SLART trademark registration in March 2007 and it was granted in March 2008.

Later that March, Minsky came across an art gallery in Second Life called "SLART Garden" operated by the avatar ‘Victor Vezina.’ With the help of a lawyer offering her services in Second Life, Minsky sent a cease and desist message to Vezina in the virtual world but received no response. Minsky then wrote to Linden’s general counsel in April to stop Vezina’s alleged unauthorized use of Minsky’s trademark. Linden not only refused to acknowledge Minsky’s trademark or remove the allegedly infringing material, they also wanted Minsky to abandon his trademark with the USPTO.

After many unsuccessful discussions with Linden, Minsky filed his complaint in July 2008 which alleged:

  • Trademark infringement and dilution & contributory trademark infringement and dilution by Linden and Vezina (included as a John Doe defendant). Minsky alleged that Vezina’s SLART Garden infringed on his SLART trademark. The complaint states that by denying the validity of Minsky’s trademark, allowing Vezina to maintain SLART Garden, and refusing to identify Vezina so that Minsky could include him in the lawsuit, Linden contributed to trademark infringement.

  • Tortious Interference by Linden when it hid Vezina and refused to take down infringing materials, which Minsky claimed Linden did in order “to try to intimidate and coerce [Minsky] into giving up [his] lawful trademark and rename [his] publication and other activities in a manner that would give them control of the content.”

  • Fraud by Mitch Kapor (former Chairman of Linden), Philip Rosedale (former CEO and current Chairman of Linden) and Linden Research. Minsky claims they enticed people (including Minsky) to join Second Life by promising protection of their IP rights in the virtual world but then failed to provide that protection.

For relief, Minsky sought an injunction to stop Linden and Vezina from using the SLART mark and to compel Linden to enforce his IP rights against other infringing SL residents. He also wanted $1,000 per day, from April 24, 2008 (when Linden was first notified by Minsky of the alleged infringement), for each act of alleged infringement.

In September 2008, the court granted a temporary restraining order keeping Second Life users from infringing on the SLART trademark and a preliminary injunction was granted in October. Linden then filed a petition with the USPTO to cancel registration of Minsky’s trademark (alleging that Minsky lied when he said he didn't know any other meanings SLART might have, since SL- was commonly linked to Second Life), but the Trademark Trial and Appeal Board decided to suspend hearings on the cancellation until after the case was decided. On October 10, Linden filed its answer as well as counterclaims seeking to terminate Minsky’s account and dismiss the complaint alleging trademark infringement, unfair competition and false designation of origin, and breach of contract by Minsky for using ‘SLART’. The avatar ‘Vezina’ was dropped willingly by Minsky from the lawsuit on December 3, 2008 as Minsky never served him. Finally, on January 22, 2009, Minsky and Linden ended litigation by reaching a settlement which apparently wasn’t made public.

While Minsky’s first website is no longer in existence, he now appears to be operating from

Check out this site for periodic updates from the proceedings as well as court documents (including complaint & counterclaim).

Click here to download an interesting journal article examining virtual IP rights in Second Life.
Debonneville v. Pierce

United States District Court for C.D. Cal.

Case No. 2:07-CV-03776-R-MAN), Settled May 5, 2008

This wasn’t an IP lawsuit, but it was a bitter dispute between the owners of Internet Gaming Entertainment. IGE is a virtual property company that engages in buying and selling virtual currency and items in MMO games for real money. Even though these games prohibit real money trading, the virtual goods industry is booming – according to the amended complaint, Goldman-Sachs once valued IGE at $220 million.

Alan Debonneville, a Swiss citizen living in Hong Kong and co-founder of IGE, initially filed a complaint in June of 2007 against co-founder Brock Pierce. The original complaint was sealed three months later, but Virtually Blind, who saw the complaint before it was sealed, said it was full of scandalous accusations. For example, Kotaku said “the Complaint ... includes third-hand allegations of cash from an earlier venture being spent on illegal drugs, a claim that Pierce's dog was shot by the "Spanish FBI," and allegations of minors being transported across state lines for sex. The complaint even takes a swipe at former-child-actor Pierce's filmography (Pierce played a young Emilio Estevez in The Mighty Ducks and The Mighty Ducks 2, and the lead in First Kid). In short, this is not your average business spat.”

According to the amended complaint, filed in September 2007, Debonneville met Pierce while playing Everquest online. Debonneville was selling virtual goods in Everquest in 2000 and discussed his business plan with Pierce, who was living in Spain. Pierce requested that Debonneville come to Spain to negotiate a business arrangement. “Impressed with the promises of riches that Pierce made, in November of 2001, Debonneville traveled to Spain from Switzerland to meet with Pierce.” Following those talks, IGE was formed, allegedly with certain promises of profits and stock for Debonneville.

The amended complaint claimed, inter alia, breach of fiduciary duty, breach of contract and fraud. Virtually Blind said that allegedly “Pierce deprived Debonneville of millions of dollars Debonneville was owed under his agreements with IGE. Debonneville names an even dozen claims ranging from breach of fiduciary duty to fraud. Along the way he accuses Pierce of failing to pay taxes owed to the Spanish government, using corporate funds for personal expenses, falsely telling Debonneville that one of the other executives in IGE was blackmailing Pierce, and partnering with a third party, Jonathan Yantis, to exploit bugs in game software to make unauthorized duplicates of in-game items and currency to offer for sale via IGE.”

Pierce threw the accusations back at Debonneville in his answer and counterclaim by alleging, as Virtually Blind put it, that Debonneville, “while overseeing IGE’s trading arm, overpaid certain people for virtual goods bought on behalf of IGE — including one of the lawyers who now represents Debonneville on this case — in order to secure favor and personal benefits, in breach of Debonneville’s fiduciary duty to IGE.”

Minutes from March 2008 stated that the parties had reached a settlement on all essential terms and that the parties needed to file a stipulation of dismissal by April 14. But the hostilities continued and the settlement failed – no stipulation was filed by the deadline.

The judge ordered a status conference to see why the settlement hadn’t been finalized and the result of that conference was a temporary restraining order against Pierce. The TRO prevented Pierce from “failing to comply with the terms of the settlement” and specifically kept Pierce from “contacting any bank for Debonneville or his attorneys for purposes of reversing any payment Pierce made to Debonneville under the terms of the parties’ settlement agreement in this lawsuit [...], attempting to reverse any payment made to Debonneville or his attorneys [...], taking any action to sell, assign, [or] transfer [...] any asset owned directly or indirectly by Pierce, unless such action is performed solely to raise funds to be paid to Debonneville, [or] filing any suit relating to the settlement, Debonneville or his attorneys, other than a personal bankruptcy suit.” The court granted the TRO because those acts would cause “irreparable injury” as they “would be part of a wrongful scheme by Pierce, already commenced, to attempt to illegally recover settlement payments already paid to Debonneville or to avoid paying Pierce’s settlement obligations.”

Another hearing was set for May 5 to determine whether the restraining order should be made permanent. The minutes from that hearing revealed that Pierce paid Debonneville the undisclosed settlement amount. After that hearing, a motion for sanctions against Pierce for his failure to attend a scheduled deposition remained (although it may have since been dropped because Pierce paid the settlement). But the emails contained in the exhibits to the motion and response show the hostility that existed between the lawyers and in this case overall.

Virtually Blind wasn’t surprised at the settlement given that the litigation would’ve likely become incredibly expensive and the parties probably wanted to avoid negative publicity. It’s still unfortunate because the issue of virtual property didn’t go in front of a judge. It would’ve been interesting to see how the judge would've acknowledged and responded to virtual property in a case concerning a business based on real money trading which violates the Terms of Service MMOs.

Check out Virtually Blind's website for more extensive analysis of the case as it progressed.
It seems that Gibson’s efforts to enforce its musical concert participation patent (U.S. Patent No. 5,990,405) have officially ended. Previously we told you that Gibson’s Tennessee case against Harmonix (and its "Rock Band" game) was on its way back on track after being on hold for a while. While it was on hold, a California court ruled that the same patent did not cover Activision's "Guitar Hero" game, and it seemed likely that the Tennessee court would end up doing the same for "Rock Band."

On Friday, the Tennessee court dismissed the case in view of a settlement that the parties had reached. This dismissal would appear to end the battle over this patent.

Settlement terms are confidential, although we can speculate that the things that happened while the case was on hold did not make Gibson’s life easy. First, proceedings at the Patent Office suggested that the “musical instrument” required by the Gibson patent had to be capable of making music. This may have caused Gibson to drop its claims against the “Guitar Hero” and “Rock Band” guitars (I’ve never been able to make actual music with those things), and the holdout claims may have been leveled against the drums in the “Rock Band” game (on the theory that the drums could at least still make music).

Second, when the California court ruled that the Activision “Guitar Hero” game was not covered by the patent, the California court doubted whether the patent covered any interactive video game at all (the patent’s description focuses on letting a user simulate participation in a musical concert, which arguably is not an interactive game type of thing). Even if Gibson was now only focusing on the "Rock Band" drums as being “musical instruments” to get around the first issue, this finding by the California court would still have been thorny for Gibson to get around.

The vast majority of cases settle before the end of trial and appeals. Mounting evidence and court rulings developed during the case help resolve points of contention, and make the chances of success clearer for both parties to see, and eventually the parties are able to make the business decision to end it at terms they can live with. With the settlement in this case, here’s hoping Gibson, Activision, Harmonix and the others can move on and give us all the next generation in great musical games!
The Magnavox Co., et al. v. Chicago Dynamic Industries, et al.

201 U.S.P.Q. 25 (N.D. Ill. 1977)

For those of you who love home video games as much as we do, the following lawsuit will be of interest.

The case concerns the Magnavox Company (makers of the Odyssey) who released a ping-pong style game you may have heard of: Pong. The defendants in this case released similar ping-pong games and Magnavox sued for patent infringement.

At issue in the case were three similar patents that all dealt with a “Television Gaming Apparatus.” While there were several questions at issue in the case, the court focused on the issue of whether the patents were obvious or anticipated in light of one another, as either finding would lead to invalidity.

I. Background

On April 17, 1973, United States Patent 3,728,408 ("the '408 patent"), was issued to Ralph Baer. In his oral judgment of the case, District Judge Grady commented: “The ‘408 patent, I think, is the pioneer patent in this art . . . with the players participating in the game in an environment such as a home or some place where a large computer would clearly not be available.” After issuance of the ‘408 patent, for the first time, video games would be brought to the home.

Two years later, on August 5, 1975, William Rusch received a similar television patent. This patent, United States Patent RE28,507 ("the '507 patent'), “discloses a movable hitting spot which is controlled by the player and which, by striking a hit spot, can change the direction of that hit spot.” The ‘507 patent used the term “distinct motion,” which Judge Grady interpreted as referring not to “a predictable motion,” but rather to motion that is different from the motion that characterized the hit spot immediately prior to the striking of the hit spot. This idea of changing the direction of the hit spot was not present in the development of games at this time. Before this patent, a player would simply turn a knob which set in motion a series of events that he had no further control over. After the ‘507 patent, however, players could now control the movement of the ball based upon the area of the hit spot the ball struck!

II. Analysis

One question presented to the court was whether the feature of patent ‘507 was obvious at the time of its production. Others had imitated the ‘507 patent in similar ping-pong style games, but Judge Grady found that the novel feature of ‘507 was not obvious. In particular, the judge relied on the testimony by people from RCA who admitted that they had the mechanical capability to create this feature, but were going in a different direction of development at the time.

The next issue concerned what knowledge, if any, the patent examiner had when the ‘507 patent was examined for re-issue. The ‘408 patent, awarded before the ‘507 patent, should have been mentioned in the application, but it was not. The court sought to determine if the patent examiner had knowledge of the ‘408 patent and was actively trying to cover it up in his issuance of the ‘507 patent. Judge Grady determined that since the ‘507 patent was neither anticipated by nor obvious in light of the ‘408 patent, the patent examiner would have reached the same conclusion and awarded the ‘507 patent.

The next issue involved another television gaming apparatus patent, United States Patent RE28,598 ("the '598 patent") which was issued on October 28, 1975. This patent made improvements to the visual reproduction in ‘507. Judge Grady found that ‘507 anticipated the ‘598 patent and also that ‘598 patent was obvious in the light of ‘507. The court determined that the ‘598 patent rectified some of the visual reproduction in ‘507 which, while an improvement, was not patentable. The ‘598 patent simply used the same type of circuitry in a more efficient way to achieve better results. As a result, 28,’598 patent was found invalid by Judge Grady as being anticipated by and obvious in view of the ‘507 patent.

Finally, Judge Grady turned to the question of whether the defendant’s Pong-like games infringed the ‘507 patent. The court found that the games did infringe the claims of the ‘507 patent “to the extent that they contain or use a player-controlled movable hitting symbol which, when it coincides with a hit symbol, causes a change in direction of that hit symbol.” Because all of the defendant’s games featured this characteristic, they were all held to infringe on ‘507.
The defendants made several arguments to provide that their games differed from the ‘507 patent. The judge, however, found these arguments to be immaterial and ruled against them on all counts. The first attempt by the defendant was focused on the influence of the direction of the ball by the place on the paddle where the ball strikes. In the ‘507 patent, when a ball in the game comes into contact with a hit symbol it changes the direction of that hit symbol in a distinct way. The defendants argued that the games do not meet this claim because the direction of the ball cannot be predicted after it strikes the paddle. Judge Grady disagreed, however, ruling that “distinct” meant “simply a motion that is different from the motion characterizing the ball immediately before the coincidence.”

III. Conclusion

This early lawsuit showed that courts were prepared to handle video game patent law, and also was a testament to the strength of patents in the video game industry. For more information on Mr. Baer's early products, check out Ralph Baer's web site, which has many more details about his inventions and his trials and tribulations getting them produced!
There's an interesting article on Law360 today:

Virtual-World Conflicts Lead To Real-World Suits.

Here's an excerpt from the article:

Law360, New York (June 08, 2010) -- As the market for online games expands and the debate over who has the right to control the virtual content heats up, website operators, their users and third parties could find themselves locked in real-world legal battles.

Disputes stemming from ownership of virtual property and operators’ terms of service agreements are starting to pop up more often, leading intellectual property experts to speculate that they may become the next hot-button issues to be played out in the courts.

The complete article can be found here.
Red-Baron-Franklin Park, Inc. v. Taito Corp.
883 F.2d 275 (4th Cir. 1989).

I. Background

Some of you may remember twin martial artists Billy Lee or Jimmy (who also went by Hammer and Spike). For those not familiar with the duo, they can be found in the 1987 beat ‘em up game “Double Dragon.” Hammer and Spike were the subject of this 1989 lawsuit. Taito is a Japanese corporation that sells video games and electronic printed circuit boards used in coin-operated video game units. Taito is the owner of United States Copyright Registration No. PA-327-710, issued June 26, 1987, for the video game audiovisual work Double Dragon.

Red Baron operated arcades where it allowed the public to play games. Red Baron, without license from Taito or Taito America, purchased circuits of Double Dragon from Japan and fitted them into their already existing game units, making the game playable to the customers. Taito took offense, arguing that they had intended the Double Dragon game to be sold in the United States as a complete video game unit, not just its circuit board.

Taito claimed that each of the boards displayed the following restrictive note: “This game is for use in Japan only. Sales, exports, or operation outside this territory may violate international copyright and trademark law and the violator subject to severe penalties.”

The question in the case was whether Red Baron infringed Taito’s copyright in “Double Dragon,” when Red Baron imported the game from Japan and installed it in its video arcades for public enjoyment. The district court ruled that Red Baron did not infringe upon Taito’s copyright. This, of course, led to an appeal to the Fourth Circuit . . .

II. Argument

On appeal, Taito argued that it had a separate and distinct right to “perform” Double Dragon, and that it had not conferred this right on Red Baron. As a result, Red Baron infringed Taito’s copyright by its activities in making use of the circuit boards available to the public for a fee.

The court had to determine the following: 1. whether Red Baron’s use of Double Dragon constituted a public performance within the meaning of § 106 (4) and if so to consider 2. whether the first sale doctrine has any application to the performance right as distinguished from actual ownership of the copyrighted work.

A Public Performance

To “perform” a work and to perform it “publicly” are defined by the Copyright Act, 17 U.S.C. § 101 et seq.

“Perform” is defined as: “to recite, render, play, dance, or act [a work], either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.”

“Public” performance is defined as: “To perform . . . a work ‘publicly’ means- (1) to perform . . . it at a place open to the public . . . .”

The court concluded that Red Baron publicly performed Double Dragon because once a coin was inserted into the machine the television monitor displayed a series of images while the speakers made audible accompanying sounds. Also, because Red Baron’s video arcade was open to public and it was Red Baron’s aim to attract members of the public to its establishment, Red Baron’s arcade was considered a public place.

B. The First Sale Doctrine and the Performance Right

The second issue the court ruled on was Red Baron’s assertion that by selling the circuit boards, Taito intended to transfer the performance right. The court concluded that the first sale doctrine did not apply to the performance right and that Taito America possessed and retained a valid copyright in the public performance of Double Dragon in the United States. They also concluded that since Taito had not granted a performance license to Red Baron, the latter was guilty of copyright infringement.

III. Conclusion

In this early gray-market goods case, the United States Court of Appeals for the Fourth Circuit reversed the judgment of the district court and remanded the case for further proceedings.

Well it looks like one of the two Harmonix/Konami cases might be settling. In Harmonix Music Systems, Inc. v Konami Digital Entertainment Co, Ltd., civil action 1:09-cv-10206 (D.Mass), the parties on June 1, 2010, jointly filed a status report with the court, indicating:

Plaintiffs Harmonix Music Systems, Inc. and Viacom Inc. (collectively, the "Plaintiffs") and Defendants Konami Digital Entertainment Co., Ltd. and Konami Digital Entertainment, Inc. (“Defendants”) respectfully inform the Court that they have executed a binding and enforceable Settlement Term Sheet. The parties are currently working to execute a formal settlement agreement. The parties thus respectfully inform the Court that they expect to be able to provide another status report in 90 days.

Looks like they have come to some agreement in this case. Still no word whether the sister case, Konami v. Harmonix, is affected or not.

Okor v. Atari Games Corp. et al

76 Fed. Appx. 327 (Fed. Cir. 2003).

I. Statement of Facts

This case is one in a series of attempts by Joseph Kwame Okor to enforce two patents against Sony and other companies. The patents at issue, U.S. Patent Nos. 4,126,851 (“851 Patent”) and 4,127,849 (“849 Patent”) both name Okor as the sole inventor. The ‘851 Patent’ involves a programmable television game system and the ‘849 Patent’ involves a system for converting coded data into display data.

II. Procedural History

In 2002, Okor filed three separate lawsuits:
1. Alleging infringement of the ‘851 Patent’ by a number of arcade-game manufacturers (Civil Action No. 00-11503)
2. Alleging infringement of the ‘849 Patent’ by the same manufacturers (Civil Action No. 00-11504), and
3. Alleging infringement of the ‘851 Patent’ by Sega, Nintendo, Sony, and nine companies who were connected to Sega’s and/or Nintendo’s products (Civil Action No. 01-10610)

The district court granted summary judgment of noninfringment of both the ‘851’ and ‘849 patents’ to the arcade-game manufacturers, and dismissed the claims against Sega, Nintendo, Sony, and the other nine defendants on the grounds of: 1. Claim Preclusion and 2. Issue Preclusion.

Okor appealed the decision of the United States District Court for the District of Massachusetts.

III. Argument

The United States Court of Appeals for the Federal Court analyzed the case using the district court’s case numbers:

A. Civil Action No. 00-11503

Against the arcade-game manufacturers, Okor asserted only claim 1 of the ‘851 Patent’, which states:

“A system for generating and controlling symbol-producing signals for display on the screen of a television receiver, comprising: (e) changeable memory means providing program instruction” 851 Patent, col. 8, II. 15-49.

The Federal Court held that the accused products did not included a “changeable memory means” required by limitation (e). The court found that all arcade-game manufacturers used fixed, “read-only” memory boards that could be changed by “taking the devices apart.” The court concluded that “no reasonable juror could find the fixed memory boards in defendants’ arcade-game machines to be equivalent to the “changeable memory means” in limitation (e).

B. Civil Action No. 00-11504

Okor asserted only claim 1 of the ‘849 Patent’ against the arcade-game manufacturers which reads:

“A system for converting coded data signals for presentation as display symbols on a display devise comprising:... (g) said dot generator including x and y comparators and x and y stacks operatively connected to one another and to said display computer, said x and y comparators receiving, respectively, x and y counts corresponding to the x and y addresses of said symbols.” ‘849 Patent’, col. 14, II. 58-68, col. 15, 11. 1-19.

The district court granted summary judgment of noninfringment because defendants’ machines failed to read on limitation (g). The court found that limitation (g) described a “stack” memory system which differed from other memory systems, including “frame-buffer, bit-map” systems. The court also held that all arcade games operate by means of frame buffers and that none of the accused devises literally read on limitation (g). Because Okor had added limitation (g) through amendment, the district court held Okor was estopped from asserting infringement by equivalents.

C. Civil Action No. 01-10610

Okor alleged that Sega’s and Nintendo’s home video-game systems infringed the ‘851 Patent’, and also alleged that Sony and nine other defendants were liable for being connected to Sega’s and/or Nintendo’s systems. The district court granted a motion to dismiss on two grounds:

1. Claim Preclusion

The First Circuit has established three required elements for claim preclusion:
“(1) a final judgment on the merits in an earlier suit, (2) sufficient identicality between the causes of action asserted in the earlier and later suits, and (3) sufficient identicality between the parties in the two suits.” Mass. Sch. of Law at Andover, Inc. v. American Bar Ass’n, 142 F.3d 26, 37 (1st Cir. 1998) (quoting Gonzalez v. Banco Cent. Corp., 27 F.3d 751, 755 (1st Cir. 1994).

Here, the district court found that all three of the factors for claim preclusion were met. Therefore, Okor’s new claims against Sega and Nintendo suing on the basis of the very same home video game consoles found not to infringe patent 851 in previous decision, are precluded.

2. Issue Preclusion

The First Circuit applies issue preclusion where “(1) an earlier decision involved ‘the same issue of law or fact’ as a later case, (2) ‘the parties actually litigated the issue’ in the earlier case, (3) the earlier court ‘actually resolved the issue in a final and binding judgment,’ and (4) the earlier court’s ‘resolution of that issue was essential to its judgment (i.e., necessary to its holding.)” Monarch Life Ins. Co. v. Ropes & Gray, 65 F.3d 973, 978 (1st Cir. 1995).

The district court determined that Okor’s claims against Sony and the other nine defendants failed because Okor was precluded from arguing that Sega’s and Nintendo’s products infringed the ‘851 Patent’, because Okor had failed to provide evidence that any of Sega’s and Nintendo’s video game consoles had been configured in a potentially infringing manner.

IV. Conclusion

The United States Court of Appeals for the Federal Circuit affirmed the district court’s judgments in all three cases.

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