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Category — Import/Export Cases

Microsoft (Accidentally) Giveth, Microsoft (Intentionally) Taketh Region Code Work-a-Round Away

Categories: Distribution Agmt CasesDRMGrey Market CasesImport/Export CasesRegion Coding Cases

If a recent post I mentioned that some clever users found a way around Microsoft’s XBox 360 region-specific Market Place movie and video demo download restrictions. The trick was to take advantage of Microsoft’s free XBox Live Accounts. A user in one jurisdiction could create multiple silver-level (a.k.a. free) accounts by simply stating in the online sign up process that they live in a another download-frinedly jurisdiction. Paid movie downloads, trailers, game demos etc. would then be available available through the alternative silver-level account in jurisdictions that Microsoft did not intend.

After only weeks of being out in the wild, Microsoft has patched this work-around. Now only users that have credit cards with billing addresses that match the purported region can download content for that region. Happily Microsoft is not banning these extra accounts, they are simply restricting their access to region-coded content.

As a lawyer, this is understandable. As a user, this is sad. Having previously lived in the U.S.and having access to virtually anything the Internet can deliver, it is a very rude awaking to move back to a 2nd tier jurisdiction like Canada where so many Internet-based services are either not available, delayed, provided at higher price points or provided with less functionality. Microsoft’s new movie download service is a perfect example of this regrettable phenomena.

Presumably a Canadian with an American credit card and billing address could still circumvent the system for instance. Humm… as a holder of several U.S.-based credit cards, I wonder which of my U.S. buddies would allow me to use their address for credit card statement receipts? :)

Sources: TeamXbox | Major Nelson | Xbox 360 Fanboy | Hexus | Pro-G | EuroGamer | PlanetXbox | Gamasutra | Joystiq

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Users Find Work-a-Round to Defeat 360 Marketplace Region Coding

Categories: Distribution Agmt CasesDRMGrey Market CasesImport/Export CasesRegion Coding Cases

If you follow Major Nelson’s (Larry Herb’s) day-to-day missives about what is available for download through the Xbox 360 Marketplace, you’ll note that many arcade games, game demos, trailers and other downloadable content is only available in certain regions of the world. This has lead to much consternation among Microsoft’s international customers. But the issue was brought to a head recently when, for the first time, North American XBox Owners were initially restricted from downloading a Rainbow Six: Las Vegas demo that was available for download by European users. This doesn’t happen very often to U.S. customers.

As a result, some clever users found a way around Microsoft’s XBox 360 region-specific MarketPlace download restrictions. You can read about them in the linked articles below.

Dale’s Comment: Just as Sony had legitimate legal reasons for opposing Lik-Sang’s import of PSP systems into the UK, no doubt Microsoft has legitimate legal reasons for restricting access to content on a country by country basis. For example, game publishers/developers that provide downloadable content to Microsoft probably have granted exclusive distribution/marketing and other rights to that content in the prohibited regions to others. My hope/expectation is that over time licensing and distribution deals will be structured to recognize the increasingly globalized nature of the market so as to anticipate and, indeed, facilitate global distribution/downloads without this kind of constraint.

Sources: Gizmodo | SAGN

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Sony Wins U.K. Lik-Sang Grey Market Case – Lik-Sang Shuts Down

Categories: Distribution Agmt CasesGrey Market CasesImport/Export CasesStruggling FirmsTrademark Cases

Sony has won a High Court Judgment in the U.K. banning Hong-Kong based Lik-Sang.com from selling PSP consoles into the European Economic Area. While Hong-Kong-based Lik-Sang did participate in pre-trial activities, it did not show up in court to contest the case. Thus, a default judgment was awarded to Sony.

This action was launched in August of 2005 when Lik-Sang sold PSPs into Europe after Sony delayed North American and European shipments for many months after the Japanese PSP launch. The same sort of delay is about to occur with the PS3. Sony is launching the PS3 in the Japanese and North American markets months before Europe.

[October 24 Update:]After years of fighting Sony, Lik-Sang has closed its e-doors. In an interesting side-story, Sony’s European management purchased Sony products from Lik-Sang when unavailable in Europe (See BBC Story). Pascal Clarysse, former marketing manager for Lik-Sang, had this to say on closing:

“Blame it on Sony. That’s the latest dark spot in their shameful track record as gaming industry leader. The ‘empire’ finally won. A few dominating retailers from the U.K. probably will rejoice (in) the news, but everybody else in the gaming world lost something today.”

Sony dismissed this as sour grapes. A similar Hong-Kong-based case between the parties continues.

Dale’s Comment: I understand Sony’s need to protect the interests of its European distributors and its trademarks. I also understand its wanting to protect its own economic interests by means of region-by-region product launches. But its claim that the lawsuit was brought to protect consumers’ safety is, of course, nonsense.

In a world of global markets with the ability to deliver products throughout the Globe overnight, one wonders if this market-by-market distribution model is appropriate any more. It certainly is far from consumer friendly or fair. Lik-Sang met a real consumer need. Through Lik-Sang, Sony’s most loyal fans had a means to purchase Sony products long before Sony had the wherewithal to launch/distribute products in their particular country. Sometimes it takes years before Sony launches a product into a given market (if ever). With this ruling, there is no legal way for etailers to sell into markets not served, or underserved by Sony and its resellers.

As a Canadian living right next to the U.S., I have oft experienced the frustration of not being able to purchase products and services only made available in the U.S. I relish the fact that etailers such as Lik-sang are willing to serve the needs of consumers in under-served regions of the world.

Lawsuit Stories: Gamasutra | Engadget | GameIndustry.biz | GameSpot | *GameDaily.biz | PC Pro | IGN | ars technica | TVG | BetaNews | Pocket-lint | GameIndustry.biz| Daily Tech

Lik-Sang Closing Stories: Lik-Sang.com Notice | Gamastura | ars technica | Outlaw.com | ZDNet | Engadget | BBC | GameSpot | GameDaily.biz | GameShout | CNet | afterdawn | PC Pro | IGN | NeoSeeker | Pocket-Lint | Gizmodo | Inquirer | Hexus | GameIndustry.biz | EuroGamer | Kotaku | Gadgetspy | PC World | Games Digest

Blogosphere: Bit-tech.net

Engadget Podcast 93 Coverage (Time Index 4:44-12:33).

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Tokyo Tax Authority Demands Sony Pony up another $244 in Taxes

Categories: Import/Export Cases

Fresh off its UK Import Duties Loss, the Tokyo Regional Tax Bureau rules that Sony owes an additional 27.9 billion yen (over $244 million) in additional taxes for 74.4 billion yen (about $650 million) in unreported income. The taxes stem from Japan’s “transfer price tax system” which is designed to prevent inter-company transactions between domestic and international affiliates at lower than market prices.

Sources: GameSpot | Next Generation | Gamasutra (4th para)

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UK Court of Appeals Rules PS2 is Not a Computer Eligible for Import Duties Rebate

Categories: Import/Export Cases

Text of Decision
After a five year battle, the British Court of Appeal has failed to overturn a ruling that classified the PlayStation 2 as a video games console rather than a computer, thereby denying Sony a lucrative £34.2 million ($63m) import duties rebate in the United Kingdom. Lord Justice Chadwick also denied Sony the right to take the appeal to the European Court of Justice describing Sony’s lawyers’ arguments as exceeding “the bounds of propriety” and going “beyond what can be regarded as acceptable written advocacy”. The rebate was phased out in 2005 so this should not be an ongoing legal issue.

Sources: GameDaily.biz | GameIndustry.biz | Gamasutra | Next Generation | joystiq | GameSpot | Boomtown | IGN | Link | Link | Out-law.com | Geek.com | GameSHOUT

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Sony Sues Online Retailer for PSP Sale

Categories: Distribution Agmt CasesGrey Market CasesImport/Export Cases

Hong Kong-based online retailer Lik-Sang.com is by Sony Computer Entertainment Europe for selling Japanese PlayStation Portable systems to UK customers ahead of the PSP’s European debut in September.

Sources: IGN | CNet | Gamasutra | GamaeIndustry.biz | Channel Register | PSPWorld | ZDNet | IGN IQ | CD Freaks | Out-Law.com | Softpedia | GamePro.com | Lik-Sang Press Release

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Sony Wins Another PSP Import Case Against Nuplayer

Categories: Grey Market CasesImport/Export Cases

Sony Computer Entertainment has won a High Court injunction to prevent online store Nuplayer selling imported Japanese PSP consoles – but the retailer has hit back by taking pre-orders for European PSPs at a reduced price.

Sources: GameIndustry.biz | Channel Register

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Sony Wins Injunction Against PSP Importer ElectricBirdLand

Categories: Grey Market CasesImport/Export CasesInjunctionsTrademark Cases

Online retailer ElectricBirdLand ordered to stop selling handhelds with immediate effect

Sources: GameIndustry.biz | Channel Register

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Sony and UK Retailer in Dispute over PSP Trademark Issues

Categories: Cease & DesistGrey Market CasesImport/Export CasesTrademark Cases

Disgruntled U.K. PSP retailer ElectricBirdLand responds to Sony Cease and Desist order instructing retailers to stop selling imported PSPs on the grounds that this infringes trademarks while Sony works to secure the rights to the PSP trademark in the U.K.

Sources: GameIndustry.biz | The Register | Channel Register | XBox Solution

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Sony Wins U.K. Mod-chip Ruling Against Channel Technology

Categories: Copyright CasesDMCA-TPM CasesImport/Export CasesModding CasesPiracy CasesPolice ActionsRegion Coding Cases

Channel Technology imported mod-chips from Russia that when installed in PS2′s to play games from all regions. Importantly, the chip also allows users to play pirated games. The U.K. High Court found Channel Technology in violation of a provision in the UK. Copyright, Designs and Patents Act 1988 that prohibits knowingly making, importing or selling any device specifically designed or adapted to circumvent copy-protection. Judge Jacob awarded Sony damages of £15,000 and costs of £45,000. Channel Technology has since closed.

Sources: The Register | ZDNet | Out-Law.com

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