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MP900449113.JPG  A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

 

 

Path Inc. to Settle Charges Over Collecting Kids’ Data
Path Inc., a maker of a popular social networking app, agreed to an $800,000 settlement with the Federal Trade Commission over charges it collected children’s personal information without their parents’ consent, regulators said Friday.

Feds Urge App Makers, Mobile Operating Systems to Do Better On Privacy
The Federal Trade Commission on Friday issued a list of recommendations of how those who make mobile software can do a better job of protecting user’s privacy and making clear what information is being collected.

What the Proposed Apps Act Would Mean for App Developers
Mobile applications have been the subject of a lot of recent attention during the past several months. Back in the fall of 2012, California Attorney General Kamala Harris warned app developers of the need to disclose their privacy practices in order to comply with California’s Online Privacy Protection Act and shortly thereafter commenced an action against Delta Airlines for its failure to have displayed a privacy policy on its app.

Fed. Circ. Aims For Clear Rules On Software Patents
A case set for oral arguments before the full Federal Circuit on Friday has the potential to provide much-needed clarity on when inventions implemented using a computer are eligible for a patent, attorneys said.

Brazil: The Social Media Capital of the Universe
Brazil’s expanding middle class is increasingly growing online, and social media are particularly popular because of Brazil’s hyper-social culture, social-media executives say.

Is Online Gambling Legal If Bitcoins, Not Dollars, Are At Stake?
With no government ties, Bitcoin is used to buy everything from blogging services to Brooklyn-made cupcakes. Theoretically, millions of dollars are being kept in the digital currency, and it’s increasingly being used by specialized online gambling websites. But is Bitcoin gambling legal?

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NEW YORK CITY

In conjunction with Social Media Week, please join us in our New York office on Wednesday, February 20th from 5 – 7 pm for Game On! Social Media Contests, Sweepstakes and Promotions.

The use of social media-based contests, sweepstakes and other promotional techniques is rapidly increasing. So too is the regulatory scrutiny and enforcements of them. The social media slant to these long-used tools creates new legal issues that must be understood and addressed.

Our panel, led by Jim Gatto and Sean Kane, will discuss some of the most important issues and trends relating to social media contests, sweepstakes and promotions.

Topics will include:

•           Understanding the FTC Endorsement Guidelines as they relate to blogging and endorsement

•           Avoiding crossing the line into illegal gambling

•           Rewarding consumers for creating product reviews or recommendations

•           Protecting your unique business model

•           Leveraging endorsement-based advertising

•           And much more…

As always, along with the great business opportunities come some legal and regulatory issues of which companies need to be aware.

WASHINGTON, DC

Please join Jim Gatto, Steven Kaplan, and Laura Lynch Flick in our Washington, DC office for a similar program on Thursday, February 21st from 3 -6 pm. Following the session on Social Media Contests, Sweepstakes and Promotions, we will have another panel on Social Media Audits: Why you need one.

The rapidly increasing use of social media is changing the way companies do business. However, companies are not adapting their legal practices and corporate policies as quickly to reflect these changes. Additionally, the law is changing quickly in some respects, but it lags behind the rapid advances in social media technology and business methods in others. Companies have been caught by surprise as the legal decisions and regulatory enforcements unfold. For these reasons, every company needs to be more proactive in this area.

Our panel will cover some of the most important components, including:

•           Developing a Written Social Media Policy

•           Intellectual Ownership and Protection

•           User Generated Content (DMCA)

•           Virtual Currency, Virtual Goods and Stored Value

•           Mobile Applications

•           Privacy and Date Use

 

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moneyimages.jpg
Kongregate, the game portal owned by GameStop, has announced a financial assistance program to the tune of $10 million for free-to-play mobile app developers. The assistance includes cash advances to help developers finish their gam, including final builds and integration, support to help with testing, QA and monetisation
and marketing through the GameStop iOS and Android apps.

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MP900449113.JPG  A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

 

Kabam Hits Profitability in 2012 on Revenue of $180 Million
Kabam doesn’t have to report earnings since it’s privately held, but that didn’t stop it from saying today that it was profitable last year on gross revenue of $180 million.

Maryland attorney general launches Internet Privacy Unit
The Maryland attorney general’s office on Monday launched a new Internet Privacy Unit designed to address the problem of privacy in the Internet age and to update “gaps” in companies’ online privacy policies.

iOS games earn 3.5 times the revenue of Android games in Q4
Even though Android app revenue grew much faster in the last quarter of 2012 than iOS app revenue, iOS apps still earned over three and a half times the amount that Android apps brought in, according to App Annie’s Index.

Axl Rose’s ‘Guitar Hero’ Suit Too Late, Judge Rules
A California judge Thursday tentatively dismissed the remainder of Guns N’ Roses frontman Axl Rose’s $20 million lawsuit accusing Activision Blizzard Inc. of tricking him into licensing a song for the video game “Guitar Hero III,” ruling that Rose’s claims were time-barred.

Scratch-Off Maker Drops $1.5B For Video Gaming Co.
Instant lottery leader Scientific Games Corp. has inked a $1.5 billion deal to combine its scratch-off and electronic gaming empire with WMS Industries Inc.’s video gambling operation, the buyer announced on Thursday.

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2475_artid_2475.jpgThe Federal Financial Institutions Examination Council (FFIEC) has released proposed guidance on the applicability of consumer protection and compliance laws, regulations, and policies to activities conducted via social media by banks, savings associations, and credit unions, as well as nonbank entities supervised by the Consumer Financial Protection Bureau and state regulators. In a press release announcing the guidelines, the FFIEC stated: “The FFIEC expects financial institutions to take steps to manage potential risks associated with social media, as they would with any new process or product channel.”

All companies should develop and implement an effective social media policy. For financial institutions, the social media policy should take into account these guidelines. If you have not taken steps to focus on this now is a good time to do so. If you have not taken steps to focus on this now is a good time to do so.

Pillsbury’s industry leading social media team offers social media audits and helps companies develop social media policies.

Click here for a full copy of the guidelines.

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Prevent a Loss of Patent Rights when the U.S. Changes to a “First-Inventor-to-File” System on March 16, 2013

Act Now.jpgOne of the most significant changes of the 2011 Leahy-Smith America Invents Act (“AIA”) takes effect on March 16, 2013 when the U.S. transitions from a “First-to-Invent” patent system to a “First-Inventor-to-File” patent system.

Join Pillsbury for a Webinar as we take a closer look at the legal and business implications of the looming deadline. We will provide recommendations and guidance so that you can ensure your company will not be at a competitive disadvantage or, worse yet, potentially lose patent rights, when the U.S. transitions to a first-inventor-to-file system.

SPEAKERS INCLUDE:
Bradford Blaise
Partner, Pillsbury
Patrick Doody
Partner, Pillsbury

WEBINAR
Wednesday, January 30, 2013
Noon – 1:00 p.m. ET
9:00 a.m. – 10:00 a.m. PT

Our speakers will try to accommodate all questions on the webinar, or will follow-up individually.

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The use of mobile applications on smartphones continues its trend of strong growth.  According to a recent press release, users of Apple’s App Store have downloaded over 40 billion apps, with over two billion downloads occurring in the month of December alone.  According to Apple, nearly 20 billion of the 40 billion downloads occurred in 2012.  Apple’s App Store first opened in July 2008; thus, users downloaded nearly the same number of apps in the last year as the combined total in the two and a half years before that.

mobile-app.pngWith numbers like these, it is clear that consumers are embracing the use of mobile apps at an ever growing rate.  To meet this demand, developers are responding with a large selection of apps.  As reported in an article written by InsideMobileApps, last October, Apple and Google, creators of the two largest mobile application marketplaces, reported that they were hosting approximately 700,000 applications each.

However, as the use of mobile applications continues to grow, it is important to consider the legal implications of creating and releasing apps.  App developers must not only conform to the relevant law in their own jurisdiction, but they must also consider the law in the jurisdiction of the users of the apps as well.

For example, the California Attorney General’s Office recently established a Privacy Enforcement and Protection Unit to ensure that information collected on the state’s residents conforms to state statues such as the California Online Privacy Protection Act (OPPA).  In late 2012, California’s Attorney General has also specifically targeted mobile app developers and operators.  Mobile app developers and operators collecting the personal information of California residents must have a conspicuously posted privacy policy that describes clearly and completely how personal data is collected, used, and shared.  Without such a privacy policy in place, mobile app developers and operators could face fines.  To better assist developers in understanding these requirements, the Attorney General has published a set of privacy guidelines recommending some best practices.  While these guidelines provide a general idea of the steps a developer can take to conform to the requirements of the statutes, they may not provide the detailed analysis needed to make informed business decisions.

If your company has released a mobile application or is planning on developing one, be sure to seek solid advice.  Contact us for additional information.

 

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On January 10, 2013, the President signed the Video Privacy Protection Act Amendments Act of 2012 into law. The 2013 Act amends the Video Privacy Protection Act of 1988 (18 USC 2710), which prohibited the sharing or disclosure of video rental history.

aj-simple-vhs-tape-clip-art.jpgThe 1988 Act was prompted due to the release of then Supreme Court nominee Robert Bork’s video rental history. Although there was nothing illicit in Bork’s video rentals, Congress noted the ease with which the information was located and disclosed.

The 1988 Act did not allow for the customer to consent in advance to the disclosure of rental history, rather, informed, written consent had to be obtained each and every time “at the time” of the disclosure.

The New Act now allows sharing of video rental history as long as informed, written consent is received from the customer, including by electronic means such as over the Internet. Notably, this consent must be in a “distinct and separate” form from any other legal or financial obligations. The consent may be given in advance and for a period of up to 2 years, or until it is withdrawn from the consumer.

The enforcement provisions of the 1988 Act remain in full force. Thus, any failure to properly follow the new informed consent requirements could lead to statutory damages of not less than $2,500 per person, attorneys’ fees and costs, punitive damages, and equitable relief.

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MP900449113.JPG  A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

 

 

USPTO Dives Into Software Patent Debate With New Group
Amid a growing chorus of criticism that software patents are too vague and can hinder innovation, the U.S. Patent and Trademark Office on Thursday announced plans to create a new group to work with the software community to improve patent quality.

The Hidden Risks Behind Facebook’s Login Tools: Part 1
Recently, a federal judge reportedly indicated tentative approval of Facebook’s offer to settle a class action claim arising from its use of individuals’ names and likenesses in connection with Sponsored Stories, a service it rolled out in January of 2012.

Ex-Zynga Software Engineer Sues Over Unpaid OT
Zynga Inc. was hit with a proposed class action Monday in California federal court by a former software engineer at the social media gaming firm accusing it of failing to give engineers proper overtime pay by misclassifying them as exempt from such wages.

Google Declares War on the Password
Want an easier way to log into your Gmail account? How about a quick tap on your computer with the ring on your finger?

Investment In Social Gaming Drops By $1 Billion In 2012
As recently as 2011, the expectation was that the social gaming industry was the future of big money in video games. Companies like Zynga were valued in the billions. In 2013, not so much. Investment in social game companies dropped by $1 billion in 2012.

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poker images.jpgAs real money online gambling remains bogged down in the legislative and regulatory morass, social gaming applications have been on a tear. As we have previously reported, major players are leveraging social gaming applications in preparation for the legalization of online gambling. One of the emerging leaders, Caesars Interactive Entertainment recently acquired Playtika and Buffalo Studios. Casino equipment manufacturer IGT acquired Doubledown, a Facebook casino app developer a year ago for a reported $500 million. Social game giant Zynga has announced that it is preparing to enter the online gambling world.

These games typically do not involve real money gambling. Often either the user can play for free or buys chips or credits but can not cash them out. These games leverage what we refer to as “gamblification” to create a simulated experience that leverages the fun aspects of gambling without legally constituting gambling.

While this trend is great for social game companies that are leveraging this phenomena, not everyone is happy about this. In Australia,
Senator Nick Xenophon reportedly intends to introduce legislation to prevent such “gambling apps.”  As reported by The Sydney Morning Herald, a virtual poker-machine game that children and teenagers can easily access was the highest-grossing phone and tablet app in Australia, prompting outrage from gambling critics and the established “pokies” industry (as they call it down under).

Such games have escaped gambling classification because even though users pay real money to but credits, they cannot cash out any winnings. Similar models are widely used by many social gaming applications such as Zynga Poker and many other such games.

In most jurisdictions, these types of games are not specifically covered by the gambling laws and are typically legal if certain precautions are taken in the business model. Perhaps Australia will change that. Stay tuned for further developments.