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Shownotes for The Singularity Law Podcast: Episode 8 for December 8, 2008

Our Panel for Today:

• Prof. Michael Scott of The Singularity Law Blog
• Josh Kagan of The Josh Kagan Blog

Video Game Law as a Hot New Practice Area: Hype or Reality?

• Wall Street Journal: Video-Game Law: The Niche Legal Practice Du Jour
• LA Times: These Lawyers Got (Video) Game
• Michael Scott’s blog: Videogame Law: New Legal Specialty or Marketing Hype?

The Limits of Section 230 Immunity, Part 1: Malware

• 47 U.S.C. §230
• Venkat Balasubramani’s SPAM NOTES blog: Could Facebook Be Liable for Spreading the Koobface Virus?
• Green v. AOL

The Limits of Section 230 Immunity, Part 2: Trademarks

• Alleyinsider: Amazon, Google: eBay Shouldn’t Have To Hunt For Trademark Infringers
• EFF: Jewelry Company Quest to Expand Trademark Law Could Quash Internet Commerce

Practice Pointer: The Continued Importance of Forum Selection Clauses

• “Internet Cases” blog: Court enforces forum selection clause in web hosting agreement
• Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (1991)

Turning Piracy Into Profit: The Myspace Experiment and Other DMCA Issues

• Reuters: MySpace, MTV Test Piracy-Profit Plan
• Michael Scott’s blog: Priming the Pump – Copyright Style

Final Thoughts: Entrapment by Emoticon

• Wall Street Journal: Emoticons on Trial at the Nebraska Supreme Court

This recording is an informational resource only. It is not designed to offer legal advice

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Click here to download this week’s show.

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Shownotes for The Singularity Law Podcast: Episode 6 for November 4, 2008

Our Panel for Today:

• Prof. Michael Scott of The Singularity Law Blog
• Josh Kagan of The Josh Kagan Blog

DMCA’s 10th Anniversary: Where Do We Go From Here?

• EFF: “Unintended Consequences: Ten Years Under the DMCA”

The Google Book Search Settlement

• Michael Scott: “Google Stares Down Book Industry: Publishers Blink, Google Book Search Wins”
• EFF: “Google Book Search Settlement: A Reader’s Guide”
• EFF: “Google Reaches Settlement With Authors and Publishers Over Google Book Search”
• Google Watch (eWeek): “Google Gets Great Deal in Book Search Settlement”
• Authors Guild: “$125 Million Settlement in Authors Guild v. Google”
• Text of Settlement Agreement
• Class Notice

Regulating Violent Video Games

• Josh Kagan: “Violent Video Games Go (Back) to Court”

Final Thoughts

• Southwestern’s Summer Abroad Program on International Information Technology Law in London
• Lawrence Lessig: “Enormously Important News from the Free Software Foundation”

As a content-based regulation, § 1746 requires a strict scrutiny analysis,³ which means that such a law is only constitutional when the state (1) has a compelling interest and (2) the law uses the least restrictive means to further that interest. The State argued that it had a compelling interest in preventing minors from accessing violent games and presented a study that purported to link violent behavior with violent games. The Court didn’t buy the State’s argument, finding that the plaintiffs raised serious questions about whether there is a causal connection between access to such games and harm to children. In the end, the plaintiffs were awarded an injunction against enforcement of the statute. Fast-forward to October 2008, and § 1746 has reared its ugly head again in the form of an appeal by Governor Schwarzenegger.

The video game industry is no stranger to controversy over game content. In 1994 it established a self-regulatory organization called the Entertainment Software Rating Board (ESRB) that applies ratings to all video games and sets certain advertising guidelines that publishers agree to. Its ratings mimic the ones used by the motion picture industry, with distinct categories for age groups like “Everyone,” “Teen,” and “Mature 17+.” Like the film rating system, the ESRB’s ratings are technically voluntary, but that doesn’t mean they’re without consequences. For example, Wal-Mart will only stock ESRB-rated games and won’t sell any games that carry an “Adults Only 18+” rating. Wal-Mart is currently the U.S.’s biggest reseller of games, so that means an AO rating is a kiss of death for most titles. A few months ago when I was working for a game publisher making a game based on the SAW movies, this was a significant concern. Ratings have real effects on the way publishers do business.

For what it’s worth, I don’t disagree that some games can be harmful to children. Grand Theft Auto IV, Soldier of Fortune: Payback, Brothers in Arms: Hell’s Highway, and many other games contain content that isn’t suitable for children. But so do at least as many Hollywood movies and popular TV shows. The industry recognizes this, which is why self-regulating programs like the ESRB have developed to keep violent games out of children’s hands while ensuring that games are still widely available. But more importantly, it’s not the state government’s place to restrict the sale of content that qualifies as speech. As courts have already found in other states that tried similar legislation including Arizona, Illinois, Louisiana, Massachusetts, and Oklahoma, this kind of law can’t survive a First Amendment attack on its face.

Next Wednesday when the appeal comes before the Ninth Circuit, I suspect the Court will agree. There isn’t really any uncertainty there. The real question here is whether lawmakers in Sacramento and other state legislatures will get the message as well.

1. Formerly known as California Assembly Bill 1179.
2. Video Software Dealers Ass’n v. Schwarzenegger, 2007 WL 2261546 (N.D. Cal. Aug. 6, 2007).
3. R. A. V. v. City of St. Paul, 505 U.S. 377 (1992).

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Click here to download this week’s show.

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Shownotes for The Singularity Law Podcast: Episode 4 for October 19, 2008

Our Panel for Today:

• Josh Kagan, author of The Josh Kagan Blog
• Prof. Michael Scott of The Singularity Law Blog

DRM and Activation in Video Games

• EA’s CEO speaks to Gamasutra about DRM.
• Ars Technica: EA’s DRM, arrogance may cause gamers to skip good titles

Anonymity on the Internet

• Anonymous proxy servers: Necessary or evil?
• The growing cowardice of online anonymity
• UK/Germany: “Disclosing Encryption Keys and IP Addresses
• Men defamed on dating sites
• Josh Kagan: JuicyCampus and the Limits of Section 230
• The Internet as Conduit for Hatred & Violence
• Passports will be needed to buy mobile phones

Google and YouTube refuse to grant special DMCA treatment to McCain Campaign Videos

• McCain Campaign’s Letter to Google/YouTube
• Ars Technica: McCain/Palin campaign angry over bogus DMCA takedowns
• YouTube to McCain: No special treatment for DMCA takedowns
• Judge Rules That Content Owners Must Consider Fair Use Before Sending Takedowns | Watch the video here
• Massive Takedown of Anti-Scientology Videos on YouTube
• Bogus anti-Scientology DMCA notices sent to YouTube linked to Wikipedia user

Cybersquatters: The Hidden Trademark Danger

• Trademark Owners Must Pursue Cybersquatters or Potentially Lose Their Trademark Rights
• Southern Grouts & Mortars, Inc. v. 3M Co., 2008 WL 4346798 (S.D. Fla. Sept. 17, 2008)
• Southern Grouts and Mortars v. 3M Co., Second Amended Complaint

The Elephant is in the Library: Digital Libraries Online

• Universities launch elephantine digital library

Final Thoughts: Can a record label infringe its own copyright? One hosting provider thinks so.

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Click here to download this week’s episode.

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Shownotes for The Singularity Law Podcast: Episode 3 for October 12, 2008

Our Panel for Today:

• Josh Kagan, author of The Josh Kagan Blog
• Prof. Michael Scott of The Singularity Law Blog
• Tigran Palyan, author of “Common Law Privacy in a Not So Common World: Prospects for the Tort of Intrusion upon Seclusion in Virtual Worlds”

Privacy in Virtual Worlds – Tigran tells Michael and Josh about his new article

• “Common Law Privacy in a Not So Common World: Prospects for the Tort of Intrusion upon Seclusion in Virtual Worlds” by Tigran Palyan

Kentucky Seizes Gambling Domains

• Ars Technica: “Kentucky seizes two gambling domains, sites fight back”
• Ars Technica: “Kentucky tries to seize gambling site domain name”

Talking Point of the Week: A EULA to End All EULAs

• BoingBoing: “Sleeping Beauty Blu-Ray requires viewers to agree to 57 page EULA”

The Issue of the First Sale Doctrine

The First Sale Doctrine as codified in the Copyright Act¹ permits a purchaser to transfer ownership of a particular copy of a copyrighted work as long as no additional copies are retained. Game discs qualify for this,² and so they can be freely sold. Historically, this has never been much of a problem for the industry. Unlike novels and videos which are often used once and then archived, consumers have traditionally resisted selling their used games because it’s a different kind of product. But now, with companies like Gamestop building retail businesses that aggressively promote the sale of used game discs, the situation has changed significantly. Some publishers and developers fear that an overly powerful secondhand games market could strangle the industry by cutting off consumers’ demand for new game discs. With new games costing as much as $30 million to develop in an industry that employs around 100,000 Americans, it’s not hard to understand that fear. On the other hand, novelists and movie-makers have been dealing with the First Sale Doctrine for ages, but those industries have managed to survive even with the proliferation of lending libraries and video stores.

Digital Downloads as a Work-Around

One potential solution would be for the industry to move more toward digital downloads. Some of the most successful games in recent weeks, such as Braid and the highly anticipated Capcom title Mega Man 9, have found tremendous success as downloadable games on platforms like Nintendo’s WiiWare, Sony’s PlayStation Network, and Microsoft’s Xbox Live Marketplace. Many developers have also found success on Apple’s App Store, a service that puts application and game downloads at the fingertips of iPhone and iPod users. The use of digital downloads has a number of advantages to the industry, one of which is that downloaded games are typically locked to a single device through the use of DRM, cutting off the First Sale Doctrine at its knees.

DRM Problems

But moving further into downloadable games also has serious consequences for the industry. While mainstream gamers have generally been accepting of DRM, with services like Nintendo’s Virtual Console reporting sales on the order of 10 million games sold per year,³ critical demographics such as the 18-35 year-old male group have expressed dissatisfaction with the DRM restrictions placed on popular games like EA’s Spore. With the entertainment sector moving increasingly away from DRM, it’s not clear that the video games industry would benefit in the long run from increased reliance on a dying technology.

Storage and Bandwidth Problems

Another more important problem is that the storage and bandwidth limitations of game consoles don’t always meet the needs of today’s cutting edge games. For example, most games for the PlayStation 3 ship on Blu-Ray discs that can hold up to 50 GB each. Some recent games such as Konami’s Metal Gear Solid 4: Guns of the Patriots have already managed to fill these discs. Delivering games this large over the Internet is impractical with current technology because they would take far too long for players to download and would occupy too much space on game consoles’ hard disks.

There’s no denying that this situation puts the industry in a tough spot.

The Best Solution: Leverage Games’ Perceived Value and Add Replayability to Game Discs

I think that the best solution here would be to make some small changes to the nature of mainstream disc-based games. One of the things that distinguishes a game disc from a novel or a video is that, in many cases, once a novel or video has been used (i.e. read or viewed) once, there might not be a lot of perceived value to the consumer in using the product again. That’s why there will always be a sizable block of consumers who rent many DVDs but don’t buy any. But the video game industry can be different by crafting products that retain their perceived value even after they have been enjoyed once.

One way to do this is by providing gamers with experiences that go beyond a typical “single player campaign” experience. Nintendo’s Metroid series was a pioneer in this area; they contain items and areas that are not essential to finishing the game, but that greatly enhance and change the nature of the game if the player chooses to explore. Vivendi’s Diablo series is similarly innovative, with dungeon layouts and discoverable items that are randomly generated each time the game is played, presenting the player with a slightly different experience on each playthrough. Some other recent games have begun to emphasize Internet multiplayer capabilities that pit players with (or against) other players from around the world. This creates communities in which players build perceived value in the game over time. It also encourages players to push sales of those games through word-of-mouth advertising because players know that the more people have the game, the better it will be. Finally, another solution is to make available new content in the form of downloadables. These can be offered to players for free simply to drive sales even as the game gets older, or they can be sold to players in the form of revenue-generating micro-transactions. It’s worth mentioning that a gamer who has invested even a few dollars in game-related micro-transactions is probably far less likely to ever sell his copy than someone who has invested nothing other than the purchase price.

Americans spent nearly $19 billion on video games in 2007, and that number is set to look even better once 2008 comes to a close. Over the past two decades we’ve watched this industry adapt dynamically to a number of consumer and technological trends such as Internet piracy and the emergence of the “casual” games market. In every case the industry has emerged stronger than it was when it went in. I wouldn’t lose sleep over the emergence of a used games market.

Save your fear for Capcom’s upcoming Resident Evil 5 launch instead. If it’s anywhere near as good as its predecessor, when that hits in March 2009 I think we’ll all be having a few zombie nightmares.

1. 17 U.S.C. § 109
2. Vernor v. Autodesk, Inc. 555 F.Supp.2d 1164 (W.D.Wash.,2008).
3. http://uk.gamespot.com/news/6185358.html