Gaming Industry IP News: Copyright enforcement service targets Minecraft-like game, Nintendo continues to combat switch emulators, Valve secures court victory, and more

To help you stay on top of the latest intellectual property news in the gaming industry, we publish a monthly roundup of the developments we are following.

Overzealous AI Platform Targets Minecraft-like Game 

Kotaku reports that a Minecraft-like game, Allumeria, was briefly taken down as a result of a copyright claim issued by the copyright enforcement service Tracer.AI. Tracer.AI is marketed on its website as a brand protection service that uses AI to monitor the internet to remove any unlicensed copyrighted material. The developers of Allumeria state that the basis for the copyright  claim was a screenshot, included in the game’s Steam page, which resembles  the art style of Microsoft’s Minecraft. 

While automating Digital Millennium Copyright Act (DMCA) takedowns is nothing new — YouTube, for example, has used an automated system for flagging copyrighted content for over a decade — previous systems tended to look for matches to a “digital fingerprint” of a copyrighted work. This has its limits, and some users have found ways to subvert YouTube’s system. Thus, a new solution that can quickly adapt to common (and new) “workarounds” used by infringers is needed, and AI may provide that answer.

However, systems trained to detect infringement using AI may have separate concerns. As in the Allumeria example, the AI may issue claims based on simply detecting a similar art style, which is generally beyond the scope of a DMCA takedown. While the dispute appears to have been resolved relatively quickly in this case, not every false positive will be settled in such a straightforward fashion, and these AI tools have the capacity to cause significant harm to innocent parties. Additionally, such tools could also make enforcement agencies or IP owners liable for false DMCA claims if their actions constitute bad-faith attempts to enforce copyright ownership. Thus, IP owners interested in taking advantage of these tools must check how quickly the tools can remedy false positives and alleviate issues like flagging similar art styles. 

Nintendo Continues to Combat Switch Emulators 

While the “Yuzu emulator” may no longer be a concern for Nintendo, other emulators for the Nintendo Switch have risen in its place. As reported by Video Games Chronicle, Nintendo has issued a DMCA notice to GitHub, a digital code repository, requesting that the service remove existing repositories containing copies of the Yuzu emulator that were still present, as well as a dozen other Switch emulators. Nintendo continues to assert that such emulators require the use of proprietary cryptographic keys in order for the emulators to be able to access and play compatible games, which would be an alleged violation of the anti-circumvention provisions of the DMCA (e.g., 17 U.S.C. § 1201). While GitHub has complied, and some of the emulator developers have ceased operations in response, other emulator developers appear to be moving forward with their projects. Whether the emulator developers believe that they have not violated the DMCA, or that Nintendo will not take further action, is unclear. For Nintendo, though, this may devolve into an ongoing game of emulator whack-a-mole. 

Valve Secures Court Victory 

Valve, owner of the video game marketplace Steam, has won a nearly three-year legal battle against a non-practicing entity, Leigh Rothschild, over a breach of a global license agreement. Non-practicing entities have long been viewed by many as illegitimate obstacles to progress for tech companies. By definition, such entities hold patents (often by acquiring patent portfolios of defunct companies) without intending to bring the invention(s) to market in some manner. Typically, such entities will eventually assert the patent(s) against alleged infringers, generally with the goal of forcing a settlement (rather than engaging in a protracted court battle to determine if the patent is valid or infringed).  

PCGamer reports that back in 2016, Valve obtained a “perpetual, irrevocable, royalty-free, fully paid-up, worldwide license” to the entire patent portfolio owned by Rothschild (including future patents). In 2022, another corporate entity, Display Technologies, asserted one of the patents in the Rothschild portfolio against Valve. This assertion was followed by a further patent infringement claim from Rothschild in 2023. In response, Valve sued Rothschild alongside several of his companies alleging a violation of the Washington Patent Troll Prevention and Consumer Protection Acts. Following a lengthy court case, Valve won a jury trial that found that Rothschild had violated his agreements with Valve.  

Such consumer protection acts have become more common in the United States over the years to address concerns raised by non-practicing entities. Starting in the 2010s, the federal government made some efforts to curb the activities of non-practicing entities. This work included establishing the inter partes review proceeding at the USPTO as a cheaper, expedited method for a party to have a patent reviewed for validity. However, there is little federal legislation that otherwise curbs the practice. States, though, have stepped in to fill this vacuum and provide avenues for response, such as the aforementioned Washington Patent Troll Prevention Act, which is providing a noticeable benefit for tech companies like Valve who, due to their size, are often prime targets for these practices.  

Game Developers Conference Recap 

We are also happy to report that we were in attendance at this year’s Game Developers Conference (GDC). This yearly event gathers both major industry players and startups in San Francisco to share ideas and discuss the state of the video game industry. A hot topic, as it is in many vocations, was the use of generative AI (GenAI). Panels discussed how GenAI has been used, both successfully and not, in development workflows or as integrated into parts of live service games. While no presenters provided a one-size-fits-all solution to each of the issues that GenAI presents, many were eager to showcase potential benefits of the technology and new ways in which end users may interact with games. 

We also had the pleasure of attending this year’s Video Game Bar Association (VGBA) CLE and networking breakfast at GDC. During the event, panelists from both industry and private practice spoke on the challenges and impacts AI will have on IP owners. The speakers gave advice on how to counsel clients on implementation of AI tools in the workplace and how to limit liability from AI. Further, the panelists prognosticated about the degree to which potential AI regulations may affect existing tools. The varying (and sometimes opposed) perspectives of the panelists made for a lively and engaging discussion.  

Overall, we thoroughly enjoyed meeting and reconnecting with multiple individuals across the industry and are already looking forward to our next opportunity to do so.