Social Media & Games Law Blog

Date: April 24-26, 2012
Place: The Westin San Francisco Market Street

Join Pillsbury as we co-sponsor this exciting and informative event in San Francisco! Learn about:

• Economics and technology in iGaming & Internet Poker
• Setting up a transparent regulatory framework
• Driving land-based business through online gaming
• Much more!

Keynote Speakers will include:

• Leo Chu, President, Hollywood Park Casino
• Leslie Lohse, Chairwoman, California Tribal Business Alliance
• Lou Correa, Senator, California 

Please stop by our booth (#4) and say hello!

For more event information, please click here.

In case you couldn't tell, we have a passion for all things social, which is why we've created our very own Pinterest page! We'll be utilizing this platform to pin about the conferences we attend, cutting-edge social technology we discover, and anything else we find interesting. So if you want to keep tabs on our team, learn about new technology, or leave comments/questions, then please check out our boards and follow us on Pinterest.

We also want to interact with the community and learn about what's going on in your neck of the woods too! So please get in touch with us and let us know about your boards as well.

Happy pinning.

In one of the most closely followed cases involving the  digital millennium copyright act (DMCA), an appeals court punted one of the key issues back to the lower court. The key issue left open relates to what constitutes actual knowledge for purposes of the DMCA. In light of this decision there are some interim steps companies should take in the event that the lower court rules in favor of the copyright owner.  

On April 5th, 2012 the U.S. Court of Appeals for the Second Circuit issued an order in the ongoing case Viacom International Inc. et al. v. YouTube Inc. et al., vacating a lower court's summary judgment in YouTube's favor and remanding the matter back to the district court for consideration of whether YouTube had actual knowledge of the infringement alleged by Viacom.  The underlying ruling by the district court in June of 2010 had granted summary judgment and found that YouTube was not liable to Viacom for copyright infringement relating to various videos that were available on its site due to the safe harbor language in the Digital Millennium Copyright Act.

The current opinion by the Second Circuit based its decision in part on and referenced an internal YouTube report noting that clips of certain Viacom shows were available on the site, and that such content was "blatantly illegal".  The Second Circuit's opinion stated that "[o]n these facts, a reasonable juror could conclude that YouTube had actual knowledge of specific infringing activity, or was at least aware of facts or circumstances from which specific infringing activity was apparent".

Moreover, while the Second Circuit agreed with underlying district court's decision that only actual knowledge of specific and identifiable infringements bars a service provider from protection under the DMCA's safe harbor, it felt that the lower court erred by not addressing whether YouTube had engaged in "willful blindness".  The ruling directed the district court to consider if YouTube (1) made a "deliberate effort to avoid guilty knowledge," (2) had the ability to control the infringing activity, and (3) received a financial benefit from the infringing activity.

Ultimately, the Second Circuit opined that "we hold that summary judgment to YouTube on all clips-in-suit, especially in the absence of any detailed examination of the extensive record on summary judgment, was premature."  Given the online technology industry-wide reliance on the protections available under the DMCA, this case will continue to be one to watch.  Its impact could be far-reaching whichever way it is finally decided.   

Given the uncertainty regarding how this case will ultimately be decided, companies hosting user posted content should take reasonable steps to minimize any liability in the event the decision ultimately favors copyright owners. Contact us for more insights on how to do this.

Epic Games to make government training games

Of all the companies you'd expect to announce a big government partnership, a major video game studio is probably not at the top of your list. Nevertheless, Epic Games announced Tuesday that it has entered into a "long-term, multi-platform" deal with a division of Applied Research Associates to license the Unreal game engine for government use.

Royal Canadian Mint unveils MintChip virtual currency

Having revealed plans to ditch the Canadian penny last week, the Mint is continuing its assault on physical cash with MintChip, which it describes as the "evolution" of currency. The system brings all the benefits of cash into the digital age, claims a dedicated Web site, providing users with instant, private and secure access to their money.

Social Gaming Key for Advertisers in 2012

Did you know Internet marketers will spend upward of $271 million on social gaming ads in 2012? In-game advertising is the next big trend in the industry, with analysts expecting ad spend on social games to reach $900 million annually in less than three years. The stakes are higher than ever for brands as they budget ad spend on laptops, mobile devices, and consoles.

Gamification Platform BigDoor Raises $5 Million From Foundry Group

White label gamification platform BigDoor has raised $5 million in new funding led by existing investor Foundry Group, bringing BigDoor's total funding to $13 million. BigDoor's gamification platform essentially allows online publishers to add game mechanics to web interactions and engagements. BigDoor helps companies build game-like mechanics and loyalty programs into their sites or apps by enabling points, badges, levels, leaderboards, virtual currency and virtual goods.

Facebook, NRDC, Opower, & 16 Utilities Team Up to Create Social Gaming App

"With an initial reach of 20 million households, the effort is one of the most significant to date, enabling people to take action and become more energy efficient," NRDC said in a statement today. "Leveraging the Facebook platform, the app allows people to quickly and easily start benchmarking their home's energy usage against similar homes, compare energy use with friends, enter energy-saving competitions, and share tips on how to become more energy efficient."

Google Glasses Face Serious Hurdles, Augmented-Reality Experts Say

When Google officially unveiled Project Glass -- the company's bid to develop Terminator-style augmented-reality glasses -- we saw a provocative glimpse of the future. The video Google released yesterday showed us the point of view of someone wearing the glasses, with icons, maps and other graphical overlays appearing over the user's complete field of vision.

On March 30, 2012 the California federal judge hearing the lawsuit initiated by a putative class of retired NFL players against Electronic Arts Inc. denied EA's motion to dismiss the suit and to strike the complaint.  The Court ruled that the retired players' allegations that EA's unauthorized use of their likenesses in the "Madden NFL" video game was not trumped by First Amendment protection because the video game does not pass the transformative use test.  Specifically, the court held that "[a]lthough EA appears to claim that its mere projection of plaintiffs' likenesses into avatar figures, capable of manipulation by gamers, is sufficient to confer constitutional protection, another way to see this supposed transformation is as a relatively literal, if skilled, translation of plaintiffs' conventional images into the medium of the video game".

This begs the question of what is transformative use?  Generally, the courts have defined transformative use as a use that "adds new material that reflects critically on the original".  Traditional categories of transformative use are for purposes of criticism, commentary, newsreporting and parody.  Therefore, EA's argument relies on its ability to fall within one of these traditional categories or to convince to court to create a new category which is more reflective of the current world and the available technology.   

EA argued in its motion to dismiss the case that it's "Madden NFL" video game should be granted the same First Amendment constitutional protection as any book or movie.  This argument is founded in the recent Supreme Court decision in Brown v. EMA which clearly granted First Amendment protection to video games.  However, the current Court took the position that the transformative use test focuses on the reproduction of the plaintiffs' likenesses, not merely the inclusion of expressive elements in game as a whole.  The decision stated that "[i]f, as EA urges, any expressive elements within the larger work were somehow to 'transform' an otherwise conventional use of a celebrity's likeness, the right of publicity would effectively be eviscerated".

That said, this decision is merely one battle in an ongoing war.  It is not dispositive on whether EA or the putative class of retired NFL players will ultimately be successful in the suit.  Moreover, EA recently was successful in dismissing a similar lawsuit in another jurisdiction alleging the misuse of college players' likenesses in its "NCAA Football" titles.  In this case the Court agreed with EA's argument that its First Amendment protections overruled the publicity rights of players.  Therefore, with these conflicting decisions in the circuits it is uncertain in which way the current state of the law will head.  

If you would like to read more about right of publicity and video games, please see our recent Client Alert.

Facebook has previously filed over 80 trademark applications on variations of its name and other terms such as "POKE", "WALL" and "LIKE".  Facebook now seems to be attempting to claim some level of ownership/protection over the word "book" as well.  In a recent revision to Facebook's "Statement of Rights and Responsibilities," which is the agreement all users must accept when accessing Facebook, language was inserted which states (emphasis added) "[y]ou will not use our copyrights or trademarks (including Facebook, the Facebook and F Logos, FB, Face, Poke, Book and Wall), or any confusingly similar marks, except as expressly permitted by our Brand Usage Guidelines or with our prior written permission."

While there is no record of a current US trademark application on "BOOK", Facebook does have a pending application in the European Union's trademark database.  Moreover, Facebook has brought several suits against online sites incorporating the word "BOOK" in their domain name, with mixed results.  Several of these suits have settled while others are still pending.  Under US law a certain level of trademark protection can be gained merely by use of an unregistered mark.  Generally, such unregistered use is referred to as having "common law" trademark rights.  While these "common law" rights do not provide the same level of protection as a registered mark, they are still quite useful.  Moreover, including the above-referenced clause in its "Statement of Rights and Responsibilities" could provide Facebook with ammunition for future suits against any of its users who attempt to wrongfully use the "BOOK" mark.  Given that approximately 50% of all internet users have registered for Facebook, this provides Facebook with fairly wide-reaching (but not all-encompassing) protection.  
Historically, Facebook hasn't shied away from protecting what is seems to consider its right in the term "BOOK".  Only time will tell how Facebook plans to utilize any new rights it has gained from users by updating the "Statement of Rights and Responsibilities".