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Introduced in response to certain digital media sellers (e.g., game publishers) revoking consumer access to purchases with little to no recourse, AB 2426 forces sellers of “digital goods,” such as movies, apps, games, books and music to clarify what a consumer is actually receiving in connection with their “purchase.” Often companies refer to the “purchase” or “sale” of digital goods, yet the associated terms of service make clear that the buyer only receives a revocable license to the such goods. In some cases, if a buyer violates the terms of service, the license is revoked and the user is denied further access to the digital goods. In other cases, a buyer may be denied access to digital goods it has “purchased” if the digital media platform shuts down.Continue Reading New California Law Targets Sellers of Digital Goods

The Consumer Financial Protection Bureau (“CFPB”) published a report on Banking in Video Games and Virtual Worlds (“Report”) that warns of greater scrutiny of and enforcements against the financial services offered in games and virtual worlds that increasingly resemble traditional financial products and services offered by regulated banking and payment systems. The Report is applicable to all types of games and virtual worlds, but creators and publishers of blockchain games and metaverses, in particular, should take note of this report.Continue Reading CFPB Report Targets Games and Virtual Worlds – What Blockchain Game and Metaverse Companies Need to Know

Roblox recently announced that it is working on generative artificial intelligence (AI) tools that will help developers who build experiences on Roblox, to more easily create games and assets. The first two test tools create generative AI content from a text prompt and enable generative AI to complete computer code. This is just the tip of the iceberg on how generative AI will be used in games and a variety of other creative industries. Music, film, art, comic books, and literary works are some other uses. AI tools are powerful and their use will no doubt be far reaching. In the near term, so too will the associated legal issues. Some of the legal issues include:Continue Reading How Generative AI Generates Legal Issues in the Games Industry

The rising prevalence of crypto and virtual currencies has invited the scrutiny of several regulatory bodies who continue to grapple with the unique challenges posed by blockchain technology, FinCEN being one prime example. The Financial Crimes Enforcement Network (“FinCEN”) is an arm of the United States Department of Treasury that seeks to impede financial crimes such as money laundering and terrorist financing, and was the first financial regulator in the U.S. to address virtual currency.Continue Reading Blockchain Game Developers and FinCEN: When are State Money Transmission Laws Applicable?

Blockchain is a revolutionary technology that has great potential to solve many of the fundamental challenges facing the music industry today. Blockchain technology including distributed, decentralized ledgers, smart contracts, and the ability to tokenize digital assets, is uniquely suited to address issues such as rights management, licensing, copyright ownership, royalty tracking and reporting and the primary and secondary ticketing markets for live events. Various aspects of the technology are currently being used to address some of these problems. Despite these current uses, blockchain adoption likely will be incremental and more evolutionary than revolutionary, at first. Longer term, blockchain technology could provide a more comprehensive solution for the industry.
Continue Reading How Blockchain Technology Can Improve the Music Industry

Cryptocurrencies and blockchain technology are rapidly emerging as disruptive technologies. As has happened with many new technologies, particularly disruptive ones, a patent arms race is occurring. The number of patents being filed for these technologies is rapidly increasing.

The number of published applications shows roughly a tenfold increase over the number of issued patents.

Despite this increase in patent filing activity, many companies are unaware of what aspects of this technology can be patented and many myths and misconceptions exist. In addition to the usual misconceptions about patents (detailed below), the open source aspect of many blockchain-based inventions leads to greater confusion. The patentability of software and technology platforms does not cease just because some or all of the software is open source or built on a known protocol.
Continue Reading Patent Strategies for Cryptocurrencies and Blockchain Technology