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Category — Unfair Business Practice Casses

Activision Settles with Two Former Guitar Hero Executives

Categories: Controller CasesCopyright CasesEmployment Law CasesInjunctionsMisc. Contract CasesNon-Compete CasesSettlementsTrade Secret CasesTrademark CasesUnfair Business Practice Casses

In February, Activision launched a new lawsuit against The Ant Commandos (TAC), Reverb Communications and three former Red Octane executives/employees: former executive producer John Tam, brand manager [name removed on request] and hardware group member Jamie Yang. These former executives founded a new company with TAC – Loadstone Entertainment.

Activision has settled with John Tam and [name removed on request]. The two have consented to a permanent injunction restraining the two from:

  • distributing a demo created by TAM incorporating elements of Guitar Hero II;
  • using or disclosing any Activision trade secrets;
  • taking steps to develop drum, guitar or synthesizer-based games for the next year;
  • “working on” a guitar controller for the XBox 360 version of Guitar Hero II for six months after release; and
  • competing against an undisclosed list of peripheral devices for six months after Activision commercially releases them.

The two were also ordered to return all materials relating to Activision’s proprietary information.

As far as I’m aware, no settlement has thus far been reached with Jamie Yang, Reverb or TAC.

Dale’s Comment [written April 26, 2007]: On a personal note, I was one of the lucky one’s to pick up Guitar Hero II for the Xbox 360 on launch day. The local Best Buy had about 100 of them on the morning of the launch. As I understand it, they sold out within hours and, to the date of this writing (owing partially to extreme demand and problems with some versions of the initially released guitar peripheral), I still can’t find them for sale anywhere in Toronto. I would like to purchase a second guitar peripheral. I’m having a blast with this game. As one of the commentators in a recent Joystiq Podcast pointed out, my fingers ache and want to stop playing long before the rest of me does! :)

Sources: GameSpot | Gamasutra | GameIndustry.biz | 1Up.com | CVG | Kotaku

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Blizzard/Vivendi Countersue WowGlider ‘bot Creator

Categories: Antitrust/Competition CasesBotsCheatingCopyright CasesDMCA-TPM CasesGold FarmingHackingTortious InterferenceTrademark CasesUnfair Business Practice Casses

Case Management Summary (March 27, 2007)
Text of Blizzard’s/Vivendi’s Answer & Counterclaim (Feb 16, 2007)
Text of MDY’s (Donnelly’s) Complaint (Oct 25, 2006)

Michael Donnelly created a ‘bot’ program called WowGlider (since renamed to simply “Glider” in response to Blizzard’s trademark complaints) that allows players of the wildly popular World of Warcraft (“WOW”) MMORPG to automate their game play and keep their character “playing” 24/7.

Using this bot the player can continue to level up and harvest gold 24/7 without actually having to play the game – an activity widely considered to be cheating. The use of such “bots” circumvent Blizzard’s security/anti-cheating measures and are prohibited by WOW’s EULA and terms of use.

In the fall of 2006 Blizzard (and its parent Vivendi) demanded Donnelly cease selling the bot. In response, On October 25, 2006 Donnelly’s company MDY filed a complaint in the U.S. District Court of Arizona seeking a Declaratory Judgment that it is not infringing any rights, copyright or otherwise owned by Blizzard and Vivendi.


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Activision Sues Ant Commandos and Former Guitar Hero Executives

Categories: Controller CasesCopyright CasesEmployment Law CasesMisc. Contract CasesNon-Compete CasesTrade Secret CasesTrademark CasesUnfair Business Practice Casses

In a new Guitar Hero related dispute, Activision (Guitar Hero publisher RedOctane’s parent company), has filed a fresh lawsuit against guitar peripheral maker The Ant Commando (TAC), Red Octane’s PR firm Reverb Communications and three former Red Octane executives/employees: former executive producer John Tam, brand manager [name removed on request] and hardware group member Jamie Yang. The former executives founded a new company with TAC – Loadstone Entertainment.

The complaint alleges:

“copyright infringement, trademark infringement, misappropriating trade secrets and confidential information, breach of contract, interference with contractual relations, and more. “

GameSpot is reporting that Activision has already obtained a temporary restraining order against the defendants restraining them from:

  • distributing a demo created by TAM incorporating elements of Guitar Hero II;
  • using or disclosing any Activision trade secrets, including: music licensing contract terms, in-game advertising, sales figures, marketing plans, product designs, and possible future songs and artists to be featured;
  • developing a guitar controller for the XBox 360 version of Guitar Hero II for three months after release;
  • soliciting Activision employees, partners or Asia-based manufacturing partners; and
  • taking any steps to develop, market, manufacture, sell, or distribute any guitar or drum based video games.

As recently as December 27, 2006, Activision and Red Octane had settled a different dispute with TAC concerning the sale of unlicensed guitar peripherals. See here for details.

Sources: Gamasutra | GameSpot | Kotaku

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RedOctane & The Ant Commandos Settle Guitar Hero Controller Dispute

Categories: Controller CasesCopyright CasesProduct PackagingSettlementsTrademark CasesUnfair Business Practice Casses

As expected, on December 22 The Ant Commandos and RedOctane settled their Guitar Hero controller/peripheral suit and countersuit. 1Up.com summarizes the dispute in this amusing way:

Anyway, so RedOctane sued the Ant Commandos, claiming rights infringement on their popular Gibson SG brand of guitar controllers. The Commandos fired back claiming that the SG stepped all over their existing patents on technology for 3-button Guitar Freaks! guitars. Everybody was fingerpointing, it sucked.

While details of the settlement have not been disclosed a representative of Ant Commandos confirmed to GameSpot that its products would continue to be distributed. Jack Black and the Rightous Gods of Rock will be happy with this outcome!

Dale’s Comment: Until I discovered that neither the Ant Commando nor the RedOctane controllers will work with the PS3, one of the primary reasons I wanted to purchase a PS3 was to play Guitar Hero. I had hoped that like most PS2 games, it would be playable on the PS3. Happily, Guitar Hero 2 is coming to the XBox 360 so I won’t need to purchase a PS2 in order to finally play this game.

Sources: Gamasutra | GameSpot | 1UP.com | GameIndustry.biz

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Class Action Firm and Austin Plaintiff Seek Class Action Status over WiiMote Strap

Categories: Consumer Protection CasesController CasesProduct Liability CasesUnfair Business Practice Casses

It was bound to happen! Within days of Nintendo announcing its plan to replace thin WiiMote wrist straps with thicker one’s, a story emerges about a Wii purchaser in Austin, Texas filed a suit alleging Nintendo violated the Washington Consumer Protection Act, was in breach of warranty and engaged in unfair or deceptive practices:

by telling consumers that the wrist strap was to prevent the controller from flying out of a user’s hand during use, and then providing a strap that was “ineffective for its intended use.

As is typical in this kind of case, the plaintiff (or more accurately, his/her lawyers :) ) is seeking status as a class.

Sources: GameSpot | Next Generation | GameIndustry.biz | GameDaily.biz | Kotaku | Bit-tech.net | Daily Tech | Gamasutra | Engadget | Green Welling (the Class Action Firm representing the plaintiff)

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Fall-Update “Brick” Class Action Brought Against Microsoft

Categories: Class Action CasesConsumer Protection CasesProduct Liability CasesUnfair Business Practice Casses

Text of Complaint (Nov 29, 2006)
Microsoft has been sued over an allegation that its XBox 360 Fall Update (ie: a mandatory XBox 360 download) caused a total system malfunction (turned the units into “bricks”) for some users.

The claim alleges that Microsoft is refusing to pay the shipping, repair or replacement costs of affected units. Microsoft says it is paying shipping costs to fix or replace all affected units. The claim alleges breach of contract, negligence and violation of Washington’s Consumer Protection Act. It seeks $5 million in damages – presumably for the a yet-to-be-certified class and not just for the particular aggrieved plaintiff Kevin Ray.

Of particular interest the claim alleges that the limitations of liability, warranty and remedies clauses contained in Microsoft’s Terms of Use (TOU) are unenforceable due to unconscionability in that:

  • XBox owners were never shown to the Class/Plaintiff: This isn’t likely. I specifically recall being presented with Microsoft’s TOU when I signed up for Xbox Live.
  • the limitations and disclaimers were not specifically shown to each member of the Class – Case after case have upheld click wrap agreements of this kind. Unless there is something specific under Washington consumer protection law on this point, I’d be enormously surprised if this is relevant to any court.
  • the limited remedy under the TOU fails in its essential purpose because it deprives the Class of the substantive value of its bargain – again, such clauses are commonplace in click-wrap agreements and routinely enforced by courts.

Sources: ars technica | Seattle Post Intelligencer | GameSpot | ZDNet | Joystiq | Next Generation

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Toys ‘R’ Us Accused of Wii Bundling Bait and Switch on Black Friday

Categories: Antitrust/Competition CasesConsumer Protection CasesUnfair Business Practice Casses

The Better Business Bureau has been asked to look into a possible Chicago area Toy’s ‘R’ Us Bait and Switch operation where a consumer says an Toys ‘R’ Us flyer promoted the Wii for $249 on Black Friday but when the consumer went to purchase one, they were forced to buy additional items or go home empty handed.

Sources: GameDaily.biz | NBC5 | 1Up.com | Kotaku | Next Generation | Joystiq

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Mark Bragg File’s Virtual Property Complaint Against Linden Labs

Categories: CheatingHackingMisc. Contract CasesModding CasesPlayer BansUnfair Business Practice CassesVirtual Property Cases

Text of Bragg v. Linden Labs Complaint (Oct 4, 2006)[.zip format]
Jurisdiction and other Interim Court Filings
While I was converting this blog to WordPress over the last 8 weeks, Mark Bragg sent me his updated complaint against Linden Research Inc. ("Linden") that was filed on October 4 in the Chester County (Pennsylvania) Court of Common Pleas.  Mr. Bragg is seeking a jury trial. On November 7, Linden petitioned the US District Court for the Eastern District of Pennsylvania to take jurisdiction of the case. 

I'm just now getting the time to review the claim and post this blog entry about it. 

The complaint contains a terrific history (frankly, the best I've read) of Linden, its MMORPG Second Life and describes how Linden differentiated Second Life from its competitors by granting "ownership rights" to in-game property (most MMORPG publishers claim/retain ownership in all related virtual property). It also contains a history/description of virtual property generally in the context of the growing MMORPG phenomena.

The 239 paragraph complaint alleges violation of Californian and Pennsylvanian unfair practices and consumer protection laws, fraud, violation of California's Civil Code concerning auctions, conversion (theft), interference with contractual relations, breach of contract, unjust enrichment and tortuous breach of the covenant of good faith and fair dealing. He discounts many of the provisions of the Linden Labs Terms of Service ("TOS") as being unenforceable due to unconscionably. Suffice it to say, when this case is over, I suspect Linden will be updating its TOS! Laughing

This Law.com article provides a good summary of the facts. The complaint, itself, is worth reading if only for its best-in-class description of the MMORPG industry and related virtual property issues. Excellent job Mark!

Dale's Comment: Given that many courts in many countries have upheld the validity of extremely one-sided Internet-service click-wrap/shrink-wrap agreements, I think Mark will have a tough time overcoming the clear provisions contained in the TOS. But he makes many compelling arguments pertaining to the contradicting public statements of Linden representatives, rights in and to virtual property purchased from other Second Life users, and the right to recoup the real $U.S. dollars he paid into the Second Life economy and not returned when Linden booted him from the game.

Bragg is claiming ownership to his in-game property. I am quite sympathetic to his arguments and have advocated, here, for the the recognition, at law, of rights in and to virtual property. But, if analogies to real-world and intangible property are taken to their logical extreme, Second Life players could argue that Linden would never have the right to shutdown their MMORPG and deny virtual property owners of their "right" to access, use, sell and other wise deal with their virtual property when, as will inevitably be the case one day, Second Life ceases to be a profitable game for Linden. 

This could be a very important, precedent setting case if it goes to trial. It could set the ground rules for the application of laws to virtual property going forward. Needless to say, I'll be following this one closely.

[Dec 13, 2006 Update: Mark has sent me this link where the most recent court filings in the case can be found. At the moment the parties are fighting over the most appropriate jurisdiction for further proceedings.] 

Sources: *Law.com | Blogger News Network | MMORPG BLog | Pilly.com

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RedOctane & The Ant Commandos in Settlement Discussions

Categories: Controller CasesCopyright CasesTrademark CasesUnfair Business Practice Casses

The Ant Commandos and RedOctane are negotiating a settlement according to a motion filed by both companies on October 26

Sources: GameSpot | Xbox 360 Net | Yahoo! Games

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Konami Settles with Roxor – ‘In the Groove’ IP Transfered to Konami

Categories: Patent CasesSettlementsTrademark CasesUnfair Business Practice Casses

It appears Konami won this one. Roxor has agreed to transfer all IP rights in and to In the Grove to Konami.

Sources: Gamasutra | GameSpot | GameIndustry.biz | Yahoo! Games | joystiq | Konami Press Release | Roxor Press Release

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The Ant Commandos Coutersues RedOctane for Trade Dress Infringement

Categories: Controller CasesCopyright CasesTrademark CasesUnfair Business Practice Casses

The Ant Commandos (TAC) is countersuing RedOctane, alleging the guitar controller was first designed by TAC’s part owner Topaway and its trade dress later copied by RedOctane after RedOctane’s CEO visited its Chinese factory and subsequently purchased several hundred of its controllers. In addition TAC has filed for an injunction asking that Activision and RedOctane be prevented from infringing on the “trade dress” and that Guitar Hero software be unbundle from SG controller to allow for fair competition.

Sources: GameSpot | Gamasutra | Next Generation | Kotaku | Joystiq | IGN | Silicon Era | GameDaily.biz

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Redoctane Sues The Ant Commandos over Peripheral

Categories: Controller CasesCopyright CasesProduct PackagingTrademark CasesUnfair Business Practice Casses

RedOctane, the developers of the popular Guitar Hero PS2 video game, have sued The Ant Commandos alleging trademark infringement, unfair competition and copyright violation among other claims in connection with the sale of The Ant Commandos’ unlicensed line of guitar-like controllers.

Sources: GameSpot | Gamasutra | Next Generation | Kotaku | ars technica | joystiq

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Massive Black Sues Ex-Employees for Pilfering Development Business, Fraud, Etc.

Categories: "Inside Baseball"Criminal ProsecutionsEmployment Law CasesMisc. Contract CasesNon-Compete CasesUnfair Business Practice Casses

Massive Black is suing its former employees James Xi Zhang and Jenny Chen for interference with contractual relations, fraud, unlawful access to computer network, trespass, breach of contract and interference with prospective business advantage. Massive, a game-art and design subcontractor for games such as Killzone 2, Helgate: Longdon and Battlefield 2142, alleges, among other things, that Zhang and Chen, while still employed by Massive Black, competitively bid on projects from Massive’s customer, without Massive’s knowledge, won the contract and used Massive’s resources (equipment and development personnel – while still on Massive’s payroll) to work on the pilfered projects. Massive also alleges that up to $150,000 was siphoned out of the company using inflated expense reporting.
Sources: 1Up.com  |  Discussed in the April 14, 2006 “1Up Yours” Podcast (Time Index 48:15-52:15)  |  Gamasutra

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Activision Countersues Spark

Categories: Misc. Contract CasesPublisher/Developer CasesTrade Secret CasesUnfair Business Practice Casses

Activision countersues Spark Unlimited alleging fraud, breach of contract, trade secret misappropriation, trademark infringement, false designation of origin, and false advertising.

Sources: Gamespot | GameIndustry.biz | Next Generation

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Independent Developer Spark Sues Activision

Categories: Misc. Contract CasesPublisher/Developer CasesUnfair Business Practice Casses

Call of Duty: Finest Hour developer, Sparq, files $10 million suit accusing publisher of fraud, breach of contract, and stealing employees and sequel ideas.

Sources: Gamespot | Gamasutra

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Konami Files Lawsuit Against Roxor Over Dance Game

Categories: Patent CasesTrademark CasesUnfair Business Practice Casses

Dance Dance Revolution creator Konami has filed a complaint in the Eastern District of Texas against Roxor Games, Inc., asking the court to grant an injunction and damages against Roxor’s In The Groove dance game alleging trademark dilution, unfair competition and patent infringement.

Sources: Gamasutra | EuroGamer | GameIndustry.biz | Konami Press Release | Wikipedia Coverage

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Xfire Countersues Yahoo!

Categories: Cease & DesistPolice ActionsUnfair Business Practice Casses

Xfire countersues Yahoo! claiming unfair business practices. Xfire alleges unfair business practices, complains that Yahoo! did not provide them with a cease and desist letter before suing, claims it made good faith attempts to address Yahoo!’s concerns and offered to disclose its software code to Yahoo! or to mediate the dispute with a neutral third party.

Sources: CNet | USA Today | Channel Register | Out-Law.com | XFire’s Press-release re: CounterSuit | Mar 23 GameDaily Biz Follow-up Story

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