Gamasutra.com is presently running an article which Steve Chang and I wrote as their feature article:
Today's feature, subtitled 'Top Mythconceptions on Patent Protection of Video Games' and from IP lawyers Ross Dannenberg and Steve Chang, addresses the sometimes controversial area of software patents from a lawyer's perspective:

"Our informal review of the records at the U.S. Patent and Trademark Office (PTO) revealed a relative dearth of patent applications for the video game industry, especially considering how technology-dependent the video game industry is, and given its size in terms of annual sales. Why is that? Patents, by their very nature, grant the right to exclude your competitors from stealing the fruits of your labor, and yet this powerful tool appears to be overlooked by the majority of the industry. In an effort to answer this question, we set out below to dispel what we see as the top myths surrounding patent protection of video games, and hope to encourage innovative game developers to take steps to protect their valuable innovations."
Read the entire article on Gamasutra.com:

R. Dannenberg & S. Chang, It’s Just a Game, Right? Top Mythconceptions on Patent Protection of Video Games, Gamasutra.com, May 31, 2005

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Japanese publisher and developer Tecmo has settled its lawsuit against fan website Ninjahacker.net, after more than four months of legal action. The lawsuit began after Tecmo accused the site’s operators of creating or distributing patches for the games Dead or Alive 3 and Dead or Alive Xtreme Beach Volleyball that allowed the already scantily clad characters to be played in the nude. Among other claims, Tecmo alleged copyright infringement, to which Ninjahacker.net replied that their modification was a fair use.

Read the full Gamasutra news story.

Previous Gamasutra news articles on this topic:

Tecmo Sues Hackers Over Xbox Game Modifications

Round-Up: Lionhead Apology, Majesco for DS, Tecmo's Lawsuit

Accolade was seeking a preliminary injunction again Distinctive Software, which makes this case intriguing because Distinctive is a developer for whom Accolade sometimes acts as the publisher. It’s also intriguing because, unlike early video game copyright infringement cases, it primarily dealt not with the overall look and feel of video games, but rather with the underlying source code.

The Duel: Test Drive II


Distinctive developed the game The Duel—Test Drive II for Accolade, and Distinctive later developed the game Outrun (for publisher Sega) using some of the same underlying “computer codes” as were used in The Duel. There is no dispute as to whether the look and feel of the games were similar—they’re not. The issue was whether Distinctive’s re-use of computer code in Outrun was an infringement of the Accolade’s copyright in The Duel. As part of the contract between Accolade and Distinctive, Distinctive assigned certain copyrights to Accolade, as further discussed below.

Outrun:


There was no question that certain subroutines and computer code, originally used in The Duel, were reused in Outrun. Distinctive argued, however, that only standard libraries and routines were re-used to perform basic functions. Distinctive argued that similar codes are contained in many computer games, since they are necessary to perform functions such as “clearing the screen or operating the joystick.” Distinctive further asserted that these library codes are not game-specific, but were routinely transferred from one computer game to another so the program writer need not duplicate the task of developing them. Distinctive also asserted a fallback position that its licensing agreement with Accolade never contemplated the transfer of copyright in the library codes and, even if it did, the computer codes were mere mechanical devices rather than copyrightable expression, and thus not subject to copyright protection in the first place.

The court noted that, when seeking a preliminary injunction, a showing of a likelihood of success on the merits in a copyright case raises a presumption of irreparable harm. To succeed in showing copyright infringement, Accolade must show that it owned a valid copyright in The Duel, and that Distinctive infringed that copyright by copying protectable material into Outrun. The court cites back to Apple Computers Inc. v. Formula Int’l Inc. for the proposition that all portions of computer programs are the proper subject matter for copyright, even those that communicated only with the machine (computer) itself and not with human users. The underlying subroutines and functions are therefore proper statutory subject matter for copyrights, and are not merely mechanical devices.

Next the court analyzed what, if any, copyrights Distinctive transferred to Accolade. The court determined that the scope of copyright assigned to Accolade by Distinctive depended on the contract language. Specifically, the contract stated, at para. 5.5, that Accolade owns the copyright to the licensed product. "Licensed product" was defined, at para. 1.1, as “the concepts to be designed and implemented by the developer.” The final piece of the puzzle was para. 4.7 of the licensing agreement, which required Distinctive to deliver to Accolade the computer codes underlying the video game. Accolade argued that para. 4.7, in conjunction with paras. 5.5 and 1.1, operated to confer copyright to Accolade of all source code delivered by Distinctive to Accolade. The court disagreed, stating that “our reading of ¶ 4.7 at the present juncture, however, is that it requires [Distinctive] to deliver the underlying codes in addition to the licensed product. Thus, we believe that the licensing agreement transfers to Accolade the copyright to the concept and design of the video game but not the underlying source code.” (emphasis added).

In a last ditch effort, and with a little circular reasoning thrown in for good measure, Accolade argued that Outrun still infringed Accolade’s copyright in The Duel based on the theory that the two games were substantially similar because—yes, you guessed it—Distinctive used the same underlying subroutines and functions in Outrun as were used in The Duel (the same subroutines and functions for which the court just declined to find that Accolade owned the copyright). Needless to say, the court didn’t buy it, and denied Accolade’s motion for a preliminary injunction.

Nota Bene: This case came down to the contract language. While Distinctive won its day in court, had there been a more clearly written contract in the first place, Distinctive might have avoided this conflict altogether, or Accolade could have secured its rights up-front.

A couple posts on the Workplace Blog highlight the allegation that video game programmers often work insane hours without getting properly paid for them, and union actors want a piece of the "residual" action from video games that sell more than 400,000 copies...

Read the article about the overtime lawsuit here.
Read the article about union actors requesting residuals here.

I. Background

In the mid-1970’s, Alpex Computer Corporation developed and patented a new home video game system technology using removable, ROM-based cartridges, which was later commercialized by Atari, Mattel, and Coleco. Nintendo entered the video game system market in the early 1980’s with its popular Nintendo Entertainment System (NES). In February 1986, Alpex filed a lawsuit against Nintendo, alleging infringement of one of its video game system patents, U.S. Patent No. 4,026,555, relating to its video display system.

The ‘555 patent developed a process for generating video signals using RAM, controlled by a microprocessor, where the RAM contained a storage position corresponding to each pixel on the television screen, totaling approximately 32,000 pixels. As the cathode ray beam in the television scanned across each pixel on the screen, display data would be provided from the corresponding position in RAM. This video display system, referred to as “bit-mapping,” provided greater control and more flexibility than prior systems. Claims 12 and 13 of the '555 patent are reproduced below:

12. Apparatus for playing games by displaying and manipulating player and ball image devices on the screen of a display tube, comprising:
first means for generating a video signal representing a linear player image device aligned in a first direction,
second means for generating a video signal representing a ball image device,
manually operable game control means, and
means responsive to said manually operable game control means for causing said first means to generate a video signal representing the player image device rotated so that it is aligned in a second direction different from said first direction.

13. Apparatus according to claim 12, wherein said means for causing includes programmed microprocessor means and a replaceable memory having program game instructions stored therein for controlling said microprocessor means, whereby different games may be played with said apparatus by replacing said replaceable memory.

The NES video display system used what Nintendo called an “on-the-fly” technique. Instead of storing the display data for the entire screen in RAM, Nintendo’s system used eight shift registers, controlled by a picture processing unit (PPU), to alter a portion of the screen, up to 64 pixels, at a time. The NES PPU technology was faster and smoother than Alpex’s bit-mapping technology.

NES:


Alpex was successful at trial, where the jury determined that Nintendo’s technology infringed Alpex’s ‘555 patent and awarded Alpex damages totaling $253,641,445. The district court denied Nintendo’s post-trial motions and upheld the verdict. Nintendo appealed.

II. Issue

The primary issue before the Federal Circuit centered on the proper claim construction of two claims, claims 12 and 13, specifically focusing on the language “means for generating a video signal,” and whether those claims included the NES video display technology.

III. Analysis

A. Trial Court

Pursuant to 35 U.S.C. § 112 ¶ 6, the trial court interpreted “means for generating a video signal” based on the structure defined in the ‘555 patent specification and drawings. Specifically, the jury was instructed that claims 12 and 13 corresponded to the structure in Figure 2 of the ‘555 patent, which consisted of ROM memory, a microprocessor, display RAM, display RAM control, and a television interface.

Nintendo argued that the trial judge approved an erroneous claim construction. Nintendo reasoned that its use of shifting registers for changing up to 64 pixels at a time was different from Alpex’s use of a RAM-based, bit-mapping system for changing one or all of the 32,000 pixels on a screen at a time. Nintendo also argued that Alpex was barred from claiming that Nintendo’s technology infringes on the ‘555 patent, because during prosecution, Alpex distinguished its technology from a prior art patent using shifting registers. Alpex argued that Nintendo waived its right to use prosecution history for prosecution history estoppel purposes.

A. Federal Circuit

1. Literal Infringement

The Federal Circuit first recognized that claims 12 and 13 were means-plus-function claims, and thus § 112 ¶ 6 required interpreting those claims “in view of the structure disclosed in the specification of the patent.” The court held, however, that “positions taken before the PTO may bar an inconsistent position on claim construction under § 112 [¶ 6.]” Therefore, Alpex’s claims cannot be construed to cover a technology that has the same functional and structural traits as a prior art patent that Alpex admitted was not covered by its claims during prosecution. By allowing such a construction, the court concluded that the district court erred in sustaining the jury verdict of literal infringement.

2. Doctrine of Equivalents

The Federal Circuit then established that “equivalency under the doctrine of equivalents and equivalency under § 112 ¶ 6 . . . each has a separate origin, purpose, and application.” Under § 112, the concern is whether the structures of the claimed device and the accused device are equivalent, whereas under the doctrine of equivalents the concern is whether the devices are only “insubstantially different.” The court concluded that because Alpex’s expert made only conclusory statements regarding the substantial similarity in terms of function/way/result, the evidence “does not support a finding of infringement under the doctrine of equivalents.” Further, the court expressed that the purpose of the doctrine of equivalents is to “prevent others from avoiding the patent by merely making ‘unimportant and insubstantial changes and substitutions in the patent,’” and held that Nintendo’s use of shift registers instead of RAM was not “merely an unimportant and insubstantial change.”

Thus, the Federal Circuit reversed the district court’s judgment as to infringement and damages.

Thanks to Brandon Rash for his assistance in the preparation of this case summary.

In this follow up to Dirkschneider I, the court grants summary judgment to Midway with respect to Midway's claims again the defendants for copyright and trademark infringement under 17 U.S.C. §§ 101 et seq. and section 43(a) of the Lanham Act of 1946 respectively, and for deceptive trade practices prohibited by the Nebraska Uniform Deceptive Trade Practices Act.

Midway is a designer and manufacturer of coin-operated electronic video games. In the United States, Midway sells its video games to regional distributors who sell the video games to operators. The operators place the machines in arcades and other places for public use. Among other games, Midway owns the U.S. rights to Pac-Man, Rally-X, and Galaxian, which it acquired from Namco.

Galxian:


The defendants purchased, through their partnership, A-1 Machines, at least ten "copy games" and three conversion kits from their distributor. The game names on the headboards of these video cabinets featured variations of Midway's trademarks: "Pac Man" was replaced by "Mighty Mouth"; "Galaxian" was replaced by "Galactic Invaders." Midway's "Rally-X" name was appropriated in toto onto the defendants' version of the game. None of the defendants' games had "Midway" imprinted on the cabinet. The strategy, design, and sound effects of these games resemble their Midway counterparts. The defendants resold these games or kits, or placed them in various locations for public use. The defendants divided the proceeds with the owners of the premises where the games were played.

Because of the difficulty of providing direct evidence of copying, plaintiffs in copyright action soften demonstrate copying by establishing (1) access by defendants to plaintiff's work and (2) a substantial similarity between defendants' work and plaintiff's work. In this case, the defendants admitted to seeing the Midway games. The court also stated that "[i]n virtually every detail, the defendants' games are identical to the plaintiff's" and the games are so strikingly similar that copying may be inferred without direct proof of access. The court also applied a reasonable observer standard, stating that "[a] reasonable observer, comparing the overall appearance of these games, could only conclude that the Mighty Mouth, Galactic Invaders, and Rally-X machines and printed circuit boards resold and displayed for public use by the defendants, copied plaintiff's unique expression of ideas for coin-operated video games." The court thus found the games to be substantially similar and that a prima facie case of obviousness had been established.

The defendants, acting pro se, argued that they did not know that the machines they purchased were copies of the Midway machines. However, the court noted that absence of scienter is not a valid defense to a charge of copyright infringement, and that the law is well settled that liability attaches to the so-called "innocent infringer" regardless of intent.

The defendant's other defense, that they did not manufacture the infringing games, was also cast aside by the court, stating that the Copyright Act clearly comprehends resale and public display of unlawfully copied machines within the ambit of activities prohibited. "The owner of copyright has the exclusive rights ... (3) to distribute copies ... of the copyrighted work to the public by sale or transfer of ownership, or by rental, lease or lending; [and] (4) in the case of ... audio visual works, to perform the copyrighted work publicly."

After a brief discussion of the Trademark and Lanham Act claims, the court granted Midway's motion for partial summary judgment.

In one of the earliest decisions in a video game infringement case, the court issues a preliminary injunction in favor of Midway, to enjoin the defendants from infringing Midway's copyrights in its coin-operated Pac-Man, Rally-X, and Galaxian electronic video games. The court also ruled in Midway's favor with respect to Trademark and other Lanham Act claims.

Midway is a designer and manufacturer of coin-operated electronic video games. In the United States, Midway sells its video games to regional distributors who sell the video games to operators. The operators place the machines in arcades and other places for public use. Among other games, Midway owns the U.S. rights to Pac-Man, Rally-X, and Galaxian, which it acquired from Namco. As per the findings of fact in the decision, over 40,000 Galaxian games had been sold since February 1980, generating royalties of over $3.5M to Namco. Similarly, over 25,000 Pac-Man games and 2,500 Rally-X games have generated another $1M in royalties to Namco.

Midway's Rally-X:


Each defendant makes or sells conversion kits for one or more of the Galactic Invader, Kamikaze III, Mighty Mouth or Rally-X games. Galactic Invader and Kamikaze III are nearly identical to Glaxian. Mighty Mouth is nearly identical to Pac-Man, and the defendants' version of Rally-X is nearly identical to Midway's version of Rally-X, and also uses the same name.

The court went through the usual analysis to determine whether a preliminary injunction was proper: 1) Probable success on the merits, 2) Irreparable harm and balancing of equities, and 3) The public interest. In determining success on the merits, the court analyzed, for each game, the validity of the copyright, and copying of protectable material. The court provided a thorough analysis in its determination that the copyrights are valid, especically in view of the fact that the court has no previous video game case law, controlling or otherwise, to draw from.

At the end of the day, Midway got its preliminary injunction. The case was finally decided by the District of Nebraska in Midway Mfg. Co. v. Dirkschneider, 571 F. Supp. 282 (D.C. Neb. 1983). A sample flyer for one of the defendants' games is shown below, albeit from another country:

We're experiementing with new web site templates, so please bear with us as we undergo renovations...

Home Gambling Network et al. v. Piche et al., CV-S-05-0610-KJD-LRL (D.Nev, filed May 16, 2005)

On May 14, 2012,
 A federal judge in Nevada on May 14 reversed a magistrate judge's recommendation to impose terminating sanctions against defendants in a patent infringement case and ordered the new magistrate judge in the case to conduct an evidentiary hearing based on evidence presented by the parties during the briefing on the defendants' objection
It's on the fringe as far as video game lawsuits go, but this new case filed on May 16, 2005, does allege patent infringement involving online video games... of the wagering type.

If the case caption didn't already give it away, the patent (U.S. Pat. No. 5,800,268) is directed to a Method Of Participating In A Live Casino Game From A Remote Location. Fig. 1 of the '268 patent:



Representative claim 1 (also the shortest independent claim in the patent), recites:

1. A method for a player to remotely participating in a live casino game comprising:
(i) establishing a first information line between a player at an interface station located remotely from the casino for the transmission of live television signals and data signals to a player interface station located remote from the casino, said interface station including a player display to display a live television image of a live game to the player;
(ii) from said interface station, the player transmitting over said first information line to the casino account information related to an account maintained by the player at a third party financial institution;
(iii) the casino opening a second information line with the third party financial institution in response to receipt of said account information;
(iv) maintaining said second information line open with the first information line;
(v) the casino transmitting over the first information line data indicative that the player can make a bet;
(vi) the player from their interface station transmitting over the first information line to the casino bet information indicating a bet being made by the player on the live game;
(vii) in response to the transmitted bet, the casino over the second information line verifying the status of the player's account, the casino accepting the bet if the player's account has sufficient funds and otherwise denying the bet;
(viii) the casino transmitting data over the first information line data indicative that no more bets can be made, said data displayed at the display with the television signal;
(ix) the player over the first information line interacting with the casino to control the play of the game until an outcome is obtained;
(x) determining from the outcome whether the player's bet is won or lost, said player viewing the live play of the game at the display to confirm the outcome;
(xi) in the event of interruption of said first information line, said casino completing the play of the game to determine the outcome pertaining to the player's wager; and
(xii) the casino issuing instructions over the second information line to credit the player's account if the player has won the bet in the amount of the bet and the player's winnings and to debit the player's account if the player's bet is lost.

Home Gambling Network has named 18 defendants, each of which operate one or more online gambling web sites. In an interesting twist, it appears from the complaint that Home Gambling Network may have already provided a license to one or more of the defendants for certain games. However, in addition to alleging patent infringement, Home Gambling Network is attembling to nullify the license on the grounds that each of the defendants, by accepting a bet from the inventor of the '268 patent (who resides in Nevada), has allegedly committed a felony in the State of Nevada by accepting bets from within the State of Nevada while not being licensed by the Nevada Gaming Commission. Home Gambling Network's argument is that any license granted thus has been used for unlawful purposes and is therefore null and void.

We'll add this case the watch list, due to the online gaming nature of the '268 patent. I'm betting the case settles...

In what is being compared to the first filmmaking schools of the '30s and '40s, the University of Denver Department of Computer Science is offering four new degree programs:

• Bachelor of Arts in Game Development and Studio Art
• Bachelor of Arts in Game Development and Electronic Media Arts Design
• Bachelor of Arts in Game Development and Digital Media Studies
• Bachelor of Science in Game Development and Animation

From c|net.com: "It's like the film industry back in 1930s and 1940s, when the first film schools were established," said Associate Professor Scott Leutenegger, who heads the University of Denver's program. "That was not taken seriously. Now everyone thinks those programs are great."

Read complete story here.

Konami Corporation v. Roxor Games Inc., 2-05CV-173 (E.D.Tex), filed May 9, 2005.

Konami Corporation has filed a lawsuit against Roxor Games, Inc., in the Federal District Court for the Eastern District of Texas, alleging patent infringement, trademark infringement, unfair competition, trademark dilution, and trade dress infringement, under both Federal and Texas law. The issue: Konami's game Dance Dance Revolution:



Konami alleges that Roxor sells and distributes an In The Groove (ITG) video arcade game kit, that a purchaser can use to retrofit one of Konami's Dance Dance Revolution (DDR) arcade games. As alleged by Konami, the kit comes with instructions on how to remoce the original main circuit board from the DDR game and replace it with the ITG game circuit board. The following was clipped from the InTheGoove.biz web site earlier today:



The patent at issue is U.S. Pat. No. 6,410,835, entitled Dance Game Apparatus And Step-On Base For Dance Game, issued June 25, 2002. Figure 2 of the '835 patent is shown below:



While the Complaint does not specifically call out particular claims, claim 1 of the '835 patent is reproduced below:
1. A dance game apparatus comprising: music output means for outputting one piece of music from at least one stored piece of music; a floor panel having a step-on base section; said step-on base section comprising a top panel and a support member which supports the panel; detection means for detecting a stepping operation on said step-on base section; said detection means comprising stepping sensors interposed between said panel and said support member at mutually opposing positions of said panel; said stepping sensors comprising longitudinally extending conductive sections having a longitudinal length, one of said conductive sections being moveable laterally relative to another of said conductive sections at any one of a plurality of positions along the longitudinal length of said one conductive section to effect contact with said other conductive sections at any one of a plurality of corresponding contact positions such that said stepping sensors detect stepping on said step-on base sections at plural locations corresponding to said plurality of corresponding contact positions, guidance means for performing a stepping operation instruction to said step-on base section in time with said music; measurement means for measuring a time deviation between the timing of a stepping operation instruction and the time at which the fact that said step-on base section is stepped on is detected by said detection means; and evaluation means for providing a higher score the smaller the measurement result.

Read Konami's press release here.

We'll add this case to our watch list and keep you posted of future developments.

Midway Mfg. Co. v. Artic. Int’l, Inc., 704 F.2d 1009 (7th Cir. 1983), cert. denied, 464 U.S. 823 (1983).

Galaxian is a video that is something of a cross between Space Invaders and Galaga:

Galaxian

Artic manufactured a computer chip to speed up the game play in Midway's Galaxian video games. The Court of Appeals for the Seventh Circuit ruled this infringed on Midway's copyright. The court ruled that the speeded up version of the video game constituted a derivative work. While Artic argued that speeding up the video game was like speeding up a phonograph record and so should not be considered a derivative work, the court rejected the argument based on the fact that there is a market for speeded up video games while there is no market for speeded up phonograph records. The court did acknowledge that the definition of derivative work had to be stretched to reach this result.

(Sorry this case summary is short, we will supplement later as time permits)

Williams Electronics, Inc. v. Artic International, Inc., 685 F.2d 870, 215 USPQ 405 (3rd Cir. 1982)

The game is Williams' arcade game Defender, which many of us remember with fondness:



Artic sold circuit boards, manufactured by others, which contain electronic circuits including a microprocessor and memory devices (ROMs). These memory devices incorporate a computer program which is virtually identical to Williams' program for the Defender game. The result is a circuit board "kit" which is sold by Artic to others and which, when connected to a cathode ray tube, produces audiovisual effects and a game almost identical to the Williams' Defender game, including both the attract mode and the play mode. The play mode and actual play of Artic's game, entitled "DEFENSE COMMAND," is virtually identical to that of the Williams game, i.e., the characters displayed on the cathode ray tube including the player's spaceship are identical in shape, size, color, manner of movement and interaction with other symbols. Also, the attract mode of the Artic game is substantially identical to that of Williams' game, with minor exceptions such as the absence of the Williams name and the substitution of the terms "DEFENSE" and/or "DEFENSE COMMAND" for the term "DEFENDER" in its display.

The principal dispute in this case was whether the audiovisual aspects of a video game are sufficiently "fixed" to obtain copyright protection under the 1976 Copyright Act. The court held that the video game Defender was sufficiently fixed in ROM regardless of the fact that game play may differ slightly each game, and also regardless of the fact that a human player causes the video game to change slightly with each"performance."

Specifically, Artic argued that there is a lack of "fixation" because the video game generates or creates "new" images each time the attract mode or play mode is displayed, notwithstanding the fact that the new images are identical or substantially identical to the earlier ones. The court gave little weight to this argument, stating that the fixation requirement is met whenever the work is "sufficiently permanent or stable to permit it to be * * * reproduced, or otherwise communicated" for more than a transitory period, and that the original audiovisual features of the DEFENDER game repeat themselves over and over. The court also noted the unnsuccessful results of Artic's same argument in other cases.

Artic also argued that the player's participation withdraws the game's audiovisual work from copyright eligibility because there is no set or fixed performance, and the player becomes a co-author of what appears on the screen. The court rejected this argument as well, noting that although there is player interaction with the machine during the play mode which causes the audiovisual presentation to change in some respects from one game to the next in response to the player's varying participation, there is always a repetitive sequence of a substantial portion of the sights and sounds of the game, and many aspects of the display remain constant from game to game regardless of how the player operates the controls. In addition, there is no player participation in the attract mode which is displayed repetitively without change.

The court went on to reject Artic's additional arguments in its defense, namely that Williams was trying to copyright a utilitarian object, and that copyright infringement only occurs when the source code is copied, not when the object code is copied. The court did, however, reverse the finding of willful infringement and remanded for further proceedings on that issue.