From July 10 to August 4, 32 patent applications filed by Nintendo were made public in Japan, 31 of which concern the game mechanics in “Legend of Zelda: Tears of the Kingdom” (see naoya2k’s post in the Hatena Blog for a full list of the patent applications).

The hottest patents that are being discussed relate to the player character’s abilities, specific mechanics, and loading sequences. Our fascination lies with Nintendo’s attempt to use patents to protect the mechanics of a game.

Nintendo’s Patent Game

Notably active in patent filings, Nintendo ranked fifth in the number of patents held in Japan in 2022. A well-known example of Nintendo's previously registered patents include patent No. 8,313,379 related to Wiimote’s motion-tracking capabilities (see Patent Arcade: U.S. Patent No. 8,313,379: Video game system with wireless modular handheld controller). The new patents are considerably interesting because of the scale and the subject matters: mechanics! In particular, a mechanic that prevents the character from grabbing objects it is positioned on top of, a mechanic that results in the character moving in alignment with dynamic objects beneath it, and a mechanic that focuses on the character transitioning from one location to another seamlessly.

However, with the newest splurge Nintendo seems to be on a spree right now, likely due to the success of Tears of the Kingdom.

Protecting Mechanics a Never Ending Quest?!

The fascination surrounding this spree of applications is figuring out how developers can best protect their IP and brand. While there are several avenues, such as Trademark, Trade Secret, contractual obligations, confidentiality, copyright, and more, protecting a game’s mechanics and use of genre tropes is a uniquely difficult task that devs so keenly are interested in. In this blog the dispute between PUBG and Fortnite already put a spotlight on how copyright approaches this issue.

In short: U.S. law and U.S. courts have steered toward not awarding game mechanics copyright protection because they are so called unprotectable ideas and/or functional elements rather than protectable original expressions. However, the law is currently somewhat unclear as to when mechanics constitute functional elements outside of copyright protection and are protectable only by patents.

Hence, Patents as another tool, garner attention and likely more value in the future?

Is a Patent the Solution?

Generally, it is particularly difficult to patent game mechanics, primarily because software is often considered an abstract idea, and likely to be viewed as ineligible subject matter under Section 101 of the U.S. Patent Act. However, this obstacle may be overcome if the software improves computer functionality or performs the computing tasks in an unconventional way (Is Software Patentable in the United States?). Moreover, for any invention to qualify for patent protection, it must be unique and non-obvious. This means that the game mechanics being patented should not be already known or in use by others, and the differences between the game mechanics and prior game mechanics must not be obvious to someone with ordinary skill in the field of game design. Due to these criteria, utility patents for game mechanics are relatively rare.

Nonetheless, there have been noteworthy attempts by other companies to patent mechanics and features which often are not protectable otherwise. A notable example includes Bandai Namco's patent No. 5,718,632, covering loading screen minigames (Electronic Frontier Foundation: The Loading Screen Game Patent Finally Expires). The mechanic was patentable due to its novelty and nonobviousness, but it was not copyrightable due its functional nature. Another famous example includes Warner Brothers’ patent No. 15/081,732 for the Nemesis system used in both Middle-Earth: Shadow of Mordor, and its 2017 sequel, Shadow of War. This system generates personalized NPC opponents for the player to interact with (IGN: WB Games' Nemesis System Patent Was Approved This Week After Multiple Attempts). While the system was patentable due to its process description, it was not copyrightable as it lacked unique protectable expression.

Other Patent Issues: Costs and Process

Patents are also costly and difficult to obtain. The expense of filing a patent application varies based on its complexity, ranging between $7,000 and $15,000. In addition, you can generally expect the need to respond to up to five office actions, each of which may cost $2,000 or more. After filing the application, it usually takes 1 or two years before the initial office action is issued. Further, there is no guarantee that the patent application will be approved. For instance, Warner Brothers had to submit several patent applications before they received a patent on the Nemesis system. Its prior applications were rejected because of too close similarities to other patents and due to issues with the specificity of the language used in the prior applications. Thus, doing proper due diligence and carefully writing down realistic patent claims can be vital in order to save costs and to get a patent application approved (IGN: WB Games' Nemesis System Patent Was Approved This Week After Multiple Attempts).

So, no Patent for me?

Due to the costs and difficulties involved with acquiring a patent, generally patents are not a developer’s go to tool for protecting a game’s inherent value. This is particularly true for small and mid-size game developers with limited resources. For a small and mid-size game developer, other forms of intellectual property play a larger role, namely, copyrights, trademarks, and trade secrets. Having said that, if your game contains a mechanic that you regard as new, you might want to consider conducting patent due diligence to ensure that you are not infringing on someone else’s patent, and to file a utility patent if you think that the patent will bring your business additional value. As to the filing, see e.g. Zachary Strebeck’s article on video game patents, which contains an overview of the requirements for acquiring a game patent, and the costs related to the filing.

Author: Jesper Rantatulkkila and Daniel Koburger

Dutch consumers are suing Sony over the argument that Sony controls about 80% of the console market in the Netherlands and abuses its dominant market position.

Ultimately, the Dutch consumer group Stichting Massaschade & Consument, representing 1.7 million Dutch Playstation users, makes the same claim that the regulators are making against dominant tech platforms like Apple and Google, who wield market abusive, and likely illegal, powers over digital ecosystems.

Uniquely here, the case represents the consumer’s fight for fairness following the February launch of the “Fair PlayStation” campaign that criticizes the “Sony tax” where digital games are allegedly priced up to 47% higher despite lower distribution costs. The lawsuits, if successful, could not only force Sony to compensate affected users, it would also open Sony to third party game stores and prove a vital cornerstone in the developer’s fight for market access against big corporations.

What Happened?
Sony’s digital ecosystem is closed by design: PlayStation users can only purchase games and add-ons through the official PlayStation Store, while third-party resellers like Amazon or Green Man Gaming are completely excluded. This gives Sony complete control over pricing and distribution, along with a standard 30% commission on all digital sales.

This setup results in limited consumer choice and higher prices - commonly referred to as the “Sony Tax.” While physical PlayStation games remain available through retailers with competitive pricing, the same is not true for digital content. Sony sells two PS5 models: a Standard Edition with a disc drive and a Digital Edition without one. Owners of the Digital Edition are fully locked into Sony’s digital-only ecosystem. Additionally, since 2019, Sony has banned third-party sales of digital game codes, preventing developers from offering their games directly or through alternative platforms.

What This Means for Game Developers?
Sony’s digital policies tightly restrict how developers can price, promote, and distribute their games. Independent discounts, regional pricing, and time-limited promotions all require Sony’s approval, while selling digital codes through developers’ own websites or third-party platforms is prohibited - practices common on PC and Xbox.

This creates a single point of access - the PlayStation store - where visibility and revenue opportunities are tightly controlled. Placement depends entirely on Sony’s algorithm and editorial discretion - a barrier for many indie and mid-sized studios. With no option to drive external traffic or leverage affiliate marketing, discoverability becomes yet another gate that only Sony can open.

This lack of alternative sales channels leaves developers fully exposed to Sony’s standard 30% commission, with no way to offset it through direct sales or discounted offers, limiting both pricing flexibility and growth potential compared to other platforms.

Is the “Walled Garden” and “Sony Tax” illegal?
Under EU competition law, companies with a dominant market position are strictly prohibited from abusing that power to the detriment of consumers or competition. The key legal provision is Article 102 of the Treaty on the Functioning of the European Union (TFEU), which bans abusive practices such as excessive pricing and unfair trading conditions. Dutch law reflects this through Article 24 of the Dutch Competition Act, which mirrors the principles of Article 102.

Legally, the Dutch Consumer Foundation argues that Sony controls about 80% of the console market in the Netherlands and has abused this dominant position by restricting developers and resellers from offering digital PlayStation games outside the PlayStation Store. They claim this has created an artificially closed market that inflates prices and harms consumer choice. According to their research, digital PlayStation games can cost up to 47% more than physical copies.

If upheld in court, this pricing model could be considered excessive pricing under Article 102 TFEU - a form of exploitative abuse - particularly if Sony’s digital prices are found to significantly exceed what would be expected in a competitive market.

Beyond Article 102, the EU’s Digital Markets Act (DMA), which came into effect in 2023, introduces new rules targeting large online platforms classified as “gatekeepers,” including Sony’s PlayStation Store. The DMA mandates fair and transparent pricing, prohibits self-preferential treatment, and aims to foster cross-border competition within the EU’s digital single market. This legislation enhances regulatory oversight and restricts the kind of closed ecosystem Sony has built around digital game sales.

What’s Next?
The first court hearing is expected later this year, beginning with the Dutch court assessing whether it has jurisdiction and whether the consumer foundation can represent the class. Cases like this can take several years to resolve, especially if appeals follow an initial ruling.

If the court ultimately grants the claims, the foundation expects that Sony could be required not only to open its platform to third-party digital game sellers, but also to compensate millions of Dutch consumers for alleged overcharges. A ruling in favor of the plaintiffs could also set a legal precedent for similar lawsuits in other EU countries, putting further pressure on Sony - and possibly other platform operators - to reform their digital distribution models.

While Sony is battling similar cases also in England and Portugal, this case arrives at a moment of mounting political will to rein in digital gatekeepers. With laws like the EU’s Digital Markets Act (DMA) already targeting tech giants like Apple and Google, Sony may now find itself drawn into a broader regulatory push for platform accountability and consumer and game developer choice. Whether driven by regulators or consumers, the message is becoming clear: the era of closed ecosystems is under challenge.

In 2024, the total value of mergers and acquisitions was approximately $1.7 trillion US dollars. It is an undeniable fact that mergers and acquisitions bring in economic benefits.

As such, whenever there is a change of administration, interested parties are on the lookout to see how mergers and acquisitions will be impacted by the new administration. Therefore, the question is whether mergers and acquisitions will be affected under the new Trump administration.

Historical Context

During Trump’s first term (2017–2021), his approach to mergers and acquisitions (M&A) shifted from pro-business and lightly regulated to stricter enforcement, with 2020 seeing more merger challenges than any year under the Obama administration. Trump’s interventions often seem to have reflected personal and political motives, such as opposing the AT&T–Time Warner merger, which was linked to CNN. Meanwhile, he supported Disney’s purchase of 21st Century Fox, owned by ally Rupert Murdoch.

After his 2024 reelection, many expected renewed deregulation and the repeal of Biden’s 2023 Merger Guidelines. Yet, nearly a year into his second term, those guidelines remain, and M&A activity has seen little growth, as evidenced by the 4,535 deals recorded between January and May 2025, similar to the previous year. Analysts attribute the slowdown to economic and policy instability, particularly shifting tariffs. However, the passage of the One Big Beautiful Bill Act (OBBBA) is expected to revive the M&A market.

Changes During the Current Administration

The OBBBA is expected to help the M&A market, especially in the energy, financial and industrial sectors. Furthermore, the OBBA reinstates a “100% bonus depreciation for certain assets, generous interest deductibility and, crucially, no new carried-interest curb. This should mean there are more tax shields, more debt capacity, and a relative valuation boost for asset-heavy U.S. companies.”

Advantages Under the One Big Beautiful Bill Act

The OBBBA includes a 100% bonus depreciation, which essentially means that if a buyer acquires a business with many fixed-assets, they may deduct much of the cost faster. This would improve the after-tax cash flow for the buyer.

Furthermore, the OBBBA now includes an enhanced business interest deduction of 30% of EBITDA. Previously, the business interest deduction was capped at 30% of EBIT. With the inclusion of depreciation and amortization, taxpayers will now be able to deduct more interest. Also, this would mean that there is a greater tax benefit from using debt in an acquisition.

Finally, the OBBBA also included changes to the Qualified Small Business Stock (QSBS) regulated under Section 1202 of the Internal Revenue Code. C Corporations with less than $50 million of gross assets have historically qualified for this benefit. Under the OBBBA, the gross asset cap has been increased to $75 million, making more businesses eligible. Previously, taxpayers could exclude $10 million in gains, now that number has increased to $15 million.

Risks

The OBBBA notably addressed the international corporate tax regime, specifically the Base Erosion and Anti-Abuse Tax (BEAT). The countries that are subject to BEAT will see an increase of 0.5%, now paying 10.5% instead of 10%. Past drafts of the OBBBA, included the BEAT at 12% in the now discarded Section 899.

While the initial drafts of the OBBBA, specifically Section 899, included more tax increases for international corporations, this reflects an ongoing sentiment of promoting domestic growth at the sake of international corporations wishing to invest.

Practical Guidance

Any company considering a merger or acquisition of an American company must be aware of legislative changes that may occur within the Trump administration.

Anyone considering a merger must know that the provisions of the OBBBA favor acquisitions of business with fixed-assets and that the acquisitions be financed via debt. Opting for acquisitions in this way and those in Trump’s preferred sectors, are the best way to take advantage of the current administration’s stance on mergers and acquisitions.