Intellectual Property

Into the Dungeon–A Comparative Look at the Original and 2023 Open Gaming Licenses

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By: Perry Maybrown

It all started with a leak, which led to a draft, before ending in a retraction.

Wizards of the Coast (WotC) rolled a critical failure when trying to modify their Open Gaming License (OGL)—a license that allows other creators to make use of some Dungeons & Dragons content as building blocks for their own games—after a draft of the updated license was leaked to news outlet Gizmodo. While WotC insisted that little would change, the new license seemed to say otherwise.

The community revolted, leading to promises of boycotts, mass cancelations of subscriptions to D&D Beyond, and a new license called Open RPG Creative License (ORC) from rival company Paizo. Faced with this onslaught, the gaming company chose to back down and keep the OGL intact.

The OG OGL

The original OGL (1.0a), published in 2000, offered prospective gamers a perpetual license to “copy, modify and distribute” the open game content making up the Systems Reference Document (SRD). While the SRD changes with each new edition of D&D (excluding the 4th edition, which is a completely separate can of worms), the OGL stays the same and is perpetual, meaning the license has no set expiration date. The mechanics and building blocks for a Table-Top Role Playing Game (or TTRPG) make up the bulk of the SRD, which creates a base from which creators can build their own games. You can’t use the OGL to publish works that use WotC’s trademarks, like the famous dragon ampersand.  

1.0a includes several caveats that creators must follow to not confuse anyone about what is and what isn’t open game content. For one, a complete copy of the OGL must be included with every copy of open game content distributed. To avoid confusion, creators must also label what is open game content. Content can be directly from the SRD, open game content from other game makers, or original works that the creator wishes to add to the proverbial open game content pile. 

The license is far from perfect, however. Most notable is the lack of the  terms “revocable” or “irrevocable” in its text. This omission makes it difficult to know if WotC can terminate the OGL. Only further muddying the waters is section IX of the license. Through this clause, WotC retains the authority to update the license and allows creators to apply any authorized version of the OGL to any open game content distributed under any license version.  

WotC may argue that they can update the OGL and include in the new version language that declares the old to be unauthorized and thus void. However, because the OGL is a long-standing open license, there are legal arguments and evidence that may contradict WotC’s statement and prevent them from deauthorizing 1.0a. Many online have weighed in on the issue, even some legal authorities, with varying conclusions. For now, it’s challenging to say what way a court may lean, but even in that uncertainty, WotC pushed forward with the plan. 

The Leaked Draft

On January 5th, 2023, a draft of the new OGL 1.1 was leaked, and it was a radical departure from 1.0a. The license now limited the OGL to the “creation of roleplaying games and supplements in printed media and static electronic file formats.” Meaning creators could no longer create other media such as video games, videos, plays, or otherwise use open gaming content. There was a misunderstanding because one of the sections seemingly implied WotC would own any creations made under the OGL; however, that reading was likely incorrect. While section III does state that WotC owns both the licensed and unlicensed content, as defined in the OGL section I(A), neither of those categories include content made by the licensee. Licensed content refers to content within the SRD, and unlicensed is content not within the SRD. However, under section X(B), creators would grant WotC “a nonexclusive, perpetual, irrevocable, worldwide, sub-licensable, royalty-free license to use that content for any purpose.” So while creators would still own their content, WotC would still be allowed to use it. 

Some provisions did remain the same between 1.0a, and 1.1. For example, publishers would still be required to include the license with distributed works and identify anything considered “licensed content.” Some sections were expanded in the new draft, like the termination clause, which now allowed termination for various causes. In addition to these expanded terms, further requirements were also tacked on to the license. Such as a clause detailing the repercussions of terminating the license and an indemnity clause that would shift the financial burden to the licensee in several instances if WotC faced legal action due to the license’s contract. While these modifications were likely made to shore up 1.1 legally, the words “revocable” or “irrevocable” were still not in the new license.

The most significant change in 1.1 was that it had been split into two parts, commercial and non-commercial. Commercial had additional monetary requirements regarding royalties and registration. If someone wished to create content to sell, they were required to register and provide WotC with extensive information about the product and creator, reporting any revenue of more than $50,000. Royalties to WotC were only required once a creator had made more than $750,000 in revenue per year across all products produced under the OGL. Creators would have to send 25% of any qualifying revenue exceeding $750,000. Separate terms and royalty rates were detailed for Kickstarter-backed projects. 

The Updated Draft

Incensed by this update, fans pushed back, leading WotC to respond with a new draft, 1.2. The license was no longer split in two and did not require creators to pay royalties to WotC. Core D&D mechanics were now licensed under the creative commons license 4.0 CC BY. Rather than requiring the full license, creators could now either include the license or display the newly designed OGL product badge on their work. 

Creators were also no longer required to grant WotC a license to use works created under the OGL. Even a new provision under section 3 allowed creators to WotC for copying works (though it does have quite a few restrictions). There was no longer an indemnity clause, though the license bar users from participating in class actions against WotC for activities regarding the OGL. To avoid further conflict, 1.2 finally incorporated the magic words. “This license is perpetual (meaning that it has no set end date), non-exclusive (meaning that we may offer others a license to Our Licensed Content or Our Unlicensed Content under any conditions we choose), and irrevocable (meaning that content licensed under this license can never be withdrawn from the license). It also cannot be modified except for the attribution provisions of Section 5 and Section 9(a) regarding notices.” 

In The End

While 1.2 was created to appease the masses, the die had already been cast, and fans were not ready to accept what seemed to be just a modern rewording of 1.0a. WotC eventually backed down, deciding it was not worth the hassle to update the OGL. It is unclear in the future if any new content will be included from the next generation of D&D or if the OGL will stay as it is, only covering the three SRDs, and other open gaming content created for it. The future of these available licenses is unclear, but at least 1.0a is safe from change for now.

Disclaimer: I worked at Wizards of the Coast from 2019-2020. None of the information discussed in the above article is confidential, or provided directly to me by Wizards of the Coast or any of its agents during or after my year of employment. All documents and sources referenced are in the public domain. 

Cannabis Patents in Federal Courts

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By: Yixin Bao

Introduction

Technology impacts almost every industry, and the cannabis industry is no exception. There are multitudes of cannabis patents granted by the United States Patent and Trademark Office (“USPTO”) each year, including the technology to process and cultivate cannabis plants, and the medical uses of cannabis in the treatment of diseases. As states continue to legalize cannabis, the dispute about whether a federal court should apply the illegality doctrine to cannabis-related patents would become more prevalent in the future.

Background

Traditionally, USPTO does not prohibit the filing of patents related to cannabis. In fact, the number of cannabis-related patent filings continues to increase in recent years. The explanation for this increase seems to be related to the more advanced technologies resulting in the rising medical and recreational use of cannabis and a trend favoring the legalization of cannabis on a state-by-state level.  21 states have acted to legalize recreational marijuana, and even more states have legalized the medical use of marijuana. Nevertheless, in most circumstances, at the federal level, marijuana and marijuana-related products are still considered illegal. Because the legalization of cannabis and marijuana is a relatively recent occurrence, unsurprisingly there has been limited cannabis patent litigation in legal history. 

With the expectation of increased patent litigation over cannabis patents, the question then becomes whether the illegality doctrine should apply to cannabis patents in a federal court, where marijuana and cannabis are schedule 1 controlled substances under the Controlled Substances Act in the eyes of the federal judiciary. The idea of the illegality doctrine comes from Everet v. Williams, also known as “the Highwayman’s case,” a 1725 case in an English court. The court refused to uphold a lawsuit regarding the enforceability of contracts, which was to share the spoils of the armed robber. “No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act.” Lord Mansfield spoke so. The illegality doctrine is based on the belief that a person shouldn’t be able to benefit from his or her wrongdoing. 

Discussion

This question of whether the illegality doctrine should apply to cannabis patents in a federal court has already been raised more often in the legal profession. For example, according to several Goodwin Procter LLP attorneys, including Rob Cerwinski, Brett Schuman, Daniel Mello, and Nikhil Sethi, the uptick in cannabis-related patenting activities in recent years might lead to a potential cannabis patent “war.” These attorneys argue that a federal court should not apply the doctrine because these patents are not the fruit of a crime. There is a big difference between the private agreement between the two criminals in the Highwayman’s case and the patent owners’ rights granted by the USPTO. For example, many cannabis patent holders are pharmaceutical companies and research institutions, instead of criminals. Even the U.S. government holds a cannabis patent. The U.S. Department of Health and Human Services has a patent on certain parts of the marijuana, the non-psychoactive cannabinoids, for their potential use to protect the brain from damage by certain diseases. These holders’ businesses are legal, where the illegality doctrine should not be applied. 

A second reason that the illegality doctrine should not be applied is that patent rights themselves do not violate federal drug laws. Patent rights are the rights to exclude others from making or using the invention, which is again, different from the rights to grant owners to make or sell the invention. 

Last but not least, if a federal court decides to apply the illegality doctrine to the cannabis patents, it will be in direct conflict with an agency that serves as the national patent office and trademark registration authority for the United States, USPTO. 

Future

While marijuana stays illegal under federal law, a large majority of the public seems to favor federal legalization of recreational and medical marijuana according to a CBC News poll published in 2022. As the technologies grow, the public shows support, and states continue to legalize cannabis, this dispute about whether a federal court should apply the doctrine to these patents could become more prevalent.

Battle of the Bike Trainers: Following the Patent War Within the Cycling Community 

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By: Zach Finn

The move to integrate physical activity with rapidly changing technology is not a new endeavor. In the last ten years, gadgets such as smartwatches and smart mirrors, and companies  like Peloton have advanced the ways we exercise and  track our personal fitness. With this emerging field combining technology and exercise, a new market space has opened, causing companies to quickly create innovative equipment or fall behind to more inventive competitors. With the downfall of Peloton starting in March of 2021, the cycling industry has seen an uproar of technological innovation ranging from E-bikes to online virtual reality racing and exercising. With all the excitement and novelty that this brings, comes a battle for market dominance in this developing smart biking space. This has produced an exhilarating and dramatic patent war.

Wahoo Fitness (“Wahoo”) is a fitness technology company based in Atlanta, Georgia. In April 2022, the hardware developer acquired RGT Cycling, a virtual cycling platform, thus acquiring new software to help develop an indoor cycling and gaming program through a subscription service known as Wahoo X. Using Wahoo’s KICKR and KICKR CORE trainers, hardware that one attaches to the rear of a cycling bike making it stationary while connecting it to virtual software, Wahoo transformed its company to produce smart bike trainers that deliver a “realistic, accurate, and quiet indoor cycling experience.” Wahoo acquired patents for their hardware.

Zwift, a software company, owns and operates a multiplayer online cycling and running physical training program, enabling users to interact, train, and compete in a virtual world. In an effort to capitalize on the booming indoor cycling frenzy, Zwift partnered with JetBlack, a hardware developer, to develop its own bike trainer. This trainer, known as the Zwift Hub, became available in the United Kingdom and the United States on Oct. 3rd, 2022, and on that same day, Wahoo filed suit against both Zwift and JetBlack for patent infringement.

35 U.S. Code § 271, “Infringement of a Patent”, states that “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” The U.S. Patent system is founded on protection which incentivizes businesses and people to continue to innovate and develop new products and ideas, with less threat from copycats. Wahoo alleges that Zwift has rebranded the JetBlack Volt Trainer, which they believe, in layman’s terms, is a rip-off of their KICKR CORE trainer. Wahoo has filed three patent infringement claims.

United States Patent No. 10.046.222, entitled “System and Method for Controlling a Bicycle Trainer” was issued by the United States Patent and Trademark Office on August 14, 2018. United States Patent No. 10.933.290, entitled “Bicycle Trainer” was issued on March 2, 2021. United States Patent No. 11.090.542, entitled “System and Method for Controlling a Bicycle Trainer”, was issued on August 17, 2021. Wahoo owns all rights and interests for each patent, including the sole and exclusive right to prosecute and enforce the patent against infringers. They have the right to collect damages against those who have infringed upon the patents. The KICKR and KICKR CORE practice the invention claimed by all three patents. Pursuant to 35 U.S.C § 287, Wahoo gives notice of the patent by listing them on its website.

Should the court find that Zwift has infringed upon Wahoo’s patent, Wahoo is seeking injunctive relief. This means Wahoo is pushing the courts to forbid Zwift from releasing the Hub in the United States retail space. Wahoo is also seeking compensatory damages for any harm the company endured from the release. Winter v NRDL (2008) is the leading case for requirements for preliminary injunctive relief. To obtain a preliminary injunction as Wahoo is currently seeking, the company will need to show 1) the likelihood of success of a permanent injunction based on the merits of the claim, 2) irreparable harm caused by Zwift, 3) a balance of equities (what would be fair), and 4) what is in the interest of the public. We should expect to see how the court rules on a temporary injunction very soon, and a permanent injunction down the line. It seems plausible for Wahoo to get a preliminary injunction against Zwift, if they establish the requisite likelihood of success on the merits, demonstrate an irreparable harm like monetary loss caused by Zwift, articulate the dangers of patent infringement, and portray how an injunction is to the betterment of public interest.

To thicken the patent war drama even more, in June 2015, Wahoo was sued for patent infringement over the very same stationary trainer that the company is suing Zwift and JetBlack for using. Powerbahn, another hardware company, sued Wahoo for patent infringement, seeking at least $1 million in lost royalties. Powerbahn licensed its patented hardware to a company called Nautilus Inc. In Powerbahn’s filed claim, Nautilus Inc.’s executive took the technology when he left the company to join another. The company he joined then licensed the patent to none other than Wahoo. The case was dismissed in April 2021, but it illustrates the theatrical and dramatic timeline of the trainer patent.

In summary, it is an exciting time at the intersection of the technological, cycling, and legal communities. As this new development in the patent war over biker trainers ensues, one must wonder the means and reasons for patent litigation today. In my opinion, as an avid cyclist enthusiast and law student, I question the motives behind Wahoo’s patent infringement claims against Zwift. If the JetBlack Volt Trainer, the hardware Wahoo believes Zwift developed and used for their Hub, was released in 2020, why did Wahoo wait until Zwift partnered with JetBlack, acquired the hardware, produced, and released it to the public? My thought is that Wahoo wanted to strategically undercut one of its biggest rivals, hoping that this patent infringement will lead to an injunction, which would severely destabilize Zwift’s success in the technological exercise market space. If this is the case, those who have interest in antitrust might also want to follow this development. Until then, we can only sit back and watch as this patent war unfolds like a soap opera, as Zwift had until October 24, 2022, to respond to Wahoo’s complaint.

The (Purple) Reign of Fair Use: Certiorari Granted for Warhol’s Portrait of Prince

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OXFORD, ENGLAND – FEBRUARY 02: A member of staff and her child walk next to a series of artworks by Andy Warhol at the Ashmolean Museum on February 2, 2016 in Oxford, England. The work forms part of a new exhibition entitled ‘Andy Warhol: Works from the Hall Collection’. Featuring over 100 unseen Warhol’s, it is due to will run from February 4 to May 15, 2016. (Photo by Carl Court/Getty Images)

By: Erika Hammer

Amongst several IP-focused cases this year having requested review by the Supreme Court, the high court has recently granted certiorari for a case involving copyright, fair use, and some famous individuals: artist Andy Warhol and musician Prince. The case focuses on whether a work is “transformative” under fair use, a major defense to copyright infringement. Notably, fair use is considered to be one of the most important exceptions to copyright law’s general monopoly grant of intelelctual property rights to authors of original works, as well as a major cornerstone for promoting artistic expression, access to knowledge, and dissemination of ideas. 

The case, Andy Warhol Foundation v. Goldsmith, arises from a set of portraits created by Andy Warhol, whose pieces often draw from preexisting works (e.g., a Marilyn Monroe photograph or a can of Campbell’s soup). The specific pieces at issue are portraits of Prince based on a Vanity Fair photograph taken by Lynn Goldsmith. The petition for certiorari describes how Warhol, via silkscreen printing, “cropped the image to remove Prince’s torso, resized it, altered the angle of Prince’s face, and changed tones, lighting, and detail” as well as “added layers of bright and unnatural colors, conspicuous hand-drawn outlines and line screens, and stark black shading that exaggerated Prince’s features.” 

Post-litigation, the district court granted the Andy Warhol Foundation summary judgment in favor of its fair use defense, deeming the use “transformative” for communicating a different meaning and message from the original Goldsmith work. However, the Second Circuit reversed, despite acknowledging that the two artists’ pieces represented different messages. It stated, “while the cumulative effect of those alterations may change the Goldsmith Photograph in ways that give a different impression of its subject, the Goldsmith Photograph remains the recognizable foundation upon which the Prince Series is built.” 

As the Andy Warhol Foundation argued in its petition for certiorari, the Second Circuit’s analysis focuses on the visual resemblances between the works. The Foundation further opines that this decision is creating a circuit split and highlights that the Ninth Circuit has held that a work of art is “transformative” when it portrays a different meaning or message from the original source. 

This case is significant not only because of the famous individuals involved, but also because it involves one of the most crucial doctrines in modern copyright law. Fair use, which is set forth in 17 U.S.C § 107, is the most wide-ranging limitation on copyright protection that attempts to promote the expression of artistic works. Fair use is also grounded in the goals of promoting common culture and enabling technological advancement. As such, highly creative works like Andy Warhol’s would appear to be exactly the kind of follow-on creativity that fair use is intended to not only protect, but to promote. 

Even if a work is highly creative, it must be examined under four factors used in determining whether there is a qualified fair use defense. These four factors include: (1) the purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit, educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market. The Second Circuit found that each of these factors weighed in favor of Goldsmith.

Under the first factor, the more transformative a use is, the more likely said use is deemed to be fair. A foundational fair use case, Campbell v. Acuff Rose, emphasized transformative use as a critical factor. Transformative use is often seen as adding new, creative expression or changing the purpose or character of the copyrighted work. The more transformative a use is, the less significant the other fair use factors will be in the analysis. Typically, if a court finds transformative use under the first factor, that factor tends to strongly influence the inquiry into the rest of the fair use factors. 

With transformative use being such a crucial factor in fair use, which is of itself a crucial doctrine in copyright law, it comes as no surprise that the Supreme Court granted certiorari in this case. Despite the fact that Andy Warhol’s artwork appears to transform Prince’s depiction “from a vulnerable, uncomfortable person to an iconic, larger-than-life figure,” as described by the district court, this paradigm of the transformative nature of the work did not pass muster in the Second Circuit. 

In contrast, other prior Second Circuit cases that have been seminal in the “transformative” aspect of fair use have allowed use of the defense even when the original work is still a “recognizable foundation” to the subsequent piece at issue. Graham v. Dorling Kindersley held that a Grateful Dead biography that used copyrighted, original posters was fair use because they served a different purpose, despite the entirety of the original work being used in the follow-on biography. However, in opposition to certiorari, Goldsmith argues that the Warhol silkscreens shared the same purpose as Goldsmith’s copyrighted photograph, as well as the same essential artistic elements.

How the Supreme Court comes out on this decision – whether a different message or meaning is sufficient for transformation under fair use despite facial similarities – will be very important in copyright jurisprudence and the scope of fair use. 

Narrower Patent Means CRISPR Victory for Broad Institute

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By: Smitha Gundavajhala

On February 28, 2022, the US Patent and Trademark Office (USPTO) handed down a ruling in one of the most bitterly fought patent turf wars in biotechnology: the battle over the use of CRISPR-Cas9 in humans. The two major groups that were vying for recognition were the Broad Institute, consisting of researchers from Harvard, and MIT and CVC, consisting of researchers from UC Berkeley, the University of Vienna, and Emmanuelle Charpentier. 

CRISPR-Cas9 is a revolutionary gene editing tool that has implications for healthcare, agriculture, and more. CRISPRs are DNA sequences with proteins that act like scissors. Originally derived from bacterial genomes, CRISPR technology has since been extended to apply to eukaryotes, which are multicellular organisms. Examples of eukaryotes include plants, animals, and humans. As one might imagine, the latest evolution in CRISPR technology is immensely lucrative. The technology could be used to prevent viral infections and chronic conditions in humans, as well as to genetically modify produce to carry more nutrients.  Both Broad Institute and CVC stood to lose a great deal in their hard-fought dispute about the CRISPR-Cas 9 patent.

The dispute between these parties was complicated by timelines, the change in US patent law, and the contradictory decisions of different jurisdictions across the world. Jennifer Doudna of UC Berkeley was the first to file a patent application in 2012, a few months before Feng Zhang and the Broad Institute filed their patent application. However, prior to 2013, the USPTO’s rules were different: the agency awarded patents to the entity that was the “first to invent,” rather than the entity that was “first to file.” 

Thus, when Doudna asked USPTO to declare an “interference” between the two patents in 2015, the office had to consider which group was the first to invent by “reducing the concept to practice.” CVC argued that Broad Institute’s patent for gene editing in eukaryotes was a mere extension of CVC’s seminal work on CRISPR-Cas9. In 2017, the Patent Trial and Appeal Board (PTAB) ruled that Broad Institute’s patents were not derived from CVC’s patents. In 2019, PTAB again declined to declare an interference regarding claims to CRISPR-Cas9 technology used in eukaryotes, and confirmed that the Broad Institute’s patents were properly issued.

Ultimately, Doudna’s patent application did not explicitly address CRISPR-Cas9 applications for eukaryotes, and Zhang’s patent application did. Thus, Zhang and the Broad Institute were determined to be the “first to invent” CRISPR-Cas9 gene editing for humans. This year’s USPTO decision represents potential losses of billions in licensing revenue for UC Berkeley and priority of invention for Broad Institute.

However, this turf war is far from over and recognition of the Broad Institute’s and CVC’s patents varies across jurisdictions. Currently, CVC maintains fundamental CRISPR-Cas9 patents in over 80 jurisdictions, including China, Japan, and the European Union. CVC and the Broad Institute also face challenges in other countries: South Korea’s ToolGen and Germany’s Sigma Aldrich still have open interference motions with the Broad Institute. From the looks of it, the international fight for CRISPR-Cas9 patent recognition won’t be over any time soon, even while the dust has seemingly settled in the United States.