Tuesday, December 8, 2015
Wednesday, June 25, 2014
Aereo is Crushed at the USSC
http://variety.com/2014/biz/news/aereo-loses-supreme-court-showdown-1201208250/
Friday, August 23, 2013
BHBA Virtual Currency Panel! (9/9 from 12-1:30 at the BHBA Conference Center)
On September 9, 2013, the Beverly Hills Bar Association will be holding an exciting panel on virtual currencies! Please join me as I will moderate an engaging discussion featuring esteemed panelists Jiji Park, Brian Klein, and John Bates!
Jiji Park, Pillsbury Winthrop Shaw Pittman LLP
As a partner at Pillsbury, Jiji Park has extensive experience on advising financial institutions, money services businesses, and retail corporations regarding unclaimed property, gift certificates, store value cards, state and federal licensure requirements, and regulations applicable to money services businesses, anti-money laundering, electronic payments, and privacy.
Brian Klein, Baker Marquart
Brian Klein, a former federal prosecutor, is partner at the boutique litigation firm Baker Marquart LLP. There, he represents individuals and corporate clients in criminal, regulatory and intellectual property matters in federal and state court. He also teaches federal criminal practice at USC Gould School of Law and is the chair of the Bitcoin Foundation’s legal defense committee.
John Bates, Virtual Worlds Consultant
For years, John Bates has consulted on the marketing and development of virtual currencies for online computer games and virtual worlds. Since 2006, John has consulted for MindArk, the creators of the Entropia Universe. He also consults for WEMO Media, creators of theBlu.com, bringing the oceans to life on the web.
Please click on the following link for more information on the event and to register!
BHBA Registration and Event Details
Jiji Park, Pillsbury Winthrop Shaw Pittman LLP
As a partner at Pillsbury, Jiji Park has extensive experience on advising financial institutions, money services businesses, and retail corporations regarding unclaimed property, gift certificates, store value cards, state and federal licensure requirements, and regulations applicable to money services businesses, anti-money laundering, electronic payments, and privacy.
Brian Klein, Baker Marquart
Brian Klein, a former federal prosecutor, is partner at the boutique litigation firm Baker Marquart LLP. There, he represents individuals and corporate clients in criminal, regulatory and intellectual property matters in federal and state court. He also teaches federal criminal practice at USC Gould School of Law and is the chair of the Bitcoin Foundation’s legal defense committee.
John Bates, Virtual Worlds Consultant
For years, John Bates has consulted on the marketing and development of virtual currencies for online computer games and virtual worlds. Since 2006, John has consulted for MindArk, the creators of the Entropia Universe. He also consults for WEMO Media, creators of theBlu.com, bringing the oceans to life on the web.
Please click on the following link for more information on the event and to register!
BHBA Registration and Event Details
Tuesday, August 13, 2013
U.S. Law Snapshot: Illegal Lotteries
Running a loyalty program or sweepstakes outside of certain parameters runs the potential risk of being considered an illegal lottery and entering the realm of gambling. Some states like California will allow state-run lotteries, but prohibit private lotteries. An illegal lottery constitutes some sort of consideration, a chance result, and a certain award constituting value. Arguably, if all three are present then such a structure constitutes an illegal lottery. However, how each component is defined and interpreted varies from state to state. Whether an award has value is arguably related to whether a secondary market exists for that award/virtual currency. To be further discussed in the BHBA panel taking place on 9/9.
Tuesday, January 22, 2013
A Comparative Legal Analysis: Fair Use in the U.S. and the People’s Republic of China
[In light of the ever increasing number of game developers creating content in China, the following analysis comparing what constitutes fair use in the U.S. and China may be helpful.]
U.S. law provides for a specific list of factors for a court to consider in deciding whether the fair use defense applies. Because the U.S. relies on a common law system, usually one can make an educated guess as to how a court will interpret and apply a statute based on controlling or persuasive precedent.
In contrast, because the People’s Republic of China (“PRC”) relies on a civil law system there have been unpredictable outcomes under the fair use standard. Additionally, the specific listing of twelve exemptions is vague. Some Chinese courts strictly apply the listed exemptions while some have relied on a multi-factor analysis similar to the U.S. standard.
U.S. Fair Use
Through the Copyright Act of 1976 Congress expressly recognized the fair use defense. U.S. courts consider the following four factors in deciding whether the fair use defense applies: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used; and (4) the effect upon the plaintiff’s potential market. However, Congress has not stated how much weight to afford to each factor.
The purpose and character of the use: If the work is “transformed,” meaning that the defendant adds something or uses the work in a different manner, then this factor sways towards fair use. Also, this factor considers whether the work is used for a commercial nature or for nonprofit educational purposes.
The nature of the copyrighted work: The second factor can refer to either the form or the content of the original work. Newscasts will likely weigh towards fair use while an original novel will not.
The amount and substantiality of the portion used: The third factor requires a court to analyze not only quantitatively but also qualitatively how much of the original work is used and whether it is reasonable.
The effect upon the plaintiff’s potential market: For the fourth factor, the court considers whether a party’s use of another’s work could cause a substantial adverse impact on the market for the original work.
Fair use has been a subject of debate in the area of linking with respect to search engines. In Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003), the defendant’s search engine created small, “thumbnail” versions of plaintiff’s photographs on its database. The 9th Circuit held that defendant’s use of plaintiff’s images was transformative given that they were small, lower-resolution images used to index images. Further, they were not highly exploitative given that when a user clicked on an image it transported the user to the original webpage with the image. The 9th Circuit reached a similar ruling in Perfect 10 v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007).
U.S. courts have mostly denied fair use as a defense in piracy cases. In A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001), the defendant claimed that users did not engage in direct infringement of works but rather they engaged in personal use like sampling or space shifting. In that case, the 9th Circuit found that the four factors swayed against a finding of fair use. Most notably, the existence of free copies of a plaintiff’s work could cause a substantial impact on the market for that work. In BMG Music v. Gonzalez, 450 F.3d 888 (7th Cir. 2005), the 7th Circuit likewise found that “sampling” of copyrighted music was not eligible for fair use because it served as a direct substitute for a purchased copy and caused a substantial impact on the market for the original work.
PRC Fair Use
Article 21 of the Implementing Regulation of Copyright Law, which went into force on September 15, 2002, states that “according to relevant provisions of the Copyright Law, use of published works without authorization of the copyright holder shall not impair the normal exploitation of such work or unreasonably prejudice the legitimate interests of the copyright holder.” In effect this provision is an implementation of the three steps examination under Article 13 of TRIPs.
Fair use is limited to the exemptions under Article 22 of the P.R.C. Copyright Law.
"Article 22: In the following cases, a work may be exploited without the permission from, and without payment of remuneration to, the copyright owner, provided that the name of the author and the title of the work are mentioned and the other rights enjoyed by the copyright owner by virtue of this Law are not infringed upon." Article 22 provides the following list of exceptions.
1) Private use: Allows for an individual to use a published work for one's own private study, research, or personal entertainment.
2) Quotation: Allows for an "appropriate" quotation from a published work for use in one's own work.
3) Education and research: Allows for the translation or reproduction of a work for use in classrooms or to aid in scientific research.
4) Official state use: Allows for a state entity to utilize a work provided such use is for actual official use and does not interfere with the normal exploitation of the work.
5) Institute Display or Preservation: Allows for libraries, archives, or museums to reproduce a work for display or preservation.
6) Translation into minority languages: Allows for an original Han Chinese language work to be translated into the languages of minority nationalities for publication and dissemination.
7) Braille Transliteration: Allows for the transliterations of published works into Braille.
8) News Reporting: Allows for the reproduction of published works by newspapers, television shows, or other mass media for reporting on current events.
9) Re-disseminating News Articles and Speeches: This exemption is related to the above exemption on news reporting in that it allows mass media to reproduce articles on economic, political, or religious topics already made publicly available.
10) Free Public Performance: Allows for one to publicly perform a published work provided that nothing is charged and no payment is made to the performers.
11) Artistic Works in Public Places: Allows for one to reproduce, draw, photograph, or make a video recording of an artistic work on public display e.g. sculptures, paintings, and calligraphy.
12) Broadcasting of a Speech at a Public Gathering: Provided that the author does preclude this type of publishing, article 22 allows for the mass media to publish or broadcast a speech made at a public gathering.
As shown above, the listed exemptions do not provide much background. For instance, what constitutes an “appropriate” quotation is unclear. Because the PRC utilizes a civil law system, each court can come to its own understanding of the fair use standard. This has led to unpredictable outcomes.
In some cases, whether or not the defense applies is clear. For instance, in the New Modern Chinese Dictionary v. Modern Chinese Dictionary, the defendant lifted thousands of sample sentences and numerous pages of text from the plaintiff's copyrighted dictionary for use in its own published dictionary. The Beijing Higher People's Court held that the whole-scale copying of text constituted infringement and did not qualify for the education and quotation exemptions. Obviously such use was neither in the aid of research nor was it a "limited quotation."
However, some courts have tweaked the standard. In Beijing Sanmian v. Hefei Bang Lue, the plaintiff sued for copyright infringement when the defendant published plaintiff’s article on mobile telephone trends in China. The defendant argued for the news reporting exemption on current events. The court held that in order to utilize the news reporting exception the event needed to be “timely sensitive” and “significant.” The court ruled that although the article was timely, it was not significant to fall under the exemption.
Although deference is given to the listed exceptions, some courts have utilized a more open-ended, multi-factor analysis. In SARFT Movie Channel Production Center v. China Education TV Station, defendant CETV broadcasted plaintiff’s copyrighted film “Out to Amazon River.” Defendant argued for fair use as a state owned television TV station which broadcast the film for educational purposes. The court first tackled the fair use exemption and held that the exception was only limited to in person classroom teaching and did not include remote broadcasting.
Despite the exemption, the court noted that fair use should “evolve to accommodate new development[s] and demand[s].” The court conducted further analysis and considered: 1) the purpose of the use, and 2) the effect of the use on the market for the film, which is similar to the first and fourth factors considered by U.S. courts. Defendant inserted numerous advertisements during the broadcasting of plaintiff’s film, which the court found swayed in the plaintiff’s favor. Because both the plaintiff and defendant were television stations with broadcasting rights the court found that the defendant’s broadcasting of plaintiff’s movie would negatively impact plaintiff’s ability to engage in normal exploitation of its work. Like U.S. courts in online piracy cases, this particular Chinese court perceived the potential adverse impact in allowing defendant to broadcast plaintiff’s work. As a result, the court found for copyright infringement against the defendant.
U.S. law provides for a specific list of factors for a court to consider in deciding whether the fair use defense applies. Because the U.S. relies on a common law system, usually one can make an educated guess as to how a court will interpret and apply a statute based on controlling or persuasive precedent.
In contrast, because the People’s Republic of China (“PRC”) relies on a civil law system there have been unpredictable outcomes under the fair use standard. Additionally, the specific listing of twelve exemptions is vague. Some Chinese courts strictly apply the listed exemptions while some have relied on a multi-factor analysis similar to the U.S. standard.
U.S. Fair Use
Through the Copyright Act of 1976 Congress expressly recognized the fair use defense. U.S. courts consider the following four factors in deciding whether the fair use defense applies: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used; and (4) the effect upon the plaintiff’s potential market. However, Congress has not stated how much weight to afford to each factor.
The purpose and character of the use: If the work is “transformed,” meaning that the defendant adds something or uses the work in a different manner, then this factor sways towards fair use. Also, this factor considers whether the work is used for a commercial nature or for nonprofit educational purposes.
The nature of the copyrighted work: The second factor can refer to either the form or the content of the original work. Newscasts will likely weigh towards fair use while an original novel will not.
The amount and substantiality of the portion used: The third factor requires a court to analyze not only quantitatively but also qualitatively how much of the original work is used and whether it is reasonable.
The effect upon the plaintiff’s potential market: For the fourth factor, the court considers whether a party’s use of another’s work could cause a substantial adverse impact on the market for the original work.
Fair use has been a subject of debate in the area of linking with respect to search engines. In Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003), the defendant’s search engine created small, “thumbnail” versions of plaintiff’s photographs on its database. The 9th Circuit held that defendant’s use of plaintiff’s images was transformative given that they were small, lower-resolution images used to index images. Further, they were not highly exploitative given that when a user clicked on an image it transported the user to the original webpage with the image. The 9th Circuit reached a similar ruling in Perfect 10 v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007).
U.S. courts have mostly denied fair use as a defense in piracy cases. In A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001), the defendant claimed that users did not engage in direct infringement of works but rather they engaged in personal use like sampling or space shifting. In that case, the 9th Circuit found that the four factors swayed against a finding of fair use. Most notably, the existence of free copies of a plaintiff’s work could cause a substantial impact on the market for that work. In BMG Music v. Gonzalez, 450 F.3d 888 (7th Cir. 2005), the 7th Circuit likewise found that “sampling” of copyrighted music was not eligible for fair use because it served as a direct substitute for a purchased copy and caused a substantial impact on the market for the original work.
PRC Fair Use
Article 21 of the Implementing Regulation of Copyright Law, which went into force on September 15, 2002, states that “according to relevant provisions of the Copyright Law, use of published works without authorization of the copyright holder shall not impair the normal exploitation of such work or unreasonably prejudice the legitimate interests of the copyright holder.” In effect this provision is an implementation of the three steps examination under Article 13 of TRIPs.
Fair use is limited to the exemptions under Article 22 of the P.R.C. Copyright Law.
"Article 22: In the following cases, a work may be exploited without the permission from, and without payment of remuneration to, the copyright owner, provided that the name of the author and the title of the work are mentioned and the other rights enjoyed by the copyright owner by virtue of this Law are not infringed upon." Article 22 provides the following list of exceptions.
1) Private use: Allows for an individual to use a published work for one's own private study, research, or personal entertainment.
2) Quotation: Allows for an "appropriate" quotation from a published work for use in one's own work.
3) Education and research: Allows for the translation or reproduction of a work for use in classrooms or to aid in scientific research.
4) Official state use: Allows for a state entity to utilize a work provided such use is for actual official use and does not interfere with the normal exploitation of the work.
5) Institute Display or Preservation: Allows for libraries, archives, or museums to reproduce a work for display or preservation.
6) Translation into minority languages: Allows for an original Han Chinese language work to be translated into the languages of minority nationalities for publication and dissemination.
7) Braille Transliteration: Allows for the transliterations of published works into Braille.
8) News Reporting: Allows for the reproduction of published works by newspapers, television shows, or other mass media for reporting on current events.
9) Re-disseminating News Articles and Speeches: This exemption is related to the above exemption on news reporting in that it allows mass media to reproduce articles on economic, political, or religious topics already made publicly available.
10) Free Public Performance: Allows for one to publicly perform a published work provided that nothing is charged and no payment is made to the performers.
11) Artistic Works in Public Places: Allows for one to reproduce, draw, photograph, or make a video recording of an artistic work on public display e.g. sculptures, paintings, and calligraphy.
12) Broadcasting of a Speech at a Public Gathering: Provided that the author does preclude this type of publishing, article 22 allows for the mass media to publish or broadcast a speech made at a public gathering.
As shown above, the listed exemptions do not provide much background. For instance, what constitutes an “appropriate” quotation is unclear. Because the PRC utilizes a civil law system, each court can come to its own understanding of the fair use standard. This has led to unpredictable outcomes.
In some cases, whether or not the defense applies is clear. For instance, in the New Modern Chinese Dictionary v. Modern Chinese Dictionary, the defendant lifted thousands of sample sentences and numerous pages of text from the plaintiff's copyrighted dictionary for use in its own published dictionary. The Beijing Higher People's Court held that the whole-scale copying of text constituted infringement and did not qualify for the education and quotation exemptions. Obviously such use was neither in the aid of research nor was it a "limited quotation."
However, some courts have tweaked the standard. In Beijing Sanmian v. Hefei Bang Lue, the plaintiff sued for copyright infringement when the defendant published plaintiff’s article on mobile telephone trends in China. The defendant argued for the news reporting exemption on current events. The court held that in order to utilize the news reporting exception the event needed to be “timely sensitive” and “significant.” The court ruled that although the article was timely, it was not significant to fall under the exemption.
Although deference is given to the listed exceptions, some courts have utilized a more open-ended, multi-factor analysis. In SARFT Movie Channel Production Center v. China Education TV Station, defendant CETV broadcasted plaintiff’s copyrighted film “Out to Amazon River.” Defendant argued for fair use as a state owned television TV station which broadcast the film for educational purposes. The court first tackled the fair use exemption and held that the exception was only limited to in person classroom teaching and did not include remote broadcasting.
Despite the exemption, the court noted that fair use should “evolve to accommodate new development[s] and demand[s].” The court conducted further analysis and considered: 1) the purpose of the use, and 2) the effect of the use on the market for the film, which is similar to the first and fourth factors considered by U.S. courts. Defendant inserted numerous advertisements during the broadcasting of plaintiff’s film, which the court found swayed in the plaintiff’s favor. Because both the plaintiff and defendant were television stations with broadcasting rights the court found that the defendant’s broadcasting of plaintiff’s movie would negatively impact plaintiff’s ability to engage in normal exploitation of its work. Like U.S. courts in online piracy cases, this particular Chinese court perceived the potential adverse impact in allowing defendant to broadcast plaintiff’s work. As a result, the court found for copyright infringement against the defendant.
Closing Thoughts
With regard to fair use, U.S. law is more open-ended with its multi-factor analysis compared to Chinese courts’ strict deference to Article 22. However, as shown above, some Chinese courts have undertaken a multifactor analysis similar to U.S. courts. Overall, with the rising rate of Internet connectivity and technological advances, it seems that both Chinese and U.S. courts will continue to face the challenge of adapting their factors and exemptions to the digital age.
With regard to fair use, U.S. law is more open-ended with its multi-factor analysis compared to Chinese courts’ strict deference to Article 22. However, as shown above, some Chinese courts have undertaken a multifactor analysis similar to U.S. courts. Overall, with the rising rate of Internet connectivity and technological advances, it seems that both Chinese and U.S. courts will continue to face the challenge of adapting their factors and exemptions to the digital age.
Wednesday, November 28, 2012
Regulation of Virtual Currencies in China and Korea, Asian Gaming Giants Eye the US Market
Gold farming is a concept by which players repeatedly purchase or gain online goods or currencies in a virtual world and exchange them for virtual currency or real world currency. Most players hate it because it allows players with money to spend to gain a leg up on the competition without having to put in the necessary hours (sometimes days) of playing time to gain special armor, weapons, items, stats, etc. However, gold farming and the ensuing trading of such goods is immensely profitable.
The Chinese government estimated that in 2008 about 1 billion yen or about $146 million was spent on virtual world currency transactions with that number anticipated to grow by about 20% each year. Overall, according to a study from the research firm In-Stat, virtual goods revenue from online social games and social networking exceeded US $7 billion in 2010 and will more than double by 2014. With respect to that figure, Asia accounted for about 70% of the 2010 revenue, or about US $4.9 billion.
However, in order for gold farming to be profitable it requires that virtual goods be allowed to be traded for real world goods or services (i.e. Ebay, Internet Game Exchange). However, it seems that government regulation, an already connected and tapped consumer market in Korea, economic trends, or perhaps a combination of such factors have pushed Asian game developers and publishers to eye the U.S. market.
Asia accounts for 70% of 2010 revenue
China
In 2009, China outright banned gold farming out of fear that virtual currency could affect its real world currency. As a result, virtual currencies cannot be traded for real goods or services in the country. On paper, gaming giant Tencent has supported this measure. Of course, virtual goods continue to be laundered or used to make payments under the table.
Ministry of Commerce People's Republic of China
China Bans Gold Farming
Virtual Money Prohibited for Trading in Real Goods
Korea
In 2010, the Korea Supreme Court made a landmark ruling allowing virtual money used in online games to be exchanged for cash. The court acquitted two individuals were indicted on the grounds of illegally making nearly 20 million won by selling 234 million won worth of virtual money in the online game Lineage. The virtual money in Lineage, "Aden," was traded at a ratio of one million Aden for 8,000 won.
The provincial court initially brought down fines on the two individuals for four and two million won, but an appeals court overturned the decision. Justice Min Il-young noted that trading virtual money for cash should only be punished where it is obtained by online gambling (e.g. poker).
Korea Times
With regard to increased regulation in China, it seems as though Korea took up some of the slack with the growth of cyber crime in Korea from 2008-2011. In or around 2009, the Korean police arrested the leaders of a $38 million dollar money laundering scheme. The ring leaders purchased game money in China, cashed the money through domestic game item brokerages, and then illegally wired it from Korea to China.
UNAFEI report
Only in the Virtual World
In June of this year (as noted in an earlier post), the Korean government shifted gears and moved to ultimately ban the trading of online goods (effective later this year). For now, the penalty for engaging in online bot farming and item trading is 5 years in jail and a maximum fine of 50 million won (about $43,000).
Korea Prohibits Trade of Online Game Items
Targeting the U.S. Market
As a result of the rising growth of virtual goods in Asian gaming markets and quite possibly because of so much existing and anticipated regulation in their respective nations, many such Asian game developers and publishers have set their sights on the U.S. market. I've already commented on the rising profiles of such Asian gaming giants in the U.S. market in earlier posts (e.g. Riot, Epic).
Asian game developers and publishers seeking to grow in U.S. market
The Chinese government estimated that in 2008 about 1 billion yen or about $146 million was spent on virtual world currency transactions with that number anticipated to grow by about 20% each year. Overall, according to a study from the research firm In-Stat, virtual goods revenue from online social games and social networking exceeded US $7 billion in 2010 and will more than double by 2014. With respect to that figure, Asia accounted for about 70% of the 2010 revenue, or about US $4.9 billion.
However, in order for gold farming to be profitable it requires that virtual goods be allowed to be traded for real world goods or services (i.e. Ebay, Internet Game Exchange). However, it seems that government regulation, an already connected and tapped consumer market in Korea, economic trends, or perhaps a combination of such factors have pushed Asian game developers and publishers to eye the U.S. market.
Asia accounts for 70% of 2010 revenue
China
In 2009, China outright banned gold farming out of fear that virtual currency could affect its real world currency. As a result, virtual currencies cannot be traded for real goods or services in the country. On paper, gaming giant Tencent has supported this measure. Of course, virtual goods continue to be laundered or used to make payments under the table.
Ministry of Commerce People's Republic of China
China Bans Gold Farming
Virtual Money Prohibited for Trading in Real Goods
Korea
In 2010, the Korea Supreme Court made a landmark ruling allowing virtual money used in online games to be exchanged for cash. The court acquitted two individuals were indicted on the grounds of illegally making nearly 20 million won by selling 234 million won worth of virtual money in the online game Lineage. The virtual money in Lineage, "Aden," was traded at a ratio of one million Aden for 8,000 won.
The provincial court initially brought down fines on the two individuals for four and two million won, but an appeals court overturned the decision. Justice Min Il-young noted that trading virtual money for cash should only be punished where it is obtained by online gambling (e.g. poker).
Korea Times
With regard to increased regulation in China, it seems as though Korea took up some of the slack with the growth of cyber crime in Korea from 2008-2011. In or around 2009, the Korean police arrested the leaders of a $38 million dollar money laundering scheme. The ring leaders purchased game money in China, cashed the money through domestic game item brokerages, and then illegally wired it from Korea to China.
UNAFEI report
Only in the Virtual World
In June of this year (as noted in an earlier post), the Korean government shifted gears and moved to ultimately ban the trading of online goods (effective later this year). For now, the penalty for engaging in online bot farming and item trading is 5 years in jail and a maximum fine of 50 million won (about $43,000).
Korea Prohibits Trade of Online Game Items
Targeting the U.S. Market
As a result of the rising growth of virtual goods in Asian gaming markets and quite possibly because of so much existing and anticipated regulation in their respective nations, many such Asian game developers and publishers have set their sights on the U.S. market. I've already commented on the rising profiles of such Asian gaming giants in the U.S. market in earlier posts (e.g. Riot, Epic).
Asian game developers and publishers seeking to grow in U.S. market
Thursday, November 8, 2012
Primer on Trademark Protection in Japan
Lexology has recently disseminated an introduction on trademark principles in Japan by Satoko Kubo. According to the article, in Japan one can file for trademark protection without establishing use of the mark in connection with goods and services. One need not establish proof of use when renewing the mark as well. An individual or company's registered mark can only be cancelled if another party requests the cancellation based on non-use. A registered mark may be cancelled when it has fallen into disuse for three consecutive years. As a result, companies regularly stockpile marks in Japan.
Additionally, the Japanese Patent Office allows for marks to be registered across a wider range of goods because it accepts broad descriptions (e.g. "clothing," "computer games"). In contrast, the U.S. trademark system requires a specific listing of goods leading to a limited set of rights.
If a video game developer were to have on its hands the next big IP money maker with the potential to be profitable across a wide range of goods (e.g. toys, clothes, think "Skylanders"), then at least with respect to the Japanese market that developer should register directly in Japan. Although registering in the U.S. would still allow for corresponding protection in Japan under the Madrid Protocol, the international registration in Japan would be tied to the limited U.S. registration. Additionally, the differences between the Japanese and U.S. trademark guidelines with respect to broad and specific designations usually requires further action by a party registering in the US first because it must explain its specific designation to the Japanese Patent Office.
Lexology
Additionally, the Japanese Patent Office allows for marks to be registered across a wider range of goods because it accepts broad descriptions (e.g. "clothing," "computer games"). In contrast, the U.S. trademark system requires a specific listing of goods leading to a limited set of rights.
If a video game developer were to have on its hands the next big IP money maker with the potential to be profitable across a wide range of goods (e.g. toys, clothes, think "Skylanders"), then at least with respect to the Japanese market that developer should register directly in Japan. Although registering in the U.S. would still allow for corresponding protection in Japan under the Madrid Protocol, the international registration in Japan would be tied to the limited U.S. registration. Additionally, the differences between the Japanese and U.S. trademark guidelines with respect to broad and specific designations usually requires further action by a party registering in the US first because it must explain its specific designation to the Japanese Patent Office.
Lexology
Monday, November 5, 2012
Take-Two Packaging New "Civilization" Game for South Korea
The Wall Street Journal reports that U.S. based Take-Two, the developer of the hit franchise "Grand Theft Auto," is seeking to make inroads in the Asian game market by repackaging its titles to suit local tastes and partnering with local game publishers. Take-Two Interactive has partnered with the South Korean company XLGAMES, Inc. to bring the "Civilization" franchise (a turn based strategy game) to the South Korean gaming
market. There is plenty of opportunity in the Asian gaming market; the South Korean market reached $5 billion last year while the Chinese market reached $6 billion.
Certain turn-based computer strategy games are a hit in South Korea. "Starcraft," an immensely popular turn-based strategy game, is so popular in South Korea that it is equated with sport, or more appropriately, e-sport. The Korean e-sports Association (KeSPA) serves to manage the broadcasting and promotion of e-sports throughout the nation.
Take-Two to Asia
KeSPA
Certain turn-based computer strategy games are a hit in South Korea. "Starcraft," an immensely popular turn-based strategy game, is so popular in South Korea that it is equated with sport, or more appropriately, e-sport. The Korean e-sports Association (KeSPA) serves to manage the broadcasting and promotion of e-sports throughout the nation.
Take-Two to Asia
KeSPA
Tuesday, October 23, 2012
2011 Korea White Paper Report
The Korea Communications Commission has released its 2011 Korea Internet White Paper report. The report details, among other things, the developing Internet infrastructure in South Korea, the increasing number of broadband Internet subscribers, and the growth of the mobile platform in the nation.
On page 58, the report makes an interesting claim that in 2009 online game sales encompassed about 56.4% of total gaming sales with sales figures reaching 37,087 units (1 unit = 100 million won) (1 won = 0.0009 US dollar). The report also claims that in 2007 online games sales reached 22,403 units and that in 2008 online games sales amounted to 26,922 units.
White Paper
On page 58, the report makes an interesting claim that in 2009 online game sales encompassed about 56.4% of total gaming sales with sales figures reaching 37,087 units (1 unit = 100 million won) (1 won = 0.0009 US dollar). The report also claims that in 2007 online games sales reached 22,403 units and that in 2008 online games sales amounted to 26,922 units.
White Paper
Sunday, October 14, 2012
Asian Game Publishers Mull Potential Valve Purchase
Asian online gaming giants Nexon and NCsoft are rumored to be in talks with Valve, makers of the successful games "Half-Life" and "Portal", to purchase the company for around US $893 million.
Valve was started by Microsoft veterans Gabe Newell and Mike Harrington. The company rejects a traditional management structure and allows its employees creative freedom by allowing them to choose what to work on. The company's unique management style has led it to become one of the most successful and innovative U.S. based game developers. Additionally, Valve commands a lions share of the on demand market for PCs through its online game distribution service, "Steam."
Given the founders' penchant for not selling out it is unlikely that this purchase will go forward. Also, a purchase price of $893 million for a gaming juggernaut like Valve seems very low. However, in the off chance that a deal is hammered out, Nexon and NCsoft's ownership would continue the trend of Asian publishers establishing large footholds in the U.S. gaming market.
Games Beat
Valve was started by Microsoft veterans Gabe Newell and Mike Harrington. The company rejects a traditional management structure and allows its employees creative freedom by allowing them to choose what to work on. The company's unique management style has led it to become one of the most successful and innovative U.S. based game developers. Additionally, Valve commands a lions share of the on demand market for PCs through its online game distribution service, "Steam."
Given the founders' penchant for not selling out it is unlikely that this purchase will go forward. Also, a purchase price of $893 million for a gaming juggernaut like Valve seems very low. However, in the off chance that a deal is hammered out, Nexon and NCsoft's ownership would continue the trend of Asian publishers establishing large footholds in the U.S. gaming market.
Games Beat
Thursday, October 4, 2012
SmileGate in Business with Tencent re "Crossfire"
South Korean online game developer SmileGate, the developer of the hit FPS Crossfire, is partnering with Chinese internet giant Tencent. SmileGate will not be renewing its contract with Neowiz Games, which will expire in July of 2013.
A lawsuit is currently pending in the South Korean courts regarding the ownership of the "Crossfire" trademark between SmileGate and Neowiz Games.
A lawsuit is currently pending in the South Korean courts regarding the ownership of the "Crossfire" trademark between SmileGate and Neowiz Games.
Tuesday, October 2, 2012
Western Developers Working with Local Partners in China
You've just put the finishing touches on a mobile game you and a couple of friends have been developing for the past year. You're excited to launch and market the app and bring in some much needed funds. Before you jump the gun consider the impact your game can make in China. China currently leads the world in iOS/Android phone activations and is on track to have over 200 million smartphone owners by the end of this year.
However, the Chinese mobile game market has its own quirks and issues. Chinese gamers have a tendency to avoid purchasing apps but make plenty of in-game purchases. In addition, China is a hotbed of rampant, unchecked piracy. How can one seize this market?
Lately, many Western developers have taken to working with local partners like Yodo1 and The9. Local partners can help adapt your IP to suit Chinese gamer's tastes, translate the game, optimize monetization of in-game purchases (if you haven't already), and police your IP. Many of these local partners have also successfully built buzz for upcoming mobile games by integrating with Chinese ad networks and promoting them across other apps.
However, the Chinese mobile game market has its own quirks and issues. Chinese gamers have a tendency to avoid purchasing apps but make plenty of in-game purchases. In addition, China is a hotbed of rampant, unchecked piracy. How can one seize this market?
Lately, many Western developers have taken to working with local partners like Yodo1 and The9. Local partners can help adapt your IP to suit Chinese gamer's tastes, translate the game, optimize monetization of in-game purchases (if you haven't already), and police your IP. Many of these local partners have also successfully built buzz for upcoming mobile games by integrating with Chinese ad networks and promoting them across other apps.
Thursday, August 16, 2012
Revenues Fall
Among almost all major publishers, revenues have fallen. This comes on the heels of several publishers doing some major cost-cutting (e.g. THQ) and encountering lower sales of hardware (e.g Sony's PS3 and PSP).
Overall, sales from video game hardware and software have fallen for the eighth straight month down to US $548.4 million.
Businessweek
Overall, sales from video game hardware and software have fallen for the eighth straight month down to US $548.4 million.
Businessweek
Friday, July 13, 2012
Tencent Buys Stake in Epic Games
The Chinese gaming juggernaut Tencent, which reportedly has more than 700 million users in mainland China, has purchased a minority stake in Epic Games, the makers of "Gears of War" and the mobile game "Infinity Blade." Last year, Tencent acquired Los Angeles based Riot Games, the makers of "League of Legends." Tencent's actions are evidently part of a new strategy to develop games across multiple platforms.
Epic Stake
Epic Stake
Wednesday, June 27, 2012
I'm a Clone, You're a Clone, Clones Everywhere!
Pillsbury's Virtual World's Team has recently commented on a federal court decision finding in favor of the owner of "Tetris" against Xio Interactive, Inc., the maker of a similar falling block game called "Mino". In its post, the team advocates a dual pronged strategy of intellectual property protection through both patent and copyright law.
Game Cloning Can be Stopped!
Intellectual property protection and enforcement is of paramount importance especially with the growth of Apple's app store distribution platform. Although the distribution platform allows developers of "indie" games to better connect with the consumer, it also allows for hundreds of game clones from various territories like China to flood the market.
Mario Kart Wii Clone from China
App Clone Uploaded from Vietnam
Unfortunately, many of these small developers are completely unaware of how to remedy the existence of a game clone on the market. Further, with each passing day there is the greater likelihood that a consumer will accidentally purchase the clone causing widespread consumer confusion.
At least during the initial screening of an application, Apple should have stronger safeguards in place.
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