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Game Is Not Over Yet: Software Patents and Their Impact on Video Game Industry in Europe

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Game Is Not Over Yet: Software Patents and Their Impact on Video Game Industry in Europe Game Is Not Over Yet: Software Patents and Their Impact on Video Game Industry in Europe Huang Yan∗ Abstract: The paper conducts a review of patent protection of video game software, such as computer game engine, game methods and game concept. The paper compares the software patent protection schemes between the US and the EU, and points out that strong software patent protection for video games may intrude virtual world and stifle innovation. The paper believes that property rights in virtual worlds are really about social relations. Only when Europe has recognized the missions of patent protection and the features of the video game business, can it make its own satisfied legal arrangements of the social relations in the real-world, and achieve the goals set by itself in the political and cultural strategies. I. Introduction A video game is usually defined as “an electronic or computerized game played by manipulating images on a video display or television screen.”1 The term “video games” includes console games, PC offline games, online games, and wireless games. There is a traditional perception that compared to other sectors of economy video games are a matter of enlightenment, which is very marginal in terms of economic contribution. However, the Study on the Economy of Culture in Europe suggests ∗ PhD candidate at the Law Faculty, National University of Singapore 1 European Commission, Study on the Economy of Culture in Europe, October 2006 http://ec.europa.eu/culture/eac/sources_info/studies/economy_en.html (Last visited Mar 12th, 2008) 1 otherwise. According to the study carried out by the European Commission in October 2006, the revenues of the video game industry as a whole on a global level are reported to have doubled between 1997 and 2003, reaching € 15.3 billion in 2003; at European level, the turnover of the video game sector increased from €2.6 billion in 1997 to €5.25 billion in 2003. The industry’s revenues are expected to grow by 16.5% a year until 2009.2 Nowadays video game industry plays a pivotal role in the international and regional economic arena. The three largest producers of and markets for computer and video games are North America (US and Canada), Japan and the United Kingdom. As the Study on the Economy of Culture in Europe shows, although the video game industry is currently dominated by the US and Japanese companies, European companies possess some significant market shares. Four European companies are listed on the top-20 video game publishing companies in 2004, including Ubi Soft Entertainment S.A., Infogrames Entertainment, Vivendi Universal Publishing and Eidos PLC.3 In May, 2007, the European Commission proposed the First-Ever European Strategy for Culture, which highlights the pressing needs for the creative industries. In January, 2008, the Commission adopted Creative Content Online in Europe’s Single Market to strengthen the competitiveness of Europe’s music, film and games industry and to support a truly single market for creative online content, while at the same time 4 ensuring a robust protection of intellectual property rights. 2 Id. 3 Id. 4 Commission Seeks Stronger Single Market for Online Creative Content, EU Focus 2008, 225, 23-24 2 Evolved from the early human-computer interaction like the “Tennis for two” and the “Spacewar”, today’s video games see a rapid boom in online communities which require highly sophisticated computer programs. While the video game developers and publishers are often aware of the patent protection of hardware devices, most of them have not yet realized the effects brought by the patent protection of software. Such ignorance of intellectual property rights increases the potential for litigation, which may result in financial loss and even significant business disruption. Although there is a fear that the patentability of software will stifle the innovation in video game development, the European Patent Office (EPO) and national patent offices continue to reward video game developers a limited monopoly for the time and energy they have devoted. Hence, the video game developers and publishers must not only learn the competitive challenges within the industry, but also be fully aware of the changing legal environment. This paper first conducts a brief review of intellectual property rights in video games, noting that there is a global trend towards patent protection of game software. The paper further cites several contents of software patent protection in video games, such as computer game engine, game methods and processes as well as game concepts. The paper then goes on to study the software patent protection approaches in Europe and also makes a comparison with the approaches in the United States. It is pointed out that strong software patent protection in video game industry may intrude virtual spaces and stifle innovation, resulting in unnecessary costs in analyzing, litigating and licensing patents. This paper believes that property rights in virtual worlds are really 3 about social relations. For Europe to encourage the prosperity of creative industries, it is of foremost importance to realize the missions of the patent system and the features of the video game business, only then can Europe make its own satisfied legal arrangements of the social and economic relations in the real-world, and only then can Europe achieve the goals set by itself in the political and cultural strategies. II. A review of video game patents 1. From copyright to patent protection Video games are among the most complex forms of application of computer technology. A contemporary computer game may include advanced physics, artificial intelligence, 3D graphics, digitized sound, an original musical score, complex strategy and may use several input devices (such as mice, keyboards, gamepads and joysticks). Video games are a relatively new type of software product and as such the manner in which they are designed and developed is still evolving.5 Programming is required throughout all phases of development except the early stage of game design. Most games are written with custom code based on the C programming language. Code is the set of computer language instructions that controls every aspect of the game. Popular game development language are C++, Java , C#, Ada and Python. Computer programs are defined by the World Intellectual Property Organization (WIPO) as being: as: “a set of instructions capable, when incorporated in a machine readable medium, of causing a machine having information processing capabilities to 5 M.J. Taylor, M. Baskett and S.J. G.D. Wade Hughes, Using soft systems methodology for computer game design, Systems Research and Behavioral Science 24.3 (May-June 2007), P359 4 indicate, perform or achieve a particular function, task or result.”6 Considered as “literal expressions”, computer programs fit comfortably into the copyright system. A computer program will be accorded copyright protection where the form of expression is original in the sense of being the author’s own intellectual creation.7 However, copyright does not protect “ideas” behind the computer programs, which often are a core part of their commercial value. Moreover, computer software can perform technical functions through creative expression. Patent can just be used to prevent competitors from making commercial use of the underlying functionality of the programs. For example, in the Atari Games Corp. v. Nintendo of America, Inc. case, Atari copied the source code of Nintendo’s 10NES program and successfully created its own “Rabbit” program to mimic the interactions of the Nintendo games / console. In this lawsuit, Nintendo filed for copyright infringement of the 10NES security program and infringement of U.S. Patent No. 4,799,635 (“the ‘635 patent”). The Court noted that while data notes and variable silences might be copyrightable within a musical composition, they are not copyrightable as a means to enable data communication. Nintendo, largely unable to avail itself of copyright protection for its 10NES data stream sequences, also relied on a traditional patent infringement claim. Nintendo’s ‘635 patent covers the 10NES program:“[R]esetting said main data processor unit unless the execution of said first authenticating program by said first processor device 6 S.1 (i), WIPO Model provisions on the protection of computer software, Geneva (1978). 7 Fernando Piera, IPR Protection of Computer Programs and Computer Software in the Global Market, 12 Currents Int'l Trade L.J. 15, Summer, 2003 5 exhibits a predetermined relationship to the execution of said second authenticating program by said second processor device.” The Court found that Atari’s liability may be based on contributory infringement. Accordingly, the Court granted Nintendo’s summary judgment motion for patent infringement on this claim. “Patents are inter-industry mechanisms for creating value. Copyright is creating protection between the industry and the channel or end customers.”8 In addition, the penalties for patent infringement are generally much harsher than for copyright infringement. Hence, patents are increasingly used as potent weapons against competitors in software industry. 2. Current contents for software patent protection in video games (1) A game engine is the core software component of a computer video game or other interactive application with real-time graphics integrated rendering, collision detection, AI, visibility, networking and file system management into one complete engine. The popular game engines include Torque Game Engine, Truevision3D, C4 Engine, 3D Game Studio, and Unreal Engine, etc. In modern days, there are even entire game engines that handle most of the tasks of game programming and only require coding game logic. Developers seek patent protection on game engines, such as “Multi-protocol game engine” (US Patent 20070050838) and “Universal game engine for a game network and method therefor” (US Patent 6428413). (2) A method or process performed by a game can also be patented, as instructed by 8 David S.
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