Developing Concerns : Video Game Development Lawyers & Attorneys: Reed Smith Law Firm: Intellectual Property, Marketing, Promotions & Privacy Law

It's the day after May Day.  And since there's no good way to make a transition from that into some bullet point topics of interest for games companies, let's just get right into it, shall we?

• EA's declaratory judgment against Textron in the lawsuit over the inclusion of Bell helicopters in Battlefield 3 can stay in California.  Sometimes, it pays to move quickly when threatened with a potential lawsuit.
   
• Speaking of lawsuits, if you're involved in a copyright infringement suit and you're seeking a preliminary injunction against an infringer, then you need to be aware that the "presumption of irreparable harm" may no longer be valid (it depends on your jurisdiction).  Instead, you may need to show evidence of irreparable harm (PDF) if you are to prevail on the prelim.
   
• Developing Concern's own Patrick Sweeney was recently interviewed by Ayzenberg for a feature on developing trends in game finance and monetization.  Great read for those who are interested in how games are getting funding and making money in today's games market.
   
• Amazon settles its digital purchase sales tax dispute with Texas.  Amazon will now invest roughly $200 in capital investments in Texas, and will begin collecting sales taxes on digital goods sold to consumers in Texas.  Read our previous coverage of the issue with collecting sales taxes on digital goods.
   
• The US DOJ has indicted 10 individuals for making and selling mod chips that circumvent DRM technologies.  The indictments stem from "Operation Tangled Web," which was launched in 2008.  As GamePolitics points out, the mod chip issue is being considered by the US Copyright Office as an exemption to the DMCA (the law under which the 10 individuals are being prosecuted).  I have no idea whether the DOJ's prosecution of mod chippers will have any impact on the Copyright Office's rulemaking, but whatever the Copyright Office decides it is unlikely to be of much help to those individuals already in the DOJ's sites.
   
• A Pennsylvania man has sued Ubisoft for copyright infringement.  The man claims that Ubisoft's marquee franchise "Assassin's Creed" infringes upon his novel "Link."  The basis of the claim is that both storylines involve the ability to relive ancestral memories.  Although a lot of fact development will need to occur before any final judgment can be rendered for this case, a quick perusal of the complaint indicates that a lot of the "substantial similarity" may stem not from original expression but rather from the ideas of reliving ancestral memories (there's a device that allows you to tap into those memories, while reliving those memories you interact with historical figures, good battles evil, etc.).  If that's the case, the plaintiff may find it difficult to prove copyright infringement because, as we've said a few times here, copyright law does not protect ideas.
  
  In the meantime, however, the plaintiff appears to be on the receiving end of a lot of vitriol from fans of Assassin's Creed.  Sometimes, legal actions have non-legal consequences (a factor that should always be kept in mind when exploring your own legal options).
   
• EMI filed a lawsuit in New York federal court alleging that Def Jam Records owes UMI for making unlicensed use of EMI's music in Def Jam’s new video game, Def Jam Rapstar.

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[This post was written by Drew Boortz and Julya Vekstein, a summer associate in Reed Smith's Washington, DC office]

When does a work made abroad and published on the Internet qualify for protection under US copyright law?  Or, perhaps more importantly, when does such a work not qualify for protection?  That was the focus of the (somewhat) recent case of Kernal Records Oy v. Mosley.  Mosley is the classic boy-meets-song, boy-takes-song, song-owner-sues scenario.  In this case, Finnish recording company, Kernal Records, claimed that producer Timbaland and musician Nelly Furtado copied the sound recording and musical arrangement of "Accidjazzed Evening" and used it in Furtado’s song "Do It." The controversy began with a single YouTube video claiming to show the similarities between songs.  It ended with a determination that the Finnish song was a "US work," and that the case should be thrown out because the record label did not satisfy the requirements for bringing a copyright infringement lawsuit.

We’ve covered copyright issues here before, but to quickly recap: copyright law protects original expression, and grants to authors certain exclusive rights – the rights to copy, sell, distribute, and make derivative works of the original being chief among them. When a work is taken and copied, sold, distributed, etc., without the permission of the author, the exclusive copyrights of the author are "infringed," and that’s when the lawyers come out to play.

Of course, nothing in the law is that simple, and bringing a lawsuit for copyright infringement is subject to a few constraints. One of the most important constraints is the fact that, in order to bring a lawsuit for copyright infringement of a work created in the United States, that work must be registered with the US Copyright Office. Note that this applies to "works created in the US."  Works created outside the US are treated differently. And based on the facts of the Mosley case, it would seem that the requirement to register a song created by a Finnish artist would not apply. However, the court in Mosley applied the requirement to register and, since the song was not in fact registered, the court threw out the case.

How could a song owned by a Finnish record label (and presumably created in Finland) get treated as a "work created in the US?" Well, the answer takes a bit of mental gymnastics, so click through the jump to read on.

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Video games are escapist fair.  They allow us to be soldiers, athletes, anthropomorphic hedgehogs, and just about anything in between.   I have been known, on occasion, to conquer the world, save princesses, win the Masters, and engage in aerial dogfights with 1040's Messerschmidts, all in the course of a single day.  The reason I spend time in these pursuits is that games allow me to add new dimensions and experiences to every day life.  

Yet adding new dimensions to every day life is not limited to just console gaming.  A couple of years ago, alternate reality games (or ARGs) were something of a rage.  I'm sure (hope?) some of you remember I Love Bees, Push, Nevada (Ben Affleck's marriage of television and ARGs), and Lost Ring (McDonald's ARG that tied in with the 2008 Olympics in China).  Then along game the augmented reality apps, which offered new possibilities for looking at the world.  With a simple touch of a button or on-screen icon, augmented reality apps can provide you with a sensory experience unlike what "real" life provides.  Want to know the location of Twitterers surrounding you, or want to use X-ray vision to find a nearby subway station?  There are apps for that. 

Now, Christopher Nolan, director of Inception, has taken augmented reality apps from minigame-saturated or information-heavy offerings to something that can be better described as a sensory-rich experience.  Here is Wired's overview of the Inception app (they do a better job discussing its feature set and potential than I could).  This is definitely an app I will be checking out.

If this were a blog devoted to gaming news, then this would probably be a great post.  But it's not.  This is a legal blog, so we ask legal questions.  Such as this: what liability does the app maker and distributor take on when offering augmented reality apps?  Here's another, why should augmented reality apps be treated any more differently than more traditional game-based apps?

Thoughts and answers after the jump.

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This morning, Attorney General Eric Holder announced the seizure of 82 websites used to traffic and/or sell counterfeit goods - everything from Timberland shoes and clothes to movies and music.  The sites were seized pursuant to 18 U.S.C. 981 and 18 U.S.C. 2323.  A full list of the sites seized is provided by Wired.com.

This crackdown, which was timed to coincide with "Cyber Monday," is part of "Operation Within Out Sites 2.0," and according to the Department of Justice, primarily targeted “online retailers of a diverse array of counterfeit goods, including sports equipment, shoes, handbags, athletic apparel and sunglasses as well as illegal copies of copyrighted DVD boxed sets, music and software.”  Hence the interest to the games community.  After all, piracy is not limited to just golf clubs and MP3's.

One interesting question is whether this seizure was done in response to the Senate Judiciary Committee's recent actions with regard to S.3804, also known as the Combating Online Infringement and Counterfeits Act, or COICA.  COICA sailed with unanimous approval through the Senate Judiciary Committee, and will be placed on the Senate's legislative calendar for the remainder of this session.  However, Senator Ron Wyden (D-Oregon) has threatened to block the legislation, and the bill itself has come under fire for the perceived ability of the US government to censor the internet at large.

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On August 3, 2010, the Senate passed a bill known as "The Copyright Cleanup, Clarification, and Corrections Act of 2010" (S.3689).  This bill provided for a number of technical corrections to the Copyright Act, such as changing the title of Chapter 6 to read "Importation and Exportation" (as opposed to its current "Manufacturing Requirements and Importation."  Of course, a few substantive corrections have been made as well, including clarification that under Section 303(b), distribution of phonorecords (sound recordings) made before 1978 shall constitute a publication of an underlying musical, dramatic, or literary work (currently, the statute's wording is limited to just underlying "musical works," which can create confusion for sound recordings like audiobooks or non-musical plays).

A few days ago - on November 15, 2010 - the House of Representatives passed a version of S.3689 that was very similar to the bill passed by the Senate a few months back.  However, one provision of note that was in the Senate's version did not make it into the version passed by the House.  This provision would have allowed the holder of an exclusive right to a copyrightable work to sublicense that right to another party without the licensor's consent.

To put this into plain English, let's say I'm a studio with a great idea - I'm developing an MMO based on (of all things) developing an MMO (how meta is that!).  I have enough original expression, embodied in enough tangible media, to qualify for copyright protection.  (See our previous posts involving copyright for more on this).  In the process of developing this MMO, I decide to license exclusive publishing rights to Bob's Discount Game Publishing Service (a totally fake entity, as far as I know).  Now Bob's has an exclusive right that is part of the "bundle of rights" that make up copyright.  Can Bob's unilaterally sublicense the publishing rights to another entity without my approval?  What if our publishing agreement did not specify any right to sublicense the publishing rights?

The answer, plus reasons why this may matter to the video game industry, after the jump.

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