The Orcish Patent: How do video game patents work, and should you be protecting your ideas?

Kostyantyn Lobov, Harbottle & Lewis

Middle Earth has unexpectedly become the backdrop for a recent debate about video game patents.

For those unaware, last month Warner Bros secured a patent for the Nemesis system, the much-loved mechanic from both Middle-earth: Shadow of Mordor and its sequel Shadow of War.

The mechanic featured a hierarchy of enemies, who would remember the player, hold grudges and carry long-term injuries, before ultimately being replaced – either once killed by the player, or deposed due to the usual Orcish in-fighting.

The patent, which came into effect on February 23rd, protects “Nemesis characters, nemesis forts, social vendettas and followers in computer games.” Essentially encompassing the core of the hugely popular mechanic.

Once the news broke, the reaction within games industry Twitter was particularly damning – with many bemoaning the patent stifling creativity in the industry, some even going so far as to call Warner Bros hypocritical for the move.

It’s hard not to be somewhat sympathetic to these arguments. The Shadow of Mordor series benefitted hugely from work that came before it – many of its mechanics closely resemble those of popular franchises such as Assassin’s Creed, and the Batman: Arkham series. To deny other developers the right to iterate upon the Nemesis system does, on its face, seem antithetical to the creative stepping stones that the series owes so much to.

However, it needs to be said that the Nemesis system situation is perhaps the first time many in the wider games industry has had to think about game patents. It might sound unreasonable when discussed in the nuance-averse Twittersphere, but these conversations require a wider context.

Patents are of course, not in and of themselves a bad thing, but are often a vital part of doing business. Indeed, many complaints were not about Warner Bros simply acquiring a patent, but that they felt the patent in question was far too broad. Which prompts the question:

How unique or specific does a game mechanic have to be in order to qualify for a patent?

“Very,” says Kostyantyn Lobov, of Harbottle & Lewis. “In order to successfully apply for a patent, two of the things you have to show are that your invention is novel and has an inventive step. If a similar invention already exists, or has been described in enough detail in a textbook or article, it could make the invention unpatentable.

“Unlike other registered IP rights, patents go through a fairly rigorous examination during the application process. After the application is filed, the relevant patent office will carry out a search of the ‘prior art’ (i.e. things that are already out there, like existing patents and other publications) and will list things it finds which it considers could be problematic. The patentee then has to overcome those challenges, either by arguing that they are not relevant, or by tweaking the scope of its patent application. If it can’t, the application may need to be abandoned.”

With this in mind, acquiring a patent for the Nemesis system does not seem particularly unfair. The reason it attracted so much attention in the first place was that it was unlike anything we’d seen in the industry before. With a process this strict (the Nemesis system patent itself was years in the making), it would be reasonable to conclude that the mechanic is at least unique enough to be worthy of legal protection.

THE SPECIFICS

Calum Smyth, Partner at Wiggin

But that’s not to say it cannot be criticised for being too broad, of preventing future mechanics that are inspired by the Nemesis system, and not simply recreating it wholesale.

So are these types of patents usually hyper specific, so other developers can create similar but non-infringing technology, or can they be used more broadly to block the use of an entire technical field?

“It is a mixture,” says Calum Smyth, partner at Wiggin. “With a nascent technology it is generally easier to obtain broad protection as there is very little pre-existing that is similar in operation. That makes the test for novelty and inventive step easier to satisfy in respect of the fundamental aspects of the technology, aspects which will need to be used by a third party irrespective of the specific application.

“It can be difficult to avoid such third party patent risks and developers may need a wholesale change in technical direction or to take a licence from the owner (if possible). In established technologies, patents may be granted for more incremental developments which, though inventive, are narrower in scope (e.g. for a specific application or method of use). The more specific the scope of the patent claim, the easier it can be for a developer to alter the work product to avoid infringement without materially impacting functionality.”

Still, as previously discussed, any aspect of a game must meet specific criteria in order to qualify for a patent. The broader the patent, the more likely it is to be dismissed. Though the simplicity of an invention can be a benefit here – something as basic as the Lego brick was the subject of several patents in the 1960s.

It’s worth noting that these patents aren’t particularly uncommon in the industry – though it’s certainly more common to see patents for hardware (Nintendo once patented its D-Pad design, or ‘multi-directional switch’), or back-end elements such as graphic engines and improved ways of handling multiplayer matchmaking.

“One of the reasons for this is that inventions have to be technical in nature,” says Harbottle & Lewis’ Lobov, “and some types of invention are excluded altogether, ‘rules or methods for performing a mental act or playing a game’ being one such exclusion.”

A COMMON LAW?

Still, Shadow of Mordor is hardly the first gaming mechanic to receive a patent. For instance, the Mass Effect dialogue wheel was the subject of a patent, as was the loading screen mini-game (much to Twitter’s chagrin).

“Big tech companies that also operate computer game divisions have vast patent portfolios,” says Wiggin’s Smyth, “and no doubt some of those inventions will underpin both game and non-game related technology. But pureplay computer games companies have also been actively pursuing patents.”

Japanese companies tend to have the largest patent portfolios – with Nintendo in particular holding a large number of patents. Though as a hardware manufacturer, this is perhaps to be expected. However, even outside of Japan, the use of patents in the industry has been steadily increasing over the years (see chart below).

These patents are territorial, too. US patents are only effective in the US, for instance. While Harbottle & Lewis’ Lobov points out that it is fairly common for identical patent applications to be filed in several countries at once, US-based companies tend to only protect their inventions in their home countries. Meaning that companies are free to use this technology outside of the US.

Of course, the realities of a global market prevent this.

“Game publishers will no doubt want to release the same game unaltered in all markets simultaneously,” says Wiggin’s Smyth, “and creating a US version that avoids patented technology that supports a game mechanic feature may be commercially impractical and technically unfeasible (for example in relation to MMO games).

“Nonetheless, there are risks in having such limited, country-specific protection for a technology that is sold and used globally.”

ENFORCEMENT

So now we know how to qualify for a patent, how common they are and where they apply – but how often are they enforced? With so many patents out there, it seems a potential minefield for developers and publishers, but we don’t tend to hear stories about lawsuits over game mechanics. “We don’t see a lot of litigation relating to gameplay patents specifically,”
agrees Harbottle & Lewis’ Lobov, “which is probably in part because there are fewer of them than patents of other types. However, that doesn’t mean there are never any disputes. It’s worth bearing in mind that the only cases which you hear about are the ones where legal proceedings have been started.

“There could, in theory, be cease and desist letters and other legal correspondence happening in the background. If a dispute is settled before legal proceedings are started, you will most likely never hear about it.”

Most litigation in video games is not between game companies, however. The majority of legal proceedings (merely threatened or otherwise) are brought by companies who acquire these patents, but do not create games themselves. These are known as ‘non-practising entities’ (NPEs), and are prevalent in the United States. NPEs can pose a particular threat to game companies, as they’re invulnerable to an infringement counterclaim – as they don’t produce anything.

Following a 2014 US supreme court decision (Alice v CLS Bank), as well as cross-industry efforts to keep patent assets away from NPEs, the threat they pose has waned in recent years (see chart below).

“However, the risk continues to present problems for the industry as many companies remain willing to sell their patent assets to NPEs,” notes Wiggin’s Smyth.

Additionally, we need to remember that these patents aren’t just a weapon to be used. They can be used defensively (to retaliate if sued by a rival company), or even as part of collaborative efforts.

“There could be several different reasons for applying for a patent,” says Harbottle & Lewis’ Lobov. “Enforcement is one of them. Patents can also be exploited through licensing, act as a deterrent, and be used to make a company more attractive to investors.”

“Patents can provide value in ways other than enforcement or the threat of enforcement,” adds Wiggin’s Smyth. “For example, they can form the centrepiece of joint development or technical collaboration projects, and may also be used by their owners in order to benefit from jurisdictional tax-related rules designed to promote innovation (e.g. the Patent Box regime in the UK).”

SCROLL OF PROTECTION

With all of that said, existing patents can absolutely pose a risk to developers. With so many patents out there, there’s certainly the potential for accidental infringement if you’re not careful.

“Patents are a true monopoly right,” says Harbottle & Lewis’ Lobov, “meaning you can infringe one without even realising it exists (unlike copyright, for example, which requires an act of copying).

“That said, there are literally millions of patents out there, and searching for them is not very straightforward. Even if you do find a patent which looks like it may be relevant, unless you have experience of reading patents, they can be difficult to understand. They are often written in obscure and highly technical language, using long sentences with multiple sub-clauses. This is because patent attorneys have to be extremely precise about the scope of the invention which is being claimed.

“From a practical perspective, if a game is doing something which has been done many times before, the chances are that it will be low risk. If a developer suspects that what they are doing could be the subject of a patent, or knows of a specific patent which could be problematic, the safest course of action is to speak to an advisor, who can help assess the risk and carry out a freedom to operate search if necessary.”

Patent litigation may not be as common in the games industry as in other industries, but developers still need to be aware of the risks.

“Strategic and commercial motivations over whether to enforce a patent or not can change quickly,” says Wiggin’s Smyth, “and so it makes sense to keep an eye on risks presented by third party assets if possible.

“If you become aware of a problematic competitor patent during the product development design phase, it may be possible to avoid infringement by ‘designing around’ the patent claims, depending on the specificity of the claimed invention. If you are collaborating with another company, you should think carefully up front about how to contractually allocate the risk of any resulting work product being the subject of third party patent enforcement proceedings.”

Additionally, developers should be aware of the need to protect their own creations. Again, these patents can be used defensively, and it’s better to be prepared ahead of time.

“As regards obtaining patent protection,” Smyth continues, “the more difficult the problem that needs solving and the more technical the solution needed to solve it, the more you should consider filing for patent protection. Should a material dispute arise with competitors, a strong patent portfolio can only help to strengthen your bargaining position, and if you don’t have one, it will be too late to rectify. But there is a balance to be struck; building a patent estate can take effort, time and money.

“Much like in other sectors, computer games companies should look to develop an appropriate patent strategy that reflects their industry, their technical innovation and their resources. The strategy should account not only for the risks of litigation, but also the opportunities to leverage patent value through licensing (e.g. in technical collaborations) and in other commercial contexts (e.g. to benefit from specific tax rules).”

So does this mean the Shadow of Mordor patent was fair? Look, I’m not going to tell Twitter what to think. I’m just disappointed we may now never see the Super Mario nemesis system.

About Chris Wallace

Chris is MCV/DEVELOP's staff writer, joining the team after graduating from Cardiff University with a Master's degree in Magazine Journalism. He can regrettably be found on Twitter at @wallacec42, where he mostly explores his obsession with the Life is Strange series, for which he refuses to apologise.

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