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.

Patent Rights Protection Group, LLC ("PRPG"), a patent-holding company, previously filed suits in the District of Nevada accusing various organizations of allegedly infringing U.S. Patents No. 6,475,087 (‘the ‘087 patent) and No. 6,860,814 (the ‘814 patent). The related patents disclose video gaming machines with a video display mounted to a door. Claim 1 of the ‘087 patent is provided below.

1. A gaming apparatus comprising
a cabinet, a door moveable between a first position and a second position, said door in said first position cooperating with said cabinet to define a generally closed interior space, said door in said second position permitting access to said interior space, said door having an opening therein;
at least one support mounted to said cabinet for configuring said gaming apparatus as a reel-type game when said support supports a reel mechanism in said open space, at least one mount for mounting a display element to said door for viewing through said opening, said display element comprising either reel-screening glass or a video display, said opening aligned with a reel mechanism when said reel mechanism is mounted to said at least one support and said reel-screening glass is mounted to said door, whereby reels of said reel mechanism are viewable through said reel-screening glass when said door is in said closed position, and
whereby said gaming apparatus is configured as a video type game when a video display is mounted to said door said video display is viewable through said opening.

PRPG accused the various organizations, including out-of-state companies SPEC and ("SPEC") and Video Gaming Technologies, Inc.'s ("VGT”), of infringing the patents by “displaying, using, and offering for sale cabinets that house gaming machines at trade shows in Nevada.” SPEC and VGT each separately filed motions to dismiss PRPG’s relevant suits in Nevada, arguing that their contacts with Nevada were insufficient for the court to exercise personal jurisdiction. Specifically, SPEC and VGT each argued that they:

were not registered to do business in Nevada;
did not manufacture any products in Nevada;
their websites were not specifically targeted to Nevada residents;
did not have sales agents, employees, manufacturing facilities, bank accounts, or telephone listings in Nevada.

VGT further asserted that it did not directly market or derive revenue from Nevada. Similarly, SPEC acknowledged mailing brochures to eight potential customers within Nevada, but only generated de minimis sales in the state. Dismissal was also sought on the grounds of improper venue and issue preclusion.

Applying 9th Circuit law, the court held that Nevada did not have personal jurisdiction over SPEC and VGT. The court also denied jurisdictional discovery, however, did not specifically address improper venue or issue preclusion, as dismissal of the suits rendered those issues moot.

PRPG appealed the dismissal of the suits and denial of jurisdictional venue to the Federal Circuit. Citing Supreme Court precedent, the Federal Circuit noted that the determination of whether personal jurisdiction may be exercised “remains whether the defendant purposefully established minimum contacts” in the relevant state and whether “personal jurisdiction would comport with 'fair play and substantial justice.’ i.e., whether exercising jurisdiction would be reasonable.” The court found that each SPEC and VGT had minimal contacts, specifically each attended trade shows in Nevada through the 1990s, 2000s, and even as recently as 2008. The court then focused on whether exercising personal jurisdictions over SPEC and VGT would be reasonable. In answering in the affirmative, the Federal Circuit held that SPEC’s and VGT’s “admitted presence at numerous trade shows in Nevada indicates that, despite their arguments to the contrary, neither company faces a particularly onerous burden in defending itself in Nevada.”

The court further addressed arguments relating to the economic hardship (or lack thereof) upon PRPG if forced to litigate the suits outside of Nevada. “Nevada has an interest in providing a convenient forum for all Nevada citizens, not just those who might face severe economic hardship if forced to litigate outside Nevada.” The decision continued to note that “[b]y providing a forum for [PRPG’s] claims against SPEC and VGT, Nevada spares [other states] the burden of providing a forum for [PRPG].” The decision also found that the district court abused its discretion when denying PRPG’s request for jurisdictional discovery. The case, therefore, was remanded back to the District of Nevada. Its case number is: 2:08-CV-00662 (D. NV).
Not exactly video game related, but our readers tend to also be interested in file-sharing and online music distribution cases, so...

LimeWire was recently found liable for copyright infringement of its users by a Federal court on Tuesday, May 11. As reported by WIRED, LimeWire is potentially on the hook for massive damages, which could cripple or bankrupt the company. Not to mention the court, in its order, found Lime Group's CEO personally liable as well:

VII. Conclusion
For the reasons stated above, the Court (1) DENIES Defendants’ motions to exclude
evidence (D.E. 138, 140, 153, 165, 168);39 (2) GRANTS Plaintiffs’ motion for summary judgment on the claim against LW of inducement of copyright infringement, and DENIES LW’s motion for summary judgment on the claim (D.E. 75, 108); (3) DENIES the parties’ crossmotions for summary judgment on the claim against LW of contributory copyright infringement (D.E. 75, 108); (4) DENIES LW’s motion for summary judgment on the claim of vicarious copyright infringement (D.E. 108); (5) GRANTS Plaintiffs’ motion for summary judgment on their claims against LW of common law copyright infringement and unfair competition, and DENIES Defendants’ motion for summary judgment on these claims (D.E. 75, 101, 108); (6)
GRANTS Plaintiffs’ motions for summary judgment on the claims against Gorton and Lime Group for inducement of copyright infringement, common law infringement, and unfair competition, and DENIES Defendants’ motions for summary judgment on these claims (D.E. 75, 101); (7) DENIES the parties’ motions for summary judgment on the claims against Gorton and Lime Group for contributory copyright infringement and vicarious copyright infringement (D.E. 75, 101); and (8) DENIES Gorton’s and Lime Wire FLP’s motion for summary judgment on the fraudulent conveyance and unjust enrichment claims (D.E. 101).
The case is Arista Records et al. v. Lime Group LLC et al., S.D.N.Y. case 06-cv-5936.

If you use LimeWire, you might not be using it for long...
Nintendo of America, Inc. (Nintendo) filed suit yesterday in a Washington district court, accusing an individual, Kevin Niu, of infringing Nintendo's copyrights and trademarks in its Nintendo DS and Nintendo Wii. Specifically, Nintendo alleges that Niu makes and sells game copiers that are designed to copy the software in the game cartridges used by the Nintendo DS, and that he uses the "DS" and "Wii" trademarks on various websites to market the copiers.

As we read the complaint, it really struck us how history repeats itself, and how the battle between IP holders and alleged hackers/copiers is neverending. This post will just highlight one example tactic from each side of the battle.

From the hacker/copier side, those guys have been trying to fake out consoles for as long as consoles have been around. In the Nintendo suit, the copier product (said to be marketed under several names, including M3 DS Real Card, DS Linker, R4 DS Revolution, etc.) allegedly included a physical interface that would fit in the slot of a Nintendo DS, and allowed owners to connect a portable memory device containing downloaded/pirated copies of games. According to Nintendo, the physical interface (and some software associated with it) would fool the console into thinking it was talking to an authentic cartridge, and the portable memory device would then be permitted to load all sorts of pirated games for play.

However, trying to fake out consoles has been around for decades. In 1983 (before the crash of that year, and on the heels of the unfortunate ET The Extra Terrestrial game), Atari, Inc. prevailed on a similar suit against a company (JS & A Group, Inc.) that allegedly marketed a device called the PROM BLASTER. The PROM BLASTER had two slots for Atari 2600 cartridges: one for an original cartridge, and another for a blank, and it let you make a "backup" copy of the original. The court in that case didn't buy the defendant's argument that the device was only used for legitimate backup purposes, and enjoined them from selling the product.

From the console side, console makers have their own strategies for protecting their IP. Nintendo's complaint alleges that when the accused device runs a game on the Nintendo DS console, a NINTENDO logo first appears. Nintendo alleges that the display of this logo when playing a game using the unauthorized device is likely to cause confusion on the part of consumers.

This reminded us of an earlier case. In 1992, Sega Enterprises, Ltd. filed suit against Accolade, Inc. for making unauthorized cartridges for the Sega GENESIS system. The GENESIS console was programmed to authenticate a cartridge upon bootup, and then display the following message when an authorized cartridge was present: "PRODUCED BY OR UNDER LICENSE FROM SEGA ENTERPRISES LTD." The Accolade cartridges were designed to function in the GENESIS console, so this message displayed there as well, and Sega argued that this display was a trademark violation that would confuse consumers. Under the facts of that case, the court ultimately found that consumers were not likely to be confused, but only time will tell how this issue is resolved in the current Nintendo case.

In summary, and as you probably all know, these kinds of IP battles will probably never go away, and I'm sure we'll see similar facts and issues pop up along the way. They're all interesting, and we should be sure to learn what we can from them. Thanks for reading!

Cases mentioned:

Nintendo v. Niu, 10-cv-00791 (W.D. Wash, filed 5/11/2010)
Atari v. JS & A Group, 597 F.Supp. 5 (N.D. Ill, 1983)
Sega v. Accolade, 977 F.2d 1510 (9th Cir. 1992)
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