Digital Law Conference: September 24 at 4:00 p.m. to 5:00 p.m. J. Michael Monahan, II, Attorney, Pattishall, McAuliffe, Newbury, Hilliard & Geraldson Michael H. Pinkerton, COO, Metaverse Mod Squad Neal Black, General Counsel, Live Gamer Shane McGee, Partner, Sonnenschein Nath & Rosenthal LLP

Why is metagaming an important issue when discussing MMORPGs? Most MMORPG designers work within a carefully designed virtual universe, precisely balanced to give every player an equal opportunity to play and enjoy the game. Metagaming can upset that balance -- or enhance the experience -- depending on foresight of the designers and the type of metagaming at issue.

Communicating outside of a game Phone calls? Instant messages? IP communication? Giving away the location of another player Disclosing the strength of enemy fortifications Communicating across factions (e.g., WoW Horde vs. Alliance) Exploits Terrain glitching Gold/item duping Cheats and bots (example: WoWGlider) Can “see” through terrain and other obstructions Reflexes of a computer Not subject to external “weaknesses” like other players (e.g., the need for food and sleep; school; work) Gold farming

Communicating outside of a game

Phone calls? Instant messages? IP communication?

Giving away the location of another player

Disclosing the strength of enemy fortifications

Communicating across factions (e.g., WoW Horde vs. Alliance)

Exploits

Terrain glitching

Gold/item duping

Cheats and bots (example: WoWGlider)

Can “see” through terrain and other obstructions

Reflexes of a computer

Not subject to external “weaknesses” like other players (e.g., the need for food and sleep; school; work)

Gold farming

On June 26, 2009, the Chinese Ministry of Commerce and Ministry of Culture released a joint circular prohibiting the use of virtual currency to trade in real goods and services Go to: http://english.mofcom.gov.cn

On June 26, 2009, the Chinese Ministry of Commerce and Ministry of Culture released a joint circular prohibiting the use of virtual currency to trade in real goods and services

Go to: http://english.mofcom.gov.cn

Virtual Items Scarcity (limited quantities or time or money) Collectability Ability to Display User Demand for Real-Money Trading Annual market for the secondary exchange of virtual items has been estimated at over $1.8 billion worldwide Itembay and ItemMania sold $974 million in virtual goods in 2006 Source: www.virtualgoods.com, Virtual goods in Asia: it’s even more than you think!, April 9, 2009

Virtual Items

Scarcity (limited quantities or time or money)

Collectability

Ability to Display

User Demand

for

Real-Money

Trading

Annual market for the secondary exchange of virtual items has been estimated at over $1.8 billion worldwide

Itembay and ItemMania sold $974 million in virtual goods in 2006

Source: www.virtualgoods.com, Virtual goods in Asia: it’s even more than you think!, April 9, 2009

Hernandez v. Internet Gambling Entertainment, Ltd.,US Dist Ct WD FL, 2007 Playfish, Ltd. v. Gosumall Digital Entertainment, US Dist Ct WD TX, 2009

Regulatory Landscape in the U.S. Financial services laws Illegal lotteries Auction licensing Income taxes (third-party information reporting) Sales tax laws Data security standards Privacy practices Export control laws Unclaimed property laws Other Legal Concerns: Ownership of intellectual property Terms of Service / EULAs

Regulatory Landscape in the U.S.

Financial services laws

Illegal lotteries

Auction licensing

Income taxes (third-party information reporting)

Sales tax laws

Data security standards

Privacy practices

Export control laws

Unclaimed property laws

Other Legal Concerns:

Ownership of intellectual property

Terms of Service / EULAs

Permit publisher-sanctioned transfer of licensed rights among users Be clear about ownership of virtual items / user-generated content Protect against “loss of value” claims: Allow for bannings, disruptions and discontinuance Allow for active management of in-game economy, game play and trading Disclaim any obligation to create a market in particular virtual items Obtain waiver of liability for any loss of value in virtual items Address RMT activities by parents and legal guardians of minors Provide for fair and equitable Alternative Dispute Resolution (consider Bragg v. Linden Research, Inc ., US Dist Ct ED PA, 2006) Prohibit disruptive / illegal conduct (e.g., gambling, money laundering, gold farming, etc.)

Permit publisher-sanctioned transfer of licensed rights among users

Be clear about ownership of virtual items / user-generated content

Protect against “loss of value” claims:

Allow for bannings, disruptions and discontinuance

Allow for active management of in-game economy, game play and trading

Disclaim any obligation to create a market in particular virtual items

Obtain waiver of liability for any loss of value in virtual items

Address RMT activities by parents and legal guardians of minors

Provide for fair and equitable Alternative Dispute Resolution (consider Bragg v. Linden Research, Inc ., US Dist Ct ED PA, 2006)

Prohibit disruptive / illegal conduct (e.g., gambling, money laundering, gold farming, etc.)

Section 230 of the CDA Immunity if operator did not create or develop the offending content Immunity Cases Defamation ( Amazon ) Invasion of privacy ( Matchmaker ) Sexual assault ( MySpace ) No Immunity Case Drop-down menu exception ( Roommates )

Section 230 of the CDA

Immunity if operator did not create or develop the offending content

Immunity Cases

Defamation ( Amazon )

Invasion of privacy ( Matchmaker )

Sexual assault ( MySpace )

No Immunity Case

Drop-down menu exception ( Roommates )

Who’s covered? Sites directed to children under 13 Any site that collects personal info from children What’s required? Posted privacy policy Verifiable parental consent before collecting personal info from kids Maine’s Super-COPPA Prohibits “predatory marketing” to minors

Who’s covered?

Sites directed to children under 13

Any site that collects personal info from children

What’s required?

Posted privacy policy

Verifiable parental consent before collecting personal info from kids

Maine’s Super-COPPA

Prohibits “predatory marketing” to minors

Digital harassment Anonymous Unsupervised Inseparable Harmful effects Self-esteem to suicide Legislation Megan Meier Cyberbulling Prevention Act (Pending) Empowering school administrators

Digital harassment

Anonymous

Unsupervised

Inseparable

Harmful effects

Self-esteem to suicide

Legislation

Megan Meier Cyberbulling Prevention Act (Pending)

Empowering school administrators

Digital Law Conference: September 24 at 4:00 p.m. to 5:00 p.m. J. Michael Monahan, II, Attorney, Pattishall, McAuliffe, Newbury, Hilliard & Geraldson Michael H. Pinkerton, COO, Metaverse Mod Squad Neal Black, General Counsel, Live Gamer Shane McGee, Partner, Sonnenschein Nath & Rosenthal LLP