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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, Worlds.com 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 Worlds.com, at least, believes that the settlement conditions haven't been satisfied. Still waiting to get a copy of Worlds.com'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 shacknews.com 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...
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