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Video games have come a long way. They have morphed from simulated games of ping pong to today’s fully-immersive virtual reality games that leverage biometrics and artificial intelligence (AI). While the origins of using AI in games were simple – such as to create more realistic non-player characters  – the use of AI now allows for much more. AI-based tools may be used to outsource quality assurance, gain data-driven insights into players, or to better understand player value to maximize retention and in-game revenue. Now is thus a good time for companies to keep in mind regulatory bodies’ increased focus on the use of AI.
Continue Reading Video Games, AI, and …the Law?

System art is of increasing importance in patent disputes despite being frequently overlooked or “left for later” in many cases.  A recent decision in the Ironburg Inventions v. Valve Corp. case highlights the importance of system prior art, particularly as IPR success rates have dropped from their high points in 2012-15.
Continue Reading Left Empty Handed: Valve Shut Down on Written Prior Art, Highlighting Importance of System Art

Earlier this month, a set of gaming industry representatives agreed upon and released a set of unifying esports principles. These representatives include the Entertainment Software Association (ESA), as well as associations from Canada, Australia and New Zealand, the UK, and Europe. These “Principles of Esports Engagement” were developed in a collaborative effort and form a set of values applicable in all aspects of the global esports environment.
Continue Reading Gaming Industry Associations Agree on Universal Esports Principles

Last fall, the PTAB modified its procedures for IPR claim construction, eliminating the use of the broadest reasonable interpretation standard. Since the rule change last year, companies challenging the validity of patents at the PTAB are required to use the Phillips plain and ordinary meaning standard.
Continue Reading “Addressing Video Game Claims Under the Phillips Standard at the PTAB”

*This article was originally published in Law360 on June 8, 2019.

Electronic sports, known in the industry as “esports,” has seen remarkable growth in the last decade. The term “esports” refers to the growing world of competitive, organized video gaming, where professional video gamers play on a variety of different video game platforms and video games (“esports titles”) in heavily attended and publicized competitions and tournaments. These competitions are watched by millions of fans across the globe on TV or online, and by others who attend live esports events. Expert projections have shown that this year will be especially significant, with the sport reaching revenues of $1.1 billion in 2019, or year-on-year growth of +26.7%. With a global audience growing to over 453.8 million worldwide in 2019, it is unsurprising that several companies are trying to break into this emerging market. In fact, reports have projected that sponsorship in esports will generate $456.7 million this year alone.

As new companies and individuals attempt to enter this space, it is important to consider several labor and employment consequences. While many of these recurring problems are not exclusive to esports, the unique characteristics of esports highlight the importance of considering these issues before or when employers get into the esports space.
Continue Reading 10 Labor and Employment Considerations in Esports*

As we have previously reported, as loot boxes have become increasingly popular in high-profile video games, they have come under greater legal scrutiny. Several jurisdictions have indicated they are not illegal gambling, but other jurisdictions have found some implementations to be illegal gambling. Even in the jurisdictions where loot boxes are not deemed gambling, regulators have raised concerns about whether loot boxes raise other issues. One alleged concern is the potential impact on children and the potentially addictive nature of loot boxes, though little, if any, hard evidence to date supports this.
Continue Reading Unpacking Recent Loot Box Updates

Apple just announced a number of changes to its App Store Review Guidelines, including the requirement that apps offering “loot boxes” or other mechanisms that provide randomized virtual items for purchase must disclose the odds of receiving each type of item to customers prior to purchase. This comes as the incredibly successful monetization mechanic of loot boxes has come under scrutiny as we have addressed in our prior posts on Are Loot Boxes An Illegal Gambling Mechanic? and an Update to that post.
Continue Reading Apple Requires Disclosure of Odds for Loot Boxes

A member of the United Kingdom’s Parliament has opened an inquiry into the legality of loot boxes. Loot boxes are virtual items that may be redeemed to receive a randomized selection of additional virtual items. Various countries around the world have recently moved to regulate the provision of loot boxes in video games, often in response to inquiries from consumers or legislators, such as the aforementioned inquiry in the UK. This leads to the ultimate question: are loot boxes legal? The linked article below addresses this question and several other issues related to loot boxes.
Continue Reading Are Loot Boxes An Illegal Gambling Mechanic?

A U.S. District Court Judge issued a preliminary injunction against enforcing a Milwaukee county ordinance requiring a permit before implementing certain AR location-based games. As we previously reported, Candy Lab AR, makers of the augmented reality poker game Texas Rope ‘Em, sued Milwaukee County, Wisconsin, over an ordinance that states: “Permits shall be required before any company may introduce a location-based augmented reality game into the Parks…”
Continue Reading Court Enjoins Milwaukee Over AR Location-based Game Ordinance