IP Issues Worth Talking About

This week, we're going to close out the legal talk with some informative podcasts that any entertainment business or brand should check out. Each podcast focuses on intellectual property (IP) issues, including copyright, patent, and trademark law, as well as regulations surrounding trade secrets. A nice plus is that they all relate to entertainment software. Really, would it make sense if they didn't?

The first podcast is from attorneys Gordon Firemark and Tamara Bennet and is part of the Entertainment Law Update series of podcasts. I will warn you right now that it is quite lengthy, but still worth listening to if your a judicial scholar or entertainment professional. In this podcast, they cover numerous different cases and issues, with topics ranging from misappropriation of hot news to trademark abandonment. Also, they discuss the case of Brown v. Entertainment Merchants Association (I encourage you to read this opinion; it's long, but incredibly entertaining and informative), which concluded in a ruling that added video games to the list of mediums protected by free speech. That's a big deal, folks. But what really caught my attention was their discussion of the new anti-SLAPP law in Texas. First of all, good for you, Texas! What an anti-SLAPP law does is allow defendants involved in an IP lawsuit relating to freedom of expression to have the case dismissed before incurring hefty attorney fees. While the first amendment should suffice in squashing any litigation pertaining to freedom of expression, it's still always nice to save money!

The next podcast is a Lawyer2Lawyer podcast from attorneys Peter Goplerud and Clay Travis, and focuses on the suit brought against EA Sports and the NCAA by college quarterback Sam Keller in 2009. In this case, Sam Keller decided to sue EA Sports for using college athletes' likenesses in their NCAA video games. It's an interesting argument, because the NCAA has regulations against the exploitation of amateur college athletes for financial gain, yet they advocate EA's exploitation of these same athletes at the same time. At the time of this case, there was a lot of speculation as to how this might impact EA Sports and the NCAA if Keller happened to win the battle. Let's face it; we play these games because they put us in the shoes of some pretty awesome athletes that actually exist. Even the athletes themselves enjoy playing the games for this very reason. So we know that EA Sports would have a much more difficult time selling their games, and the NCAA would have to slap themselves on the wrist for violating their own regulations. More importantly, the colleges would have to begin taking some of the power back from the NCAA, to which they have basically given all control over to in regards to college athleticism. I'll just spoil the case for you right now: it was thrown out on the grounds of transformative fair use (Note the references to freedom of expression and Brown v. EMA in the article by Eriq Gardner). You can actually listen to EA's attorney bringing all of her legal know-how to bear right here.

The final podcast is a Suffolk University podcast with Peter Lando concerning IP issues relating to software. In this podcast, Lando discusses a number of different IP issues pertaining to software innovations, but the issue that really stands out is that of using open source in your source code programming. Essentially, this means trouble for any business intending to protect their software with patents, copyrights, or as trade secrets. The lesson to be learned here: be wary with works for hire, because some source code programmers may come with a mental vault full of open source code. This will essentially render your source code outside the realm of protection, even if a good portion of it is original. On the plus side, the USPTO is shifting towards a software mindset, and bigger companies are even going as far as patenting snippets of software code to streamline source code programming and gain an advantage over the competition. Also, he briefly discusses the case of Aristocrat Technologies, and the means-plus-function procedure that has been implemented to make it more difficult to secure patents with software.

There they are. I encourage you to check them out, because they are jam-packed with tips for business success to those with the right ears to hear them. For anyone interested in starting a business that will employ copyright, patent, and trademark issues (such as myself), they can be incredibly helpful. Case in point: I'm currently working on a business plan for a talent management agency that will employ proprietary software as a part of the management process. Lando's discussion about software and intellectual property, particularly the section pertaining to source code, was extremely informative for me. And, of course, the freedom of expression issues brought up by the Entertainment Law Update and Lawyer2Lawyer podcasts convinced me to delve into the first amendment and gain a more appropriate understanding of it. Honestly, I think everyone should be well versed with the Bill of Rights by now. I hope these legal talks have been helpful!

Activision-Blizzard: The Big Leagues of Intellectual Property Protection

While the entertainment software industry may seem like so much fun and games to the average consumer, there is a harsh truth underneath all of the fantasy and excitement: developers and publishers of these video games spend ridiculous amounts of time and money to protect their intellectual property, and they do so with ruthless precision. Activision-Blizzard represents a fine example of just how far a company will go to protect their copyrighted materials, patented methods, brand trademarks, and trade secrets.

Allow me to introduce you to Michael Donnelly and MDY Industries, LLC. Michael Donnelly invented a clever automation bot (robot) for World of Warcraft (WoW) called “Glider” that allowed subscribers to bypass the tedious requirement of actually playing the game during earlier levels, allowing them to come back after a meal or a movie to a character that has increased in levels and gathered a load of loot. Evidently, the demand for having your game play itself for you was higher than one might anticipate, as Donnelly went on to form MDY Industries, LLC, and licensed over 120,000 Glider bots to WoW subscribers.

IP Check: Who owns World of Warcraft?

If you said “Blizzard,” then you were right! As it turns out, Blizzard was not too happy about Donnelly essentially making a living off of their proprietary software. After dealing with hundreds of thousands of complaints from non-glider subscribers of WoW, Blizzard modified created Warden, software designed to detect hackers and bots, and also began focusing on the finer details of the WoW EULA, including the section that restricts licensees from using “cheats, automation software (bots), hacks, mods or any other unauthorized third-party software designed to modify the World of Warcraft experience.” 

IP Lesson: When you purchase a video game, you’re only purchasing the license to play it; you are not the owner.

In the end, MDY Industries kicked the proverbial bucket by circumventing these countermeasures and allowing licensees to do so as well. Donnelly and MDY Industries, LLC were found liable under the Digital Millenium Copyright Act, and the Glider and MDY Industries, LLC are officially no more. You can get the details here. I would say good riddance, but I think this particular attempt at protecting intellectual property may have been slightly trivial. However, preserving the intended experience for subscribers and ensuring that everyone is playing by the same rules is vital to keeping customers happy.

For a less trivial application of IP protection, we should turn to more recent events. Enter Defense of the Ancients, an Action/RTS mod for a Warcraft III expansion. Technically, DotA is in the public domain, as it was created and modified by a variety of authors, and is free to play. Now Valve is regularly updating their most recent creation, DotA 2 . But, wait! Wasn’t DotA a mod for a Warcraft III expansion?

IP Check: Who owns Warcraft III?

You can stop answering; these questions are rhetorical. Activision-Blizzard is pretty miffed about Valve’s presumptuous claim on the DotA trademark. While it’s true that Activision-Blizzard does not own the rights to DotA, the public at large has already made a direct connection between the two. It is on these grounds that the game publishing giant is filing its suit. I’m not sure how this will turn out, but I can see why Activision-Blizzard would be upset about the situation. While it’s not like them to make assumptions about intellectual property, who would have thought that another publisher would ever attempt to claim a trademark so largely associated with Activision-Blizzard?

IP Lesson: You cannot register a trademark that is already directly associated with an existing company. For instance, if I wanted to launch a new portable gaming device and call it an iBox, Microsoft and Apple would both be sure to take notice due to the i- prefix (commonly associated with Apple products) and the –Box suffix (commonly associated in video games with Microsoft’s Xbox console).

Of course, even a company as awesome as Activision-Blizzard can miss an obscure patent here and there. Did you know that Walker Digital, LLC has over 500 patents and patent applications in its IP portfolio? One of those patents is essentially a method for allowing game players to collaborate online for tournament play. Jay Walker believes that Activision-Blizzard and Zynga have both infringed upon that patent by releasing various games that allowed players to gather online for tournament play. It’s all in this document, if you want to read about it.

This scenario reminds me of those cyber squatters who register a domain name containing an unregistered trademark before the company using the trademark has the opportunity to register the domain name. Confusing, right? These cyber squatters then turn around and sell the domain name to the company at an inflated price.

IP Lesson: Thanks to the Anticybersquatting Consumer Protection Act, we don’t really have to worry about cyber squatters anymore.

What Walker Digital, LLC essentially did was patent an online business method that they really had no intention of following through on with subsequent products. Their goal was obviously to license this patent out to companies like Activision-Blizzard and Zynga, or to file suit when they felt said companies had infringed upon that patent. Walker Digital has since filed suit against over 100 companies for patent infringement. The decision will fall on one or many judges as to whether the patent in question pertains to an “obvious” business method, and whether the companies in question are truly infringing upon this business method.

So, for those of you who think the entertainment software industry is all fun and games, think again. Anyone will tell you that, insofar as business operations and intellectual property are concerned, where there is money, there will be legal battles. Activision-Blizzard is the number one publisher of entertainment software products in the world, and they defend that title day in and day out with an ever-increasing docket of lawsuits. My advice to anyone looking to launch a product or service in the entertainment industry: study your state and federal laws pertaining to Intellectual Property.