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Jim Gatto is a partner in the Intellectual Property Practice Group in the firm's Washington, D.C. office.

The Ninth Circuit Court of Appeals reversed a district court’s dismissal of a purported class action and held that a social casino game constituted illegal gambling under Washington law. According to the Court, all online or virtual gambling is illegal in Washington state. The panel held that the virtual chips extended the privilege of playing the game and fell within Wash. Rev. Code § 9.46.0285’s definition of a “thing of value.”
Continue Reading Social Casino Game Found to Be Illegal Gambling

Cryptocurrencies and blockchain technology are rapidly emerging as disruptive technologies. As has happened with many new technologies, particularly disruptive ones, a patent arms race is occurring. The number of patents being filed for these technologies is rapidly increasing.

The number of published applications shows roughly a tenfold increase over the number of issued patents.

Despite this increase in patent filing activity, many companies are unaware of what aspects of this technology can be patented and many myths and misconceptions exist. In addition to the usual misconceptions about patents (detailed below), the open source aspect of many blockchain-based inventions leads to greater confusion. The patentability of software and technology platforms does not cease just because some or all of the software is open source or built on a known protocol.
Continue Reading Patent Strategies for Cryptocurrencies and Blockchain Technology

Apple just announced a number of changes to its App Store Review Guidelines, including the requirement that apps offering “loot boxes” or other mechanisms that provide randomized virtual items for purchase must disclose the odds of receiving each type of item to customers prior to purchase. This comes as the incredibly successful monetization mechanic of loot boxes has come under scrutiny as we have addressed in our prior posts on Are Loot Boxes An Illegal Gambling Mechanic? and an Update to that post.
Continue Reading Apple Requires Disclosure of Odds for Loot Boxes

We recently blogged on legal issues with loot boxes as a game mechanic, and some of the scrutiny to which they are being subjected. The debate continues on whether loot boxes are an illegal gambling mechanic, but at least for now, they likely remain legal in many jurisdictions. The following is an update on recent statements from various gambling regulatory authorities around the world.
Continue Reading The Legality of Loot Boxes – Update

The Commodity Futures Trading Commission’s LabCFTC recently released, “A CFTC Primer on Virtual Currencies.” This primer provides an overview of virtual currencies and their potential use-cases, helps outline the CFTC’s role and oversight of virtual currencies, and cautions investors and users of the potential risks involved with virtual currencies.
Continue Reading CFTC Issues Primer on Virtual Currency, Virtual Tokens and ICOs

A member of the United Kingdom’s Parliament has opened an inquiry into the legality of loot boxes. Loot boxes are virtual items that may be redeemed to receive a randomized selection of additional virtual items. Various countries around the world have recently moved to regulate the provision of loot boxes in video games, often in response to inquiries from consumers or legislators, such as the aforementioned inquiry in the UK. This leads to the ultimate question: are loot boxes legal? The linked article below addresses this question and several other issues related to loot boxes.
Continue Reading Are Loot Boxes An Illegal Gambling Mechanic?

The Patent Trial and Appeal Board (PTAB) recently upheld the patentability of a video game-related patent, ruling the computer graphics features were not obvious over the prior art. The patent (US Patent 7,061,488) address techniques for rendering lighting and shadows in computer graphic simulations where there are at least 2 virtual light sources. The claims were alleged to be obvious because the high level concepts were allegedly known in the art as evidenced by various prior art references. However, the PTAB disagreed stating that there was no evidence that it would have been obvious to combine the prior art features. This case shows that even if general concepts are known, improvements to those concepts and/or a unique combination of concepts can be patentable.
Continue Reading PTAB Sheds Light On Video Game Patent Validity

The Federal District Court in Delaware recently denied a motion to dismiss a patent infringement case involving a video game networking technology patent based on the patent allegedly being  invalid for lack of patent-eligible subject matter under 35 U.S.C. § 101. Despite all of the recent press regarding the so-called Alice test, which revised the test for patent-eligible subject matter, video game related patents are still obtainable and enforceable. It is critical that patent applications for these inventions be carefully considered, the patent applications be properly drafted and the claims be presented in a way that complies with the relevant test.
Continue Reading Video Game Network Patent Found to Be Patent Eligible – Not an Abstract Idea