litigation

Small UK IP lawsuits get quicker and cheaper (in theory)

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A long awaited development in UK civil procedure is due to make low value IP infringement claims quicker and cheaper.  It is called the small claims track, it will be open for IP infringement cases worth less than £5,000 and it will be heard by the specialist Patents County Court.

My friend Rosie Burbidge, a solicitor at Rouse (as well as a writer of the Art and Artifice art law blog and contributor to the famous IPKat IP law blog) wrote on the Guardian about this development.  This is (some of) what she said: (more…)

Langdell Squared: Edge magazine v Tim Langdell

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This is a guest post by Jonny Mayner.  Jonny Mayner spent most of his 20’s playing games and working in bookshops and the construction industry before getting down to the serious business of being a lawyer. He is currently a trainee solicitor at Osborne Clarke, soon to qualify and join the firm’s Intellectual Property Litigation team. He still plays games though.

Tim Langdell, the man behind Edge Games and long-time botherer of Edge Magazine (among others – read about his US shenanigans here and here) was dealt a critical blow by UK High Court last month, which we’ve just had a look at. In her judgement Mrs Justice Proudman pretty much flatly rejected much of Langdell’s evidence and ruled on various issues which will make it harder for him to assert IP rights in all things Edge-related going forward.  (Jas: plus, now an English court and a US court have ruled that he is a Naughty Man.)

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The US violent games case: Americans are from Mars, Europeans are from Venus

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Earlier this month, the US Supreme Court handed down its decision in Brown v EMA, AKA the Californian ‘violent’ games law case, AKA Arnie vs all gamers, everywhere.  The law, if upheld, would have given lawmakers the ability to ban certain games and place stringent requirements on others. However, the US Supreme Court struck down the law on the basis that games are protected by the free speech provisions of the US Constitution and that the Californian law was unconstitutional.  So far, so good.

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Atari sues Tommo for $30m over Flashback 2 console

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This is interesting:  Atari is suing Tommo Video Games Distribution in the US in a $30 million claim over the Atari Flashback 2, according to Kidscreen.  Details are very sparse at the moment but the allegation seems to be that Tommo is selling or distributing a counterfeit version of Atari’s Flashback 2 console, which I understand is itself is a repackaged version of Atari’s famous Atari 2600 console released in 2010.

I wanted to blog about this for two reasons:

(1) A quick recap about counterfeit goods.

Counterfeit goods are simply knock offs – goods which are manfactured to look, feel and operate like your goods but which are actually made by a rival third party.  Because counterfeit goods are made without your authorisation, they infringe just about every intellectual property right that you may own in the original goods.  In this case, IF Tommo is indeed manufacturing and marketing a counterfeit Flashback 2 without Atari’s authorisation (which remains to be proven), then in principle it may be infringing Atari’s copyright, trade marks, design rights and patents in particular.  If there was an agreement between Tommo and Atari for the manufacture of the Flashback 2 and Tommo has gone outside that contract, then Tommo may in principle also be liable for breach of contract. 

Consumers also are heavily affected by counterfeit goods, since they may be purchasing these goods without realising that they’re not genuine – and therefore they’re not getting the ‘real thing’ (in fact, they may be receiving technically inferior goods).  Depending on what country consumers are in, their national consumer protection laws may help them to different degrees.  For example, in the UK a consumer would under the right circumstances have a right to return counterfeit goods to the seller (not the manfacturer) and demand a refund under the Sale of Goods Act 1979.

(2) The Flashback 2 isn’t exactly new technology.

I was struck by the fact that the Flashback 2, which depends on Atari 2600 technology, basically goes back right to the start of the modern games industry.  And yet Atari is reportedly commencing a $30 million action over that technology.  It just goes to show that games businesses shouldn’t discount the value of their old hardware or IP too lightly – Atari clearly saw a market opportunity to bring their old console back and are now having to take legal action to preserve it.

Top tips:

  • Consider whether there’s an opportunity to make money out of your old hardware or IP again (e.g. through a licence or re-release, maybe on one of the new platforms like Steam or iOS)
  • This is critical: review your legal protection of your old IP.  Have you maintained protection of their copyright/trade marks/patents?  It won’t be expensive to take remedial action, but you never know when it might come in handy.
  • Look at third party hardware and IP.  Has it become abandonware and, if so, could you do something with it?  NB that means getting a licence, not just charging in and using it without authorisation (I’ll be writing about the legality of abadonware soon…)

Image credit: Atari/CNET

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The second virtual goods crime: is Runescape theft, theft?

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The Dutch Supreme Court will be invited later this year to conclude that the theft of virtual goods from Runescape constitutes theft under Dutch criminal law; indications to date suggest that it may conclude that theft of virtual currency/goods IS criminal theft.  To my knowledge, this is only the second time that a Western court has considered the (increasingly important) issue of the relationship between virtual goods and criminal law, the first time having been a UK criminal court earlier this year over Zynga chips.*

According to Futocop, this Dutch case apparently forms part of a long-running matter which began in 2008 when two boys were sentenced to community service and suspended juvenile detention after they forced a 13-year old to transfer a Runescape virtual mask and a virtual amulet from one avatar to another under the threat of physical violence.  The detail is not entirely clear from Futocop, but I think what happened next is that the case was appealed, but the Court of Appeal ruled against the defendants and the case is now going even higher, to the Supreme Court.

One point in particular is worth noting.  As part of the referral of the case to the Supreme Court, the Dutch  Advocate General (a sort of legal expert whose job is to assist the court to make its decision) said that the economic value of the virtual goods is of particular interest to the question whether there is theft:

Virtual objects can represent an economic value both inside and outside the game. They are also individually distinguishable and transferable“.

This comment is interesting because, if it was accepted by legal authorities, then basically that on its own could bring virtual goods and currency within the existing law.  Put it another way: if both physical goods and virtual goods are recognised as having the same economic value even though one exists in the real world and one does not, then that is a powerful argument for both of them to be protected in the same way legally.  In a way this is nothing new really: after all shares, electronic money and electricity are all legally protected even though you can’t physically touch them.  But it is taking some time for courts to recognise that virtual goods fall into this category too.  Of course, once that recognition is made, it opens up a whole new can of worms for the games and tech industry: who owns virtual goods?  What can you do with them?  What classes as virtual goods – game items, ebooks apps? And so on (more details on that here).

Anyway, in the meantime this case is due to go to the Supreme Court in October 2011, so expect more details later in the year…

* For those virtual goods scholars who are reading this post, to clarify: I know there have been previous opportunities in the West to consdier the legal status of virtual goods (e.g. Bragg v Linden Labs), but to my knowledge all of them resulted in settlements etc with no judicial pronouncements being made.

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More on Lodsys, apps and software patents

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More interesting developments in the Lodsys/app developers spat (more on that here): now Apple has got involved.  Yesterday, Apple wrote to Lodsys asking it to withdrew its threats against a number of iOS app developers. You can read the full letter here.

Apple’s arguments were three-fold:

(1) The patent licences which Lodsys has granted Apple cover both Apple and its app developers – therefore Lodsys has no basis for arguing patent infringement by any app developers, because they already have the right to use Lodsys’ patents.

(2) Based on the limited evidence in Lodsys’ letters to app developers and on its site, all of the allegedly infringing acts take place via Apple products and services (e.g. the App Store), not on app developer products and services (e.g. the app developers’ apps).

(3) Lodsys’ claims are barred by the legal doctrines of patent exhaustion and first sale. Very basically, the argument here is that, once a product which contains your IP rights has entered the market, you lose certain rights to try to control how that IP is used. Otherwise, people who actually turn the IP into valuable products would forever be under the control of the IP owners (more detail here).

Overall it’s a very measured letter, which doesn’t issue anything like a threat to Lodsys but makes it clear that Apple is on the app developers’ side.

So what?

The ball is now ofc in Lodsys’ net. This letter doesn’t change anything in terms of Lodsys vs the app developers – Lodsys is still free to pursue legal action against them if it likes, or just to try to get a quick cash settlement from them. BUT, if that legal action were to go ahead, two things have now changed:

(1) The app developer can just adopt Apple’s legal arguments against Lodsys; and

(2) More importantly, if Lodsys was to take legal action against app developers there is a stronger possibility that Apple would join in on the app developers’ side (though that is far from clear).

This doesn’t really change the wider issues with software patents…

If Lodsys does now back down, it would largely be because Apple has demonstrated the weakness of Lodsys’ position – which is good for the affected app developers.

But what happens the next time someone comes along with a better software patent – perhaps one that hasn’t been licensed by Apple or one of the other mobile manufacturers? Or maybe one games company starts sending cease and desist letters to its rivals based on a patent it has just been awarded? In other words, I don’t think we’ve seen the last of software patent controversies in the mobile or games worlds just yet…

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Apple v Amazon over the ‘App Store’

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Last week news broke that Apple is taking legal action against Amazon over the latter’s forthcoming opening of its “Appstore for Android“.  Apple argued it constituted trade mark infringement of its well known iOS “App Store“.

I spoke with Pocketgamer.biz about what all this means – here’s the article reproduced below:

“Apple’s move to block Amazon’s use of the ‘Appstore’ name on the day before it launched was an aggressive move, even in the context of the ongoing battle between Apple and Microsoft over the App Store moniker.

On a legal basis, however, Apple isn’t looking for a quick win over its newfound rival.  The attempt to protect the ‘App Store’ name is the kind of tussle that has the potential to roll on for some time to come.
That’s the view of Olswang LLP lawyer Jas Purewal who told PocketGamer.biz he thinks the case could become a complex legal battle.

Take the stand

“This lawsuit is really about the application of trade mark law to the fast changing world of mobile purchases,” Purewall, who is also the writer behind games law blog Gamer/Law, says.

“Briefly, a trade mark is a sign – like a logo or brand name – which a business uses so that its customers can recognise its goods and services and distinguish them from the goods and services of a competitor.

“Trademarks can generate significant brand value and, therefore, protecting them is important. In this case, Apple is suing Amazon on the basis that Amazon’s Appstore will ‘confuse and mislead customers’ – for example, that customers may buy an app from the Amazon App Store thinking that it is in fact created, sponsored or approved by Apple.

“In effect, Apple wants to stop Amazon from benefiting from the value which Apple says it has built up in that phrase via its iOS App Store.”
Problem precedent

Apple’s case against Amazon, however, is complicated by its ongoing efforts to register its App Store trademark with the USPTO.

“There are potential difficulties for Apple in pursuing this case,” explains Purewal.

“Firstly, Apple does not itself yet have a fully registered trade mark over ‘App Store’ – in fact, Apple’s trade mark application is reportedly being contested by Microsoft on the basis that it is too generic to be protectable – which has the potential to turn this into a three-way battle between Microsoft, Apple and Amazon.

“This is by no means fatal to Apple’s case against Amazon, but it may complicate it. Secondly, Amazon will no doubt argue that there is no likelihood of confusion between the Amazon Appstore and the Apple App Store because they will presumably run on completely different devices.

“Further details of the lawsuit are not clear at the moment, but it is possible that Apple may seek a temporary ban on Amazon rolling out its Appstore until a full trial of the lawsuit – though Amazon would no doubt contest this.

“If the case does reach trial in due course, the court will then need to decide upon the relative merits of Apple’s and Amazon’s cases and rule whether or not Amazon may proceed with its Appstore plans.”

You can read more about trade marks and games here: demystifying trademarks and games.



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LG vs Sony: court battle over PS3 seizures due tomorrow

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UPDATE: Sony was able to lift apparently all restrictions against it and LG was ordered to pay it substantial damages.  More here.

Sony and LG are set to go to court in Holland tomorrow over a court order apparently obtained last week by LG for the seizure of reportedly tens of thousands of PlayStation 3s.  This appears to be a separate strand to the patents battle ongoing between Sony and LG over the PlayStation 3 among other devices.

Florian Mueller over at Foss Patents has all the details.  Here’s my view of the highlights:

  • It seems that, at around the same time that LG secured a temporary ban on the importation of PS3s into Holland, it also obtained a seizure order over PS3s stores in a Sony warehouse in Holland.  As I said, media reports suggest tens of thousands of PS3s may have been seized.
  • Sony was not given advance notice of the seizure (apparently because the judge ruled Sony the opportunity to move its PlayStations out of that warehouse ahead of confiscation).  However, Sony was given permission to appeal against the seizure – which is now set for a court hearing in The Hague tomorrow (10th March).
  • Sony will of course be wanting to have that seizure order overturned, whereas LG will want to extend it – much like the position regarding the temporary importation ban (no news on that, by the way).
  • The court documents filed in support of this seizure order set out interesting details about LG’s explanation why this litigation started up in the first place. 
  • Basically, it seems that LG and Sony were in discussions late last year about giving each other licences over technology underlying a whole range of products.  LG wanted to give Sony only a licence over Bluray technology (and leave the other products for another licence(s), but Sony wanted a licence to cover everything. 
  • LG says that, when these discussions failed, Sony then launched legal action in the US and LG responded with its own legal action in Europe and the US.

So, what’s the current state of play?

(1) Sony and LG will go to court tomorrow over the seizure order – watch this space for more.  In the meantime, bear in mind that the seizure order does not mean conclusively that LG was right and Sony was wrong.  It simply means that the judge felt that LG’s case is sufficiently convincing to warrant the seizure ahead of a full court hearing – but the judge won’t have been able to come to a full decision yet.
(2) The temporary ban on importing the PS3 into Holland is still in place but I suspect is soon to run out – which will mean another court hearing soon.
(3) What impact will the seizure of the PS3s have on PS3 stocks in Europe?  Will it change analysts’ assessments that stocks won’t run low anytime soon?
(4) If in due course a judge finds that LG was wrong to have obtained the importation ban or the PS3 seizures, it would in principle be liable to pay potentially substantial compensation to Sony.
(4) We’ve yet to hear Sony’s side of the story…

Again, go to Foss Patents for all the details.  I’ll write another update when I hear more.


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