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>Nintendo Granted Summary Judgment in V-Chip Lawsuit

>Nintendo of America Inc., producer of the Wii home video game console, scored a victory on June 2, 2009, when a federal district judge in the Central District of California granted Nintendo’s motion for summary judgment, holding that the Wii does not infringe a V-chip censoring technology patent. Nintendo had asserted all along that the parental controls that allow Wii users to selectively prevent the play of games based on Entertainment Software Ratings Board (ESRB) classifications were fundamentally different than the technology taught by the patents, which are owned by Guardian Media Technologies, Ltd., a Texas-based limited partnership and non-practicing entity. The court’s findings of fact and conclusions of law, issued on June 8, 2009, identify such a fundamental difference and justified Nintendo’s opposition of a complaint that has already prompted several defendants settle with Guardian rather than see the matter through to trial. Not just a victory for Nintendo,… Continue Reading

>Massachusetts Data Security Regulations

>Massachusetts is on track to became the first state to mandate that game companies (and other companies) storing the personal information of state residents must comply with specific data security practices. Massachusetts enacted a data protection statute on October 31, 2007, authorizing the Massachusetts Office of Consumer Affairs and Business Regulation (“OCABR”) to develop regulations implementing the statute. OCABR has now issued regulations set to go into effect on January 1, 2010. These regulations require game companies (regardless of where a company is located) to comply with certain administrative and computer security requirements when storing or transferring personal information that has been gathered from gamers or company employees living in Massachusetts.Under the regulations, games companies must create and follow a security program that includes, among other things, assignment of personnel to oversee and update the security program, identification of all records containing personal information, identification of security risks to those… Continue Reading

>Tip: Video Game Copyright Registration

>Most folks in the industry know about filing copyrights to protect their source code. One area of concern that I see, though, is a lack of awareness of the some of the Copyright Office requirements buried in the Copyright Office regulations. When filing a copyright registration for a book, it is generally pretty easy to decide when to register (when the book is finished) and what to register (the book). However, software (and games, in particular) is a much more fluid situation. When is a game truly ever finished? And, if we don’t know when the game is finished, what exactly do you decide to register with the Copyright Office? More importantly……the Copyright Office requires that “each separately published version of a computer program that contains new, copyrightable authorship must be registered separately, with a new appliation and fee.” (Circular 61) So, now the question becomes, how are defining a… Continue Reading

>Tip: Work Made for Hire vs. Get the Assignment

>One of the more common missteps involving intellectual property is the concept of a work made for hire. This concept is defined in the U.S. Copyright Act and there is a lot of case law over the years regarding it. Many people believe that “if Company A paid for Person B to develop The Thing, then Company A owns The Thing”… like all things lawyer, the answer is “maybe.” If Person B was an employee of Company A and it was part of Person’s B to develop The Thing, then The thing is a work made for hire. There is a second concept for work made for hire……that is spelled out in the statute, but it requires many other extra hoops for The Thing to qualify as a work made for hire. However, as you can see, not every instance qualifies as a work made for hire. And, if The… Continue Reading

>Activision v. Double Fine

>Another day, another publisher-developer lawsuit. This time, Activision filed a suit against Double Fine (headed by Tim Schafer, of Psychonauts and Day of the Tentacle fame) last week in an effort to prevent the release of the new game Brutal Legend. Activision claims it still has the rights to release Brutal Legend, which it acquired by way of its merger with Vivendi Games last year. In its complaint, Activision says that Vivendi Games invested roughly $15 million in Brutal Legend before the merger. However, Activision dropped Brutal Legend after the merger was complete, and didn’t continue efforts to publish the title. When a publisher loses interest in a half-finished game, developers can be left in limbo. At that point, publishers have invested money in the game, and usually have been granted certain rights in return. And without those rights, developers can have a hard time getting a new publisher on-board… Continue Reading

>Killer Hardware Can Trigger Killer Lawsuits

>All three leading console makers previewed new motion-sensing controller technology this week at E3. With the success of the Wiimote, the industry may have realized that killer controller hardware can sell consoles just as well as killer game titles. Whenever a large company launches a significant new product like a game controller, there are numerous intellectual property “clearance” issues that play out behind the scenes. Not only does the company have to worry about protecting its new hardware design from infringers, but it simultaneously has to worry about infringing everyone else’s intellectual property.Today at E3, Sony unveiled a motion-sensing system with a controller that can translate player movement as a sword, a bat, a gun, etc., while Nintendo announced a few technological tweaks to the Wiimote. Sony’s and Nintendo’s unveilings came just a day after Microsoft announced that it developed a system that allows game control through tracking of players’… Continue Reading

>Bilski is going to the Supreme Court

>The blogosphere is all abuzz about Bilski going to the Supreme Court. When Bilski was first issued, I didn’t expect it to go to the Supreme Court — but after seeing how broadly it has been applied and interpreted, I expected no less. As the video game industry continues to evolve, patents are becoming more of an issue, both from an enforcement and defense position. A Supreme Court ruling could go a long way toward determining whether the software and business method patents obtained by software companies are a hollow or substantive asset.

>Tip: Contract Indemnification

>Indemnification provisions are pretty common in software development agreements. The key with an indemnity is determining the appropriate trigger events. For example, should a only third party claim trigger the indemnity is should any loss by the other party? Perhaps only certain kinds of losses will be covered by the indemnity? Another point to consider is whether the indemnity obligation should be capped by the limitation of liability in the agreement. Consider whether the indemnity should be separated from the limitation, or that a separate cap should apply.Lastly (for this post), if the indemnifying party has an obligation to defend the other party, be sure to consider the full practical effect of that obligation. Sure, it may be all well and good that the cost of paying lawyers to defend the lawsuit has been shifted to the other party — but, do you really want that other party to be… Continue Reading

>Tip: Buying Video Game Assets Out of Bankruptcy

>Like many industries, the video game industry has seen a rise in Chapter 11 bankruptcy filings. Large corporate bankruptcy cases can be complicated and intimidating affairs, but for the savvy investor (or the savvy competitor), they can present tremendous opportunities. Traditionally, companies filed Chapter 11 to restructure their debt and emerge from bankruptcy as a more efficient going concern. It is becoming more common, however, for companies to file bankruptcy and quickly sell some or all of their assets and liquidate the remainder. These transactions are commonly referred to a “363 sales” (named after the applicable Bankruptcy Code section). Such sales can involve any asset of a bankrupt company, including intellectual property rights, and a prospective buyer has an opportunity to acquire a desired asset at a discounted price. However, because of the particularities of the bankruptcy proceeedings, there are some choppy waters that a prospective buyer needs to successfully… Continue Reading

>Take-Two and 3D Realms are All Out of Gum

>A soured game publishing deal has ended in litigation between the developer and publisher. Last Friday, Duke Nukem Forever publisher Take-Two Interactive sued developer 3D Realms’ parent company, Apogee Software Ltd. Take-Two is accusing 3D Realms of failing to deliver on a contract to produce Duke Nukem Forever after Take-Two paid $12 million in 2000. The success of Take-Two’s suit may depend on how well-defined the obligations are within its publishing agreement with 3D Realms.Earlier this month, there had been rumors that 3D Realms had shut down, and 3D Realms did confirm that the Duke Nukem Forever development team was let go on May 6. However, today, 3D Realms issued a statement declaring that it is not going out of business. The statement said 3D Realms has not closed down entirely, and 3D Realms still retains ownership of the Duke Nukem-related intellectual property. 3D Realms says it will continue to… Continue Reading

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