Legal Geek No. 101: "Down the Stretch They Come" in TM Infringement

Welcome back to Legal Geek!  This week, we celebrate the upcoming horse racing season in my neck of the woods, with a look at an April Appeals Court decision that was a loss for Churchill Downs, the track where next week's Kentucky Derby is held.

https://archive.org/details/LegalGeekEp101

Several racing track owners including the Churchill Downs owner filed suit in late 2015 against another racing venue Kentucky Downs and video-based gambling system software developer Exacta Systems.  The claim was for trademark infringement in the use of the trademarked names of these other tracks within the gambling system made by Exacta and used at Kentucky Downs to allow for betting on races taking place at other venues.  So down the stretch they come to the courthouse!

According to the lower court and Appeals court decisions, the gambling system works by showing a computer-generated simulation of a horse race as it happens.  On the screen is an identifier of the location of the race, AKA the name of the track in a field behind the word Location. 

The track owners asserting infringement argued that this was unauthorized use of their trademarks because consumers of the gambling services would incorrectly assume that the venues themselves are the source of the computer-generated recreations of the horse races.  In short, these other track owners wanted to cut off gambling profits happening at rival tracks based on their own races.

The Sixth Circuit Court of Appeals summarily disagreed with this argument.  The Court noted that these computer generated recreations are sufficiently different from the product sold by the other track owners, which is live horse racing.  It appears that if live video of actual footage from the other tracks were used, that would have been more problematic, but that was not the case here opined the Court.  Essentially, the Appeals Court agreed that this use of the trademark names was a non-TM use more akin to a factual recounting of race results in a newspaper, which cannot be stopped by trademark owners.

The Court also noted that the consumer confusion argument was not persuasive because if the gambling system showed an inaccurate result, the person using it would likely take up complaints to Kentucky Downs and Exacta, where they are located rather than the other tracks.  Without potential consumer confusion, trademark infringement cannot exist. 

The Bottom Line is, although trademark rights are important for businesses to have, they do have some clear limits in scope.  This lawsuit was exposed as something of a cash-grab between competing horse racing tracks because the trademark infringement claim was too expansive for the limits of trademarks. But as horse racing season rounds the bend and heads for home, I'm sure there will be plenty of profits to be made for all these gambling tracks and sites.

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Thanks for reading. Please provide feedback and legal-themed questions as segment suggestions to me on Twitter @BuckeyeFitzy

Legal Geek No. 100: Pokemon Go = Virtual Trespassing?

Welcome back to Legal Geek, and we are happy to celebrate the 100th installment of this segment.  Thank you to all listeners who send feedback or suggestions, and I look forward to seeing some of you at Nerdtacular.  Now, on with the segment.

This week, we check in on an interesting lawsuit filed against Niantic, the makers of Pokémon Go, for virtual trespassing and other wrongs.

https://archive.org/details/LegalGeekEp100

Pokémon Go was the craze of summer 2016, and the software application has undergone some updates recently to keep it fresh.  Niantic still brings in over $30 million dollars monthly with this app, so the game remains highly popular as the weather warms up and brings people back outside for 2017.

However, making big money and successful endeavors often brings threats in the form of legal action.  This case is interesting because it looks legitimate, and the case may be on the cutting edge as virtual reality and enhanced reality games and devices go more mainstream.

Residents of several states have joined claims in California federal court to sue Niantic for placing virtual items in the form of Pokémon, Pokestops, or Gyms on their property, causing many people to trespass and damage those properties.  The primary theory is that this placement of the virtual items is a type of new virtual trespass, but there's also an argument that the damage and intrusions are caused by negligence on the part of Niantic.

As to the virtual trespass claim, Niantic has a fairly strong response in that trespass laws, while varied from state to state, typically do not protect from intrusions of intangible items like noise, vibrations, dust, or chemical clouds.  Trespass is a fairly specific type of tort, and creating a new version of that would have potentially large unintended consequences for other developers in the VR field and elsewhere.  Thus, as interesting as the concept of virtual trespass may be, it is not established in law by the states or federal government, and it seems unlikely that the court will expand the law to cover the facts presented by the plantiffs of this case.

Turning to the negligence argument, that potentially has some legs.  Even though Niantic warns players when they log in against going into unauthorized or dangerous areas, that would not necessarily protect them from liability if the overall development of the app was deemed careless or thoughtless in such a manner that encourages activities that lead to things like unwanted trespass and/or property damage.  Indeed, this is likely the very reason Niantic prevents players from operating the app at speeds of over 15-20 miles per hour, so as to avoid carelessly encouraging players to play and drive distracted.

Thus, it will be interesting to see if this case proceeds beyond initial summary judgement stages, and if so, whether Niantic will be the first to define the limits of what developers can do with VR and augmented reality type experiences.  It's possible that like some parks in places like Milwaukee, the plaintiffs (and any other aggrieved party) may be able to negotiate an agreement with Niantic to prevent the game assets from popping up at certain hours of day, or maybe completely.  But it will be more interesting if there is not a settlement like that.

The Bottom Line is, even though Pokémon Go is a lot of fun for users, just ask my 8 year old and 6 year old, and even though many businesses love the extra foot traffic caused by getting people outside hunting Pokémon in their area, it's not a desire shared by everyone, especially private property owners.  With VR and similar technology on the rise, law will need to adjust and adapt to fit the circumstances, in a similar way as trespass laws with respect to airspace and drone usage.  Who knew Lapras, Charizard, and Dragonite would lead the charge to settling these issues in court?

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Thanks for reading. Please provide feedback and legal-themed questions as segment suggestions to me on Twitter @BuckeyeFitzy

Legal Geek No. 99: Blizzard Stops Cheating Software in a Big Week

Welcome back to Legal Geek.  This week, we review another recent case of a favorite game developer taking on cheating and hacking services with great success, and this time it's Blizzard Entertainment.

https://archive.org/details/LegalGeekEp99


A few weeks back we looked at how Nintendo and Riot Games were protecting their gaming customers in court, and Blizzard is right there with these other game giants in this regard. This week was already big week for Blizzard, with BlizzCon tickets going on sale as well as a new Hearthstone expansion and year, and an announced drastic re-design to Heroes of the Storm. But the week also was successful in court for the company from Irvine.

Last year, Blizzard sued a German company called Bossland in California federal court as well as in German courts where that other company is located, alleging copyright infringement. Bossland is one of the leading developers of cheats and bots for use with several Blizzard games, including programs called Honorbuddy, Stormbuddy, and Hearthbuddy. Essentially, the argument for Blizzard is that Bossland's programs bypass Blizzard's cheat protection technology, which is a hacking action that allegedly violates the DMCA, while also allowing users to play modified versions of these games, AKA, unauthorized derivative works of the game titles that are copyright infringements.

The cheating and use of bots causes damage to Blizzard because it negatively affects their normal paying customers, and therefore potentially their reputation and market share. With these big companies putting lots of intellectual property and programming in place to protect their rights and their consumers, it is no surprise that Blizzard has multiple actionable claims against a company like Bossland. It's also no surprise these legal claims are fairly strong.

Bossland decided to not defend itself actively in the U.S. case, so a quick judgement was achieved this week in favor of Blizzard. Blizzard proved over 42,000 violations, which led to over 8.5 million dollars of statutory damages. An injunction against further sales or marketing of the cheat programs in the U.S. has also now been established. However, that ruling doesn't stop Bossland from operating in other countries, and the CEO of that company vows to keep fighting especially in their hometown German courts.

The Bottom Line is, Blizzard is just like other major gaming companies in protecting its customers and future revenue streams by fighting cheaters with bans and even legal actions like these. It's doubtful the hefty copyright damages award can be effectively collected in this case, but it's a positive development for fair players who want to keep enjoying all the big things Blizzard releases in this week and future weeks.

Finally, a few weeks ago we explained the confirmation process for Supreme Court nominees and the potential nuclear option of removing filibusters for such nominees. That has come to pass this week, as the Republican Senators could not obtain sufficient votes to overcome a filibuster, so we will see Gorsuch on the court...but it's unclear whether this nuclear option move will be a net loss long term as the filibuster because less and less pertinent for important issues. Stay tuned, everyone.
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Thanks for reading. Please provide feedback and legal-themed questions as segment suggestions to me on Twitter @BuckeyeFitzy