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>Tip: IP Indemnification

>As patent and other intellectual property lawsuits continue to litter the video game landscape, it makes a mind wander to one of everyone’s favorite clauses in developer and publisher agreements: indemnification (which we have discussed before). This is one of those clauses that gets buried at the end of the agreement, often on the hope that it never gets discussed. And, certainly neither party ever hopes to have to invoke the indemnity clause. The problem arises that, while the clause generally does not see the light of day, should the clause ever become necessary — the dollars and stakes are bigger than ever anticipated.A publisher will generally try to seek a broad indemnity from a developer, so that, if a patent owner sues the publisher alleging that the developer’s game infringes the patent (or other intellectual property), the publisher will be protected. The indemnity clause will be used to shield… Continue Reading

>NFL Retirees Suing EA Over Madden

>Electronic Arts, Inc. is again feeling the pressure regarding its sports-based video games, this time thanks to a class action centered around its ?Ç£Madden NFL?Ç¥ video game franchise. The complaint was filed in the District Court for the Northern District of California on Thursday, July 29, 2010, by former Cincinnati Bengal and Tampa Bay Buccaneer Michael ?Ç£Tony?Ç¥ Davis, on behalf of himself and about 6,000 former NFL players. It claims that EA is intentionally pilfering the players?ÇÖ publicity rights under California law, through the unauthorized use of the players?ÇÖ likenesses to recreate over 140 NFL teams of the past. Specifically, the complaint states that older versions of Madden NFL included player profiles for each ?Ç£player?Ç¥ on a ?Ç£vintage?Ç¥ team featured in the game, such profiles including descriptions of the players?ÇÖ positions, number of years of NFL experience, physical characteristics, and relative skill level in different facets of the game. These… Continue Reading

>UK Looking To Offer Tax Incentives for the Gaming Industry

>In the Economic and Fiscal Strategy Report and Financial Statement and Budget Report issued today by the Chancellor of the Exchequer for the United Kingdom, one of the key strategy points raised in conjunction with the overall fiscal strategy of the United Kingdom was to introduce “tax relief for the UK’s video games industry.” Recognition at the highest levels of government of the financial impact of the video game industry — it truly is becoming a Gamer’s World.

>False Patent Marking

>The false marking statute, 35 U.S.C. ?º 292(a), is a little-known statute (unless you happen to be a patent attorney), that aims to prevent a patent owner from hindering competition by falsely marking their products with a patent number that does not cover the product. The false marking statute provides for damages of ?Ç£not more than $500 for every such offense.?Ç¥ Furthermore, the false marking statute allows ?Ç£any person?Ç¥ to sue for the penalty and split the award with the federal government in a qui tam action. In December 2009, the Federal Circuit, in the suit Forest Group, Inc. v. Bon Tool Co., clarified that ?Ç£every such offense?Ç¥ meant that each article or product made by an company that was falsely marked will receive a fine of ?Ç£not more than $500.?Ç¥ Previously, courts had various interpretations of the statute and might find a single offense and fine a company $500… Continue Reading

>Hasbro and Atari Duel over a Licensing Spat

>Hasbro, the owner of the venerable Dungeons & Dragons intellectual property has brought suit against Atari, seeking to terminate Atari’s rights to develop video games based on Dungeons & Dragons. According to Hasbro, the license agreement contained (i) a confidentiality provision that prohibited Atari from disclosing non-public information about Dungeons & Dragons video games to third parties and (ii) provisions outlining minimum customer support requirements.As outlined in Hasbro’s complaint, Atari spun off divisions and went through multiple leadership changes, and then had a subsidiary of Namco Bandai (a key Hasbro competitor) take the reigns of certain Dungeons and Dragons games in certain European countries (thereby disclosing Hasbro confidential information to its competitor). Hasbro also includes in the complaint that it went country-by-country to assess Atari’s customer support of Dungeons & Dragons games and found the support lacking. Hasbro is seeking to terminate the license agreement and also brought claims for… Continue Reading

>Software licenses, assignability, and mergers

>A new case was handed down out of the Sixth Circuit last week that dealt with software licensing. In this case, a company had licensed some software, and the license agreement contained some of the standard non-assignment language: that the license was non-transferable and that the licensee could not transfer its rights without the approval of the licensor. The licensee underwent some corporate reorganization — it was merged into a new entity. The key thing here is that the merger was *not* with a third party entity or as part of buying assets. This case stemmed simply from a parent company consolidating a set of wholly-owned subsidiaries. However, even though, pre- and post-merger, the software sat on the same computer, doing the same thing, at the same location, the surviving entity was in violation of the software license as a result of the merger.So, two tips for all of the… Continue Reading

>Game Developers Convention

>I was out at the Game Developers Convention in Austin last week. I had a great time and wish I could have met more folks. I’ll have some notes and observations on trends that I gathered from the festivities that I’ll be rolling out soon, but the one thing that really caught my eye was the extreme interest in the “Free to Play (with a heaping helping of microtransactions)” business model. My personal thought is that its going to get crowded online with everyone scrambling to attract their preferred gender/age demographic, while at the same time not having minimal (or no) revenue stream. Plus, if you are one of the lucky newcomers to have That Certain Something, what steps are you taking to prevent the existing games from simply adding That Certain Something as a game mode/feature to their own game?

>We’re back!

>My apologies on the hiatus. We’ve been caught up in a few deals, but there’s some great content in the works and we’ll be back with our regular posts, tips and updates. I hope to run into folks at the Game Developer’s Conference later this month in Austin, Texas. It looks like it should be an interesting event.

>Potential New Implied Software License Warranty

>The American Law Institute has issued a proposed final draft on the “Principles of Law of Software Contracts” (click here to obtain a copy). In this draft, the ALI seeks to provide (suggested) clarifications and requirements in the context of software licenses. While it is not a law or statute, it does serve as a model for States to choose to adopt, and can provide guidance to judges who seek assistance in interpreting software licenses and contracts. One of the areas of concern is that the draft creates an implied warranty of no material hidden defects AND that this warranty is non-disclaimable. The effect, if this were to become law, would be that customers would be able to bring a claim for bugs in the software. Of course, depending on whether you are a software developer or a software buyer will dictate your reaction to this new “requirement.” Looking closer… Continue Reading

>Copyright Office and Electronic Filing

>The Copyright Office continues to try and push itself into the digital age. The Office has been trying to implement an electronic filing system, but there have been a few hiccups along the way. However, as they have been ironing out the kinks, the Copyright Office has become more aggressive in pushing filers to use the electronic system. Prices for filing copyrights will be changing on August 1. The new prices will be $35 for filing an electronic application, $50 to file the scannable CO form, and the traditional paper filing will now be $65. Remember, though, whenever you are filing the copyright application (electronic or otherwise), to be very careful about your deposit materials. I have seen many copyright infringement cases go awry because of mistakes made with the deposit materials … but I’ll save that for another post.

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