Gaming Industry IP News: An active Nintendo and a significant copyright debate

There’s a lot happening in the video game industry as it relates to intellectual property law. We explore several developments and offer analysis of how the industry utilizes patents.

Nintendo Corner: Nintendo has recently been very active in obtaining and enforcing IP rights, so, let’s start with them.

Broad Patent Claims – Valuable or Tenuous?

Nintendo (alongside its joint venture The Pokémon Company) caused quite the uproar with a newly issued patent, U.S. Patent No. 12,403,397. The patent, titled “Storage medium, information processing system, information processing apparatus, and game processing method,” covers a method of initiating combat between a player and an in-game enemy. This reflects the combat system utilized in Pokémon: Legends Arceus and may be related to Nintendo’s ongoing lawsuit against Pocketpair, Inc. (for some of our previous coverage on this ongoing litigation, see Nintendo’s Patents were designed to take on Palworld and Palworld: Friend or Foe?). This new patent describes two methods in which a player’s avatar can direct a minion to engage in combat on the player’s behalf. Obtaining a patent narrowly tailored to Nintendo’s exact software implementation of in-game features would not be a surprise. However, some commentators (including those in the PC Gamer article cited above) have raised the argument that the USPTO failed to adequately examine the claims in light of the prior art. This argument likely stems from the apparent breadth of Nintendo’s patented claims and the fact that the USPTO did not reject the claims even once prior to allowing them (which is a relatively uncommon occurrence for U.S. patent applications). Of course, broad claim coverage can be a double-edged sword. While broad claims may make it easier to demonstrate infringement, they may also be more susceptible to invalidity challenges. While some in the game press have been critical of Nintendo’s recent IP strategy, it remains to be seen if Nintendo will ultimately assert these patents and, if so, with what degree of success.

One interesting fact about U.S. Patent No. 12,403,397 is that, unlike most of the Nintendo patents previously discussed by us and others with respect to the ongoing Palworld litigation, it does not claim priority to a previous U.S. patent application (i.e., U.S. Patent No. 12,403,397 did not result from a continuation patent application). Further, while it is true that the claims in U.S. Patent No. 12,403,397 were not rejected prior to being allowed, the claims were also not amended by Nintendo after Palworld was released into early access in January 2024. Per publicly available records from the USPTO, the claims were filed on March 1, 2023, and have not been modified at all since. Hence, there is a reasonable argument that Nintendo was interested in pursuing the claim scope obtained in U.S. Patent No. 12,403,397 before it was aware of any significant competition posed by Palworld.

Overall, while it seems fair to question the rigor with which the application was examined, it also seems fair to argue that Nintendo would have pursued the claims with or without the existence of Palworld. Couple this with the bias against patents, and other forms of IP protection, with which many commentators inherently approach the subject of gaming IP, and it’s difficult to get a true read on the validity (or lack thereof) of the issued claims without significantly more investigation. It will be interesting to see if Pocketpair (or anyone else for that matter) calls this Nintendo patent into question in a more formal manner (e.g., in U.S. district court or at the Patent Trial and Appeal Board (PTAB)).

Mods as Prior Art?

Next, PC Gamer reports that as part of the ongoing litigation in Japan between Pocketpair and Nintendo, Pocketpair has pointed to mods like “Pocket Souls” (a game mod that combines Pokémon mechanics with the game Dark Souls 3) as examples of non-Nintendo prior art that predates the patents at issue in the lawsuit. Broadly speaking, prior art can be used to limit the scope of, if not outright invalidate, patents. As such, the realm of what constitutes prior art might well be of interest to Nintendo (and its opponents). Nintendo responded to Pocketpair’s assertions by arguing that mods cannot properly constitute prior art on the basis that they do not stand alone and are dependent upon a separate underlying game. Whether or not Nintendo succeeds with this argument is yet to be seen, but if Nintendo is successful, this would certainly form a very interesting precedent (at least in Japan).

While we won’t opine on Japanese patent law, it would seem challenging to argue under U.S. prior art rules that mods do not constitute prior art. According to 35 U.S.C. § 102(a), if something was “patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention” it can be used as prior art against the claimed invention. Assuming a mod is publicly distributed (e.g., through Nexus mods), it would arguably be both “publicly used” and “otherwise available to the public,” not to mention if the mod is bought or sold (in which case it would arguably be “on sale,” as well). If courts and the USPTO agree with this assessment, mods could readily be used to invalidate patents in the U.S. and/or to prohibit an applicant from obtaining a U.S. patent in the first place. Given the vast repositories of mods available across all genres of games, mods could prove a mother lode when mining for prior art. This will certainly be an intriguing space to monitor going forward.

Unlicensed Peripherals

Kotaku reported on a settlement with video game accessory manufacturer Genki. The accessory manufacturer had apparently used leaks surrounding the then un-revealed Nintendo Switch 2 to manufacture compatible products. Genki was cited as even going so far as to display its products in tandem with a 3D printed mockup of the Switch 2 at a trade conference. Nintendo then sued Genki for trademark infringement in the Central District of California. The two parties have since reached a confidential settlement agreement that, in part, required Genki to pay Nintendo an undisclosed amount, required Genki to better advertise to customers that it was an unlicensed manufacturer, and required Genki to abstain from using any Nintendo-adjacent trademarks or marketing practices (e.g., to refrain from referring to presentations as “Genki Directs,” vis-a-vis “Nintendo Directs”).

Unlicensed Mods

Ars Technica reported that Nintendo has won its lawsuit in the Western District of Washington against Switch modder Ryan Daly. Daly was cited as having operated an online business where he sold modded Nintendo Switches, as well as the software for buyers to mod their own Switches, which were capable of running pirated games. It is reported that last year Daly had been approached by Nintendo to cease such activities, and had, in fact, agreed to do so. Daly, though, reneged on his deal. Daly now owes Nintendo $2 million and is effectively barred for life from engaging in similar modding. It is worth noting that Daly chose to represent himself and, as a result, did not fare well in making his case against the video game giant.

This success resembles Nintendo’s prior lawsuit against Gary Bowser (also in the Western District of Washington), which left Bowser owing $14 million and with a 40-month prison sentence. Both the Daly case and the Bowser case are obviously somewhat extreme, but they demonstrate the potential degrees of punishment for purveying unapproved mods and modded hardware.

Non-Nintendo News:

Protectable Aesthetics vs. Scènes à Faire

Earlier this year, Sony sued Tencent in the Northern District of California, accusing the latter of violating Sony’s copyrights and trademarks relating to its “Horizon” series of games. Tencent aims to release a new game, Light of Motiram, which bears some aesthetic similarities to Sony’s franchise. However, Tencent has now responded by claiming that Sony seeks to copyright and protect elements of Horizon that are beyond the scope of copyright. In particular, Tencent argues that Sony has attempted to copyright scènes à faire (i.e., mere tropes and other common elements of a genre that are ineligible for copyright protection). Whether or not Tencent will succeed depends upon how the court analyzes these common elements and whether the court feels Sony meaningfully evolved the baseline tropes. If this case goes to trial, which Sony has pushed for, then it could shape how gaming companies approach development for years to come.