DCT

2:24-cv-04056

Milestone Entertainment LLC v. Activision Blizzard Inc

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I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:24-cv-04056, C.D. Cal., 05/15/2024
  • Venue Allegations: Venue is alleged to be proper as Defendant's principal place of business is in the Central District of California, where it resides and has committed acts of infringement.
  • Core Dispute: Plaintiff alleges that Defendant’s popular mobile games, including Candy Crush Saga and Call of Duty: Mobile, infringe six patents related to dynamically altering gameplay parameters and implementing virtual currency systems based on player analytics.
  • Technical Context: The technology concerns systems for managing computerized games by monitoring player behavior and adjusting game elements like difficulty and prizing to achieve predefined objectives, a concept central to the "freemium" and live-service models in the modern multi-billion-dollar mobile gaming industry.
  • Key Procedural History: The complaint does not mention any prior litigation, Inter Partes Review (IPR) proceedings, or licensing history related to the asserted patents. The patents-in-suit all claim priority to a common 2004 patent application, positioning the inventions as predating the widespread adoption of modern smartphone gaming.

Case Timeline

Date Event
2004-09-01 Earliest Patent Priority Date
2013-09-10 U.S. Patent No. 8,529,336 Issued
2020-05-12 U.S. Patent No. 10,650,635 Issued
2020-11-03 U.S. Patent No. 10,825,294 Issued
2022-05-17 U.S. Patent No. 11,335,164 Issued
2022-07-19 U.S. Patent No. 11,393,279 Issued
2022-11-15 U.S. Patent No. 11,501,607 Issued
2024-05-15 Complaint Filing Date

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 8,529,336 - "Apparatus, systems, and methods for implementing enhanced gaming and prizing parameters in an electronic environment"

  • Patent Identification: U.S. Patent No. 8,529,336, "Apparatus, systems, and methods for implementing enhanced gaming and prizing parameters in an electronic environment," Issued September 10, 2013.

The Invention Explained

  • Problem Addressed: The patent describes the technical challenge of obtaining a "higher level of audience interest and potential participation" in computerized games while simultaneously maintaining a set of game objectives favorable to the operator, such as a target win probability or overall prize payout (Compl. ¶13; ’336 Patent, col. 13:63-65).
  • The Patented Solution: The invention is a computer-implemented method that receives a set of high-level "mandated parameters" (e.g., an overall payout percentage) and analyzes real-time gameplay data. Based on this analysis, the system programmatically alters a set of "variable parameters," such as game difficulty or the value of prizes, to ensure the overall mandated parameters are met for the game "as a whole" (Compl. ¶¶13, 15; ’336 Patent, col. 5:7-64).
  • Technical Importance: The patent claims a specific, unconventional method for using a computer to dynamically alter networked game structures based on real-time analysis, differing from prior static game systems (Compl. ¶¶14, 17).

Key Claims at a Glance

  • The complaint asserts independent Claim 1, among other claims (Compl. ¶76). Plaintiff also reserves the right to assert additional claims (Compl. ¶74).
  • Claim 1 requires a method for electronic interaction comprising the steps of:
    • Receiving mandated parameters which must be achieved by the system as a whole.
    • Storing in a memory at least the mandated parameters.
    • Processing in a processing system to implement the mandated parameters by utilizing variable parameters to achieve them.
    • Storing information regarding particular game play events.
    • Generating presentations for displaying game play events.
    • Performing game analytics on the game play events.
    • Varying the displays presented to the user to achieve the mandated parameters.

U.S. Patent No. 11,335,164 - "Systems for implementing enhanced gaming and prizing parameters in an electronic environment"

  • Patent Identification: U.S. Patent No. 11,335,164, "Systems for implementing enhanced gaming and prizing parameters in an electronic environment," Issued May 17, 2022.

The Invention Explained

  • Problem Addressed: The patent addresses the problem of maintaining player interest in a game, particularly when faced with other entertainment possibilities or game difficulty (Compl. ¶22; ’164 Patent, col. 46:21-26). This is framed within the broader problem of increasing audience participation while maintaining operator-favorable game objectives (’164 Patent, col. 14:56-58).
  • The Patented Solution: The invention is a system that combines the dynamic adjustment of game parameters with a virtual currency ("vCoins") framework. The system modifies a player's experience based on game analytics and provides virtual currency that can be acquired through cash purchases. Crucially, the virtual currency acquired via purchase is "subject to a multiplier," which can be varied to induce play at specific times or for different games (Compl. ¶¶21-22; ’164 Patent, col. 46:24-29).
  • Technical Importance: The claimed system is presented as an unconventional improvement to gaming computers by enabling dynamic modifications to gameplay based on analysis and the use of variable virtual currencies with multipliers (Compl. ¶26).

Key Claims at a Glance

  • The complaint asserts independent Claim 1, among other claims (Compl. ¶99).
  • Claim 1 requires a system for electronic game play comprising:
    • A server with memory to store mandated and variable parameters for game structure and prizing.
    • A game processor that generates gameplay information, including gameplay with virtual money ("vCoins") acquired via purchase.
    • The virtual money acquired by purchase is subject to a multiplier.
    • The system implements a first set of variable parameters for a first gameplay experience and modifies them to provide a different, second gameplay experience.
    • Memory to store account information that varies through gameplay.
    • A decision engine to perform game analytics on the gameplay.

U.S. Patent No. 11,393,279 - "System for implementing enhanced gaming and prizing parameters in an electronic environment"

  • Patent Identification: U.S. Patent No. 11,393,279, "System for implementing enhanced gaming and prizing parameters in an electronic environment," Issued July 19, 2022 (Compl. ¶28).
  • Technology Synopsis: The patent is directed to methods of dynamically altering a computerized game by changing its structure or prizing based on an analysis of gameplay data. It claims a system with memory for storing mandated and variable parameters and a "play engine" that selects different parameter sets based on recorded gameplay information and predefined criteria (Compl. ¶¶30, 33).
  • Asserted Claims: At least Claims 1, 3-9, 13, 17, 18, 23, 25, 26, 28, and 29 (Compl. ¶131).
  • Accused Features: The complaint alleges that Candy Crush Saga uses mandated and variable parameters to dynamically alter the structure and/or prizing of games (Compl. ¶131).

U.S. Patent No. 10,650,635 - "Systems for implementing enhanced gaming and prizing parameters in an electronic environment"

  • Patent Identification: U.S. Patent No. 10,650,635, "Systems for implementing enhanced gaming and prizing parameters in an electronic environment," Issued May 12, 2020 (Compl. ¶36).
  • Technology Synopsis: The patent is directed to systems for computerized gaming that use virtual currency ("virtual money" or "vCoins"). The currency can be acquired through both gameplay and cash purchase, with the cash purchase being subject to a multiplier. The claims also require the "conversion of the virtual money into a non-cash good comprising an image to permit advancement to another level within the game" (Compl. ¶¶38, 41).
  • Asserted Claims: At least Claims 1, 2, 4, 6, 8, 9, 10, 14-16, 17, 18, 21, 22, 23, 25, 27, and 29 (Compl. ¶136).
  • Accused Features: The complaint alleges that Candy Crush Saga infringes by using virtual currency acquired through cash purchase and subject to a multiplier, or through gameplay (Compl. ¶136).

U.S. Patent No. 11,501,607 - "Systems for implementing enhanced gaming and prizing parameters in an electronic environment"

  • Patent Identification: U.S. Patent No. 11,501,607, "Systems for implementing enhanced gaming and prizing parameters in an electronic environment," Issued November 15, 2022 (Compl. ¶44).
  • Technology Synopsis: The patent is directed to methods of dynamically altering computerized gameplay by changing game structure or prizing based on system analysis, combined with the use of virtual currency ("vCoins") acquired via cash purchase subject to a multiplier. The claims recite a system that implements different sets of variable parameters to provide differing gameplay experiences based on game analytics (Compl. ¶¶46, 50).
  • Asserted Claims: At least Claims 1, 2, 4, 6, 7, 11, 15, and 19 (Compl. ¶145).
  • Accused Features: The complaint alleges that Candy Crush Saga infringes by using mandated and variable parameters to dynamically alter game structure/prizing and by using virtual currency acquired via cash purchase subject to a multiplier (Compl. ¶145).

U.S. Patent No. 10,825,294 - "Systems for implementing enhanced gaming and prizing parameters in an electronic environment"

  • Patent Identification: U.S. Patent No. 10,825,294, "Systems for implementing enhanced gaming and prizing parameters in an electronic environment," Issued November 3, 2020 (Compl. ¶53).
  • Technology Synopsis: This patent is directed to systems for computerized gaming that use virtual currency acquired through gameplay and cash purchase. The claims require that the virtual money from a cash purchase be subject to a multiplier and also require the "conversion of the virtual money into a non-cash good comprising an image" to permit game advancement (Compl. ¶¶55, 58).
  • Asserted Claims: At least Claims 1, 2, 3, 4, 5, 6, 7, 8, 9, 13, 16, 17, 18, 19, and 20 (Compl. ¶155).
  • Accused Features: The complaint alleges that Candy Crush Saga infringes by using virtual currency acquired through cash purchase and subject to a multiplier, or through gameplay (Compl. ¶155).

III. The Accused Instrumentality

Product Identification

The complaint identifies Defendant's computer games, including but not limited to Candy Crush Saga and Call of Duty: Mobile, as the "Accused Products" (Compl. ¶62).

Functionality and Market Context

  • The complaint alleges that Candy Crush Saga tracks numerous gameplay metrics for use as "mandated parameters," including frequency of play, win/loss rates, and the frequency and amount of in-game purchases (Compl. ¶¶66, 68). Based on these tracked metrics, the game allegedly alters "variable parameters" such as the composition of the game board, the likelihood of obtaining special items, and the prizing structure—for example, by offering discounted purchases for "hard levels" based on a player's prior experience (Compl. ¶¶69, 70, 73). A screenshot provided in the complaint shows Candy Crush Saga informing a player that "51% of players needed a boost on this level" and offering an in-game purchase (Compl. p. 28).
  • The complaint alleges that Call of Duty: Mobile uses virtual money called "COD Points" or "CP," which can be acquired through gameplay or cash purchase (Compl. ¶¶63-64). It is further alleged that cash purchases of this virtual money are subject to a multiplier, where larger cash purchases result in disproportionately larger amounts of virtual money (Compl. ¶65). The complaint includes a screenshot from the game's store showing different purchase tiers for "COD Points," with larger dollar amounts yielding progressively higher bonus percentages of virtual currency (Compl. p. 25).

IV. Analysis of Infringement Allegations

’336 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
a method for electronic interaction with one or more users of the system, comprising the steps of: receiving mandated parameters, the mandated parameters being those which must be achieved by the system as a whole Candy Crush Saga is alleged to track numerous aspects of gameplay, such as frequency of play, win/loss rate, and in-game purchases, for use as thresholds the game seeks to achieve. ¶78 col. 5:7-12
storing in a memory coupled to the input at least the mandated parameters The game allegedly utilizes the memory of the device on which it is installed and/or a server environment to store the tracked parameters. ¶79 col. 5:15-17
processing in a processing system coupled to the memory for implementing the mandated parameters by utilizing variable parameters, the processing system utilizing the variable parameters to achieve the mandated parameters Candy Crush Saga allegedly stores and alters variable parameters—such as game difficulty and win likelihood—when the thresholds of the mandated parameters are met or crossed. ¶80 col. 5:17-21
storing information regarding particular game play events as determined by the processor The game allegedly tracks metrics such as the number of monthly average users (MAUs), in-game net bookings, and win rates for each level. ¶85 col. 4:18-20
generating presentations for at least displaying game play events Candy Crush Saga displays the game board and game events to the user during play, as depicted in a provided screenshot of the game in progress (Compl. p. 33). ¶87 col. 4:13-17
performing game analytics on the game play events The game is alleged to track win rates and in-game purchases for each level. ¶88 col. 6:40-42
varying the displays presented to the user to achieve the mandated parameters The game allegedly alters the game board, the availability of special items, and the prizing structure—such as by offering discounted purchases on "hard levels" based on player experience—to increase the chances of completing a level, as shown in a screenshot offering a discounted boost (Compl. p. 36). ¶¶89, 93 col. 6:53-56
  • Identified Points of Contention:
    • Scope Questions: A central question may be whether internal business metrics like "monthly average users (MAUs)" and "in-game net bookings" (Compl. ¶85) qualify as "mandated parameters" that "must be achieved by the system as a whole," as required by the claim. The defense may argue the patent contemplates rigid, externally imposed rules (like in a lottery), not flexible, internal business goals.
    • Technical Questions: The complaint alleges that game alterations are made "in order to increase the chances of completing a level" (Compl. ¶81). A point of contention may be whether this action directly serves to "achieve the mandated parameters" (like a target win rate or purchase frequency), or if it is a general gameplay feature without the specific causal link required by the claim.

’164 Patent Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
a server including memory to store mandated and variable parameters for use in the course of game play, wherein the mandated parameters represent parameters which must be achieved by the system as a whole, and the variable parameters represent parameters characterizing at least one of: a game structure and a prizing structure Candy Crush Saga is alleged to utilize servers to store player registration, payment information, and various game parameters related to game structure and prizing. A screenshot shows an error message indicating a lack of internet connection is required to access the store (Compl. p. 43). ¶¶101-102 col. 5:30-40
a game processor coupled to memory generating game play information, the game processor providing at least: the game play information including game play with virtual money (vCoins), the virtual money (vCoins) being acquired in response to a purchase utilizing the payment information of the users Candy Crush Saga provides virtual currency ("Gold Bars") that can be acquired through gameplay or with real money from the game's store, as explained in a provided support page screenshot (Compl. p. 48). ¶110 col. 46:16-19
the virtual money (vCoins) acquired in response to a purchase being subject to a multiplier Call of Duty: Mobile is alleged to offer its virtual currency ("COD Points") with a multiplier, where larger cash purchases yield disproportionately more virtual currency, as shown in a screenshot of the in-game store (Compl. p. 25). ¶¶65, 111 col. 46:16-29
implementing a first set of variable parameters to provide a first game play experience, and modifying the variable parameters to provide a second set of variable parameters providing a second game play experience, where the first game play experience differs from the second game play experience Candy Crush Saga allegedly alters the gameplay experience by, for example, removing the option to watch an advertisement for extra moves after a player makes their first in-game purchase, leaving payment as the only option, as shown in a side-by-side comparison screenshot (Compl. p. 51). ¶¶112, 116 col. 10:19-23
memory storing account information which varies through game play The game allegedly stores information about registered players, including their identity, points, and accrued special items, all of which vary during gameplay, as depicted in a player profile screenshot (Compl. p. 53). ¶118 col. 46:48-52
a decision engine for performing game analytics on the game play Candy Crush Saga allegedly tracks metrics such as MAUs, in-game net bookings, win rates per level, and in-game purchases per level. ¶119 col. 10:19-20
  • Identified Points of Contention:
    • Scope Questions: A dispute may arise over whether a tiered pricing structure that provides a "bonus" for larger purchases (Compl. ¶65) meets the claim limitation of a "multiplier." The defense could argue this is a simple volume discount, whereas the patent specification describes a more dynamic multiplier that can be varied based on factors like time or player status to induce play (’164 Patent, col. 46:24-29).
    • Technical Questions: The complaint alleges that removing an ad-watching option after a first purchase constitutes modifying parameters to provide a different gameplay experience (Compl. ¶116). A question for the court will be whether this change is driven by the claimed "decision engine" performing "game analytics," or if it is a predetermined, one-time change in the game's business logic for all paying users.

V. Key Claim Terms for Construction

  • The Term: "mandated parameters" (’336 Patent, Claim 1)

    • Context and Importance: The construction of this term is fundamental to the infringement case for the ’336 patent and related patents. Practitioners may focus on this term because its scope will determine whether the Defendant's internal business analytics and performance metrics can be considered the kind of top-down constraints the patent describes.
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The specification states that "Exemplary mandated parameters may consist of prize pay out and win rates, and may include such factors as the minimum payout amount, the maximum payout amount, a defined percentage payout..." (’336 Patent, col. 5:7-12). The use of "may consist of" and "may include" suggests this is a non-exhaustive list, potentially allowing for other types of parameters like player engagement metrics.
      • Evidence for a Narrower Interpretation: The specification also states these parameters are "typically being provided by the game sponsor, such as a lottery" and "must be achieved by the system as a whole" (’336 Patent, col. 5:1-6). This language could support a narrower construction limited to externally imposed, rigid objectives akin to those in regulated gambling, rather than flexible, internal business goals.

  • The Term: "multiplier" (’164 Patent, Claim 1)

    • Context and Importance: This term is critical for the patents involving virtual currency. Practitioners may focus on this term because the dispute may turn on whether a static, tiered pricing structure for virtual currency constitutes a "multiplier."
    • Intrinsic Evidence for Interpretation:
      • Evidence for a Broader Interpretation: The patent specification provides a simple example: "one dollar equals 500 vCoins," directly equating a multiplier with a conversion rate (’164 Patent, col. 46:22-24). This could support reading the term on any system where the amount of virtual currency received is not a 1:1 ratio with real currency, including tiered discounts.
      • Evidence for a Narrower Interpretation: The specification elaborates that the "multiplier may be fixed over time and over games, or it may vary based on factors, such as time, game or player status" and "may be used to induce play at times when other entertainment is available" (’164 Patent, col. 46:24-29). This language may support a narrower construction requiring a dynamic factor that is actively managed by the game operator to influence player behavior, rather than a static pricing table.

VI. Other Allegations

  • Indirect Infringement: The complaint alleges induced infringement for the ’164, ’635, ’607, and ’294 patents. The allegations are based on Defendant encouraging customers to download and use the accused games as intended, which allegedly practices the claimed systems, and by providing FAQs and support documents that instruct users on how to use features like virtual currency (Compl. ¶¶123-125, 137-139, 146-149, 156-158).
  • Willful Infringement: The complaint alleges willful infringement based on Defendant's alleged knowledge of the patents and infringement as of the filing and service of the complaint, asserting that continued infringement would be willful (Compl. ¶¶126, 140, 150, 160). No specific allegations of pre-suit knowledge are made.

VII. Analyst’s Conclusion: Key Questions for the Case

  • A core issue will be one of definitional scope: can the term "mandated parameters," described in the patent specification with examples from the state-sponsored lottery context, be construed to cover the internal, algorithmically-driven business metrics (e.g., player engagement, monetization rates) used by modern, free-to-play mobile games?
  • A second central issue will be one of causal linkage: does the evidence show that the accused games' dynamic adjustments are performed specifically for the purpose of achieving the alleged "mandated parameters," as required by the claims, or are they general-purpose features designed to improve user experience without being governed by the top-down, objective-driven architecture described in the patents?
  • Finally, a key question of technical scope will be whether the term "multiplier," as applied to virtual currency, is broad enough to read on static, tiered pricing structures offering volume discounts, or if it is limited to the more dynamic, behavior-influencing examples described in the patent specifications.