Zynga’s Patent Infringement Under Alice Test

Justin Farooq

Online game developer Zynga Inc. survived a patent infringement lawsuit asserted by numerous technology companies concerning its online social casino gaming platform on October 13, 2016 when a federal judge in Nevada held that the alleged patents were invalid according to the U.S. Supreme Court’s decision in Alice Corporation PTF. LTD. v. CLS Bank International et al.[1] The U.S. Supreme Court held in Alice that abstract ideas executed on a computer are not patent eligible.[2]  The court denied Alice Corp.’s patents on computerized trading methods and created a two part test for figuring out if a patent is eligible for protection under Section 101 of the Patent Act.[3]  First, the court must assess whether the subject matter at issue is aimed at an abstract idea.[4]  The subsequent inquiry is whether the assertions comprise of something “significantly more” than the abstract idea.[5]  If so, they are patent eligible.

Plaintiffs in this case are CG Technology Development LLC, Interactive Games Limited and Interactive Games LLC.[6]  According to the Nevada judge, “The only limitations on the abstract idea are that it involves a server and a remote processor — components which are extraordinarily commonplace in online gaming. These physical devices are used to implement the abstract idea.”[7]  The court said the claim is focused on the abstract idea of using information to decide the most effective tactics for a player’s ensuing move and that this idea of “risk hedging” is not patentable subject matter.[8]

Many attorneys say numerous significant questions regarding how the test will be implemented require much more guidance from Federal Circuits.[9]  As more courts litigate the issue we will see how courts apply, direct and guide the two step rule from Alice.  

 

[1] Suevon Lee, Zynga Escapes IP Suit Over Casino Gaming Suite Under Alice, Law360 (Oct. 13, 2016, 4:28 PM), https://www.law360.com/technology/articles/851207/zynga-escapes-ip-suit-over-casino-gaming-suite-under-alice.

[2] Id.

[3] Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2358, 189 L. Ed. 2d 296 (2014).

[4] Id.

[5] Id.

[6] Lee, supra note 1.

[7] Id.

[8] Id.

[9] Ryan Davis, 5 Burning Questions About Patent-Eligibility Post-Alice, Law360 (April 3, 2015, 3:07 PM), http://www.law360.com/articles/638936/5-burning-questions-about-patent-eligibility-post-alice.

 

Teal Johnson

This Samsung and Apple dispute is the first design patent case to make it to the Supreme Court in over 120 years.  Samsung Electronics Co. Ltd. appealed a jury verdict that awarded Apple Inc. $399 million.  The patents-in-suit are U.S. Patent Numbers D593,087, D604,305 and D618,677.  The case is Samsung Electronics Co. Ltd. et al. v. Apple Inc., case number 15-77, in the Supreme Court.

At oral arguments in the appeal some of the supreme court justices questioned the decisions by the district court and the Federal Circuit to set damages as Samsung’s total profits from the accused phones.  Several justices suggested that they did not believe Apple should be awarded the total profits from Samsung’s smartphones that infringe Apple’s design patents.

The design patent statute states that anyone who uses a patented design to an “article of manufacture” or sells an article to which the design has been applied “shall be liable to the owner to the extent of his total profit.”  The arguments are focused on how the “article of manufacture” should be determined.

The justices appear open to Samsung’s argument that damages should have been the profits derived from the parts found to infringe Apple’s design patents instead of all the profits from the smartphones.  The design patents cover the face of the iPhone and the layout of the home screen icons.  Chief Justice John Roberts believes that the design patent is the exterior case of the phone and not the chips and wires.  He stated that it seemed to him that the profits awarded should not be based on the entire price of the phone.

Google Inc. submitted an amicus brief in support of Samsung.  The brief laid out a standard which said that only profit derived from the patented design should be awarded.  Justice Stephen Breyer suggested that this was a workable standard.

The jury was instructed that if Samsung was found to infringe Apple’s design patent, they could award Apple the total profit attributable to Samsung’s infringing products, not just the parts covered by the design patent.  The Federal Circuit court affirmed that approach.

The Supreme Court asked how damages could be measured if the damages were deemed to be profits from only some parts of a product.  Additionally, what evidence and expert testimony would be needed was questioned.  Justice Anthony Kennedy voiced concern of how to instruct the jury on damage measurement under that standard.  He said, “If I were the juror, I simply wouldn’t know what to do under [that] test.”

Samsung’s attorney, Kathleen Sullivan responded that courts could first identify the relevant article of manufacture, which she said in this case should be the front fact of the phone and the icons, and then get evidence and expert testimony on how much those features contributed to the infringers profits.  Apple disagrees arguing that there was no basis for overturning the jury’s damages award because Samsung never argued that the article of manufacture should be anything other than the phones themselves.  There was not a suggestion of what parts that would be considered the article of manufacture under the new test.

Those in attendance of the argument said the justices appeared interested in describing a new standard for design patent damages instead of talking about the damage award potentially being correct.  Several justices appeared to approve of Samsung’s proposal that the courts must first determine the article of manufacture and then how much that contributed to the profit.  When the decisions comes out, it will likely have some type of that two-part test.

See the original Law 360 article here.

Lishayne King

At a time when privacy and information concerns are high, it appears that yet another government official is under investigation to determine “whether he stole and disclosed highly classified computer code developed by the [NSA] to hack into the networks of foreign governments.” On August 27th, an F.B.I. raid on contractor Harold T. Martin III’s home uncovered a large number of documents, computers, and other electronic devices, which contained a considerable amount of confidential information. The authorities have not, however, determined how Mr. Martin used the information.

A complaint filed by the Justice Department against Mr. Martin remained sealed until the New York Times “notified the government it intended to publish a story about Mr. Martin.” In a statement issued by Martin’s lawyers, they insisted that Mr. Martin “loves his family and his country,” and did not plan to be disloyal to his country.

The Obama administration’s procedures have become tighter since Mr. Snowden’s leaks, argued the press secretary for the White House, Josh Earnest. He described a task force that has been created to address these recent disclosures. Mr. Earnest further cited that the number of employees with access to confidential information has decreased by 17% over the past few years.

However, another official of the Obama administration stated that investigators believed there was a possibility that Mr. Martin started taking information before Mr. Snowden’s actions were publicized. Further, changes established after Mr. Snowden’s disclosures may not have deterred Mr. Martin.

It appears that Mr. Martin does not match the profile of an “insider threat,” stated one official of the Obama administration. However, further investigation is necessary to determine his motives. The company, Booz Allen Hamilton, that employed Mr. Martin has been cooperative with the FBI and subsequently discharged him after discovering his arrest.

See original New York Times article here: Jo Becker, Adam Goldman, Michael S. Schmidt, and Matt Apuzzo, N.S.A. Contractor Arrested in Possible New Theft of Secrets, New York Times (Oct. 5, 2016), http://www.nytimes.com/2016/10/06/us/nsa-leak-booz-allen-hamilton.html?ref=technology.

Jeffrey Cullen

A recent issue in cyber security is China’s efforts to hack and steal intellectual property from the United States. Thousands of Chinese hackers have gained the ability to steal intellectual property from United States industries. This information is then used to produce identical products and sell those products at low rates that companies are unable compete with.[1] According to Blackwell’s article, the U.S. International Trade Commission report cited potential losses of over $300 billion due to these cyber hacks.[2] It is vitally important that this issue be addressed. The cyber theft of intellectual property is harming our economy and is detrimental to our national defense. “If China can steal from one company and flood US markets with their cut rate goods, then thousands of US businesses, along with potentially millions of jobs, are at risk.”[3] Our intellectual property is very vulnerable. If the country’s leaders in manufacturing are unable to protect their data and trade secrets from cyber attacks, where does that leave the individual in society?

 

[1] Ken Blackwell, China’s cyber and trade war has US firms, national security in crosshairs, The Hill (Oct. 6, 2016), http://thehill.com/blogs/pundits-blog/defense/299663-chinas-cyber-and-trade-war-has-us-firms-in-crosshairs

[2] Blackwell, supra note 1.

[3] Id.

Nicholas Fedorka

Russian hackers have been accused by the United States for carrying out a series of attacks against political organizations.  United States officials claim it’s an attempt “to interfere with the US election.”  Specifically, Democratic nominee Hillary Clinton claims her party had been targeted.   This is all happening at a time when Russia’s relations with the West is at its lowest point since the end of the Cold War.  

Defense Secretary Ash Carter has warned Russia against “interfering with the democratic processes.”  Recently, Germany’s domestic agency (BfV) reported what it believed was a russian attempt to sabotage Germany’s political internet infrastructure.  Russia’s Prime Minister Vladimir Putin states that “Russia never does this at a state level.”  Foreign Minister Sergei Lavrov described the allegations as nonsense, while ministry spokeswoman Maria Zakharov said “not once” had America provided facts to support such claims.  

Teal Johnson

Yahoo had a system intended for scanning emails of child pornography and spam which has helped Yahoo search messages for a computer “signature” tied to communications of a state-sponsored terrorist organization because of a secret court order.  Last year a judge of the Foreign Intelligence Surveillance Court barred Yahoo from disclosing the matter.  The court order involved the systematic scanning of all Yahoo users’ emails rather than individual accounts.

This issue touches on and expands past conflicts between Silicon Valley companies and the United States government.  Investigators found out that agents of the foreign terrorist organization were communicating using Yahoo’s email service using the unique identifier or signature.  They did not know which accounts were using this signature, however.  The officials did not name the terrorist organization.

This use of unusual surveillance has sparked outrage among privacy and technology specialists.  Suzanne Philion, a Yahoo spokeswoman, said the company “narrowly interprets every government request for user data to minimize disclosure.  The mail scanning described in the article does not exist on our systems.”

Tech companies complain that such orders make it impossible for them to explain to customers what data they do and do not turn over.  Twitter and Microsoft have both sued the Justice Department over this gag order practice and both the cases are pending.

See original New York Times article here.

Samantha Cirillo

In California, the law on prostitution is beginning to shift away from prosecuting the children and young women that may have been forced into the industry. This is largely a result of organizations such as “Saving Innocence” and “Rights4Girls”, and their efforts to show that minors are victims, not criminals. [1]

On Monday, August 26, 2016, Governor Jerry Brown addressed these widespread concerns by signing several bills that decriminalize prostitution and provide protections and services for minor victims. [2] One of the bills, Senate Bill 1322, was created to make “the crimes of solicitation and loitering with intent to commit prostitution misdemeanors inapplicable to children younger than 18”. [3] The bill also allows law enforcement to take children into temporary custody if leaving them unattended would involve a threat to their safety. [4]

Another bill passed will make it easier for minors to share their painful experiences by allowing them to testify through closed-circuit televisions outside of the courtroom. [5]

[1] Mike McPhate, California Today: A Shift in the Child Sex Trafficking Trade, NY T???? (Oct. 3, 2016) http://www.nytimes.com/2016/10/03/us/california-today-child-sex-trafficking.html.

[2] Jazmine Ulloa, California decriminalizes prostitution for minors after Gov. Jerry Brown signs bills to aid trafficking victims, L?? A?????? T???? (Sept. 26, 2016) http://www.latimes.com/politics/essential/la-pol-sac-essential-politics-updates-california-decriminalizes-prostitution-1474918476-htmlstory.html.

[3] Id.

[4] Id.

[5] Id.

Lindsey Marie Round

It is that time of the year again. Over the past week and this coming week, the Nobel Prize recipients have been or will be announced in anticipation of the Nobel Prize Awards ceremony in December. It is always exciting to hear will be receiving the awards each year. On Wednesday, October 3, 2016, the recipients of the Nobel Prize for Chemistry were announced.[1] This year, the award will be shared amongst three individuals, Jean-Pierre Sauvage, J. Fraser Stoddart, and Bernard L. Feringa.[2] These three individuals have forged the way in the field of nanomachines made of moving molecules.[3] They follow the path of Dr. Richard Feynman, who was also a Nobel Laureate, who looked at nanotechnology.[4] While these machines may not be large, in fact, they are quite the opposite measuring the size of approximately one-thousandth the width of a single strand of hair, they are revolutionary in the science world.[5] While they are still in the beginning stages, these machines show great potential. These three men have contributed much to the future of this field and are most deserving of this prestigious award.

 

[1] Kenneth Chang and Sewell Chan, 3 Makers of World’s Smallest Machines Awarded Nobel Prize in Chemistry, N.Y. Times (Oct 5, 2016), http://www.nytimes.com/2016/10/06/science/nobel-prize-chemistry.html

[2] Id.

[3] Id.

[4] Id.

[5] Id.

Cecilia Santostefano

Charges against Harold Martin, a contractor with the National Security Agency became unsealed on Wednesday, October 5, 2016. The fifty-one-year-old from Maryland has been charged with theft of government property and the unauthorized removal and retention of classified materials.[1] Materials include a highly classified code generated to break into the electronic systems of agency adversaries, including Russia, China, Iran, and North Korea.[2]

Officials often rely on psychological and behavioral profiles to uncover possible “insider threats.”[3] For example, Edward Snowden was driven by political motives to protect the rights of Americans when he spoke of government monitoring programs to journalists.[4] This, however, is not the case for Harold Martin. Officials say Martin does not fit the usual profile of an insider threat.[5] His motive, among many other aspects of the investigation, is still unclear. There is currently a large wave of secrecy surrounding the proceedings. Regardless, the N.S.A. will have to take remedial measures, as it did following Snowden’s disclosures a few years back, in an era where people are speaking more openly about the agency and its practices.[6]

 

[1] Ian Duncan, Federal contractor from Glen Burnie charged with stealing top secret information, The Baltimore Sun, (Oct. 5, 2016, 2:44 PM), http://www.baltimoresun.com/business/federal-workplace/bs-md-contract-arrest-secrets-20161005-story.html.

[2] Jo Becker, Adam Goldman, Michael S. Schmidt, and Matt Apuzzo, N.S.A. Contractor Arrested in Possible New Theft of Secrets, NY Times, (Oct. 5, 2015), http://www.nytimes.com/2016/10/06/us/nsa-leak-booz-allen-hamilton.html?ref=technology&_r=0.

[3] See Becker, supra note 2.

[4] Id.

[5] Id.

[6] See id.