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Patents And The Video Game Industry: What You Don't Know Could Hurt You
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Patents And The Video Game Industry: What You Don't Know Could Hurt You

January 13, 2011 Article Start Previous Page 3 of 3

Divided We Stand -- What Happens If Multiple Actors Each Use Only Part Of A Patented Invention?

Video games and systems are increasingly used by multiple actors, each of whom acts independently of the others. As a result of this division of activity, there may be no single person or entity that does everything that is claimed in a patent, even if a combination of people and entities together does everything.

When such "divided infringement" occurs, it may not be possible to hold anyone responsible for infringement, in which case it is not possible to stop the combined activity or to collect a royalty for use of the patented invention. This multiple-actor environment thus creates challenges for patent owners to anticipate how their inventions may be used -- now and in the future -- and to claim their inventions in a way that provides adequate protection.

An example of a divided infringement case is BMC Resources v. Paymentech, in which the invention was an interface between a touch-tone telephone and a debit card network. This invention enabled a person to make payment transactions with only a telephone keypad.

Unfortunately for BMC, the claims of its patent required different people to perform different claimed functions: (1) a person would input information using a keypad, (2) a telecommunications company would transmit that information to a bank, and (3) a bank would process the information.

The alleged infringer, Paymentech, operated a system that forwarded payment requests from telephone users to financial institutions, but did not perform the other steps. The court held that there can be no infringement unless someone controls or directs each step of a patented method.

The court allowed that infringement cannot be avoided simply by "contracting out" part of a process, but that did not happen in BMC's case. Thus, even though the system as a whole infringed, Paymentech escaped BMC's infringement claims because it did not direct or control what users did with the keypad.

Likewise, there was no infringement in MuniAuction v. Thomson, which involved a system for performing bond auctions using an internet browser. Although Thomson operated a bond auction system, some of the claimed steps (such as entering bids) were performed by bidders. The court held that providing users with access to the system and instructing them how to use the system was not enough to prove direction and control. Again, there was no infringement -- even though all of the steps were performed -- because all steps were not performed by a single entity.

More recently, in Akamai Technologies v. Limelight Networks, the court found that Limelight did not infringe Akamai's patents involving the storage and delivery of website content. Limelight performed all of the steps of the claimed method except for the "tagging" step, which was performed by Limelight's customers in accordance with instructions provided by Limelight. The court held that the customers' actions could not be attributed to Limelight because the customers were not obligated to perform that step, either by contract or as "agents" controlled by Limelight.

This "divided infringement" problem can be significant for video game inventions that, as claimed in a patent, involve the actions of two or more people. If claims are not carefully drafted to be directed to the actions of a single entity, they may be of little practical value because they may not be infringed, even if a combination of entities uses the invention through their combined action.


While the debate may continue about the proper place of patents in the video game marketplace, recent court decisions have once again highlighted the real-world importance of patents to the industry. It is important to understand these developments to secure the potential benefits provided by patents, and to navigate around the potential pitfalls patents can present.

Note: Mark Bloomberg and Steven Baughman are members of Ropes & Gray LLP. Daniel Lee and Scott Ollivierre, who are associates at Ropes & Gray LLP, assisted them in preparing this article. The information in this article should not be construed as legal advice or a legal opinion on any specific facts or circumstances.

This information is not intended to create, and its receipt or review does not constitute, a lawyer-client relationship. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your own situation and any specific legal questions you may have.

Article Start Previous Page 3 of 3

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