Konami, no stranger to invalidity challenges against their video gaming patents, recently had four more patents directed to slot machines struck down as directed to abstract ideas.

On Feb. 21, 2018, the U.S. District Court for the District of Nevada granted summary judgment for defendant High 5 Games, LLC (“High 5”) against plaintiff Konami Gaming, Inc. (“Konami”).  The Court, dismissing Konami’s case, found all four of Konami’s asserted patents invalid as directed to unpatentable subject matter.



In the case, Konami alleged infringement of four patents: U.S. Patent Nos. 8,096,869, 8,366,540, 8,662,810, and 8,616,955. All asserted patents generally relate to slot machines, and High 5’s allegedly infringing products included various online and “land-based” slot machine games featuring a “Super Stack” feature (including, inter alia, “Bah, Humbug,” “Bollywood Bride,” “Dangerous Beauty,” “Diamonds of Athens The Dream,” “Shadow of the Panther,” and many others).
Claim 1 of the ’869 Patent reads:

1. A gaming machine comprising:
   a processor configured to execute a game displaying a matrix of symbol containing elements having a plurality of rows and a plurality columns;
   at least one column of said matrix comprising a portion of a simulated rotatable reel of a plurality of said symbol containing elements;
   said simulated rotatable reel comprising sections of symbol containing elements displaying a plurality of symbols that are fixed for each game played on said gaming machine;
   said simulated rotatable reel including at least one section in which a consecutive run of three or more of said symbol containing elements is populated by an identical symbol so that, as the simulated rotatable reel rotates, a consecutive string of said same identical symbol is sequentially displayed within said consecutive string of symbol containing elements; and
   said identical symbol is randomly selected anew for each play of said game, wherein said identical symbol is selected by virtually spinning a notional, non-visible, inner reel comprising a subset of said plurality of symbols.

After a lengthy discussion of claim construction, the Court found Konami’s patents’ claims “individually and collectively” invalid for abstractness.  Per the Court, the claims “perform the functions of what may be described as an aesthetic variation on a play of the game” because “the primary focus of the patents, as acknowledged even by Konami, is displaying a consecutive run of a randomly selected identical symbol in one reel of the simulated digital reels in each iteration of a game as a means of increasing interest in the game and ‘increasing probability of a winning outcome.’”  The Court was unpersuaded that the claims recited more than this idea: “[c]hanging how often a symbol appears and where it appears in a slot game without more is simply altering the manner of display of random symbols – i.e. changing the rules of the game.”

This decision underscores the continued impact of the Supreme Court’s 2014 decision in Alice v. CLS Bank.  In this case, the Court was clear: “changes to game rules of a generic slot machine using conventional technology are not patentable.”  Such a ruling may suggest that patents directed to game play rules may also be invalid as directed to abstract ideas.  Patentees may improve their likelihood of surviving similar challenges by, where possible, tying their claimed inventions to technology and technical problems.

At first blush, this patent infringement case does not seem as though it would fall within the scope of videogame law, but it does. T5 Labs brought suit against Gaikai for infringement of U.S. Patent No. 8,203,568 ("the 568 patent"). This patent involves using a centralized server within a bank of servers that allows remote access by a user. The server runs a plurality of programs which share a graphical processing unit (GPU) which can store frames generated by different programs at different memory locations. For example, using this technology, a player at home could essentially stream the graphical processing of a game from the remote server to their home. The patent is meant to address, among other things, the speed with which GPUs become obsolete for the average consumer as well as allowing the development of programs over different platforms without having to actually create new code for each platform. Specifically, the patent attempts to address the problems of compressing video data signals over a broadband connection while also decreasing the latency in hosted interactive graphics systems.

T5 alleges that Gaikai is directly infringing by, "virtualizing multiple instances of game programs on a server with one or more shared GPUs through [its] cloud-based gaming applications and service." Furthermore, T5 alleges that by offering for sale and selling the use of its GPU cloud, Gaikai is committing contributory infringement as well as inducing the direct infringement of others. Prior to filing its complaint, T5 claims to have provided written notice to Gaikai that the patent in question was being infringed upon. T5 seeks a declaratory judgment stating infringement has occurred and that the patent is valid and enforceable as well damages and a permanent injunction against Gaikai.

Gaikai filed a motion to dismiss for failure to state a claim, but the magistrate court denied the motion stating that T5 had alleged sufficient facts to allow for the inference that infringement exists. After its motion was denied, Gaikai filed an answer to the complaint along with counterclaims that sought declaratory judgment stating that Gaikai has not infringed upon the 568 patent and that the patent is invalid.

This patent dispute is even more relevant with the advent of the next generation of consoles later this year. Both the Xbox One and the PS4 tout cloud-based computing and streaming as one of their main features. Sony's PS4, in particular, is of note because of its acquisition of Gaikai last July. The console-maker has said that it will be utilizing the streaming service in order to provide backwards compatibility with its PS3 game library. Due to the broad nature of the patent, a favorable ruling for T5 could lead to console manufacturers having to rethink cloud computing and its implementation, or will otherwise lead to increased costs to cover the patent license(s).

We will monitor this case and inform you of any new developments.

The long awaited decision in Microsoft v. i4i is out. In short, on June 9, 2011, the United States Supreme Court did a surprising thing: it affirmed! The Supreme Court did not change existing patent law or reverse the Federal Circuit. Recent patent case decisions of the Court have sometimes done both, but routinely at least one.