Introduced in response to certain digital media sellers (e.g., game publishers) revoking consumer access to purchases with little to no recourse, AB 2426 forces sellers of “digital goods,” such as movies, apps, games, books and music to clarify what a consumer is actually receiving in connection with their “purchase.” Often companies refer to the “purchase” or “sale” of digital goods, yet the associated terms of service make clear that the buyer only receives a revocable license to the such goods. In some cases, if a buyer violates the terms of service, the license is revoked and the user is denied
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Regulators Ramp up Scrutiny of Games’ Business Models
On August 28, the CFPB issued a Consumer Advisory warning that it believes video game companies are targeting children for monetary gain. With 45.7 million U.S. children engaged in video gameplay, the agency is concerned about the financial risks that games and virtual worlds pose, especially to young consumers. This Advisory highlights a growing focus on the game industry’s practices, which allegedly mimic traditional banking systems but lack corresponding consumer protections. …
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Closer to a Federal Right of Publicity – Senate Introduces NO FAKES Act
Given the introduction of the ‘NO FAKES’ Act by a bi-partisan group of senators within days of U.S. Copyright Office’s release of its digital replicas report asserting an “urgent need” for more cohesive protections at the federal level, it’s clear that momentum is building for federal oversight in the realm of deepfake and digital replication technology. This legislative effort is intertwined with broader national and global discussions about AI’s impact on privacy, intellectual property, and personal identity, alongside existing gaps in enforceable protections.
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China Proposes New Regulations for Online Gaming
In December 2023, China’s National Press and Publication Administration introduced draft regulations with potentially significant implications for the online gaming industry. The proposed regulations, aimed at curbing in-game spending, could substantially affect games that rely on high spenders for their revenue, particularly “free to play” games. This initiative is part of China’s broader strategy to regulate the country’s leading gaming industry, which rebounded to generate approximately $42 billion in 2023, following a decline in revenue in the previous year due to China’s previous regulatory crackdown which included a temporary suspension of new game approvals and restrictions on the amount of…
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Blockchain Game Developers and FinCEN: When are State Money Transmission Laws Applicable?
The rising prevalence of crypto and virtual currencies has invited the scrutiny of several regulatory bodies who continue to grapple with the unique challenges posed by blockchain technology, FinCEN being one prime example. The Financial Crimes Enforcement Network (“FinCEN”) is an arm of the United States Department of Treasury that seeks to impede financial crimes such as money laundering and terrorist financing, and was the first financial regulator in the U.S. to address virtual currency.
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Too Many Bites at the Apple?
When a patent owner loses at the International Trade Commission (“ITC”), can it hire new counsel and try again in district court? That question will be answered in Gamevice, Inc. v. Nintendo Co., Ltd. et al, No. 3-18-cv-01942 (N.D. Cal.), where plaintiff Gamevice is asserting three patents against Nintendo despite losing on those same patents in two prior ITC proceedings.
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Video Games, AI, and …the Law?
Video games have come a long way. They have morphed from simulated games of ping pong to today’s fully-immersive virtual reality games that leverage biometrics and artificial intelligence (AI). While the origins of using AI in games were simple – such as to create more realistic non-player characters – the use of AI now allows for much more. AI-based tools may be used to outsource quality assurance, gain data-driven insights into players, or to better understand player value to maximize retention and in-game revenue. Now is thus a good time for companies to keep in mind regulatory bodies’ increased focus…
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What the Future Holds for Esports Gambling
The emergence of legalized sports gambling in more than half the states across the country appears destined to coincide with the rise of competitive video gaming or “esports”—a wildly popular sphere within the entertainment industry now facing increasing regulatory scrutiny.
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Esports Media Rights
Sheppard Mullin’s Esports and Games Industry Team is pleased to share our whitepaper on Esports Media Rights, in partnership with and co-written by FTI Consulting, a leading global business advisory firm.
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Playing with privacy? Privacy and cybersecurity considerations in esports
This was originally published by Esports Insider on June 24, 2021
The world of competitive video gaming implicates a complicated patchwork of privacy laws, and esports companies need to keep in mind some key issues when assessing privacy and cybersecurity obligations. Understanding these obligations is all the more important as esports continues to be a quickly growing international trend.
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The Legal Considerations of Esports NFTs
This was originally published by Esports Insider on June 4, 2021
Within the blockchain space, one of the fastest-growing areas is NFTs. Within the games space, esports is growing rapidly. So naturally the combination of NFTs and esports should have tremendous potential. This article will explore some opportunities at the intersection of these trends and some of the potential legal issues that might arise.
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Top Esports Deals and Investments in 2020 and 2021
Despite the coronavirus pandemic, the esports community has witnessed an explosive year of investment growth in 2020 and early 2021. Here is a brief summary of just some of the more significant esports acquisitions and investment transactions over the past year.
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Hello Again, Worlds: A Failed Gaming IPR Leads to § 101 Success
The tides have turned again in the litigation campaign against gaming companies by Worlds, Inc., who many may recognize as one of the named parties in often-cited Federal Circuit case law on real-parties in interest (“RPI”). In 2018, the Federal Circuit shook up the IPR landscape with a series of RPI decisions, starting with Wi-Fi One, LLC v. Broadcom Corp., which held that the PTAB’s time-bar determinations under § 315(b) are appealable. A series of frequently-cited Federal Circuit decisions followed, including Applications in Internet Time, LLC v. RPX Corp. and Worlds, Inc. v. Bungie, Inc.
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Activision Files Lawsuit Over the Rights to Use the Word “Warzone” in the Call Of Duty Series
On April 8, 2021, Activision Publishing, Inc. filed a lawsuit against Warzone.com LLC regarding the use of the word marks “Warzone” and “Call of Duty Warzone.” Activision is the publisher of the Call of Duty series of military-themed “first-person shooter” games. Warzone.com is the developer of a multiplayer turn-based strategy and negotiation game similar to Hasbro’s Risk.
Activision’s complaint alleges that, in 2020, Activision released a free-to-play multiplayer game titled Call of Duty: Warzone, a “large-scale, highly competitive, fast-paced military combat game in which 150 players fight to be the last soldier standing in a massive, detailed, fully-realized ‘Warzone,’ spanning…
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A Primer on Game Monetization
Despite all of the artistry that goes into making a game, at some point early in the development process the question must be asked, “How are we going to make money?” And with the ever-growing cost of developing modern games, this is no trivial question.
Technology has opened up a litany of new methods for monetizing games; gone are the days where a publisher’s only option was the uniform system of retail sales. Each modern method of monetization has different requirements for what a game must do to be implemented successfully, and these elements need to be intrinsically woven into…
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Nevada Moves to Create Esports Commission
The State of Nevada has taken to the initials steps to create an official commission governing esports with the introduction of Senate Bill 165, and its subsequent discussion in a hearing of the Nevada Senate Judiciary Committee on March 17, 2021. The proposed commission would be tasked with creating regulations overseeing esports competitions within the state. Such a move is the first of its kind in the US, and a major step as esports continues to move into the mainstream.
The size and composition of the commission was still being worked out, though the current draft of the bill…
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