All About the Benjamins

You’re heard this before: small company sues big company for patent infringement. It’s not a particularly interesting story at this point, considering it happens at least once a month, but that’s the beauty of corporate greed – just when we’ve kicked back and chalked it all up to the status quo, a genuinely interesting case comes banging down the pipes.

And by interesting, of course, I mean so unbelievably frustrating that I want to chuck the American patent system into the fire and start over again. I won’t be the only one, mind, if the defendants in this particular case are any indication: Activision Blizzard, Sony, Turbine, NCSoft, and Jagex. That first one should ring a bell – ever heard of World of Warcraft? Yeah. Those guys.

Click that little read link down there to see why anyone would dare dream of tackling the largest Massively Multiplayer Online game of all time.

Each of those companies are currently embroiled in a lawsuit filed by Paltalk Holdings, Inc., that claims all five – and their respective MMOs – infringe on technology that Paltalk purchased from another company in 2002. Why they’ve waited some seven years to speak up about it is an interesting question, but not the most pressing concern at the moment.

The big problem? Paltalk filed a similar lawsuit against Microsoft in 2007, claiming the online communication tech employed in Halo and Halo 2 violated the same patents. They also claimed that Microsoft owed them the princely sum of 90 million in damages, an especially sizable amount when you consider that they purchased the original patents for the tiny (by comparison) amount of $200,000. The case was met by much rolling of eyes and internet mocking until the big M decided to settle out of court, turning what most people presumed was more legal mumbo jumbo into something legitimately interesting.

Now, to be clear, this doesn’t mean that Paltalk’s patents are a legitimate threat – it’s not uncommon for companies to settle their disputes away from the courtoom, wanting to avoid costly lawyer and legal fees. Considering Microsoft bowed out early and skipped over most of the legal proceedings, however, we can’t really be sure if those patents would have held up in the court at all. Given a chance, the presiding judge might have sided with Microsoft, labeling Paltalk’s claims as bogus and possibly preventing the company from trying to capitalize on them again.

That didn’t happen. What did occur was that Paltalk received an undisclosed sum of money from an exceedingly rich company, kept the validity of its claims as a mystery, and now – some two years later – struck again. The target this time isn’t just one computer giant, but at least three, raising the stakes almost as high as the amount of cash Paltalk could be sitting on if everything goes according to plan.

Will it? That’s impossible to know, since courtroom action won’t come for a few months yet, though you can just imagine the intense paper-shuffling the lawyers are doing to prep for the big day. So saying, the bigger companies – Activision Blizzard, Sony, etc. – might not be overly concerned, given the large body of wealth they take in on a yearly basis. It’s more of an issue for smaller companies like Turbine and Jagex, the latter in particular – despite how intensely popular their products are, they likely lack the funding of their big-business counterparts.

That is, coincidentally, the most troubling aspect of this whole sordid affair. Whereas a company like Microsoft can shrug off daily dances in and out of the courtroom, a developer like Jagex doesn’t have that same flexibility. It’s a problem exacerbated by the broad nature of technological patents, which theoretically allow Paltalk to sue – and possibly suck the money out of – MMO developers of every shape and size. And if Paltalk strikes gold again here, who’s to say it won’t spread that net even wider the next time it files a lawsuit?

There’s also the pretty compelling argument that it all just sounds so dumb. Paltalk established itself as the creator of a glorified chat client, something well away from the domain of an MMO like World of Warcraft, and yet can still file for patent infringement? The fact that’s it all based around the (legally) nebulous concept of ‘technology’ complicates things, sure, but even that doesn’t seem like reason enough to offer Paltalk any power over a different section of the software market. It doesn’t bode well for the future of MMO games, at least, if a company that hasn’t even dabbled in the genre holds legal sway over it.

I don’t profess to be an expert on the patent system, of course, but it doesn’t seem like the numbers add up so well here. Anyone out in the audience well-studied on the subject? I suspect there will be a wealth of information to illuminate Paltalk’s actions, but for now it’s hard not to look at them as everything wrong with copyright in the modern world. I might also be a teensy bit biased, too, but that’s unimportant here. What does matter is how this turns out – if not for the MMO fanatic, then for copyright itself, as companies left and right try to patent the innovation and technology that push the industry forward.

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