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Meet The Video Game Lawyers

In the high-stakes corporate tort system, an elite squad of legal eagles handle lawsuits dealing with "World of Warcraft," "FarmVille," and others in the big business of video games. These are their stories.

Some lawyers deal with corporate torts. Others prefer video games.

The legal issues surrounding gaming—everything from virtual currencies in games like World of Warcraft to privacy issues surrounding a corporate sponsor's virtual world—are a hot topic these days. One large corporate law firm, Pillsbury LLC, has built a dedicated team to handle video game and virtual world cases. A boutique industry has popped up to handle the glut of video game cases out there which also includes Sheppard Mullin and Canada's Davis LLP.

Virtual currencies are one of the major issues that video game lawyers deal with on a daily basis. James G. Gatto, a partner at Pillsbury and the head of the firm's Virtual Worlds and Video Game Team, tells Fast Company that a host of overlapping local, state, and national regulations all surround the trade of virtual currencies online. Laws regarding debit card usage, for instance, can affect how payments for online currencies are processed. Banking laws regulate how American video game fans purchase payments on European and Japanese games as well. There is also the added difficulty of dealing with P2P virtual currencies such as Bitcoin.

More traditional issues such as intellectual property—which carried over from movies, books, and music into the world of Xboxes and MMORPGs—are also a factor. In one notable case, an attorney represented World of Warcraft manufacturers ActiVision Blizzard in an intellectual property suit against the makers of the Wowglider bot. Wowglider was a "trainer" that automatically played the lower and more boring levels of Warcraft on a player's behalf so they could move on to more exciting levels. Blizzard argued that the bot software, which sold at $25 apiece (and which was purchased by a staggering number of customers—more than 100,000 Warcraft players worldwide obtained copies) violated Warcraft's terms of service. A federal appeals court eventually sided with Blizzard and found that Wowglider was illegal under U.S. copyright law.

Pwned.

Blizzard has taken a pugnacious legal approach to protecting the rights to Warcraft. The video game maker has been in numerous lawsuits over the years over everything from scanning users' computers to find pirated copies of software to suing eBay for reselling strategy guides for their games.

James G. GattoWarcraft is a "freemium" game—the software can be obtained for free, with the manufacturer betting that profits will come from subscription fees and optional add-ons that the addicted player will later obtain. Given the right game, it is an extremely lucrative model. Zynga, the makers of FarmVille, have become insanely rich through their freemium games. According to Gatto, laws surrounding freemium games and cloud-based games are becoming important issues to video game developers: "There are tremendous issues surrounding cloud-based gaming; the business model used for most of these games is a freemium one that has copyright and intellectual property issues" surrounding it.

Freemium games such as Warcraft, FarmVille, and DC Universe online, along with their mobile counterparts, have two obvious attractions: They're free and they use sophisticated psychological techniques to lure the player in for just one more hit. However, this also has a legal flipside. Video game developers who switch over to cloud-based hosting could leave themselves open to patent lawsuits. If a user's Internet connection lags, they could miss an important fight/game event and potentially have grounds for a lawsuit. Cloud-hosted games are especially likely to be the subject of data breaches and information theft. Even communications between players—an important part of cloud-hosted multiplayer games—could be subject to government investigations if, say, criminal activity or potential acts of terror are discussed.

Gatto also tells Fast Company that gamification law is likely to be an important topic over the next year. A series of Federal Trade Commission (FTC) guidelines adopted in 2009 regulate paid product endorsements by users of Twitter, Facebook, and other social media services. These guidelines are intimately tied in to gamification—after all, brands regularly use immersive online games to build product loyalty. Developers of gamified applications have to take these FTC guidelines under advisement or they leave their parent companies open to potential legal trouble.

[Images: Pillsbury LLC]

For more stories like this, follow @fastcompany on Twitter. Email Neal Ungerleider, the author of this article, here or find him on Twitter and Google+.