Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

As we wrap up our E3 2008 coverage here at Joystiq HQ, I thought it might be a good time to take a look at what makes many of E3's big surprises possible: the non-disclosure agreement. Non-disclosure agreements, or NDAs, are common not only in the gaming industry but in virtually all industries, and I've drafted my fair share of them. However, they are exceedingly prevalent in the game industry because of their application to not only game company employees but also members of the press who are given early access to titles subject to media blackouts, which are just another form of non-disclosure agreement.

So, what is an NDA? At the simplest level, it's just another contract, but one that limits someone's ability to share certain information, sometimes with anyone and sometimes with certain designated people, for a set period of time. The NDA arose because companies have to share information with employees and outsiders, and those companies need to manage the risk of having that confidential information leaked to the public or to competitors. NDAs may be stand alone contracts or provisions of larger agreements, largely depending on the context in which they are needed.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:
A few weeks ago, I received an e-mail request to cover the basics of trademark as it applies to the gaming world. Given that E3 is next week, we're all likely to see many new uses for old trademarks and new trademarks surfacing from many of the industry's power players. Surprisingly, this isn't just as simple as picking a name and going with it. In fact, there's a lot of the 'trademark' game, and hopefully this week's column will give you a better-than-Wikipedia level background in what the game makers go through to get their hands on names like Crash Bandicoot, apparently the most desired piece of E3 news according to Joystiq readers.

Trademark is probably the most well known of the three unfair competition concepts, and its origins trace back to the guilds in England, although the idea of placing an identifying mark on something goes back as far as human history. In fact, the first trademark laws in England were passed in 1266. The basic concept is a fairly straightforward one: Someone who makes something should be able to have a mark that identifies that persons products for consumers, and that mark should be limited to use by that one producer. This idea benefits both the consumers, by allowing them to identify reputable products in the marketplace, and producers, by allowing them to build reputations for their products and preventing others from taking advantage of their reputations.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:
In a recent Sessler's Soapbox, Adam took the opportunity to comment on some of the trash talking on Xbox Live. During the course of that diatribe, he mentioned that he thought the First Amendment argument was a "crock of s***" with respect to trash talking. Well, as the resident lawyer here on Joystiq, I'd like to take this opportunity to explain the First Amendment argument is just flat out wrong. In fact, it's one of my greatest pet peeves that the First Amendment gets thrown about as an excuse for most everything that is said in the realms of gamer culture, from trash talking in online matches, to posts on forums, to comments on gaming blogs.

In case you're one of the thirty-four people worldwide who has never experienced the phenomenon in question, this is essentially what's being talked about: Typically, someone will do something offensive online, be that posting something in a forum or saying something on Xbox Live. Then, someone in power will either reprimand that user, often through censoring, or banning for the behavior. This is typically either followed by that user or some other user decrying this exercise of authority as a violation of their 'rights.' The responses do vary, but as a moderator of one of the biggest forums on the internet, I've seen everything from 'OMG U R VIOL8ING MY FURST AMNDMT RYTES!!!11!' to some very lengthy and polished answers. The only commonality between these varying levels of responses is that they are all wrong.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

Summer is typically a "low season" for game releases, except for one particular annual tradition: new football games. As of late, those games have been all from EA, most notably the Madden and NCAA franchises. Last week it was made public that two gamers brought suit to disrupt EA's stranglehold over the football game market. Since the pleadings are online, I thought I would take the opportunity to offer some commentary on the issues presented. Of course, these are just my thoughts on the matter, not a prediction as to what result a trial may bring. EA's actual response may vary.

Professional sports are no strangers to antitrust and other anti-competition based legal actions. More or less every major professional sports league has faced these suits in the past, and some of them even hold specific anti-trust exemptions. For example, the Sports Broadcasting Act of 1961 is a specific anti-trust exemption for the NFL to be able to negotiate the broadcast rights for all teams. While none of the leagues have a true monopoly over the sports they represent, the barriers to entry are fairly great and most leagues are ultimately unable to compete (need I remind you of the XFL?). From the perspective of the NFL or MLB, exclusive licenses are likely viewed the way TV rights are, and I'm somewhat surprised that exclusivity has only become an issue in recent years.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

Today we're going to discuss enforcement of intellectual property, which is a much deeper topic than simply "what is it going to cost me?" There are enforcement considerations on both sides of the issue, and it's often a rather sticky situation for the rights holder in a copyright scenario. Interestingly enough, there are some pretty important economic and public relations considerations with regard to enforcement as well as the legal ones.

There's a burden trademark owners face that isn't applied to copyright holders, specifically that those who don't protect trademarks lose them. Copyrights, on the other hand, aren't lost in this way. Theoretically, a copyright can only be lost once the time period for the copyright has elapsed, though recovery may soon be limited on so-called "orphan works" whose authors are difficult to locate. Alternatively, a copyright holder can formally release a work into the public domain, which is the equivalent of "abandonment" of a copyright.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

Ah, the library (the place with books, not the bar). The once quiet and relaxing readers' domain has moved into the digital age, now containing computers and video games. In fact, a number of non-profits, like libraries, churches, and schools, have all found video game based events worthwhile to attract players of all ages to their establishments, or to add more entertainment to an existing event. GamePolitics actually raised an interesting question I had also received from a reader related to library and church game nights, specifically: What are the potential ramifications of holding these events from a copyright and EULA perspective?

It's actually a very good question, albeit one with a fairly nebulous answer. As was pointed out by the GamePolitics piece, there are licensing services that will acquire the proper license for the public performance of a movie. Similarly, groups like ASCAP have well established licensing procedures for music. The reasoning is that public display and performance are within the bundle of rights a copyright holder has. Therefore, in order to publicly display something, you need to have the copyright holder's permission in the form of a license. Of course, if it were this simple, I wouldn't be writing a column about it.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

It's only fitting that during the same week Red vs. Blue: Reconstruction premiers, Law of the Game on Joystiq would finally get to the topic of machinima. The game-based machinima issue boils down to one of copyrights and licensing. To be more specific, there are issues of copyright involved in all machinima productions, which give a need for licensing; which are addressed by Microsoft and Blizzard by means of a "machinima policy."

For those of you who have been living in a cave -- on Mars! -- since 2003 (the year Red vs. Blue stormed the internet), machinima is the use of a pre-rendered engine to make a film. It's often been compared to digital puppetry. It's become a popular art form, in part because it minimizes production costs and requirements, and in part because it often utilizes games that people enjoy. Of course, because the art often makes use of someone else's game engine or game assets, there are a lot of copyright issues involved. Thankfully, both Microsoft and Blizzard have made many of these concerns much simpler by publishing machinima policies.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

Based on the comments to the last few copyright-oriented columns, it seems like everyone wants to talk about fair use. In fact, fair use is one of the most misunderstood aspects of intellectual property law, even though it's popular to play the "fair use" card in response to alleged infringement. Much of the confusion stems from the fact that there are different fair uses of copyrights and trademarks; still, other confusion stems from the fact that many of the tests for what qualifies as fair use are not terribly clear -- but I'll be clearing much of this up for you today ... hopefully.

For the most part, trademark fair use is far simpler to understand than copyright fair use, so trademarks will be our first stop. Simply put, it is fair to use a trademark nominatively or for identification. That means if you re-sell a BMW, you are allowed to refer to it as a BMW. If you're writing a book or game dialog, you are allowed to refer to brand names. You are also allowed to refer to brand names in comparative advertising too; for example: "Our console has more games than the PlayStation 3!" or "Our hardware is more powerful than the Nintendo Wii!" or "Our system is more fun than the Xbox360!" Now that I've angered all the fanboys, that's pretty much the entire universe of trademark fair use. Copyright fair use, on the other hand, is far more complicated.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

Today's column has nothing to do with math. (Sorry to disappoint some of you!) For most, I'm sure, it's a relief -- myself included. What may not be such a relief, though, is that the topic of the day is once again copyright, which is often confusing. I've received quite a bit of e-mail over the past few months regarding game footage on YouTube or streaming footage, and how exactly that relates to copyright. What this article won't address specifically is machinima, but rest assured that Law of the Game on Joystiq will visit the territory of Red vs Blue at some point in the future.

When last we discussed copyright, we talked about what was protected under the law and what was not. But what the previous article didn't spell out were the rights granted to the copyright owner. In this way, "copyright" is a bit of a misnomer, as the person who holds a "copyright" actually has a number of rights with respect to the work. In fact, there are 5 generally identified rights in the copyright:

1. The Right to Reproduce the Work
2. The Right to Distribute the Work
3. The Right to Create Derivative Works
4. The Right to Show Display the Work Publicly
5. The Right of Public Performance

Rights 4 and 5 vary with the particular type of work. The issue we're tackling today falls somewhere in the rights listed, although it's difficult to precisely label.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

A few weeks ago, a copyright issue was posed to me for discussion via e-mail, highlighting some key misunderstandings of copyright and its purpose as it applies to video games. The e-mail pointed out that a copyright for a game doesn't really protect the game, and to that end, the writer of the e-mail didn't completely see the point to copyrighting game software. In fact, he pointed out that casino games are often patented. This observation leaves me with four issues to discuss: (1) what is protected when you copyright a game; (2) what isn't protected when you copyright a game; (3) why game patents are rarely used in a video game context; and (4) why patents aren't necessarily a good idea for the industry or gamers.

Even the basic ground rules that govern copyright and intellectual property concepts can be confusing. The lines that various legal protections have drawn are not necessarily the most logical, especially with respect to newer technology.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

From cheating to piracy, game security has become a major issue. In fact, the most recent Computer Law & Security Report features a piece by Steven Davis, author of PlayNoEvil, and W. Joseph Price about the state of security in the gaming industry. Their verdict was less than reassuring if you're a player or developer. Sure enough, just a few weeks after the report was issued, Grand Theft Auto IV was leaked prior to release. So what is a developer to do? What about the video game community?

To start, a "pirate" is someone who illegally reproduces or distributes something that is protected by an intellectual property right. In simple legal terms, that person is infringing on the rights of the copyright, patent, or trademark owner. While any intellectual property can theoretically be "pirated," I'm only talking about items that can be copyrighted. And before anyone points this out, yes, this is what groups such as the RIAA have taken pretty extreme steps to combat. Of course, the music industry and game industry are two different beasts.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

I have a great deal of respect for fellow Joystiq columnist and GamePolitics.com Editor Dennis McCauley, but I have to disagree with his most recent column on the EA Take-Two situation. Or at least, while I agree in spirit with his assertion that EA is trying to eliminate the competition in the sports games market with this buyout offer, in practice I don't think EA absorbing Take-Two will have any actual effect on the sports games market. This is in part why I think the Federal Trade Commission's recent inquiries are likely just routine investigation. However, I'm getting ahead of myself. Before explaining why I think this is the case, I should explain the basis for the complaints about the merger: anti-trust.

Anti-trust deals with the law of competition among businesses. In a capitalist economy, there are proven economic detriments to having monopolies or unfair competition, and therefore the government has seen fit to place restrictions on certain practices that can be injurious to a capitalist economy. In fact, the first US law dealing with anti-trust was the Sherman Act of 1890. Of course, this is not universally approved of, nor is the act universally welcomed; even economists as notable as Alan Greenspan have found fault with the Sherman Act, but I digress. The important point to note is that anti-competitive and monopolistic practices are regulated.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

Last week, Sean Bersell of the EMA directed me to a lawsuit out of California that had him concerned. Once I had a chance to read over the suit, I didn't just share Sean's concern, I was actually cringing at the potential of this suit to bring about the death of consumer rights as we know them. If you have ever bought a DVD, CD, or video game, then this suit could affect you. I sincerely hope that the courts will, in their wisdom, not side with Universal Music Group's expansive view of the copyright law. But, I'm getting ahead of myself. The suit in question is UMG Recordings Inc. v. Augusto. (The EFF has many of the court documents available at that link, if you would like to read the filings.)

To summarize the lawsuit, UMG puts out early release promo CDs, which go to radio stations and reviewers. Augusto runs an eBay business selling music, and one of his big focuses is re-selling these 'rare' promo CDs. UMG claims that re-selling these CDs is a violation of its copyright, and Augusto obviously doesn't agree. The case turns on interpretation of what is commonly known as the 'first sale doctrine,' even though it isn't as tied to a sale as the name would suggest. To put the gravity of this into perspective: UMG's claim, essentially, is that a copyright owner can control what the consumer can do with a product once it is in the marketplace. In other words, the copyright owner can prevent you from reselling a game you bought, or even throwing it away. That level of control, besides being wholly impractical, should sound as crazy to you as it does to me.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

Patents seem to be the intellectual property du jour for conflict in the video game world. After all, it was only a matter of time before the conflicts that have engulfed technology at large would spread to our little corner of the electronic world. However, patent law is not exactly a simple area of the law, and it's one that, like most of the other intellectual properties, is generally not well understood. Because of the complexity, someone mentioned it would be a good idea to give an overview of patent law and patent infringement. I should mention before I begin that I am not a patent attorney, meaning I haven't taken the patent bar, and so I wouldn't consider myself an expert on the subject. More importantly, this commentary applies to 'utility patents,' which is what most people mean when they simply say 'patent.'

To start from the most basic level, a patent is a type of intellectual property, like a copyright or a trademark. Patents, generally, protect ideas for a limited time (20 years in the US). The theory behind a patent is that someone who invents something should be able to profit from that product for some period of time before anyone can produce the item. So, for example, when a new pain reliever is patented, only the patent holder and those who have a license from the patent holder can produce the product until the patent expires. Once the patent has expired, then anyone can produce that product. In fact, this is the big catch with patenting: you have to expose the "formula" for the product, in detail, in the patent application, which becomes public record. Many companies opt to not patent items for this reason, keeping them as "trade secrets" instead. A well known example is the formula for Coca-Cola. While this overview may sound simple, there is much more to a patent.

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

First, I'd like to apologize to all of the aspiring beaurocrats out there. This is not an announcement post for World of Taxcraft -- I hope I haven't ruined your favorite time of the year: tax season. Yes, with April Fools' behind us there are no distractions left to cling to. We're headed into the big tax crunch and that dreaded day, April 15. So what do taxes have to do with gamers, other than the fact that we probably pay them and are either reveling in our refund or frantically finishing 1040s right now? Well, looming on the horizon is a concept that may strike fear into the hearts of Azeroth: taxing the virtual world.

The virtual taxation concept isn't a new one. I discussed it in 2005, Prof. Bryan Camp wrote about it at length in 2007, and Dan Miller and the Joint Economic Committee are working on a report on the topic right now. At this point, it seems to be more of a 'when' rather than an 'if' we will start seeing taxation applied to the virtual realm. The US government is bent on spending an almost impossible amount of money, and this is yet another way to earn some revenue. What is more curious is how exactly the idea of virtual taxation can be applied, given the methodology behind the US income tax system. Tax law can get rather complex, so this column will try to keep things as elementary as possible.