GEORGETOWN LAW TECHNOLOGY REVIEW
PAY TO PLAY: VIDEO GAME MONETIZATION
PATENTS AND THE DOCTRINE OF MORAL
UTILITY
Kirk A. Sigmon*
CITE AS: 5 GEO. L. TECH. REV. 72 (2021)
TABLE OF CONTENTS
I. INTRODUCTION ...................................................................................... 72
II. THE GROWING COST OF VIDEO GAMES ................................................. 74
III. CONTROVERSIAL VIDEO GAME PATENTS ON DLC AND
MICROTRANSACTIONS ................................................................................... 81
IV. THE CONTROVERSY BEHIND THE PSYCHOLOGY OF DLC AND
MICROTRANSACTIONS ................................................................................... 86
V. A BRIEF HISTORY OF PATENTS AND “MORAL UTILITY” ........................ 89
VI. WHY MORAL UTILITY SHOULD NOT BE REVIVED FOR VIDEO GAMES .. 94
VII. CONCLUSION .......................................................................................... 98
I. INTRODUCTION
Video games are now more complex and realistic than they ever have
been—but making those games is not cheap. Video game development and
marketing costs are sky high.
1
To help recoup these costs, game developers
and publishers have begun inventing increasingly clever ways to encourage
users to spend more money on video games—and they are pursuing patents
for those inventions. One recently granted patent seeks to drive in-game
purchases by making multiplayer matches difficult for a player, encouraging
that player to buy an item and, once that item is purchased and used, subtly
rewarding the spending by making multiplayer matches easier.
2
Another
recently granted patent targets players more likely to spend money in-game by
presenting them with exclusive spending opportunities, maximizing value
* Shareholder, Banner Witcoff. Thanks to Ross A. Dannenberg, Scott M. Kelly, and Carlos
Goldie for their invaluable input and assistance with this Article.
1
See infra Part II.
2
See U.S. Patent No. 9,789,406 (filed Oct. 17, 2017) [hereinafter Marr].
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 73
from users inclined to spend.
3
Despite their ingenuity, such video game
monetization techniques remain controversial: according to some
psychologists, video game monetization techniques are predatory and may
lead to addictive behavior akin to gambling.
4
This raises the question: should the U.S. Patent and Trademark Office
(USPTO) deny patents to video game monetization-related inventions on the
grounds they might deceive users or harm their psychological well-being? In
particular, should the USPTO revive the now dead “moral utility” doctrine,
pursuant to which inventions were once considered patent ineligible if found
to be “immoral”?
5
A growing number of commentators have argued in favor
of such a revival, albeit outside the context of video games. For example, one
commentator has argued in favor of revitalizing the moral utility doctrine to
prevent “deceptive patents,” such as those disclosing so-called “point-of-sale
deception,” in order to “promote true innovation, prevent dead-weight loss,
and ensure that ‘the stream of commercial information flow[s] cleanly as well
as freely.’”
6
Another commentator has argued that inventions with the
potential to harm the health of the user (e.g., inventions directed to “products
and processes that contain an excessive amount of unhealthy ingredients or
components such as salt, fat, and sugar”) should be considered patent
ineligible.
7
Clearly, this Article does not seek to proffer an opinion regarding
whether video games are addictive, reinforce gambling habits, or are otherwise
psychologically problematic—though it is clear that some psychologists have
raised serious negative allegations regarding video game monetization
strategies. Rather, this Article centers on whether the USPTO should allow
patents for these monetization strategies to be issued.
This Article explores the growing trend of patents directed to video
game monetization methods, surveys criticisms of that trend, and argues that
re-introduction of the moral utility doctrine in patent law to curtail such
monetization is inappropriate. Part II presents a brief summary of strategies
that video game companies have developed to recoup development and
marketing costs. Part III examines various recent—and potentially
3
See U.S. Patent No. 9,623,335 (filed Apr. 18, 2017) [hereinafter Kim].
4
See Daniel L. King & Paul H. Delfabbro, Predatory Monetization Schemes in Video
Games (e.g. ‘Loot Boxes’) and Internet Gaming Disorder, 113 ADDICTION 1967–1969
(2018), https://onlinelibrary.wiley.com/doi/epdf/10.1111/add.14286 [https://perma.cc/5C4S-
DQD6].
5
See infra Part V.
6
Paul Spiel, Deceptive Patents: Deconstructing Juicy Whip, 2017 BYU L. REV. 743, 776-77
(2018) (quoting Va. State Bd. of Pharm. v. Va. Citizens Consumer Council, Inc., 425 U.S.
748, 772 (1976)).
7
Enrico Bonadio, The Case For Incentivizing Healthy Food By Using Patents, 20 MARQ.
INTELL. PROP. L. REV. 241, 250-53 (2016).
74 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
controversial—video game monetization scheme patents. Part IV discusses
video game addiction as depicted by some psychologists and its potential
relationship to patented monetization strategies. Part V traces the history of
the moral utility doctrine, which once provided that so-called “immoral”
inventions were patent ineligible. Part VI argues that revival of the moral
utility doctrine, while tempting, is inapt to remedy the concerns presented by
video game monetization strategies.
II. THE GROWING COST OF VIDEO GAMES
Modern video games are significantly more expensive to produce than
their predecessors. In an article for VentureBeat, game designer Ralph Koster
examined the development cost of video games over time, observing that the
slope of a line representing the average development cost of triple-A
8
console
and PC releases, adjusted for inflation, “goes up tenfold every 10 years and
has since at least 1995 or so, and possibly earlier.”
9
As Koster notes, this figure
is even larger when marketing costs are taken into account, as a triple-A title’s
marketing budget represents an additional cost that can easily reach 75% to
100% of that same title’s development cost.
10
It is not hard to imagine why these costs have ballooned over time: as
graphical fidelity and game complexity increase, so does the time and skill
required for development.
11
But, as early as 2011, venerated video game
developer Mark Cerny warned game developers and publishers that there was
“no intrinsic value to a $50 million game,” emphasizing the need to “learn
what is important to spend money on, and what isn’t.”
12
Cerny’s comments
reflect the practical reality that high-budget triple-A titles compete in the same
market as significantly cheaper games. After all, in 2016, the $15 farming
game Stardew Valley—a game made by a single person
13
—out-earned many
8
The term “triple-A” or “AAA” game generally “represents that the game was published/is
to be published by a major publisher . . . and [also] usually indicates that it has a
considerable development and marketing budget.” Samuel Stewart, What Is A Triple-A
Game (AAA)?, GAMINGSCAN (Nov. 11, 2020), https://www.gamingscan.com/what-is-a-
triple-a-game/ [https://perma.cc/9265-ZFSW].
9
Ralph Koster, The Cost of Games, VENTUREBEAT (Jan. 23, 2018, 5:10 PM),
https://venturebeat.com/2018/01/23/the-cost-of-games/ [https://perma.cc/P2QE-AHSY].
10
Id.
11
See id.
12
Kshosfy, As Mobile Games Rise, Studios Fear for Blockbusters’ Future, WIRED (Feb. 15,
2011, 4:52 PM), https://www.wired.com/2011/02/dice-blockbuster-games/
[https://perma.cc/HQT7-KGRD].
13
Jonathan Leack, Stardew Valley’s Single Developer Has Made Over $30 Million, and It’s
Well Deserved, GAMEREVOLUTION (Jan. 5, 2017),
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 75
far more expensive titles that year, including Deus Ex: Mankind Divided,
Watch_Dogs 2, and Mafia 3.
14
Despite the allure of sophisticated video games, their increased
development and marketing costs have forced developers to look beyond game
sales to turn a profit. As Colin Moriarty at IGN has noted, video games are
cheaper for consumers than they have been in the past, which has a significant
impact on the ability of developers and publishers to recoup their costs through
game sales alone:
An NES game in 1990 cost, on average, about $50. That’s $89
in 2013 money. Your $70 N64 cartridges in 1998 would require
the equivalent of $100 today. Heck, the $50 PlayStation 2 game
you bought in 2005 is worth $60, the exact price of a typical
retail game in 2013. This isn't to say that salaries (or hourly
pay) have kept up with inflation and the cost-of-living—it
decidedly hasn’t—but it is to say that, dollar-to-dollar over the
past 35 years, gaming hardware and software is generally
cheaper than ever.
15
Today, even high-budget triple-A titles retail for around $60,
16
which some
argue is far too low to allow the companies developing and publishing those
titles to recoup their costs. Consoles seemingly fare no better: for example, the
launch cost of the Nintendo Entertainment System ($175 in 1982) would be
over $470 today, and yet the Nintendo Switch launched in 2017 for just $299.
17
https://www.gamerevolution.com/features/13384-stardew-valleys-single-developer-has-
made-over-30-million [https://perma.cc/7WKQ-W8LN].
14
Top 100 Best Sellers of 2016, STEAM,
https://store.steampowered.com/sale/2016_top_sellers/ (last visited Dec. 9, 2020)
[https://perma.cc/TW7D-LL9S].
15
Colin Moriarty, The Real Cost of Gaming: Inflation, Time, and Purchasing Power, IGN
(Oct. 15, 2013, 4:56 PM), https://www.ign.com/articles/2013/10/15/the-real-cost-of-gaming-
inflation-time-and-purchasing-power [https://perma.cc/W64F-U5ZV].
16
Ben Kuchera, An Inconvenient Truth: Game Prices Have Come Down with Time, ARS
TECHNICA (Oct. 5, 2010, 8:45 PM), https://arstechnica.com/gaming/2010/10/an-
inconvenient-truth-game-prices-have-come-down-with-time/ [https://perma.cc/WR6N-
VCYG]; Kyle Orland, The Return of the $70 Video Game Has Been a Long Time Coming,
ARS TECHNICA (July 9, 2020, 12:05 PM), https://arstechnica.com/gaming/2020/07/the-
return-of-the-70-video-game-has-been-a-long-time-coming/ [https://perma.cc/79TF-WRYJ].
17
Jonathon Dornbush & Jordan Sirani, Update: Comparing the Price of Every Game
Console, with Inflation, IGN, https://www.ign.com/articles/2016/10/04/comparing-the-price-
of-every-game-console-with-inflation (last updated Sept. 18, 2020) [https://perma.cc/3V7V-
BEMX]; Value of $175 in 1982, SAVING.ORG,
https://www.saving.org/inflation/inflation.php?amount=175&year=1982 (last visited Dec. 9,
2020) [https://perma.cc/B9EE-LULL].
76 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
In fact, console makers often sell their consoles at a loss, hoping to recoup
their losses through subsequent game sales.
18
Recognizing that the expected profit margin of a retail video game is
often too low to recoup development costs, game developers and publishers
have explored several other monetization strategies with varying degrees of
success. Some companies, for example, offer pricier “deluxe” editions of
games, which can include bonus figurines, game soundtracks, art books, and
the like.
19
These “special editions” can sometimes serve a dual purpose:
recapturing development costs while also functioning as a marketing tool for
the game itself. As one amusing example, the “Super Dangerous Wad Wad
Edition” of Saints Row IV, which cost $1 million, included seven nights at a
hotel in Dubai, a week for two in Washington, D.C., a Lamborghini Gallardo,
a new Toyota Prius, plastic surgery, a Virgin Galactic space flight, and more.
20
Some game developers sell physical toys (e.g., action figures, such as
Nintendo’s amiibo toys
21
) which correspond with in-game benefits—an
approach that created its own video game genre, the so-called “toys-to-life”
genre.
22
Although the strategy was popular for a period of time in the 2010s,
18
See, e.g., Don Reisinger, PlayStation 4 to Sell at a Loss, but Sony Expects Profit, CNET
(Sept. 20, 2013, 9:32 AM), https://www.cnet.com/news/playstation-4-to-sell-at-a-loss-but-
sony-expects-profit/ [https://perma.cc/99VD-STEU]; see also James Batchelor, Xbox One X
Selling at a Loss, GAMESINDUSTRY.BIZ (June 15, 2017),
https://www.gamesindustry.biz/articles/2017-06-15-xbox-one-x-selling-at-a-loss
[https://perma.cc/82WM-ZZBV].
19
Tyler Wilde, How Much Should Games Cost?, PC GAMER (Jan. 11, 2017),
https://www.pcgamer.com/how-much-should-games-cost/ [https://perma.cc/97JS-RXH5];
Emanuel Flores, Why Video Game Collector’s Editions are Expensive, WAYPOINT (June 28,
2018), https://waypoint.la/collectibles/why-video-game-collectors-editions-are-so-
expensive/ [https://perma.cc/V2JA-7DU6]; Leonard Perez, Are Video Games Underpriced?,
GAMASUTRA (Jan. 25, 2018, 9:43 AM),
https://www.gamasutra.com/blogs/LeonardPerez/20180125/313388/Are_video_games_unde
rpriced.php [https://perma.cc/X9DP-ZCPL].
20
Nathan Ingraham, Ludicrous $1 Million 'Saints Row IV' Special Edition Includes
Lamborghini, Plastic Surgery, and Trip to Space, THE VERGE (Aug. 10, 2013, 1:42 PM),
https://www.theverge.com/2013/8/10/4608848/ludicrous-1-million-saints-row-iv-special-
edition-includes [https://perma.cc/GTB4-EGXH]; see also Kyle Orland, Do Not Buy the
$1,000,000 Saints Row IV Bundle, ARS TECHNICA (Aug. 9, 2013, 11:41 AM),
https://arstechnica.com/gaming/2013/08/do-not-buy-the-1000000-saints-row-iv-bundle/
(noting that the bundle was a bad idea because the total value of all items was “only
$629,974.69”) [https://perma.cc/SQA8-JSNU].
21
What is an Amiibo Figure?, NINTENDO, https://www.nintendo.com/amiibo/what-is-
amiibo/ (last visited Dec. 9, 2020) [https://perma.cc/8EQV-Q9H3].
22
Matt Peckham, Skylanders SuperChargers Versus Disney Infinity Versus Nintendo Amiibo
Versus LEGO Dimensions, TIME (Dec. 18, 2015, 11:38 AM),
https://time.com/4152325/toys-to-life-buyers-guide/ [https://perma.cc/C5BC-8HQ3]; Ian
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 77
many companies, including Disney, have since abandoned the “toys-to-life”
market.
23
Post-purchase monetization strategies, such as microtransactions, in-
game downloadable content (DLC), and similar forms of in-game purchases
have been embraced by an industry concerned about its bottom line.
24
Strategically placed in-game purchases create new revenue streams by inviting
gamers to spend money on a game they already own. In return, gamers gain
access to customized content, such as “skins” (cosmetic modifications of in-
game content), additional game features (e.g., new maps, characters, and
stories), and other game enhancements.
25
As a result, these monetization
strategies can “balloon the cost of an underpriced $60 game closer to the
inflation-adjusted $100 it should be at.”
26
Indeed, these strategies have been
quite successful for some companies: for Activision Blizzard, for example,
more than half of the company’s revenue in 2017 came from in-game
purchases.
27
Recognizing that not all gamers are likely to pay for DLC, some
developers and publishers now offer “season passes” to games’ DLC.
28
A
“season pass” allows consumers to purchase a right to current and future DLC,
often at a discount.
29
Such season passes thus arguably benefit players as well
as video game developers and publishers: season passes typically provide
Sherr, From Skylanders to Amiibo: Video Games Embrace the Toy, CNET (June 11, 2014,
4:00 AM), https://www.cnet.com/news/from-skylanders-to-amiibo-video-games-embrace-
the-toy/ [https://perma.cc/TP9G-WYH5].
23
Dan Pearson, The Death of Toys-to-Life?, GAMESINDUSTRY.BIZ (May 11, 2016),
https://www.gamesindustry.biz/articles/2016-05-11-the-death-of-toys-to-life
[https://perma.cc/W6MF-V8W4]; Allegra Frank, Skylanders Put on Hiatus for First Time in
Six Years, POLYGON (Feb. 9, 2017, 5:25 PM),
https://www.polygon.com/2017/2/9/14568518/new-skylanders-game-2017
[https://perma.cc/MWC5-LWR6].
24
Erik Kain, Video Games Should be More Expensive, FORBES (Apr. 24, 2015, 8:00 AM),
https://www.forbes.com/sites/erikkain/2015/04/24/video-games-should-be-more-expensive/
[https://perma.cc/D5ET-V252]; Marc Berman, The Price People are Willing to Pay for
CS:GO Virtual Pixels, PROGRAMMING INSIDER (Nov. 2, 2020, 8:58 AM),
https://programminginsider.com/the-price-people-are-willing-to-pay-for-csgo-virtual-pixels/
[https://perma.cc/9ZC8-FPY4].
25
Id.
26
Id.
27
Dustin Bailey, Over Half of Activision Blizzard’s Revenue in 2017 Came From In-Game
Purchases, PC GAMESN (Feb. 8, 2018), https://www.pcgamesn.com/activision-blizzard-
profits-2017 [https://perma.cc/JSR3-HB4F].
28
Wilde, supra note 19; DLC Season Pass, GIANT BOMB, https://www.giantbomb.com/dlc-
season-pass/3015-7186/ (last visited Apr. 5, 2020) [https://perma.cc/5AYZ-Q4FT].
29
Season Pass (Video Games), WIKIPEDIA,
https://en.wikipedia.org/wiki/Season_pass_(video_games) (last visited Nov. 29, 2020)
[https://perma.cc/P96M-EKKZ].
78 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
gamers a deal on desirable DLC while allowing companies to collect revenue
when content is still in development.
30
Needless to say, some players dislike the monetization strategies used
by modern video game companies. Aside from complaints about cost,
31
some
players criticize DLC and microtransactions as effectuating “a dramatically
different gameplay experience” for those willing to pay, particularly in
multiplayer contexts where they can provide players who purchase them with
“an unfair advantage over players who do not purchase them.”
32
In fact, a
variety of different editions of the same game might be sold, with each
providing a different set of in-game content. For instance, gaming website
Kotaku once created a chart to show the “insane” number of differences
among editions of Watch Dogs, concluding that, “if you wanted to own every
single piece of exclusive launch DLC, and all of the collectable junk, you’ll
need to buy Watch Dogs three times.”
33
Another particularly controversial
aspect of DLC is so-called “on-disc” DLC—that is, content developed before
a game’s release but accessed later in the game for additional payment.
34
Some
argue “on-disc” DLC deprives players of enjoying the full extent of their
purchase: a supposedly complete game.
35
“Whales” (that is, video game players that spend significant amounts
of money buying content in a video game) drive the vast majority of in-game
spending, whether via DLC, microtransactions, or otherwise.
36
A 2014
industry report indicated that a whopping 50% of mobile game purchases came
from 0.15% of players—that is, the so-called “whales.”
37
But whales rarely
30
See id.
31
See, e.g., Mike Bitter, Why Is DLC So Expensive? Should They Charge Us $100 a Game?,
GSTYLE MAG. (May 11, 2015), https://gstylemag.com/2015/05/11/why-are-dlc-so-
expensive-should-they-charge-us-100-a-game/ [https://perma.cc/AZM8-TRFZ].
32
Matt Fernandez, ‘Star Wars’ Video Game Microtransactions Ignite Controversy, VARIETY
(Nov. 23, 2017, 10:00 AM), https://variety.com/2017/digital/news/star-wars-video-game-
controversy-microtransaction-loot-box-1202621913/ [https://perma.cc/S4FN-5FZF].
33
Mark Serrels, The Graph That Proves Video Games Have Crossed the Line, KOTAKU AU
(May 13, 2014, 10:00 AM), https://www.kotaku.com.au/2014/05/this-is-the-graph-that-
proves-video-game-retail-has-crossed-the-line/ [https://perma.cc/F5J6-Y4G9].
34
See Joel Hruska, EA Executive Calls On-Disc DLC Complaints ‘Nonsense,’ but the Truth
is More Complex, EXTREME TECH (Aug. 14, 2015, 2:54 PM),
https://www.extremetech.com/gaming/212245-ea-executive-calls-on-disc-dlc-complaints-
nonsense-but-the-truth-is-more-complex [https://perma.cc/HS3G-ZZCM].
35
See id.
36
See Paul Tassi, Why It's Scary When 0.15% Mobile Gamers Bring in 50% of the Revenue,
FORBES (Mar. 1, 2014, 4:28 PM), https://www.forbes.com/sites/insertcoin/2014/03/01/why-
its-scary-when-0-15-mobile-gamers-bring-in-50-of-the-revenue/ [https://perma.cc/KP5C-
3DVA].
37
Id.
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 79
set out to spend significant sums: generally, whales “spend modest amounts
over time that can add up to significant sums.”
38
For example, Yodo1, the
developers of the mobile game Transformers: Earth Wars, reported that a
single player had spent over $150,000 USD in the game.
39
Yodo1’s CEO later
allegedly revealed that Yodo1 had been actively seeking out whales to spend
such hefty sums: the game “fed two-and-a-half years of detailed behavior and
monetization data collected from players” to a machine learning model to
identify and “pick[] potential whales” with an accuracy of “about 87%.”
40
At
the conference Game Connect Asia Pacific, the CEO of Yodo1, Henry Fong,
emphasized the strategic value of microtransactions to monetize:
The funny thing is, I always used to think that if you monetize
your audience too hard, they’ll leave the game. But it’s actually
the other way around. Our retention rates for paid users in this
game [Transformers: Earth Wars]—30-day retention for paid
users—is 85%. So once they start spending, they don’t leave.
They want to stay in the game [longer] and preserve their
investment, and when they stay in the game, they spend more.
41
Some games appear to rely almost entirely on whales to make a profit. For
example, Candy Crush Saga, a free game, only generated revenue from 2.3%
of its players from in-game purchases, but these players collectively spent
$1.33 billion on in-app purchases.
42
Critics of the video game industry’s propensity for “chasing the whale”
claim it ventures into an ethical gray area.
43
Numerous stories have been
written about players who have lost significant sums as a result of their
38
Isaac Roseboom, What You Need to Know About How Whales Spend, DELTADNA (Apr.
13, 2016), https://deltadna.com/blog/how-whales-spend/ [https://perma.cc/AF7N-KUUP].
39
Alex Walker, Someone Spent Over $220,000 in Microtransactions on a Transformers
Game, Kotaku AU (Oct. 11, 2019, 9:00 AM),
https://www.kotaku.com.au/2019/10/someone-spent-over-220000-in-microtransactions-on-
a-transformers-game/ [https://perma.cc/P2W9-EPCA].
40
Matthew Handrahan, Yodo1’s AI-Driven Whale Hunt is a Bad Look for the Games
Industry, GAMESINDUSTRY.BIZ (Oct. 21, 2019),
https://www.gamesindustry.biz/articles/2019-10-21-yodo1s-ai-driven-whale-hunt-is-a-bad-
look-for-the-games-industry-opinion [https://perma.cc/K9GW-V8CX].
41
Id.
42
Stuart Dredge, Candy Crush Saga Players Spent £865m on the Game in 2014 Alone, THE
GUARDIAN (Feb. 13, 2015), https://www.theguardian.com/technology/2015/feb/13/candy-
crush-saga-players-855m-2014 [https://perma.cc/B9B6-NJ65].
43
See, e.g., Mike Rose, Chasing the Whale: Examining the Ethics of Free-to-Play Games,
GAMASUTRA (July 9, 2013),
https://www.gamasutra.com/view/feature/195806/chasing_the_whale_examining_the_.php?
print=1 [https://perma.cc/QV8Y-7W2L].
80 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
addiction to in-game purchases.
44
After all, most whales aren’t “millionaire or
billionaire fat cats,” as their spending might otherwise suggest–they’re
“normal people with addictive personalities.”
45
Some organizations also express particular concern with games that
allegedly target underage players. The Center for Investigative Reporting
alleged that Facebook “made money off children” by “bamboozling children
who racked up hundreds, and sometimes even thousands, of dollars in game
charges” without providing “an effective way for unsuspecting parents to
dispute the massive charges.”
46
A similar charge was levied against Apple—
in what was referred to by some journalists as the “Smurfberry Affair”—when
a young girl purchased $1,400 in virtual “Smurfberries” without knowing that
the purchases were made with her parents’ real money.
47
In response to
Federal Trade Commission enforcement actions, both Apple and Google
settled with the FTC in 2014 to refund many millions of dollars of
unauthorized charges made by children.
48
In summary, there exists an uncomfortable tension in the video game
industry: modern video games are expensive to make, and game developers
must carefully toe the line between recouping their costs and allegedly
44
See, e.g., id.; Vic Hood, Interview with the Video Game Whale, EUROGAMER (Oct. 25,
2017), https://www.eurogamer.net/articles/2017-10-20-interview-with-the-whale
[https://perma.cc/54T9-AGKB]; Sasha Erfanian Dow, Confessions of a Mobile Gaming
Whale, ESCAPIST MAGAZINE (Oct. 12, 2018),
https://www.escapistmagazine.com/v2/confessions-of-a-mobile-gaming-whale/
[https://perma.cc/3KDV-E9TB].
45
Paul Tassi, Why It's Scary When 0.15% Mobile Gamers Bring In 50% of the Revenue,
FORBES (Mar. 1, 2014), https://www.forbes.com/sites/insertcoin/2014/03/01/why-its-scary-
when-0-15-mobile-gamers-bring-in-50-of-the-revenue/?sh=1ae6bcdf4065
[https://perma.cc/RK56-LVPH].
46
Nathan Halverson, Judge Unseals Trove of Internal Facebook Documents Following our
Legal Action, REVEAL (Jan. 17, 2019), https://www.revealnews.org/blog/a-judge-unsealed-
a-trove-of-internal-facebook-documents-following-our-legal-action/
[https://perma.cc/3EM7-6U2Z].
47
Dave Greenbaum, In-App Purchases and The Smurfberry Affair, GIGAOM (Feb. 21, 2011),
https://gigaom.com/2011/02/21/in-app-purchases-and-the-smurfberry-affair/
[https://perma.cc/Y79Q-NJH8]; see also Cecilia Kang, In-app Purchases in iPad, iPhone,
iPod Dids' Games Touch Off Parental Firestorm, THE WASH. POST (Feb. 8, 2011 12:34
PM), https://www.washingtonpost.com/wp-
dyn/content/article/2011/02/07/AR2011020706073.html [https://perma.cc/3PPV-28KF].
48
Diane Bartz, Google to Refund $19 Million in Dids' In-App Purchase Case: U.S.,
REUTERS (Sept. 4, 2014), https://www.reuters.com/article/us-usa-google-ftc-
idUSKBN0GZ25520140904 [https://perma.cc/LN8T-CK4Q]; see also Apple Inc. Will
Provide Full Consumer Refunds of At Least $32.5 Million to Settle FTC Complaint It
Charged for Kids’ In-App Purchases Without Parental Consent, FTC.GOV (Jan. 15, 2014),
https://www.ftc.gov/news-events/press-releases/2014/01/apple-inc-will-provide-full-
consumer-refunds-least-325-million [https://perma.cc/58M6-N834].
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 81
extorting gamers. As will be explained in the next Part, this has led studios to
explore new monetization strategies through the patent process.
III. CONTROVERSIAL VIDEO GAME PATENTS ON DLC AND
MICROTRANSACTIONS
The need for innovative video game monetization has driven inventors
to file patents on game features that notify users about opportunities to spend
money in-game. U.S. Patent Number (U.S. Patent No.) 8,360,866 to Luchene
(hereinafter “Luchene”) describes an invention that nudges users to make in-
game purchases when they face a difficult scenario.
49
In doing so, Luchene’s
“video game can provide an offer to a player of the video game at a time when
the player has, for example, encountered a difficulty, perhaps repeatedly
encountered a difficulty” in a task such as “kill[ing] a particular monster,
NPC[,] or player character.”
50
Such an offer “can be, for example, for an item
that is useful in overcoming the difficulty the player has encountered.”
51
That
offer, referred to by Luchene as an “upsell message,” encourages the user to
pay for in-game success using “in-game currency,” “virtual items,” or “real
currency.”
52
Luchene also describes allowing users to “establish that certain
offers” are “to be accepted without further action” during, for example, a time
period.
53
For example, “a credit card account of the player can be charged
automatically” under certain circumstances.
54
U.S. Patent No. 10,099,140 to Lynch and Kanouse (hereinafter
“Lynch”), is similar: Lynch describes a “customized messaging campaign for
[a game] player.”
55
Lynch’s messages “may be customized for a gamer based
on his or her behavioral data,” such as their “level of interest or satisfaction
with a game.” Triggers for such messages may include “a player winning or
losing a predetermined number of games in a row.”
56
Such messages may
include “promotions relating to microtransactions or downloadable content
(e.g., offers, discounts, etc.).”
57
Luchene and Lynch arguably describe what is tantamount to “smart”
marketing – that is, marketing messages specifically tailored to the player of a
particular video game. One might argue that Luchene and Lynch are little
49
U.S. Patent No. 8,360,866 (filed Jan. 29, 2013).
50
Id. at col. 16 l. 50-55, col. 20 l. 62-63.
51
‘866 Patent col. 16 1. 53-55.
52
Id. at col. 17 l. 19-47.
53
Id. at col. 28 l. 1-10.
54
Id. at col. 30 l. 35-46.
55
U.S. Patent No. 10,099,140 col. 2 l. 57 (filed Oct. 16, 2018) .
56
Id. at col. 2 l. 62 – col. 3 l. 12, col. 3 l. 38-45.
57
Id. col. 6 l. 53 – col. 10 l. 4.
82 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
different than Facebook, which permits advertisers to select their audience
using a variety of different targeting options such as age, interests, behaviors,
and types of devices.
58
Some have even argued that targeted marketing
benefits both advertisers as well as target consumers. Proponents of targeted
marketing argue it reduces waste by avoiding the imposition of advertisements
on individuals who are unlikely to be receptive to the marketing.
59
Beyond patents on targeted marketing techniques, some other patents
in the video game world appear more likely to generate controversy. There is
a growing trend in patents that describe methods for exploiting the information
asymmetry between players and video game creators.
60
Some patents describe
methods which modify gameplay—in a manner largely imperceptible to the
player—to push the player to spend money. For example, U.S. Patent No.
9,789,406 to Marr, Kaplan, and Lewis (hereinafter “Marr”), modifies the
difficulty of multiplayer matches to encourage microtransaction purchases.
Marr describes a process for “influencing in-game purchases through targeted
matchmaking.”
61
Specifically, Marr identifies “an in-game item that may be
relevant for (e.g., of interest to) a first player,” then locates “a second user that
has acquired (e.g., purchased), used, or otherwise possesses the in-game
item.”
62
Matchmaking variables are then tuned such that the first player and
the second user are matched in a gameplay session.
63
After that matchmaking
process, Marr’s system determines whether the first player purchased the in-
game item owned by the second player.
64
If the first player did purchase the
in-game item, the first player is later matched into a different gameplay session
where “the in-game item is suitable to be used.”
65
In this case, “suitable to be
used” can include where a purchased item (e.g., a weapon) is “highly
effective.”
66
Stated simply, Marr promotes in-game purchases by making
multiplayer matches difficult for a player, encouraging that player to buy an
item, then rewarding the player’s spending by making multiplayer matches
58
See Kim Doefler, Facebook Targeting Options Reference, DOEFLER.COM,
https://doefler.com/blog/facebook-targeting-options/ (last updated Mar. 30, 2019)
[https://perma.cc/SRA8-BCQN].
59
Ganesh Iyer, David Soberman & J. Miguel Villas-Boas, The Targeting of Advertising, 24
MARKETING SCI. 461, 462 (Aug. 1, 2005),
https://pubsonline.informs.org/doi/10.1287/mksc.1050.0117 [https://perma.cc/A7KE-
VV59].
60
See King & Delfabbro, supra note 4, at 1967.
61
Marr, supra note 2, at fig. 8.
62
Id. at col. 30 l. 16-25.
63
Id. at col. 30 l. 26-35.
64
Id. at col. 30 l. 36-40.
65
Id. at col. 30 l. 41-61.
66
Id.
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 83
easier when the purchased item is used.
67
Though this system is likely a de
minimis part of a huge matchmaking algorithm, it is easy to see how Marr may
be ill-received by players, who may perceive Marr as a system that prioritizes
profit over competitive matchmaking.
Another controversial category of patents treats so-called whales
68
differently by introducing more opportunities for them to spend money. For
example, U.S. Patent No. 9,623,335 to Kim, Henrick, and Morris (hereinafter
“Kim”), utilizes a “user spend parameter value” to “determine which users
should be provided with access to an exclusive virtual section of the online
game.”
69
Such a virtual exclusive section may include a shop interface with
exclusive offers, such as the “presentation of high-end, or expensive virtual
items to users that have demonstrated an appetite for making purchases at a
higher level.”
70
Kim notes that “[r]estricting such offers may enhance the in-
game experience for users that do not see these offers, as they may keep such
users from feeling frustrated and/or overwhelmed by the amount of money
that other users are spending in the game.”
71
Kim explains that this approach
also prevents the game from losing the opportunity “to extract additional value
from users inclined to spend relatively more money.”
72
Kim further recognizes
“when the users that are less inclined to spend money are made aware of the
ability of other users to spend more to get ahead in the game, the users that
spend less may be discouraged and thus driven out of the game.”
73
Kim thus
acts like a savvy car salesman: while more thrifty customers might be directed
towards a base model of a vehicle, higher spending customers are directed to
purchase various add-on packages for the same vehicle.
Other patents relating to whales are more direct, recognizing that
whales can be charged higher prices than their relatively frugal counterparts.
Like Kim, U.S. Patent No. 9,138,639 to Ernst (hereinafter “Ernst”), describes
a system which modifies the “pricing of in-game virtual items associated with
[players’] experience and their progress in the game.”
74
In this way, “while all
players may receive a message for a particular item, the cost for each player
may be more or less than other players based on the individual’s in-game
statistics.”
75
Rather than present an item solely to whales, video game creators
67
See id. col. 30 l. 16-61.
68
See Stephanie Carmichael, What It Means to Be a ‘Whale’ - And Why Social Gamers are
Just Gamers, VENTUREBEAT (Mar. 14, 2013), https://venturebeat.com/2013/03/14/whales-
and-why-social-gamers-are-just-gamers/ [https://perma.cc/RF8X-H4VF].
69
Kim, supra note 3, at col. 1 l. 36-58.
70
Id.
71
Id.
72
Id. at col. 1 l. 21-32.
73
Id.
74
U.S. Patent No. 9,138,639 col. 2 l. 57 (filed Sept. 22, 2015) .
75
Id. at col. 8 l. 56-59.
84 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
can tap into both whale and non-whale markets by presenting both groups with
an identical item, albeit at a different cost based on their predicted willingness
to pay for that item. As such, Ernst is arguably describing a video game-
implemented form of price discrimination by “charg[ing] customers different
prices for the same product or service . . . based on what the seller thinks they
can get the customer to agree to.”
76
Of course, such a tactic requires an
information deficit on the part of the player, and it is unlikely that whales
would be happy to learn that the game charges them a premium while charging
less to other players.
A different tactic targets all players by capitalizing on a player’s
tendency to commit to a purchase after investing significant time into the video
game. For example, U.S. Patent No. 8,702,523 to David and Canessa
(hereinafter “David”) describes “steps associated with utilizing achievements
to drive download and purchase behaviors.”
77
In short, a user is made “aware
of an opportunity to add an achievement to their collection by downloading
and playing a demo or trial version of a particular game.”
78
But this
notification comes with a caveat: “[i]nstead of recording the achievement”
upon completion, David “initiates a notification to the user . . . that the
achievement will not be recorded unless they purchase the full version of the
game at that time.”
79
Stated differently, David allows users to earn rewards
from a game they demo, but makes those rewards unavailable unless they
follow through and purchase the game.
Other patents recognize that players might be willing to spend money
to overcome difficulty in-game. U.S. Patent No. 9,795,886 to Smalley and
Schultz (hereinafter “Smalley”), describes a system which allows newer users
to purchase in-game support more cheaply than experienced users. In
particular, Smalley’s system determines “prices for a protection extension in
an online game” based on “the user’s power and/or strength in a game”
80
Though not explicitly stated, Smalley suggests that the prices are in real-world
currency (rather than, for example, in free in-game currency).
81
This allows a
less experienced player to “build up their strength in a game, thus promoting
further player engagement.”
82
By intelligently pricing in-game protection
76
Alexandra Twin, Price Discrimination, INVESTOPEDIA,
https://www.investopedia.com/terms/p/price_discrimination.asp (last updated Feb. 3, 2020)
[https://perma.cc/EW4T-C9BX].
77
U.S. Patent No. 8,702,523 col. 8 l. 55-63 (filed Apr. 22, 2014).
78
Id.
79
Id. at col. 10 l. 14-29.
80
U.S. Patent No. 9,795,886 col. 2 l. 57 (filed Oct. 24, 2017).
81
See id. at col. 2 l. 3-9 (considering “real currency”).
82
Id. at col. 1 l. 22-36.
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 85
based on the lack of experience of the player, Smalley increases the likelihood
that a player will purchase that protection.
Other patents describe encouraging players to make purchases outside
of a video game to receive in-game benefits. U.S. Patent No. 10,252,170 to
Judkins, Linker, Han, Pale, and Kullgren (hereinafter “Judkins”) describes
“[g]aming systems and methods for integrated computer-related and physical
game play interactions between a game player, a physical game piece, and an
electronic device.”
83
One aspect of Judkins pushes players to be physically
active outside of the video game by instructing them to engage in “timed
physical play” while wearing a physical device, such as a wristband.
84
These
real-world devices record information which correlates to “charg[ing] an
avatar’s energy” within the video game.
85
But Judkins elaborates that the
number of points a player may earn—currency for virtual upgrades—can be
tied to the retail price of the toy,
86
such that, for example, a user might earn in-
game points for scanning in codes that come with separately purchased
physical toys.
87
Similarly, Judkins appears to contemplate that in-game points
might be earned when users provide personal information to merchants
(which, presumably, would be used by the merchants for marketing
purposes).
88
As such, Judkins provides a slight twist on the “toys-to-life”
genre, by offering in-game benefits for consumption activity outside of the
game, even if that consumption activity is not directly related to the gameplay
itself.
Judkins is far from the only patent that recognizes that video games
might be used to encourage players to consume out-of-game content. U.S.
Patent No. 10,569,171 to Peterson, Robillard, and Harper (hereinafter
“Peterson”) describes “a gaming device having a video game application that
is associated with media content, such as a television show broadcast by a
television network and displayed on a television.”
89
Peterson’s gaming device
“captures, e.g., from a microphone of the gaming device, an audio signal from
the media content being played concurrently with the video game application”
and “uses content recognition techniques to identify the media content from
the capture audio signal and, based on the recognized media content, unlocks
‘premium’ in-game content that augment gameplay of the video game
application.”
90
In other words, Peterson provides in-game benefits based on
83
U.S. Patent No. 10,252,170 col. 2 l. 57 (filed Oct. 9, 2017) .
84
Id. at col. 7 l. 33-43.
85
Id.
86
Id. col. 8 l. 30-50.
87
Id. col. 3 l. 65 – col. 4 l. 1.
88
Id. col. 4 l. 20-27.
89
U.S. Patent No. 10,569,171 col. 3 l. 1-12 (filed Jul. 2, 2012) .
90
Id.
86 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
other media consumed by a player.
91
This helps increase the “viewership and
audience ratings of the associated media content.”
92
Such a concept would
likely benefit companies with wide-ranging media empires: even if they might
not be able to reliably recoup a game’s development and marketing costs
through sales alone, they might recoup costs by driving consumption of other
content (e.g., ad-supported television or purchased movies).
IV. THE CONTROVERSY BEHIND THE PSYCHOLOGY OF DLC AND
MICROTRANSACTIONS
The monetization mechanisms described in patents reflect clever
strategies that can help video game developers generate sufficient revenue to
recoup production costs. That said, some in the psychology world assert that
these concepts have much darker implications, arguing that these monetization
strategies amplify the already addictive aspects of video games.
93
The idea that one can become addicted to video games is far from
new.
94
Both Internet addiction and video game addiction are considered by
psychologists to perhaps be the “most widely recognized negative
psychosocial terms associated with gaming,” and psychologists consider both
to be similar to pathological gambling.
95
Indeed, some studies have shown that
“long‐term internet game playing affected brain regions responsible for
reward, impulse control and sensory‐motor coordination,” and video game
“playing was associated with dopamine release similar in magnitude to those
of drugs of abuse.”
96
One reason that video games may be so addictive is that
they provide players rewards “on concurrent variable-ratio and fixed-interval
91
See id.
92
Id. at col. 3 l. 19-21.
93
See generally King & Delfabbro, supra note 4.
94
See generally MOHAMED K. KHAN, COUNCIL OF SCIENCE AND PUBLIC HEALTH, CSAPH
REPORT 12-A-07, Emotional and Behavioral Effects, Including Addictive Potential, of Video
Games 4, https://www.ama-assn.org/sites/ama-assn.org/files/corp/media-
browser/public/about-ama/councils/Council%20Reports/council-on-science-public-
health/a07-csaph-effects-video-games-internet.pdf https://perma.cc/QL9Q-3PJ8] (surveying
scientific literature from 1985 to 2007).
95
Id.; see also Daniel King, Paul Delfabbro & Mark Griffiths, The Role of Structural
Characteristics in Problem Video Game Playing: A Review, 4(1) J. PSYCHOSOCIAL RES. ON
CYBERSPACE (2010), https://cyberpsychology.eu/article/view/4229/3272
[https://perma.cc/NRQ3-B9H6].
96
Aviv Weinstein & Michel Lejoyeux, New Developments on the Neurobiological and
Pharmaco-Genetic Mechanisms Underlying Internet and Videogame Addictions, 24(2) AM.
J. ADDICTIONS 117, 117 (2015), https://onlinelibrary.wiley.com/doi/abs/10.1111/ajad.12110
[https://perma.cc/37CK-MUES].
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 87
schedules that lead the player to respond rapidly and with few post-
reinforcement pauses.”
97
Compared to gambling, video games do seem to
provide more than just a chance at rewards. Indeed, according to some
psychologists, the most addictive form of video game is generally the
Massively Multiplayer Online Role Playing Game (MMORPG), in part
because MMORPGs allow individuals who are “somewhat marginalized
socially, perhaps experiencing high levels of emotional loneliness and/or
difficulty with real life social interactions” to “achieve more control . . . and
more success in social relationships in the virtual reality realm than in real
relationships.”
98
In 2019, the World Health Organization voted to adopt the
latest edition of its International Classification of Diseases to include an entry
on “gaming disorder,”
99
defined as “a pattern of gaming behavior . . .
characterized by impaired control over gaming, increasing priority given to
gaming over other activities to the extent that gaming takes precedence over
other interests and daily activities, and continuation or escalation of gaming
despite the occurrence of negative consequences.”
100
Though video game addiction and pathological gambling are different,
some believe that video games may be a “gateway to problem gambling.”
101
Of particular concern are loot boxes, a commonly used form of
microtransactions which permit players to use real money to purchase a chance
for in-game content in a manner similar to buying a lottery ticket for a chance
at a cash prize.
102
Some studies have found that loot boxes “either cause
problem gambling among older adolescents, allow game companies to profit
97
See King et al., supra note 95.
98
Khan, supra note 94, at 4; see also King et al., supra note 95.
99
Addictive behaviours: Gaming disorder, WORLD HEALTH ORGANIZATION (Sept. 14,
2018), https://www.who.int/news-room/q-a-detail/addictive-behaviours-gaming-disorder
[https://perma.cc/WC68-GV5G].
100
See generally Anya Kamenetz, Is ‘Gaming Disorder’ An Illness? WHO Says Yes, Adding
It To Its List of Diseases, NPR (May 28, 2019, 5:48 PM),
https://www.npr.org/2019/05/28/727585904/is-gaming-disorder-an-illness-the-who-says-
yes-adding-it-to-its-list-of-diseases [https://perma.cc/ZME6-X3VU]. Note, however, that
this classification is controversial. See Antonius J. van Rooij et al., A Weak Scientific Basis
for Gaming Disorder: Let Us Err on the Side of Caution, 7(1) J. BEHAVIORAL ADDICTIONS 1
(2018), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6035022/ [https://perma.cc/BWM4-
6L2X].
101
Ted Knutson, Video Games Can Be A Gateway to Problem Gambling, FTC Warned,
FORBES (Aug. 8, 2019, 12:43 PM),
https://www.forbes.com/sites/tedknutson/2019/08/08/video-games-can-be-a-gateway-to-
problem-gambling-ftc-warned/ [https://perma.cc/5CYJ-2XMB].
102
Id.
88 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
from adolescents with gambling problems for massive monetary rewards, or
both.”
103
The increasingly complex methods video games employ to entice
player spending raise concerns for psychologists. In an editorial in the journal
Addiction, psychologists Daniel L. King and Paul H. Delfabbro explicitly cite
Marr, Kim, and Ernst as examples of “predatory monetization schemes” which
they liken to entrapment; that is, “the belief that one has invested too much to
quit.”
104
King and Delfabbro characterize such schemes quite negatively:
Predatory monetization schemes typically involve in‐game
purchasing systems that disguise or withhold the true long‐term
cost of the activity until players are already financially and
psychologically committed. Such schemes are designed to
encourage repeated player spending using tactics or elements
that may involve, either singularly or in combination, limited
disclosure of the product; intrusive and unavoidable
solicitations; and systems that manipulate reward outcomes to
reinforce purchasing behaviors over skillful or strategic play.
Such strategies may exploit inequalities in information
between purchaser and provider, such as when the industry
uses knowledge of the player’s game‐related preferences,
available funds and/or playing and spending habits, to present
offers predetermined to maximize the likelihood of eliciting
player spending.
105
King and Delfabbro also criticize the “collection and use of individual player
data to manipulate the nature and presentation of purchasing offers in ways
that maximize the likelihood of the player spending money.” In particular, they
argue that those strategies exploit “an information asymmetry”—that is, the
game system knows more about the player than the player can know about the
103
David Zendle, Rachel Meyer & Harriet Over, Adolescents and Loot Boxes: Links with
Problem Gambling and Motivations for Purchase, R. SOC. OPEN SCI. (2019) 1,
https://royalsocietypublishing.org/doi/10.1098/rsos.190049#d3e2905
[https://perma.cc/9B5D-49CM]; see also Aaron Drummond & James D. Sauer, Video Game
Loot Boxes are Psychologically Akin to Gambling, 2 NATURE HUMAN BEHAVIOUR 530
(2018), https://www.nature.com/articles/s41562-018-0360-1 [https://perma.cc/7V5Y-
5RN7]; Wen Li, Devin Mills & Lia Nower, The Relationship of Loot Box Purchases to
Problem Video Gaming and Problem Gambling, 97 ADDICTIVE BEHAVIORS 27 (2019),
https://www.sciencedirect.com/science/article/abs/pii/S0306460319301091
[https://perma.cc/44YM-A2EZ].
104
King & Delfabbro, supra note 4, at 1967.
105
Id.
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 89
game—and use “pressuring tactics” which can lead to overspending or using
credit cards by some players .
106
That said, other experts are concerned that the concept of video game
and Internet addiction is misplaced or overly specific. Chris Ferguson, a
professor of psychology at Stetson University, has argued that video games
are no different than many other pleasurable activities: after all, “[s]troking a
cat tends to release dopamine,” “cats have mechanisms to try to keep you
petting them,” and people hoard cats, and yet “[w]e do not talk about cat
addiction.”
107
Even the inclusion of gaming disorder in the International
Classification of Diseases was quite controversial. Among many other
criticisms of the inclusion, critics argued that the concept of a gaming disorder
was ill-defined and there was no evidentiary basis for defining video game
addiction, but not addiction to other well-documented addictions, like food,
sex, exercise, shopping, or tanning.
108
To its credit, the video game industry has taken steps to respond to
concerns regarding video game addiction. For example, Sony, Microsoft, and
Nintendo all agreed in an FTC workshop that publishers of upcoming
PlayStation, Xbox, and Switch games must reveal the chances of earning rare
items, taking some of the uncertainty out of loot boxes.
109
Moreover, resources
have been developed to help gamers identify and address game addiction, such
as the website Game Quitters.
110
Because these monetization methods are controversial, critics argue
that issuing patents for these strategies grant patentholders a state-sanctioned
monopoly over problematic and deceptive practices. Once granted, patent
assignees have the right to exclusively use those monetization strategies and
to license them to others. A question thus arises from these concerns: should
the USPTO issue these patents at all?
V. A BRIEF HISTORY OF PATENTS AND “MORAL UTILITY”
Historically, the idea that “immoral” inventions were unpatentable was
a tenet of U.S. patent law. The rationale for such a rule originated from the
106
Id. at 1967-98.
107
Tara Haelle, Don’t Hate the Player: Controversy Over Gaming as Mental Disorder
Levels Up, PSYCHIATRY ADVISOR (Feb. 1, 2019),
https://www.psychiatryadvisor.com/home/topics/general-psychiatry/dont-hate-the-player-
controversy-over-gaming-as-mental-disorder-levels-up/ [https://perma.cc/F6HE-C6CH].
108
van Rooij et al., supra note 100, at 2-5.
109
Kris Holt, Sony, Microsoft and Nintendo Agree to Disclose Loot Box Odds, ENGADGET
(Aug. 7, 2019), https://www.engadget.com/2019-08-07-sony-microsoft-nintendo-loot-box-
odds.html [https://perma.cc/H6Z9-F956].
110
GAMEQUITTERS.COM, https://gamequitters.com/ (last visited Dec. 9, 2020)
[https://perma.cc/N9H9-2XAK].
90 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
idea that immoral inventions were not “useful” as required by 35 U.S.C. § 101.
For example, in Bedford v. Hunt, Justice Story argued that an invention is not
“useful” unless it “may be applied to some beneficial use in society, in
contradistinction to an invention[] which is injurious to the morals, the health,
or the good order of society.”
111
Taking this idea to heart, the USPTO and
courts once rejected the idea that gambling devices were patent eligible,
despite the clear utility of such devices (e.g., financially benefiting the owner
by causing players to lose money).
112
For example, in Schultze v. Holtz, the
court rejected the patentability of a coin-operated device because of its
intended use for gambling purposes in saloons, barrooms, and other drinking
places.
113
One of the more interesting cases implementing this so-called “moral
utility” doctrine was Rickard v. Du Bon.
114
Rickard involved U.S. Patent No.
604,338 to Rickard and Long (the ’338 Patent), which was directed to the “art
of treating tobacco-leaves.”
115
The lower court in Rickard found that the patent
lacked any utility “except to deceive,” noting that the ’338 Patent was the
result of experiments to “produce an imitation” of high-quality Sumatra
tobacco by spraying a leaf with an alkali in a solution.
116
The Second Circuit
agreed, finding that “[i]n authorizing patents to the authors of new and useful
discoveries and inventions, [C]ongress did not intend to extend protection to
those which confer no other benefit upon the public than the opportunity of
profiting by deception and fraud.”
117
The holding in another case, Scott & Williams, Inc. v. Aristo Hosiery
Co., was similarly premised on the idea of a “moral utility” doctrine.
118
Aristo
Hosiery related U.S. Patent No. 1,233,714 to Scott (the ’714 Patent), which
was directed to a “seamless stocking.”
119
The ’714 Patent described a seamless
stocking with an imitation seam, leveraging the fact that buyers associated
seams in stockings with higher-quality stockings and were thus more likely to
buy a seamless stocking with an imitation seam than one without an imitation
111
Bedford v. Hunt, 3 F. Cas. 37 (C.C.D. Mass. 1817); see also Lowell v. Lewis, 15 F. Cas.
1018, 1019 (C.C.D. Mass. 1817) (finding that inventions “injurious to the well-being, good
policy, or sound morals of society” are unpatentable).
112
For a collection of cases, see, e.g., F. Scott Kieff et al., PRINCIPLES OF PATENT LAW 706
(5th ed. Foundation Press 2011).
113
Schultze v. Holtz, 82 F. 448, 449 (C.C.N.D. Cal. 1897).
114
Rickard v. Du Bon, 97 F. 96 (C.C.D. Conn. 1899), aff’d Rickard v. Du Bon, 103 F. 868
(2d Cir. 1900).
115
Rickard, 97 F. at 97 (1899).
116
Id. at 96-97.
117
Rickard, 103 F. at 873 (1900).
118
Scott Williams, Inc. v. Aristo Hosiery Co., 7 F.2d 1003 (2d Cir. 1925).
119
Id. at 1003.
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 91
seam.
120
The Second Circuit found that the ’714 Patent lacked moral utility,
specifically finding that the ’714 Patent “does not create a new useful
discovery or invention, and it was not the intention of Congress to grant
protection to those who confer no other benefit to the public than an
opportunity for making the article more salable.”
121
But the “moral utility” doctrine of Rickard and Aristo Hosiery is long
dead: controversial (and arguably “immoral”) inventions are very much
patent-eligible today. Juicy Whip, Inc. v. Orange Bang, Inc.
122
arguably killed
moral utility.
123
The patent at issue in Juicy Whip, U.S. Patent No. 5,575,405
to Stratton and Stratton (the ’405 Patent), related to a beverage dispenser “with
an associated simulated visual display of beverage.”
124
Specifically, the
invention of the ’405 Patent comprised a display bowl filled with “a permanent
sterile and stable fluid simulating the color and texture of a beverage to be
dispensed,” but actually dispensed beverages from hidden tanks of
“pressurized water and concentrate.”
125
Fig. 1 of the ’405 Patent, reproduced
below, depicts this arrangement.
120
Id.
121
Id. at 1004.
122
Juicy Whip, Inc. v. Orange Bang, Inc., 185 F.3d 1364 (Fed. Cir. 1999).
123
Margo Bagley, Patent First, Ask Questions Later: Morality and Biotechnology in Patent
Law, 45 WM. & MARY L. REV. 469, 492 (2003).
124
U.S. Patent No. 5,575,405 (filed Apr. 18, 1996).
125
Id. at col. 2 l. 57.
92 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
The ’405 Patent explained that this display bowl acted as a “powerful
merchandising tool for stimulating impulse buying,” and that the hidden tanks
avoided issues with actually putting a beverage in the display bowl, such as
the display bowl requiring “frequent cleaning” and having a “small dispensing
capacity that require[s] frequent manual filling.”
126
Defendants Orange Bang,
Inc. and Unique Beverage Dispensers, Inc., argued that the ’405 Patent was
invalid because the ’405 Patent described an immoral invention that lacked
utility.
127
The Federal Circuit disagreed, finding that “[t]he requirement of
‘utility’ in patent law is not a directive to the Patent and Trademark Office or
the courts to serve as arbiters of deceptive trade practices.”
128
After all, the
Federal Circuit held that “Congress never intended that the patent laws should
displace the police powers of the States, meaning by that term those powers
by which the health, good order, peace and general welfare of the community
are promoted.”
129
In this ruling, the Federal Circuit explicitly declined to
follow Rickard and Aristo Hosiery, asserting that those cases did not
“represent[] the correct view of the doctrine of utility under the Patent Act of
1952.”
130
It should be emphasized that the Federal Circuit’s ruling in Juicy Whip
was not a cavalier rejection of the concept of morality, but rather a particular
understanding of the meaning of “useful” under the 1952 Patent Act.
131
According to the Federal Circuit, the “fact that one product can be altered to
make it look like another is in itself a specific benefit sufficient to satisfy the
statutory requirement of utility.”
132
Indeed, one can also envision uses for the
inventions in question in Rickard and Aristo Hosiery as well. For example, the
inventions in Rickard and Aristo Hosiery could provide consumers with
products having an aesthetic appearance mimicking a more expensive product
at a cheaper cost. Considering that some women in World War II resorted to
painting false stocking creases on the back of their legs to imitate the crease
of real stockings,
133
it is plausible that some customers wanted to purchase
cheaper stockings that merely looked expensive, and the invention in Aristo
Hosiery provided such a product. Similarly, the invention in Juicy Whip has a
clear benefit. Beyond the aesthetic benefits recognized by the Federal Circuit,
using a storage tank allows a greater volume of liquid to be dispensed while
126
Id. at col. 1 l. 45-53.
127
Juicy Whip, 185 F.3d at 1366.
128
Id. at 1368.
129
Id. (citing Webber v. Virginia, 103 U.S. 344, 347-48 (1880)).
130
Id. at 1367.
131
35 U.S.C. § 101 (2012); Juicy Whip, 185 F.3d at 1367.
132
Juicy Whip, 185 F.3d at 1367.
133
Amanda Uren, 1940s: Improvising Stockings, MASHABLE (May 18, 2015),
https://mashable.com/2015/05/18/nylon-stocking-shortage/ [https://perma.cc/QDC7-2CF6];
Juicy Whip, 185 F.3d at 1367.
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 93
avoiding possible sanitation issues associated with having a display bowl near
a customer.
134
There are very appealing reasons for keeping the concept of utility
quite broad. The Supreme Court has openly characterized the word “useful”
as “pregnant with ambiguity when applied to the facts of life.”
135
Recognizing
this ambiguity, the USPTO has seemingly taken a quite permissive view of
what is and is not useful. After all, granting a patent covering a useless
invention is unlikely to be of much harm to society, whereas denying a patent
to an ultimately useful invention might significantly harm the inventors’
ability to realize the value of their invention. According to the Manual of
Patent Examining Procedure, an invention need only have a specific utility
(i.e., “a well-defined and particular benefit to the public”) and a substantial
utility (i.e., a “significant and presently available benefit to the public”) to be
patentable.
136
As such, the USPTO defines what is not useful quite narrowly,
such as circumstances where the claimed invention is outright inoperative or
outright unbelievable.
137
In fact, a cursory review of issued patents suggests that, even before
the ruling in Juicy Whip, the USPTO has long since dispensed with the concept
of moral utility and has granted patents on inventions that aim to confuse
consumers.
138
For example, the company Alcantara S.p.A. is famous for
producing patented faux leather products which might be assumed to be
leather when present in luxury vehicles.
139
Also, slot machine-related
inventions, such as those described in U.S. Pat. No. 5,113,990, were patented
long before the Juicy Whip decision.
140
Other controversial patents, such as
those potentially directed to human cloning, also appear on the table; U.S. Pat.
No. 6,211,429 (the ’429 Patent) recites, in claim 19, a “method for producing
a cloned mammalian embryo,” which includes human embryos.
141
Criticizing
the ’429 Patent, Patent Watch Executive Director Andrew Kimbrell asserted
134
‘405 Patent, supra note 124, at col. 1 l. 45-53.
135
Brenner v. Manson, 383 U.S. 519, 529 (1966).
136
USPTO, MANUAL OF PATENT EXAMINING PROCEDURE § 2107.01 (2020) (citing In re
Fisher, 421 F.3d 1365, 1371 (Fed. Cir. 2005)),
https://www.uspto.gov/web/offices/pac/mpep/mpep-2100.pdf [https://perma.cc/M3ZW-
XW24].
137
Id.
138
See, e.g., U.S. Patent No. 6,890,602 (filed Apr. 10, 2003).
139
See Jason Torchinski, What the Hell is Alcantara, Anyway?, JALOPNIK (July 14, 2014,
3:31 PM), https://jalopnik.com/what-the-hell-is-alacantara-anyway-1604799947
[https://perma.cc/FA98-ZWGC].
140
See U.S. Patent No. 5,113,990 (filed Aug. 15, 1989).
141
U.S. Patent No. 6,211,429 (filed June 18, 1998); see also Kristen Philipkoski, Why Does
School Own Clone Patent?, WIRED (May 16, 2002, 5:26 PM),
https://www.wired.com/2002/05/why-does-school-own-clone-patent/
[https://perma.cc/D2PT-FSPU].
94 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
that the USPTO “has become a ghoulish human body shop allowing
researchers and corporations to patent and own human body parts, cloning
processes and even human life forms.”
142
VI. WHY MORAL UTILITY SHOULD NOT BE REVIVED FOR VIDEO GAMES
Perhaps needless to say, U.S. patent laws are unlikely to change just
because some patents describe innovative methods to monetize in-game
spending. This is probably for the better, and the USPTO should not revive
the moral utility doctrine, particularly as it pertains to video game
monetization.
First, consumers of video games are well positioned to avoid the
monetization strategies outlined above. Video games are a discretionary hobby
where players elect to play a particular game as a harmless diversion.
Moreover, players are often connected to gaming news and information in a
variety of ways (e.g., forums, news websites, podcasts, live streaming) which
are all readily available through their video game console or device of choice.
These information sources provide players with a (perhaps limited)
opportunity to learn about and react to developments in the gaming industry.
In this regard, gamers are empowered to vote with their wallets. If they dislike
how a particular game is structured or monetized, they can refuse to purchase
or play the game. This is precisely what happened with the game Star Wars
Battlefront II. Players rejected what many perceived as “an overly aggressive
use of loot boxes and microtransactions, tied to a progression system that
incentivized spending real money.”
143
In fact, leveraging some players’ vocal
distaste for these monetization strategies, the absence of common
monetization strategies has become a selling point for some games. For
example, some publications maintain lists of games with no
microtransactions,
144
and some yet-to-be-released games emphasize their lack
of microtransactions as a selling point.
145
142
Philipkoski, supra note 141.
143
Andrew Webster, EA Says It’s Learned From Star Wars Battlefront Controversy, Vows
to ‘Be Better’, THE VERGE (Apr. 13, 2018, 8:59 AM),
https://www.theverge.com/2018/4/13/17230874/ea-star-wars-battlefront-2-loot-box-patrick-
soderlund-interview [https://perma.cc/HK98-XEMX].
144
See, e.g., Will Greenwald, 10 Awesome AAA Games with No Loot Boxes, PCMAG.COM
(Dec. 15, 2017), https://www.pcmag.com/news/10-awesome-aaa-games-with-no-loot-boxes
[https://perma.cc/WH5D-94MG].
145
See, e.g., Derek Strickland, Torchlight III Revealed, Buy to Play with No
Microtransactions, TWEAKTOWN (Jan. 27, 2020, 11:59 AM),
https://www.tweaktown.com/news/70211/torchlight-iii-revealed-buy-play-
microtransactions/index.html [https://perma.cc/426T-U8V8].
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 95
Second, there are other ways in which the U.S. government might
address the potential negative impact of deceptiveness in video game
monetization. Consumer protection laws, rather than patent laws, are better
suited to address perceived deceptiveness. The Federal Trade Commission
(“FTC”) recently held a workshop investigating loot boxes,
146
which suggests
that video game monetization has captured the FTC’s attention. Moreover,
Congress seems increasingly interested in the issue. For example, Sen. Josh
Hawley (R-MO) proposed a bill that would ban loot boxes and other forms of
microtransactions.
147
That said, as of the writing of this article, the bill has not
progressed,
148
and some pundits predict it has little chance of passing.
149
Another possible option, referenced in Juicy Whip,
150
is that Congress could
modify 35 U.S.C. 101 to render video game monetization per se unpatentable,
but this type of legislation seems rather unlikely.
Regardless, it seems unlikely that reviving the moral utility doctrine
would have any effect on the monetization strategies used by video games.
Although some companies might file for patents to reward employees’
inventive effort or shore up a defensive patent portfolio, patents probably do
not matter much to this particular aspect of the video game industry. As
described above, video game developers need new ways to make money on
the video games they develop,
151
and thus those companies will likely
implement new monetization strategies whether or not those strategies are
patentable. In other words, if video game monetization-directed inventions
were made per se unpatentable, it seems unlikely that companies would stop
employing or developing strategies to encourage players to spend money. In
any event, if gaming companies were still concerned that their competitors
146
Lesley Fair, FTC Workshop Looks Into Loot Boxes, FTC.GOV (Apr. 8, 2019, 11:14 AM),
https://www.ftc.gov/news-events/blogs/business-blog/2019/04/ftc-workshop-looks-loot-
boxes [https://perma.cc/ZPJ7-Z89E].
147
See, e.g., Charlie Hall, Anti-Loot Box Bill Could Radically Change How Video Games
are Sold, POLYGON (May 23, 2019, 5:27 PM),
https://www.polygon.com/2019/5/23/18637556/anti-loot-box-bill-microtransaction-ban-
legal-analysis-esa [https://perma.cc/VG7X-RMS9].
148
A bill to regulate certain pay-to-win microtransactions and sales of loot boxes in
interactive digital entertainment products, and for other purposes, S.1629, 116th Cong.
(2019), https://www.congress.gov/bill/116th-congress/senate-bill/1629/text (last visited Feb.
20, 2020) [https://perma.cc/Y7D9-HCTJ].
149
Giancarlo Valdes, ‘Zero’ Chance it Passes: Game Analysts Break Down Senator’s Anti-
Loot Box Bill, VENTUREBEAT (May 13, 2019), https://venturebeat.com/2019/05/13/zero-
chance-it-passes-game-analysts-break-down-senators-anti-loot-box-bill/
[https://perma.cc/N7LP-JJB6].
150
Juicy Whip, 185 F.3d at 1368.
151
See discussion supra Part I.
96 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
might pilfer their monetization strategies, all they would need to do is maintain
those strategies as trade secrets.
152
Moreover, there is a significant advantage to allowing controversial
inventions to be patented, in that the underlying “tricks of the trade” are
disclosed to the public in the patents. Patents have strict written description
requirements, as such requirements “promote[] the progress of the useful arts
by ensuring that patentees adequately describe their inventions in their patent
specifications in exchange for the right to exclude others from practicing the
invention for the duration of the patent’s term.”
153
In other words, patents
benefit society by forcing inventors to disclose their inventions to the public
in exchange for providing those inventors with limited-duration monopoly
rights.
154
In a similar fashion, the public benefits when game companies
disclose how they monetize their games, as such disclosures can form the basis
for critical analysis and informed player decision-making.
155
For example,
players of a particular video game might be encouraged to openly discuss in-
game prices once armed with the knowledge that the video game might, using
the methods described in Ernst,
156
modify in-game item prices based on their
likelihood to buy those items.
From a broader patent law policy perspective, reversing the Juicy Whip
decision and allowing the USPTO to become an arbiter of the morality of
inventions may have undesirable consequences. For example, is a “[c]onsumer
profiling and advertisement selection system” patent inherently immoral
because it “provides targeting of appropriate audience[s] based on
psychographic or behavioral profiles of end users”?
157
An ardent opponent of
advertisements might argue that the answer is yes—but, admittedly, many
valuable websites (e.g., underfunded news websites) might rely on such
targeted advertising to raise the funds necessary to operate. What about a
patent on an “[a]pparatus for mounting and locking a folding stock on a
rifle?”
158
One might object to a folding stock being used to conceal a rifle for
criminal activity, but might not mind the folding stock being used by police or
hunters. The USPTO already struggles to define patent-eligible subject matter
152
See generally What is a Trade Secret?, WORLD INTELL. PROP. ORG.,
https://www.wipo.int/tradesecrets/en/ (last visited Mar. 3, 2020) [https://perma.cc/X3NN-
MX5M].
153
USPTO, MANUAL OF PATENT EXAMINING PROCEDURE § 2163 (2020).
154
See id.
155
Video game patents are the subject of discussion in online gaming forums. See, e.g.,
r/Playstation, REDDIT, https://www.reddit.com/r/playstation/search?q=patent&restrict_sr=on
(last visited April. 7, 2021) [https://perma.cc/CZ2G-EMRH].
156
See discussion supra Part II.
157
Id.
158
U.S. Patent No. 3,369,316 (filed Apr. 29, 1966).
2021 GEORGETOWN LAW TECHNOLOGY REVIEW 97
across the multitude of cases it handles every year.
159
Introducing a new, even
more nebulous, concept of morality into the examination process would
scarcely help matters, particularly where the concept of morality might require
examiners to make assumptions about the likely consumers of an invention.
That said, video game developers should exercise caution when
patenting inventions directed to video game monetization, as the detail
included in those patents could quickly become a public relations nightmare.
As an example, Sony filed a patent application in 2009, now granted as U.S.
Pat. No. 8,246,454 to Zalewski (“Zalewski”), for a system designed to
“convert[] television commercials into interactive network video games,”
which prompted users to play an interactive game as part of an
advertisement.
160
Journalists were quick to condemn Zalewski as “hilarious”
but “terrifying”
161
because, when describing various ways in which users
might interact with an advertisement, Zalewski refers to a user being prompted
to “Say ‘McDonalds’ to end commercial.”
162
Although likely intended to be
little more than an example of how voice commands might be used in
interactive games, this concept nonetheless led journalists to assert that “[l]ife
has become Idiocracy” (a comedic movie lampooning, among other things,
American politics and marketing), and that Sony’s patent would read on, for
example, a circumstance where “an ad for The Apprentice may require you to
pick up a motion-detecting controller and comb Donald Trump’s hair with one
hand while taking his wallet with Melania’s other hand.”
163
Needless to say,
in the 11 years since Zalewski was filed, such a parade of horribles never
occurred, but the reputational damage was done. One can easily see similar
articles being written about many of the patents described above.
164
Setting aside the question whether a particular invention is patent-
eligible, patentees should not forget how certain disclosures might be misread.
Take, for example, the invention in Juicy Whip. If the specification of that
159
See Kate Gaudry & Samuel Hayim, Update on 101 Rejections at the USPTO: Prospects
for Computer-Related Applications Continue to Improve Post-Guidance,
IPWATCHDOG.COM (Aug. 13, 2019), https://www.ipwatchdog.com/2019/08/13/update-101-
rejections-uspto-prospects-computer-related-applications-continue-improve-post-
guidance/id=112132/ [https://perma.cc/T9PV-GGS2].
160
U.S. Patent No. 8,246,454 col. 9 l. 18-26 (filed Oct. 23, 2009) [hereinafter Zalewski].
161
See, e.g., Matt Vella, Sony Patent is Hilarious, Terrifying, FORTUNE (Apr. 30, 2013, 5:32
PM), https://fortune.com/2013/04/30/sony-patent-is-hilarious-terrifying/
[https://perma.cc/5XFN-73YD].
162
Id.; Zalewski, col. 10 l. 13-33, fig. 9.
163
Michael Howard, There's a New Technology That Encourages You to Scream At Your TV
to Skip Commercials, ESQUIRE (Nov. 3, 2014), https://www.esquire.com/news-
politics/news/a30579/sony-patent-for-television-shouting-110314/ [https://perma.cc/DW5A-
MURP].
164
See supra Part II.
98 GEORGETOWN LAW TECHNOLOGY REVIEW 5.1
invention was crafted in terms of genuine prosocial goals (e.g., making sure
consumers are not drinking liquids that are likely to have been churning
around in a potentially unclean display bowl for weeks) instead of goals that
might seem less customer-friendly (e.g., dispensing a beverage other than
what a customer thought they were purchasing to save money or effort), the
invention might be less likely to be misunderstood by a reader. Many of the
video game patents discussed above could be positively reframed. Consider
Marr, for example.
165
Rather than being potentially interpreted as an effort to
bilk players out of money (e.g., by rewarding players for purchases by making
matchmaking results easier in games), Marr could be characterized as a way
to gently introduce players to new in-game content, such that those users are
not overwhelmed with a deluge of purchasable content all at once. As another
example, rather than being misunderstood as a method of targeting potential
whales, Kim could perhaps be ethically characterized as a way to efficiently
display ads so that users who do not engage with ads are not bothered by them.
VII. CONCLUSION
In sum, neither the growing costs of game development and marketing
nor the concerns regarding video game monetization strategies are easily fixed
through the patent system. Revival of the concept of moral utility would
introduce an unacceptable level of uncertainty into the patent prosecution
process and would have a dubious impact on the monetization strategies
themselves. Nonetheless, video game developers and publishers should
remember that such patents are in the public record, and the way in which
monetization strategies are portrayed and implemented may have a serious
impact on how the companies are received by the public. Indeed, such patents
risk prompting action by a government agency like the FTC or inviting
significant media backlash.
165
See supra Part III.
