We (Playsaurus, developers of Clicker Heroes) are getting shaken down by patent trolls for using “virtual currency” in our game.
GTX Corp., owners of U.S. Patent no. 7,177,838, claims that we’re infringing on their patent for using “electronic tokens” (I assume they mean the rubies in Clicker Heroes).
They offered to let us pay a *bargain* $35,000 license fee to avoid “costly litigation”. We were given 10 days to respond.
I believe their claims are completely meritless and their behavior to be abusive and terribly unethical. As I am a major owner of Playsaurus I see this as a personal attack, and the cost in my own time and well-being has already been significant and draining. It is a shame that the United States legal system can’t provide a quick and easy way for us to punish them for these actions.
I believe it is unethical on our part to pay any negotiated amount, which serves to encourage the behavior of trolls with bogus claims. So, if pressed, we will take the matter to court and see it to the end. We have retained a law firm to assist and represent us if necessary. Playsaurus is a 100% privately owned organization, and we are not beholden to outside investors. We absolutely refuse to negotiate license fees with patent holders who make bogus claims.
You can see everything they sent to us in the PDFs below. I have also included our response, written by my good friend Miguel Bombach from Perkins Coie, describing to GTX how their claims are completely meritless.
The history of this patent (known as the ‘838 patent) is long. It was used by several different companies who owned it to shake down countless major institutions about 10 years ago. A more recent development is that they are threatening smaller companies (like Playsaurus) who typically don’t have many resources. What they’re asking for, $35,000, is about half a year of salary for one of our employees. I am concerned that they may be preying on a lot of other small studios, in a final attempt for them to profit off this bogus patent (which only has about 2 years left on it).
I believe they are targeting smaller organizations now, because recent developments in patent law have made bogus patents like these much easier to fight, but only if you have enough resources and money to properly prepare the legal challenges. If they were to go after larger organizations, the patent could easily be challenged. But smaller organizations like ours often can’t afford to go through that process as easily.
A cursory search shows that there’s a current lawsuit from GTX Corp. against Nekki (another game developer) for infringing on this same patent on February 8th. There is another lawsuit against Soccer Manager Ltd. I don’t yet know any details of these cases.
I would like to hear from any other game developers who are also up against this problem, so that we could exchange any information we find and collaborate. I will freely discuss any information we or our lawyers discover that can be legally shared. Maybe we can help each other put an end to this. Please contact me at email@example.com.
Here is what they sent to us:
- Their letter to us: GTX Playsaurus Letter (2 20 2018).pdf
- The patent in question: Exhibit A US7177838.pdf
- The lawsuit they will file if we don’t pay: Exhibit B Playsaurus Complaint – Draft (2 20 2018).pdf
- An expert witness on the patent: Expert Declaration 838 Patent.pdf
- The expert witness’s CV: [redacted]
Here is our response: