How popular are used videogames and video game rental services?  Very popular, especially over the past several years.  Sellers of used videogames have acknowledged not only an upward trend in the demand for used videogames, but also that the sale of used videogame sales is more profitable than the sale of new videogames.  In its most recent annual report on Form 10-K, GameStop, which holds itself out as the “world’s largest multichannel retailer of video game products and PC entertainment software,” indicated that “[w]e will continue to expand the selection and availability of used video game products in our stores.  Used video game products generate significantly higher gross margins than new video game products.”  The profitability associated with the sale of used videogames has not gone unnoticed by other major retailers.  Best Buy, Wal-Mart, Amazon, and Toys R Us have each adopted videogame buyback and/or resale programs to varying degrees.

Similarly, videogame rentals have been increasingly popular over the past several years.  For example, GameFly, which holds itself out as the “largest online video game rental subscription service in the United States,” noted in a recently-filed submission with the SEC that “[w]e believe that online rental subscriptions will constitute a growing percentage of total video game-related expenditures and that our subscription service presents a compelling alternative for video game players who have historically either purchased video games or rented them from traditional retailers.”  In addition, Blockbuster stated in a quarterly statement filed last year that its strategic objectives for 2010 included “enhancing our product offering through the addition of video game rentals in all domestic markets in August 2010.”  

What is the First Sale Doctrine, and how does prevent videogame producers from generating revenue in these markets?  The First Sale Doctrine, which is codified in the Copyright Act, is a limitation on the rights of a copyright holder.  It provides that a bona fide purchaser or licensee of a copy of a copyrighted work may transfer his or her right to that copy without the copyright holder’s permission once those rights have been obtained.  In other words, once a copyright holder’s rights to a copy of a copyrighted work have been sold or licensed to someone else, that copyright holder’s right to control further transfer of the copy of the copyrighted work have exhausted.

Here is how the First Sale Doctrine applies in the used videogame and videogame rental marketplaces.  As to the used videogame market, once a company such as GameStop or Best Buy obtains a used videogame from a consumer, they may then resell the game without seeking permission from the producer or providing the producer any additional compensation.  As to the videogame rental market, once a company such as GameFly or Blockbuster purchases a copy of a videogame, they may then rent the game to their subscribers without seeking permission from the producer or providing the producer any additional compensation.  Thus, videogame producers do not profit from transactions in either the used videogame market or the videogame rental market (with the exception of the initial sale of the game to the rental provider). 

How has online gameplay helped level the playing field for videogame producers?  The modern videogame experience typically combines two types of gameplay: (1) an in-home experience in which the user either plays a one-player game against a computer opponent or a multiplayer game in which the user plays against other in-person opponents; and (2) a multiplayer online experience in which the user remotely plays against other opponents.  As discussed above, the First Sale Doctrine does not prevent a purchaser of a videogame from transferring his or her right to enjoy the first category of gameplay experience to either a used game purchaser or a videogame rental customer. 

Whether the original purchaser of a videogame has a right to transfer his or her right to access the second category of gameplay experience is a more complicated issue.  In order to play online, a user must not only have access to a copy of the game (which is subject to the First Sale Doctrine), he or she must also have access to the server that is housing the multiplayer environment (which is not subject to the First Sale Doctrine).  Thus, the First Sale Doctrine does not entitle the original purchaser of a videogame to transfer his or her right to online gameplay because it does not require videogame producers to provide game users access to their servers.  For this reason, videogame producers are increasingly targeting online play as a means to address their inability to generate revenue from consumers of used videogames and videogame rentals.       

Introducing EA’s Online Pass.  Videogame producers are increasingly offering videogame add-on content known as downloadable content (DLC).  Expanding upon this trend, producers are now bundling together as a premium service DLC and online access to features to their videogames.  This trend has essentially allowed producers to impose controls on consumers of used videogames and videogame rentals.  They do so by providing only purchasers of new videogames with access codes to these premium services.  Without the access code, a videogame user cannot access the online content.    

For example, EA introduced the concept of the Online Pass with its EA Sports franchises.  According to EA, starting with Tiger Woods PGA Tour 11, each new EA Sports videogame will come with an additional code for online play that will give the purchaser of the game access to various online modes, content and more.  Assuming that the code has already been used by the original purchaser of the videogame, those consumers who rent the same game or purchase it used must pay $10 for a new code (through Xbox Live or the PlayStation Network) to access all the online games modes and additional content.   

Other videogame producers have followed EA’s lead.  Sony has reportedly adopted a program similar to EA’s Online Pass, which it calls PSN Pass.  Like EA’s Online Pass, Sony’s PSN pass requires users to input a one-time use code to access a game’s online capabilities.  Warner Bros. Interactive Entertainment adopted a similar program, named “Kombat Pass,” for its most recent entry in the Mortal Kombat franchise.  And other game producers have either implemented similar programs or indicated an interest in possibly implementing a similar program in the future.

What does the future hold for Online Pass and similar programs?  There is a significant tension here.  On the one hand, videogame producers feel that the videogame rental and used videogame markets deprive them of revenue to which they are entitled.  On the other hand, programs like EA’s Online Pass have come under fire by gamers because many gamers apparently believe that that they are entitled to all of a game’s features – including online play – if they legitimately acquire the game, regardless whether the game is new, used, or rented.  Further complicating the issue, retailers who sell used videogames believe that these types of programs reduce the value of used game sales. 

Notwithstanding these criticisms, videogame producers are increasingly adopting programs like EA’s Online Pass.  This trend makes sense because such programs allow videogame producers to obtain revenue that they previously were not able to obtain.  Moreover, it appears that the backlash to videogame producers from gamers and retailers is unlikely to dissuade other videogame producers from following this trend.  For this reason, I anticipate that programs like the Online Pass will eventually become the industry standard.

Why are videogames entitled to First Amendment protections?    Justice Scalia wrote the majority opinion, to which Justices Kennedy, Sotomayor, Ginsburg, and Kagan joined.  As discussed by Justice Scalia, the Supreme Court found that videogames, like other arts forms (e.g., books, plays, and movies), qualified for First Amendment protection as protected speech.  This finding was not controversial. 

However, the Court also found that State of California overreached when it attempted to criminalize the distribution of videogames to minors.  The State of California attempted to enact legislation that closely mirrored a New York statute regulating obscenity for minors, which had previously been upheld by the Court.  The Court distinguished the cases and criticized California for attempting to expand the scope of unprotected speech.  In so holding, the Court stressed that obscenity has been treated differently than violence throughout the history of this country.  Justice Scalia stressed not only that “speech about violence is not obscene,” but also that minors are entitled to a significant measure of First Amendment protection.

Why did the statute violate the First Amendment?  In general, where a statute imposes restrictions on the content of protected speech, that statute is invalid unless it passes the following two-pronged strict scrutiny test – that is, the government must demonstrate that: (1) the restriction is justified by a compelling government interest, and (2) the restriction is narrowly tailored to serve that interest.  Here, the Supreme Court held that California failed to satisfy either prong of the test. 

First, the Court rejected California’s argument that violence to minors was a compelling state interest.  It found that California could not establish a direct causal link between violent videogames and harm to minors.  Nor did the Court find persuasive the psychological studies relied upon by California that suggested a link between violent videogames and harm to minors.

Second, the Court held that the California statute was not narrowly tailored to advance the State’s interest of protecting minors from the harm associated with exposure to violence.  While the statute sought to prohibit minors from accessing violent videogames, it was underinclusive in that it did not impose restrictions on, for example, violent cartoons, books or movies.  Hence, the Court found that videogame distributors were singled out for disfavored treatment.

The Court also rejected California’s argument that the statute was necessary to assist parental authority.  It noted that the videogame industry already instituted a system to inform consumers about violent content in videogames.  Specifically, the Entertainment Software Rating Board (ESRB) provided age-specific ratings for each game submitted to it, and specifically noted when games contained violent content.  The Court also noted that not all parents care whether their children have access to violent videogames.   

Why didn’t all of the Justices join in the majority’s opinion?  As discussed above, only five of the Justices signed off on the majority opinion.  The remaining justices either concurred (i.e., agreed with the conclusion, but not the rationale) or dissented (i.e., disagreed with the conclusion all together).  More specifically, Justice Alito wrote a concurrence, to which Chief Justice Roberts joined.  And Justices Thomas and Breyer each wrote dissents.

Justice Alito and Chief Justice Roberts agreed with the majority’s conclusion (i.e., that the statute was unconstitutional), but disagreed with its approach.  According to Justice Alito, the definitions for the terms “violent videogames” and “violent,” as these phrases were used in the statute, were unconstitutionally vague.  Justice Alito found that the statute failed to recognize that our society considered certain forms of violence as suitable features of popular entertainment.  However, Justice Alito criticized the majority for not leaving the door open for future legislative efforts to impose restrictions on violent videogames.  Citing the increasingly immersive nature of videogames, Justice Alito stressed that the majority too quickly dismissed the notion that videogames were a form of media that could have very different psychological effects on users than any other form of media before it.  

In his dissent Justice Thomas explained that he disagreed with the majority’s conclusion because he did not believe that minors had any constitutional right to speak or be spoken to without their parents’ consent. 

Finally, Justice Breyer concluded that the statute was neither unconstitutionally vague, nor an unconstitutional restriction against the exercise of First Amendment rights.  First, Justice Breyer concluded that the statute provided fair notice of the type of “violence” that was covered by the statute.  Second, relying on evidence both within and outside the record, Justice Breyer concluded that California had a compelling interest in enacting the statute.  Justice Breyer reasoned that the statute furthered California’s interests in aiding the discharge of parental authority and protecting the well-being of its youth.

What are the ramifications of this decision?  The videogame industry let out a big sigh of relief in response to this decision because had the statute passed constitutional muster, game manufacturers would have been forced to fundamentally change their business models.  Significantly, industry experts opined that major game retailers, such as Wal-Mart, could have discontinued the sale of M-rated (i.e., rated mature) games had the Supreme Court ruled differently.  Such a decision by the major retailers would have seriously impacted the industry because it would effectively render it less economically viable for game developers to develop videogames containing violent content – including some of the most commercially popular videogame franchises – because of the new limits on the channels of distribution for such games.

More importantly, I found it significant that the majority did not adopt Justice Alito’s rationale that videogames were a different form of media that depicted violence in manner fundamentally different than past depictions.  It is true that with the advent of high-definition viewing, 3-D televisions, motion control, and sensory simulation devices, videogames are now able to provide a much more immersive experience than past media. 

Critics of violent videogames often charged that certain videogames were crime simulators.  It struck me that these critics will argue that as game technology advances, violent videogames will simulate the experience of committing a crime in an even more realistic fashion.  Hence, they will likely conclude that the link between violent videogames and the potential of harm to minors will increase as technology progresses and that the problem will worsen over time.  In any event, the Supreme Court’s decision in Brown v. Entertainment Merchants Association essentially foreclosed this issue, as it made it very unlikely that any future effort by a state to criminalize the distribution of violent videogames alone would overcome judicial scrutiny.

As a preliminary matter, based upon the parties’ papers on the class certification issue, it does not appear that the Plaintiffs’ have advanced their definition of the relevant market yet.  Rather, they claim that they are capable of providing such a definition at a later date based upon the following: (1) EA raised the prices to retailers and distributors after entering into the exclusive license with the NFL, which, according to Plaintiffs, led to higher revenues for EA; (2) industry participants and internal documents will aid in determining what products consumers viewed as reasonable substitutes for interactive football software; and (3) EA itself has conducted a significant amount of market research that is likely to aid in the product market definition.  These contentions, together with the fact that manufacturers other than EA have attempted to release football videogames without the NFL license during the relevant timeframe to little or no success, suggest to me that the Plaintiffs will likely define the relevant market as the market for NFL-licensed football videogames.  

EA has already started to lay a foundation to combat this definition.  They argue that: (1) John Madden Football already had an 85% market share in the market for NFL Football simulations before it acquired the exclusive NFL license; and (2) a videogame’s success is driven by its quality, not by its genre.  In other words, EA argues that John Madden Football is not solely competing against other football videogame franchises, but it also is competing against other videogames in general.  Thus, EA essentially argues that adopting a narrow relevant market definition would not accurately depict the marketplace in which John Madden Football competes.

I believe that EA has the better argument here.  To define the market for John Madden Football as simply the market for NFL-licensed videogames seems to me to be somewhat of an artificial definition.  It ignores the fact that other, non-football videogames also compete in the marketplace.  Admittedly, the NFL license is a valuable asset, as NFL football is an extremely popular sport.  Undoubtedly, many gamers will purchase the game for that reason alone.  But I don’t think that it would be a good idea to carve out a marketplace based upon the underlying premise that the NFL is popular and that there exists a distinct market for NFL-branded videogames.  This ignores the fact that consumers of John Madden Football expect a threshold level of quality.  I strongly believe that the quality of a game is a major driving factor behind the game’s sales.  If EA’s next edition of John Madden Football scored an aggregate critic rating of below 6.5, I suspect that a significant percentage of those consumers who typically purchase John Madden Football would opt to purchase a different game rather than purchase a mediocre version of John Madden Football.  I believe that this would be the case because it is extremely hard to justify spending $60 on a bad game.  However, because the John Madden Football franchise routinely receives aggregate critic ratings of 8.0 or higher, this hypothesis likely cannot be tested.   

I also believe that adopting a relevant market definition that is limited to something similar to “NFL-licensed videogames” would be dangerous precedent.  More specifically, if the videogame industry is comprised of a series of sub-markets for games, where do you draw the line?  The problem here would be that creative litigants would likely try to test these boundaries to the detriment of the industry.

The plaintiffs contend that in the absence of competition, innovation is sacrificed.  I think that this position has common sense appeal to it.  In general, a monopolist has little incentive to invest in innovation because, for all intents and purposes, it has a captive market.  But I also believe that this argument is impractical for purposes of showing damages.  As a litigator, I’m concerned about quantifying damages.  Litigants need to demonstrate to the court that their theory of damages is not speculative.  The notion that consumers have been harmed by the lack of innovation in the marketplace is not an easy concept to quantify, as innovation lies in the eye of the beholder.  For this reason, I agree with EA that the plaintiffs’ argument that consumers have been harmed in the form of a lack of innovation in the marketplace  is too subjective to support a claim for damages.

But what about the notion that the acquisition of an exclusive license will promote game quality and innovation?  Here, EA notes that Madden Football must maintain a minimum aggregate critic review score as a condition of EA’s license from the NFL, which presumably guarantees a threshold degree of game quality.  Further, EA argues that its significant investment in research and development in the Madden Football franchise yields higher quality and more innovative games as a result of its exclusive license with the NFL.  I have two observations about this argument. 

First, there is no guarantee that an investment in research and development will yield higher quality or more innovative games.  In fact, sometimes the opposite is true.  For example, EA introduced “QB Vision Control” in Madden ’06.  EA touted that this new feature was a step forward in the evolution of football videogames because it increased the realism of the game.  Here’s how the feature worked: A cone would emanate from the quarterback during passing plays.  The cone represents the quarterback’s field of vision, and the size of the cone depends upon the quarterback’s awareness.  In order to make accurate passes, the quarterback must throw to receivers that are within the cone.  Otherwise, the quarterback would throw either inaccurate passes or interceptions.  In my opinion, this feature was a step backwards for the franchise because it rendered gameplay clunky.  It overly complicated the game’s passing mechanics.  So while “QB Vision Control” may have made the game more realistic, it did not improve upon the core gameplay in an appreciable way.  In fact, its inclusion made the game unnecessarily frustrating.     

Second, I believe that competition in the marketplace provides a meaningful and significant motivation for game producers to manufacture a more innovative product.  As a preliminary matter, I think of innovation in sports videogames as significant improvements to the following features: (a) graphics, (b) sound, (c) gameplay, (d) extra features, and (e) replayability.  Notably, these are substantially the same factors that game critics analyze when they review videogames.  While, in my opinion, Madden Football has achieved modest advancements in these categories since EA acquired the exclusive NFL license, other professional sports videogames that are not subject to exclusive license arrangements have far surpassed Madden Football in terms of innovation.  For example, Visual Concepts’ NBA 2K11 is widely considered one of the best games of 2010.  I believe that NBA 2K11 is a superior sports videogame because it represents an improvement over last year’s entry in the NBA 2K franchise in almost every way.  In fact, I consider this game one of the best sports simulation videogames ever because it features: (1) superior graphics and character animations; (2) realistic and up-to-date commentary from the virtual sportscasters; (3) a dynamic online system that updates player stats and roster moves on what appear to be a daily basis; (4) tight online play; and (5) meaningful extras, such as the inclusion of Michael Jordan and Michael Jordan’s famous games.  Unlike Madden Football, Virtual Concepts’ NBA 2K franchise faces competition in the market for NBA-licensed basketball videogames, including from EA in the form of the NBA Elite 11 (which is EA’s NBA basketball simulation that has not yet been released) and NBA Jam (which features more of an arcade-style NBA experience).  I seriously doubt that Visual Concepts would have manufactured such a superior game in the absence of any meaningful competition.

1. The Canadian Online Explorer reports that a group from Toronto have discovered a method of using Kinect as a hands-free means to view a patient’s imaging data, such as CT scan and MRI data, during surgery.  Specifically, a doctor and a pair of engineers set up a Kinect sensor on a remote computer and then connected the corresponding output to a suspended screen in the operating room.  The device would recognize the doctor’s physical gestures as a means for the doctor to access the patient’s data.  In the absence of this device, the doctor would be forced to go to another room to view the data, then sterilize again before reentering the operating room.  
2. UC Berkeley student attached a Kinect unit to a quadrotor aircraft, thereby enabling the vehicle with a spatial sensor.  By doing so, the Kinect sensor allowed the aircraft to sense and avoid physical obstacles in 3D space.   
3. An MIT student enabled a robot with a Kinect sensor that enabled the robot to generate a 3D map of the surrounding area.  The Kinect-enabled robot was also able to recognize human forms and command gestures.  The student believes the 3D mapping could provide a map for a small group of quadrotor flying robots to investigate a disaster area for trapped people.

Microsoft’s original response to hackers who sought to discover new and creative uses of Kinect was official protest and threats of legal action.  Now, however, Microsoft embraces open-source research into the many unintended uses for Kinect.

In general, the type of DLC promotions that are the subject of this lawsuit appear on the original packaging of games.  Included with the games are one-time codes that allow purchasers of the game to download the advertised DLC at no additional cost.  Here’s the problem:  If an original purchaser of a game uses the one-time promotional code to download the DLC then later sells his or her copy of the game to GameStop, the code that accompanies that particular copy of the game will no longer be active.  So if GameStop later sells the same copy of the game as a used game, the purchaser of the used game will not be able to download the DLC for free, despite the fact that the original packaging for the game advertises free DLC.  Hence, at issue is whether GameStop can be held liable for “falsely advertising” that the free DLC promotion is available to purchasers of used copies of the games.

While this case involves quite a few key factual and legal issues (including the definition of a “retail sale,” the veracity and content of certain representations made on GameSpot’s website and print advertising, the contents of special editions of certain videogames, the reasonableness of GameSpot’s 7-day return period for used games, etc.), we believe that the most interesting issue presented is whether the alleged “false advertising” for free DLC that is contained on the original packaging of the used games at issue, by itself, is likely to deceive a reasonable consumer.  Assuming that a “reasonable consumer” in this context is defined as a typical consumer for used videogames – that is, a gamer who is somewhat familiar with the industry and its practices – we don’t believe so.  In general, claims brought under the California Consumer Remedies Act and unfair competition law must satisfy the reasonable consumer standard.  In other words, the plaintiff must show that GameSpot’s alleged practice of falsely advertising free DLC with the purchase of used copies of games is likely to deceive members of the public.  We suspect that if you polled such gamers, the majority of those polled would confirm that they understand that the free DLC promotions that are prominently featured on the original packaging for videogames are: (a) one-time offers, (b) typically used by the original owner of the game, and (c) offered by the game’s manufacturer (and not GameStop), and (d) available only on the first sale of the videogames.  For these reasons, we’re not convinced that a reasonable consumer would believe that GameSpot is falsely advertising the inclusion of promotional DLC in connection with its sale of used copies of videogames simply because the original packaging for the game touts free DLC.

It appears that developers and users alike have only started to discover the untapped potential for this technology.  Developers have had only little time with the related development kits.  Allowing developers additional time to familiarize themselves with this technology will serve to improve the quality of Kinect games in the future.  Notably, certain of Kinect’s capabilities have yet to have been featured in games.  For example, the technology can map a person’s real-time facial expression onto an on-screen avatar.  Utilizing this capability in a game will clearly enhance a gamer’s immersion into gameplay.  To the best of our knowledge, this particular feature has yet to appear in any Kinect games.  Also, Kinect hackers discovered that the technology can be used for 3D photography.  While this finding was a product of what appears to be a violation of Microsoft’s license agreement, Microsoft does not appear to have any intention of halting hackers from further exploring into this finding.  To the contrary, Microsoft appears to be encouraging similar research into the possible uses for the technology.

The Dutch dispute is part of a global intellectual property dispute between the two parties involving blu-ray and mobile technologies. These disputes illustrate a common litigation strategy for technology companies that assert or defend against allegations of patent infringement against their industry rivals. Both Sony and LG have employed a tit-for-tat intellectual property strategy. In other words, once one party initiated a patent litigation against the other, the accused infringer responded by asserting its own patents and initiating new litigations in different jurisdictions and countries. For example, there is a looming patent dispute in the United States between the two companies involving the same technologies.

It’s all about timing. Here’s how this dynamic played out. In general, to certify a class, a court must determine whether the class is adequately defined and ascertainable as a prerequisite to certifying a class. Plaintiffs proposed the following class definition: “All persons in the United States who purchased Electronic Arts’ Madden NFL, NCCA, or Arena Football brand interactive football software, excluding software for mobile devices, with a release date of January 1, 2005 to the present.” Although EA did not object to this definition, it suggested that the definition is potentially improper because it included two sets of plaintiff classes with conflicting interests: (1) “early” purchasers of the games (who buy the games near the launch date), and (2) “late” purchasers of the games (who buy the games after they have been discounted in price late in the product cycle). Using this model of consumer behavior, EA concludes that that while the “early” purchasers are more concerned about quality, the “late” purchasers are concerned more about price. EA then argued these two sets of plaintiffs have conflicting interests because the “early” purchasers are not as concerned with price, and the “late” purchasers are only concerned about price. The Court rejected EA’s argument, finding that (1) all class actions involve classes that have some antagonistic characteristics, and (2) there is no evidence in the record that any class member opposes this lawsuit.

Good luck showing that the “early” purchasers paid too much for John Madden Football. On its face, this dispute about “class” definition may seem insignificant. But EA’s argument reveals a major defense case theme that could seriously undermine plaintiffs’ theory of liability. More specifically, plaintiffs will have an extremely difficult time proving that the “early” purchasers have been harmed by EA’s conduct. To demonstrate that the “early” purchasers have been harmed, plaintiffs must show that John Madden Football would have been priced at something less than $59.99 for the Xbox 360 and PS3 platforms if EA had not obtained an exclusive license. The realities of the marketplace for videogames suggest otherwise. As a practical matter, nearly all new games for the Xbox 360 and PS3 are priced at $59.99 at launch. This is especially true with respect to premium sports games, such as John Madden Football, the NBA 2K series, the NHL 2K series, MLB 2K series, etc. It’s hard to imagine that the price of John Madden Football would deviate from this industry-standard pricing strategy. Plaintiffs’ theory that John Madden Football is overpriced is based upon the fact that EA was forced to reduce the price of this game in order to compete with Take Two’s NFL 2K series at a time when EA did not have an exclusive license to the NFL. According to evidence submitted by EA (which seems credible), this argument incorrectly assumes that Take Two would have continued to compete with EA at the pricing of football videogames for subsequent iterations of their respective football titles. EA offered evidence that not only was Take Two’s act of pricing its NFL-licensed football videogame at $19.99 part of a one-time marketing effort to expand exposure to their title, but Take Two intended to raise the price of the next iteration of its football game franchise to the industry-standard rate.

It may be easier to demonstrate that “late” purchasers paid too much for the game, but so what? Plaintiffs will likely have an easier time showing that “late” purchasers of John Madden Football have been harmed. With this theory, plaintiffs need not address the industry-wide pricing policies for videogames at launch. All they need to show is that the “late” purchasers suffered damages in that the reduced price of John Madden Football was higher than it would have been but for EA’s anticompetitive conduct. To make this showing, plaintiffs need to demonstrate that (1) the reduction in the price of the game that the retailer is willing to offer is tied to the game’s wholesale price, and (2) the wholesale price of the game is higher because of the exclusive license attached to it. Making this type of showing seems much more feasible than proving that “early” purchasers suffered harm. But the problem here is that, according to EA, the majority of consumers who purchase John Madden Football do so when the game is priced $59.99. So if plaintiffs are unable to show that the entire class of plaintiffs suffered harm because of EA’s alleged conduct, this lawsuit may not have any real value to it.

1. What is a trademark?
Trademark law is about the identification of the source of goods. Trademarks are not meant to protect inventions like patents or trade secrets, but rather the “goodwill” of a company or brand. Trademarks can include words, such as: Xerox or Apple Computers. Trademarks also include logos, such as the Nike swoosh or McDonald’s golden arches.

In video games, possible trademarks could include the names of your company (like “Sony®”), a particular game system (like “Playstation®” or “PS3TM”), or individual game titles. In addition, you can trademark the name of a character or a graphic or logo that identifies your company, game or product.

There are requirements for trademarks. For example, the trademark cannot be merely descriptive.  The more fanciful or unique the trademark, the stronger the mark.  

2. How does a trademark gain protection?
One establishes rights in a trademark simply by being the first one to use the mark in commerce. Using the trademark is important – it is not enough to come up with some name or logo – one must actually use it in commerce, like advertising or selling products.

Just using your trademark in commerce establishes common law rights. However, to gain more protection, one can register the trademark either within particular states or federally.

3. What are the advantages of Federal registration?
Federal registration of a trademark has a lot of advantages. First, there is a presumption that your trademark is valid once it is registered. This presumption makes it harder for others to challenge your trademark later. Second, it puts others on notice of your trademark. By being federally registered, your trademark is published and others are on constructive notice of it. Third, federal registration of a trademark allows the owner to collect statutory damages from an infringer – this can include also include attorneys’ fees and triple damages for willful infringement.

At Banie & Ishimoto LLP, we provide services relating to all aspects of trademark law, from registration to monitoring to enforcement. Contact us today to set-up a free 30 minute telephone consultation, so that we can help you evaluate your trademark needs.