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Earlier in January, the D.C. Court of Appeals put the kabosh on the FCC’s proposed net neutrality rules, which could mean that broadband providers could implement fee structures to access certain sites, rather than have users pay a flat fee to access the whole internet. After all, Comcast started the battle for a neutral net when they started slowing down Internet connections to peer-to-peer networks back in the day.
Why should you care about these things? Consider the following:
Comcast currently has 22 million cable subscribers and about 20 million broadband subscribers. If this deal goes through, that would bring an additional 11 million cable and broadband subscribers on board and would mean that Comcast would be controlling roughly one-third of the entire country’s cable/broadband market.
Cable is a dying animal so Comcast is probably relying on the extra broadband revenue to buoy their bottom-line. Comcast is already experimenting with data-cap and overage charge schemas so it seems plausible that TWComcast could charge the 11 million World of Warcraft players, or the 46 million Xbox Live and Playstation Network customers, a lot more money just to access their networks.
Digital game subscriptions – a 5.9 billion dollar industry in the U.S. alone – would be heavily affected because customers would have to pay additional money for adequate Internet service. All MMO and live player mediums would be severely affected for the same reasons.
Even those of you who have other service providers would not be able to escape the TWComcast empire. Essentially, TWComcast would be the ultimate schoolyard bully, essentially forcing content creators, other Internet companies, and other communications networks who would be directly connecting to TWComcast servers to deliver their services to do as their overlord bids.
Comcast argues that this mega-deal is mutually beneficial because customers would be getting higher quality broadband, Wi-Fi- and an overall superior videogame experience. And this could be true; just ten days after Comcast announced its acquisition of TimeWarner, Netflix signed a deal which would allow it direct access to Comcast’s broadband network rather than delivering its traffic through third parties which further slowed down content delivery.
Whether this deal will serve as industry precedent for all digital streaming services, influencing how Microsoft, Sony, and other major videogame companies that are focusing on streaming services for gamers has yet to be seen, but so far some critics are skeptical of what the implications will be.
Electronic Arts is in trouble again and maybe the video game industry can learn from this. A couple years ago, EA settled a lawsuit alleging that it was overcharging for its football simulation franchises. Now, EA is in trouble again. This past holiday season, the company released the much anticipated, but undoubtedly not ready for primetime, Battlefield 4. This game was riddled with bugs and barely ran on the new Sony PS4.
Most people have always expected first versions of computer applications to have bugs which eventually would be fixed with updates. Historically, this has not been true for console based video games. People expect a working game when it is released. In the past, console based video games had to be perfect right out of the box. The ability to download fixes from the Internet began relatively recently with the currently available consoles. Consequently, publishers have, but only in the past few years, started to fix problems after a game’s release. Previously, for example, if a bug made it onto a Nintendo 64 cartridge or a PS2 CD, it stayed in the game forever. Today, games can be updated over the Internet. Therefore, publishers think games don’t have to be perfect at release. Some games have even been released that require day one patches before they will even play.
EA took a gamble and released Battlefield 4 early because of pressure from its competitor releasing Call of Duty: Ghosts in the same holiday season. EA took this risk realizing that people would complain, however, they must have thought that before the company’s or the Battlefield franchise’s reputation was too badly tarnished, an update would be available and everybody would forgive and forget. This is not what happened.
The law firm Robbins, Geller, Rudman and Dowd filed one of many class action lawsuits against EA and charged them with securities violations. The complaint alleges the hype associated with the launch led investors to drive EA’s stock price up, at which time, EA insiders sold their positions before the stock crashed which the lawsuit claims is a result of the negative reception to the game’s release.
In order for this case to succeed, it would have to be proven that investors relied on EA’s statements. The lawsuit argues that investors were misled by EA’s hype and led to believe that the game would be an overwhelming success. The petitioners would need to prove investors relied so heavily on these predictions that the possibility of failure was unlikely. Because this would be hard to prove, this case is unlikely to succeed.
One thing that EA as well as the rest of the video game industry will learn is to be more careful when making promises of product quality that may prove difficult to keep. Game publishers need to know that if they do release substandard work, not only will they alienate their fans and tarnish the game’s brand, but also they may end up in court defending these types of lawsuits and dealing with additional negative publicity. Additionally investors need to know that when investing in any part of the entertainment industry, they need to understand there is a risk that a release, even one that is a sequel to a successful predecessor and hyped as a blockbuster, may turn out to be a dud.
The gaming community recently put itself in an uproar over of King.com trademarking the word “Candy” in connection with their game “Candy Crush Saga”. King’s CEO stated that the company was simply seeking to protect its IP. Gamers and developers saw the trademarking of the word “Candy” as devious due to it being a commonplace term and should not be trademarked. The gameplay style of “Candy Crush Saga” also added to the controversy since it was a common play style of tile matching, a very popular casual game type. In protest of King’s actions developers came together to create as many games similar to “Candy Crush Saga” called the Candy Jam.
The Issue of Mark Category
Trademarks are categorized into ascending levels of strength: generic, descriptive, suggestive, arbitrary, and fanciful. These categories indicate the manner in which consumers associate the mark with the product. Marks in weaker categories are less likely to gain protection. So the issue here is in what category the mark in question belongs.
It is likely that there is a false-equivalence where the gaming community is associating the mark category with the gameplay of “Candy Crush Saga”. In truth, the gameplay has no effect on what category the mark belongs to.
So how can the mark be categorized? Most comment boards in the gaming community argued that “Candy” is more descriptive or generic, by nature of the word itself and the gameplay of “Candy Crush Saga”. The argument is that “Candy Crush Saga” is a game involving candy tiles so the mark is only descriptive, and without any secondary meaning connecting the product to the mark and the producer it should not be granted protection.
Considering the proliferation of tile-matching games this may be unlikely since it is fairly difficult to differentiate between those games. This, the community argues, would be grounds for not granting King the protection. However, since the gameplay does not have any effect on how a mark is viewed this argument fails.
Rather the mark should be understood as more arbitrary since the product is itself a video game and not a type of sweet treat, which is how “Candy” is commonly understood. “Candy” is a term that isn’t naturally associated with video games and bears no independent relation to video games. This is the position that King would take.
Thus they would be pushing their trademark rights in “Candy Crush Saga”, as in the case against “Candy Casino Slots: Jewels Craze Connect: Big Blast Mania Land” which was shown as “Candy Slots” in the app store, to prevent others from using “Candy” in similar ways as King uses it to prevent consumer confusion. The mark “Candy”, being used arbitrarily, would then be understood to be associated by consumers with King’s Candy Crush Saga product and, therefore, King would have earned the recognition necessary to grant protection.
Why is King Trademarking Candy?
There is certainly a factual question over whether “Candy Slots” infringed King’s trademark of the term “Candy.” The fact that both appear in the app store, which is the same marketing channel, is significant and would lend to the possibility of consumer confusion. What King wants to do is to prevent the possibility of confusion for the sake of their product. And King even pointed out that it will not try to enforce its trademark against everyone who uses “Candy.”
What about Other Developers?
While this seems like a heavy-handed way to protect legal interests this may not ultimately result in any harm to other developers. As indicated the mark has no relation to the particular content of the game so other developers will not be precluded from making any other candy style tile-matching games. They will only be precluded from using the mark “Candy” in a game title, or perhaps even as the name of a development studio, in such a way that would confuse consumers about the products and whether one or the other was King’s product.
So the Candy Slots developer is put between a rock and a hard place. Either take up the dispute against King or abdicate to their demands and make changes so as to prevent both litigation and consumer confusion. As described here Candy Slots’s developer went with the latter. This prevents an extended, expensive dispute between the two developers and neither is prevented from selling their respective products.
Ultimately there is nothing legally wrong with King’s actions. A game developer ought to be able to actively protect its IP. As Jas Purewal points out this is the foundation of trademark enforcement. If King can actively enforce its trademark then it may likely see more success as it can prevent other games from using exceedingly similar marks, which would prevent confusion and further distinguish the game among the many games available. All that’s left now is to see if any oppositions to King’s application are sustained by the United States PTO. The uproar against King’s actions is therefore largely misplaced.
eSports thus far has lived largely in isolation. In the past the big developers usually helped to stage the tournaments for their own games with outside sponsors who are usually limited to tech and gaming gear manufacturers. Recently, however, that seems to be changing. It started late in 2013 with Riot Games announcing the League of Legends (LoL) Challenger Series, an amateur league in comparison to LoL’s LCS (think AAA baseball to the MLB). Part of the announcement revealed one of the league’s sponsors would be Coke Zero. This was huge for eSports and LoL’s developer, Riot Games.
There was little doubt that Riot’s LCS would stick around with its impressive production and viewership statistics. Weekly LCS matches typically garner 100,000-150,000 viewers on average. But there certainly were questions about whether the sport could expand from the foundation of the LCS. Sponsorship is one of the issues here.
Many sponsors are skeptical about stepping into such a new field, which is why most of the sponsors from event to event are usually the same and are almost always tech companies. Sponsors get cold feet because eSports is still a very young field so they would prefer the known quantities that is the MLB, NFL, and cable television. Kevin Lin explained as much during GDC Next 2013.
This is soon to change, however, and in a big way. Coke Zero laid the foundation and now Hollywood should be chomping at the bit to get into eSports. Lionsgate Entertainment has partnered with MLG, a prominent tournament organizer, and Twitch.tv to sponsor the “Ender’s Game on Blu-ray Tournament.” As the title of the event suggests the tournament is meant to help promote the Blu-ray release of “Ender’s Game”, but it is also a way for MLG to reestablish its credibility after it dropped Starcraft II late in 2013 amidst a strong public outcry.
The sponsorship of course can work both ways, with both MLG and Lionsgate effectively reaching each other’s audiences. This is an outstanding marketing opportunity for Lionsgate, as it can directly target the large young, male audience. This article discusses that benefit and also that it may be likely that other studios may follow Lionsgate’s example with similar sponsorships.
eSports’ popularity has only increased the past few years, with Twitch.tv claiming larger and larger audiences since its inception. The Coke Zero and Lionsgate sponsorships show that the upward trend in popularity should not slow down, and other companies might want a piece of the ever-popular eSports pie. It also shows that outside entities who boldly cross into the realm of eSports stand make significant gains in marketing opportunities. Who knows, maybe someday we will see a “SyFy Presents: The Sharknado 2 Straight to DVD Release Starcraft II Tournament.”
On February 6, 2014 the resale of used digital games became more restricted when the Regional Court of Berlin dismissed the Federation of German Consumer Organizations (VZVB) lawsuit against Valve Inc. over provisions in the company’s terms of service that prohibit transferring Steam accounts or selling pre-owned Steam games. According to Carola Elbrecht, VZVB’s project manager for consumer rights in the digital world, “the exchange of games that can only be played online is impossible” because “Valve forbids its users to sell or transfer their accounts to another person.”
In both America and Europe, the first sale doctrine allows lawful owners of physical copies of copyrighted work to otherwise
dispose of those copies in any way they please, including resale. Currently, the majority view is that the first sale doctrine is not triggered by licensing a digitally downloaded copy because the holder of a license does not own the copy that they use.
Because the first sale doctrine requires a transfer or sale, a license does not trigger this protection because a license is merely a promise not to sue someone and is not considered transfer or sale. As such licenses have been viewed as closer to rentals. However, most people would agree with Carola Elbrecht’s argument that it doesn’t make sense why traditional game owners can resell their games whenever they want but owners of downloaded games cannot, even though the users purchase the games like traditional card or board games.
For all those hoping to see at least Europe allow the resale of used digital games, this dismissal must seem at odds with the European Court of Justice’s (ECJ)2012 ruling that trading used software licenses is legal. ECJ held that authors of such software cannot oppose any resale because the right of distribution of a computer program is exhausted by its first sale when sold to the customer for an unlimited amount of time. This ruling should have gotten rid of the distinction between rights for owners of downloaded games and rights of owners of physical games
The ECJ is the highest court in the European Union that interprets EU law. As such, the ECJ’s 2012 decision should have been binding on German Courts because the first sale doctrine is part of the World Intellectual Property Organization (WIPO) Copyright Treaty which has been adopted by Europe. However, according to the law firm of Osborne Clark,
“The reasons for the decision have not yet been published, and VZBV may still have the right to appeal the judgment. Even so, the ruling touches on hot issues of European copyright law and may have ramifications for the games industry and the used games market across all EU jurisdictions.”
The Regional Court of Berlin’s 2014 dismissal of VZVB’s lawsuit will continue to allow copyright owners to use licenses to eviscerate the first sale doctrine because the world is moving towards more and more digital distribution. Currently Germany and the United States have a similar view on the first sale doctrine.
In 2010, the 9th Circuit held that the first sale doctrine does not apply to unauthorized transfers of software user licenses. Because the Supreme Court has refused to hear the appeal, the 9th Circuit’s holding is still good law, and is considered to be the state of the law in the United States. As such, end users of everything from videogames to eBooks will continue to see more and more restrictions that would be completely illegal if they were board games or actual books.
The resale of used digital games might never be as successful as the resale of physical games. Not only has there been an attempt to restrict used games of all types by the publishers, it also remains unclear whether a used digital game market would even be legal in the United States.
Used disc sales are protected in the United States under the longstanding “first sale doctrine,” codified in section 109 of the Copyright Act. But the next generation of consoles is poised to reduce (if not eliminate altogether) the user functionality of pre-owned discs. Microsoft is rumored to be planning implementation of single-use online game activation codes in its next Xbox generation. A Sony executive recently told Eurogamer that used discs will be playable on the next PlayStation console, although further details have not been announced. Read more
Piracy is back: pushing more buttons than ever. In reaction to this button-pushing, Microsoft has promised “vigorous action” against those who illegally downloaded complete copies of Gears of War: Judgment. The pirated versions of GoW: Judgment appeared on popular Internet torrent sites more than a month before the March 19 release date. By the morning of February 19, 2013 Microsoft discovered the leak and that some of those pirates had the not-so brilliant idea to play their illegally obtained copies online.
What does Microsoft mean by “vigorous action”? Microsoft has promised a lifetime account and console bans for people caught playing the game early. To any who would call Microsoft’s bluff on this, it would be wise to look at the history the company has with pirated copies of non-released games. Read more
In the wake of the Sandy Hook Elementary tragedy, Congress has turned its attention to gun control. Where gun violence is involved, we have seen a scramble to pinpoint the exact cause of such tragedies. Like in the cases of Columbine and the Virginia Tech shootings, violent video games have also come under scrutiny by both sides of the aisle as a contributing cause, along with easy access to guns and mental health, in what causes such tragedy. Those who oppose further gun control, like the National Rifle Association, have argued that video games are the sole factor, rather than a contributing factor, to bolster their stance on guns and shift the blame to violent media.
Senator Lamar Alexander (R-TN) has stated, “Video games [are] a bigger problem than guns.” This was his response when asked about his support of universal background checks (in regard to guns) in an interview on MSNBC. Senator Alexander’s rationale: “because video games affect people.” This rationale has yet to be proven. In fact, more research has been proposed in order to find a connection between video games and its “effect on people.” Read more
The game, Counter Strike: Global Offensive, is created by Valve Corporation and uses open source software that allows its users to create their own level, or “scene”, for the game. Diego Liatis and Frederic Denis, independent game designers from Montreal, Canada, spent nine months creating a new scene for the game. The level design was for a major Montreal game competition taking place March 1st, 2nd, and 3rd of this year. Liatis and Denis’s scene was a replica of the Berri-UQAM subway station in Montreal, recreated with the help of the Montreal transit authority. However, close to the completion of his level for the game, Liatis received a cease-and-desist letter from the Montreal transit authority telling him not to publish the scene and that they would pursue legal action if it went public.
The cease and desist letter threatens a lawsuit on two grounds. First, if the design gave away private footage of areas that unable to be seen by a normal commuter using the train, then that footage could possibly be used to cause harm to the station. Second, if the scene violated any intellectual property rights (e.g., copyrights and trademarks) of any company that may be advertising on the trains or in the station itself, then the letter states claims likely to succeed. However, the letter did not come from the company who owned the products in the advertisements. The letter came from the Montreal transit authority so the second grounds of the lawsuit would not apply . There is the possibility of a third issue involving train maps. The trains and train stations in Montreal have maps that are trademarked by the Montreal transit authorities.
All of these claims are weak. A major flaw in the claim that the depiction poses security risks is that the in-game scene does not depict anything a normal commuter is unable to see upon entering the station and thus the scene does not reveal any secrets. Because terrorist threats and activity are a current and vivid issue, a game depicting terrorist and weapons fighting in a known subway station may cause a panic. The panic may stem from commuters feeling that art may one day imitate life and that something terrible could happen in the train station similar to what the game depicts. Regardless, this is a video game and numerous companies depict real world areas in their games. Thus, this scene does not raise unique security risks or topics warranting the ban of a game’s scene.
The intellectual property issues discussed earlier are the stronger claims by the Montreal transit authority. Again, the developers may avoid them if they replace all signs and pictures with fictional maps and signs. Liatis alleges that during the nine months it took to create the level, he was in contact with the Montreal transit authority on the designs. This may be an implied license issue in favor of Liatis. An implied license refers to an unwritten license that permits a party (the licensee) to do something that would normally require the express permission of another party (the licensor). If the Montreal transit authority did help Liatis with his design, were aware of what he was doing, and gave him the impression they were comfortable with the use of the subway for nine months, Liatis may have an implied license. Liatis has not confirmed whether he plans to release his level to public yet.
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