Articles Posted in Virtual World IP Policies

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

 

Is Online Poker Over?

This week, the FBI landed a crushing blow on all of the online poker sites that are advertised nightly in the United States. Individuals involved with internet gambling companies PokerStars, Full Tilt Poker and Absolute Poker were indicted for bank fraud, money laundering,
and illegal gambling and sued in a companion civil suit that seeks at least $3 billion in forfeitures and penalties.

HP Rolls Out Virtual Banking With Avaya’s Web.alive

Building on HP’s Unified Communications and Collaboration Services portfolio for the enterprise, HP and Avaya today announced a strategic offering that provides banks with a customer-centric, humanizing element for assisted self-service.

What Effect Has the Internet Had On Religion?

The concept of religious ritual is so deeply embedded in our social fabric that it is natural for it to have made the leap to virtuality. And it hasn’t just reared its head in worlds such as Second Life. Social networks, including Facebook, have active and close-knit communities of religious followers of all creeds, gathering in what science writer Margaret Wertheim described in her 1999 book, The Pearly Gates of Cyberspace, as “a new kind of realm for the mind”.

Hackers Go After Points, Credits,
and Virtual Currency

Virtual thieves can sell stolen points in online forums or on eBay, or they can try to exchange points for rewards. However, most online retailers,
social media, and gaming websites recognize the thieves’ behavior patterns when cashing in stolen points. By analyzing the history of the device being used to access a website, the website’s operator can prevent fraudulent transactions.

Social Gaming on Track to Become $5 Billion Industry by 2015

Parks Associates, an internationally recognized market research and consulting company specializing in emerging consumer technology products and services,
forecasts revenues in the social gaming market will increase by five times from 2010 to 2015, due in large part to advertising revenues and sales of virtual items. These factors already pushed revenues over $1 billion in 2010.

FNB’s eBucks Buy 19 Million KMs of Fuel

In December 2009, members of eBucks, First National Bank’s rewards programme, were given the ability to pay for fuel with eBucks, FNB’s virtual currency, at participating Engen service stations around South Africa. Since then, FNB has enabled eBucks’
members to fill up on fuel to the value of over R13m at participating Engen service stations – which is enough fuel to drive almost 20 million kilometres or – more accurately – to make 25 trips to the moon driving an average family sedan.

IU Shares $297,929 NSF Grant to Study Use of 3D Virtual Worlds

The National Science Foundation has awarded $297,929 to a multi-disciplinary team from Indiana University and Arizona State University. The award supports on-going research concerned with the use of computer-generated 3D virtual environments by business and educational enterprises.

Virtual Currency Drawing in More Viewers

Virtual currency isn’t just for gamers any longer. New data from Jun Group indicates that video viewers are also interested in virtual currency. According to their report on incentivized social video, virtual currency is pushing consumers to watch more video content in the social space.

 

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A UK court entered  a guilty plea against Ashley Mitchell, an IT guy who hacked into Zynga’s servers last year and stole 400 billion virtual poker chips. His efforts to resell them, which is against Zynga’s terms of service, netted him $86,000 and a yet to be determined jail sentence.

To avoid issues with the gambling laws, Zynga sells poker chips to users for real money (and in some cases to reward user actions), but prohibits any cash out or resale of the chips.

Zynga’s Terms of Service states:

“Zynga owns, has licensed,
or otherwise has rights to use all of the content that appears in the Service or the Zynga games. Notwithstanding any provision to the contrary herein, you agree that you have no right or title in or to any content that appears in the Service, including without limitation the virtual goods or currency appearing or originating in any Zynga game, whether earned in a game or purchased from Zynga, or any other attributes associated with an Account or stored on the Service.

Zynga prohibits and does not recognize any purported transfers of virtual property effectuated outside of the Service, or the purported sale, gift or trade in the “real world” of anything that appears or originates in the Service, unless otherwise expressly authorized by Zynga in writing. Accordingly, you may not trade, sell or attempt to sell in-game items or currency for “real”
money, or exchange those items or currency for value of any kind outside of a game, without Zynga’s written permission. Any such transfer or attempted transfer is prohibited and void, and will subject your Account to termination.”

With respect to chip “purchases”, Zynga states:

“The purchase of Zynga Poker
chips from a third party seller is a violation of Zynga’s Terms of Service. We are  not responsible for any losses incurred and will not restore chips.

The only safe method of purchasing our chips is directly through the application, via the Buy Chips tab.”

As virtual currencies proliferate, it is important for companies to ensure that they think through their business models, develop and enforce effective terms of service and consider up front how they can use technological measures to deal with people who inevitably will try to beat the system. This requires a careful integration of business, legal and technical strategy.

For more information on legal issues with virtual currency, see Pillsbury’s Virtual Currencies Overview.

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Despite supposedly having millions of users (to Facebook’s 3/4 of a billion), social networking pioneer MySpace appears to be headed out to pasture. Last week, the company laid off 47 percent of its workforce, lopping off 500 employees from its nearly 1,100-person payroll. Rumors that MySpace’s parent company News Corp. wants to sell are all over the tech and mainstream media. (see Link)
This is despite a widely publicized “redesign” intended to focus the site on “social entertainment.”

Assuming the redesign doesn’t provide the boost News Corp. (or a potential buyer) would be looking for, what will happen to all of the material on users’ MySpace pages if the service shuts down? A similar question faced users of Second Life’s Teen Grid when Linden Labs announced that portion of the virtual world would be shut down. (See Link).

But closing down Teen Grid doesn’t come close to the scale of shutting down MySpace. If done right (i.e.,
with plenty of notice and providing members a user-friendly option to export content), the passing of this early social media icon could be the model of the right way to wind things down.

The idea that a social media platform with millions of members (and millions more still joining),
could “go gently into that good night” should serve as a warning to those investing time, energy and money into virtual assets – if you’re on someone else’s platform, and you’re not big enough to get anything other than their standard user agreement, you need to plan for the day when your platform could turn off.

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In October, tech media sources, such as CNET, were reporting that Facebook had acquired part of Zenbe’s intellectual property portfolio, in addition to hiring some of Zenbe’s key engineers. While Zenbe will stay intact, Zenbe Mail has been shut down, and the associated intellectual property, has been acquired by Facebook.  

Zenbe is just one in a long list of recent acquisitions by the social networking giant that have focused primarily on the value of intellectual property assets. Some of those acquisitions include: Divvyshot, Hot Potato, NextStop, Drop.io and FriendFeed. This underscores to critical importance of a sound intellectual property strategy that helps protect your product development and is aligned with your overall business goals.

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There has been much buzz about Zynga’s attempt to patent virtual currency. As is often the case with patents, there is much hype, many misconceptions and little focus on the actual facts. Here are the facts.

1. Zynga does not have a patent on virtual currency. It has applied for a patent, the application has been published but has not yet been examined. It will be some time, if ever, before a patent will issue. The published application is 2010-0227675. Here is a copy of the Zynga Application.

2. Zynga is seeking protection for various aspects of virtual currency, particularly in the context of “gambling” games. The following is an example of one of the claims:

A method, comprising:receiving, at a server, a purchase order for virtual currency from a player, wherein the purchase order was made with legal currency, and wherein the virtual currency is usable within the context of a computer-implemented game;crediting an account of the player with virtual currency, wherein the virtual currency is not redeemable for legal currency;receiving a second purchase order for a virtual object within the context of the computer-implemented game from the player,
wherein the second purchase order was made with virtual currency;
and debiting the account of the player based on the second purchase order.

3. This claim appears to be seeking protection using real money to buy virtual currency, precluding redemption of the virtual currency for real money but enabling it to be used to buy virtual objects in the game.

4. The patent application was filed

03-03-2010 and claims priority to a provisional application 61/158,246 filed March 6, 2009.

5. We will monitor the status of this application as it is examined and any rejections are made.

While many believe that this patent application will be rejected due to prior art, the most important take always are these:

  • MANY ASPECTS OF SOCIAL GAMES ARE POTENTIALLY PATENTABLE
  • ZYNGA (AND OTHERS) ARE PURSUING MORE PATENTS IN THIS SPACE
  • IT IS WELL KNOWN THAT THERE IS A LOT OF “BORROWING” OF IDEAS FROM COMPETITORS IN THE SOCIAL GAME SPACE
  • THIS HAS BEEN FACILITATED BY LACK OF ATTENTION TO IP PROTECTION
  • IT IS CRITICAL FOR ANYONE OPERATING IN THE SOCIAL GAMING SPACE TO DEVELOP A COMPREHENSIVE IP PROTECTION STRATEGY,  INCLUDING PATENTS, COPYRIGHTS AND TRADEMARKS

E-mail us for a free guide on patent and other IP strategies in the social game space.

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Three Wire Systems, LLC recently announced its VetAdvisor Virtual Room (VVR) won the U.S. Army Simulation & Training Technology Center’s Federal Virtual Worlds Challenge for best collaboration in a virtual world by a government contractor. The award was presented on the final day of the Defense GameTech Users’ Conference in Orlando on March 31.

Three Wire’s VetAdvisor Virtual Room is an expansion of the successful VetAdvisor Support Program with the U.S. Department of Veteran Affairs, which offers telehealth and virtual health delivery platforms for veteran mental health care. The program is designed to provide support when and where the veteran chooses, thus supporting the Veteran Centered Medical Home Care Model.

Providing a secure meeting place for veterans and Care Coaches (licensed behavior health professionals) to interact, the VetAdvisor Virtual Room features avatars representing both the veterans and Care Coaches.

This tool is just one of a growing list of virtual world technologies used by government agencies.

Pillsbury’s Virtual Worlds team is proud to assist Three Wire on this and other projects.

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This article from Slate.com provides an interesting discussion regarding the applicability of virtual worlds and MMORPGs to economics research. One of the things the article points out is that research in the real world must handle inevitable data loss – making calculations like GDP the result of estimates and approximations – while every transaction in a virtual world is tracked without error. Although some researchers are skeptical about the ability of virtual world economies to mirror the real world, the point of the article is that research tools like rat mazes and petri dishes don’t model the real world, either. What those tools provide are environments where basic principles of a given activity can be examined, so those general principles can be extrapolated and applied to the real world. Virtual worlds have an additional advantage for researchers and policymakers – the “laws” in the form of the terms of service and the general rules of the world, are both more simplistic than the real world and more malleable – making them a research tool for the intersection of law and economics, as well.