Don’t Tase Me, Linden Labs

Kotaku reported today that Taser International, Inc has sued Second Life parent company Linden Labs for damages in excess of $75,000.

The suit was filed in the United States District Court for the District of Arizona, and names not only Linden as a corporation but some Linden employees past and present. The Complaint makes several allegations involving trademark infringement under both federal and Arizona common law, unfair competition, design patent infringement, and, most puzzlingly, RICO violations.

Taser argues that the existence of Taser and Taser-related items in Second life is causing people to associate the device with “prurient content”, such as pornography. Apparently some Second Life users have developed Taser replicas in-game. None of these digital devices actually function as an electric takedown device. Other users have developed different Second Life props that use the name “TASER” but bear no resemblance or similar functionality to the original Taser device. Because these users have Tasers in Second Life, and because Second Life has available a copious amount of material that some individuals would find offensive, Taser is alleging that the appearance of “Tasers” in the game is tarnishing the sterling reputation of their otherwise unblemished product. Taser appears to draw most of their evidence for this from a group of role-players who do a heavy trade in e-Tasers under the group name The Crack Den. The Complaint draws little or no distinction between these users and Linden itself, however, which may be a bridge too far for a federal court.

Taser’s case has some structural issues, too, mainly pertaining to the proper naming of proper defendants. First, Linden no longer brokers item transactions between users. They recently acquired XStreet to do that for them. XStreet is not currently named as a Defendant in the case, but as they are a wholly-owned subsidiary of Linden, Linden would have to show a remarkable degree of corporate separation to divest themselves of responsibility in the matter. If Taser gets their act together and amends their Complaint, Linden could be open to some liability on this front.

Next, Taser that they don’t even seem to have named Linden properly. Taser has named both Linden Lab and Linden Research Inc., even though one is a DBA of the other. In addition, Taser, a Delaware corporation, states in their Complaint that Linden is “an entity of unknown origin”. Linden makes no secret that they, too are a Delaware corporation.

Taser is reaching here, and not just legally. They are claiming damages in excess of $75,000 to get over the federal minimum. In addition, under Arizona Revised Statutes Taser can be granted US$500 per infringing copy for every non-functional. Each Second Life Taser only “retails” for about $2 US. That’s a long way to go for a bunch of pixels.

Popularity: 16% [?]

Supreme Court Declines To Hear Jack Thompson’s Case

As we expected, the Supreme Court announced today that certiorari was denied in Thompson v. The Florida Bar, in which longtime game industry antagonist Jack Thompson attempted to appeal his disbarment. The explosive saga has ended in a rather lackluster way, as the disposition of his case in the Court’s weekly order list is easily lost among the many other failed appeals.

Popularity: 2% [?]

All Quiet On The Westwood Front

We previously reported some rumblings about a class action against Westwood College reportedly being sued for fraud. After communicating with representatives from Westwood, it appears this is all some sort of miscommunication.  Apparently the WFAA news broadcast that sparked the issue was several years old, and managed to find itself back on the internet. According to Westwood’s marketing crew (channeling Mark Harmon, Program Director of Gaming), the video dates back to 2005. The matter in question was settled in arbitration, “subject to a confidentiality agreement”, in 2007. Westwood’s attorneys report no filings at this time; a strange choice of words, do they expect some in the future?  We’ll continue to track this story in the hopes that it doesn’t flatline.

Popularity: 2% [?]

Thompson v. The Florida Bar: Filings Distributed To The Supreme Court

This morning, Jack Thompson’s petition for a writ of certiorari (basically a complaint accompanied by an appellate brief) was circulated among the nine Justices, who will decide whether or not to hear his appeal of his disbarrment. As of this writing (about 5:40pm Eastern Time), there is no word on their decision. We can expect to hear more news on Monday, when the Court’s weekly Order List is posted on the Supreme Court’s official website. Read the rest of this entry »

Popularity: unranked [?]

Trademark Licensing Dispute Over Fallout MMO

Kotaku brings word of a spat between IP owner Bethesda and licensee Interplay over the Fallout MMO Interplay is allegedly developing. I say allegedly, because whether Interplay is doing anything is the crux of Bethesda’s dispute. The history between the two firms and the Fallout brand is somewhat convoluted, but the end result is, Bethesda now owns the rights for the name and the IP, but Interplay has a license to create the MMO. Bethesda is threatening to terminate the license because Interplay has failed to secure funding or to start work.

What’s interesting here is two-fold. First, Bethesda (through their parent company Zenimax) certainly has publishing capability. Why haven’t they stepped in and said “fine, we’ll publish it, you develop it”? The question bodes ominously for the fate of the game… is Zenimax scared to touch it?

Second, it appears that Bethesda negotiated terms to the license agreement that would put Interplay, allegedly, in material breach of the license terms. Under contract law, a material breach allows the licensor/offeror in a contract to terminate the contract (as opposed to a partial/non-material breach, which merely allows monetary damages as remedy for breach, but not termination of the agreement). Now, I’m under the impression that Interplay is somewhat strapped for cash, so damages are not really the big concern for Zenimax since they’d likely not get anything great. So what’s the play here? Is it over the real value (the IP?) It will be interesting to see what Bethesda’s goal is here.

If anyone can point us towards a copy of the licensing agreement, or the SEC filings regarding the sale of the IP between Bethesda and Interplay, that’d be awesome.

Popularity: unranked [?]

Westwood College Reportedly Sued for Fraud

Westwood College, home of the “tighten up the graphics on level 3″ advertisement, is allegedly being sued by 67 past students for deception, fraud, and breach of contract. At issue, apparently, is that students were being charged around $30,000 for an AA degree. WFAA News 8 has a video covering the suit after the jump.

Read the rest of this entry »

Popularity: 2% [?]

Potential Counter-argument for GameStop Used Game Sales

Kotaku has come to the conclusion that GameStop’s sale of pre-owned games constitutes false advertising or deceptive trade practices paralleling that of  Mark Methenitis of Vernon Law Group. Now, Mark’s a good guy, and it was great finally meeting him at his panel at GDC this year, but I’d like to propose a counter-argument to his research.

Mark argues that under Texas law (where his firm is based), for example, a deceptive trade practice occurs when a person “”represent[s] that goods are original or new if they are deteriorated, reconditioned, reclaimed, used, or secondhand.” One situation, however, where this is not the case, is in the auto industry. It’s very common to buy a “new car”, even from the manufacturer, and receive it with miles on the odometer. This “use” of the car, comes from transport and testing, and yet, the car is still “new” because it has never been titled before.* Similarly, in Utah, a car can be sold as “new” with up to 7500 miles on it.* And in Virginia, there can be use of the car for testing purposes and transport, and the car is still new; any other purpose and it becomes used.

A parallel can be found here in the Federal Odometer Law, which the Seventh Circuit has held to be limited to issues where the dealership or seller “intended to defraud the buyer….” There is an argument to be made here that Gamestop’s activities are no different than that of the auto industry. They’re giving their employees the opportunity to test out what they are selling, in order that they can be more knowledgeable on the subject. Is it a dispositive argument? Certainly not, and probably isn’t even going to be persuasive. But in Gamestop’s defense, it must be said that what they are doing is not at all unique, nor is it novel (this was going on when I worked at EB Games in the late 90’s), and we ought to take a step back before wildly criticizing them and ask “Why do they think this is a good idea?”

*Not sure what happened to the server, but this wasn’t a 404 when I did my research.

Correction: We initially wrote that Kotaku was confusing Mark’s research with their own. As clarified in the comment below, this is not the case, and the article has been updated to reflect this. We apologize to Kotaku, and our readers, for the mistake.

Popularity: 11% [?]

Gamestop Accused of Selling Games Played By Employees as ‘New’

Hot off the presses at several tech websites, including Slashdot and Kotaku, comes word that Gamestop’s unofficial official policy of lending new copies of games to employees at their stores and later selling said games as new, unused copies, is not only  uncool, but it may also be illegal.

The current practice involves the following: When a Gamestop receives a shipment of new games, managers are told to open several copies, put the actual games behind the counter in protective encasements, and use the empty covers as display material for customers to view without any fear of unsavory fellows actual stealing a game (since it’s just the empty case being displayed). When the store is down to its display copies as the last available copy for sale, the employee takes the display cover, puts the “new” game back in it, and sells it as new. Sounds simple right?

Except for the fact that these new games are being checked out and played by Gamestop employees on personal systems, and are then brought back and sold still under the “New Game” classification and price.

The accusation that this practice is illegal stems from Kotaku’s limited conversation with the Federal Trade Commission and its mandate that it is charged with protecting “consumers from unfair or deceptive advertising and marketing practices.” If a company is found to have violated this provision, they may be prosecuted under federal law. The FTC also states that consumers are encouraged to file a complaint with them about a company’s business practices.

Granted, this isn’t a new issue for Gamestop, but apparently it’s gotten to the point where folks that can actually do something about it are perturbed.

Currently, there has been no comment from Gamestop, and no word from the FTC if complaints have been filed or investigations undertaken. Suffice to say, we’ll continue to monitor this story closely and inform you of further developments.

Popularity: 3% [?]

Take-Two Settles With Shareholders

Take-Two disclosed on Monday that they’ve settled their lawsuit with shareholders over the attempted buyout from EA Games last year. In what appears to be something of a coup for the company over its shareholders, the terms of the settlement do not include any payments. Since the suit was launched for failure to consider EA’s $26 per share proposal last year, that’s a bit odd, and it looks like Take-Two can push any fees and costs aside into insurance and get out of the suit without a dime. The news sent Take-Two stock up over 3% today, with EA’s stock rising by over 2%.

Popularity: unranked [?]

Colorado District Court: Copyright Act Violates First Amendment (Golan v. Holder)

In stunning news, the U.S. District Court for the District of Colorado has granted summary judgment in Golan v. Holder, determining that parts of the Copyright Act (specifically 17 U.S.C. §104A) violate the First Amendment. The portion in question is in regards to restorations of copyright for foreign works that have previously fallen into the public domain. Under the Berne Convention (Art. 18), such restoration would be required, but the Golan court today holds that the First Amendment trumps such treaty obligations due to interference with amendment’s free speech clause.  Here’s an interesting snippet from Judge Babcock’s decision:

Congress has a legitimate interest in complying with the terms of the Berne Convention. The Berne Convention, however, affords each member nation discretion to restore the copyrights of foreign authors in a manner consistent with that member nation’s own body of copyright law. In the United States, that body of law includes the bedrock principle that works in the public domain remain in the public domain. Removing works from the public domain violated

Plaintiffs’ vested First Amendment interests. In light of the discretion afforded it by the Berne Convention, Congress could have complied with the Convention without interfering with Plaintiffs’ protected speech. Accordingly–to the extent Section 514 suppresses the right of reliance parties to use works they exploited while the works were in the public domain–Section 514 is substantially broader than necessary to achieve the Government’s interest.

On the basis of the record before the Court, I conclude no evidence exists showing whether the Government’s two additional justifications for implementing Section 514–Section 514 helps protect the copyright interests of United States authors abroad; and Section 514 corrects for historic inequities wrought on foreign authors who lost their United States copyrights through no fault of their own–constitute important Government interests, or whether Section 514 is narrowly tailored to meet those interests.

By the way, if the case sounds familiar but something about the name seems off, you may remember this particular case from Golan v. Ashcroft and Golan v. Gonzales, dating back to 2001. It’s the same case, on remand. The full decision can be read at the above link in text format. For the official PDF (courtesy of Stanford University’s Cyberlaw site), check here.

The case is sure to get some major law review coverage, because it raises all sorts of amazing conflicts-of-law issues between the Constitution and international treaty, and it opens up a new line of attack on copyright power beyond what the Supreme Court has defined in Eldred v. Ashcroft.

So why is this important to gamers? Most games are nowhere close to the terms of their copyright protection running out. Where this becomes important to gamers is the stories involved. For example, J.R.R. Tolkien works were covered in this series of cases, as were those by H.G. Wells.

Lawrence Lessig, getting some justice after losing on Eldred, had this to say:

I am very happy and very very proud to report a big victory in Golan v. Holder. As you may recall, Golan was filed at the time Eldred v. Ashcroft was in the Supreme Court. The case challenged the URAA, which restored the copyright to works in the public domain. We lost in the district court, but then the CA10 reversed that decision, holding (for the first time ever) that the First Amendment restrained Congress when it changed the “traditional contours of copyright” beyond those explicitly mentioned in Eldred (idea/expression dichotomy and fair use). The CA10 sent the case back down to the district court, and Friday, Judge Babcock granted our motion for summary judgment, holding that the URAA violated the First Amendment to the extent it restored copyright against parties who had relied on works in the public domain.

We’ll keep this covered for the inevitable appeal, as it is highly likely that the U.S. government will appeal this up to SCOTUS if necessary.

Popularity: 6% [?]