Fast Company

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.

<a href=James G. Gatto" />Warcraft 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+.

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11 Comments

  • Marc Shakter

    These guys need to go after Wargaming. Their customer service is never ever consistent, their player base is downright abusive and harassing, and they encourage/excuse it.

  • Axgrindder

     These guys should take a look at some of the things going on with Kabam and their game Realm of the Mad God

  • Randydubbs

    dude i'm so fuckin pissed at KABAM'S BULLSHIT  its not funny spent well over a thousand dollars on Dragons of Atlantis for them to give me 8 million troops which took 3 days to collect and then they take them away after they awarded me them for buying rubies wtf!

  • ver7ex

    How awesome is that! I truly believe that Zynga is one step closer to finally dominate the gaming world. Only thing that they miss is the quality of the games. Not only replicas of one popular Farmville. We need something more like Warcraft on Facebook. Or even Google Plus. I don't care, as long as they keep us entertained.
    At this time I only believe that guys from http://freefarmvillegamecard.c... had made an astonishing work of holding every month contests for Farmville lovers. I urge you to have a look at the newest farms that are being uploaded every day. God, I wish there was any better game on this world, but there are simply none like Farmville!

  • kenBT

    "I'm pretty sure that World of Warcraft is neither free to buy nor free to play"

    That is exactly why it is a "Freemium" game; a mix of free and premium content.  A game is either completely 1) Free, 2) Paid/Premium or 3) In the middle- Freemium.   The whole "Free-to-Play" nonsense doesn't make any sense, the term may be a clever move from a marketing standpoint but it seems pretty deceptive.  Either it's Free, it's a one-time payment aka Paid/Premium, or it's a Freemium mix.    

    Interesting article, it will be cool to see how legal issues evolve in the future. 

  • Megan Carriker

    World of Warcraft is a subscription-based (Paid) game, though, with microtransactions now as well. There's nothing free about it except for trials. They *did* recently allow people to play up to level 20 for free but it's still a subscription-based game in general. It really shouldn't be listed at all with Zynga's FarmVille, which is purely free-to-play and based solely on the microtransactions business model. World of Warcraft is still one of the strongholds world-wide for the subscription-based model since, for nearly a decade, it has been required that you pay to play. And DC Universe is still subscription-based too, not freemium. It will be going free-to-play but not until October.

    Saying a game is free, paid/premium, or freemium doesn't really make sense. There's either free-to-play (F2P) which can have microtransactions and can have premium features...or subscription-based games, which can also include microtransactions and premium features. 

    Granted, there are some games that are free-to-play that don't have microtransactions or premium features (probably by monetizing through advertisements and sponsorships)...but that's still a F2P game. 

  • Steven Olsen

    There are 7 day trials of the game after which you have to pay your monthly fee to keep playing. If you want to get beyond level 60 then you need the expansion packs.

  • Ross P

    Yeah, um. WoW is not a 'freemium' game like Farmville. At. All. 5 minutes of research, or just asking your nerdy cousin or whatever could've answered that question for you. Otherwise interesting article.

    You can try it out up to level 20 for free, but that's it. If you want to play the most recent content? You have to pay for: The actual game. Every expansion that has been made thereafter: of which there are now three. That's about $100 right there, just to get where everyone is playing. Now add a monthly subscription of about $15. It is so not free. Blizz does sell virtual items for it's games through their store but they have no benefit to the player, they just look pretty. They range from $10 to $25.

    http://us.blizzard.com/store/b...