Avocats chez Davis S.E.N.C.R.L.

Digital Locks and Video Games

Digital locks and anti-circumvention prohibitions generally say that it is illegal to bypass technological copy-protection measures. Such laws are contentious because of the fear that these prohibitions will apply even if the protected work is being accessed for legal activities (for example, under fair use or fair dealing exceptions).

The US Digital Millennium Copyright Act contains anti-circumvention provisions, but has a built-in mechanism by which the Librarian of Congress periodically determines whether there are classes of works that should be exempted from those provisions. The Librarian of Congress recently designated several new classes of exempt works, two of which are relevant to video games:

1. Computer programs that enable wireless handsets to execute software applications, so long as the circumvention if for the sole purpose of enabling the interoperability of lawfully-obtained applications. This exception opens the door to "jailbreaking" smartphones so that they can run unauthorized applications (including games).

2. Video games accessible on personal computers, so long as the circumvention is solely for the good-faith testing for, investigating, or correcting security flaws or vulnerabilities. The information generated from the testing must be used to promote the security of the owner or operator of a computer or computer system or network, and the information must be used or maintained in a way that does not facilitate copyright infringement or other violations of the law.

These are narrow exceptions, but they demonstrate the ongoing evolution of how anti-circumention laws are approached in different circumstances.

Coverage at Gamasutra; see the Librarian of Congress's statement here.

Settlement of Duke Nukem Forever Litigation

As a follow up to our May 26, 2009 blog entitled "Duke Nukem Forever or Never?", it has been reported that 3D Realms/Apogee Ltd. and Take-Two have come to a settlement agreement with respect to their dispute over the Duke Nukem Forever game. This settlement could pave the way to the release of the game, which now reportedly needs to be completed.

It had initially been reported that Take-Two, the publisher behind the Duke Nukem Forever game, had sued 3D Realms/Apogee Ltd. after it had let go its development staff. Take-Two had taken this to mean that the Duke Nukem Forever game had been cancelled. This was reportedly followed by a counter-suit by 3D Realms/Apogee Ltd., in which it was revealed that the game was still in development.

Coverage at http://www.shacknews.com/onearticle.x/64233.

Universomo... No More?

It has apparently been confirmed by THQ that Universomo, its Finnish mobile games studio, has entered liquidation. Universomo reportedly had more that 15 games and entertainment applications scheduled for release on mobile handsets at the time it was placed into liquidation. However, according to a spokesperson, these games and applications are still going to be released by using outsourcing and resources elsewhere in the company.

Coverage at Mobile-Ent.biz

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.

MumboJumbo Award Increased in PopCap Lawsuit

As a follow up to our January 27, 2010 blog post entitled "MumboJumbo Awarded Damages in Lawsuit Against PopCap", it has been reported that the payout awarded to MumboJumbo in this lawsuit has been increased from $4.6 Million to $7.3 Million. PopCap has reportedly been required to pay $2.7 Million to MumboJumbo in lawyers' fees, thereby increasing the total award of damages and fees to be paid out. The initial $4.6 Million award was granted by a jury who reportedly found PopCap liable for fraud, tortious interference and breach of contract.

Mike Richardson, an attorney from legal firm Rose Walker which represented MumboJumbo in the trial, reportedly stated the following: "We are happy to see the court award these fees. MumboJumbo shouldn't have to bear the cost of proving that PopCap breached the contract here."

Coverage at Gamasutra.com.

MumboJumbo Awarded Damages in Lawsuit Against PopCap

It has been reported that MumboJumbo, a Dallas-based worldwide publisher, developer and marketer of premium casual games for PCs and various game consoles such as "Midnight Mysteries: The Edgar Allan Poe Conspiracy" and "Luxor Adventures" has been awarded $4.6 Million in a lawsuit against its former business partner PopCap.

The lawsuit opposing the parties allegedly originated from a 2006 game retail distribution agreement whereby MumboJumbo undertook to produce, distribute and sell certain PopCap games in North America. However, it was reportedly found that PopCap breached the contract by deciding to sell and market its games on its own. MumboJumbo's lawyers also reportedly showed that PopCap committed fraud and tortious interference by damaging MumboJumbo's relationship with a key retailer.

Beyond the $4.6 Million in damages that was awarded to MumboJumbo, it has been reported there will be another hearing to decide on the quantum of the attorneys' fees to be added to the damages.

Furthermore, PopCap has reportedly indicated that it intends to appeal the decision in question.

Coverage at PRNewswire.com, Gamasutra.com and Edge-Online.com.

Human Rights Violations are No (Video) Games

A study conducted by two Swiss human rights organizations, Trial and Pro Juventute, has reportedly found that some video games depict actions that would constitute violations to international human rights laws in real life. More precisely, the researchers focused on International Humanitarian Law (IHL), basic norms of International Human Rights Law (IHRL) and International Criminal Law (ICL). The study was reportedly conducted as follows: gamers played 20 different games, while three attorneys observed the games in order to pinpoint which actions violated armed conflict rules and regulations.

It has been reported that the organizations in charge of the study have made the following statement: "The practically complete absence of rules or sanctions is nevertheless astonishing: civilians or protected objects such as churches or mosques can be attacked with impunity, in scenes portraying interrogations it is possible to torture, degrade or treat the prisoner inhumanely without being sanctioned for it and extrajudicial executions are simulated." The groups also reportedly noted that there were a few games that reprimanded the killing of civilians and that rewarded strategies aimed at preventing damages.

However, the organizations behind the study have allegedly stated that the study's purpose was not to prohibit the games or to make them less violent but rather, on a going forward basis, to have developers observe human rights laws and make it clear to gamers that human rights violations cannot be tolerated, even in a game setting.

Coverage at News.cnet.com

Don't You Wish You Were an Activision Shareholder Now?

Set to be the most successful video game of all time (according to press releases anyway), Activision paired up with retailers like Game Stop and Best Buy to ensure that shelves were fully stocked for stores open late to receive the throngs of gamers vying to be among the first to claim the latest version of its earlier hit Call of Duty, "Call of Duty: Modern Warfare 2".

If what analysts have been saying has any truth to it, this game should pull in upwards of $700 million U.S. dollars by the end of 2009. Other analysts (are these "analysts" like Call of Duty is likely to account for a sizable chunk of Activision's profits in the fourth quarter, analysts say, so there is plenty at stake in the launch."

Well, clearly the analysts were on to something. Kids across Canada lined up to try and secure a copy of the much anticipated game, including the son of a friend of mine who lives in British Columbia, who saved up his money and insisted on camping out early to wait for the store to open. I'm very happy to report that he got a copy which I'm sure he has already tormented his parents by playing constantly and not sharing with his siblings (well, that's what I would do anyway).

As for Activision, in its first week, well, first 5 days actually, Call of Duty 2 managed to post record sales of $550 million coming very close to what analysts had predicted late last week. Activision has also managed to come out ahead of its rival Electronic Arts, as its shares rose by another 5 cents.

"Hot Coffee" Dispute Changes Industry

It has been reported that the class-action lawsuit opposing Take-Two and its shareholders has now been settled for $20 million. The dispute allegedly began when it was discovered that a sexual minigame hidden in the code of Grand Theft Auto: San Andreas could be unlocked by a downloaded hack. This discovery reportedly lead to the game being re-rated to "Adults Only", to copies being removed from store shelves and to a drop in stock price for the company.

The scandal was allegedly named "Hot Coffee" because the minigame was initiated by the game character agreeing to enter a woman's house for a cup of coffee.

Take-Two was reportedly accused of several missteps in this case, namely that its management was not cooperating or assisting with the company's audit committee, that its management was failing to keep the board of directors informed of important issues or failing to do so in a timely manner, that inventory and software development costs were misstated, that it did not have the ability to accurately report its financial results due to failing and deficient internal controls and procedures and that it lied about where the content of the game came from. It has been reported that a new management team was installed in 2007 as a result of these missteps.

Despite the end of this particular dispute, some have stated that the gaming industry has been forever changed in the way games are rated, because all of the content on a game disc now has to be disclosed and rated.

Coverage at Arstechnica.com

It May be a Brutal Rocktober: Counterclaim Filed in Activision Lawsuit

Submitted by Sylvie Lang
In a counterclaim filed last week, game maker Double Fine Productions allegedly accused Activision Entertainment Inc. of trying to kill the scheduled October 2009 release of the game "Brutal Legend". Brutal Legend features Jack Black as a heavy metal roadie fighting evil in an ancient mythical world. The counterclaim was filed in response to a lawsuit launched by Activision in June. In the lawsuit, Activision reportedly claimed it never surrendered its publication rights to Brutal Legend and as a result Double Fine's transfer of the rights in the game to Electronic Arts ("EA") was conducted improperly. The lawsuit also allegedly attempts to stop competitor EA from releasing the game. It is reported that Double Fine's counterclaim accuses Activision of engaging in unlawful practices and a conspiracy to protect sales of Activision's franchise "Guitar Hero".
Originally, Double Fine developed Brutal Legend for Vivendi Universal Games, which was acquired by Activision in 2008. Purportedly, Activision showed little interest in the game and dropped it from its roster which Double Fine felt opened the door for it to transfer the publication rights to EA. The hearing on Activision's motion to block the release of Brutal Legend is reported to be scheduled for July 30th.
Coverage at Augustachronicle.com

Online game company sues bot software company and wins

Submitted by Dr. Andreas Lober

In an unprecedented case in German jurisprudence, the operator of an online game sued the provider of a bot software, and won. The court granted a cease and desist order, so the bot must no longer be distributed.

1. Facts of the case:

The plaintiff developed and operates one of the worlds most popular massively multiplayer online brower based strategy games. The plaintiff's online game is free to play in a basic version, but requires purchasing so called premium functions in order for the user to be able to use special and enhanced features of the game. The Terms of Service of the game expressly prohibit the use of cheating software or bot software.

The defendant offered a bot software on the Internet by using a website which was available in German and various other languages. The bot software was specifically configured to interfere with the plaintiff's online game. By using the bot software, the user was enabled to use game functions which the plaintiff's online game either did not have at all or which were only available in the game as a so called premium feature with costs. Therefore, the use of the bot did not only extensively interfere with the gameplay and the game balance of the defendant's online game, but also caused a potential loss of income for the plaintiff because users of the bot did not have to purchase the plaintiff's premium functions anymore.

The use of the defendant's bot software was free for a trial period, but required a license for a valuable consideration after that. On its website, the defendant used the plaintiff's registered trademark and also graphical material which was taken from the plaintiff's online game.

2. The court's decision:

The court held that offering and selling the bot by the defendant constitutes an illegitimate exploitation of the plaintiffs reputation in the sense of "selling of compatible products that interfere with a third party line of products" and an unfair interference with the plaintiff's business model under Section 4 No. 9b and Section 10 the German Unfair Competition Act.

The court was of the opinion that the defendant intentionally undermines the plaintiff's business model which - since the basic version of the game is free to play - is based on selling premium functions for the online game. Users of the defendant's bot software would stop purchasing premium functions for the plaintiff's online game if such functions were also available by using the bot software.

Further, the plaintiff's Terms of Service for the online game expressly prohibit the use of cheating software or bot software. Consequently, the court held that the defendant entices the users of the plaintiff's online game to breach their respective contract with the plaintiff over the use of the game by offering prohibited software and enabling such breach of contract.

Lastly, the court held that by using the plaintiff's trademark and graphical material on the website, the defendant infringes on the plaintiff's trademark rights and on the plaintiff's copyright.

Apple may be "Out of Luck"

It has been reported that Cupertino-based Apple is being sued for an iPhone video game entitled "ParkingLot". It has been alleged that this game, which requires players to move around cars in a parking lot in order to release a blocked-in car, resembles a 1977 brain-teaser entitled "Lots of Luck" ("Lots"). The puzzle master behind Lots is reportedly suing Apple on the basis of copyright infringement, claiming that Apple should not have approved the game in the first place.

Coverage at Kliv.com>Kliv.com.

Duke Nukem Forever or Never?

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

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

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

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

Scratch DJ Game Itching for Damages and Injunctive Relief

It has been reported that Scratch DJ Game ("Scratch"), a joint venture between Genius Products ("Genius") and Numark Industries, has filed a lawsuit against publisher Activision, former partner and game developer California 7 Studios ("7 Studios") and its CEO Lewis Peterson, claiming that Activision has "engaged in intentional interference with contract, breach of contract, conversion and misappropriation of trade secrets obtained from Genius to purchase 7 Studios, which is under contract to develop the much anticipated new Hip Hop video game, Scratch: The Ultimate DJ." Scratch has also alleged that Activision and 7 Studios have deliberately hindered the release of Scratch: The Ultimate DJ in order to allow the future release of Activision's own prospective game, DJ Hero, to grab the spotlight.

Scratch has explained that while Activision had offered Genius to acquire Scratch: The Ultimate DJ, this offer was refused. It is at that point that Activision began to look to purchase Genius' product developer, 7 Studios, despite a non-disclosure and confidentiality agreement with Genius. Scratch has also alleged that Activision and California 7 studios conspired to impede the release Scratch: The Ultimate DJ.

It is reported that Trevor Drinkwater, President and CEO of Genius, has stated that "We believe that Activision and 7 Studios have improperly used confidential information obtained from Genius and 7 Studios to interfere with our efforts to complete the game. In short, we believe that Activision is attempting to sabotage the release of our much anticipated game and prevent it from getting to market prior to the release of DJ Hero."

Apparently, Scratch is not only seeking damages, but also an order to have the game returned to it immediately, as well as other injunctive relief.

Meanwhile, in response to these allegations, Activision has reportedly issued a statement, denying that there is any truth to these allegations and claiming that the Los Angeles Superior Court "found that there was no evidence of any wrongdoing by Activision and refused to grant any restraining order against Activision." Activision has also claimed that Scratch has made these allegations "to place blame for the game's delay, as well as to divert attention from the cash flow, liquidity and revenue challenges Genius detailed in its March 30, 2009, SEC filing." Finally, Activision also claimed that it acquired 7 Studios to increase its development capabilities, which did not interfere with 7 Studios efforts to complete the game, as it provided much needed financing to the developer.

However, it has been reported that Genius and Numark have claimed that they were the ones to prevail in Court, rather than Activision. The transcript from the Los Angeles Superior Court hearing has been made public by the companies and although the judge began by stating that there was no evidence against Activision and no reason to restrain it from doing anything, the judge went on to say that 7 Studios "has a duty to return the work product, source code, and software of the plaintiff [Genius]." The judge then stated that Activision had to turn over the source code and should it want it back, that it could argue its case during a hearing set for May 6. The judge also ordered a wall-off between 7 Studios and Activision, preventing the two companies from sharing any trade secrets that 7 Studios may have learned from Genius.

The next step in the case is a May 6 hearing, regarding the damages that Genius is seeking.

Coverage at GameDaily.com, Gamasutra.com, GameDaily.com and Gamespot.

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

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

LittleBigPlanet DELAYED OVER RELIGIOUS LYRICS

A Muslim gamer's flagging of a song that contains lyrics from verses of the Koran has resulted in a formal apology from Sony. It is reported that the complaint will result in the delay of the release of LittleBigPlanet to mid-November, in order to allow for the removal of the controversial material.

Opinions vary on whether the material is disrespectful or forbidden.

Coverage at: Gamedaily.com

OBAMA IN BURNOUT

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

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

Coverage at: Gamedaily.com

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

FACENDA'S FAMILY SUES NFL FILMS

Submitted by Sylvie Lang

A U.S. Appeals Court has ruled that the estate of legendary football announcer John Facenda can sue NFL Films for the misuse of his father’s voice in a promotional video for an NFL video game. The Appeals Court unanimously held that the use of Facenda’s voice, known to football fans as the “Voice of God” violated Pennsylvania’s “right of publicity” laws. The Court rejected NFL Films’ argument that they were permitted to use Facenda’s voice because a release signed by Facenda provided them with a complete defense. Instead, they held that while the release permitted the use of the announcer’s voice in football videos, it did not extend to using Facenda’s voice for the endorsement of these videos. The NFL’s argument that the promotional video was an artistic expression and therefore protected by the First Amendment was also rejected by the Court who found that the video was clearly produced for commercial purposes.

Unless the NFL decides to appeal, the lawsuit will now go to trial.

Coverage at: Fanhouse.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

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.

Game Counterfeiter Busted in Vancouver

A game counterfeiter in Richmond B.C., a suburb of Vancouver, has plead guilty to counterfeiting video games for a variety of game systems.

The counterfeiter was fined $25,000 and was forced to give up his counterfeiter equipment.

The amount of the fine was subject to criticism from the software industry who have pushed for harsher penalties for game counterfeiters.

More at the Province

Fight Over UK Ban on Manhunt 2 Continues

Rockstar Games, publisher of the ultra violent Manhunt 2 video game, continue to push for a the UK ban on the game to be lifted.

In an appeal to the Video Appeals Committee, Rockstar's legal counsel submitted scientific studies that purported to show that Manhunt 2 was no more violent than numerous 18-rated games and films that were available to the UK public. Rockstar's counsel also argued that banning the game had, by making the game "forbidden fruit", actually increased the public's desire to play it

Legal Counsel for the British Board of Film Classification, the entity that banned the game, responded by arguing that Manhunt 2 was a uniquely violent game.

A verdict on the appeal is expected soon.

More coverage at Gamespot

Is the End of Atari Near?

In response to more disappointing news, Atari, Inc. has publicly questioned whether it will continue to carry on business.

The release of Atari, Inc.'s second quarter results indicated that as compared to the same period last year revenues had dropped from $USD28.6 million to $USD13.3 million and losses had increased from $USD68,000 to $USD7.7 million.

In light of these results (and presumably other recent setbacks at Atari), Atari concluded that:

"The uncertainty caused by these above conditions raises substantial doubt about our ability to continue as a going concern."

More coverage at: Gamsutra

Atari Announces Additional Loss

Atari, Inc. announced that its net loss for the first quarter ended June 30, 2007 was $11.9 million. By comparison, Atari’s loss for the first quarter ended June 30, 2006 was $7.3 million.

The reported loss was yet another piece of bad news for Atari which in recent months has announced its possible delisting from the Nasdaq stock exchange and ongoing dispute over its distribution of the Dragonball Z franchise.

Additional coverage at Gamasutra and Game Daily

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.

Quebec: More Video Games in French!

The Office québecois de la langue fran¸aise and the Entertainment Software Association of Canada officially made public the agreement reached in connection with the availability in Quebec of French language versions of video games.

The joint press release confirms that since July 2007 new video games sold in Quebec come in bilingual (French/English) or multilingual packaging and that all accompanying literature includes a French version. Moreover, the press release states that from October 1, 2007, computer games will be made available in French when sold in Quebec, if available in French anywhere else in the world. The “francization” of video games will continue progressively until April 1, 2009, when all new video games sold in Quebec, including games for next generation consoles and hand-hand held units as well as computer games, will become subject to the same rules.

Coverage at The Montreal Gazette

An Epic Battle With the Knights

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

Coverage at Gamasutra.

World of Warcraft EULA - Will it be enforceable? Are end-users at risk?

Read Section 5 of the WOW EULA (End-User License Agreement) and you might be concerned about allowing Blizzard Entertainment to "monitor" your machine for "unauthorized" third party software. Read Section 11 of the WOW EULA and you might be even more concerned because Blizzard seeks to limit its liability to "the total fees paid ... to Blizzard during the six (6) months prior to the time such claim arose". It remains to be seen whether clauses of this nature are in fact enforceable.

The question really is - has Blizzard gone to far in its efforts to prevent cheating? Gary McGraw (CTO of Cigital Inc.) and Greg Hoglund (CEO of HBGary Inc.) seem to think so. In the meantime, in response to the "monitoring" software Blizzard calls "The Warden", McGraw and Hoglund have released their own piece of software they call "The Govenor". Their software "closely monitors The Warden and curtails activities the authors deem invasive".

And so the war between cyber-defence and spyware continues.

References:

• WOW EULA
• GAME INDUSTRY
• THE REGISTER

ANTI-ADDICTION SOFTWARE: JULY 16 DEADLINE FOR COMPLIANCE IN CHINA

Video game operators must comply with new rules imposed by the Chinese government by July 16th. In a move which is bound to have repercussions for game operators, the Chinese government has required that operators implement software controls which restrict the amount of time gamers under 18 years of age are allowed to play video games.

According to the People’s Daily Online, the software will allow video games to be played normally for up to 3 hours following which the number of points that can be earned drops by half for the next 2 hours and then to zero beyond hour 5 of consecutive play time. While this scheme might not be much of a deterrent for avid fans, also having a warning flashed up on the screen ever 15 minutes (following the first 5 hours of play) and needing to register using an identity card in order to play, might prove to be too much for die-hards whether they are under 18 or not.

While video game operators don’t appear to be overly concerned by the requirement to incorporate the "anti-online game addiction” software - that the system also requires every online player to register with his or her real identity does cause some concern because it is likely to have the greatest impact, at least short-term, on sales.

Current coverage at: People’s Daily Online and also at PC-MAC Zone

Previous coverage of this issue at: Games Industry; China View

HOUSE BILL NO. 77 - ROUND 2 FOR AMENDING VIDEO GAME LEGISLATION IN DELAWARE

On Mar 14, 2007, House Bill No. 77 was “Introduced and Assigned to Judiciary Committee” in the House of Representatives. Delaware Representative Helene Keeley is once again attempting to introduce legislation in the U.S. which would target access to video games with “mature” content by minors.

If enacted, the new Bill will require Entertainment Software Rating Board (ESRB) ratings to be displayed at the point of sale, or, in the absence of an ESRB rating, to be clearly and prominently marked as “not rated”. Additionally, retailers will be barred from selling Mature (M) and Adult Only (AO)-rated games to persons under the age of 17 and 18, respectively. Identification, which provides a date of birth, will be required at the point of sale.

Attempts by Keeley to push legislation to restrict access to violent content by minors has failed in Delaware in the past; however, Keeley seems determined to press on.

SYNOPSIS of BILL NO. 77:

“This Act prohibits a person from selling or renting a video game, if rated, unless the official rating is clearly displayed. This Act also makes it unlawful for a person to sell or rent to an underage person and requires proof of age prior to sale or rental. Any violation will be a Class “A” Misdemeanor. “

http://tinyurl.com/3694p5 (game politics)
http://tinyurl.com/3bqgp3 (proposed Bill)

SOFTWARE GLITCH OR SUBLIMINAL MESSAGE?

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

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

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

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

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

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 .

5 YARDS FOR ILLEGAL Wii BUNDLING?!

Toys "R" Us is said to be under investigation by the Better Business Bureau over its Wii bundling practices. Some Chicago consumers are complaining of having been misled and railroaded into purchasing Wii bundles costing about $200 more than an advertised price (not for a bundle).

The BBB is reported to now be 'apparently challenging Toys "R" Us on its advertising of the Wii"? while Toys "R" Us has apparently told NBC that it was not an advertising problem and that it was simply a "misunderstanding"?, that consumers that wish to return the bundle and purchase the cheaper product will be allowed to so.

Mere bundling is not necessarily illegal.

coverage at http://shorl.com/bobrybigamoda (GameDaily)

SONY'S PS3 FALLS SHORT

When a New York Times article begins with, 'Howard Stringer, you have a problem. Your company's new video game system just isn't that great,"? you may be well advised to call your PR agency to arrange some damage control. Seth Schiesel of the New York Times took the PS3 for a week long, 30 hour, 13 game joy ride and had the following to say 

"Measured in megaflops, gigabytes and other technical benchmarks, the PlayStation 3 is certainly the world's most powerful game console. It falls far short, however, of providing the world's most engaging overall entertainment experience. There is a big difference, and Sony seems to have confused one for the other."

This can't be good news for Sony who some say may be fighting a losing battle with its main competitor, Microsoft. In his article, Stringer compares the PS3 with Microsoft's Xbox 360 and frankly, even as a neophyte in this arena, his article confirms my gut feeling that it would be better to wait and see what the next iteration looks like. 

I have to wonder what the bids look like on eBay now that gamers have had a chance to take the PS3 for a test run"?

Coverage at http://shorl.com/jesykeprefrybra (NY Times) 

JACK THOMPSON VS THE BULLY - PART II - JUSTICE FRIEDMAN STEPS DOWN

The presiding judge in the case, Ronald M. Friedman, has recused himself and filed a complaint with the Florida bar against Thompson. Undaunted, Thompson sent an open letter to the Florida bar arguing First Amendment rights and stating that 'if you take Judge Friedman's bait, I shall reel you in."?  

For the time being Thompson seems to have avoided jail time, but I wouldn't hold my breath if I were you. The self proclaimed 'jerk"? isn't likely to back down from a fight any time soon.

Coverage at 

http://shorl.com/daridraheraste (Destructoid)

THE FUTURE IN-GAME ADS

In what is said to be the first such deal of its kind, Double Fusion has partnered with Emergent for the integration of their in-game ad technology to Gamebryo Element game engine and toolkit. Double Fusion's stated goal is to allow advertisers to "move 'beyond the billboard' to employ 3D interactive objects, video, interactive ads, and other exclusive and unique advertising formats". 

Certain Canadian jurisdictions have enacted legislation prohibiting traditional commercial advertising directed at minors (the notion of what is a minor is specifically defined in said legislation - for example, in Quebec, the trigger age is 13). 

To determine whether or not an ad is directed at a minor, legislators have taken into account several factors including 

 (a) the nature and intended purpose of the goods advertised; 

 (b) the manner of presenting such advertisement; 

 (c) the time and place it is shown. 

We will certainly keep an eye on how legislators and the courts deal with this new form of advertising. 
coverage at  http://shorl.com/jamubrubrebryve (GameDaily)

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. 

CAE LOOKING INTO VIDEO GAMES

CAE's president, Robert Brown, has confirmed that CAE has put together a team to study the feasibility of developing aviation themed video games. Mr Brown is quoted as saying that technological advances and lower production costs are major considerations behind his company's certain exploration into video games.

 
coverage at http://shorl.com/dekikykehydri (La Presse - in French)

IRAN BUILDING VIRTUAL NUCLEAR WEAPONS

Several news agencies are reporting that students from the Union of Islamic Student Societies are designing a video game where Commander Bahman, an Iranian special forces hero, must rescue the country's top atomic scientist from U.S. troops, to allow him to continue his scientific work. Is this an answer to video game titles like 'U.S. Attacks Iran"? or Assault on Iran"??

 
coverage at  http://shorl.com/bypryfatradreda

THIS IS DOPA!

Last May 9 House Rep. Michael Fitzpatrick introduced the Deleting Online Predators Act with the view of amending the Communications Act of 1934, targeting access by minors of commercial 'social-networking"? Web sites that allow users to create 'Web pages or profiles and also offer a discussion board, chat room, or email service"?. DOPA would require libraries, elementary and secondary schools to restrict minors' access to social-networking Web sites or chat rooms through which they may access sexual material or be subject to sexual advances. Access for educational purposes, under the supervision of an adult, would be allowed. Sites like MySpace.com and LiveJournal.com would likely be restricted. Some say that Microsoft's Xbox 360, which permits in-game chat, would also be indexed under DOPA.

coverage at  http://shorl.com/gehademefeva

full DOPA text at http://shorl.com/hemijojifany

U.S. INVASION OF VENEZUELA

Venezuelan President Hugo Chavez has long foretold the invasion of Venezuela by the United States. Now members of Mr. Chavez' government find evidence in support of his fears in Pandemic Studio's Mercenaries 2: World in Flames, a video game that is said to be based on the overthrow of an imaginary Venezuelan tyrant and which is set to be released next year.

Venezuelan politicians are saying that the U.S. is using the game to 'drum-up"? support for the real invasion. While Pandemic Studios has denied any ties to the U.S. government, it is reported to have developed video games for U.S. military use in the past.

 
coverage at http://shorl.com/gerumudastohy

TENNESSEE'S ANTI-VIOLENT VIDEOGAMES BILL WITHDRAWN

Tennessee's Senator Kilby has withdrawn his anti-violent videogames bill over constitutionality concerns. In brief, his bill proposed the ban of the sale of violent videogames, regardless of consumer age. The bill was viewed as non-viable given that less draconian bills have been struck in other states.

The battle over censorship continues, with judicial challenges by the industry and attempts by governments to control videogame content or distribution. Minnesota, for example, has just passed a new bill proposing fines for underage consumers found to be knowingly renting or buying M or AO rated software.

 
coverage at http://shorl.com/bidupryripropo

WOMEN PREFER IT CASUAL

A recent study by the Consumer Electronics Association found that among game players between the ages of 25 and 34 woman outnumber men almost 2 to 1. Women in that bracket were found to be less interested in console games (traditionally associated to violence and/or competition between players) and more so in 'casual games"? (e.g. puzzle games like Tetris, card games). At least Nintendo is said to be paying attention and is set to service the casual game market.

coverage at http://shorl.com/huluhunydusta

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

Florida's Violent Videogames Legislation Passes Senate Hearing Committee

The continued efforts by US states to introduce legislation preventing the sale of violent videogames to minors took another turn last week, as a Florida Senate committee hearing passed a new bill by a vote of 7-1.

Closely modelled on California Bill AB1179, Senate Bill 492 seeks to impose fines (up to USD $1,000 per infraction!) for retailers selling violent videogames to minors. Additionally, the bill would impose government-approved labels on videogames, on top of the existing self-regulatory ESRB ratings system.

However, considering that the continued efforts of the Entertainment Software Association have so far resulted in the prevention of similar laws in Indianapolis, Michigan and Illinois, actual implementation of Bill 492 might never occur. In fact, a similar bill was also halted recently in California, on the grounds of violating the free speech amendment to the Constitution.

The progress of Bill 492, as well as of any related litigation, will be followed closely in the upcoming weeks.

Coverage at http://shorl.com/jededromadrusta

Electronic Arts' Empire Goes Wireless

Just when you thought monolithic publishing emperor EA couldn't get any bigger, it goes and purchases mobile gaming company Jamdat for a reported $680 million, or USD $27 per share. Jamdat, created in 2000, will add a significant mobile gaming component to EA, which has thus far been unable to create a dominant position for itself in that area. It is expected that Jamdat will benefit from EA's host of gaming rights, EA will benefit from Jamdat's technical expertise and strong position in the mobile space, and cell phone users everywhere will benefit from having Madden with them during awkward visits from in-laws.

Coverage at http://shorl.com/duprobudyfrasty

The Resurrection Of Acclaim

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

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

Vivendi Allows Fans To Create King's Quest Sequel

Vivendi Universal Games, the holder of the rights to the King's Quest games (which were created by Sierra in the 1980s), has allegedly granted a 'fan license"? to Phoenix Online Studios to create "The Silver Lining," which was previously entitled "King's Quest IX Every Cloak has a Silver Lining."  Details of the license are not available, but Vivendi has apparently responded to fan requests to grant the license after Vivendi ordered Phoenix to stop development on the title a few months ago. This appears to be a winning move for Vivendi the fan project could breathe new life into the stagnant King's Quest world, fans of the games get a new title to enjoy, the brand "King's Quest" doesn't get watered down (at least, not by the title of the game), and Vivendi has undoubtedly earned some new fans by this generous move. Who said the adventure genre is dead?

Coverage at http://www.kqix.com/home.php

The Adventures Of Mary Kate&ashley Could Be Yours!

The trustee for the bankrupt publisher Acclaim Entertainment, Allan B. Mendelsohn, has put the rights to more than 200 video game titles up for auction in Oceanside, New York. Famous titles such as 'Crazy Taxi,"? 'Re-Volt,"? and"? 'The Adventures of Mary Kate& Ashley"? are on the block, though Mendelsohn has admitted that he hasn't done complete due diligence on the properties, and thus some of the IP rights may be incomplete or nonexistent. For example, a game that included licensed properties may lack the license to continue using such properties, making the game itself a risky or worthless investment. It's strictly buyer beware, but then again, when has buying a game from Acclaim ever been any different?

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

See the auction site at http://www.maltzauctions.com/acclaimip.htm

Sony Acquires Guerrilla Games

Sony Computer Entertainment Worldwide Studios has announced that it has acquired developer Guerrilla Games from its parent, Media Republic. Guerrilla Games, known for its creatively-named Playstation 2 title 'Killzone"?, is apparently hard at work developing further Killzone properties for the Playstation Portable and the upcoming Playstation 3.  Soon, there will be no Playstation zones in which killing is impossible.

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

Blagojevich Versus The Constitution

As reported in an earlier posting , U.S. District Court Judge Kennelly has ruled that the proposed Illinois law, which sought to ban the sale of violent or sexual video games to minors, is unconstitutional. Undeterred, Illinois Governor Rod Blagojevich has vowed that the 'battle is not over,"? and will presumably attempt to redraft the law so it complies with the first amendment right to free speech.

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

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

POSTAL GOES INTERNATIONAL

Back in 1997, game publisher Running With Scissors released a PC game called 'Postal"?, a violent shoot-em-up featuring a postal worker on a rampage. Unsurprisingly, Postal caused controversy and outrage when it was released, and was in fact banned in 13 countries (including New Zealand and Australia). Despite that, the game sold very well (over a million copies).

Now Running With Scissors has partnered with Softwrap ( www.softwrap.com ), who provides software that allows developers to distribute their products on-line without fear of piracy, to make its line of Postal games available for download. As a result, gamers in jurisdictions that banned Postal will be able to get their hands on the games by downloading them directly. Says Running With Scissors CEO Vince Desi '"?the world can now go Postal in peace and privacy, as God intended"?.

Coverage at http://shorl.com/fivilibrutyfu

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

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

Don't Mess With Texactivision

Looks like the giant woke up. As previously reported, Spark Unlimited launched a lawsuit against Activision, alleging that Activisionfailed to pay promised royalties for the first title developed under that deal (the console edition of Call of Duty Finest Hour), and took Spark's proposals for a sequel and gave them to its own developers.. Now, Activision has filed a counter-suit against Spark, allegingfraud, breach of contract, trade secret misappropriation, trademark infringement, false designation of origin, and false advertising. In a lengthy statement of claim, Activision refutes virtually everything alleged by Spark, and paints an interesting alternative perspective of Spark's claims. Activision also argues that Spark's refusal to return Activision development kits, mixed with the fact that Spark is generating new content for Atari, may result in Atari unwittingly violating Activision's intellectual property. Ultimately, Activision has requested that damages be calculated through a full trial, which indicates a potentially lengthy (and potentially difficult for Spark to finance) legal battle between the two companies.

Coverage at http://shorl.com/fetanihirete

Previous Coverage at http://www.davis.ca/community/blogs/video_games/archive/2005/08/30/283.aspx

Michigan Tackles Inappropriate Video Games

Michigan's House of Representatives has passed two bills to help enforce video game content ratings. Bills 416 and 464 would impose fines on people who sell or rent violent or sexually inappropriate video games to people under the age of 17, with exceptions if the rental or sale follows the ESRB ratings system. The bills are not yet law - the Michigan state senate still needs to approve them.

Coverage at http://www.shorl.com/fapihypramyfu and http://www.shorl.com/dalugosifretre

INSANE IN THE V-GAME

An astute Slashdot contributor has called attention to US patent no. 6,935,954, which issued August 30, 2005. The patent, owned by Nintendo, is titled 'Sanity system for video game"? a game system whereby a game character's sanity level is affected by different occurrences. Game play is affected (for example, by the character not responding to the player's commands, by the character having hallucinations, etc.) as the character's sanity level decreases.  In-game effects include (and we're not making this up) "enormous roar that emits from a tiny rodent (mouse or rat)" and "faint maniacal laughter (that gets louder and louder as the character draws deeper into insanity)".

The character's sanity is affected by encountering 'a game creature or a gruesome situation"?, and the effect of each such encounter depends on factors such as whether the character is prepared for the encounter or whether the character is rested. Luckily, sanity can also be improved (in the game, at least) by locating 'mind aids"?.

We are all used to games which track a character's physical health, so tracking mental health isn't too big a stretch. The patent acknowledges this fact, but goes on to explain that 'when circumstances beyond imagination are encountered, the brain must attempt to deal with the improbable and impossible as reality"?. We can't argue with that. And we'll just have to wait and see whether this in-game insanity is good or bad for players' mental health.

Wait . . . is that faint maniacal laughter I hear?  Excuse me while I go look for a mind aid.

Coverage at http://shorl.com/hystylehekigre

Copy of US patent at http://shorl.com/guganorinamy

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

Us House Of Representatives Burned By Hot Coffee

Rockstar Games, and its parent Take-Two Interactive, are under investigation by the feds. The US House of Representatives has voted 355 to 21 to support a Federal Trade Commission inquiry into GTA San Andreas, asking whether the companies intentionally deceived the Entertainment Software Ratings Board by failing to disclose the graphic sexual content hidden within San Andreas.

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

Video Games Get More Annoying

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

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

Japanese Gaming Industry To Self-regulate

Amid concerns over recent video-game related violent incidents in Japan, the Japanese gaming industry is rolling out a video game ratings system. The system asks retailers to not sell over-18 rated games to minors unless they are accompanied by an adult, but retailers are under no legal obligation to comply. It's been speculated that this is a move by the Japanese gaming industry to forestall government regulation on video game content, in light of the recent move by Kanagawa prefecture to ban the sale of Grand Theft Auto III to minors. Whether this move will be enough to keep the government out of gaming is an open question; the North American ESRB ratings system, which itself was set up by big gaming companies to avoid government regulation, is presently being eroded by recent government bans on the sale of games to minors, and by Ms. Hilary Clinton's actions in the wake of the Hot Coffee fiasco.

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

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

HASBRO GIVE AND TAKE

Five years after licensing the digital gaming rights to various toy brands to Infogrames in 2005, Hasbro has now re-acquired them in a $65 million deal. In connection with this deal, Hasbro re-licensed 10 popular franchises, including Dungeons and Dragons and Monopoly, back to Infogrames.

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

GAMES KEEP TALKING

The Screen Actors Guild and the American Federation of Television and Radio Artists have agreed to a deal with video game publishers, ending the threat of a strike by video game voice actors. The new 3 and a half year deal includes a 36% pay raise for voice actors and improved benefits, but the issue of residual payments was dropped to facilitate the deal. The deal has yet to be ratified by the unions.

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

Previous coverage here

PSP - PLAYSTATION PORNOGRAPHY?

This summer, adult publishers Glay'z and H.M.P. will release a total of 8 movies on Sony's UMD disc format, playable on the PSP. Though every PSP game must be approved by Sony prior to publication, Sony has decided that it will not seek to control or censor movie content for its handheld.

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

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

NO MORE GRAVY

After nearly three years of court battles, Valve and Sierra have settled their dispute regarding the distribution of Valve's games. Valve claimed that Sierra had been unlawfully distributing Valve's games through cybercafes. Valve also claimed damages from Sierra's parent, Vivendi, for delaying the release of Counter-Strike Condition Zero. 

As a result of the settlement (a) Vivendi will no longer distribute packaged versions of Valve's games, (b) Vivendi will notify former licensees that only Valve is authorized to distribute Valve games through cybercafes, and (c) all former licences granted by Vivendi to cybercafes are now void.

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

PC = PARENTAL CONTROL?

Everyone knows about the V-Chip, which gives parents some control over their children's viewing habits. A new program from SMARTGuard Software aims to do the same thing for PCs. The program, called WallFly , monitors video game use and can block games from being run (based on their ESRB ratings an sub-categories); it also lets parents establish set periods where games can (or cannot) be played and set up weekly time budgets for gaming (which raises the problematic scenario of having your weekly budget expire just before you finish a level "? how frustrating would that be?).

This program acknowledges a point that some commentators and many politicians miss, namely that parents should take responsibility for what games their children are playing. Of course, parents who don't bother to check what their children are playing are unlikely to buy a game-monitoring program in the first place. And WallFly only applies to PC games, not console games, and so still leaves a significant portion of the games market uncovered. Still, tools like this are a way to address video game violence and children without resorting to legislation.

Coverage at  http://shorl.com/bestipefrefaka

The Courtship Of EIDOS Ends Without A Kiss

After months of competition, Elevation Partners has withdrawn from bidding for EIDOS Interactive, leaving SCi alone in the buying battle. EIDOS's shareholders are expected to vote on SCi's proposal on May 13, 2005. See previous coverage here .

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

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

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

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

XFIRE FIRES BACK

Last month we reported that Yahoo! had sued online gaming company Xfire for patent infringement. Yahoo! claimed that a former Yahoo employee (who now works for Xfire) developed online messaging technology that violates Yahoo!'s patents.

Xfire recently responded by counterclaiming damages for unfair business practices. Xfireclaims Yahoo! is trying to force it to sell or licence technology at less than market rates.

 
Coverage at  http://shorl.com/behobyfagupre

NINTENDO GETS PICKY ABOUT WIKI

Nintendo has warned Webzen (the publisher of MU Online) that some of the characters in Webzen's new online game, Wiki, are similar to those in The Legend of Zelda The Wind Waker.  Nintendo says it will wait until Wiki is finalized before deciding whether to start a lawsuit.  Coverage at http://shorl.com/hastefrejybofi

VIDEO GAME FIGHT TAKEN OUTSIDE

A Japanese student was arrested recently after threatening to kill his friend during an argument over - wait for it - which version of Dragon Quest was the best.  The game series is so popular in Japan that the producer does not release new titles on weekdays due to increases in workplace and school absenteeism.  Whether the game is worth uttering death threats over is another matter - one would think that such passion should be saved for more important issues, such as whether the USS Enterprise could defeat an Imperial Star Destroyer in a one-on-one fight (Dave says no;  Chris says yes).Coverage at  http://shorl.com/dejedunefrupru

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

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

MAYBE MODDING ISN'T SO MARVELLOUS

Marvel Enterprises Inc. sued NcSoft Corp. and Cryptic Studios Inc. in regard to their massively multiplayer game "City of Heroes". Marvel claims 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 argues that the defendants are liable for their customers' actions because the games are played on the defendants' servers

. 

This is uncharted territory and it raises the larger question of the extent to which a publisher, developer or gamer could be liable for creating modding tools. One of the major difficulties in pursuing such a lawsuit is that mod tools can be used for non-infringing purposes. Accordingly, there is an argument that mod tool makers should be no more liable for damages than the makers of "Photoshop" or the manufacturers of computers. After all, when it comes to liability for enabling infringement, courts have held that people infringe copyrights, and that machines or software tools generally do not. 

Coverage at http://shorl.com/higanafofofe

SOFTWARE IS GOOD

The Supreme Court of India recently ruled that off-the-shelf computer software is a "good", which means it's subject to sales tax in India. The plaintiff unsuccessfully argued that software is primarily knowledge and should not be taxable.

Coverage at  http://shorl.com/fegeburebryla

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

Electronic Art - Painting By Numbers

(This is an archived case summary)

Edward Gussin, who had invented an electronic drawing and colouring system, tried to claim that Nintendo's “Mario Paint” infringed his patent. Mr. Gussin lost at both the District Court and the Court of Appeals. The Court of Appeals focused on two grounds to dismiss Mr. Gussin's claim. First, Mr. Gussin did not provide any facts to support his claim. Second, Mr. Gussin's patent specifically related to devices that stored actual colour data on the pixel memory, whereas Nintendo's game used “pointers” connecting the pixel memory to a separate location that stored colour.

The Court of Appeals did not find it necessary to address the other issues the lower court examined. The lower court had found against Mr. Gussin in addition to the above grounds because (1) Mr. Gussin's patent related to a separate hardware device rather than a programmable computer; (2) Mr. Gussin's device had two joysticks rather than one computer mouse; and (3) Mr. Gussin's invention has a “dedicated draw switch”, which Nintendo's system did not have.

Gussin v. Nintendo of America, Inc.
1995, US Ct of Appeals, Fed. Cir.
No. 95-1051, 1995 WL 460566
KEYWORDS: patent infringement - Mario Paint
Summary by: Cheyenne Reese

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

THERE IS COPYRIGHT IN VIDEO GAMES!

Williams Electronics Inc. v. Artic International is a key case which established that copyright exists in video games.

Williams Electronics manufactured and sold a coin-operated electronic video game called “Defender,” whose “phenomenal popularity” the court attributed to its “use of unrealistic fantasy creatures.” Artic International sold a memory device that produced audiovisual effects and a game called “Defense Command” that were almost identical to “Defender.”

Williams sued Artic for copyright infringement and won a permanent injunction in the district court. Artic appealed and lost.

The first issue the court had to consider was fixation. Artic argued that no copyright could exist in audiovisual effects because they failed to meet the statutory requirement of fixation found in s. 102 of the 1976 Copyright Act. Artic argued that the audiovisual effects displayed on screen were transient and that new images were generated each time the “attract” or “play” mode of the program was displayed, even if the images were essentially identical to earlier images. Further, Artic argued that no copyright could exist in the computer program as player participation meant each player become a co-author of what was displayed on screen; there was no set or fixed performance of the program and therefore no eligibility for copyright.
The court disagreed with Artic on both points. Fixation was met in the memory devices of the game. On the issue of player co-authorship as a grounds for invalidity, the court found that while player interaction during “play” mode resulted in some changes in the audiovisual presentation and game, there was always some repetitive sequence of a substantial portion of sights and sounds, and many aspects of the display remained constant despite a player's operation of the controls. Further, in “attract” mode there was no player interaction whatsoever that might raise a question of co-authorship in a new work.

The court also had to consider whether the ROM as a memory device component for the game was copyrightable. Artic argued that Williams was claiming copyright in what was essentially a utilitarian object or machine part in which copyright is not permitted. The court dismissed Artic's argument as Williams wasn't claiming any protection for the ROM itself but was using the ROM to meet the statutory fixation requirement for their copyrightable material.

The court also rejected Artic's argument that what it had copied was object code as opposed to source code (i.e., it wasn't intelligible to human beings or intended as a medium of communication to human beings, and therefore not copyrightable). The court rejected this argument in favor of a more expansive interpretation of the Copyright Act that contemplated technological advances, where a copy might need the aid of a machine or device to be reproduced, perceived or otherwise communicated. The court dismissed Artic's interpretation as creating an “unlimited loophole” where copying the text of a program (which is directly intelligible to human beings) is prohibited but the copying of a silicon chip containing that program (which is not directly intelligible) is permitted.

Williams Electronic Inc. v. Artic International, Inc.
1982 US Ct. of Appeals, 3rd Circuit
685 F. 2d 870
KEYWORDS: copyright - fixation
SUMMARY BY: Dani Lemon