Why a Video Card Patent War Could Take Place in 2011

Why a Video Card Patent War Could Take Place in 2011

You might never have guessed it, but the history of telephones and the history of baseball cards have a lot of similarities. In the 1870s, at about the same time baseball cards were first invented, the telephone was born. Soon after, a patent war erupted between Alexander Graham Bell and Elisha Gray over who actually invented the telephone. More than a hundred years later, there's a current patent war over smart phones between Apple, Samsung, Google, RIM (Blackberry), Nokia, Microsoft, etc. with at least 40 suits already on file.A similar battlefront is repeating itself in the sports card arena. A patent war over memorabilia cards just ended, and a new war over video cards may be coming.

In 1994, Adrian Gluck filed for a patent entitled, “Memorabilia Card." Basically, the patent claimed a baseball card with “a piece of a memorabilia… adhered to the card adjacent to where an image of the actual item normally would appear" and “a certificate attesting to the authenticity of the item." Although it looks like Mr. Gluck did invent the modern game-used and relic card, he had difficulty interesting any card manufacturers in producing such items.

The Court of Appeals summarized why:

“The ′501 patent was filed in 1994. Up until that point, not a single reference in over a century of history disclosed attaching a cut-up piece of a memorabilia item to a baseball card. The concept behind the invention was initially met with much skepticism. The major trading card companies, including the named defendants in this case, rejected Adrian Gluck, the inventor of the ′501 patent. They reasoned, quite logically at the time, that the value of a particular memorabilia item depended on its physical preservation…the notion of cutting up an authentic player's jersey into numerous pieces and attaching it to a trading card seemed sure to destroy far more value than it could ever create."
Three years after Mr. Gluck's invention, Upper Deck released its first Game Jersey inserts in their Series I packs of 1997 Upper Deck Baseball. The inserts were a huge success in the marketplace but led to a patent infringement action.

The suit did not end well for the “Memorabilia Card" patent. The district court ruled it was invalid because the invention was “obvious." Although the analysis is rather complex, “obvious" basically means an invention is not patentable because, sooner or later, someone would have invented it no matter what. On appeal, two of the three judges agreed that the patent was “obvious," which was sufficient to kill the patent and the lawsuit in 2010.

Now, for those of you who think a “memorabilia card" is obvious, you should consider that Justice Rader, now the Chief Judge of the court of appeals, disagreed with his brethren, and eloquently explained why he believed Mr. Gluck's patent was valid:

“As mentioned, this invention does not advance rocket science or cancer medicine. Still, for many individuals, this avocation wins vast devotion.…Without even so much as a cursory review of these unexpected results, the skepticism of experts, the commercial success, the flattery of copying, or any other objective facts, this court concludes in a rather passing fashion that the claimed invention would have been obvious at the time of invention based on the prior art references. But viewed in the context of the record as a whole, the prior art does not support that judgment as a matter of law."

I tend to side with Judge Rader, and here's why: baseball cards were around for a hundred years, and not once over that period did a card company think of or actually create a memorabilia card. It was only after Mr. Gluck came up with the idea for the card, and told others, that the idea took off…and it took off big time. To me, that's a pretty good sign that “memorabilia cards" are not “obvious." “Memorabilia cards" changed the entire industry. In other words, there was a market demand for a product like this. If there was such a demand for this product, and if someone would have thought of it no matter what, why did it take over 100 years?

Regardless, this opinion, looks to have ended the “memorabilia card" patent war in 2010. In 2011, however, a new technology hit the trading card market—video cards. And just as the smartphone patent war heated up this year, so could a video card patent war.

Upper Deck released its Evolution video cards in April for football. Panini is about to release Panini HRX for basketball. Two competitors, two revolutionary products. And the chance for conflict.

Why? Because there are a number of patents claiming various aspects of video cards, and none appear to be owned by Panini or by Upper Deck.

Most of the patents seem to be narrow and may not present problems. However, there is at least one that may be of interest—a patent owned by Warner Communications, entitled “Electronic Baseball Card and Stand for the Same." The patent was filed in 1999 and claims the following:

Translating from patent-eze, this claim basically requires: 1) a trading card, 2) shaped like a sports trading card, 3) with a memory to store images, 4) a display to show those images, 5) and printed text on the card. And, although the title of the patent requires a “stand," this claim apparently does not.

Sounds like a video card, right? Figure 4 from the patent also depicts what looks to be a video card:

Business dealings between large corporations tend to be secretive, so we don't know whether Upper Deck and/or Panini have permission from Warner to make their respective video cards. If they do, then neither company has anything to worry about from this patent (provided of course, they pay the license fee). Heck, both companies may be aware of the patent, but given how the courts treated the “Memorabilia card," they may believe this patent will also be invalidated. Or, both companies may believe the patent is invalid for other reasons, or not infringed.

Or, either company may be unaware that this patent even exists.

With these unknowns, 2011 may be an interesting year for the video card. Will it be accepted by consumers? Will it inspire patent infringement lawsuits?

Regardless of what happens, and, although I only collect baseball cards, I have a funny feeling I'll purchase at least one Upper Deck and Panini video card just to have a piece of history for my office. And, so I can also explain how the history of baseball cards remarkably tracks the history of telephones.

The information provided in Paul Lesko's “Law of Cards" column is not intended to be legal advice, but merely conveys general information related to legal issues commonly encountered in the sports industry. This information is not intended to create any legal relationship between Paul Lesko, the Simmons Browder Gianaris Angelides & Barnerd LLC or any attorney and the user. Neither the transmission nor receipt of these website materials will create an attorney-client relationship between the author and the readers.

The views expressed in the “Law of Cards" column are solely those of the author and are not affiliated with the Simmons Law Firm. You should not act or rely on any information in the “Law of Cards" column without seeking the advice of an attorney. The determination of whether you need legal services and your choice of a lawyer are very important matters that should not be based on websites or advertisements.

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Paul Lesko has litigated intellectual property for over 15 years. Don’t hold the fact that Paul is a lawyer against him, he’s also a rabid baseball and college basketball fan, and an avid baseball card collector. Paul can be found on Twitter @Paul_Lesko and Google+.

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