Spry Fox and 6Waves have settled their legal dispute over allegations that 6Waves had cloned Spry Fox’s game Triple Town. News of the lawsuit received great attention and no small amount of oppobrium directed at 6Waves. News of the settlement has received similar fanfare. But does this really matter to the wider games or software industry? I don’t think so – not from a purely legal perspective anyway. Continue reading Spry Fox settles with 6Waves – does it matter?
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.)
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.
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.
- 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
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.
This is an opinion post about the need for tech businesses of all kinds to do their part in ensuring that the legal system regulates them fairly, but doesn’t ruin their business.
The genesis of this post comes from this Telegraph article about comments made by Google Executive Chairman Eric Schmidt, which I encourage everyone to read. The article was ostensibly about Google’s views regarding facial recognition databases (which it is against), but it also said this:
“Mr Schmidt, however, warned regulators and legislators against trying to prevent worrying services in such a way that may stifle innovation. “Hopefully the French or any other country won’t pass laws that are so foolish they force Google to not be able to operate in those countries,” he said referring to a French law requiring internet companies to retain unencrypted passwords for a year.
Well-meaning people in government write something which is pretty broad and you have to be careful when you do this kind of regulation,” Mr Scmidt said in answer to a related question. You might affect something and have an unintended consequence. So that is what we are always concerned about”.
It sometimes seems that tech businesses don’t spend much time on thinking about what the legal/tax/regulatory system should be like as part of their business strategy. Instead, this important issue is relegated to the same status as the day to day business legal ‘compliance’ – which can have unfortunate consequences.
As a result, well-meaning governments worldwide over the last decade or so have done a number of things which they think are needed to protect people, but which also stifle innovation or just plain make life hard for tech businesses. Here’s some examples:
Yahoo and the Nazi Memorabilia case: way back in 2000, a French organisation sued Yahoo! for alleged breach of a law against the display or sale of Nazi memorabilia, some items of which was at the time on sale on a Yahoo! auction site. Yahoo! argued (quite sensibly) that it was based in the US and the service was not in any way targeted specifically at France or intended to breach that law. It was just an auction site, over whose contents Yahoo! exerted no control. Yahoo! was still found liable and ordered to take steps to ensure this could never happen again or face a 100,000 Franc fine per day (which, as far as I know, is still running).
Three Strikes: a number of different countries have enacted or are enacting Three Strike type laws (e.g. the Digital Economy Act in the UK). You can debate whether or not they (or any other anti-piracy laws) are a good idea, but it’s clear they impose significant burdens on tech business – principally ISPs – for the benefit of the creative industries. Generally, the ISPs weren’t particularly happy about it (in the UK, two of them even sued the government over it) but they haven’t got much of a choice really.
Street View, Facebook privacy policies, Google Buzz and Sony/PSN: in each of these more recent examples, tech businesses have greatly underestimated the depth of consumer feeling over data protection and privacy issues. It’s just a matter of time before we see governments taking action over this.
Virtual goods: so far, legal developments in virtual goods have been in the East (e.g. here’s what the Vietnamese government said last year) – but with the incredibly rapid rise in the value and importance of virtual goods worldwide, it’s just a matter of time before regulators step in the West as well. As I’ve written about before, I suspect there’s going to be a battle. But I don’t see virtual goods providers doing anything so far to fend off heavy-handed government regulation.
I could go on, but hopefully you get my point – these are tech innovations brought low either by existing laws or because they just didn’t understand the government/legal perspective. All of it was avoidable.
What can you do about it?
There isn’t any magic cure of course – but, at whatever stage your business might be, you still have a stake in shaping how it will be regulated on a range of different fronts: how it should be taxed/incentivised by government, how IP laws should be made fit for their modern usage, how to deal with trade and competition issues – the list goes on.
Here’s some thoughts on what you can do:
Talk with your lawyer – not just about the day to day legal issues that need to be dealt with, but what’s coming up on the horizon and how it could affect you.
Industry events – discuss these issues when you meet your colleagues. Example: if you’re a games business, it’s good to discuss recent business and tech developments, but what about changes to the intellectual property laws that your whole business depends on?
Politics – get your trade association involved, go to governmental events, speak with your local MP, get lobbyists involved if need be – do what you can to influence the debate.
I think now is the best time we’ve had in years for authorities to actually listen to the needs of tech businesses – so let’s make use of it.
This is just a quick personal post to let you know about a change in my circumstances: after three great years at technology law firm Olswang, I’ve decided to move on. So, I’ll shortly be joining Osborne Clarke, a UK law firm with one of (if not the) leading video games and technology law practices (in which, as you’ll know, I have a passing interest!) – so these are pretty exciting times for me.
Anyway. As far as Gamer/Law is concerned, it will continue much as before. In fact, over the next few months you’ll see more content, new features and a new layout, so watch this space…
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