Abington May Sue Over Xbox Live Bannings

Joystiq reports that IP boutique Abington is considering a class action on behalf of Xbox Live subscribers banned recently from the service for using modded consoles. The firm alleges that the bans came as a money grabbing move timed after players would have purchased Halo 3:ODST and would have pre-ordered Modern Warfare 2. Mark Methenitis, over at Joystiq’s Law of the Game blog, astutely points out that this is probably a cash grab, but notes that there is a chance that there might be a kernel of legitimacy in the claim.  Let’s mark this one up in the “probably not going anywhere” category.

Popularity: 19% [?]

WoW Shut Down in China?

GamePolitics reported earlier this month on the battle between China’s Ministry of Culture and their General Administration of Press and Publication over control of the online game industry.   According to reports, the GAPP has banned Chinese WoW operator NetEase from running The Burning Crusade in China, and is requiring that they stop taking new subscriptions and cease current subscription fees. Most previous regulation, including censorship, of the industry has recently come from the Ministry of Culture, and this appears to be a major turf war between the two organizations. The Ministry of Culture has approved WoW in China, launched this September, while the GAPP did not.  For their part, NetEase has issued a press release stating that they believe they are in compliance with PRC law, and doesn’t indicate that they will be ceasing any operations. It also notes that they haven’t had any official “notice” of the ban, and that the announcement came from the GAPP’s website (rather than an official determination.) Earlier in the year, China banned FDI (foreign direct investment) into the gaming industry, and has increasingly cracked down on what it views as an opportunity for the expression of dissident viewpoints and “undesirable content.”

On a related note, I’m putting the finishing touches on a journal article regarding an international framework for protecting human rights in virtual worlds and MMORPGs. With this news, the topic only seems more relevant.  Chinese gamers should be entitled to express dissident viewpoints in a virtual world without fear of censorship, and without fear that their avatars and virtual property will be at risk of seizure or deletion. Similarly, virtual worlds operators should be entitled to profit from their businesses without fear of government crackdowns like this. I’ll post the article here once the publication process is complete.

The NetEase press release reprinted in full below.

NetEase.com Announcement Regarding Statement by the General Administration of
Press and Publication With Respect to World of Warcraft(R)

BEIJING, Nov. 2 /PRNewswire-Asia/ -- NetEase.com, Inc. (Nasdaq: NTES), one
of China's leading Internet and online game services providers, today
announced that the General Administration of Press and Publication ("GAPP") of
the PRC government has posted on its official website a statement that the
current operation of the World of Warcraft(R) in China by NetEase's affiliated
company, Shanghai EaseNet Network Technology Limited ("Shanghai EaseNet"), is
being conducted without proper approval from GAPP. The statement further
indicates that GAPP is returning Shanghai EaseNet's application for approval
and Shanghai EaseNet should suspend charging users to play the game and not
allow new account registrations. GAPP also notes in its statement that it is
evaluating whether to impose administrative penalties on Shanghai EaseNet. As
of the time of this press release, neither NetEase nor Shanghai EaseNet has
been officially notified of GAPP's determination. Shanghai EaseNet licenses
World of Warcraft(R), a massively multi-player online role-playing game, for
operation in China from Blizzard Entertainment, Inc.
    NetEase and Shanghai EaseNet believe that they are in full compliance with
applicable PRC laws and are currently seeking clarification from the relevant
governmental authorities regarding this statement by GAPP. NetEase will
provide further updates on the statement by GAPP as appropriate.
    About NetEase
    NetEase.com, Inc. is a leading China-based Internet technology company
that pioneered the development of applications, services and other
technologies for the Internet in China. NetEase's online communities and
personalized premium services have established a large and stable user base
for the NetEase websites which are operated by its affiliates. In particular,
NetEase provides online game services to Internet users through the in-house
development or licensing of massively multi-player online role-playing games,
including Fantasy Westward Journey, Westward Journey Online II, Westward
Journey Online III, Tianxia II and Datang, as well as the licensed game World
of Warcraft(R).
    NetEase also offers online advertising on its websites which enables
advertisers to reach its substantial user base. In addition, NetEase has paid
listings on its search engine and web directory and classified advertising
services, as well as an online mall, which provides opportunities for e-
commerce and traditional businesses to establish their own storefront on the
Internet. NetEase also offers wireless value-added services such as news and
information content, matchmaking services, music and photos from the Web which
are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.
    Other community services which the NetEase websites offer include instant
messaging, online personal advertisements, matchmaking, alumni clubs and
community forums. NetEase is also the largest provider of free email services
in China. Furthermore, the NetEase websites provide various channels of
content. NetEase aggregates news content on world events, sports, science and
technology, and financial markets, as well as entertainment content such as
cartoons, games, astrology and jokes, from over one hundred international and
domestic content providers.
    Safe Harbor Statement
    This press release contains statements of a forward-looking nature. These
statements are made under the "safe harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995. You can identify these
forward-looking statements by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes," "estimates" and
similar statements. The accuracy of these statements may be impacted by a
number of business risks and uncertainties that could cause actual results to
differ materially from those projected or anticipated, including risks related
to:  the risk that Shanghai EaseNet will not be able to continue operating
World of Warcraft(R) or other games licensed by it for a period of time or
permanently due to the position of GAPP or other governmental actions; the
risk that Shanghai EaseNet or NetEase will be subject to penalties or
operating restrictions imposed by governmental authorities in the PRC
resulting from the operations of their online games, including suspension of
their Internet service or other penalties; and other risks outlined in
NetEase's filings with the Securities and Exchange Commission. NetEase does
not undertake any obligation to update this forward-looking information,
except as required under applicable law.
    For further information, please contact:

    NetEase.com, Inc.
     Brandi Piacente
     Investor Relations
     Email: brandi@corp.netease.com
     Tel:   +1-212-481-2050

     Li Jia
     Email: liddyli@corp.netease.com
     Tel:   +86-10-8255-8208

SOURCE  NetEase.com, Inc.

Brandi Piacente, Investor Relations, brandi@corp.netease.com, +1-212-481-2050;
or Li Jia of NetEase.com, Inc., liddyli@corp.netease.com, +86-10-8255-8208

Popularity: 11% [?]

Geography of Job Loss

Somewhat related to the arguments that the game industry is “recession proof” or at least “recession resistant”, a very interesting interactive map outlining job creation/loss over the past 5 years is circulating around the internet. When viewing this map, keep in mind that the game development industry is highly centralized in Southern California, Seattle, Austin, and to a lesser extent Boston — keep track of these locations while you’re watching the progress, and that the map represents areas by MSA (so suburbs are included in the metropolis they are tied to, for instance Cambridge would be tied to Boston).

If you look in the beginning, you’ll notice SoCal booming, as well as in Austin, with no major losses anywhere until the mega-red explosion from Katrina hitting New Orleans, but even there are no major losses. Up through the beginning of 2008, California begins shrinking, with losses starting to appear for the first times in SoCal (although ironically, the reverse is occurring in the Bay Area), but Texas and Seattle remain booming with tens of thousands of new jobs.

Then by mid-2008, the meltdown is in full swing. Starting in South Florida, SoCal, and Detroit, it quickly spreads over the next year to the entire nation. Interestingly enough, while in August 2008 Los Angeles was posting a -97,800 lost job rate for the previous 12 months and -20,000 in San Francisco, Austin was up by 18,100 jobs and Seattle was up by 17,200.

By November, that had turned into nearly -160,000 lost jobs in LA alone, while even Seattle was starting to feel the heat with -11,000 or so. Boston was down by nearly -20,000, and only Austin (as an industry hub) remained in the green.

Perhaps the most fascinating slide is the end, which looks like red nuclear explosions going off; but lets pay attention to what you CAN’T see on that last slide: Austin down by only -1,400 jobs that year (keeping in mind this is across ALL industries) compared to -240,000 in LA.

The website itself states “The animated map makes clear that this recession has not treated all regions equally.” Does this mean that Austin is a safe place to work to wait out the recession? That might not be a stretch of the imagination. Texas isn’t faced with nearly the same budget meltdowns as California, and aside from Houston and Dallas, hasn’t been hit with the same critical job loss that California has (though the site also notes that Texas remained solid in part due to a run-up in oil prices through 2008, and that the receding job growth in 2009 came from the energy and construction sectors.)

The time will come where development studios are going to have to think harder about where they set up shop — not just in terms of access to employment talent or favorable taxes, but economic solidity and risk of rampant unemployment in other critical sectors like public safety or education. Perhaps this map will highlight that for some studios.

Popularity: 12% [?]

Call for Papers: Journal of Game Amusement Society

The Journal of Game Amusement Society (which I’m not familiar with, but appears to be an Asia-based game journal) is issuing a call for papers for their third volume. They don’t specifically include law as a topic, but do include “Psychology, History, Pedagogy, Business administration, Business style of game industry, Game industry as venture business, [and] Game as business” so it is a safe bet legal papers would be accepted.

 I haven’t really published CFP’s before here, but I’m thinking it would be a good idea in the future.  Manuscripts are due Dec. 25, and if you’re thinking of submitting along with a law journal, you’ll probably have to trim it down – full papers are limited to eight pages.

If anyone has other CFP’s they’d like us to republish, as long as they are law/financial/business related, I’m happy to cover them here.

Popularity: 9% [?]

Playstation Network: Not a Company Town

Late last month, the Southern District of California held in Estavillo v. Sony that the Playstation Network does not qualify as a “company town”, and therefore not eligible for protection under the First Amendment. By extension, this strikes a blow to virtual worlds exceptionalists, who have long argued that virtual worlds ARE company towns; including notable theorists like Prof. Jack Balkin.  Already a heavily limited doctrine, the court held that it doesn’t apply to virtual worlds because “[i]n providing this electronic space that users can voluntarily choose to entertain themselves with, Sony is merely providing a robust commercial product, and is not “performing the full spectrum of municipal powers and [standing] in the shoes of the State.”

Now, to be fair, the hordes of fanbois on internet forums that rage about their First Amendment rights being violated when their posts are deleted (or they get banned) probably didn’t even know about the company town exception to the state action requirement of the First Amendment. Just the same though, this predictable decision puts a fairly solid nail in their coffin.

Eric Goldman has an interesting opinion on the decision:

Nevertheless, this case could have significant import for academic discourse about the virtual worlds. I believe this is the first ruling to squarely conclude that an online game/virtual world isn’t a company town. As a result, this opinion emphatically rejects a meme that has become pretty popular among virtual world exceptionalists. Some exceptionalists have favored the company town analogy because it enable virtual world customers to reduce an operator’s ability to run its business capriciously.

At the same time, as I explain in my 2005 article, importing constitutional doctrines into paying vendor-customer relationships could have untold detrimental effects on the entire online industry. This efficient ruling will hardly be the last word in that debate, but it should take a little wind out of the sails of the virtual-world-as-company-town meme that gets invoked so frequently in virtual world exceptionalist circles.

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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.

Popularity: 6% [?]

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.

Popularity: 34% [?]

Breaking: Petition Launched to Remove Tim Langdell from IGDA Board

As some of you may have heard, there has recently been a row over some trademark issues involving Tim Langdell, who was recently elected to the IGDA Board. The crux of the issue is that Tim holds a trademark in various uses of the mark “Edge” as used in relation to gaming. Tim has allegedly been aggressive about acquiring and enforcing his trademarks, which have allegedly resulted in at least one iPhone gaming with the word Edge in the title being removed from the Apple Store. Tigsource has compiled a very comprehensive list of articles involving Tim and the use of the mark.

There is now a  petition to remove Tim from the board. The petition’s author, well known narrative designer Corvus Elrod, had this to say:

I have started a survey which requires you to enter your IGDA
membership number when you vote. Once we have “yes” votes from 10% of
the membership (about 1400), I will bring it to the board directly and
force them to call a special meeting of the membership to vote on Tim
Langdell’s removal.

Corvus expanded further at Man Bytes Blog:

My feelings about Tim Langdell are of little consequence here, but I do feel like emphasizing that I feel calling his actions “trademark protection” is rather like claiming the aristocracy went on fox hunts to protect the hen house. It may be legal, but to base the financial success of your studio on predatory IP manipulation is ass-hattery of the worst degree. The fact that Langdell’s studio is surviving in this economy without having released a game in well over a decade is astounding. That it can even afford to litagate over the use of the word ‘EDGE’ when the big publishers are closing entire studios rather than suffer thinner-than-average profit margins is a danger to every single developer-independent or affiliated.

This is obviously a huge issue, especially for a very troubled IGDA. There have been recent questions in mainstream blogs and those of several high profile industry members questioning what exactly IGDA is providing to its members. The trademark issue further fans the flames of allegations that IGDA isn’t doing enough, and it’s being talked about by key industry figures, such as IGDA board candidate Darius Kazemi and board member Tom Buscaglia.

To be fair, the petition is not a slam job against Tim: as Corvus states “You’ll notice, I’ve included a “no” vote. I know members who do not wish to vote Tim Langdell off the board. If 10% of the IGDA membership is dead against this, it’s only fair they have a voice too.”

We’ll be tracking this issue further as it develops, and I’m hoping to discuss it at this year’s PAX 2009 Legal Issues in Gaming panel (which you should all attend!).

FULL DISCLOSURE: The author is a student member of IGDA and an IGDA GDC Scholar.

CORRECTION: The author of the petition is Covus Elrod, not Michael Lubker as originally reported.

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Updated: Nintendo Patent Infringement Suit Dismissed

Earlier this week, Judge Manuel Real summarily dismissed Guardian Media Technologies’ patent infringement claim against Nintendo. The suit alleged that Nintendo infringed their patents relating to V-chip content censoring technology. Nintendo’s prevailed by countering that while the Wii does have parental controls, Guardian’s patent was limited to movies and TV shows — things that Wii doesn’t offer. Guardian appears to be something of a patent troll — according to Business Week, they’ve sued “a slew” of tech companies after receiving the patents from the original inventor, but only two of the companies have settled. Nintendo was just one of around forty defendants Guardian sued for various patent infringement claims – the cases against thirty-eight other defendants remain ongoing.

UPDATE: In a statement, SVP and General Counsel for Nintendo of America Rick Flamm elaborated slightly. “Nintendo vigorously defends patent lawsuits … At the earliest stages of this case, Nintendo convinced the court to dismiss this case as Guardian’s patent had nothing to do with Nintendo’s products.” The case information, in case anyone is interested, is Guardian Media Technologies Ltd. v. Coby Electronics Corp., 08cv8439, U.S. District Court, Central District of California (Los Angeles).

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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.

Popularity: 6% [?]