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Microsoft Sued over Xbox Live 68

Posted by Zonk
from the nice-timing dept.
fiorenza writes "Ars Technica is reporting that Paltalk has sued Microsoft in the Eastern District of Texas over its Xbox Live service. The suit alleges that Microsoft's Xbox Live infringes on two of its patents, and that the company has suffered damages 'in at least the tens of millions of dollars,' which raises obvious questions about why they waited four years to file the suit (Xbox Live was launched in late 2002)." From the article: "Microsoft, as a company that runs multiplayer game servers, is alleged to be violating these patents. It's not clear how they're doing so--the initial complaint provides literally no evidence of Microsoft's guilt. The filing instead describes the Paltalk patents and the dates that Xbox Live went, err, live. After five pages of this, Paltalk simply claims that "gameplay on the Xbox or Xbox 360 through the Xbox Live online gaming service infringes the Paltalk patents," then goes on to ask for a jury trial. Presumably, actual information will be released once the trial begins."
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Microsoft Sued over Xbox Live

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  • by gEvil (beta) (945888) on Friday September 15, 2006 @02:43PM (#16115499)
    Presumably, actual information will be released once the trial begins.

    I don't know if I'd make that assumption anymore. (see SCO v. IBM)
    • Re: (Score:3, Informative)

      by TubeSteak (669689)
      Last I checked, SCO v. IBM was in the terminal stage of the discovery process & SCO is in the position where they must put up or STFU.

      They really don't have many more options to drag things out.

      IIRC, SCO is fighting the Judge's decision(s) on IBM's motion(s) to dismiss/limit various aspects of the case... a motion IBM could make because SCO has yet to show any proof.

      Anyways, trial is set for Feb 2007. If the judge hasn't forced something substantive out of SCO in the next 6 months, I imagine it won't be
  • by legoburner (702695) on Friday September 15, 2006 @02:43PM (#16115502) Homepage Journal
    Even Microsoft must be getting fed up with the instability caused by the patent system in the US. Do they benefit enough from having such a large number of patents that they would not put pressure on the system for change, or is everything building up to one big patent-lawsuit blowout with IBM/Sun/Every other major computer player (or does that work more like cold war style M.A.D.)?
    • Re: (Score:2, Insightful)

      Do they benefit enough from having such a large number of patents that they would not put pressure on the system for change, or is everything building up to one big patent-lawsuit blowout with IBM/Sun/Every other major computer player (or does that work more like cold war style M.A.D.)?

      Its more the latter (M.A.D.). See the SCO v IBM case for an example. SCO sued IBM for, among other things, violating some patents they may-or-may-not hold (as a result of the "asset transfer"). IBM then countersued SCO for, a

      • by Behrooz (302401)
        Its more the latter (M.A.D.). See the SCO v IBM case for an example. SCO sued IBM for, among other things, violating some patents they may-or-may-not hold (as a result of the "asset transfer"). IBM then countersued SCO for, among other things, violating their patents on stuff.

        Companies with huge patent portfolios (IBM, Microsoft, Intel, etc) will usually set up cross licensing deals in the settlement process from an infringement lawsuit that will allow them to use patents without fear of suit.


        I'd say it's c
    • Re: (Score:3, Insightful)

      by Blakey Rat (99501)
      Microsoft is probably the most pro-patent reform of any US tech company. The problem is that, as cases like this show, they can't afford to not play the game... they just want the rules of the game to change.
      • by MMaestro (585010)
        Microsoft is not the most pro-patent. That award belongs to the legions of patent trolls, delusional companies such as SCO and IBM which ACTUALLY has valid aging patents.
    • by cybermancer (99420) on Friday September 15, 2006 @03:28PM (#16115927) Homepage
      Actually a cold war is fairly accurate. Many patent rich companies use the patents they hold, that they know others are infringine upon as a defense to keep other patent rich companies from suing them.

      Anytime a patent infringement lawsuit comes in they will examine the business of the one suing them to see which patents they can counter-sue on. Their goal is to counter sue for enough damages to exceed the original complaint.

      Most companies in the computer industry know not to sue IBM because they hold so many patents that everyone is most likely infringing on. Occasionally some small company does attempt to sue them and IBM makes an example of them.
      • by Haeleth (414428)
        Anytime a patent infringement lawsuit comes in they will examine the business of the one suing them to see which patents they can counter-sue on. Their goal is to counter sue for enough damages to exceed the original complaint.

        Most companies in the computer industry know not to sue IBM because they hold so many patents that everyone is most likely infringing on. Occasionally some small company does attempt to sue them and IBM makes an example of them.


        But surely the solution is simply to sell your offensive
        • by KDR_11k (778916)
          Well, you'd have to keep a licensing agreement with that troll company and you wouldn't get money from the lawsuit at all. This may work if you just want to damage the opposition but since patent MAD is not handled by the law but by the way the responsible people feel right now they might figure yout you're behind that troll company and blast you anyway.
    • Having a large patent portfolio only helps to deal with other large companies that *do produce* something. Then both companies mutually agree that it is not in their interest not to destroy each other. Think of the United States and Soviet Uninon during the cold war.

      However, if you get sued by some one that don't produce anything then all your own patents are useless, unless you can prove that you have already patented what is being contested, and your patent preceedes theirs.

  • Now, (Score:4, Interesting)

    by joe 155 (937621) on Friday September 15, 2006 @02:44PM (#16115508) Journal
    I wondered how I felt about this, and I've decided this is a very good thing. I dislike MS as much as the next Linux user* but I also dislike patents. So what I hope will happen, and what I assume will happen, is that MS will be sued, but will win and these stupid patents will be invalidated. The patent trolls lose their patents and MS loses a lot of money on lawyers. yay!

    *It is said "BSD is for those who love UNIX, Linux is for those who hate M$"... which I like so much I'll bring up now
    • by heyguy (981995)
      It seems like MS can hire some TV lawyer for a few hundred bucks to defend against these schmos.
      • by elrous0 (869638) *
        I think I know a team for the job. And if Microsoft has a problem, if no one else can help, and if they can find them, maybe Microsoft can hire them.

        -Eric

    • Microsoft would rather lose the lawsuit and pay a few million rather then invalidate a tool that they can use aganst other companies.



      Microsoft will either buy the company or tie them up in years of lawsuits (which will kill the company). In the end, chances are Microsoft lawyers will either find a problem with the suit or the holding company will get so tired they will just settle out-of-court.



  • ... that microsoft is patenting everything? Suits like this cost money.

    It's rediculous, and patent reform is the only way out. These are major companies, too. Average Joe stands no chance in court against the big dogs.
  • Midway's wave net per dates this buy a few years
    hhttp://en.wikipedia.org/wiki/Ultimate_Mortal_Komb at_3_Wave_Net#Ultimate_Mortal_Kombat_3_Wave_Net
    http://en.wikipedia.org/wiki/Rush_Wavenet [wikipedia.org]
    • by drinkypoo (153816)
      That's the crappiest wikipedia entry I've ever seen. It literally doesn't tell you jack shit, it's just a list of links.
    • I'm not a lawyer, but I was around at Williams/Midway at the end of MK3 Wavenet and by my reading of the 523 patent claims, Wavenet is not prior art. The patent claims a set of computers pushing messages up to a server every so often, the server aggregating them and pushing a compound message back down to everyone who needs to know. It claims this running on a fixed, short time interval, over the Internet, with the groups being registered and subsequently joined by individual computers.

      However, there is not
  • by TopShelf (92521) on Friday September 15, 2006 @02:48PM (#16115541) Homepage Journal
    Of course they waited and waited to see how much business the XBox Live was doing. Regardless of whether or not their claim has any merit, it's typical that a plaintiff like this is going to claim that should be receiving licensing fees in proportion to the scale of business at which the patent applies. If XBox Live did 10 times as well, the calculation damages should result in a figure that his also 10 times higher.

    That said, there is something SCO-like [wikipedia.org] stinkin' here...
  • by alvinrod (889928) on Friday September 15, 2006 @02:50PM (#16115564)
    In the best case scenario this is thrown out of court and Microsoft's lawyers actually get to earn their keep. No big deal other than a few sensationalist headlines every now and again. Isn't any press good press anyhow?

    In the worst case Microsoft is seriously guilty of the claims of infringement. They end up paying a few tens of millions of dollars and having to pay to liscense the stolen technology in Live. But considering that Microsoft makes billions of dollars each year as a whole company and that the Xbox division dropped something like $4 billion on the Xbox, and probably a few extra billion on the Xbox 360 at this point, does an extra ten or twenty million dollars really matter?

    Considering that Live is one of Microsoft's big selling points for their console, I seriously doubt that they would put themselves into a situation where they could no long offer it until they fixed parts to work around the infringement. Either they throw some chump change at some company or they don't. Business as usual in that the only real winners are the lawyers.
    • by cybereal (621599) on Friday September 15, 2006 @03:10PM (#16115746) Homepage
      You seem to have missed about half the point here. You are correct about the costs being insignificant to the XBOX project for Microsoft. Well, not entirely insignificant, but certainly nowhere near untenable.

      However, the real point of this article is about the patent trolls. If you look at it as a case as MS having to decide if paying for trials or paying the desired settlement (which is bound to be less than what is asked in the trial itself) then you'll see that MS may be better off just paying these guys without a trial. This is a serious problem with the legal system.

      You see, if Microsoft decided to take this to court, and they won, then a precedent would be set for similar cases in the future. This precedent would serve the smaller companies that can't really afford to pay out settlements. But instead, MS will probably just settle and give into this extortion and future cases just like this will continue to come about with no new ammunition against them.

      It's unfortunate but, our legal system relies heavily on precedents and if none are set, well, no progress is ever made.
      • Or settle and buy a significant percentage of the companies stock. Later the same company will also sue PS3's sad little Live clone, Sony will deny any wrong doing, lose and be required to disable the service... oh wait that was the rumble feature.
    • by RexRhino (769423)
      It isn't a big deal for Microsoft. It is a big deal for any company that plans to offer voice or video chat that doesn't have millions to spend on lawyers to fight patent trolls. It is a big deal for open source and non-profit software, who most of the time don't have a penny to spend on lawyers for patent trolls.

      One of the effects of patent trolls is to raise the legal costs of doing buisness to the point where only big corporations like Microsoft can afford the legal costs of fighting patent trolls.
  • Paltalk is a company that makes an addon for AOL, Yahoo, and ICQ that apparently "enhances the traditional instant message and chat room functionality you know and love with state-of-the-art voice and video that you'll enjoy with all your senses", including the equivalent of multiple-user audio/video-conferencing in chat rooms and instant messages. Presumably, then, they are going after the in-game chatting ability in X-box live. If this is true (though don't take it as read, I'm not a patent lawyer), it
  • Why don't patents have a "genericized" sort of clause like trademarks do? In the trademark world, if you don't protect your trademark by at least pretending to control its use, then after a reasonable period of time you lose the right to control it. Is this not a reasonable stance to take on patents? Cases like this seem to have become more and more common with popular products violating patents.

    If someone is violating your patent, you should be required to ask them for compensation within say, a year, or

    • Re: (Score:3, Insightful)

      by The_REAL_DZA (731082)

      It seems very unfair that a patent holder can quietly wait years for a violating product to become incredibly popular before he pops in and says "Hey! That's all mine!"

      The entire point of patents is to protect an innovator from losses if/when some entity tries to profit from the innovator's hard work (without licensing it from the innovator.) If nobody's profiting (actually, if the innovator isn't losing anything -- an "entity" similarly can't start making widgets they don't own or license the pat

      • by drinkypoo (153816)
        The entire point of patents is to protect an innovator from losses if/when some entity tries to profit from the innovator's hard work

        No, that was the point of patents. The point of patents with our current system is to protect megacorporations and make the process of getting submarine patents and other applications which should be thrown out immediately through the system.

    • Re: (Score:2, Interesting)

      by BeeBeard (999187)
      IAAL, but not a patent lawyer. What I do know is that what you're suggesting would effectively dismantle the U.S. patent system. Trademarks just identify goods and services and protect what usually amounts to name recognition and consumer goodwill.

      But patents are completely different. A patent is a property right granted to an inventor that gives the inventor a reasonable period of time to profit from their invention without fear of infringement. Whether or not the inventor has profited from the patent
      • proof of how obvious it is? I mean, yeah, it took time to invent then perfect the lightbulb. But voice chatrooms? It's just a conference call over ip. Moreover, I see more and more patents that don't cover technology, but the application of technology. Seen in that light, Amazon's "One click Shopping" wasn't an invention, it was an application of cookies.
        • by BeeBeard (999187)
          Not really. All you did was echo my own sentiments and summarize my comment, and you got modded higher. I guess it's not too late for me to patent a ./ moderation system that works.

          It is logically untenable to state that building upon existing technologies to create new technologies makes those existing technologies more obvious for the purpose of undermining a patent. Our collective comfort level and familiarity with technologies as time goes on is something different entirely.

          I am too ignorant of scien
  • So its sorta like (Score:2, Insightful)

    by joshetc (955226)
    Blizzard's battle.net service? IIRC that was rolled out around 1997, wouldn't it be prior art then?
    • MS Zone was actually earlier. Same with several other services, such as DWANGO and the TEN network.
  • by RealGrouchy (943109) on Friday September 15, 2006 @03:05PM (#16115697)
    This just goes to show you how useful technology is becoming for real-life scenarios.

    MS sued over Xbox live? Tremendous progress! I mean, you don't see many law suits taking place over AIM, TTY, or even IRC!

    - RG>
  • by Anonymous Coward
    ** head explodes **
  • by Evro (18923) <evandhoffman&gmail,com> on Friday September 15, 2006 @03:39PM (#16116027) Homepage Journal
    That's an odd way to sue someone, I'd think they'd do it in a court of law.
  • I guess this is the American Way? Sue, sue & sue, its quite annoying. The only reason why they are doing this is because they know MS has loads of cash.
    • What's the point of suing someone who doesn't have loads of cash?
      • by Nutria (679911)
        What's the point of suing someone who doesn't have loads of cash?

        Driving them to financial/personal ruin and possibly bankruptcy.

  • by Janthkin (32289) on Friday September 15, 2006 @05:52PM (#16117172)
    From TFA: "The two patents at issue are the '523 patent and the '686 patent, both of which involve server-group messaging."

    I read every comment that was posted prior to starting to write this. Lots of babble about "Oh, Battle.net predates this" and "it must be about voice over Live". Read, people!

    The '523 patent, from a cursory reading of the one independent claim, looks to involve transmissions from a collection of host computers (think individual Xboxen), back to a central server, where the data is aggregated, and then returned to one of the host computers. Interesting bit is that it's dealing with a unicast network and payloads, which doesn't sound like packet-based transmission. See the long, boring words of the patent for more details.

    The '686 is an extremely narrow-looking patent, addressing the creation of a "group" of computers for messaging purposes. See Claim 1 - there are 6 ennumerated elements, each with subconditions, and a final non-ennumerated element; infringement would have to touch each and every one of these elements.
    • voice chat isn't included in the dashboard like xbox live version 1 but peer to peer communications.

      There are games - specifically EA games that use servers, but i'm not sure how the voice is handled on them or if the servers are for games, stats or data gathering or other purposes.
  • Mayby a statue of limitations is in order if you havn't filed a claim against a company within 5 years of them putting a product out you loose the rights to the patent.
    • by Archfeld (6757) *
      Maybe 5 years from when you 'discover' the alleged infringment, although that introduces a boatload of new issues as well.
  • I am not sure exactly which is being referenced here, but there are a few other areas other than Live tha will be hit.

    Voice: Ventrilo and other such Voice communication software packages. Heck, many of the newer games, Battlefield 2 and UnReal Tournament 2004 for instance, have VOIP built into the software.

    Games: Pretty much any PC game out there, which has a multiplayer option, has to connect to a "server" and get the packet updates for the game from that computer. How is it that they are willing to su
  • ...bloody time!

In these matters the only certainty is that there is nothing certain. -- Pliny the Elder

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