I Ain't 'Fraid of No Licensing Deal

Unlike Las Vegas, what hits the Internet often doesn't stay on the Internet. Overnight, such mishaps as a drunken/no underwear wearing night out with Paris Hilton, or videos of an early game build of a 1980's movie classic can become public - very public.

In what is being called "in-game footage of early prototypes on the Xbox 360", Game Developer Zootfly showed what they are doing with the Ghostbusters franchise; without permission. The footage depicts a scene of a Ghostbuster running around NYC with a proton pack, blasting away at translucent baddies. The only problem is that Zootfly currently has no license from the IP owners of the Ghostbuster franchise, meaning they are intentionally infringing on the copyrights.

The developers at Zootfly were quoted as saying: "We hoped the publisher would sort out the IP issue in a jiffy and we'd be recharging proton packs in no time. Unfortunately, they didn't push to untangle the IP hard enough and the whole thing stalled a bit. There's actually no insurmountable problem with getting the IP. It's just that extra mile someone needs to stride to get it." All assumptions aside, since the publisher did not straighten out the whole "IP issue", the IP owners are now in a very interesting position from which to negotiate.

Which brings us to my interest in this whole snafu (other than the fact that it involves ectoplasm, video games and IP). Can the very event that generates an overwhelming buzz for a game, actually impede and possibly kill the project? In one sense, the release of the video prior to the IP being acquired meant that the glimpsers, bloggers and other pundits generated hype that as powerful as any advertising campaign (Snakes on a Plane anyone?). This could be good for the developer b/c it shows that people support the projects' incarnation and would likely buy the product if and when it hits the marketplace.

On the other hand, the IP owners now have a very strong BATNA (best alternative to negotiated agreement) should they choose not to work with this publisher. Here the mistake of not acquiring a license prior to development becomes evident. Since the IP owner now has a gauge as to the potential worth of the license, the video may allow them to jack up the price for the developer to work with it.

Think about it: prior to seeing the video, most of us would have thought Ghostbusters was a so-so idea. Such an announcement likely would have made a mild to warm buzz. But actually seeing the game in action (which looked like a skin for Gears of War at first), we all want to see more (a youtube video is worth a million words).


So where does this leave all parties? Well, should the IP owner not want to deal w/Zootfly, then the developer faces a suit for infringing on the IP. The remedies could include an injunction to cease work on the game, a take down order for all videos and pictures posted to date and possibly damages under 17 USC 504. The damages would most likely be limited to actual damages and profits, or statutory damages not to exceed $30K per infringement (of $150K if plaintiff has to meet a burden of proof at trial).

Given the response to the videos, however, it is more likely that the IP owner would want to exploit the IP with Zootfly. This means that Zootfly will likely have to pay considerably MORE for the license than they would have if the videos & subsequent buzz had never ensued.

As I said before, the BATNA for the IP owner is very good b/c if Zootfly won't pay the asking price, then the IP owner can go with another publisher, and simultaneously sue Zootfly for the infringement. It is really a win/win situation for the IP owner. The only obstacle may be jurisdictions since Zootfly is a Slovenia-based company.

Last point, regardless of outcome, Zootfly is now solidly on everyone's radar. This brings up another issue: efficient breach. Similarly to Luther Campbell of 2LiveCrew in the '90's, acting badly and generating legal problems is sometimes worth it. He sold millions of records that likely wouldn't have sold without all of the hype around the albums obscene content. Could Zootfly have made a similar move here? Time will tell.

Call of Duty - Not So Finest Hour ... A Look At Industry Contracts and the Disputes That Love Them

This is one of the coolest things I have seen yet on video games and the law. My entertainment law mentor Scott Shagin sent me the link to this article on Gamasutra (we love Gamasutra) titled Call of Duty - Finest Hour: the Contract

By clicking the link above, you dear reader, become privy to a bonafide industry contract for one of the BIGGEST games to hit consoles and perhaps one of the finest shooter franchises out there. The contracts became part of the public record after Los Angeles Superior Court judge Tricia Ann Bigelow unsealed them in a pending lawsuit between publisher Activision and developer Spark studio.

As Tom Buscaglia, "game attorney" says: "Contracts such as these are rarely made public because they inevitably contain confidentiality provisions that prohibit the publication of or even talking about their terms. But once the contract was filed as an exhibit in the lawsuit, and then unsealed by the court, the contract became public information."

Thankfully for all of us, we can now get an inside glimpse of what went on in the minds of the attorneys, clients and others who developed this giant. Enjoy!

Dangling the Carrot of Reward Over Our Virtual Heads

One of the key components to making a successful video game is the reward that goes into conquering its many challenges. With the full swing of the Now Generation of gaming XBox Achievement points became a driving force in the creation of games, and a creative challenge for game makers. How do we keep the player motivated? What reward points work best? Why do we play games in the first place? Most importantly for us as IP attorneys, is there anything protected in creating a rewards system? (You betcha!). Check out this article from Gamasutra titled: Rethinking Carrots: A New Method For Measuring What Players Find Most Rewarding and Motivating About Your Game

Copyright Law Is Not Always Hard On Flying Penises

In an article from our good friends at the Video Game Law Blog titled:

Anshe Chung's Husband Drops Lawsuit, Admits It Wasn't Really About Copyright...

From VGL: "Guntram Graef, husband of Ailin Graef, better known as Second Life's real estate mogul Anshe Chung, has withdrawn a complaint filed under the Digital Millenium Copyright against YouTube for copyright infringement, after YouTube allowed clips to be posted of his wife's avatar being attacked by "a barrage of digital flying penises." The, ahem, "attack" was launched by griefers during an appearance by Anshe Chung in CNET's Second Life bureau for an interview. Chung is a controversial figure in Second Life because of her dominance in the real estate market (the Graefs claim over US$1,000,000 in real-life assets arising from the value of their virtual properties, and boast that they currently employ 30 persons full-time in their studio in China to manage Chung's empire) and her omnipresent advertising presence.

Graef told CNET that he withdrew the complaint because "the real issue at hand wasn't at all about copyright," but about the offensive nature of the video and the trauma of seeing his wife's avatar sullied in such a manner. Graef complained that there was no other way to compel YouTube to take down the video clip, and that the DMCA claim was a last resort."

Regardless of what Graef or his lawyers decide to call it, the digital attack likely receives strong protection as an expressive work of fiction, and/or political comment. Good luck getting the offensive argument to work: generally free speech protects even offensive speech

Of course bringing the suit under some other country's law may yield different results, but the chances are that (1) they want to take advantage of the U.S. litigious climate and bank all the money they can & (2) Second Life has a clause in their End User agreement ordering that all claims be litigated in the U.S. (YouTube also). Hence, it was a good decision for the Graefs to drop the suit.

Gamastura Article: Localizing Brands and Licenses

This is a great article for Gamasutra exploring the ramifications of localizing video games based on licences and franchises. It gives a good overview and some practical tips on how to organizat localization, preparation and production:

"The main parameter is IP ownership, as theoretically the owner has the final word on nearly everything. Game localizing is handled in different ways, whether dealing with you own the IP or not. There are quite a few factors and pitfalls that will strongly impact your work, whether your game is based on a license that is yours, the IP is new or well-established, or your game is tied to a movie release (a “movie tie-in” in localization lingo). If you don't own the IP, you might need to seek your licensor’s approval on different items, which obviously bears heavy consequences on your schedule."

Click here to read more...

"Big 3" Facing Port Patent Lawsuit

From PSX Extreme

The bigger "big business" gets, the more lawsuits begin to arise. This time, every member of the "Big 3" is under fire by one party: Fenner Investments based out of Texas. The suit alleges that the three corporations infringed on Fenner's 1998 patent for a "low-voltage port interface."

Apparently, this suit is all about joystick ports, and the plaintiff is seeking damages and an injunction against Sony, Microsoft, and Nintendo. We don't have any further details as of yet, but the patent summary (courtesy of Gamasutra) reads-

"The joystick port interface according the present invention is a low power port which interfaces a typical 5 Volt joystick peripheral device with a lower power computer port. The low-voltage joystick port interface includes a bidirectional buffer circuit and a pulse generator which, together, generate a digital pulse signal, representing a joystick coordinate position, based on an input analog measurement signal."

Patent lawsuits are a dime a dozen, and with all the technological advancements in gaming lately, there could be a whole slew of these obscure suits in the very near future.