The “Mod” Mentality Blizzard and Copyright for Crowd-sourced Videogames

Annie Lee – Summer Associate

2

2016 Gaming Industry Numbers • Mobile = $38 Billion

• Personal Computing = $33 Billion

• Console = $6 Billion

Videogame & eSports Industry

The International (TI) Dota2 Competition

• $20M prize pool (2016)

• 10,000 spectators

• Broadcasted on Twitch

3

Blizzard Entertainment &

Valve Co. (personal computing gamemakers)

Lilith Games (Shanghai) &

UCool (smart-phone gamemakers)

DotA

DotA 2

DotA Allstars

DotA Legends

Heroes Charge

v.

Blizzard v. Lilith (N.D. Cal. May 16, 2017) – Copyright Infringement

4

World of Warcraft III

DotA

DotA Allstars

DotA

DotA

DotA 2

Blizzard

“Mods” (versions of the game)

”Guinsoo”

”Meian & Madcow”

“IceFrog” Valve

Valve

Valve

Blizzard

transferred IP rights

transferred IP rights

transferred IP rights

”Eul”

“Masterminds” (lead game developers)

*

*

* Asterisk denotes “mods” where the “mastermind” crowd-sourced input and contributions from other players

“for a handsome price”

Development of the Game

5

Issue #1: Defining the Work

Unitary Work or Collective Work?

Each “mod” is a unitary work N.D. Cal. Judge Breyer:

“Heroes do battle in teams on fictional battlefieds ⎯ together.”

“Each version is a unitary derivative work based on earlier versions [of] DotA and DotA Allstars.” Blizzard & Valve v. Lilith & UCool, No. 3:15-CV-04084-CRB (N.D. Cal. May 16, 2017).

6

Issue #2: Identifying the Authors of the Work

“Eul”, “Guinsoo”, and “Icefrog” = Authors N.D. Cal. Judge Breyer: Authorship goes to the “people who spent years creating, growing, and (yes) masterminding) much of the DotA universe. Help along the way does not drain those efforts of their considerable value.”

Blizzard & Valve v. Lilith & UCool, No. 3:15-CV-04084-CRB (N.D. Cal. May 16, 2017).

• Analogizes to Jefri (Plaintiff) in Malcolm X

• Jefri wrote specific passages of dialogue and scenes

• Jefri wrote made “extremely helpful recommendations”, but Spike Lee ”was not bound to accept any of them”

• Holding: Jefri is not an author, only director Spike Lee was an author

Aalmuhammed v. Lee, 202 F.3d 1227 (9th Cir. 2000)

7

World of Warcraft III

DotA

DotA Allstars

DotA

DotA

DotA 2

Blizzard

“Mods” (versions of the game)

”Guinsoo”

”Meian & Madcow”

“IceFrog” Valve

Valve

Valve

Blizzard

transferred IP rights

transferred IP rights

transferred IP rights

”Eul”

“Masterminds” (lead game developers)

*

*

* Asterisk denotes “mods” where the “mastermind” crowd-sourced input and contributions from other players

“for a handsome price”

Development of the Game

8

Issue #2: Identifying the Authors of the Work

“Eul”, “Guinsoo”, and “Icefrog” = Authors

Authorship goes to the “people who spent years creating, growing, and (yes) masterminding) much of the DotA universe. Help along the way does not drain those efforts of their considerable value.”

“Eul”, “Guinsoo”, and “Icefrog” = Authors N.D. Cal. Judge Breyer: Authorship goes to the “people who spent years creating, growing, and (yes) masterminding) much of the DotA universe. Help along the way does not drain those efforts of their considerable value.”

Blizzard & Valve v. Lilith & UCool, No. 3:15-CV-04084-CRB (N.D. Cal. May 16, 2017).

• Analogizes to Jefri (Plaintiff) in Malcolm X

• Jefri wrote specific passages of dialogue and scenes

• Jefri wrote made “extremely helpful recommendations”, but Spike Lee ”was not bound to accept any of them”

• Holding: Jefri is not an author, only director Spike Lee was an author

Aalmuhammed v. Lee, 202 F.3d 1227 (9th Cir. 2000)

9

Implications • The “mastermind” of a “mod” can assert and assign rights to

the entire “mod”, even parts they did not create • Simplicity v. fairness to individual contributors • IP for crowdsourced games is similar to IP for a Hollywood

movie

Questions Raised • When is the individual copyright of a contribution preserved?

• E.g. A hero, a storyline, a map, etc.

• What constitutes a “mastermind”? • Does this oversimplify the IP rights to a crowd-sourced project? What

are the implications in an increasingly gig-oriented economy?

Thanks to Alex Parker & Melody Drummond Hansen for the feedback, guidance, and fun

The Growing Perilousness of DMCA Safe Harbors Adi Kamdar

Summer Associate

DMCA Digital Millennium Copyright Act 17 U.S.C.§512 OCILLA

Online Copyright Infringement Liability Limitation Act

optional

protects qualifying intermediaries from liability

1. Repeat infringer termination policy 2. NO knowledge of actual infringements 3. NO awareness of facts and circumstances indicating

infringing activity 4. NO direct financial benefit from infringing activity

combined with right and ability to supervise or control 5. Designate agent to receive notifications 6. Upon actual knowledge or awareness, expeditiously

remove or disable access to infringing material/activity 7. Upon notification, expeditiously remove or disable

access to infringing material/activity (minimum of 10 days if counter-notification)

8. Accommodate, and not interfere with, “standard technical measures”

to qualify…

v.

(9th Cir. 2017)

one “owner,” hired by LiveJournal nine volunteer moderators review and post user submissions

twenty celebrity photographs posted on ONTD some contained watermarks did not use LiveJournal’s “notice and

takedown” procedure

A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider—

A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider—

A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider—

one “owner,” hired by LiveJournal nine volunteer moderators review and post user submissions

BWP Media USA Inc. v. Clarity Digital Group., LLC

(10th Cir. 2016)

“simply because someone is an employee does not automatically disqualify him as a ‘user’ under§512.”

“The panel’s decision threatens to expose online services to a possible loss of DMCA protection simply because they make efforts to screen content that users submit for posting.”

“This legislation is not intended to discourage the service provider from monitoring its service for infringing material. Courts should not conclude that the service provider loses eligibility for limitations on liability under section 512 solely because it engaged in a monitoring program.”

automated review

The DMCA safe harbor already has many conditions to meet.

The Mavrix decision adds one more.

Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA) with affiliated limited liability partnerships conducting the practice in the United Kingdom, France, Italy and Singapore and as affiliated partnerships conducting the practice in Hong Kong and Japan. Latham & Watkins operates in Seoul as a Foreign Legal Consultant Office. The Law Office of Salman M. Al-Sudairi is Latham & Watkins’ associated office in the Kingdom of Saudi Arabia. © Copyright 2017 Latham & Watkins. All Rights Reserved.

District Court Applications of the Defend Trade Secret Act’s Ex Parte Seizure Remedy

Brittany Bruns & John Polansky June 21, 2017

• The statute lists 8 requirements that must be met to grant an ex parte seizure order.

• Courts have focused on the following 3 requirements: • A temporary restraining order or other equitable relief must be

inadequate; • The ex parte order must be necessary to forestall immediate and

irreparable injury; • The ex parte order is necessary to prevent the alleged trade secret

misappropriator from destroying the trade secret or fleeing.

18 U.S.C. § 1836 (2)(A)(ii)

Published District Court Orders Granting or Denying Ex Parte Seizures

Granting • Mission Capital Advisors, LLC v.

Romaka (S.D.N.Y. July 29, 2016)

• How many orders granted under seal? • At least one sealed order exists

(Florida)

Denying • Dazzle Software II, LLC v. Kinney (E.D. Mich. July 18, 2016)

• Balearia Caribbean Ltd. Corp. v. Calvo (S.D. Fla. Aug. 5, 2016)

• Jones Printing, LLC v. Adams Lithographing Co.

(E.D. Tenn. Nov. 3, 2016)

• OOO Brunswick Rail Mgt. v. Sultanov (N.D. Cal. Jan. 6, 2017)

• Digital Assurance Certification, LLC v. Pendolino

(M.D. Fla. Jan. 23, 2017)

Exhausted!: Global Implications for Patent Exhaustion after Lexmark Patrick Nack-Lehman, O'Melveny & Myers

What is Exhaustion?

• A defense to patent infringement • Authorized sales “exhaust” patent rights

• Geography and post-sale restrictions • Jazz Photo v. ITC: U.S. patentee’s sale abroad does

not authorize buyer to import item to U.S. (only U.S. sales exhaust U.S. rights)

• Mallinckrodt v. Medipart: Post-sale restrictions enforceable through patent infringement suit (not all sales exhaust patent rights)

2

Before Lexmark

• Lexmark makes and sells printers and toner cartridges worldwide

3

• Impression Products refills and resells Lexmark cartridges • Lexmark sued Impression for patent infringement • Impression’s defense: exhaustion

• Two Purchase Options: • No Post-sale Restrictions OR • Discount with Restrictions

20% discount if buyer agrees to single-use/no-resale

What Happened in Lexmark?

Supreme Court Overrules Federal Circuit

Post-Sale: Can Lexmark enforce post-sale restrictions through a patent infringement suit?

Geography: Can Lexmark stop import of items it sold abroad through a patent infringement suit?

No

No

Lexmark may be able to enforce restrictions under contract law, but authorized sales exhaust patent rights for a sold item.

Lexmark made the sales, and authorized sales exhaust patent rights regardless of location.

Yes

Yes

Lexmark chose not to transfer resale rights, and a sale need not transfer all rights to the purchaser.

Lexmark still has patent rights because sales outside the U.S. do not exhaust U.S. patent rights.

4

Lexmark’s Potential Impact

Contract Law • Enforceability and privity issues • Suing customers

Pricing • Price items to capture monopoly

revenue in first sale

Licenses, not Sales • Exhaustion applies to “sales” • Line between sale/license unclear • Physical v. digital products

Technology • E.g., Lexmark tried using a chip

to prevent unauthorized refilling

Opinion suggests it may be more difficult to: • Tailor pricing options to user needs • Control refillable/repairable products to ensure quality • Manage regional pricing to allow for affordability worldwide

Feeling Exhausted? Alternatives to Patent Law

5

6

The Future?

Questions?

7

BREADTH OF POST-AIA ON-SALE BAR

Patent Forfeiture After Helsinn

Yuqing Cui June 21, 2017

§102(a)(1): A person shall be entitled to a patent unless the claimed invention was • patented, • described in a printed publication, • or in public use, • on sale • or otherwise available to the public

before the effective filing date of the claimed invention . . .

1

The existence of a sale/offer

by patent owner

Public

Informing

Non-informing

Secret

Informing

Non-informing

Pre-AIA Post-AIA

?

?

Plain text of statute

Helsinn

Buildex, Inc.

Buildex, Inc. v. Kason Indus., Inc., 849 F.2d 1461 (Fed. Cir. 1988) Helsinn Healthcare S.A. v. Teva Pharms. USA, Inc., 855 F.3d 1356 (Fed. Cir. 2017) Pennock v. Dialogue, 27 U.S. (2 Pet.) 1 (1829) (Story, J.) Siemens Aktiengesellschaft v. United States, 26 Cl. Ct. 980, 312, 1992 U.S. Cl. Ct. LEXIS 368 (Cl. Ct. Aug. 14, 1992)

Pennock

Siemens Aktienge-sellschaft

Plain text of statute

State Law Threats to CDA Section 230 Meghan Fenzel

San Francisco Bar Association—Summer of IP June 21, 2017

The Law that Created the Modern Internet

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider” 47 U.S.C.§230(c)(1)

• Prohibition on publisher liability includes distributor liability • Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997)

• Differs from traditional notions of “publisher” under defamation law

Key Provisions of CDA§230

“The term “interactive computer service” means any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions.” 47 U.S.C. § 230(f)(2)

Key Provisions of CDA§230: Scope

Does not apply to • Federal criminal law§230(e)(1) • Intellectual property law§230(e)(2)

• Separate safe harbor provisions under DMCA 17 U.S.C.§512(c) • Electronic Communications Privacy Act §230(e)(4)

• Or state law analogs, like CalECPA

Key Provisions of CDA§230: Carve-outs

The Dark Side of Humanity (and the Internet)

State Attorneys General proposal • State criminal law liability

Congressional proposals • Revenge porn liability • No Immunity for Sex Traffickers Online Act

Proposed Reforms

Swiss cheese of state law liability Chipping away at immunity Incentivizes caution for platforms seeking to avoid liability What does excess caution lead to?

Implications of CDA 230 Reform

Implications of CDA 230 Reform

Negligence and Failure to Warn • Doe #14 v. Internet Brands, 2016 WL 3067995 (9th Cir. May 31, 2016)

(Model Mayhem) • McDonald v. LG Electronics USA, Inc., 2016 WL 6648751 (D. Md. Nov. 10,

2016) Verification Obligations

• Airbnb, Inc. v. City and County of San Francisco, 2016 WL 6599821 (N.D. Cal. Nov. 8, 2016)

Third-party Injunctions • Hassell v. Bird, 2016 WL 3163296 (Cal. App. Ct. June 7, 2016)

Chipping Away at Immunity

Eric Goldman, Technology & Marketing Law Blog: https://blog.ericgoldman.org

Electronic Frontier Foundation, Section 230 of the Communications Decency Act: https://www.eff.org/issues/cda230

Further Reading

Thank you!

Meghan Fenzel Summer Associate, Fenwick & West LLP mfenzel@fenwick.com, mfenzel@berkeley.edu

@meghanfenzel

Presented by: Valerie Truong

The Implications of the Supreme Court’s TC Heartland Decision

TALENT. TEAMWORK. RESULTS.

TC Heartland LLC v. Kraft Foods Group Brands LLC

A New (but Old) Test for Venue in Patent Cases

Governing Statute: 28 U.S.C. § 1400(b)

Patent infringement cases may be brought: (1) where the defendant “resides” OR (2) where the defendant has committed acts of infringement and has a regular and established place of business.

Facts • Kraft sued TC Heartland in the District

of Delaware • TC Heartland is incorporated and

headquartered in IN, but shipped the allegedly infringing products to DL.

• TC Heartland moved to transfer venue to IN, relying on Fourco, but the District Court denied the motion under VE Holding.

• Federal Circuit affirmed • SCOTUS granted certiorari

SIDLEY AUSTIN LLP

Kraft’s “MiO” liquid water enhancer

TC Heartland’s allegedly infringing product

Issue

SIDLEY AUSTIN LLP

The only question we must answer is whether Congress changed the meaning of §1400(b) [the patent

venue law] when it amended §1391 [the general venue law].

JUSTICE CLARENCE THOMAS

Holding

No. In a unanimous 8-0 decision, the Supreme Court ruled that for purposes of venue in patent-infringement litigation, a U.S. corporation “resides” only in the state where it is incorporated.

SIDLEY AUSTIN LLP

Practical Implications

SIDLEY AUSTIN LLP

1. Limitations on Forum Shopping

• Restricts the unfair practice of forum shopping at patent-friendly venues

• Procedural tool to avoid fighting patent assertions in venues where the connection is attenuated

• Curtail patent trolls from using the Eastern District of Texas as a tool for extorting settlements from accused infringers

SIDLEY AUSTIN LLP

2. Changes in the Geographical Landscape

• Decrease of patent litigation in the Eastern District of Texas • Increase of patent litigation in the Northern District of

California (home of many technology companies) and District of Delaware (where many companies are incorporated)

• Flood of motions to dismiss for improper venue and transfer motions – But see, Cobalt Boats, LLC v. Sea Ray Boats, Inc., No. 2:15CV21,

2017 WL 2556679, at *3 (E.D. Va. June 7, 2017)

SIDLEY AUSTIN LLP

SIDLEY AUSTIN LLP

Unanswered Questions

• Effect on declaratory actions • Determining venue for multinational corporations • Whether a Defendant has a “regular and established

place of business”

SIDLEY AUSTIN LLP

TALENT. TEAMWORK. RESULTS.

Thank you!