Publication
Intellectual Property Issues for Game Developers and Operators (Part 2: Building and Navigating the Patent Landscape)
What’s patentable in gaming, what isn’t, and how to build a patent strategy that protects your competitive advantage
By Scott Weide and Matthew T. Kramer
Trademarks protect your brand. Copyrights protect your creative expression. But what protects the bonus feature players can’t stop talking about, the wagering system or gaming machine cabinet your engineers spent two years designing, or the UX innovation that makes your game feel different from everything else on the market?
That’s the domain of patent law. Patent law is the area of IP that gaming developers and operators often misunderstand, sometimes overestimating what patents can do and underestimating how valuable a well-built portfolio can be. This installment covers what a patent is, what’s patentable in gaming, and how the process works for studios and operators of different sizes.
What a Patent Actually Is
A patent is a government-granted right to exclude others from making, using, selling, or importing an invention for a limited period.1 In exchange, the inventor publicly discloses how the invention works, adding it to the public domain when the patent expires.
There are three filing types relevant to the gaming industry:
| Utility Patents | Design Patents | Provisional Applications |
|---|---|---|
| Protects processes of making and using, the configuration of machines and other articles of manufacture, including systems | Protects ornamental appearance of an article of manufacture2 | Not a patent – a placeholder for a later regular utility patent application filing3 |
| 20-year term from filing4 | 15-year term from grant5 | Establishes a priority date for 12 months; must convert or file a non-provisional application within the 12 months to seek an actual patent |
| Generally, offers the broadest protection since it covers structure and/or functionality | Generally faster and cheaper to obtain than a utility patent | Buys time to develop and evaluate before full filing at a lower cost than a non-provisional |
| Example gaming applicability: The structural configuration of gaming devices or components; gaming tables; gaming machine hardware configurations; gaming systems including gaming machines, table and back-end system configurations; game and bonus mechanics | Example gaming applicability: The appearance of gaming machines, consoles or the components thereof (including the shapes of video displays); distinctive graphical user interfaces or graphical elements of games | A provisional application can’t be filed as the basis for a design patent. |
Pursuing a Patent: Timing
Timing is critical when pursuing a patent. In the U.S., an application must be filed no later than one year after the invention is first placed in public use, sold, offered for sale, or described in a printed publication, although it is usually advantageous to file as soon as practicable (because the U.S. follows a “first to file” system, meaning the first party to file obtains priority). Outside the U.S., applications may need to be filed before any public use or disclosure of the invention. It is therefore important to evaluate new games, gaming devices, and game systems for innovations during development, before the window to file closes.
What Types of Gaming Inventions May be the Subject of a Utility Patent
Once innovative developments are identified, the next question is whether they can be patented. This requires determining which type of patent applies and then considering whether the invention is eligible to be patented and, if so, whether it is also novel and non-obvious.6
One of the most complex questions is whether an invention constitutes patent-eligible subject matter. This is particularly problematic in the gaming space because of significant shifts in the law. Section 101 of the Patent Act defines eligible subject matter broadly as any new and useful process, machine, manufacture, or composition of matter.7 In Alice Corp. v. CLS Bank International, the U.S. Supreme Court limited this broad scope by establishing a two-step test for patent subject-matter eligibility under Section 101. First, the court (or examiner) asks whether the claims are directed to an abstract idea; if so, it asks whether the claims include an “inventive concept,” that is, something that transforms the abstract idea into a patentable application. If the invention does not involve an inventive concept, it may still be subject-matter eligible if, under the second step, additional features of the invention are determined to go beyond “well-understood, routine, conventional activity” (for example, more than merely reciting an abstract idea as simply implemented by a generic computer).8
The practical effect of this test has been that the U.S. Patent and Trademark Office and the lower courts have found many inventions that would have likely been subject-matter eligible before Alice are now ineligible. For example, in the gaming context, before Alice, the USPTO granted hundreds of patents directed to methods of playing games recited as a sequence of rule-type steps. Post-Alice, the Court of Appeals for the Federal Circuit has held that claims directed to rules for a wagering card game and a method for playing a dice game are directed to abstract ideas and are unpatentable.9
Important Steps in the Patent Process
Long before the U.S. Patent and Trademark Office’s review of a patent application, there are some important steps:
- Invention ownership and identification: In the gaming space, third-party developers are common. Make sure that all rights in any developments are owned by the company, whether via employee contracts or third-party contractor agreements. As early as practical during development, identify and document areas of innovation. A simple approach is to flag anything that works differently from what is believed to exist or be conventional.
- Areas of focus may include: (1) Solutions to technical problems (e.g. gaming device or system components or arrangements of components that improve the speed of operation, reduce space, improve cooling or other functionality). (2) Different or visually appealing features (e.g. GUIs or machine design features). (3) Other areas of improvement (e.g. gaming systems with new functionality, new game play mechanics including bonus mechanics with innovative solutions to how game information is generated (symbol stacks, symbol permutation generation) and transformed during play).
- Invention analysis: Analyze the innovation for patentability: Is it likely patent-eligible under Section 101? Is it novel under Section 102 and non-obvious under Section 103? A prior art search can help answer these questions and inform claim strategy.10 Consider the cost of preparing, filing, and prosecuting the application, as well as patent maintenance and the cost of enforcing any resulting patent, relative to the forecasted or potential market value of the patent (e.g., exclusivity driving sales volume, pricing power, or licensing revenue).
- Application drafting and prosecution: Counsel drafts the specification (which must enable a person skilled in the art to make and use the invention and describe the best mode of practicing it11) and the claims (the legally operative scope of protection). While the issued claims ultimately define the scope of protection, the specification is important for interpreting the claims and is often needed to establish novelty or non-obviousness.12 The application should therefore not only describe the invention but broadly capture the inventive concept, including alternative implementations, even if less preferred. Identifying advantages over existing technology or how the invention solves technical problems also supports subject-matter eligibility and non-obviousness arguments. During review of the application at the USPTO, counsel works to establish the patentability of the invention while capturing the invention with the broadest possible scope.
Provisional Applications and Obtaining Patents Outside the U.S.
If you have identified potential innovations that are not yet complete, a U.S. provisional application lets you establish a filing date quickly and cheaply before you’ve finished building, testing, and launching the product.
There is no “worldwide” patent, but patents may be obtained in individual countries and in some cases (such as the EU), a region. Timing is important here, too. While many countries permit filings up to one year after a U.S. filing with a priority claim, a filing strategy should be developed before any public disclosure of the invention.
Building a Patent Strategy Proportionate to Your Business
Not every studio needs the same patent strategy. A well-resourced casino game manufacturer competing for floor space needs a different approach than a mobile developer or a startup iGaming operator. The most important areas of focus may vary:
- Early-stage developers: Consider focusing on provisional applications. When your team invents something potentially novel, file a provisional to preserve the priority date and convert selectively based on commercial potential, thus reducing upfront IP costs.
- Growth-stage studios: Build a defensive portfolio around core innovations. Even a modest set of well-drafted patents can deter direct copying and create cross-licensing leverage with larger studios, such as to resolve patent infringement claims.
- Established operators and suppliers: Maintain a formal invention capture program, conduct regular portfolio reviews (maintain, abandon, or license), and manage both offensive and defensive objectives (including enforcement of issued patents). Monitor competitor activities for infringement risks or for opportunities to extend coverage through continuation applications.
- Identification of important foreign markets: A U.S. patent does not reach third-party manufacture and associated sale outside the U.S., so long as the products are not exported from, imported into, or sold in the U.S. A strategic portfolio may therefore include patents in countries where competitors would make or sell competing products.
Patent Thickets: Navigating the Gaming Patent Landscape
The flip side of building a patent portfolio is the risk posed by competitors. Even holding a patent on an invention does not mean the patent owner can make and sell it free from infringement. Casino games and technology, as well as console and online game technology, are densely patented spaces. Major players have spent decades building portfolios covering commercially successful mechanics including cascading reels, expanding wilds, free spin triggers, mystery progressives, community jackpots, and many more. This creates a thicket: a dense web of overlapping patents that any new entrant must navigate carefully. Navigating it requires diligence:
- Freedom-to-operate analysis: Before launching a new product, a freedom-to-operate (FTO) search may be useful in identifying patents that pose a risk of infringement. A good-faith opinion of non-infringement also matters defensively: in court, a finding of willful infringement can support enhanced damages of up to three times the compensatory award, and a good-faith opinion is evidence against willfulness.13
- Design-around and licensing strategies: When an FTO identifies an obstacle patent, counsel may be able to identify design-around options, which are alternative technical implementations that achieve a similar commercial result without infringing the identified patent. Claim scope, not commercial resemblance, defines infringement. In other situations, procuring a license, including an exclusive license, may be beneficial.
- Watch the competition: Competitor patent filings are a window into their R&D roadmap and an early warning of infringement claims you may need to address. Published applications become public 18 months after filing.14 Monitor and evaluate risks and consider options to challenge applications or issued patents.15
What to Do Right Now
- Inventory your innovations: Conduct an IP audit to identify innovations that are still in the window for filing for patent protection and reinforce the need for design and development teams to identify innovations for potential patent protection on an ongoing basis.
- File provisionals before any public disclosure or sale: Trade shows, press releases, app store soft launches, and investor decks can all constitute disclosure; in the U.S. an offer to sell an invention, even if made in a confidential setting, starts the one-year filing deadline clock.
- Commission an FTO before launch: For a new mechanic entering the casino or mobile market, or a gaming machine design, consider a freedom-to-operate opinion before building out, as it can reduce risk and costly redesigns.16
- Check your inventor assignments: Confirm development contracts include invention ownership/assignment provisions. Filed patent applications and issued patents should be formally assigned from the named inventors to the company, and the assignments recorded with the USPTO.
- Monitor the market for infringement: Regularly monitor competing products and services for potential infringement of issued patents. Prompt enforcement can deter copying, preserve the value of patented innovations, and protect available remedies, which may be limited by statutory time periods.17
Footnotes
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See 35 U.S.C. §271 (infringement).
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35 U.S.C. §171 (design patents for new, original, and ornamental designs).
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35 U.S.C. §111(b) (provisional applications); §119(e) (benefit of provisional filing date).
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35 U.S.C. §154(a)(2) (utility patent term of 20 years from earliest effective filing date).
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35 U.S.C. §173 (15-year design patent term for applications filed on or after May 13, 2015).
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35 U.S.C. §101 (utility), §102 (novelty), §103 (non-obviousness).
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Excluding laws of nature, natural phenomena, and abstract ideas. 35 U.S.C. §101.
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Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014)
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In re Smith, 815 F.3d 816 (Fed. Cir. 2016) (rules for conducting a wagering game held patent-ineligible as an abstract idea); In re Marco Guldenaar Holding BV, 911 F.3d 1157 (Fed. Cir. 2018) (method of playing dice game with physical dice merely recited abstract idea of game rules).
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35 U.S.C. §101 (utility), §102 (novelty), §103 (non-obviousness).
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35 U.S.C. §112 (specification, enablement, and claim requirements).
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Id.
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35 U.S.C. §284 (enhanced damages up to treble).
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35 U.S.C. §122(b) (publication of applications 18 months after earliest filing date).
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35 U.S.C. §122(e) (pre-issuance submissions); 35 U.S.C. §302 (ex parte re-examination); 35 U.S.C. §321 (post-grant review); 35 U.S.C. §311 (inter partes review).
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35 U.S.C. §284 (enhanced damages up to treble).
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35 U.S.C. §286 (Time limitation on damages).
About Snell & Wilmer
Founded in 1938, Snell & Wilmer is a full-service business law firm with more than 500 attorneys practicing in 17 locations throughout the United States and in Mexico, including Phoenix and Tucson, Arizona; Los Angeles, Orange County, Palo Alto and San Diego, California; Denver, Colorado; Washington, D.C.; Boise, Idaho; Las Vegas and Reno-Tahoe, Nevada; Albuquerque, New Mexico; Portland, Oregon; Dallas, Texas; Salt Lake City, Utah; Seattle, Washington; and Los Cabos, Mexico. The firm represents clients ranging from large, publicly traded corporations to small businesses, individuals and entrepreneurs. For more information, visit swlaw.com.
