Patent Arcade

Hochstein et al. v. Microsoft et al.
United States District Court for E.D. Mich.
Case No. 04-cv-73071, Filed August 11, 2004

In 1991, Peter Hochstein and Jeffrey Tenenbaum came up with the idea of communicating live while playing the same video game in separate locations. They patented the technology for doing so in 1994. In 2002, Microsoft released Xbox Live, a gaming service that also allows users to communicate while playing the same game. Sony also released similar capabilities for PlayStation 2. In 2004, Hochstein, Tenenbaum and Harold Milton, Jr. (an assignee of the patent) brought a patent infringement suit against Microsoft and Sony alleging that the voice and data communications technology used in the gaming systems infringed on the patent claims. For relief they sought a permanent injunction and treble damages. Sony settled its suit in April 2009, leaving Microsoft as the only remaining defendant.

While U.S. Patent No. RE36,574 is also asserted, the primary patent at issue is U.S. Patent No. 5,292,125, which is for an “apparatus and method for electrically connecting remotely located video games.” See representative claim 1:

1. A video game communication assembly (100) for communicating command signals between a local video game (28) having at least two player ports (A, B), at least one set of player controls (20), and at least two operating modes, and at least one remote video game (30) through a medium (110) capable of transmitting a plurality of data signals and voice signals, said assembly (100) comprising:

control means (106) for controlling command signals received from a set of player controls (20) of the local video game (28) and for creating communication signals;

modem means (114) for bilaterally transmitting said communication signals between said control means (106) and at least one remote video game (30);

first port means (112) for bilaterally transmitting said communication signals between said control means (106) and said modem means (114), said assembly (100) characterized by

said control means (106) including transit time means (126) for determining the amount of time required for said communication signals to travel between said first port means (112) and the remote video game (30).

After years of discovery, last fall Microsoft alerted the court that some claims still needed to be construed before trial began. Microsoft submitted its motion for construction of claim 39 in February 2009. See claim 39:

39. A video game communications circuit for communicating command signals between a local video game having at least two player ports (A, B), at least one set of player controls (20), and at least one remote video game (30) in a medium capable of transmitting plurality of data signals and voice signals, said circuit comprising:

a first microprocessor (140) electrically connected to one set of player controls (20), two player ports (A, B) and an oscillating circuit (Y1, C2, C3, R2);

two player port logic circuits (108, 124) electrically connected between said first microprocessor (140) and the two player ports (A, B);

a switch (150) connected to said first microprocessor (140) having at least two positions;

a modem circuit (114) electrically connected to said first microprocessor (140) for bilaterally transmitting communication signals to and from said first microprocessor (140);

a voice over data circuit (134) for filtering voice signals from communication signals and for transmitting both to said modem circuit (114); and

communication couplers (L1, L2) for connecting said voice over data circuit (134) to the medium of communication.

Microsoft wanted the claim to be construed to mean that the “video game communications circuit” and its associated components were separate and distinct from the video game computer to which the circuit is attached.

Microsoft argued that a distinction between the claimed apparatus and its video game computer was expressly reflected in claim 39, which asserts that the video game communications circuit is not the local video game, but instead, a separate circuit that connects to the local video game. ‘Plaintiffs want to collapse this distinction and ignore the claim's clear direction as to where particular components must be located — i.e., in a separate apparatus, and not in the video game computer itself,’ Microsoft argued in its motion.

In May, the special master to whom the matter was referred issued his report and recommendations, denying Microsoft's proposed limiting construction. Instead, he construed “video game communication circuit” to mean “a circuit operatively associated with a local video game and at least one remote video game without limitation as to such circuit's physical location or attachment to the local video game.” Microsoft objected to the master’s recommendations, but the court granted plaintiffs’ motion to adopt the recommendation anyway, dealing Microsoft a blow right before trial.

Read the court's claim construction order here.

A couple side notes:

This is the same case where Microsoft got in trouble for wasting the court’s time by filing an objection to discovery because of a typo Hochstein made in the discovery request. In February 2009, Hochstein deposed a Microsoft employee, Ms. Mason, about Xbox marketing and then filed a formal request for all marketing documents related to Xbox “including but not limited to all such documents identified by Ms. Mason at her February 12, 2008 [sic] deposition.” Microsoft responded five weeks later with general objections, including “Microsoft objects to this request as vague in that Ms. Mason’s deposition took place in 2009, not in 2008.” Over the next week, Microsoft proceeded to provide over 140,000 documents to Hochstein without any index.

The court, upset by Microsoft playing dumb in its written response, said the frivolous objection to an obvious, harmless typo was a waste of time for all the parties involved. The court issued a separate order directing Microsoft to explain why its counsel shouldn’t be sanctioned “for unreasonably and vexatiously multiplying the proceedings.”

Microsoft’s five week delay and “document dump” less than two months before trial also annoyed the court. The court ordered Microsoft to provide an index of the marketing documents within one week and barred Microsoft from introducing the marketing documents against Hochstein or contesting the admissibility of the marketing documents at trial.

Read the court’s discovery order here.

Also, in January 2009, Hochstein filed an almost identical suit as the one discussed here (dubbed Hochstein I), again brought against Microsoft and Sony. According to the complaint, during a Hochstein I pretrial conference in January 2008, the parties discussed whether the defendants’ new game consoles (Xbox 360 and PlayStation 3) should be litigated in Hochstein I or a separate lawsuit. Hochstein filed this complaint to adjudicate the possible infringement of the new products separately.

Read the Hochman II complaint here.

Zynga, the popular online social gaming company, has filed yet another lawsuit. Much like its suit against John Does 1-5, Zynga is again going after website operators infringing on its ZYNGA trademark. This time, however, Zynga has a problem with more than just the domain names.

One of the games Zynga operates is Texas Hold ‘Em Poker which uses virtual “chips.” Players get a set amount of chips when they first sign up and then may win more through game play or purchase more from Zynga. Zynga alleges that the defendants operate sites that sell virtual chips that can be used in the game for real world money, an act that Zynga’s Terms of Service expressly forbid.

The defendants are unnamed “John Does” for the time being because they “registered their domain names using the Domain by Proxy privacy protection service, preventing Zynga from accessing the name and contact information Defendants used to register the domain names.”

Examples of the domain names, some of which include Zynga’s mark, are: 123chips.net, facebookchips.com, and zyngachips.org.

Zynga alleges 7 causes of action for which it’s seeking an injunction and damages:

1. Trademark Infringement – False Designation of Origin Regarding the Mark ZYNGA: The complaint alleges that consumers may be confused or misled into thinking a connection exists between Zynga and the defendants by the defendants’ use of the ZYNGA mark.



2. Trademark Infringement – Federal Cybersquatting Regarding the Mark ZYNGA: The complaint alleges that the defendants registered domain names with the bad faith intent to profit from use of the ZYNGA mark.



3. California Statutory Unfair Competition: The complaint alleges that by using the ZYNGA mark and selling the virtual chips required for the game the defendants are attempting to trade on Zynga’s goodwill and have gained an unfair advantage.



4. Common Law Trademark Infringement of the Mark ZYNGA: The complaint alleges that the defendants’ use of the ZYNGA mark causes confusion or deception as to the source of, and authorization for, the defendants’ products in violation of California common law.



5. California Common Law Passing Off and Unfair Competition: Zynga is seeking punitive damages for the defendants’ allegedly intentional and malicious actions which Zynga says resulted in an unfair advantage.



6. Breach of Contract: Zynga claims the defendants agreed to be bound by the game’s Terms of Service by participating in the poker game. “By selling ‘chips’ for use in the Game through the Infringing Websites, and by using the Game itself to transfer the ‘chips’ they sell, Defendants have breached the Terms of Service, which specifically prohibit Game users from exchanging ‘chips’ “for ‘real-world’ money or otherwise exchange items for value outside of the Game.”



7. Intentional Interference with Contractual Relations: Zynga alleges that the defendants intentionally acted to induce consumers to breach their contracts with Zynga by selling chips without authorization at a lower price than Zynga offered and by distributing the chips in a manner prohibited by the Terms of Service.

Read the full complaint here.

An entertainment licensing company has begun legal combat with bankrupt video game producer Midway Games Inc. over the licenses for movies, television shows, live action productions and other properties based on the blockbuster game "Mortal Kombat."

Threshold Entertainment Inc. filed an adversary complaint Wednesday in the U.S. Bankruptcy Court for the District of Delaware challenging Midway's proposed $33 million sale of substantially all of its assets, including all previously released titles and games based on the hit Mortal Kombat series, to Warner Bros. Entertainment Inc. That deal was announced in late May.

Threshold claims that it holds perpetual exclusive rights to develop derivative works in film and television based on Mortal Kombat as well as rights to licenses on certain characters that appear in both the video games and the films and TV series based on them.

1. Violation of the Computer Fraud & Abuse Act



2. Violation of the California Computer Data Access & Fraud Act



3. Intentional Interference with Contract



4. Trespass to Chattels



5. Unjust Enrichment



6. Unfair Competition

NOA is the wholly-owned subsidiary of Nintendo Co. Ltd. responsible for the marketing and sale of Nintendo products in the Western hemisphere and for enforcing Nintendo’s intellectual property rights worldwide (except Japan).

According to the complaint Daniel Man Tik Chan is the owner, President or CEO of the other defendant Inspire Electronics and does business as Inspire Technologies and Inspiretech Electronics as well as on the websites www.dselite.com, www.thedsdeals.com, and www.inspiretech.com.

NOA alleges that the defendant sells devices “designed to circumvent the technological security measures built into” Nintendo’s DS handheld video game systems. The accused devices, referred to in the complaint as “Game Copiers” are “commonly used to play illegally downloaded pirated copies of Nintendo DS video games on the Nintendo DS.” The Nintendo DS is Nintendo's popular dual-screen handheld portable video game system featuring a clamshell design with two LCD screens inside, the bottom one a touchscreen.

The complaint states that Nintendo is the target of a lot of intellectual property piracy because of the immense popularity of its games and systems. In addition to registering its intellectual property rights, the company builds protections into its systems and software. The Nintendo DS contains design-based protection in that the system will only play game cartridges that fit, with a certain size and matching electrical components. Nintendo also has a technological security measure where commands are exchanged between the system and game card inserted into the system. Copyrighted programs are repeatedly accessed and copied during the use of the system. So even if the game card fits, passing the design-based measure, if the game card doesn’t have the software necessary to pass (or circumvent) the technological security measure, the game can’t be played.

The defendants’ accused devices consist of two parts: 1) the game card itself (referred to as the “Game Copier Card”), which substantially matches the DS cartridges so it passes the design-based measure, and 2) a portable memory device (or instructions to purchase one) that can hold hundreds of illegally pirated DS games that can be inserted into the Game Copier Card for unauthorized play that passes the second measure. When the Game Copier Card is used as instructed by the defendants, Nintendo’s trademark appears on the screen. NOA alleges this may confuse users into thinking they are using an authorized copy of the game.

On June 1, 2009, NOA alerted defendants that they were infringing on NOA’s IP rights and ordered them to cease their infringing operations, but the defendants failed to respond.

NOA brings four causes of action in this suit:

1. Violation of the Digital Millenium Copyright Act:
   
   NOA alleges that the defendants’ willfully violated the DMCA because their actions fell into at least one of the categories listed in 17 U.S.C. § 1201 (a), Violations Regarding Circumvention of Technological Measures:
   
   (1) (A) No person shall circumvent a technological measure that effectively controls access to a work protected under this title.
   
   (2) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that:
   (A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title;
   (B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; or
   (C) is marketed by that person or another, acting in concert with that person with that person’s knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title.


2. Copyright Infringement
   
   NOA alleges that the defendants’ actions “constitute the vicarious or contributory reproduction, preparation of derivative works, distribution, and inducement of the same, in violation of Nintendo’s exclusive rights in its copyrighted works under 17 U.S.C. § 106.”


3. Trademark Infringement
   
   NOA alleges that the defendants violated the Lanham Act, 15 U.S.C. §§ 1114, 1125 (a) because they cause the Nintendo trademark to appear on the DS without Nintendo’s authorization. The complaint says the defendants violate § 1114 because they used a “reproduction, counterfeit, copy, or colorable imitation” of NOA’s registered trademark in commerce which is likely to cause confusion or to deceive. The defendants allegedly violate § 1125 (a) because use of the trademark is a false or misleading representation, likely to cause confusion or deceive the user as to the origin or approval of the goods provided.


4. Unfair Competition
   
   Nintendo also alleges that the defendants have willfully and persistently violated the California Business and Professions Code section 17200 et seq.

Read the full complaint here.

Fenner Investments, Ltd. v. Microsoft et al.
United States District Court for E.D. Tex.
Filed 1/5/07, Decided 3/16/09 (Opinion issued 6/3/09)

This case revolved around Fenner Investment’s U.S. Patent No. 6,297,751, which describes a low-voltage joystick port interface.

Prior art joysticks used resistor-like devices called potentiometers to produce analog signals. These analog signals had to be transformed into digital signals to be read by a computer. An interface circuit interpreted the joystick’s analog signal to produce a responsive digital pulse which had a pulse width that corresponded to the joystick position. The computer would measure the width of the digital pulse to figure out the position.

Newly developed computer and video game systems require lower voltage (prior art joysticks and computers were electronically compatible, both operating at 5 volts), so they didn’t work with the interface circuits/joysticks anymore. Fenner’s patent solved that problem by creating an interface circuit that allowed the old, higher voltage joysticks to be used with the newer, lower voltage systems.

The “Pulse Width” Limitation
Fenner’s patent contains a limitation that requires an infringing product to produce ‘a single cycle of variation in the logical level of a signal, a width of the single cycle of variation, assessed in time or distance, represents a coordinate position of said joystick device.”

Fenner alleged that Microsoft’s Xbox controller and Nintendo’s Wii and GameCube controllers infringed on its patent. These controllers contain thumbsticks that operate by initial analog signals being translated into 8- or 10-bit digital signals (or “words”) that get sent to the console processor which interprets the digital word to calculate the corresponding thumbstick position.

Basically, Fenner’s invention works so that analog signals are represented by the width of a variation (pulse) in a digital signal, whereas defendants’ products require the full 8- or 10-bit digital word (made up of 1’s and 0’s) to give the joystick position. As an example of a digital word, “01100000” shows a two cycle “pulse” occurring toward the beginning of the 8-bit word.

Fenner argued that the defendants infringed simply because the accused products create a pulse with a width that can be measured and, based on the pulses, a joystick position can be determined. The defendants argued that the pulse widths alone are irrelevant and instead the entire digital word is necessary to determine the joystick position.

Claim Construction
The main issue here turned on the claim construction of the pulse width “representing” joystick position and whether that meant providing some information about the position (Fenner’s argument) or providing all information necessary to determine the position (Defendants’ argument). Relying on intrinsic evidence (i.e., the patent claims, specification, and its prosecution history before the United States Patent & Trademark Office), the court found that the claim required that the pulse must communicate all the necessary information to determine the specific joystick coordinate position.

Fenner also argued that “represent” meant that pulse width could be combined with other data, such as the position of the pulse in the 8- or 10-bit word, to indicate joystick position. The court rejected this argument based on the prosecution history and claim amendment language which indicated that only pulse width, not other data, was to be used to determine joystick position.

Summary Judgment – Direct Infringement
Using the above claim construction, the court found summary judgment appropriate because there was no genuine issue of material fact. Because Fenner’s patent relied on a pulse width alone to relate the joystick position, the defendants had not infringed on the patent. This is because, in the accused devices, the pulse widths alone are meaningless and say nothing about joystick position. The pulse widths simply describe the bits. It’s the 8 or 10 bits, read together, that actually give the position. A signal representing the series of two, three, or more “1's” in a row does express “a single variation of the logical level of a signal,” but it doesn’t give any position information without the accompanying “0's” that also make up the digital word.

Summary Judgment – Doctrine of Equivalents
Generally, patent protection is limited to what’s written in the patent claims. However, to ensure fair protection of patents, the doctrine of equivalents states that a patent may be protected even when another product or process does not literally infringe on the patent, as long as the infringing product or process is deemed to be equivalent. The doctrine of equivalents was formed so that copycats could not avoid patent infringement simply by making minor or trivial variations to the claims. For the doctrine to apply, the accused product must perform “substantially the same function in substantially the same way with substantially the same result” (referred to as the function-way-result, or FWR, test).

Fenner argued that the doctrine applied because the production of binary encoded numbers was equivalent to the production of pulse widths for determining joystick position. The court determined that Fenner’s interpretation wrongly wrote the “pulse limitation” out of the claim and disregarded the “way” part of the test by being so broad that it would include any digital signal no matter what “way” that it communicated position. The court further found that Fenner failed to show equivalence in the “way” the devices operate because in Fenner’s device, only the pulses, or “cycles of variation,” are used to determine joystick position whereas in the defendants’ devices the periods of no variation are just as necessary as the periods of variation (for creating an 8- or 10-bit digital word) to determine position.

The “Lower Source Voltage” Limitation
The court also faced a second issue of claim construction concerning the definition of the device parts, because certain parts of the accused products had to operate at a lower voltage in order to be infringing.

Claims 1, 9, and 14 of the ‘751 patent call for “[a]n interface between a joystick device having a first source voltage and a processor, comprising . . . an interface circuit having a second source voltage that is lower than the first source voltage. . .” The Court’s claim construction defined “interface circuit” as “a circuit that connects the joystick and the processor.”

The ‘751 patent claims required the interface circuit between the joystick and processor to operate at a lower voltage than the joystick. In the defendants’ accused products, only the processor core, or central processing unit (CPU), operates at a lower voltage than the joystick. Fenner argued that the periphery of the processor could be included in the interface circuit, while the defendants argued that the processor included the CPU and its peripherals, both separate from the interface circuit. The claim construction then turned on whether “processor” meant the entire processor chip or just the processor core. Using extrinsic definitions as well as the context of the claim, the court held that “processor” should be defined as “the CPU along with its peripheral circuitry.” Fenner had agreed that such a definition would preclude any issues of triable fact, so summary judgment was appropriate.