MAGfest 8

So we’ve survived yet another set of panels, this time at MAGFest 8, which was an utter blast. Destructoid has a rundown on what you missed if you didn’t go, but let’s face it, you all know that I’m the only important thing on that list, right?

Right?

Looking forward, we’ll be expecting to hear a final confirmation on the third iteration of “Legal Issues in Gaming” at PAX (East) some time in the next couple of weeks, and we’ll get that information out to you as soon as it comes in and we finalize the panel attendees.

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Hasbro sues Atari over D & D IP

It almost rhymes, doesn’t it? Just before Christmas, Hasbro sued Atari over the licensing rights for video games based on the Dungeons and Dragons IP (owned by Wizards of the Coast, a Hasbro subsidiary). According to Wizards, they’ve been negotiating with Hasbro for months to no avail. Hasbro filed the complaint in the U.S. District Court for the Rhode Island district, prompting this response from Atari:

“Hasbro has resorted to these meritless allegations, in an apparent attempt to unfairly take back rights granted to Atari [...] Atari has sought to resolve the matter without cooperation from Hasbro. We regret that our longtime partner has decided to pursue this action.”

Atari denies the allegations (though to date they have not filed a response or a MTD on the case, it’s far too early for that). Hasbro is seeking both pecuniary damages and an injunction ending the licensing agreement.

I think this is the start of a long and bitter battle over a very very valuable IP. They’ve apparently been negotiating for months before the suit, and the wording and timing don’t appear to be that of getting a complaint in the door before a statute of limitations — it legitimately appears like a rancorous disagreement between the parties, meaning it’s distinctly possible this one will achieve some level of litigation before settlement becomes likely (if settlement even happens; Atari is being unusually vocal in asserting that the claims are meritless). The timing, just before Christmas, is also a slap in the face, especially as a potential blow to holiday financials….the whole thing just comes off as very spiteful. We’ll keep track of this dispute as it progresses.

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Pending Supreme Court Case US v. Stevens Has Implications for the Game Industry

Most attempts by state legislatures to censor the game industry involve statutes which prohibit the distribution of ”violent video games” to minors. However, these statutes have invariably been stricken down by federal courts because they sought to restrict distribution of games, the contents of which fell into a category of speech (violence) that is protected under the First Amendment and the respective states could not show the requisite danger of imminent lawless action that the First Amendment requires in  order to restrict speech that is protected(1).  Very recently in VSDA v. Schwarzenegger, the Ninth Circuit struck down one such statute for that reason(2). Through this and other examples, we see that courts are loathe to create new categories of unprotected speech, or to expand the categories that are already unprotected(3). On October 6th, the Supreme Court heard oral argument in US v. Stevens, which challenges the Constitutional validity of a federal statute that prohibits the creation, sale, and possession of depictions animal cruelty. Due to the insight into the new Court roster’s attitudes on First Amendment issues that Stevens will offer, we are watching closely.  Hit the jump for an in-depth analysis. Read the rest of this entry »

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Paltalk Sues Sony, NCsoft, ActiBlizz, Turbine, and Jagex for Patent Infringement

Boston.com (via Ars Technica) reports that Paltalk Holdings, (which patent-savvy readers may remember forced Microsoft to settle a patent lawsuit in 2006 over the Halo series), has launched another round of lawsuits for patent infringement, this time covering a bevy of top name MMOG producers. Naming Sony, NCsoft, Activision Blizzard, Turbine, and Jagex as defendants, the complaint alleges infringements of patents covering “sharing data between computers that are connected together so users see the same digital environment”. The patents were purchased in 2002 from a company called HearMe. Shadows of Worlds.com rising? Paltalk is alleging that any MMO game in which players “have to see the same environs simultaneously” would infringe the patent. More accurately, it seems from the Boston.com article that it involves the process for synchronization between the different player’s screens. Given that presumably Runescape (Jagex), World of Warcraft (Blizzard), and Guild Wars (NCsoft) all use different methods of communications and display, from instancing to open-world MMO, to server-side-only calculations, this seems like a stretch, but we’ll withhold judgment for now.

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Eros LLC sues Linden Labs over Second Life Infringement

In an interesting move, Eros LLC, a maker of Second Life virtual sex products, has sued Linden Labs, the developer and publisher of Second Life, for a bevy of causes of action including trademark infringement, copyright infringement, DMCA violations, and tortious interference. Eros, who some readers may remember as the plaintiff in a previous sex bed case, is claiming that Linden is profiting immensely from the sale of illegally copied goods protected under Eros’ marks. The difference this time lies with the defendant; while Eros was previously going after the individual copiers, this time they’re going after Linden themselves. Stephen Wu, who will be presenting a discussion at Engage! Expo/Digital Law Conference entitled “Intellectual Property Megasuit: Could it Happen to You” suggests that Eros may be seeking to replicate Viacom’s successes against Youtube and Google. “It’s hard to judge, but perhaps you’ll see some better activity on behalf of Linden’s to reform their system, and maybe get a settlement in exchange.”

The broader issue, Wu warns, is what effect this may have on other virtual worlds and MMOG owners. Already faced with one landscape changing mega-litigation to watch (the NCSoft/Worlds.com patent suit), virtual worlds owners will now have to “get their houses in order” as far as IP and DRM are concerned, lest they become the next targets. “There is risk for other virtual world owners. If they don’t have their own protections for copyright and trademark owners, they may see themselves getting sued from this firm [KamberEdelson] or a similar plaintiff,” says Wu. KamberEdelson, according to Wu, is on the hunt for what they perceive to be unfair business practices — they were involved in the recent Amazon suit over the pulling of digital copies of Orwell’s 1984 from Kindle owners. In closing, Wu warns, “This is not a one-off event. This is going to be a prime form of litigation in the near future.”

For further analysis, Patent Arcade is tracking the suit as well. The complaint can be viewed in full here.

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Five Silliest MMO Lawsuits

Ignoring how terribly passé Top (x) lists are, I have to call this one out for being one of the worst of the bunch. MMORPG.com, which I’ve always considered to be an otherwise decent site, has released an abysmal list of the “Five Silliest MMO Lawsuits“, written by someone with a below-average understanding of the law in general. (Actually there aren’t just five, they include an “honorable mention).

(UPDATE: After receiving my criticism from this article, the author has changed the name from Five Silliest MMO Lawsuits to “Five Memorable MMO Lawsuits”. The factual inaccuracies remain the same, however.)

Here’s the rundown:

• Mythic v. Auran: This one wasn’t even a lawsuit; it was apparently a C&D over a clearcut case of trademark infringement. What’s silly about this, you may ask? The author of the article doesn’t understand what a trademark is. “Mythic coined a term and wanted to hang on to it. I just don’t necessarily understand why they would want to stop other companies from using it. It’s not like they have the idea behind RvR trademarked.” Well, duh. You don’t trademark an idea. The whole point of a trademark is to protect a mark associated with YOUR good from being used by other companies to associate with THEIR good, and thus lose its distinctiveness as being recognizable as yours. When you think of RvR, what do you immediately think of? Mythic games. You think Warhammer Online, or I guess Dark Age of Camelot if you’re old school. To top it off, the author doesn’t understand likelihood of confusion, by way of the line “Even sillier than the time Mythic sued “Mythica” over its name. Mythica was eventually cancelled by Microsoft in 2004.” Yes, god forbid Mythic protect it’s own brand name from another mark that is confusingly similar (to the point of only being 1 letter different).
• Esther Leong v. Square Enix: They don’t even manage to get the first line right on this one. “Looking only back to June of this year, we saw a lawsuit from a lone individual named Esther Leong against Square Enix…”. Except, it wasn’t from a lone individual. It was a class action on behalf of all FFXI players similarly situated. “This begs the question: How many accounts did this woman have?” Facepalm. They also go on to get the merits wrong while having them right in front of their face. “Please, oh please, tell me that this person didn’t file a suit claiming to have not known that there was a fee to play the game, and then not knowing that the company would apply rules to their game and reserve the right to stop letting you play if you didn’t pay your fee.” As a matter of fact, no. They filed suit because Square advertised one fee, then presented another with hidden charges, and made it nearly impossible to actually cancel your account, all while upping your fee if you payed late; as well as a complaint that they were not clearly informed that they did not actually purchase the game (and all ownership rights appurtenant thereto), but a license. “It can’t possibly be that ridiculous, could it? COULD IT?” No. No it wasn’t. 0 for 2 MMORPG.com.
• Kohnke Communications v. Perpetual Entertainment: They don’t even bother to justify this one as being silly: in fact, MMORPG.com straight up admits that it was a cut and dry breach of contract and that Kohnke (now TriplePoint PR) got screwed out of money they were owed. 0 for 3.
• Garriott v. NCsoft: “Jokes aside, the facts around the suit actually see Garriott suing his former company for 27 million dollars in money lost in stock options when, he claims, his firing was internally re-structured to look like a resignation.” Another one where they don’t attempt to justify how silly it is that someone got screwed out of their money. 0 for 4. Not good MMORPG.com. Not good.
• Blizzard v. MMO Glider: Before I go any further, WTF? This is a case that actually had some legitimate precedential value to determine what constitutes copying of data into RAM under the MAI standard. And once again, there’s no justification for what makes the lawsuit actually silly. Glider, under Blizzard’s argument, was costing Blizzard money and not to mention that the broader issue of “Do you own the MMORPG software you buy” was implicated (as it was in the Leong case above). Even the EFF got involved on this one. 0 for 5.
• Finally, Worlds.com v. NCsoft: In the very first sentence “Speaking of bone headedly stupid trademark based lawsuits…” …. this is a patent suit, not trademark. But keep going: “Now, as stated previously, I’m not a legal expert,” (ed. No, really?)  “but this describes the most simplistic and basic workings of an MMO.” Congratulations. You’ve discovered that patents require a description of how things work. Since Worlds.com claims to have been the first to invent the 3d MMO (though there is a dispute as to whether there is prior art), there is nothing unusual about that claim. MMORPG.com then goes on to get the date of the patent wrong, (it has priority dating to 1996, not 2000, though the confusion may have been justified as there are two patents in question here). 0 for 6. Incidentally, we’ll be discussing Worlds.com with Ross Dannenberg of Patent Arcade on our panel at PAX this year.

It’s not unusual for a site to make factual errors in an article. We’ve been guilty of it before too. It IS, however, unusual for an entire article to be wrong both in premise and every single one of the 6 segments that constitute it. Shame on you MMORPG.com. For shame.

Updated: Italicized quotations for clarity, clarified that there are intentionally 6 items on the list.

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Jindal Passes Tax Breaks for Game Devs, Nobody Cares

GamePolitics is reporting on an AP story that Louisiana governor (and often cited potential Presidential candidate in 2012) Bobby Jindal has signed into law tax breaks to, among others, game development studios to try and bolster production in the state. The action has received praise from the ESA.

Here’s why you shouldn’t care: Bobby Jindal is the governor of Louisiana, and his tax breaks will only affect Louisiana. Not California, not New York, not any other state in the union. Louisiana. Now, you may be thinking “so what, he’s trying to attract an industry into Louisiana.” Problem is, that’s not going to happen.

Louisiana is different than most every other state in the union, because their state legal system has not updated itself to anything remotely resembling the 21st century. Louisiana is the sole state in the union that follows the “civil law” legal system, rather than the traditional common law. The problem with this form of law, is that while common law provides a certain amount of precedent, which can be researched and relied upon, the civil law system is relatively uncertain. It relies upon judges interpreting what the law should be. The difference is most marked in the area of estate law and succession, and to be fair the gap has narrowed with the Uniform Commercial Code. But game developers working in Louisiana have to abide by its law. They’re going to live there, and be subject to its tort laws when they get in a wreck going to work. They’re going to be subject to its estate law when they make a will, or (god forbid) pass away. They’re going to face the state’s antiquated legal system day in and day out, and that is a MAJOR turnoff for attracting skilled developers. Nobody wants to work in a state where you can’t tell what the law is in advance. The secondary issues like the abject poverty surrounding much of the state, inequality in education, jobs, and healthcare, and the blindingly deep corruption reaching nearly every level of the state’s government certainly can’t help.

So, while Bobby Jindal’s announcement is all fine and dandy, it’s a non-starter.

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Legal Issues for GameDevelopers: Game Design Concepts

For those of you not taking the summer Game Design Concepts course that everyone on the internet seems to be taking….why not? As if there weren’t enough reason to, you can study the Legal Issues for Game Developers section that I developed for the course. Here’s a quick snippet.

At this point, some of you may be thinking that by posting your game
to the forum, you run the risk that someone will Steal Your Great Idea.
How can you protect yourself from the threat of someone taking your
basic idea, turning it into a working, sellable game, and leaving you
with nothing?

Remember, ideas are not copyrightable, they’re not
trademarkable, not trade secretable, and both difficult and
prohibitively expensive to patent. You can’t protect them anyway, and
you shouldn’t try — instead you should try to come up with new ones,
and start working on the good ones.  Don’t freak out when you see
things like Game Jams, or this course and think “Ian says I should post
my work to the discussion forum, but I came up with a Great Idea(tm)
and I don’t want other people to steal it.” Ideas are commonplace in
games, and the value of your idea is nothing compared to the value of
the implementation of that idea, your expertise and hard work in
developing it into something that’s going to make you real money. But
most importantly, our industry is very lateral, very tight-knit, very
collaborative. You’ll find people sharing their ideas at GDC, doing
collaborative projects between studios, or using inspiration from one
game’s mechanics to improve another. Don’t fight it. That’s the way
things work, and by embracing that open atmosphere, you’ll be far
better off.

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Blizzard v. In Game Dollar Analysis

Patent Arcade has a case analysis of the In Game Dollar lawsuit, perhaps more well known as Peons4Hire.com. Though the case settled and therefore doesn’t serve as binding precedent, it makes for a good study of Blizzard’s methods that they’d later use in other cases. Also, Virtually Blind (now defunct) has their own analysis here. Thanks again to the excellent Patent Arcade for the heads up.

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China bans RMT, perhaps EVE Online.

China’s Ministry of Culture and Ministry of Commerce have banned the trading of virtual currency for tangible goods or services. According to the ministry, “the virtual currency, which is converted into
real money at a certain exchange rate, will only be allowed to trade in
virtual goods and services provided by its issuer, not real goods and
services,” and specifically includes prepaid game cards for online games.

This presents something of a problem for games with sanctioned RMT models, as by the ministry’s wording not even game publishers can traffic in real goods and services. For a game like EVE, where the developers have sanctioned third party trading in prepaid time cards, this seems to run afoul of the letter of the policy; rather unfairly as it doesn’t seem to violate the spirit of the policy. Interestingly, China Daily is reporting that virtual item selling will not be covered under this policy.

Something tells me that this is going to be a rather empty gesture by the Chinese government, but we’ll keep an eye on this.

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