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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

» December, 2006

DISGRUNTLED CONSUMER LAUNCHES WII LAWSUIT

As you have probably heard, there have been some problems with the wrist straps for Nintendo's new Wii controllers and Nintendo announced a voluntary replacement program last week. In the meantime, a Wii purchaser from Texas has filed a lawsuit against Nintendo, claiming that Nintendo engaged in 'unfair or deceptive practices"? by telling consumers that the Wiimote's wrist strap was meant to prevent the controller from flying from a user's hand during use, but then providing a strap that was not effective for that intended use. The lawsuit also claims that the wrist strap defects are a breach of warranty.

Nintendo has responded by stating that the lawsuit is without merit.

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

BOSTON TRANSIT UPDATE

There was a recent controversy in Boston over the placing of Grand Theft Auto ads on Boston subway cars (see here ). The Metro Boston Transit Authority General Manager has now announced that the MBTA will ban ads for AO (Adults Only) and M (Mature "? 17 and older) rated games. The rationale behind the decision is apparently that if the MBTA can ban ads for X-rated movies, it can do the same for AO and M games in the interests of not offending its riders.

The decision begs the question of what is an X-rated movie? The MPAA movie ratings include R (under 17 must be accompanied by adult) and NC-17 (no admittance under 17). R-rated movies may contain 'strong language, violence, nudity, drug abuse, other elements, or a combination of the above"?, and we suppose it's not unlikely that M-rated games could have similar content.

Coverage here http://shorl.com/defysygroriku (Game Politics)

and here http://shorl.com/bygodipygyste (Boston Herald)

NEW LAW IN CHINA FORCES GAME DISTRIBUTORS TO GET PRIOR APPROVAL OF OFFICIAL CENSORS

New law has been introduced in China which requires game distributors to get approval from the country's censors before being able to release new games in China. With over 23 million gamers in China and an estimated market of nearly 100 million Canadian dollars (and climbing), distributors will have to submit to these latest attempts by China to control video game content. According to the BBC, 'companies must also submit monthly monitoring reports, confirming developers have not added forbidden content."? Forbidden content is said to include pornography, excessive violence, sensitive religious material and references to territorial disputes.

Earlier plans by the General Administration of Press and Publication (GAPP) in China to control video gaming and content have included 3 hour limits being imposed on gaming followed by a 5 hour 'cooling off"? period between 3 hour sessions; banning minors from being able to play games on-line which are deemed to be too violent; and embedding technology within games which enforces such restrictive measures.

According to some, these and other measures are being proposed and imposed in an effort to assist in curbing the 'addiction of Chinese youth to video games"? and to censor offensive content. How effective these measures are, remains to be seen.

Coverage at  http://shorl.com/bypapribidroku (Games Industry); http://shorl.com/byfukystujima (China View)

Video Game Pirates Arrr On The Run

Aye me hearties, the US Entertainment Software Association and the UK's Entertainment& Leisure Software Publishers Association both announced recent devastating broadsides against creators and purveyors of pirated video games.

In the US, a New Jersey man was nabbed on December 8 and charged with selling pirated video games as well as modifying Xbox 360s to play pirated games. He faces up to five years in prison along with fines. Meanwhile, in the UK, a man in South Gloucestershire was arrested on December 6 amidst what the ELSPA describes as an 'Aladdin's Cave of criminal activity"? and charged with selling thousands of illegally copied games.

It is unknown whether the ESA or ELSPA representatives danced a merry hornpipe after making their announcements.

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

YES, BUT ARE THE DAMAGES WIIMOTE?

Interlink Electronics, Inc. has filed a lawsuit against Nintendo, claiming that the Wii's controller violates one of Interlink's patents. Lawsuits over controller hardware are not new "? for example, Sony lost a well-publicized cased against Immersion Corporation relating to force-feedback technology in the Playstation's controller (see here ). Given the importance of the Wii's controller to its new console's appeal, Nintendo is no doubt taking the lawsuit very seriously. Whether that means a quick settlement or a drawn-out, knock-down legal battle of the sort that we all love (we video game lawyers, that is) won't be known for a while.

Coverage at http://shorl.com/gedodrijofalu (ars technica)

Real Taxes On Virtual Assets Only A Matter Of Time

Maybe you own a snazzy home in Second Life, or an imposing castle in Ultima Online, or maybe you found a Krol Blade while questing in World of Warcraft. Though the home, the castle and the Krol Blade are all virtual property, all can be (and routinely are) exchanged for money - both virtual in-game currency and cold, hard cash. To the extent, then, that these items have real value, does their acquisition or transfer create a taxable event? If you sell that Krol Blade in-game for 800 gold pieces, for example, or auction it off on e-Bay for $80, should you be forced to report that income?

Dan Miller, a senior economist with the U.S. Congress' Joint Economic Committee, suggests that it's a question of 'when"? and not 'if"? Congress and the IRS will start paying attention to the virtual economy. Miller's committee began examining issues surrounding the virtual economy in October of this year and, just recently, he attended a panel called 'Tax and Finance"? at the State of Play/Terra Nova symposium, a gathering at the New York Law School to discuss the issues surrounding virtual worlds. At that symposium, Miller suggested that there could be wider future congressional oversight and a revised IRS tax policy in respect of the virtual economy.

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

Amendments To Australian Copyright Law Will Legalize Some Mod-Chips

It will be back to the drawing board for console makers who have to re-think anti-piracy technology in consoles after the Australian government announced plans to pass amendments legalizing mod chips that circumvent certain kinds of anti-piracy technology.

Under the amendments, technologies which prevent the use of copyrighted material legally bought in a different geographic region will not have the benefit of anti-circumvention laws.  Only those mod chips whose sole purpose is to thwart anti-piracy technology will be illegal. 

The amendments are suspected to be passed this week.  More coverage on this at Australian IT http://shorl.com/gejosepupredri

 

STATES FORCED TO PAY LEGALS

Illinois, $510,000; Washington state, $344,000; St. Louis, $180, 000; Indianapolis, $318,000; Michigan, $182,349"? All in USD!

In April, Michigan's video game law was declared unconstitutional and now the state has been ordered to pay the video industry's legal bill.

Douglas Lowenstein, president of the Entertainment Software Association, is quoted as saying that "In nine out of nine cases in the past six years, judges have struck down these clearly unconstitutional laws, and in each instance ESA has or will recover its legal fees from the states. What's worse, the politicians proposing and voting for these laws know this will be the outcome"?.
coverage at http://shorl.com/hygrutrapifoni (GameDaily)

5 YARDS FOR ILLEGAL Wii BUNDLING?!

Toys "R" Us is said to be under investigation by the Better Business Bureau over its Wii bundling practices. Some Chicago consumers are complaining of having been misled and railroaded into purchasing Wii bundles costing about $200 more than an advertised price (not for a bundle).

The BBB is reported to now be 'apparently challenging Toys "R" Us on its advertising of the Wii"? while Toys "R" Us has apparently told NBC that it was not an advertising problem and that it was simply a "misunderstanding"?, that consumers that wish to return the bundle and purchase the cheaper product will be allowed to so.

Mere bundling is not necessarily illegal.

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

1,000 Counterfeit Video Game Consoles Seized By RCMP

The counterfeit Magic Mega Plug and Play consoles were seized by the RCMP from kiosks at three Ottawa area malls. The consoles were being sold for about $60 and feature over 150 games, including a number of original Nintendo games.

No charges have yet been laid and the investigation is continuing.

Coverage at http://shorl.com/behymereteva (Ottawasun.com)

LADY KIER SUES SEGA AND LOSES

In the mid-80's, Keirin Kirby (better known to us video game lawyers of the "?80s as "Lady Kier") was the lead singer of a band called "Deee-Lite". But wait"?that's not all! Kirby was more than just a retro-funk-dance pretty face she was also a dancer, choreographer and fashion designer. And she believes she has created a distinctive look and character.

Enter Sega.

In 1999 Sega released Space Channel 5, a futuristic space game which featured a character called "Ulala" who dressed in an outfit similar to the outfits Kirby liked to wear (i.e. mini-skirt, tank top with a number on the front, pink hair in pigtails, etc.). THQ later released a Gameboy Advance version of the game.

Kirby sued, claiming that the game misappropriated her likeness and identity. The lower court dismissed the lawsuit (through summary judgment). Kirby appealed but lost.

The courts found there were similarities between the appearances of Kirby and Ulala, so Kirby at least had an argument that her likeness and identity were misappropriated. However, the courts also found that the First Amendment (freedom of expression) provided a complete defence to Kirby's claims because Ulala was not a literal depiction of Kirby"?there were sufficient differences between Kirby and Ulala.

At one time or another, many of you have probably considered basing a video game character on one of the many buff, distinctive and charismatic video game lawyers at Davis. And you probably wondered how to do it.

Well here's how. According to the California Court of Appeal, all you need to do is ensure that your work contains "something new, with a further purpose or different character, altering the first with new expression, meaning, or message."

The test in Canada will likely be different, of course, but there doesn't appear to be any video game case law on point yet. But heck, we're willing to make some, so here's a link to our photos  http://www.shorl.com/divofrakodefri  

Kirby v. Sega is here http://www.shorl.com/distokimynagu

Is A Console Maker Liable To Gamers Who Strain Themselves Through Overplay?

Just two weeks after the release of the Nintendo Wii, the Wall Street journal has reported cases of numb arms, sore shoulders and 'Wii-elbow"? caused by jerky or repetitive motions. It's not just the Wii gamers, of course, that can suffer from overplay - Dr. Daniel Latch, a gamer and a chiropractor, says that gamers on all consoles overwork their thumb tendons and neck muscles. Similarly, Dr. Chester Quan, an optometrist, is seeing a growing trend in nearsightedness and, in teens, a need for more frequent changes in prescription which he says is likely attributable to an increased exposure to computer screens and video games.

So, could these type of overplay-related injuries lead to a product liability suit against a console maker? It would appear at least theoretically possible. What about product warnings, though? Will warnings in the console manual about the dangers of repetitive motion be sufficient to shield a console maker from this kind of product liability claim? We note, for example, that such warnings also appear on both the Wii and Xbox360 web pages though, until a product liability claim based on repetitive injuries is litigated, it's not clear how much protection the warnings will ultimately offer.

Coverage at http://shorl.com/gigotovynino  (CBS5.com)