A Closer Look at the Parallels Between US v. Stevens and EMA v. Schwarzenegger

This article is to supplement GP’s coverage of US v. Stevens and its implications for the game industry (also addressed on GamesLaw). I will elaborate on why the Supreme Court refuses to analogize depictions of the unlawful killing, maiming, wounding, etc. of animals to child pornography and why it probably will not liken video game violence to it either in the pending case EMA v. Schwarzenegger. Also, the somewhat less-discussed basis for the Stevens decision: overbreadth of the statute and why the EMA law will also likely be found overbroad and stricken. Read the rest of this entry »

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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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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.

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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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Gamefly Action vs. US Postal Service

Back in April, Gamefly filed a complaint against the US Postal Service, claiming that Netflix and Blockbuster’s DVD-by-mail services are receiving preferential handling of discs in transit. Gamefly alleged that their discs are being stolen, and that Netflix and Blockbuster are getting manual processing to prevent breakage. According to Gamefly, the USPS breaks 1-2% of the nearly 600,000 games shipped each month, which accounts for up to $295,000 per month in loss. Note that as best we understand, this is not a formal lawsuit, but rather an administrative complaint with the Postal Regulatory Commission.

In their latest filing, Gamefly points out that Netflix in particular has benefited from unauthorized “Netflix only” slots in the post offices– slots that the USPS claims that they don’t know exist, but if they did would be against policy. Something tells me that this case is going to likely progress beyond the administrative stage, but we’ll of course keep you updated as new developments are announced.

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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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Marvel/Disney Served with Copyright Termination Notice by Kirby Estate

In breaking news, the estate of Jack Kirby, co-creator of a range of successful comic franchies from Captain America, X-Men, Hulk, The Fantastic Four, and more, has served notice to Marvel and Disney, and their film studios (Sony, Universal, Paramount, and 20th Century Fox) terminating their copyright in these IPs. The estate has also retained veteran IP litigator Marc Toberoff to go after any future claims.

There doesn’t appear to be any immediate danger for EXISTING games based on those IP’s, however, future games might be in jeopardy. According to comic news outlet bleedingcool, his copyright claim would exist from 2014. This would mean Marvel Ultimate Alliance 2 is safe, but look out Marvel Ultimate Alliance 4.  Toberoff has experience in this realm, he’s been successful on an identical claim on behalf of the Siegel estate, regaining copyright in Superman material. This is something we’ll obviously be following very closely, as the financial implications from forced licensing (let alone the IP issues) could have huge effects on some very popular game franchises.

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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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Zynga Files Massive Lawsuit Against Playdom

We’ve previously reported on Zynga’s misleading advertisement litigation against Playdom. Now it seems that Zynga is ready to throw down for real. Zynga has sued Playdom in California Superior Court for a laundry list of causes of action, including tortious interference with contract and tortious interference with economic advantage, breach of duty of loyalty (and an inducement cause), breach of contract, misappropriation of trade secret, and unfair competition. Zynga alleges that former employees were stolen from them by Playdom, bringing with them a so-called “playbook” of  documents and know-how. Zynga goes into great detail to describe how important the playbook is to them, but to be honest, the analogy is perfect anyway. Imagine how earth-shattering it would be if the New York Jets got a hold of the Miami Dolphins playbook. Now imagine that they got it by actively soliciting Dolphins players to leave their contracts, take the playbook with them and sign with the Jets.

Zynga seems to have quite a bit of very in-depth information on what the former employees allegedly stole and how they did it, which seems to imply that they had some sort of monitoring or internal security software installed. It’s obviously far too early to speculate how this one is going to play out, but given that Zynga essentially forced Playdom to change their deceptive advertising practices earlier this year, there’s a good chance that this is part of a greater trend of bad behavior by Playdom. We’ll be anxiously waiting to hear the Answer on this one.

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Dr. Tim Langdell resigns from IGDA Board

An update to our prior discussions on the trademark scandal surrounding Dr. Tim Langdell: as of yesterday, Dr. Langdell has resigned from the IGDA board. This obviously invalidates the need for the special meeting and vote to remove him. We will continue to discuss the trademark issues surrounding the incident at our PAX panel, and representatives from both sides of the removal debate have confirmed that they will be in attendance. We’ll keep you updated if there is a statement from Dr. Langdell.

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