Episode 21 is a delightful maze of plots, plot twists and omens.  At Pied Piper, Richard fails in his attempt to go over CEO Action Jack’s head and have Laurie, the investor, force Jack to scrap his Box and build the consumer platform.  As a result of this failed coup, Jack warns Richard darkly, “if you’re going to shoot the king, you’ve got to be goddamn sure you kill him.”  Undeterred, the team opts for covert action:  they will build their consumer platform while pretending to build Jack’s box. They form a secret ‘startup within a startup,’ aptly/obviously codenamed “Skunkworks.” But before they can even get to work, Richard lets the Skunkworks plans fall into the enemy, sales team hands… and it seems like the entire scheme is blown!
Continue Reading Trade Secrets and Lies (Silicon Valley – Episode 21)

This blog entry, which focuses on the Google Play Developer Distribution Agreement, is the first of two articles geared at helping app developers understand the fine print of the agreements they are asked to enter into with the companies that distribute their products. Following later this year, the second installment will focus on the iOS Program Developer Program License Agreement.
Continue Reading Bargaining with the Little Green Robot: Understanding the Google Play Developer Distribution Agreement [1]

Last week’s arrests[1] of Robert Faiella, an alleged seller on online marketplace Silk Road, and Charlie Shrem, the CEO of the startup BitInstant, marked a recent round in a series of law enforcement actions against what the government characterizes as a “rise in criminal activity”[2] by people using the cryptographically-controlled digital currency, Bitcoin.[3]  The arrests of Shrem and Faiella occurred nearly contemporaneously with hearings by the New York Department of Financial Services to determine how to regulate Bitcoin in the State of New York.  More than one source has suggested the timing of the arrests may have cast at least some cloud on the New York hearings on regulation of Bitcoin.
Continue Reading Bitcoins and Liability in the Wake of Recent Silk Road Arrests

The Honorable Judge James L. Robart recently took on the challenging task of determining a reasonable and non-discriminatory (“RAND”) royalty rate for Motorola’s standards-essential patents (“SEP”). Microsoft Corp. v. Motorola, Inc., 2013 U.S. Dist. LEXIS 60233, No. C10-11823 (W.D. Wash. Apr. 25, 2013). This decision comes after a two-year patent war between Microsoft and Motorola. In November 2010, Microsoft filed a breach of contract suit, alleging Motorola breached its obligation to license its SEP at a RAND rate.
Continue Reading An Unreasonable Royalty Rate is No Gaming Matter

In Thorner v. Sony Computer Entertainment America, LLC (Case No. 2011-1114, Feb. 1, 2012) (Moore*, Rader & Aiken (D. Or. sitting by designation)), the Federal Circuit reiterated the prohibition against importing limitations from the specification and reversed a district court construction depending from consistent uses of the disputed phrase in the specification.

Continue Reading Federal Circuit Narrows Claim Construction Options in Game Controller Suit

When strolling the streets of an online virtual world that allows user-created content, it is not uncommon to see brands that you recognize. A Ferrari may roll past you in the street. The avatar walking toward you may be cushioning its steps with Nike-Swoosh-emblazoned tennis shoes. The virtual jewelry store that you pass may feature a gleaming Cartier necklace in its window. Familiar brands cushion the virtual experience with the trappings of familiar surroundings for the software user. The problem is, chances are these brand owners never created these virtual goods, and the money from their sale likely went into someone else’s pockets.
 


Continue Reading Creating the (Virtual) American Dream: User-Generated Content and Trademarks in Virtual Worlds

Let’s start with the basics. Under a typical game development contract, a publisher furnishes the funds required to develop a game to a game developer. Understandably, access to these funds is subject to certain restrictions, expectations and other contractual obligations. Invariably, there is a provision dedicated to the handling of the rights to intellectual property created pursuant to the terms of the agreement.
 


Continue Reading Who Owns The Tools Of The Trade?

In a traditional online game, users are required to abide by the Terms of Use (“TOU”). Companies, cognizant of the fact that not everyone will comply with the TOU, implement various enforcement measures such as automated filters, user-driven complaint systems, or a more involved in-game monitoring system utilizing Game Masters. As the popularity of user-generated content (“UGC”) and user-customization has increased, ensuring TOU compliance has become increasingly costly and labor-intensive. Additionally, by granting users the ability to import copyrighted materials such as facial depictions, art, literary works, or music, the inclusion of UGC in online games potentially raises Digital Millennium Copyright Act (“DMCA”) compliance issues.
Continue Reading In-Game Monitoring May Create Exposure to Copyright Liability Claims

Video games and feature films have a lot in common. Both tell stories and have exciting visuals and music. Although one is "interactive", recent Blu-ray HD discs are now turning linear films into more immersive, interactive experiences. Rights and talent deals for both have likewise followed a path towards convergence with terms and consideration often being negotiated and drafted the same way. Nowhere is this trend more obvious than the increasing popularity of product placement in enhancing the economic value of video games by making the game play more realistic while providing increased marketing value and good will by allowing the game developer and product owner, generally at no out-of-pocket cost, to reach new audiences.


Continue Reading Branded: Product Placement and Video Games