Lawyers in Canada: Davis LLP - Legal Advisors Since 1892

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.

RCMP and York Police Arrest DVD Pirates

Much criticism has been leveled at Canada regarding its copyright laws; however, the news isn't all bad. Following a six-month investigation, the RCMP and York Police, in a collaborative effort, have arrested five men (Huici Chen, 36, Chung Ping Pang, 37, Tongjin Chen, 62, all from Markham, Ya Ouyang, 29, of Scarborough and Huixin Chen, 27, of Brampton) for multiple breaches of the Canadian Copyright Act for pirating movies including "Slumdog Millionaire", the "Curious case of Benjamin Button" and "James Bond: Quantum of Solace".

You might remember that in Louis Vuitton Malletier S. A. v. 486353 BC Ltd. et al (2008 BCSC 799), the Supreme Court of Canada sent a strong message to infringers of among other things, copyright, by awarding statutory damages of $20,000 per work, and $300,000 (total) in punitive and exemplary damages which were awarded (jointly and severally) against the defendant corporation and two employees.

If convicted, the five men in this most recent case could face fines of up to one million dollars and/or imprisonment of up to five years.

http://www.thestar.com/gta/crime/article/630068

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

ARRIVA! ARRIVA!

Mexico's Procuraduria General de la Republica and Agencia Federal de Investigacion recently seized 20 tons of pirated materials including approximately 91,200 copies of video games, 130,000 video game cover inserts and 3,200 empty video game boxes in a Guadalajara Market. It is reported that the government agencies worked with local ESA representatives to conduct the raid.

ESA has stated that they "commend Mexican law enforcement officials for their actions in this raid and are committed to fully supporting authorities around the world who conduct these kinds of enforcement actions".

Coverage at: GameDaily.com

THE PIRATES OF WAR

Submitted by Karine Bellavance

Despite the fact that Gears of War 2 is not coming to PC, it is reported that a forged copy of the game has already been uploaded by various pirate sites for use on modified Xbox 360 systems. Epic Games' Lead Game Designer had stated that the game would not be coming to PC primarily due to piracy concerns.

Coverage at: Gamedaily.com

PROLIFIC PIRATE PLEADS GUILTY

Submitted by Karine Bellavance

Gary Boulter, who took part in a major piracy operation in Bristol, plead guilty to 23 offenses relating to the commercial piracy of illegally copied games, films, music and pornography. The Bristol Crown Court sentenced him to 15 months of prison, and he was also ordered to pay 12 000 pounds towards prosecution costs, in addition to a 10 500 pound fine.

Coverage at: Gamedaily.com

Legal Battle Joined over WoW Bot

Vivendi, the parent company of Blizzard Entertainment (the creator of the popular World of Warcraft on-line multiplayer game), has sued the author of a software tool that automates certain in-game tasks such as fighting.

Vivendi and Blizzard claim that the software tool infringes its copyrights (because the tool copies game code into RAM in order to avoid cheat-prevention software) and also violates the game's end-user licence agreement.

The defendant, who claims to have sold more than 100,000 copies of his program, denies there is any copyright infringement.

Both parties have filed written submissions and are awaiting summary judgment in the case.

Coverage on the BBC and at the International Business Times.

Yarrrrr! Canada Teeming With Online Pirates, Warns ESA.

In its "Special 301 Report", filed with the U.S. Trade Representative, the Entertainment Software Association claims that online piracy is a persistent problem in Canada, China, Malaysia, Russia and other parts of Europe. The ESA urges those nations to bring their copyright and enforcent regimes up to international standards.

The report, which threatens potential trade sanctions, specifically criticizes the "legal and enforcement deficiencies in Canada".

Coverage at: Next Generation

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.

Manhunt 2 gets hacked - but is it really any surprise?

Isn’t it kind of like getting sued? You know you’ve really hit the big time when someone takes the time to hack your software? Or was this just a stunt to promote game sales? Seriously though, it only took hackers three days to crack the Manhunt 2 software. And there is (or was anyway) a detailed video on YouTube just in case you needed the details. According to reports, the software was to have been modified to remove “ultra-violent… full-color death scenes” in order to comply with an Entertainment Software Ratings Board (ESRB) request. In light of the software’s recent hacking, it would appear however, that the scenes were not removed - just edited by adding a filter, so as to render them black and white. This isn’t the first time the game company has gotten into hot water - or what it “Hot-Coffee” - most recently, for not removing sexually explicit content from one of its games.

“Hackers apparently have altered one of those edits to produce an illegally modified version of the game that can only be played on an unauthorized, modified PlayStation Portable handheld system.”

“All of the game material, and especially these specific edits, was submitted to and reviewed by the ESRB in accordance with requirements regarding disclosure that were enacted two years ago and any contrary suggestion is inaccurate and irresponsible.”
Uh huh. Right. I’ll buy that for a dollar. I would say though that it is time you had some serious hackers on staff guys. And hey, ‘there is no such thing as bad publicity’, right?

You can still find the “death scenes” on YouTube but you are going to have to find them yourselves. And, not surprisingly, you can enter a fake birth date to access age-restricted materials. Trust me - I’m old enough to look - but my mother told me never to tell the truth about my age…

Coverage at Gamasutra and IGN.

Mod Chip Crackdown

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

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

Coverage here (ComputerWorld).

Piracy of Video Game Films

Thinking of turning your hot new game into a movie? You'll be happy to know that Canada is getting tough with the pirates who would steal your booty. We recently published an article in the CBA Addendum regarding Canada's new anti-piracy efforts in the movie industry. The article is available here.

WoW LAWSUIT OVER BOT SOFTWARE

A flurry of legal activity has erupted over a piece of software called WoWglider. The software (see here) will play your World of Warcraft character for you while you do other things. WoWglider's FAQ states bluntly that using the software is a violation of WoW's terms of use, and that your WoW account may be closed if you are caught using it. However, the FAQ also points out the various steps taken to make WoWglider difficult to detect.

When the creator of WoWglider, Michael Donnelly, received notice that Blizzard and Vivendi considered WoWglider to be a copyright infringement and a violation of the Digital Millennium Copyright Act, he decided to strike first and commenced a lawsuit seeking a declaration that WoWglider does not infringe any rights.

Blizzard and Vivendi have now filed a countersuit claiming various infringements, including violation of WoW's terms of use, copyright and trade-mark infringement, violation of the DMCA (by circumventing copyright protection), unfair competition, and tortious interference with contractual relations. The countersuit alleges that by creating and distributing WoWglider, Donnelly's company is encouraging and enabling WoW subscribers to breach their contracts with Blizzard.

Coverage at: http://tinyurl.com/25h3kp (Gamasutra)

and at: http://tinyurl.com/2m2hys (Game Politics)

WoWglider's Complaint here; Blizzard and Vivendi countersuit here.

CANADIAN THOUGHTS ON MOD CHIPS

Dr. Michael Geist, one of Canada’s pre-eminent technology law scholars, has an interesting entry on his blog about mod chips. One of his readers recently received a cease and desist letter from a large Canadian IP firm on behalf of the ESA concerning the use and sale of mod chips. As well as citing various statutes that prohibit software pirating, the letter also claims that using and selling mod chips to circumvent security on game consoles is an offence and constitutes direct or indirect IP infringement by “inducing and procuring” infringement in Canada.

Dr. Geist has two thoughts about the demand letter. First, the ESA is trying to apply US law in Canada – there is no Canadian doctrine of “inducing” copyright infringement. Second, the letter contradicts the ESA’s position that Canadian copyright law needs reform. On one hand, the ESA says that Canadian law does not adequately address mod chips and therefore needs to be amended; on the other hand, the ESA is relying on existing Canadian laws to prohibit the use and sale of mod chips (in other words, existing Canadian laws are adequate).

Coverage at: http://preview.tinyurl.com/yrfbf3 (Michael Geist)

New Japanese Anti-piracy Legislation

Japanese customs and copyright law is being amended to start banning the exportation of pirated software as of July 1, 2007. The current laws bans importation, but not exportation, of pirated software.

This is actually not very unusual. For example, the Canadian Copyright Act doesn’t specifically prohibit exportation of pirated software, although it does prohibit the distribution of pirated works “to such an extent as to prejudicially affect the owner of the copyright” in those works.

Coverage of Japanese law here: http://tinyurl.com/ywr8bp (Yomirui)

SECOND LIFE GOES OPEN SOURCE

Second Life publisher Linden Lab has released virtual world's viewer as open source software, and intends to do the same with the server software that runs the virtual world itself. Linden Lab released the viewer software under the open source General Public Licence (GPL), which allows anyone to view, change and distribute source code, but requires anyone who distributes modified software to make the changes available as well. Linden Lab will require programmers to sign a contributor agreement which gives Linden Lab joint ownership of the software; Linden Lab will also maintain control of an official version of the viewer software.

This is a big step in the games industry, as most large game companies prefer to keep their code proprietary. However, Linden Lab believes that Second Life lends itself to an open source approach, and also believes that it still has significant income potential even if software is open source.

Coverage from News.com here .

Linden Lab press release here .

THEY FOUGHT THE LAW, BUT THE LAW WON

Two Bristol men have been sent to jail for large-scale copying operations, which included the creation and sale of pirated games. The men have been convicted under the UK Trade-marks Act and Video Recordings Act, and proceeds of crime investigations have also begun.

Coverage at http://shorl.com/dynehubrybopu (BBC)

and at http://shorl.com/hupustalivysy (Myth-Games.com)

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. 

FAN MOVIE PORTRAYED AS TERRORIST RECRUITING TOOL

It all started innocently enough a Battlefield 2 player, inspired by the movie Team America World Police, created a short fan film using, among other things, footage from BF2's Special Forces add-on module, sound clips from Team America, and sound bites from George W. Bush speeches. The movie, which builds on the back story of one of the Team America characters, shows a man in Arab headdress fighting US troops. It was all for fun, as are the many other BF2 movies that the game's fans have created.  Note that there was no modding involved, merely assembling existing footage, dialogue and music.

Things soon took a disturbing turn, however a US congressional intelligence committee was told by the Pentagon and defence contractors that the video was produced by Al Quaeda in order to recruit jihadist terrorists. Further, Reuters picked up the story and published it under the headline 'Islamists using US video games in youth appeal"? (see its original article here ).

The real story has gotten out quickly, thanks largely to excellent reporting from Game Politics (see the GP interview with the video maker here ). Reuters has since released a follow-up article with more accurate details (see here ).

Clearly, video games are still misunderstood and portrayed incorrectly by government and media. Members of the gamer community are also surprised and annoyed that the US defence contractor (who apparently has a $7 million contract to monitor militant web sites) could make such a mistake (the initial Reuters report stated 'SAIC executive Eric Michael said researchers suspect Islamic militants are using video games to train recruits and condition youth to attack US-led coalition forces in Iraq"?). Many others have pointed out that the game America's Army is a full-on training and recruiting tool for the US army, and that there is something hypocritical about vilifying other games or mods that can be used for 'recruiting"? purposes.

As for the maker of the video, he is bemused at being portrayed as a terrorist recruiter, and is (understandably) concerned about being blacklisted and monitored by US security agencies.

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

FROM RUSSIA WITH LOVE

StarForce, Russian makers of game copy protection software that has recently elicited controversy in gaming circles, has threatened technology weblog BoingBoing.net with legal action following a negative piece on game copy protection software and its alleged adverse effect on consumers' computers.

Late last year StarForce challenged consumers to prove the adverse effect of its software on their systems and offered a $1,000 prize to whomever succeeded.
coverage at http://tinyurl.com/a6hec

$6 MILLION FOR SELLING MOD CHIPS

Sony alleged that the Defendant, Filipiak, operated an on-line retail store that sold devices (“mod chips”) used to modify PlayStation and PlayStation 2 video game consoles so as to circumvent copyright protection mechanisms that prevent copied games from being played on them.

Sony sued the Defendant for injunctive relief and damages for alleged copyright infringement under the US Digital Millennium Copyright Act. The DMCA prohibits the sale of devices which circumvent copy protection, and the Plaintiff chose the option of statutory damages under the DMCA (between $200 and $2,500 for each infringement).

The court held that the DMCA allows a separate award of statutory damages for each device sold, and that statutory damages would be set at $800 for devices sold before June 12, 2004 (when the defendant agreed to stop selling the mod chips), and at the maximum $2,500 after that date (because the later sales constituted wilful violations of the DMCA). Ultimately, the District Court awarded Sony over $6 million in statutory damages.

This decision demonstrates that the DMCA can be a powerful took against modders and hackers in the United States. As we have mentioned before, Canada does not have comparable anti-circumvention legislation, but there is some is in the works.

Coverage at http://shorl.com/gesirubredryna

Sony Computer Entertainment America, Inc. v. Filipiak
December 27, 2005 US Dist. Ct., ND Cal.
2005 WL 3556676
KEYWORDS: DMCA - statutory damages - anti-circumvention - mods - copyright infringement - contributory infringement
SUMMARY BY: David Sprately

XBOX PIRATES AND MODDERS ARE INDICTED

The owners of a video game store in California were recently indicted for allegedly copying XBOX games and installing them on modded consoles. 

Video game piracy is obviously an infringement of copyright, and it might also be a criminal offence. Likewise, circumventing copy protection technology can violate US copyright law. Canada does not yet have anti-circumvention legislation; however, Canada's proposed amendments to the Copyright Act do currently contain anti-circumvention provsions.

Coverage here http://www.shorl.com/bejubugrekuko

WoW CRACKDOWN CONTINUES

We reported several months ago (see post ) about how Blizzard was scanning the hard drives of World of Warcraft players, trying to prevent hacking and cheating. Blizzard is obviously keeping on top of things, as it has announced that over the past three months is has permanently closed more than 18,000 WoW accounts for violating the Terms of Use.

Most of the closed accounts were using third-party programs to collect gold and items for sale in the real world.

Blizzard's report at http://shorl.com/fastynobrobradri

Coverage at http://shorl.com/hagrivakedygro

LIABILITY IN THE MMO WORLD

We just published an article in theLawyers Weeklyregarding unexpected potential liability in the online gaming world. 

Here's the link  http://www.shorl.com/gorufebradrome

KING'S QUEST SEQUEL SHUT DOWN

KQIX, the unofficial ninth sequel to the King's Quest series was recently shut down after developers received a demand letter from Vivendi Universal Inc.

The legality of unofficial sequels is sometimes uncertain. It often depends on the extent to which intellectual property from the original game is included in the sequel.

For example, if the sequel uses trade-marks from the original game such as the name of the game (or sometimes even the names of characters or places in the game), the sequel might violate trade-mark rights in the original game.

Likewise, if the sequel uses any code, characters, or other materials from the original game, the sequel might violate copyright in the original game.
Shut down site is at  http://www.kqix.com

The Dreaded Pirate Ponce De Leon

No, not the 16thcentury explorer. Dashiell Ponce de Leon of Richmond, Texas has been convicted of criminal copyright infringement by the US District Court of the District of Columbia, for selling 'backup"? (read pirated) copies of game and application software online. Ponce de Leon was sentenced for 3 years and 10 months in a federal prison, followed by 2 years of supervised release, and must pay $1.15 million in restitution fines. Due to this strong sentence, Ponce de Leon's case stands as a harsh deterrent against Caribbean and North American exploration. Piracy. I meant to write 'piracy"?.

Full coverage at http://shorl.com/fabegedratyku

XBOX 360 PIRACY FEARED

Reports from Germany are that 10 Xbox 360 development kits have been stolen from a German warehouse. The kits, which are used by game developers to create software for the next-generation platform, are thoughtto be in the hands of hackers who will be able to pirate Xbox 360 software and create unauthorized mods and cheats.

Police have recovered 3 of the 10 missing kits, but the remainder are still on the loose.

Coverage at http://shorl.com/dekaprotihiho

and at http://shorl.com/befajepradugo

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

NOTE TO DEFENCE COUNSEL

This isn't exactly a video game law story, but it's close enough. The reason we're reporting it is because it provides a great laundry list for counsel who are drafting counterstatements or statements of defence.

As you know, theRecording Industry Association of America (RIAA) has been busy filing lawsuits against thousands of individuals who have allegedly violated copyright by sharing MP3 files online. 

The RIAA has had some PR problems in the past (e.g., when it sued a 12 year old honours student and an 83 year-old grandmother).  The RIAA has just encountered another PR problem with its lawsuit against a 42 year-old, disabled, single mother. 

The interesting part of this story is that the mother filed a lawsuit in response. And she's not shy  she's suing for RICO violations, fraud, invasion of privacy, abuse of process, electronic trespass, violation of the Computer Fraud and Abuse Act, negligent misrepresentation, deceptive business practices and"?we like this one"?the tort of 'outrage"?. We'd never heard of that one before. 

This highlights an important point when you're faced with a breach of your intellectual property rights, you have to respond carefully. Your intellectual property is valuable and you must protect it (in fact, if you don't protect it you can lose some or all of your rights). And a lawsuit can be a very effective way to protect your IP. However, sometimes a lawsuit isn't the best choice. 

Sony is well aware of this (and has experienced several litigation-related PR issues in the past). Perhaps this is why Sony decided to sue retailers"?instead of consumers"?to prevent grey-market PSPs from entering other markets ahead of schedule. 

RIAA coverage at http://www.shorl.com/butytofrubrelu

 

DON'T HACK ME OR MY PSP

Sony has issued another patch for the PSP, this time to fix a bug that allows hackers to crack the PSP and run their own apps on it. Sony isn't currently setting its lawyers loose on PSP hackers, but is reminding its customers that cracking the PSP voids the warranty on it. 
Coverage at  http://www.shorl.com/buvagrahybepre

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

ESRB CLEANS UP HOT COFFEE SPILL

The ESRB is trying to clean up the mess that resulted from the Hot Coffee incident. The ESRB has sent a strongly-worded email to US publishers requiring a full audit of all titles released in the past year to identify hidden content that could be relevant to a game's rating. The ESRB email states that disclosing hidden content that is accessible through cheat codes or Easter eggs has always been an ESRB requirement. As well, a publisher who does not wish hidden content to be accessible must remove it from the game software altogether (i.e., rather than locking it away).

Publishers have until January 9 to disclose the results of their hidden-content audit, and the ESRB says it will issue new ratings if required. It also threatens 'punitive actions"? for failure to give notice of previously undisclosed, non-playable, pertinent content if that content subsequently becomes playable through authorized or unauthorized code.

The board's email also acknowledges that it is concerned about mods and about maintaining the rating system's credibility in the face of mods. This is an interesting point "? should game publishers and the ESRB be responsible for third-party unauthorized mods (which is how Rockstar initially characterized the Hot Coffee mini-game) which add content that could potentially change a game's rating?

Coverage at  http://shorl.com/gybrenepaneme

and at http://shorl.com/giledypovapra

DON'T BE HACKING BATTLE.NET

Last year we reported that Blizzard Entertainment had won its lawsuit against Internet Gateway Inc. and various individuals who reverse engineered Blizzard's software and protocols to create the bnetd project, a free and unregulated alternative to Blizzard's Battle.net arena.  The lower court ruled that the defendants' activities violated US copyright law and also violated Blizzard's software licences and online terms of use. The Court of Appeal (8th Circuit) upheld this decision yesterday.

When the defendants agreed to Blizzard's Terms of Use and End User Licence Agreement, the defendants contractually agreed not to reverse engineer any of Blizzard's software. The Court of Appeal ruled that this contract was binding and enforceable, and that the defendants had breached it. Also, the Court of Appeal ruled that the defendants had breached the DMCA's anti-circumvention provision (by allowing gamers to play unauthorized copies of Blizzard games on bnetd) and one of the DMCA's anti-trafficking provisions (by developing the bnetd emulator for the purpose of circumventing Blizzard's copy protection). 

The decision is available here http://www.shorl.com/hegrysorarufa

SCAMMER ARRESTED FOR FIRING BLANKS

A Utah man has been arrested for buying video games and then returning the boxes (re-shrinkwrapped) with blank CDs inside. He would then sell the game CDs on eBay. Authorities say that the man was caught because he got greedy "? he kept working his scam long enough for stores and the police to catch on.

Coverage at http://shorl.com/jedutydrupusi

A BLIZZARD OF PRIVACY QUESTIONS

Blizzard Entertainment is receiving flack from some players for scanning players' computers for illegal cheats and hacks relating to the massively multiplayer online game World of Warcraft. Some players claim that preventing cheating and hacking is not a sufficient excuse to impinge on their privacy. Blizzard, on the other hand, says that looking for hacks in the actual game itself is not unreasonable, and points out that World of Warcraft's end-user licence agreement (which players must review and acknowledge before playing) explicitly states that Blizzard reserves the right to scan for hacks and cheats.

Putting information about the scans in the EULA is a good move (Sony ran into trouble with Everquest players because it performed similar scans without giving notice to its players), and this story highlights the importance of actually reading software licence agreements instead of just scrolling through and hitting 'I accept"?.  Personal hard drives are increasingly open to prying eyes "? readers may recall that Microsoft generated much discussion when it announced new measures to verify that users seeking upgrades actually had legitimate copies of its operating system -- and it is a good public relations move to be as open about such activities as possible.

Coverage at http://shorl.com/bogatygravuge

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 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

TAKE TWO OOPS, PARDON US, OUR MISTAKE….

Take Two has now admitted that the 'hot coffee"? sex scenes in GTA San Andreas were created by Rockstar, not a modder. And the ESRB has changed the game's rating from M to AO. Rockstar is working to create a new version of San Andreas that would qualify for the original M rating. 

The ESRB's change raises an interesting debate. On the one hand, producers are required to disclose all content to the ESRB so games can be properly rated. On the other hand, the AO content is not accessible without the mod, which might lead some people (a video game lawyer perhaps?) to argue the game should be rated based on what's accessible without the mod (afterall, the Sims can be made pornographic too, but the ESRB doesn't rate mods).

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

Our earlier posting is here .

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

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

GAMESPOT DOUBTS ROCKSTAR

In an earlier posting  we discussed the recent 'hot coffee"? controversy surrounding GTA San Andreas.

Gamespot has done its own investigating and questioned Rockstar's allegations of hacker mischief. It appears the cheat codes work on the PS2 version of the game (which comes on an unmoddable DVD).
Coverage at  http://www.shorl.com/fulegrubripryva

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

PIRACY'S A STATE OF MIND

A recent UK study has found that people (UK people, at least) do not view downloading copyrighted material as theft.  Most people view downloading a copyrighted game as somehow different from shoplifting that same game from a store; in fact, such downloading is often considered a 'normal leisure practice"?. This study reinforces the point that attitudes towards game piracy still have to change significantly, especially as the ability to access and download pirated games continues to increase.

Coverage at http://shorl.com/hekistalihumu

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

Consequences Of Nakeder Tecmo Games

May 18 was a sad day for video game lawyers, because on that day US Federal Judge Charles Kocoras permitted a settlement of a case between Tecmo and video game modders. NinjaHacker.net, whose webmasters Mike Greiling and Will Glynn were named as defendants in the lawsuit initiated by Tecmo, offered a community to create and distribute mods for Tecmo games such as Dead or Alive 3 and Dead or Alive Xtreme Beach Volleyball. Tecmo, famous for making electronic near-naked characters fight and... play extreme beach volleyball, argued that NinjaHacker.net's mods violated US intellectual property and unfair competition laws, and of course the DMCA. Now that the case has settled, we may never know the legal accuracy of Tecmo's claims.  As video game lawyers in search of truth and justice, we can thus only hope that this settlement collapses and everyone involved is ruined.

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

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

PSP PIRATES “WE'RE SO S-M-R-T SMART!!!”

Pirates recently released unauthorized copies of PSP games onto the Internet. However, the PSP has great copy protection technology there aren't any UMD burners yet, so the pirated games can't be played on the PSP. There's a chance the games could eventually be played from a memory stick, but Sony has taken steps to prevent this.

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

Finland Or The FBI?

When the law stops working, it's time to create a dummy hash file.

Finnish Company Viralg Oy claims to have engineered digital rights protection software that generates such a file, which can then be inserted into a P2P network to trick downloaders into accepting garbage data instead of the copyrighted content they so greedily desire. As this garbage data spreads across the P2P network, less original content is distributed and more finished downloads are corrupted, making the file sharing process nigh-impossible. Whether Viralg's creation will significantly prevent piracy - or merely cause a short-lived annoyance to the grog-drinking yar-shouting masses - remains to be seen.

Coverage at http://www.shorl.com/garobynufusta and http://www.shorl.com/hytrahodresyla

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

YOU TOO CAN HIRE THE FBI

They're tough. They're smart. They have cool earpieces and sunglasses. They pack heat. And they can get secret court orders under the USA PATRIOT Act.

No, they're not your friendly neighbourhood video game lawyers. (We wish.) They're the FBI. And they're working for you!!! Or at least some of you.

Games publisherIn The Deepwas ticked-off at publisherTake Two Interactivebecause In The Deep thought Take Two was selling illegal copies of one of In The Deep's games. 

In The Deep didn't have the cash to hire one of those fancy US video game attorneys, so they complained to the FBI instead. 
Coverage at  http://www.shorl.com/feprodrudyrajy

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

BSA BS?

The Business Software Alliance (BSA) has withdrawn its lawsuit against Project Entropia creator MindArk Studios.  The lawsuit alleged that MindArk used unlicensed versions of Microsoft, Adobe, Macromedia and Autodesk software to develop Project Entropia. It turns out the software was licensed afterall. (Oops.)

Predictably, the dispute doesn't end there. MindArk is preparing a countersuit claiming damages caused by the original lawsuit.
Coverage at  http://www.shorl.com/jelitojugajo

HEROS ONE; MARVEL ZERO

Last year, in an article (brilliantly, we think) entitled 'Maybe Modding Isn't So Marvellous"?) we reported that Marvel Comics had sued the publisher and developer of City of Heros. Marvel claimed that the character customization functionality in the game allows players to create superheroes that closely resemble trade-marked Marvel comic characters like "The Incredible Hulk" and the "X-Men".

Marvel's lawsuit recently suffered a major setback more than half of Marvel's claims were dismissed"?including Marvel's claim that the defendants had directly infringed Marvel's registered trade-marks.

On the copyright issue, the judge concluded that the character customization feature has a substantial non-infringing use (for example, making superheros who look like lawyers). This meant that the defendants shouldn't be held liable for contributory copyright infringement.

Coverage at  http://shorl.com/bestebribymeste
And at  http://shorl.com/fytugreprynuvy

YAAR - CONSOLE PIRACY BE ON THE RISE, MATEY

A recent survey by Macrovision, a California-based anti-piracy firm, shows that 21 percent of console gamers use pirated software (mostly from peer to peer networks). Obviously such gamers also use mod chips or modify their consoles without chips to be able to play the pirated games. Macrovision, probably with an eye to future business, warns that game piracy is bound to increase in the future.

The report also claims that three quarters of those who obtain pirated games would have purchased the games had they not been available for free, so it's interesting to wonder the extent to which the pirates also buy legitimate copies of games.

Coverage at http://shorl.com/gebygroludruhu

SONY CRACKS DOWN ON CRACKS DOWN UNDER

Australia's position on mod chips just became more interesting. In 2002, the Australian Competition and Consumer Commission intervened in a case launched by Sony Computer Entertainment Australia against Eddy Stevens, who was supplying mod chips to the Australian market, on the grounds that the PS2's region coding created artificial trade barriers which deprived Australians of their chance to purchase games and DVDs overseas. Unfortunately for Stevens, the ruling was overturned, and he has now filed a further appeal in Australia's High Court.

Sony, who is awaiting the decision of the Stevens appeal before proceeding, claims that recent changes to copyright laws, enacted by Australia to comply with its Free Trade Agreement with the USA, offer a fresh opportunity to bring the pain to Australia's nefarious mod chippers.

 
Coverage at http://shorl.com/bibrityprefroste

PLAYSTATION SCARES JUDGES

In an ongoing lawsuit between Sony and a video game salesman who installed modchips into Playstations, Sony projected a racing game on the walls of the court to demonstrate how the mod chips worked. The Australian court was at first reluctant to see the demonstration one of the judges was worried that the game might be violent. The judge's fears were eased, however, when Sony promised that there would be only one crash in the game.

Coverage at  http://shorl.com/fugrohuhydyfra

 

DUKE NUKEM? NUKED 'EM!

3D Realms has shut down development of an amateur mod for Half-Life 2 which was meant to recreate Duke Nukem 3D. 3D Realms, which developed the classic Duke Nukem 3D, is currently working on that game's sequel. There is clearly a tension between protecting intellectual property and promoting the game. In this case, 3D Realms made the safe bet.

Coverage at http://shorl.com/hepypugrostubro

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.

REVERSE ENGINEERING BREWS UP A STORM ON BATTLE.NET

Blizzard Entertainment recently won its lawsuit against Internet Gateway Inc. and various individuals who reverse engineered Blizzard's software and protocols to create the bnetd project, a free and unregulated alternative to Blizzard's Battle.net arena. The court ruled that the defendants' activities violated US copyright law and also violated Blizzard's software licences and online terms of use.  

Other software publishers should take note that the court was impressed by the following (a) Blizzard's licence agreement explicitly prohibited reverse engineering, (b) the software boxes and packaging stated that the customers' use of the software and Battle.net were subject to a licence agreement and terms of use; (c) the pop-up licence agreement and terms of use gave users explicit notice that their use of the software and Battle.net was governed by the agreement and that the users could return the software for a full refund if they didn't agree to the terms; (d) users would not be able to use the game if they did not consent to the agreement and the terms by clicking "I Agree".

Coverage at http://shorl.com/dujenanurata

321 COMES TO NAUGHT

321 Studios Inc., whose Games X Copy software allowed users to make backup copies of copy-protected PC games, has agreed never to make or sell software that lets users create copies of computer games. This is part of its settlement with three video game powerhouses (Atari Inc., Electronic Arts Inc. and Vivendi Universal Games Inc.) who sued 321 for copyright infringement. 321 had already been sued by various Hollywood studios over its DVD-copying software; that lawsuit came to a similar conclusion. 321 went out of business in August, due in large part to these lawsuits and various court orders which went against it.

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

MOD SQUAD CRACKDOWN

Three DC-area video game stores were raided recently, resulting in the seizure of equipment and the arrest of two employees. The charge modifying Xbox consoles so that they could play pirated copies of video games. Some of the modified consoles on display already held 15 or more games on their hard drives. The employees were charged with conspiracy to commit copyright infringement and conspiracy to traffic in a device that circumvents technological protection measures. This is a reminder that copyright infringement is a criminal offence, and that game makers can look to criminal proceedings as well as civil actions to protect their copyright.

Coverage at http://shorl.com/henumamudrory

Coverage at http://shorl.com/bujogrurygryfe

BANNED FOR HALF-LIFE

Half-Life 2 maker Valve has hit back at players who obtained pirated copies of its popular new game. To be able to play, players must set up an account on Steam, Valve's online gaming community. Steam then verifies whether the player's game is legitimate or pirated. Valve has now shut down close to 20,000 Steam accounts on the grounds that the account holders obtained the game illegally. Valve maintains that this system makes it easy to trace and confirm which accounts use pirated copies, but some banned users claim they are innocent. Clearly there are some wrinkles to be ironed out, but Valve's approach may be a significant new development in copyright protection for video games.

Coverage at http://shorl.com/gesavakymutra

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

 

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.)

DVD COPYING VS. FREE SPEECH

(This is an archived case summary.)

321 Studios is the maker of “DVD Copy Plus”, a product that makes backup personal copies of movies on DVD. A U.S. federal court in California ruled in February 2004 that this product violates the Digital Millennium Copyright Act (the DMCA). DVD Copy Plus bypasses the “Contents Scramble System” (CSS) that manufacturers insert on DVDs. The DMCA is a controversial Act that bans such circumvention tools. 321 Studios argued that banning the product violated the consumers' rights to free expression to make backup copies of DVDs they had purchased.

Judge Ilston wrote that making backup copies for personal use is not illegal; in fact it is a legitimate “fair use” of a work that the consumer already owns. The right to personal use is protected under the First Amendment (free expression), but even though the DMCA radically restricts the legitimate use, the Act does not unconstitutionally restrict 321's speech.

The Judge pointed out that ”if 321 removed the part of its software that bypasses CSS and marketed only the DVD copying portion, it could freely market its product to customers who use the software to copy non-CSS encrypted DVDs and other public domain material.”

The judge ordered an injunction against 321 Studios, prohibiting them from manufacturing, distributing, or otherwise trafficking in any DVD circumvention software.

321 Studios v. Metro Goldwyn Mayer et al
February 19, 2004 US Dist. Ct., ND Cal.
307 F. Supp. 2d 1085
KEYWORDS: DVD copying - freedom of speech - DMCA - fair use
SUMMARY BY: Chris Bennet
The case is available here http://www.shorl.com/gafevubibridri

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

BUILD EDITORS AND DERIVATIVE RIGHTS

(This is an archived case summary.)

Duke Nukem 3-D (DN 3-D) was shipped with a Build Editor which allowed fans to create their own levels for DN 3-D. Players were encouraged to build their own levels and to share them with other players. These levels were saved as .MAP files which, with references to the art databases of DN 3-D, allowed the recreation of user created levels with the use of any copy of DN 3-D. The DN 3-D licence agreement however, specifically forbade users from selling the levels they created. Micro Star downloaded over 300 levels from sites across the internet and marketed these levels as a CD entitled “Nuke It”. “Nuke It” was packaged in a box containing screen shots of the new levels.

The owner of the rights to Duke Nukem 3-D, FormGen, brought an action alleging Micro Star was infringing the copyright on those rights by selling derivate works. This argument was based on the fact that the MAP files ran only in conjunction with the DN 3-D engine and all of the audio/visuals were extracted from the DN 3-D art databases. FormGen also sought a preliminary injunction to block the use of the screen shots on the “Nuke It” packaging. The district court rejected the claim for copyright infringement ruling that the levels were not derivative works. It did however grant a preliminary injunction barring Micro Star from using the screenshots and dismissing the fair use defence that Micro Star raised.

Both parties appealed this decision. FormGen appealed the ruling that MAP files were not derivative works. Micro Star argued that the audio/visuals were not incorporated into a “concrete” form and therefore could not be derivative works. The court sided with FormGen and dismissed Micro Star's arguments. The MAP files were incorporated into a concrete form when they were burned on to the “Nuke It” CD.
The court also held that the files were obviously similar to DN 3-D since they were entirely generated by the DN 3-D engine and databases. Given its “concrete form” and similarity, the MAP files were held to be derivative works. Having found that the MAP files were derivative works, the court granted an injunction barring the production and distribution of “Nuke It”. Of the four factors considered, the determining factor appears to have been the fact that “Nuke It” impacted the potential market for DN 3-D sequels thereby reducing FormGen's ability to capitalize on derivate works of its own.

The court also upheld the district courts finding that use of screen shots from DN 3-D to market a product that competes directly with DN 3-D was not acceptable as a “fair use” of copyrighted material.

Micro Star v. FormGen, Inc.
1998, US Ct. of Appeals, 9th Cir.
154 F. 3d 1107
Keywords: copyright - derivative works - Duke Nukem 3-D - player-created content
Summary by: Adam Nott

NINTENDO SPANKS ANOTHER PIRATE

(This is an archived case summary)

The Court of Appeal affirmed the District Court's decision enjoining Brown from selling video game cartridges that infringed copyrights and trade-marks owned by Nintendo. The games sold by Brown were virtually identical to games protected by Nintendo's intellectual property rights. The only difference, in fact, was that the knock-offs did not have the Nintendo copyright symbol on the cartridge.

Nintendo of America v. Brown
1996, US Ct. of Appeals, 9th Ct.
94 F. 3d 652
Keywords: copyright - trademarks
Summary by Chris Metcalfe

SUPERUFO SHOT DOWN

(This is an archived case summary.)

C&E Inc. produced the SuperUFO, a device which plugs into Nintendo game consoles and allows the user to format disks, copy games and play copied games. Nintendo brought an application for a preliminary injunction barring C&E from producing or distributing the SuperUFO.

Upon a review of the application, the court held that there were substantially no non-infringing uses for a game-copying device such as the SuperUFO. The non-infringing uses could easily be performed on a personal computer and at a price of $420 it was not foreseeable that anyone would purchase the SuperUFO to perform these basic functions. It was also held that copying a game from a cartridge to a disc created a derivative work, a right that was specifically reserved to Nintendo. For this reason it was held that Nintendo's copyright claims were likely to succeed and a preliminary injunction was granted.

Nintendo of America, Inc. v. Computer & Entertainment Inc.
1996, US Dist. Ct., D. Wash..
US Dist. LEXIS 20975
Keywords: SuperUFO - copyright - derivative work - injunction
Summary by: Adam Nott

DAMAGE AWARD AGAINST ABSENT DEFENDANTS UPHELD

(This is an archived case summary.)

The defendants, NTDEC and Megasoff Inc., appealed a default judgment issued by the District Court to Nintendo on the basis of copyright and trade-mark infringement. The defendant corporations were owned by five men from Taiwan. These corporations manufactured, imported and sold pirated Nintendo games in the United States, South America and Asia. After numerous attempts to gain access to various documents through the discovery process, the Court gave the defendants one last chance to cooperate, then issued default judgment. The defendants did not attend the default judgment. The default judgment awarded Nintendo $24M in damages and a little under $110,000 in attorneys' fees.

On appeal, the defendants raised various grounds of appeal, as well as various reasons why damage award should be lowered. The defendants also attempted to raise technical issues regarding the method in which documents were served upon them, including the incorrect placement of signatures. The Court determined that the defendants' failure to attend any of the hearings and argue on their own behalf was solely attributable to their own behaviour and was not a flaw in the service of documents.

With respect to the damage award, the defendants raised an argument based upon Title 15, section 1117 of the U.S. Code, which states that defendants must prove all elements of a cost or deduction claimed in regard to a trade-mark infringement award. Damages awarded for copyright infringement were statutory damages of up to $100,000 per infringement. The defendants argued that their inability to raise a defence restricted them from being able to demonstrate the costs involved in manufacturing these infringing products and thus that the damage award was inflated.

The Court of Appeal held that there were no grounds upon which to set aside the default judgment, nor were there any compelling reasons to alter the damage award. There is no record of whether Nintendo was able to collect the award.

Nintendo of America, Inc. v. NTDEC
1995, US Ct. of Appeals, 9th Cir.
51 F. 3d 281
Keywords: copyright - trademark - default judgment - piracy
Summary 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 CONTEMPT OF COURT

(This is an archived case summary.)

Nintendo sought an order declaring the defendants to be in contempt of a court order restraining them from trading in an infringing multi-game video game cartridge. The court found the defendants in contempt since they had knowingly violated the court order by selling the infringing cartridge on two separate occasions. The defendants were fined $3,500 for each offence and were order to pay $5,000 for costs of the action on a solicitor-client basis.

Nintendo of America Inc. v. 798824 Ontario Inc.
1991, Fed Ct. of Canada (Trial Div.)
[1991] F.C.J. No. 47
Keywords: piracy - infringement
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