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LGJ: FTC could target EULAs
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: A few weeks back, I mentioned that the FTC was looking into regulating DRM. Well, in part on some discussions at the Game::Business::Law Conference, I have a sneaking suspicion that the FTC likely won't stop with DRM. In fact, I would be willing to guess that within the next few years, the often maligned End User License Agreement ("EULA") may fall into the realm of being regulated as further "consumer protection." Is it necessary? Well, that's a matter of opinion, really. The only certainty is that it will be able to bring in additional revenue for the government, which is certainly short on cash these days.If the FTC opts to regulate EULAs, I see three probable scenarios to accomplish its goal. Before I get ahead of myself, I should describe what the theoretical goal of consumer protection is: to prevent companies from taking advantage of consumers. Generally, though, it isn't necessarily the average consumer who's seeing the greatest benefit from the regulations. Often it's the most uneducated consumer, which usually means the regulations tone things down to a level of near absurdity.
LGJ: Virtual Taxation
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: It seems around this time every year, with W2s and 1099s filling mailboxes, that someone thinks it's a good idea to bring up the idea of taxing the virtual world. The irony really is that most of these discussions are far from complete and often only address one potential viewpoint that could be taken. The latest commentary comes from the Washington Post (via GamePolitics) with further follow up on New World Notes based on a recent publication by the IRS. Their basic contention is that the essential difference in the Terms of Service between the Second Life model and the more traditional MMO model (i.e. World of Warcraft, Ultima Online, Everquest) would mean different tax treatment. I don't think it's nearly so cut and dry.
LGJ: Pirates are grumpy, underutilized customers?
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: This week I've been at the Game::Business::Law Conference, and one of the speakers was Jason Holtman, Director of Business Development / Legal Affairs for Valve. Jason set out a fascinating theory on piracy: The majority of 'pirates' are just underutilized customers. This certainly sets forth an interesting business proposition, but also interesting possibilities for legal strategies related to piracy management and IP protection. I do want to caveat that this is building on a theoretical basis, and that doesn't necessarily mean any of these strategies is optimal for any given company. I want to summarize Jason's viewpoint to better frame the discussion. His view, and his research suggests, that piracy is heavily mitigated by ensuring worldwide cross-market releases.
LGJ: Here comes the FTC
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: GamePolitics is reporting that the Federal Trade Commission is ready to look into "consumer protection" related to digital rights management tools. To many people, this may seem like a great idea. In general, it's not. It would be nice to give consumers some protection from some of the most draconian or horribly flawed DRM systems that have been put into use. On the other hand, those of us who have been around the "government regulation" block know that these protections rarely solve the problem they set out to resolve, and in turn, generally put more hurdles in the way of those who want to get a product into the marketplace, which raises the cost of production and usually the consumer price, too. Consumer protection regulations do just what they sound like: they protect consumers. There are hundreds of these regulations at both the state and federal level in the U.S., and most are targeted at an industry level. There are consumer protections related to everything from debt collecting to auto repair to purchasing a franchised business. Many of these laws were enacted in response to a perceived or actual abuse by producers toward consumers. So, the government set out to level the playing field and to give consumers a way to deal with their grievances. All in all, the intent was good.
LGJ: Wrath of the Discrimination King
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: GamePolitics recent posted a report that some employers may be 'discriminating' against World of Warcraft players. In fact, there have been longstanding reports of gamers, generally, not being the most favored employee in some workplaces. Of course, as soon as anyone reads the word 'discrimination' they immediately think 'lawsuit.' Whether that's an unfortunate byproduct of the direction of the American legal system or something else entirely is a discussion for another day. Today, rather, I want to take a look at the question of whether gamer discrimination could give rise to an employment discrimination lawsuit.
LGJ: Revising Piracy Strategy
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: I've talked about piracy in a number of LGJ pieces over the course of 2008. In most of those, I've criticized many approaches to stemming the tide of piracy, not only in games but in other related media as well. I'm not sure if I have any readers at the RIAA, but it appears the music industry has decided to opt for a strategy more in line with what I've described, according to the Wall Street Journal (via GamePolitics). It's definately a move in the right direction for a number of reasons, but would the same apporach work for the game industry? And would it be the right approach?Let's start by examining the reported new RIAA strategy, which really makes two key changes. First, it alters the strategy to request ISPs issue warnings to file sharers, and then those who continue stand to have their service cut off. The second change is that this strategy goes into action when the RIAA, to quote the article, 'finds a provider's customers making music available online for others to take.' In short, rather than focusing on the demand, they're focusing on the supply. The RIAA does reserve the right to sue repeat offenders, but by and large, they're using the threat of loss of internet as their main punishment rather than lawsuits.
LGJ: Regulating Virtual Currency
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: We're seeing quite the economic turbulence in the United States as of late, and financial problems lead to two things: 1) further regulations on the issues that caused the problem; and 2) people seeking out new sources to exploit to make a quick buck. Plenty of people have written article upon article about all of the various economic tools that have been exploited to bring us to this point. I, however, would like to talk about one of those potentially exploitable areas people may move toward, that being the currencies that exist in virtual worlds and MMO games. I figure it's only a matter of time before what I'm about to describe occurs in one manner or another, which could very easily turn the tide of regulatory scorn from Wall Street to Azeroth or Second Life.I guess the best place to start is from something I hope most people are familiar with on a basic level: insider trading. In short, insider trading is when people with non-public information trade stocks to their benefit. It's regulated as a combination of a breach of fiduciary duty to the company or a misappropriation of information. In short, it's an unethical way to profit from inside information, and generally frowned upon (though some economists disagree with regulating insider trading). But insider trading is about stocks and securities, so where am I going with this?
LGJ: Class Dismissed
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: It seems almost weekly a new article appears on Joystiq referencing yet another class action filed against the game industry. If it's not consoles, it's kick pedals. As a result of this class action proliferation, I was asked by a reader to explain this whole class action concept in a little more detail. I'm sure most people have some idea of the basic concept behind the class action, but not necessarily why it's become the weapon of choice, so to speak, of certain disgruntled gamers or what these lawsuits actually entail. The basic idea behind a class action suit is to resolve a large number of suits with similar elements in one proceeding, rather than requiring each to have its own proceeding. These similarly situated plaintiffs make up the 'class' in the class action. Taking the red ring suit as an example, there are a large number of people whose Xbox360s red ringed who could file suit under the theory presented. Rather than force Microsoft to potentially deal with each suit individually, they can deal with that 'class' in a single legal action. In reality, that's a gross oversimplification of the process.
LGJ: The Name Game
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: I received an e-mail this week asking a common question I've neglected to answer in LGJ to date. The question is generally what laws prevent a game developer from using actual car/gun names in their titles? There's also a follow-up question that generally asked about whether this is the same in movies, especially as it relates to cars. The answer to this question is relatively straightforward, and it's one of trademark law. At least, the answer starts in trademark law.
LGJ: User Content Continued
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: Between Guitar Hero: World Tour and Little Big Planet, user content is king going into this holiday season. Last time on LGJ, we talked about the issue of the rights of the user. This week, I wanted to take the opposite approach and hopefully outline the legal issues that make Microsoft and Sony's lawyers cringe. These are the reasons for the complex terms of use and mildly mysterious disappearances of some content from the sharing servers. While there are a myriad of potential legal theories that could be employed if someone wanted to sue based on user content, I'm going to focus on what I think are the more likely and/or more plausible ones.In case you're still living in a dial-up world and haven't experienced user content, the basics are fairly simple: People who play the game create content and upload it for others to use. In the games I mentioned above, that content is put up on servers for the game maintained either by the network (PSN, Xbox Live) or by the developer/publisher. This content varies by game, but it may be new levels, scenarios, maps, or songs. The content is based on in-game editing tools, and has been really successful in games like Halo 3 with Forge. It can also help develop a community around the game and extend the shelf life of the title.
LGJ: User Content Creation Crisis
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: It appears there has been a bit of a controversy over the recent changes to the PSN Terms of Service with regard to user-generated content, which seems to be at least in part tied to the release of the Sackboy epic Little Big Planet. Of course, user-created content is nothing new, and neither is the management of the licenses associated with that content. However, it seems like as good a time as ever to discuss the issue of managing the intellectual property rights of user created content and what that can mean for you, the user, and them, the game companies. I guess we should get back to basics, though I'll skip the intellectual property primer this time around. When users create content for games, they're creating intellectual property that would likely qualify as a derivative work. After all, what good is the content outside of the game? Some types of mods are more derivative than others, depending on how much is taken from the original work. But the point remains, it's at some level a derivative work. In this case, however, there is at least an implicit authorization for the user to create the work based on the virtue of the developer giving the user the tools to do so. In this way, we're not dealing with a situation identical to, say, machinima.
LGJ: First Sale, Re-Sale, Everything's on SALE!
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: While it seems like the rest of the known universe is busy talking about subprime mortgages and bailouts, the game industry and associated news outlets have been talking about sales. Specifically, they've been talking about resales, and how that's affected by the first sale doctrine. The most recent development has been talk of incentives to buy Gears of War 2 new, but even that's in the wake of the recent comments from Marty O'Donnell, which has been commented on in other columns on Joystiq. Of course, none of this quite gets to the root of the issue: What is this first sale doctrine and why does it exist? More importantly, assuming it applies to all kinds of software, is there another way to accomplish what we're doing now within those legal constraints? So, let's start at square one. The first sale doctrine is a rule which says, in short, that once an item that is copyrighted is first sold, then the author no longer has the ability to prevent the resale of that item through copyright law. Without the first sale rule, a copyright holder could theoretically continue to control the item because copyright includes the right of distribution. The first sale doctrine, however, does not protect someone who bought an item if they're illegally reproducing it, for example. It only allows for the legitimate resale of the item itself. The courts have even recently held that this idea extends to demo CDs marked not for resale.
LGJ: The PRO-IP Act and Gaming
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: Congress has recently passed the Prioritizing Resources and Organization for Intellectual Property Act (the "PRO-IP Act"). While it has not been signed by the President yet, it seems as it's only a matter of time before the Act has the force of law. The PRO-IP Act does three things, generally: 1) it increases the penalties for infringement by expanding what is considered a 'work;' 2) it broadens the ability of the government to permanently seize goods; and 3) it creates an Intellectual Property Enforcement Coordinator, a new cabinet position whose sole job is to increase intellectual property enforcement. In short, it's a load of bad news for consumers, but really, it's not that much good news for many intellectual property owners either, as I'll explain. Because this act is so broad and will be applied in so many ways, I'm actually writing two articles about it. Here on Joystiq, I will be covering the PRO-IP Act as it relates to gaming while on Law of the Game, my blog, I've (shameless plug) posted an article discussing the act as it applies to other media. I consider myself to be in a pretty neutral position with respect to weighing the pros and cons of various IP regulations. I'm a consumer, I represent producers, and as a writer, I'm a producer myself. Being in that position, I've always admired the game industry for typically not being in favor of or enforcing the most draconian regulations to their fullest extent. In that respect, many game companies and gamers seem to understand that their relationship is symbiotic. Without one, the other would not be able to function. And with that understanding, the majority of gamers and game producers see the need for some intellectual property protection but also see the need for reasonable protection to balance the interests of the producer and consumer. And in that respect, the PRO-IP Act starts to shift the balance in ways that aren't necessarily desirable for either, but are certainly not desirable to the consumer.
LGJ: Mo' Madden madness
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: New developments in the Madden franchise's ongoing legal troubles have provided a unique opportunity to talk about the so-called "right of publicity" that has become an issue with retired NFL players. As reported by GamePolitics, there are allegedly documents showing that EA altered aspects of Madden to keep from having to pay the NFL Player's Association (NFLPA), which kept the NFLPA from having to pay all of the former NFL players that appear in the game. The lawsuit is by the players toward the NFLPA to recover royalties for the use of their likenesses. The idea that EA would have to pay the NFLPA and the NFLPA would have to pay the players for the use of retired players likenesses rests in the "right of publicity."The right of publicity is rooted in the concept of privacy, and has evolved in part from the ideas of libel, slander, and "passing off," which is often associated with a trademark-like protection. The basic concept is that you alone have the right to profit from the use of your likeness, which may include your name, physical appearance, voice, personality or other defining characteristics. So, if Nintendo wanted to make "Super Mark-io Brothers" with me as the main character, then they would have to pay me royalties. But it gets a lot deeper than that.
Law of the Game on Joystiq: Activision's stealth enforcement
Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games: There's been a torrent of discussion about a series of mysterious Activision anti-piracy actions as of late. Given the rumors and secrecy, I thought I should give my thoughts on the matter. For the record, this is just speculation. I don't have an inside source at Activision that is feeding me information, nor have I spoken with any of the alleged pirates. Hopefully, my analysis of the activity will give a little clarity to those of you trying to piece together this puzzle.Here's what we know: Activision had suits against six people, all of which seem to have settled out of court. The cases had something to do with piracy but did not involve file sharing. The rest of the goings on were largely a mystery, other than one of the defendants alleging that he was encouraged not to seek counsel. So, that means there are far more questions than answers, but I think I have a pretty good theory to resolve most of these outstanding questions.
Law of the Game on Joystiq: Rare footage of the DRM in its natural habitat
Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games: Digital Rights Management (or "DRM" for short) is back in the news in a big way with the recent Spore fiasco. DRM, much like a Spore creature, is a quirky animal, with legs of technology, a torso of law, and arms of business, but it doesn't always have a head on its shoulders. But like so many other things that potentially put consumers and producers at odds, the viewpoints on DRM are extremely polarized with almost no middle ground. So this week I wanted to take a look at DRM, why it exists from a legal and economic viewpoint, and most importantly, try to get hold of that slippery middle ground.Thinking back to the days of the floppy disk, piracy wasn't yet an overwhelming concern. Yes, it was easy to bypass the write protection on a floppy, but without an internet, you had to find someone who had an existing copy in real life. For the majority of the population, this wasn't an option. Then we entered the initial CD-ROM phase, and at the time, the CD-ROM was a pretty secure media. The idea of a low cost home CD burner and blank CDs were years off, and the Internet was still in its infancy, so CDs were pretty safe from piracy well into the 1990s. It was the proliferation of CD burners, high speed internet connections, and peer to peer file sharing (Hi Napster!) that made software license security a big issue for all software companies in the late 1990s, and things haven't slowed down since.
Law of the Game on Joystiq: Tournamentality
Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games: I get a surprising number of questions about video game tournaments and whether those constitute gambling. So today I'm going to discuss the matter specifically. I want to state up front that because this varies from state to state, please consult an attorney before attempting to set up a tournament. If you can't figure out what the laws in your state are, check with the state's Attorney General. Even if you have seen other tournaments in your area, you need to know what rules you have to play by to host your own. It's far better to be cautious than to be in jail. You've been warned. Now, back to our discussion...Professional sports are legal and gambling (in general) is not in the United States. Video games, however, seem to be consistently stuck between the two. Part of this is due to video games being, in relative terms, the new kid on the block. And part of this comes from the structure of the tournaments themselves. The last bit comes from the skill-chance continuum that games are placed on. But let's take each of these issues one at a time.
Law of the Game on Joystiq: Trademark infringement
Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games: There's been a lot of talk about copyright piracy lately, largely from a few high profile convictions. What we've been short on lately is some high profile trademark infringement suits, but trademark piracy in the gaming world can and has been as rampant as copyright piracy. In fact, the concept of what all constitutes trademark infringement isn't even as well known as copyright infringement. Everyone knows about Napster and warez, but these are all copyright issues. So I'd like to take some time to talk about trademark infringement and piracy.We've been through the basics of trademark before, and that's a good place to start if you're a complete trademark neophyte. However, with a basic understanding of what is trademarked, it's easy to see the areas where trademarks can be infringed. Basic infringement is based on the idea that someone will take advantage of a trademark to confuse the consumer into purchasing their product based on the reputation of the trademark they're infringing. Put into simpler terms, if you believe Nintendo is a good brand, then you'd be likely to buy a Nintendo product. Therefore, if I make a product and put "Nintendo" on it, then you'd be likely to buy my product because of the illusion that it's a Nintendo product. I get the benefit of selling more product by infringing Nintendo's trademark, so if there wasn't a penalty, trademarks would be infringed on a regular basis.
Law of the Game on Joystiq: The evolution of Pub Games
Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games: Despite the relatively small amount of time I've had to play them, I've so far enjoyed Fable II's Pub Games, especially Fortune's Tower (pictured above). The idea of minigames has been around for ages, but Pub Games adds deeper elements than the norm, as well as pre-release hype for Fable II. Of course, this begs the question: Is this a sign of things to come? I could certainly see other RPGs following suit, pre-releasing a related Xbox Live Arcade, PlayStation Network, or WiiWare game that interacts with the core game, like a Final Fantasy XIII card game stand-alone. If this becomes a trend, then developers will be looking to the next evolution of this idea. I would imagine the next step would be external games that affect MMO environments; and beyond that, perhaps gambling with real currency. Think of the evolution this way: You start with a game like Texas Hold 'Em, where your play only affects that game, then the next logical step is something like Pub Games, which affects you alone in a virtual environment. From there, the evolution would logically move to impacting a multiplayer virtual environment and, ultimately, to affecting a real world environment, specifically your bank account. It's these last two steps that present some legal issues.
Law of the Game on Joystiq: Let the payment fit the damages
Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games: There are a lot of theoretical claims an injured party could make against a game manufacturer, but the one I'd like to focus on is the world of products liability. After all, the crux of most of these claims is "this video game product caused this person to do this act, which resulted in damages." It would certainly be a novel claim, and one that tweaks the traditional definition of products liability, which surprisingly can be applied to video games outright in certain circumstances.The reason I've picked products liability is because if the current laws were expanded to account for the kind of civil liability for game makers that has been talked about, then products liability would be a logical place to put the new causes of action. Not to get ahead of ourselves, it's probably a good time to explain what products liability is: Products liability is the area of the law where parties on the chain of a product, from the retailer to the manufacturer to the manufacturers of sub-assemblies or parts, can be held liable for damages caused by their products. So, if for some reason the video game console you're playing randomly exploded, this would be the theoretical means for recovery.
