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.
Several news agencies are reporting that students from the Union of Islamic Student Societies are designing a video game where Commander Bahman, an Iranian special forces hero, must rescue the country's top atomic scientist from U.S. troops, to allow him to continue his scientific work. Is this an answer to video game titles like 'U.S. Attacks Iran"? or Assault on Iran"??
coverage at http://shorl.com/bypryfatradreda
Last May 9 House Rep. Michael Fitzpatrick introduced the Deleting Online Predators Act with the view of amending the Communications Act of 1934, targeting access by minors of commercial 'social-networking"? Web sites that allow users to create 'Web pages or profiles and also offer a discussion board, chat room, or email service"?. DOPA would require libraries, elementary and secondary schools to restrict minors' access to social-networking Web sites or chat rooms through which they may access sexual material or be subject to sexual advances. Access for educational purposes, under the supervision of an adult, would be allowed. Sites like MySpace.com and LiveJournal.com would likely be restricted. Some say that Microsoft's Xbox 360, which permits in-game chat, would also be indexed under DOPA.
coverage at http://shorl.com/gehademefeva
full DOPA text at http://shorl.com/hemijojifany
Venezuelan President Hugo Chavez has long foretold the invasion of Venezuela by the United States. Now members of Mr. Chavez' government find evidence in support of his fears in Pandemic Studio's Mercenaries 2: World in Flames, a video game that is said to be based on the overthrow of an imaginary Venezuelan tyrant and which is set to be released next year.
Venezuelan politicians are saying that the U.S. is using the game to 'drum-up"? support for the real invasion. While Pandemic Studios has denied any ties to the U.S. government, it is reported to have developed video games for U.S. military use in the past.
coverage at http://shorl.com/gerumudastohy
It all started innocently enough a Battlefield 2 player, inspired by the movie Team America World Police, created a short fan film using, among other things, footage from BF2's Special Forces add-on module, sound clips from Team America, and sound bites from George W. Bush speeches. The movie, which builds on the back story of one of the Team America characters, shows a man in Arab headdress fighting US troops. It was all for fun, as are the many other BF2 movies that the game's fans have created. Note that there was no modding involved, merely assembling existing footage, dialogue and music.
Things soon took a disturbing turn, however a US congressional intelligence committee was told by the Pentagon and defence contractors that the video was produced by Al Quaeda in order to recruit jihadist terrorists. Further, Reuters picked up the story and published it under the headline 'Islamists using US video games in youth appeal"? (see its original article here ).
The real story has gotten out quickly, thanks largely to excellent reporting from Game Politics (see the GP interview with the video maker here ). Reuters has since released a follow-up article with more accurate details (see here ).
Clearly, video games are still misunderstood and portrayed incorrectly by government and media. Members of the gamer community are also surprised and annoyed that the US defence contractor (who apparently has a $7 million contract to monitor militant web sites) could make such a mistake (the initial Reuters report stated 'SAIC executive Eric Michael said researchers suspect Islamic militants are using video games to train recruits and condition youth to attack US-led coalition forces in Iraq"?). Many others have pointed out that the game America's Army is a full-on training and recruiting tool for the US army, and that there is something hypocritical about vilifying other games or mods that can be used for 'recruiting"? purposes.
As for the maker of the video, he is bemused at being portrayed as a terrorist recruiter, and is (understandably) concerned about being blacklisted and monitored by US security agencies.
The Maryland House and Senate unanimously passed its video game bill into law on May 2. It comes into force on October 1, 2006. Surprisingly, the Entertainment Software Association not only failed to challenge this bill but actually supported it. This may be because the new law does not deal with video game violence; instead it prohibits the display of an obscene video game to a minor. The new law centers its definition of what is 'obscene"? around nudity and sex, to the exclusion of violence. Some say that this law is merely an extension of existing laws barring minors' access to pornography.
coverage at http://shorl.com/bohetrahifame
Stream Theory, which provides streaming application technology, has filed a patent infringement suit against three other companies (Softricity, AppStream and Exent). Stream Theory has a Games on Demand series with over 550 PC games available.
One of the defendants "? Extent "? is known for providing games on demand; the other two defendants provide other forms of streaming software.
Coverage at http://shorl.com/jefyfafrifredy (Gamasutra)
Our blog has over two dozen categories of video game law material, including advertising law, IP law, privacy law and more. We now have a new category and RSS feed for virtual property in video games. This is a hot topic in the video game law world, and we have lots to say about it.
To prove it, here's a great overview of the subject written by our Dave Spratley (the guy who insanely believes that an Imperial Star Destroyer could take the USS Enterprise an in a one-on-one fight) http://www.davis.ca/community/blogs/video_games/files/virtual_property.pdf
He's obviously off his rocker on Star Wars vs. Star Trek issues, but fortunately for him he's a great writer. An abbreviated version of the article was published in the April 21, 2006 issue of The Lawyers Weekly
Tennessee's Senator Kilby has withdrawn his anti-violent videogames bill over constitutionality concerns. In brief, his bill proposed the ban of the sale of violent videogames, regardless of consumer age. The bill was viewed as non-viable given that less draconian bills have been struck in other states.
The battle over censorship continues, with judicial challenges by the industry and attempts by governments to control videogame content or distribution. Minnesota, for example, has just passed a new bill proposing fines for underage consumers found to be knowingly renting or buying M or AO rated software.
coverage at http://shorl.com/bidupryripropo
A while ago, Immersion Corporation was awarded damages of over $80 million in its patent infringement lawsuit against Sony (see our coverage here and here ). The lawsuit involved the force-feedback technology which Sony used in its PS2 controllers. Immersion also sought an injunction prohibiting Sony from making or selling related technologies in the US. Sony is currently appealing the injunction decision.
At the recent E3 convention, Sony announced that its next generation controllers would not include the rumble feature because of possible interference with the new controller's tilt sensors. This decision is not sitting well with gamers and industry insiders, who view the removal of force-feedback controllers as a step backward.
Immersion's President has stated publicly that Immersion is willing to help Sony with force-feedback technology that can co-exist with the tilt sensors, if Sony settles the patent litigation on Immersion's terms.
Coverage at http://www.gamasutra.com/features/20060517/murdey_01.shtml (Gamasutra)
and at http://www.gamesindustry.biz/content_page.php?aid=17141 (GamesIndustry.biz)
The WWE and THQ aren't the best of friends. THQ has a merchandising licence from the WWE, but the WWE says it was obtained by commercial bribery. In 2004, the WWE sued THQ and its joint-venture partner Jakks Pacific Inc., seeking to nullify the licence. Then, last year, the WWE came off the top rope and body-slammed THQ CEO Brian Farrell by adding him as an individual defendant.
THQ appears to be unscathed. It recently announced a long-term multi-platform deal with Yukes to produce further WWE games. THQ said the lawsuit was not a factor in the deal.
Coverage here http://www.shorl.com/gatrepylotapro (gamesindustry.biz)
A gamer has sued Second-Life publisher, Linden Lab, after his online game account was shut down. The gamer claims this resulted in the lost of $3,200 in virtual property. He is now demanding $8,000 in damages. Linden Labs says it shut down the account after the gamer participated in a suspicious auction where he purchased several plots of land at very low prices.
This move follows Blizzard's announcement last month that it had banned 5,400 World of Warcraft players and suspended a further 10,700 for participating in activities that violate the game's Terms of Use, including using third-party programs to farm gold and items.
These cases raise an interesting issue for video game lawyers to what extent can online gaming companies be held liable for damage or destruction caused to online players or their virtual property? The answer to this question will depend (at least in part) on whether the publishers' licence agreements and online terms of use agreements adequately deal with potential liability issues such as cheating, hacking, viruses and service interruptions.
Linden Lab coverage here http://www.shorl.com/filepedropifo (Joystiq)
The Minnesota House of Representatives has passed a bill which targets the customer side the video game retail transaction "? the bill makes it a petty misdemeanour for a person younger than 17 to knowingly rent or purchase a video game with an ESRB rating of M (Mature) or AO (Adults Only). Violators will be subject to a fine of up to $25.
Jeff Johnson, one of the bill's authors, says that video games are full of 'absolutely disgusting stuff"?. Mr. Johnson, who is running to be Minnesota's Attorney General, acknowledges that the bill is open to constitutional challenge.
Information on Minnesota Bill SF0785: http://shorl.com/gofrividrehabu
Coverage at http://shorl.com/dujugostosapry (GameSpot)
The General Manager of Nintendo UK has taken a few public shots at Sony's new motion-sensing controller, which Sony revealed at the recent E3 convention. According to Gamasutra, David Yarnton has suggested that Sony copied Nintendo's innovations not only with respect to the new controller but also to various other innovations over the years.
This could Yarnton's own personal opinions, or it could signal that a dispute between the two game giants is in the works.
Coverage at http://shorl.com/hibapypejoka (Gamasutra)
A subscriber to the popular Second Life video game has filed a lawsuit in Pennsylvania seeking financial damages against the video game's publisher, Linden Research Inc., citing a breach of a virtual land auction contract and also for violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law.
Marc Bragg had invested thousands of real world dollars to purchase virtual land in an online auction, only to find that his account had been terminated without explanation. When his calls to customer service and to Linden's legal counsel went unanswered, he sought relief in the real world courts.
Coverage at http://shorl.com/hegrosigutemy
Lucent sued Microsoft in March 2006, claiming that technology inthe Xbox 360 used for decoding MPEG-2 files infringes Lucent's patent. Microsoft has now filed a countersuit claiming that two of Lucent's patents are invalid and alleging that Lucent has in fact infringed some Microsoft patents. Microsoft has also voiced its annoyance that Lucent started litigation without engaging in 'meaningful licence negotiations"?. That being said, lawsuits are themselves a form of negotiation.
Lucent has not yet sought an injunction preventing the sale of the XBOX 360, but doing so would certainly raise the stakes in the dispute and apply additional pressure to Microsoft.
Coverage at http://shorl.com/boprifugryvoko (GamesIndustry.biz).
Louisiana's house of representatives has now passed a bill that would prohibit the sale of potentially harmful video games to minors. The next step is for the bill to proceed before the senate for approval.
If approved, the constitutionality of the bill will unquestionably be challenged in court. If the results in St. Louis , Illinois , Michigan and Calfornia are any indication, this bill will be in for a rough ride.
Coverage at http://www.shorl.com/hutybrajypraro (Gamasutra).
After having succeeded earlier this month in obtaining a provisional injunction against former Ubisoft Montreal head Martin Tremblay (reported here ), now President of Worldwide Studios at Vivendi Games, Ubisoft has now succeeded in obtaining a safeguard order valid until June 7, 2006.
The Superior Court ruling, issued by the Honourable Justice Hélène Langlois, orders Martin Tremblay to "respect the contractual obligations included in the employment contract he signed with Ubisoft", in a specific attempt to enforce the non-compete clause which has been a source of major controversy in Montreal gaming circles of late.
The safeguard order stipulates that Martin Tremblay must "...cease immediately working, directly or indirectly, within the territories of Canada, the United States and Mexico, for his own behalf or on behalf of any third party, in any business which manufactures or commercializes video products that may compete with products sold, manufactured or developed by applicant Ubisoft."
Justice Langlois rejected Tremblay's allegations that he was the object of a "constructive dismissal". In her judgement, she stated that "...it doesn't appear from the proof that Martin Tremblay was the object of a constructive dismissal and consequently the non-compete clause produces all its effect. In this respect Ubisoft's right appears to be clear."
Coverage at http://www.shorl.com/dakevosystistu
Timothy Roberts, the former Chief Executive Officer of Infinium Lab, Inc. has been charged by the SEC for artificially inflating the value of Infinium Lab’s stock.
Timothy Roberts allegedly authorized a promoter to send junk faxes to potential investors stipulating that Infinium Lab was about to launch a new gaming console. Infinium Lab’s stock increased in value and Mr. Robert allegedly sold 1.3 million of his own shares for a significant profit.
Infinium Lab, Inc. is a Seattle based interactive media, entertainment and technology company whose common stock trades on the OTCBB (Over The Counter Bulletin Board) under the ticker symbol "IFLB". Infinium Lab is developing certain online gaming services. Mr. Roberts is no longer associated with Infinium Lab.
Read more at Infinium Lab’s website at www.phantom.net or
Coverage at: http://shorl.com/bystyfrastimepe (Gamasutra)
The parents of a 13-year-old Chinese boy who they say jumped to his death from a tall building after playing one of the popular 'Warcraft"? online games for 36 hours straight are suing Aomeisoft, the Chinese distributor of 'Warcraft Orcs and Humans"?.
Zhang Xiaoyi died on Dec. 27, 2004, leaving behind a suicide note saying he wanted 'to join the heroes of the game he worshipped,'' the official Xinhua News Agency reported. In a suit that claims that Aomeisoft failed to include a warning that the game's U.S. maker rates it as suitable only for players above age 13, Zhang's parents are reportedly seeking 100,000 yuan ($12,500) in damages.
The Warcraft games are made by Blizzard Entertainment, a subsidiary of Vivendi Universal SA, but Xinhua reports that a Chinese court rejected a claim by the parents against the game maker.
Bai Jie, the vice president of Aomeisoft, told The Associated Press that he saw news reports about the lawsuit but that the company had yet to receive any official court notice. Bai stated that Zhang's parents would be suing the wrong company, because Aomeisoft was set up in August, eight months after his death. Bai also stated that he didn't know which distributor sold the game in 2004.
It is reported that the suit also calls on the distributor to put a warning on the game's packaging saying 'playing games excessively harms health"?. In response to this, Bai stated that the company plans to add 'anti-addiction warnings"? to future games.
According to a statement from Vivendi Universal chairman Jean-Bernard Levy in April 2006, the Warcraft games have 2.5 million players in China, with copies in more than 100,000 Internet cafes.
For coverage http://shorl.com/fobredrejoryfra
If you're planning an auditory tour de force at next year's Electronic Entertainment Expo, think again.
NCsoft, who set up a large stage area at E3 2006 for live music sets and encouraged the crowd to applaud loudly, has been slapped with a US$5,000 fine for violating the organizers' rules on acceptable noise levels. In response, the video game publisher has threatened to showcase its games at an alternate venue in 2007.
The noise level rules are part of new E3 policies that also regulate stage size and the use of 'booth babes"?.
Coverage at http://shorl.com/hihapeprigafa
California's video game legislation, which was due to come into force on January 1, 2006, is under review by the federal court. The legislation restricts the sale of violent games to minors and requires manufacturers, distributors, importers, and retailers to put extra labels on such games.
The Video Software Dealers Association and the Entertainment Software Association have challenged the legislation, claiming that it violates the First Amendment's freedom of speech protections by restricting access to games solely based on expressive content.
Last year, the US District Court for the Northern District of California granted a preliminary injunction stopping the implementation of the legislation. The Court stated that video games are protected by the First Amendment's freedom of speech principles, and that the law would likely be ruled unconstitutional.
The court is still considering the constitutionality of the legislation, but there are indications that the judge believes the legislation is unconstitutional. For example, the judge said that the legislation must be judged according to the 'strict scrutiny"? standard which protects free speech rights.
A final ruling is expected soon.
Coverage at http://www.shorl.com/bagrafostosupro (cbs5)
A co-owner of a trendy Melrose Avenue game store has pleaded guilty to conspiring to traffic in copyright-circumvention technology, conspiring to infringe copyright for financial gain, and wilfully infringing copyright by reproducing and distributing pirated works. His co-owner has agreed to enter a similar guilty plea.
The two are accused selling modified XBOX consoles with pirated games preloaded onto their hard drives. A third man has been charged but has missed his court appearances.
Coverage at http://shorl.com/gysydalinoro (News.com)
VMC Game Labs, a Redmond, WA based consulting agency offering technical support for the video game producers, has opened its first office in Canada and has chosen Montreal as its home.
VMC Game Labs has opted to set up shop in close proximity to the offices of one of its major competitors, British company Babel Media, which opened an office in Montreal last summer. The company hopes to be competitive in the sub-contracting of video game production industry. 165 'testers"? began working in Game Labs' office on Monday and the company expects to hire over a hundred more employees in the upcoming months.
VMC Game Labs' decision to settle down in Montreal was encouraged in part by the fiscal advantages offered by Investment Quebec, a government Agency, but was also motivated by Montreal's thriving multi-culturalism.'Montreal gives us access to numerous cultures and, since we service a wide array of areas, we need people who master various European and Asian languages (translation)"?, stated Glenn Hoogerwerf, President of VMC Game Labs.Mr. Glenn also explained that the choice of Montreal over cities in India or China came as a result of Montreal's proximity to the key players of the video gaming industry.
For coverage (in French) http://shorl.com/hylohehuprito
First there was the revelation that a mod (a downloadable software modification) for Grand Theft Auto San Andreas used hidden code in the video game to allow the gangster protagonist to engage in virtual sex. When that mod came to the attention of the Entertainment Software Rating Board, it imposed an 'adults only"? rating on GTA San Andreas, resulting in the publisher, Take-Two Interactive, having to pull the video game from shelves, edit the game and consequently incur millions of dollars in losses. Adding further insult to injury, Take-Two has been forced to defend itself in various resulting legal actions.
Now, there are reports by the ESRB that a mod for Elder Scrolls IV Oblivion, a highly popular fantasy-themed video game co-published by Take-Two and Bethesda Softworks, accesses an art file in the game to make female characters appear topless. Citing the 'topless"? mod, as well as the fact that the game publishers understated the detail and intensity of the blood and gore in the game, the ESRB has changed its rating on the game from 'teen"? to 'mature"? - i.e. unsuitable for those under 17. A spokesperson for Take-Two said that he doesn't expect that the ratings change will have a financial impact.
From a legal standpoint, the fact that, in both cases, a third-party downloadable mod appears to have accessed hidden code in the game itself, raises interesting questions about a video game publisher's liability for the effects of that mod.
Coverage at http://shorl.com/defybrojemedu
Activision, Inc. (NASDAQ ATVI) has joined Electronic Arts in its class action woes due to lack of payment of overtime wages to its computer graphics employees.
The plaintiff, a former animator at Activision, is seeking compensation for unpaid wages in addition to penalties and punitive damages. Moreover, the plaintiff is asking the court to rule that Activision's compensation policy is unlawful.
Electronic Arts Inc. (NASDAQ ERTS) recently settled its overtime lawsuit, which resulted in a payout of $14.9 million and a reclassification for some employees as hourly worker.
Coverage at http://shorl.com/bahohudrujame (GameDaily)
We've talked before about in-game advertising (for example, here and here ). One of the leaders in this field is Massive Inc., a New York firm that has developed technology that lets dynamic advertisements be inserted into video games.
There are now reports that computer giant Microsoft is in negotiations to purchase Massive (perhaps for as much as $400 million). Microsoft has not confirmed these reports. If such an acquisition takes place, Microsoft will be able to increase and improve the in-game ads in its on-line XBOX games.
Coverage at http://shorl.com/fagydrypribrynu (E-Commerce Times)
Eliot Spitzer, New York's incredibly active Attorney General and Democratic candidate for Governor, has spoken out about video game regulation. Mr. Spitzer stated that a government-controlled uniform video game rating system is required, and that the current ESRB self-regulatory system is ineffective and largely ignored. He also voiced his support for the various attempts to create state legislation regulating video games, although he acknowledges that most such legislation has been struck down on constitutional grounds.
Not surprisingly, industry bodies such as the Video Software Dealers Association and the Entertainment Software Association, as well as the ESRB itself, have made statements in reply to Mr. Spitzer's comments.
Coverage at http://shorl.com/fodyhetybime (GamesIndustryBiz)
and at http://shorl.com/duhinedrystibe and http://shorl.com/gonolababryvo (Gamasutra)
Martin Tremblay, formerly the head of Ubisoft in Quebec, now the President Worldwide Studios of Vivendi Games, has been provisionally enjoined by Mongeon J.C.S. of Quebec's Superior Court from, directly or indirectly, competing with Ubisoft and ordered to immediately cease working, directly or indirectly, within Canada, the United States and Mexico, for himself or any third party, in any business which manufactures or commercializes video products that may compete with products sold, manufactured or developed by Ubisoft. The provisional injunction was issued based on Martin's contract with Ubisoft, which contained a non-competition covenant.
Unless it is renewed, or an interlocutory injunction or safeguard order is issued, the provisional injunction will only remain in force until 5:00 PM on Tuesday May 9, 2006.
The irony of it is that Tremblay was the principal supporter behind Ubisoft's recent clashes with EA over the use of non-competition clauses.
coverage at http://shorl.com/dururededrehy
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