A Deeper Look at the Worlds vs. NCsoft Lawsuit

| Oh the Games You'll Play

There's an old curse, purported to be Chinese in origin: "May you live in interesting times." For senior executives at MMORPG developer NCsoft, it was an interesting holiday season indeed: As the company was preparing to release the Mac version of its MMO City of Heroes, it was slapped with a lawsuit by Worlds.com. In essence, Worlds claims it has a patent ("System and method for enabling users to interact in a virtual space," 7,181,690 ('690)) on the technology underlying MMOs, a patent that was granted in 2007 but is actually a continuation of a 1996 patent, "Scalable virtual world chat client-server system" (6,219,045 ('045)). All of NCsoft's MMOs (it publishes several of them) were named in the filing.

Unfortunately, trying to get to the bottom of the lawsuit's merits is much like trying to figure out the true origins of that "May you live in interesting times" curse. As M. Scott Boone, associate professor of law at Appalachian School of Law, told me: "The Patent Office was ill-prepared to deal with the onslaught of software, internet, and business method patents filed during [the mid-1990s]. Many would even say that they still aren't prepared to deal with them now.  The PTO simply did not have the infrastructure and expertise to find all the proper prior art needed to determine whether patent applications in this area were novel and nonobvious.

"The PTO and its patent examiners were used to having access to a huge database of decades and decades of prior patents which could be used to test patent applications," he continued. "That was not the case for all of these new areas for patenting. Thus, even if 'virtual worlds' as claimed by Worlds.com were in use and known years prior to the filing of the patent applications, the patent examiner might not have been able to locate a source to use as prior art."

So, as he told me: "The biggest problem with the lawsuit will clearly be the validity of the '690 patent." If Worlds can untangle the morass of technical minutiae at the heart of their case (one of the patent's claims, for example is a "crowd control" function, which Mr. Boone said "may have been what Worlds.com used to convince the patent examiner that their invention was patentable"), NCsoft "could face fairly steep damages, particularly if NCsoft's patent infringement was willful," he said. "In that instance, a court can triple the damages and tack on attorney's fees. Additionally, NCsoft could face an injunction forcing them to stop using the technology in the United States."

And with MMOs becoming big moneymakers, particularly for a company like Blizzard and their wildly successful World of Warcraft game, the stage could be set for Worlds to go after other developers next. "Most people seem to be convinced that Worlds.com's choice of NCSoft is much more strategic than they are admitting publicly," Mr. Boone acknowledged. "They may also think that NCSoft is more likely to settle than Blizzard.  It is not uncommon for patent litigants to try to get as many licensees of their patents as possible before going into a tough patent battle.  They can argue that the willingness of others in the industry to license their patent is secondary evidence of its validity."

Mr. Boone speculated: "Perhaps Worlds.com will offer a very attractive settlement and license to NCSoft in hopes of building a stronger case against the richest potential defendant.  I think this is more likely than Worlds.com trying to test how well their patent will hold up in actual litigation.  I'm guessing they already have a pretty good idea of its strengths and weaknesses.  Keep in mind that all of those smaller fishes such as NCSoft are actually competitors of Blizzard.  It might actually be in their interest to help Worlds.com build a stronger case against Blizzard. There could be some very Machiavellian motivations coming into play."

Echoing other sentiments voiced online since this case was filed last month, Mr. Boone said: "For Worlds.com, it seems to just be about money.  As far as I can tell, Worlds.com and NCSoft are not in competition.  Thus, preventing NCSoft from operating does not appear to give Worlds.com any particular advantage in selling its own products and services."

Following the Threads

So is this all about a company looking for a revenue stream, or does it have a valid case? Or both? Worlds describes itself thus on its web site: "Worlds.com is the pioneering platform in 3D virtual communities and rich immersive environments. Launching [sic] in 1994, Worlds leverages its patented proprietary technology in partnership with brand leaders in specific market segments to offer users multi-user environments that have interactive Avatars, rich media graphics, text chat, voice-to-voice chat, video and e-commerce." Its client base is very diverse and high-profile, covering the rock band Aerosmith, Sony, IBM, MGM, VISA, Universal Pictures, and many others. This is obviously a firm with an established business model, as opposed to one fishing around for a way to support itself.

Mr. Boone noted that the '045 patent, while not named in the lawsuit, provided the basis for the '690 patent. '045 was filed in November 1996, but, as Mr. Boone told me, "patent applicants can 'swear behind' prior art references earlier than that but alleging that they invented the subject matter of the patent prior to the date of those references.  So it is possible that Worlds.com could claim priority even earlier than November 1996." Meridian 59, which is often considered the first 3D online role-playing game, was released in 1996. (Online role-playing games, both 2D- and text-based, were around long before, of course, but Worlds seems to be concerned with the 3D era.) Ultimate Online, which is typically thought of as the first such game that landed with a splash, came out the following year.

Why list the '690 patent in the lawsuit but not the '045 one? "My impression is that the claims of '690 are simpler and better worded than those in the '045 patent," Mr. Boone said. "That may be a result of a better understanding of what was important between the time the '045 patent issued in 2001 and the '690 patent issued in 2007."

He added: "Sometimes patent applicants will keep a patent application active in the Patent Office for a long period of time to allow the technology and industry to develop, and then once the technology becomes more set, the claims of that application can be amended to better cover the technology that is used."

In defense of the case, Stephen F. Roth, who represents Worlds.com's law firm, Lerner David Littenberg Krumholz & Mentlik, told Virtual World News: "I wouldn't call it 'starting with NCsoft.' It is a very robust patent." He gave no specific reason for singling out NCsoft in the case, and would only state: "I'm not at liberty to disclose what other companies I believe come within the scope of the claims. I think it is a very broad and robust claim, managing both bandwidth and the display and interaction of avatars in virtual worlds and massively multiplayer games."

A Worlds.com representative had not responded by the time I published this column. An NCsoft representative could only tell me: "We can't comment on potential litigation except to say that NCsoft takes all legal action seriously -- even if the company believes a lawsuit has no merit. We intend to defend ourselves vigorously." 

Comments

Bosco (Brad Hutchings)

M. Scott Boone was a man,
Yes, a smart man!
Professor legal eagle,
And a mind of molten metal had he!

M. Scott Boone was a man,
Yes, a smart man!
He knew patents and copyrights
Like the back of his hand did he!

From the sheepskin dimploma on the wall of M. Scott
to the ribs from Tony Roma he’d chew
The factualest, smartest IP law prof
The patent bar ever knew!

M. Scott Boone was a man,
Yes, a smart man!
And he fought against the patents
and the trolls to keep the software free!

What a Boone, what a do-er,
What a dream come-er true-er was he!

Brad Cook

So, anyway, I don’t see Scott fighting “against the patents and the trolls to keep the software free.” Not sure where you’re going with that.

randompro42

i think this patent needs to be thrown out

any video game manufacturer would be subject to the laws of this patent including but not limited to

blizzard (world of warcraft)
valve (half life)
epic games (unreal tournament)

but lets not stop there, they could also sue

microsoft (xbox live)
sony (playstation network)

just read the abstract for the patent - it describes any manner of online interaction in a three dimensional space

http://www.google.com/patents?id=wv5-AAAAEBAJ&dq=7,181,690

TRO

CaiTheSaxon

Worlds.com has managed to exist without any revenue stream for years now, relying on statutory ending of debts after a certain time period and then declaring that as income.

The actual experience is limited to a few long time members still inhabiting a GZ trapped in a timewarp.

The sole existance of the day to day running of Worlds,com at a loss has been to protect the patent.

Last year Worlds,com enlarged its board with some high rolers experienced in on line gaming etc.

To an indipendant observer it is quite easy to belive that the purpose of the case is to achieve revenue on the back of other legitimate buisnes.

It is a quite cynical land grab of the virtual world as a whole.

CaiTheSaxon

I ought to add that Worlds.com are essentialy broke.  Their market capitalisation is based on the wildly fluctuatiion of there shares from the stratospheric heights of 40c down to 12c.

The vast majority of shares being held by one person.

This is directly available from inspection of the submissions of WDDD which if it wasn’t for the cynicism of this land grab would make hillarious reading.

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