Legal MumboJumbo and Popcap Games


Earlier this week it was reported that casual games developer MumboJumbo had succeeded in its legal action in Texas against fellow casual games developer Popcap Games, with the jury awarding MumboJumbo damages of $4.6m.  More on the case below...

FYI, MumboJumbo is the creator of "such popular games as 'Midnight Mysteries: The Edgar Allan Poe Conspiracy,' 'Luxor Adventures,'and 'Samantha Swift and the Mystery from Atlantis' ('fraid I've not played them).

What do we know about the case?

The litigation stemmed from a 2006 contract under which MumboJumbo agreed to produce, distribute and sell certain PopCap games in North America.  The jury reportedly found that "PopCap breached the contract when it went behind MumboJumbo's back and decided to market and sell its games on its own".  The case involved findings of breach of contract, fraud and tortious interference on PopCap's part against MumboJumbo (serious stuff).  The press release states "central to proving that portion of the case were PopCap's own internal e-mail messages, which showed the company employed a calculated use of false and misleading statements in order to sour that business relationship".  Serious stuff.

The jury awarded $4.6m in damages.  Separately, there will be another court hearing to work out the lawyers' costs (which is standard practice in England and could add a fair bit on to the $4.6m for which Popcap already has to cough up).

According to Gamesindustry.biz, Popcap's VP of public relations Garth Chouteau said of the judgment: "PopCap continues to believe that it did nothing wrong in this case, and will vigorously pursue its claims and defend itself through the appeals process."  Which, it seems reasonably safe to assume, means that Popcap will be mounting an appeal against the decision.


What does all that legal mumbojumbo (ahahaha) mean?*
* sorry, couldn't resist the weak pun


The judgment in the case has not been released, so there is very little to go upon at present unfortunately.  But I thought it might helpful, in very general terms (based in English law, which is very similar to US law in these respects), to give the lowdown on what those legal findings of breach of contract, fraud and tortious interference mean:

Breach of contract

A contract is an agreement (whether written or verbal) between two or more persons which has four basic characteristics: (i) an offer, (ii) acceptance of that offer, (iii) consideration (i.e. something of value in return for what is being offered) and (iv) intention to create legal relations (i.e. meaning to enter the contract).  Example: Ann buys from Bob a copy of Half Life 2 for £10 following an verbal agreement between them.

The 'contract' will contain the key elements of the deal (these are the 'Terms and Conditions' you hear about, plus other stuff), which both sides are meant to respect.  But if one of side breaks the deal, then in principle that entitles the other side to go off to court, provided you can prove:

(i) there is a specific enforceable term in the contract on which you can rely (e.g. Ann promised to buy Half Life 2 from Bob)
(ii) breach of that term (e.g. Ann took the game but refused to pay Bob)
(iii) loss (e.g. Bob lost out financially as a result of the breach of contract)

The basic way you calculate the loss is this: how much would you have gained had the contract been properly performed?  In the above example, Bob would have earned £10 had the contract been performed so that is the measure of his loss.  Obviously, with large contracts like the one that MumboJumbo and PopCap entered into, the amounts at stake - and therefore the potential contractual damages - can be very large and difficult to quantify exactly.

Note: one important point of difference between England and the USA is that, in England, breach of contract cases are decided entirely by a single judge, who will determine how much damages should be paid if any.  However, in the USA there is still jury trial available in breach of contract cases, in which case the jury determines the damages to be paid out (this is said to be one of the reasons that you see larger contract damages paid out in the USA than in England).

Obviously, real breach of contract cases are generally far more complicated than that.  There are often difficult arguments as to what the contract actually said, what constitutes a 'breach' anyway and what the innocent party is entitled even if he/she is in the right.  Then, on top of that, sometimes the innocent guy doesn't just want compensation but also wants some protection that the wrongdoer won't do it again...But you get the gist of it.

Fraud

Fraud is fairly simple to explain: it is any act by Ann which is intended to deprive Bob of a benefit or to cause him harm, for the enrichment of Ann herself.  The above example, where Ann takes the game but doesn't pay Bob, could potentially be fraud if there was the appropriate intention.  Another example would be Ann impersonating Bob in order to get a whole bunch more copies of Half Life 2 at his expense.  A yet further example would be Ann entering into a business deal with Bob with the hidden purpose of making money at Bob's expense or damaging his business in some way.

Fraud is one of the most serious legal offences around.  As a result, the law treats it pretty seriously and so it can have both civil and criminal consequences (i.e. you can sued for lots of money AND face criminal prosecution potentially).  If Ann was found liable for fraud, she could find herself having to (for example): compensate Bob for his loss; pay over to Bob all of the profit she made at his expense; give disclosure as to exactly what she did and how; and potentially face other legal/regulatory/professional proceedings depending on what she does for a living.

Tortious interference

This is difficult to summarise because it is not clear exactly what kind of 'tortious interference' Popcap was found liable for.  But, in very general terms, English and American law recognises the concept that a person can deliberately do things which are intended to disrupt other people contracting with each other or break their existing contracts with each other.  For example, Ann finds out that Carl has contracted with Bob and offers Carl incentives/bribes/whatever in order to persuade him to contract with Ann instead.  Obviously, in that kind of situation Ann may just be a good businesswoman and no harm in that, but sometimes it goes beyond that and the law needs to step in to stop someone deliberately encouraging the breaking of contracts.


If and when more details about the MumboJumbo/Popcap case are released, then hopefully we will able to apply some of the above to the actual facts.  Now, that's the end of Civil Law 101 for today, kids...

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[Image credits: Popcap Games ]


Posted on 28.1.10
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Games developer fails in court claim over copying himself



You'd think the last thing a games developer should be worried about is copying his own work, right?  Wrong.  Last week, the High Court published its judgment of a claim brought by a games developer against his employer over a games concept which the developer had created when he was freelance but which later he copied and effectively pitched to his employer as a new company project.  The developer later sued for breach of copyright and confidence, in which we now know he was unsuccessful.  Read on for more details...

The story in a nutshell

The case went like this: a freelance developer created a games concept, later joined a games development company and copied his earlier work in order to prepare a highly similar games concept for the company, without telling anyone about the copying (so everyone else thought this was a brand new idea).  The development company took on the 'new' concept but ultimately it went nowhere and another company took over.  Subsequently, the developer sued for copyright infringement for the copying of his original concept.  The court held: no copyright infringement because no one had known the developer had already come up with the games concept when he was freelance so they had not 'copied' anything. The court also rejected a breach of confidence claim.

The case is one of the few recent times that a UK developer has been involved in a court battle.  In fact, several of the UK games establishment were name-checked: the case involved evidence from Adrian Smith (former boss of Core Design, developer of Tomb Raider, and who was also a defendant in the case) and Sir Ian Livingstone OBE (founder of Eidos plc, which gave the development company some advice regading the development of the games concept) and also involved UK developers CiRCLE Studios and Crush Digital Media (both of which subsequently went into administration - see here and here).

Need to know points

You can read a summary of the case below, but here are some upfront thoughts on the need to know/best practice points for developers which came out of this case:
  • When a freelance games developer joins a new employer, discussing his/her existing games concepts at the outset and how they will be treated going forward should help to avoid any confusion as to who owns the IP later on.
  • If a freelance developer creates a game concept before he joins a development company, DOESN'T tell the company about this and subsequently pitches the concept to them as a company idea then, if the game concept is taken forward, there is a risk that the developer may lose any IP rights he may have in the concept.
  • The judge said game concepts discussed by a game developer with his employer are unlikely to be confidential as between the two of them, so a developer could not generally prevent his employer from for example pitching the concept to publishers (unless there is some express agreement to the contrary).
  • Review carefully the provisions of your employment agreements which deal with ownership of IP rights, because they could be important if there is subsequently a dispute between the developer and the development company over who owns the IP rights in a game concept.
  • Pick your legal battles carefully.  Litigation is costly, lengthy and risky, as this case demonstrates.   A little advice early on from experienced litigation lawyers about your prospects of success and the legal cost/benefit analysis can save a lot of time, money and stress down the line.
So what happened?

In around 1998 a then-freelance developer, Stuart Burrows, developed the concept for a game which came to be known as "Tracktrix", described in Court papers as follows: "Traktrix's gameplay is very simple: get the ball from one side of an environment to another and enter the "Finish Area" within a time limit. The player achieves this by laying a track in front of the ball as it progresses".  Burrows himself desribed it as " 'Marble Madness meets Tetris/Wetrix and a Scalectric track' and 'Super Monkey ball meets Tetris' ".

Traktrix and Train Trax

Burrows later joined CiRCLE Studios as a senior games developer, but did not did not disclose to CiRCLE that he had already come up with the Tracktrix concept.  He copied parts of his original work on Tracktrix in order to pitch a CiRCLE projet which was similar to Tracktrix, again without explaining that he had come up with Tracktrix before joining CiRCLE.  CiRCLE then took the concept to publishers and, following the advice of Sir Ian Livingstone of Eidos, further developed it into a game concept known as "Train Trax".

But ultimately no one was willing to pick up Train Trax.  CiRCLE later went into administration in 2007.  However, CiRCLE boss Adrian Smith and industry veteran Martin Carr formed another games development company, Crush Digital Media, which bought up some of the now-bust CiRCLE's IP - including Train Trax.  Crush then hired Burrows to work on Train Trax further and tried again to get publishers interested in, again without success unfortunately.

It seems that Burrows later began to argue that CiRCLE and Crush had infringed his copyright in Traktrix, and had breached confidence, by seeking to develop and market Train Trax.   Lawyers were involved and the case went all the way to trial in 2009, despite Crush going the way of CiRCLE and entering administration in early 2009.

The High Court judgment

In a judgment published last week, Mr Justice Norris ruled that CiRCLE and its boss Adrian Smith had not copied Burrows' copyright works in developing Train Trax because they had not known there was anything to copy.  As far as they knew, Burrows had invented the Traktrix concept (which became Train Trax) for the first time when he was a CiRCLE employee.  The judge found that Burrows had created Traktrix before he had joined CiRCLE, had then copied his own work to create a similar concept for the company and this then became Train Trax.  So it was Burrows himself, not anyone else, who had done the copying.  That was the end of the copyright claim.

As for the breach of confidence claim, the judge decided that a developer pitching a game idea to his employer ordinarily was not confidential as between the two of them.  He said: "Mr Burrows was employed as a senior games designer by Circle. It was his job to come up with ideas. If he came up with an idea and shared it with his employer he was doing what he was paid to do: the disclosure would not be in circumstances importing any duty of confidence owed by the employer to the employee."

Thoughts

The judge was pretty clear the case should never have got to trial (he referred to "the regrettable fact that the action reached trial at all").  That said, the legal issues in the case were fairly clear cut and he did not have difficulty in ruling in Smith and Crush's favour.

Still, to my mind there were no real winners here.   Yes, the case established that effectively Crush still had the rights to Train Trax but no one wanted to buy it anyway, the game was never actually developed and Crush went into administration in early 2009 anyway.  As for Burrows, he was left emptyhanded and probably in fact received a substantial legal costs order against him (though it is always possible he may try to appeal).  Not a great result.

(Case name: Burrows v Smith & Another [2010] EWHC 22 (Ch))

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[Image credit: Mike Reeve http://en.wikipedia.org/wiki/File:Royal-courts-of-justice.jpg]

Posted on 24.1.10
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Thoughts on the Westminster eForum

The Westminster eForum discussion in London on 20 January 2010 went over a lot of ground, from digital distribution to games education to tax breaks. UK games classification got a special mention, with Keith Ramsdale of EA Northern Europe making a special plea to the government to "just hurry up and make PEGI law" (the current UK games rating system is being reviewed at the moment and may or may not become law before the next election).


It was well attended by industry figures, including David Braben (of Elite fame) and Ian Livingstone of Eidos as well as representatives from EA, Codemasters and Unity to name but a few. Also attending was gaming champion Tom Watson MP (Labour), who chaired the first half of the session, and Ed Vaizey MP (Conservative), the Shadow Minister for Culture and the Creative Industries.

My thoughts on the highlights below...


Tax breaks


There was a lot of discussion about the need for a tax break for the UK games industry. Richard Wilson of TIGA in particular put forward a strong argument for the tax break (and separately Mike Rawlinson of ELSPA has done the same). Keith Ramsdale of EA Northern Europe argued that last year games made 44% more than films and music put together, but attract far less government support. Overall, the consensus was that the UK games industry punches above its weight, but without government tax breaks to match those being offered in competitor countries like France and Canada, it will decline (some predict that the UK will drop from its current place as the third-largest producer of games to sixth in the coming years).


There was also an interesting presentation from Dustin Chodorowicz of Nordicity regarding the Canadian experience of games tax breaks and the lessons the UK could learn from it. Unfortunately, with the present Labour government having refused a games tax break in this term, and Ed Vaizey's rather blunt assessment that a future Conservative government would not introduce a games tax break in the next 2-3 years, all of this will have to remain on the backburner for a while to come.


Digital Distribution


The discussion about digital distribution was interesting, if not ground-breaking. The discussion ranged back and forth regarding the pros and cons of digital distribution, the consensus from the industry bods on the panel being that digital distribution would continue to expand rapidly in this and coming years, but there will still be a place for the retail market for some time to come.

One crucial issue which wasn't discussed at all though is the secondary market in retail games and the total absence of a secondary market in digital distribution (or, put simply, I can buy Half Life 2 boxed second hand but I can't buy it off Steam second hand). There is a lot of money to be made in second hand sales - for example, the UK's only games retail chain GAME reported in 2008 that fully a quarter of its income derived from second hand sales.


All of this fundamentally derives from (i) gamers wanting to play games but not wanting to play full whack for them; and (ii) gamers wanting to make some money back from games they have played but don't want to keep. So it seems likely that sheer consumer demand will mean that at some point a secondary market in digitally downloaded games will have to develop. Obviously though, this presents real commercial issues (why allow a digital game to be sold secondhand online for $10 when you can sell it firsthand online for $30?) - so whether or not a digital second hand sales market will survive is another question altogether.

In fact, there have already been a few isolated instances of gamers trying effectively to establish their own second hand market in digitally downloaded games (for example, last week a guy tried to sell his Steam account for $1,000), but they are pretty much doomed to failure as long as download platforms stick to their current legal structure in which they can stop and unwind any attempt to sell to someone else any games downloaded them from.


It seems to me that the change could come in one of two ways. Firstly, a legal challenge against the Terms of Service/Subscriber Agreements that the current download platforms make gamers agree to at the outset, on the basis that such contracts contain numerous unfair contract terms which should be struck down by the court (which I'm going to blog about separately). Secondly, and probably more likely, someone figures out a new model for profiting from digital second-hand sales and make a popular download platform out of it.

Games education


The discussion regarding games education was also interesting. The consensus from industry figures in the panel discussion was that the UK's universities are not doing enough to prepare students for entry into the games industry. For example, David Braben of Frontier complained "we are getting far fewer people with computer science skills. We're having to recruit people from abroad" and Ian Livingstone of Eidos worried that university courses have "dumbed down" recently (a constant refrain in UK papers for some time now).


But there were no figures from the education establishment on the panel to respond to those complaints. If there had been, I think they would have said that the issue is complicated and affects multiple industries, so a simple claim that universities don't do enough isn't particularly productive. But one big problem which does affect the games industry specifically is the perception among universities that universities simply don't take games-focused courses seriously (according to one university lecturer who I spoke with) . That, it seems to me, is something that the games industry can and should help to remedy. (Clearly there is enough for a forum discussion on this issue alone!)


And, yes, Keith Vaz didn't show up


Lastly, and most infamously, there was gaming opponent Keith Vaz MP's no show. More on that here.
All in all, a great session, and I look forward to the next gathering on Monday 25th Jan at the Houses of Parliament for "Taking Games Seriously"...


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Posted on 22.1.10
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UK games tax break not Tories' top priority

At the Westminster eForum meeting in London yesterday on the state of the UK games industry (which I attended), Ed Vaizey, Conservative shadow minister for culture and the creative industries, made it quite clear that if a Conservative government comes into power this year the UK games industry is unlikely to see any movement towards a UK games tax break for 2-3 years.  He said that a tax break for the UK games industry is simply not one of the Tories' top priorities, compared to the challenges presented by the present recession.  (In December 2009, the present Labour government confirmed it has no plans to introduce a UK games tax break in this term).


In a wide-ranging panel discussion, Ed Vaizey also covered:
  • his hopes for the industry bodies TIGA and ELSPA to work together, or even be merged, in the future
  • the controversial possibility that the UK Film Council could adopt a role in representing the games industry (and possibly the games industry could thereby obtain access to National Lottery funding - an important source of film financing)
  • Conservative plans for broadband penetration in the next few years (he compared the current Labour plans of universal 2mbps by 2012 rather unfavourably to curren broadband already available in Asia)
My thoughts more generally on the Westminster eForum, which went over a lot of ground from digital distribution to games education to tax breaks, are here.
Posted on 22.1.10
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Bethesda vs Interplay: Bethesda appeals over Fallout litigation


The Fallout litigation continues with Bethesda reportedly going to the US Court of Appeal over its claim for a preliminary injunction to restrain Interplay using the Fallout IP, including developing 'Project V13',  Interplay's rumoured Fallout MMO.  Bethesda's original claim for a preliminary injunction was rejected in December 2009 (our summary of the dispute is here).

We have not yet seen any information regarding the grounds of the appeal, though no doubt they will emerge on the blogosphere in due course, at which point we will be able to have a closer look at the legal arguments.

In the meantime, Duck and Cover has released partial transcripts of Bethesda's last attempt to secure the preliminary injunction - which do not appear to have been particularly successful.  The court's formal judgment on the matter has not been released as far as we are aware, but from the transcripts of the actual arguments before the judge, it seems that Bethesda ran into difficulties with the judge over the exact reasons it sought a preliminary injunction.  The judge's reasoning appeared to be that the purpose of a preliminary injunction is to prevent one party from doing something until the court has time to establish whether it is legally entitled to do that thing or not - but if Interplay is not actually working on its Fallout MMO project then logically there would be nothing to temporarily ban them from doing.  There were also issues regarding Bethesda's claim of trademark infringement, which Interplay argued has no merit because there was never any breach of contract by Interplay and therefore it always owned the Fallout trademarks.

Now, some bloggers have derived from the above that Bethesda's lawyers did not understand the purpose of preliminary injunctions.  That is of course possible, but also seems somewhat unfair.  A more likely explanation (assuming US preliminary injunctions are anything like their English counterparts, which seems very broadly right) is that they understand exactly what a preliminary injunction is for, understand that it could be an uphill struggle to win it at court, but they also understand that if they did win they could inflict serious damage on Interplay by effectively stopping them from doing anything with the Fallout IP for potentially quite a long time.  In fact, in some cases obtaining preliminary legal relief from the court can bring the other side to the negotiating table or even cause them to fold altogether (although obviously that doesn't necessarily mean that Interplay would have done either).

So it may simply be that Bethesda gambled and lost the first time around.  Now, clearly, they would like another bite at the preliminary injunction cherry.  It will be interesting to see if they fare any better this time around...


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[Image source: Wikipedia]
Posted on 17.1.10
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Are modchips illegal?

[This article was first posted on Gamaustra here]

This article is about modchips: is their sale/use illegal or not?  We look at three recent cases in England, Spain and France - which show an interesting divergence of European opinion as to the legality of modchips: not every country thinks that modchips are a bad thing.  More below...


What is a modchip anyway? 

Wikipedia has a succinct definition:

"A modchip (short for modification chip) is a small electronic device used to modify or disable built-in restrictions and limitations of many popular videogame consoles. It introduces various modifications to its host system's function, including the circumvention of region coding, digital rights management, and copy protection (homebrew) software checks for the purpose of running software intended for other markets, copied game media, or unlicensed third-party." 

Modchips exist for other devices (e.g. dvd players) but for today's purposes we're only talking about modchips which are used in games consoles and which are intended to circumvent games copy-protection: in other words, modchips which fool a console into thinking that the player owns an authentic, licenced copy of a game when it fact he/she does not.  An example of such a modchip is the wiikey, which (funnily enough) mods the Wii.



Why are modchips a problem?


Modchips are seen as a problem by the games industry because: (i) they are said to facilitate games piracy by allowing players to play unauthorised/pirated copies of games; and (ii) they enable a player to tamper with the innards of a games console.  The games industry periodically takes action to stamp out modchipping - for example, Microsoft banned a lot of Xbox Live accounts of owners of chipped consoles last year.


Of course, gamers may (and do) take a rather different approach.  Many argue: (i) it's my console and I should be able to do what I want with it, including playing pirated games or modifying my console; and (ii) I didn't ask console manufacturers to install arbitrary mechanisms for controlling what I can do with my console.  And so forth.



Still, the purpose of this post is not to debate the merits of these arguments, but simply to summarise what the legal position is regarding modchip in different jurisdictions.  (Caveat:  the following really is just a summary, so it should not be taken as a authoritative analysis of the law of these jurisdictions!)



England


Use and sale/distribution of modchips is illegal in England.

Section 296ZB of the Copyright, Designs and Patents Act 1988 (CDPA) makes it a criminal offence to sell or distribute "any device, product or component which is primarily designed, produce, or adapted for the purpose of enabling or facilitating the circumvention of effective technological measures" (this provision was introduced as part of the EU-wide anti-DRM laws introduced by the EU Copyright Directive of 2001).

So, under English law the sale or distribution or such devices intended to circumvent "effective technological measures" is a criminal offence.  Does this apply to modchips?  Yes, is the answer.  We know this thanks to recent case-law in the English courts. 

In a case called Gilham v the Queen, the Court held that that selling or hiring modchips will be a criminal offence under s296ZB CDPA if it is established that:

(1) The game is or includes copyright works.

(2) The playing of a counterfeit DVD on a game console involves the copying of a copyright work.

(3) Such copying is of "the whole or a substantial part" of a copyright work.

(4) The game consoles include effective technological measures designed to protect those copyright works.

(5) The offender sold or hired the modchip device in the course of a business.

In Gilham v the Queen, the jury found that modchips met of all of these requirements - and so they convicted Gilham.  He appealed, arguing that using a modchip does not lead to copyright infringement because there is no "substantial" copying of the game - all that happens when you play a chipped game is that a fragment of the game is copied to the console's RAM at any point, which is insufficient to establish copyright infringement.

 This gave rise to tricky legal issues as to whether copying lots of little pieces of a copyright work (so-called "little but often" copying) could in some way turn into "substantial" copying.  Tough question...which the Court side-stepped by instead holding that the game drawings which appear on the screen, and the audio recordings which are played, are themselves copyright works which are "substantially" copied in playing the game.

So, selling modchips is illegal under English law.  What about just using a modchip in your console but not selling/distributing them?  You're no better off really, because (following the logic in Gilham) using a modchip in your console would involve copyright infringement - which could have civil (and possibly criminal) legal implication of its own.

Verdict: sale or distribution of modchips in England is a criminal offence.  The use of  modchips in your own console would likely constitute copyright infringement.


Spain

Since Spain is also subject to the EU Copyright Directive (which led to the introduction of the law in England that has made modchips illegal -see above), you may expect to see Spanish law also ruling that modchips are  illegal.  Si?

Apparently...no.  Admittedly I'm by no means a Spanish lawyer, but I understand that the Spanish Penal Code does contain measures intended to prevent the circumvention of "effective technical measures".  However, a Spanish court case in 2009 seems to have gone the opposite direction to the English courts.

The case followed a criminal complaint by Nintendo against Movilquick, a Spanish modchip distributor. The judge decided that flash carts could be used for "both legitimate and illegitimate purposes, but not only illegitimate" purposes.  He held that flash carts could be used for "pirated games" but may also have  "legitimate functions of employment" such as "backing up original games or other various functions such as managing photos, music or performance of [free] software".  On that basis, he dismissed the criminal complaint.

Why is this interesting?  Well, it is not often that one sees the judiciary coming down on the side of gamers.  The judgement was not set out in great detail, so it is not at all clear why the judge decided to do so.  In particular, it is not clear how this decision can be reconciled with the EU Copyright Directive (or with the Spanish law that implements it). It is also not clear whether this is the only case-law on the subject - it may be that there are other Spanish cases elsewhere that go the other way. Still, I imagine it made Spanish gamers happy...

Verdict: using or selling a modchip/flash cart may be legal, but just wait for Nintendo's lawyers to get the appeal going...


France


Ah, La France, home of la loi Hadopi (also known popularly as '3 strikes') and also a subject of the EU Copyright Directive.  Do its judges sympathise with their English or their Spanish colleagues when it comes to modchips?

Answer: Spain, apparently. 

Details so far are sketchy (no sign of the actual judgment yet) but summary as follows: in December 2009, a Paris criminal court ruled that Divineo, a company which makes Nintendo DS flash carts - essentially, a type of modchip - did not break the law (i.e. presumably they do not "circumvent effective technical measures").

The Court's logic seems to have been that flash carts in fact extend the utility of the DS and that the user should therefore be free to use them as he or she wishes - a lot closer to the reasoning of the Spanish than the English court.  But, in the absence of more details being made public (especially the Court's formal judgment), it is not entirely clear on what legal basis the Court made its judgment.

For completeness: Nintendo said it would appeal the decision and pointed out that Divineo has already been banned from selling flash carts by a Hong Kong court and ordered to pay damages to Nintendo.


So, are modchips illegal then?

It is pretty clear from the above that there is a divergences of opinion within the EU as to the legality of modchips.  The legislation is there (i.e. the EU Copyright Directive) to make modchips illegal, but that legislation has been interpreted (or possibly simply ignored) in different ways.

As often happens in the EU when different Member States take different approaches to legal issues, the answer may only come when the EU itself takes the opportunity to clarify the position (whether through a case before the European Court of Justice or through further legislation from the Commission)...but those opportunities are relatively few and far between.  Until then, that uncertainty seems set to continue...


What about modchips in other countries?


For those of you who are interested, here is a quick round-up of developments in the treatment of modchips in other jurisdictions:

  • USA: in principle, use of modchips may fall foul of the Digital Millenium Copyright Act (DCMA), which has been used previously to get at sellers of modchips (example here)

  • In Italy, back in 2005 a court ruled that the purpose of modchips was to 'avoid monopolistic positions and improve the possibilities for use of the PlayStation'. The court said: 'It's a little like Fiat marketing its cars while banning them from being driven by non-European citizens or outside towns.' "
  • In Australia, the Australian High Court ruled in 2005 that modchips for the Playstation 2 were not illegal.  As I understand it the Court's reasoning was that, since the Playstation 2 technology had only ever sought to stop players playing unauthorised games but had not sought to stop them copying those games, a modchip which assisted players to play but not copy unauthorised games was not an attempt to circumvent "technological protection measures" under Australian law.  (As far as I'm aware, that position has not been contradicted in any subsequent case-law).

    (In England, the Court took a rather simpler approach by holding that the very act of playing a game using a modchip constitutes copying infringement - but there may have been good reasons why this
    argument was not adopted in Australia).

Closing thoughts


  • Even without having to get into a detailed legal review of the laws of different jurisdictions, it is clear that some countries have adopted a relatively hardline approach to modchips (e.g. the UK or USA).  In particular, the UK has made it clear that the sale of modchips may be a criminal offence.

  • But, maybe surprisingly, other countries appear to have taken a more neutral/favourable approach to modchips, recognising that modchips are not just about playing pirated games.  With games companies apparently remaining keen to shut down modchip sellers (as with the French action above), it will be interesting to see what 2010 brings...
Posted on 11.1.10
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Games censorship and classification in 2009

2009 has seen a fair deal of controversy regarding games censorship and classification.  Here's some of the highlights:


Left 4 Dead 2:



The general release version of Left 4 Dead 2 was refused classification by the Australian Classification Board, despite Valve's attempts to appeal that ruling.  In a nutshell: L4D2 is a pretty...intense game in the zombie-killing stakes, Australia's highest games rating is 15+ and they felt the game was beyond a 15+ classification, therefore the game was refused classification.  This meant the general retail version of L4D2 could not be sold legally in Australia.  Valve was then forced to accept a compromise in which it issued a toned down version of the game in Australia (which appears to have been panned).

Why all the hoo-ha?  Rightly or wrongly, largely the internets blamed one person:  the Attorney General of South Australia, Michael Atkinson, who has publicly stated his opposition to violent videogames and has refused to countenance proposals to give Australia an 18+ rating.  For example, he has said "I see my children become physically and emotionally obsessed with games, and it is difficult to drag them away from the gaming console. The repeated act of killing a computer-generated person or creature desensitises children to violence."

It seems that, following further outcry, the Australian government announced that it would consider whether to introduce an 18+ rating into the Australian system - but some commentators are doubtful as to whether that will really happen.

Another minor L4D2 controversy: it seems that the US ESRB required Valve to tone down its promotional poster, meaning that the ring and little finger of the iconographic L4D hand were pulled back rather than torn off - the cheek!


Aliens vs Predator


Another one from Australia.  The game was initially refused classification by Australia's Classification Board because it was felt to be too violent for a 15+ rating.  The Board was apparently uncomfortable that "the violence in the game causes a high playing impact due to its first-person, close-up perspective, conceptual nature and the level of explicit detail involved in the depictions".

Rebellion and its publishers Sega then raised the ante by announcing that they would not release a toned down version and would appeal the refusal.  The Classification Board subsequently changed their mind and stated that the game could after all come within the 15+ rating.  As a result, AVP may now be sold officially in Oz - hurrah!

Still, query why AvP was suitable to come within a 15+ classification when L4D2 was not.  Could this show a crack in the sensibilities of the Australian censors?  We'll know more the next time a major title is put before them for classification...


Modern Warfare 2


As we all know, there was a lot of controversy caused by that level in Modern Warfare 2.  And, of course, politicians and newspapers got involved all over the world.

For example, UK Labour MP Keith Vaz said about the game "I am absolutely shocked by the level of violence in this game and am particularly concerned about how realistic the game itself looks".  He even raised the issue in Parliament, questioning what the government would do to ensure that the game could not be played by children (see below re the new UK rating system).  Also, predictably the Daily Mail gave the game a kicking.

On the other hand, Labour MPs Tom Watson and Sion Simon stepped forward to do battle with Mr Vaz, with Sion Simon pointing out in Parliament that MW2 already carries the appropriate rating/warnings in line with current games classification legislation.  Tom Watson went on to found a pro-gamers pressure group called Gamers' Voice, which (so far) has proven very popular.

Oh, and Michael Atkinson had another pop at games thanks to MW2.  At one point, he said he intended to appeal against MW2's 15+ rating in Oz.  As far as I know, you can still buy it in Oz, so go figure (as our American friends would say).

None of which has changed the fact that the game has been a roaring success all over the world (as well, apparently, as being the most pirated game of 2009).


The FTC loves games (ish)


Speaking of politicans, it has not been all bad in 2009.  On a more positive note, in 2009 the FTC published its seventh report on "Marketing Violent Games to Children".  From GamesPolitics: "The FTC review labeled the games industry the 'strongest' of the three entertainment sectors (games, music and movies), when it came to self-regulation.  Additionally, compliance with the Entertainment Software Rating Board (ESRB) code within the videogame industry was 'high in all media' ".

In other words, the report endorsed the self-regulation model for classifying games and protecting minors which has been adopted by the US games industry.


New games classification regime in the UK

For the UK government however, self-regulation of games classification by the UK games industry is no longer the way forward.


The UK Government's Digital Economy Bill proposes for the first time a single UK games rating system, based on the PEGI system, under the control of the Video Standards Council (the previous practice was that some publishers used either the BBFC and/or PEGI systems).  The Bill is being debated in Parliament, but it is expected the new rating system will become law some point next year.  We've written about this in detail here. 

What does this mean for UK games classification/censorship?  Well, the Government says that the new system is intended to give better protection to minors, but we'll have to wait until the new system is in place before we can see exactly what new actions the Govt intends to take to achieve that in practice...


And there will be more censorship controversy in 2010...

There are already signs that governments and regulators will be keeping a close eye on games censorship and classification into 2010, whether on grounds of protecting minors or simply on pure political grounds.  Here are a few examples which we've already heard about:

  • Censorship authorities in Dubai have suggested that they may investigate 2K's forthcoming game Spec Op: The Line, which (says the LA Times) "follows a U.S. Army captain and his team of elite special-ops forces as they launch a suicidal rescue mission after Dubai is destroyed by a series of cataclysmic sandstorms".  In particular, the game features a destroyed Burj Al-Arab.  Off the top of our heads, we can't think of many recent games that allow you to explore post-apocalyptic real-world cities or countries (can you?), so this game could set an interesting precedent.

  • China has recently "placed more than 4.65 million computers at some 80,000 Internet cafes under watch in a bid to crack down on violent or pornographic online games" (according to ABS-CBN).  This information was derived from a recent state media announcement, so we don't know yet if there is any published supporting info/evidence behind this action.

    The fact that the Chinese Ministry of Culture made this announcement may be the most interesting thing about this development.  Why?  Because there appears to be an ongoing battle between that Ministry and an entity called the General Administration of Press and Publication, which in 2009 announced that it was now in charge of Chinese games regulation.  The Ministry of Culture then responded tartly that it remains in charge.  Since then, these two Chinest govt entities seem to keep treading on each others' toes.  So, have these internet cafes really been placed under watch and, if so, by whom?

  • A Senator in Brazil has drafted a games censorship bill with the intention apparently to "curb the manufacture, distribution, importation, trading, custody, and storage of video games that affect the customs and traditions of the people, their worship, creeds, religions, and symbols" (source: Boing Boing).  Now, so far as I am aware Brazil has not hitherto a high-profile games consuming country, but apparently that is no good reason not to have censorship laws, although query whether it really needs to be as widely drafted as the above sugggests - why would you want to censor a game that " affect[s] the customs and traditions of the people"?

As always, we will be keeping an eye on games censorship and classification in 2010, particularly their legal implications, so watch this space...

Sources:


L4D2: http://upload.wikimedia.org/wikipedia/en/b/ba/Left4Dead2.jpg
AVP: http://upload.wikimedia.org/wikipedia/en/3/30/Aliens_vs_Predator_cover.jpg
Modern Warfare 2: http://upload.wikimedia.org/wikipedia/en/d/db/Modern_Warfare_2_cover.PNG
Posted on 1.1.10
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