Law of the Game on Joystiq: May the Enforce Be With You

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

Today we're going to discuss enforcement of intellectual property, which is a much deeper topic than simply "what is it going to cost me?" There are enforcement considerations on both sides of the issue, and it's often a rather sticky situation for the rights holder in a copyright scenario. Interestingly enough, there are some pretty important economic and public relations considerations with regard to enforcement as well as the legal ones.

There's a burden trademark owners face that isn't applied to copyright holders, specifically that those who don't protect trademarks lose them. Copyrights, on the other hand, aren't lost in this way. Theoretically, a copyright can only be lost once the time period for the copyright has elapsed, though recovery may soon be limited on so-called "orphan works" whose authors are difficult to locate. Alternatively, a copyright holder can formally release a work into the public domain, which is the equivalent of "abandonment" of a copyright.

This disconnect between the concept of abandonment in trademark and copyright can create a legal oddity for a game company. In some cases, for example where someone is distributing a pirated version of a game that includes a virus, it may be necessary to seek copyright enforcement in order to protect the trademark from tarnishment.

There's also the matter of what can be recovered in a legal action, which may influence the decision process with respect to copyright protection. In general, a copyright holder can recover either actual damages or "statutory damages." Statutory damages are damages set by the statute, and they are generally between $750 and $30,000, but can be as high as $150,000 in a "willful" case. Because it is exceedingly difficult to prove actual damages -- as you will learn from my forthcoming economics discussion -- many opt for statutory damages. Of course, that is if the action goes through a trial, and given that many of these cases settle, the copyright holder is by no means always going to receive that amount. Given that recovery of attorney's fees and costs is not assured in these cases (it is left to the discretion of the judge), it's even possible that it would cost more to enforce the copyright than could be recovered in the case.

The main purpose of protection and enforcement is an economic concern, and the economics are relatively convoluted. The analysis has always started from a baseline: A creation is protected so that the author can profit from it, and anyone else who is distributing or using the product is violating that author's right. This was pretty straightforward with older media. If someone else is re-printing and selling my book without paying me for it, then that printer is making money from my work without my consent. Even if that printer is printing the book and giving it away for free, that is still, theoretically, hurting my sales. After all, who would pay for something they can get for free, right?

Well, in today's reality, this has become far more complex, and the arguments are numerous. The internet's distribution power and ease of replicating digital files has made piracy much simpler and also far more likely to be done for free. Some argue that rampant piracy is killing the industry, as no one would purchase products they can get for free. Others argue that having some content floating around may in fact entice additional people to purchase the product, which is often countered with the "demo" argument. Some argue that those who pirate wouldn't have bought the product to begin with, which is often touted by those who favor exposure of content to the maximum audience. This is often countered with the simple point that if they weren't willing to pay for it to begin with, why should they have the benefit of free use? Many of these arguments are circular, and looking to the practical economy, there seems to be some element of truth in most of it.

Then, there is the issue of public relations. The RIAA has taken a beating in the wake of their hard line approach to music piracy. On the other hand, if there's no reason to fear enforcement, then piracy will be rampant. It's a risk vs. reward analysis. If the risk is minimal compared to the reward, then people are likely to take the risk. On the other hand, if the reward is minimal for a substantial risk, then people are unlikely to take the risk.

Managing the various elements is a balancing act. Companies have to balance the cost of enforcement against the cost of piracy, as well as the risk of negative publicity against the risk of being perceived as a pushover. There's an awful lot to consider. The enforcement game will likely never end, as it's equally likely that piracy will never end. From the rights holder's perspective, it's the only way to be certain that you'll be the one to make money from your hard work, at least until someone finds a better solution.

Mark Methenitis is the Editor in Chief of the Law of the Game blog, which discusses legal issues in video games. Mr. Methenitis is also a licensed attorney in the state of Texas with The Vernon Law Group, PLLC and a member of the Texas Bar Assoc., American Bar Assoc., and the International Game Developers Assoc. Opinions expressed in this column are his own. Reach him at: lawofthegame [AAT] gmail [DAWT] com.

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