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Game Industry Legal Liabilities

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    This paper will discuss the legal exposure of copyright infringement within the game industry. Parts of a video game that are copyrightable include the underlying code, considered literary work, and artwork and sound as it is protected as audiovisual work (‘Video games and the law: copyright, trademark and intellectual property,’ 2017). There have been many cases that have been filed where one game studio is alleging that another studio has taken their idea be it code, artwork, or music and therefore infringing on their copyrights. This paper will look into three cases where this type of copyright infringement was filed.

    The cases being examined are as follows; Dream Games of Arizona, Inc. v. PC Onsite, Capcom v. Data East, and Romantics v. Activision Pub., Inc. During the analysis of the aforementioned cases, a look into steps that can be taken to avoid a similar lawsuit will be discussed. The case of Dream Games of Arizona, Inc. v. PC Onsite involved copyright infringement of source code that was the intellectual property of Dream Games. Dream Games designs, develops, licenses, and sells electronic video games, including Fast Action Bingo (‘FindLaw’s United States Ninth Circuit case and opinions,’ n.d.).

    PC Onsite who is a company that licenses, distributes, and sells computer hardware and software, entered into a third-party source code nondisclosure agreement, which listed Dream Games as the licensor and PC Onsite as the licensee (‘FindLaw’s United States Ninth Circuit case and opinions,’ n.d.). The agreement prohibited PC Onsite from assigning, selling, distributing, licensing, or otherwise transferring the proprietary information (‘FindLaw’s United States Ninth Circuit case and opinions,’ n.d.). PC Onsite during this contractual agreement developed a new game called “Fast Action Bingo II” which it presented to Dream Games. PC Onsite presented this new game to the executives of Dream Games. During this presentation, negotiations relating to the game failed. After the failed negotiations, PC Onsite released the newly developed game under the name of “Quick Play Bingo 1”. On November 27, 2002, Dream Games registered a copyright, No. TX 5-622-656, for Fast Action Bingo 1 source code (‘FindLaw’s United States Ninth Circuit case and opinions,’ n.d.).

    In December 2002, PC Onsite installed 5 of their game Quick Play Bingo 1 in bingo parlors that already had Fast Action Bingo installed in them. This caused a direct competition between the two companies’ games. As a result, in Dream Games filed a complaint in the United States District Court for the District of Arizona, alleging copyright infringement (‘FindLaw’s United States Ninth Circuit case and opinions,’ n.d.). During a six-day jury trial the jury found PC Onsite liable for willful copyright infringement (‘FindLaw’s United States Ninth Circuit case and opinions,’ n.d.). Evidence in the case involved defining what elements were protected under the copyright and what elements were unprotectable. The jury was instructed that in order for there to be a copyright infringement, Dream Games would have to prove that PC Onsite’s game was virtually identical. Elements that are common within a video game of this type, such as the menu and game over are considered unprotectable elements.

    However, if these elements are almost identical, they may be entitled to some copyright protection. The jury found in Dream Games favor as the PC Onsite game was virtually identical. The case of The Romantics v. Activision Pub., Inc. involved the copyrights to a song that was performed in the 1980’s by the popular band The Romantics and whether the use of this song in the game confuses the consumer as to whether The Romantics endorsed the game. The Romantics filed a motion seeking preliminary injunction during the pendency of this action, from offering for sale, selling, distributing or otherwise making of selling the video game “Guitar Hero Encore: Rock’s the 80s”, or otherwise using the identities, persona, or allegedly distinctive sound of the Plaintiffs in connection with the Game (‘Romantics v. Activision Pub., Inc, 532 F. Supp. 2d 884,’ 22)

    Activision obtained a valid nonexclusive synchronization license from EMI Entertainment World, Inc., the owner of the copyright in the musical composition entitles “What I Like About You” (written and originally recorded in 1979 by the band, The Romantics, and published in 1980) (‘Romantics v. Activision Pub., Inc, 532 F. Supp. 2d 884,’ 22). The synch license allows Activision to make a new recording of the underlying composition and to use that recording in synchronization with visual images in the video game to enable game play (‘Romantics v. Activision Pub., Inc, 532 F. Supp. 2d 884,’ 22).

    The Romantics do acknowledge that they do not own any rights in the song, however they do not want prudent consumers of the game to be confused, deceived, or mistaken about whether the Plaintiff’s sponsored or endorsed the Game (‘Romantics v. Activision Pub., Inc, 532 F. Supp. 2d 884,’ 22). The Romantics failed to prove that there was a likelihood of success. The Romantics have made no trademark use of the name of “The Romantics”, using the name merely in the body of the Game to accurately identify the group that made the song famous, Activision has not sought to pass off the Song as the original recording by The Romantics (‘Romantics v. Activision Pub., Inc, 532 F. Supp. 2d 884,’ 22).

    The reference to the name of “The Romantics” during the play of the Game – in the disclaimer language “as made famous by The Romantics” – is a non-infringing use of “The Romantics” (‘Romantics v. Activision Pub., Inc, 532 F. Supp. 2d 884,’ 22). Activision possessed a valid synchronization license; therefore, they had the right to make their own recording of the song to integrate into the Game without violating The Romantics right of publicity (‘Romantics v. Activision Pub., Inc, 532 F. Supp. 2d 884,’ 22). ). The ruling of this case determined that the Plaintiffs are not entitled to a preliminary injunction. The case of Atari, Inc. v. North American Philips Consumer Electronics Corp. involves the copyright of the entire game, with focus on similar gameplay and artwork in the form of the screen visuals and characters. Atari, Inc. filed suit against North American Philips Consumer Electronics Corp. alleging copyright infringement of and unfair competition against Atari’s audiovisual game “PAC-MAN” (‘Atari, Inc. v. North American Philips Consumer Electronics Corp., 672 F.2d 607 (7th Cir. 1982),’ n.d.).

    The determination of the copyright infringement (or lack thereof) is predicated upon an ocular comparison of the works (‘Atari, Inc. v. North American Philips Consumer Electronics Corp., 672 F.2d 607 (7th Cir. 1982),’ n.d.). Certain components of the PAC-MAN game, such as the maze, scoring, tunnel and “wrap-around” concept used in maze-chase games are considered standard game features (‘Atari, Inc. v. North American Philips Consumer Electronics Corp., 672 F.2d 607 (7th Cir. 1982),’ n.d.). These features would not be considered copyrightable. The characters and overall art of the game are considered copyrightable. Based on the ocular comparison of the two games, while both games are not identical to PAC-MAN, the game K.C. Munchkin does capture the “total concept and feel” of and is substantially similar to PAC-MAN (‘Atari, Inc. v. North American Philips Consumer Electronics Corp., 672 F.2d 607 (7th Cir. 1982),’ n.d.). This does not mean that the copyright of PAC-MAN was infringed on, as the game K.C. Munchkin contained its own unique gameplay. The district court concluded that the two works were not substantially similar. The three cases outlined above are examples of copyright infringement in the game industry. It would indicate that games developed by studios have to follow certain guidelines in order to comply with copyright laws. Parts of a game that are subject to copyright include the source code, artwork, and music. Studios can learn from these cases as to how to go about protecting their work, as well as how to not infringe on another studios work.

    In the case of Dream Games of Arizona Inc. v. PC Onsite, the issue of source code copyright infringement was addressed. Source code is considered intellectual property and in the aforementioned case was copyrighted by Dream Games. Dream Games entered into a contract with PC Onsite at which time Dream Games allowed PC Onsite access to this source code. While Dream Games had obtained a third-party source code nondisclosure agreement through which PC Onsite would work to develop a new game for Dream Games, when the negotiations regarding this game failed, PC Onsite took this source code and released a similar game to the one they have originally developed for Dream Games. This case was an issue of what would be considered protectable under copyright laws and what is considered unprotectable.

    It is important for studios to understand that gaining source code from other studios while working together to create a game, can potentially lead to copyright infringement. Code that is given to another studio while working on a mutual project remains the property of the studio who has developed this source code. Only under permission by the studio who owns the source code should another studio use this code in any of their games. In the case of The Romantics v. Activision Pub., Inc., the issue for The Romantics was not one of copyright infringement but of publicity.

    The Romantics had no copyright ownership of the song contained within the lawsuit, but rather their image and portrayal within the game. When dealing with music contained within the game, studios must ensure that they have followed the proper steps to utilize this music. In this case, Activision had obtained a valid synchronization license from the owner of the copyright. This license allowed Activision to take this music and create a new recording and use it in sync with the visuals of the video game. While studios cannot ensure that an artist who originally performed the music will not try and bring a lawsuit of this type against them, by having the required licenses to use this music the studio will be able to successfully defend their position. It is important for a studio to research and obtain all the licenses necessary to utilize any music that was not commissioned by the studio within its games.

    The case of Atari, Inc. v. North American Philips Consumer Electronics Corp., is a good example for studios to understand how important it is to copyright the artwork associated with its game. This is an area that can be arbitrary based on ocular similarities between the games. In the Atari case the court found in favor of North American Philips Consumer Electronics Corp. as it deemed that while the games were similar, the game contained its own unique game play which made it not fall within the determination of it not infringing on copyrights. According to research, the district courts conclusion that the two works are not substantially similar was clearly erroneous (‘Atari, Inc. v. North American Philips Consumer Electronics Corp., 672 F.2d 607 (7th Cir. 1982),’ n.d.).

    Ensuring that the artwork that the studio has worked endless hours to create are protected from being copied by other studios helps the studio to build its brand presence within the industry. It is not always guaranteed that a studio will maintain these rights, it is important to defend their position, when infringement arises. Lessons can be learned from all three of these cases on how to protect that proprietary games that a studio develops. The game industry is highly competitive which makes it even more important for a studio to protect its assets be it source code, music, or sound.

    References

    • Atari, Inc. v. North American Philips Consumer Electronics Corp., 672 F.2d 607 (7th Cir. 1982). (n.d.). Retrieved from https://law.justia.com/cases/federal/appellate-courts/F2/672/607/331150/
    • FindLaw’s United States Ninth Circuit case and opinions. (n.d.). Retrieved from https://caselaw.findlaw.com/us-9th-circuit/1405455.html
    • The Romantics v. Activision Pub., Inc, 532 F. Supp. 2d 884. (22, January). Retrieved from https://casetext.com/case/the-romantics-v-activision-pub
    • Video games and the law: copyright, trademark and intellectual property. (2017, June 21). Retrieved October 25, 2018, from https://www.newmediarights.org/guide/legal/Video_Games_law_Copyright_Trademark_Intellectual_Property

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    Game Industry Legal Liabilities. (2021, Aug 30). Retrieved from https://graduateway.com/game-industry-legal-liabilities/

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