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Xbox Live leads to Microsoft being sued

A case against Microsoft was filed on the 12th of September, after the Prosecution company Paltalk discovered that Microsoft broke one their patents they filed in 1998 with the use of their Xbox Live service.

I took the time out to read the whole case in an attempt to understand what had actually gone on. Before attempting to do so yourselves, I do warn you that there is a lot of legal jargon in there. But I managed to discover the patent that Microsoft breached was patent 5,822,523, or, as it will be known in the case, “the 523 patent”. The patent states:

Multiplayer games conducted over Wide Area Networks generally involve difficult technical issues because of the requirement that all players have the same view of the game environment in real time. Paltalks technology provides for efficient handling of communications between players necessary to maintain a consistent game environment for all players. Paltalk’s technology covers a number of aspects of online gaming, including communications through a group message server as well as establishing groups for online game play.

MS therefore break the patent because they pay nothing to Paltalk for use of the technology with their Xbox Live service, which stretches right across the world. And a quick word of warning to anyone in the UK, since Paltalk have one registered there too. It seems like Paltalk, who run an Instant Messaging service similar to that of Microsoft’s own MSN, are doing this to simply boost their reputation. Live has been up for four years in November. Could they not have pointed it out to Microsoft at the time, before it got huge? Or did they simply “forget” that they had filed the patent until now?

So what will Microsoft do? If they follow Sony, who got sued for their vibrating technology that they stole, and who have since announced no vibration for the PS3, Microsoft will simply take down Xbox Live. However, I doubt they will follow Sony, and will simply pay vast sums of money to Paltalk.

It will be interesting to see what exactly MS will do. If they pay up, MS will have to continue paying royalties to Paltalk for Xbox Live, so will this push the subscription service price up? Who knows, we can only speculate at this stage, but we at Xboxic will be keeping an eye on it, and will let you know.

Many thanks to CleanSweep for the submission.

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29 comments on 'Xbox Live leads to Microsoft being sued'

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Comment by Vidic on 2006-09-15 11:31:03 | Reply

What will MS do?
Pay liability and the story will fade away :P

he joys of being one of the largest companies in the world.. unlike Sony ;)

Comment by hurricanepilot on 2006-09-15 11:58:55 | Reply

I imagine microsoft will initially counter that it’s an obvious solution to the problem.

Be nice to know if patents work like trademarks, as you can lose a trademark if you aren’t seen to be actively protecting them….and 4 years is a long time have not noticed xbox live.

Patents can expire, so you have to keep renewing them if you want to continue to hold exclusive rights to the idea.

Comment by hurricanepilot on 2006-09-15 12:24:07 | Reply

I think 17 years is the standard expiry for a patent in the UK and US, I’m not sure under what conditions you could extend that though.

Comment by Stonie on 2006-09-15 18:17:32 | Reply

In the UK the legal rights last for a maximum term of 20 years from the date of filing of the patent application at the Patent Office. The patent has to be maintained by payment of renewal fees. Once the 20 year term has expired or the patent has lapsed through non-payment of renewal fees, the invention can be worked by anyone as long as there are no other intellectual property rights associated with the invention.

So what exactly does this patent? Because it sounds to me like a software patent and we’ve established that they aren’t actually valid in Europe…

Regardless MS will probably fight it in court for a while and if they lose or get bored they’ll just pay up. In the controller vibration patent issue mentioned, Sony removed vibration from the PS3 (with a really lame excuse) while MS just paid whoever holds the patent in question.

Surely this patent would also affect Sony too (maybe every company making online games? I can’t really say since I can’t be bothered to find out exactly what this patent is for), unless Sony are already paying Paltalk royalties…

It patents the bit I quoted- the use of Wide Area Network communications. Paltalk provide technology that better handles the problem of communication across the internet, and feels everyone should use it when playing online games. Read the case, I think you might enjoy it. ;)

I wondered about it affecting other people, but there is no concrete evidence as to whether or not Sony pay royalties to Paytalk or not.

And Immersion hold the patent for the vibration.

Comment by honus on 2006-09-15 18:59:00 | Reply

It seems unlikely that it patents exactly what you quoted. It probably patents one solution to that problem, which apparently they think Microsoft is doing.

That does not boil down to MS using chunks of Paltalk’s code. Paltalk’s code implements a solution to the problem of online gaming and communication and if Microsoft implemented the same solution then the patent is violated, regardless if they used Paltalk’s code, or had even heard of the patent before.

Yes that’s the difference between patents and copyright. You patent an idea and/or own the copyright over one particular implementation of that idea. That still doesn’t make software patents valid in Europe, though :)

To be honest I doubt that anyone else is paying Paltalk for using technology such as this, because if it’s as vague as Rossko seems to think it is the vast majority of games with Internet multiplayer are in violation of it. I can’t imagine all of these companies paying royalties.

It sounds to me like it’s just another company patenting the obvious in the hope of getting other companies to pay them royalties in fear of being sued if they didn’t. Patents take too much money to question, and they aren’t examined properly prior to acceptance so we have all these patents that either patent the obvious or patent ideas that have been around for years prior to the filing of the patent.

It’s a nice system, but it’s so badly flawed.

Comment by kineticonline on 2006-09-15 12:37:03 | Reply

From what i can understand from the pdf i cant really see where the problem is. Is sounds like a small company trying to get money / publicity for nothing. The claim basically is that “we patented online gaming and communication across the internet and microsoft with the xbox and xbox360 break the patent because you can play games and communicate” Unless MS have used chunks of their code in creating xbox live i cant see any problem and whoever is incarge of the case will end up just telling paltalk to beat it. (on the other side it could be MS employing a all publicity is good publicity tactic and have asked paltalk to file the claim)

surely this only applies if MS use Paltalks technology. Maybe MS have their own technology that does the same job, they don’t have to use Paltalks. Also why leave it til now to speak up? I think MS should fight!

Comment by Farstarbuck on 2006-09-15 12:52:35 | Reply

Its a blip, nothing will happen. Sure Microsoft may pay loads to this company, but im sure the judge will also see this as a P.R stunt. Either way, im sure we’re not about to be charged any more for xbox live. For all the patents Microsoft have broken, then everything would have went up in price. But alas, they havent. Im sure they will do the respectable thing and buy the majority holding share in the company. LOL

Comment by voodooboo on 2006-09-15 12:55:21 | Reply

Sweet lordy me, someone just shoot these stupid little complanies…

Reason why i hate these stupid patents!
Its plain stupid in my opinion! Nuthin will happen

Comment by Dirty Duck on 2006-09-15 13:22:25 | Reply

a company trying to get some cash from a large company nothing changes!!

Comment by Raldanash on 2006-09-15 13:59:38 | Reply

You’d have to look at the technical level of the claim. Just the idea of using WANs for gaming has been around for longer than 4 years, and I don’t think you can patent at that level. It would have to be implementation specific. Now in a way the cutting hints at it when mentioning group servers, messaging and matchmaking. Again - that has been done before 2002 (Gamespy is a case in point I think, can’t remember exactly when they started up).
Obviously I am completely incompetent in patent law, but my gut feel is that this won’t amount to much.
patent laws in general however are very valid and important, because who would invest in research, often taking a decade to get right, if any competitor can then just take your product and copy it without the extensive investment you just made.

Comment by Hologuts on 2006-09-15 14:16:52 | Reply

If this company has a case, it would be a good company to buy (or buy shares in), allowing Microsft to licence it out to others. Sony soon jumped away from the vibration function when Microsoft paid up and bought shares in that company.

I don’t enjoy gaming without voice communications. It just kills off team play. BF2 is a great team game to play, but has been effectively made into a single payer game (online) because the communications don’t work (and seems never will in that game).

In game voice is important.

Of course, if Microsoft believe this company doesn’t have a case, then, let them pay everything they have to sue Microsoft. It would be costly for them, and If Microsoft stick to the usual tactics of delay after delay, eventually the costs will be so high this company will have drowned before even getting near a court.

Comment by TEC9000 on 2006-09-15 14:51:30 | Reply

This is called a submarine patent. A company files a very generic patent for a technology. Then they sit and wait for other companies to come along and actually develop the technology necessary to violate the patent. Once the technology becomes pervasive, and profitable…like a submarine, the company pops up and sues everyone…instead of torpedoing them;)

I am going to file for a patent right now. Patent: Stepping on any surface with your feet. Pay up everyone!!!!!!

Comment by DJ_Giver on 2006-09-15 16:08:07 | Reply

tens of millions my a$$

Comment by trj156 on 2006-09-15 20:33:15 | Reply

HAHAAH simply shut down xbox live, imagine that. “we are sorry, xbox live no longer exists. thank you and remember to check out other microsoft products!”

Comment by steve fajita on 2006-09-15 23:31:16 | Reply

What will they do? Do what they should. Pay the highest price lawyers in the world to make this go away. And they will.

Comment by Matt0817 on 2006-09-15 23:37:35 | Reply

$5 says microsoft buys the company

Comment by The_Glovner on 2006-09-18 15:14:44 | Reply

Well I patented the idea of allowing a global communication network being utilised through home PC’s 40 years ago, pay up bitches you all owe me cash!

What a lot of fucking nonsense, good mind to patent the idea of giving these people a fucking slap, because I should be able to cash in on that one pretty soon.

So does this mean that MS will pay them in large sums of 1 dollar bills, like the picture above shows?? :p

Comment by The_Glovner on 2006-09-18 19:17:09 | Reply

MS should just pay someone to go and burn down their offices.

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Comment by Danielcraig24 on 2008-12-15 04:24:37 | Reply

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