Wildcat Sues Wizards of the Coast Over Electronic Trading Cards

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The most talked about trading card lawsuit in 2012 easily has been the electronic trading card (ETC) patent suit filed by Wildcat Intellectual Property Holdings (Wildcat). As you'll recall, this is the case where Wildcat sued a slew of companies like Topps and Panini over their online trading card services.

Most of the conversations I've had with others about this case involve companies on the outside looking in, gauging whether or not there is a future for them in the ETC field.

Just about every company I've spoken with has adopted the same strategy: wait-and-see.

Legal translation: You know, since Panini, Topps and their friends are already spending money trying to blow up Wildcat's patents, let's get a free ride on their coattails. Heck, if they are successful, then we'll launch our own ETCs.

It's a good strategy. Let someone else pay the money and do the work, and if defendants win, swoop on in afterward. Of course, if the defendants lose and the patent prevails, well, it's a good thing you didn't launch a product that'd likely be the next target.

Not only are potential entrants into the ETC field taking the wait-and-see approach, the original defendants look to have adopted the same strategy: very few of them have rolled out additional ETC products. They're also likely awaiting the outcome of the first suit before they invest more time and effort into new ETC products.

Wizards of the Coast (WotC), however, recently bucked this strategy and rolled out a new ETC product. Originally, Wildcat sued WotC for its "Magic: The Gathering – Tactics" product. Undaunted, Wizards rolled out a newer product this September called "Magic: The Gathering Online."

So, what happened? You guessed it—Wildcat sued WotC on its ETC patent. Again.

Unlike the other Wildcat lawsuit that has a traffic jam of defendants (Panini, Topps, Electronic Arts, Pokemon, Sony and Zynga), this lawsuit is just Wildcat v. WotC. Mano-a-mano.

Sure, it's streamlined compared to the original Wildcat case, but, in all likelihood, this case will get swallowed by the larger action (since it involves the same issues), or it will get stayed (because the patent is battling through a reexamination process at the USPTO).

There are two contrasting takeaways from this latest lawsuit. First, if you roll out a new ETC product, Wildcat is watching, and it'll likely pounce on you. Second, WotC obviously believes the first case (or the re-exam) will make Wildcat's patent disappear. So why not launch another product? Since everyone else in the industry is more timid, there's an opportunity for WotC to establish itself as a leader in the ETC market.

Of course, WotC's new strategy could backfire and open itself up for additional damages, but, fortune often favors the bold.

I'm looking forward to seeing if the other defendants share Wizards' confidence and roll out new products themselves. Or to see if this action motivates additional companies to enter the ETC market.

Why? Well, the ETC market is an underdeveloped market that could make a lot of companies a lot of money, so it would be nice to see new companies and products in this market. But, I'd also like to see WotC's actions inspire more companies to jump into this market for more selfish reasons. You see, the more new products and new entrants into the ETC market, the more Wildcat lawsuits there will likely be, which will give me more to write about.

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