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Forest Park Pictures v. Universal Television Network, Inc.  
U.S. Court of Appeals, Second Circuit
Case no. 11-2011-cv, Decided June 26, 2012

A recent Second Circuit case has held contract claims with promises to pay are not preempted by the Copyright Act.  This case was decided under circumstances involving idea theft in television shows, however this may easily be applied to the video game industry.  (For example, one may recall the Bissoon-Dath case holding that the God of War franchise did not infringe upon the copyrights of plaintiffs.)  Plaintiffs alleged they had sent their works to agents working with Sony in 2002 and that this had coincided with the development of the game that began 3 years prior to its release in 2005.  This case was decided under the copyright law regime, however plaintiffs may choose to seek relief for idea theft under state law. Studios in turn may seek to dismiss these claims through preemption by the Copyright Act.  Section 301 of the Copyright Act states that:
On and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.  17 U.S.C. §301 (a)
What this means is that claims brought under state law will be preempted by the Copyright Act if the claim is under the subject matter of the Copyright Act and if the rights sought to be protected are protected by the Copyright Act.  Many courts follow the "extra element" test to determine preemption.  This case is described by the Second Circuit as follows: "'But if an extra element is required instead of or in addition to the acts of reproduction, performance, distribution or display, in order to constitute a state-created cause of action,' there is no preemption."  In other words, a claim is not preempted by the Copyright Act if it includes one extra element that qualitatively differentiates it from a copyright claim.  

Studios may seek to combat a myriad of idea theft claims, often brought as state law contract claims, through copyright preemption.  Studios may seek to have such suits thrown out based on copyright preemption and may later argue that allegedly stolen ideas are not protected by copyright law.

In Forest Park Pictures v. Universal Television Network Inc, a decision recently issued on June 26, 2012, the Second Circuit reversed a decision holding contract claims preempted by the Copyright Act.  In this case, Hayden and Tove Christensen under Forest Park Pictures brought suit against Universal Television Network for breach of implied contract.  Forest Park claimed that they had pitched an idea for a television show to a USA Television Network programming executive named Alex Sepiol.  The concept of the television series focused around a character who "after being expelled from the medical community for treating  patients who could not pay, moved to Malibu, California, and became a “concierge” doctor to the rich and famous."  Forest Park sent a written series treatment to Sepiol and later met with him in person to pitch the idea for the show, later alleging “that it was standard in the entertainment industry for ideas to be pitched with the expectation of compensation in the event of use.”  In 2009, USA produced and aired "Royal Pains,"  a show "in which a doctor, after being expelled from the medical community for treating patients who could not pay, became a concierge doctor to the rich and famous in the Hamptons."  The district court dismissed Forest Park's claim against Universal for breach of implied contract, holding that it was preempted by the Copyright Act.

On appeal, the Second Circuit sought to answer two questions: "first, whether Forest Park’s breach of implied contract claim is preempted by the Copyright Act; and second, if such a claim is not preempted, whether Forest Park adequately pleaded a claim under state law."  

In answering the first question, the Second Circuit found that a claim for breach of contract including a promise to pay is not preempted by the Copyright Act.  The court applied the "extra element" test and found that a contract claim and copyright infringement claim have several qualitative differences between them.  The court named three qualitative differences between the two types of claims: That the "Copyright Act does not provide an express right for the copyright owner to receive payment for the use of a work,"  that "a plaintiff suing for failure to pay under a contract must prove extra elements beyond use or copying, including mutual assent and valid consideration," and that "a breach of contract claim asserts rights only against the contractual counterparty, not the public at large."  The court did not address, however, whether all contract claims or contract claims with included promises to pay are protected from preemption by the Copyright Act.  This particular claim against Universal involved a breach of contract claim with promise to pay.  USA was required to pay Forest Park for the use of its idea under the implied contract and this court found that this claim was "qualitatively different from a suit to vindicate a right included in the Copyright Act" and thus protected from preemption by the Copyright Act.

By holding that breach of contract claims are not preempted by the Copyright Act, studios may now face more costly litigation from suits alleging idea theft. These suits are not uncommon, especially when a given TV show or movie becomes popular.  This may have similar implications for studios in the video game industry.  Using the Bissoon-Dath case as an example, video game studios are not immune to idea theft suits and studios may be precluded from using the preemption defense in some situations.  

As more information on this case becomes available, this post will be updated. 

Beiswenger may have dismissed his suit against Ubisoft in the Assassin's Creed dispute, but the battle is not over yet.  In the original case, John Beiswenger sued Ubisoft for copyright infringement, alleging that Ubisoft copied elements of his book, "Link," in the Assassin's Creed franchise.  In a statement made to Gamasutra, a Ubisoft representative said "The plaintiff in the case alleging copyright infringement by Ubisoft has dropped his claim, without settlement.  Ubisoft believes this suit was frivolous and without merit, and is seeking a ruling to prevent future related claims."  The complaint that Ubisoft filed alleges Beiswenger attempted to protect elements of his work that are not able to receive protection under copyright law.  The complaint continues, "A declaration is necessary to enable Ubisoft to continue to develop and market creative content under the Assassin's Creed brand free from the cloud that Beiswenger's meritless claims have placed over Ubisoft's right to do so."

More information on this chapter of the Assassin's Creed dispute can be found here.

UPDATE: August 20, 2012

Today Ubisoft voluntarily dismissed the case.  I suspect a settlement was reached.  This one is over, folks.
Electronic Arts Inc. v. Zynga Inc.
U.S. District Court for the Northern District of California.
Case No.3:2012cv04099. Filed On August 3, 2012

Two media giants, Electronic Arts and Zynga, have once again stepped into the legal arena in a battle over The Sims.  In its complaint, Electronic Arts accused Zynga of infringing its copyrights in The Sims Social, a Facebook extension released in August 2011 to Electronic Art's popular The Sims franchise.  Electronic Arts alleged that Zynga copied its original, creative expression and unique elements through The Ville, a game also released on Facebook in June 2012.  Both games allow users to create virtual people that they are able to control through a virtual world.  Users are able to customize the people through appearance, clothing, and personality traits, and are also able to customize the houses and environments that these people live in.  The people have needs that users can fulfill and users can interact with their friends on Facebook who are also part of the game.  According to Electronic Art's complaint, reviewers of both games found them to be very similar.  For example, the website Gamezebo commented:
It’s hard to play The Ville without feeling some wholesale deja vu. . . .  [E]very trait that has made The Sims iconic has been rehashed by Zynga. Characters in The Ville communicate via pictographs and a garbled language. Even their bodily gestures are eerily similar to what you find in The Sims.
The reviewers at the website Mashable also found similarities between the two games, stating "at first glance, The Ville bears such a striking resemblance to The Sims we’d be surprised if the average person could tell the difference between the two games.”  Accordingly, Electronic Arts alleged that Zynga could have designed The Ville in a different way as not to infringe upon Electronic Art's Copyrights.

Before delving into the specific instances of copying in its own game, Electronic Arts boldly outed a criticism held by many about the casual gaming giant: Zynga achieves success through copying other products instead of through creative innovation.  Electronic Arts claimed that this was not the first time Zynga had been accused of copyright infringement.  For example, Zynga was sued in 2009 for copying the game Mob Wars when it released Mafia Wars in 2008.  Zynga was sued again in 2011 by SocialApps for copying the game myFarm (among others) to create the popular game Farmville.  In its complaint, Electronic Arts accuses several other popular Zynga games of being clones of previously existing intellectual property.  Such instances of copying include the "cloning" of Playfish's Restaurant City to create Cafe World, Crowdstar's Happy Aquarium to create FishVille, and Nimblebit's Tiny Tower to create Dream Heights.  Electronic Arts also quoted an article in SF Weekly Magazine that described Zynga's business model.  The headline of this article allegedly describes the strategy behind Zynga's success: "Steal Someone else's game.  Change its name. Make Millions. Repeat."  In this article, the CEO of Zynga is quoted as saying “I don’t f[***]ing want innovation. . . . You’re not smarter than your competitor. Just copy what they do and do it until you get their numbers.”  Electronic Arts concluded that Zynga had a history of copying other competitors and believes that Zynga is now engaged in the same business practice with The Sims Social.

In its complaint, Electronic Arts pointed to several areas where Zynga allegedly copied the protectable original expression in "The Sims Social," "i.e. the game’s animation sequences, visual arrangements, characters’ motions and actions, and other unique audio-visual elements." The character creator used by "The Ville" is one such element that Electronic Arts believes was copied from its own game.  For example, six out of nine personality types in The Ville, "Jock, Artist, Charmer, Partier, Mogul, and Scoundrel," can be compared with EA's "Athlete, Creative, Romantic, Socialite, Tycoon, and Villain" personality types. Electronic Arts further noted that these personality types were not required in a simulation game since the original The Sims used different personality types such as playfulness.  Electronic Arts went even further by accusing Zynga of copying animations used to designate the aforementioned personality types.  For example, the animation associated with a "creative" or "artist" personality type includes the selected character writing on a notepad.  Electronic Arts also found similarities in the ways that users customize their characters' skin tones and outfits. For example, Electronic Arts alleged that Zynga copied the RGB values to create the same skin tone colors as those found in "The Sims Social."  Since RGB values can be combined to create "more than 16 million different color combinations," Electronic Arts concluded that "there is an infinitesimally small chance that the use of the same RGB values for skin tone in The Ville as The Sims Social is mere coincidence."

Electronic Arts also detailed similarities between houses in The Sims Social and The Ville such as the basic dimensions of the houses, the wall heights, and decorations.  For example, Electronic Arts highlighted how a user could create an almost identical house in The Ville to one he created in The Sims Social.  Electronic Arts also noted that many of the objects and appliances that can be bought in The Ville are similar to those that can be bought in The Sims Social, and that these objects increase the value of the user's home in the same way.  Since many of the objects found in both games are so similar, Electronic Arts stated that "is apparent that Zynga used the EA art as a reference point."  The game mechanisms related to the way a user's house can be viewed were also allegedly copied from Electronic Arts according to the complaint.  For example, The Sims franchise has traditionally included a "walls down" way of looking at a building.  This feature allows users to look at their house without walls showing, giving users a different perspective.  Electronic Arts alleges that Zynga copied this feature almost exactly, even keeping the floating windows and doors visible when in "walls down" mode.

Other elements that were allegedly copied by Zynga include characters' "bodily needs."  Electronic Arts believes that Zynga not only copied these bodily needs themselves, but also the way that these are represented in game.  Electronic Arts used the showering sequence used in both games to exemplify this type of copying.  In The Sims Social, a character approaches the shower, takes his clothes off in an animated spin, walks into the shower wearing under garments or a bathing suit, and then proceeds to shower.  After the character walks into the shower, the curtain closes and steam rises from the top of the shower.  Electronic Arts alleges that Zynga copied this "original and unique" animation sequence in The Ville.  

Finally, Electronic Arts alleged that Zynga copied the "unique visual manner and style" of The Sim Social's social interaction mechanisms.  For example, Electronic Arts claims that its feature of letting players invite others into their own houses is unique in the sphere of social games.  By including this feature in The Ville, Electronic Arts alleges that Zynga copied The Sims Social.  Electronic Arts also alleged that Zynga copied other social interaction mechanisms from The Sims Social, such as the visual separation of romantic interactions from friendly interactions.  The way that characters communicate with one another is also a similarity noted by Electronic Arts.  Characters in The Sims franchise have usually "spoken" to one another using a gibberish language and images in speech bubbles.  Electronic Arts alleges that Zynga "animat[es] in a similar style and show[s] speech and/or thought balloons above them," also using "garbled language for its characters, remarkably similar to Simlish in The Sims Social."  Electronic Arts also notes other similar animations for interactions between characters such as dancing or cuddling on a couch.

More information will be released when it becomes available to us.


Uniloc USA, Inc. et al v. Mojang AB
U.S. District Court, Eastern District of Texas
Case No. 6:2012cv00470, Filed on July 20, 2012

Mojang, the studio responsible for creating the game Minecraft, has been targeted in a recent patent infringement suit by Uniloc USA and Uniloc Luxembourg. In its complaint, Uniloc alleges that Mojang infringed upon its Patent No.6,857,067 entitled " “SYSTEM AND METHOD FOR PREVENTING UNAUTHORIZED ACCESS TO ELECTRONIC DATA.”  Mojang allegedly infringed Uniloc's patent through making its Android applications available over mobile devices that  "require communication with a server to perform a license check to prevent the unauthorized use of said application[s]."

According to Uniloc's complaint, "said applications" include Mojang's most famous game, "Mindcraft."  Yes, "Mindcraft."  Uniloc was most likely referring to "Minecraft," the critically acclaimed game that has sold more than 4 million copies since 2009.  Mojang's Notch released a copy of the complaint over twitter, also stating that: "Unfortunately for them, they're suing us over a software patent. If needed, I will throw piles of money at making sure they don't get a cent."

This article will be updated when more information becomes available to us.
Technology Properties Limited LLC et al v. Nintendo Co., Ltd et al

U.S. District Court, Northern District of California
Case no. 5:2012cv03881 , Filed on July 24, 2012

On July 24, 2012, Plaintiffs filed a complaint alleging Defendants Nintendo Co., LTD and Nintendo of America, Inc. infringe upon three of its patents: Patent No. 5,440,749 ("the '749 Patent") entitled "High Performance, Low Cost Microprocessor Architecture," Patent No. 5,530,890 ("the '890 Patent") entitled "High Performance, Low Cost Microprocessor," and Patent No. 5,809,336 ("the '336 Patent"), entitled "High Performance Microprocessor having Variable Speed System Clock."  Plaintiffs allege that Nintendo has infringed upon these patents through its products such as the DSi.  More specifically, Plaintiffs allege in their complaint that Defendants "encourag[e] and facilitat[e] others to perform actions known by Defendants to infringe with the intent that performance of the actions will infringe" by providing the DSi with a USB input/output interface.  This allows peripheral devices to be connected to the DSi that may have "a clock independent of the CPU clock connected to the central processing unit on the microprocessors of the DSi."  Plaintiffs also allege that Defendants have instructed consumers to connect the DSi and peripheral devices in such a way that infringes upon Plaintiffs' patents.  Plaintiffs ask for damages in an amount to compensate Plaintiffs for infringement of the patents and an award of enhanced damages from Defendants' "willful" infringement, among other things.

This case will be updated as new information becomes available. 

Pecover et al v. Electronic Arts Inc.
U.S. District Court, Northern District of California
Case No. 08-cv-02820 CW,  Filed June 5, 2008


A settlement has finally been reached in the lengthy battle over Electronic Arts' football video games.  In 2008, plaintiffs sued Electronic Arts alleging that Electronic Arts violated several antitrust and restraint of trade laws by entering into exclusive licensing agreements with the NFL, NFL Players Association, AFL, NCAA, CLC, and ESPN.  Through these licensing agreements, the plaintiffs alleged that Electronic Arts excluded competitors from entering the football video game market and was able to inflate prices due to its monopoly in violation of several antitrust and fair trade laws including California's Cartwright Act, Cal. Bus. & Prof. Code Sec. 16720, et seq., California's unfair Compettiion Law, Cal. Bus. & Prof. Code Sec. 17200, et seq., and the federal Sherman Act, 15 U.S.C. Sec. 2.  Plaintiffs claimed that Electronic Arts entered into exclusive licensing agreements as a response to competition from Take-Two Interactive Software, Inc. that offered discount pricing.  In December 2009, Plaintiffs filled a motion to certify the class that was granted by Chief Judge Walker who certified a nationwide class that includes "[a]ll persons in the United States who purchased Electronic Arts' Madden NFL, NCAA or Arena Football League brand interactive football software, excluding software for mobile devices...with a release date of January 1, 2005."

To give you an idea of how extensive this case became, Class Counsel analyzed and reviewed more than 2 million pages of documents produced by Electronic Arts and third parties and took 22 depositions, and responded to 1,295 requests for admission during discovery.  Experts were brought in by both parties who  produced "two lengthy reports involving economic analyses of the parties' claims and defenses" exploring such topics as the economic implications of Electronic Arts' exclusive licenses.  During this discovery period, Plaintiffs and Defendants participated in the first of two mediations, however no agreement was made.  During the second mediation that took place on May 4, 2012, the parties reached this settlement agreement.  As part of the settlement agreement, Electronic Arts agreed to pay $27 million into a settlement fund.  In addition, Electronic Arts can no longer enter or renew an exclusive trademark license with the AFL for 5 years, nor can Electronic Arts renew an exclusive collegiate football trademark license with the CLC that is set to expire in 2014.  Part of this settlement agreement also prohibits Electronic Arts from entering any new exclusive trademark license with the NCAA, CLC, or NCAA member institution covered by the exclusive license for "a period of 5 years thereafter."  The agreement also allows counsel for plaintiffs to request fees up to 30 percent of the fund not exceeding $2,000,000, and that Electronic Arts would not "oppose a request for attorney's fees and costs within these limits."

For Class Members seeking to get compensation out of the Net Settlement Fund (the amount left over in the fund after other costs have been deducted), they can expect payments according to the type of video game purchased.  For example, after filing a claim form, a class member who purchased a Sixth Generation Title is entitled to a cash payment of "up to $6.79 per unit purchased, up to a maximum of eight units ($54.32)."  Comparatively, a purchaser of a Seventh Generation Title is only entitled to $1.95 per unit up to $15.60 for 8 units.  If the Net Settlement Fund does run out, then the parties will identify other Sixth Generation purchasers who have not filed a claim form through addresses that they had provided to Electronic Arts.

If you are seeking more information on this case or the settlement agreement, you can visit www.easportslitigation.com.

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