Supercell Is Negotiating With Japanese Game Maker Gree To End Lawsuit
Attorney and IP litigation specialist Darius Gambino of Pennsylvania-based law firm Saul Ewing Arnstein & Lehr LLP tells SBJ’s James Fudge that Supercell beginning the process of settling its ongoing patent lawsuits with Japanese game maker Gree recently was probably the result of losing two verdicts and facing an additional trial in August.
Recently, Gree and the Swedish mobile game developer Supercell (which is owned by Chinese conglomerate Tencent Holdings) filed a joint notice of settlement and a request for a 30-day stay of all deadlines related to nine separate cases filed between February 2019 — April 2020. Those lawsuits related to Supercell’s popular game Clash of Clans played out in two different cases in the Eastern District of Texas and led to two losses for the developer to the tune of close to $100 million USD in judgments. Those lawsuits alleged that Supercell’s game infringed 27 patents, according to court filings. Clash of Clans gained popularity in the U.S. thanks to vigorous online and TV marketing campaigns and a notable Super Bowl XLIX Commercial in 2015 called “Clash of Clans Revenge,” starring actor Liam Neeson.
While Supercell managed to knock down some of Gree’s claims, the company ultimately faced verdicts of $92 million in May and another $8.5 million in September. The May verdict was of particular concern for Supercell because the jury found that the company “willfully infringed,” which gives Gree the ability to collect “treble damages,” or three-times the verdict amount.
“They were potentially on the hook for triple the amount, so $275 million just in that case,” Gambino said in a phone interview Monday. “And then they had the prior case, which was only about $8 million, and then they had this upcoming trial in August and I can’t really guess as to what the damages were going to be in that case, but I think they looked at all of that, and just thought, ‘We’ve taken this as far as we want to take it, we’d rather just focus on something else and put it to bed.’”
Gambino added that assuming the settlement is accepted by both sides, Supercell will sign a license agreement for Gree’s patents, or “ a combination of a release for past infringement and a license agreement” that would allow it to continue operating Clash of Clans and any other games without worry about patent infringement.
But the big takeaway from this latest development in the long string of ligation is that other companies that make mobile games had better be prepared to settle or go to court: “I think that’s the one intangible of this settlement is that once you have a patent assertion and you have a settlement like this, which is over $100 million it allows the patent holder to go to other companies who have these games that might be implicated by these patents and say, ‘Supercell settled with us and you should too,’” Gambino said. “I think it gives them a little bit more leverage to settle without going to litigation. I do think that they will probably start to pursue other entities now that they’ve achieved this big settlement.”
Supercell makes a number of games that are popular esports including Brawl Stars, Clash Royale, and Clash of Clans. Tribe Gaming, one of the most prominent mobile esports organizations in the U.S., competes in all three games.
