Intellectual Property in the Videogame Industry

Intellectual Property in the Videogame Industry

INTRODUCTION

The gaming industry is one of the fastest-growing industries in the world.

The videogame industry is a multi-billion dollar industry. With the global game market reaching $137.9 billion
in 2018 with mobile revenues amounting to approximately 50% of the total global market.

With the gaming industry booming rapidly, the growth of piracy is also going directly proportional
with its increase. Piracy came into existence within some time from the date of the existence of
videogames. The hackers encrypting the source codes and software of games make the games
available at some cost or free which is anyways lesser than the original price of the game.
Why do we need copyright in video game industry?

Videogames are protected as intellectual property as they are audio-visual and also as it
contains both literal and non-literal elements.

• Protecting Creative Expression

• Encouraging Innovation
• Preventing Unauthorized Use
• Fostering Economic Growth
• Promoting Fair Competition
When was the first copyright law specifically protecting video games
enforced?

The first-ever convention for the protection of literary and artistic works dates back
to the Berne Convention for the Protection of Literary and Artistic Works, generally
known as Berne Convention, 1886 which was accepted in Berne, Switzerland.
World Intellectual Property Organisation (WIPO) came up with the WIPO Copyright
Treaty in the year 1996 due to the growing advent of technological advancements
and the growth of the videogame industry and protection of the original expression
of the thought of the author and not the ideas.
In context to the videogame industry,  music, code, story, characters
are copyrightable; company logo, game title, game sub-title, company name comes
under the ambit of the trademark; hardware technical solutions, game design
elements, technical solutions in software, unique method are protected
under patents.
 Laws protecting video games industry
1. Copyright laws
Case of Atari Games Corp. v. Nintendo of America Inc.
Nintendo designed a 10NES lock-out system to prevent unauthorised games from
running on its console. Atari began its work to reverse engineer the 10 NES but did
not succeed. In 1987, Atari became the Licensee of Nintendo and gained the right to
make games for Nintendo. Atari obtained the source code of 10 NES from
Copyright Office by falsely alleging that copy was required by them and succeeded
in making its replica by the name, Rabbit with the same functioning. Atari was held
liable for copyright infringement by deceitfully obtaining the source code and
making software akin to 10 NES.
2. Trademarks laws
The case of Rogers v. Grimaldi is a notable legal case that involved issues of trademark and the First
Amendment. Here's a brief overview of the case:
Case Name: Rogers v. Grimaldi
• Background:
• The case centered around a controversial movie titled "Ginger and Fred," which was directed by Federico
Fellini and starred actors Giulietta Masina and Marcello Mastroianni.
• The film depicted a story about two Italian cabaret dancers imitating the famous American dancers Ginger
Rogers and Fred Astaire.
• Ginger Rogers, a well-known Hollywood actress and dancer, filed a lawsuit against the film's distributor,
claiming that the use of her name in the movie's title and the portrayal of imitators violated her trademark
rights and constituted false advertising.
• Legal Issues:
• The primary legal issue in this case was whether the Lanham Act (the federal trademark law) could be
applied to prevent the use of a celebrity's name in the title of an artistic work without violating the First
Amendment right to free speech.
• Court's Decision:
• The Second Circuit Court of Appeals ruled in favor of the film distributor (Grimaldi), stating that the
Lanham Act should be applied narrowly when it comes to artistic works.
• The court established the "Rogers test" as a guideline for evaluating whether the Lanham Act could
be applied to restrict the use of a trademark in artistic works.
• According to the Rogers test, the Lanham Act should not be used to restrict the use of a trademark in
an artistic work unless:
• The use of the trademark has no artistic relevance to the work.
• The use of the trademark explicitly misleads consumers about the source or content of the work.
• In this case, the court found that the use of Ginger Rogers' name in the film's title had artistic
relevance to the movie's content and did not mislead consumers. Therefore, the film's title was
protected by the First Amendment, and there was no trademark infringement.
• Significance:
• The Rogers v. Grimaldi case is significant because it established a legal framework that balances trademark protection
with the First Amendment rights of artists and creators.
• It recognized that artistic expression should be safeguarded, and trademark laws should not be used to stifle creativity or
free speech in artistic works.
• This case has been cited in subsequent legal disputes involving the use of trademarks in creative works, helping to clarify
the boundaries between trademark protection and the protection of free expression.
Patent Laws
Patents are legal protections granted to inventors
for their innovative and novel creations.

Types of Gaming Patents:

1. Game mechanics: These Patents safeguard

unique and inventive gameplay features.

 Examples include :

 Nintendo's D-pad

  “Game display method, moving

direction indicating method, game
apparatus and drive simulating
apparatus,”

- assigned to Sega Enterprises, Ltd.,

For Crazy Taxi describes a game
method in which movable objects
automatically move away from an
approaching character.
 2. Hardware Patents: Patents can cover specialized gaming
hardware, like controllers or VR headsets.

 Examples include :

 Oculus Rift's Head Tracking (U.S. Patent

US8810564B1): Oculus Rift's VR headset used
patented head tracking technology that allowed
users to interact with virtual environments by
moving their heads. This patent protected the
unique hardware and software integration required
for this functionality.

 Nintendo's Wii Remote (U.S. Patent

US8025668B2): The Wii Remote's motion-sensing
technology, which enabled gesture-based gameplay,
was patented by Nintendo. This patent protected the
hardware components and the interaction between
the controller and games.
3. Software Patents : Patents can be obtained for software
innovations, such as graphics rendering techniques or game
engines.

 Examples Include:

 Epic Games' Unreal Engine (U.S. Patent

US9244626B2): Epic Games obtained patents
related to its Unreal Engine, a widely used game
development platform. These patents cover various
software innovations, such as real-time graphics
rendering techniques and advanced physics
simulations.

 Valve's SteamVR Tracking (U.S. Patent

US9607071B2): Valve's SteamVR tracking
system, used in VR devices like the HTC Vive, relies
on patented software algorithms and hardware
components to precisely track the position and
movement of VR controllers and headsets.
 Purpose of Patents

 Promoting Innovation: Patents drive innovation by providing exclusive rights,

motivating inventors and companies through financial rewards, market advantages,
and legal protection.

 Protecting Intellectual Property: Patents protect intellectual property, ensuring

creators benefit from their inventions without unauthorized use.

 Economic Incentives: Licensing of patents to others helps the parent company in

a generation of wealth by license fees.

 Fostering Competition: Patents encourage competition and knowledge sharing by

disclosing inventions, fostering dynamic marketplaces.
End-User License
Agreement(EULA)
 EULA is the agreement which is entered between the licensor
and the purchaser which provides the right to the purchaser
to use the software.

 From the Licensor's Perspective:

 Enables distribution, selling, or licensing of the software.

 Allows the licensor to include specific clauses:

 Non-transferable
 Non-exclusive
 Limited or restricted installation rights (for personal
use, not resale)

 Restrictions and Acceptable Uses

 Prohibits undesirable software uses, such as:

 Hacking servers
 Reverse engineering

 Defines acceptable and intended uses of the software.

 EULA and Reverse Engineering Case
 Background
 Plaintiffs: Blizzard Games - they had established an online system whereby end-users could access
and play games, online, 24 hours a day..
 Defendant: Internet Gateway

 EULA Breach
 Internet Gateway had an EULA with Blizzard, Terms of which included a ban on reverse engineering
 Internet Gateway ignored this and reverse-engineered Blizzard's system, creating a Competing System

 Legal Argument
 Defendants argued that reverse engineering was a fair use exception under US copyright law.

 Court Ruling
 The Court held that the EULA and other terms of use contracts overrode intellectual property law.
 Parties entering into agreements can choose to waive exemptions provided in intellectual property law.

This case highlights the significance of EULAs and how they can supersede certain aspects of intellectual
property law when agreed upon by parties.
The emergence of conflict of interest in the
videogame industry
The video gaming industry is growing; so is the number
of disputes

• The growing popularity of video games

among consumers and the revenues
these games generate are fueling the
industry’s expansion, transforming it into
an increasingly important economic
sector within the global economy. This
rapid expansion, however, comes with an
increasing risk of disputes.
What are the characteristics of disputes in the
video games and eSports sectors?
• Video games also encompass multiple IP-protected components (e.g.,
graphic and sound elements, gameplay, software and more). Such
complexity is a breeding ground for disputes. Similarly, the dual nature
of eSports - as organized competitions and forms of entertainment within
the video games industry - makes them prone to disputes.
• Such disputes typically involve a combination of tangible/physical
elements (such as physical game consoles, peripherals, and
merchandise),
• intangible/legal issues and information technology (such as IP rights,
online interactions, and virtual economies
 Potential disputes relating to IP and contracts

• brands (e.g. in relation to the use of trademarks underpinning game

logos, merchandizing);
• copyright (e.g. in relation to the storyline, gameplay, music of a video
game,
• design rights (e.g. in relation to product packaging);
• agreements related to IP licensing, research and development (R&D),
technology transfer, software and more; and
• patents (e.g. in relation to game hardware, such as consoles and
accessories, in-game mechanics, gamepads, and virtual reality headsets);
Some famous disputes that has recently surfaced.

1. PUBG vs Fortnite
• PUBG filed a copyright violation
lawsuit against ‘Fortnite’
regarding the various similar
features like battleground
warfare, concepts, hosting players
on various servers, game modes,
etc.This provoked a plagiarism
controversy and allegations that
‘Fornite’ copied “Battlegrounds”
items and user interface.
2. Nova Productions Limited v. Mazooma Games Limited
An appeal was filed in the Court regarding the infringement of copyright by two games,
namely, Jackpot Pool and Trick Shot. The appellant alleged that these two games copied a
number of outputs from their game, Pocket Money. Appellant’s contention was that the
outputs that appeared on the screen of the defendant were inspired by the appellant’s game.
It was held that no copyright infringement took place as the outputs were way too general

3. I Ate My Heart Inc v. Mind Candy Ltd

-the character in the Moshi Monsters game was called Lady Goo Goo (a baby with blond hair
wearing large sunglasses). The appellant objected to the defendant’s release of a song called
Moshi Dance sung by Lady Goo Goo which was alleged by the appellant that it resembles Lady
Gaga’s song Bad Romance. Court held that the character of Lady Goo Goo can be
misunderstood by people as Lady Gaga and could amount to her loss of reputation.
Alternatives to court litigation
• Copying of concepts is anyways permissible but modification in it is necessary
with new inclusions in the game are mandatory for the game to not violate
any Intellectual Property laws, example, If a video game is a car racing game,
then for making it unique, developer can add various types of hybrid cars,
unique rewards, different way of showing the damages to the car, etc., then
certainly, the game will stand out from the rest and no infringement would
have been committed even though if somehow infringement is committed
arbitration and mediation are a good option for parties facing disputes in the
video gaming sectors.
• Arbitration, mediation, expedited arbitration, and expert determination are
widely used alternative dispute resolution mechanisms.
Advantages that arbitration and mediation offer parties
to a dispute

• Unlike court proceedings, arbitration and

mediation proceedings can be more informal and
customized to the specific needs of the disputing
parties. The private and consensual nature of
proceedings offers parties a greater degree of
control over the process and its evolution.
• Arbitration and mediation can reduce the time
(and money) needed to resolve a dispute.
•  Arbitration and mediation can help preserve
business relationships
 Conclusion and Suggestive
Remedies
Protecting Intellectual Property Rights in the Video Game Industry
 Strengthening the Techno-legal Framework
• Need to strengthen the techno-legal framework
It's crucial to recognize the pressing need for reinforcing the techno-legal
framework within the video game industry.
• Encompassing a wide range of cases
To effectively protect intellectual property rights (IPR) in the gaming world,
this strengthened framework must be comprehensive.
• Focusing on reducing piracy
One of the primary objectives of this enhanced framework should be to
tackle piracy head-on.
• Incorporating strict Indemnity clauses
To safeguard the interests of game developers and authors, it's essential to
incorporate strict indemnity clauses in end-user license agreements (EULAs).
 Global Perspective on Geo-location and
VPNs
• Bypassing Geo-Location Restrictions
With the widespread availability of VPN services, players can easily mask their actual location and
make it appear as if they are accessing games from a different region or country.
• Need for Stronger Legal Measures
While technological advancements have made it easier for players to access games from anywhere,
this has also led to a surge in unauthorized access and distribution.
• India's Role in Addressing the Issue
As a rapidly growing market for the gaming industry, India must take proactive steps to develop a
robust techno-legal framework. 
• Global Collaboration
Game developers, publishers, and legal authorities from various countries should work together to
share best practices, insights, and strategies to combat these challenges effectively.
• Protecting Intellectual Property
By implementing stronger legal measures and fostering international cooperation, we can ensure that
the creativity and innovation within the gaming industry are safeguarded, allowing it to continue thriving.
Amendments in IP laws
• Necessity of Amendments
India's IP laws, including the Copyright, Patent, and Design Acts,
require updates to address the dynamic video game industry’s unique
challenges, such as digital distribution and online gaming.
• Global Alignment
Aligning these laws with global conventions and international treaties
is vital, given the industry's global nature, promoting consistency and
protecting Indian developers in global markets.
• Expanding Protection
Extend protection to encompass critical game designs, including
locations. Characters, and game levels, which currently fall outside the
scope of theDesign Act, safeguarding developers' unique creative
assets.
 Accelerating IP Registration
• Expedited Registration
Pressing need to streamline copyright, trademark, and patent registration
processes in India, given their current complexity and time-consuming nature.
• Industry Growth Demands Speed
The video game industry's swift expansion requires faster IP protection.
Delayed registration can expose developers to infringement risks.
• Benefits of more Patents
Expanding the number of patents in the industry attracts investors, unlocks
financial support, enhances credibility, and bolsters global competitiveness,
securing long-term success in the dynamic gaming market.
 Strengthening Anti-Piracy Measures
• Stricter-State Laws
Pivotal role of strict state laws in combatting piracy, safeguarding
revenue, and protecting intellectual property rights within the video game
industry.
• Restricting VPNs and Illegal Sites
Need to limit access to VPNs and illegal websites that facilitate piracy,
thereby reducing the ease of illegal content distribution.
• Industry Growth Impact
Robust anti-piracy measures not only shield developers but also promote
industry growth, economic contributions, and global competitiveness.
 Collaboration and Deterrence
• Collaboration Importance
Crucial role of collaboration between the video game industry and
the Ministry of Communications in piracy prevention.
• Proactive Approach
Proactive strategy that encompasses public awareness
campaigns, technological safeguards, and a cultural shift towards
respecting intellectual property.
• Beyond Punishment
Need to move beyond punitive measures, focusing on long-term
solutions addressing the root causes of piracy, while also making
individuals aware of the ethical and legal implications of piracy.