Lawyers in Canada: Davis LLP - Legal Advisors Since 1892

Casual Gamers Beware!

You know that casual gaming is on the upswing when Facebook gamers initiate class action lawsuits on the basis of "misleading ads" associated with social games that use Facebook as a platform. In November of 2009, Rebecca Swift filed a class action lawsuit against Facebook and Zynga (the latter being a developer of social games on Facebook and MySpace). Allegedly, Ms. Swift ordered a "risk free" trial of green tea supplements in order to obtain "YoCash" (virtual currency) to "buy" various in-game items for use in Zynga's YoVille. Ms. Swift claims that when she attempted to cancel the order within the "risk free" trial period, the supplier of the supplements failed to honour her request and her credit card was charged.

Ms. Swift has since dropped the lawsuit against Facebook, but is continuing with her action against Zynga.

There is an obvious moral in all of this for social game aficionados that are concerned about being possibly ripped off by "misleading ads": stop playing social games, not so much because of the possibility of liability, but more so because they suck. Do yourself a favour and pick up a 360 or a PS3.

Coverage at Industry Gamers

Jellyvision Sues Aflac Alleging Infringement of its Copyright in "You Don't Know Jack"

Back in 1995, Jellyvision developed and released its comedic interactive trivia game You Don't Know Jack. Indeed, in 2001, it was apparently briefly made into a game show that aired on ABC. It is still available online today. Aflac, a Fortune 500 company that provides supplemental insurance recently developed a campaign called You Don't Know Quack, which encourages consumers to interact and respond to (three) trivia questions designed to provide information about the company's products and services. In addition to this recent campaign, Aflac has also used such slogans as Don't Let "em See you Quack.

Critics argue that Jellyvision is taking advantage of an opportunity to garner publicity because Aflac is a known, established company with strong brand identity; however, legally speaking, if confusion can be proven exists between the two brands, and Aflac has received an economic benefit as a result of its You Don't Know Quack campaign, Jellyvision could have a case.

According to sources, the parties are looking to settle the matter amicably.

Coverage at: Gamasutra.com and the Ledger Inquirer.

CTA Bans Video Game Ads; ESA Sues

The Entertainment Software Association announced that they are suing the Chicago Transit Authority over the CTA's decision to ban all ads for "M" and "AO" rated video games on trains and buses. The policy, which came into effect January 1, 2009, follows the CTA's decision to pull ads for GTA IV last April for "inspiring violence" - a decision that was ultimately reversed when Take-Two sued and later settled with the CTA.

The ESA has decided to challenge the CTA's ordinance on First Amendment grounds, arguing that game ads are entitled to free speech protection and the CTA's rule unconstitutionally "restricts speech in a public forum that is otherwise open to all speakers without a compelling interest for doing so." The ESA also notes that the ads are themselves subject to ESRB review.

A CTA spokesperson said that the policy is consistent with the CTA's long-standing policy of banning alcohol and tobacco advertising.

The full press release is available here.

Duke Nukem Forever or Never?

It has been reported that Take-Two Interactive Software Inc. ("Take-Two") has filed a lawsuit against Apogee Software Ltd. because of the developer's "continually delayed" delivery of the game Duke Nukem Forever, a project that has been ongoing since 1997 . Publisher Take-Two had purchased the publishing rights to the game in 2000 for over $12 million dollars.

It is to be noted that Apogee Software Ltd. is a 3D Realms-related entity and is a different entity than Apogee Software LLC who is the developer behind the Duke Nukem Trilogy.

It has been reported that the complaint states that "Apogee repeatedly assured Take-Two and the video-gaming community that it was diligently working toward competing development of the PC Version of the Duke Nukem Forever." However, despite these assurances, it has been reported that 3D Realms has shut down its doors. It has also been reported that Take-Two had offered cash incentives to 3D Realms for the completion of the game. Nevertheless, it seems that the developer is now out of money and may owe more than expected.

Coverage at Kotaku.com, Gamasutra.com and Gamedaily.com.

Controversial Ad Leads to Outrage ... and Potential Lawsuit

Submitted by Karine Bellavance

In response to a printed ad released by the U.K. government, it is reported that Sony Computer Entertainment Europe ("Sony") is considering legal action. This ad was published as part of the Change4Life campaign, backed by the British Heart Foundation, Cancer Research and Diabetes UK. It is reported that the campaign's intent is to promote an active lifestyle among children. The publicity depicts a young boy looking bored holding a PlayStation-like game controller and suggests that playing video games could "risk an early death". The message behind the ad has sparked outrage among gamers, publishers and industry trade groups.

It has been reported that the ad agency behind the publicity had not contacted Sony before using the PlayStation-like controller in the ad, leading to Sony considering legal action. Sony has reportedly stated that this negative portrayal of gamers is "a serious issue for the video games industry and one that needs to be dealt with by the industry as a whole".

In light of this controversy, some have suggested that such a lawsuit would be an overreaction, being that a limited number of people will be able to tell that the ad shows a PlayStation-like game controller. Furthermore, some have also stated that the real issue that should be looked into in this case is the misleading message behind the ad.

Coverage at EscapistMagazine.com and Techdirt.com

GTA ads are back on Chicago Transit

In an earlier posting, we reported that Take Two sued the Chicago Transit Authority after the CTA removed ads for Grand Theft Auto IV. The CTA's actions appear to have been a response to a Fox News reporter's on-air question about why the CTA was carrying the ads.

Take Two and the CTA have now settled the lawsuit. Part of the settlement apparently involves the CTA displaying the ads again for 6 weeks.

Coverage here (kotaku.com)

ECA PARTNERSHIPS WITH WAL-MART, AMAZON AND K2 NETWORK

The Entertainment Consumers' Association (ECA) promotes gamers' rights and wishes to ensure that First Amendment rights are upheld for videogames as they are for other forms of entertainment.
The ECA has formed a new retail partnership with Wal-Mart, Amazon and K2 Network in order to promote videogame advocacy. Walmart.com and Amazon.com will also begin selling ECA membership cards.
Additional retail partners will be announced at a later date.

Coverage at: gamedaily.com

OBAMA IN BURNOUT

Barack Obama has brought his campaign online. It is reported that nine games, including Burnout, Madden, Nascar and NHL, feature Mr. Obama's in-game ads in the Xbox Live versions of the games. The ads are will continue to run until November 3.

Mr. Obama is said to be the first presidential candidate to advertise in a video game.

Coverage at: Gamedaily.com

Music Suit Against Nintendo Suddenly Dropped

GameSpot is reporting that a suit against Nintendo for using unauthorized music in its 2004 commercial for “Paper Mario: The Thousand Year Door” has been dropped. Morgan Creek Productions filed the suit on June 12, 2008 alleging that Nintendo had used the song “You’re So Cool” without permission. The song is better known as the theme to the ultra-violent, Tarantino-penned cult classic “True Romance”.

According to GameSpot, Morgan Creek voluntarily dismissed the case on June 18. No reasons were given.

GameSpot report is here.

Google Video of Nintendo’s ad is here.

Submitted by Michael Mjanes

Stranglehold Ad Banned in UK

The UK Advertising Standards Authority has ruled that a TV ad for Midway's "Stranglehold" cannot be shown on British television because the ad encourages and promotes violence. The decision was prompted by two consumer complaints.

The ad had been carefully prepared so that it did not depict bullets hitting anyone (since the game is associated with John Woo and his "bullet ballet" style of action, there's no question that it features plenty of bullets), and had been pre-cleared by the British NGO which approves ads (the Broadcast Advertising Clearance Centre). Nonetheless, the ASA felt that the ad's voice-over (which read "Honour is his code. Vengeance is his mission. Violence is his only option. John Woo presents Stranglehold. The next generation of action gaming has arrived.") suggested that revenge was honourable and that violence was an acceptable option.

Coverage at 1UP and Game Politics.

Perpetual Entertainment sued by PR Firm over Gods and Heroes: Rome Rising

After announcing that its MMO, Gods and Heroes: Rome Rising, would be put on hold so that it could focus on Star Trek Online, Perpetual Entertainment was sued by its former PR firm, Kohnke Communications.

Kohnke claims that Perpetual owes it monies for outstanding invoices, as well as for bonuses Kohnke would have made, depending on the success of Gods and Heroes. Kohnke's suit also alleges that Perpetual fraudulently transferred its assets in order to avoid paying debts to Kohnke.

Coverage at: 1Up.com

In-Game Ads Becoming More Popular

For advertisers, at least. Media giant NBC Universal has announced that it will start selling ads into IGA Worldwide's inventory of game titles. Industry commentators note that NBC Universal is the first non-gaming media entity to make a serious entry into in-game ads, and that more in-game ads from non-game advertisers are to be expected.

Coverage at GameDaily News.

New Ad Partnerships Announced for Guitar Hero 3

Activision has announced that the latest entry in its popular Guitar Hero franchise will feature several real-world brands. Activision has entered into agreements with various well-known musical instrument and equipment suppliers and music industry publications, through which the real-world brands will appear in the game itself.

Activision states that the presence of real-world brands will add verisimilitude to the game experience. This is an interesting example of how in-game advertising and the use of real brands in games is somewhat of a two-way street -- brand owners view it as a way to get more exposure, and game companies see it as a way of increasing the realism (and therefore appeal) of their games. Of course, at the end of the day both parties almost certainly see it as a direct or indirect way of increasing revenues.

Coverage at Gamasutra.

UK Burnout Ad Fades Away

EA has been instructed by the British Advertising Standards Authority not to reuse an advertisement depicting a crashed car with the tag line "inner peace through outer violence". The ASA says that the ad (for the game "Burnout: Dominator") was irresponsible because it could been seen to condone a violent lifestyle, anti-social behaviour, or dangerous driving.

Although the ASA's statement was a strong one, it might be a case of closing the barn door after the animals have already escaped -- the game was released in March 2007, and the primary advertising campaign is long over. Nonetheless, EA has said that it will not re-use the advertisement in its current form.

Coverage at Gamasutra and at BBC News.

Europe Grappling With Offensive Content in Video Games

First there was the threat of legal action between Sony and the Church of England over Sony's decision to include a gun battle inside Manchester Cathedral in its Resistance: Fall of Man title. Though Sony ultimately apologized, the Church still maintains that the video game should be pulled from shelves and that Sony should make a contribution to the Church's anti-violence campaign.

Then came the UK ban on Manhunt 2, a title whose gameplay was characterized by the British Board of Film Classification as "sustained and cumulative casual sadism", making it the first game to be banned in that country in 10 years.

Now, three more incidents are keeping alive, at least in Europe, the issue of offensive content in video games.

In England, an ad for Electronic Arts' Burnout Dominator has been voluntarily pulled after the Advertising Standards Authority received 37 complaints. The poster, which was ruled "irresponsible" by the ASA, depicted a wrecked car, a burning tire and the slogan "Inner peace through outer violence".

Meanwhile, Legacy Interactive, the developer behind the Law & Order video games, has come under fire for including in its Law & Order II: Double or Nothing title an image of James Bulger, a two-year old who was abducted and murdered in England in 1993. The game also specifically refers to the murder case. In the wake of complaints from the victim's mother, Legacy has issued a formal apology to the Bulger family and released a patch to remove the image. The game has also been pulled from British retail shelves, with Legacy promising to remove the offending photo from future printings.

Finally, Ubisoft's Mind Quiz game has received criticism as a result of complaints regarding offensive comment in the game. More specifically, poor performance in the game can result in the player being referred to as "spastic" - a term deragotory to disabled people. Ubisoft, who blames the error on the Japanese development team and also on its own quality assurance, has withdrawn the game from the European market.

Coverage at:

• Gameindustry.biz

• Joystiq.com

• Gamepolitics.com

Britain Bans Xbox 360 Racing Ad

The ad, which is not for any specific game, involves a street race between two cars in heavy traffic. The race culminates in one of the cars overturning. Though the cars never exceed the speed limit, the ad was shown only after 9 pm, and it further included onscreen text reading "Dramatisation. Professional stunt. Do not attempt." the UK Advertising Standards Agency upheld consumer complaints against the ad for "glamorising street racing", ruling that it breached health and safety and driving standards rules, and should not be re-broadcast.

The ASA took the position that the onscreen text only “reinforced the sense that the events were real, rather than fantasy, and were therefore capable of being copied” and stated that the agency was concerned "that the ad gave the impression that reckless street car racing was exciting and fun”.

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

DENVER RTD REJECTS BAN ON ADS FOR ADULT-RATED VIDEO GAMES

The Denver Regional Transportation District (RTD) directors have ultimately rejected banning the use of adult-rated video game ads on agency buses and trains. The ban, which was put forward by the RTD committee, was initially proposed by “the Parents Television Council and the Campaign for a Commercial-Free Childhood,” recommended that Mature (M) and Adult Only (AO) games not be advertised on local transportation because it “exposes young riders to graphic violence and explicit sexual content”. The current RTD policy does apparently prohibit the posting of ads which are “deceptive, illegal or obscene” or which promote the sale of tobacco products. Additionally, if the existing policy does indeed require that content be “of a reputable character,” conceivably the policy as it stands could be used to limit the content of advertisements relating to any video game. Airing on the side of caution with regard to constitutionally entrenched rights to free speech in the U.S. was probably the right thing to do.

http://tinyurl.com/26c5j8 (Denver News)

PRODUCT PLACEMENT RISKS IN GERMANY

(This posting was written by Andreas Lober at Schulte Riesenkampff in Germany.)

Publishers' hopes for additional revenues created through product placement in games get a slash back with some recent decisions coming from Germany.

In Europe, many forms of product placement are currently illegal. While the European Parliament favors a liberalization, the German parliament wants to maintain the strict rules currently applicable in Europe's largest economy. 

A Munich court has decided recently that publishers may have to pay back product placement revenues to the advertisers even if the product placement was provided as agreed. Europeans assume that the customer may be mislead by product placement, which is considered as a form of camouflaged advertising.

Publsihers targeting an international audience are therefore well-advised to consider European legislation when designing the product placement, and when drafting the relevant advertising agreements.

The Munich case number is BayObLG München 29 U 4412/05.

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)

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)

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 .

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)

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)

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)

TABLE OF VIDEO GAME CASE LAW

We're pleased to report that our blog now contains a table of video game law cases.  It's a work in progress (we have a bunch more cases to add) but we're so excited that we just can't wait to share.  So here's the link  http://www.davis.ca/community/blogs/video_games/files/blogtable.htm

Keep checking back for updates.  There's also a link on the homepage of the blog. 

EUROPEAN PSP AD CAUSES CONTROVERSY

Sony Computer Entertainment is introducing a new PSP in 'ceramic white"? (the original PSP is black). However, some ads for the new PSP in the Netherlands are causing a bit of a stir. One ad shows a white woman grabbing a coloured woman's jaw, with the slogan 'PlayStation Portable White is coming"?. Many people are claiming the ad is racist, and should be removed. In fact, the NAACP (a US civil rights group) has issued a statement lambasting Sony's 'archaic advertising techniques"?.

Sony has stated that the ad campaign, which is only being used in the Benelux countries, uses images that were designed to emphasize the colour contrast between the black PSP and the white PSP, and which 'have no other message or purpose"?.

Coverage at http://shorl.com/gudryfrofikihu and at http://shorl.com/bonafigosara (EuroGamer.net)

MICROSOFT GETTING MASSIVE?

We've talked before about in-game advertising (for example, here  and here ). One of the leaders in this field is Massive Inc., a New York firm that has developed technology that lets dynamic advertisements be inserted into video games.

There are now reports that computer giant Microsoft is in negotiations to purchase Massive (perhaps for as much as $400 million). Microsoft has not confirmed these reports. If such an acquisition takes place, Microsoft will be able to increase and improve the in-game ads in its on-line XBOX games.

Coverage at http://shorl.com/fagydrypribrynu (E-Commerce Times)

MERCURY FALLING?

Mercury Games, run by the same individuals who ran the now-defunct Digital Jesters, is in some hot water already. Apparently Mercury's new web site, launched just last week, contained incorrect data relating to UK game charts. Mercury admits that the incorrect data was mistakenly posted on its site, and that it was quickly removed. Mercury says that it is being persecuted by certain individuals who claim that they are owed money by Digital Jesters, and Mercury says that plans to sue these individuals are in the works.

Coverage at http://shorl.com/hyfryfeduropu (GamesIndustry.biz)

THE GTA COMPLAINT

In an earlier posting , we reported that Rockstar andTake-Two Interactive had been sued by the LA city attorney.  The lawsuit claims they made misleading statements and engaged in unfair competition in marketing the popular Grand Theft Auto San Andreas game.

For your reading pleasure, we can now provide you with a copy of the complaint.  Here it is http://www.shorl.com/jatinudurede

It's a big file, so be patient.

DON'T MIND THE GAP?

Part of Sony's PSP promotional campaign in the UK involved plain white posters with the red text 'take a running jump here"?. After subway and train workers expressed concern about having such posters at train stations (and close to the tracks), Sony decided to remove the posters from those locations.

We hope that no posters were put up on piers or bridges.

The moral of the story? You should certainly try to have catchy and edgy advertising to promote your games and products, but always give some thought to what effect those ads might have on the intended audience, and what legal liabilities might be involved.

Coverage at http://shorl.com/gonaroprydoni (GamesIndustry.biz)

The Resurrection Of Acclaim

When Acclaim Games went belly-up in September 2004, it left scads of vaunted intellectual property like 'The Adventures of Mary Kate& Ashley"? in legal limbo. Howard Marks, a former significant shareholder and executive with Activision, had the foresight to buy up what was perhaps Acclaim's greatest intellectual asset its name. Now, it is being reported that Marks is readying to launch a new company with the old name, specializing in casual, Asian-style MMOs. Whether Marks' Acclaim will have more success than the Acclaim of old remains to be seen, but we're glad to see that someone is making the attempt.

Coverage at http://www.shorl.com/hutababredrope

Gizmondo Gets A Date

If all goes according to plan, on October 22ndAmerican gamers will finally be able to get their hands on Tiger Telematics' handheld gaming system, 'Gizmondo,"? which launched in the UK almost a year ago.   An interesting innovation, the Gizmondo will be sold for either$399 (US) for the regular system, or for $229 (US) for a model that automatically downloads and plays commercials.  Several details regarding Gizmondo's launch are still unclearwe're unsure whether it's launching in Canada, and nobody seems to know who will actually be selling the unit, although Tiger will reportedly be setting up special mall kiosks to move the handheld. Whether Gizmondo will be able to compete with Sony and Nintendo's new handheld units - the PSP, GBA Micro, and the DS - remains to be seen.

Coverage at http://shorl.com/bafredrihyhijy

Tiger Going Public…

..but the Gizmondo is still not on North American retail shelves.

Tiger Telematics Inc. has announced its intention to become a public company by seeking a listing on the Nasdaq stock exchange. The company has stated that such listing would"engage a much larger investor base as it permits retail solicitation orders and research by analysts. Tiger's common stock will then be considered a marginable security for loans." It seems likely that Tiger is making the move to obtain cash to be used to push Gizmondos into retail outlets and ultimately the hot little hands of consumers. Given the huge uphill battle facing the Gizmondo, the wisdom of investing in Tiger remains an open question.

Coverage at http://shorl.com/gagragokygreba

Xbox 360 Launch Date Announced

Or should I say, launch dates?  Though originally it was at least heavily implied that Xbox 360 would launch in North America, Europe, and Japan on the same date, that's now the same "time frame" - Tuesday, November 22 in North America, Friday, December 2 in Europe, and Saturday, December 10 in Japan.  This falls in line with the concept that launch titles are considered those released within 3 months of the console's launch.  Though not legal news per se, this is a huge release that's going to kick off the next generation of the console wars.  Hang on to your potatoes!

Coverage at http://www.xbox.com/en-US/news/2005/0914-xbox360launchdates.htm

Video Games Get More Annoying

Massive Inc., a New York-based company which places ads in video games, has developed technology that downloads full-motion video ads from the internet and inserts them automatically into a certain PC game (Anarchy Online). Video game ad insertion has traditionally been problematic because ads would need to be integrated into the game's code, leading toward logo or brand placement instead of current ad campaigns or timely offers; however, because Massive's technology permits ads to be constantly updated via the web, ads can be current, timely, and frequently changed. Although currently a PC trend due to the broad-based availability of the internet for PC gaming, the next generation of consoles' drive for ubiquitous online availability means no one will have to wait long for their electronic avatars to be assailed by constant commercialization. Just like the real world, only with anti-aliasing!

Coverage at http://www.shorl.com/hogrykifrastyso

The Death Of P2p?

The end of June brought sad news for the peer-to-peer (p2p) community, with the US Supreme Court finally deciding MGM v. Grokster. The decision, which holds p2p company Grokster liable for the unauthorized trading of copyrighted works on its networks, modifies the 1984 Sony Betamax case in which the US Supreme Court stated that manufacturers of devices capable of copyright infringement (such as VCRs and photocopiers) are not liable for such infringement, provided their devices also have legitimate uses. Grokster does not significantly change this 1984 decision, but instead carves the niche that 'one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, going beyond mere distribution with knowledge of third-party action, is liable for the resulting acts of infringement by third parties using the device, regardless of the device's lawful uses."?

Instead of outlawing p2p networks, the ruling warns against improper p2p software marketing. Unfortunately, determining what might constitute the "?promotion of copyright infringement' is not made readily clear by the ruling, leaving p2p software companies on potentially unstable legal footing. Whether this uncertainty will result in a chilling effect on p2p software remains to be seen.

See the case at http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=000&invol=04-480

THE ONLY THING BETTER THAN A PORTABLE VIDEO GAME...

...is apparently a portable video game with ads. The Tiger Telematics' portable video game console "Gizmondo," which is expected to be released in North America later this year, has developed an interesting approach to keeping the unit affordable. Up to three times a day, a Gizmondo will play an ad beamed to it by Tiger and which is tailored to each individual user. Our prediction? Lots of ads for video games.

Full coverage at http://www.shorl.com/jefysyprusute

HOW TO GET AHEAD IN IN-GAME ADVERTISING

Massive Inc., the company that is taking the lead in in-game advertising, has just announced its first group of advertisers and brands. The list includes Verizon and RealNetworks (previously announced), as well as Universal Music Group, Intel, T-Mobile, Dunkin' Donuts, Nestle, Coke, Paramount, and Honda Element. Massive intends to have 40 games receiving its advertising stream by the end of 2005.

Massive's in-game advertising model moves beyond mere product placement to dynamic streamed advertising which changes over time and can be targeted based on geography, time of day, etc. Massive's CEO believes that this sort of in-game advertising is a huge potential market because a key demographic, namely 18 to 34-year old males, is shifting to video games as their primary source of entertainment (apparently the majority of males in this cohort spend about 20 hours a week playing games). The model is also said to add realism to games, and apparently a recent Harvard Business School study found that in-game advertising improved the gaming experience for a large majority of gamers. Combine this with increased per-unit profits for publishers, and Massive thinks it has a no-lose proposition on its hands.

Coverage at http://shorl.com/desysobrufrugro

Interview with Massive Inc. CEO Mitch Davis at http://shorl.com/fisyprokogafi

CONNERY SAYS “YESH” TO BOND GAME

Actor Sean Connery is providing the voice for EA's latest James Bond game, From Russia With Love. The game will also feature the likeness of Connery as he was at the age of 33 when the film was made (he is now 74).

Using celebrity voices and likenesses in video games is nothing new (PC gamers may recall Mark Hamill's voice in the later Wing Commander games, for example). However, that Connery is willing and eager to participate in video games when his film career is still going strong indicates, once again, the emergence of video games as a dominant player in the entertainment industry.

Coverage at  http://shorl.com/fusestotranypru

Hey Sam… Holster The Gun And Pick Up An N-GAGE!

We just learned that Ubisoft signed an advertising deal with several companies including Nokia. Under the agreement, Ubisoft agreed to place the companies' products in Ubisoft's latest release, Splinter Cell Chaos Theory.

In-game advertising is really catching on. The NBA , Pizza Hut and Reebok have all signed big contracts to advertise their products in newly released games.  We thought about jumping on the bandwagon and adding a "dial a video game lawyer" feature to the next hot release, but we're a little worried about what the modding community might do to us... 

Coverage at  http://www.shorl.com/dasidubefrapu

NBA STARTS FIVE

The NBA is the most recent professional sports league to enter into new large-scale licensing arrangements with game publishers. However, instead of giving one publisher exclusive rights to use NBA properties (as the NFL did with Electronic Arts), the NBA has entered into non-exclusive licence deals with five different publishers Electronic Arts, Take-Two Interactive, Midway Games, Sony, and Atari.

The NBA says that this approach will keep the quality of the games high and will maintain a diverse range of NBA video games. It also cited the importance of in-game advertising, and how the new licences will give it increased 'virtual signage"? to sell to advertisers.

Coverage at http://shorl.com/fohojobrybide

And at http://shorl.com/gagufamavevo

DON'T ATTACK ME - I'M ORDERING PIZZA

Two recent stories address the development of in-game advertising and product tie-ins.  First, Sony's new Everquest II on-line multiplayer game has a built-in function that lets players access the Pizza Hut website and order pizza without leaving the game (the game does not pause during the transaction, however, so players are cautioned only to order pizza while in a safe place).  Sony also plans to integrate the pizza function even further, so that players can charge their pizza purchases to their monthly game subscription bill.  How Sony plans to deal with the resulting waste issues remains to be seen.Second, Swedish game publisher Funcom has entered into a new deal with Massive which will see Massive stream advertising into the Anarchy Online gameworld.  As discussed in Issue 1.1 of the Video Game Law Report, this in-game advertising trend will only get bigger as advertisers catch on to the fact that a key market demographic is shifting from television to video games for entertainment.Coverage at  http://shorl.com/badekogryfose http://shorl.com/fastidynidobru

TAKE TWO ROUNDS THIRD

Take Two Interactive has entered into further semi-exclusive baseball agreements by signing long-term deals with MLB Properties and MLB Advanced Media, two key Major League Baseball licensing firms. These deals, which come shortly after Take Two's deal with the MLB Players' Association, give the game publisher rights to the brands of all the clubs and ball parks in the league. As before, Take Two acquires exclusive rights among third party publishers, but video game system manufacturers will still be able to develop and publish baseball games.

Coverage at http://shorl.com/fuvodrobrostyti

TAKE 2 TAKES TWO, GETS ON BASE WITH MLB

Take 2 Interactive has reached an agreement in principle with the Major League Baseball Players Association to develop and publish baseball video games. Under this seven-year deal, Take 2 will have exclusive rights among third-party publishers to develop and market baseball video games. Video game system manufacturers will still be able to develop and publish baseball simulation games for their own platforms. Given recent similar agreements between EA and the NFL, ESPN, and Reebok, it seems like there are few professional sports leagues left without exclusive contracts with game developers. But here's a free tip: we hear curling is still up for grabs...

Coverage at http://shorl.com/guminafipryvu

Exclusive curling licences at http://www.curling.ca

AS IS ESPN

Electronic Arts continued its trend of signing exlusive licence agreements with everyone under the sun (except for us, apparently, but we haven't given up hope) by announcing an unprecedented 15-year agreement with ESPN that gives EA exclusive first rights to all ESPN content for simulation sports games.

Coverage at http://shorl.com/bybebuposypru

REEBOK IS IN THE GAME

Sports giant Reebok has signed a multi-title sponsorship agreement with Electronic Arts, under which Reebok's products will be included in various EA sports games. Reebok sees this as a natural expansion of its branding campaign; EA is downplaying the marketing overtones by saying that the agreement will add "authenticity" to its games. Regardless of the spin it's given, the sponsorship agreement demonstrates how video games are coming into their own as branding and marketing platforms.

Coverage at http://shorl.com/dubrojolyjypu

IN-GAME ADVERTISING THE NEXT BIG THING

Video games are growing in popularity and pulling audiences away from more traditional forms of entertainment such as movies and television. And where audiences go, advertisers are quick to follow -- advertisements in video games are on the rise, as are advertising revenues for video game publishers. In fact, a newly-created video game advertising network lets advertisers deliver new ads directly into games through online connections, and allows advertisers to measure the exposure of each ad. In-game advertising is therefore a trend that video game publishers (and developers) must recognize and take into consideration as it becomes a regular and important aspect of the video game business.

Coverage at http://shorl.com/fuprobrugalygry

ADVERTISING AND FREEDOM OF EXPRESSION

(This is an archived case summary)

This case addressed the constitutionality of Quebec legislation prohibiting commercial advertising directed at persons less than thirteen years of age. A key issue addressed by the Supreme Court of Canada was whether the prohibition violated the freedom of expression guarantee in s. 2(b) of the Canadian Charter of Rights and Freedoms.

The Court established that freedom of expression protects any activity that attempts to convey a meaning, with the exception of violent expression. Accordingly, commercial advertising was a form of expression protected by s. 2(b). As the purpose and effect of the legislation was to limit or restrict attempts by advertisers to convey a meaning, the law infringed freedom of expression. However, a majority of the Court held that the infringement was justified. The government had a pressing and substantial objective in protecting children from “the techniques of seduction and manipulation abundant in advertising”. This objective was in line with the general goal of consumer protection legislation. While there was conflicting social science evidence, the majority found that that the evidence nonetheless supported the reasonableness of the prohibition. The majority noted that advertisers were free to direct their messages to the true purchasers of children's products, namely, parents and adults. Advertisers were also permitted to participate in educational advertising to children. The Court dismissed concerns that the prohibition would result in reduced revenues and stated that marketers would just have to develop new marketing strategies for children's projects.

Irwin Toy Ltd. v. Quebec (A.G.)
April 27, 1989
Supreme Court of Canada [1989] 1 SCR 927
KEYWORDS: freedom of expression - constitutional law - commercial speech - advertising - children
SUMMARY BY: Sarah Ciarrocchi