Virtual World Law Blog

On April 28, 2010, a social game developer Crowdstar sued Wonderhill for copyright infringement based on similarities between Wonderhill's "Aquarium Life" and Crowdstar's "Happy Aquarium". While copyright does not protect ideas (such as the idea for a fish-based game) it does protect expression of the idea. If this case should make it to court, it will provide an interesting test case for game developers that have developed social games that have been "cloned," which tends to be quite common in the space.

Happy Aquarium is generally acknowledged as one of the first, if not the original, fish care-based social games. Happy Aquarium and Aquarium Life are not the only aquarium games. But in its complaint, Crowdstar alleges an especially high level of correspondence in the user interface, game play and other features between Happy Aquarium and Aquarium Life as being the impetus for the suit.

Starting with a relatively obscure game from 1 year old Wonderhill may increase the potential for a quick settlement. But is this a one off lawsuit or is Crowdstar chasing a minnow while it waits for a bigger fish to fry? Check back and we will keep you updated.

One interesting aspect of the complaint relates to the relief sought - or more accurately what is not sought. In the U.S., statutory damages of up to $150,000 per infringement, the potential for recovery of legal costs and attorneys' fees, and certain legal presumptions regarding ownership and validity are available to a copyright holder for works that were timely registered with the Copyright Office. These benefits are typically available for works that were registered prior to infringement or within three months of first publication. It is notable that the Crowdstar copyright registration at issue was only recently registered (registration no. TX 7-117-794, registered March 25, 2010), while Happy Aquarium itself was published in September, 2009. Perhaps as a result of this, the relief sought by Crowdstar does not include statutory damages or recovery of legal costs and attorneys' fees.

But, regardless of the result here, there can be no doubt that a game developer's leverage over a clone can be increased significantly with a timely copyright registration For more on this topic see our advisory on the benefits of timely filing copyright registrations.

Three Wire Systems, LLC recently announced its VetAdvisor Virtual Room (VVR) won the U.S. Army Simulation & Training Technology Center's Federal Virtual Worlds Challenge for best collaboration in a virtual world by a government contractor. The award was presented on the final day of the Defense GameTech Users' Conference in Orlando on March 31.

Three Wire's VetAdvisor Virtual Room is an expansion of the successful VetAdvisor Support Program with the U.S. Department of Veteran Affairs, which offers telehealth and virtual health delivery platforms for veteran mental health care. The program is designed to provide support when and where the veteran chooses, thus supporting the Veteran Centered Medical Home Care Model.

Providing a secure meeting place for veterans and Care Coaches (licensed behavior health professionals) to interact, the VetAdvisor Virtual Room features avatars representing both the veterans and Care Coaches.

This tool is just one of a growing list of virtual world technologies used by government agencies.

Pillsbury's Virtual Worlds team is proud to assist Three Wire on this and other projects.

Pillsbury is proud to announce a writing competition on legal issues relating to virtual worlds. Participants can elect to write a paper on a topic within one of the categories listed in the document attached. The papers must be submitted by June 30, 2010 and will be judged by members of Pillsbury's Virtual Worlds team. Judges will select a best paper in each of the five categories, including a best overall paper. The best overall paper will be awarded $2000. The best paper in each of the other categories will be awarded $500. Winning and other notable papers will be recognized right here on our Virtual World Law blog.

Please see additional details and rules and regulations here: Virtual Worlds Writing Competition.pdf.

On March 31, a California District Court dismissed a copyright infringement suit brought against Facebook relating to a video game made available on its social networking site. The suit was dismissed for failure to state a claim upon which relief can be granted. However, the court provided the Plaintiff, Daniel Miller, an opportunity to file an amended complaint, within 14 days, to cure the deficiencies of the dismissed complaint. On April 14, Miller filed a motion for leave to amend, along with a second amended complaint.

Background

According to the pleadings, Miller authored Boomshine, a game using Adobe Flash technology, and made it available on his Web site K2xl.com starting in March 2007. In the game, players click on a floating circle, causing the clicked circle to expand and causing other floating circles it contacts to expand in a chain reaction. The parties do not dispute Miller's ownership of Boomshine, for which he was granted a copyright registration by the U.S. Copyright Office.

Co-defendant Yeo allegedly first published ChainRxn on Facebook's site around April 2009. According to the complaint, "ChainRxn copies the look and feel of Boomshine by incorporating almost every visual element of the game" and Yeo's publication of ChainRxn on Facebook's site resulted in "members of the public [being] deceived regarding the origin of ChainRxn." Miller alleges that he sent letters to Facebook and Yeo in May 2009 demanding that ChainRxn be removed from the Facebook site because it violates his copyright in Boomshine. Yet they refused to do so. Miller also claims that Yeo then modified ChainRxn to prevent Miller and all of his Facebook friends from accessing ChainRxn.

The Court's Dismissal

The dismissed complaint claimed Facebook violated Miller's copyright in Boomshine by allowing ChainRxn to remain on Facebook's site, even after it was notified of the infringement. Miller also named the creator of ChainRxn, Yao Wei Yeo, as a defendant.

Judge Alsup wrote in his Order dismissing the suit that the complaint was unclear as to whether it was attempting to allege direct or indirect copyright infringement, but he addressed both allegations in his ruling. In holding that no allegation of direct infringement was sufficiently pled, the Judge stated: "If plaintiff wishes to proceed with his direct copyright infringement claim, he must include sufficient factual allegations that explain how defendant Facebook copied, displayed or distributed infringing copies of Boomshine. Mere legal conclusions disguised as factual allegations will not suffice."

Likewise, the Judge held that the complaint failed to allege sufficient facts to demonstrate indirect infringement, either on contributory or vicarious infringement grounds, adding "To state a claim for contributory infringement, plaintiff must allege facts showing that defendant Facebook induced, caused or materially contributed to the infringing product. No such factual allegations are included in the complaint." The judge continued: "Because plaintiff's explanation for how defendant Facebook induced and encouraged infringement is flawed, his assertion that defendant Facebook 'induced and encouraged' stands alone as merely a legal conclusion without factual support."

As with contributory infringement, the judge wrote that the complaint lacks sufficient factual allegations to state a claim for vicarious infringement and that "[t]o state a claim for vicarious copyright infringement, a plaintiff must allege that the defendant has ... the right and ability to supervise the infringing conduct ... ." However, the judge explained, the complaint's "allegations do not demonstrate that defendant Facebook has the right and ability to supervise the infringing conduct because it is unclear what infringing material was published on defendant Facebook's website. This information is crucial and without this information, any analysis of defendant Facebook's actions or inactions is mere speculation."

Miller's Second Amended Complaint

On April 14, Miller moved the court for leave to file a second amended complaint, which purportedly addresses each of the deficiencies of the earlier complaint. Narrowing his claims against Facebook, Miller's second amended complaint only asserts a claim of contributory infringement against Facebook because it had knowledge of Yeo's infringement and materially contributed to this infringement by not removing access to the infringing content or disabling Yeo's account. Miller asserts that these acts by Facebook assisted Yeo in distributing the ChainRxn game to Facebook users around the world.

Comments

As this case demonstrates, the rapid emergence of social networking platforms and user generated content (applications, goods, etc.) has increased the number of copyright issues. Now more than ever it is important for both site operators allowing third party content to be posted and creators who post content to such sites to understand and avail themselves of copyright (and other IP) protection and enforcement techniques. Some of the advantages of timely filing copyright protection are addressed in an advisory prepared by Pillsbury's Virtual World team.

Another option often available to content creators is to leverage the "take down" provisions of the Digital Millennium Copyright Act (DMCA). If done right, it is often an effective tool to promptly cause infringing content to be removed from social networking sites. Under one part of the DMCA, online service providers can minimize liability for contributory infringement for content posted to their sites, if upon receipt of a proper "take down" notice, they timely take down the allegedly infringing content.

Worlds.com has reportedly settled its patent infringement lawsuit with NCsoft. The terms remain confidential and as of this morning neither company has a press release on its website. Worlds.com filed the suit on Christmas eve in 2008 after rattling its patent saber months earlier. To some, it is surprising the case lasted this long, due to the extensive amount of prior art that surfaced after the suit was announced.

In March 2009, Worlds.com CEO Tom Kidrin also boldly proclaimed that if the litigation was successful it would also sue other industry leaders. If Kidrin remains true to his word, we will likely know soon if they deemed the litigation successful.

In what will be the first such case heard by the Supreme Court, the highest court in the land will address in its October term whether a California state law that bans the sale and rental of violent video games to minors runs afoul of the First Amendment right to free speech and the Fourteenth Amendment protections. A petition for certiorari was filed by the State of California after the Ninth Circuit Court of Appeals nixed the law as being unconstitutional.

At issue are California Civil Code Sections 1746-1746.5, which if enacted, would have imposed restrictions and labeling requirements on the sale of "violent" video games to kids under 18. According to the statute "Violent video game" means a video game in which the range of options available to a player includes killing, maiming, dismembering, or sexually assaulting an image of a human being (subject to certain limitations). On December 21, 2005, Judge Ronald Whyte ruled the law unconstitutional, preventing it from going into effect, as scheduled, on January 1, 2006. On appeal, the Ninth Circuit also declared the law unconstitutional.

The case is Schwarzenegger v. Video Software Dealers Association (08-1448).

Earlier this year, Jim Gatto, leader of Pillsbury's Virtual Worlds and Video Games multi-disciplinary team, presented at The Cyberlaw Student Association at George Washington University. The presentation focused on the explosive growth of user-generated content, social networking, social games, virtual goods and virtual worlds. The presentation also touched on some of the uses of virtual worlds (education, simulation, historical preservation). Jim concluded the presentation with an in-depth look at some of the emerging legal issues associated with these developing social networking, training and branding tools.

The Cyberlaw Student Association is a student group at the George Washington University Law School dedicated to promoting interest in cyberlaw issues and helping students practice cyberlaw after graduation.

The presentation can be viewed here: final -- Presentation to GW Cyberlaw Student Association.pdf

In what turned out to be an April Fool's prank, Gamestation modified its Terms of Service to include a provision that required users to sell their soul to Gamestation before they could make any online purchase. Pretty amazing prank! What's more amazing is that nearly 90% of the users agreed! One can only speculate as to whether these user's didn't care about their souls or didn't read the Terms of Service. But it is likely a safe bet that many didn't bother to read the terms.

Gamestation of course announced the prank and stated that it does not intend to enforce the so called "immortal soul" provision. So these users got off easy. But such may not be the case if there was a real dispute. As Blizzard demonstrated when it successfully sued MDY (for use of a bot that helped users level up in World of Warcraft without actually playing, the Terms of Service can be outcome determinative in the event of a real legal dispute.

All pranks aside, it is critical for Virtual World and Online game companies to protect themselves and users through effective Terms of Service. It is also important for users, and businesses operating in these online spaces to understand the terms.