Virtual World Law Blog

One of the primary concerns that companies have regarding patent filings is the time it takes to get a patent. Recent changes to the patent laws have created a fast track option to "whisk" your patent through the process. To use this option you must file a petition and pay a fee.

According to the PTO:

Following passage of the Leahy-Smith America Invents Act in September 2011, the United States Patent and Trademark Office (USPTO) began accepting requests for prioritized examination of patent applications through the Track I Prioritized Patent Examination Program. Simply put, Track I allows inventors and businesses, for a fee, to have their patents processed to completion in 12 months.

According to a recent update from the PTO many applicants have used the fast track process and the results are summarized as follows:

• 1,218 of the 1,231 requests for prioritized examination that have been decided were granted, which represents a 98.9% approval rate.
  
• 648 have already received a first office action, and another 34 will be mailed within days.
• On average, the PTO is getting a first action out in Track I cases just 30.7 days after approval of the petition - for a total elapsed period to first action of 66.4 days after filing of the request-petition, with the longest time to  first action being 70 days from grant of the petition.
•  23 allowances have already been mailed on Track I applications, the fastest of which was mailed just 37 days after the application was filed and 7 more allowances are currently in the pipeline.
• Of the Track I cases allowed so far, the average time to allowance is 39.2 days from petition approval.
  
• As for rejections, so far there have been three final rejections issued on Track I applications. The average time to final rejection has been 34.3 days, and the longest time to final was 50 days, both measured from approval of the Track I petition.
• The first Track I application is due to issue on Jan. 10, 2012. This application was filed Sept. 30, 2011.

Given the fast paced developments in areas such as social games, augmented reality, mobile applications and other hot sectors, it may be worth considering use of this procedure to get your patents issued more quickly.

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Virtual Justice

Rutgers University law professor Greg Lastowka looks at whether players can and should be granted legal ownership of virtual items, whether or not there's any existing legal precedent and how the virtual item landscape may change in the near future.

Italian court: Online editors not responsible for reader comments

Online commentators Wednesday welcomed a ruling by Italy's highest court that the editors of online publications cannot be held legally responsible for defamatory comments posted by their readers. In a ruling handed down at the end of October, the Court of Cassation acquitted a former online editor of L'Espresso news magazine of the crime of failing to prevent defamation committed by one of her readers.

OUII Seeks Clarity On 'Process Of Establishment' Claims

The U.S. International Trade Commission should review a recent finding in a video game patent infringement case and clarify how to determine if a domestic industry is in the process of being established in Section 337 cases, the ITC's Office of Unfair Import Investigations said in a petition publicized Tuesday.

Germany's Merck wants Facebook page back

Germany's Merck KGaA has threatened legal action after it said it lost its Facebook page apparently to rival Merck & Co. in the U.S., though it has yet to identify defendants in the case.

Virtual World Startups Seek Refuge From Patent Attacks

The developers behind the next evolution of the Internet -- linked, immersive, 3D environments -- are trying to think of ways to minimize the adverse impact of software patents on their industry.

Social media in for worse cyber attacks in 2012

Social media sites and cellphones will prove to be fertile grounds for cyber criminals to exploit globally important events in 2012 to steal personal information and data and make financial gains, cyber security firm Websense has said. The Websense document, " 2012 Cyber Security Threats," has said identity information posted by users of sites such as Facebook, Twitter or LinkedIn may prove more valuable to cybercriminals than even credit cards.

Facebook recently filed a Patent Application that Triggered a Congressional inquiry.  The patent application, which describes technology for tracking users on other websites, resulted in a letter from Reps. Edward Markey, D- Mass., and Joe Barton, R-Texas, seeking information on its current privacy practices and future intentions for tracking user activity and data. Markey and Barton co-chair the Congressional Bipartisan Privacy Caucus.

The application was published on Sept. 22, 2011 and describes a method "for tracking information about the activities of users of a social networking system while on another domain."

In the letter to facebook CEO Mark Zuckerberg, Markey and Barton sought clarification on the purpose of the patent and how Facebook intends to use it. They also inquired about how Facebook intends to integrate the location data of its users into its targeted advertising system, noting that Facebook has previously stated that it does not track people across the Internet.

It is important to note that just because Facebook has filed a patent does not necessarily mean that they have commercially implemented what the patent discloses. However,  this action is just one of the latest from Washington focusing on privacy. There seems to be a very focused effort by legislators and regulators to ensure that companies only collect user information needed for legitimate business purposes and that the information collected is not retained indefinitely. 

As with many other aspects of social media, the laws and regulatory climate are continuing to evolve.  If you have not recently reviewed your data collection, privacy practices and privacy policies, now is a good time to do so. 

Social media took a step into the real world with Pepsi's announcement of a social vending machine. According to the press release, Pepsi will launch its Social Vending System, a state-of-the-art networked unit that features full touch screen interactive vending technology, enabling consumers to better connect with PepsiCo brands right at the point of purchase. A prototype of the Social Vending System will debut at the National Automatic Merchandising Association's One Show in Chicago, April 27-29. According to the release:

Using digital technology, PepsiCo's Social Vending System enables any user to gift a friend by selecting a beverage and entering the recipient's name, mobile number and a personalized text message. There's also the option to further personalize the gift with a short video recorded right at the machine. The gift is delivered with a system code and instructions to redeem it at any PepsiCo Social Vending system. When the recipient redeems his or her gift, they're given the option of either thanking the original sender with a gift of their own or paying it forward and gifting a beverage to someone else.

A promotional video is available. 

This innovative approach to integrating social media into everyday activities and to devices and appliances is part of a growing trend that is resulting in social media going well beyond just Facebook and other internet sites.

Judging from the patent filings that we monitor in this area, there is much more to come!. Many companies are filing patents for innovative uses of social media integrated into everyday activities and to use of social media for innovative advertising and brand engagement concepts.

Many nonprofits are using social media to create awareness of their cause, raise funds, develop closer connections with existing constituents and engage with new ones.

On April 14, 2011, at The Kreeger Museum in Washington, DC, Jim Gatto delivered a compelling presentation on top social media legal issues targeted to nonprofits. His presentation explored examples of how nonprofits are using social media today, including a focus on virtual goods, virtual currencies and gamification and the associated legal issues. For a copy of his presentation, please click here.

Leveraging social media technologies and applications is critical to the success of any marketing campaign, consumer outreach program or research plan.

Social media tools can be used to shed light on your target market and consumer decision making process. These tools can also be used to engage in a two-way conversation with your consumers and allows customers to communicate your messaging on your behalf. Restaurants are ahead of the curve:  81% are currently using social media, compared with 60% in other industries. Companies in these industries cannot ignore the powerful impact of social media. Companies in this space also face a host of new legal risks and concerns from virtually all sides. The key to success is staying on top of these laws and emerging trends.

On March 22, 2011, Jim Gatto delivered an exciting webinar presentation on top social media legal issues targeted to the restaurant, food and beverage industries. For a copy of his presentation, please click RFB Legal Briefing Series.pdf.

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.

Onlive announced that it was awarded a patent that it alleges is a "fundamental cloud gaming patent." The patent, USP 7,849,491, is entitled "Apparatus and method for wireless video gaming" was filed in 2002 but just issued in December 2010 after an 8 year battle with the Patent Office. According to a company press release:

Cloud gaming is a breakthrough technology where video games run on remote servers, and users simply connect an Internet-connected device--be it a TV, PC/Mac®, iPad™, Android™ tablet, smartphone--and instantly are able to play the highest performance, new-release games with no discs, no downloads and no upgrades. OnLive's patented and patent-pending technology makes the games almost instantly responsive, providing a gaming experience comparable to the games being played locally, even though they may actually be running on servers 1000 miles away.

As often is the case with seemingly fundamental patents, there has been quite a bit of stir in the press.  Many non-patent attorneys have commented and opined on the patent which has fanned the fires. Not all of the commentary has been factually based.

A review of the file from the Patent Office reveals some interesting facts. The original patent had claims that focused mostly on a set-top box. For example, original claim 1 recited:

1. A set-top box comprising:
a slot with an interface that connects to a game card providing a platform to run a software video game, the game card outputting video game data through the interface; a unit to process the video game data for output to a display device; a wireless transceiver to receive the software video game via a wireless local area network (WLAN).

It also included a method claim as follows.

15. A method of operating a video game box comprising:
inserting a game card into a slot of the video game box;
downloading a software video game via a wireless transceiver;
running the software video game on the game card, video game data being output through an interface of the slot;
processing the video game data for output to a display device.

However, the claims that were granted by the Patent Office were different. For example, claim 1 of the issued patent recites:

1. A method of operating a video game box comprising: downloading a software video game to a storage device via a wireless transceiver, the software video game being compliant with a game platform standard; running the software video game on a game card coupled to the video game box via an interface, the game card including a processor, a memory and a graphics engine, the game card providing a game platform compliant with the game platform standard, high twitch-action video game data being output through the interface; processing the high twitch-action video game data for output to a display device; compressing the high twitch-action video game data with a latency of less than approximately 80 ms, but greater than about 5 ms; wirelessly transmitting the compressed high twitch-action video game data to a remote player via the wireless transceiver during interactive play of the software video game, the remote player being located a distance beyond a transmission distance of the wireless transceiver.

The patent includes other claims as well, which differ from those for which Onlive originally applied. In order to properly assess the scope of this (or any other) patent it is necessary to analyze the claims that were actually awarded. In many cases, awarded claims are not necessarily as broad as those a company originally pursued. Yet, commentators often overlook this, creating misconceptions about the scope of a given patent.

At least one of Onlive's competitors says it is not concerned about the patent. Dave Perry, CEO of Gaikai, reportedly says his company isn't worried about the fallout, because its service operates in a different way. Both services do game rendering on the server-side and then stream the images to the client, but Gaikai remains confident moving forward.

If you have questions about the legal scope of a patent, it is advisable to consult with a knowledgeable patent attorney. 

 

 

Motorola Mobility Inc. recently brought an action before the U.S. International Trade Commission ("ITC") against Microsoft Corp. relating to the importation of the Xbox 360 console.  At the center of the controversy is the potential infringement of five patents covering digital video coding and transmission.  The case is In re: Certain Gaming and Entertainment Consoles, Related Software and Components Thereof, case number 337-2770.

Motorola has requested that the ITC institute a Section 337 investigation with allegations that various Microsoft consoles (specifically the 4GB Xbox 360S and 250GB Xbox 360S) infringe U.S. Patent Numbers 5,319,712; 5,357,571; 6,069,896; 6,980,596; and 7,162,094.

Motorola's '712, '571 and '896 patents describe methods for protecting data streams and securing point-to-point communications in wireless communication and establishing connections between devices in a wireless peer-to-peer network.  The '596 and '094 patents describe frequency scanning paths for transform-based decoding of digital content as well as digital coding inventions that facilitate higher levels of compression of digital video content.

Motorola is seeking a permanent exclusion order to stop Microsoft from importing the allegedly infringing consoles, as well as an order barring their advertisement and warehousing.

 

In October, tech media sources, such as CNET, were reporting that Facebook had acquired part of Zenbe's intellectual property portfolio, in addition to hiring some of Zenbe's key engineers. While Zenbe will stay intact, Zenbe Mail has been shut down, and the associated intellectual property, has been acquired by Facebook.  

Zenbe is just one in a long list of recent acquisitions by the social networking giant that have focused primarily on the value of intellectual property assets. Some of those acquisitions include: Divvyshot, Hot Potato, NextStop, Drop.io and FriendFeed. This underscores to critical importance of a sound intellectual property strategy that helps protect your product development and is aligned with your overall business goals.

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.

Microsoft recently agreed to buy Canesta, which makes gesture control technology. This appears to be part of a roll up strategy by Microsoft having purchased 3DV Systems and licenses from GestureTek and PrimeSense.

A recent article in Venture Beat speculates that Microsoft may be close to having ownership of or license to most of the major patented technology relating to gesture recognition.

Microsoft is leveraging these acquistions in connection with its Kinect technology, Microsoft's motion-controlled system for Xbox 360.

The fact that Microsoft is opening its corporate coffers to acquire patent rights is powerful example of the power of patents relating to games and emerging technologies. Yet, we continue to see many companies overlook the value of patents in these areas. Comprehensive patent protection can be both an offensive tool and a defensive weapon and can create significant business value as apparently Canesta, GestureTek and PrimeSense have realized.

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.

There has been much buzz about Zynga's attempt to patent virtual currency. As is often the case with patents, there is much hype, many misconceptions and little focus on the actual facts. Here are the facts.

1. Zynga does not have a patent on virtual currency. It has applied for a patent, the application has been published but has not yet been examined. It will be some time, if ever, before a patent will issue. The published application is 2010-0227675. Here is a copy of the Zynga Application.

2. Zynga is seeking protection for various aspects of virtual currency, particularly in the context of "gambling" games. The following is an example of one of the claims:

A method, comprising:receiving, at a server, a purchase order for virtual currency from a player, wherein the purchase order was made with legal currency, and wherein the virtual currency is usable within the context of a computer-implemented game;crediting an account of the player with virtual currency, wherein the virtual currency is not redeemable for legal currency;receiving a second purchase order for a virtual object within the context of the computer-implemented game from the player, wherein the second purchase order was made with virtual currency; and debiting the account of the player based on the second purchase order.

3. This claim appears to be seeking protection using real money to buy virtual currency, precluding redemption of the virtual currency for real money but enabling it to be used to buy virtual objects in the game.

4. The patent application was filed 03-03-2010 and claims priority to a provisional application 61/158,246 filed March 6, 2009.

5. We will monitor the status of this application as it is examined and any rejections are made.

While many believe that this patent application will be rejected due to prior art, the most important take aways are these:

• MANY ASPECTS OF SOCIAL GAMES ARE POTENTIALLY PATENTABLE
  
• ZYNGA (AND OTHERS) ARE PURSUING MORE PATENTS IN THIS SPACE
• IT IS WELL KNOWN THAT THERE IS A LOT OF "BORROWING" OF IDEAS FROM COMPETITORS IN THE SOCIAL GAME SPACE
• THIS HAS BEEN FACILITATED BY LACK OF ATTENTION TO IP PROTECTION
  
• IT IS CRITICAL FOR ANYONE OPERATING IN THE SOCIAL GAMING SPACE TO DEVELOP A COMPREHENSIVE IP PROTECTION STRATEGY,  INCLUDING PATENTS, COPYRIGHTS AND TRADEMARKS

E-mail us for a free guide on patent and other IP strategies in the social game space.

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 Decison

Th US Supreme Court issued a ruling today that overruled a relatively narrow test adopted by the Court of Appeals for the Federal Circuit, known as the machine-or-transformation test. The Supreme Court found:
i) The machine-or-transformation test is not the sole test for patent eligibility under §101. The Court's precedents establish that although that test may be a useful and important clue or investigative tool, it is not the sole test for deciding whether an invention is a patent-eligible "process" under §101;
ii) Section 101 similarly precludes a reading of the term "process" that would categorically exclude business methods. The term "method" within §100(b)'s "process" definition, at least as a textual matter and before other consulting other Patent Act limitations and this Court's precedents, may include at least some methods of doing business; and
iii) because petitioners' patent application can be rejected under the Court's precedents on the unpatentability of abstract ideas, the Court need not define further what constitutes a patentable "process," beyond pointing to the definition of that term provided in §100(b) and looking to the guideposts in Benson, Flook, and Diehr. Nothing in today's opinion should be read as endorsing the Federal Circuit's past interpretations of §101. See, e.g., State Street, 49 F. 3d, at 1373. The appeals court may have thought it needed to make the machine-or-transformation test exclusive precisely because its case law had not adequately identified less extreme means of restricting business method patents. In disapproving an exclusive machine-or-transformation test, this Court by no means desires to preclude the Federal Circuit's development of other limiting criteria that further the Patent Act's purposes and are not inconsistent with its text.

This is relevant to virtual worlds in that it expands the scope of patentable subject matter that can be protected for software based processes and the many novel business models that are emerging in virtual worlds, mirror worlds, augmented reality and other social media applications.

We have prepared a more detailed advisory on this case.

On June 15, 2010, Amazon was awarded U.S. Patent No. 7,739,139 entitled "Social Networking System." Some have said this relates to fundamental aspects of "friending" and data sharing in social networks. If the patent is truly as broad as some say, what impact might this have on Facebook and other social networking sites?

Here is a copy of claim 1 to read for yourself:

1. A computer-implemented method, comprising:
receiving and storing personal data of a first user of a computer-based service, said computer-based service accessible to users over a network, said personal data specified by the first user;
providing a user interface for users to establish contact relationships with other users of the service such that each user can have one or more contacts, said user interface enabling a user to identify other users of the service, and to selectively initiate the generation of requests to establish contact relationships with the identified users;
receiving a request from a second user of the service to establish a contact relationship with the first user, said request submitted to the service over a network via said user interface;
sending a notification of the request to the first user over a network;
providing an option, in connection with said request, for the first user to grant permission for the second user to view at least some of the personal data of the first user; and
in response to the first user granting said permission, providing the second user access to at least some of the personal data of the first user via a contact information user interface of the service, such that the second user is provided access to data that would not otherwise be accessible to the second user via the service;
wherein the method, including receiving and storing the personal data, providing the user interface, receiving the request, sending the notification, providing said option, and providing the second user access, is performed by a server computer system.

As such, the '139 Patent appears to be related to invitations between users that establish a contact relationship in which an invitation also includes an option that is selectable by a receiving user to provide enhanced access to personal information of the receiving user for a requesting user.

An obvious question that people ask whenever an apparently broad patent is issued is whether the patent is valid. The Amazon patent is part of a chain of applications and patents dating back to 1997. These patents include U.S. Patent No. 7,386,464 ("the '464 Patent") entitled "Network-Based Crossing Paths Notification Service", U.S. Patent No. 7,194,419 ("the '419 Patent") entitled "Network-Based Personal Contact Manager And Associated Methods", U.S. Patent No. 6,714,916 ("the '916 Patent") entitled "Crossing Paths Notification Service", and U.S. Patent No. 6,269,369 entitled "Networked Personal Contact Manager". The chain also includes two pending U.S. patent applications that have not yet been examined substantively by the U.S. Patent and Trademark Office. These applications have been published as U.S. Patent Application Publication No. 2009/0282120 ("the '120 Publication") entitled "Social Networking System", and U.S. Patent Application Publication No. 2009/0282121 ("the '120 Publication") entitled "Social Networking System". The patents and applications in this chain generally describe many features of social interactive media that are now common. Some of these features include:automatically proposing meetings for contacts based on travel plans and/or home locations; presenting users with other users they may be interested in forming contact relationships (based, e.g., on contacts in common, affiliation with common organizations, and/or other parameters); and controlling the types of personal information to which individual contacts have access.

Many argue that "software patents" describing systems and methods such as the ones described in the Amazon family of patents are not practical because this technology moves too quickly. This family of Amazon patents demonstrates how timely filing of patent applications early on in the development of a technology can continue to bare fruit that is relevant to ongoing technological developments for over a decade after the original filing.

As yet, Amazon has not brought any law suits based on this family of patents. Pillsbury's Virtual Worlds and Video Game team has previously prepared an article that discusses some of the reasons a portfolio like this one can be valuable to a company even if they are not used to bring law suits for patent infringement, a copy of which can be found here.

In a recently filed complaint (Actus Complaint.pdf), a patent holding company has sued over a dozen major companies for alleged patent infringement. The suit alleges infringement of 4 patents that relate to virtual currency or "electronic tokens". The patents include United States Patent No. 7,328,189; 7,249,099; 7,177,838; and 7,177,838.

The defendants in the case include Discover Financial Svcs.; Electronic Arts, Inc.; Home Depot, Inc.; Lowe's Companies, Inc.; McDonald's Corp.; Moneygram Int'l, Inc.; News Corp.; Recreational Equipment, Inc.; Sears Holding Corp.; Simon Property Group; Starbucks Corp.; Target Corp.; The Sports Authority, Inc.; The TJX Companies, Inc.; The Gap, Inc.; Yum! Brands, Inc.; Zynga Game Network, Inc.; ACE Cash Express, Inc.; Brinker Int'l, Inc.; and Darden Restaurants, Inc.

Given the rapidly increasing use of virtual currency and alternative forms of micropayments, it is not surprising to see more patent litigation. But patent infringement is but one legal concern when using virtual currency. A whole host of legal issues impact virtual currency. Pillsbury's Virtual Worlds and Video Game team has prepared an advisory on legal issues with virtual currency. Virtual Currency.pdf

Worlds.com has reportedly settled its patent infringement lawsuit with NCsoft. The terms remain confidential and as of this morning neither company has a press release on its website. Worlds.com filed the suit on Christmas eve in 2008 after rattling its patent saber months earlier. To some, it is surprising the case lasted this long, due to the extensive amount of prior art that surfaced after the suit was announced.

In March 2009, Worlds.com CEO Tom Kidrin also boldly proclaimed that if the litigation was successful it would also sue other industry leaders. If Kidrin remains true to his word, we will likely know soon if they deemed the litigation successful.

In a growing trend, another patent infringement lawsuit was recently filed against nearly two dozen companies involved in virtual worlds, video games, social networks and other websites. The plaintiff, Balthaser Online, appears to provide a web application that enables users to create Adobe Flash animations and interfaces for inclusion in websites. The patent in suit is U.S. Patent Number 7,000,180, entitled "Methods, systems and processes for the design and creation of rich-media applications via the Internet."

In September 2009 the court split Balthaser Online Inc.'s patent infringement lawsuit against Friendster Inc., Nike Inc. and two dozen other defendants by sending more than 20 of them to a California federal court and keeping just four in the Texas federal court where the case originated. Click here for more recent developments on the procedural motions in the Balthaser Patent Infringement Case.

This and other cases evidence a growing need for virtual worlds, video games, social network companies to take proactive steps to prevent or deter patent infringement suits. Click here for more information about this Virtual World Patent Lawsuit and here for a prior alert on the Worlds.com patent infringement case and elements of a comprehensive IP strategy to prevent or deter patent infringement suits.