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Jim Gatto is a partner in the Intellectual Property Practice Group in the firm’s Washington, D.C. office. He is Co-Leader of the Artificial Intelligence Team, the Blockchain & Fintech Team, and Leader of the Open Source Team.

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

As the collective market cap of the cryptocurrencies has jump above $150 billion, traders and investors have accumulated significant gains. That’s the good news. The bad news is that the Internal Revenue Service is stepping up efforts to ensure that taxes are reported and paid. To assist in this effort, it has contracted with company that provides software that analyzes and tracks bitcoin transactions.
Continue Reading Cryptocurrency Traders Beware – The Taxman Cometh!

As the number and dollar volume of Initial Coin Offerings (“ICOs”) continue to increase, the SEC has taken a greater interest in this activity. As we previously reported, the SEC issued its initial ICO guidance on July 25, 2017. In this guidance it declared that depending on the facts and circumstances, an ICO offering may involve the offer and sale of securities. If that is the case, the offer and sale of virtual coins or tokens must itself be registered with the SEC, or be performed pursuant to an exemption from registration. 
Continue Reading SEC Issues Warning on Certain ICOs

The SEC has opined that, depending on the facts and circumstances of each individual ICO, the virtual coins or tokens that are offered or sold may be securities. If they are securities, the offer and sale of these virtual coins or tokens in an ICO are subject to the federal securities laws.
Continue Reading SEC Declares That Initial Coin Offerings (ICOs) May Be Securities; Finds DAO a Security

A U.S. District Court Judge issued a preliminary injunction against enforcing a Milwaukee county ordinance requiring a permit before implementing certain AR location-based games. As we previously reported, Candy Lab AR, makers of the augmented reality poker game Texas Rope ‘Em, sued Milwaukee County, Wisconsin, over an ordinance that states: “Permits shall be required before any company may introduce a location-based augmented reality game into the Parks…”
Continue Reading Court Enjoins Milwaukee Over AR Location-based Game Ordinance