LGJ: The 'Kinect' story, a case study in international trademark trickery

This week's LGJ is about trademarks, international trademarks, and the Kinect.

Read on!

The Xbox Live Class Action

As noted on GameSpot, a number of Texas residents have sued over the Xbox Live holiday outage, for which Microsoft previously apologized and will be offering a free game. The suit apparently asks some $5 million in damages, based on a breach of contract for the service. I have a few thoughts on the matter, which are entirely thoughts and not legal advice (in case anyone is inclined to take them in an improper context).

1. A subscription to Xbox Live, annually, is $50. For 3 months, the going rate is $20, and for a month it's $8. So, the actual value of a month of Xbox Live is somewhere between $8 and $4.17 or so. The service has been down, or at least been acting in a less than satisfactory manner for approximately one month or less.

2. Microsoft has noted, and will be offering, a free live arcade game of some sort to all paying Live members. Assuming the game isn't one everyone has already purchased, or there are multiple options or the like, then the approximate value of the replacement game should be about the same as the loss experienced by the Live users.

3. More importantly, as this is supposedly a breach of contract action, upon review of the Xbox Live Terms of Use, the basic contract that governs Xbox Live, there's not an action to be had on the terms of the agreement if Xbox Live goes down. To quote the agreement:

16. WE MAKE NO WARRANTY
We provide the Service "as-is," "with all faults" and "as available." The Microsoft Parties give no express warranties, guarantees or conditions. You may have additional consumer rights under your local laws that this contract cannot change. To the extent permitted by law, we exclude the implied warranties of merchantability, fitness for a particular purpose, workmanlike effort and non-infringement.

17. LIABILITY LIMITATION; YOUR EXCLUSIVE REMEDY
You can recover from the Microsoft Parties only direct damages up to an amount equal to your Service fee for one month. You cannot recover any other damages, including consequential, lost profits, special, indirect or incidental damages.
This limitation applies to:
-any matter related to the Service,
-any matter related to content (including code) on third party Internet sites, third party programs or third party conduct,
-any matter related to viruses or other disabling features that affect your access to or use of the Service,
-any matter related to incompatibility between the Service and other services, software and hardware,
-any matter related to delays or failures you may have in initiating, conducting or completing any transmissions or transactions in connection with the Service in an accurate or timely manner, and
-claims for breach of contract, breach of warranty, guarantee or condition, strict liability, negligence, or other tort to the extent permitted by applicable law.
It also applies even if:
-this remedy does not fully compensate you for any losses, or fails of its essential purpose; or
-Microsoft knew or should have known about the possibility of damages.
Some states do not allow the exclusion or limitation of incidental or consequential damages, so the above limitation or exclusion may not apply to you. They also may not apply to you because your province or country may not allow the exclusion or limitation of incidental, consequential or other damages.

In short, the service is provided "as-is," and any damages are limited to the value of one month of service. Whether a court will allow payment in the form of, say, additional time on Xbox Live or a free game is yet to be seen, but I would imagine that, given the low per user amount involved, Microsoft's remedy would likely be adequate, especially since the outage was not 100% over the time claimed and not too terribly extensive in the grand scheme of things.

This is by no means to say the suit is doomed or without merit. There are a number of possible interpretations under which the plaintiffs could succeed, but in general, this seems similar to so many of the other suits levied against the house that Gates built: mostly for profit or for principle.

[Via Joystiq]

Latest Microsoft Bandwagon Lawsuit: Halo 3 is Defective

Information Week is reporting that a San Diego resident is suing Microsoft and Bungie because Halo 3 "consistently causes the Xbox 360 to crash, freeze, or lock up while the game is being played." I have a number of problems with this allegation and this suit. First and foremost, if Halo 3 were truly "defective" or caused the problems alleged, it seems reasonable to assume that message boards and blogs alike would have been exploding with those types of complaints since October. I dare say it might have broken the internet due to the volume of vocal complaints. However, this is the first time I have seen any such allegation, between the Rooster Teeth forums, Bungie forums, and Xbox.com forums or anywhere on the gaming blog circuit. The suit states: "Although faced with repeated and mounting consumer complaints and inquiries concerning this operational flaw in Halo 3, the defendants have failed to recall Halo 3 or otherwise remedy its failure to function on the Xbox 360." I would love to see a full version of the complaint and/or the "mounting consumer complaints" that are being referenced therein.

This brings me to the second issue. What the plaintiff is describing sounds far more like the well publicized problem with the Xbox 360 console rather than any problem with the game. And if that is the case, then the plaintiff should be taking advantage of the warranty repair process rather than filing a lawsuit. Which brings me to the third and final point, that given the available evidence, this seems like a rather simplistic attempt to profit from the game that set the new single day sales record. I have no problem with using the legal system to remedy actual problems, but at first glance, this suit seems like it's either misplaced blame or a shot in the dark. Once the pleadings make their way onto the internet in full, hopefully some more light will be shed on this case.


[Via Joystiq]

Kids, Cards, and Class Actions: The Xbox Live Lawsuit

Information Week is reporting about a class action lawsuit that resulted from a child using his parent's debit card to register for Xbox Live without permission. The damages are from an overdraft fee a year later when the automatic renewal occurred. While I'm sure many class action attorneys love the idea of being able to take a shot at Microsoft, this case makes me want to roll my eyes because it highlights three major points of personal responsibility, one of which is a legal issue.

First, the two non-legal points: financial responsibility and parental responsibility. Financial responsibility in the US has been a major problem as of late, especially given the debt trends in the country. However, I would assume most people monitor their cash flow to some extent. Accordingly, I find it hard to believe that the parent in this case didn't notice the original Xbox Live charge, and if he did, then it was irresponsible not to address the issue at that time and rather let it renew a year later. Second, the parent should be monitoring the child's activity, and it is ultimately the parent's fault the card was taken and used by the child. The parent should realize this at some point in the transaction before an entire year has elapsed.

This leaves the third issue, the concept of vicarious liability for the actions of your child, which I would consider a spin-off of parental responsibility. While this issue varies from state to state, many states do hold parents responsible for the actions of their children, be that vandalism or online piracy or, in this case, use of a parent's credit card. Given that Microsoft already refunded the charge, the vicarious liability would be limited to the bank overdraft fee, which still stems from the original action of the child. I'm not sure of the vicarious liability laws in the state where this action is being brought, however.

Ultimately, holding a parent liable for $35 in damages caused by the unsupervised action of their child seems like a pretty minimal penalty, and I would hope that the parent would take it as a very inexpensive lesson that they need to keep a closer eye on their child and their wallet. Instead, it has been turned into a class action suit against Microsoft. I can't predict the outcome of the case, but if it were entirely up to me, I would dismiss the suit without question.

[Via Joystiq]

Even More Microsoft Machinima Rule Information: The Revised Rules

Microsoft has finally posted the long promised "Revised" Game Content Usage Rules. They are available here. Now that they are available, what has changed? The short answer is "Not much."

1. The "reverse engineering" rule was re-written to clarify "not normally permitted by the game." As such, things like the Halo 3 Forge or the Halo CE included editors seem to be acceptable.

2. One of the most notable changes is the specific reference to film festivals. You are allowed to enter film festivals, even those with prizes, with machinima. However, this seems like a fine line as there is also a specific note as to contests. Generally, the difference seems to be securing Microsoft's permission for the use.

3. The music/soundtrack/sound effect issue is more resolved, and for Halo fans, Halo 3 is specifically noted as having a usable soundtrack for machinima. This, as I noted in previous articles, falls about in the manner you would expect. The soundtracks are often licensed, and it's more noticeable in some games (i.e. PGR where the tracks are named) than in others. Microsoft seems committed to making notice of this on a game by game basis on the Xbox.com site/forums, which seems like a more reasonable course of action than an outright ban.

4. The phrase "You'll know it when you see it." appears a lot. On the plus side, this leaves a lot of room for interpretation. On the negative side, this leaves a lot of room for interpretation. I suppose we'll find out more as this is enforced, both as to the content and as to "Microsoft approval" on contests.

5. The backstory/lost chapters rule has changed significantly. You are now allowed to tell any story, but if your story contains elements from the game's story arc or surrounding content, then you're providing Microsoft a license to use that content. This is actually a fairly good solution to a real problem, even if it seems as though the machinimist is losing the rights to their "story." There have been many cases (mostly in the film and literary arenas) where someone writes a story, then without knowing, someone else writes a related story. Or, a writer sends a script in, the script is returned and the film company makes a similar movie. This often results in a lawsuit. What Microsoft is trying to avoid is the instance where they already have a story planned, and then one or more machinimists create something similar, Microsoft releases their content and the machinimist sues for infringement. If you want to work in Microsoft's universes, you have to accept that Microsoft may use a similar story, and you're giving up recourse if that happens. On the other hand, if you create something totally original, you've given up nothing.

6. You can let other people build on your work, but it's governed by the same rules as your work. Basically, it's a trickle down license.

7. They actually provide a contact email for people interested in getting a commercial license or for film fesitval sponsors who want approval. The address is gamevids*at*microsoft.com.

All in all, while the changes are not unexpected or dramatic, they are all positive and address many of the concerns of the machinima community.

Related Stories:
Past Microsoft Machinima Rule Coverage
Blizzard Machinima Rule

Microsoft Machinima Rules Updates

Just a few, new key updates:

1. There will soon be a standard contact form for commercial licenses.
2. There has been some mild clarification on reverse engineering, but still nothing definite. In short, if you can extract assets without doing anything illegal or abnormal to the game, it may be fine. A more detailed description is available in the original post.

[Via Machinima for Dummies]

Revised Microsoft Machimima Rules Coming "Soon"

It would seem that more and more people in the blog-o-sphere are joining the Microsoft Content Usage Rules coverage, most recently the EFF and the blog for the book Machinima for Dummies. Both of these parties were privvy to a conference call sometime yesterday in which it was revealed that Microsoft is updating the Content Usage Rules (the "Machinima Rules"), and revised rules should be made public "soon." I personally hope that these rules address some, if not all, of the major issues I have pointed out in my coverage of the Machinima Rules. Once the new rules are posted, I will post a revised analysis.

For more information see my previous coverage of the "Machinima Rules":
Microsoft's New Content Usage Rules: A Small Step for Machinima
New Microsoft Machinima Rules Revisited
Microsoft Machinima Rule Podcast
More Details on the Microsoft Machinima Rule

More Details on the Microsoft Machinima Rule

A Microsoft attorney who goes by DonkeyXote has posted a discussion of the Microsoft Content Usage Rules in his blog. Before reading my continued commentary on the issue, you should probably read his five clarification points.

The clarification process, I can only imagine, will continue for quite some time as new issues continue to pop up from the Machinima community. There are a couple issues that specifically need some attention in the near future.

1. The Universe Expansion Rule
I suppose the real question is how remote is remote enough to be allowed? While I can understand the point DonkeyXote makes in his post, it doesn't speak to the machinimist trying to develop his story. It was a point Laird and I specifically discussed in the recent podcast. For example, I'm certain making use of any of the game's characters is not allowed. But what about a story going on in the same timeframe in another part of the universe? What about a parallel universe? Do you need to re-name all of the character models? Speaking to a more practical level, is the Red vs. Blue storyline remote enough? Sponsors vs. Freeloaders? Halo Unyielding? It would be much easier on the community if a clear framework were applied to this rule.

2. Reverse Engineering/Modifying the Engine Rule
The rule itself is vague enough that "reverse engineering" could involve modifications made using, for example, the tools in Halo CE, Halo 2 Vista, or what appears to be in the Halo 3 Forge. While I would anticipate that this isn't "modifying" the engine, I think the community would feel more comfortable if Microsoft said that these things were allowed.

3. The Contest Rule
Are all contests disallowed? And if so, what is a "contest?" Is entering a video in the YouTube Debates a contest? You do have the basic elements of a "contest," but the prize has no monetary value. A clarification as to the term contest (for example, that it has to have a prize worth $XXX) would likely be quite helpful.


All in all, it is nice to see one of the drafters of the rule address the issue in his blog, and hopefully he will continue to field questions like these as they arise.

Microsoft Machinima Rule Podcast

Last evening, I was invited onto a podcast to discuss Law of the Game and the new Microsoft Machinima Rule. The podcast is ClassyDude's Emporium of Chat, found here.

The podcast's description is here, and a direct download of the episode is here. It's also a news item on Halo.Bungie.Org.

I'd also like to offer one clarification. Toward the end of the podcast, the topic of receiving a letter from Microsoft came up. I think I could have more clearly explained that the person you are being contacted by is probably a lawyer, and having your own representation is highly advisable in regard to contacting Microsoft about any letter they send you. However, if you cannot afford a lawyer, you can choose to contact them yourself, but be aware you are talking to Microsoft (and probably a lawyer) and that you should be apologetic and polite without incriminating yourself.

Anyway, the podcast is a bit lengthy, but if the Microsoft Machinima Rules are of interest to you, then I think you'll enjoy it.

New Microsoft Machinima Rules Revisited

As I've been monitoring the reaction to the new machinima rules Microsoft put out last week, I'm seeing far more negative doom and gloom reactions than I had anticipated. As such, I thought it might be an opportune time to address a few of the more common reactions I've seen to hopefully put the rules in perspective.

1. It was legal before, and now they're punishing us?

Surprisingly enough, what you were doing before was actually illegal. Specifically, it was copyright infringement. This isn't nearly as nebulous as re-skinning an engine, an issue I plan to go further into in the third part of my copyright discussion. You are using the game, exactly as it was, to create a new work. This new work is a derivative work, and creating a derivative work without a license is, in fact, copyright infringement. Microsoft was simply not enforcing their rights to that point in most cases. Simply because something happened does not mean it was legal.

2. This is the end of machinima.

This is by no means the end of machinima. In fact, it makes the whole operation far more clear cut for people who use those Microsoft games in their series. It just means that more creativity will have to go into the series to avoid the "expanding the universe" rule, and more audio production will be involved to make up for the sound effects. Moreover, these rules only apply to the Microsoft games on the list. If this is really an issue, use a different engine. Much like I noted in the SouthPaw Manifesto, if you don't like something, don't buy/use it. Of course, I think you will be hard pressed to find a game developer, at this point in time, who has said "Please use my game to make as many videos as you like, and feel free to profit on them as much as you can."


3. No wonder Rooster Teeth ended Red vs. Blue. They must have had advance notice!

I really can't speak to whether Burnie and crew had advance notice, but I am fairly certain Rooster Teeth has a commercial license. You might have noticed a little one sentence reference to "commercial license" in the guidelines. A license like this will give you the freedom to do whatever you like within the scope of that license. However, there are two caveats: 1. You have
to get a commercial license for your production group; and 2. Microsoft doesn't exactly hand them out like candy. In fact, the only license that has been granted which I know of is the Rooster Teeth license. This does not mean that other licenses won't be granted, but they are not a simple thing to get your hands on. So, if you think you can get one, you need to ask Microsoft, and then negotiate the terms accordingly. Otherwise, you need to follow the new rules.

4. It is impossible to produce anything under these rules, especially without accepting donations.

If this were 2003, I would probably agree with you that the donation requirement essentially negates the concept of online machinima as the distribution costs will likely bankrupt you. However, YouTube at least makes it possible to get your content out there. I think many machinimators need to ask themselves: Am I in this to produce something, or am I in this for the money? If you really want to get your material out there, it can certainly be done. Yes, you have to pony up the money for the hard materials of your hobby: PC upgrades, games, systems. However, the distribution can now be done for free. And the fan community? Free message boards are a dime a dozen.

If you can produce something truly great, the rest will fall into place. I would imagine if Microsoft found some starving machinimist who had a brilliant series running on YouTube or GameTrailers or some other free site, they would be far more likely to grant a commercial license based on the existing content than they would be to just another face in the crowd. Actors, musicians, writers, and other artists don't just become instantly wealthy. They have to work at their art. Just keep that in mind as you're working on your next project, without the donations.

5. This is a huge step backward for machinima.

Actually, this is just the opposite. A game company is finally saying "You can make machinima. You just have to follow some rules." Most developers have remained totally silent on the issue, and there may come a time when they choose to respond with a lawsuit rather than the conditional permission Microsoft chose.



So, the big M has spoken, and the world hasn't ended. Machinima still exists, it's just not as straightforward as it was when it wasn't legal. And once everyone has time to adjust, I'm sure we'll see some great new work. For those of you who had a series that violated the rules, I'm sorry you had to kill off your project. But look at this as an opportunity to make your own work even better, not as a big corporation squashing your dream. In the end, compromises like this are more than likely going to be the future of the medium. I'm personally glad they didn't decide to end machinima with their games altogether.

Microsoft's New Content Usage Rules: A Small Step for Machinima

Microsoft has set forth an interesting new content policy, found here, that seems to be giving the non-profit machinimist a break. In fact, I would go as far as to say this is really what needed to be done, but only addresses half of the issue.

The rules boil down to this: You can use the following games:
-Age of Empires (all versions)
-Flight Simulator (all versions)
-Forza Motorsport (all versions)
-Halo: Combat Evolved, Halo 2, and Halo 3 (when released)
-Kameo
-Perfect Dark Zero
-Project Gotham Racing (all versions)
-Rise of Nations (all versions)
-Shadowrun
-Viva Piñata

to make machinima, provided you put the following disclaimer on it:

[The title of your Item] was created under Microsoft’s “Game Content Usage Rules” using assets from GAMENAME, © Microsoft Corporation.

AND it follows these rules:


"1. You can’t reverse engineer our games to access the assets or otherwise do things that the games don’t normally permit in order to create your Items.
2. You can’t use Game Content to create pornographic or obscene Items, or anything that contains vulgar, racist, hateful, or otherwise objectionable content.
3. You can’t sell or otherwise earn anything from your Items. We will let you have advertising on the page with the Item on it, but that’s it. That means you can’t sell it, post it on a site that requires subscription or other fees, solicit donations of any kind (even by PayPal), use it to enter a contest or sweepstakes, or post it on a page you use to sell other items (even if those other items have nothing to do with Game Content or Microsoft).
4. You can’t use the soundtracks or audio effects from the original game. We often license those from third parties and don’t have the rights to pass them on to you.
5. You can’t infringe anyone’s IP rights in your Item, even if the IP rights being infringed don’t belong to Microsoft. Among other things that means you can’t use any of Microsoft’s trademarked logos or names except in the ways described in the pages linked from www.microsoft.com/trademarks.
6. You can’t add to the game universe or expand on the story told in the game with “lost chapters” or back story or anything like that.
7. You can’t grant anyone the right to build on your creations. We don’t mind if other people help you out, but you have to be clear with them that it’s not you giving permission, it’s us. (That’s how we make sure everyone plays by the same rules.)"

Consider these the 7 Deadly Sins of Microsoft Machinima. In short, they are:
1. Hacking
2. Obscenity
3. Profit
4. Audio
5. Other IP
6. Fanfiction
7. Piggybacking

Presuming you play by these rules, Microsoft will leave you alone. There are, of course, still a few particular issues with this scheme.

1. You essentially have to overwrite the entire audio track. While this is understandable to the extent of background music, many machinimists do use the sound effects. Moreover, dedicated players will know that the effect is different for, say, the ghost in Halo. I estimate that many people may hear from Microsoft on the sound effect issue, if the plan to enforce it.
2. Of course, you're not allowed to make any money, at all, whatsoever. Since many machinimists do have a "donate via paypal" link on their site, the link will need to be removed to comply with the new rules.
3. There's also no stated method for contact for obtaining a commercial license, although they do mention the commercial license. I assume this means that still, for the most part, the answer is "no" on that particular front, unless you happen to be Rooster Teeth Productions.

All in all, I think this is a good move for Microsoft and it would not surprise me to see other companies follow suit. This license generates a positive reaction from the fans and really doesn't hurt the owner of the IP license. Additionally, it retains control over the assets, so issues of the items becoming "public domain" due to use by the consumer should be mitigated. It, unfortunately, doesn't really offer anything for the aspiring professional machinimist.

[Thanks to Overman for the tip.]