Wednesday, February 25, 2009

LGJ: Piracy and the economy

In the last LGJ, a discussion of Piracy as it relates to the economy.

Read on!

Game::Business::Law Conference Audio/Video Now Available

I was just forwarded a press release (which appears below) notifying me that all of the sessions from the Game::Business::Law Conference are available for download via iTunes, or can be requested on DVD from the Guildhall at SMU. The iTunes U link is:
(requires Apple iTunes be installed, available for free at The iTunes downloads are available at no charge, so enjoy! If you are looking for my portion of the presentation, download the 'Games and Gaming Litigation' segment (Direct Links: Video and Audio).

Press Release

Second Game::Business::Law Summit Slated for January 27-28, 2010 in Dallas at SMU
DVDs and Audio Downloads of 2009 Panel Sessions Now Available at

SMU/Plano-February 23, 2009- The success of this year’s Game:: Business::Law, an international summit on the law and business of video games, has prompted sponsors of the event to begin planning for next year’s event by announcing its conference date of January 27-28 in Dallas.

The event was hosted by SMU Dedman School of Law, The Guildhall at SMU and The Center for American and International Law. A group of approximately 165 game industry leaders, developers, publishers, lawyers and members of the venture capital and financial industry were on hand to discuss in depth the latest business trends and legal issues of the game industry.

“The conference exceeded our expectations,” Dr. Peter Raad, executive director, The Guildhall at SMU, a graduate video game development program, and co-chair of the summit. “It looks like the conference fulfilled a need for the business and legal side of the game industry to get together and take a long, hard and personal look at our future.”

“Attendees came from all across North America and as far away as Asia and Europe. We were glad to see representation from major game publishers such as Activision and EA as well as independent studio business development leaders and their attorneys. In addition, we had good representation from a nationally known research analyst and venture capitalists,” Dr. Raad added.

The Guildhall at SMU has made it possible to download the Game:: Business::Law Summit video and audio through the program’s website at:

On the home page, under Guildhall Journal, are instructions and a link to hear the individual summit’s keynote speakers and panel sessions through SMU’s iTunes U. Alternatively, if you would like to order a complete DVD set of the Game:: Business::Law Summit keynote speakers and panel sessions, there is a link on the home page as well.

Notable speakers at the Game:: Business::Law Summit included:
• Chris Baker, Wired Magazine
• Zach Bishop, Hunton & Williams
• Edward A. Cavazos, Fish & Richardson P.C.
• Roxanne E. Christ, Latham & Watkins
• John W. Crittenden, Cooley Godward Kronish LLP
• Dan Ferguson, Blockdot, Inc.
• J. Holt Foster, III, Thompson & Knight LLP
• Richard Garriott, Astronaut and Game Industry Legend
• Christian S. Genetski, Sonnenschein Nath and Rosenthal LLP
• Dan Hewitt, Entertainment Software Association
• Mike Hogan, GameStop Corporation
• Jason Holtman, Valve
• Zack Karlsson, Sr., NAMCO BANDAI Games America, Inc.
• Michael Klotz, NPD Group
• Mitch Lasky, Benchmark Capital
• David L. McCombs, Haynes and Boone, LLP
• Mark Methenitis, The Vernon Law Group
• Steve Nix, id Software, Inc.
• Xuan-Thao Nguyen, SMU Dedman School of Law
• Joseph Olin, The Academy of Interactive Arts & Sciences
• Patrick Pugh, PricewaterhouseCoopers
• JJ Richards, Microsoft Corporation
• Barry Seaton, Barry C. Seaton, P.C.
• Rob Seaver, Vivox
• Colin A. Sebastian, Lazard Capital Markets
• Greg Short, Electronic Entertainment Design and Research (EEDAR)
• Edward Williams, BMO Capital Markets
• Michael Yatsko, PricewaterhouseCoopers
• Jerry Zhang , Shanda Games

About The Guildhall at SMU:
The Guildhall at Southern Methodist University is the premier graduate video game education program in the US. Many of the school’s founders are industry icons, and classes are taught by industry veterans. In five years, the program has graduated over 250 students and alums have worked at more than 80 video game studios around the world, with several graduates now serving in leadership positions. SMU offers both a Master’s degree and a graduate Professional Certificate of Interactive Technology in Digital Game Development, with specializations in art creation, level design, and software development. For more information, visit

Contact: Ron Jenkins, jenkinsr at, 972.473.3546

Friday, February 20, 2009

The Right to Hyperlink

A case that could have not only impacted the game industry, but every gamer, blogger, and person who ever put any content on the internet, has just been settled. The settlement concerned the use of hyperlinks on the internet, and it's one of those rare cases that had the potential to impact everyone. However, since the gaming crowd tends to be more internet-driven than others, it truly had the potential to impact us. Thankfully, because it settled out of court, there was no legal precedent set. Despite that, the outcome is one that casts a dark cloud over the internet, and it's one that should offend most anyone.

Here's the short version of the facts: A real estate web site posted notices of the sales of certain properties. Those sale notices often listed the purchaser, and in the case of these specific purchases, the purchasers were attorneys with the law firm Jones Day. In those sales posts, BlockShopper linked to the attorney profiles of the purchasers. The purchaser's name was hyperlinked directly to the Jones Day attorney profile. Jones Day sued, alleging that this made it appear as though Jones Day was somehow affiliated with the site or otherwise diluted its trademark. BlockShopper, not having the money to defend a suit like this, settled out of court and removed all such hyperlinks. You can see how absurd this case is, and arguably, I'm violating the same principal by linking to the firm as I did in this very paragraph. No, this isn't a joke, and the original pleadings are available online.

I cannot fathom how this case was not rejected outright, but more importantly how anyone could possibly have come up with this claim in the first place. Text-based links are a cornerstone of the internet. They act like footnotes, allowing someone to reference something without interrupting the natural flow of the text. More importantly, it is obvious when these links move away from the actual site. First, most browsers display the full URL of a hyperlink when it's hovered over, and certainly once it's clicked on. More importantly, the URL is hard coded into the site. The only way it would be possible for consumers to be confused by a hyperlink is if either the URL or the linking site itself attempted to mimic the site that's being linked to. There are, literally, thousands of examples where similar domain names were quashed due to trademark issues because of actual or potential confusion or dilution of the brand -- examples we've discussed previously on LGJ.

This case, though, fails to present any evidence of actual confusion or even the potential for confusion. No average internet user would have been confused by the use of hyperlinks. More importantly, the allegation in the case that there is some unlawful action by means of a "link to web sites owned by others," is absurd. More importantly, the alleged "wrongdoing," that is, listing these employees as Jones Day employees and linking to their profiles, is one of the most clearly defined fair uses in trademark law. Would Nintendo object if an eBay re-sale of a Wii included a link to Nintendo's website? No. Has anyone objected when news sites like Joystiq link to the companies they are reporting on? No. Do I object when people link to my articles? Of course not. There's no content being taken for a copyright claim, and there's no likelyhood of confusion because people understand how links work.

This lawsuit basically alleges the internet shouldn't be allowed to operate. After all, these "links" might confuse people, and linking to things people make available to the public on the internet should be as strictly controlled as possible, right? Of course not. That's why this case was described as a "new entry in the contest for 'grossest abuse of trademark law to suppress speech the plaintiff doesn't like.'" Should this legal precedent have been established, rather than settling out of court, it would potentially bar pretty much everyone from using text-based links in favor of forcing the use of complete URLs throughout normal paragraphs, something that I can only describe as hideous as a writer, blogger, forum user, and internet resident.

Thankfully, a private settlement sets no such precedent, other than demonstrating that people without the resources to fight such suits may be the subject of bullying. I can only imagine that any subsequent such action would be the object of a greater movement by those on the internet with the resources and abilities to pursue a more comprehensive legal strategy. I also can't imagine, though, that many other people would take the position that a hyperlink can be viewed as trademark infringement. I do foresee that, as a result of this action, more disclaimers will clearly state that links to other sites should not imply association with or approval of content, even though this fact is obvious to the overwhelming majority of internet users.

For the time being, at least, we're all still free to link to sites without having the exact format of those hyperlinks dictated to us. I, however, wouldn't assume this issue will just vanish, either. If you thought net neutrality would be a rallying cry for many internet users, I can only imagine the response if the freedom to hyperlink were to be challenged again, and perhaps publicized better.

This site and its content has no association with Jones Day.

Thursday, February 19, 2009

Law of the Game at GDC: Speaking Engagement

I wanted to take a moment to mention that I will be speaking at the Worlds in Motion Summit at GDC 2009. Information about my session, "How to Avoid New Legal Pitfalls in Virtual World Design and Policy," can be found here. As it currently stands, here is the session information:

(306) How to Avoid New Legal Pitfalls in Virtual World Design and Policy
Speaker: Mark Methenitis (Attorney, The Vernon Law Group, PLLC)
Date/Time: Tuesday (March 24, 2009) 3:15pm — 4:00pm
Location (room): Room 132, North Hall
Experience Level: All
Track: Worlds in Motion Summit
Format: 45-minute Lecture

Session Description
There are always new legal pitfalls and challenges emerging in relation to virtual worlds, especially as the field continues to grow. This lecture gives attendees an opportunity to hear from a foremost legal scholar on virtual world legal issues and discuss new areas of concern, including updates on well known cases. The focus of the lecture will be an exploration of recent cases and emerging legal issues involving game and virtual world producers with an emphasis on �lessons learned,� including areas such as user disputes with virtual world owners, intellectual property enforcement, in-world gambling, and privacy concerns. Mark Methenitis will also be open to audience questions about virtual world concepts and design elements that may have unforeseen legal consequences.

Hope to see some of you there! Please feel free to come up and say hi if you're a Law of the Game or LGJ reader.

Tuesday, February 17, 2009

Gold Farming Study

A colleague and fellow Dallas IGDA board member, Myke Sanders, recently forwarded me a data analysis he did on the habits of players who purchase gold from gold farmers. It's a really fascinating bit of data, one that may give developers some revised perspective on how to combat the gold farming issue while continuing to avoid micro-transactions, implementing real money auctions, and/or monetizing the currency. While this isn't an overly legal issue, I still wanted to take an opportunity to comment on the findings. The full piece is available here (PDF).

Myke notes two specific spikes on each graph: There were spikes at single and highly repetitive (12) transactions within the 90 day window of the study. There was also a large spike of people making high value transactions. I would be interested to see a correlated data set of these two, but based on Myke's analysis, there were basically two groups of people: those buying a huge amount of gold once in 90 days, and those who bought almost weekly but for a much smaller sum. He reasons that the first group might be making purchases for a single, say, epic mount or piece of equipment while others might be buying to supply a weekly raid. He goes on to theorize that a loan system might satisfy the former while non-transferable buffs that are a better alternative to disposable equipment might satisfy the latter.

In general, I would tend to agree. It's almost surprising there hasn't been a 'Bank of WarCraft' to date, though I would have to say that it would need to be operated by Blizzard rather than by players (i.e. virtual loan sharks). Of course, Blizzard may need to employ an economist to at least design the system such that we don't end up with an financial meltdown in Azeroth. It would be very easy to over saturate the market with a virtual currency, which would lead to inflation and thereby throw off the balance of the game between the bank and random drops. It would also be interesting if you could actually earn interest on gold deposits. Another alternative might be a virtual credit market, but that gets even more complex. I guess the real questions is whether players want their virtual world to mimic the real world more or not.

The solution for the second group tends to be a little more complex, as it would take likely a pretty good revision to the overall mechanics of the game to get the kinds of buffs being proposed, or at least a major change to the game as it's currently available. Granted, this is not impossible, but I imagine the sudden change in strategy might not go over well with many players (a la the New Game Enhancements in Star Wars Galaxies) and may be better suited as an approach for developers of future games.

As a side note, it will be interesting to see if developers take advantage of the wide latitude granted by the Glider decision in order to go after gold farmers in a similar manner. The recent DMCA applications won't apply, but it is a similar inducement to break the EULA/TOS of most games.

I certainly hope that this will be the first of many studies into actual buying habits of those who utilize the services of gold farmers and even virtual commodity salespeople. While there has been plenty of anecdotal evidence over the years, only actual data like this will provide enough information to actually combat the problem, if your game is designed to avoid such outside monetary influences, by changing certain game design elements to be more in line with the way people want to play. Similarly, if you're looking to start a game that encourages monetization of one sort or another, this is likely a good source of information for your design decisions as well.

Thursday, February 12, 2009

LGJ: Jack Thompson's Utah 'game bill'

The latest LGJ is a more in-depth look at the bill Jack Thompson was behind in Utah and some of its major flaws.

Read on!

In the period of time between my writing that piece and its publication, GamePolitics has published another commentary on the issue. While I don't necessarily disagree with the intent theory posed there, I believe the state would argue (and I'm certain Jack would argue) that by showing a pattern of 'mistakes' based on a series of stings, that the retailer has no intent to follow through on their advertised policy. In the alternative, I could see the argument being made that while most false advertising is a specific intent offense, this type of goodwill based advertising is not given that it's not targeted to a specific event or sale but rather to artificially boost the store's reputation at large. I do think the noted 'fallacy' of tying the advertising to subsequent conduct isn't a fallacy insomuch as it is valid if the court wanted to accept this offense as one of strict liability, which is what it appears the goal of the provision is. This also completely invalidates the concept of intent, as strict liability requires no intent only that the conduct occurred. It would be an interesting new realm, as this would be a sort of self imposed strict liability in that it only applies to the extent the seller represents that they act in this manner.

Regardless of the outcomes of the attempts to invalidate the statute legally, my main objective in my column was to demonstrate the fact that from a practical standpoint, the statute can be completely avoided without much difficulty.

Tuesday, February 10, 2009

Speaking at Dallas IGDA Panel: “START-UPS: ARE THEY WORTH IT?”

Just a note for my Dallas-Ft. Worth area readers:

I will be on the Dallas IGDA panel “START-UPS: ARE THEY WORTH IT?” this coming Wednesday, February 11. The event is at 7 pm at the DeVry campus in Richardson. If you're a Dallas IGDA member, an IGDA member, or just interested in the topic (and possibly becoming an IGDA member), come out an join us.

More information can be found here.

LGJ: More game laws?

This week's LGJ is a survey of a number of proposed game laws, including a new proposal from Jack Thompson.

Read on!