Interactive Network v. NTN Communications

Citation
Interactive Network, Inc. v. NTN Communications, Inc., 875 F. Supp. 1398 (N.D. Cal. 1995).

Factual Background
Defendant, NTN Communications, Inc. (“NTN”), is popularly known as the creator of “QB1,” an interactive game played in conjunction with televised football games. QB1 allows players to earn points by predicting the next play of the game – allowing fans from across the bar or across the country to compete to see who would make the best coach. Plaintiff, Interactive Network, Inc (“IN”), was an early licensee of NTN’s, selling a modified version of QB1 to its subscribers. However, in 1993, IN announced that it had developed its own interactive football home game, “IN the Huddle,” designed to compete with QB1. The similarities between “IN the Huddle” and QB1 disturbed NTN, and litigation ensued.

Trial Court Proceedings
IN filed for a declaratory judgment, seeking assurances that “IN the Huddle” did not infringe NTN’s intellectual property rights. NTN responded with counterclaims for copyright infringement, trade dress infringement, and unfair competition, prompting IN to move for summary judgment on those claims.

Before applying the “substantial similarity” test with regard to copyright infringement to the alleged infringing game, “IN the Huddle,” the trial court first examined each feature of QB1, focusing on the idea of “protectable expression.” Animation and displayed images in video games are protectable expression. However, copyright protection does not extend to the idea of the video game, only to the author’s expression of that idea. Although IN the Huddle’s play-prediction scheme was identical to the scheme used by QB1, the trial court granted summary judgment in favor of IN on this feature. The court reasoned that the idea of play-prediction is an essential aspect of interactive TV football games, therefore NTN’s prediction scheme was not protectable expression.

With respect to other elements of QB1, such as the “clutch pick” and “consecutive bonus” game features, the court denied IN’s summary judgment motion. The trial court stated that these game features were not essential to an interactive football game, and were therefore NTN’s protectable expression. Similarly, the court decided that QB1’s scoring system (awarding specific point values for predicting certain plays) was not essential to an interactive football game. While some scoring system certainly is essential, QB1’s specific scoring system may have equally functional alternatives. The court found no evidentiary support for IN’s argument that these specific point values are necessitated by the statistical likelihood of those plays occurring in an NFL game. Thus, the court held that QB1’s specific scoring system is not essential but is just one possible scoring system implementation and is protectable expression.

The court then addressed QB1’s data feed structure and the various animation screen displays of QB1. While these elements of the game are protectable expression, summary judgment of noninfringement was nevertheless awarded to IN. With respect to the data feed structure, NTN had only offered evidence that IN’s version of QB1 had a similar data feed to NTN’s version. NTN had produced no expert evidence that “IN the Huddle”, the alleged infringing game, used a similar data feed structure. Finally, with respect to the screen displays and animation sequences, IN had not infringed NTN’s copyright as a matter of law because IN, not NTN, was the author of these animation screens for “IN the Huddle.”

The court next considered whether the trade dress, or total product image, of QB1 was infringed by “IN the Huddle.” As with the copyright infringement analysis, trade dress protection under the Lanham Act does not apply to the functional elements of a product, otherwise trade dress protection could provide a constant monopoly over unpatentable features.

With respect to NTN’s three-level prediction scheme, and it’s scoring and bonus system, the court held that these features are not, as a matter of law, protectable as trade dress. The prediction-scheme, scoring, and bonus features are wholly functional. The trial court reasoned that the absence of any commonly practiced alternative indicated that the features were so closely related to the purpose of an interactive football game, that they must be considered functional, and were therefore unprotectable.

The court next addressed the alleged infringement of the Interactive-created instruction manual for game. Given the parties’ previous licensing arrangement for QB1, the trial court addressed the issue of whether a licensor could acquire trade dress rights in those features of a licensed product that are added by the licensee and held in the negative for this case because NTN did not acquire trade dress rights to the IN-created features of QB1. Although consumers may associate IN’s instruction manual with NTN’s game, the QB1 licensing agreement implied that IN would add its own intellectual property to the game it provided its subscribers. While NTN had the right to require IN to protect its trademark and the appearance of the game, it could not claim the trade dress rights on the IN-created features built into the game.

Thus, regardless of the likelihood of customer confusion, the trial court granted IN’s summary judgment motion for noninfringement with respect to NTN’s trade dress. The court found no features of QB1’s trade dress that were created by NTN and were not essential to the game and functional in nature.