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ESRB Sues Kotaku over Link to ESRB Parody T-Shirt

The ESRB is apparently demanding that Kotaku remove a post on their website describing and depicting a T-Shirt that parodies the ESRB logo (see the offending logo on the t-shirt depicted to the left). Despite being notified by Kotaku that the post is editorial content and not an advertisement for the sale of a T-shirt, the ESRB continues to demand the removal of the post. The ESRB demand letter states, in part:

We believe that this t-shirt ad will result in consumer confusion, and a substantial likelihood that the ESRB certification marks will face tarnishment and dilution.

Dale’s Comment: I personally don’t get the parody joke. Unfortunately the current state of trademark law is such that the trademark owner must fiercely protect its mark or face loosing it. This is an area of IP law that I believe is ripe for reform. The recent spat of “pod” related lawsuits brought by Apple against any company or service including ‘pod’ in their corporate, product or service name is another example of this silliness. Chris Bennet at the law firm of Davis & Company wrote this interesting blog entry on the topic. While the ESRB may have a case against the t-shirt manufacturer (and even that, I believe, is a tenuous case), they would have a much tougher time in any legal action brought against Kotaku based on this editorial post because Kotaku is not using the parodied logo in commerce. It merely comments on the existence of the shirt in a blog post. Trademark law is designed to keep others from using the trademark holder’s marks in commerce – not to keep editorialists from commenting on the existence of items that possibly infringe another’s trademarks.

[Update:] TheBBPS, a one man blog, apparently also received a cease and desist order from the ESRB for a similar blog post and took down the post. Destructoid, still another gaming blog, has seemingly decided to keep its post on the t-shirt up despite also receiving an ESRB cease and desist letter.

Sources: Kotaku | GamePolitics.com | Davis & Company | MMORPG Blog

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XNA Game Studio Express Beta 2 – You Too Can be a Game Developer!

Microsoft’s XNA Game Studio Express Beta 2 aims to provide anyone who’s ever thought they’d like to take a stab at developing a video game with a platform and system to do so. The beta version can be downloaded for free until December 11.

Dale’s Comment: From everything I’ve heard about the XNA Game Studio, this bodes very well for both the future of video gaming and the prospects for new developers to get into the business. With this development environment, anyone can attempt to develop video games. Video games created with XNA can be uploaded to the Internet and downloaded by members of the XNA Creators Club ($99 a year – or $44 for a 4 month trial) who wish to give your game a go – including through Xbox 360 Live Marketplace downloads. This is a tremendous opportunity for new developers to start off small and get their creations seen by publishers. If successful, such small games might, one day, become saleable PC game titles or XBox 360 Arcade titles – or both. Heck, maybe I’ll give it a try! 🙂

Sources: Gamasutra | IGN.com | Kotaku | EuroGamer | Next Generation | GameIndustry.biz | GameDaily.biz | TeamXbox

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Australian Tax Office Will Tax Income from Virtual Transactions

A spokesperson for he Australian Tax Office, in what is probably a world first, has said that if a virtual transaction has real world implications – if it can be attributed a monetary value – it attracts the attention of the Tax Office. In her words:

“The real world value of a transaction may form part of your taxable income, even if it is in Linden dollars,”

Australia seems to be heading in a different direction on this issue as the U.S. is based on Representative Jim Saxton has recently said.

Dale’s Comment: Frankly this makes complete sense to me. I see no reason to make a distinction between real-world revenue generated from virtual activities and any other income.

Sources: TheAge.com | Kotaku | nzherald.co.nz | TaxNews.com

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Jack Thompson Misfires with Mortal Kombat Cease & Desist Letter

The new Mortal Kombat Armageddon game has a built-in character editor. Gamers can mix and match clothing, body types, hairstyles and facial characteristics to create original characters to be played/fought in the game. The enterprising e-zeen Gaming Target posted this story providing character editor formulas for gamers to use to create famous, and infamous, characters including a formula for creating anti-game-violence crusader Jack Thompson.

Jack Thompson, apparently not quite understanding the character editor distinction, sent off a cease and desist letter to Midway, the game’s publisher, with the following contained therein:

“It has today come to my attention that the newly recently Mortal Kombat: Armageddon contains an unauthorized commercial exploitation of my name, photograph, image, and likeness within the game.”

“You are commanded to cease and desist immediately from the distribution of this game because of this unauthorized, illegal content…”

“It would appear that your company has done this at least in part because I sued you all in the Paducah school massacre case and further because I appeared on CNN’s Anderson Cooper 360 when your company came out with your profane, violent, and idiotic Blitz: The League.”

To be clear, there is no crusading Florida lawyer character that is shipped with the game. On the presumption that Jack Thompson is aware of the Marvel v. NCSoft decision (see linked posts below) which is on point, this demand will likely just fade away once Mr. Thompson realizes what has happened here. The mere inclusion of a character editor does not, in itself, infringe anyone’s IP or personality rights any more than the manufacture and sale of Etch-a-Sketches does.

Sources: GamePolitics.com| Gaming Target | Gamasutra | joystiq | The Inquirer | GameSpot | EuroGamer | GWN | Pro-G | igniq.com

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Hot Coffee’s Effects on the Mod Scene

This Gamasutra feature article is a very interesting article on the Effects of ‘Hot Coffee’ on the game modding scene. Mods can inprove and extend the life of video games but since Hot Coffee, there is a keen awareness of the liability that game modding can expose developers and publishers to.

Sources: Gamasutra

‘Hot Coffee’ Related Posts:

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Florida Judge Personally Files Contempt Complaint Against Jack Thompson, then Recuses Himself

An initial hearing was held in the contempt hearing requested by Take-Two’s lawyers, Blank-Rome. (See Destructoid’s Youtube video of the proceeding below). Judge Friedman accused Thompson of wanting the judge to provide him with a soapbox – something he refused to do. After Thompson argued openly and personally with the judge, Judge Friedman then informed Thompson that he was going to personally file a complaint against Thompson with the Florida Bar and because of that he went on to recuse himself from further contempt hearings. At one point the Judge seemingly threatened Thompson with immediate incarceration if he continued to hold up a large bristol-board presumably showing the Court’s contempt rules. Neiro at Destructoid took a Video of Initial Contempt Hearing on YouTube.

[Update: The Prior YouTube Video of Proceeding No Longer Available]

Post-Contempt Hearing Sources: Destructoid | Calgary Sun | Canoe.com | BoomTown | GameSpot | CNet | Kotaku | Gamasutra

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Take-Two Lawyers Move Court to Find Thompson in Contempt of Court

Thompson’s Post-Ruling Letter to Judge Friedman [.doc]
In the wake of the recent Floridian court review of Bully, Take-Two’s lawyers, Blank-Rome, filed a “Petition for Order to Show Cause” asking the court to find controversial lawyer in contempt of court. GamePolitics.com reports that after hearing of the petition Thompson fired off an e-mail that included the following fiery excerpts that appear to both threat

‘You want to play hardball…? You want to try to throw me in jail? You have no idea what you are unleashing in doing this. You’re at the brink…”

“If this court in any fashion proceeds toward issuing a show cause order, given its utter baselessness and the bad faith goo in which it slithers, then Thompson will add whatever judge should do so as a defendant in the aforementioned federal civil rights action…”

Dale’s Comment: I have not seen the contents of the petition but I do note that immediately following the judges ruling Thompson sent Judge Ronald Friedman this highly charged, disrespectful and threatening letter.

Reports of Contempt Filing: GamePolitics.com | GameSpot | Next Generation | 1Up.com | PressStart.com | GameShout | Spong| Destructoid | Gamasutra

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Sony Wins U.K. Lik-Sang Grey Market Case – Lik-Sang Shuts Down

Sony has won a High Court Judgment in the U.K. banning Hong-Kong based Lik-Sang.com from selling PSP consoles into the European Economic Area. While Hong-Kong-based Lik-Sang did participate in pre-trial activities, it did not show up in court to contest the case. Thus, a default judgment was awarded to Sony.

This action was launched in August of 2005 when Lik-Sang sold PSPs into Europe after Sony delayed North American and European shipments for many months after the Japanese PSP launch. The same sort of delay is about to occur with the PS3. Sony is launching the PS3 in the Japanese and North American markets months before Europe.

[October 24 Update:]After years of fighting Sony, Lik-Sang has closed its e-doors. In an interesting side-story, Sony’s European management purchased Sony products from Lik-Sang when unavailable in Europe (See BBC Story). Pascal Clarysse, former marketing manager for Lik-Sang, had this to say on closing:

“Blame it on Sony. That’s the latest dark spot in their shameful track record as gaming industry leader. The ’empire’ finally won. A few dominating retailers from the U.K. probably will rejoice (in) the news, but everybody else in the gaming world lost something today.”

Sony dismissed this as sour grapes. A similar Hong-Kong-based case between the parties continues.

Dale’s Comment: I understand Sony’s need to protect the interests of its European distributors and its trademarks. I also understand its wanting to protect its own economic interests by means of region-by-region product launches. But its claim that the lawsuit was brought to protect consumers’ safety is, of course, nonsense.

In a world of global markets with the ability to deliver products throughout the Globe overnight, one wonders if this market-by-market distribution model is appropriate any more. It certainly is far from consumer friendly or fair. Lik-Sang met a real consumer need. Through Lik-Sang, Sony’s most loyal fans had a means to purchase Sony products long before Sony had the wherewithal to launch/distribute products in their particular country. Sometimes it takes years before Sony launches a product into a given market (if ever). With this ruling, there is no legal way for etailers to sell into markets not served, or underserved by Sony and its resellers.

As a Canadian living right next to the U.S., I have oft experienced the frustration of not being able to purchase products and services only made available in the U.S. I relish the fact that etailers such as Lik-sang are willing to serve the needs of consumers in under-served regions of the world.

Lawsuit Stories: Gamasutra | Engadget | GameIndustry.biz | GameSpot | *GameDaily.biz | PC Pro | IGN | ars technica | TVG | BetaNews | Pocket-lint | GameIndustry.biz| Daily Tech

Lik-Sang Closing Stories: Lik-Sang.com Notice | Gamastura | ars technica | Outlaw.com | ZDNet | Engadget | BBC | GameSpot | GameDaily.biz | GameShout | CNet | afterdawn | PC Pro | IGN | NeoSeeker | Pocket-Lint | Gizmodo | Inquirer | Hexus | GameIndustry.biz | EuroGamer | Kotaku | Gadgetspy | PC World | Games Digest

Blogosphere: Bit-tech.net

Engadget Podcast 93 Coverage (Time Index 4:44-12:33).

Related Posts:

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Gears of War Denied Rating in Germany

Once again Germany’s USK has decided not to rate a violent video game. This time the highly anticipated game, Gears of War. This does not result in the game being banned. It prevents Microsoft from marketing it in Germany. Stores cannot display it on racks. Rather, it can only be sold under the counter.

Sources: Gamasutra | GameIndustry.biz | GameSpot | Next Generation | CVG | Fox News | Portal IT | Pro-G | Hexus | Gears of War | GameDaily.biz | TeamXbox | Xbox 360 Fanboy

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Representative Jim Saxton Believes Taxing Virtual Economies Would be a Mistake

JEC Press Release The Chairman of the U.S. Congressional Joint Economic Committee (JEC), Jim Saxton, believes taxing virtual economies would be a mistake. The goal of a forthcoming JEC study is to head off any premature attempt to impose tax on virtual economies.

[November 9, 2006 Update: Despite heavy Republican House losses in the November 7 midterm elections, Rep. Jim Saxton held his seat and won for a 12th term.]

Sources: GamePolitics.com | Reuters | nzherald.co.nz | TaxNews.com

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Florida Court Clears “Bully” for Sale Despite Jack Thompson Protest

Text of Thompson’s Complaint [.doc]
 After ordering Take-Two to provide a pre-release copy of Bully for review in chambers, Judge Ronald Friedman, a Miami-Dade County Circuit Court judge ruled that Bully is not a public nuisance and dismissed Thompson’s complaint. According to Niero of Destructoid, who was in the court, the judge said the following:

“I have spent a couple of hours viewing the game. It was produced to me by an operator using a cheat, which allowed him to skip through the game and show me ‘key points’ that would require an average gamer hundreds of hours to reach. There is a LOT of violence, but not more than the general public has access to on television”

…

“As I said, there is a lot less violence in this game than what we see on television, and although it is pervasive, but not to the extent that it would cause a public threat that would require me to prevent these folks from selling it”

…

“Would I want MY kids to play this game?” His palm is open like a starfish on his chest. “Absolutely not. But this game is not a nuisance.”

Sources: Destructiod in-Court Summary | GamePolitics 1 | GamePolitics 2 | GamePolitics 3 | Miami Herald | 1Up.com | CNet | OUT-LAW.com | InformationWeek | IGN | afterdawn.com | GameIndustry.biz | Inquirer | Next Generation | Gamasutra

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Court Orders Take-Two to Provide an Advanced copy of Bully for ‘Judicial Review’ :)

Text of Thompson’s Complaint [.doc]
 Jack Thompson has convinced Judge Ronald Friedman, a Miami-Dade County Circuit Court judge, to order Take-Two Interactive to provide an advanced copy of the “T”een rated video game Bully for review in chambers by the court. Contrary to some early reports, the judge did not order that the video game be provided to Jack Thompson for his review. Rather, the judge has ordered that along with the game, Take-Two provide someone to play the game in front of the judge so the judge can review it. Thompson had called this game a “Columbine Simulator” without ever having seen the game.

Dale’s Comment: After months of controversy and fears that this video game would celebrate and promote bullies, all the reviews I have read and listened to make the point that, to the contrary, being a bully is not celebrated. The main character is not a bully at all, but, rather, has to defend himself against school-yard bullies and form alliances with other schoolyard mates. This critically acclaimed game is more akin to a high-school simulator letting players relive in a very realistic way, what it was like to be in high school and deal with the trials and tribulations of growing up.

While I was somewhat pleased that the order was limited to handing over the game for review by the court and not by Thompson (goodness knows what kind of a precedent that would have been), I still find it disconcerting that a court interposed itself into the process to decide for himself whether the game is suitable for sales to minors. Who appointed him the emperor?

Sources: Gamasutra | Play | ars technica | The Register | OUT-LAW.com | GameSpot | GamePolitics.com 1 | GamePolitics.com 2 | Miami Herald | Washington Post Destructoid | BBC

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GameStop Launches Internet Distribution Service ‘Download Now’

GameStop has launched its new Internet-based digital distribution service “Download Now“. The service launches with some 1,000 titles including games from Capcom and Eidos.

Dale’s Comment: Internet video game distribution is an inevitability. The only thing surprising about this is that it took GameStop this long to get into the game that Valve has been in for several years with its Steam digital distribution system. I believe third party digital distribution has a very bright future. GameStop may face the same challenge that the likes of Cinema Now and others have faced in the context of online movie distribution – an industry reluctant to share revenue from 3rd party online distributors in the hopes it can bypass such distributors. But just like movies, in the main, I believe gamers won’t want to surf from publisher web-site to publisher website when searching for online game purchases. They’ll want a choice of one stop online game aggregaters just as they have a choice of brick and mortar shops to shop for games today.

Sources: Gamasutra | GameDaily.biz | GameIndustry.biz | Next Generation

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Another GTA Wrongful-Death Suit Launched (Cody Posey)

Jack Thompson is involved in yet another wrongful death suit brought against Rockstar, Take-Two and Sony. This one involves the case of Cody Posey who confessed to killing his father, stepmother and stepsister. Once again Thompson, representing the surviving Posey relatives, argues that the game acted as a simulator that trained Cody to be effective killer. Thompson had filed a similar suit in Alabama where he was forced to remove himself from the case shortly before his temporary Alabama license was revoked in a shroud of controversy.

Sources: Albuquerque Tribune | Gamasutra | GamePolitics.com 1 | GamePolitics.com 2 | joystiq | Wall St. Journal Law Blog | Pantagraph.com

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Group Prosecuted in China for ‘Arms Dealing’ in Legends of Mir

A former deputy manager of Shanghai-based Shanda Network Development, Wang Yihui, and two accomplices are being prosecuted in China for illegal virtual weapons trade. Mr. Yihui changed the underlying game database of the popular Legend of Mir video game to produce, and replicate, two high powered weapons and provide them to two registered gamer accomplices. They, in turn, sold multiple copies of these weapons for profit. The group was able to make around $250,000 between September 2004 to August 2005 by such sales. Users of these weapons have an unfair advantage that allows them to advance through the game at a much quicker pace. The group are being prosecuted for copyright infringement.

Sources: Bit-tech.net | ars technica | Live Science | Spong | Taipei Times | 7 Days | IEET | War Cry | China Post

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Tom Buscaglia: The Game Attorney Interview

In December of 2005 GameCloud interviewed Florida game attorney Tom Buscaglia on a number of game law related topics. I thought the interview was interesting. In particular his answers to questions 3, 4 and 5 about common business and IP problems that game developers run into in the early stages of a game development studio. New game developers often fail to properly secure the intellectual property rights needed/used in a game. They also often fail to deal with the issues needed to sustain a viable business. Creating a great game alone is not sufficient to create a sustainable game development studio.

Source: GameAttorney.com

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Is an Eve Online Ponzi Scam an Actionable Fraud or Taxable by IRS?

Gamer’s with Jobs has a very interesting article about a recent Eve Online virtual ponzi scheme where ‘Dentara Rast’, the gaming name of an Eve Online player, scammed 700 billion ISK (the in-game currency) from other players. Given that ISK is convertible into real-world currency, making his ‘winnings/earnings’ from the scam roughly equal to $81,667 USD, would the other players have an actionable real-world fraud claim against the player? Are his ‘winnings’ taxable by the IRS? If Dentara Rast does not convert his winnings into cash, are his winnings taxable on the same theory as unrealized capital gains from exercised stock option purchases? Does Eve-Online’s EULA, claiming ownership rights to all in-game property, affect the result given that ISK is bought and sold on e-Bay in contravention to the EULA? Or, does the voluntary participation of other gamers in the free-wheeling, unregulated, world of Eve Online, comprise implicit consent (as with a poker-player’s implicit consent to being lied to by another player that bluffs) to in-game fraud and other shenanigans that would be illegal in the real world? All interesting questions explored in this article.

Sources: Gamers with Jobs | Joystiq | CNet | Gaming Insider | Gamasutra | Game Politics | Google Cache | Dentara Rasts Downloadable Confession

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Jack Thompson Sues For Early Access to Bully Video Game

Text of Complaint [.doc]
Jack Thompson has sued Rockstar and Wal-Mart for early access to the video game Bully so that he may independently review it prior to commercial release. He cites the ESRB rating system as having been inept in the past at rating Take-Two products.

Dale’s Comment: Thompson proves yet again that he will try any stunt to get notoriety. I will be very surprised if this ‘case’ is not immediately dismissed.

Sources: GamePolitics.com | GameSpot | Pro-G | CNet | ars technica | Inquirer | Bit-tech.net