Friday, January 26, 2018

GREE sues Supercell for patent infringement while considering reputation risk

Here is another news story of patent litigation between game companies in Japan, following my previous report.

On January 23 2018, Finnish game developer Supercell made an announcement, on  Twitter and in its game application, that it got sued by Japanese mobile game company GREE for patent infringement in Japan on May 18, May 25, July 13, and July 27 in 2017, and it will delete specific features in the Japanese version of “Clash of Clans” and “Clash Royale” until the lawsuits become settled, though it firmly believes that it doesn’t infringe the GREE’s patents in question.

In response to this announcement, some of game users started to deliver complaints against GREE with a hashtag of “グリーを許すな (Don’t allow GREE)” and the like on social media.

Maybe GREE has been concerned damage to its reputation among game users. Next day, on January 24, GREE made a comment on the Supercell’s announcement, which interestingly includes the expressions of regret for any inconvenience the users of the Supercell’s games may experience, in addition to the backgrounder of the case. According to the GREE’s comment, GREE filed lawsuits against Supercell at Tokyo District Court for damages and an injunction against “Clash of Clans” and “Clash Royale”, because Supercell has infringed more than 10 GREE’s patents and also refused to have a discussion GREE has proposed since September 2016 to resolve the dispute in an amicable manner.

On the other hand, Supercell issued a brief statement again on January 25 in response to the GREE’s comment of the previous day, arguing that Supercell didn’t refuse the meeting, and actually the management team flied to Tokyo to have a meeting, seeking a “fair, reasonable and amicable solution”. After that, GREE counter-argued on the same day that it was in late December 2017 and after we filed lawsuits, when Supercell’s management visited us to have a meeting.

GREE and Supercell are spending time to argue not only in court but also outside court. It looks like that they are arguing before a jury of game users. Enforcing patent rights is legitimate right for patent holders. However, especially for game companies, it seems to be a serious problem to earn a bad reputation among game users, from a business perspective. Therefore, when taking legal action, an appropriate communication strategy could be a key factor for them to obtain understanding from the users.

By the way, GREE seems to be battling against Supercell also in the US.

Saturday, January 13, 2018

Nintendo plays a patent game with COLOPL for $40 million

On January 10 2017, a Japanese mobile game company COLOPL announced that it got sued by Nintendo for patent infringement. Nintendo seeks JPY 4.4 billion (approximately $40 million) in damages and an injunction to stop operation of “Shiro Neko (White Cat) project” which is COLOPL’s most profitable smartphone game. Nintendo reportedly filed a lawsuit at Tokyo District Court on December 22 2017 after the negotiation for over a year since September 2016. This is the first time Nintendo has filed a patent infringement lawsuit in Japan. Nintendo alleges the COLOPL’s game infringes on Nintendo’s 5 patents relating to touch panel operation and other technologies.

Responding to this announcement, COLOPL’s stock price plummeted 22% at one point from the day before. It seems the stock market concerns about the impact on its performance, though COLOPL has boosted sales since 2014 when COLOPL released “Shiro Neko project”, and also has increased patent filing sharply with sales (See chart; Please note that all patent application filed in 2016 and beyond are not yet published.).

In a separate case, COLOPL signed its first patent cross-licensing agreement with another Japanese video game company CAPCOM for patents relating to multiplayer functionality in November 2017. CAPCOM is actively utilizing its patent portfolio. It also successfully signed a patent cross-licensing agreement with BANDAI NAMCO in June 2017, as previously reported in this blog. Japanese game companies might be beginning to be concerned about game of patents.