Virtual World Law Blog

A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

Piracy battle goes to CES, Wikipedia may join SOPA protest, Google social search faces privacy concerns

A contentious battle over Internet anti-piracy legislation shifted from Washington to the Consumer Electronics Show, The Washington Post reported. The Consumer Electronics Association, which is behind the show, has been a vocal opponent of the two bills circulating in Congress that would help Hollywood titans, record labels and pharmaceutical firms enforce copyright infringement laws online.

Mobile virtual currency market to hit $4.8bn by 2016

In fact, a study released yesterday from Juniper Research predicts that the amount of money being spent on virtual currency in mobile apps is going to more than double in the next four years, going from $2.1bn last year to $4.8bn by 2016.

Bethesda Buys Interplay's 'Fallout' Rights, Ends IP Suit

Interplay Entertainment Corp., original developer of the "Fallout" line of video games, on Monday forfeited its rights to continue work on the series -- resolving a trademark dispute with former business partner Bethesda Softworks LLC.

Domino's Pizza uses augmented reality offers to boost food sales

Domino's Pizza, which has already been testing the waters of mobile marketing for some time now, has started a new campaign that includes the use of augmented reality, to add a whole new dimension to its latest 555 pizza offer.

CES: Better augmented reality with high-tech contact lenses

Augmented reality has made progress on smartphones, with apps letting people layer information and graphics over a view of the real world. A startup from the Seattle region is looking to take the next step toward an AR future with special contact lenses that make it possible to view objects projected onto glasses a short distance away from the eye.

Banks start playing games with your money

A new video game has gotten its hooks into Brian Kealer, a 26-year-old San Francisco software engineer. He's not killing birds or using his vocabulary to impress his friends. No, Kealer is after real prizes, like the iPad2 he just scored. And he's playing with his bank account. 

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Social Media usage in the financial services industry is on the rise, which is now putting many registered investment advisers (RIAs) under the microscope for potential federal securities laws violations. RIAs that have not taken the time to review and update their social media policies and procedures may soon find the Securities and Exchange Commission (SEC) knocking on their door. Just recently, the SEC charged an Illinois-based investment adviser with offering to sell fictitious securities on LinkedIn.

On January 4, 2012, the SEC also released a National Examination Risk Alert addressing investment adviser use of social media. This alert outlines the specific factors that need to be addressed by RIAs who wish to remain in compliance with federal securities laws. The SEC's guidance could be particularly important given the "crowdfunding" legislation Congress is currently considering.

For a full breakdown and analysis of the SEC's alert, please click here.

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Will 2012 be the year of virtual worlds?

What got me thinking about this was a blog post by Maria Korlova over at the HyperGrid Business Blog. In it, she maintains her firm conviction that businesses will soon come around to using these virtual worlds as business tools. Just as the nay-sayers were wrong about the Internet, Software as a Service, and Lady Gaga, we will eventually integrate this technology into how we work.

Courts, Sports And Videogames: What's In A Game?

Although one of the clearest legal thinkers, Louis Brandeis, conceived the modern right of publicity,[1] "unclear" would be an adjective all lawyers would apply to the current state of right of publicity law, regardless of which side of the issue they usually argue. Indeed, although the right of publicity concept was further developed by another very clear legal thinker, William Prosser,[2] he himself alluded to it as the concept "that launched a thousand lawsuits,"[3] few of which can be reconciled with one another.

Insurers Can't Join Coverage Suit Over Athlete Image Use

A Georgia federal judge said Wednesday that four insurers can't intervene in a coverage suit in California over underlying antitrust class actions concerning the use of college athletes' likenesses in video games.

What the Copycat Saw: Creative Theft in Mobile and Social Games

The distinction between theft and inspiration is often unclear in video games. Traditions are formed, broken down, and remade every few years. The most successful ideas are eagerly absorbed by others, from regenerative health in first person shooters to the subdivision of platformer levels into world and stage.

Virtual worlds training for federal cyber pros in the works

Following passage of the Leahy-Smith America Invents Act in September 2011, the United States Patent and Trademark Office (USPTO) began accepting requests for prioritized examination of patent applications through the Track I Prioritized Patent Examination Program. Simply put, Track I allows inventors and businesses, for a fee, to have their patents processed to completion in 12 months.

• 1,218 of the 1,231 requests for prioritized examination that have been decided were granted, which represents a 98.9% approval rate.
  
• 648 have already received a first office action, and another 34 will be mailed within days.
• On average, the PTO is getting a first action out in Track I cases just 30.7 days after approval of the petition - for a total elapsed period to first action of 66.4 days after filing of the request-petition, with the longest time to  first action being 70 days from grant of the petition.
•  23 allowances have already been mailed on Track I applications, the fastest of which was mailed just 37 days after the application was filed and 7 more allowances are currently in the pipeline.
• Of the Track I cases allowed so far, the average time to allowance is 39.2 days from petition approval.
  
• As for rejections, so far there have been three final rejections issued on Track I applications. The average time to final rejection has been 34.3 days, and the longest time to final was 50 days, both measured from approval of the Track I petition.
• The first Track I application is due to issue on Jan. 10, 2012. This application was filed Sept. 30, 2011.

PhoneDog LLC filed a lawsuit last July against a now former employee, Noah Kravitz. PhoneDog, which reviews mobile devices, including phones and tablets, is claiming ownership of Kravitz's Twitter followers. They claim he owes them $340,000 based on an assumed value of $2.50 per follower per month.

The dispute arose when Kravitz resigned and allegedly changed his Twitter name from PhoneDog_Noah to noahkravitz, to keep the 17,000 followers that he built up since 2006 when he started with the company. The company is alleging that the followers should be treated like a customer list, and therefore PhoneDog's property. The fact that Mr. Kravitz used the company name in his Twitter handle likely will not help him. However, the company probably could have done more to ensure that they owned the account and followers.The outcome of this case will likely be based on the specific facts here.

But regardless of the outcome, companies should take away a very important lesson from this case. The lesson is that it is critical to address employee social media issues. Lawsuits and their costs and uncertain outcomes can be avoided by having well thought out and clear policies and agreements with employees who use social media in connection with company activities. Don't wait until an issue like this is upon you to focus on a social media policy.

Companies that do not have a social media policy need to fix that as soon as possible. Those that have cobbled one together but without expert advice, need to have the policies reviewed to plug the holes. In short, all companies using social media would benefit from spending a little time having their social media policies and agreements reviewed by an attorney who spends time everyday on social media issues. 

Continue reading "Dog Gone! And their Twitter Followers Too?" »

Scientists Find Safer Ways To Test Medical Procedures

Scientists are developing ever more sophisticated versions of "virtual patients" with the aim of testing medical devices and procedures that can't readily be assessed in real people.

FarmVille Creator Zynga Kicks Off $1B IPO

Zynga Inc., creator of the FarmVille and CityVille phenomena as well as other games that piggyback on Facebook Inc.'s tidal wave of popularity, became a publicly traded company Friday when it made a $1 billion initial public offering of its stock.

What's the right social cocktail for you?

From supply chain management to PR crisis management, the role of public social data in the enterprise is no longer framed around the question of "why does this data matter?"  That said, we are still in the very early stages of corporate adoption and there are plenty of unanswered questions for most companies.   Once enterprises get past asking why this data is important, the next obvious question to address is: which public social data is best for performing business analysis and decision-making?  Facebook?  Twitter?  Google+?, WordPress?

U.S. Senator Mad that Your Tax Dollars Saved Video Games

Video game preservation, educational robot dragons and Department of Homeland Security Sno Cones are just some of the "outlandish" federally funded projects called out in U.S. Senator Tom Coburn's annual big book of wasteful government spending this week.

New Research Shows 72% of Consumers Welcome The Opportunity To Watch Sponsored Videos In Online Games

A new study conducted by SponsorPay, the leading international cross-platform social advertising solution, found that consumers welcome the opportunity to watch sponsored videos in online games and not only recall these brands but also harbor positive sentiment towards them.

New Report Details Demographics of Mobile Gamers Buying Virtual Goods

As gamers age, so does their propensity to buy mobile virtual goods, according to a new study by MocoSpace, the largest mobile gaming community in North America. The results of the new study focusing on virtual goods consumption and engagement by age found younger gamers (25-35) spend the most time playing social games, but gamers over 45 buy exponentially more virtual goods than their younger counterparts.

On December 6, 2011 Zynga settled its copyright suits against Vostu USA Inc. and others.  The first suit, case number 5:11-cv-02959, filed in the U.S. District Court for the Northern District of California back in June, alleged that several of Vostu's games infringed Zynga's copyrights.  Specifically, Zynga had alleged, that Vostu's MegaCity, Cafe Mania, Pet Mania, Vostu Poker and MiniRazenda games are merely clones of Zynga's popular titles.  Zynga followed this suit with another one in Brazil claiming copyright infringement and unfair competition.  Vostu initially responded to the suits asserting that its games were non-infringing but has ultimately agreed to settle the US and Brazilian matters by compensating Zynga and altering some of its games.

The parties have issued a joint statement that "Zynga and Vostu have settled the copyright lawsuits and counterclaims against each other in the United States and Brazil".  Additionally, "[a]s part of the settlement, Vostu made a monetary payment to Zynga and made some changes to four of its games" but the parties did not elaborate on the amount of the payment or the nature of the changes.

This settlement followed (and may have been prompted by) some early success in the cases by Zynga.  Zynga was able to obtain a preliminary injunction from the Brazilian court ordering Vostu to cease making the challenged games available.  In response Vostu initially convinced a U.S. District Judge to grant a temporary restraining order prohibiting Zynga from enforcing the Brazilian court's order; however this TRO was quickly dissolved.  The Brazilian order was stayed by the appeals court pending Vostu's appeal.

This settlement is a good example of how IP rights can be used to protect a video game from being cloned.  There is a history of successful games being the subject of imitation which goes back to the earliest days of the industry.  Many companies have come to believe that cloning is just part of business and there is nothing that can be done to stop it.  However, this is not entirety true.  Copyright, trademark, trade secrets and patent rights can all provide differing levels of protection for games.  Copyright can protect a game from literal duplication or use of its protected images, code, literary elements, music, etc.  Trademark can protect the actual name, logo or certain other identifying elements from a competitor's potentially confusing use in a game (or elsewhere).  Additionally, trade secrets can be used to protect a company or game's "secret sauce" from being co-opted.  Finally, patents may be used to protect features and functions of a game, including game mechanics, business methods and other functionality and processes. 

Virtual Justice

Rutgers University law professor Greg Lastowka looks at whether players can and should be granted legal ownership of virtual items, whether or not there's any existing legal precedent and how the virtual item landscape may change in the near future.

Italian court: Online editors not responsible for reader comments

Online commentators Wednesday welcomed a ruling by Italy's highest court that the editors of online publications cannot be held legally responsible for defamatory comments posted by their readers. In a ruling handed down at the end of October, the Court of Cassation acquitted a former online editor of L'Espresso news magazine of the crime of failing to prevent defamation committed by one of her readers.

OUII Seeks Clarity On 'Process Of Establishment' Claims

The U.S. International Trade Commission should review a recent finding in a video game patent infringement case and clarify how to determine if a domestic industry is in the process of being established in Section 337 cases, the ITC's Office of Unfair Import Investigations said in a petition publicized Tuesday.

Germany's Merck wants Facebook page back

Germany's Merck KGaA has threatened legal action after it said it lost its Facebook page apparently to rival Merck & Co. in the U.S., though it has yet to identify defendants in the case.

Virtual World Startups Seek Refuge From Patent Attacks

The developers behind the next evolution of the Internet -- linked, immersive, 3D environments -- are trying to think of ways to minimize the adverse impact of software patents on their industry.

Social media in for worse cyber attacks in 2012

Social media sites and cellphones will prove to be fertile grounds for cyber criminals to exploit globally important events in 2012 to steal personal information and data and make financial gains, cyber security firm Websense has said. The Websense document, " 2012 Cyber Security Threats," has said identity information posted by users of sites such as Facebook, Twitter or LinkedIn may prove more valuable to cybercriminals than even credit cards.

Facebook recently filed a Patent Application that Triggered a Congressional inquiry.  The patent application, which describes technology for tracking users on other websites, resulted in a letter from Reps. Edward Markey, D- Mass., and Joe Barton, R-Texas, seeking information on its current privacy practices and future intentions for tracking user activity and data. Markey and Barton co-chair the Congressional Bipartisan Privacy Caucus.

The application was published on Sept. 22, 2011 and describes a method "for tracking information about the activities of users of a social networking system while on another domain."

In the letter to facebook CEO Mark Zuckerberg, Markey and Barton sought clarification on the purpose of the patent and how Facebook intends to use it. They also inquired about how Facebook intends to integrate the location data of its users into its targeted advertising system, noting that Facebook has previously stated that it does not track people across the Internet.

It is important to note that just because Facebook has filed a patent does not necessarily mean that they have commercially implemented what the patent discloses. However,  this action is just one of the latest from Washington focusing on privacy. There seems to be a very focused effort by legislators and regulators to ensure that companies only collect user information needed for legitimate business purposes and that the information collected is not retained indefinitely. 

As with many other aspects of social media, the laws and regulatory climate are continuing to evolve.  If you have not recently reviewed your data collection, privacy practices and privacy policies, now is a good time to do so. 

Virtual Fairs Offer Real Jobs

As companies find themselves swarmed with applicants, struggling to match workers with the right skills to job openings, many are turning to virtual career fairs. Employers say these online forums--accessed by companies and job seekers from anywhere in the world--can save them time and money, as well as broaden the candidate pool.

Deal United's Facebook "Credits Rewards" Lets Clients Incentivize Signups and Purchases With Virtual Currency

German offer provider Deal United today announced it is entering the virtual currency incentives industry with the launch of "Credits Rewards". The new service allows brands to reward to users with Facebook Credits when they make purchases, registrations, signup for newsletters, enter contests, fill out surveys and more. Because virtual currency is so cheap to distribute and Facebook users may value Credits higher than their actual cost in dollars, they can be a cost effective way for businesses to reward users for following their call actions.

Children's book publisher heads into virtual world

Given that virtual worlds are driven by strong narratives, it comes as little surprise that more book publishers are eyeing opportunities in the space. The latest example comes from Finnish publisher DramaForum, which is transitioning its Petra's Planet book series into a virtual world through UK development studio Dubit.

Three ways virtual environments are changing how companies conduct business

One of the more popular attractions at major theme parks is the "motion ride." Through the use of visual, audio and other sensory cues (along with some pretty slick technology), visitors are given the opportunity to go places and do things they never could in the real world. Whether it's flying through the jaws of a dinosaur in Doc Brown's Delorean, visiting a galaxy far, far away, or taking a tour through the inner workings of the human body, these virtual environments engage visitors with a sensory experience that moves them in a way ordinary roller coasters can't.

Samsung Launches the Industry's First Gamified Corporate Website

Samsung Electronics America today announced the launch of Samsung Nation, its first social loyalty program. Available on the Samsung U.S. website, the program rewards consumers by enhancing their online experience with Samsung.

The Not-At-All-Distant Future of Green Gamification

Games are like ketchup: widely loved and diversely applied, with an appeal rooted in childhood. In fact, a new report reveals that over 90 percent of U.S. kids aged 2-17 are gaming today. Yet the gaming generation has been on the rise for three decades, leading to not only an army of young gamers, but also an influential adult segment. It is small wonder, then, that "gamification" is the most disruptive force to impact marketing since the arrival of social media.

Macy's Introduces Augmented Reality Experience in Stores across Country as Part of Its 2011 "Believe" Campaign

Bambuser Powers World's First 24-Hour Virtual Tour of New York City

Starting and finishing in Times Square on Tuesday, 1^st November at 9am EDT, Hans Eriksson - executive chairman of the live mobile streaming application Bambuser will spend 24 hours exploring New York, broadcasting all he encounters live onto the web from his iPhone - with his itinerary selected by his online audience.

Square Enix, DeNA Team Up For Japanese Final Fantasy Social Game

Square Enix and Japanese mobile social gaming company DeNA are teaming up to create the first social game based on the popular Final Fantasy series. Few details have been announced regarding the Mobage title, which is based around the theme of "fighting for teammates," but DeNA said it will be developing the game in-house using familair characters from Square Enix's Final Fantasy series.

Bunchball Wants to be the 'Motivation Engine for the Internet'

Who would have thought that a company located just above an Irish pub in San Jose would grow to be so successful? According to Bunchball's Founder and Chief Product Officer, Rajat Paharia, Bunchball originally had roots in "social gaming", a concept that he admits was a bit too early to market and proved very difficult as a pitching point.

Nirav Tolia launches Nextdoor, private social network for neighbors

"Even though social networks are completely ubiquitous, I didn't see a social network for one of the most important communities in our lives: the neighborhood," Tolia said in an interview this week. Tolia says neighbors have lost touch with each other. He points to a 2010 study from the Pew Research Center that found that 60% of Americans didn't know the people who lived near them.

Video games for sweepstakes argued before NC court

The state is seeking to preserve a law that attempts to rid North Carolina of sweepstakes that use video-style games to reveal winnings but that companies say infringes on free speech rights and should be thrown out.

The Top 10 Most Influential People in Facebook and Social Games

In an attempt at fairness, we took to AppData's developer leaderboard, but also peppered the list with industry transplants of note. We're certain we've glossed over some video game veterans, but did you really want a list of 30 people? So, feel free to give us your two cents in the comments. (We've put on our flame-retardant suits already.) Here are the top 10 most influential people in Facebook and social games...

PBS KIDS Sets New Bar in Educational Gaming Space

PBS KIDS today launched over 40 new cross-platform games designed to help children ages 2-8 build critical math skills. They include PBS KIDS' largest offering of interactive math content for preschoolers to date. The games comprise several suites, each of which is centered around a PBS KIDS media property - from CURIOUS GEORGE to THE CAT IN THE HAT KNOWS A LOT ABOUT THAT!. Available for free on the new PBS KIDS Lab website (PBSKIDS.org/lab), each suite links a set of games across platforms - accessible through computers, mobile devices and interactive whiteboards - so that kids engage with the same characters as they move from device to device. The content is also linked by a curricular framework, leveraging games on a variety of platforms to support key math skills.

Zynga announces 'CastleVille,' 9 other titles

From its sparkling new headquarters here, the company announced a major new gaming platform, code-named Project Z, that will let its millions of customers seamlessly play games on Facebook and Zynga.com; a lineup of 10 new titles, including Zynga Bingo, Hidden Chronicles and the mobile-only Dream Zoo; and, perhaps, its most ambitious game yet, CastleVille.

Hollywood Taps Videogames as Source of Inspiration

Despite the tarnished history of videogame adaptations, studios are moving forward with more than dozen big-screen gaming movies. What's amazing, though, is it's possible -- just possible -- that some of these films might not stink.

What drives Adidas' virtual wall

So popular was Inside Retail's story about the Adidas in-store 'virtual wall' which took an innovation honour at the recent World Retail Awards, we're revisiting the concept with an interview with designer David Judge from Stuart MacGill.

Oracle To Launch Enterprise Social Network

Oracle Social Network enables users to communicate and collaborate with other people inside or outside of their organization using a variety of tools, such as personal profiles, groups, activity feeds, status updates, discussion forums, document sharing, co-browsing and editing, instant messaging, e-mail, and Web conferencing. Oracle Social Network also provides native applications for iPhones, iPads, and Android devices, along with Web browser support, so mobile users can work and interact from anywhere.

The self-imposed guidelines, detailed below, were developed jointly by the Distilled Spirits Council of the United States (DISCUS), the national trade association representing America's leading distilled spirits companies and nearly 70% of all distilled spirits brands sold in the United States, and the European Forum for Responsible Drinking (EFRD), an alliance of Europe's leading distilled spirits companies.

The guidelines consist of a set of "basic principles" together with definitions and directions for implementing those principles. They aim to protect consumers' information while urging responsible marketing practices in the context of digital media such as websites, social networks, blogs and mobile apps. Furthermore, the issuance of these guidelines reflects the fact that digital marketing is increasingly a valuable and appropriate tool for reaching consumers who are legally old enough to purchase distilled spirits.

Per the guidelines, distilled spirits companies should:

1. intend their digital marketing communications for adults of legal purchase age;

2. place their digital marketing communications only in media where at least 71.6% of the audience is reasonably expected to be of the legal purchase age (and DISCUS notes that Nielsen online syndicated data from August 2011 disclosed that 82.22% of the Facebook audience, 86.86% of the Twitter audience, and 80.96% of the YouTube audience, was 21 years of age or older);

3. require age affirmation (full date of birth to determine if a user is of legal purchase age) when a user first reaches the companies' interactive webpages;

4. display, on their webpages that permit the posting of user-generated content, a disclaimer stating that all inappropriate user-generated content will be removed;

5. monitor and moderate, preferably every business day but no less than every five business days, user-generated content on the companies' webpages and promptly remove inappropriate material;

6. instruct users that digital marketing communications should not be forwarded to individuals below the legal purchase age;

7. respect user privacy in their digital marketing communications;

8. ensure that their digital marketing communications and product promotions are identified as brand marketing;

9. include social responsibility statements in their digital marketing communications where practicable; and

10. display, follow, and encourage users to read before submitting their information, a privacy policy that provides for the following: age affirmation will be used prior to the collection of any other information; user information can only be collected from people who are of the legal purchase age; an "opt-in" mechanism will be used before the user receives a direct digital marketing communication, and an "opt-out" mechanism will be available if a user wants to discontinue receiving such communications; clear information must be provided about the collection and use of personal data; information collected shall never be sold or shared with unrelated third parties; and steps will be taken to keep user information secure and protected from loss or theft.

The full text of the official guidelines can be viewed here.

Although the guidelines are self-imposed and do not constitute a legal regulation, law or statute, failure to comply with these guidelines may have adverse consequences. DISCUS, for example, has said that it will (i) investigate U.S. distilled spirits companies that are reported to be not in compliance with the guidelines and (ii) disclose the results of such investigations on its website. Consequently, we recommend that distilled spirits companies in the United States and/or Europe review the new guidelines and seek counsel on how they might impact current company practices.

Social network ad revenue to hit $10B

Non-U.S. markets would account for slightly more than half, or 51.9 percent, of the US$10 billion global ad revenue in 2013, the research firm said in report Wednesday. While revenue growth would be in the double digits in the United States, higher growth elsewhere meant that spending in non-U.S. markets would account for a slighter greater share each subsequent year, it explained.

Steve Jobs: Accidental video games visionary

Sure, Jobs had some history in the space. He took a job at Atari as a technician in the mid-'70s, but this was because he was looking for money to fund a spiritual retreat to India. Later, with the release of the Apple II in 1977 he helped usher in a golden age of video games by providing a platform for the explosion of creativity that came in the early '80s: Bubble Bobble, Beach Head, Boulder Dash, Choplifter, F-15 Strike Eagle, Hacker, Hardball!, Karateka, King's Quest, Leather Goddesses of Phobos, Leisure Suit Larry, Lode Runner, Might & Magic, The Oregon Trail, Raid Over Moscow, Skyfox, Ultima, Wizardry, Zork. So many games that so many of us remember fondly, and all of them made possible because of the Apple II and Jobs.

Supreme Court Dodges Video Game Fee Request

In a surprisingly precarious move, the U.S. Supreme Court took no action Monday on a request from the video game industry for 1.4 million dollars in attorneys' fees and expenses incurred fighting the unconstitutional violent video game ban law, originally passed in California. 

How will Facebook's newest changes affect gamification?

If you're at all interested in the world of social and casual games, and the gamification of social media, the stream of major and minor changes from Facebook over the past week or so has got to be top of mind. Besides the major F8 developer conference, which introduced Timeline and an updated version of Open Graph, we've also seen the introduction of Facebook subscriptions and an updated news feed in the past few weeks.

What the iPhone 4S Means for Mobile Gaming

Some of the best news is that the iPhone 4S is getting a power upgrade. The 4S is getting a dual-core 1GHz A5 processor with dual-core graphics. That means the 4S have comparable graphics to the iPad 2. Games are almost guaranteed to run smoother and faster on the new 4S, since it will be about 7 times faster than the old iPhone 4. However, gamers might not be able to enjoy the increased details due to the tiny screen size which stayed at 3.5".

Augmented Reality Meets Location-based Social Networking

A new app in this field is TagWhat. Part augmented reality-app and part social networking service, it lets people check and view locations along with additional random info like the place's history, the famous people who lived in it, anecdotes about the neighboring establishments, or any other information that can either be trivial, interesting, or extremely useful.