Microsoft settles in Halo lawsuit

By Ellie Gibson Published 16 March, 2009

Multiplayer patents allegedly infringed.

Microsoft has coughed up an undisclosed amount of money to tech firm PalTalk, settling a lawsuit over the Halo games.

As reported by Seattle PI, PalTalk wanted USD 90 million in royalties. It alleged Microsoft had infringed patents covering the control of interactive applications over multiple computers. Real-time multiplayer stuff, in other words.

Microsoft challenged the validity of the patents and claimed it had taken a different approach to the technology. But now the firm has agreed to settle, for an amount which wasn't revealed but which PalTalk was said to be "quite pleased" with.

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About Ellie Gibson

Since joining Eurogamer in the mid 2000s, Ellie has written about subjects as diverse as the fall of Gizmondo, the rise of Hollyoaks actresses in Red Alert games and the noise a bear makes under NSFW circumstances.

Read more articles from Ellie by visiting the Ellie Gibson archive page.

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Comments (27) Latest comment 3 years ago

Comments threads automatically close after 30 days, but please feel free to continue chatting on the forum!

  • Moz #1 3 years ago

    Wounder how valid the claim was. Cos if MS payed them off just to get them off their back then they could just have opened a flood gate!

  • Dizzy #2 3 years ago

    The patent is a joke, the claim was not very realistic. They probably got the minimum of 300K$. MS probably didn't even have time to spend on PalTalk.

  • Petulant_Radish #3 3 years ago

    Paid not ‘payed’!

  • Xerx3s #4 3 years ago

    "Wounder how valid the claim was. Cos if MS payed them off just to get them off their back then they could just have opened a flood gate!"

    That flood gate is already wide open, it's called the patent system. :/

  • gingerlink #5 3 years ago

    patent troll...

  • ZuluHero #6 3 years ago

    @Dizzy

    Do you think a company with a patent to potentially reap millions of dollars from multiple publishers would really settle for that paltry sum?

  • Lutz #7 3 years ago

    Real Time Multiplayer stuff?

    Correct me if I'm wrong, but what does Halo do in "real time multiplayer" that others don't?

  • drumbaby #8 3 years ago

    "Microsoft challenged the validity of the patents and claimed it had taken a different approach to the technology. "

    You mean they lied?

  • Dizzy #9 3 years ago

    "Do you think a company with a patent to potentially reap millions of dollars from multiple publishers would really settle for that paltry sum? "

    They know their patent is bogus. They probably got 100k profit. I guess that is good enough. These companies are empty shells... they are happy with any profit so they owner can keep his BMW.

  • Dizzy #10 3 years ago

    "Correct me if I'm wrong, but what does Halo do in "real time multiplayer" that others don't? "

    Matchmaking, host migration and trueskill.

    The patent is probably about host migration (detail of the patent seem hard to find) but that has been done before in non-gaming projects. That is just a networking pattern that people have used since the dawn of online programming.

    Then again maybe it is matchmaking since Halo 2 was the first game to do that (on console). MPath had matchmaking as well, but a patent on "matching players of equal skill" is just a pure joke. Ofc you never know ;) with these silly US courtcases.

    It is probably this one. That would indeed indicate host migration stuff. A rather silly patent since that is a algorithm many software guys would come up independently with in a few brainstorming sessions.
    Edited by 5 at 16/03/09 @ 10:33

  • HSH25 #11 3 years ago

    It was probably cheaper for MS to settle than it was for them to take it to court. Absolutely ridiculous.

  • oreillymj #12 3 years ago

    Wonder if MS bought a slice of the company as part of the settlement like they did with rumble.

    By settling, MS are reinforcing the validity of claim and it therefore makes it harder for future defendants to win their case.

    It's quite a clever ploy, as MS end up gaining more in the long run.

  • Sunyavadin #13 3 years ago

    Ths is why I argue for revision to the patent system allowing ANYONE to use ANY idea, with a requirement that a minor percentage going to the patent holder (Encouraging the capitalist competition remains whilst implementing a socialist methodology on it) and making a requirement threshold for the degree of complexity an idea must have before it can be patented. (Proving that the likelihood of someone coming up with the idea independently is sufficiently low that it would not be originated elsewhere)
    That'd kill off about 90% of patents outright, and kill off all but the LEGITIMATE cases like this.

  • kangarootoo #14 3 years ago

    Given how thin information is on the ground, everyone seems to be very quick to declare this patent as bogus.

    First off, why on earth would Microsoft pay out if they didn't think the patent had any substance? Simply to get this company "off their back"? What the hell does that even mean? I'm sure MS can deal with having a small company "on their back" if they feel their business is safe.


    "A rather silly patent since that is a algorithm many software guys would come up independently with in a few brainstorming sessions."

    Patenting something has nothing to do with the fact that somebody else might eventually come up with the same idea. In almost every case, OF COURSE someone else would eventually come up with the same idea. The point is that you came up with the idea first. Should we completely ignore that aspect, especially as getting there first is often the result of spending time and money investigating something?


    "This is why I argue for revision to the patent system allowing ANYONE to use ANY idea, with a requirement that a minor percentage going to the patent holder"

    I agree that some form of forced licensing system might be a good idea, but it is extremely hard to define the value of an idea at the early stages. If I invented something that revolutionised a certain industry completely , I would want rather more than a "minor percentage" of the profits everyone else is making from my idea. And if a minor percentage is all any company is allowed, why would they bother investing millions in developing new ideas in the first place?

    The issue that a lot of people seem to ignore is that many patents are the result of a great deal of R&D money being invested. And without a rigid patent system, that money simply wouldn't have been spent. The very games consoles we enjoy today probably wouldn't have existed if not for the patent system creating the incentive for R&D.

    There are of course a selection of anecdotal cases where the system is abused, but that doesn't make the whole system bad. As usual, if we tar the whole subject with the same brush we will ignore the very most important details.

  • Ignatius_Cheese #15 3 years ago

    Fuck Iraq, Obama! Get this patent loophole plugged STAT!

  • Lutz #16 3 years ago

    Have Microsoft bought PalTalk yet?

  • Dizzy #17 3 years ago

    >Have Microsoft bought PalTalk yet?

    I noticed that a couple of patents that referred to PalTalk in a Google search are (now?) owned by Microsoft, so who knows? ;)

  • thesombrerokid #18 3 years ago

    @kangarootoo
    imo you are pointing out the flaws of alternatives while failing to notice the flaws in the current system some of which are the critisims you have for the alternatives for example the current system doesn't 'define the value of an idea' either and is even more open to abuse in this regard as the only way you can use it is by pricing it at the value you think it's worth at the time which usually isn't that much. people are regularly screwed out of their idea in this fashion and in this regard sunyavadins idea actually outperforms the current system.

    lets not forget that the person who owns the patent is rarely the person who came up with the idea or put up the R&D costs *cough* echelon *cough*.

  • kangarootoo #19 3 years ago

    @thesombrerokid

    "imo you are pointing out the flaws of alternatives while failing to notice the flaws in the current system"

    Well, I am actually ignoring the flaws in the current system so that I may play devil's advocate, but point well made :)


    I am really just saying (with my devil's advocate hat on) that cries of "patents are shit, the system should be scrapped" need to view the larger picture.


    One way of putting it might be this (and it applies to many many things - legislation in particular).


    There was a time when the patent system did not exist, and at some point during that time a clear need emerged for a system that would protect a person's investment of time and money in the discovery of "new practical and useful stuff". The patent system was created as a way of addressing that need.

    If we simply disband the patent system without supplying a replacement that still fully serves that original need, what are we left with? Exactly the situation that we had in the first place (which clearly didn't work, or there would be no patent system today).


    "lets not forget that the person who owns the patent is rarely the person who came up with the idea or put up the R&D costs *cough* echelon *cough*"

    Well those are two different things. It is very common for the actual inventor not to own the patent on something, but that is because their employer is the actual owner of the patent. However, this is fine because the employer is the entity that invested the money in R&D (including the wages of the inventor in most cases).

    So what I am saying is that you are right in saying the individual person who had the idea is rarely the owner of the idea, but I would dispute that the majority of patent owners aren't in fact the same company that put up the R&D money. I would say the vast majority of them in fact are.

  • Les #20 3 years ago

    "There are of course a selection of anecdotal cases where the system is abused, but that doesn't make the whole system bad. As usual, if we tar the whole subject with the same brush we will ignore the very most important details."

    +1

  • cyber_nicco #21 3 years ago

    @Kangarootoo

    "First off, why on earth would Microsoft pay out if they didn't think the patent had any substance? Simply to get this company "off their back"? What the hell does that even mean? I'm sure MS can deal with having a small company "on their back" if they feel their business is safe. "

    While I agree that we can't make any sort of assumption based on the little information that is provided here, I would have to say that companies settle lawsuits all the time that have little or no merit. Basically, if the claim is not so ridiculous as to be immediately thrown out at a hearing, they have to make a careful calculation regarding their costs (litigation, reputation, future exposure, etc.) vs. the gains of winning the case.

  • cyber_nicco #22 3 years ago

    ^^^

    I am not supposing you don't already realize this, I'm just pointing it out. Unless, of course, you disagree... ;)

  • kangarootoo #23 3 years ago

    @cyber_nicco

    "I am not supposing you don't already realize this"

    I'm not that familiar with the legal back bone of it all. I kind of assumed that if there were no solid case to bring that MS would just ignore it, but maybe that is naive of me. I guess my point hinges on whether "their business is safe", but you rightly point out that determining that may not be as simple as I assume.


    "Basically, if the claim is not so ridiculous as to be immediately thrown out at a hearing, they have to make a careful calculation regarding their costs"

    This is all very true. I guess even investigating whether a patent infringement has occurred would cost MS money, so they might just say "give 'em ?300k and tell 'em to bugger off". I guess then they know how much it has cost them (?300k in this case) rather than leave the door open to potentially spiralling costs.

    A case well made sir :)

  • NoQuarter #24 3 years ago

    Statement: Software patents restrict innovation.

    Discuss.

  • wankerw #25 3 years ago

    Bet the patent still wasn't "better than halo" =D

    Had to be said

  • thesombrerokid #26 3 years ago

    @kangarootoo

    'There was a time when the patent system did not exist, and at some point during that time a clear need emerged for a system that would protect a person's investment of time and money in the discovery of "new practical and useful stuff". The patent system was created as a way of addressing that need.'

    good point but i believe the need to protect a person's investment of time and money in the discovery of "new practical and useful stuff" is a flaw of global capitalism and the patent system is a band aid for it, taking it out and shooting it might be better.

    with software at least there is a concept of patent squatting, because most software needing patents predate the software patenting system most software patents are held by people who know very little about the process and are looking to profiteer, thus you get the ludicrous case of one guy owning the concept of dll's which he could cash in at any moment and following the letter of the law bankrupt every company who has written virtually any code for windows since 95 and that certainly isn't fair.

    there are so many cases of the patent system being used to protect monopolies that the arguement it creates competition is a void one, the intel nvidia disagreement is a good example of this, intel are protecting thier place at the top of the x86 market because they own the patents to it no one is allowed to compete with them without thier permission nvidia would love to but aren't allowed thus intel if it wasn't for AMD holding some counter patents would be the monopoly of the x86 chip market, the patent system is diametricly opposed to standardisation of technology which is what people demand.

    the competition arguement is this
    'people will want to come up with new ideas because we'll give them the monopoly on that idea
    ?
    competition'

  • Tetsuo_Shima #27 3 years ago

    ^

    Is your full-stop key broken?