Dr. Evil is actually . . . NOOOOO!!

Nintendo wants to leverage patent systems to create barriers

THE BIG PICTURE

A few months ago I wrote a satirical article suggesting how problems in the game industry might be solved by Dr. Evil from the Austin Powers movies.

• How Dr. Evil Would "Fix" the Game Industry

My goal was to list all the strategies — whether legit, questionable, or unethical — that corporations and business collectives have used throughout history to increase revenue.

I assumed that these methods could be applied in the game industry, so since June I’ve been casually tracking news items that match up with my list of “predictions”. Some recent articles align directly with one of those predictions.

ZOOM IN

The comedic mantra that I imagine Dr. Evil reciting is an alliterative list of verbs: Control, Consolidate, Capture, Create, and Collude! These are categories of strategies drawn from the business historical record.

Today’s verb is CREATE! Specifically the “Create Barriers” strategy:

• Create, purchase, or start enforcing patents around some critical aspects of gameplay, game content delivery, game deployment, or operation.

I added bold emphasis so you can compare that item, published in June of 2024, to a list of articles that have appeared over the past few days about Nintendo:

?? 09/20/2024 — CBR — “The Pokémon Company Just Invented a Patent to Sue Palworld”

?? 09/24/2024 — gamesradar+ — “Japanese patent law expert says Nintendo may have strengthened its claims specifically to target Palworld”

?? 09/25/2024 — PC GAMER — “A videogame patent lawyer breaks down Nintendo's risky Palworld lawsuit: 'It definitely feels like a punishment'“

?? 09/27/2024 — EUROGAMER — “‘Exceedingly plausible’ Nintendo crafted patent claims to specifically target Palworld, says IP expert”

?? 09/30/2024 — PC GAMER — “Nintendo is filing for the patents it's suing Palworld with in the US as well, though some (non-final) rejections could complicate matters”

I suggest you read them, but the titles say a lot.

Nintendo has garnered great respect in the industry because of their ethical behavior toward players and developers, which is why I’m surprised by this news.

HOW IT WORKS

IANAL (I Am Not A Lawyer) so nothing I say here should be construed as legal advice, but here are my thoughts.

• Patent systems were designed to encourage innovation by legislating profits for a certain time period. The intent is to induce useful risk taking by ensuring a certain level of monetary reward.
• Patents that are challenged and defeated can result in the patent being thrown out entirely, or some of the claims (the things that really matter) being invalidated. That means patent enforcement efforts can backfire, resulting in greater access to the process of interest rather than less.
• Patent systems are a swamp because they are overwhelmed and underfunded. It’s no surprise then, that granted patents often duplicate existing patents or patents under review.
• Patent application and granting rates have been accelerating so it is increasingly difficult to prevent an invalid patent from getting granted. In 2023 alone, China granted over 790 thousand patents and the US granted over 320 thousand patents.
• Patents have much more limited time frames than copyright claims. Internationally agreed upon limits for patents are generally 20 years from the date of filing.

WHY IT MATTERS

The patent system doesn’t always, or even often, work as originally intended.

• The purpose of patents, at least in the US, has been subverted — abused — due to the perverse incentive of, essentially, extortion. Go search the internet for the term “Patent Troll” to see how that works.
• Patents can actually REDUCE innovation when patent holders game the system. Take a look at the pharmaceutical industry for an example of maximizing profits through minimal innovation by using the patent extension mechanic.
• And one that pertains to the recent reporting on Nintendo: patents can be used as moats to prevent competition. Prompt ChatGPT with “provide examples of companies using broad patent portfolios to create barriers to competition” and you get a list of some of the biggest companies on the planet and a description of how they do it.

READING BETWEEN THE LINES

I can sympathize with Nintendo that some other company has ripped off an idea or game mechanic, even if that’s been the way of the game industry for a long time.

Gameplay mechanics are not the type of intellectual property for which patent systems were designed, so seeking a patent, at least in the USPTO, is a gamble.

Pokémon dates back to February of 1996, so more than 25 years ago. In the US, patent laws prevent granting patents for things that are already in use. But I’ve seen more egregious mistakes occur in the US patent system.

THE WORST CASE

In the worst case, if Nintendo wins a patent suit then gameplay mechanic patents could become rampant in the industry, reducing the number of groups who can make games of specific genres to a handful of powerful patent holders.

When these patents are in the hands of aggressive and well funded corporations (think Disney and “the mouse”) then the sheer threat of enforcement processes keep the lanes clear of competition.

The result for gamers isn’t great, and for game developers is severely restricting — say goodbye to innovative variations on genre themes.

As I said before, IANAL, but it’s unclear to me how the patent application in the US can succeed. As a game developer I certainly hope it doesn’t, no matter how much sympathy I feel for Nintendo.

RESOURCES

• Patent statistics by country
• Patents granted in the US
• Wikipedia - Term of patent