[Patent attorney thorough explanation] Permission strategy for gifting system | Monopolize live streaming effects and payment processing flow

1. Why is gifting a "patent"?

Positioning as a business model patent (software patent)

First of all, the act of "donating money" itself (the culture of donating money) is not new. However, patent law does not protect abstract ideas, but rather technical ideas such as ``How to concretely implement information processing using hardware resources.'' This is a field called "business model patents," but in practice, they are examined as "software-related inventions."

The tipping system for live streaming is an advanced software invention that involves a complex interplay of the following elements.

1. UI/UX (front end): How the user selects items and how they interact with the screen.

2. Communication control (infrastructure): How to synchronize to a large number of viewers in real time.

3. Database management (back end): How to distinguish between paid and free points and how to consume them.

4. Algorithm: What kind of performance effect should be generated depending on the amount and frequency.

If there is an "unconventional processing procedure" or "unique technical problem-solving means" for these, it is possible to obtain rights as a patent.

Trends of major platform operators and the "patent minefield"

Big IT companies such as DeNA, Gree, CyberAgent, LINE Yahoo, Rakuten, and Google and ByteDance have obtained a web of patents in this area.

There are two reasons why they take patents.

1. Securing exclusivity: Do not allow other companies to imitate your company's superior functions (excluding competition).

2. Defense (cross-licensing): When you are sued by another company, use it as a weapon to negotiate by saying, ``They are also using our patents.''

For startups and small and medium-sized enterprises that are about to enter the market, it is extremely risky to enter this field unarmed.

2. [Core technology ①] Patent points of effect linkage system

In the coin tipping system, the easiest thing to differentiate and the most likely to be patented is "linkage with effects".

It is difficult to recognize inventiveness (something that cannot be easily thought of) simply by saying, ``If you throw 100 yen, a heart will appear'', but there are hidden potentials for patents in the following aspects.

(1) "Dynamic effect generation" logic according to parameters

Rather than displaying a static image, a mechanism that combines multiple variables to change effects in real time is powerful.

• Composite parameter processing:

  An algorithm that determines the effect size, residence time, brightness, and trajectory by multiplying not only the amount of coins to be tipped, but also the number of combos (number of consecutive throws), current number of viewers, broadcaster status (HP gauge and fatigue level), and BGM tempo.

• Combination/evolution logic:

  If multiple different users throw gifts in a specific combination (for example, user A throws "water" and user B throws "seeds") within a specific time, the server side detects this and combines and distributes a different "large tree growing" effect than usual. This functions as a means to solve the problem of ``encouraging cooperation among viewers.''

(2) Real-time synchronization and "lag" control

The biggest enemy of live streaming is latency. How to control the time lag between tipping and when the effect appears is a technical problem in itself.

• Synchronized drawing based on server time:

  A synchronous control system in which the server that receives the coin tipping request sends a drawing command with the start time of "current time + N seconds" to all clients, and each terminal waits for that time and starts playing the effect at the same time, allowing all viewers to witness the production at the same time.

• Optimistic UI implementation:

  On the smartphone of the person who threw the ball (Mr. A), the effect is displayed immediately (zero perceived delay) without waiting for a completion notification from the server, and payment processing is performed behind the scenes. An asynchronous processing flow to improve the UX, such as letting the effect fade out naturally if a payment error is returned.

(3) Interaction technology

In addition to viewing the screen, features that physically and visually affect the broadcaster and other viewers are also subject to patents.

• Interlocking with IoT devices:

  The flow of sending control signals from the server to IoT devices, such as changing the color of smart lights in the streamer's room or moving a stuffed animal (robot), using the tipping signal as a trigger.

• Avatar/metaverse linkage:

  In 3D space, a physical calculation process in which a thrown gift (3D object) has a collision detection with the broadcaster's avatar, and if it hits, the avatar will stagger or be equipped as equipment.

3. [Core technology ②] Patent strategy for payment processing flow and point management

The "money processing (payment flow)" behind the gorgeous effects is also the main battleground for business model patents. In Japan in particular, there is a law called the Fund Settlement Act, so system design and compliance with laws and regulations are closely related.

(1) "Separate management" and "priority consumption" of paid and free points

Many apps strictly distinguish between "coins purchased for a fee" and "free coins such as login bonuses" in consideration of the deposit obligation under the Payment Services Act (prepaid payment instruments).

The logic used to incorporate this legal requirement into a system becomes a patent.

• Consumption priority control:

  A program that displays to the user a total of ``coins in possession,'' but on the backend, prioritizes consumption of ``free coins with the closest expiration date,'' and consumes paid coins when the free coins run out.

• Calculation of change in return rate (reward):

  A calculation formula that changes the revenue distribution rate (revenue share) paid to the distributor between "gifts tossed with paid coins" and "gifts tossed with free coins." For example, it is a mechanism that automatically calculates processing such as ``70% return rate for gifts with paid coins and 30% return rate for free gifts'' without the user being aware of it.

(2) Transaction integrity and exclusive control

Different from shopping on e-commerce sites, a large amount of transactions occur in a short period of time.

• Exclusive control (lock) of limited gifts:

  When a click battle occurs over the "First come, first served premier gift", the order of arrival is determined in milliseconds, points are immediately returned (roll lock) to unsuccessful users, and database transaction control that inseparably processes winning and payment processing.

• Queuing during high load:

  In order to prevent server downtime, an architecture that temporarily stores coin tipping requests in a "queue" and processes billing processing (high importance) and effect display processing (low importance) separately.

(3) Achieving both erroneous operation prevention and UX

• Prevention of repeated hits and confirmed action:

  In order to prevent high charges due to unintentional repeated presses, interface control requires specific actions such as "long press" or "slide" for gifts over a certain amount, and links the action signal with the payment confirmation signal.

4. Risk of "patent infringement (copying)" that developers are prone to

Up to this point, we have explained how to obtain a patent, but what is even more important is **do not step on (infringe) other companies' patents**.

Examples of functions that can easily be compromised without knowing

The following functions may already have rights granted by other companies (*This is just a general example, and it is necessary to carefully examine the scope of individual rights).

• Gauge linked function: A function that enters "fever time" when the total amount of coins donated by all viewers exceeds a certain value.

• Specified comment function: A function in which comments sent along with coins are fixedly displayed at a specific position on the screen for a certain period of time.

• Gacha production: A function in which the viewer, rather than the broadcaster, obtains random items (avatar dress-up, etc.) as a result of tipping.

The importance of FTO investigation (Freedom to Operate)

In order to avoid a situation where you receive a warning letter after releasing an app and are required to suspend the service (injunction) or pay damages, it is essential to conduct a "prior art investigation (infringement prevention investigation)" at the specification formulation stage.

The idea that ``it's okay because there are similar apps'' doesn't work. Other companies may be paying licensing fees, or they may simply be overlooked.

Having a patent attorney conduct an investigation and come up with a strategy such as ``This specification has a high risk of infringing Company A's patent, but it can be avoided by reversing the order of processing (avoidance design)'' will become a bulwark to protect your business.

5. A patent attorney will teach you! How to write a strong patent specification (claim)

If your company applies for a patent for its own tipping system, what kind of specification should you write?

A patent attorney's skill lies in how to write "Claims".

Bad example: Too specific complaint

"A system that sends a signal to the server when you tap the red heart button at the bottom right of the smartphone screen, subtracts 100 yen, and displays a fireworks effect in the center of the screen"

In this case, you can avoid the patent by simply changing it to a "blue star button" or changing it to "bottom left of the screen."

Good example: Abstracted/higher-level claims

[Image of claim 1]

A payment processing means that reduces value information based on instruction input from a first user terminal;

An image processing means for superimposing and displaying a specific visual effect on the distributed video in response to the instruction input;

Control means for dynamically changing the display mode of the visual effect based on parameters related to the instruction input (amount, continuity, user attributes, etc.);

An information processing system equipped with

.

In this way, by abstracting the "specific functions" to the "technical essence" and describing it, even if a competitor imitates it with slightly different specifications, it will be possible to catch it in the patent net.

The essence of a patent application is not to simply apply for a specification written by a programmer, but to convert it into a "legal web" by a patent attorney.

6. Startups should increase their corporate value with "patents"

Don't you think that patents cost money and belong to large companies?

Actually, startups aiming to raise funds need patents.

1. Improvement of valuation (corporate value):

   Investors (VCs) focus on technical barriers to entry (Moat). The fact that they have a unique patent related to the UX of tipping coins proves their technological capabilities and is a big plus when deciding on investment.

2. M&A (buyout) weapons:

   When selling a business in the future, it is not uncommon for the purchase price to vary by tens of millions of yen to hundreds of millions of yen, depending on whether intellectual property rights such as patents are included.

3. Using the accelerated examination system:

   If you are a startup, you may be able to shorten the examination process, which normally takes more than a year, to about two to three months by using the Japan Patent Office's "accelerated examination." This makes it possible to secure patent rights early in time for product release.

Summary: "Intellectual property consulting" before development is a shortcut to success

Gifting systems are an extremely advanced technological field that combines entertainment that stirs users' emotions with a sound financial system.

That's why there are countless patent opportunities, and at the same time, there is also the risk of infringement.

• "I came up with a new tipping effect"

• "I want to create my own point redemption ecosystem"

• "I'm worried whether the app I'm developing infringes on another company's patent"

If you have a concept like this, please consult a patent attorney at the "planning stage" before you start writing the program code.

The best time to incorporate an intellectual property strategy is when the specifications have not yet been finalized.

At our firm, we have a specialized team that specializes in IT, software, and business model patents, and are able to communicate smoothly with engineers, providing consistent support from hearing technical details to obtaining rights and investigating infringement.

Let us help you turn your innovative services into legal "exclusivity" assets and build a strong business that will stand out from your competitors. Please feel free to contact us for a free consultation.

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#Patent attorney #Patent #Business model patent #Software patent #IT patent #Title tip #Gifting #Live streaming app #Startup #App development #Intellectual property strategy #UIUX #Patent investigation #Fund payment method #Fintech #Intellectual property rights #Copyright #Patent infringement #FTO investigation #IP landscape