Activision Blizzard, Inc. v. Milestone Entertainment, LLC

Prosecution History analysis

Examiner Search analysis

Invalidity Framework analysis

Petition

Petition summary

## 1. Case Identification
- Case Number: [IPR2025-00709](https://ai-lab.exparte.com/case/ptab/IPR2025-00709)
- Patent #: [10,650,635](https://ai-lab.exparte.com/patent/10650635)
- Filed: March 25, 2025
- Petitioner(s): [Activision Blizzard, Inc.](https://ai-lab.exparte.com/party/activision-blizzard-inc)
- Patent Owner(s): [Milestone Entertainment, LLC](https://ai-lab.exparte.com/party/milestone-entertainment-llc)
- Challenged Claims: 1, 2, 4, 6, 8-10, 14-18, 21-23, 25, 27, and 29

## 2. Patent Overview
- Title: System for Effecting User Experience in an Electronic Game Environment
- Brief Description: The [’635](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1001) patent relates to systems for enhancing user experience in a multi-level electronic game by using virtual currency (vCoins). The system involves acquiring virtual currency through gameplay or cash purchase, which can then be converted into non-cash goods to permit advancement within the game.

## 3. Grounds for Unpatentability

#### Ground 1: Obviousness over Schneier143 - Claims 1, 2, 4, 6, 8-10, 14-18, 21-23, 25, 27, and 29 are obvious over Schneier143.
  - **Prior Art Relied Upon:** Patent 5,970,143 ("[Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008)").
  - **Core Argument for this Ground:**
    - **Prior Art Mapping:** Petitioner argued that [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008), which discloses a system for computer-generated game tournaments, teaches every limitation of the challenged claims. For independent claim 1, Petitioner asserted that [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008)’s system of "credits" is equivalent to the [’635](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1001) patent’s "virtual money." [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008) allegedly discloses acquiring these credits through both in-game performance (game play) and by purchasing them with real money (cash purchase). Petitioner contended that [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008)’s pricing structure, where bulk credit purchases are cheaper per credit (e.g., ten credits for $0.50 each vs. twenty for $0.30 each), inherently discloses a "multiplier." Furthermore, Petitioner argued that [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008) teaches the conversion of these credits into non-cash goods (e.g., a special weapon, a map, or access to bonus levels) to permit advancement in the game. The system also allegedly discloses an account (a "meter") where the credit balance is increased through purchase or gameplay and decreased with each play, meeting the final limitation of claim 1.
    - **Motivation to Combine (for §103 grounds):** Petitioner asserted that because this is a single-reference ground, a finding of motivation is not strictly necessary. However, Petitioner argued that [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008) itself teaches that its various disclosed features are combinable options for its gaming system, which would have motivated a person of ordinary skill in the art (POSITA) to implement them together.
    - **Key Aspects:** The core of this ground rests on the assertion that [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008)’s system of "credits" and associated features for purchase and use are functionally identical to the "virtual money" system claimed in the [’635](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1001) patent.

#### Ground 2: Obviousness over Schneier143 in view of Okita - Claims 1, 2, 4, 6, 8-10, 14-18, 21-23, 25, 27, and 29 are obvious over Schneier143 in view of Okita.
  - **Prior Art Relied Upon:** Patent 5,970,143 ("[Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008)") and Application # 2003/0078102 ("[Okita](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1009)").
  - **Core Argument for this Ground:**
    - **Prior Art Mapping:** This ground was presented as an alternative, arguing that if [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008)’s "credits" are not considered "virtual money," then [Okita](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1009) supplies the missing elements. [Okita](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1009) discloses a video game system that explicitly performs conversion between in-game "pseudo-values" (like points or [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008)’s credits) and a persistent "virtual money" that can be stored on a management server and used across different games. Petitioner argued that [Okita](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1009) teaches acquiring this virtual money through both gameplay (earning pseudo-values) and real money purchase via a "real money conversion unit." This combination allegedly renders obvious the limitations of claim 1 related to virtual money.
    - **Motivation to Combine (for §103 grounds):** A POSITA would combine the teachings of [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008) and [Okita](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1009) to enhance the user experience and promote player engagement. Implementing [Okita](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1009)’s virtual money conversion functionality into [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008)’s tournament system would allow players to use earned currency across multiple games and tournaments, a known method for increasing player retention and providing a more robust gaming economy.
    - **Expectation of Success (for §103 grounds):** A POSITA would have a reasonable expectation of success in this combination because the systems of [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008) and [Okita](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1009) are substantially similar, both employing a central server architecture with connected client gaming terminals. Integrating [Okita](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1009)'s server-based currency management into [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008)'s server would be a predictable application of known client-server technologies.

## 4. Arguments Regarding Discretionary Denial
- Petitioner argued that discretionary denial would be inappropriate.
- **Under §325(d):** Petitioner asserted that institution is proper because the primary prior art references, [Schneier143](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1008) and [Okita](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1009), and the specific combinations argued in the petition were never presented to or considered by the USPTO during the original prosecution of the [’635](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1001) patent.
- **Under §314(a) (Fintiv):** Petitioner contended that the *Fintiv* factors weigh against denial because the parallel district court litigation is currently stayed and no trial date is scheduled, meaning an IPR decision would be issued long before any potential trial.

## 5. Relief Requested
- Petitioner requested the institution of an inter partes review and the cancellation of claims 1, 2, 4, 6, 8-10, 14-18, 21-23, 25, 27, and 29 of the [’635](https://ai-lab.exparte.com/case/ptab/IPR2025-00709/doc/1001) patent as unpatentable.

Activision Blizzard targets game virtual currency patent: Schneier & Okita cited for obviousness of 20 claims on in-game purchases for advancement.