Articles Posted in IP Infringement

Published on:

In the fast and furious world of app development, time is of the essence. So claims the Plaintiff YoHolla in a lawsuit against an app developer Pinwheel Designs Corp. and its subcontractor Burton Design Group (BDG). Allegedly the defendants’ inability to produce a bug-free app in a timely manner delayed YoHolla’s launch of its social network.

This case involves a classic fact pattern of a development contract gone awry. YoHolla claims that BDG missed several deadlines for completion of an Iphone and Android app, that what BDG produced was riddled with bugs and required additional payments well beyond the initial estimates. YoHolla further alleges that the contract stated that TIME WAS OF THE ESSENCE and that these delays caused delay of YoHolla’s planned launch of its social network and over $550, 000 in delay damages.

After things escalated, YoHolla went elsewhere to get the development finished and formally terminated the development contract.

BDG demanded final payments and ordered YoHolla to cease and desist from use of any source code developed by BDG, alleging that such use would constitute copyright infringement (despite an apparent assignment of all rights to YoHolla in the contract).

Where this gets more interesting is that BDG contacted Apple and alleged that YoHolla’s iphone app infringes BDG’s copyrights. After 3 or so rounds of “he said, she said” regarding copyright ownership, to no avail, YoHolla filed suit.

The Yohalla Complaint raises claims for declaration of ownership of copyright and non-infringement, breach of contract, tortious interference with a business relationship (for BDG’s allegedly false notices to Apple), defamation and a claim for indemnification against Pinwheel.

This will be an interesting case to watch.

 

 

Published on:

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.

Published on:
Gibson Guitar Corp. recently filed suit in the U.S. District Court for the Middle District of Tennessee alleging that Seven45 Studios’ video game “Power Gig: Rise of the SixString,” infringes Gibson’s concert simulation patent.  Gibson filed its complaint againgibson.jpgst 745 LLC (d/b/a Seven45 Studios) asserting “Power Gig” violates its U.S. Patent Number 5,990,405, titled “System and method for generating and controlling a simulated musical concert experience.”  The claims center on “Power Gig” and its related components, which includes a guitar-style controller.  Gibson is claiming that the game, in conjunction with a gaming console (Sony’s Playstation 2 and Microsift’s Xbox 360), contains elements that infringed its rights under the ‘405 patent.  In addition to a claim for direct infringement, Gibson alleges contributory patent infringement and inducement of infringement.  Gibson is seeking a preliminarily and permanently injunction, treble damages and attorneys’ fees. 

Published on:

The Court of Appeals for the 9th Circuit ruled on the Blizzard v. MDY case, largely affirming the district court’s finding that MDY’s bot (“Glider”) for playing World of Warcraft (WOW) violates the WOW Terms of Use and violates anti-circumvention provisions of the DMCA. However, the 9th Circuit found that the violation was breach of a contractual covenant not a breach of a condition of the license and applied a somewhat different analysis to the DMCA claims. The net result still largely favors Blizzard and a permanent injunction was affirmed.

We previously prepared an advisory on the District Court decision.

The Court found that the use of Glider violated the Terms of Use prohibition on bots. However, unlike the district court, the 9th Circuit ruled that this was a breach of a contractual covenant not a breach of a condition of the license. One significance of this is the different remedies available for breach of contract and copyright infringement.
 
The DMCA claims related to whether Glider violates DMCA sections 1201(a)(2) and (b)(1) by circumventing WOW’s Warden, which is intended to detect bots. The Court ruled in Blizzard’s favor with respect to “dynamic non-literal elements” of WOW.
 
In reaching its decision, the Court refused to follow a Federal Circuit decision (in the Chamberlain case) interpreting the DMCA. The 9th Circuit ruled that Section 1201 (a) creates a new anti-circumvention right distinct from copyright infringement while section (b) strengthens the traditional prohibition against copyright infringement.  In contrast, the Federal Circuit in Chamberlain found that the DMCA coverage is limited to a copyright owner’s rights under Section 106 of the Copyright Act, and required a “nexus” to infringement. The 9th Circuit refused to adopt any requirement for an infringement nexus. The tension between these appeals courts may set up a show down in the Supreme Court.

The Court went on to find that MDY did violate Section 1202 (a)(2) of the DMCA with respect to the dynamic non-literal elements of WOW.  But the Court found that Glider does not violate DMCA Section 1201(a)(2) with respect to WOW’s literal and individual non-literal elements, because Warden does not effectively control access to these WOW elements.

The Court also found that the tortious interference with contract claims were not preempted by the Copyright Act, but that factual issues prevented a proper summary judgment finding. As a result, it vacated the district court’s summary judgment ruling on this issue and remanded the issue of personal liability for MDY’s CEO.

Perhaps serendipitously, the decision was handed down just days after Blizzard’s release of Cataclysm the third expansion of WOW. More than 3.3 million
copies as of Cataclysm were sold in the first 24 hours of release, which according to Blizzard, makes it the
fastest-selling PC game of all time.

Here is a copy of the 9th Circuit decision.

Published on:

Microsoft, Nintendo, Sony and Valve have been sued for patent infringement over two patents relating to purchasing products relating to games. The suit, filed by Olympic Developments AG, LLC, involves US Patents  5,475, 585 (“Transactional Processing System”) and 6,246,400 (“Device for Controlling Remote Interactive Receiver”). The ‘585 patent was issued way back in 1995 and the 400 patent in 2001.

We will monitor the case. Check back for significant developments.

Published on:

Everglades Interactive, LLC has filed a patent litigation against a number of social game companies for alleged infringement of USP 6,656,050. The patent is entitled “Odds Accelerator for Promotional Type Sweepstakes, Games, and Contests.”

A sample claim of the patent is as follows:

A method enabling at least one player to increase a likelihood of winning at least one of a collect-and-win game and a match-and-win game promotion while simultaneously increasing an appeal of said game to the player and thus making a substantially more valuable system for a promoter, comprising the steps of:
providing at least one game piece to at least one player;
applying said game piece to an appropriate game board at a game site;
making game piece information available to said player, said game piece information indicative of needed game pieces needed to complete a winning combination of game pieces to thereby win said game, whereby the player may share or trade game pieces with at least one other player,
enabling said player and said other player to easily and securely store said game pieces for future use.

The patent is based on a provisional application (2001/0028708) which was filed on August 4, 2000, and a utility application (09/920,940) which was filed on August 3, 2001. Based on our preliminary research, this patent will be heavily attacked for invalidity based on prior art that easily predates this patent. It will also face challenges for failing to constitute patent eligible subject matter under Section 101 under the recently announced test in the Bilski case.

The number of social game-related patent applications and patent lawsuits being file is increasing. Yet, many companies in this space have not focused much on patents. This and other recent activity, such as Zynga‘s attempt to patent aspects of using virtual currency (see our prior blog post), should be catalyst to cause more companies to ensure that they are considering patent protection for their social games offerings and taking steps to minimize liability for infringement of others’ patents.

E-mail us for a free guide on patent and other IP strategies for social games companies.

Published on:

In a very significant decision, the 9th circuit Court of Appeals ruled that software developers can legally prevent customers from owning the copies of software that they pay for. Instead, if the software license agreement is properly drafted, the software developer retains ownership in the copies they distribute and the customers merely have a license to use the software.

This is significant for many reasons. The first is that this means the “first sale doctrine” does not apply. Under this doctrine a copyright owners rights are extinguished in a particular copy of the software after an authorized first sale. As a result, the customer can rightfully sell the software if they no longer need/want it. In contrast, with a license that restricts transfer this is not permissible.

This ruling by analogy may be applicable to virtual goods as well. Many terms of service specify that virtual goods are merely licensed and not owned by customers.

Vernor 

Published on:

Thumbnail image for Thumbnail image for logo1w.pngA federal court dismissed on summary judgment most of the copyright infringement claims against Google, ruling, in part, that Plaintiff’s notices were not compliant with the requirements of the Digital Millennium Copyright Act (“DMCA”). As a result, the court found that Google was entitled to “safe harbor” protection under various sections of the DMCA.

This is another in a string of DMCA rulings that favor online service providers, place the burden of policing infringement on content owners and demonstrate the courts’ inclination to strictly construe the DMCA requirements. We previously posted about the $1 billion damage claim that Google (and its YouTube subsidiary) avoided in its lawsuit with Viacom by reliance on the DMCA. These cases continue to highlight the business need for ensuring that companies have and comply with effective DMCA policies.

In framing some of the issues, the court stated:

In order to be eligible for any of these three safe harbors under the DMCA, a party must satisfy three threshold conditions. First, the party must be a service provider as defined under 17 U.S.C. § 512(k)(1)(B). Second, the party must have “adopted and reasonably implemented, and inform[] subscribers and account holders of the service provider’s system or network of a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers.” 17 U.S.C. § 512(i)(1). Third, the party must “accommodate[] and . . . not interfere with standard technical measures” used by copyright owners to identify or protect copyrighted works. 17 U.S.C. §§ 512(i)(1)-(2).

The court found that Perfect 10 did not dispute that Google met the first and third prongs, but rather it argued that there were issues about whether Google implemented a suitable policy for repeat infringers. But for some of the technologies at issue (e.g., Google’s Web Search, Image Search and caching feature”), Google does not have account holders or subscribers. Even Perfect 10 did not contend that Google must, or even can, have a repeat infringer policy for those services. See 17 U.S.C. § 512(i)(1)(A) (requiring a repeat infringer policy for those services with “subscribers and account holders”). Thus, the court summarily found in Google’s favor on these issues.

The court also addressed issues relating to the “Information Location Tools” safe harbor under Section 512(d) of the DMCA. Here the court found that Google, in many cases, did not have “actual notice” of infringement, despite receiving numerous notices from Perfect 10. The court stated:

As the Ninth Circuit explained in CCBill, “The DMCA notification procedures place the burden of policing copyright infringement–identifying the potentially infringing material and adequately documenting infringement–squarely on the owners of the copyright.” CCBill, 488 F.3d at 1113. P10’s Group C notices do not “identif[y] . . . the copyrighted work claimed to have been infringed . . . .” 17 U.S.C. § 512(c)(3). To refer Google to more than 15,000 images appearing on the entirety of P10’s website falls far short of identifying what may have been infringed. Nor is a reference to the totality of the P10 image collection “a representative list” of “multiple copyrighted works” appearing without authorization at a single infringing site. See 17 U.S.C. § 512(c)(3). Thus, all of P10’s Group C notices lack the identification of the copyrighted work required by section 512(c)(3)(A)(ii).

P10’s Group C notices are additionally defective because they do not contain all of the required information in a single written communication.

The court also addressed the Safe Harbor for caching under Section 512(b) of the DMCA and various other issues.

The case is Perfect 10, Inc. v. Google, Inc. Here is a  copy of the Decision

Published on:

A patent infringement suit targeting a multiplayer, networking feature of Microsoft’s Xbox video game console was dismissed because the court found that, based on how the patent claims were written, the Xbox’s network connectivity mechanism differed from that required in the patent. This case, like many patent infringement cases, turned on the Court’s interpretation of the patent claim language and highlights the importance of the patent attorney’s wording of the patent claims. It is one thing to get a patent. It is another to get one that is commercially significant and can be viably enforced. A patent attorney who understands a range of alternatives can add significant value to a patent.

Interestingly, Sony previously settled a patent infringement suit involving the same patent relating to its PlayStation video game console.

The case, which was filed in the Eastern District of Michigan, alleged infringement by Microsoft of  U.S. Patent No. 5,292,195, entitled “Apparatus and method for electrically connecting remotely located video games” (“the ‘195 Patent”). The ‘195 Patent issued way back in March 8, 1994.  The court stated:

The ‘125 Patent involves an invention that allows “for two or more players playing the same video game to compete with each other without using the same physical video game which alleviates the necessity of proximity of the players.” ‘125 Patent col. 2 ll. 39-43. The ‘125 Patent describes a system where a video game player can talk and play with a remote opponent at the same time over a telephone line.

The Court ruled that Microsoft did not infringe the asserted claims because micro-processor to modem coupling in the Microsoft Xbox was accomplished via inductive coupling, while the court found that the claims require that the components be electrically
connected.  A Special Master had recommended that the claims should be interpreted to include inductive coupling.  However, the Court did not follow the Special Master’s recommendation, holding that the Special Master had improperly relied on extrinsic evidence, rather than relying on “the ordinary meaning of [the] claim language” which, as the Court indicated “may be readily apparent even to lay judges” [quoting Phillips v. AWH Corp., 415 F.3d 1303, 1314 (Fed. Cir. 2005)].  Along with the plain meaning of the term “electrically connected”, the Court relied on the fact that the term “electrically connected” was used in the ‘195 Patent description to refer only to connections accomplished via conductive electrical wires.

Because the Court’s interpretation is a legal determination, it is subject to review on appeal. Stay tuned to this blog for further developments should an appeal proceed.

Click here for a copy of the Decision.

Published on:

On July 23, 2010, Judge William Alsup of the U.S. District Court for the Northern District of California entered an order denying Facebook Inc.’s motion to dismiss a second amended complaint alleging that Facebook is guilty of contributing to the copyright infringement of a video game. Judge Alsup denied Facebook’s argument that, as the Plaintiff had failed to properly allege direct infringement by its Co-Defendant, no claim against Facebook for contributory infringement could be made. A copy of the decision can be found here: Miller v Facebook

Background

The pleadings allege that Plaintiff, Daniel Miller, created the video game Boomshine in 2007 and was granted a copyright registration by the U.S. Copyright Office. Boomshine is a game in which players click on floating circles which cause them to expand resulting in the expansion of any other circles which come into contact. Miller’s second amended complaint accuses Defendant,Yao Wei Yeo, of direct infringement by arguing a similar “look and feel” between his video game, ChainRxn, and Boomshine but provides no further evidence of copying. According to the allegations in Miller’s filings, “ChainRxn copies the look and feel of Boomshine by incorporating almost every visual element of the game”. Moreover, the second amended complaint accuses Facebook of contributing to the infringement of the video game by allowing Yeo’s game to remain on its website after being notified that it infringed the copyright of Boomshine.  Miller alleges that “[a]fter defendant Yeo published ChainRxn on defendant Facebook’s website, members of the public were deceived regarding the origin of ChainRxn.” For more information about the history of the case see the previous posting prepared by the Pillsbury Virtual World Team.

The Court’s Denial

Facebook filed a motion for dismissal of the suit on June 21, 2010. Its argument was founded on the position that, as Miller had not properly first pled direct infringement by Yeo, he could not sustain a claim for contributory infringement by Facebook. The basis for Facebook’s argument was that Miller’s mere allegation that ChainRxn “looks and feels” identical to Boomshine without further proof of copying was insufficient to allege direct copyright infringement of Boomshine’s source code. Moreover, Facebook argued that the copyright registration Miller had obtained for the source code was limited to its literal elements and not audiovisual elements of Boomshine. Judge Alsup denied the first element of Facebook’s motion as premature noting that a “plaintiff can rarely examine the underlying source code of an accused infringing software program without resorting to discovery.” Specifically, Judge Alsup said it would be “unreasonable, if not impossible” for Miller to know with “exacting detail” how Yeo copied the Boomshine source code so early in the case. Additionally, Judge Alsup denied the second portion of Facebook’s motion by clarifying that the Court’s earlier order “did not hold that copyright protection for source code was limited to the literal elements of the work” but rather that “plaintiff’s copyright appears to be limited to the source code rather than the audiovisual aspects” and further determination is necessary to decide if the audiovisual elements of the game were also protected.

Finally, the court reminded Miller to address the disputed service of the second amended complaint on Yeo by the July 30, 2010 deadline or suffer a “potentially fatal defect” to his case.

Comments

The above action is interesting for several reasons. Platform companies like Facebook generally rely on the “safe harbor” protections the Digital Millennium Copyright Act provides when an infringement claim is made for the postings of a third-party. In fact,YouTube recently obtained a favorable decision providing it with DMCA protection in a potentially billion-dollar copyright infringement suit brought by Viacom. Moreover, while the Courts may differ on copyright protection for audiovisual “screen displays” in video games, the Copyright office’s consistent position is that “a single registration is sufficient to protect the copyright in a computer program and related screen displays, including videogames, without a separate registration for the screen displays or a specific reference to them on the application for the computer program.” For further discussion you can review the Copyright office’s Circular 61

That said, this case continues to demonstrate that social networking platforms and other websites displaying user generated content must be ever vigilant or potentially face suits arguing various copyright theories. As technology advances (as well as the means of infringement) it is likely the pleading requirements will remain relatively low and defer the need to demonstrate the how, when and why of the alleged infringement until the completion of discovery. Since this will likely increase the cost of litigating these matters, Platform operators and creators of user generated content need to understand and avail themselves of copyright (and other IP) protection, enforcement techniques and available defenses.