I can't shake my gut feeling that OUYA is going to be bigger than even they realize right now.  Full disclosure: do I know some of the principals there? Yes.  Have I heard their thoughts on this?  Briefly.  Do I have inside information?  NO!  Simply put, the potential for OUYA as a competitive Android game platform is significant, regardless of whether they incorporate their chipsets into other manufacturer's television sets, get purchased by someone else, or carve their own path.  I am optimistic that OUYA, in some way, shape, or form, is here for the long haul, which is why I was psyched when I received my official OUYA username the other day.  In case you're looking for me online, here's where you can find me:

On November 1, 2012, Wildcat filed suit against Wizards of the Coast for patent infringement of U.S. Pat. No. 6,200,216, entitled "Electronic Trading Card." The '216 patent was filed March 6, 1995, and issued on March 13, 2001. The independent claims of the patent are included below.  We will watch this case and keep you updated of any significant developments.

1. A system for the implementation of a trading card metaphor, comprising:
a disassociated computer program, consisting of a plurality of electronic trading cards (ETCs), each ETC corresponding to a disassociated computer code segment and having an electronic format that supports card scarcity and card authenticity.

15. A method for implementing a trading card metaphor in an electronic trading card (ETC), comprising the steps of:
assembling and personalizing at least one ETCs, each ETC corresponding to a disassociated computer code segment and having an electronic format that supports card scarcity and card authenticity;
choosing a format and setting for said ETC;
optionally adding a personalized multimedia character to said ETC;
optionally selecting a game to be incorporated into said ETC;
optionally adding a secret message, linked to said game, to said ETC; and
optionally adding links to other ETCs.

16. A method for implementing a trading card metaphor in an electronic trading card (ETC), comprising the steps of:
entering a multiroom virtual environment where each room in said environment requires a specific set of ETCs to complete an ETC collection, each ETC corresponding to a disassociated computer code segment and having an electronic format that supports card scarcity and card authenticity;
finding a missing ETC;
completing said set; and
reward when said set is completed.

19. A method for implementing a trading card metaphor in an electronic trading card (ETC), comprising the steps of:
solving a puzzle having increasing levels of difficulty using a series of linked electronic trading cards (ETCs), each ETC corresponding to a disassociated computer code segment and having an electronic format that supports card scarcity and card authenticity; and
reproducing a personalized certificate of completion when, and only when, each level of said puzzle is solved, said certificate of completion optionally including clues to solve a next level of said puzzle.

21. A method for the implementing a trading card metaphor, comprising the steps of:
a dissociating a computer program, consisting of a plurality of electronic trading cards (ETCs), each ETC corresponding to a disassociated computer code segment and having an electronic format that supports card scarcity and card authenticity.

38. A system for the implementation of a trading card metaphor, comprising:
a disassociated computer program, consisting of a plurality of electronic trading cards (ETCs), each ETC corresponding to a disassociated computer code segment and having an electronic format that supports card scarcity and card authenticity; said ETC including a display system, a housing, software, a battery, a CPU, and an LCD display.

Previous Post 1: Initial post regarding this case

Previous Post 2: Intermediate decision re summary judgment

UPDATE October 23, 2012:

In view of the summary judgment decision, the parties have reached a settlement:

10/23/2012

30

STIPULATION AND PROPOSED ORDER of Dismissal by parties. (Lorbiecki, Mark) (Entered: 10/23/2012)

Terms are undisclosed.  This case is over.

A startup, IP Checkups, is looking to unmask the entities behind Intellectual Ventures ("IV"). IV owns a portfolio of 30,000+ patents. IP Checkups is looking to create a publicly-accessible database of patents owned by Intellectual Ventures and its shell companies. They also want to share their investigation with curious observers, using its online IV Thicket case files to show how they unearth Intellectual Ventures’ patent portfolio. They are crowdfunding at the moment at http://www.indiegogo.com/iv-thicket.

The project has received some press already, e.g., in the Wall Street Journal and VentureBeat:
http://blogs.wsj.com/digits/2012/10/15/noir-detective-treatment-planned-for-patent-giant/
http://venturebeat.com/2012/10/15/crowdfunding-campaign-launches-to-expose-thousands-of-hidden-patents/

Will be interesting to see what comes of this...

Nothing like a little comic relief, video game style...

Check out the Skyrim version of Gangnam Style.

As we previously reported, Spry Fox sued 6waves for copyright infringement back in January 2012.  Spry Fox developed Triple Town, and 6waves developed the suspiciously similar Yeti Town.  Well we have a significant update.  6waves filed a motion to dismiss, asking the court to throw out the lawsuit based on 6waves' belief that they only copied unprotectable material from Spry Fox.  While the court agreed in part, the court ultimately ruled that Spry Fox alleged enough in its complaint that, if proven at trial, could demonstrate that 6waves committed copyright infringement.  For any game designer, we strongly recommend you read the DECISION for yourself, as it contains some good fodder regarding what is protectable versus what is not.

For example, the court states:

Copyright does not protect the ideas underlying a work or other aspects that are beyond the scope of the Copyright Act. By statute, copyright does not “extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” 17 U.S.C. § 102(b). Several judicial doctrines ensure that copyright does not extend to the ideas underlying a work.... At this stage of the litigation, where the court has only the complaint, its description of Triple Town, and the accompanying screen shot images, the court concludes that the idea underlying Triple Town is that of a hierarchical matching game, one in which players create objects that are higher in the hierarchy by matching three objects that are lower in the hierarchy. Frustrating the player’s efforts are antagonist objects; aiding the player are objects that destroy unwanted or ill-placed objects. Spry Fox’s copyright gives it no monopoly over this idea. 6Waves (or anyone else) is free to create a video game based on the same idea.

 However, the court goes on to analyze similarities of expression between Triple Town and Yeti Town, concluding that there are at least enough similarities to go to trial.  Is this over? No.  There is a long road ahead.  But this Order at least gives us some guidance regarding what is protectable versus what is not.  For example, the court also states:

Although the court need not decide the issue in this motion, it appears that some elements of Triple Town are not protectable because they are functional. Much as copyright does not protect ideas, it does not protect the “functional process[es]” that are “indispensable to the idea” inherent in a game. Apple, 35 F.3d at 1444 (considering functional ideas in computer operating system user interface). For example, Spry Fox’s choice of a six-by-six game grid is not likely an expressive choice. A grid that is too small would make the game trivial; a grid that is too large would make it pointless. There is perhaps a range of functionally appropriate choices for the dimensions of the game grid; perhaps a seven-by-seven grid, or a six-by-seven grid, would serve the game’s purposes just as well. But it would extend copyright protection beyond its proper scope to afford protection to a functionally-dictated choice like this one.

This is interesting because, in the past, the owners of the Tetris copyright have argued that the size of their grid was an expressive choice. and couldn't be copied.  At the time, however, the court did not appear to give much consideration to the functional considerations of grid size in the Tetris context.  Perhaps it's time to revisit that notion...

While the above examples illustrate the portions of Triple Town that are NOT protected, the court's decision also points to some areas of expression that were copied, e.g., the progression of grass, bushes, trees, huts, houses, etc. in Triple Town to saplings, trees, tents, shacks, etc., in Yeti Town.  The similarity of playing board environments, and the use of wild animals as blocking characters, to name a few.  Did 6waves go too far?  Time will tell.

One other interesting issue is how this might affect the EA v. Zynga case.  I am sure that the attorneys for both sides are reviewing this decision in excruciating detail trying to figure out how this affects their case.

Stay tuned!

Its that time of year again, when the ABA votes for best 100 blogs/blawgs.  Please vote for the Patent Arcade here: http://www.abajournal.com/blawgs/blawg100_submit/.

A recent Second Circuit case has held contract claims with promises to pay are not preempted by the Copyright Act.  This case was decided under circumstances involving idea theft in television shows, however this may easily be applied to the video game industry.  (For example, one may recall the Bissoon-Dath case holding that the God of War franchise did not infringe upon the copyrights of plaintiffs.)  Plaintiffs alleged they had sent their works to agents working with Sony in 2002 and that this had coincided with the development of the game that began 3 years prior to its release in 2005.  This case was decided under the copyright law regime, however plaintiffs may choose to seek relief for idea theft under state law. Studios in turn may seek to dismiss these claims through preemption by the Copyright Act.  Section 301 of the Copyright Act states that:

On and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.  17 U.S.C. §301 (a)

What this means is that claims brought under state law will be preempted by the Copyright Act if the claim is under the subject matter of the Copyright Act and if the rights sought to be protected are protected by the Copyright Act.  Many courts follow the "extra element" test to determine preemption.  This case is described by the Second Circuit as follows: "'But if an extra element is required instead of or in addition to the acts of reproduction, performance, distribution or display, in order to constitute a state-created cause of action,' there is no preemption."  In other words, a claim is not preempted by the Copyright Act if it includes one extra element that qualitatively differentiates it from a copyright claim.  

Studios may seek to combat a myriad of idea theft claims, often brought as state law contract claims, through copyright preemption.  Studios may seek to have such suits thrown out based on copyright preemption and may later argue that allegedly stolen ideas are not protected by copyright law.

In Forest Park Pictures v. Universal Television Network Inc, a decision recently issued on June 26, 2012, the Second Circuit reversed a decision holding contract claims preempted by the Copyright Act.  In this case, Hayden and Tove Christensen under Forest Park Pictures brought suit against Universal Television Network for breach of implied contract.  Forest Park claimed that they had pitched an idea for a television show to a USA Television Network programming executive named Alex Sepiol.  The concept of the television series focused around a character who "after being expelled from the medical community for treating  patients who could not pay, moved to Malibu, California, and became a “concierge” doctor to the rich and famous."  Forest Park sent a written series treatment to Sepiol and later met with him in person to pitch the idea for the show, later alleging “that it was standard in the entertainment industry for ideas to be pitched with the expectation of compensation in the event of use.”  In 2009, USA produced and aired "Royal Pains,"  a show "in which a doctor, after being expelled from the medical community for treating patients who could not pay, became a concierge doctor to the rich and famous in the Hamptons."  The district court dismissed Forest Park's claim against Universal for breach of implied contract, holding that it was preempted by the Copyright Act.

On appeal, the Second Circuit sought to answer two questions: "first, whether Forest Park’s breach of implied contract claim is preempted by the Copyright Act; and second, if such a claim is not preempted, whether Forest Park adequately pleaded a claim under state law."  

In answering the first question, the Second Circuit found that a claim for breach of contract including a promise to pay is not preempted by the Copyright Act.  The court applied the "extra element" test and found that a contract claim and copyright infringement claim have several qualitative differences between them.  The court named three qualitative differences between the two types of claims: That the "Copyright Act does not provide an express right for the copyright owner to receive payment for the use of a work,"  that "a plaintiff suing for failure to pay under a contract must prove extra elements beyond use or copying, including mutual assent and valid consideration," and that "a breach of contract claim asserts rights only against the contractual counterparty, not the public at large."  The court did not address, however, whether all contract claims or contract claims with included promises to pay are protected from preemption by the Copyright Act.  This particular claim against Universal involved a breach of contract claim with promise to pay.  USA was required to pay Forest Park for the use of its idea under the implied contract and this court found that this claim was "qualitatively different from a suit to vindicate a right included in the Copyright Act" and thus protected from preemption by the Copyright Act.
By holding that breach of contract claims are not preempted by the Copyright Act, studios may now face more costly litigation from suits alleging idea theft. These suits are not uncommon, especially when a given TV show or movie becomes popular.  This may have similar implications for studios in the video game industry.  Using the Bissoon-Dath case as an example, video game studios are not immune to idea theft suits and studios may be precluded from using the preemption defense in some situations.  

As more information on this case becomes available, this post will be updated. 

Beiswenger may have dismissed his suit against Ubisoft in the Assassin's Creed dispute, but the battle is not over yet.  In the original case, John Beiswenger sued Ubisoft for copyright infringement, alleging that Ubisoft copied elements of his book, "Link," in the Assassin's Creed franchise.  In a statement made to Gamasutra, a Ubisoft representative said "The plaintiff in the case alleging copyright infringement by Ubisoft has dropped his claim, without settlement.  Ubisoft believes this suit was frivolous and without merit, and is seeking a ruling to prevent future related claims."  The complaint that Ubisoft filed alleges Beiswenger attempted to protect elements of his work that are not able to receive protection under copyright law.  The complaint continues, "A declaration is necessary to enable Ubisoft to continue to develop and market creative content under the Assassin's Creed brand free from the cloud that Beiswenger's meritless claims have placed over Ubisoft's right to do so."

Mojang, the studio responsible for creating the game Minecraft, has been targeted in a recent patent infringement suit by Uniloc USA and Uniloc Luxembourg. In its complaint, Uniloc alleges that Mojang infringed upon its Patent No.6,857,067 entitled " “SYSTEM AND METHOD FOR PREVENTING UNAUTHORIZED ACCESS TO ELECTRONIC DATA.”  Mojang allegedly infringed Uniloc's patent through making its Android applications available over mobile devices that  "require communication with a server to perform a license check to prevent the unauthorized use of said application[s]."

According to Uniloc's complaint, "said applications" include Mojang's most famous game, "Mindcraft."  Yes, "Mindcraft."  Uniloc was most likely referring to "Minecraft," the critically acclaimed game that has sold more than 4 million copies since 2009.  Mojang's Notch released a copy of the complaint over twitter, also stating that: "Unfortunately for them, they're suing us over a software patent. If needed, I will throw piles of money at making sure they don't get a cent."

This article will be updated when more information becomes available to us.

A settlement has finally been reached in the lengthy battle over Electronic Arts' football video games.  In 2008, plaintiffs sued Electronic Arts alleging that Electronic Arts violated several antitrust and restraint of trade laws by entering into exclusive licensing agreements with the NFL, NFL Players Association, AFL, NCAA, CLC, and ESPN.  Through these licensing agreements, the plaintiffs alleged that Electronic Arts excluded competitors from entering the football video game market and was able to inflate prices due to its monopoly in violation of several antitrust and fair trade laws including California's Cartwright Act, Cal. Bus. & Prof. Code Sec. 16720, et seq., California's unfair Compettiion Law, Cal. Bus. & Prof. Code Sec. 17200, et seq., and the federal Sherman Act, 15 U.S.C. Sec. 2.  Plaintiffs claimed that Electronic Arts entered into exclusive licensing agreements as a response to competition from Take-Two Interactive Software, Inc. that offered discount pricing.  In December 2009, Plaintiffs filled a motion to certify the class that was granted by Chief Judge Walker who certified a nationwide class that includes "[a]ll persons in the United States who purchased Electronic Arts' Madden NFL, NCAA or Arena Football League brand interactive football software, excluding software for mobile devices...with a release date of January 1, 2005."

To give you an idea of how extensive this case became, Class Counsel analyzed and reviewed more than 2 million pages of documents produced by Electronic Arts and third parties and took 22 depositions, and responded to 1,295 requests for admission during discovery.  Experts were brought in by both parties who  produced "two lengthy reports involving economic analyses of the parties' claims and defenses" exploring such topics as the economic implications of Electronic Arts' exclusive licenses.  During this discovery period, Plaintiffs and Defendants participated in the first of two mediations, however no agreement was made.  During the second mediation that took place on May 4, 2012, the parties reached this settlement agreement.  As part of the settlement agreement, Electronic Arts agreed to pay $27 million into a settlement fund.  In addition, Electronic Arts can no longer enter or renew an exclusive trademark license with the AFL for 5 years, nor can Electronic Arts renew an exclusive collegiate football trademark license with the CLC that is set to expire in 2014.  Part of this settlement agreement also prohibits Electronic Arts from entering any new exclusive trademark license with the NCAA, CLC, or NCAA member institution covered by the exclusive license for "a period of 5 years thereafter."  The agreement also allows counsel for plaintiffs to request fees up to 30 percent of the fund not exceeding $2,000,000, and that Electronic Arts would not "oppose a request for attorney's fees and costs within these limits."

For Class Members seeking to get compensation out of the Net Settlement Fund (the amount left over in the fund after other costs have been deducted), they can expect payments according to the type of video game purchased.  For example, after filing a claim form, a class member who purchased a Sixth Generation Title is entitled to a cash payment of "up to $6.79 per unit purchased, up to a maximum of eight units ($54.32)."  Comparatively, a purchaser of a Seventh Generation Title is only entitled to $1.95 per unit up to $15.60 for 8 units.  If the Net Settlement Fund does run out, then the parties will identify other Sixth Generation purchasers who have not filed a claim form through addresses that they had provided to Electronic Arts.

If you are seeking more information on this case or the settlement agreement, you can visit www.easportslitigation.com.

In October of 2009, Blizzard brought suit against Alyson Reeves for operating a private server for the popular MMORPG, "World of Warcraft."  Usually, a player buys the WoW game software and pays a monthly subscription fee to use the service.  The copyrighted software, or "game client," allows the user to access the game and will only connect to authorized servers.  Likewise, the server software is copyrighted by Blizzard and will only recognize authorized game clients.  Before being able to access the game, users must also agree to Blizzard's End User's License Agreement and Terms of Use. After agreeing to both contracts, the user must finally pass Blizzard's anti-piracy system that authenticates the user's game client before allowing access to the game content.

In its complaint, Blizzard alleged that Reeves had violated its copyrights, circumvented copyright protection systems, and engaged in unfair competition among other claims.  Blizzard alleged that Reeves violated its copyrights through the operation of a website called "scapegaming."  Users of scapegaming's services did not have to pay a subscription fee and the service allowed users to access unauthorized servers that emulated Blizzard's own. Furthermore, scapegaming allowed pirated or unauthorized game clients to access its servers since it did not use an anti-piracy system.  Blizzard alleged that scapegaming achieved this by reverse engineering code taken from Blizzard's game client and servers.  Users were able to access WoW content through these servers and could make donations to scapegaming to keep its servers operational.  Between July 22, 2007, and September 26, 2009, Reeves received approximately $3,052,339 from donations and transactions through Paypal's "shopping cart."

After the initiation of this lawsuit, Reeves failed to appear and did not respond to the complaint.  Blizzard filed a motion for default judgement that was granted on August 10, 2010.  Blizzard was awarded  $88,594,539 in damages:  $3,052,339 in disgorged profits, $85,478,600 in statutory damages, and $63,600 in attorneys fees.  The statutory damages appear suspect, and could be overturned on appeal, but in view of the default judgment it doesn't appeal likely that will happen.

Courthouse News has recently reported that ProCloud Media Invest AB has brought a suit against Paramount Pictures Corporation for breach of contract and unjust enrichment when Paramount allegedly walked away from an agreement between the two companies.  ProCloud is suing for $10 million dollars, claiming that it had an agreement with Paramount for the exclusive right to develop video games for the media giant.  ProCloud claimed that it paid a $500,000 license fee for the rights to develop video games based off of Paramount movies on two occasions: once as part of the original agreement, and again when this agreement was amended.  The head of Paramount Digital Entertainment was fired, however, after the agreement was amended, and the Digital Entertainment division was shut down.  ProCloud claimed that since Paramount had changed its organizational structure, it has been difficult to speak to anyone knowledgeable of the agreement and ProCloud has been unable to fulfill its part of the agreement.  Regardless, ProCloud alleges that "Paramount unequivocally indicated it did not intend to continue with the deal."

More information will be added as it becomes available to us.

In March this year, Swedish Minecraft developer Mojang and Zenimax/Bethesda Softworks settled a lawsuit over the trademark "Scrolls."  Mojang had filed a trademark registration for this mark on May 17, 2011, intending for it to be used as the title of Mojang's latest game.  Mojang's founder Marcus "Notch" Persson revealed through twitter that he had received a letter from Zenimax/Bethesda alleging that the name "Scrolls" infringed upon Bethesda's trademarks for The Elder Scrolls.  Meanwhile, The USPTO issued a letter on September 13th, 2011, that refused the trademark, stating that it was likely to be confused with The Elder Scrolls trademarks: "The examining attorney refuses registration under Trademark Act Section 2(d), 15 U.S.C. §1052(d), because the applicant’s mark, when used on or in connection with the identified goods and services, so resembles the marks in U.S. Registration Nos. 2634683, 2861127, 3375520, 3421731 and 3584564 (THE ELDER SCROLLS) and 4010219 (SCROLLS) as to be likely to cause confusion, to cause mistake, or to deceive."  Zenimax/Bethesda ended up filing suit against Mojang on September 27, 2011, in Swedish court.

In this high profile case, trademark issues were highlighted by individuals on both sides of the fence.  In his blog, Perrson stated "The implication that you could own the right to all individual words within a trademark is also a bit scary. We looked things up and realized they didn’t have much of a case, but we still took it seriously. Nothing about Scrolls is meant to in any way derive from or allude to their games."  As reported by Kotaku, Vice president of Bethesda Pete Hines explained that   "This is a business matter based on how trademark law works and it will continue to be dealt with by lawyers who understand it, not by me or our developers...Nobody here enjoys being forced into this. Hopefully it will all be resolved soon."  What both Perrson and Hines are alluding to are the nuances in Trademark law.  Trademark infringement can occur if a company uses a mark that would cause confusion, mistake, or deception regarding another mark.  Furthermore, if a mark holder does not act to protect his trademark, his mark may become weakened or he may lose rights over the mark.

Case Update: May 2012


Following a settlement with Game Trailers out of court, John Beiswenger has voluntarily dismissed his lawsuit against Ubisoft for copyright infringement regarding the Assasin's Creed series.  The author filed for voluntary dismissal without prejudice on May 29, leaving the door open for him to reinstate the charges against Ubisoft at a later date.  Beiswenger's lawyer, Kelley Clements, stated in a recent press release that "My client's decision to exercise his right to voluntarily dismiss the action, without prejudice, in no way diminishes his stalwart conviction in the merit of his claims against Ubisoft. He is unwavering in his belief that many key components of the Assassin's Creed video game franchise infringe on many key components of his novel, Link."

Beiswenger has decided to drop his lawsuit against Ubisoft at this time in order to focus his attentions elsewhere.  According to his official statement, "I filed the Complaint and Motion for Preliminary Injunction in federal court because I believe authors should vigorously defend their rights in their creative works; otherwise, the laws protecting them simply have no purpose.  Regrettably, the resources required to defend those rights are unavailable to many individual creators. As a result, rampant infringement is occurring with impunity."  This news comes just in time for the October 30, 2012, release of Ubisoft's next title in the franchise, Assassin's Creed III.  Stay tuned, this is not the end of the story.

Original Post:


John Beiswenger has sued a whole slew of Ubisoft entities for copyright infringement regarding Ubisoft's Assassin's Creed franchise. Mr. Beiswenger is the author of the book "Link", which has been sold on Amazon.com for a while. The lawsuit is John L. Beiswenger v. Ubisoft Entertainment et al., court docket 1:12-cv-00717-CCC, Middle District of Pennsylvania, filed Tuesday, April 17, 2012.

Evony, LLC is a company that develops, publishes, and operates the game "Evony," a massively multiplayer online real-time strategy game.  This game requires no subscription fee and instead, users can buy items for the game using real money.  To gain access to the game, users must register for an account that allows the Evony client game code, or game client, to be played online.  This game client should only work with Evony servers authorized by Evony's system before the user can gain access to the game. Users must also agree to the Terms of Use that prohibits access to the servers by unauthorized game clients and prohibits reverse engineering of the game.  Evony claimed that the defendant operated a website ("www.xandiumstudios.net") where he published an unauthorized copy of the "Evony" game.  According to the complaint, defendant allegedly operated an independent server, copied the game client, and published a version of the game titled "Evony Second Opinion."  Evony brought suit against Holland alleging copyright infringement, infringement of trademark, infringement of trade dress, and breach of contract among other claims. Evony further asserted that the website operated by the defendants was “devoted to cheating, hacking, and publishing unauthorized copies of the Evony Game using the EVONY trademark and Trade Dress.”

Evony filed its verified complaint on January 21, 2011.  Holland failed to return and answer within 21 days after service of the summons.  On February 22, 2011, Evony filed a motion for default judgment.  The judge granted this motion on March 31, 2011 and awarded Evony $300,000 in statutory damages.  Whether Evony ever collects that money is another matter entirely...

A recent decision coming from the Southern District of New York raises important implications about the usage of trademarks without permission in artistic works.  While this case concerns the usage of unauthorized trademarks in film, the reasoning may be applied to video games as "artistic works."  Electronic Arts is engaged in a similar legal battle with Textron over its usage of helicopters in Battlefield 3.  Electronic Arts' First Amendment defense is comparable to that of Warner Brothers in a case with film as the medium instead of a video game.

In Louis Vuitton Mallatier S.A. v. Warner Brothers Entertainment Inc., the court declared that Warner Brothers did not infringe upon Louis Vuitton's trademarks when it used a knock-off Louis Vuitton bag in "The Hangover: Part II."  Warner Brothers admitted that it had used a knockoff bag from Diophy, a company that makes knock-off bags that imitate the Louis Vuitton Toile monogram, however claimed that it was protected by the First Amendment and filed for a motion to dismiss.  In the contested scene of the film, the main characters are walking through an airport.  One of the characters, Alan, carries the knock-off bag while a porter transports several luggage pieces behind him.  As the characters sit down, Alan puts the knock-off bag on a chair between him and "Stu," another main character in the film.  Stu moves the bag and Alan quips, "Careful that is ... that is a Lewis Vuitton."

As emphasized by the court's opinion, it is important to distinguish what Louis Vuitton was actually claiming in this suit.  In this case, Louis Vuitton was suing over the usage a third party's product that allegedly infringed upon its trademarks.  Unlike the Hyundai case decided in Louis Vuitton's favor earlier this year, the bag company did not claim that Warner Brothers misled the audience to believe that Louis Vuitton sponsored or was affiliated with the film.  Likewise, Louis Vuitton did not protest the usage of its trademarks in the film or the reference to its name.  Instead, the company alleged that the usage of the Diophy bag would confuse the audience into believing that the bag was a Louis Vuitton product and that Louis Vuitton "sponsored or approved of  Warner Bros.' use and misrepresentation of the infringing Diophy [b]ag as a genuine product of Louis Vuitton in The Hangover: Part II."  In its complaint, Louis Vuitton further asserted that the use of the Diophy bag "is likely to blur the distinctiveness of the LVM Marks" and "tarnish the LVM Marks by associating Louis Vuitton with the poor quality and shoddy reputation of the cheap products bearing the Knock-Off Monogram Design.”

Judge Carter cited Rogers v. Grimaldi in his analysis of Warner Bros.' claim of First Amendment protection.  Under Rogers, artistic works are given protection from the Lanham Act when they include an unauthorized use of a trademark when the usage is "(1) “artistically relevant” to the work and (2) not “explicitly misleading” as to the source or content of the work."  875 F.2d at 999. The court determined that Warner Bros.' usage of the bag was "artistically relevant" to the film since it played a role in defining Alan's personality and relationship with other characters in the movie.  According to the opinion, the usage of the bag "add[ed] to the image of Alan as a socially inept and comically misinformed character."

In the court's analysis of whether the usage of the Diophy bag was "explicitly misleading," Judge Carter brought up the purpose of the Lanham Act and in what scenarios it can be used to limit freedom of expression.  That is, the Lanham Act protects against trademark uses that “dupe[] consumers into buying a product they mistakenly believe is sponsored by the trademark owner.”  In this case, Louis Vuitton did not claim that Warner Brothers misled the audience into believing that it sponsored or was otherwise affiliated with the film.  The Judge continued that even if Louis Vuitton did establish a valid claim of confusion, it would still fail because the likelihood of confusion was "not plausible, let alone 'particularly compelling.'"  The Judge noted that it was unlikely that any person in the audience could tell that the bag in the movie was a knock-off.  Regarding Louis Vuitton's claims that the audience would believe the Diophy bag to be an authentic Louis Vuitton bag based off of what Alan said in the movie, Judge Carter held that the statements made by Alan could not be attributed to the views of the film producer.  He continued by stating that any misrepresentation made by Alan "assumes that the fictional Alan character knew that his bag was a knock-off; otherwise, he would simply be (innocently) misinformed about the origin of his bag."  Thus, Judge Carter determined that there was no likelihood of confusion when the fictional character Alan claimed that the Diophy bag was a Louis Vuitton product in the film.

Since Warner Brothers's usage of the Diophy bag was protected by the First Amendment under Rogers, Judge Carter granted the film producer's motion to dismiss.

Despite Warner Brother's victory over Louis Vuitton, using trademarks without permission in an artistic work is risky business.  For example, Louis Vuitton successfully brought Lanham charges against Hyundai for using its marks in a "luxury" themed commercial.  During the 2010 Superbowl, Hyundai aired an advertisement that included a one second shot of a basketball with a pattern resembling Louis Vuitton's trademarked toile monogram.  The court found that Louis Vuitton had established blurring of its trademark according to six factors that answer “whether an association, arising from the similarity of subject marks, ‘impairs the distinctiveness of the famous mark.’”  The court rejected Hyundai's Fair Use and First Amendment defenses and granted Louis Vuitton's motion for summary judgment.  Contrast this case to Caterpillar Inc. v. Walt Disney Co.  In this case, Caterpillar sued Disney for trademark infringement and dilution for using its bulldozers and trademarks in the movie "George of the Jungle 2."  In this suit, the judge found that Caterpillar in the film was unlikely to succeed in its trademark dilution and unfair competition claims.  In his analysis, the judge asked the question "For example, action movies frequently feature automobiles in a variety of situations. Is the mere appearance of a Ford Taurus in a garden variety car chase scene sufficient by itself to constitute unfair competition?"  He concluded that, in regards to Caterpillar, Caterpillar was unlikely to prove unfair competition because "It does not appear to the Court that an intent to free ride on the fame of Caterpillar's trademarks to spur the sales and awareness for Defendants' George 2 movie is present here."

The usage of trademarks without permission in film is analogous to the usage in video games.  Using real life products and brands in video games may be desirable for game developers to add to the realism or appeal of the digital worlds that they create.  For example, Electronic Arts is engaged in a similar legal battle with Textron over the usage of helicopters in Battlefield 3.  In this case, Textron has claimed trademark infringement and false designation of origin under the Lanham Act, unfair competition and misappropriation, and injury to trademarks.  Electronic Arts believes that its usage is expressive, and therefor protected by the 1st Amendment.  In instances like this, the video game developer's use of a trademark or product without permission opens the door to more realistic and compelling universes, however the trademark owner may wish to be compensated for its product's role in the game.  For example, Electronic Arts paid Textron for a license to use its property for the previous two Battlefield games.  After all, being able to control the trademarked helicopters will surely add to the marketing value of the game.  Will Electronic Arts be able to prevail using a similar argument to Warner Brothers or will the court consider the usage to be commercially motivated?

Given the disparity between the aforementioned decisions, it appears that cases such as these are very much fact based.  However, when using trademarks or products without asking permission, an important distinction should be made between artistic works and works where usage of the mark is commercially motivated.  According to Rogers v. Grimaldi, unauthorized use of a trademark is protected from the Lanham Act if it is artistically relevant and does not mislead the audience as to the source of the trademark.  Thus, the usage of a product in a video game may be protected under Rogers and under the First Amendment if it satisfies these two requirements.  If the usage of the trademark in a video game is deemed to be commercially motivated or "intends to associate with the mark to exploit the mark’s popularity and good will," however, protection may not be granted since the usage would fall outside of an artistic work.  It is important to note, however, that this threshold is very low according to Judge Carter, who stated in the Warner Brother's case that "The threshold for 'artistic relevance' is purposely low and will be satisfied unless the use 'has no artistic relevance to the underlying work whatsoever.'"  In describing the threshold for artistic relevance, Judge Carter quoted another video game case that used the First Amendment defense to ward off trademark infringement charges: E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc.  In this case, the owner of the Los Angeles strip club "Play Pen Gentlemen's Club" sued Rock Star for its inclusion of a strip club named "Pig Pen" in the Grand Theft Auto: San Andreas" game.  The court rejected ESS's trademark infringement claim, stating that the game was protected by the First Amendment.  In this case, the court decided that the inclusion of a strip club similar to "Play Pen" was artistically relevant, stating that "the level of relevance merely must be above zero."

The case law on this subject seems to indicate that the usage of trademarks without permission in a video game is allowed if certain requirements are met.  That is, the usage will be protected by the First Amendment if it is "(1) “artistically relevant” to the work and (2) not “explicitly misleading” as to the source or content of the work."  875 F.2d at 999. Fulfilling these requirements does not grant immunity from being sued, however, and the individual circumstances of the usage will be taken into account by the court.  It is also important to consider whether or not the usage is being made with commercial motivation or in a way that takes advantage of the trademark's popularity and good will. Whether or not Electronic Arts succeeds with its First Amendment claims will be highly dependent upon the above factors, and we eagerly look forward to the court's decision.

In April of 2011, New World brought suit against Zoo for violation of a licensing agreement between the two companies.  Law360 reported that under this licensing agreement, New World granted Zoo the rights to produce more than 60 games it owned in exchange for a royalty payment.  New World alleged that Zoo had not provided it with any of the royalty accounting and thus the licensing agreement had been breached.  Moreover, New World believed that Zoo owed a minimum royalty payment of around $1.9 million.  When Zoo refused to pay the minimum royalty payment, New World ended the licensing agreement between them.  After this termination, New World determined that Zoo had not ceased the use of its trademarks.  In its defense, Zoo alleged that 65 out of 69 games covered by the licensing could not be sold or produced since they were not complete.  Zoo further claimed that it had already spent $500,000 on finishing the games so that it could sell them.  Besides, Zoo alleged that it had already paid royalties to New World in the amount of $500,000.

The application period for new generic top level domains (which will supplement existing gTLDs like “.com”) closed on May 30, 2012. On June 13, 2012, the Internet Corporation for Assigned Names and Numbers (ICANN), the Internet’s primary governing body, announced the applied-for gTLDs and their applicants--view the list here.

In summary, 1930 new gTLD applications were received. Due to the unexpectedly large number of applications received, ICANN has decided to evaluate the applications in 500-lot batches.

The list’s publication triggers the start of the formal objection period to applications. Objections can be based on a wide variety of grounds, including:

• Legal Rights: the applied-for gTLD violates the objector’s intellectual property rights;
• String Confusion: the applied-for gTLD is too similar to an existing top level domain or another applied-for or existing gTLD (objector must be a gTLD applicant or existing TLD operator);
• Limited Public Interest: the applied-for gTLD violates generally accepted international legal norms of morality and public order; and
• Community: substantial opposition to the applied-for gTLD exists within the applied-for gTLD’s targeted community (objector must be an established institution associated with a clearly defined community).

Generally speaking, the objection process is an inter partes process adjudicated by arbitration centers. In addition to objections, public comments regarding applications can now be submitted. The current version of the official applicant guidebook for the entire new gTLD process is available here.

Banner & Witcoff’s Richard Stockton will summarize and suggest next steps in the gTLD process in a podcast prepared in connection with the American Marketing Association. The podcast will be made available on Banner & Witcoff’s website on June 21. In the interim, please feel free to direct questions to Richard (rstockton@bannerwitcoff.com) or other Banner & Witcoff attorneys.

Summary:

The ‘192 patent describes a shooting game system for shooting targets. The system uses a controller for shooting which features a scope and a trigger. A photoelectric converter converts light which shot an electric signal towards the television, thus allowing a player to shoot a target on the screen. Whenever a player hits a target, the target is changed and reacted in whatever way it was designed to do after being struck.  This is one of the older "light gun" patents around.

Abstract:

A video game set (1) displays a sighting mark on a television receiver (4). A player shoots this sighting mark by a shooting scope (5). At this time, the shift between a coordinate position of the sighting mark and a coordinate position which is shot is operated by the video game set (1) and is stored as a correction value. When the player shoots a target in a game mode, the coordinate position which is shot is corrected on the basis of the correction value stored in the video game set (1).

Illustrative Claim:

1. A shooting game system for shooting a target displayed on a raster scan type display in a position spaced apart from the display to play a shooting game, comprising:

game processing apparatus being connected to said display for performing processing for the shooting game;

a shooting scope, having a light receiving axis, used in a position spaced apart from said display for shooting the target displayed on said display; and

a sight attached on said shooting scope and defining a sighting axis having a predetermined angle with respect to the light receiving axis of said shooting scope, whereby said sighting axis intersects the light receiving axis of said shooting scope on said display when the distance between said shooting scope and said display is a predetermined distance;

said shooting scope comprising;

a trigger signal generator for generating a trigger signal in response to an operation performed by a player,

a photoelectric converter for converting light from a position which is shot on said display into an electric signal which is synchronized with raster scanning of said display, and

a control signal transmitter for transmitting by optical space communication a control signal based on the electric signal outputted from said photoelectric converting means to said game processing apparatus in response to said trigger signal from said trigger signal generator,

said game processing apparatus comprising

a control signal receiver for receiving the control signal transmitted from said control signal transmitter,

shot coordinate position determining means for detecting a coordinate position which is shot by said shooting scope on said display on the basis of a raster coordinate position on said display at the time of receiving of said control signal by said control signal receiver,

reference mark display controlling means for displaying a reference mark in a predetermined fixed position on said display before starting the game,

an error detector for operating, when said reference mark is shot by said shooting scope, to detect an error between the coordinate position detected by said shot coordinate position detecting means and a coordinate position of said reference mark,

an error storing device for storing the error detected by said error detector,

a target display controller for displaying the target on said display while the game is played,

correcting means for correcting, when the target on said display is shot by said shooting scope, the relative positional relationship between a coordinate position of the target and the coordinate position detected by said shot coordinate position detecting means on the basis of the error stored in said error storing device, and

hit judging means for making a hit determination in a case where said target is shot by said shooting scope on the basis of said relative positional relationship after being corrected by said correcting means.

Bethesda and Interplay reached a settlement agreement regarding the "Fallout" trademark back in the January of 2012.  The origins of this dispute trace back to September 8, 2009, when Bethesda filed a complaint alleging that Interplay had, among other things, participated in trademark infringement, unfair competition, false designation of origin, and breach of contract.  Interplay filed its answer in October of 2009 along with counterclaims that include breach of contract, breach of the implied covenant of good faith and fair dealing, and tortious interference with prospective economic advantage.

When the "Fallout" mark was first issued on August 8, 1998, Interplay had ownership and developed, manufactured, and distributed three games using the mark: "Fallout," "Fallout 2," and "Fallout Tactics: Brotherhood of Steel."   Interplay entered an Exclusive Licensing Agreement with Bethesda during June 2004 which gave Bethesda the exclusive license rights "to future uses of the Fallout property and its associated trademark."  On April 4th of 2007, Bethesda and Interplay entered an Asset Purchase Agreement ("APA") and a Trademark License Agreement ("TLA").  Under the APA, Bethesda could purchase the rights to the Fallout mark for $5,750,000 while Interplay retained its exclusive right to manufacture, have manufactured, sell, and distribute the preexisting Fallout games.  The TLA allowed Interplay to create a Massively Multiplayer Online Game around the Fallout franchise under two conditions: 1) Interplay must begin the "full-scale development of its FALLOUT MMOG" and 2) Interplay must have "secured financing for the FALLOUT MMOG in an amount no less than $30,000,000" by April of 2009.  If Interplay failed to meet these two conditions, the TLA provided that Interplay would have to forfeit its license rights.  When Interplay refused to relinquish its licensing rights and insisted on creating a Fallout MMOG through Masthead Studios, Bethesda initiated this lawsuit.

In the January of this year, Bethesda and Interplay finally reached a settlement in this trademark dispute.  Bethesda now owns the rights to create a Fallout MMOG and Interplay has forfeited any right to Fallout intellectual property.  Interplay will be allowed, however, to manufacture, sell, and distribute the preexisting Fallout games through 2013.

Case Update: May 2012


After 2 years of legal dispute between Gary Friedrich and Marvel, Marvel filed a counterclaim against Friedrich in December 2010.  Marvel claimed that Friedrich had violated its copyright and trademark ownership when he sold Ghost Rider merchandise.

Both Friedrich and Marvel filed for summary judgment during December of 2011.  Judge Katherine Forrest granted the defendant's motion for summary judgement on the issue of ownership of the Ghost Rider character.  It was determined that Friedrich had no legal ownership of the character since he was first paid to create the work with a check containing language assigning all rights to Marvel.  Furthermore, Friedrich and Marvel had signed a contract in 1978 assigning copyright renewal rights to Marvel.

Regarding Marvel's counterclaim against Friedrich, the court determined that Friedrich had infringed Marvel's copyright and he was ordered to pay $17,000 for profits realized from the sale of Ghost Rider merchandise.  Friedrich is also enjoined from future uses of the Ghost Rider character.

Case Update: June 2011
This case has been transferred from the Southern District of Illinois, to the Southern District of New York.

Original Post:

Ghost Rider creator Gary Friedrich has apparently sued a whole host of people, including Take2 Interactive, over his rights in the Ghost Rider character. He claims to have rights to the character since 2001, yet there is a movie, merchandising, video game (that's where Take2 got sucked in), etc.

Sounds like the details are still a little fuzzy, but we'll add this case to our list and keep you posted as we hear more.

In the meantime, read more here.