“Jennifer Strange’s death was a tragedy. Our hearts go out to all of her loved ones, including, in particular, her husband and children. While legal restrictions preclude us from commenting further on the verdict, we respect the jury’s decision and hope that it will assist the Strange family in coping with its loss.”

California Court Awards $16 Million in Damages for Fatal Wii Prank is a post from: gameslaw.net

The statute(4) at issue in US v. Stevensprohibits the creation, sale, and possession of “depictions of animal cruelty” with the intention of placing such depictions into interstate or foreign commerce for commercial gain. “Depictions of animal cruelty” are defined as those in which “a living animal is intentionally maimed, mutilated, tortured, wounded, or killed, if such conduct is illegal under Federal law or the law of the state in which the creation, sale, or possession takes place…” Additionally, the statute contains a safe harbor provision which is nearly identical to those seen in statutes that restrict obscenity, which is an unprotected category of speech.  In any content-restrictive statute in any state, the safe harbor provision will hold exempt from restriction depictions of obscenity which have serious political, religious, literary, scientific, educational, or artistic value.  This is the general gist of the safe harbor provision in the animal cruelty depiction statute, albeit w ith slightly different wording. However, we have seen that if a statute invalidly restricts the content of a protected category of speech, even a safe harbor cannot save it(5).

Though seemingly unrelated to the game industry, US v. Stevenswill no doubt be a landmark First Amendment case–the outcome of which will have lasting effects on state and federal attempts to regulate the content of games for years to come. After being convicted under the statute at issue for selling dog-fighting videos, the defendant Robert Stevens challenged the statute on its face, arguing that it is an unconstitutional infringement on the freedom of speech. The U.S. Court of Appeals for the Third Circuit agreed, declining to adopt the government’s reasoning that depictions of animal cruelty are akin to child pornography, and holding that such depictions are protected speech because they do not fall within any of the narrowly defined categories of unprotected speech. Regular readers of GamesLaw will recall that when a statute restricts the content of speech, it must be narrowly tailored to advance a compelling government interest and use the least restrictive means to do so(6). The Third Circuit held that though animal protection may be a noble moral interest, it is not sufficiently compelling as to “trump an individual’s free speech rights”(7). Further, the government failed to prove that the harms caused by cruelty to animals followed directly from the depictions of such(8). As for the safe harbor provision, if that alone were to render an otherwise unconstitutional statute valid, then there would be no limit to the speech that government could regulate(9).
 You can find the Third Circuit’s opinion here.  

Should the Supreme Court affirm the Third Circuit, this will have positive implications for the game industry. Because the states attempt to regulate the distribution of games based on content by analogizing violence to obscenity, to affirm US v. Stevens would strengthen the argument that this is not acceptable due to a lack of compatibility with the very narrowly drawn categories of unprotected speech. Reviewing courts have recognized time and again that a safe harbor provision (such as the one in the California statute stricken down for the unconstitutional restriction of depictions of violence in video games by the Ninth Circuit in VSDA v. Schwarzenegger) does not save an unconstitutional content-based restriction of speech(10). If the Court continues to do so and agrees with the Third Circuit, then the argument that the safe harbor clause in California statute does not render it valid will be easier still.

As we reported some time ago, California is appealing VSDA v. Schwarzenegger to the Supreme Court. Should the Court issue an opinion, it will become the leading case in First Amendment law as it relates to the game industry. Because states attempt to regulate the artistic content of video games by attempting to withhold Constitutional protection from depictions of violence, the industry can only benefit from the Court’s refusal to create new categories of unprotected speech.

Though very interesting and robust, the oral argument alone cannot be a predictor of the Supreme Court’s decision. We look forward to bringing you future developments and analysis.

No doubt what I have written tonight will cause a few sparks to fly, particularly among those who would support the statute at issue in Stevens. So I will leave you with the thought that no matter what morals we have, no matter our beliefs, the greatest test of our commitment to upholding, embracing, and appreciating the freedom of expression is our willingness to protect even the speech that we  hate.

1. See Brandenburg v. Ohio, 399 US 444 (1969)
2. See VSDA v. Schwarzenegger, 556 F.3d 950 (2009)
3. For an example, see Ashcroft v. Free Speech Coalition, 535 US 234 (2002), in which the Supreme Court held that while child pornography is outside of First Amendment protection, it refused to expand the prohibition to that pornography which lacks actual children.
4. 18 U.S.C. 48 (1999) http://www.law.cornell.edu/uscode/18/usc_sec_18_00000048—-000-.html
5. VSDA v. Schwarzenegger, 556 F.3d 950 (2009)
6. Brandenburg, 399 US 444 (1969)
7. US v. Stevens, 533 F.3d 218, 226  (2008)
8. Id at 228
9. Id at 232
10. See VSDA v. Schwarzenegger for one example

Pending Supreme Court Case US v. Stevens Has Implications for the Game Industry is a post from: gameslaw.net

If you look in the beginning, you’ll notice SoCal booming, as well as in Austin, with no major losses anywhere until the mega-red explosion from Katrina hitting New Orleans, but even there are no major losses. Up through the beginning of 2008, California begins shrinking, with losses starting to appear for the first times in SoCal (although ironically, the reverse is occurring in the Bay Area), but Texas and Seattle remain booming with tens of thousands of new jobs.

Then by mid-2008, the meltdown is in full swing. Starting in South Florida, SoCal, and Detroit, it quickly spreads over the next year to the entire nation. Interestingly enough, while in August 2008 Los Angeles was posting a -97,800 lost job rate for the previous 12 months and -20,000 in San Francisco, Austin was up by 18,100 jobs and Seattle was up by 17,200.

By November, that had turned into nearly -160,000 lost jobs in LA alone, while even Seattle was starting to feel the heat with -11,000 or so. Boston was down by nearly -20,000, and only Austin (as an industry hub) remained in the green.

Perhaps the most fascinating slide is the end, which looks like red nuclear explosions going off; but lets pay attention to what you CAN’T see on that last slide: Austin down by only -1,400 jobs that year (keeping in mind this is across ALL industries) compared to -240,000 in LA.

The website itself states “The animated map makes clear that this recession has not treated all regions equally.” Does this mean that Austin is a safe place to work to wait out the recession? That might not be a stretch of the imagination. Texas isn’t faced with nearly the same budget meltdowns as California, and aside from Houston and Dallas, hasn’t been hit with the same critical job loss that California has (though the site also notes that Texas remained solid in part due to a run-up in oil prices through 2008, and that the receding job growth in 2009 came from the energy and construction sectors.)

The time will come where development studios are going to have to think harder about where they set up shop — not just in terms of access to employment talent or favorable taxes, but economic solidity and risk of rampant unemployment in other critical sectors like public safety or education. Perhaps this map will highlight that for some studios.

Geography of Job Loss is a post from: gameslaw.net

In their latest filing, Gamefly points out that Netflix in particular has benefited from unauthorized “Netflix only” slots in the post offices– slots that the USPS claims that they don’t know exist, but if they did would be against policy. Something tells me that this case is going to likely progress beyond the administrative stage, but we’ll of course keep you updated as new developments are announced.

Gamefly Action vs. US Postal Service is a post from: gameslaw.net

 I haven’t really published CFP’s before here, but I’m thinking it would be a good idea in the future.  Manuscripts are due Dec. 25, and if you’re thinking of submitting along with a law journal, you’ll probably have to trim it down – full papers are limited to eight pages.

If anyone has other CFP’s they’d like us to republish, as long as they are law/financial/business related, I’m happy to cover them here.

Call for Papers: Journal of Game Amusement Society is a post from: gameslaw.net

Now, to be fair, the hordes of fanbois on internet forums that rage about their First Amendment rights being violated when their posts are deleted (or they get banned) probably didn’t even know about the company town exception to the state action requirement of the First Amendment. Just the same though, this predictable decision puts a fairly solid nail in their coffin.

Eric Goldman has an interesting opinion on the decision:

Nevertheless, this case could have significant import for academic discourse about the virtual worlds. I believe this is the first ruling to squarely conclude that an online game/virtual world isn’t a company town. As a result, this opinion emphatically rejects a meme that has become pretty popular among virtual world exceptionalists. Some exceptionalists have favored the company town analogy because it enable virtual world customers to reduce an operator’s ability to run its business capriciously.

At the same time, as I explain in my 2005 article, importing constitutional doctrines into paying vendor-customer relationships could have untold detrimental effects on the entire online industry. This efficient ruling will hardly be the last word in that debate, but it should take a little wind out of the sails of the virtual-world-as-company-town meme that gets invoked so frequently in virtual world exceptionalist circles.

Playstation Network: Not a Company Town is a post from: gameslaw.net

There doesn’t appear to be any immediate danger for EXISTING games based on those IP’s, however, future games might be in jeopardy. According to comic news outlet bleedingcool, his copyright claim would exist from 2014. This would mean Marvel Ultimate Alliance 2 is safe, but look out Marvel Ultimate Alliance 4.  Toberoff has experience in this realm, he’s been successful on an identical claim on behalf of the Siegel estate, regaining copyright in Superman material. This is something we’ll obviously be following very closely, as the financial implications from forced licensing (let alone the IP issues) could have huge effects on some very popular game franchises.

Marvel/Disney Served with Copyright Termination Notice by Kirby Estate is a post from: gameslaw.net

Paltalk Sues Sony, NCsoft, ActiBlizz, Turbine, and Jagex for Patent Infringement is a post from: gameslaw.net

The broader issue, Wu warns, is what effect this may have on other virtual worlds and MMOG owners. Already faced with one landscape changing mega-litigation to watch (the NCSoft/Worlds.com patent suit), virtual worlds owners will now have to “get their houses in order” as far as IP and DRM are concerned, lest they become the next targets. “There is risk for other virtual world owners. If they don’t have their own protections for copyright and trademark owners, they may see themselves getting sued from this firm [KamberEdelson] or a similar plaintiff,” says Wu. KamberEdelson, according to Wu, is on the hunt for what they perceive to be unfair business practices — they were involved in the recent Amazon suit over the pulling of digital copies of Orwell’s 1984 from Kindle owners. In closing, Wu warns, “This is not a one-off event. This is going to be a prime form of litigation in the near future.”

For further analysis, Patent Arcade is tracking the suit as well. The complaint can be viewed in full here.

Eros LLC sues Linden Labs over Second Life Infringement is a post from: gameslaw.net

Zynga seems to have quite a bit of very in-depth information on what the former employees allegedly stole and how they did it, which seems to imply that they had some sort of monitoring or internal security software installed. It’s obviously far too early to speculate how this one is going to play out, but given that Zynga essentially forced Playdom to change their deceptive advertising practices earlier this year, there’s a good chance that this is part of a greater trend of bad behavior by Playdom. We’ll be anxiously waiting to hear the Answer on this one.

Zynga Files Massive Lawsuit Against Playdom is a post from: gameslaw.net