Virtual World Law Blog

Social gaming powerhouse Zynga has joined forces with 7-Eleven to begin selling items branded with its popular gaming titles in 7-Eleven stores throughout the US and Canada. The six week promotion will include more than 30 products, including Slurpees and Big Gulp drinks, all with redemption codes that will allow users to purchase virtual goods, including limited edition and uber gifts, in FarmVille, Mafia Wars or YoVille. The virtual goods range from a virtual coffee cart in FarmVille redeemed from the purchase of an iced coffee, to a bullet proof vest redeemed from the purchase of pizza, chicken wings, Big Bite products, chicken tenders or breakfast quesadillas. 7-Eleven expects to promote the new campaign, which begins June 1, through several different media outlets, including radio, print, online and on MTV.

This Federal Trade Commission has launched a campaign to educate tweens (kids ages 8 to 12) about advertising so they can become more discerning consumers of information. Called Admongo, the goal of the campaign is to boost advertising literacy by:

• Raising awareness of advertising and marketing messages
• Teaching critical thinking skills that will allow tweens to better analyze and interpret advertisements
• Demonstrating the benefits of being an informed consumer

Here is a link to the game trailer

Join Pillsbury for an evening with social game entrepreneurs, venture capitalists and legal analysts. This event will cover a number of recent trends and changes in social gaming business models. We will also discuss the current venture climate, what VCs are looking for in a social gaming company and ways to position emerging companies for investment. Finally, we will discuss the key legal issues associated with this emerging industry and review the key intellectual property due diligence factors that are critical to current and future financing.

June 1, 2010

Agenda
6:00 - 6:50 pm Registration & Networking (Appetizers will be served)
6:50 - 7:00 pm Welcome and Introductions
7:00 - 8:30 pm Panel Discussion and Q&A
8:30 - 9:00 pm Networking

Speakers include:
James Gatto, Leader of the Virtual Worlds & Video Games Team, Partner, Pillsbury
Keith McCurdy, Digital Media Executive, Entrepreneur and Board Member
Jeremy Liew, Managing Director, Lightspeed Venture Partners
Phil Sanderson, Managing Director, IDG Ventures SF

To register, please contact Meggan Maromonte by May 28.

Pillsbury's Silicon Valley office
2475 Hanover Street
Palo Alto, CA 94304

Nickelodeon has announced a virtual good platform for its Addicting Games site. According to Dave Williams, a Senior VP and GM, he sees virtual goods as a huge opportunity and by developing its own virtual goods platform, Nickelodeon minimizes the burden on developers to create their own platforms. This launch is another example of the perceived potential of virtual goods to monetize online games.

Additional details on the launch were reported by GamesBeat

Itechlaw, a premier international organization focused on legal issues affecting technology, is forming a working group on virtual worlds. The group's initial meeting will occur at The ITechLaw 2010 World Technology Law Conference and Annual Meeting in Boston MAY 20-21. The working group will focus on international legal issues affecting virtual worlds. One of its first projects will focus on a comparison of the legal issues around virtual currencies based on different countries' laws.

The working group will be co-chaired by Jenna Leavitt (who is also an Itechlaw Board Member) and Jim Gatto (who heads Pillsbury's Virtual Worlds and video Game Team).

Itechlaw's mission is to inform and educate lawyers about the unique legal issues arising from the evolution, production, marketing, acquisition and use of information and communications technology. It has a global membership base representing six continents and spanning more than 60 countries. Its members and officials reflect a broad spectrum of expertise in the technology law field.

As further evidence that Virtual worlds technology is useful to all types of entities, including the Federal Government, the USDA recently announced an award of a virtual world contract to four companies: Advanced Software Systems, INC; Avaya Government Solutions INC; Science Application International; and Three Wire Systems LLC.

The solicitation states that the purpose of the contract is to: "obtain a broad range of high-quality virtual world software products .... to foster enhanced participation from commercial and non-government entities to assist the agency in the development of virtual world solutions." Sounds like this is just the beginning of what could be a multistage evolution and helps explain the four winners.

On a personal note, we would like to congratulate all the winners, but in particular, Three Wire which is a Pillsbury client. This contract award is another bit of good news for Three Wire which also recently 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 at the Defense GameTech Users' Conference in Orlando in March for Three Wire's VetAdvisor Virtual Room (VVR).

Continue reading "U.S. Government Gets in on Virtual Worlds " »

Linden Research Inc. and its CE Philip Rosedale have been named as defendants in a class action lawsuit relating to the ownership status of virtual property in Second Life, the popular virtual world in which users can realize significant gains from buying and selling virtual real estate (land and buildings), virtual clothing, and other virtual goods. In Second Life, transactions are implemented using virtual currency provided by Linden called Linden Dollars. These dollars can be earned and bought and sold, including via the LindeX, the official Second Life Linden Dollar exchange.

A significant issue in this case is the status of ownership of virtual goods and virtual currency and the conditions, if any, upon which a user may be denied access to them for violations of the terms of service agreement.

Continue reading "Second Life Gets Action...Class Action That Is" »

On April 8, 2010, Zynga sued Playerauctions.com for operating a website that provides an unauthorized "Secondary Market" for enabling Zynga game users to post and sell "Virtual Currency" and "Virtual Goods" allegedly in violation of Zynga's Terms of Service. According to Zynga, its Terms of Service prohibits users from selling "Virtual Currency" or "Virtual Goods" for real-world money or anything of value outside of its games.

A recent version of the Zynga Terms of Service states:

The Service may include a virtual, in-game currency ("Virtual Currency") including, but not limited to coins, cash, or points, that may be purchased from Zynga for "real world" money if you are a legal adult in your country of residence. The Service may also include virtual, in-game digital items ("Virtual Goods") that may be purchased from Zynga for "real world" money or for Virtual Currency. Regardless of the terminology used, Virtual Currency and Virtual Goods may never be redeemed for "real world" money, goods or other items of monetary value from Zynga or any other party.

Transfers of Virtual Currencies and Virtual Goods are strictly prohibited except where explicitly authorized within the Service. Outside of the game, you may not buy or sell any Virtual Currency or Virtual Goods for "real world" money or otherwise exchange items for value. Any attempt to do so is in violation of these Terms and may result in a lifetime ban from Zynga Service and possible legal action.

Zynga alleges that the Playerauctions.com has committed copyright and trademark infringement (along with false designation of origin, unfair competition and other claims) by displaying and/reproducing images and code from the games and using various Zynga trademarks with authorization.

The Complaint identifies unlawful sales in connection with Zynga's Poker, Mafia Wars and FarmVille games. A recent review of the Playerauctions.com site showed over 750 Mafia Wars related items alone available for sale ranging in unit price from 25 cents to $900 and 84 entire "accounts" for sale ranging in asking price from $30 to $5,000 with one listed at a whopping $492,000!

Interestingly, Zynga does not specifically allege impropriety with or seek to prevent the outright sale of accounts.

Florida A&M University (FAMU) recently filed a law suit against the maker of a porn video that depicted multiple individuals engaging in sexual acts in a setting that allegedly represented a dorm room on the FAMU campus. FAMU claims that such association constitutes false or misleading descriptions and misrepresentations under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), federal trademark dilution under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(c), disparagement and injury to business reputation and trademark dilution under Florida Statute § 495.151(2009), and common law trademark infringement under Florida law.

Although this suit does not relate directly to virtual worlds, we are writing about it because this type of fact pattern commonly occurs in virtual worlds where famous brands are used in seedy portions of virtual worlds. Like this case, such uses can be actionable to prevent brand disparagement and tarnishment and other harms.

FAMU claiims that the defendant used FAMU's trademarks in the registered mark "FAMU", its tradename, "Rattlers," and its orange and green color scheme, which was chosen to represent Florida's major industry (citrus). FAMU alleges that it has produced and sold merchandise bearing the "FAMU" mark since 1953 and the "Rattlers" mark since 1985.

The Complaint alleges that Defendant RK operates the website "daredorm.com," which depicts individuals engaging in sexually explicit activities in what appears to be dorm rooms at various college campuses throughout the United States and charges a fee to internet consumers who wish to view the videos depicted on its "daredorm.com" website.

The Complaint alleges that on or about March 1, 2010, RK posted a full-length video entitled "BigRattler77" on its "daredorm.com" website depicting no less than eight (8) individuals engaging in multiple acts of sexual intercourse in what is intended to appear to be a FAMU dorm room, that the video contains several visual depictions of and oral references to the FAMU and "Rattlers" marks and depicts the orange and green color scheme in connection with the "FAMU" and "Rattlers" marks. The Complaint further alleges that the caption for the "BigRattler77" video states that it was filmed 'at a historically black college in Florida" and that the individuals were FAMU students and contains derogatory and highly offensive racial innuendo and visual depictions of gang signs purportedly associated with FAMU.

FAMU complains that "BigRattler77" is a transparent attempt to trade on the good name and identity of Florida Agricultural and Mechanical University and its marks by wrongly insinuating that its students routinely engage in the debasing and degrading behavior depicted therein, that it is likely to deceive, confuse and mislead prospective purchasers and viewers of the video into believing that the video was produced, authorized or is in some manner associated with FAMU.

FAMU seeks a preliminary and permanent injunction to prevent such use.

The caption of the case is Florida Agricultural & Mechanical University Board of Trustees v. RK Netmedia Inc. et al., No. 10-0100, complaint filed (N.D. Fla., Tallahassee Div. Mar. 16, 2010).