Social Media & Games Law Blog

Prevent a Loss of Patent Rights when the U.S. Changes to a "First-Inventor-to-File" System on March 16, 2013

One of the most significant changes of the 2011 Leahy-Smith America Invents Act ("AIA") takes effect on March 16, 2013 when the U.S. transitions from a "First-to-Invent" patent system to a "First-Inventor-to-File" patent system.

Join Pillsbury for a Webinar as we take a closer look at the legal and business implications of the looming deadline. We will provide recommendations and guidance so that you can ensure your company will not be at a competitive disadvantage or, worse yet, potentially lose patent rights, when the U.S. transitions to a first-inventor-to-file system.

SPEAKERS INCLUDE:
Bradford Blaise
Partner, Pillsbury
Patrick Doody
Partner, Pillsbury

WEBINAR
Wednesday, January 30, 2013
Noon - 1:00 p.m. ET
9:00 a.m. - 10:00 a.m. PT
REGISTER NOW!

 

Already have a question? Feel free to email questions to Meggan Maromonte at meggan.maromonte@pillsburylaw.com.

Our speakers will try to accomodate all questions on the webinar, or will follow-up individually.

The Director of the USPTO recently explained why patents are "innovation currency," how they create jobs and how they add significantly to the economy. He also explained why this is driving the multi-billion dollar acquisitions of patents and high-profile patent wars in the mobile space. The Director also acknowledged that the patent system is not perfect, but highlighted the new patent laws that will help ensure the quality of software patents. In part, the Director said:

It is increasingly clear that intellectual property, or IP, is a key driver of economic growth, exports, and job creation. IP rights are the global currency for creating value for products and services, for all innovators, in all markets. And the protection provided by patents is critical to the innovation ecosystem. In fact, last spring, the U.S. Commerce Department released a report that found IP-intensive industries support at least 40 million jobs and contributes more than $5 trillion to our economy, accounting for 35 percent of America's gross domestic product. So it is in this context that we are seeing multi-billion dollar acquisitions of patent portfolios and a number of high profile patent lawsuits, involving some of the most innovative companies on the planet, who are producing some of the most popular technologies ever created.

For a full copy of the speech, click here. 

Notwithstanding the clear value and importance of software patents, many companies still do not appreciate their value. Additionally, many people do not fully understand the types of software-based inventions that can be patented. Those that do not seek guidance from knowledgeable patent attorneys who specialize in software and internet patents fail to retain their rightful share of innovation currency.

Software and internet patents are crucial to many of today's leading industries, including games, social media and mobile. For some examples of what can be patented in these types of areas, see our client advisory on IP Protection for Games.

If you are interested in learning more about challenging software patents under the new laws, we have a team of people dedicated to these new procedures. We also have a whole new section of our website dedicated to the new procedures for challenging patents.

For more information about software patent strategies, please contact us.

 

A federal court recently found copyright infringement based on a developers copying of aspects of the popular Tetris game, even though the code itself was not copied. This ruling confirms that IP can be used to effectively prevent certain cloning practices that are prevalent with online games. While this case focused on copyright infringement, a passing note by the court highlights how patents can be instrumental to a comprehensive IP strategy as well.

In this case, Tetris sued Xio Interactive Inc. over its game Mino. Mino is a falling block game which incorporates game-play rules similar to Tetris, as well as utilizing a similar playing area and geometric block combinations. In its opinion, the court stated that game developers are free to use others' ideas, but not the expression of those ideas. The court noted that the idea-expression dichotomy in the video game world is "simple to state- copyright will not protect an idea, only its expression - but difficult to apply, especially in the context of computer programs."

The court summarized the law by stating generally that game mechanics and rules are not entitled to copyright protection, but courts have found expressive elements copyrightable, including game labels, design of game boards, playing cards and graphical works. Significantly however, the court noted that game mechanics and other functional game features can be patented.

The court determined that Xio did more than just incorporate Tetris' underlying rules in Mino. In looking at the similarity of the look and feel of the two games, the court stated that "[t]here is such similarity between the visual expression of Tetris and Mino that it is akin to literal copying" regardless of the fact that Xio did not actually copy the underlying Tetris code. For a more detailed discussion of this case, please see our client alert. 

If you are a game developer and want to maximize your ability to shut down clones, it is critical to have a comprehensive IP strategy that incorporates both patents and copyrights. If you rely just on copyright, a more skillful game cloner can change the expressive elements enough to avoid copyright infringement. But if you patent core mechanics of your novel game, you can prevent others from copying that functionality regardless of how different they make the expressive elements.

For more information on IP protection for games, see IP Protection for Games.

One of the primary concerns that companies have regarding patent filings is the time it takes to get a patent. Recent changes to the patent laws have created a fast track option to "whisk" your patent through the process. To use this option you must file a petition and pay a fee.

According to the PTO:

Following passage of the Leahy-Smith America Invents Act in September 2011, the United States Patent and Trademark Office (USPTO) began accepting requests for prioritized examination of patent applications through the Track I Prioritized Patent Examination Program. Simply put, Track I allows inventors and businesses, for a fee, to have their patents processed to completion in 12 months.

According to a recent update from the PTO many applicants have used the fast track process and the results are summarized as follows:

• 1,218 of the 1,231 requests for prioritized examination that have been decided were granted, which represents a 98.9% approval rate.
  
• 648 have already received a first office action, and another 34 will be mailed within days.
• On average, the PTO is getting a first action out in Track I cases just 30.7 days after approval of the petition - for a total elapsed period to first action of 66.4 days after filing of the request-petition, with the longest time to  first action being 70 days from grant of the petition.
•  23 allowances have already been mailed on Track I applications, the fastest of which was mailed just 37 days after the application was filed and 7 more allowances are currently in the pipeline.
• Of the Track I cases allowed so far, the average time to allowance is 39.2 days from petition approval.
  
• As for rejections, so far there have been three final rejections issued on Track I applications. The average time to final rejection has been 34.3 days, and the longest time to final was 50 days, both measured from approval of the Track I petition.
• The first Track I application is due to issue on Jan. 10, 2012. This application was filed Sept. 30, 2011.

Given the fast paced developments in areas such as social games, augmented reality, mobile applications and other hot sectors, it may be worth considering use of this procedure to get your patents issued more quickly.

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Virtual Justice

Rutgers University law professor Greg Lastowka looks at whether players can and should be granted legal ownership of virtual items, whether or not there's any existing legal precedent and how the virtual item landscape may change in the near future.

Italian court: Online editors not responsible for reader comments

Online commentators Wednesday welcomed a ruling by Italy's highest court that the editors of online publications cannot be held legally responsible for defamatory comments posted by their readers. In a ruling handed down at the end of October, the Court of Cassation acquitted a former online editor of L'Espresso news magazine of the crime of failing to prevent defamation committed by one of her readers.

OUII Seeks Clarity On 'Process Of Establishment' Claims

The U.S. International Trade Commission should review a recent finding in a video game patent infringement case and clarify how to determine if a domestic industry is in the process of being established in Section 337 cases, the ITC's Office of Unfair Import Investigations said in a petition publicized Tuesday.

Germany's Merck wants Facebook page back

Germany's Merck KGaA has threatened legal action after it said it lost its Facebook page apparently to rival Merck & Co. in the U.S., though it has yet to identify defendants in the case.

Virtual World Startups Seek Refuge From Patent Attacks

The developers behind the next evolution of the Internet -- linked, immersive, 3D environments -- are trying to think of ways to minimize the adverse impact of software patents on their industry.

Social media in for worse cyber attacks in 2012

Social media sites and cellphones will prove to be fertile grounds for cyber criminals to exploit globally important events in 2012 to steal personal information and data and make financial gains, cyber security firm Websense has said. The Websense document, " 2012 Cyber Security Threats," has said identity information posted by users of sites such as Facebook, Twitter or LinkedIn may prove more valuable to cybercriminals than even credit cards.

Facebook recently filed a Patent Application that Triggered a Congressional inquiry.  The patent application, which describes technology for tracking users on other websites, resulted in a letter from Reps. Edward Markey, D- Mass., and Joe Barton, R-Texas, seeking information on its current privacy practices and future intentions for tracking user activity and data. Markey and Barton co-chair the Congressional Bipartisan Privacy Caucus.

The application was published on Sept. 22, 2011 and describes a method "for tracking information about the activities of users of a social networking system while on another domain."

In the letter to facebook CEO Mark Zuckerberg, Markey and Barton sought clarification on the purpose of the patent and how Facebook intends to use it. They also inquired about how Facebook intends to integrate the location data of its users into its targeted advertising system, noting that Facebook has previously stated that it does not track people across the Internet.

It is important to note that just because Facebook has filed a patent does not necessarily mean that they have commercially implemented what the patent discloses. However,  this action is just one of the latest from Washington focusing on privacy. There seems to be a very focused effort by legislators and regulators to ensure that companies only collect user information needed for legitimate business purposes and that the information collected is not retained indefinitely. 

As with many other aspects of social media, the laws and regulatory climate are continuing to evolve.  If you have not recently reviewed your data collection, privacy practices and privacy policies, now is a good time to do so. 

Social media took a step into the real world with Pepsi's announcement of a social vending machine. According to the press release, Pepsi will launch its Social Vending System, a state-of-the-art networked unit that features full touch screen interactive vending technology, enabling consumers to better connect with PepsiCo brands right at the point of purchase. A prototype of the Social Vending System will debut at the National Automatic Merchandising Association's One Show in Chicago, April 27-29. According to the release:

Using digital technology, PepsiCo's Social Vending System enables any user to gift a friend by selecting a beverage and entering the recipient's name, mobile number and a personalized text message. There's also the option to further personalize the gift with a short video recorded right at the machine. The gift is delivered with a system code and instructions to redeem it at any PepsiCo Social Vending system. When the recipient redeems his or her gift, they're given the option of either thanking the original sender with a gift of their own or paying it forward and gifting a beverage to someone else.

A promotional video is available. 

This innovative approach to integrating social media into everyday activities and to devices and appliances is part of a growing trend that is resulting in social media going well beyond just Facebook and other internet sites.

Judging from the patent filings that we monitor in this area, there is much more to come!. Many companies are filing patents for innovative uses of social media integrated into everyday activities and to use of social media for innovative advertising and brand engagement concepts.

Many nonprofits are using social media to create awareness of their cause, raise funds, develop closer connections with existing constituents and engage with new ones.

On April 14, 2011, at The Kreeger Museum in Washington, DC, Jim Gatto delivered a compelling presentation on top social media legal issues targeted to nonprofits. His presentation explored examples of how nonprofits are using social media today, including a focus on virtual goods, virtual currencies and gamification and the associated legal issues. For a copy of his presentation, please click here.

Leveraging social media technologies and applications is critical to the success of any marketing campaign, consumer outreach program or research plan.

Social media tools can be used to shed light on your target market and consumer decision making process. These tools can also be used to engage in a two-way conversation with your consumers and allows customers to communicate your messaging on your behalf. Restaurants are ahead of the curve:  81% are currently using social media, compared with 60% in other industries. Companies in these industries cannot ignore the powerful impact of social media. Companies in this space also face a host of new legal risks and concerns from virtually all sides. The key to success is staying on top of these laws and emerging trends.

On March 22, 2011, Jim Gatto delivered an exciting webinar presentation on top social media legal issues targeted to the restaurant, food and beverage industries. For a copy of his presentation, please click RFB Legal Briefing Series.pdf.

On March 15, hours after its asserted patent was issued (U.S. Patent No. 7,908,342), Wireless Ink Corp. filed a complaint for patent infringement against Facebook, Google, YouTube, and MySpace in the U.S. District Court for the Southern District of New York, Case No. 1:11-cv-01751-PKC. Wireless Ink is a mobile content management and social networking software company that operates Winksite.com.

If this scenario sounds familiar, it's because Wireless Ink has a pending lawsuit against Facebook and Google in the same court, before the same judge, and for infringement of a related patent (U.S. Patent No. 7,599,983), Case No. 1:10-cv-01841-PKC (filed Mar. 9, 2010). 

In this newest action, Wireless Ink alleges that each Defendant directly infringes several claims of its '342 patent (titled Method, Apparatus and System for Management of Information Content for Enhanced Accessibility over Wireless Communication Networks) by, among other things, (i) providing a user-accessible content management website, (ii) generating a mobile website that is accessible independently of the content management website via a mobile device, (iii) where the mobile website is configured to receive data automatically from external data sources designated by the user at the content management website, and (iv) where the content management website permits the user to upload information items and enter messages which are included in the mobile website.

Wireless Ink also alleges that Defendants' infringing activities are willful, and that Defendants have induced infringement by actively encouraging their users to use their mobile websites, even after having knowledge of Wireless Ink's patent rights. As characterized in the complaint, the Defendants' alleged infringing activities "involve hundreds of millions of users and potentially billions of acts of infringement."

Interestingly, in exhibits to its complaint, Wireless Ink points out that all of the known relevant prior art to the related '983 patent produced by Facebook and Google in the 2010 litigation was disclosed by Wireless Ink to the U.S. Patent & Trademark Office during prosecution of the application that issued as the now-asserted '342 patent. The '342 patent's application was a continuation of the '983 patent's application. Whether this has any impact on the validity of the '342 patent remains to be seen. 

This action is currently scheduled to have its initial pretrial conference on May 9, 2011.

Onlive announced that it was awarded a patent that it alleges is a "fundamental cloud gaming patent." The patent, USP 7,849,491, is entitled "Apparatus and method for wireless video gaming" was filed in 2002 but just issued in December 2010 after an 8 year battle with the Patent Office. According to a company press release:

Cloud gaming is a breakthrough technology where video games run on remote servers, and users simply connect an Internet-connected device--be it a TV, PC/Mac®, iPad™, Android™ tablet, smartphone--and instantly are able to play the highest performance, new-release games with no discs, no downloads and no upgrades. OnLive's patented and patent-pending technology makes the games almost instantly responsive, providing a gaming experience comparable to the games being played locally, even though they may actually be running on servers 1000 miles away.

As often is the case with seemingly fundamental patents, there has been quite a bit of stir in the press.  Many non-patent attorneys have commented and opined on the patent which has fanned the fires. Not all of the commentary has been factually based.

A review of the file from the Patent Office reveals some interesting facts. The original patent had claims that focused mostly on a set-top box. For example, original claim 1 recited:

1. A set-top box comprising:
a slot with an interface that connects to a game card providing a platform to run a software video game, the game card outputting video game data through the interface; a unit to process the video game data for output to a display device; a wireless transceiver to receive the software video game via a wireless local area network (WLAN).

It also included a method claim as follows.

15. A method of operating a video game box comprising:
inserting a game card into a slot of the video game box;
downloading a software video game via a wireless transceiver;
running the software video game on the game card, video game data being output through an interface of the slot;
processing the video game data for output to a display device.

However, the claims that were granted by the Patent Office were different. For example, claim 1 of the issued patent recites:

1. A method of operating a video game box comprising: downloading a software video game to a storage device via a wireless transceiver, the software video game being compliant with a game platform standard; running the software video game on a game card coupled to the video game box via an interface, the game card including a processor, a memory and a graphics engine, the game card providing a game platform compliant with the game platform standard, high twitch-action video game data being output through the interface; processing the high twitch-action video game data for output to a display device; compressing the high twitch-action video game data with a latency of less than approximately 80 ms, but greater than about 5 ms; wirelessly transmitting the compressed high twitch-action video game data to a remote player via the wireless transceiver during interactive play of the software video game, the remote player being located a distance beyond a transmission distance of the wireless transceiver.

The patent includes other claims as well, which differ from those for which Onlive originally applied. In order to properly assess the scope of this (or any other) patent it is necessary to analyze the claims that were actually awarded. In many cases, awarded claims are not necessarily as broad as those a company originally pursued. Yet, commentators often overlook this, creating misconceptions about the scope of a given patent.

At least one of Onlive's competitors says it is not concerned about the patent. Dave Perry, CEO of Gaikai, reportedly says his company isn't worried about the fallout, because its service operates in a different way. Both services do game rendering on the server-side and then stream the images to the client, but Gaikai remains confident moving forward.

If you have questions about the legal scope of a patent, it is advisable to consult with a knowledgeable patent attorney. 

 

 

Motorola Mobility Inc. recently brought an action before the U.S. International Trade Commission ("ITC") against Microsoft Corp. relating to the importation of the Xbox 360 console.  At the center of the controversy is the potential infringement of five patents covering digital video coding and transmission.  The case is In re: Certain Gaming and Entertainment Consoles, Related Software and Components Thereof, case number 337-2770.

Motorola has requested that the ITC institute a Section 337 investigation with allegations that various Microsoft consoles (specifically the 4GB Xbox 360S and 250GB Xbox 360S) infringe U.S. Patent Numbers 5,319,712; 5,357,571; 6,069,896; 6,980,596; and 7,162,094.

Motorola's '712, '571 and '896 patents describe methods for protecting data streams and securing point-to-point communications in wireless communication and establishing connections between devices in a wireless peer-to-peer network.  The '596 and '094 patents describe frequency scanning paths for transform-based decoding of digital content as well as digital coding inventions that facilitate higher levels of compression of digital video content.

Motorola is seeking a permanent exclusion order to stop Microsoft from importing the allegedly infringing consoles, as well as an order barring their advertisement and warehousing.

 

In October, tech media sources, such as CNET, were reporting that Facebook had acquired part of Zenbe's intellectual property portfolio, in addition to hiring some of Zenbe's key engineers. While Zenbe will stay intact, Zenbe Mail has been shut down, and the associated intellectual property, has been acquired by Facebook.  

Zenbe is just one in a long list of recent acquisitions by the social networking giant that have focused primarily on the value of intellectual property assets. Some of those acquisitions include: Divvyshot, Hot Potato, NextStop, Drop.io and FriendFeed. This underscores to critical importance of a sound intellectual property strategy that helps protect your product development and is aligned with your overall business goals.