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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

» September, 2006

Albuquerque Lawsuit Blames Murders On Grand Theft Auto Game

Cody Posey was convicted in February, 2006 of murdering his family. In a wrongful death suit filed September 25, 2006 and seeking an unspecified amount of damages, the victims' relatives named Posey as a defendant, along with Sony Entertainment, Take-Two Interactive Software and Rockstar Games. Referring to Grand Theft Auto as a 'murder-simulation device"?, the suit alleges that Posey killed his family as a result of playing the game.

Coverage at  http://shorl.com/honyfruvufygro  (KRQE.com)

Guitar Hero Suit TAC Responds To RedOctane With Counter-Claim

Following the filing of a lawsuit by Guitar Hero publisher and recent Activision acquisition RedOctane against The Ant Commandos (TAC), over third-party Guitar Hero controllers, TAC has filed a counter-claim, against both Activision and RedOctane, alleging that both companies are violating Federal Antitrust legislation pertaining to the Guitar Hero game and controller bundle. In addition, the counter claim goes on to allege the controller was originally created by Topway Electrical Appliance Co., which partly owns TAC, and that both Activision and RedOctane 'copied the identifiable trade dress of the controller"? (including its color, shape, and placement of fret buttons located on the controller).

In addition, TAC has filed for a preliminary injunction asking the federal court to enjoin Activision and RedOctane from further infringing on the trade dress originally developed by Topway. The injunction also asks the court to allow for fair competition in the market by enjoining the sale of the game/controller 'bundle"? so that consumers no longer have to purchase both Guitar Hero and the RedOctane controller, but rather may purchase the game and have their choice on which controller to buy. To date, no injunction against TAC has been filed in this matter.

RedOctane's original claim alleges, inter alia, unfair competition, trademark infringement, copyright infringement, unfair and deceptive trade practices, false advertising and unjust enrichment on the part of TAC.
For coverage, click here

UBISOFT LOSES CONFIDENTIAL INFORMATION

Ubisoft is justifiably annoyed that a file containing confidential information and images about upcoming games has made its way onto the Internet. An inquisitive web surfer pulled the file from Ubisoft's FTP site and posted it on the web; the information is disseminating rapidly.

Confidential information or trade secrets can be among a company's most valuable assets, and it is important to protect them carefully (including by using legal documents such as confidentiality agreements and non-disclosure agreements, as well as by implementing effective technological and physical security procedures and practices). This is particularly true in the digital and high-tech context, where hackers and techies delight in ferreting out and distributing information that companies would rather keep confidential.

Coverage at http://shorl.com/defrusemileni (GameSpot)

THQ Again Facing SmackDown! Suit

THQ's World Wrestling Entertainment line of games is one of the company's staple franchises year in and year out, but it has also been the source of a number of lawsuits. Already facing a trademark-infringement suit brought by the wrestler formerly known as The Ultimate Warrior and another brought by the WWE itself, which is seeking to have its game license agreement nullified, THQ is yet again facing legal woes.

A New York musiciannamed Michael Tumbarello, formerly knows as "Vada," filed a civil suit against the publisher, charging that it used one of his songs in last year's SmackDown! vs. Raw 2006 without permission. The suit alleges that Tumbarello's song titled "King of the Mat" appears in the game in its entirety, and that THQ neither asked for nor was given permission to include the cut. It also alleges that he initially demanded the publisher stop distributing the game to no avail.

His claim of at least $12 million in damages is broken down into the following heads of damages (of no lessthan $3 million each)

- copyright infringement;

- misappropriation of property;

- violation of New York civil rights law; and

- another charge referenced but not actually specified in the suit.

Attempts to contact Tumbarello's lawyer for clarification on the last charge have thus far remained unsuccessful.

Coverage here .

THE ANTS GO MARCHING ONE BY ONE TO COURT

Red Octane (the publisher of Guitar Hero) has sued the Ant Commandos for selling wireless guitar controllers for use with the game.  Red Octane claims Ant Commandos copied Guitar Hero packaging and advertising materials, in violation of Red Octane's copyrights and trade-marks. They also claim false advertising with respect to Ant Commandos' claims that the guitar controllers work properly with the PS2.

Interestingly, Red Octane is facing IP lawsuits for its own activities. Konami claims that Red Octane's dance game Groove violates Konami's patents relating to Dance Dance Revolution, and KnuckleBonz claims Red Octane's use of GUITAR HERO violates KnuckleBonz's trade-mark rights in that name.
Coverage of the marching ants is here  http://www.shorl.com/fadredrufrarine (Gamespot)

GAME GUILD TRADE-MARKS NAME

This isn't breaking news, but it's an interesting issue that recently came to our attention. On-line gamers often create what are called 'clans"? or 'guilds"? "? namely, groups of players who game together, and who may have defined goals, rules, etc. (see the Wikipedia entry here ). One large, long-standing guild has gone so far as to register its name ('The Syndicate"?) and its logo as US trade-marks (see US registrations 3,027,852 and 3,027,530). Both marks are registered in association with 'entertainment services, namely, an online gaming guild providing in-game opportunities for proliferating game expertise and camaraderie among games supported by a web site featuring multimedia materials"?.

This is interesting for at least two reasons. First, it shows how on-line communities are beginning to act like many other real-world associations and entities. Second, The Syndicate explains that it registered the trade-marks in order to protect its reputation (most of which is based on in-game activities). Admittedly, the Syndicate guild is a particularly active and well-established one, and is involved in various real-world activities such as contributing to game development books, creating game guides, holding annual conventions, etc. Still, the fact that it decided to register trade-marks to protect its brand (and to prevent other guilds from using confusing names) is an interesting development indeed.
The Syndicate's explanation of its trade-marks is here http://shorl.com/hafrefanugriry

NVidia Sued For Patent Infringement

Graphics processor giant nVidia is being sued for patent infringement.  Scanner Technologies, in their suit launched in the U.S. District Court, Eastern District of Texas, claims that two of their patents, which disclose a method of manufacturing "ball grid array" devices, have been "deliberately and wilfully infringed" by nVidia.  Ball grid array, or BGA devices, are used as components in graphics cards, motherboards, computers, game consoles, cell phones and handheld consoles.  Scanner says nVidia has not only sold and is selling devices infringing Scanner patents, but has induced others to infringe as well. 

Scanner is seeking preliminary and permanent injunctions, as well as damages.  We'll keep you updated on developments in this case. 

Source http://shorl.com/gupobrebrupebo

CLINTON'S CAMRA

The U.S. Senate has passed the Children and Media Research Advancement Act ('CAMRA"?). CAMRA aims to foment research on the effect of modern media (including the Internet and video games) on children.  Senator Clinton, one of CAMRA's main supporters, is reported to have stated that  CAMRA "is one more step in the right direction" and that it "will provide parents with better, more current facts about the impact of this new media dominating our kids' lives."

 
coverage at http://shorl.com/guprupohalagi  (GameDaily)

ANOTHER GAMING PATENT LAWSUIT

Online instant chat company Paltalk has sued Microsoft for patent infringement. The lawsuit claims that Xbox Live violates two of Paltalk's US patents which cover online communications.

This lawsuit follows several other major patent lawsuits in the gaming industry, including Agere v. Sony (relating to PSP and PS2 technology), Immersion v. Sony (relating to Sony's Dual Shock controllers), Yahoo! v. XFire (relating to Yahoo!'s Game Prowler IM application) AVG v. Atari (relating to AVG's patent for spherical panning) and Lucent v. Microsoft (relating to the 360's method of decoding MPEG-2 files).

It's also interesting from a Microsoft perspective, considering that earlier this spring Microsoft was awarded its 5,000thUS patent. 
Coverage of Paltalk lawsuit here  http://www.shorl.com/hamelibakubi

Hacker Accesses Second Life Users' Confidential Data

Linden Labs, the operator of the popular capitalist-fantasy MMORPG, announced on Monday that a hacker had accessed a Web server for several hours, thereby accessing users' confidential information, including credit card numbers and passwords. Though no users have reported fraudulent charges or other problems since the incident, the company is asking its 660,000 subscribers to change their passwords in light of the security breach.

Coverage at http://shorl.com/bumepulofohu  (SiliconValley.com)

VIOLENCE IN MONTREAL

25-year-old Kimveer Gill is reported to be responsible for the murder of one Dawson College student and injuring 19 others. Not to mention scaring and scarring the student population and bringing tears to the eyes of my hometown. His death at the hands of the police does not assuage our collective sorrow. 
Talking about this tragedy, Prime Minister Harper is said to have stated that 'debates are sure to unfold about the government's role of censorship in video games and the monitoring of the Internet"?. I agree with his thinking. Let's start a debate. Here are my two cents worth. 

News reports so far seem to confirm that the Dawson population helped each other, that the police acted prudently and quickly and that emergency personnel succored those in need rapidly. I'm sure that with time we might find flaws in how things were handled, to be denounced and addressed.   

Aside from legislation that dictates the duties of police and emergency personnel, Art. 2 of Quebec's Charter of Human Rights and Freedoms provides that every human being whose life is in danger has a right to assistance and imposes a legal obligation on every person to come to the aid of the person in danger, personally or by calling for aid, unless this would result in danger for the person assisting or someone else. 

So the Good Samaritan rule of the Quebec Charter was respected. 

What about Kimveer Gill? Did we fail to assist him? Should we have identified him as someone in need of aid? And if so, how should we have helped him? Would the censorship of video games and the monitoring of the Internet have helped him? Would we also need to consider censoring the music groups that Kimveer listened to (e.g. Marilyn Manson) or the websites that he frequented? What about Canada's gun register and gun laws? Should we revisit them? 

It's a good thing that this is just a video game law blog. I don't have to pronounce myself on whether we failed to help Kimveer or not. I will say, however, that, in my opinion, the levels of censorship/monitoring and of government intervention that would be required to prevent crimes such as Kimveer's would be right out of 1984. Are we willing to give up so much freedom?

 
coverage at  http://shorl.com/gylybryvokeve (Sympatico News)

Infogrames Restructure Its Debt

As reported yesterday, Infogrames Entertainment is in financial trouble and it has unveiled the cure, a debt restructuring plan pursuant to which it will shed approximately 173 million Euros in debt. The pain will be felt by its main bank, creditors and not least the bondholders. The next item on Infogrames agenda will be to turn the business around. It is expected that Infogrames will resume trading today.

Coverage at http://www.shorl.com/davepusevyfo (Gamedaily.biz)

Time Is Running Out For Atari

In April of this year, we reported that Atari, Inc. risked being delisted from NASDAQ if its shares did not trade above $1.00 for more than 10 consecutive business days. That deadline ran out on August 30 and Atari failed to meet NASDAQ's continuing listing requirements, as its share has not broken the $1.00 price. However, Atari intends to request a hearing before the NASDAQ Listing Qualifications Panel, and will remain listed on The NASDAQ Global Market until the panel issues its decision.

On August 30, Atari's share traded at $0.69. In order to bring its trading price above $1.00, Atari could do a reverse split of its share. A reverse split means that the company reduces the number of issued and outstanding shares proportionally among all of the shareholders. For example, each shareholder would get one 'new"? Atari share for every three 'old"? Atari shares that they held. Thereby the trading price will increase. Historically, this has shown only to give a struggling company a short lived relief, in that the trading price often will spiralling down under $1.00 again.

Coverage at http://shorl.com/jefistimujypro (Gamasutra)

Atari's website www.atari.com

Atari's Parent Suspended

Now Atari, Inc.'s parent company, Infogrames Entertainment SA, has been suspended from the French stock exchange due to continuing operation related issues.

Lately, Infogrames has been struggling with losses and massive debts. In order to bring down the debt, Infogrames has been selling its properties and a number of entertainment studios.

Coverage at http://shorl.com/difygrodobede (Gamasutra)

EA SIGNS MASSIVE DEAL

Late last month video game giant EA entered into an agreement with in-game advertiser Massive through which various EA games will be included in Massive's advertising network. As a result, EA games will include dynamic in-game advertisements which can be updated seamlessly and in real time.

Coverage at http://shorl.com/falaprudretiho (TechNewsWorld)

PLAYERS LOSE VIRTUAL FORTUNES IN ON-LINE BANK SCAM

Here's another dispatch from the wacky world of virtual property. Various players in the on-line game 'Eve Online"? gave large amounts of in-game currency to another player who operated an in-game on-line bank. The purported banker then made off with all the money, which caused quite a stir in the Eve Online community. However, the game's terms of use and EULA are permissive, and allow all sort of cons, swindles and thefts.

The interesting question is whether in-game activities like the bank con (which are permitted by the game's EULA) should have any real-world consequences. Arguably they shouldn't, seeing as how it's all part of a game and doesn't involve real money. The flip side, of course, is that in-game items and currency (including Eve Online currency) can be bought and sold outside of the game for real-world money. Did the victims of the scam lose something with real-world value? Should they be entitled to seek real-world remedies? If so, from whom? We don't have quick answers for these questions, but this story is another good example of the issues raised by virtual property.

Coverage at  http://shorl.com/fefruminosapy (News.com)

NCSoft Wants You To Play Smart

NC Soft, creator of "City of Heroes," wants to be a real-life superhero when it comes to protecting the virtual world from evil.  The company has announced that it is launching the "Play Smart" program, which will instruct gamers, and parents, on how to keep themselves and their children safe while playing online. 

"Play Smart" will commence later this year in the form of basic guidelines included in game packaging, which will warn gamers to keep their usernames, passwords, and credit card information private in order to avoid account swiping.  "Play Smart" will also stress the importance of never volunteering personal information to other players in order to avoid online predators.  "Play Smart" is an important industry initiative towards gaming safety, because, as noted by Matt Slagle of the AP, "though the true names and identities of players are disguised [in games] as avatars ranging from animals to sorcerers, there's nothing to prevent players from probing for personal information." 

Good on you, NC Soft.  In the immortal words of Dave Spratley, "No one likes a probing, it's true."

See NCsoft Corp's website http://plaync.com

Source http://shorl.com/humybotastedi

THE FUTURE IN-GAME ADS

In what is said to be the first such deal of its kind, Double Fusion has partnered with Emergent for the integration of their in-game ad technology to Gamebryo Element game engine and toolkit. Double Fusion's stated goal is to allow advertisers to "move 'beyond the billboard' to employ 3D interactive objects, video, interactive ads, and other exclusive and unique advertising formats". 

Certain Canadian jurisdictions have enacted legislation prohibiting traditional commercial advertising directed at minors (the notion of what is a minor is specifically defined in said legislation - for example, in Quebec, the trigger age is 13). 

To determine whether or not an ad is directed at a minor, legislators have taken into account several factors including 

 (a) the nature and intended purpose of the goods advertised; 

 (b) the manner of presenting such advertisement; 

 (c) the time and place it is shown. 

We will certainly keep an eye on how legislators and the courts deal with this new form of advertising. 
coverage at  http://shorl.com/jamubrubrebryve (GameDaily)

SQUARE-ENIX SUED FOR ROYALTIES

Reputedly the largest Chinese video game publisher, Soft-World International has sued Square-Enix for reimbursement of US$3.78 million in paid royalties based on the alleged breach of a MMORPG distribution contract.

 
coverage at http://shorl.com/behustabryfreti (gameindustry.biz)

TAKE-TWO TROUBLES

Take-Two should be celebrating last quarter's jump in its net revenue to $240 million. Instead, Take-Two is reported to have announced the delay of its final earnings report due to an internal investigation into its granting of stock options. Moreover, the company is also said to have disclosed having received additional grand jury subpoenas issued by the District Attorney of the County of New York 'requesting documents...regarding stock options and other equity-based compensation."

coverage at http://shorl.com/degrovimubregre (Gamespot)