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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

» November, 2006

LOUISIANA'S VIDEO GAME LAW STRUCK FROM BENCH

Following the temporary injunction he issued against same in August 2006, U.S. District Judge James Brady has declared unconstitutional Louisiana's HB 1381, which was signed into law on June 16, 2006.  

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

VIOLENCE AND SEXUALLY EXPLICIT MATERIALS LAWS APPEAL DISMISSED

The Entertainment Software Association's successful first instance challenge of Illinois Governor Rod Blagojevich's 2005 Sexually Explicit Video Games Law was upheld by the US Seventh Circuit Court of Appeals. Governor Blagojevich had not appealed the unconstitutionality ruling of his Violent Video Games Law, which he also signed into law in 2005.
GameSpot reports that 'The appeals court judges also upheld the ruling that the state's plans to put a sticker on all games deemed sexually explicit were unconstitutional"?.

coverage at  http://shorl.com/badestatusubre (GameSpot)

DMCA DOES NOT APPLY TO OLD GAMES?

The US Digital Millennium Copyright Act prohibits the circumvention of technological measures that prevent access to copyrighted works. The US Librarian of Congress has recently announced six classes of works that are exempted from this prohibition. One such category relates to 'obsolete"? computer games; the exemption is described as follows

'Computer programs and video games distributed in formats that have become obsolete and that require the original media or hardware as a condition of access, when circumvention is accomplished for the purpose of preservation or archival reproduction of published digital works by a library or archive."?

A format is 'obsolete"? if 'the machine or system necessary to render perceptible a work stored in that format is no longer manufactured or is no longer reasonably available in the commercial marketplace"?.

Some fans of obsolete games (sometimes termed 'abandonware"?) have argued that such games should be exempt from copy protection laws; the Librarian's announcement provides some support for that argument. Of course, the new exemption only applies for preservation or archival reproduction "? breaking copy protection on old games merely to play them may not qualify.

Coverage at http://shorl.com/fodastaribypra (Gamespot)

Librarian of Congress rulemaking on anticircumvention http://www.copyright.gov/1201/

FBI's Newest Elite Unit The Code Case Squad

The FBI has joined forces with NCSoft to execute a super-top-secret-ultra-dangerous-multi-city shutdown of L2Extreme, a company running its own unauthorizedLineage IIservers and boasting up to 50,000 active users.  It's unclear how the L2Extreme proprietors got access toLineage IIcode (speculation is that it was leaked to them), but what is clear is that NCSoft's counsel and the FBI are taking this kind of unauthorized reproduction or use of copyrighted code seriously-the FBI aren't making the charges public and conducted a series of raids and interviews across the U.S. before the crackdown. 

Gamasutra has exclusive interviews and further coverage on the story at http://shorl.com/fofrojatapridu

GTA ADS ON BOSTON TRAINS DRAW CONTROVERSY

A game-related controversy has arisen in Boston this week. The heart of the problem is that the Massachusetts Bay Transit Authority has allowed ads for Grand Theft Auto Vice City Stories on its subway cars. Various officials and organizations, including the mayor of Boston and the local police union, are calling for the ads to be removed. The MBTA's general manager is not giving into the pressure, although he has stated that the MBTA might review its ad policies with respect to M-rated games (the GTA ad campaign ends November 30).

This controversy obviously raises freedom of speech issues. The Boston Mayor has accused the MBTA of 'hiding"? behind the First Amendment; the MBTA general manager has pointed out that the MBTA does not have the authority to regulate ad content, and that the MBTA in fact spent more than a million dollars some years ago in a failed attempt to prevent ads supporting proposed changes to marijuana laws.

Restricting advertising for controversial video games is a sticky question, especially when objections are based solely on the content of what is being advertised. An obvious question is whether the MBTA has put ads for R-rated movies on its trains without drawing the outcry we are seeing over the GTA ads "? we expect that it has.

There is excellent coverage of this story at GamePolitics.com .

ALCATEL LAWSUIT AGAINST MICROSOFT HAS (PERHAPS REMOTE) VIDEO GAME CONNECTION

Alcatel has sued Microsoft for patent infringement relating to digital video and communication network technology. What does this have to do with video game law, you ask? Well, Alcatel is in the process of acquiring Lucent Technologies Inc. Lucent has also started several lawsuits against Microsoft for patent infringement, including one action which claims that the XBOX 360 infringes Lucent's video-decoding technology (see our post here ). A Microsoft spokesperson has stated that Alcatel's recent lawsuits relate to the patent dispute between Lucent and Microsoft (including, of course, the 360 action).  And there you have it.

Coverage at http://shorl.com/dutomuduprope (Seattle Post-Intelligencer)

German Politicians Call For Crackdown On Violent Computer Games After Armed Attack On Secondary School

On Monday, November 20, a man identified as 18-year old Bastian B. committed suicide after attacking a German secondary school with guns and explosives and wounding as many as 27 people. The German media have reported that Bastian had a fondness for war simulation and computer games.

Responding to the attack, the deputy head of the Christian Democratic party said it was time to consider banning games that simulate wanton killing, citing studies showing that violent games have disturbing effects on some children. As well, Christa Stewens, the family minister for the German state of Bavaria has called for a nationwide ban on war games like paintball and laser tag and has also said that children should not be permitted to play violent computer games.

A ban on violent games, however, looks far from certain. To date, the German federal government has refused to ban violent computer games and the opposition party - the Greens - continue to be resistant to the idea, suggesting that the proper course would be to focus debate on the proper use of computers.

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

SONY'S PS3 FALLS SHORT

When a New York Times article begins with, 'Howard Stringer, you have a problem. Your company's new video game system just isn't that great,"? you may be well advised to call your PR agency to arrange some damage control. Seth Schiesel of the New York Times took the PS3 for a week long, 30 hour, 13 game joy ride and had the following to say 

"Measured in megaflops, gigabytes and other technical benchmarks, the PlayStation 3 is certainly the world's most powerful game console. It falls far short, however, of providing the world's most engaging overall entertainment experience. There is a big difference, and Sony seems to have confused one for the other."

This can't be good news for Sony who some say may be fighting a losing battle with its main competitor, Microsoft. In his article, Stringer compares the PS3 with Microsoft's Xbox 360 and frankly, even as a neophyte in this arena, his article confirms my gut feeling that it would be better to wait and see what the next iteration looks like. 

I have to wonder what the bids look like on eBay now that gamers have had a chance to take the PS3 for a test run"?

Coverage at http://shorl.com/jesykeprefrybra (NY Times) 

Utah Lawmakers Determined To Pass Bill Restricting Access To Violent Video Games

Though an earlier bill - HB 257 - classifying violent games as pornography failed to be approved by the Utah legislature in 2006, a new draft bill very similar to HB 257 has been approved by the Judiciary Interim Committee. Whereas HB 257 detailed the criteria classifying a game as having inappropriate violence, however, the new draft bill replaces the descriptions with a line defining a game as inappropriately violent if it 'appeals to the morbid interest of minors in violence."?

Of note, the Committee's approval comes despite warning from the state attorney general that the bill, if challenged, would likely be declared unconstitutional. Similar laws against violent games - such as those enacted in Louisiana, Illinois and California - have been found to be unconstitutional by the courts.

Coverage at http://shorl.com/dipokuhygrala (Gamespot)

PS3 MANIA IN TORONTO

Call me a wet blanket, but did I really see people lined up on Bay Street this morning, in the rain, waiting for a chance to get a Sony PS3? Not since the last time I was in the UK and saw hoards of fans, in costume no less, waiting for the release of the latest Harry Potter novel, have I seen such an excited bunch of folks! Apparently one store in town has 100 for sale, another only 12. I have to wonder how Sony decided that one. In any event, the media are encamped and waiting for the doors to be thrown open for Sony's adoring gaming fans who are just dying to part with hundreds of hard earned dollars for"? what was it? A chance to make a profit by selling their new PS3's on eBay?  Ahhh, the cynic in me... Though admittedly, when I heard that there was a bid on eBay out of California for $19,000USD, I nearly went back to see if I too might find a place in line. Um, hi, Theresa? I'm feeling a bit under the weather today and won't be in"? damn, was that a news camera pointed at me?!   Gulp.  But no, instead,I look forward to watching all of this on the news tonight and possibly playing a rousing game of Pong on my 20 inch, not-even-close-to flat screen TV.  Note to self  tell Santa I have a couple of things to add to my Christmas list"?

Other coverage at  http://shorl.com/bihuduremifry (WTHR)

COPYING POSES THREAT FOR VIRTUAL ECONOMY?

Second Life is a popular virtual world with a thriving economy. Players design, create and sell of in-game items, including clothes, furniture, cars, etc. The items are bought and sold for in-game money, which can be exchanged for real-world money. Each player owns the rights in the content that he or she creates, and many players make modest (or not so modest) real-world profits from their Second Life businesses.

Therefore the creation and dissemination of a software program which can replicate any in-game object, including items created and sold by other players, is causing concern for Second Life's economy. The story sounds familiar to anyone following the digital copying controversy in the music and movie industries "? content owners are concerned that their content can easily be reproduced and distributed without any remuneration or acknowledgement. The same concerns apply in Second Life why should a player purchase a designer (virtual) suit in the game if that player can obtain and use a copy of it for free?

Second Life publisher Linden Lab has presented some solutions to the use of the copying software. First, it advises content creators to rely on the real-world Digital Millennium Copyright Act to prevent the unauthorized copying of their works. Second, it has stated that using an external application to make unauthorized duplicates within the game violates the terms of service, and those who engage in such copying may have their Second Life accounts closed.

This development should come as no surprise "? on-line games involve nothing but digital data, which is of course relatively easy to copy. But as the Second Life controversy demonstrates, the implications of such copying in the context of on-line games and virtual economies are far-reaching and challenging.

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

BILL TO DEAL WITH BULLIES UNANIMOUSLY PASSES IN THE U.S. SENATE

Jack Thompson might have lost his court battle against the controversial 'Bully"? video game, but we haven't heard the last of U.S. courts trying to deal with bullies, virtual or not.

Sen. Robert Antonioni, who currently chairs the Joint Committee on Education, is pushing for a new state (Massachusetts)law to create policy to deal with bullies in the public schools. This law proposes to define bullying and to provide guidelines for school boards to develop and enforce anti-bullying policies.

While the bill is not likely to have any impact on video games such as the 'Bully"?, clearly there is a problem with bullying in the U.S. and at least one Senator is trying to do something about it.

The bill unanimously passed in the Senate and is expected to pass in the House next spring.

Coverage at  http://shorl.com/fotrakebisahe  (CBS4 Boston)

US ANTI-DILUTION LAW

Further to our recent post about the ESA and the 'dilution"? or 'tarnishment"? of trade-marks, the Trademark Dilution Revision Act of 2006 recently became law in the United States. The new Act, which was a response to a US Supreme Court decision dealing with trade-mark dilution, expressly gives owners of 'famous"? marks the right to prevent the use in commerce of a mark or trade name that is likely to cause dilution by blurring or dilution by tarnishment to the famous mark. The Act confirms that dilution can occur regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.

'Dilution by blurring"? means an association arising from the similarity between a mark or trade name and the famous mark that impairs the distinctiveness of the famous mark. 'Dilution by tarnishment"? means an association arising from the similarity between a mark or trade name and the famous mark that harms the reputation of the famous mark.

The new legislation should make it easier for owners of famous trade-marks in the US to bring and prosecute dilution claims. As discussed in our previous post, there is not an equivalent law in Canada. However, certain parts of the Canadian Trade-marks Act (those dealing with the 'depreciation of goodwill"?) have been equated with US dilution principles.

Text of Trademark Dilution Revision Act of 2006: http://shorl.com/hyhibadogryvu

More On MMORPG Liability

Backbone Magazine recently published an interesting article by Danny Bradbury regarding legal liability in the online gaming world. If it leaves you craving more, check out the more-detailed article by our own David Spratley.

Backbone article here http://www.shorl.com/dapryprijufugru
Spratley article here   http://www.davis.ca/community/blogs/video_games/files/virtual_property.pdf

ESA Gets Demanding With Kotaku

The Entertainment Software Association recently sent a demand letter to website Kotaku.com, asking the owners of the site to take down their posting regarding a guy who's selling a t-shirt containing the words 'Your mom--rated E for Everyone"?. The shirt contains these words in a rectangular box with a big letter 'E"? (mimicking the ESA's 'E"? rating logo for games that are suitable for everyone).

The ESA says that Kotaku's posting is an advertisement for the shirt, which tarnishes and dilutes the ESA's logo. Kotaku says its posting is editorial content--not an ad--and that Kotaku has every right to post it.

CANADIAN LAW

The Canadian version of 'tarnishment"? and 'dilution"? is called 'depreciation of goodwill"?.  The concepts are different, but there are some similarities.

The Supreme Court of Canada considered these concepts in June of this year in a case where luxury champagne maker Veuve Clicquot tried to stop a mid-priced women's wear chain from calling its shops 'Boutique Cliquot"?. 

The champagne-maker argued that consumers would be confused into thinking that the clothing and the champagne came from the same source. It also argued that even if there was no confusion, the value of the champagne mark would be depreciated by allowing 'Cliquot"? to be used in association with mid-level clothing.  These arguments didn't fly.

The courts ruled that there was no likelihood of confusion between the marks. The courts were also not convinced that the clothing stores' use of the mark would depreciate the goodwill associated with the champagne mark. 

So turning to the t-shirts, does the 'rated E"? t-shirt lower the value of the ESA's mark? Maybe. Gamers will certainly make a connection between the shirt and the ESA logo, but is it a bad connection? This will depend on the evidence that the ESA is able to provide to a court. 

That said, there's one other important element under Canadian law to depreciate the goodwill of a trade-mark, you actually have to 'use"? the trade-mark (which means slapping it on a product and selling it, or using the mark to advertise a service).  It doesn't appear that Kotaku has done this, so the ESA will have a challenge arguing that Kotaku's postings depreciate the goodwill in their Canadian marks. 

The ESA could also sue Kotaku for 'infringing"? the ESA's mark, but to win the ESA would have to prove that the t-shirt mark is confusing with the ESA's mark. This is probably do-able, but it won't be easy.

U.S. LAW

The ESA might have an easier time under US law. We understand there are a series of cases in the US (particularly in the porn industry) under which US courts have found tarnishment of US trade-marks. A particularly relevant case isAnheuser-Busch, Inc. v. Andy's Sportswear, Inc.where the court issued an injunction to stop the defendant from selling 'Buttwiser"? t-shirts. This case should help the ESA with the t-shirt seller, but will it help the ESA with Kotaku? We'll leave this question for our US colleagues to answer.

Kotaku coverage here  http://www.shorl.com/bymihabrigrivy

GamePolitics.com coverage here .

 

TECMO'S ITAGAKI SUED FOR SEXUAL HARASSMENT

According to recent reports, Tecmo's Tomonobu Itagaki, creator of theDead or Aliveseries, has been accused of sexually harassing a former Tecmo employee. According to the former employee who is suing Tecmo for 10 million Japanese Yen (approximately $96,000CAD), Itagaki made repeated advances towards her over a period of at least 3 years.  Itagaki, who is married with children, has not denied that there was kissing involved although when questioned,he stated thatthat 'anything they did was with her consent."? Although Itagaki does not appear to have a new job description, according to some sources, in title at least, Tecmo demoted Itagaki from Executive Officer to Managing Executive Officer in response to the harassment allegations. According to Tecmo, 'there was a difference of opinions, and it will be cleared up in the trial."?  The plaintiff it would seem, is going to get her day in court.

Coverage at 

http://www.shorl.com/harykorejestu (biz.gamedaily)

http://www.shorl.com/bybutregrosyfa (gamerevolution)

http://www.shorl.com/damegobujyfry (gamesarefun)

Xfire Sues IGN For Copyright Infringement, Loses First Legal Battle

On October 16, 2006 Xfire filed suit against rival IGN Entertainment over IGN's GameSpy Comrade program incorporated into Electronic Arts' Battlefield 2142 game. Xfire's complaint is that GameSpy Comrade's 'Buddy Sync"? feature, which retrieves users' friends list from other instant messaging programs like Xfire and allows those users to invite friends with GameSpy accounts to join, infringes on Xfire's copyrights.

The day before Battlefield 2142 was scheduled to ship to retail, Xfire filed a request for a temporary restraining order in order was to prevent the distribution of Gamespy Comrade, arguing the release of the game could irreparably harm Xfire by infringing its copyrights, disclosing trade secrets and siphoning off its users to IGN's program. In response, IGN argued that Xfire has no copyright to a user's name and list of friends and, furthermore, that the alleged 'trade secrets"? were prominently posted on a publicly accessible area of Xfire's web-site. Electronic Arts also responded, arguing that a delay in the game's release would significantly reduce its sales.

In the result, the court denied Xfire's request for a restraining order, citing Xfire's failure to meet the burden of demonstrating probable success on the merits of the case.

Coverage at  http://shorl.com/fypumunyvebru (Gamespot)