The ESA’s President had this to say: “Courts throughout the country have ruled consistently that content-based regulation of computer and video games is unconstitutional. Research shows that the public agrees, video games should be provided the same protections as books, movies and music.” (Reuters)

The law also defines what is a violent video game:

It goes on to describe what is meant by heinous, cruel, depraved, and torture:

It requires strict labeling if a game is violent by putting a conspicuous “18″ on the cover with a $1,000 penalty for violations.

Nintendo traced the illegal release back to Burt using “sophisticated technological forensics,” which most likely amounts to looking up his IP address and calling his Internet service provider.  After tracing the leak to Burt, Nintendo was granted a search order by Australia’s Federal Court requiring Burt to disclose the whereabouts of all his computers, disks, and electronic storage devices.  Additionally, he was required to grant access to all of his social networking sites, email accounts, and websites.

A few thoughts:  First, I am glad to see Nintendo going after uploaders.  While piracy in all forms is damaging, the prosecution of uploaders and release groups is far more productive than going after individual downloaders.  Second, I am shocked by the amount of information that the Australian Federal Court required Burt to divulge.  While I can understand the necessity of conducting a targeted search of his computer hardware for infringing material, the surrender of all his online passwords seems a bit extreme.  Email and social networking sites are not equipped for file sharing and any information acquired from these sites would be completely unnecessary considering the quality of raw data that can be acquired from torrent tracking sites and/or usenet groups.  Third, the settlement amount seems astronomical.  Unless Burt is independently wealthy, this settlement seems to be intended to scare away future pirates more than punish Burt.

UPDATE: Burt recently appeared on the Australian version of A Current Affair.

[Heavy Ink] and any other party associated with the Comic Book does not have Ms. Munn’s permission to use or exploit her image and/or name in any manner whatsoever.  On behalf of our client we demand that you immediately cease and desist all further production, advertising, distribution and other exploitation of the Comic Book, remove all advertisements, and destroy all copies of the Comic Book.

In response, Heavy Ink President Travis Corcoran sent the following, excerpted in part:

[I]t is clear that [Olivia Munn] is a public figure. As a public figure, the use of her likeness meets the tests for the parody copyright exception set forth in both Campbell v. Acuff-Rose Music, Inc. and the more recent Suntrust v. Houghton Mifflin.

As such, we have no intention of taking down our webpage, destroying any inventory, or refusing to offer the comic for sale.

The full response can be found here.

After briefly reading these materials, a few things seem screwy.  First, it is odd that Munn’s attorneys addressed their letter to Heavy Ink’s “DMCA Agent” when they are asserting her exclusive right of publicity, not making a copyright claim.  The DMCA, as far as I can recall, is solely concerned with copyright law and does not contain any provisions regarding the right of publicity.

Second, Heavy Ink’s response is misguided because the parody exception to copyright does not apply to the right of publicity.  There is a parody exception to the right of publicity, but the cases cited by Mr. Corcoran do not apply.  It is impossible to determine whether the parody exception would apply to an unreleased comic, but the product description may provide some guidance:

Olivia Munn conquers the world in this hilarious spoof! Hollywood’s hottest geek girl, Olivia Munn, hosts G4’s Attack of the Show, but while at comic con, she is attacked by a swarm of fans. Unable to escape, her gamma-irradiated cells explode and unleash the fury of The 50-Foot Womunn. It’s the showdown of the century! Geeks vs Munn! Let’s get ready to rumble!!

Based on this brief description, it doesn’t appear that the parody exception will apply, as the comic seems to merely grant Munn superpowers and place her in a ridiculous scenario.  The comic does not appear to offer any sort of commentary or criticism regarding Munn, which is a necessary component of parody.

While there are many issues to consider, including First Amendment arguments, Heavy Ink was right to direct Munn’s complaints to the publisher.  As a mere retailer, it seems odd that Heavy Ink is the one being targeted.

Well, like nearly everything involving the laws of war (great name for a sister site), the answer is complicated.  You see, an agreement signed at the Hague Peace Conference in 1899 states:

The Contracting Parties agree to abstain from the use of bullets which expand or flatten easily in the human body, such as bullets with a hard envelope which does not entirely cover the core, or is pierced with incisions.

As a result of this provision, most Americans believe that the United States is barred from using hollow or soft point ammunition in the current war on terror–the main subject of Modern Warfare 2.  However, this notion is mistaken for several reasons.  First, most people fail to take into account the full text of the Hague Convention’s 1899 agreement, which states:

The Contracting Parties agree to abstain from the use of bullets which expand or flatten easily in the human body, such as bullets with a hard envelope which does not entirely cover the core, or is pierced with incisions.

The present Declaration is only binding for the Contracting Powers in the case of a war between two or more of them.

It shall cease to be binding from the time when, in a war between the Contracting Parties, one of the belligerents is joined by a non-Contracting Power.

When considering the full text of the agreement, the main problem becomes readily apparent: The terrorist organizations being engaged in the Modern Warfare series are not Contracting Parties and, therefore, this particular provision is inapplicable.  Second, the United States never officially ratified the 1899 agreement and, instead, signed on to the 1907 Hague Convention, which states:

In addition to the prohibitions provided by special Conventions, it is especially forbidden -

To employ arms, projectiles, or material calculated to cause unnecessary suffering;

In most cases, this provision has prevented the U.S. from employing expandable ammunition.  However, a 1985 opinion penned by W. Hays Parks, then Chief of the JAG’s International Law Branch, stated:

…expanding point ammunition is legally permissible in counterterrorist operations not involving the engagement of the armed forces of another State.

So, as far as Modern Warfare is concerned, this seems to be where the law stands.  Because the units involved in the game are engaged in counter-terrorist operations and not against the armed forces of another State, hollow and soft point ammunition is legally permissible.  Who ever said first person shooters aren’t learning tools?

As an additional note, I came across a very interesting study during my research.  Two Swiss organizations, Pro Juventute and Track Impunity Always (TRIAL), conducted a study to “raise public awareness among developers and publishers of [video] games, as well as among authorities, educators and the media about virtually committed crimes in computer and videogames.”  The study focused on identifying violations of international human rights law in nineteen games, including 24: The Game, Army of Two, Battlefield Bad Company, Call of Duty: Modern Warfare, Call of Duty: World at War, Far Cry 2, Metal Gear Solid 4, and Tom Clancy’s Rainbow 6 Vegas.

Violations included destruction of civilian property, torture (inevitable when Jack Bauer is involved), pillaging, and the use of cluster bombs.  While most games contained one or more violations, the study also showed that some titles–Modern Warfare and Rainbow 6 Vegas–actually impose limitations on players that require them to follow international human rights law.  You can read the full study, titled Playing by the Rule, here.

Spy Games (Privacy)
Not long ago, games existed in a sphere of their own. Whether on a disc or in a cartridge, games were self-contained experiences that never ventured outside the television or computer screen. Today, it’s nearly impossible to find a game that doesn’t incorporate some form of user account. Whether it’s Xbox Live, Steam, OpenFeint, or games built on social networking platforms, today’s games are hopelessly intertwined with our social lives.

Unfortunately, the more tangled games become with social networks, the more opportunities arise for developers to obtain consumers’ personal data.  Often times the data collected is completely innocuous and can even improve the performance of future applications, such as aggregate data regarding the configuration of gaming PCs.  However, with modern games obtaining access to photo galleries, friends lists, and sometimes even financial data, the risks associated with improperly kept data drastically increase.  While it is unlikely that any of this data will be abused by game developers (save for potentially undesired targeted advertising), it is possible that some developers may not secure access to this data as carefully as they should.

There has not yet been a significant breach of consumer data stored by a gaming company, but the likelihood of an incident occurring continues to increase as DRM schemes and online games collect more data on gamers.  Information privacy is an area of law that is still testing its boundaries and I wouldn’t be surprised to see online gaming targeted by legislators and scholars in the near future.

Digital Gold Rush (Rights to Virtual Goods)
Modern games have not only increased access to consumer information, but have also increased their reliance on user-generated content.  From the emergent narratives of MMOs to entirely new games built on existing engines, developers are relying on user-generated content to extend the life of their products.  However, in many cases, it is still unclear who owns the intellectual property rights to this creative content.

The legal landscape in this area is exceptionally tricky.  While there has been some guidance regarding map packs, the complex legal issues surrounding machinima, emergent narratives, and game modifications are ready for some long-overdue clarity.  While some developers are modification-friendly, others strongly discourage the practice.  Perhaps most confusingly, some developers enforce their Terms of Use agreements to promote or discourage user-generated content in a seemingly arbitrary manner.

While many issues related to virtual goods can be handled with existing contract and copyright law, the industry is at a point now where both gamers and developers could greatly benefit from clear, standardized EULA and TOS provisions.

Balkanizing the Internet (Net Neutrality)
Net neutrality is a hot topic with just about everyone these days, but gamers have taken particular notice for good reason: An estimated 65 million online gamers could be drastically affected by future regulation.  Interestingly, there are gamers on both sides of the net neutrality argument.

Pro-neutrality gamers argue that without net neutrality, ISPs will be free to charge gamers additional fees to play games online or even block access to some games and online services altogether.  The most commonly cited example is Comcast’s prior practice of throttling bittorrent bandwidth, which prompted a cease and desist order from the FCC.  Additionally, some developers in favor of net neutrality argue that it is the only way to ensure that ISPs do not bargain for gaming exclusivity deals, which were common on mobile networks prior to the iPhone and are currently seen on game consoles.

Gamers against net neutrality argue that excessive government regulation of ISPs will decrease competition and innovation, which could be more harmful for online gamers in the long run.  Furthermore, these gamers argue that latency (and not bandwidth) is the major concern for online gamers and ISPs have little incentive to throttle online gaming services when services like bittorrent are a much larger burden on networks.  In fact, limiting bittorrent traffic could even increase the performance of online gaming.

Aside from gamers, some developers argue that ISPs will be better equipped to reduce or eliminate piracy with no or limited FCC interference.  By monitoring network traffic, ISPs would be able to stop the illegal transfer of games.  In theory, reducing losses due to theft would enable developers to charge a lower price for games–a benefit for both developers and gamers.

Ultimately, there are valid arguments for gamers on both sides of the debate and it will be interesting to see what the future holds.

The Digital Seven Seas (Piracy)
Piracy is a perennial issue that concerns nearly all digital media producers.  Although recent litigation has delivered serious blows to some of the worst offenders (The Pirate Bay), the illegal transfer of games still occurs regularly on bittorrent, peer to peer networks, and usenet.  As the cat-and-mouse game between developers and pirates continues, gamers will be forced to deal with increasingly complex DRM schemes, more tightly controlled gaming platforms, and potential deep packet inspection.

The online trade of grey market games is also increasing at a staggering rate.  While many of these transactions are carried out successfully, others have caused serious headaches for gamers and developers.  For a better understanding of the grey market game trade, read this prior Laws of Play post.

Ballet Hero (Choreographic Works)
It is no secret that both Sony and Microsoft are eager to introduce products that compete with the family-friendly Nintendo Wii. While Sony and Microsoft’s console offerings are targeted at the traditional gamer, Nintendo tapped into a much larger market by eliminating the largest barrier to entry for most would-be gamers: the controller.  Eager to keep up, Microsoft has announced Project Natal, an interactive body-tracking device for the Xbox 360, and Sony has announced some sort of odd motion-tracking-wand-thing.

In what may be the oddest prediction of this post, it is feasible that gamers and developers may have to begin considering copyrights in choreographic works.  Soon, game developers wanting to produce dancing or wrestling games–among others–may have to consider licensing choreographic works.  Could Ballet Hero be the next big hit?  How about a Macarena-inspired party game?  Perhaps a new dance craze will sweep the nation based on a series of moves found in Nintendo’s Wii Dance.

It’s too soon to tell whether games featuring choreographic works will gain traction, but developers may have an all new class of works to both license and protect.

In my opinion, the various rationales seem silly. Games, particularly video games, have generated quite a bit of positive press for their ability to provide escapism for inmates. Some Oregon correctional facilities have even seen significant drops in gang-related behavior simply because inmates that are divorced from the realities of prison life are less likely to join gangs. As for the other two rationales, with enough research one could, sadly, link almost any hobby or storyline to the commission of a crime or suicide. While I can somewhat understand not wanting prisoners to play anything from the Grand Theft Auto series, a game of D&D or one of its various video game incarnations hardly seems like a threat to anyone’s safety.

Unfortunately for Wisconsin inmates, prison officials need only prove that their regulations are rationally related to a legitimate goal of prison administration. Here, the goal is clearly legitimate–reducing inmate gang activity–and, as we all know, “rational basis” more often than not reads “any reason at all.”

With this in mind, readers with friends and relatives in a Wisconsin correctional facility may want to rethink sending the latest Dungeon Master’s Guide or Elder Scrolls game. Why not try a more traditional cake-with-a-metal-file-baked-inside?

You can read the full opinion here and listen to the oral argument here.

What many people may not know is how quickly these small scams add up and how often they lead to more complex cons.  Below is a 30-minute interview with a former “professional” scammer.  He discusses the techniques he used to rip off EVE Online and World of Warcraft players and how fraudulent account sales eventually turned into more elaborate scams, including identity theft and old-fashioned grifting.

Patrick, the scammer being interviewed, claimed that he easily made between $10,000-20,000 in his first year of scamming, but he worked with other individuals pulling in over $100,000 a year.  I highly recommend giving the interview a listen (you can play it in the background, as I can’t think of a good reason to actually watch an interview over the telephone)  in order to understand the types of scams occurring online.  While we tend to focus on IP and licensing issues on Laws of Play, Patrick’s interview highlights the increasing importance of criminal law to the average gamer.

The facts of the case are as follows:

In 2002, NFL Properties (“NFLP”), the business responsible for controlling all NFL licensing contracts, signed a ten-year exclusivity agreement granting Reebok the sole right to manufacture officially licensed NFL apparel.  American Needle, an apparel manufacturer that held a non-exclusive license to produce NFL apparel for nearly three decades, argued that the NFL’s exclusive agreement with Reebok is a violation of federal antitrust law, specifically Section 1 of the Sherman Antitrust Act.

While private companies are typically allowed to engage in exclusive licensing agreements without violating the Sherman Act, Section 1 of the Act forbids competitors to conspire in order to limit competition or harm consumers.  Because the NFL consists of 32 privately-owned, competitive teams and NFL Properties is equally owned by all 32 teams, American Needle argues that the Reebok exclusivity contract constitutes an agreement between the NFL teams to limit competition and harm consumers in violation of the Sherman Act.

American Needle argues that the Reebok/NFLP agreement limits competition by preventing apparel manufacturers from negotiating with individual NFL teams for the right to produce branded apparel and, as a result of exclusivity in apparel markets, allows Reebok to charge higher prices than it could with adequate competition.  Anyone who has ever paid $100+ for a polyester Bears jersey has surely felt the effects of exclusivity agreements.

Aside from merely harming consumers through increased prices, the Sherman Act is also designed to prevent competitors from conspiring to limit consumer choice, which American Needle argues is a major concern when there is only one apparel supplier.

In response, the NFL argues that it is, despite being composed of separate and competitive teams, a “single entity” for purposes of antitrust law.  As a single entity, the NFL cannot possibly conspire with itself nor can it limit competition because it is, quite literally, the only game in town.

Both the district court and Seventh Circuit Court of Appeals opined that the NFL is a single entity for purposes of antitrust law, but I would tend to disagree with their decision.  A 1984 Supreme Court opinion held that only parent companies and their wholly-owned subsidiaries qualify as single entities, which certainly doesn’t apply to the structure of the NFL or NFLP.  While there are a number of good reasons to maintain the NFL’s current licensing arrangements, it does not seem to me that the long history of competition between NFL teams–including ticket sales and media rights–supports the idea that the NFL should be considered a single entity.

While the effects of the Court’s decision will be far-reaching, the primary concern for gamers will be over existing licensing arrangements for sports games.  If the NFL loses the case, EA could lose its current position as the exclusive publisher of NFL-licensed games.  Furthermore, the ways in which future game licensing agreements are negotiated would be forever changed.  Rather than appealing to a single business or organization, such as the NFLP, publishers would be able to negotiate with individual teams.  While this could lead to more competition in the sports gaming markets, it could also lead to really wonky arrangements–imagine EA releasing an NFL game with 20 NFL teams and a dozen or so fantasy teams to round out the roster while 2K releases a game with the 12 NFL teams missing from EA’s game and a handful of its own fantasy teams.  However, it’s also very likely that publishers would have no trouble securing the rights to each individual team for their games.

In another interesting scenario, publishers could consider the cost to license individual marks and opt only to enter into agreements with the teams that seemed economically “worth it.”  After all, it is possible that a publisher does not derive as much value from including the Lions in their game as they do from including the Packers.  While the Madden franchise will certainly continue to include the full “NFL experience,” it’s likely that another publisher may want to take advantage of individual licensing agreements to create a scaled-back football experience that only includes top teams.

With the American Needle decision potentially affecting the NFL, NBA, and NHL (among others), gamers may soon be seeing some big changes in a significant portion of the industry.