Not all fun and games in copycat litigation

The gaming industry (and gamers) will be watching two recent US cases with great anticipation. In these cases, law suits have been brought against alleged copycat games, relying on causes of action including copyright, trade dress and patent infringement.

The decisions raise the important and interesting question – can you protect the rules and implementation of a game? What about the characters and their interaction? Or is it only the visual, literary, and software elements of a game that can be protected?

Magic: the Gathering v Hex: Shards of Fate

In May of this year, Wizards of the Coast (or WotC), a Hasbro subsidiary that is responsible for publishing the successful tabletop games Dungeons & Dragons and Magic: the Gathering, filed suit in US District Court against Cryptozoic Entertainment and its related company Hex Entertainment, the developers of a digital trading card game called “Hex: Shards of Fate”. WotC alleges that the game Hex is a clone of Magic: the Gathering products (specifically, the online version also run by WotC and a separate series of computer games entitled “Duels of the Planeswalkers”), and so infringes a number of aspects of WotC’s intellectual property, including copyright, patent, and trade dress. Cryptozoic has recently filed its response to WotC’s claims, denying any liability.

Hex was the subject of a very successful Kickstarter funding campaign, which raised over US $2,000,000 for a target of only US $300,000. Its Kickstarter page markets the game as a fusion between Massively Multiplayer Online Games like World of Warcraft (for which a trading card game was previously published by Cryptozoic) and Trading Card Games. While to a casual observer, one card game featuring swords and sorcery is much the same as any other, from a legal perspective this case is much more complicated.

As a general rule, copyright only prohibits reproductions of specified categories of creative expression, such as a literary work (like a novel, a script for a play or movie, newspaper article, or computer code), dramatic works (like a performance of Shakespeare’s Othello, say), or artistic works (like a drawing, painting or photograph), among other things. But there is no intrinsic protection for “games”, except to the extent the game is comprised of individual copyrightable elements – the game’s artwork for example, the plot or dialogue, background music, or in the case of a video game, the computer code that comprises the software for the game. The actual rules of a game, however, have generally not been considered to be copyrightable as they are considered to be ideas rather than expression – see for example the 2012 US case of Tetris Holdings v Xio Interactive (and our previous Whiteboard post on the same). WotC’s claim also includes alleged infringement of “play sequence and flow”, which is not an ordinarily recognised copyrightable work. The computer code that makes up the game software would be copyright protected (and indeed, much of the IP litigation in the video game space is based on pirates copying the software itself), but there is no suggestion in WotC’s claim that Cryptozoic or Hex have copied any of the computer code, only the game elements themselves.

This potentially opens the door for copycats to imitate a successful game, without technically infringing copyright. Such practice can be quite successful, as those familiar with the many “Flappy Bird” imitators that recently populated the top ratings on the iTunes and Google Play Stores will no doubt be aware. Unlike a film, or a book, or a drawing, the rules of a game will often be the key distinguishing feature or innovation that makes the game successful. However, game rules are merely ideas, and cannot be copyrighted themselves In the Tetris Holdings case, the Court found that specific implementations of the rules could be copyrightable – but does that mean an imitator merely needs to change the aesthetic coating of the game to avoid infringement while keeping the rules identical?

WotC may also have difficulties with their trade dress arguments. Under US law, trade dress refers to the visual and aesthetic appearance of a product, like its packaging or design. However, trade dress cannot extend to any functional aspect of the product. Although there are elements of Magic: the Gathering cards which are similar to elements of Hex cards as set out in WotC’s claim, it could be argued that those elements are not purely aesthetic but serve a functional purpose within the context of the game, and therefore are not eligible for protection under trade dress.

WotC’s final cause of action is for patent infringement. WotC owns US Patent No. RE 37,957 (a re-issue of the earlier US Patent 5,662,332), which claims in essence the method of a trading card game. The patent refers to the game involving “game components” rather than “cards”, so it does not appear to be limited to the physical manifestation of the game and could include implementations using digital objects.

However, patents may be invalidated at any time. If Cryptozoic/Hex were able to show that the WotC patent was invalid, for instance because it lacked novelty or inventiveness, WotC will lose the ability to enforce it against the world, let alone Cryptozoic/Hex. Furthermore, the patent was filed with a priority date of 22 June 1994 – which means its 20 year life span has already come to an end. Even if WotC succeeds in its patent infringement argument, it could not obtain an injunction to prevent Cryptozoic and Hex from launching their game; its only remedy would be damages or an account of profits made during the period between the first infringement and 22 June 2014.

Cryptozoic has raised the issues discussed above in its recent response to WotC’s claim.

If this case proceeds to final judgment, it will be an important landmark for the future of the gaming industry. Will the rules and implementation of a game be protectable IP sufficient to keep clones from competing? Or will game developers simply have to rely on the copyright in the visual, literary, and software elements of their game, and competitors must simply change those elements of to avoid infringement while using the same ideas? In that case, with the burgeoning games industry, should game design be given some form of sui generis intellectual property protection in functional gameplay elements? This case will also raise interesting issues for programs like Kickstarter – what happens when a project that gets funded by donations turns out to infringe intellectual property held by a third party? Are the donors entitled to be refunded? Or are they potentially authorising the infringement by providing funding?

Bang! v Legend of the Three Kingdoms

Meanwhile, in the non-digital world, another “cloning” lawsuit is underway. In Texas, Italian company DaVinci Editrice S.R.L., the creator of spaghetti-western themed card game “Bang!”, has commenced action against ZiKo Games LLC and Yoka Games, the creators of a competing card game named “Legends of the Three Kingdoms” based on the Chinese historical period and the associated mythology. DaVinci Editrice is alleging that Legend of the Three Kingdoms uses the same mechanical features of Bang! but changes the aesthetic (including artwork and instructions) to an Asian-themed alternative, including for example the hidden roles taken by each player (Sheriff, Deputy, Outlaw, and Renegade in Bang!; Monarch, Minister, Rebel, and Turncoat in Legend of the Three Kingdoms) and the associated objectives, and the character cards used by the players. DaVinci Editrice claims that in so doing, Legend of the Three Kingdoms infringes the copyrights in Bang! and is in breach of Texas’s unfair competition laws (a doctrine in the US for which Australia does not have a true equivalent). DaVinci Editrice sought a preliminary injunction, while ZiKo and Yoka sought summary dismissal.

Judge Rosenthal last week released her initial opinion in which she denied the injunction, on the basis that the artistic differences between the two games meant that a jury could reasonably find that they were not substantially similar (notwithstanding the duplication of some elements), which was insufficient to discharge the burden required to obtain preliminary injunctive relief. She also rejected DaVinci Editrice’s claims under Texas state law, as it did not plead any conduct separate from the claims under US federal copyright law, and so its unfair competition and unjust enrichment claims were explicitly pre-empted by the federal law.

However, Judge Rosenthal held that the character cards used in Bang! and the roles defining interaction between the players were creative expressions that were eligible for copyright protection, and noted that in role-playing games such as these, the artwork has less of an impact on the “total concept and feel” of the finished product than does the other creative methods a designer uses to shape the experience of the players through their individual decisions and interactions. As a result, DaVinci Editrice had presented a claim on which relief was possible, given the similarity of gameplay mechanics between the two games, and Judge Rosenthal denied ZiKo and Yoka’s motion to dismiss the matter.

Although only a first step in the litigation, this decision potentially strengthens the position of game designers such as WotC, as the more functional elements of gameplay could be considered creative expression eligible for copyright protection independently of the art, music, story, or other copyrightable elements of the game that may not themselves be infringed by an imitator.

Those of us with an interest in games, whether big budget blockbusters or addictive smartphone distractions, will watch this space with much anticipation.

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