Patents and Copyright, Oh My - (Some of) The Rules of the Game Industry Game

In my RSS reading early this morning I encountered something which piqued my interest. I wish I'd somehow managed to attend this event, because I've been very interested in patent and copyright law as it relates to the video game industry. Even more disturbing was the title of the talk given in London to a group of IGDA members. That title was, "Rules of the Game: Legal Issues in Game Development," which though purported to be about copyright, trademark, and patent law seems at least based on the notes to have been more about copyright and trademark.

Anyway, the following bit caught my eye:

Game Career Guide - IGDA Rules of the Game

How Similar is Too Similar is Too Similar?
"There has to be copying," says speaker Vincent Scheurer, a speaker at the IGDA meeting. "Accidental similarity is not an infringement." Scheurer expressed his disgust with the similarities -- or what he thinks is just plain copying -- between Webzen's art style (left) and Nintendo's in Wind Waker (right). He wonders why the Japanese game giant allows Webzen get away with it, as Nintendo has never filed suit.

Which lends yet even more evidence to a theory that has been developing in my head throughout my research. Namely, that Nintendo has a different vision of what patent, copyright, and trademark in the game industry is supposed to be doing. While Scheurer seems to look down on "plain copying," as he sees it, Nintendo seems to see something else.

This same sort of non-litigation has occurred in the space of patents by Nintendo as well. Nearly every 3rd Person game for the PS2, PS3, Xbox, Xbox360, Gamecube, and Wii actually infringe on several patents by Nintendo related to the use of analog sticks on controllers. Yet Nintendo does not litigate. So it is either (in the case of patents anyway) done out of only self protection, but I'm beginning to suspect that it is also done out of a desire to carve out new areas in the world of game development and to protect them.

So sure, "Webzen get[s] away with it," but maybe Nintendo is willing to carve new directions out for others to also pursue. Remember, frequently Nintendo seems simply happy to be somewhere first, they don't necessarily want to rule those places.

Gamasutra Publishes Adverarticle on Patents

Well, typically I expect more from Gamasutra on this front. Rather than labeling it "Opinion:", they perhaps ought to have labeled it "Advert:".

The punch-line of the article: "The video game industry is at a point where patents and other intellectual property are becoming vital to determining who the future winners will be." Is dead on. That isn't to say that there perhaps should have been a counter opinion piece about the effect that this kind of patent arms proliferation could have to stifle the industry to the point of collapse.

If you read carefully the argument, I'm not left feeling, "Yeah, patents are a good idea to think about." Rather, I'm left feeling as if I'm envisioning an arms standoff much like that forming between Open Source Software and Commercial Software (like Microsoft). They are beginning a dance that may result in the criminalization of human inquisitiveness and innovation.

It's precisely this kind of environment that I suspect the creators of patents were hoping to not have emerge. It is this kind of article and environment that points to a call for massive overhaul of the U.S. Patent system.

Gamasutra - Opinion: Is Your Invention Worth Patenting?

Video games are big business. In 2005, the world wide market for video games was estimated at $28 billion, and is expected to grow to $46.5 billion by 2010. And the video game market is still growing fast; the latest estimates show an 11.4% compound annual growth rate.
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Nonetheless, the pace of patent filings by video game developers is on the rise, and, more importantly, lawsuits involving video game patents are also on the rise. One need look no further than the recently settled “force feedback” suit, in which Immersion managed to extract over $110 million from Sony.
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For purposes of this article, the costs of obtaining a patent in the United States can be estimated at $10,000 to $20,000, depending on the complexity of the underlying invention, and not accounting for the inventor’s time. Weighed against these costs are the benefits provided by patent protection. Estimating the benefits of patent protection is a more involved process, which is explored below.
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In such a situation, maintaining such an invention as a trade secret is the most prudent course of action. A trade secret is any economically valuable information that is not publicly known, and for which steps have been taken to maintain secrecy. Unlike patents, no formalities, such as filing with a government agency, are required to maintain a trade secret.

Also unlike patents, trade secrets endure for as long as secrecy is maintained. If a trade secret is “stolen,” the holder of the trade secret may sue for misappropriation. For inventions that, if implemented by others, would be undiscoverable, the advantage of trade secret protection is readily apparent.

In fact, since an application for patent must include a clear description of the invention, applying for a patent directed to an invention that is not discoverable when incorporated within a product may do little but share the developer’s technology with the developer’s competitors.

Unfortunately, a trade secret will not prevent a competitor from reverse engineering the developer’s technology. Therefore, if an invention is valuable, and is capable of being detected in the product, patent protection is almost always more appropriate.
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If a particular invention has sufficient financial value, but the video game developer has no intention of practicing it, the developer should look at the possibility of licensing the invention to others in exchange for licensing fees. To obtain licensing fees the developer does not need to practice the invention or have even built the invention. Practically, the amount of a reasonable royalty is tied to the additional profit enabled by the invention.

Patents also have defensive value, especially in hotly contested new markets. Often, a larger, established company can prevent a smaller video game developer from pursuing a business opportunity by threatening a patent suit.
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The video game industry is at a point where patents and other intellectual property are becoming vital to determining who the future winners will be. Decision makers at video game companies need to be informed of the different types of protection that can be sought for inventions, as well as the advantages of each. Armed with proper information, video game developers can use intellectual property to establish competitive advantage over their rivals.

Konrad Sherinian is an attorney with Cook & Alex, with his offices in Chicago. His practice focuses on counseling small to mid-size companies, including video game developers, on the strategic use of intellectual property. In addition, Mr. Sherinian maintains a commercial litigation practice, and presently represents a number of patent holders on a contingent-fee basis seeking to obtain compensation for patent infringement. Prior to becoming an attorney, Konrad, who has an electrical engineering degree, worked for various high-tech companies and start-ups, and lead the development of many hardware and software technologies. Notably, from 1998-2000, Konrad worked at Bungie Software, and contributed to the development of Myth II and Halo, as well as Bungie’s game matching platform, bungie.net.

Perhaps the Big Bucks of the Game Industry can Force a Change?

The software industry on it's own hasn't been able to push for any renovations to the U.S.'s achingly outdated patent system. Perhaps the game industry can. Certainly the patent office has been a fixture in the game industry for a while now, but as time goes on, you'll see more of this kind of stuff.

The pressure point I suspect will be on sample implementations. Companies who take out patents must actually implement the concept, it can't be purely theoretical. There must be an application. For an example check out Nintendo's patents on certain concepts, always shortly followed up by design patents.

GameDaily BIZ: Beware the Patent Troll

Here is a glimpse of some patents of which you may want to take note.

• U.S. Pat. 6,200,138: "Game display method, moving direction, indicating method, game apparatus and drive simulating apparatus," assigned to Sega (a game display method displays a driving game which permits characters to be present in a city and can prevent cruel images of collisions with characters).
• U.S. Patent No. 6,695,694: "Game machine, game device, control method, information storage medium, game distribution device and game distribution method," assigned to Konami Co. (a control method for controlling a game machine allowing a player to enjoy stepping while listening to game music, comprises the steps of detecting whether or not the player puts their foot or feet on each of a plurality of step positions).
• U.S. Patent No. 6,729,954: "Battle method with attack power based on character group density," assigned to Koei Co. (a character group battle method which can express uneven distribution of attack power, defense strength or the like that is unevenly distributed in a group comprising a plurality of characters is provided).

Concerned? You should be.

Patent litigation is expensive with each party on average crossing the seven-digit line in trial preparation costs. However, there are steps you can take to reduce the possibility of a patent claim successfully being brought against you. For instance, you can conduct a search of existing patent filings for the critical aspects of any new product prior to development. For example the '954 patent held by Koei Co. described above covers a particular method to simulate battle. Once a search uncovers patents that may address your technology, you should evaluate whether to make adjustments to more certainly fall outside the scope of the patent. If adjustments to your game are impractical or not possible, your patent attorney can help you determine whether the patent is valid and, if so, the likelihood of success if the patent is enforced against your product. While such patent opinions are not inexpensive, they can insulate you from a later claim of willful infringement. A court may treble damages if willful infringement is found. Patent counsel can also help determine whether you should attempt to obtain a license from the patent owner. In some cases, it may be better to obtain permission from the patent owner at the development stage, rather than risk your substantial investment of time and money by developing a game under a patent cloud. Keep in mind that patents can issue after many years in the patent office and surprise the owners of well-established games.

Another way to fend off patent litigation is by obtaining your own patent. The video game industry is a booming business. However, as the sales of video games soar, the number of patents filed in this space remains flat. The industry appears not to have grasped the defensive value of patents. Patents can provide bargaining power and may create cross-licensing opportunities. Not only can you use your patent as a sword against infringers, but a patent can also act as a shield by encouraging cross-licensing programs as a resolution to infringement actions and discourage others from bringing a patent action in the first place if the plaintiff might be subject to a counter-infringement claim.

It is no longer necessary to sell video games to be profitable in the video game industry. Taking their cue from patent plaintiffs in other industries, some patent trolls generate revenue solely by enforcing their patents rather than developing and selling products. After working so hard to create an innovative product, you should carefully evaluate ways to protect yourself from patent litigation or else you could reach the GAME OVER stage before you even begin to really play.