Original Post:

On June 1, 2010, PCG filed a notice for dismissal of the case under FRCP 41(a)(1). Rule 41 allows a plaintiff to dismiss an action without a court order by filing a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment. In this case Activision had not responded to PCG’s suit with any court filings before PCG filed the voluntary dismissal. Based on the amount of time between the lawsuit being filed and dismissed, the parties likely started settlement discussions immediately after the case was filed, and PCG kept agreeing to delay the deadline for Activision to file its Answer to the Complaint in view of ongoing settlement discussions.


Case Update:

The immense popularity of musical video games such as Guitar Hero, Band Hero and DJ Hero appears to have generated some unwanted attention for Activision Publishing, Inc. ("Activision"). In particular, on February 12, 2010, Patent Compliance Group, Inc. ("PCG") filed a qui tam action against Activision, alleging that Activision has falsely marked many of its video games including Guitar Hero 5, Band Hero, DJ Hero and Guitar Hero Smash Hits (collectively "Activision video game products") as patented or patent pending. Specifically, PCG alleges that Activision has violated 35 U.S.C. 292(a), which states, in relevant part, that:

Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article the word "patent" or any word or number importing the same is patented, for the purpose of deceiving the public; or Whoever marks upon, or affixes to, or uses in advertising in connection with any article the words "patent applied for," "patent pending," or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public - Shall be fined not more than $500 for every such offense.

PCG's complaint makes the following specific assertions of false patent marking:

• Activision's Guitar Hero 5, DJ Hero, Band Hero and Guitar Hero Smash Hits video games are falsely marked with U.S. Patent No. 5,739,457 ("'457 Patent").




• Guitar Hero 5, DJ Hero, Band Hero and Guitar Hero Smash Hits video games are falsely marked with U.S. Patent No. 6,018,121 ("'121 Patent").




• Guitar Hero 5, Band Hero and Guitar Hero Smash Hits video games are falsely marked with U.S. Patent No. 6,252,153 ("'153 Patent").




• Guitar Hero 5, Band Hero and Guitar Hero Smash Hits video games are falsely marked with U.S. Patent No. 6,268,557 ("'557 Patent").




• Guitar Hero 5, DJ Hero, Band Hero and Guitar Hero Smash Hits video games are falsely marked with U.S. Patent No. 6,369,313 ("'313 Patent").




• Guitar Hero 5, Band Hero and Guitar Hero Smash Hits video games are falsely marked with U.S. Patent No. 6,379,244 ("'244 Patent").




• Guitar Hero 5, DJ Hero, Band Hero and Guitar Hero Smash Hits video games are falsely marked with U.S. Patent No. 6,429,863 ("'863 Patent").




• Guitar Hero 5, Band Hero and Guitar Hero Smash Hits video games are falsely marked with U.S. Patent No. 6,758,753 ("'753 Patent").




• Guitar Hero 5, Band Hero and Guitar Hero Smash Hits video games are falsely marked with U.S. Patent No. 6,769,689 ("'689 Patent").




• Guitar Hero 5 and Guitar Hero Smash Hits video games are falsely marked with U.S. Design Patent No. D441,403 ("'403 Patent").




• Guitar Hero 5, DJ Hero, Band Hero and Guitar Hero Smash Hits video games are falsely marked as "patent pending" or "patent applied for."

Essentially, PCG is claiming that the scopes of the patents with which Activision's video game products are marked do not cover the methods or systems of the actual products. In addition, where Activision has marked products with "patent pending" or "patent applied for," PCG's position is that none of Activision's patent application has a potential scope of protection which would cover any aspect of the specified video game products.

Success in a qui tam action of this nature will depend heavily on whether PCG is able to show that the scope(s) of one or more of the specified patents do not cover the specified products as well as whether Activision had an intent to deceive the public with those markings. Generally, a simple denial of intent to deceive is insufficient to escape liability under section 292. However, Activision may avoid liability if it is able to sufficiently prove that it had a reasonable belief that the articles were within the scope of the patents with which the product were marked.

If PCG prevails on one or more of its false marking claims, the assessed damages may be astronomical given the number of copies of Activision's video game products that have been sold. Although in some cases, courts have attempted to reign in the potential for substantial sums of damages, the Federal Circuit recently held that damages for false markings are to be calculated on a per article basis. See Forest Group, Inc. v. Bon Tool Co., 2009 WL 5064353 at *4-5 (Fed. Cir., Dec. 28, 2009). However, a court may set the damages assessed to each article well below the $500 maximum in order to avoid what they might feel is an excessive penalty.

We will keep you posted.

This case is Patent Compliance Group, Inc. v. Activision Publishing, Inc., Case 3:10-cv-00288-B (N.D. Tex.).