Zynga vs Everybody: The Battle Over Online Game Intellectual Property

As we have pointed out before, it is always useful to examine any game industry lawsuits by considering what they say about the business of buying and selling games. The longer you have been playing, the more you know how much things have changed. As the pixel count climbs upwards, so have the costs of development. It used to be possible for a few friends in a basement to build a console-quality title from scratch. Now, if you want to take full advantage of the power of the PS3 or the Xbox360, this is not realistic. Big games are now big business, with million dollar budgets and advertising campaigns to match.

That does not mean that there is no more room for the little guy. One of the biggest cost barriers to market entry is distribution, and the explosion in broadband has whittled down that block, bit by bit. Also, people have gradually figured out that a game does not need to knock your socks off with incredible graphics and effects to be popular. If people enjoy playing it, the design can be a throwback and still do quite well. The smaller development costs make such games ideal for slim, streamlined teams of programmers. And if it becomes a hit, the lower overhead means you could see a profit much quicker. The growing popularity of social media games gives you another venue to reach potential customers.

But where there is opportunity, there is bound to be competition. With competition comes conflict. At the center of many of these conflicts has been Zynga. The company has published popular games for social media and mobile phones, including Mafia Wars, FarmVille, and Words with Friends. Along the way, they have also amassed their fair share of critics, particularly smaller studios who argue that Zynga has ripped off their work. For example, see this graphic depicting similarities between NimbleBit’s Tiny Tower and Zynga’s Dream Heights. Or, this one from Buffalo making similar complaints about Zynga Bingo. But is what Zynga does illegal? Probably not. In this post, we will discuss why that is the case, and examine a pending cases with a stronger potential for success.

To understand the nature of copyright infringement, you first must grasp the difference between an idea and an expression. For example, an idea would be a “game about farming." The expression of that idea would be the game itself, complete with source code and unique graphics. Ideas are not available for copyright protection, but expressions are. (Ideas are protected by patents, which have been used to protect game designs in the past.)To summarize, you could not sue someone simply because they made a “game about farming" after you did, but if their game substantially copied your source code you would have a strong case. Our fearless leader Mark outlined a lot of these issues in interviews with Opposable Thumbs and Industry Gamers, along with a previous post on similarities between Dante’s Inferno and God of War. To put it bluntly, So many of the new social games have created their own “sub-genres" that are narrowly defined such that similarity is inevitable.

It is worth noting that copyright protects traditional board games as well as video games. Board game aficionados have created some legal resources on the issue, but the basic concept is the same. The copyright protects the expression (for example, the design of the board), not the game’s mechanics. Some of you may remember this issue in the Scrabble and Scrabulous dispute from 2008. The issue there was not only the trademark similarity, but the direct copying of the game board itself. Words with Friends avoided this design mistake, and therefore avoided an infringement suit.

Copyright law is far from perfect, but there are reasons to believe this level of protection is appropriate. Copyright is intended to serve twin goals that sometimes are in opposition. Ideally, it will reward creativity by protecting the right for creators to be compensated for their work. At the same time, it will encourage innovation, leaving room for people to experiment using work that has come before as inspiration. A great example of this dichotomy is the mechanical license. Over the history of music, one of best ways for a new artist to reach a large audience is by playing a popular song the listening public already knows, called a “cover". Some of the best covers are not direct reproductions of a classic, but instead add their own quirks and sounds to the mix. For instance, compare Pavement’s original Spit on a Stranger with Nickel Creek’s more folky take.

Where does the mechanical license come into play? Imagine you are a young, developing artist with only a little money in the bank, and the song you want to cover is by an established band. If you tried to negotiate with them directly, the bigger band would be at a huge advantage. They could either refuse to let you use their work, or make the license prohibitively expensive. The mechanical license solves this problem by allowing you to cover a copyrighted song provided you pay a set statutory rate per copy, distributed by the Harry Fox Agency. While there is not a parallel concept in the gamespace, the theme of encouraging innovation crosses into both formats. As Mark pointed out in his interview, if a game company had received intellectual property protection (patent) for the concept of a “platform game" in general, games today would be much less rich and diverse. That basic concept has been repeated (or “covered") millions of times, and the successful titles that borrowed that concept added their own innovations bit by bit.

So where could Zynga be in trouble? First, there is the case of Personalized Media Communications suing for patent infringement. A patent is very different animal, as noted above, protecting an actual idea. The subject of a patent must be the invention of a “new, useful, and non-obvious process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof, and claims that right in a formal patent application." So, for Personalized Media Communications to succeed, they would need to show that Zynga treaded on their inventions that use “control and information signals embedded in electronic media content to generate output for display that is personalized and relevant to a user." We here at Law of the Game love engineers, but we are not engineers. So all we can do at the moment for this particular case is pledge to monitor it and pass along information once it has been translated for our liberal arts educations. Another case was filed by GameTek, LLC, and Mark offered some commentary on this case on Ars Technica, which you may want to take a look at. Generally speaking, as he notes, there will be a question of fact as to whether this patent was filed before the invention was used in the real world, and there is some question about the patent’s validity for this reason. More importantly, as the claims in the patent go beyond the games space, there is a potentially big impact for a victory by GameTek. It presents an interesting situation where the idea of FRAND licensing may be applied outside of the standards setting process based on the potential impact for the whole mobile app ecosystem, not to mention the potential antitrust issues, either of which may lead to compulsory licensing.

Another case that could spell trouble for Zynga is the lawsuit by SocialApps LLC. This involves the enormously popular Farmville game. SocialApps alleges that after releasing their title myFarm on Facebook in November 2008, they were approached the following spring by Zynga, apparently interested in acquiring the intellectual rights and code to their work. As part of the negotiations, SocialApps shared their source code, at which point they claim Zynga became non responsive. Zynga then released Farmville in June of 2009. In early February, the suit survived an attempt by Zynga at dismissal. If it progresses further, Zynga may be faced with the choice of either settling out of court to cut their losses, or letting it go to trial with the risk of extended bad publicity and potentially greater damages. Obviously, taking source code would likely be an infringement, and the facts of this case present that as a real possible finding.

For the indie developers without such complex claims, their best option may be exactly what they have done so far – call attention to the issue through publicity. Zynga has an enormous infrastructure and large audience in their corner, but the internet has had a long history of championing the little guy. You may draw customers your way by pointing out that you believe your work has been borrowed. As long as Zynga does well it would be unrealistic to expect their business model to change. Even in new markets with easy opportunities for entry, it is inevitable to see one party become the 800 lb gorilla. Whether Zynga has actually done anything that could hurt their status remains to be seen.



Zack Bastian is an official contributor to Law of the Game. A third year student at George Washington University Law, Zack works at the Woodrow Wilson Center's Science and Technology Innovation Program and is a member of the American Intellectual Property Law Association. The opinions expressed in his columns are his own. Reach him at: zack[dawt]bastian[aat]gmail[dawt]com.

LGJ: IP Police, Arrest this man, He talks in torrents

This week's LGJ goes into the reported 'Pirate Finder General' in the UK and what could follow in the US.

Read on!

HR1201: Freedom And Innovation Revitalizing U.S. Entrepreneurship Act of 2007 (The Modchip Law)

A good friend of mine has been following the mod chip issue, and reminded me of a bill that I thought had died in Congress. In reality, the Freedom And Innovation Revitalizing U.S. Entrepreneurship Act of 2007 (HR 1201 in the 110th Congress) is in committee. Why is this bill important? It would soften many of the copyright restrictions faced in the electronics world, most notably, it would seemingly take mod chips out of the Digital Millennium Copyright Act's jurisdiction.

There is one important part of this bill.

"(g) Certain Hardware Devices- No person shall be liable for copyright infringement based on the design, manufacture, or distribution of a hardware device or of a component of the device if the device is capable of substantial, commercially significant noninfringing use."

A mod chip would seem to fall into this exception, since, as noted previously, there are noninfringing uses for mod chips. Whether homebrew software and region unlocking, among other uses, are "substantial" and "commercially significant" remains to be seen. However, if this bill passes, then it will undoubtedly be tested in that regard.

Also worth noting was the previous list of allowed uses of circumvention technology, found here. It would seem some in the gaming community have presented game related exemptions, but the proposals have all been denied (see the rejected proposals at the bottom of the document). It would seem that if the relevant game consumer groups can get valid proposals with adequate evidence before the next decision is made, then perhaps circumvention for the purpose of region unlocking may be added to the list. It is at least a possibility.

[Thanks Geonex88]

Customs Raids Mod Chip Makers

According to a news release issues today, ICE (Immigration and Customs Enforcement) has executed warrants related to the manufacture of mod chips that are designed to "allow users to play illegally obtained, pirated and/or counterfeit software on video game consoles including Sony's Playstation 2, Microsoft's XBOX and XBOX 360, and Nintendo's Wii." A gallery of the seized chips can be found here.

As many may know, mod chips that allow users to circumvent the anti-piracy technology in consoles are covered by the anti-circumvention provisions of the Digital Millennium Copyright Act, while a small exemption was allowed for libraries for archival purposes.

The mod chip issue has always been a rather tricky one. On the one hand, mod chips created for the express and limited purpose of circumventing copy protection shouldn't be allowed on the market. When a product has no legal purpose, that is generally the case. On the other hand, there are plenty of legitimate uses for mod chips, and to that end, the ones designed for those purposes, be that homebrew software or improved media capabilities, should be allowed to exist in the stream of commerce. Think of a mod chip like a knife. A knife can be used for the legitimate purpose of cutting open a box or chopping a vegetable, but it can also be used for the illegitimate purpose of stabbing an innocent person. Perhaps the better approach is to target the software pirates rather than the mod chip manufacturers, but by and large, the mod chip makers are probably easier to find.

It will be interesting to see which direction this ongoing "investigation" moves. I can only hope that ICE does not inadvertently harm those who were not participating in targeted software protection circumvention. It seems that the case with some technology related seizures is a lack of understanding of the technology leading to a less than accurate application of the law.