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Davis LLP Web Logs or "Blogs" are intended to provide general comments on developments in the law. They are not intended to be a comprehensive review nor are they intended to provide legal advice. Readers should not act on information in the blogs without seeking specific advice on the particular matter. Please contact a lawyer listed on the blog pages for additional details, or to discuss how blog information is relevant to a specific situation.

Video Game Law Blog

» February, 2006

INAPPROPRIATE VIOLENCE

You may recall that in late January we covered Utah's violent video games bill (HB 257). Well, it was passed overwhelmingly (56-8) by a vote in the Utah House of Representatives last week. The bill, which seeks to stop access to 'inappropriate violence"? by minors, will now be examined by Utah's Senate. The constitutionality of the bill remains in question.

our previous coverage is here

current coverage at  http://shorl.com/buprygumidreki

P.S. Game Politics has developed a video game legislation tracker, to help keep an eye on things, at  http://www.gamepolitics.com/legislation.htm

Immersion And Electro Source Settle Patent Dispute

Immersion, which develops and licenses touch-feedback technology, has reached a settlement with Electro Source, maker of Pelican video game accessories and one of the top three sellers of video console accessories in the United States. This settlement comes after years of litigation over the 'rumble' effects that Immersion patented for use in its third-party game controllers, following litigation filed back in September 2004.

In accordance with the terms of the settlement, Electro Source will now have a worldwide license to Immersion's patents for vibro-tactile devices in the consumer gaming peripheral field of use. In consideration for this licence, Electro Source will make royalty payments to Immersion based on Electro Source's sales of spinning mass vibro-tactile gamepads, steering wheels, and other game controllers for dedicated gaming consoles such as the Sony PlayStation and PlayStation 2, the Nintendo GameCube, and the Microsoft Xbox and Xbox 360, in addition to certain other remuneration.

Previously, Immersion won a lawsuit against Sony over two contested patents that Sony inadvertently violated in its Dual Shock controllers for PlayStation and PlayStation 2, though this lawsuit is being further contested. Immersion also settled against Microsoft in a case over similar Xbox-related patent violations, thanks to Immersion's wide-ranging patent on the concept.

Coverage at http://shorl.com/gegysipiroto

ATARI PAYS $300,000 TO SETTLE LAWSUIT

In August 2004, American Video Graphics sued Atari and various other publishers for infringing US Patent No. 4,734,690 (a method for spherical panning). A similar lawsuit was also filed against console manufacturers.

Atari's latest financials reveal that the company paid $300,000 to settle the lawsuit. As part of the settlement, Atari received an irrevocable, nonexclusive, worldwide license to use, publish, sell, etc. products covered by the patents.

This lawsuit and others (such as the Immersion lawsuit involving force feedback technology) are a good reminder that developers and publishers can't always include standard techniques (such as 3D panning and zooming) or technology (such as force feedback) in their games and consoles, even if everyone else in the industry is doing it. 
Coverage at   http://www.shorl.com/boprehygrufrery (Gamasutra)

Activision Video Game Ads Found To Be Misleading

For anyone who's ever stared in awe at a TV commercial for the latest video game and thought 'I can't believe it looks that good!"?, well, you may have been right after all.

In a pivotal decision, the UK Advertising Standards Authority (the 'ASA"?) has declared that commercials for two Activision games - Call of Duty 2 and CoD2, the Big Red One - are misleading and must not be shown again. The decision comes in response to complaints from three television viewers who claimed that the graphics shown in the TV ads were superior to the graphics in the game itself. The ASA agreed, noting that the ads did not include any indication that the images shown did not reflect the quality of graphics of the games.

Of note, Activision did not deny that the TV ads featured scenes produced solely for the ads instead of scenes taken from the game itself. Rather, its unsuccessful defence was that using such pre-rendered footage was 'common practice"?, that it 'had not been told that it was not acceptable to use material created specially for an ad in this way"? and that it had 'acted in good faith."?

The decision is sure to be alarming for any video game publisher using rendered footage, whether in its TV or print ads.

Coverage at http://shorl.com/dufobigregifu

Legal Dispute Over In-game Advertising Resolved

The dispute between Valve, the publisher of Counter-Strike, and IGA Worldwide, an in-game advertising firm, has been resolved. The two companies had become engaged in a legal quarrel over ads for the Subway fast-food chain placed by IGA Worldwide into the online Counter-Strike game using third party maps, servers and mods. Apparently at issue was the fact that the ad campaign had been implemented by IGA Worldwide without permission from Valve.

The joint statement released by Valve and IGA Worldwide stated both that an amicable resolution had been reached, and also that 'ads in games such as Counter-Strike require permission from the intellectual property (IP) owner"?. In other words, Valve is making it clear that its permission is required before its games can be used for in-game advertising campaigns.

Coverage at http://shorl.com/figrujybrysohe

GMX To Tesseraction It Ain't Over 'Til It's Over

Last week we told you how Tesseraction was claiming victory in winning a summary judgment against GMX over their distribution of "Enigma Rising Tide."  Well, apparently victory is all in the eyes of the beholder...GMX fired back this week with a strong refutal of Tesseraction's claims.  GMX says the judgment was won against a consultant for GMX, not an employee of the firm, and thus doesn't reflect badly on GMX.  GMX also says Tesseraction's lawsuit against them was dismissed in October 2005 because of jurisdiction issues.  Tesseraction maintains that only parts of the suit were dismissed, and that lawsuits are being refiled in the UK, and says success is still imminent.  Meanwhile, GMX says it's contemplating suing Tesseraction for trash talking GMX on their website...

For more coverage, click here .

Marc Ecko's Getting Up Banned By Australian Ratings Board

Australia's entertainment ratings board, the Office of Film and Literature Classification, has refused to grant a rating for forthcoming Atari titleMarc Ecko'sGetting Up: Contents Under Pressure, thereby effectively banning the game from sale.

After having grantedGetting Upan "MA 15+" (Mature Audiences of 15+) rating back in November on the basis that,although the game contains strong violence and themes, it was suitable for gamers aged 15 and over, the OFLC reviewed the rating and determined that "this game promotes the crime of graffiti"?. The OFLC says that games will not be rated if they "include or contain detailed instruction or promotion of matters of crime".

The OFLC had particular problems withGetting Up's "realistic scenarios", where main character Trane learns about graffiti techniques and styles from five real life graffiti artists, and the fact that players are rewarded for putting graffiti on public buildings.

Atari Australia issued a statement saying that the publisher 'strongly disagrees with the board's decision, and defends the original classification by the OFLC"?. It has also stated its intention to contact Australia's Interactive Entertainment Association in a bid to get their support, claiming that the OFLC's decision "will impact the industry and is not specific or isolated to one company".

Australia is notoriously tough on games with violent or sexual content, with titles such asLeisure Suit Larry,Manhuntand Grand Theft Auto III also being refused classification.

Coverage at http://shorl.com/dihimygradene

WILL VISUAL SCIENCE SUE VIVENDI?

Scottish developer Visual Science has recently gone into creditor protection. The company blames its financial woes on Vivendi Universal Vivendi recently terminated its development agreement with Visual Science. Visual Science says it plans to use its remaining cash to sue Vivendi. Bring on the lawyers"?
Coverage at  http://www.shorl.com/fatevebrupudy

CHALLENGE TO MICHIGAN VIDEO GAME LAW STILL ALIVE

(a case summary)

The Governor of Michigan signedMichigan 2005 Public Act 108into law in September 2005, to go into effect on December 1, 2005. The Act is designed to prohibit the dissemination, exhibiting or displaying of sexually explicit (under Part I of the Act) and ultra-violent (under Part II) video games to minors without the consent of their parents or guardians.

The Entertainment Software Association, the Video Software Dealers Association and the Michigan Retailers Association immediately challenged the constitutionality of the Act, and obtained a preliminary injunction in November 2005 preventing Michigan from enforcing Part II of the Act (the part dealing with violent games).

The defendants (Michigan's Governor and Attorney General, and the Wayne County Prosecuting Attorney) then moved to dismiss the plaintiffs' case. The US District Court for the Eastern District of Michigan issued its decision on January 19, 2006.

The defendants first argued that a federal district court did not have jurisdiction over claims against an unconsenting state. However, there is an exception allowing suits against state officers in their official capacities if they have some connection with the enforcement of the legislation in question. The Court found that the plaintiffs and their members faced an immediate risk of state-wide enforcement of the Act and its 'likely unconstitutional"? restrictions on speech. Since both the Attorney General and the Governor had the power and duty to enforce Michigan's laws, the case fell within the exception. Further, the Act would limit freedom of speech regardless of whether any prosecutions or enforcement actions were brought, in the form of self-censorship and chilling of speech. Because the mere existence of the Act would violate First Amendment (i.e., free speech) rights, the plaintiffs could challenge the Act before anyone was charged under it. The Court therefore upheld this portion of the plaintiffs' complaint.

Second, the defendants attacked the plaintiffs' claim that the Act violated due process by delegating the power to determine what video games are subject to the Act's restrictions to a private organization (the ESRB) without any accompanying legislative standards. The Court rejected the defendants' arguments here as well first, the Court had jurisdiction because the plaintiffs were claiming violations of due process under the US Constitution; second, the Act clearly refers to an 'entertainment industry rating system"? established by the ESRB, which constitutes a delegation to a private, voluntary rating system that is not subject to judicial review. The Court upheld this portion of the complaint as well.

Finally, the Court dismissed another portion of the plaintiffs' complaint; the plaintiffs consented, as their constitutional claims were covered elsewhere in the complaint.

Therefore the Court upheld the plaintiffs' primary arguments. The case will continue.

Decision isEntertainment Software Associationv.Granholm, 2006 U.S. Dist. LEXIS 2792 (January 19, 2006)

Tesseraction Wins Judgment Against GMX

Tesseraction Games has won a summary judgment against its European publishing partner, UK-based GMX Media , for breach of contract.  TAG filed the suit in the District Court of Oregon after alleging GMX had breached several terms of their distribution agreement for "Engima Rising Tide," including failing to produce timely and accurate sales and royalty accounts, failing to pay royalties and distributing Enigma in countries other than those agreed to in the distribution agreement. 

The judgment is 2 years in the making and several parts of the suit that were dismissed by the Oregon court due to lack of jurisdiction (GMX is a UK-based company) are being re-filed in UK courts.

No word on what kind of damages TAG will be awarded but their intial estimate of damages was over a million dollars.  We'll keep you updated on the award and on the cases' progress through the UK courts.

Hyping Your Product On-line? You Might Be Breaking The Law

So you're on your favourite MMO forums and you just read the latest post from Stryker87, a regular contributor on such topics as the etiquette of raiding and the importance of a good supporting healer.  This time, though, Stryker87 is going on about his new video card (or possibly his monitor) and he's recommending that everyone get one.  Hmmm, you think, well if Stryker87 likes it, it must be pretty good, right?

Wrong.

Stryker87 might be on the level, or he may in fact be a made-up persona, used to hype products on message boards. The practice of first building up on-line personas and then subtly pushing a product on other message board members has been raised in several recent on-line articles dealing with the video game industry. Leaving aside the ethical arguments over promoting a product in this way, any company doing so should definitely consider the potential legal consequences.

The Ontario Consumer Protection Act, 2002 (the 'CPA"?), for example, makes it an unfair trade practice to make a representation that misrepresents the purpose or intent of any solicitation of or any communication with a customer. Unfair trade practices are prohibited and, under the CPA, a corporation convicted of engaging in an unfair trade practice can be fined up to $250,000. Of note, the CPA specifies that officers and directors of a corporation can also be liable and, if convicted, face fines up to $50,000 and a potential jail term of not more than two years less a day.

Coverage at http://shorl.com/dagrupisovagu

GIZMONDO EUROPE IS TOAST

In an earlier posting, we reported that Gizmondo Europe sought protection from its creditors. That didn't turn out very well the UK High Court has now ordered Gizmondo Europe to liquidate. The company claims approximately $90 million in liabilities and perhaps $72 million in assets.

Coverage at  http://www.shorl.com/jepepedehegru

RED CROSS FOLLOW-UP

Last week we posted a story regarding the use of the Red Cross insignia in video games.  Here's a follow-up story that ran today in the Vancouver Sun, Calgary Herald and Ottawa Citizen  http://www.shorl.com/busobravimuvo

Sony Employee Fired For Criticizing PS3

Sony Online Entertainment 3D artist Josh Robinson has been fired  for criticizing the PS3.  In January, Robinson posted comments criticizing PS3 development on his blog, including comments from other developers that the XBox 360 was technically a better product than the PS3.   In an interview   with PS3week, Robinson claims that despite showing the blog entry to two Sony employees and an SOE producer before posting it, SOE reception to his comments was less than warm and he was let go for breaching non-disclosure agreements (NDA) related to the PS3.  Robinson denies that he knowingly broke any NDA but says he has no ill will towards SOE, saying "it was something unfortunate that happened and I sincerely hope Sony isn't damaged by it."  Robinson says he's received several job offers since leaving Sony and is currently working with a company in the Santa Monica area.

Indiana Violent Videogames Legislation Dies Due To Lack Of Support

In January 2006, Indiana State Senator Vi Simpson announced she would be proposing and supporting a bill to prevent the sale of violent videogames to minors.  What exactly was proposed in Senate Bill 135 will never be known, however, as the bill was abandoned yesterday after failing to receive enough support to be formally introduced to the senate.

An earlier incarnation of Indiana's video games legislation was struck down on constitutional grounds in 2005.

More coverage available here .

DIRTY POOL?

Today in Chicago, Mike Sigel (a famous pool player) sued Interplay Entertainment and Celeris Inc. for using his name and likeness in Virtual Pool 2 without his permission. The game apparently includes clips of Sigel and uses his name on packaging and marketing materials. 

We're looking forward to hearing the publisher's response to this lawsuit. Is this a case like Mirra vs. Acclaim, where famous BMX rider Dave Mirra gave Acclaim permission to use his name and likeness, but the publisher went beyond the permission by using it on an XXX-rated game? Or did the publisher here just simply use Sigel's name and image without any prior permission? 
Coverage at  http://www.shorl.com/fufraprehabiru

EA And Ubisoft Employee Hiring Feud Reignites

EA's Montreal GM Alain Toscan has sent a letter to Ubisoft's GM Martin Tremblay condemning Ubisoft's practice of requiring employees to sign non-competition agreements, and has hired a former Ubisoft developer in defiance of the agreement preventing the developer from working for any Ubisoft competitor.  This turn of events revives an old dispute between the two studios in their bids to attract and retain top developer talent.  In 2003, EA and Ubisoft went to court in Montreal over EA's hiring of former Ubisoft employees.  Ubisoft had made former Splinter Cell developers, who had since been hired by EA, sign employment contracts containing non-compete clauses which prevented them from working for competitors for 12 months after their departure from Ubisoft, which EA argued was repressive. Ubisoft was successful in obtaining an interim injunction preventing the developers from working at EA until the 12 month non-competition clauses had expired.  EA wasn't impressed with the judgment and said it didn't decide the case on the issues, and appears, with recent developments, to be ready to go to court again to resolve the dispute once and for all.

EA argues that the non-competition agreements don't protect Ubisoft's business interests and are too restrictive on developers trying to make a living in the industry.  EA alleges that Ubisoft could protect its interests sufficiently by requiring employees to sign confidentiality undertakings and enforcing copyright protections on its games.

Coverage here and here.

To read Alain Toscan's letter to Martin Tremblay, click here.

For a Ubisoft employee's take on the non-competition agreements, click here .

Lawsuits Mount Against Take-Two Interactive

Take-Two Interactive, already the subject of an ongoing investigation by the FTC, was previously named in a lawsuit brought by the families of slain police officers as well as a lawsuit by the LA. city attorney, both in respect of the popular Grand Theft Auto San Andreas game produced by Take-Two's subsidiary, Rockstar Games.

Now, with the filing of Take-Two's financials with the SEC, three further lawsuits - in Delaware, North Carolina and Connecticut have come to light, with requests in each case for the company to turn over books and records relating to the Grand Theft Auto San Andreas game.

Coverage at http://shorl.com/jatratuvugysa

PSP HACKS CONTINUE

Hackers continue to chip away at the PSP despite Sony's security upgrades, hackers are able to run their own software on even the latest version of the PSP firmware. The hack depends on using a malformed saved game from GTA Liberty Stories, and therefore seems to flow from a problem with that software rather than with the PSP firmware itself. As a result, it's not clear whether Sony will be able to patch this hole.

The underlying concern is that hacks such as this may soon develop into pirating software for the PSP. However, no hacker appears to have achieved that to date.

Coverage at http://shorl.com/hisadryrufroma