August 13, 2019
Protecting the gaming industry’s intellectual property in Canada
By John Koh
In common with other businesses in the entertainment industry, gaming companies, including casino operators, strive to engage and retain customers by providing an experience that is satisfying and exciting. Doing so requires an understanding of players’ desires and no small amount of creativity from the gaming companies, all in a rapidly changing environment that is becoming increasingly digital in nature. Like seemingly every other disrupted industry, gaming has become fertile ground for tech startups, and the effort and creativity that young companies are investing into their products could result in significant advantages and improvements in the industry. But high-value intellectual property that needs to be protected — failing to do so could be the death knell of any young start-up.
The consequence of forging ahead without legal cover is falling flat in a thriving industry. In Canada, the total revenue from all forms of gaming, including revenue from casinos, VLTs and lotteries exceeded $17 billion in 2017. These forms of gaming also directly provided 135,000 full-time jobs. In view of these numbers, it is not surprising that gaming is the largest segment of Canada’s entertainment industry. Of course, the gaming industry in the United States is even greater and generates revenue in the neighbourhood of US$150 billion and directly provides over 700,000 jobs.
The constellation of intellectual property rights includes copyright, trademarks, industrial designs (known in the U.S. as design patents) and patents (also known in the U.S. as utility patents). Each one has a specific purpose.
• Copyright protects artistic or literary expression and can apply to software.
• A trademark is a form of protection for brand names. It indicates the source of a product or service and can give consumers confidence that they are purchasing from a familiar and reputable supplier. A trademark can also reassure consumers that the quality of a product or service will be consistent.
• Industrial design protects the aesthetic aspects of an object such as its shape or pattern.
• Patents protect useful, functional inventions. They’re relevant and important in the gaming industry, but special attention should be paid to the application of patent protection to digital technologies.
It is also possible that a single product is protected by more than one type of intellectual property. For example, a patented product could be marketed under a registered trademark.
A patent is an exchange between an inventor, who teaches the invention, and the government, which grants a limited monopoly. The patent owner can prevent others from making, using or selling an invention for a specified period of time.
A patent application includes a description and drawings that teach the invention. A patent application also includes a set of claims that define the scope of the invention. After filing at a government patent office, the application is examined by a patent examiner, and if the application is successful, a patent is granted.
To be patentable, an invention must be new, inventive (i.e. not obvious) and useful. The invention must also be directed to “patentable subject-matter” such as processes, machines and manufactured articles that meet certain criteria. An invention is often framed as the solution to a practical problem. An invention need not be in an entirely new field of technology (“pioneering patent”), as patents can also be granted for improvements to existing technology.
Patents can provide many benefits. One important benefit is the ability to exclude others from practicing the patented invention to gain a competitive advantage. The patent owner can license the invention in exchange for royalties, thus producing a stream of revenue. Patents can be important assets in negotiations. For example, if each party owns an invention that the other would like to use, they may agree to cross-license.
Since patents are granted by governments, a separate patent is needed in each country or region in which protection is sought. Of course, there are differences between countries and regions in patent laws and practice. However, there are mechanisms that can simplify seeking patent protection in more than one jurisdiction.
Computer-Implemented Inventions and Gaming
Traditionally, patented inventions were typically a physical object, such as a tire, or an observable process, such as a process for making cement.
Conventional technologies can rely on conventional patent practice. For example, determining whether a new mechanism for a folding chair is patentable is unlikely to present difficult challenges because the issues are familiar and have been collectively considered over a long period of time, but new classes of inventions have less experience fitting within traditional frameworks. Patent law and practice may raise new issues when applied to recent or leading edge technologies that are being used in new practical applications.
As computer processing power has grown exponentially, computers are becoming omnipresent in our lives. We have moved away from stand-alone computers towards networks of systems and devices. Software is moving from a one-time purchase (with possible updates) to software as a service in which software is licensed on a subscription basis and is typically accessed over a network. Not surprisingly, “computer-implemented inventions” has become an important class of inventions. These inventions involve a computer which is programmed by software to achieve an objective by following an algorithm.
The gaming industry uses computer-implemented technology in countless ways. A great deal of ingenuity and investment goes into the various digital systems that dominate the typical gaming operations, including surveillance systems that provide physical security and deter fraud and cheating; mobile and web applications that reach and engage players; and cashless payments that reduce cost and improve logistics. Other examples of computer-implemented technology include tracking software to combat money laundering; and customer relations software to better understand players and build loyalty.
A search of the Canadian Patents Database using the search term “wager” shows that recent patent applications include those relating to electronic gaming machines, including machines which support in-game advertising; machine detection of wagers; and networking of casino management computer systems.
Patenting technology relating to computer-implemented inventions can pose challenges from the point of view of subject-matter. In Canada, as in many other jurisdictions, a patent examiner will raise an objection if the examiner considers that the invention is not directed to patentable subject matter. The criteria for what constitutes patentable subject matter depends on the country or region in which patent protection is sought. In the United States, recent case law provides some guidance from the courts in determining what is patentable subject matter.
Canada does not have as many court decisions to provide guidance, and the policies of the Canadian Intellectual Property Office (CIPO) play a very significant role in determining how inventions are assessed by the patent examiners employed there. CIPO considers an invention to be a solution to a practical problem. That solution must be something with physical existence or a process that produces a discernible effect or change.
Regarding software, CIPO takes the position that where it appears “the computer is required to resolve a practical problem, the computer may be considered an essential element of the claim.” Thus, if a computer program solves a practical problem in a way that requires use of a computer, then the invention may be patentable. How the invention is described and claimed in a patent application and which elements are emphasized, however, can significantly affect the probability of success. For example, an invention characterized simply as an algorithm that is run on a computer could be difficult to patent. If the invention does not provide a discernible effect or change, the invention could be considered to be abstract and disembodied.
In analyzing a computer-implemented invention, the computer might be considered to be “non-essential.” For example, if a method is computer-implemented, but the computer is considered to be a mere convenience and the method could be carried out using pen and paper, then CIPO may consider that the computer is not part of the invention. Under these circumstances, for the purposes of determining patentability, the invention could be reduced to an algorithm that’s abstract and unpatentable.
Therefore, a patent application for a computer-implemented invention should, where appropriate, discuss why a computer is necessary to solve a practical problem. It is easier to argue that a computer is essential if the computer is presented as one component of a system that interacts with other components. Examples include using a computer to transmit data to remote servers, retrieve information from databases and write files to memory. Where possible, physical steps such as measuring speed or saving resources should be discussed and exemplified.
It may be helpful if the problem addressed by the invention and the solution provided by the invention are discussed from a technological point of view. For example, the patent application could use language to emphasize technical details of implementation instead of language relating to human activities (such as accounting, conducting business and financial transactions).
Engaging Professional Services
Patent agents and trademark agents are experts in obtaining protection for their respective form of intellectual property protection. If you have developed or acquired intellectual property, consider engaging the services of a professional to guide and assist you in obtaining an appropriate form of protection. In addition, a patent agent, a trademark agent or a lawyer may be able to help develop an overall strategy that will make the most of your intellectual property.
If you are seeking patent protection, consider engaging the services of a patent agent very early on, preferably as soon as a decision is made to seek patent protection. A patent agent can draft and file a patent application to protect your invention in Canada and abroad. An experienced patent agent will help ensure that the patent application is properly drafted to avoid risk of rejection, to help avoid costly mistakes and to assist in obtaining the broadest possible protection including obtaining international rights.
Maximizing the chances of successfully patenting a computer-implemented invention requires detailed of knowledge of the law, an understanding of the practices of the patent office, and awareness of strategies that have been recently successful. In seeking the help of a patent agent, consider someone who has an active practice in this area and is familiar with recent developments.
John Koh is an associate and a Canadian Patent Agent, Barrister and Solicitor for Marks & Clerk (Ottawa, Canada).
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