Finnish company Supercell OY, which makes the popular “Clash of Clans” and “Brawl Stars” mobile games, has just lost a patent battle with Gree Inc., a Japanese maker of games like “War of Nations.”
It’s a David-vs.-Goliath story: Gree reported $37 million in profits in its most recent fiscal year, versus Supercell’s $577 million.
After three years of litigation, before both the federal courts and the Patent Trial and Appeal Board, a federal court jury in Texas awarded Gree $8.5 million, finding that “Clash of Clans” and “Clash Royale” infringed at least one claim from five Gree patents for controlling video game content and operations.
The patents relate to the ability for players to copy city templates, calculate available funds, aim and shoot, and engage with other players.
Supercell contended that the patents were invalid because the technology had been used in previous games like “FarmVille” and “Magic.”
The trial was initially pushed back from August 3 to September 14. Supercell had sought to delay the trial again, arguing that its employees and expert witnesses shouldn’t have to travel to Texas during the COVID-19 pandemic, especially since Texas was a hotbed of infection.
“Forcing witnesses and legal staff — particularly those who may face severe or fatal complications from COVID-19 — to travel from nearly a dozen major cities during the current outbreak and be confined indoors for extended periods creates an incredibly troubling and avoidable health hazard,” Supercell argued.
Some witnesses eventually testified via video deposition.
This was only the second in-person jury trial the judge had held since the pandemic shut down jury trials in March. Courtroom observers were asked to wear face masks and jury members wore shields but not masks – presumably so attorneys could gauge their expressions.
However, counsel for the parties, the judge, and the court staff did not wear masks during closing arguments.
Gree was awarded a lump sum, rather than the ongoing royalties that it sought. Gree had asked the jury to award between $18.5 million and $24.6 million.
Because the jury found the infringement willful, the judge could triple the amount of damages awarded.
So far, Gree has brought six lawsuits and filed 32 preliminary injunction motions against Supercell. Supercell, in turn, filed seven inter partes review petitions and 16 post-grant review petitions with the Patent Trial and Appeal Board, seeking to have Gree’s patent claims invalidated.
In September, the Patent Trial and Appeal Board allowed Gree to amend a patent in a post-grant review after finding that the original claims covered unpatentable abstract ideas, citing the US Supreme Court’s Alice decision interpreting Section 101 of the Patent Act.
The Gree patent at issue covers a system for executing a battle in a video game, and the Board found that rules for playing a game were “abstract.”
Attempts to amend patent claims during such a review are usually unsuccessful, and motions to amend are granted only about 10% of the time.
Even while the companies are fighting in court, Gree has licensed 1,000 Japanese patents to Supercell for $4.5 million.
The war between the two companies continues, with three more cases scheduled for trial in 2021 and additional issues pending before the Federal Circuit.
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