Lawyers in Canada: Davis LLP - Legal Advisors Since 1892

Chinese Editorial Condemns Virtual Property Trading

A recent editorial in the Shanghai Daily News calls for the Chinese government to ban trading in virtual property, mostly because that trade is fuelled by "an underground network of theft" and the gold-farming trade, where workers toil for long hours at low wages to collect virtual property and to level up characters.

The article suggests that video game players who "waste too much time" playing games become "losers" in school, and then often become online "criminals" because they have no other marketable skills.

Despite the over-the-top rhetoric (here's the best sample: "Numb and dull in real life ... who could make better slaves for this postmodern industry, whose motto is to turn persons into batteries for the matrix"), the editorial does identify the negative sides of the virtual property trade.

Coverage at GameSpot; editorial at Shanghai Daily News

Nasdaq Gives Atari Second Warning

After initially warning Atari, Inc. last month, Nasdaq has again notified the software publisher that it is in danger of being de-listed from the exchange.

The latest warning arose after Atari failed to file its quarterly financial statement when due. A hearing has been set for August 30 to determine whether Atari will be de-listed.

Coverage at Gamasutra and CRN Australia

Take-Two Served with Wells Notice

Take-Two Interactive Software Inc.'s ("Take-Two") troubles with the U.S. Securities and Exchange Commission ("SEC") continue as it was recently served with two "'Wells Notices". Wells Notices are letters issued by the SEC to notify parties that the SEC intends to commence an action against them.

Over the past year several former officers of Take-Two have been convicted or plead guilty to charges of backdating stock options that arose from SEC investigations.

Take-Two responded to the Wells Notice by stating that it would fully co-operate with the SEC.

Coverage at cfo.com and gamedaily.com.

The changing landscape of law

Here's a nice little blurb about our Video Game Law practice. Wow... that guy sure looks cool playing video games in his suit...

Link to National Article

Quebec: All Video Games in French!

Quebec Government Minister Christine Saint-Pierre stirred things up in Quebec today by her declaration to Le Soleil newspaper that all video games coming to Quebec would have to be made available in French, not by law (pursuant to Quebec’s Charter of the French Language) but through an agreement with the video game industry.

Our sources confirm that only an agreement in principle has been reached with the Entertainment Software Association of Canada and that a formal agreement has not yet been signed. We have found out that a formal news release detailing the content of the agreement was scheduled to be released in early September.

And justice for all?

Recent reports alleged that Metallica filed suit against Harmonix and Red Octane on the grounds that Guitar Hero III and Rock Band violate Metallica's copyright in its music. This of course led us to wonder who's the master of which puppets. But now Metallica has stated that it is NOT suing anyone, and that it has licensed both parties to use the classic song "One" in their new games. Good thing, too -- a lawsuit by Metallica would have been some kind of monster for the defendants, who would have been wondering for whom the bell tolls.

Initial reports at Digg.com and DailyGaming.Net.
Denial news at Rolling Stone.

An Epic Battle With the Knights

Epic has filed a Motion to Dismiss Silicon Knights (“SK”) mid-July lawsuit and a cross-claim, alleging that SK’s lawsuit is merely a strategy, designed to force Epic to renegotiate its license agreement. SK’s lawsuit is based on alleged contractual breaches, particularly with respect to the tardy delivery of Epic’s Xbox 360 versions of the Unreal Engine code 3 and the misuse of royalties paid by sundry licensees to compete with them and ensure commercial success of its own game title.

Coverage at Gamasutra.

Juicing OJ

In 1995, OJ Simpson was acquitted in criminal court of murdering Ron Goldman. Two years later, Goldman’s family won a civil suit against Simpson. The court awarded the family over $33 million for the wrongful death of Goldman and Simpson’s ex-wife.

Ten years later Simpson licensed Take Two to use his likeness in All Pro Football 2K8. But any revenues he was due to earn from that have been lost: a court has ordered Simpson to pay the revenues to Goldman’s family as part of the $33 million he has not yet repaid.

Coverage here (news.com).

Does Nintendo Patent Portend Portable Wii?

In March 2004 Nintendo filed a new US patent application excitingly titled "Game System and Game Information Storage Medium Used for Same", for what looks to be a small hand-held device. That application has just been published (or laid open, as our patent law brethren would say). The patent discloses motion-sensing technology, such that moving the device will have an impact on game play (i.e., in the same way that the wiimote control is used for Nintendo's Wii console).

Nintendo will not comment on whether this patent application reveals the nature of Nintendo's next hand-held game system, or whether it's just something they're experimenting with.

See the patent application at the USPTO site.

Coverage at GameSpot

SCHWARZENEGGER WILL BE BACK (OR AT LEAST WILL APPEAL)

Following the issuance of a permanent injunction, California Governor Schwarzenegger's 2005 video game violence law will never go into effect, unless the Governor is successful in his projected appeal.

The Entertainment Software Association reportedly commented that it “is pleased with today's permanent injunction ruling as it cements nationwide judicial consensus that our self-regulatory efforts work and attempts to regulate computer and video games are unconstitutional”.

Coverage at GameDaily BIZ.

ONE LAWSUIT? SCRATCH THAT!

A while ago we mentioned a Florida lawsuit against Microsoft, alleging that Xbox360s scratch discs to the point that the discs are unreadable (see here).

Another similar lawsuit was launched in California shortly after the Florida claim. Given that both lawsuits are seeking to become class actions, Microsoft might have a growing legal battle on its hands.

Coverage at PCWorld.

Mod Chip Crackdown

US Customs agents recently conducted dozens of raids of homes and businesses to seize mod chips that allow pirated versions of games to be played on gaming consoles. The mod chips were apparently manufactured in other countries and imported into the US.

The US Digital Millennium Copyright Act specifically addresses devices such as mod chips which are used to circumvent copyright protection. Canada’s Copyright Act doesn’t currently prohibit anti-circumvention devices, but it will if proposed amendments to the legislation are passed.

Coverage here (ComputerWorld).

50 CENT PUTS HIS 2 CENTS IN

Curtis Jackson, aka 50 Cent, has filed a $1 million lawsuit against Traffix Inc., an internet advertising company. The claim alleges that an on-line advertisement mini-game called "Shoot the Rapper" uses 50 Cent's likeness (although not his name) without permission.

Personality rights can be tricky, especially if there's an issue about whether the offending representation is obviously the celebrity or just kind of similar.

Coverage at NME.com and GabbyBabble.com

Former Take-Two executives charged with falsifying company records

Two former executives of Take-Two Interactive Software Inc. ("Take-Two") have plead guilty to misdemeanor charges involving falsifying company records in connection with backdated stock options. The former general counsel of Take-Two was fined $50,000 (U.S.) and has been permanently barred from holding certain positions in publicly-traded companies. The former comptroller of Take-Two was fined $300,000 (U.S.) and was barred from holding certain positions in publicly-traded companies for five years.

More coverage at: C/Net News.com

Related blog entry in one of our past postings.

DR. HOOK WOULD BE PROUD

Our Video Game Law Group was recently featured in the Vancouver Sun, Business in Vancouver and The Lawyers Weekly. Here are the links:

Vancouver Sun article is here.

The Lawyers Weekly article is here.