Lawyers in Canada: Davis LLP - Legal Advisors Since 1892

VIVENDI, SIERRA, SONY AND HIAWATHA SUED OVER SPYRO

A New York woman has filed suit for unspecified damages in New York Supreme Court claiming that her infant son suffered a “gran mal seizure” (epilepsy) while playing Spyro: Enter the Dragonfly. GameSpot reports that the woman claims that the defendants were “negligent, careless, and reckless with regards to the design and manufacture” of Spyro. The PS2 edition of the game is said to come with a warning advising consumers of a “very small percentage of individuals” experiencing epileptic seizures when exposed to certain light patterns or flashing lights.

coverage at: http://www.gamespot.com/news/6168230.html

WHAT'S THE BIG IDEA?

The UK Court of Appeal recently decided a case involving copyright infringement and video games. Nova Productions Limited had created a computer pool game called "Pocket Money", and claimed that games created by two other companies -- "Jackpot Pool" by Mazooma Games Limited and "Trick Shot" by Bell Fruit Games Limited -- infringed its copyright.

The trial court found that there was no copyright infringement, and the Court of Appeal upheld that finding.

The basis for the decision was the key principle that copyright protects expression, not ideas. The games had some similar elements -- after all, they were all computer pool games -- but there was no evidence that any substantial part of "Pocket Money" was copied in the defendants' games. As the court said, "what was found to have inspired some aspects of the defendants' game is just too general to amount to a substantial part of the claimant's game".

The claimant's barrister argued that this approach meant that there is no effective protection for computer games if the rules of the game but not its graphics can be copied. The court did not accept this argument -- to protect such general ideas as the claimant was relying on would make copyright law an "instrument of oppression" rather than an "incentive for creation". Ideas themselves cannot be protected by copyright.

Coverage here: http://tinyurl.com/2bzvoe (Out-Law.com)

Decision here: http://tinyurl.com/2joscf

PEOPLE IN GLASS HOUSES...

You are probably aware that Viacom recently filed a massive lawsuit against Google over unauthorized film clips on YouTube. Viacom says that YouTube has not been proactive in preventing copyright infringement, and that YouTube's business model "is clearly illegal and is in obvious conflict with copyright laws".

It turns out that Viacom's moral high ground might be compromised -- Viacom owns iFilm, and the iFilm site contains content in which Viacom does not hold copyright. It's not clear whether, or how, these circumstances will affect Viacom's lawsuit, but it does demonstrate the point that if you're going to bring an action your own house had better be in order, as your past conduct will certainly be fair game.

This rule is true in the video game context as well. In one of the classic video game lawsuits, Universal City Studios, Inc. v. Nintendo Co., Ltd. (see a case summary here), the plaintiff found itself in hot water for trying to enforce rights in the King Kong franchise against Nintendo's Donkey Kong because the plaintiff had previously (and successfully!) argued in another lawsuit that King Kong was in the public domain.

So, the point to remember is that it's best to be sure of your own position before you start trying to throw your weight around.

WeeWorld Wants To Withdraw Wii Suit Whereas Nintendo Won't Waver, Wants To Win

Ahem.

WeeWorld's suit against Nintendo accuses the game maker of trademark infringement - more specifically, it alleges that Nintendo's Mii avatars infinged WeeWorld's trademarks for its own digital avatars (named WeeMees). Now, WeeWorld is is trying to have its suit dismissed. Problem is, Nintendo won't agree.

WeeWorld argues that the case is in its early stages and that a dismissal, without prejudice to its right to bring a similar suit in the future, would allow it to conserve its limited resources and see how similar litigation in the United Kingdom (where WeeWorld does most of its business) plays out. Nintendo, on the other hand, argues that any dismissal should be granted with prejudice (preventing WeeWorld from bringing a similar claim in the future) and, in any event, Nintendo seeks to recover the $400,000 it claims to have spent to date investigating the claim and preparing its defence.

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

Jack Thompson Gets Served

Anti-videogame activist (and lawyer) Jack Thompson is being pre-emptively sued by Take Two, in a bid by Take Two to thwart Thompson's plans to attempt to have Grand Theft Auto 4 and Manhunt 2 declared as public nuisances in the state of Florida.

Thompson is calling this lawsuit a SLAPP (a Strategic Lawsuit Against Public Participation) in the face, and said in an email to "Gamers and Gamer Publications on the Internet and Elsewhere" that he has been "praying, literally, that Take-Two and its lawyers would do something so stupid, so arrogant, so dumb-even dumber than what they have to date done-that such a misstep would enable me to destroy Take-Two." Thompson went on to call the lawsuit "the single dumbest thing I have ever seen any lawyers do in my thirty years of practicing law."

We're sure the to-and-fro will continue...and we'll be sure to report on it...

Coverage at: http://urlsnip.com/540776 and http://urlsnip.com/120441

Take-Two Downgraded

Despite Take-Two’s blockbuster hit, the Grand Theft Auto series, Wedbush Morgan (a financial analyst firm), has downgraded Take-Two’s stock to a sell due to poor financial results and hopes for the future.

Coverage: http://shorl.com/litretragykere (Gamesindustry)

Is Video Game Legislation Constitutional In Canada?

You've all heard a lot about video game legislation in the US. It gets passed, it goes to court, then it gets declared unconsitutional.

"What about Canadian video game legislation?" you ask? Well here's your answer, eh? Check out the article our video game law group recently published in The Lawyers Weekly.

Article here: Video Game Violence Legislation

Take-Two Take Over?

Stay tuned for Take-Two Interactive Software Inc.’s (NASDAQ: TTWO) annual general meeting on March 23rd. A group of investors currently holding 46% of the company may take control of the board, which could be the end of its current CEO’s, Paul Eibeler.

Take-Two has gotten a lot air time in the media a lately in connection with backdating of options, late filings of financials and placement of hot coffee in Grand Theft Auto. Despite its trouble, Two-Take has a lot of solid assets in its portfolio including Grand Theft Auto and if the change of control is successful, the company could very well be sold or certain assets could be spun out.

Coverage:
http://shorl.com/tarybrabobrupre (Gamesindustry)
http://shorl.com/bibruvenulyfro (Gamasutra)

MIDWAY SUED

W. L. Crawford, author of a 1998 screenplay entitled “Psi-ops”, has sued Midway alleging that it has taken his plot and characters for its game “Psi-ops: The Mindgate Conspiracy”. Gamespot.com reports that the screenplay is listed as copyrighted at the US Copyright Office on March 26, 1998 and the game is listed as copyrighted on July 9, 2004. Mr. Crawford is said to be seeking an accounting of revenue from Midway and a share of the profits, which he estimates at no less than 1.5 million.

coverage at: http://shorl.com/jalosydamagru (gamespot.com)

The Ups And Downs Of Litigation

In 2005 we reported that Roller Coaster Tycoon developer Chris Sawyer had sued Atari for US$5 million in respect of royalties he claimed Atari owed him. Sawyer also claimed that Atari breached a licensing agreement with him by failing to give him access to Atari’s accounts between 1999 and 2001.

Atari counter-claimed that Sawyer induced developer Frontier to breach its agreement with Atari, when Sawyer engaged Frontier to create a Roller Coaster Tycoon demo.

Now the UK High Court has agreed to hear the case. The interesting part of the story is that under current UK law, Atari’s claim will fail. However, the UK’s highest court (the House of Lords) is considering two other cases dealing with inducement under UK law. If the House of Lords upholds the decisions in these cases, there’s a good chance that Atari will drop its counterclaim.

Coverage here: http://tinyurl.com/2o6wj5 (gamesindustry.biz)

Take-Two In Settlement Discussions To Settle GTA "Hot Coffee" Lawsuit

A consumer lawsuit brought in New York against Take-Two Interactive, parent company of Rockstar Games - the publisher of the Grand Theft Auto series - has been stayed in order to allow the parties to carry out settlement discussions. The lawsuit is one of several brought in connection with hidden sex minigames programmed into the game Grand Theft Auto: San Andreas, which minigames could be activated through a game mod named "Hot Coffee". In light of the discovery, the game was re-rated AO for "Adults Only".

The announcement of the settlement discussions was closely followed by Rockstar Games' announcement that the trailer for the fourth installment in the GTA series would be available on March 29.

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

CHINA MOVES AGAINST VIRTUAL MONEY

The Chinese government is cracking down on the use of virtual money from online games to buy real-world products. According to a government notice, there must be a “strict differentiation between virtual exchanges and online commerce in material products” -- virtual currency can only be used to purchase virtual products and services, and users are forbidden from exchanging virtual money for real money for a profit.

The notice goes on to say that the People's Bank of China will "strengthen management of the virtual currencies used in online games and will stay on the lookout for any assault by such virtual currencies on the real economic and financial order.”

Analysts are pointing at the Hong Kong-based online game provider Tencent, which issues virtual "QQ Coins" through its games, as one of the driving forces behind the new policy. Tencent's games are enormously popular in China, and QQ Coins have been accepted as payment by other businesses and have been exchanged for legal tender.

We wonder whether the Canadian government will soon follow suit and crack down on the use of Canadian Tire Money, which we've always thought might constitute an assault on Canada's real economic order.

Coverage at: http://shorl.com/brusihokibetre (GameSpot)
and at: http://shorl.com/preganokebrobro (Financial Times)

Sony And Immersion Settle Differences, Enter Into Business Agreement

The announcement comes in the wake of a $91 million judgment in favor of Immersion in its lawsuit over Sony's DualShock controllers, which Immersion claimed violated Immersion's force feedback patent. Sony had appealed the decision.

Both companies have expressed enthusiasm over the incorporation of Immersion's advanced vibration technology in Sony's products.

Immersion will still receive the $91 million awarded to it by the court. As well, it appears that Sony will pay Immersion quarterly installments of $1,875,000 from March 31, 2007 to December 31, 2009, as well as other fees and royalty amounts. For its part, Immersion has agreed not to sue Sony or to enforce a permanent injunction it was awarded in March, 2005.

Coverage at: http://shorl.com/gruguprudofapru (Gamedaily)

Take-Two Enters Into Settlement Discussions Over Grand Theft Auto Lawsuit

Take-Two Interactive Software Inc. has agreed to enter into settlement discussions with a view to settling the lawsuit accusing Take-Two of selling its popular Grand Theft Auto video game titles - allegedly containing sexually explicit images - under the wrong content label.

The proceedings have been stayed by a federal judge in Manhattan so as to allow the settlement discussions to proceed.

Coverage at: http://shorl.com/drapigydyjosy (Reuters)

SOFTWARE GLITCH OR SUBLIMINAL MESSAGE?

The CBC recently reported that Ontario Lottery and Gaming pulled 87 slot machines out of service or physically removed them from casinos following a CBC investigation that uncovered flashing “winning” jackpot symbols in Konami’s “Most Wanted”, “Sergeant Fritter”, and “Billionaires” game machines - each of which appeared to be subliminally encouraging people to keep gambling. According the CBC, there didn’t appear to be anything unusual about the games - that is, until they slowed down the video recordings taken of the games. In slow motion, each of the three games clearly flashed winning jackpot symbols. Other provinces are investigating the matter.

Konami’s response? According to Konami spokesman Steve Sutherland, “it is simply a software glitch that our engineers have identified in four game titles, and we have identified [that] three of those title have been shipped into Canada”. The fourth title, “Sticks and Stones” is sold in the U.S. but not Canada. Whether or not it proves to be a technical problem, U.S. authorities are taking the CBC report seriously and have hired Gaming Laboratories International to investigate Konami slot machines in the U.S.

Marketing in the form of subliminal messages is nothing new. Think back to the controversial Camel cigarette pack. People today are still debating about whether there is a naked man on the pack or not. Did you know that some people have even claimed to see a likeness of Mae West?

It’s all fun and games - until it isn’t.

Coverage at: http://tinyurl.com/275ruy (Gamespot) and at http://tinyurl.com/3dvsgd (CBC)