Lawyers in Canada: Davis LLP - Legal Advisors Since 1892

Help Save the IT Work Permit Category

HRSDC intends to eliminate the Information Technology Workers category any day. Provide your support for saving the IT category - Information Technology Workers

The IT Category - Advantages to Avoiding LMO Applications

The standard work permit process for temporary foreign workers is a two-step process:

• The first step involves the prospective employer applying to Service Canada for a Labour Market Opinion ("LMO").
• The second step involves the prospective employee applying for the work permit.

For a few occupations, HRSDC has issued a national LMO to recognize that critical labour shortages in these occupations are experienced throughout Canada. As a result, employers are not required to apply for individual LMOs. One such national confirmation is for Information Technology Workers who fall within one of seven prescribed occupations, including Embedded Systems Software Designers, Software Developers - Services and Software Products Developers.

It is advantageous to prospective employers to not have to apply for an LMO. Reasons include:

1. Employers do not have to show comprehensive efforts recruiting qualified Canadians. This is important in light of the recent developments which make LMO applications increasingly uncertain. Service Canada adopted an arguably overly restrictive approach in January 2009 that continues to the present time. Service Canada is overemphasizing hiring Canadians and underemphasizing other important factors like job creation/retention and skills and knowledge transfer which can result from the hiring of a particular foreign worker.

2. Employers do not have to wait for the LMO application to be processed. The processing time is dynamic and gaming companies can not rely on processing times remaining at the current 2-4 weeks.

3. With the elimination of LMO "extensions" in April 2009, an employer is required to make in essence a new LMO application when wanting to support a work permit extension, including demonstrating that new recruitment efforts were conducted. The company will be required to lay off the foreign worker if it can not secure a new LMO, as may happen due to reasons cited in item 1 above. There are situations where Service Canada can be convinced to waive the recruitment requirement, but this is very much case-by-case and can not be assumed.

Proposal to Eliminate the IT Category

HRSDC has announced that it intends to eliminate the IT category, likely during the first few months of 2010. Particular industry organizations have also apparently been notified. Justification provided by HRSDC for eliminating the IT category is questionable.

The IT category should continue in order to facilitate the recruitment of highly talented and skilled temporary foreign workers. Elimination of the IT category will adversely impact various industries affected in Canada in terms of maintaining their strong position in the global market. If required to apply for individual LMOs, based on current trends, companies will be prevented from hiring talented and skilled foreign workers, and as a result will be forced to either carry out projects with compromised staffing or even forego certain projects due to multinational management deciding to develop projects abroad.

If you support the IT category, let us know and we will pass along said support to the various immigration authorities, federally and provincially.

PS3 gets hacked

According to Edge, the "unhackable" PS3 has been hacked, with details to follow, apparently.

This is timely, with the latest round of Anti-Counterfeiting Trade Agreement negotiations underway now in Guadalajara, Mexico. Those negotiations cover a wide range of copyright-related topics including anti-circumvention. One proposal is for civil and criminal penalties for breaching anti-circumvention provisions. The US has also proposed that anti-circumvention provisions be expended to cover technology that prevents access to a work (in addition to preventing reproduction of the work)

The US, of course, has anti-circumvention legislation as part of its DMCA. Canada has no such legislation, but for years has been been debating the appropriate Canadian approach to circumvention of copyright protection.

Edge article here.

Some Xbox 360 users losing their memory

Microsoft locks out aftermarket Xbox 360 memory units; Datel objects, launches antitrust lawsuit

Are you one of thousands of Microsoft Xbox 360 users that have recently purchased a third-party memory unit for the Xbox 360 to store data and saved games? If so, you are likely suffering from memory loss. As a consequence of a recent mandatory update of Xbox 360's firmware, all third-party memory units have been disabled by Microsoft. Datel Design & Development ("Datel"), for one, is not taking this development sitting down. Having sold over 50,000 of its Memory Max cards to Xbox 360 users since May of 2009, Datel has responded by initiating a an antitrust lawsuit pursuant to the California Unfair Competition Law alleging that Microsoft has unfairly targeted Datel and its customers, and that permitting Microsoft to go ahead with its lock-out will "forestall innovation, and deprive future consumers of the benefits of competition."

It will certainly be interesting to see how this battle plays out in the courtroom; though I'm rooting for the little guy, my money's squarely on Microsoft. Check back regularly for further updates.

Gamasutra coverage here

Nintendo Co. can Shout Wii over Legal Victory

It has been reported that Nintendo Co. has won the dismissal of a lawsuit instituted by Guardian Media Technologies Ltd ("Guardian"). It was reported that the Texas based plaintiff had alleged that Nintendo Co., in its Wii video-game system, had infringed its patent for a technology used to impose parental controls. The judge allegedly found that the Wii doesn't play movies or television programs, and it does not use a parental-control function that affects the playback of "video programs." Guardian reportedly sued other companies, retailers and electronics makers including Amazon.com Inc., Microsoft Corp., Apple Inc., RadioShack Corp. and Wal-Mart Stores Inc. The court allegedly found that the claims against Nintendo Co. were separate from the claims for relief leveled against the other defendants and that Nintendo Co. should not have to wait for the entire case to be completed for its dismissal.

Coverage at Bloomberg.com

Rumoured Premium App Store Could Help Make iPhone the "Future of Game Play"

Submitted by Sylvie Lang
Rumours abound that Apple will launch a premium app store this week, at the same time as it unveils an updated iPhone operating system. The new "upscale" section of the Apple app store will only handle software programs that cost $20 or more. The new section will focus on more complex games and is likely aimed at helping game development companies such as EA and enterprise software companies such as SAP, offer premium applications that are more difficult and therefore more costly to develop. The Apple app store is highly successful, however the number of games available for $1 or less offered by independent developers has led to a cluttered store as well as a significant drop in game prices. If Apple does open the new premium app section as predicted, not only will it be easier for users to find more sophisticated and graphic focused products, but major game developers will also be encouraged to offer their more complex products in the Apple store instead of through competitors such as Blackberry. The launch of a premium app store would help Apple focus on making the iPhone and iPod touch the "future of game play".
Coverage at CasualGaming

Console manufacturers: time to update your warning notices

An article in the British Journal of Dermatology has identified a new skin disorder, affectionately called "PlayStation palmar hidradenitis". It was discovered by researchers when a 12 year-old girl was admitted to a hospital, complaining of painful sores on her palms. Turned out she played a lot of PlayStation while gripping the controller tightly and sweating a lot. (Note: that's SWEATING a lot; not SWEARING a lot. To our knowledge, only the former activity is medically relevant).

Her playing sytle combined with her underlying skin disorder caused the sores. The doctors ordered her to stop playing the console for 10 days, and bingo: she made a full recovery.

Console manufacturers will no doubt want to add this potential condition to their warning notices in the future.

Also, we wonder how long it will take for Sony to object to the condition's name. This naming problem is similar to a case in 2005 where researchers named a cancer causing gene "POK Erythroid Myeloid Ontogenic", or POKEMON for short. It didn't take Nintendo's lawyers long to send out the demand letter, after which the gene was renamed "Zbtb7".

PlayStation story here (BBC)

POKEMON story here (Gamasutra)

Decrease in Piracy for PSP Software

Submitted by Karine Bellavance

Sony Computer Entertainment America's head of hardware marketing, John Koller, has said that although piracy remains a problem for the PlayStation Portable (PSP), it has trended down in recent months. Although it has been reported that sales for the PSP hardware have been doing reasonably well, it has not been the case for the PSP software. Sony has claimed that PSP games rarely make it to into The NPD Group's monthly top 10 software charts because of piracy issues. It is also possible that consumers are interested in the PSP hardware for its other multimedia functionality.

Direct downloads from the PlayStation Store, which have recently been introduced, may also contribute to decreasing piracy. While Koller has noted that Sony has been monitoring video game message boards, he has stated the following: ??oeThere's certainly people that are standing up and fighting for what we consider the good side, the rights of developers and publishers to make money on their IP. And then there's certainly the other side that believes that they can take as warranted. Its kind of been nice to see other consumers going and help and fight the battle for us”.

Coverage at GameDaily.com

Canadians Doing Their Share to Boost Game Industry

Video game hardware and software sales for the first half of 2008 are up 56 percent in Canada and 53 percent in the US compared to last year. First-half sales were $783 million in Canada and $8.3 billion in the US.

These figures (which were provided by NPD Canada) reinforce what many of us have known for a while: the video game industry is huge, and is as significant as any other form of "traditional" entertainment.

Coverage at the CBC.

Nintendo and Nyko in Nunchuk Fight

Nintendo has sued Nyko Technologies Inc. over its Wii accessory, the wireless Kama Nunchuk. In a suit filed in US District Court in Seattle, Nintendo alleges that Nyko’s remote "wholly appropriates the novel shape, design, overall appearance and even the color and materials used in the Nintendo Nunchuk controller." Nyko has denied any violation of Nintendo’s intellectual property.

In addition to accusing Nyko of trademark and patent violations, Nintendo is seeking damages and profits earned as a result of the infringements.

Nintendo’s Wii Nunchuk is the motion-sensitive controller used with the popular system, but is attached to the main controller by a wire. Nyko also makes other peripherals for use with the Wii, including another wireless remote and a wireless Telecaster-ish guitar for GHIII.

Coverage at GameSpot and Game Daily.
Nyko home page is here.
UPDATE: Patent Arcade also has coverage here.
Submitted by Michael Mjanes

Activision Settles Guitar Hero Suit

Hard to find time to blog, what with the steady torrent of press releases and marketing hype on this GTA IV-eve. Apparently, an ever-growing list of concerned citizens would like to remind you that, unlike Trix, GTA IV is definitely not for kids.

In other news, Guitar Hero publisher Activision has reportedly settled a class-action suit brought on behalf of frustrated purchasers of the Wii version of the game, who claimed that the sound was outputting in mono only. The lawsuit accused Activision of deceptive marketing practices after the game was advertised as being compatible with Dolby Pro Logic II. Despite early denials by Activision, the company has since admitted the problem and is offering to replace the faulty discs with freshly re-mastered ones. They are also offering a free GHIII faceplate. The replacement program runs until August 31, 2008 and covers the US only.

Coverage at Gamespot.

Submitted by Michael Mjanes

Nintendo and Sony Sued for Violating Controller Patents

Nintendo and Sony have been the latest video game manufacturers to be accused of infringing patents in producing video game controllers. Copper Innovations Group has commenced lawsuits in Pennsylvania alleging that Nintendo and Sony infringed a patent Copper filed in January 1996.

Nintendo may face additional claims as a video has been released of a “motion controller” being used by a former employer of Midway Games in 2000, several years before Nintendo released its famous Wii motion controller.

Sony previously settled another claim for a controller-related patent infringement as did Microsoft. The amounts of these settlements ($86 million paid by Sony and $26 million by Microsoft) were significant and definitely highlight the value of patents.

More coverage at Gamasutra and Kotaku

PS3 Doubles as Hacking Machine

An Australian computer security expert has found that the PS3's computing power makes it a powerful tool for cryptography cracking. This does not mean that casual gamers can suddenly start hacking using the PS3 -- the cryptanalysis algorithms being used in the "Crackstation" are very sophisticated. But it raises the interesting concept of video game consolse (which pack significant processing punch) being used for other high-tech applications.

The analyst admits (no doubt tongue firmly in cheek) that he started the project so that his company would buy him a PS3. Sadly, our own similar requests (for "industry research" purposes) have not yet been successful.

Coverage at PC World.

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

Xbox360 Scratches Way to Lawsuit

The rash of Xbox360 failures is well known (and the reason behind Microsoft's recent extension of the 360's warranty). Now another alleged hardware problem is causing problems for Microsoft -- a Florida man has launched a lawsuit (and is seeking to have it classified as a class action) against Microsoft on the grounds that his 360 scratches discs to the point that they become unreadable. The man claims that the 360 was "negligently designed and manufactured", and is seeking $5 million in damages.

There have been various reports of disc-scratching 360s, but (not surprisingly) Microsoft has not confirmed whether there's a widespread breakout of scratchiness in relation to the 360.

Coverage here Miami Herald and here Joystiq.

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)

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)

MS DEPLOYS COUNTER HACKING EFFORTS IN KOREA

Microsoft is confident that the DVD firmware hack will be countered by its Xbox Live updates.

Sales of security upgraded consoles in Korea have increased over the past month after hackers tinkered with the embedded DVD software drive to allow copied CDs to run on the machine. Xbox is confident that the problem will be 'neutralized"? through software updates (detected and prompted for installation upon connecting to Xbox Live).

Apparently more consumers are attempting to bypass Xbox's security in order to be able to use cheaper pirated software. The additional cost for a modified console is said to be approximately KRW 70,000 (60 Euro) and users are tempted by the saving of about KRW 25,000 (21 Euro) from the purchase of pirated software.
coverage at http://shorl.com/gybrestigribinu

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. 

MORE RUMBLINGS BETWEEN SONY AND IMMERSION

A while ago, Immersion Corporation was awarded damages of over $80 million in its patent infringement lawsuit against Sony (see our coverage here and here ). The lawsuit involved the force-feedback technology which Sony used in its PS2 controllers. Immersion also sought an injunction prohibiting Sony from making or selling related technologies in the US. Sony is currently appealing the injunction decision.

At the recent E3 convention, Sony announced that its next generation controllers would not include the rumble feature because of possible interference with the new controller's tilt sensors. This decision is not sitting well with gamers and industry insiders, who view the removal of force-feedback controllers as a step backward.

Immersion's President has stated publicly that Immersion is willing to help Sony with force-feedback technology that can co-exist with the tilt sensors, if Sony settles the patent litigation on Immersion's terms.

Coverage at http://www.gamasutra.com/features/20060517/murdey_01.shtml (Gamasutra)

and at http://www.gamesindustry.biz/content_page.php?aid=17141 (GamesIndustry.biz)

NINTENDO MANAGER TAKES SHOT AT SONY

The General Manager of Nintendo UK has taken a few public shots at Sony's new motion-sensing controller, which Sony revealed at the recent E3 convention. According to Gamasutra, David Yarnton has suggested that Sony copied Nintendo's innovations not only with respect to the new controller but also to various other innovations over the years.

This could Yarnton's own personal opinions, or it could signal that a dispute between the two game giants is in the works.

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

GUILTY PLEA IN HOLLYWOOD XBOX COPYING CASE

A co-owner of a trendy Melrose Avenue game store has pleaded guilty to conspiring to traffic in copyright-circumvention technology, conspiring to infringe copyright for financial gain, and wilfully infringing copyright by reproducing and distributing pirated works. His co-owner has agreed to enter a similar guilty plea.

The two are accused selling modified XBOX consoles with pirated games preloaded onto their hard drives. A third man has been charged but has missed his court appearances.

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

PSP HACKS CONTINUE

Hackers continue to chip away at the PSP despite Sony's security upgrades, hackers are able to run their own software on even the latest version of the PSP firmware. The hack depends on using a malformed saved game from GTA Liberty Stories, and therefore seems to flow from a problem with that software rather than with the PSP firmware itself. As a result, it's not clear whether Sony will be able to patch this hole.

The underlying concern is that hacks such as this may soon develop into pirating software for the PSP. However, no hacker appears to have achieved that to date.

Coverage at http://shorl.com/hisadryrufroma

Microsoft Sued For Alleged 360 Defects

A Chicago man is suing Microsoft over an alleged design flaw that causes his new 360 to overheat and freeze. (In case that seems oxymoronic, it means the console gets too hot and causes games to stop cold). 

The suit alleges that Microsoft was too concerned with being the first next-gen console out of the gates, and as such sold a 'defectively designed"? product. This suit comes hot on the heels of numerous internet reports of similar 360 problems, especially regarding overheating (for example, see our previous post here ). Microsoft, however, maintains that it has only received isolated reports of malfunctioning consoles, representing a 'very, very small fraction"? of units sold.Coverage at http://www.shorl.com/fovastubromotra

NINTENDO PATENT OFFERS REVOLUTION INSIGHT?

The US Patents and Trademarks Office granted Nintendo a new patent earlier this month US Patent No. 6,955,606, with the catchy title 'Game information storage medium and game system using the same"?. Since we think everyone should have the opportunity to read patents, here is a description from the patent itself

'"?the invention relates to a game information storage medium and a game system using the game information storage medium. The game information storage medium stores in a first game machine, a game program for a second game machine having an architecture different from the first game machine architecture and an emulator program for converting the second-game-machine game program to be executed on the first game machine. By executing the second-game-machine game program on the first game machine, a game can be enjoyed on the first game machine which would not otherwise have been possible."?

In short, the patent covers a technology which allows a later-generation console to play games from older consoles using emulation software. Some commentators believe this technology may be integral to Nintendo's next-generation Revolution console, which Nintendo promises will be able to play a back catalogue of older Nintendo games.

Coverage at http://shorl.com/babrypustodrije

Patent details at http://shorl.com/gyjudrigrystugi

SONY ANNOUNCES PARENTAL CONTROLS

Sony has announced that its next-generation Playstation 3 will contain controls which allow parents to restrict their children's access to video games or movies with certain ratings, and to control access to on-line gaming.

Nintendo has announced similar plans for its next-generation Revolution, and Sony's Xbox 360, released last week, already has such controls built in.

Coverage at http://shorl.com/hykyhubronule

360: Too Hot To Use?

The internet is rife with rumours that xbox 360s are overheating, and xbox 360 games are freezing. Currently, the word is that the 360's brick-sized power supply units may be to blame the PSUs are large, and are thus being tucked away by gamers where they cannot obtain required ventilation to stay cool. Hopefully this doesn't indicate that the 360's power supplies will need to be recalled, as happened to the xbox power cord due to fire risk, but at any rate Microsoft is thus far denying any systemic problem with the 360.

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

SONY SETTLES PS2 LAWSUIT

Sony agreed to settle its 'disc read error"? lawsuit by paying affected gamers US$25 (which is CDN$31"? wooo-hoo!), giving them a free game from a specified list, and by repairing or replacing the affected system. The settlement is subject to approval by Canadian and American courts next spring. 
Coverage at http://www.shorl.com/gadrunyronavy

Sony Versus One Guy - One Guy Wins

The High Court of Australia has allowed Mr. Eddy Stevens' appeal of an Australian Full Court decision, which ruled that mod chips sold by Mr. Stevens in Australia were illegal because they violated the copy protection devices built into PlayStations. The High Court overturned the Full Court decision, holding that because the actual PlayStation and PlayStation 2 chips circumvented by Stevens' mod chips cannot be considered 'technological protection measures,"? as defined by copyright legislation, Stevens' mod chips are not illegal.

An unmodified PlayStation or PlayStation 2 will not play a pirated or imported game, and will only play games containing a certain region code - which cannot be copied. A mod chip effectively works to trick the PlayStation into ignoring the need for this code, and thus permits the console to play pirated or imported games, but does not actually copy the game itself. The High Court held that in order for a mod chip to be illegal, it must contravene a 'technological protection measure,"? which is a device designed to prevent or inhibit copyingin breach of copyright. Because the PlayStation's security devices only prevent the playing of a pirated or imported disc - but do not prevent the actual copying of a legitimate game - their contravention by Mr. Stevens' mod chips does not qualify as a violation of copyright.

It has been speculated that mod chips would be considered legal by the High Court because they do not have purely illegitimate uses. Although they do permit the play of evil pirated games, they also allow wonderful foreign-region-encoded games (i.e., legitimately purchased games from a foreign country) to be played on a domestic machine. Hopefully, Sony will stop region-coding in the future, allowing hard core gamers to import great games from around the world.

Coverage at http://www.hcourt.gov.au/media/Stevens.pdf

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

FURTHER DVD HYPERBOLE

Earlier this week, Microsoft and Intel declared their support for the HD-DVD format for next-generation DVDs (see earlier post ). Dell and HP have now reiterated their support for the competing Blu-ray format, and have accused Microsoft and Intel of spreading inaccurate information about the new formats.

The ongoing dispute is particularly frustrating for retailers, who would prefer to move ahead with one next-generation format.

Coverage at http://shorl.com/dedyjydrodiby

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

NEW ALLIANCES IN NEXT-GENERATION DVD FIGHT

Tech giants Microsoft and Intel have picked sides in the battle over the standard format for next-generation DVDs. Both companies have sided with Toshiba's HD-DVD format in preference over the Blu-ray standard pushed by Sony and others. Microsoft and Intel believe that HD-DVDs are likely to become the dominant standard because they can be produced quicker and at less cost.

This move has not simplified matters "? other major players, including Dell and HP, are in the Blu-ray camp. Industry pressure to come up with one next-generation standard is increasing, as the shift to next-generation DVDs is seen as an opportunity to re-energize flagging DVD sales.

Coverage at http://shorl.com/bisipranijyli

DAVY JONES'S LOCKER FOR PIRATE CAPTAIN

The Entertainment Software Association has announced that the owner of the Pandora's Cube chain has been sentenced to 5 months in prison and three years of supervised release (including 5 months of home arrest) for game piracy activities. The sentence also includes a fine of $247,237 and 80 hours of community service.

Several Pandora's Cube employees modified Xbox consoles into 'Super Xboxes"?, which allowed users to bypass the Xbox's copy protection and use pirated games; the employees also loaded illegal copies of games onto the 'Super Xbox"? hard drives. Three other employees have also been convicted and sentenced for these activities (see our previous post ).

ESA press release at http://shorl.com/fodifrifeleby

Coverage at http://shorl.com/bodradrorofryvu

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

SONY BATTLES MICROSOFT FOR MELTDOWN SUPREMACY

Earlier this year we reported that Microsoft had recalled more than 14 million XBOX power cables because they were a potential smoke or fire hazard. Now Sony has issued a similar recall for certain power adaptors that were supplied with the new black slimline PS2. The affected adaptors were manufactured between August 2004 and December 2004 and bear the product identification code 'HP "? ATH048H03"?
Sony's recall website is here  http://www.shorl.com/batudutihyfro

360 Hardware Requires Licenses

Microsoft will require 3rd-party accessory manufacturers to obtain a license to make their products function with the upcoming Xbox 360 console, and will enforce this requirement with a security mechanism through which the 360 will validate the accessories when they are used.  Although Microsoft has a licensing program with the original Xbox, it is optional though a license must be obtained to display the Xbox logo on a current-generation accessory, no such permission is required if the accessory does not contain Xbox branding.  With this move, Microsoft has positioned itself to both regulate 3rd-party 360 hardware content and, of course, receive more money.

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

ANOTHER PSP SUIT

Sony has started another lawsuit against an on-line retailer who is selling PSPs in the UK. This time Sony has its sights set on Lik-Sang.com, a well-known Hong Kong video game retailer. Sony will not officially launch the PSP in the UK until September 2005, and is taking action in the meantime to prevent PSPs from other parts of the world from being sold to UK customers.

Sony brought another lawsuit against Lik-Sang in 2002 to try to prevent the retailer from selling unauthorized hardware mods for the PS2.

Coverage at http://shorl.com/bygamugubrigro

and at http://shorl.com/byfrybrudodysto

Another Xbox Modder Sentenced

Hitesh Patel, a 31-year-old employee of Washington DC-based game retailer Pandora's Cube, has been sentenced to 8 months for selling 'Super Xboxes,"? which are Xboxes modified with larger hard drives which play imported and pirated games. Because Patel sold many units with pirated games pre-installed, it is difficult to assess the extent to which his prosecution is due to modding, versus the distribution of pirated games.

See article at http://www.shorl.com/fekobribrybyru

SONY CRACKS DOWN ON NUPLAYER

We described in a post  last month how Sony is cracking down on retailers who are selling imported PSPs in the UK. As part of this campaign, Sony recently obtained an injunction preventing online game retailer Nuplayer from selling imported Japanese PSPs in the UK. The court found that Nuplayer had no arguable defence against Sony's claim of trade-mark infringement, and required Nuplayer to pay damages and costs, give up its remaining inventory of Japanese PSPs, and provide details of profits, suppliers and the names and addresses of customers who bought more than 5 PSPs.

Nuplayer remains unshaken, however "? it claims that it only had a few Japanese PSPs remaining, and is already taking pre-orders in the UK on Europrean PSPs for a fair bit less than the recommended retail price. According to Nuplayer, its sales of imported European PSPs will more than make up for the damages it was required to pay to Sony.

Coverage at http://shorl.com/davistyfredite

Modding Is Illegal... At Least If 80 Pirated Games Are A Mod

A 22-year old man was recently charged in the UK for modifying and selling Xboxes. The modification of video game consoles is illegal in the UK due to its adoption of the EU Copyright Directive. Although official comments from ELSPA - the Entertainment& Leisure Software Publishers Association - state that this conviction sends a signal to would-be modders, the importance of this case should not be overstated. Here, the Xboxes were not only chipped, but also sold with 80 pre-installed pirated games, leading us to wonder whether it was the software piracy or the mod chip that lead to enforcement.

Article at http://www.shorl.com/hugepofafavi

PSP PIRACY BATTLE ESCALATES

Ingenious hackers (is there any other kind?) have found a way to make the PSP play pirated copies of commercial games through the hand-held's Memory Stick slot. The hackers exploited a bug in early versions of the PSP firmware (present on the original Japanese PSPs and on some early US PSPs); more recent versions of the firmware already address the problem, and Sony is planning on providing automatic firmware upgrades on future game titles.

Although Sony is downplaying this development's significance, others fear that it is the beginning of a long fight between Sony and PSP hackers.

Coverage at http://shorl.com/fygrydunonodu

DVD HOSTILITIES RENEWED

We've told you before about the potential conflict between next-generation DVD formats. Last time this came up the parties were negotiating with respect to a single standard incorporating the best aspects of both competing formats (Sony's Blu-Ray vs. Toshiba's HD-DVD). Sadly, these negotiations have ended without agreement. Be prepared for two formats of next-gen DVDs hitting markets next winter, with all the confusion and inconvenience to consumers that entails.

Coverage at http://shorl.com/jarijibrakosti

PRODUCT LIABILITY IS HOT TOPIC FOR XBOX

In an earlier post , we reported that Microsoft had recalled 14 million power cables because they were a potential smoke or fire hazard. Turns out the problem is bigger than Microsoft originally thought Microsoft is now advising anyone whose XBOX was manufactured before January 14, 2005, to contact Microsoft to see if their cord should be replaced.

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

PROTECTING THE PSP IN EUROPE

The PSP, Sony's handheld answer to the Nintendo GameBoy and DS, has not yet launched in Europe and has had its launch date delayed more than once. ElectricBirdLand is one of the online stores importing Japanese PSPs to Europe for retail sale, prompting Sony to respond this past April with cease and desist orders. However, according to Dan Morelle, the managing director of ElectricBirdLand, Sony may not have the European intellectual property protection it needs to stop importers. Morelle reports that 'PSP"? is used by UK firm Owtanet Ltd for their 'Publishing, Shopping and Profiles"? software, and Owtanet claims to have registered a trademark in PSP in 2000, and that legal proceedings are currently underway. Furthermore, Morelle claims that Advanced Micro Devices (AMD) is contesting Sony's use of 'UMD"? to describe its optical discs, on the grounds that it is confusingly similar to 'AMD"?. Morelle states that ElectricBirdLand will continue to sell PSPs in Europe until Sony can establish how it is being harmed by import sales.

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

PLUMBER V. PIRATES

A new report from Nintendo of America describes the company's various anti-piracy efforts in the first quarter of 2005. Nintendo, which is ramping up its anti-piracy efforts, proudly reports on how many counterfeited products were confiscated around the world (approximately 178,287), how many on-line auctions for counterfeit products were shut down (approximately 25,299), and how many criminal actiosn and investigations are ongoing (about 81).

The report also discusses various significant piracy cases, including the start of a trial in Taiwan against Eric Lo and his company Revotek (whom Nintendo claims has designed and distributed in excess of 35 million chips used in counterfeit Nintendo games); the addition of a Taiwanese semiconductor company to existing litigation against two US companies for distributing counterfeit devices; and obtaining a $5 million judgment (plus interest) in Hong Kong against defendants who sold the Flash Advance Linker (which allows Game Boy software products to be copied).

Coverage at http://shorl.com/geranesadygu

BEWARE VIDEO GAME INJURIES

A recent CBC article reminds us that the mere act of playing a video game (any video game) can cause actual damage to your neck, back, hands and tendons. Playing games for long periods can result in what is known as repetitive strain injury or carpal tunnel syndrome, due in part to the awkward, unergonomic positions players tend to assume and the repetitive motions involved in playing games.

Players avoid such problems by taking the occasional break to stretch and walk around "? something that sounds simple in theory, but as all gamers who have had hours vanish on them while playing games know, is not always easily put into practice.  We also recommend adequate warm-up and cool-down exercises and stretching before and after every gaming session.

The article also mentions a lawsuit where Nintendo was successfully sued by a gamer who developed carpal tunnel syndrome.

CBC article at http://shorl.com/fafrysohodrugre

North Carolina Cleanin' Up The Streets

North Carolina's Senate Bill 2 has obtained state senate approval; if it is also passed by the state house and the governor, it could be North Carolina law as early as December, 2005. Bill 2 governs the sale and rental of video games, and prohibits stores from selling or renting violent or sexually explicit games to minors.  The bill also seeks to force stores to keep such games out of the reach and view of minors, and to post information on the ESRB ratings system.  Games likely affected include Grand Theft Auto, Leisure Suit Larry, and the Guy Game.

See the Bill at http://www.shorl.com/bamujekimedru

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

DISC DETENTE?

We reported last year about the looming war over next-generation DVD formats "? with Sony and Blu-Ray on one side and Toshiba's HD-DVD on the other. Well, take hope various reports claim that the combatants are negotiating towards a single standard incorporating the best aspects of both formats. The status of these negotiations is another matter "? some reports have Sony and Toshiba close to a deal, while others have them stalled again.

Currently the two rivals have split the market almost evenly, but recognize that maintaining different formats is bad for everyone in the long run. Whether this mindset will indeed result in a single DVD standard isn't yet clear, but the negotiations give us some hope.

It's also not clear what will happen to Sony's PlayStation3 in the interim. Sony announced last year that its next-generation game console would use Blu-Ray technology, but presumably that would change if the negotiations are fruitful.

Coverage at http://shorl.com/dyvetugikobi

NINTENDO “THE FBI ROCKS!”

OK, so Nintendo didn't really say that. What they really said was 'Nintendo applauds the actions taken by the FBI. U.S. law enforcement authorities have played an instrumental role in attacking piracy in the U.S. and abroad"?".

We still prefer our version.

Anyway, these accolades came after the FBI seized thousands of pirated games including Donkey Kong, Mario Bros. and Duck Hunt.

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

To learn more about hiring the FBI for your personal pirating problem, see our coverage here . 

NINTENDO CO. VS. NINTENDO PIRATES

The FBI busted video game pirates trying to distribute a cache of more than 60,000 illegal Nintendo games, which were seized by the authorities in raids in New York and New Jersey. Perhaps even more interesting than the arrests, the Associated Press is apparently fuzzy on the distinction between video games and video game consoles - see for yourself at "Full coverage", below.

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

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

THE PSP HAS BEEN HACKED!

In almost no time, the new PSP has been hacked to allow web browsing additions, IM and TiVo playback abilities (among other things).

Hacks such as these often violate copyright law.  They might also be a breach of contract  some companies specifically prohibit hacking in their End User Licence Agreements. 

But regardless of whether Sony can legally stop the hackers, there's a business decision to be made regarding whether Sony should even try. 

Sony hasn't had much luck cracking down on hackers in the past. For example, it once sued one of its customers for hacking Aibo, the company's robotic dog toy. This strategy backfired when fans started boycotting the product.

The other downside, of course, is that hacking can raise interest in a product and help promote product sales. 

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

CUSTOMIZED PSPs ALREADY?

Sony's new PSP has barely been released, and already various modifications are springing up that extend the handheld's capabilities. Various hacks seen thus far include ones that allow web browsing and online chatting and one that allows Tivo-recorded TV shows to be transferred to the PSP. Other game-related hacks let PSP users play all games wirelessly over the Internet and play multiplayer games with only one copy of the game.

Hacks and mods are nothing new, of course, but the rapidity with which eager modders have acted on the PSP is impressive.

Coverage at  http://shorl.com/dudifygrygryri

SONY SHAKEN BUT NOT STIRRED

A US District Court has confirmed a jury's decision requiring Sony to pay damages for patent infringement to Immersion Corp. The jury ordered Sony to pay $82 million in damages (see previous coverage ) for infringing patents relating to 'vibro-tacticle"? technologies that cause controllers to vibrate in response to what is happening in the game. Immersion's infringement lawsuit names the PS2 console, Sony's DualShock controllers, and 47 games. 

The judge increased the damage award to $90.7 million to account for interest and issued a ban on the sale of PS2 consoles; however, that ban has been stayed pending Sony's appeal of the decision. Sony has paid Immersion $7 million in compulsory licence fees, and will continue to pay such fees until the parties settle or the decision is overturned.

Immersion settled a similar dispute with Microsoft over the Xbox console and controllers in 2003.

Coverage at http://shorl.com/fyhonunytovo

And at http://shorl.com/denesumykity

Someone's About To Get Fired…

Earlier this month, we reported that some Xbox gamers were getting all fired up over their Xbox power cables. Literally. 

Microsoft recalled 14 million of the cables, but it appears that wasn't the only problem. The Xbox power supplies may be a fire hazard too. 

Our suggestion?  Practice your stop, drop and roll.

Coverage at http://shorl.com/dajyvasydove  

XBOX CABLE A HOT ITEM

Microsoft has promised to replace more than 14 million Xbox power cables due to safety concerns, citing reports of minor injury or property damage due to faulty cables.  This serves as a reminder that problems with video game software or hardware can cause damage and public relations issues for gaming companies.Coverage at  http://shorl.com/bifetehotrami

ONE GAME PATENT . . .

Microsoft has filed a US patent application for a system that will help consumers determine whether their PCs can run a particular piece of software. The system involves a "capability tool", which examines a PC's components and assigns the PC a numerical rating, and an independent ratings board which assigns ratings to software applications and games. If the two ratings match, the PC will be able to run the software in question. This system should help gamers in their eternal struggle to determine whether their PCs can handle the latest games.

Coverage at http://shorl.com/jagepasugribri

. . . AFTER ANOTHER

Sony has also filed a US patent application, this one to do with wirelessly connecting portable game machines (ie Sony's new handheld PSP) with various Internet-connected devices. The application discusses various scenarios, including connecting the portable game device to a remote server for processing software that's too complex for the handheld device; storing content (games, movies, music, etc.) on central servers for uploading to the handheld device when required; and e-commerce transactions such as buying games online through the handheld device. This patent application is likely part of Sony's strategy to make the PSP a general portable multimedia device rather than a mere game machine.

Coverage at http://shorl.com/geratykynybu

PSST... WANNA LEARN HOW TO BUILD AN XBOX2?

A new US patent might describe key elements of the XBOX2, including a system of multiple processors which work together to generate realistic geometry while simultaneously managing other routine game functions. 

Coverage at http://shorl.com/fefregronusypry Patent application at  http://shorl.com/fesefostofibru

PSST... WANNA LEARN HOW TO MAKE IT SHAKE?

A jury has awarded Immersion Corp. $82 million in damages after deciding that the rumble feature in Sony's Dual Shock controllers violates two US patents owned by Immersion. Sony was also ordered to pay a licensing fee of 1.37% per quarter on sales of PlayStations, Dual Shock controllers and various PS2 games that use the technology. 

Coverage at http://shorl.com/jahypobrebryhe

Patents at  http://shorl.com/bugolonapore

And  http://shorl.com/gerivanyhidi

 

REVERSE ENGINEERS LIABLE

(This is an archived case summary)

Davidson & Associates v. Internet Gateway, et al
US Court of Appeal for the 8th Circuit (2005) No. 04-3654

The plaintiffs do business as Blizzard Entertainment, and make and sell computer games such as StarCraft and WarCraft. Blizzard launched an online service, Battle.net, that allowed gamers to play with each other over the Internet. Blizzard has valid copyrights on all of its games.

Blizzard took steps to avoid piracy by creating various safeguards in its software. For example, when a user connects with the Battle.net server, the server performs a "secret handshake" with the game to verify if the game is an authorized version. Furthermore, in order to play a Blizzard game users must install the game and agree to comply with the End User Licence Agreement and Terms of Use (both of which prohibit reverse engineering).

The defendants created a similar server to Battle.net and reverse engineered the Blizzard software to allow users to play both real and pirated versions of the Blizzard games online. The most significant difference was that the defendants' server read every code as an "ok" when performing the "secret handshake" and allowed users to log on regardless of the status of their software.

The Court of Appeal upheld the District Court's finding of copyright infringement, circumvention of copyright protection systems, trade-mark infringement and breach of the user agreements.

MICROSOFT TARGETS MODDERS

Microsoft has begun checking its Xbox Live users' consoles for mods, refusing to let modified consoles participate in online games. Microsoft says the purpose of this new policy is to reduce cheating on Xbox Live.

Coverage at  http://shorl.com/fystestofradruka

 

VIDEO GAMES ARE SECOND FRONT IN DVD FORMAT WAR

Two new rival DVD formats are preparing for hostilities similar to those that occurred between VHS and Beta in the 1980s. Both formats -- "Blu Ray", which is backed by Sony, and "HD DVD", which is developed by Toshiba -- use blue lasers to replace the red lasers used in current DVD machines. Industry analysts fear that a protracted conflict will damage the whole entertainment industry and alienate consumers, but the two sides recognize that the DVD market is unlikely to support parallel incompatible formats and are preparing for a fight to the death. Video games may well be one of the key battlegrounds in this war -- Sony has already announced that its Playstation 3 will use the Blu Ray DVD format.

Coverage at http://shorl.com/fofosafrabrusi

XBOX DISC DRIVE LAWSUIT

A disgruntled Xbox owner has started an action against Microsoft in the Los Angeles Superior Court, claiming that his Xbox lost its ability to read discs after less than a year of use. The action was brought on behalf of all those who have purchased Xboxes in the United States since Microsoft released the gaming console in late 2001. Microsoft is reviewing the complaint and has yet to respond.

Coverage at http://shorl.com/hiheherudubra

PIRATES OF THE PLAYSTATION WALK THE PLANK

(This is an archived case summary)

Sony manufactured and sold PlayStation games on CD-ROMs for which it owned the copyright. To protect its copyright, Sony imbedded an "access code" on each CD-ROM that worked in concert with a "boot ROM chip" in each PlayStation console. The boot ROM chip would only allow CD-ROMs with valid access codes to run on the PlayStation console and the access code on each CD-ROM could not be copied by conventional copying devices.

Mr. Ball thwarted this system by creating a "Messiah 2" chip that would allow pirated PlayStation CD-ROMs without valid access codes to be played on a modified PlayStation console. Sony sued Ball under the U.K. Copyright Act, which provides a right of action against a person who manufactures, imports, distributes, offers for sale, advertises or possesses for commercial purposes devices for the purpose of circumventing technological protection measures that have been applied to a copyright work.

The court found that Sony's protection measures was a "copyright protection" means under the Act and that the Messiah 2 chip results in an infringing copy of Sony's works by allowing portions of the CD-ROMs to be loaded into RAM memory. The court held that the temporary or "ephemeral" nature of the portions of Sony's work that were loaded into RAM qualified as an infringing copy under the Act. The court found that Ball had breached the Act by distributing, offering for sale, advertising and holding in possession for commercial purposes a copyright circumventing device.

Kabushiki Kaisha Sony Computer Entertainment v. Ball
[2004] EWHC 1738 (Ch.)

TILT AND TUMBLE LICENCE FIGHT

(This is an archived case summary)

The Court considered whether a licence authorizing the use of a patent to make and sell a product protected a third party purchaser from liability for patent infringement for that same use. Jacobs, the owner of a patent related to a tilt-sensitive video game controller, alleged that Nintendo's “Kirby Tilt and Tumble” infringed his patent. The technology for Nintendo's tilt-sensitive controller was supplied by a company called Analog. Jacobs had granted Analog an irrevocable licence which included (1) the right not to be sued for infringement of the patent; and (2) the right to”sell...micromachined accelerometers for use in tilt-sensitive control boxes”. The court said that the clause granting Analog the right to sell its accelerometers for use in tilt-sensitive control boxes barred Jacobs from interfering with that right by prohibiting Analog's customers from using the accelerometers for the authorized purpose. The Court said that the licence gave Analog's customers an implied sublicence to use Analog's accelerometers to make, use and sell tilt-sensitive control boxes that infringed Jacobs patent without interference by Jacob.

The case is available here.

Jordan Spencer Jacobs v. Nintendo of America, Inc.
2004, US Ct. of Appeals, Fed. Dist.
2004 US App. LEXIS 10515
KEYWORDS: licence - patent - third party producer
SUMMARY BY: Sarah Ciarrocchi

MODDING PREVENTED DOWN UNDER

(This is an archived case summary)

Sony manufactured and sold PlayStation games on CD-ROMs for which it owned the copyright. To protect its copyright, Sony imbedded an "access code" on each CD-ROM that worked in concert with a "boot ROM chip" in each PlayStation console. The boot ROM chip would only allow CD-ROMs with valid access codes to run on the PlayStation console, and the access code on each CD-ROM could not be copied by conventional copying devices.

Mr. Stevens created a "mod chip" that would allow pirated PlayStation CD-ROMs without valid access codes to be played on a modified PlayStation console. Sony sued Stevens under s. 116A of the Australian Copyright Act, which provides a right of action against persons supplying devices to circumvent technological protection measures designed to protect or inhibit copyright infringement.

The trial judge found that Sony's protection measures did not constitute a "technological protection measure" under the Act, as it did not prevent or inhibit subsequent copyright infringement of the CD-ROMs. Rather, it merely discouraged copyright infringement by making pirated CD-ROMS unusable on PlayStation consoles.

The majority of the Court of Appeal disagreed with such a narrow construction and held that preventing infringement by rendering the sale or copy of the CD-ROMs "impracticable or impossible by anticipatory action" was sufficient to constitute a "technological protection measure" under the Act.

Citation is
Kabushiki Kaisha Sony Computer Entertainmentv.Stevens,
2003 FCA 157; 57 I.P.R. 161 (Fed. Court of Australia)

Summary by Chris Metcalfe

NINTENDO WINS PATENT CASE

(This is an archived case summary)

Nintendo appealed a District Court ruling that awarded Alpex Computer Corporation $253 million in damages (equivalent to a 6% royalty) for patent infringement. In 1974, Alpex patented a new microprocessor-based home video game system that was meant to surpass the computing ability of the Magnavox Odyssey (which could only play one game, called “ball and paddle”, where a dot of light bounced between two vertical lines).

Alpex's invention allowed a home video system to play multiple games, including games with rotating images. This invention was commercialized by Atari, Mattel, and Coleco. The relevant claims of the patent relate to a “means for generating a video signal representing a linear player image device aligned in a first direction” and where those means include a random access memory (RAM) system. This RAM system was superior to the prior art (owned by Okuda) which employed as an alternative a series of shift registers. When Alpex filed its patent application, it specifically outlined the differences between its technology and the Okuda invention.

The court found that Nintendo's invention did not infringe the Alpex patent because Nintendo's system in fact paralleled and improved on the Okuda technology. The court denied a claim construction that would bring the operation of the Nintendo system under the scope of the Alpex patent, as Alpex had already disclosed how its patent differed from the Okuda invention.

Alpex Computer Corporation v. Nintendo Company, Inc.
1996, US Ct of Appeals, Fed. Cir.
102 F. 3d 1214
Keywords: patent infringement - pioneer patent
Summary By: Byron Yep

GAME GENIE INJUNCTION DENIED

(This is an archived case summary)

Nintendo appealed a District Court ruling that the Game Genie does not violate any Nintendo copyrights. The Game Genie is a device that is placed between the game and the Nintendo game console that allows a user to input codes to change game characteristics such as character strength, lives and speed. The Game Genie functions by changing the value of a single byte of data that is sent out by the game cartridge.

The Court of Appeal upheld the District Court's finding and denied Nintendo an injunction. The Court held that the way the Game Genie operated did not constitute or create a “derivative work' under the Copyright Act. The District Court held, "[h]aving paid Nintendo a fair return, the consumer may experiment with the product and create new variations of play, for personal enjoyment, without creating a derivative work." The court also held that even if the Game Genie produced derivative works, such works would not be infringing under the doctrine of fair use.

The judge also noted that “while board games may never die, good video games are mortal” in reply to Nintendo's assertion that it may re-release some games. The judge stated that this assertion was not supported by claims Nintendo had made in other anti-trust cases where it argued that the video game industry is fast paced and unstable.

Lewis Galoob Toys, Inc. v. Nintendo of America, Inc.
May 21, 1992
US Ct. of Appeal, 9th Cir. 964 F. 2d 965
Keywords: Game Genie - copyright infringement - injunction - modification of games
Summar by: Byron Yep

HARMLESS GAME GENIE

(This is an archived case summary.)

Nintendo applied for a preliminary injunction prohibiting the sale of Game Genies in Canada. Nintendo argued that Camerica was depreciating the goodwill of Nintendo trademarks by selling the Game Genie. This device allows players to insert codes prior to playing games on the Nintendo system, the effect of which is a change in the playability of the game. These changes increased or decreased the difficulty of the game by modifying a variety of the elements in Nintendo's games. This change was only temporary, and the code had to be entered each time the game was restarted.

Upon review of the application it was found that although there was a serious issue to be tried, Nintendo failed to show that it would be harmed irreparably if an injunction was not granted. It was noted that the Game Genie and Nintendo did not compete with each other, and in fact the Game Genie was of no use without a video game with which the device could interact. The Court held that the balance of irreparable harm was in favour of the Defendant.

The court dismissed the application for an injunction. This decision was upheld on appeal by the Federal Court of Appeal ((1991) 36 C.P.R. (3d) 352).

Nintendo of America, Inc. v. Camerica Corp.
January 28, 1991, Fed. Ct. of Canada (Trial Div.)
34 CPR (3d) 193
Keywords: injunction - Game Genie - goodwill - trademark
SUMMARY BY: Adam Nott.

NINTENDO ARGUES NO JURISDICTION

(This is an archived case summary.)

On behalf of retail purchasers in California, the plaintiffs alleged that Nintendo had violated California antitrust laws through its monopoly on video game cartridges created by the use of “lock-out" technology and marketing practices that increased the price and limited the number of video games available to consumers. Nintendo applied to have the matter removed from state court to federal court.

First, Nintendo argued that the doctrine of “artful pleading" should apply (drafting claims so as to qualify for state law rather than federal law). The court held that this doctrine should only be applied in exceptional circumstances and is only available where federal law completely pre-empts the state law claim, and the federal law provides the plaintiff a remedy. The court dismissed Nintendo's argument that a decision by the California court would affect interstate commerce, which is governed by the US Constitution and therefore should be decided under federal jurisdiction. The court held that the California courts are competent to determine the extent to which California antitrust laws may be enforced without violating the Commerce Clause of the US Constitution.

Second, Nintendo argued that the plaintiffs' allegations arose under federal patent and copyright laws, as Nintendo's copyright and patent of its lock-out system granted it the right to exclude others. The court dismissed this argument as well, stating that the plaintiffs were not alleging that Nintendo did not have valid copyright and patent rights over the technology, but rather, were challenging the anti-competitive manner in which Nintendo was using the technology.

Morse v. Nintendo of America, Inc.
1990, US Dist. Ct., ND Cal
1990 US Dist. LEXIS 5200
KEYWORDS: anti-trust - jurisdiction
SUMMARY BY: Chris Metcalfe

COPYRIGHT LAW PROTECTS VIDEO GAMES

(This is an archived case summary.)

Arctic International sold two types of circuit boards for coin-operated video games. The first increased the rate of play of "Galaxian" a video game that Midway owned the rights to. The second chip produced images and sounds almost identical to "PacMan" the rights to which Midway also owned. The second chip did not copy the program of PacMan, however it produced an almost identical game.

The first question the court had to decide was whether or not the "audio visual works" protected by the 1976 Copyright Act was broad enough to include video games. The two concerns were that the images were not in a fixed sequence and the sequence was changed by the players of the game. The court held that the first concern was not a bar to the Midway's case as it had already been decided that the act applied where the sequence of images was varied. Likewise, it analogized that the variance in the sequence of games to an individual watching television and changing the channels, thereby changing the sequence of images. The player does not have the ability to create any sequence of images and sounds and therefore they are more akin to someone changing channels than they are to an author of a new audio/visual work.

The court also held that the chip that increased the speed of play of Galaxian created an "accelerated" version of the game which was a derivative work. Having found that the video games were protected by the Copyright Act and that Arctic had likely infringed upon those rights, the court upheld the lower courts preliminary injunction prohibiting Arctic from distributing and producing its chips. 

Midway Mfg. Co. v. Arctic International Inc.
1983, US CA 7th Cir.
704 F.2d 1009
KEYWORDS: copyright - derivative works - mods
Summary by: Adam Nott

FIRST CANADIAN VIDEO GAME COPYRIGHT CASE?

(This is an archived case summary)

This was one of the first Canadian cases to consider whether copyright could attach to the source code of a game. The defendant's game units would flash the “Atari” logo, and when Atari sought an injunction the judge found that there was clear evidence of copying. However, the defendant raised the issue as to whether existing Canadian copyright laws extended to game machines, pieces of equipment, EPROMS, source code, or object code. Since this was a question of major importance to copyright law, and because damages would be an appropriate remedy should the plaintiff succeed at trial, the judge denied the injunction and stated that the issue of whether a video game was copyrightable should be sent to trial.
There is no record of this issue ever being sent to trial.

Atari, Inc. v. Video Amusements of Canada Ltd.
1982, Federal Court of Canada, Trial Division
FCJ No. 1100
KEYWORDS: copyright - source code - injunction
SUMMARY BY: Byron Yep

CRAZY KONG ENJOINED

(This is an archived case summary)

Nintendo sought and received an injunction against Elcon, who had been importing circuit boards manufactured by Falcon into the United States. Falcon was a past Nintendo licensee who was licensed to manufacture and sell only in Japan. The circuit boards were modified slightly to create a game called “Crazy Kong”, which was manufactured and imported to be sold in the US. The game was merely a copy of “Donkey Kong”, with a different title and no Nintendo marks.

Nintendo of America, Inc. v. Elcon Industries
US. Dist. Ct, SD East Dist. of Michigan
564 F. Supp 937
KEYWORDS: injunction - copyright infringement
Summary by: Byron Yep