HT TECH wants to start sending you push notifications. Click allow to subscribe

Tencent Gaming unit must pay $8.5 million in ‘freemium’ dispute

Tencent Holdings' Supercell games infringed four patents, a federal jury in Marshall, Texas, found Friday. The $8.5 million, which was less than Gree was seeking, covers past and future sales, the jury said.

By: BLOOMBERG
Updated on: Aug 20 2022, 22:59 IST
Tencent bought an 84% share of Supercell for $8.6 billion in 2016. The Finnish company makes some of the most popular games for mobile devices. (REUTERS)
Tencent bought an 84% share of Supercell for $8.6 billion in 2016. The Finnish company makes some of the most popular games for mobile devices. (REUTERS)

Tencent Holdings Ltd.’s Supercell gaming unit was ordered to pay $8.5 million in royalties to Japan’s Gree Inc. in a patent trial over features used in popular online games.

Supercell games infringed four patents, a federal jury in Marshall, Texas, found Friday. The $8.5 million, which was less than Gree was seeking, covers past and future sales, the jury said. The jury also found that the infringement was willful, so District Court Judge Rodney Gilstrap could increase that amount by as much as three time the figure set by jurors. 

You may be interested in

Mobiles Tablets Laptops
7% OFF
Apple iPhone 15 Pro Max
  • Black Titanium
  • 8 GB RAM
  • 256 GB Storage
₹148,900₹159,900
Buy now
Google Pixel 8 Pro
  • Obsidian
  • 12 GB RAM
  • 128 GB Storage
₹106,998
Check details
34% OFF
Samsung Galaxy S23 Ultra 5G
  • Green
  • 12 GB RAM
  • 256 GB Storage
₹98,799₹149,999
Buy now
Apple iPhone 15 Plus
  • Black
  • 6 GB RAM
  • 128 GB Storage
₹87,900
Check details
21% OFF
Acer Swift Go SFG14 41 NX KG3SI 002 Laptop
  • Pure Silver
  • 8 GB RAM
  • 512 GB SSD
₹58,999₹74,999
Buy now
39% OFF
Acer Aspire 5 A515 57G Laptop
  • Gray
  • 16 GB RAM
  • 512 GB SSD
₹54,949₹89,999
Buy now
22% OFF
Acer Aspire 3 A315 24 NX KDESI 004 Laptop
  • Silver
  • 8 GB RAM
  • 512 GB SSD
₹33,499₹42,999
Buy now
39% OFF
Asus VivoBook 15 X515JA BQ322WS Laptop
  • Transparent Silver
  • 8 GB RAM
  • 512 GB SSD
₹31,490₹51,990
Buy now
34% OFF
Xiaomi Pad 6
  • Mist Blue
  • 6 GB RAM
  • 128 GB Storage
₹26,299₹39,999
Buy now
55% OFF
Lenovo Tab M10 5G
  • Abyss Blue
  • 6 GB RAM
  • 128 GB Storage
₹20,999₹47,000
Buy now
32% OFF
Realme Pad 2
  • Imagination Grey
  • 6 GB RAM
  • 128 GB Storage
₹19,749₹28,999
Buy now
Honor Pad X9
  • Gray
  • 4 GB RAM
  • 128 GB Storage
₹14,999
Check details

The dispute is over features in “freemium” games, a portmanteau of the words “free” and “premium,” that are free to download but make money by letting users buy virtual items or upgrade during the game. Gree was one of the pioneers of the technique, also known as gacha.

Gree claimed Supercell’s Clash of Clans, Clash Royale and Brawl Stars games infringed its patents for methods for controlling and presenting downloadable games to smartphone players, controlling their in-game purchases and transfers of objects between players, and enhancing the visual effects for multi-player mobile games.

Supercell denied using any of the patented technology, and argued that the patents were invalid. The jury rejected Supercell’s invalidity arguments.

Tencent bought an 84% share of Supercell for $8.6 billion in 2016. The Finnish company makes some of the most popular games for mobile devices. Even after eight years, Clash of Clans ranks in the top 5 most popular strategy games in the iPhone App Store. Supercell Chief Ilkka Paananen said in February that the company of 300 employees recorded a profit of $577 million on revenue of $1.56 billion last year.

Also Read: Tencent nears deal to take gaming firm Leyou private

By itself, Supercell ranked as the fourth-biggest publisher by revenue, according to a March report by researchers at App Annie. Shenzhen, China-based Tencent, which gets a third of its revenue from online games, topped the list.

Gree reported 71 billion yen ($680 million) in revenue last year but it and other Japanese game developers were starting to see falling revenue, in part from overseas game competition, before the pandemic lockdown gave a boost to sales.

Supercell had filed its own suit against Gree in 2017, but the case was dismissed last year after a federal judge invalidated a Supercell patent for obtaining login information.

Supercell had tried to get the trial postponed, saying its Finnish witnesses refused to come to the U.S. because of the coronavirus pandemic. Finland has had fewer than 8,800 Covid-19 cases, and fewer than 350 deaths, according to data from Johns Hopkins University. The request was denied, with U.S. Magistrate Roy Payne noting that there’s already been a trial in the district without problems. In that case, Apple Inc. was hit with a $506 million verdict over wireless communications.

The case is Gree Inc. v. Supercell Oy, 19-70, U.S. District Court for the Eastern District of Texas (Marshall). 

Catch all the Latest Tech News, Mobile News, Laptop News, Gaming news, Wearables News , How To News, also keep up with us on ,Twitter, Facebook, , and Instagram. For our latest videos, subscribe to our YouTube channel.

First Published Date: 19 Sep, 15:50 IST
Tags:

Sale

Mobiles Tablets Laptops
4% OFF
Samsung Galaxy S24 Ultra
  • Titanium Black
  • 12 GB RAM
  • 256 GB Storage
₹129,999₹134,999
Buy now
13% OFF
Xiaomi 14
  • Matte Black
  • 12 GB RAM
  • 512 GB Storage
₹69,999₹79,999
Buy now
10% OFF
Apple iPhone 15 Plus
  • Black
  • 6 GB RAM
  • 128 GB Storage
₹72,200₹79,900
Buy now
12% OFF
IQOO 12 5G
  • Legend
  • 12 GB RAM
  • 256 GB Storage
₹52,999₹59,999
Buy now
35% OFF
Xiaomi Pad 6
  • Mist Blue
  • 6 GB RAM
  • 128 GB Storage
₹25,998₹39,999
Buy now
38% OFF
Lenovo Tab M10 5G
  • Abyss Blue
  • 6 GB RAM
  • 128 GB Storage
₹20,999₹34,000
Buy now
38% OFF
Realme Pad 2
  • Imagination Grey
  • 6 GB RAM
  • 128 GB Storage
₹17,999₹28,999
Buy now
57% OFF
Honor Pad X8
  • Blue Hour
  • 3 GB RAM
  • 32 GB Storage
₹8,999₹20,999
Buy now
29% OFF
Asus ROG Flow X13 GV301RE LI201WS Laptop
  • Off Black
  • 32 GB RAM
  • 1 TB SSD
₹89,789₹125,989
Buy now
39% OFF
Asus ROG Zephyrus G14 GA401QH HZ076TS Laptop
  • Black
  • 8 GB RAM
  • 1 TB SSD
₹94,990₹155,990
Buy now
31% OFF
Asus ROG Zephyrus G14 GA401QC HZ094TS Laptop
  • Grey
  • 16 GB RAM
  • 1 TB SSD
₹94,999₹137,990
Buy now
27% OFF
Asus TUF Gaming F15 FX506HC HN089WS Laptop
  • Graphite Black
  • 8 GB RAM
  • 512 GB SSD
₹60,990₹82,990
Buy now
NEXT ARTICLE BEGINS