Playsaurus, a small Los Angeles-based game studio that makes Clicker Heroes and the upcoming Clicker Heroes 2, has recently been threatened with a lawsuit if it doesn’t pay $35,000 for a patent licensing fee to cover a patent for “electronic tokens.”
In a Thursday blog post, the CEO of Playsaurus wrote that the company that sent him the letter, GTX Corporation, is a “patent troll.” CEO Thomas Wolfley called GTX’s demands to avoid “costly litigation” over Playsaurus’ use of electronic “Rubies” in its games “meritless.”
In a brief phone interview with Ars on Friday, Wolfley told Ars that receiving the demand letter was disconcerting.
“I kind of feel like it’s as if someone walked into my home with a knife and asked me for $35,000, except it’s legal,” he said. “I’ve been stressed out this whole week.”
Leslie Jacobs, the Maryland-based attorney who sent Playsaurus the demand letter, did not respond to Ars’ request for comment.
GTX claims that its patent (7,177,838, or simply ‘838) seemingly covers any kind of digital credit or currency. The patent was filed in 2000—it notes that “Electronic commerce using the World Wide Web (Web) is exploding in growth”—and was issued in 2007.
On its website, GTX describes itself as a company “dedicated to the development of technologically advanced proprietary raster-to-vector conversion and editing software to bridge paper to CAD.” The website makes no mention of “electronic tokens” or the ‘838 patent.
However, the ‘838 patent was fairly quickly used as a weapon in litigation. A company called Actus used ‘838 as early as 2009 in a lawsuit against Apple, Amazon, eBay, and others. That lawsuit was ultimately settled.
More recently, GTX has also filed suits over alleged infringement of the ‘838 patent against a Cypriot game company and another British company called Soccer Manager Limited. The precise relationship between GTX, Actus, and another company, PayByClick, is unclear. The ‘838’s patent history shows that the assignee has bounced between those three entities.
The inventor of the ‘838 patent is listed as one Marvin Ling, who is Andrew Ling’s father—Andrew now serves as the company’s CEO. Andrew, who also did not respond to Ars’ request for comment, is also the co-founder of PayByClick.
In the blog post, Wolfley continued that GTX’s legal efforts were “abusive and unethical,” noting that $35,000 was half the annual salary of an employee. He also wrote:
As I am a major owner of Playsaurus, I see this as a personal attack, and the cost in my own time and well-being has already been significant and draining. It is a shame that the United States legal system can’t provide a quick and easy way for us to punish them for these actions.
I believe it is unethical on our part to pay any negotiated amount, which serves to encourage the behavior of trolls with bogus claims. So, if pressed, we will take the matter to court and see it to the end. We have retained a law firm to assist and represent us if necessary. Playsaurus is a 100-percent privately owned organization, and we are not beholden to outside investors. We absolutely refuse to negotiate license fees with patent holders who make bogus claims.
Wolfley’s attorney, Miguel Bombach of Perkins Coie, a major commercial law firm, wrote back in a sternly-worded letter that Jacobs’ allegations were “baseless.”
Primarily, he argued, the ‘838 should be invalidated as it is an unpatentable abstract idea, which was resoundingly rejected in a unanimous 2014 Supreme Court decision known as Alice Corp v. CLS Bank.
This abstract idea is no different than using tickets to purchase drinks at a party or going to an arcade and using tokens to play games… Applying the idea with a “server” or reciting “memory” does not transform this concept into something that is patent eligible. After Alice, buying and using tokens for transactions (like a kid would do at Chuck E. Cheese’s), cannot be patented by simply reciting computers and the Internet. Furthermore, GTX’s attempted preemption of using tokens on the Internet clearly signals patent ineligible subject matter under Alice.
GTX has not yet responded to Bombach’s letter.
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