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LGJ: Come As Your Avatar, Smells Like Lawsuit? Nevermind
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: The well publicized dispute over the use of an avatar of Kurt Cobain in Guitar Hero 5 has provided a good backdrop to discuss the 'right of publicity.' For anyone who doesn't want to take time to read the stories, here's a summary. Guitar Hero 5 includes Kurt Cobain as an unlockable playable avatar, much like previous titles in the series have done with other rock stars. Shortly after release, Courtney Love expressed her distaste at the use of Kurt, and Activision has stated Love signed an agreement allowing the use. Since then, other former Nirvana members have stated they think the avatar should be limited to performances of Nirvana songs. Kurt's in-game likeness is governed by the part of the law called the 'right of publicity,' also called the 'right of personality' or 'personality rights.' In the US, that is unfortunately a complicated subject. Unlike other intellectual property rights, the right of publicity is governed by the states, not federal laws. So, unlike copyright or trademark, the exact rules of the right of publicity game change in every state. This, of course, makes the topic difficult to discuss and analyze, but there are some general theories about the right that can be discussed on a universal level.
LGJ: You down with FCC?
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: With its proposal for universal ratings, the FCC is in the news again. Yet, despite its filings having become a gold mine for breaking news, from bigger Slims to the secrets of turntablism, many people are not entirely familiar with what exactly the FCC does -- beyond, of course, Family Guy's take on the organization.The Federal Communications Commission was created by the Communications Act of 1934 as the successor to the Federal Radio Commission. The FCC was originally tasked with managing all non-governmental use of the radio waves, as well as managing the telephone infrastructure. The initial rationale for managing the airwaves was relatively straightforward: no one could own the air or frequencies, and unless there was someone managing the use of the airwaves, broadcasting would fall into chaos. (Just imagine if there was no system in place to determine and assign broadcast frequencies.) More importantly, there was a strong hope that the telephone system would work on a national level, and so consolidating management of these two key communication forces made sense. Over time, the organizations control has extended to all uses of the wireless spectrum, as well as all interstate and international telecommunications.
LGJ: Welcome to the Big Leagues of Deception
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: There are, in the legal profession, certain kinds of activities that really make a statement after the fact about just how big a company is. One of those activities is using subterfuge in either getting a deal done or in filing with the government. When I say subterfuge, I don't mean with the intent to defraud anyone, but rather with the intent that things be kept a secret. Walt Disney used dozens of companies to acquire the land that would later become Disney World, and now Sony is using alternate entities to file for FCC clearances on the PS3 Slim. Of course, I'm sure many of you are wondering how all this works, and why companies go to all this trouble. The why is a slightly simpler answer than the how. Put simply: the company doesn't want the public to know. The reasons for the why are pretty varied. In Sony's case, they were trying to preserve the surprise we've talked about in previous LGJ columns. In the Disney case, they were trying to prevent people from either buying up the land they were trying to acquire to then re-sell it to Disney at a huge markup or prevent people from prospectively buying up all the land around the development. While a theme park is an extreme example, the same could apply if, say, Microsoft, decided to build a new campus somewhere other than Redmond.
LGJ: First Sale and Digital Distribution
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: Ever since the Glider opinion was handed down late last year, there's been a resurgence of calls for courts to uphold the first sale doctrine with regard to all software. One such suit, featured in the latest Jurimetrics, concerned ligation over consumers as "owners" versus "licensees," since different copyright rights are granted based on the particular status. The court determined that players were licensees, thus negating certain rights of owners. We've talked about first sale before in LGJ, but generally in the context of retail products. In the context of retail games, no matter where you stand on the "owner" versus "licensee" position, nothing is stopping you from reselling the copy of the game you purchased. Digital distribution changes this dynamic dramatically, however. As digital distribution mechanisms become more and more popular, it seems inevitable that the courts will have to eventually weigh in further on the owner versus licensee question. In fact, if those who run digital distribution systems wish to steer well clear of potential government involvement in their businesses, inclusion of certain features may mitigate the first sale question so that consumers have more rights and aren't in need of protection in that regard.
LGJ: And still, they want to take away our games
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: As of late, it seems I've become sort of a policy spokesman for issues concerning the government intervening in the game industry, especially in the wake of my debate with Jack Thompson. However, the discussion over whether violent content can be policed under the First Amendment is getting tired, and the courts have universally declared "no" at this point. Rather than go down that road again, I want to discuss two new ways that the government could attack games; one of which came up in the debate itself. The first is probably the more mundane of the two, and it's the seemingly frequent specter of imposing political correctness on games. In fact, this issue came up yet again this week as a discussion related to not just Resident Evil 5, but also Left 4 Dead 2 and Call of Juarez: Bound in Blood. Of course, the claims here were racism and cultural insensitivity. The irony is that now that the games themselves are seemingly more inclusive of characters other than white males and large breasted women, the assumption is automatically that use of more diverse settings and characters must have malicious motives, rather than crediting the industry for finally being more inclusive.
LGJ: The new meaning of 'player vs player'
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: Terra Nova recently posted a note about a Craigslist case that could have some impact on the gaming space. It relates to theories about how players could sue other players, which is something that briefly came up in a World of Warcraft suit two years ago (which settled before going to court). The result of the case was, in no uncertain terms, that a lawsuit under a third-party beneficiary theory could be entirely blocked by a well written Terms of Use. That's not to say that all cases involving third parties are barred, as another World of Warcraft legal battle, the Glider case, was successful; though primarily based on tortious interference. So, while some potential sources of player-versus-player lawsuits may be now foreclosed, I still think there's a range of potential suits that could become prevalent.Of course, this theorizing requires a basic understanding of third party-beneficiaries, and that goes all the way back to the basics of contracts. In a simple contract, there are generally two parties. A basic sales transaction is probably the simplest contract. Say you go to GameStop to purchase inFAMOUS: You give the clerk your $59.99 plus tax, and he gives you the game and a receipt. That was a basic contract for the sale of goods, and the receipt is evidence of some additional terms of the contract for sale, such as the return policy.
LGJ: Is the NDA still viable?
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: It was about E3 time last year when I gave an overview of our old friend (or enemy) the non-disclosure agreement. After all, it's those NDAs that are responsible for keeping the surprises as surprises. This year's E3, however, was a solid demonstration of the failure of the surprises mentioned last year, with Sony bearing the brunt of the leaked information. While I don't think this is necessarily an indication of the health of the NDA concept, it is a good opportunity to showcase some of the weaknesses of the NDA.I'm willing to assume that most people have heard the term "iron-clad contract." In that regard, I have some unfortunate news: there's really no such thing. Even a perfectly drafted contract that addresses every possible contingency still requires that the parties hold up their ends of the bargain. Otherwise, you're going to have to go down an enforcement route like litigation. The idea is to make the penalties for violation of the agreement something people want to avoid to encourage compliance with the agreement, and in the game industry context, as well as much of the tech sector, certain kinds of disclosures are simply difficult to deal with.
LGJ: A case of tortious interference
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: No, it's not a symptom of the dreaded Swine Flu, but there has been a seeming rise in disputes concerning "tortious interference" in the games industry as of late. The most notable example being the Scratch: The Ultimate DJ dispute. Of course, from the first appearance of that curious word "tortious," there's been much confusion; be it over the term's actual meaning or it being incorrectly interchanged with the non-legal word "tortuous" (meaning winding or twisting). The word "tortious" comes from "tort," which is a civil wrong that results in damages. So, "tortious interference," from a definitional standpoint, is when someone intentionally interferes in someone else's business or contractual relationship and causes civil damage. These two varieties of tortious interference are not the same on a more detailed level, however.
'Law of the Game' lawyer explores GameStop used vs. new controversy
Joystiq LGJ columnist Mark Methenitis has written a piece analyzing the claims posited earlier this week by Kotaku surrounding the legality of GameStop's employee "checkout policy" and found that, in his professional opinion, the illegality of this practice may be in question for a variety of reasons. The main question at hand: Is GameStop deceiving customers who purchase employee-played (read: "used") games as new? His answer: Much like most legal matters, it really depends. Depends on what, you ask? For one, Methenitis says games sold at GameStop as new where, "the disc, packaging, or other materials are damaged in any way, or if one-time use download codes are used" could be "a deceptive act." The problem with minutiae such as this, he says, is that damages are so small (monetarily speaking) that a lawsuit would be ineffective in court. Furthermore, he says that laws put in place to protect consumers from used vs. new item fraud are often based on products that degrade rather than "nebulous" products like DVD discs and, to a greater extent, cartridge-based games (such as Nintendo DS titles). With legal ambiguities surrounding this issue, we'd simply suggest buying used titles from your friendly, online click-and-order retailer in the meantime, rather than contributing to billions of dollars in used game sales at your own and other gamers' expense.
LGJ: Is game censorship the new trade barrier?
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: Thinking about the recent rash of international game censorship issues, I noticed a pattern: Games banned abroad are almost exclusively American (having, at least, significant ties to US companies). Games don't tend to be banned in the countries where their respective developers and publishers are located. So, does this speak to the attitudes of the country and free speech? Or, is it a ruse for creating a trade barrier? More importantly, could an entire trade war arise from video game content restrictions?There's a fair amount of groundwork that goes into understanding this discussion, unfortunately, but it's a topic that needs to be discussed.First, there are two major areas of the law that need to be understood: international free speech regulations and international trade regulations. I know regulatory discussion is less than fascinating, so allow me to present you with the short and sweet version.
LGJ: Serious games with serious regulations
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: One of the areas in which the law firm I work for focuses on is international trade, which many of us might assume doesn't have a significant impact on the video game industry. Surprisingly, there is a growing sector of the industry that has a great potential for international trade problems. That sector is often referred to as "serious games" (or games with a purpose other than pure entertainment). In fact, there are a few specific areas that serious game developers need to be particularly wary of to avoid problems with US Customs.Before getting into the specifics,let's delve into a brief overview of international trade regulation. After all, the new administration has noted trade enforcement as a top priority, so it could potentially impact many different people in the community; like it impacted the mod chip importers not too long ago. In short, the primary areas of trade regulations are on imports and exports, although other related areas like the Foreign Corrupt Practices Act are starting to get a lot more attention. Imports (in other words, anything you bring into the country) have to be classified so that the proper taxes can be paid on the goods. Exports (anything you send out) have to be classified so that the government can track and prevent certain products from going to certain people and places. These are two different concerns, but if you don't follow the rules, it can land you stiff fines, penalties, and even a prison sentence.
LGJ: Unlicensed games and the DMCA
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: Fans of retro games or even just videos about retro games are familiar with the "unlicensed" games that existed on bygone systems like NES and SNES. These titles include a number of "Bible games" and more risque offerings like Bubble Bath Babes (box art pictured above). What's of particular interest to me, though, is how unlicensed games were ever "allowed" in the first place, and how more recent legal requirements more or less eliminate the possibility of new unlicensed titles in the retail marketplace.We can trace unlicensed games back to the US game industry's so-called "crash" in the early 1980s. At the time, the console market was basically an open playing field. If you wanted to make a game for an Atari console, you just made it. This led to the widely publicized over-saturation of low quality titles, which killed consumer confidence in the home games market. Remember, back then, there was no Joystiq.com -- let alone the other copious resources used to research a game before purchasing. So, when Nintendo came to the US and almost single-handedly brought the video game industry back from the dead, the company decided to take certain quality control measures to prevent repeating Atari's mistakes.
LGJ: The Flash game quandry
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 all somewhat familiar with the endless stream of Flash games featuring some famous person: Presidential Paintball, Super Obama World, Whack Britney Spears, Paris Hilton Jail Escape, etc. An interesting question was posed to me the other day about these games: Is there a quarrel over the right of publicity related to Flash games? Obviously, retail games featuring certain public figures, such as professional athletes, are paying for the use of those celebrity likenesses. Flash games, however, are positioned much differently, and it's one of the more complex relationships between differing legal theories I've seen in the gaming sphere.While we've discussed the right of publicity before, it's worth reiterating that the concept is basically the equivalent of a trademark for a famous person's likeness. Think of it like a brand name helping to sell a product. A lot of people will buy a game just because it's made by Nintendo. Similarly, a lot of people might buy a game that appears to be created or endorsed by someone; be that a particular game developer or a celebrity. How many people initially bought Madden Football because of Madden's attachment to it? Probably quite a few. There's certainly a good strategy in using celebrity to sell a product.
LGJ: Piracy and the economy
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: We stand in an unusual and unprecedented place in history. We face a global economic crisis and are simultaneously in the latter stages of a technological revolution that started with the internet explosion of the 1990s. Because of present circumstances, we have the potential to fall into a piracy cycle that will hurt both the industry and the consumer. I'm hoping that this column will, at a minimum, expose the potential issues concerning this cycle, so that people can consciously avoid taking a dangerous path. We're already seeing increased talk about piracy and actions against "pirates," but I don't think we're anywhere close to hitting rock bottom.Obviously, a down economy means people are more concerned about their money, have less money, and, in many instances, have lose their sources of income all together. On the opposite side of the table, the loss in spending leads to a loss of revenue for companies, which leads back to job loss. So how does piracy fit in? Many people may turn to piracy to get the content they no longer can afford, or take the opportunity to take something for free to save their money. On the converse, companies in the intellectual property realms, like game developers, may see the opportunity to increase some revenue through enforcement actions against pirates. And here's where the cycle begins.
LGJ: Jack Thompson's Utah 'game bill'
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: Right on cue, after this week's previous LGJ, Jack Thompson's Utah bill finally made its public appearance. Surprisingly, the bill amounts to only 4 lines of text that will be edited into Utah's existing Truth in Advertising Act, a form of deceptive trade practice regulation. The entire relevant text of the statute is: 13-11a-3. Deceptive trade practices enumerated -- Records to be kept -- Defenses. (1) Deceptive trade practices occur when, in the course of a person's business, vocation, or occupation that person: (u) (i) advertises that the person will not sell a good or service labeled with an age restriction or recommendation to a person under the age restriction or recommendation; and (ii) sells that good or service to a person under the age restriction or recommendation. So what does this mean for the industry? I believe this bill has far more bark than bite, but it's more complex than a simple analogy. There are some potential consequences for electronic retailers based on this new potential regulation, but it also looks like this provision leaves a number of major loopholes that retailers can take advantage of. As the bill hasn't passed yet, this all may be moot if the Utah legislature opts against the regulation, but it's certainly worth analyzing in the interim.
LGJ: More game laws?
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: It's early 2009, we've just elected a new President, and there are quite literally a mountain of problems to be addressed on Capitol Hill. Our economy has been in substantial turmoil for roughly six months, with some problems stretching back for years. Many states are at or near bankruptcy. This economic crisis has, by now, hit every country on the planet to some degree. So, our legislators have spent the last two months rushing to put together proposals to regulate video games. No, no one's undivided attention has been on the economy during this complete mess. Instead, since the start of the year, it seems there has been an explosion of potential new video game regulations, from Jack Thompson's bill in Utah, to New York, to the US Congress, to Australia -- just to name a few. And that's in addition to issues like the FTC's rumblings about DRM, which I've mentioned previously. While this boom in regulations and potential enforcement may be great news for sites like GamePolitics, it's potentially bad news for game developers and consumers, not to mention the taxpayers who are footing the bill for all of this. Of course, these laws are also coming from a number of different directions and under different theories, so I thought it might be a good time to give a short take on each and predict which directions things could be going.
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: 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.
