Source: https://www.internetandtechnologylaw.com/category/ip-infringement/page/2/
Timestamp: 2019-04-23 02:29:29+00:00

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Bad App – There’s a Lawsuit for That!
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.
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 again st 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.
We previously prepared an advisory on the District Court decision.
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.
fastest-selling PC game of all time.
Here is a copy of the 9th Circuit decision.
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.
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.
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.
A 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 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.
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.
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 ‘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.
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.

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