Please find the statute at issue in EMA v. Schwarzenegger here.

If you need some background info on VSDA / EMA v. Schwarzenegger, you can find information here and here.

1. Why the Court did not create a new category of unprotected speech, and why they probably will not do so in EMA either.

For those not familiar, First Amendment jurisprudence recognizes specific categories of speech that are minimally protected or not protected at all. If the speech restricted by the government, most often by statute in First Amendment cases, is outside of those specific, narrowly drawn categories, the court will apply the Strict Scrutiny test. In order to pass Strict Scrutiny, a content-based restriction on speech must be narrowly tailored to serve a compelling government interest and use the least restrictive means to do so—more on that later.

Here, the Government argues that even without historical precedent, new categories of unprotected speech can still be created if a weighing of the “value of the speech against its societal costs” falls more heavily on the latter. Because of New York v. Ferber (discussed below), the Government suggests that such a balancing test can be used to create new categories of unprotected speech all of the time.

As Chief Justice Roberts pointed out in the 8-1 majority opinion, to use this “balancing test” that the government relies on would put at risk of censorship a great amount, if not the vast majority, of the ordinary speech we make to each other every day because much of we say in ordinary conversation has little or no “religious, political, scientific, educational, journalistic, historical, or artistic” value. It is an alarming proposition that the states, municipalities, and the federal government could ban speech that they found objectionable “simply on the basis that some speech is not worth it” He goes on to acknowledge that while certain categories of speech, such as child pornography, have been described as having such slight or nonexistent value as to be outweighed by societal interests, those descriptions are just…well, “descriptions” and not the actual rationale behind the holdings.

In New York v. Ferber, the Supreme Court carved out a relatively new category of unprotected speech—child pornography. In the Stevens opinion, the Court made it quite clear that Ferber was very exceptional and that states will not be successful in analogizing just anything to it in order to create new exceptions to First Amendment protection. In Ferber, the state had a compelling interest in protecting children from abuse and the Court further found that the market for child pornography is intrinsically related to actual child abuse. While it could be argued that the market for crush videos is intrinsically related to animal cruelty, the Court in Stevens did not say that preventing animal cruelty was a compelling state interest. (More on that later, too.) I read Stevens’ interpretation of Ferber to mean that both a compelling state interest and an intrinsic relation between the prohibited conduct and the restricted speech (which could also inform a narrow tailoring analysis) are required at the very least to create a new category. If we were to apply that to the statute at issue in EMA, we may have a compelling interest in protecting children from psychological harm, but we find no causal relationship between video game violence and psychological harm to children, let alone an intrinsic relation between depictions of violence in games and violence in reality. I wonder if the Court would even go as far as I just did, given that it considers Ferber to be very, very, unique.

The balancing test that has been adopted was done so by the people in our social contract with our government by virtue of the First Amendment is as follows: the benefits of restricting the government itself, in this case its ability to regulate and restrict speech, outweigh the costs. Though crush videos are disgusting, and some video game violence is outright gratuitous and excessive, the government cannot simply decide that it wants to prohibit certain types of speech based on its own whims as to what it finds valuable and what if finds harmful. That is why the Court will probably not decide that virtual depictions of “killing, maiming, dismembering, or sexually assaulting an image of a human being” are unprotected speech in EMA v. Schwarzenegger.

2. Overbreadth—why the “safe harbor” exception won’t save the EMA law.

Overbreadth is a common cause of the downfall of statutes, particularly in the First Amendment context. To put it plainly, a statute will be adjudged overbroad, and therefore invalid, if it just so happens to sweep in speech that the government has no right to restrict (even if the government did not intend it to), as well as speech that it can. The rationale behind invalidating a statute for this reason is that a person will decline to exercise their right to free speech for fear of running afoul of the law—thereby resulting in the dreaded chilling effect.

Many statutes of all kinds have “safe harbor” provisions—exceptions that are written in as an attempt to protect citizens against unintended applications of the law. For example, it is well settled (see Miller v. California) that a law restricting obscenity must have a safe harbor because we acknowledge that oftentimes patently offensive depictions of sex should be permitted and are often necessary for literary, artistic, educational, or scientific purposes, even if the work they are contained in appeals to the prurient interest when taken as a whole. The safe harbor protects such works if they exhibit serious value, and so the local bookstore can sell erotic literature without fear of prosecution even if it cannot sell Hustler.

The law at issue in Stevens contains such a clause, which the Government argues should save it. Any depiction that has “serious religious, political, scientific, educational, journalistic, historical, or artistic value” is immune from prohibition. However, the safe harbor was not enough to alleviate the statute’s overbreadth because the word “serious” itself actually restricts the amount of protection that the safe harbor would give to speech that is outside of the crush videos, animal fighting (except Spanish bullfighting), or other extreme depictions of animal cruelty that the law was intended to prohibit. In addition to the high standard that the word “serious” implies, there is the problem that much speech that is usually protected (by default, I might add) simply does not have serious religious, political, scientific, educational, journalistic, historical, or artistic value. The Court uses recreational hunting videos as an example of how speech that should ordinarily be protected would not fall under the safe harbor because it is merely “recreational.” Also, the Government failed to justify its characterization of Spanish bullfighting videos as having inherent value and reconcile that with its notion that Japanese dog-fighting videos (one of which was one of the grounds for Stevens’ conviction) do not. In short, no reading of the safe harbor results in the government banning only the speech that it has specifically intended to and that is why it is overbroad and invalid.

We could easily apply these ideas to the safe harbor clause in California’s law restricting the sale of violent video games to minors. The statute exempts from its definition of “violent video game” (and therefore from the prohibition of sale to minors) games that do not “as a whole lack serious literary, artistic, political, or scientific value for minors.” Again, we can see the burden that the word “serious” imposes. All games have artistic value, but whether that value is “serious” could be debatable in some cases depending on what any legislature’s definition of “serious” is. Also, as above, video games are without question “recreational”, and the vast majority of recreational speech is protected under the First Amendment by default. Even if a game does not have serious artistic value, it would still be entitled to First Amendment protection if it is not obscene (or if depictions of graphic violence are not an unprotected category of speech, following our assumptions above). However, the safe harbor would not protect such games from restriction and therefore would not be sufficient to preserve the statute’s validity.

3. Conclusion and an observation

In case you skimmed or skipped the wall of text (understandable), in sum, the statute at issue in EMA v. Schwarzenegger is analogous to the one in US v. Stevens and will probably be stricken down because the Court is loathe to create new categories of unprotected speech except in very extreme circumstances, and that the statute restricts speech that is protected, even if it also regulates speech that is unprotected.

I mentioned Strict Scrutiny way back up there in the second paragraph of section (chapter?) 1. It is interesting to note that the 3^rd Circuit below upheld the striking down of the statute in US v. Stevens because it did not pass Strict Scrutiny—it found that the interest in preventing cruelty to animals was not compelling, that the statute was not narrowly tailored to serve that interest, and that it did not use the least restrictive means of doing so. Although the Supreme Court opinion struck the law down on the basis of overbreadth, the only time that overbreadth is mentioned in the 3^rd Circuit opinion is in a footnote in which it notes that the law only “might” be overbroad. What I find most fascinating is that, aside from a summary of procedural history, there was no mention of Strict Scrutiny in the entire majority opinion. But all’s well that ends well, I suppose.

The Court might choose to address Strict Scrutiny in EMA v. Schwarzenegger and maybe even overbreadth and vagueness. Not to mention the variable obscenity issue that would apply if the Court found that graphic violence is an unprotected category of speech. Time will tell.

A Closer Look at the Parallels Between US v. Stevens and EMA v. Schwarzenegger is a post from: gameslaw.net

Right?

Looking forward, we’ll be expecting to hear a final confirmation on the third iteration of “Legal Issues in Gaming” at PAX (East) some time in the next couple of weeks, and we’ll get that information out to you as soon as it comes in and we finalize the panel attendees.

MAGfest 8 is a post from: gameslaw.net

“Hasbro has resorted to these meritless allegations, in an apparent attempt to unfairly take back rights granted to Atari [...] Atari has sought to resolve the matter without cooperation from Hasbro. We regret that our longtime partner has decided to pursue this action.”

Atari denies the allegations (though to date they have not filed a response or a MTD on the case, it’s far too early for that). Hasbro is seeking both pecuniary damages and an injunction ending the licensing agreement.

I think this is the start of a long and bitter battle over a very very valuable IP. They’ve apparently been negotiating for months before the suit, and the wording and timing don’t appear to be that of getting a complaint in the door before a statute of limitations — it legitimately appears like a rancorous disagreement between the parties, meaning it’s distinctly possible this one will achieve some level of litigation before settlement becomes likely (if settlement even happens; Atari is being unusually vocal in asserting that the claims are meritless). The timing, just before Christmas, is also a slap in the face, especially as a potential blow to holiday financials….the whole thing just comes off as very spiteful. We’ll keep track of this dispute as it progresses.

Hasbro sues Atari over D & D IP is a post from: gameslaw.net

Until now. Atkinson now believes that he should be the sole arbiter of what games you get to play on purely moral grounds. He recently proclaimed “You don’t need to be playing a game in which you impale, decapitate and dismember people.”

Atkinson’s hypocrisy really knows no bounds. On the one hand, he says “This is a question of a small number of very zealous gamers trying to impose their will on society. And I think harm society. It’s the public interest versus the small vested interest,” but on the other hand, he himself is the small vested interest that is imposing his will on the broad public. How many millions of dollars has Atkinson cost the Australian economy, by lowering sales of “altered” games like L4D2 (sending further sales overseas), or forcing publishers that show a backbone to outright refuse to sell in Australia?

Atkinson outright admits that the problem he forsees doesn’t even exist yet. “I accept that 98 per cent, 99 per cent of gamers will tell the difference between fantasy and reality, but the 1 per cent to 2 per cent could go on to be motivated by these games to commit horrible acts of violence,” ….note the emphasis. Could. Not “have”.

Despite the fact that Australians are allowed to watch violent movies with an 18+ classification, games unfortunately don’t get the same treatment. Unfortunate for the industry as a whole, not just Australians.

Atkinson: “You don’t need to play this game” is a post from: gameslaw.net

Desert Bus for Hope/Childs Play Charity is a post from: gameslaw.net

Abington May Sue Over Xbox Live Bannings is a post from: gameslaw.net

On a related note, I’m putting the finishing touches on a journal article regarding an international framework for protecting human rights in virtual worlds and MMORPGs. With this news, the topic only seems more relevant.  Chinese gamers should be entitled to express dissident viewpoints in a virtual world without fear of censorship, and without fear that their avatars and virtual property will be at risk of seizure or deletion. Similarly, virtual worlds operators should be entitled to profit from their businesses without fear of government crackdowns like this. I’ll post the article here once the publication process is complete.

The NetEase press release reprinted in full below.

NetEase.com Announcement Regarding Statement by the General Administration of
Press and Publication With Respect to World of Warcraft(R)

BEIJING, Nov. 2 /PRNewswire-Asia/ -- NetEase.com, Inc. (Nasdaq: NTES), one
of China's leading Internet and online game services providers, today
announced that the General Administration of Press and Publication ("GAPP") of
the PRC government has posted on its official website a statement that the
current operation of the World of Warcraft(R) in China by NetEase's affiliated
company, Shanghai EaseNet Network Technology Limited ("Shanghai EaseNet"), is
being conducted without proper approval from GAPP. The statement further
indicates that GAPP is returning Shanghai EaseNet's application for approval
and Shanghai EaseNet should suspend charging users to play the game and not
allow new account registrations. GAPP also notes in its statement that it is
evaluating whether to impose administrative penalties on Shanghai EaseNet. As
of the time of this press release, neither NetEase nor Shanghai EaseNet has
been officially notified of GAPP's determination. Shanghai EaseNet licenses
World of Warcraft(R), a massively multi-player online role-playing game, for
operation in China from Blizzard Entertainment, Inc.
    NetEase and Shanghai EaseNet believe that they are in full compliance with
applicable PRC laws and are currently seeking clarification from the relevant
governmental authorities regarding this statement by GAPP. NetEase will
provide further updates on the statement by GAPP as appropriate.
    About NetEase
    NetEase.com, Inc. is a leading China-based Internet technology company
that pioneered the development of applications, services and other
technologies for the Internet in China. NetEase's online communities and
personalized premium services have established a large and stable user base
for the NetEase websites which are operated by its affiliates. In particular,
NetEase provides online game services to Internet users through the in-house
development or licensing of massively multi-player online role-playing games,
including Fantasy Westward Journey, Westward Journey Online II, Westward
Journey Online III, Tianxia II and Datang, as well as the licensed game World
of Warcraft(R).
    NetEase also offers online advertising on its websites which enables
advertisers to reach its substantial user base. In addition, NetEase has paid
listings on its search engine and web directory and classified advertising
services, as well as an online mall, which provides opportunities for e-
commerce and traditional businesses to establish their own storefront on the
Internet. NetEase also offers wireless value-added services such as news and
information content, matchmaking services, music and photos from the Web which
are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.
    Other community services which the NetEase websites offer include instant
messaging, online personal advertisements, matchmaking, alumni clubs and
community forums. NetEase is also the largest provider of free email services
in China. Furthermore, the NetEase websites provide various channels of
content. NetEase aggregates news content on world events, sports, science and
technology, and financial markets, as well as entertainment content such as
cartoons, games, astrology and jokes, from over one hundred international and
domestic content providers.
    Safe Harbor Statement
    This press release contains statements of a forward-looking nature. These
statements are made under the "safe harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995. You can identify these
forward-looking statements by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes," "estimates" and
similar statements. The accuracy of these statements may be impacted by a
number of business risks and uncertainties that could cause actual results to
differ materially from those projected or anticipated, including risks related
to:  the risk that Shanghai EaseNet will not be able to continue operating
World of Warcraft(R) or other games licensed by it for a period of time or
permanently due to the position of GAPP or other governmental actions; the
risk that Shanghai EaseNet or NetEase will be subject to penalties or
operating restrictions imposed by governmental authorities in the PRC
resulting from the operations of their online games, including suspension of
their Internet service or other penalties; and other risks outlined in
NetEase's filings with the Securities and Exchange Commission. NetEase does
not undertake any obligation to update this forward-looking information,
except as required under applicable law.
    For further information, please contact:

    NetEase.com, Inc.
     Brandi Piacente
     Investor Relations
     Email: brandi@corp.netease.com
     Tel:   +1-212-481-2050

     Li Jia
     Email: liddyli@corp.netease.com
     Tel:   +86-10-8255-8208

SOURCE  NetEase.com, Inc.

Brandi Piacente, Investor Relations, brandi@corp.netease.com, +1-212-481-2050;
or Li Jia of NetEase.com, Inc., liddyli@corp.netease.com, +86-10-8255-8208

WoW Shut Down in China? is a post from: gameslaw.net

“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