Articles Posted in Copyright

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On April 8, 2010, Zynga sued Playerauctions.com for operating a website that provides an unauthorized “Secondary Market” for enabling Zynga game users to post and sell “Virtual Currency” and “Virtual Goods” allegedly in violation of Zynga’s Terms of Service. According to Zynga, its Terms of Service prohibits users from selling “Virtual Currency” or “Virtual Goods” for real-world money or anything of value outside of its games.

A recent version of the Zynga Terms of Service states:

The Service may include a virtual, in-game currency (“Virtual Currency”) including, but not limited to coins, cash, or points, that may be purchased from Zynga for “real world” money if you are a legal adult in your country of residence. The Service may also include virtual, in-game digital items (“Virtual Goods”) that may be purchased from Zynga for “real world” money or for Virtual Currency. Regardless of the terminology used, Virtual Currency and Virtual Goods may never be redeemed for “real world” money, goods or other items of monetary value from Zynga or any other party.

It further states:

Transfers of Virtual Currencies and Virtual Goods are strictly prohibited except where explicitly authorized within the Service. Outside of the game, you may not buy or sell any Virtual Currency or Virtual Goods for “real world” money or otherwise exchange items for value. Any attempt to do so is in violation of these Terms and may result in a lifetime ban from Zynga Service and possible legal action.

Zynga alleges that the Playerauctions.com has committed copyright and trademark infringement (along with false designation of origin, unfair competition and other claims) by displaying and/reproducing images and code from the games and using various Zynga trademarks with authorization.

The Complaint identifies unlawful sales in connection with Zynga’s Poker, Mafia Wars and FarmVille games. A recent review of the Playerauctions.com site showed over 750 Mafia Wars related items alone available for sale ranging in unit price from 25 cents to $900 and 84 entire “accounts” for sale ranging in asking price from $30 to $5,000 with one listed at a whopping $492,000!

Interestingly, Zynga does not specifically allege impropriety with or seek to prevent the outright sale of accounts.

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On April 28, 2010, a social game developer Crowdstar sued Wonderhill for copyright infringement based on similarities between Wonderhill’s “Aquarium Life” and Crowdstar’s “Happy Aquarium”. While copyright does not protect ideas (such as the idea for a fish-based game) it does protect expression of the idea. If this case should make it to court, it will provide an interesting test case for game developers that have developed social games that have been “cloned,” which tends to be quite common in the space.

Happy Aquarium is generally acknowledged as one of the first, if not the original, fish care-based social games. Happy Aquarium and Aquarium Life are not the only aquarium games. But in its complaint, Crowdstar alleges an especially high level of correspondence in the user interface, game play and other features between Happy Aquarium and Aquarium Life as being the impetus for the suit.

Starting with a relatively obscure game from 1 year old Wonderhill may increase the potential for a quick settlement. But is this a one off lawsuit or is Crowdstar chasing a minnow while it waits for a bigger fish to fry? Check back and we will keep you updated.

One interesting aspect of the complaint relates to the relief sought – or more accurately what is not sought. In the U.S., statutory damages of up to $150,000 per infringement, the potential for recovery of legal costs and attorneys’ fees, and certain legal presumptions regarding ownership and validity are available to a copyright holder for works that were timely registered with the Copyright Office. These benefits are typically available for works that were registered prior to infringement or within three months of first publication. It is notable that the Crowdstar copyright registration at issue was only recently registered (registration no. TX 7-117-794, registered March 25, 2010), while Happy Aquarium itself was published in September, 2009. Perhaps as a result of this, the relief sought by Crowdstar does not include statutory damages or recovery of legal costs and attorneys’ fees.

But, regardless of the result here, there can be no doubt that a game developer’s leverage over a clone can be increased significantly with a timely copyright registration For more on this topic see our advisory on the benefits of timely filing copyright registrations.