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If a patent is filed in the U.S. Patent and Trademark Office and no one is around to enforce it, does it make any money?
This somewhat zen query actually hides a serious business question about the best way to extract value from a patent. Sure, there's some prestige associated with publicly staking your claim to an idea before anyone else, but prestige doesn't pay the bills. It takes a significant investment of time and money to get a patent -- between 18 to 30 months and thousands of dollars in filing fees on average, according to PatentInfo.com. In the business world, the point of such investments is usually to make money.
In the video game world, there are two main ways to make money off a game-related patent. You can do it indirectly by using the threat of litigation to secure a monopoly on a lucrative genre or technology, holding the patent over the heads of potential competitors like a Sword of Damocles. Or you can be more active about it, bringing suits against infringers, usually resulting in favorable settlements from defendants unwilling or unable to defend their work.
But there's a much more direct way to make money from that moldy old patent – by renting it out in the form of license fees to other companies.
At least one company has been using this third method since at least 2001 to make money off a set of patents that traces its lineage back to a game from the late '80s. Look carefully at the legal fine print associated with games like Sony Online Entertainment's GripShift, Namco's Ridge Racer 6 and Sega's Outrun 2006: Coast 2 Coast and you'll find the following cryptic bit of legalese:
“US Patent Nos. 5,269,687; 5,354,202 and 5,577,913 used under license from Midway Games West Inc. All rights reserved.”
See if you can guess what these patents cover based on this easy-to-follow excerpt from patent '913.
“A first driver responsive software having a buffer, wherein the first driver responsive software is representative of a first user and responsive to said position information provided by the first user, and wherein the first driver responsive software stores in the buffer a first route of said simulated vehicle taken by the first user through said simulated environment, replays the first route on said video display, and stores at least one parameter indicative of a performance characteristic of the first route in the buffer; and
A second driver responsive software representative of a second user, wherein the second driver responsive software is responsive to said position information provided by the second user for a first time, and wherein the second driver responsive software displays a second route of said simulated vehicle taken by the second user through said simulated environment and determines at least one parameter indicative of a performance characteristic of the second route;
Wherein said first route is replayed simultaneously with said display of said second route on said video display; and
Wherein a best route through the simulated environment is selected by comparing route parameters indicative of the first and second routes.”
If you were able to condense this mouthful of a description down to “a ghost mode in a racing game,” you win a prize for succinctness that a patent lawyer could never dream of winning.
The patents Midway is licensing derive from the 1989 Atari Games arcade hit Hard Drivin', the first racing game to let players race against a translucent, ghost-like recording of their previous run. In 1993 and 1994, Hard Drivin' Project Manager Rick Moncrief and programmers Max Behensky and Stephanie Mott filed the patents cited above on behalf of Atari Games. The patents were all granted by 1996, just in time for Midway to buy up the remnants of Atari Games, including their patents, from Time Warner.
Midway spun the Atari Games division off into Midway Games West in 2000, and in 2002, the renamed company updated its claim by filing U.S. patent 6,755,654 for a “system and method of vehicle competition with enhanced ghosting features.”
Microsoft's Xbox racer Project Gotham Racing
The updated patent was granted in June of 2004, though the licensing language for the older patents first appeared in the instruction booklet for Microsoft's Project Gotham Racing in 2001. Midway “currently has about a dozen or so licenses for its ghosting patents,” according to their legal team.
“It's more of a unique [patent] than other things I've seen,” said Debbie Minardi, vice president of corporate development at Global VR. Minardi acquired one of those dozen or so ghosting patent licenses for a “Shadow Attack” mode in the arcade version of Need for Speed: Underground.