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On October 11, Epic Games, Inc. and Epic Games International (“Epic”) sued individuals Brandon Broom and Charles Vraspir in two separate suits (5:17-CV-0511 and 5:17-CV-0512) for copyright infringement, circumvention of the Digital Millennium Copyright Act (“DMCA”), breach of contract, and intentional interference with contractual relations.  The suits, filed in the Eastern District of North Carolina, relate to Epic's game Fortnite.



Epic alleges that Broom and Vraspir not only cheated in Fortnite, but also assisted others in doing so on the website AddictedCheats.net.  When cheating themselves, Broom and Vraspir allegedly intentionally targeted Fortnite streamers (i.e. “stream sniping”) because, allegedly per Vrapsir, “its [sic] fun to rage and see streamers cry about how loaded they are and then get them stomped anyways.”  Epic’s complaints seem to suggest that Vraspir was particularly aggressive on cheating in Fortnite because he was banned from Fortnite: allegedly per Vraspir, his ban “unleash[ed] the beast” such that “Epic will have to take care or their game will die.”

Fortnite’s popularity in recent weeks has exploded since a recent free mode released which, some allege, provides a game mode duplicative of the massively popular PlayerUnknown’s BattlegroundsSome speculated that Bluehole, PlayerUnknown’s Battlegrounds’ developer, might explore a suit against Epic (indeed, Bluehole issued a public press release complaining about the similarities); however, Bluehole’s extensive reliance on Epic’s Unreal Engine 4 and ongoing licensing relationship with Epic makes such a suit seemingly unlikely.
On October 4, 2017, Landmark Networks, LLC (“Landmark”) sued Nintendo Co. and Nintendo of America (“Nintendo”) for alleged infringement of two networking patents: U.S. 6,856,966 and U.S. 6,018,720.  Landmark asserts that certain features of Nintendo’s eShop infringe its patents.


The patents asserted by Landmark originated from the Japanese company Universal Entertainment Corporation.  Landmark asserts that the patents relate to recording customer data to a “purchaser record medium,” on which both game software and “a predetermined amount of money” are written.

U.S. Pat. No. 6,018,720 Claim 1, for example, recites:

1. A data delivery method comprising:

providing a purchaser rewritable record medium having a primary data area for storing primary data including software, and an additional data area for storing additional data including purchaser inherent data, purchase data and accounting data therein;

recording historical data representing a history of the additional data in both of a computer of a software deliverer and said purchaser rewritable record medium, respectively; and

delivering the primary data, which is requested by a purchaser, from said computer of the software deliverer to said purchaser rewritable record medium when the historical data recorded in said computer of the software deliverer is matched with the historical data recorded in said purchaser rewritable record medium; and

performing an accounting operation.

The thrust of Landmark’s argument appears to be that, because the eShop entails both associating available funds and one or more games with an account, Nintendo infringes Landmark’s patents.

This case is remarkably similar to that filed by Landmark against Valve Corporation (“Valve”), Sony Corporation of America, Sony Interactive Entertainment America, and Sony Interactive Entertainment (collectively, “Sony”) in December of 2016.  The case, originally filed in the Eastern District of Texas as 2:17-CV-00855 but transferred to the Western District of Washington as 2:17-CV-00855, asserted the exact same patents against Valve’s Steam and Sony’s PlayStation Store.  That case was settled by the parties in July 2017.

One issue Landmark may need to overcome in this case is whether these claims are directed to an abstract idea.  Although Courts have begun to slightly relax the application of 35 USC § 101 in patent proceedings, § 101 remains an important threshold issue under Alice v. CLS Bank.

Also note that the '720 patent claims priority to November 7, 1997, and appears on its face to expire a month from now.  Nonetheless, patent law allows a patent owner to collect damages up to six years preceding a lawsuit.
On August 31, 2017, a Northern District of Texas jury awarded plaintiff iLife Technologies, Inc. (“iLife”) $10.1 million from Nintendo of America, Inc. (“Nintendo”) for patent infringement. The accused products included Wii and WiiU games, particularly Wii Sports, Wii Sports Resort, Wii Club Sports, and Mario Kart 8.


Back in 2013, iLife sued Nintendo over patents broadly relating to evaluating motions of a body. The asserted patents were U.S. Pat. No. 6,307,481, U.S. Pat. No. 6,703,939, U.S. Pat. No. 6,864,796, U.S. Pat. No. 7,095,331, U.S. Pat. No. 7,145,461, and U.S. Pat. No. 7,479,890.

Rolling Stone has reported that iLife’s body motion detecting technology is used to, among other things, monitor infants to prevent sudden infant death syndrome (“SIDS”).


U.S. Patent No. 8,000,581: Advertisement scheme for use with interactive content


Issued August 16, 2011, to Sony Computer
 Entertainment America LLC



Summary:

For anyone who’s ever been interrupted from playing a game by an advertisement, this patent at least tries to lessen the agony. Patent ‘581 describes a method to suspend gameplay, display an advertisement, and then resume the gameplay. After a game is initiated, the computer program will provide a player with an indication that the game will be suspended. This could include such indications as the game gradually slowing down, a warning indicating that game play is about to stop, or a visual signal such as a blinking light. A similar warning would indicate that the game is about to continue. The patent also describes the possibility of the program rewinding the game to some extent before resuming the gameplay. While advertisements are no one’s favorite thing to see while gaming, patent ‘581 at least allows free-to-play players to enjoy someone’s content without it impairing their ability to get that high score.


Abstract:


A method for use in advertising includes initiating playing of interactive content, suspending playing of the interactive content, displaying an advertisement, and resuming playing of the interactive content. A computer program product includes a medium embodying a computer program for causing a computer to perform these operations, and a system for use in advertising includes a display and a processing system configured to perform these operations.

 
Illustrative Claims:


1. A method comprising: initiating, through a processor based apparatus, playing of interactive content; suspending, through the processor based apparatus, playing of the interactive content; and displaying a different item of content; wherein the suspending playing of the interactive content comprises synchronizing the suspending playing of the interactive content among a plurality of users interacting with the interactive content.

Research By: Rachel Johns







We’ve previously written with updates about inter partes reviews (“IPRs”), where an accused infringer files a petition with the US Patent and Trademark Office arguing that the asserted patent should’ve never been granted in the first place.

A law passed by Congress in 2011 created, for use starting in 2012, this IPR procedure to allow for the challenge of issued patents. IPRs were designed as a low cost alternative to long, expensive lawsuits with patent owners who hold bad patents. Anyone bothered with a patent can bring an IPR challenge if they meet the standards of the law and regulations, by having a reasonable likelihood of cancelling the patent, acting within deadlines, and paying necessary (and not small!) fees.

The patent owner gets to respond, but the IPR will be decided by highly patent-and-technology-experienced Patent Trial and Appeal Board (“PTAB,” said “Pea-Tab”) administrative patent judges (“APJs”) in 3-judge panels. Once the IPR “petition” is accepted, which usually happens within 6 months, the IPR almost always ends within a year. Some features of IPR favor patent owners, but challengers get first and last briefs in IPR, have the right to use technology experts, get PTAB APJs who decide cases “by the book,” not like juries, and win IPRs at a rate of about 65%, cancelling patents. The procedure is so valued by challengers that they have filed thousands of IPRs, including 1,434 in USPTO fiscal year 2017 alone.

A quick search on Docket Navigator reveals that IPRs have been a popular option for game companies when faced with patent assertions. Since 2013, the top 50 game companies have filed over 250 IPR petitions. Some recognizable names using IPRs as part of their litigation strategy include Sony, Microsoft, Nintendo, Electronic Arts, Activision Blizzard, Valve, Bungie, Ubisoft, and Naughty Dog. Of the IPRs we found that reached a final decision, around 68% had claims of the challenged patent found unpatentable and cancelled. Not a bad success rate for accused infringers!

An interesting statistic close to home at our law firm, Banner & Witcoff, is that its lawyers, paralegals, and staff filed more IPR petitions than any law firm filed in the first half of 2017. We filed 45 IPR petitions for one client in those six months, as well as appearing in about double that number of proceedings when other petitions and appearances on behalf of patent owners as well as patent challengers are counted.

The constitutionality of the IPR process has recently been challenged at the Supreme Court. It remains to be seen whether this popular alternative to litigation will remain a useful option for defendants in patent matters. But what is clear is that IPRs have truly changed the current patent landscape and the dynamics of patent litigation.

We will continue to post updates about interesting IPRs that catch our attention.

Special thanks to Charles Shifley for his help in preparing this post.
Atari Interactive, Inc. v. Nestlé, SA

No. 3:17-CV-04803-SK (N.D. Cal. Aug. 17, 2017)

On August 17, 2017, Atari Interactive sued Nestlé, alleging that a Nestlé KIT KAT® advertisement titled “Kit Kat: Breakout” infringed Atari’s rights relating to the video game BreakoutSpecifically, Atari has sued Nestlé for trademark and copyright infringement, false designation of origin, dilution, and both state and common law unfair competition.

Like many early Atari games, Breakout has a storied history.  Atari founder Nolan Bushnell originally conceptualized Breakout.  As noted by Atari’s Complaint, Steve Jobs and (“[i]n reality”) Steve Wozniak reduced Breakout from 100-175 chips down to 20-30 chips, allowing Breakout to be produced much more cheaply.  Some of the reward money earned by Jobs and Wozniak by improving Breakout was used to form Apple, and many of Wozniak’s innovations from the Breakout circuit board were used in developing the Apple II personal computer.

Nestlé’s “Kit Kat: Breakout” advertisement depicts four adults on a couch holding video game controllers and playing what appears to be a Breakout-style video game on a television in a train station:


Per its complaint, Atari appears particularly worried that Nestlé’s association with various scandals may be falsely imputed to Atari.  This is particularly the case because Atari heavily relies on its brand recognition to expand into new markets.  For example, most recently, Atari has been heavily promoting both a new throwback console as well as Atari-branded “speakerhats” (which are exactly what the name suggests).

Ed. - I checked and it's too late to get into the speakerhats beta.

Thanks to Kirk Sigmon for preparing this post
Wireless Accessory Retaining, LLC v. GameStop Corp.
No. 2:17-CV-167-RWS (N.D. Ga. Aug. 9, 2017)

Fresh on the heels of Gamevice’s lawsuit against Nintendo, which we discussed in a previous post, Wireless Accessory Retaining, LLC has filed suit against video game retailer GameStop for selling the Nintendo Switch, which Wireless Accessory Retaining alleges infringes U.S. Patent No. 8,472,658 to Singh (the “’658 Patent”).

The ’658 Patent generally relates to a way to power wireless accessories using a “retainer port” defining an “accessory retaining structure” with a “cavity for retaining said retainable wireless accessory . . . by inserting said conductive member of said retainable wireless accessory within said cavity, wherein said conductive member of said retainable wireless accessory to enable flow of charge such that the retainable wireless accessory can function by wirelessly communicating with the hand-held.  Wireless Accessory Retaining alleges that the Nintendo Switch Joy-Cons, which may be powered by the Nintendo Switch tablet through a retaining structure, infringe this patent.  The images below capture part of the infringement theory set out in the complaint.




We’re unsure why Wireless Accessory Retaining sued GameStop but not Nintendo at this time.  Based on the filed complaint and in USPTO assignment records, Wireless Accessory Retaining is headquartered at a residence in Georgia and is the assignee of a plurality of patents by the same inventor, Dr. Sanjeev Kumar Singh.  And, based on public sources, this appears to be Wireless Accessory Retaining’s first lawsuit.  One possible reason Gamestop was sued instead of Nintendo may be to secure Wireless Accessory Retaining's (apparently) preferred venue of Georgia in view of recent venue law changes, as it seems likely Nintendo will want to step in to protect their vendor.

Thanks to Kirk Sigmon for his help in preparing this article.
Gamevice, Inc. v. Nintendo Co.
No. 2:17-CV-05923 (C.D. Cal. Aug. 9, 2017)

On August 9, 2017, Gamevice – perhaps best known for the Wikipad and slide- and snap-on cell phone controllers for Android and iOS – sued Nintendo in the Central District of California, alleging that the Nintendo Switch violates U.S. Pat. No. 9,126,119 B2 to Joynes et al (“the ’119 Patent”).


The ’119 Patent relates to a game controller, including a computing device (e.g. a tablet) which is attached to an input device with two sides (e.g. a left portion of a controller and a right portion of a controller), a “structural bridge” (e.g. something to hold the back of the tablet), a conduit, and a fastening mechanism (e.g. structure to connect it all together).  The Wikipad, for example, features a tablet which slides into a U-shaped controller featuring two analog sticks, a directional pad, buttons, and a speaker bar.  A figure from the ’119 Patent depicting a Wikipad-like device is shown above.

Interestingly, whereas the Wikipad product had a “structural bridge” comprising, for example, the above-pictured bottom speaker bar and back supporting mechanism, the Nintendo Switch does not have a bottom speaker bar or the like.  Rather, the Nintendo Switch’s Joy-Con controllers independently slide onto the left and right sides of the Nintendo Switch tablet.  Gamevice argues that a portion of the Nintendo Switch tablet itself is the “structural bridge”:
Given the Nintendo Switch’s explosive popularity, this may a particularly exciting case to watch. 

Thanks to Kirk Sigmon for preparing this article.

SUPREME COURT NOT A FAN OF TRADEMARK BAN

On Monday, June 19, 2017, the Supreme Court held in Matal v. Tam[i] that the disparagement clause of the Lanham Act violates the Free Speech Clause of the First Amendment, and therefore is unconstitutional. The disparagement clause—which prohibits federal registration of trademarks “that may ‘disparage or bring into contempt or disrepute’ any ‘persons, living or dead’”—the Court explained, “offends a bedrock First Amendment principle: Speech may not be banned on the ground that it expresses ideas that offend.” [ii]
Background
The Supreme Court’s opinion is the climax in Simon Tam’s long-running battle to obtain a trademark registration for his dance-rock band’s name, THE SLANTS. Tam first submitted a trademark application in 2010, but the U.S. Patent and Trademark Office refused the application for being “disparaging to people of Asian descent.” Tam lost on appeal at the Trademark Trial and Appeal Board, as well as at a panel of the U.S. Court of Appeals for the Federal Circuit. His fortunes changed, however, when the Federal Circuit later issued a 9–3 en banc opinion holding that Section 2(a) of the Lanham Act—the provision under which Tam’s application was rejected—was unconstitutional. The Supreme Court eventually granted certiorari, and heard oral arguments in January 2017, which Banner & Witcoff analyzed at the time.
Opinion
The Court’s decision is a decisive victory for Tam. All eight justices[iii] considering the case agreed that the Lanham Act’s disparagement clause is facially invalid under the First Amendment.[iv] Because the Lanham Act’s disparagement clause is unconstitutional, the USPTO’s refusal of Tam’s application based on that section was also impermissible.
All the justices agreed[v] that offensive speech is protected by the First Amendment, even in the trademark context. For example, Justice Alito’s opinion explained that the Supreme Court has “said time and time again that ‘the public expression of ideas may not be prohibited merely because the ideas are themselves offensive to some of their hearers.’”[vi] Additionally, Justice Kennedy wrote that “the Court’s cases have long prohibited the government from justifying a First Amendment burden by pointing to the offensiveness of the speech to be suppressed.”[vii] The danger of allowing the government to restrict offensive speech, Justice Kennedy explained, is that “[a] law that can be directed against speech found offensive to some portion of the public can be turned against minority and dissenting views to the detriment of all.”[viii]
The justices also all agreed that “trademarks are private, not government, speech.”[ix] The USPTO had argued that registered trademarks are government speech, which the First Amendment does not regulate. The Court rejected the idea, saying “it is far-fetched to suggest that the content of a registered mark is government speech. If the federal registration of a trademark makes the mark government speech, the Federal Government is babbling prodigiously and incoherently.”[x] Many registered trademarks say “unseemly things,” “express[] contradictory views,” “unashamedly endors[e] a vast array of commercial products and services,” and “provid[e] Delphic advice to the consuming public.”[xi] “And there is no evidence that the public associates the contents of trademarks with the Federal Government.”[xii]
The Court noted the “most worrisome implication” of the idea that trademarks constitute government speech “concerns the system of copyright registration”[xiii]; this was also the subject of the justices’ first question at oral argument.[xiv] In its opinion, the Court asked, “If federal registration makes a trademark government speech and thus eliminates all First Amendment protection, would the registration of the copyright for a book produce a similar transformation?” Acknowledging that “trademarks often have expressive content,” and that “powerful messages can sometimes be conveyed in just a few words,” the Court rejected the USPTO’s attempts to distinguish copyright as being “the engine of free expression.”[xv]
Ultimately, Justice Kennedy explained, the Court’s objective is to protect “a diversity of views from private speakers.”[xvi] And “our reliance must be on the substantial safeguards of free and open discussion in a democratic society.”[xvii]
Impact
Despite the parade of horribles prophesied by Tam’s opponents, the Court’s decision is unlikely to have a significant impact—or even be noticeable—in the lives of most Americans. As the Court stated, “it is unlikely that more than a tiny fraction of the public has any idea what federal registration of a trademark means.”[xviii] Thus, when businesses select names for themselves or their products or services, they are generally more focused on the marketing power of those names, not whether those names might ultimately be eligible for trademark protection. Those who seek to offend—or, like Tam, “reclaim[] an offensive term for [a] positive purpose”[xix]—are similarly unlikely to choose their message based on federal-trademark-registration eligibility.
The most famous exception to this argument is the Washington Redskins football team. The team’s trademark registration was cancelled in 2014 under the disparagement clause of Section 2(a) of the Lanham Act. The team’s appeal is currently before the U.S. Court of Appeals for the Fourth Circuit, which placed the case in abeyance in November 2016, pending the Supreme Court’s decision in Tam. Because the Supreme Court’s holding invalidated Section 2(a)’s disparagement clause altogether, the team is likely to prevail in its appeal.
Modern society provides many tools, such as social media, for opposition to those who wish to brand themselves with offensive terms. Yet the government may not join in that opposition, at least not by regulating trademarks or most other private speech. “[T]he proudest boast of our free speech jurisprudence is that we protect the freedom to express ‘the thought that we hate.’”[xx]
The Court’s full opinion is available here.
A printable version of this article is available here.

[i] Matal v. Tam, No. 15-1293 (Jun. 19, 2017).
[ii] Id., slip op. at 1-2.
[iii] Justice Gorsuch took no part in the consideration or decision of this case.
[iv] Matal at 1.
[v] All the justices joined the Opinion of the Court authored by Justice Alito. Chief Justice Roberts and Justices Thomas and Breyer joined a further opinion by Justice Alito. Justice Kennedy authored a concurrence joined by Justices Ginsburg, Sotomayor, and Kagan. Justice Thomas also authored a concurrence.
[vi] Matal at 22-23.
[vii] Matal at 4 (Kennedy, J.).
[viii] Id. at 8.
[ix] Matal at 18.
[x] Id. at 14-15.
[xi] Id. at 15.
[xii] Id. at 17.
[xiii] Id. at 18.
[xiv] See R. Gregory Israelsen, IP Alert: The Slants Perform at the Supreme Court, Banner & Witcoff (Jan. 20, 2017), https://bannerwitcoff.com/ip-alert-the-slants-perform-at-the-supreme-court/.
[xv] Matal at 18.
[xvi] Matal at 7 (Kennedy, J.).
[xvii] Id. at 8.
[xviii] Matal at 15.
[xix] Matal at 4 (Kennedy, J.).
[xx] Matal at 25 (Alito, J.).
BREAKING NEWS: Lanham Act Held Partially Unconstitutional

Today the United States Supreme Court held that the disparagement clause of the U.S. Trademark Act (also known as the Lanham Act) is unconstitutional.  In Matal v. Tam (formerly Lee v. Tam, but Michelle Lee recently resigned as Director of the USPTO and was replaced with Acting Director Joseph Matal), the Court affirmed the Federal Circuit's previous finding that the disparagement clause was unconstitutional.

The Government's primary argument was that Federal trademark registrations somehow constitute government speech, and the government therefore should not be required to grant marks that are disparaging.  However, the Court quickly dispatched this notion, stating:
...It is [] farfetched to suggest that the content of a registered mark is government speech, especially given the fact that if trademarks become government speech when they are registered, the Federal Government is babbling prodigiously and incoherently.
The immediate effect of the ruling is that Simon Tam will be allowed to register the mark THE SLANTS for his rock band, The Slants.  The secondary effect of the ruling is that the Washington Redskins will likely be allowed to keep its REDSKINS trademarks.  I doubt there will be a flood of new registrations for disparaging marks because, quite frankly, those products just won't sell well to the consuming public, and the market will ultimately decide which marks and how often companies pursue a registration for something that may be construed as disparaging.

The case is Joseph Matal, Interim Director, United States Patent and Trademark Office v. Simon Shiao Tam, Case No. 15-1293, June 19, 2017.

More analysis forthcoming.  Stay tuned...
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