Series Info...Trials, Triumphs & Trivialities #164:

Online Games & The Law: The Latest Cases

by Shannon Appelcline

Last year I wrote a series of articles on online games and how they can be affected by various IP laws. I discussed copyright, trademark, and patent--the big three.

Since the end of February, a number of interesting online- and game-related cases have all come across the transom, hence this week's article, which updates my earlier discussions of online gaming law and also gives my earlier generalities some specifics by discussing recent & current cases.

As before: I'm not a lawyer.

Marvel Entertainment v. Cryptic Studios & NCSoft

The biggest news is an update in Marvel Entertainment's lawsuit against City of Heroes. The original lawsuit was filed on November 10 against both Cryptic Studios & NCSoft. Marvel's main claims were copyright & trademark infringement.

City of Heroes has an innovative character creation system which lets you graphically design your hero by mixing and matching various patterns, letters, colors, textures, and outfits. Marvel Entertainment said that because you could create characters who looked sort of like Marvel's characters through this system Cryptic Studios was thus responsible for the copyright infringement. They also said that Cryptic Studios was responsible for copyright infringement because people could name their characters after Marvel's characters, e.g. "Wolverine", or alternatively "W0lver1ne__SUX!!!". To be more specific, these claims said that the City of Heroes folks were guilty of "contributory infringement", which means that they were helping other people to violate Marvel's copyright & trademark.

Most people who read about the original case thought it was entirely ludicrous, and that Marvel didn't have a bionic-leg/tentacle/pseudopod to stand on. One of my friends replied, "I once drew a picture of Green Lantern on a unicorn when I was six. Is Marvel going to sue me and the crayon company?" (To which I replied, "Of course not. Green Lantern is a DC hero.")

Cryptic Studios had two main (and strong) defenses against these charges.

The first was the "betamax decision" (aka Sony Corp v. Universal City Studios), which says that if a technology has a "significant noninfringing uses", then as a whole it's non-infringing and thus legal.

The second was the online service provider safe harbor in the Digital Millennium Copyright Act, which said that if Cryptic was an OSP then they weren't liable for contributory infringement, provided that they take specific actions when alerted to infringement.

A lot of us in the online gaming field should probably feel a little nervous about this whole case, because the more that we give users the ability to create their own content, the more vulnerable we are to this sort of lawsuit--and I strongly believe that user content is the way of the future.

On March 11, NCsoft put out a press release that made it sound like they'd basically won the case. Not quite, but the judge did make some good decisions in their favor. In particular, he refused to say that City of Heroes wasn't an OSP and in reference to the betamax precedent he said, "It is uncontested that Defendantsí game has a substantial non-infringing use", which definitely sounds pretty good.

He also gave Marvel a bit of a bloody nose by dismissing some of their exhibits of copyright and trademark infringement because Marvel had created them themselves, not users. Whether they were ever promoted as anything else I can't tell, because the press release is badly biased, and the LA District Court doesn't have its filings online yet.

This is going to be a case well worth watching, and most of us in the online game field will be ferevently hoping that NCSoft and Cryptic score a total victory, else our field is going to get a lot harder to navigate.

Hasbro v. RADGames

Hasbro, the publishers of Monopoly seem to be constantly suing someone about their game of rampant capitalism. Their latest lawsuit against RADGames is somewhat interesting because it's very much an edge case. It was filed on February 25, and Hasbro very quickly got a restraining order.

RADGames has introduced a product line that they call "super add-ons". The idea seems to be supplements for existing games, where you have a board-within-a-board, which allows for an additional level of play with an old favorite game. Hasbro of course says that it's copyright (and maybe trademark) infringement. In response to Hasbro's lawsuit a couple of weeks ago, RADGames wrote a release which included the following:

"Our game has a unique look and feel, with brand-new moves and action cards," said RADGames co-founder Robert Wilkins. "In developing our 'Super Add-Ons' game, our creative team worked in tandem with copyright and trademark attorneys, using extreme care not to violate anyone's rights. We were upfront with Hasbro and went as far as to show them a prototype prior to Toy Fair. This demonstrated our willingness to work in conjunction with them. Instead, Hasbro has chosen to file a baseless legal action. This is a clear example of the big corporation trying to stifle the little guy."

In my opinion, RADGames is probably right. As I've said previously, you can't copyright game mechanics. There could be some valid trademark complaints, but there shouldn't be if RADGames was careful with their packaging, making it clear that they were not the actual makers of Monopoly (and whether they were careful or not, I can't say).

Unfortunately, it probably isn't going to matter if Hasbro is right or not. They have more money, and so they'll probably be able to run RADGames into bankruptcy with the court case (and the restraining order), and so no decision will ever be made.

I don't think many of us in the online field are thinking about making supplements to (or knock-offs of) existing games. However if you are this is the exact sort of case you need to pay attention to. No matter what the law may say, for a lot of these edge cases a lawsuit can drive you out of business if you're in the right legally or not.

Apple Computer v. John Doe, John Doe, John Doe, et. al.

In December Apple Computer filed a lawsuit against 25 John Does for leaking information to web sites in violation of the California Trade Secret Act. They then followed this up with a common tactic by going to three web-sites/publishers and attempting to force them to give up the names of the anonymous contributors. The web sites in turn said that they didn't have to because of the California "shield" law, which protects journalists from giving up their sources.

Apple Computers then tried to claim that the web sites weren't actually journalists, but the judge side-stepped the whole issue when he came back with his decision on March 11. He said, "The journalist's privilege is not absolute ... For example, journalists cannot refuse to disclose information when it relates to a crime." In other words, because trade secrets were being violated it didn't matter if these web sites were journalists or not.

On the one hand, I found this to be an interesting upholding of the strength of trade secrets, something I mentioned in my original articles, but didn't go into a lot of depth, because the whole idea doesn't impact most of our lives.

On the other hand this decision is of importance to makers of online games because we're implicitly creating communities, and anything that infringes on the protections of those communities implicitly hurts us. In this case the communities themselves didn't face any legal sanctions as far as I can tell. However, no doubt their (and perhaps our) community members will feel that much less safe in the future.

I'd like to talk more about the laws surrounding online communities sometime in the future.


Generally, I believe that you should make sure that you know something about the lawss related to the online games that you're making, so that you're never caught by surprise. Beyond that I don't think that any of us should constantly live in fear (at least not yet) of unjust (or just) lawsuits affecting our business, but the potential is always there, so it's worthwhile keeping up on what's going on in online & gaming related lawsuits.

[ <— #163: Social Software & Gaming: User Content | #165: A Theory of Game: Psychology & The Prisoner's Dilemma —> ]

Miniseries ...