In dismissing the State’s arguments that the law was addressing a substantial need of parents which wish to restrict their children’s access to violent games but cannot do so, the Court stated that the ratings of the Entertainment Software Rating Board (ESRB) and video retailers’ efforts in not selling games rated “M” to minors helped ensure that children would not be able to purchase violent video games.   Thus, the “remaining modest gap” that the California law was intended to fill could not be deemed a “compelling state interest” that could overcome First Amendment protection for the games.

The full decision can be found here.  As noted previously, Hughes Hubbard & Reed represented the Entertainment Consumers Association in filing an amicus brief opposing the law.

While California Governor Arnold Schwarzenegger initially signed the Act in 2005, it has yet to be enforced.  In a lawsuit challenging the constitutionality of the law brought by the Video Software Dealers Association and Entertainment Software Association the , the United States District Court for the Northern District of California in August 2007 granted plaintiffs’ motion for  summary judgment and permanently enjoined enforcement of the Act.  We have previously written about that decision.

On February 20, 2009, the U.S. Court of Appeals for the Ninth Circuit affirmed the District Court’s decision.  The Court of Appeals held that the Act violates rights protected by the First Amendment because California failed to demonstrate a compelling interest supporting its regulation of protected speech, and even if it had a compelling interest did not narrowly tailor the restriction to that alleged interest.  Furthermore, less-restrictive alternatives exist that would further the State’s interests.  Finally, the Court held that because the Act is unconstitutional, the labeling requirement is also unconstitutional as the required labels would not disclose purely factual information but rather the State’s content-based opinion. 

The State of California  petitioned the United States Supreme Court for a writ of certiorari, which the Supreme Court granted on April 26.  The State filed its brief on the merits on July 12.  On July 19, eleven states filed an amicus brief in support of the California law, as did a number of other organizations.  The Respondents’ brief is due on September 10.  The Firm’s amicus brief on behalf of the ECA is due by September 17. 

The ECA is a non-profit membership organization that represents consumers of interactive entertainment in the US and Canada.  The primary policy of the ECA is to oppose legislative efforts that unconstitutionally restrict access to interactive entertainment. 

Bill Stein, Dan Weiner and Dan Doeschner of the Firm are representing the ECA.

Whether a dance routine or a martial arts demonstration, legal protection for the majority of athletic movements that will be incorporated into the forthcoming wave of motion detection-based games will likely fall under copyright law’s definition of “choreography”–a form of artistic creation which secured copyright protection in 1976 when the Copyright Act (the “Act”) was amended to include “pantomimes and choreographic works” (17 U.S.C. 102(a)). Prior to that time, choreography could only be protected under copyright statutes to the extent embodied within another copyrighted work that was eligible for protection. Although the Act extended protection to “choreographic works”, it failed to define the term and what types of movements qualified as same. Other copyrightable forms, including “architectural, audiovisual, literary, pictorial, graphic and sculptural works, motion pictures, and sound recordings” are defined in the Act, but “choreographic work” is the only copyrightable form whose meaning is left unclear. In fact, the House and Senate Reports surrounding the Act indicate that Congress’ decision not to define “choreographic work” was deliberate, as legislators believed the meaning to be “fairly well settled”. In fact, the only guidance provided by Congress with respect to the category of “choreographic works” was that it does not include “social dance steps and simple routines.”

In the absence of guidance from Congress or the copyright statutes on which activities qualify for protection under copyright law as “choreographic works”, the U.S. Copyright Office (the “Office”) offered a more technical definition of “choreography” in its Compendium of Copyright Office Practices, stating that “[c]horeography is the composition and arrangement of dance movements and patterns usually intended to be accompanied by music.”

While instructive, this interpretation is not binding on the federal judiciary, and there is little case law defining the precise scope of “choreographic works”. Moreover, even if the Office’s interpretation of a “choreographic work” does not capture the essence of certain athletic movements, the fact remains that the Act’s enumeration of copyrightable subject matter is not meant to be exhaustive, and is prefaced with the statement that “[w]orks of authorship include the following categories”; and since the Act defines the term “including” as “illustrative and not limitative,” the fact that Congress did not specifically list all athletic movements that fall within the realm of copyrightable subject matter does not mean that they are not covered (just as, for example, the absence of programming code and computer programs from the Copyright Act has not prevented the courts from finding same to be well within the range of copyrightable subject matter). Further, a separate category of copyrightable subject matter known as “dramatic works” also provides some applicability to the extent the athletic movements portray a story or narrative through action, but the underlying movements, which themselves are devoid of story, would not likely find refuge here if separated from the corresponding story or narrative in the context of an interactive game.

While some athletic movements remain close enough to the Office’s definition of “choreographic works” or “dramatic works” that they should be afforded copyright protection (e.g., figure skating, rhythmic gymnastics, synchronized swimming, etc.), there has been, in recent years, a push for the copyrightability of other athletic movements under the guise of “choreographic works.”  For instance, Open Source Yoga Unity v. Choudhury, specifically addressed the question of the copyrightability of yoga moves (see 2005 WL 756558 (N.D. Cal. Apr. 1, 2005).  While the court did not settle this question, it held that it is at least possible for individual yoga positions to be “arranged in a sufficiently creative manner” to merit copyright protection. In Ahn v. Midway Manufacturing Co., a district court held that dancers who performed martial arts routines for a software developer that later incorporated the routines into the “Mortal Kombat” video game did not become joint owners of the copyright in the game only because they assigned their rights to the copyrights pursuant to a work-for-hire contract (see 965 F. Supp. 1134 (N.D. Ill. 1997)).  The court deemed the martial art performances to be “choreographic works” and stated that these “choreographic works were all original works of authorship [and] choreographic works fall within the subject matter of copyright.”  In fact, in Baltimore Orioles, Inc. v. Major League Baseball Players Ass’n, the Seventh Circuit held that “[baseball] [p]layers’ performances possess the modest creativity required for copyrightability” (see 805 F.2d 663 (7th Cir. 1986)).

Based on the foregoing decisions, there may not be a significant enough distinction between a kung fu sequence, a skateboarding demonstration set to music and a figure skating routine that would warrant extending copyright protection to one and not the others. Ultimately, though, determining which choreography or movements actually fulfill the statutory criteria, and which on the other hand are too commonplace to qualify as copyrightable subject matter, will require a case-by-case, fact-specific analysis. That being said, as the above discussion indicates, it is certain that to qualify for copyright protection, an athletic movement will have to evince a certain degree of complexity and original expression, and routine-oriented athletic performances are more likely to warrant coverage as they generally embody sufficient amounts of artistic expression and each move is specifically choreographed and designed for repetition. As one commentator described, a sport like football, even where each play is diagrammed and practiced to some extent, depends more upon the interaction and improvisation of the participants throughout the natural course of the game. A running back, for example, may go fifty yards for a touchdown, eluding opponents, breaking tackles and navigating through the defense on one play, but the next time that play is called, he may fumble the ball or be tackled for a loss of yards. A figure skating routine, on the other hand, has a repetitive nature to it; the skater will often perform the same routine countless numbers of times with minimal variations.

Once the determination is made that the athletic movement likely falls within a class of protectable subject matter under the Act, the next step is licensing the rights for inclusion in the interactive game. The clearance process for music-based interactive games, for example, relies on a well-established framework with the licensing arms of the major labels, publishers, performing rights organizations and other collectives serving as long-standing clearing houses for securing rights from multiple artists and writers. However, there are no analogous industry clearing houses or collectives for licensing choreography rights and each applicable copyright, together with any corresponding moral, publicity or privacy rights, need to be licensed from the individual owner.

In fact, this may well be the first time that movements deemed “choreography” under the Act, whether in the form of modern dance or complex wrestling moves, will be exploited and licensed as individual works on a large scale–separate and apart from the play, the music video, the movie or even the person through which it entered the public consciousness. In other words, in order to develop an interactive title based on choreography on an operational level, each individual movement will need to be reperformed and recast by professionals and technicians who will recreate the movements in a green screen-reminiscent environment using motion sensors that will allow advanced computers to precisely track a new range of activity, in particular depth-based movement, which will then be digitized and incorporated into the video game. This process will ultimately allow for the comparison of the professional recreation against the end users’ movement on a television screen and allow the game to rate and track performance, alter difficulty settings, offer training functionality, etc., all of which have become standard functionality in interactive titles. Having now extracted and recreated the choreography as a stand-alone artistic creation, the publishers and developers of motion detection games will need to begin the process of securing the rights to those popular movements crucial to a successful gaming title.

This is where the legal confusion begins for licensing athletic movements and choreography. As an example, consider the implications of the inclusion of modern or popular dance into a motion capture video game. Dances have never been the subject of lucrative licensing outside the realm of dance companies and on-stage performances because dancers were often placed at a severe disadvantage for demonstrating ownership of copyrights. As a result, attribution and credit for a dance in the dance community is frequently not equated with ownership of the copyright given the lack of economic incentive in establishing and maintaining an accurate chain of title. In these muddy waters, who holds the necessary rights required to license the dance? The music label that owns the music video? The artist who performed the dance? The artist’s choreographer who conceived of the dance? Is it jointly owned by contributing dancers and the artist? Was it created pursuant to a work for hire agreement or within the scope of employment without an agreement? Was the dance based on a pre-existing dance which could invalidate ownership? Was the dance created outside the United States thus leaving the creator with moral rights over the work that cannot be assigned? Was it previously performed and recorded on stage or in dance studio, so that the movie studio or music label is left without ownership outside of their movie or video?

The foregoing dance hypothetical is just one example of the complications associated with one form of athletic movement destined to be incorporated into motion capture games. Once the worldwide popularity of a new line of these games takes hold and creators of all forms of movements claim copyright protection after realizing the new found economic value of their works, legal disputes over the nature of copyright and the bounds of statutory protection will force the courts to take a series of bold moves–ones that can be repeated.

As always, we will keep an eye out for developments in this area of the law, particularly as the technological bounds of interactive gaming continue to expand with the introduction of gesture-based gaming.

The tremendous effectiveness of video game product placement and in-game sponsorship is no surprise, with gamers maintaining high and sustained exposure to advertisements. A recent study revealed that gaming audiences are more inclined to remember and positively perceive brands featured inside video games than other advertisements and that this form of advertising is even beginning to trump the effectiveness of television advertisements. Another similar study found that, unlike advertising messages in other media, advertising in video games is seen by gamers as making the games feel more authentic and 65% of players agreed that in-game advertisements made the gaming experience feel more realistic and 55% said the advertisements “look cool”.

In this climate, your decision to dress your main video game character in, for example, a pair of Vans (or even kicks resembling Vans) could earn you a thank you note or possibly a temporary restraining order from Vans which may have an exclusive in-game licensing arrangement with Activision Blizzard, the publishers of the Tony Hawk series of skateboarding games. Make no mistake, the major video game developers and publishers are engaged in a well-funded war for market share, and licensing agreements with real-world content owners have become the norm. Whether you’re creating a sports game, a music title or a first person shooter, there is both tremendous promotional value and legitimacy that accompanies the in-game inclusion of popular names, products and places, and the respective owners now want their say as to the games in which they appear and how and under what conditions their content is featured.

Now that content owners have skin in the game (no pun intended, of course), licensing arrangements are being struck left and right–some exclusive, some non-exclusive, some royalty bearing, some royalty free. From guitar makers to gun manufactures, content owners know that placing, for example, a “Smith & Wesson” gun in the main character’s hands, as opposed to an “ACME” rifle, has the potential to sway consumers inundated with options, especially in the already crowded first person shooter genre, from one title to another. With  in-game asset licensing arrangements becoming more and more common, the traditional test for assessing trademark infringement as it relates to video games—the likelihood of confusion among consumers as to whether the assets being depicted in the video game are endorsed or associated with the title—has and will continue to be an easier hurdle for trademark owners to clear as the amount of licensing agreements pertaining to inclusion of trademarked or copyrighted works in video games increases. In other words, circumventing the licensing process in favor of a “fair use” or First Amendment defense will no longer be a viable position from a risk assessment perspective, as plaintiffs will now have an easier time demonstrating and establishing that in-game licensing arrangements have become industry standard and convey substantial commercial value.

This will be the first of many posts to come on the subject of video game licensing and clearances, as well as the legal principles and case law underlying the topic, including fair use and infringement (both for copyright and trademark) and the building blocks of the licensing agreements required to navigate the interactive gaming space.

The protected work at issue in Capcom Co. v. The MKR Group Ltd. was George A. Romero’s Dawn of the Dead, a film about a small group of people who are trapped in a shopping mall overrun by zombies.  Dead Rising is a video game that shares the same basic premise and many of the same details.  Both works are set in rural towns and feature protagonists who are tough, cynical journalists with short brown hair and a leather jacket.  Similarly, in both works, the protagonist arrives by helicopter and survives by utilizing food and weapons located inside the mall.  The game even shares the film’s unexplained tendency to dress an inordinate number of zombies in plaid shirts.  Gamedaily, a popular website that reviews video games, even commented that “Dead Rising is about as close as you’ll probably get to being a part of George Romero’s film, Dawn of the Dead.” 

A cynic might conclude that Capcom, the company that created Dead Rising, was attempting to cater to the Dawn of the Dead fan base by capturing the movie experience and presenting it in video game form.  In fact, as noted in the decision, Capcom approached MKR Group, the owners of the rights to Dawn of the Dead, to enquire about licensing the film’s elements for the video game.  It is unclear why no agreement was ever reached but Capcom went ahead with the release and took the somewhat unusual step of placing a disclaimer on the box stating that “THIS GAME WAS NOT DEVELOPED, APPROVED OR LICENSED BY THE OWNERS OF GEORGE AV. ROMERO’S DAWN OF THE DEAD TM.”  However, this strategy also came with certain risks. 

Recognizing the potential for litigation, Capcom sought a declaratory judgment that no copyright infringement had taken place, arguing that the differences between the two works far outweigh the similarities.  MKR Group countered by alleging copyright infringement. 

To succeed on its claim, MKR Group would have had to show that Dawn of the Dead and Dead Rising were “substantially similar” in their “protected elements.”  To meet this standard, the Ninth Circuit requires that the copyright holder satisfy both an “intrinsic test” and an “extrinsic test.”  The “intrinsic test” examines an ordinary person’s subjective impressions of the similarities between the two works and is exclusively within the province of the jury.  When a court finds that the claim fails the “extrinsic test,” as was the case here, it is dismissed before the jury is faced with this inquiry.

The “extrinsic test” is described as an “objective” test of similarity in the “expression of protectable ideas.”  To simplify this abstract legal concept, courts generally require that similar elements be present and that these elements be “expressed” in analogous ways.  If similarities exist but are outweighed by accompanying differences, this standard is not met.  This is a difficult standard for copyright holders, as evidenced by this case. 

In ruling in favor of Capcom, the court identified several differences between the game and film.  For example, with regard to plot, the court noted that the helicopter rides occur at different points in each story.  Similarly, the journalist in Dawn of the Dead is middle-aged and non-athletic, while his counterpart in Dead Rising is young and physically fit.  The two characters also possess contrasting personalities.  Furthermore, the game lacked anti-consumerism themes present in the film and proceeded at a faster pace.  Differences in dialogue, mood and setting were also noted.  Distinctions such as these were sufficient to defeat the infringement claim.  In contrast, the district court viewed the parallels between the game and film as a “string of disconnected facts.”

Copyright infringement cases are always fact-specific.  It is therefore difficult to draw clear conclusions about how this case might impact other situations involving video games containing themes and plot lines that resemble films or other dramatic works.  However, because of the uncertainty facing both game developers and publishers like Capcom-which was concerned enough about the case to take the pre-emptive step of a declaratory judgment action-and film owners, these parties should carefully evaluate possible infringement claims.  They also may want to explore entering into licensing agreements that will provide the certainty of an agreed-upon royalty scheme and provisions related to the scope and use of the licensed property, rather than risk, cost and uncertainty of litigation.

The statute at issue is a 2005 California law that would prevent minors from renting or purchasing violent video games that depict serious injury to human beings in a manner that is “especially heinous, cruel, or depraved.”  Retailers who rent or sell such games in violation of the act would face a maximum fine of $1,000 for each violation.

Shortly after this law was enacted, its constitutionality was challenged by the Video Software Dealers Association and the Entertainment Software Association, two trade associations that represent companies in the video game industry.  The groups argued that video games are protected speech under the First Amendment and that the act constituted an impermissible restriction on such speech. The district court agreed with these arguments, holding that the law was unconstitutional and granting a permanent injunction against its enforcement. 

While it is difficult to predict how the Ninth Circuit will rule on this issue, the Eighth Circuit recently addressed the constitutionality of a Minnesota statute functionally similar to the challenged California law.  (Interestingly enough, the Entertainment Software Association was a party in that case as well.)  In that case, the court found that video games are a form of protected speech, comparable to literature and film.  Because the regulations were content-based, focusing on the presence of violent themes and imagery, the court reviewed the legislation under a “strict scrutiny” standard.  To be upheld under this standard of review, the law needs to be “narrowly tailored” to serve a “compelling interest.”

Since the Supreme Court has held that the psychological well-being of children qualifies as a “compelling interest”, the Eighth Circuit found that element satisfied.  The decision therefore focused on whether the legislation was “narrowly tailored,” a question that involved both the breadth of the legislation and its causal connection to the aforementioned goal.  As was the case in the California district court decision, the Eighth Circuit found that the statutory language did not effectively isolate troubling content and that the scientific link between violent video games and psychological harm to children lacked sufficient proof.  Consequently, the Eighth Circuit found the regulation to be unconstitutional.

If the Ninth Circuit follows the precedent set forth by the Eighth Circuit, regulators will have a difficult time tailoring legislation to meet this stringent standard.  On the other hand, if the court finds all or portions of these regulations permissible, software developers may feel compelled to curtail particular forms of violence in video games and retailers may need to alter their current sales and rental practices.  While this decision may provide temporary clarity to the industry and regulators, these constitutional issues will not be definitively resolved until they reach the Supreme Court.

Advances over the last decade in the media, entertainment and technology industries have been unparalleled. The new media landscape is dynamically shifting in real time and all businesses must anticipate and react to innovations in technology in order to seize new opportunities and develop unique business models.

Hughes Hubbard and Reed’s New Media, Entertainment and Technology group recognizes the pace at which these advancements are affecting the day-to-day operations of our clients. We specialize in helping clients exploit such developments to stay ahead of the curve by understanding the way technology influences business. It is not merely the convergence of the media, entertainment and technology industries, but the impact of such convergence on the global consumer, which drives the marketplace forward. We combine the resources and experience of a traditional law firm with an understanding and passion for today’s cutting-edge technologies to assist our clients in navigating the new realities and challenges arising from this shifting landscape.

Digital Media and Internet

• Digital audio-visual content licensing, distribution and syndication initiatives on all new media platforms including wireless, broadband, satellite radio and IPTV
• Online social networking services, virtual reality communities, blogging, massively multiplayer online games (MMOGs)
• Mergers & acquisitions, strategic alliances, online sponsorships/promotional collaborations and joint ventures
• Embeddable media player development, deployment and syndication
• Electronic publishing and distribution
• Integrated marketing, contextual advertising and brand management
• Viral marketing and Internet based “word of mouth” campaigns
• Ad serving, syndication, publication, targeting and tracking
• User-generated content ingestion, distribution, syndication and liability-related issues
• Digital content screening, moderation and filtering
• Online gaming, sweepstakes, contests and promotion compliance
• Digital Millennium Copyright Act – safe harbors and anti-circumvention issues
• Adoption and content of website Terms of Use agreements

Entertainment

• Development and production matters for motion picture and television productions, including writer, producer and director arrangements, guild issues, special effects agreements, location agreements, and other production related matters and documentation
• Domestic and international motion picture distribution in all media, including output deals and ancillary exploitation
• Cable and television broadcast, syndication and other distribution
• Motion picture and television finance, including single- and multi-project finance and all forms of debt, equity and mezzanine financing
• Strategic alliances and motion picture and television co-production and co-financing arrangements
• Major record label sound recording, publishing and associated rights clearances
• Independent music recording, publishing and licensing
• Video game development, publishing ,distribution and licensing for all platforms, including console, handheld ,wireless and online games
• Professional sports league television licensing and retransmission
• Professional athlete employment contracts and talent agreements, including spokesperson, appearance and sponsorship agreements
• Literary and other underlying rights acquisition and licensing
• Rights clearance for motion pictures, television productions and video games
• Product, character and technology merchandising and licensing
• Television format licensing
• Overall and housekeeping deals with talent elements and production companies
• Motion picture and television library acquisitions and dispositions
• Network, cable system and satellite affiliation and carriage agreements
• Product placement and commercial tie-ins
• Motion picture and television marketing agreements and arrangements
• Registration and licensing of patents, trademarks and copyrights
• Litigation concerning the interpretation of recording, film and distribution contracts
• Theme park, gaming and hotel operation

Technology and Information Security

• Privacy, data and information security compliance
• Information technology, business process, call center and manufacturing outsourcing transactions
• Website development, hosting and colocation arrangements
• Electronic commerce, publishing and distribution
• Technology and data export compliance
• Record retention and disaster recovery/contingency planning compliance
• Wireless device and network applications
• Software/hardware and intellectual property procurement, development, licensing and distribution
• Micropayment, contactless payment, smart cards and other alternative electronic payment technology implementations
• Technology transfers and acquisitions
• Technology service and maintenance agreements
• Domain name disputes

New Media, Entertainment and Technology Attorneys

• Dan Schnapp
• Rita Haeusler
• Wayne Josel
• Peter M. Langenberg
• Lindsay Orosz
• Matthew Syrkin
• Other Attorneys