Should Game Companies Fear GREE?

BACKGROUND

Generally speaking, there are very few patent cases between active video game companies. The vast majority of patent cases in the industry involve a non-practicing entity suing one or more video game companies. An exception to this rule is the patent battle between GREE, Inc., a Japanese mobile social and game company, and Supercell, a Finnish mobile game developer. GREE has filed several patent suits against Supercell, who has in turn filed patent suits against GREE. The cases have spanned China, Japan, and the U.S, beginning in 2017 and have involved over a dozen patents. At one point, it seemed that the parties would resolve their disputes. In February 19, 2019, Supercell and GREE entered into a settlement agreement to resolve pending Japanese litigation. Both parties agreed to pause further litigation until February 28, 2019. But on the day the pause ended, GREE filed three new patent suits against Supercell. Just one month ago (April 2020), GREE filed a new suit against Supercell.

GREE’S PATENT STRATEGY

GREE has been granted over 150 patents since 2013, covering everything from gaming devices to automatic targeting in shooting games (see figures from two GREE patents related to shooting game controls).

GREE shut down three of its studios and laid off all staff focused on Western operations in 2017 (the same year it began litigation against Supercell). It may have decided to shift focus to monetizing its patent portfolio. Based on GREE’s patenting strategy and aggressive stance against Supercell (basically, to keep throwing patents at a defendant until they take a portfolio license, which is how many patent assertion entities work), if GREE prevails against Supercell, I would not be surprised if GREE started a broader strategy of aggressive licensing and patent suits against other game companies. GREE would use Supercell’s license as evidence of the strength and value of the portfolio. GREE also filed suit against Supercell in the Eastern District of Texas, which is a favorite venue of patent assertion entities.

CURRENT CASE AND COVID-19

Supercell and GREE are headed for trial in August in the most advanced case, but due to COVID-19, Supercell has been unable to depose GREE witnesses in Japan. Supercell sought a continuance of the case deadlines for 90 days and an order for GREE to make its witnesses available for deposition in Japan. Magistrate Judge Payne denied Supercell’s motions finding that Supercell’s requested discovery did not justify the 90-day continuance. In an odd litigation tactic, Supercell sought an order compelling the depositions to proceed in Japan. Magistrate Payne noted that such an order was impossible and that the U.S. Embassy in Japan has stated that Americans cannot take depositions in Japan. It’s unclear to me just what Supercell expected the court to do, even if the court felt that the depositions were necessary. We’ll continue to track the cases to see if Supercell ultimately prevails or if other game companies should start digging up prior art on GREE’s fairly extensive portfolio.