by: David Pridham
Is there a Pokemon hiding in the patent courts?
If you’ve seen mobs of people walking the streets with eyes glued to their smartphones, then you know that Pokemon Go has become a huge phenomenon since its release July 6. Now available in 40 countries, this location-based augmented reality game in which users try to catch virtual Pokemon characters has already been downloaded 75 million times.
It has also boosted the market value of Nintendo, which co-owns the licensing rights to the game developed by Niantic, Inc., by a whopping 50% or $12 billion dollars in just the last month alone.
But could Pokemon Go’s profit engine be derailed by challenges to the software patents underlying the game? Not one of the financial analysts who cover Nintendo (Niantic is privately held) has thought to examine this possibility. But as I will demonstrate below, they — and Nintendo — ignore these very real patent risks only at their peril.
Nintendo owns over 200 U.S. and international patents and patent applications, including many covering virtual reality and other software innovations. Niantic owns at least three software patents that I could find using our IPedia patent analytics platform — two of them assigned to Niantic by Google — and two pending but unpublished patent applications.
But here’s the danger for both companies: many of Nintendo’s patents (and all of Niantic’s) were filed prior to June 19, 2014.
Why is that date important? Because on that date, in the most consequential patent ruling of the last decade, the U.S. Supreme Court decided Alice v CLS Bank. As a result of how that decision has been interpreted, the Patent Office (USPTO) has dramatically limited the software-related inventions it considers patentable, and the courts have declared hundreds of already-issued patents invalid.
Any software patents applied for before Alice,therefore, are highly vulnerable to challenges by competitors.