Bethesda vs Interplay lawsuit isn't over yet


The battle over Fallout continues.  Bethesda has failed in its attempt to obtain a preliminary injunction against Interplay in their ongoing legal battle over the Fallout IP - but this doesn't mean the lawsuit is over by any means, contrary to what some reports have suggested.  The Fallout IP is still up for grabs...


The story so far
We've blogged about this lawsuit previously (here and here), but here's a quick summary:

Interplay agreed to sell the Fallout IP to Bethesda in 2007 as part of which it retained certain rights, including the right to develop a Fallout MMO.  Bethesda has now commenced a (USA) lawsuit arguing that Interplay is in breach of that agreement and has infringed Bethesdra's trademark rights in the Fallout series.  In particular, it seems that Bethesda is angry that Interplay sold the Fallout 1 and 2 games and expansions as a 'Fallout trilogy' at around the same time that Bethesda released Fallout 3.  As a result, Bethesda argues that Interplay has lost its rights to develop a Fallout MMO (it is suspected that Interplay's "Project V13" is its Fallout MMO).

Bethesda seeks an injunction 

Now it has emerged that Bethesda sought a preliminary injunction against Interplay.  The details of it have not been made public, but I would bet that what Bethesda did was ask the Court to order Interplay to effectively freeze doing anything in relation to the Fallout IP (including to stop selling Fallout games or developing the Fallout MMO) until the ownership of the Fallout IP is determined at trial.  At that point, the Court would either overturn the injunction (if Interplay won) or could be asked to make the order permanent (if Bethesda won).

But Bethesda clearly failed to convince the Court, whose order refusing to grant the injunction emerged on the net earlier this week.  The Court's reasoned judgment has not been publicly released (and may never be) so we cannot know exactly why the Court came down on Interplay's side.

But, in any event, Bethesda would probably have had a high hurdle to meet in the first place: injunctions are one of the judges' nuclear weapons and therefore they will generally require a lot of convincing before they will grant you one.  Some jurisdictions make it harder than others to get injunctions: under English law, for example, even if you do get an injunction you may have to give the other side a "cross undertaking for damages" - in other words, a promise that if eventually it turns out you were wrong to obtain the injunction and the other guy was right all along, then you will compensate him for loss he suffers as a result of the injunction. 

What does this mean for Bethesda and Interplay?


This will have been a setback for Bethesda.  If they had won the injunction it would have been an important legal, commercial and psychological victory, and it may even have brought Interplay to the negotiation table (e.g. if the judge was particularly emphatic in Bethesda's favour).

But the fact that Bethesda lost means that any legal and psychological victory belongs to Interplay.  Mind you, if Bethesda lost on a technical ground then maybe Interplay won't have too much to crow about.  On the other hand, maybe Bethesda lost because the judge didn't like its legal case - in which case, Interplay could take perhaps some heart that the court is on its side.  In fact, I have seen cases in the past when the guy who tried to get an injunction lost and then he made a settlement offer (though obviously there's no evidence Bethesda might do that).  We just won't know unless and until more details become public.

The battle will probably just continue anyway

Assuming that Bethesda does not wish to throw in the towel just yet (and recent comments from Bethesda suggest they still want to continue the fight), then it can just keep pushing ahead with the litigation - which would probably get to trial sometime in 2010 (unless it gets bogged down in skirmishes, of course).  Taking a long term view, all that will really matter is what the trial judge (and jury, if the parties have sought a jury trial) decides at the end of the day.

In the meantime, Interplay can still push ahead with selling Fallout games and developing its MMO (if that is indeed what it is doing) if wants, but would they want to go to all that expense if there is a real risk that they might lose their rights in the Fallout IP next year?  That will be one to discuss with the lawyers...

UPDATE: Interplay wants to keep fighting

Via Joystiq: Interplay had "released a short statement about the court case in the form of SEC Form 8-K, which is intended to provide information about major events to shareholders. Interplay is not happy to merely defend its rights to make and sell Fallout games: the statement reads that Interplay is going to continue pursuing 'its Counter-Claims against Bethesda, including its claims for Breach of Contract, Tortious Interference with Prospective Economic Advantage, Rescission, Accounting and Declaratory Relief seeking an award of damages and other relief.' "

Well, I just can't wait for the next thrilling instalment...

New House of Lords proposal could water down Digital Economy Bill

A new proposal by the House of Lords could weaken the effect of the most contentious aspects of the Digital Economy Bill, being: (i) obligations on ISP to assist in curbing online infringement; and (ii) the Government's ability to modify the Copyright, Designs and Patents Act 1988 by order. (Thanks to Tom Watson for this tip.)

According to the House of Lords website, the following addition has just been proposed to the Bill by the Lib Dems:

"Compliance with fundamental rights

In drafting or amending any code, laying any statutory instrument, or taking any other action under sections 124A to 124L of the Communications Act 2003 or under section 302A of the Copyright, Designs and Patents Act 1988, the Secretary of State must demonstrate before such action is implemented that he has considered whether such action is—


(a) necessary and proportionate to the goal of protecting and enforcing copyright, and


(b) that it appropriately balances the interest of rights holders and the interests of the public in due process, privacy, freedom of expression and other fundamental human rights guaranteed by inter alia the European Convention of Human Rights and the EC Charter of Rights."


What does this mean?

Any way you look at it, this proposal (if enacted) would restrict the power of the Government to act unilaterally in taking measures intended to curb copyright infringement. 

With the first condition ("necessary and proportionate to the goal of protecting and enforcing copyright"), the hook is of course that the Secretary of State must demonstrate that the proposed action is "necessary and proportionate".  This kind of wording has been the cause of much litigation over the years, particularly over similar concepts in EU law.

With the second condition ("balances the interest of rights holders and the interests of the public in due process, privacy, freedom of expression and other fundamental human rights..."), the Secretary of State would effectively have to certify that the proposed action complies with relevant human rights law - in particular, the European Convention on Human Rights, which enshrines such rights as: the right to fair trial; privacy; and freedom of expression.  (Interesting that the HL proposal does not refer to the Human Rights Act 1998, which imports the ECHR principles directly into English law - I wonder why not?)

A third condition, which is more subtle, is that the Secretary of State must "demonstrate before such action is implemented" that the proposed action complies with the above conditions.  So, the Secretary of State must do something to show he has complied with these conditions.  It is not clear what at present:  perhaps making a declaration or issuing a statement of compliance.

A fourth condition, which is more subtle still, is that the mere existence of this provision in the Digital Economy Act (when it finally becomes law) would mean that, if the Secretary of State wants to take action but fails to comply with the above conditions, then it is theoretically possible that the Government could find itself the subject of a judicial review challenge in court.  Obviously whether or not any such challenges would succeed would depend on the court, but the fact they could happen at all may give the Government pause for thought.

What next?  Is this all a storm in a teacup?

The Bill has recently completed its second reading and is due to go to a HL committee on 20 December 2009. This proposal will need to be discussed by the committee and, even if it is kept in the Bill, there is no guarantee that it may not be struck out in subsequent readings. So it is quite possible that this proposal may not make it into law.  Or it may survive, but perhaps in an amended form. 

But, either way, it reinforces again the point that some of the Lords are working to curb the Government's ambitions in the Digital Economy Bill.  Watch this space...

The fallback position for human rights campaigners

One very last thought.  As a result of the Human Rights Act 1998 (section 4 if you want to be precise), the Court has the power to declare that an Act of Parliament is incompatible with the fundamental human rights contained in the ECHR, at which point the onus would be on the Government to amend the Act to make it compatible (or risk the public controversy that may follow by the law being declared to breach fundmental Convention rights).

Getting that far would be difficult, since the Court will not easily make a declaration of incompatibility (in fact it has a legal obligation to read legislation in a way compatible with the ECHR so far as possible) - but it is possible.

SO, even if none of the above proposal makes it into law, then in theory it may still be possible for campaigners to bring a legal challenge against the Digital Economy Act (once it comes into force) on the basis of incompatibility with fundamental human rights.  Again, whether or not that ever happens and, if so, what the Court decides, we'll have to wait and see...

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Evony vs Brit blogger in Oz

Evony vs blogger

Just a quick one: the Guardian reports that the US company which owns Evony, the (in)famous web-based game, is suing a British blogger (Bruce Everiss) over allegedly libellous comments he made regarding Evony in his blog.

In Australia?
  
However, Evony is bringing its libel claim aginst Everiss in Australia, rather than in Britain or the US.

The Guardian quotes Evony's lawyer: "[Everiss's] actions bring an enormous discredit to all online journalists internationally and have substantially impacted Evony's reputation in Australia" said the lawyer acting for Evony, Dean Groundwater of Warren McKeown Dickson.

By contrast, it seems that Mr Everiss is arguing that this action is nothing more than libel tourism (the kind of comment which we have heard a lot recently in England as much of the press have attacked English libel law as being too claimant-friendly).

Hello Mr Jurisdictional Challenge!

Unsurprisingly, the first step in the litigation will reportedly be the Court of New South Wales having to be decide whether it has jurisdiction to hear the claim (this could be Evony seeking a declaration that the Court has the proper jurisdiction, or it may be Everiss seeking a declaration that the Court does not).  Sounds legalistic perhaps, but it will decide whether or not the litigation will go ahead to consider Evony's actual complaints.

What's libel?

A very quick and rough summary of libel under English law (which is very similar to Australian law):

A communication is libellous if it is in written form and makes an allegedly factual claim that may in some way harm the image of another person.  Generally, that factual claim must be proved to be false and must be published to someone other than the person who is defamed.  A person who is libelled has the right to comemence Court proceedings seeking (usually): (i) an apology; (ii) a Court order forbidding further publication of the libel; and (iii) financial damages.

Libel law is a very complex (and high risk) area of law so obviously it is never as simple as the summary above may suggest.  There can be very difficult issues for example regarding the standard and burden of proof.  Libel is also subject of many defences - in particular, truth is an absolute defence to libel.

Each of these points may have to be fought out between Evony and Everiss in the coming months, so it will be interesting to see how this develops...

No Doubt vs Activision: a legal analysis


The dispute between No Doubt and Activision over Band Hero (which we've blogged about previously) has continued to escalate, with Activision this week filing papers setting out its formal legal position.

Below, I set out a lowdown of what's going on, what No Doubt and Activision argue against each other and my thoughts about  how the battle is shaping up.  Before we do that, a boring but necessary caveat: this post is of course written from the perspective of an English lawyer (me!) based on a review of the early legal papers and the contract.  It therefore deals with the legal issues in general terms rather than focusing on the finer points of Californian law.


The Lowdown


In November 2009, the rock band No Doubt commenced a lawsuit in California against Activision over the band's appearance in Activision's extremely popular Band Hero.  So far, the lawsuit is at an early stage: both sides have (as of this week) now filed their initial legal papers setting out their positions in the dispute and will probably need to file further legal papers against each other in due course.
 

No Doubt's case



No Doubt say they contracted with Activision for their avatars to appear in Band Hero and sing a maximum of three No Doubt songs only.  They also say that they agreed to be photographed and have motion-capture video taken of them (to make game avatars for each of them) and to assist with marketing the game (e.g. press interviews).  In return, they received an undisclosed payment.

But the band argue that, without their authorisation, the game actually permits players to: (i) have band avatars play over sixty songs from other bands; and (ii) have No Doubt band members sing other bands' songs in other bands'/singers' voices, whether male or female (they give the example of Gwen Stefani singing the 'Stones song "Honky Tonk Woman" in a man's voice). This, they argue, has "transformed No Doubt band members into a virtual karaoke circus act"

Lastly, they say that when they found all of this out they asked Activision to 'lock out' this unauthorised functionality, but that Activision refused because it would be "too expensive" (Activision deny this allegation and say that No Doubt only made this request after manufacture of the game had already begun).

No Doubt's legal arguments (the highlights):
  • No Doubt say that Activision knew that Band Hero would do more than their contract permitted, but Activision deliberately concealed this from the band in order to 'fraudulently induce' them to agree to have their avatars and songs in the game.

  • No Doubt say that Activision is in breach of contract.  In particular, they say the contract specifically provided that any use of the band's name or likeness or any representation of the band in the game had to be expressly approved by the band first - but Activision did not obtain this approval.  They also say that they only gave Activision rights to use the whole band's name and likeness and did give Activision to use band members on their own in the game (e.g. Gwen Stefani or Tony Kanal singing a song on their own).
     
  • No Doubt also argue under specific Californian laws and the common law right to publicity (in basic terms, the right to control the way your name/image is presented in public).
What do No Doubt want?
  • A Court order that Activision recalls all distributed versions of Band Hero and and an restraining order/injunction stopping Activision from using or encouraging others to use the band's name of likeness in Band Hero.

  • Substantial financial damages, including a share of Activision's profits from the game.

Activision's case



Activision's case, as set out in its legal papers filed earlier this week, is essentially that it denies that it has any liability to No Doubt.


Activision's legal arguments (the highlights again):
  • Activision did have the rights under its contract with No Doubt to allow players to use band avatars to sing non-No Doubt songs (although Activision has not at this stage set out its analysis of the contract in detail).
     
  • Activision says it was "publicly known that certain users of "Guitar Hero" videogames are able to "unlock" in-game characters and then can choose to play songs performed by other artists using "unlocked" characters".

  • Therefore, for a range of legal reasons (including consent, estoppel and waiver if you are particularly interested), Activision says that No Doubt cannot legally complain that Band Hero permits players to use band avatars to sing songs which No Doubt didn't write or approve.

  • Activision counterclaims that No Doubt is itself in breach of contract for failing to provide the marketing services in support of the game which it promised to provide (possibly they stopped cooperating with Activision when they took legal issue with Band Hero itself?)
What does Activision claim?

Activision demands the repayment of (an undisclosed sum of) money given to No Doubt for carrying out marketing services in support of Band Hero which it promised - but failed - to carry out.  (If you're interested, Activision's claim is stated to be based on the legal doctrine of 'unjust enrichment'. In simple terms: you have money that belongs to me and you have no right to it, therefore I want it back.)


How is the battle shaping up?


At this early stage in the litigation, based on the legal papers it seems to me that there are arguable legal issues both ways.  Based on their stated legal case and the contract, No Doubt appear to have an argument that the contract does not give Activision any rights regarding individual band members appearing in Band Hero and further that any appearance of the band in the game had to be approved by the band first - which they say Activision failed to obtain. 

On the other hand, Activision argues that the band already knew how they would appear in the game even before (or at least at the same time as) they entered into the contract - and they had plenty of time to say something if they were unhappy.  They also seem to argue (albeit without much legal detail as yet) that No Doubt have not suffered financial loss and if they did it was not caused by Activision.

No Doubt's reply to that argument is that in fact the band knew nothing of the sort and that (i) the contract doesn't say that either; and (ii) Activision deliberately misled them by failing to tell them what plans it had for the band's and band members' appearances in the game.  This second point will depend on factual rather than legal argument: No Doubt would need to demonstrate that some actual person from Activision deliberately misled them.  Whether or not that is true and can be proven remains to be seen.

One quite interesting issue, which will need to be explored in the litigation, is the question of loss.  Can No Doubt prove that their unauthorised appearance in Band Hero has really caused them financial loss?  Is it really the case that having your avatars sing songs which are not yours could cause you to lose reputation, business and goodwill?

Of course, all of the above is subject to one critically important caveat - nothing is ever certain in litigation.  You simply cannot predict all of the twists and turns that a lawsuit (espeically one as high-profile as this) can take during its course - and those who do try may end up looking a little foolish by the end (wise words there from your uncle GamerLaw).  We shall have to see what No Doubt, Activision and the learned judge have in store for us...


No Doubt, No Claim?


A quick look at several sites which have carried this story (and the comments threads on them) suggest perhaps a certain amount of scepticism as to why No Doubt have brought this claim - are they really that bothered that their avatars in a videogame can be made to sing non-No Doubt songs, or is this just a claim to grab money from Activision and its highly successful game?  I don't know, is the honest answer.  But, it does seem to me based on the legal documents so far that No Doubt does have some at least arguable legal points.  As we said, whether or not they have enough to convince a judge and jury at trial remains to be seen.


What is at stake?


Quite a lot, potentially.  If No Doubt were to win at trial, it may be able to claim substantial financial damages including a share of Activision's profits on Band Hero - which are probably pretty significant I imagine.  More importantly, No Doubt just may be able to secure a Court order for the recall of the game or at least a freeze on further sales - which could be seismic.  This however would be a pretty draconian measure and (if a US judge is anything like an English judge) he/she may well require a lot of convincing that it is necessary.

If Activision wins, however, then it may be able to claim the repayment of at least part of the fee paid to No Doubt.  It will also have won an important symbolic victory against any other artists who may be watching this case closely and considering what legal options they may have themselves.

The case also raises questions about the extent to which artists can control representations of themselves in games - a question which is likely to become increasingly important in the future.


What happens next?


That depends upon the choices which Activision and No Doubt make, as well as on Californian litigation procedure.  In general terms, there may be a further round of legal submissions, quite possibly followed by initial legal skirmishes in court, leading to mutual disclosure of documents, exchange of witness statements and - eventually - a trial before a judge and jury in Los Angeles.  At that point, who knows what might happen...

Or, it could settle early - which would avoid the embarassment and risk of a high-profile trial, but could prove expensive to one or the other of them (though possibly still cheaper than fighting all the way to the court).

As always, we'll be keeping an eye on this one...


Image sources:
(i) Wikipedia - http://en.wikipedia.org/wiki/File:CoolGwenStefanitset.jpg  - Gwen Stefani (originally posted by Flickr by compulsiveprep_8)
(ii) Wikipedia - http://commons.wikimedia.org/wiki/File:Activision_logo.png - Activision logo
(iii) Wikipedia - http://en.wikipedia.org/wiki/File:Band_Hero.jpg - The North American boxart for Band Hero

Confirmed: UK Govt rejects games tax break


UK Chancellor Alastair Darling has rejected granting a tax break to the games industry. It had been hoped that his Pre Budget Report (more on that here) would introduce the tax break, which has been the subject of substantial lobbying from the games industry and has received cross-party political support. This result will of course be disappointing to the industry, but not entirely unexpected.


Cliona Kirby, a Tax Partner at Olswang who has advised the games industry regarding the proposed tax break, said (over at Olswang's Pre Budget Report Blog) said:

"It is incredibly disappointing that after months of lobbying from the games industry the Government has rejected our calls for a tax break to incentivise games development in the UK. The UK’s position as a world leader has been eroded as other countries such as France and Canada encourage both games companies and our creative talent to relocate with the offer of targeted tax breaks. The effect of such continued corporate migration would be a loss of revenues derived from the profitable games industry for the Treasury. In my view we should be encouraging new and innovative games to be made in the UK. Cross party political support for this area remains strong and I will continue to lobby alongside the industry to keep this on the political agenda. I hope that we will be able to persuade the Government to extend the existing film tax credit regime to games on the basis we described in our recent paper.

There was a small piece of good news for the industry because changes have been made to the R&D rules which remove the IP ownership requirement for SMEs which should make it easier for games companies to claim R&D tax credits on their development spend."

UK to refuse to grant games tax break

The Guardian reports that the UK Government is expected to reject including a tax break for the UK games industry in its Pre-Budget Report to be published today (the Pre-Budget Report has become in recent years one of the best indications as to the Government's proposals for the next year's budget - if it is in the Pre-Budget Report, chances are it will be in the next Budget too).

This is a bit of the shame, as other countries' governments have really boosted their national games industries through tax breaks (akin to tax breaks for other creative industries such as film) - industry bodies such as TIGA and ELSPA had lobbied hard for a similar tax break for the games industry.  Still, it's always possible that things might be different if a new government comes in after the general election next year.

Olswang has done a lot of work advising the industry on the proposed games tax break/how it could work, and has put together a Pre-Budget Report blog which they'll be updating as the report comes out.  Here it is: http://olswangbudgetblog.wordpress.com/.

UK games class action lawsuits edge a bit closer?


Just a quick one: the UK Government has released a paper regarding the role and powers which it proposes to give to a new consumer champion (known as the Consumer Advocate) who will have the power to take on large companies on behalf of consumers.  A key proposal is that the Consumer Advocate will be able to commence class action type lawsuits on behalf of consumers.

We have blogged previously about class actions in the games industry and the increasingly high profile which they are attaining.  At present, all of the high profile class action lawsuits against the industry have been in the USA - principally because that is the largest games market but also because the US legal regime is friendly to class actions.  The UK legal system, however, has not historically permitted US-style class action lawsuits.

As we've said before, sometimes class actions can be useful where there is a legitimate grievance against a business organisation with (hopefully) deep pockets, especially if there is no specialist regulator policing the industry's actions.

The games industry fits all of that: many times in the past gamers have felt they got a rough deal - take for example the  Red Rings problem with the Xbox 360 - which it has taken a long time to resolve with games companies (although it has been more or less resolved with Microsoft's additional consumer protection).  At the same time, in the UK there is no specialist regulator policing what the games industry does - the nearest would probably be the Office of Fair Trading, which has a general remit over retail traders.  So, it may be that UK class action type lawsuits could be of real help to UK consumers, including gamers.  That said, there is a big if: in the US, consumers can start class actions themselves, but it seems likely that under the new UK proposals the Consumer Advocate would be able to pick and choose what class actions to commence. 

So the creation of the role of Consumer Advocate being proposed by the Govt could actually prove quite useful to the games industry, since its existence would limit the ability of UK consumers to bring something like the more speculative class action lawsuits that have been seen previously in the USA.  Still, the mere possibility of any class action lawsuit in the UK against games companies is perhaps unlikely to be good news to the big players any way you cut it. 

In any event, the Govt proposals are still at the consultation stage and there is a way to go yet before we get close to a draft Bill or actual law.  More on this as and when...

A single UK games rating system?

The new Digital Economy Bill proposes for the first time a single UK games rating system under the control of the Video Standards Council.  GamesBrief is carrying our article on it here...

Runescape, the Computer Misuse Act and theft


The background:

Details here.  A group of Runescape players mount a phishing scam, obtain other players' accounts, strip those accounts of gold and loot.  Presumably they make an in-game or real-world profit.  Then the UK Police (specifically the Central Police e-crimes unit) swoop in.  They arrest a caution an individual in Avon and Somerset "on suspicion of a number of computer misuse offences".

Police pwn players

This appears to have been the first time that a UK games company has gone to the police to protect the integrity of its game.  Not much at all has been said about exactly what offences have been alleged. 

UPDATE: I had initially thought that one way in which the Police could go after the accused would be to prosecute for theft.  However, on a closer look (and thanks to the guys in the comment thread), it seems that a better way may be under the Computer Misuse Act 1990 - with which I must admit I was previously unfamiliar.  Thanks!

What is the Computer Misuse Act 1990? (CMA)

In the late 1980s there was controversy in the UK regarding the legality of hacking, following a UK case called R v Gold and Schifreen - in a nutshell, two guys were able to hack a British Telecom system but, as the law stood at the time, hacking was not expressly illegal and therefore they were acquitted.  This was a factor in the Parliament of the day passing the CMA.

As a very quick summary, the CMA was intended to criminalise three kinds of conduct:

(i) Intentional attempts to cause a computer to perform any function with intent to obtain unauthorised secure access to a computer or data on it (the section 1 offence)

(ii) Same as (i) but with the intent to carry out a further criminal offence (e.g. hacking a PC in order to commit fraud) (the second 2 offence), and

(iii) acting in any way which causes the unauthorised modification of the contents of any computer, with the intent to impair the operation of any computer/programme or to hinder access to data on any computer (the section 3 offence).

Carrying out any of the above renders you liable to a fine and/or imprisonment (between six months and five years depending on how you plead to the offence).

Is the phisher/account-ninja covered?

'Yes, but the wording isn't brilliant', seems to be the general answer.  Certainly phishing could be said to fall under the section 1 offence under the argument that the phisher sets programmes running which find out the account details etc of the innocent person(s).  To the extent that the phisher had intent to use those details to commit further criminal offences then he/she could also fall under section 2 - which carries harsher penalties.  Then there is the somewhat more nebulous section 3: does phishing or ninjaing someone's account "impair" or "hinder" any other computer or program?  Maybe - perhaps if having your account details "hinders" your ability to use the programme?

But this gets even more interesting

Anyway, what we want to do is focus on section 2.  If the phisher stole Runescape account details with a view to somehow trying to gain access of others' computers or stealing their bank details, then there would in principle be a case for arguing that they had had intent to commit further criminal offences under section 2.  But what if the phishers only intended to enrich themselves in-game by, for example, turning the stolen accounts' assets into gold and transferring that gold to themselves or even selling it on the black market (which would be a breach of the EULA etc but not necessarily illegal as such).  Could enriching yourself in-game or in the real-world through a game by unauthorised means be classified as an offence?

That is the really interesting part to this case and, if the Police are interested in pushing for the strongest sentence possible against these phishers, they will need to consider this sometime soon - if they haven't already.

That's exciting, isn't it?  Makes us think about adding a chapter to that book on virtual law which we'll have to write one day...

In the meantime, the story goes on...

Little more has been announced since the Police announcement earlier this week, but no doubt further details will follow in due course.  It's also worth bearing in mind that Jagex has stated that this is part of a long-term investigation in both the USA and UK - so there may be further twists in the tale yet...

Commentary: The Life and Times of Erik Estavillo

Consider Erik Estavillo, a man with a dream.  What dream?  A dream to sue many, many games companies.  And not just sue them, no!  He wants to sue them in the most high-profile way possible!  Below is a summary of what Erik has got up to, and what you could do to ensure you don't find yourself a target of something similar.

Example the first: Erik takes on Sony

In July 2009, Erik sues Sony Computer Entertainment America (SCEA) in California following SCEA's banning of his Playstation Network account over comments he allegedly made on a SCEA forum and which appeared in some way to relate to the PS3 game "Resistance: Fall of Man".  Among other things, Erik bravely claimed his freedom of expression was protected by the US First Amendment and therefore his account should not have been banned.  Also, he claimed $55,000 punitive damages and an injunction against SCEA banning further players in the same way.

In September 2009, the California court threw Erik claim out following a summary judgment application by SCEA, which argued that the First Amendment did not apply to PSN.  The Judge, he say yes.

In October 2009, not to be deterred, Erik filed an appeal against the court's previous judgment. (Which seemed a bit ambitious, given that Erik was unrepresented and generally appellate courts will only consider genuine uncertainty in the law and will not simply hear a rehash of the previous case - appeals are not meant to be a second bite at the cherry).  As to that appeal, no word has reached the interwebs so far.

Example the second: Erik turns to Microsoft and Nintendo of America

In November 2009, Erik commenced a separate claim against Microsoft over the well-known 'red rings of death' problem.  In a nutshell (and without having seen the detailed court documents), it appears that he argued that Microsoft should pay the cost of fixing this hardware error, since Erik himself is disabled.  Erik also commenced a claim against Nintendo over its actions which allegedly led to certain of his characters in Mario Kart Wii becoming locked unless he bought Super Mario Galaxy.

Relatively little seems to be have been said about legal niceties such as establishing an arguable cause of action.  (For example: it is difficult to see why Microsoft should be forced to bear liability in respect of the 'red rings of death' beyond its (quite generous) warranty coverage - however ill or disadvantaged any of its players may be).

Example the third: Erik battles Activision-Blizzard

More hot legal actions a-coming.  Also in November 2009, Erik sues Activision-Blizzard over certain aspects of WoW.  This claim attracts the most publicity, because Erik claimed that he would sub-poena (i.e. witness summons) individuals including Winona Ryder and some chap from Depeche Mode (the reasons for which we will not waste time typing about).   Once again, relatively little (i.e. nothing) seems to be said about the precise details about Erik's legal case.

What do we think? Vexatious litigation

Many people have commented across the net that Erik Estavillo must be a vexatious litigant.  Whether or not that is the case will no doubt be decided out in court in due course.

But let's think about this in more general terms.  All games companies have the hypothetical risk that one of their players could after them (or many of them) with legal claims at any time.  In the usual course, the merits of that claim will be determined in Court. 

But sometimes people can use court claims tactically, to try to obtain quick commercial settlements on the basis that the claim is not worth fighting to trial either financially or for other (e.g. PR) reasons.  Or, sometimes, a person may have a perceived grudge with a company or another person and may pursue court claims as a way of 'getting back' at them.

What can you do about this?  Here are some quick tips/thinking points:
  • Think about the applicable law in the countries in which you operate and which govern your contracts (in particular, end user agreements such as EULAs).  What steps can you take to reduce the litigatio risk?  Bear in mind some legal systems are more 'litigation friendly' than others.  For example, it is sometime said that the US is (in very general terms) more claimant friendly than the UK because the US has no 'loser pays the winner's legal costs rule' - which in the UK can be a big disincentive to legal action
  • If you do find yourself being pursued by a vexatious litigant, what steps can you take?  Depending on the laws of the jurisdiction, you may be able to take your own court action - for example, seeking an injunction against him/her.  If you have to fight a Court claim, discuss with your lawyers what aggressive actions you can take to knock the claim down (for example, you may be able to 'strike out' the claim if it has no realistic prospects of success).  And there is always the costs-hammer with which you can try to hit the claimant (see above)
  • Leave aside the legals and consider what other risk management strategies you should have in place.  What potential pitfalls are coming on the horizon and how are you dealing with them?  What is your customer-base happy or not so happy about? 
In the meantime, we will of course continue to keep an eye on Erik and his litigation machine...

[thanks for many links to GamesPolitics!]