Category: intellectual property

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trademarks

Do I need a Metaverse Trademark?

Luxury goods company Gucci recently bought a plot of LAND in the Sandbox Game, an Ethereum-based play-to-earn game. This LAND is a virtual real estate plot (in the form of an NFT or non-fungible token) where Gucci plans to sell in-game clothing and collectibles. As futuristic as this seems, Gucci is not the only major company looking to get into the Web3.0 space. Walmart, McDonalds, Panera, Victoria’s Secret, Nike, and L’Oréal are just a few of the big players that recently filed trademarks specifically to protect their intellectual property in the Metaverse.

Nike has become particularly active. The company created a Nikeland experience in the popular Roblox game world (along with companies like Vans, Chipotle, and Hyundai, which also have staked out territory on Roblox). Nike also recently acquired RTFKT, a studio that specializes in NFT development and in January 2022, Nike announced the formation of Nike Digital Studios to create and deliver Metaverse and blockchain-based user experiences. Additionally, Nike has filed for dozens of trademarks to protect its virtual brand, including the use of its name and logo in online art, virtual goods, video games, and avatars. With a multi-billion dollar company like Nike trademarking dozens of its NFTs, many game developers, NFT collectors, traders, crypto bros, and others wonder whether they, too, should file for trademark protection within the Metaverse for their brand.

Do Gaming Developers Need Trademark Protection?

Absolutely. Games, gaming, and software in general are highly-competitive industries. Unfortunately, there is not much stopping a third party from copying your design and profiting off of it. This can create – not only marketplace confusion – but irreparable damage and dilution of your valuable brand. This can happen to companies big and small. Additionally, if you fail to trademark your game, brand, logo, catchphrase, etc., your competitor can come in, copy your brand, and then accuse you of violating their rights. While it is possible to file for retroactive trademark protection and win eventually, the easiest (and cheapest) protection is filing a trademark right away.

Do I Need to Trademark my NFT?

Yes. It is essential for you to trademark your NFT in order to protect it from copycats. The United States is a first-to-use country, which means your NFT will already have some automatic protections after minting. However, it would be very tough protecting your unregistered “common law” trademark in the worldwide NFT marketplace. Additionally, it would be very difficult to defend an unregistered NFT trademark in any sort of legal dispute should a third party copy your idea. Filing a trademark with the USPTO ensures validity and protection within all fifty states.

Trademarking your NFT creates a brand identity that is uniquely yours. Trademarking a unique slogan, logo, or design can be a valuable marketing tool for you going forward and add tremendous value to your project. After all, intellectual property rights are what you actually own when it comes to non-physical property like NFTs (and software or computer code in general).

Copyright is another important intellectual property right for NFT owners, users, buyers, and sellers. For example, it is critical to ask what rights you are actually buying when purchasing an NFT? Is there an agreement to transfer the copyright? A license? Nothing at all? Lack of clarity in the NFT transfer process can and will lead to litigation, more so as NFTs become more and more widespread.

How Do I Protect my NFT Internationally?

You can protect your NFT internationally, provided that you also apply for international registration during your initial trademark filing. Under the Madrid Protocol (which is an international treaty for the uniform protection and registration of trademarks), a registration through the USPTO can also be registered in other countries with a single application.

What is a benefit of international registration? International registration allows you to use a foreign country’s laws and judicial resources to enforce your mark in that country. A USPTO registration still allows enforcement through a U.S. based court, even if the infringer is in a foreign country. However, even if you prevail, you might not be able to enforce the U.S. court’s judgment abroad. An international trademark registration opens up a number of other enforcement options. If you are interested in international trademark registration, this is something to discuss at your initial consultation.

What Types of Things Should I Trademark?

Here is a non-exhaustive list of items that could potentially qualify for trademark protection:

  • Avatars
  • Logos
  • Game Name or Gaming Development Company’s Name
  • NFTs
  • Virtual Goods (avatar skins, digital art, etc.)
  • Color Schemes
  • Particular Sounds (The coin grab ding from the classic Mario Brothers game comes to mind here.)
  • Slogans

What Cannot be Trademarked?

The United States Patent and Trademark Office (USPTO) has a set of guidelines that lists some of the following reasons for trademark rejection:

  • Likelihood of Confusion – If you create a game called GranD Turismo 7, you could not trademark that name because people could confuse it with Gran Turismo 7, the newest addition to PlayStation’s highest selling video game franchise. Sony owns the trademark to protect against competitors who seek to profit off of its name recognition by creating a similarly named game. Thus, you cannot trademark GranD Turismo 7.
  • Merely Descriptive and/or Intentionally Misleading – For example, you can’t trademark the words “fun and entertaining.” Even though your game is both fun and entertaining, these only describe the game itself and don’t necessarily make your game unique, so you can’t trademark them. Likewise, the USPTO will reject your trademark if it is intentionally misleading. For example, if your game’s name is “Play with Cryptocurrency,” but the game does not play with cryptocurrency, the USPTO reviewer could consider this game name intentionally misleading and deny your trademark.
  • Primarily a Surname – For example, Smith’s Play-to-Earn Game is primarily a last name (and merely descriptive) would not be suitable for a trademark.

How do I file a trademark for my game or NFT?

Whether you’re filing a trademark for an NFT, a digital avatar, a slogan, or your business name, Artaev at Law has the professional expertise to help you do it right. Artaev at Law, together with the specialized trademark attorneys at Mighty Marks, now offers a fixed fee, all-inclusive trademark service. Contact Dan Artaev at dan@artaevatlaw.com for additional information.

Disclaimer: This guide is for general informational and promotional purposes only. Nothing herein constitutes legal, investment, or tax advice. Every situation is different and faces its own unique set of challenges. Do not take any action or sign any contract until you have obtained specific guidance from a qualified professional. Any link to or reference to any specific project is not an endorsement of or validation of that project and is for solely informational purposes.

Who Owns Your Invention? The Concepts and Inventions Assignment Clause, Work-For-Hire, and the Shop Right Doctrine.

In the modern employment context, there are plenty of on-boarding documents, including a handbook, that the employee may be asked to sign as part of getting hired. Lurking in these pages of seemingly innocuous workplace policies may be critical obligations and restrictions that significantly restrict the employee’s rights. For example, non-compete and non-solicitation clauses are becoming more and more common in all industries. Also, there may be another Trojan Horse to watch for, especially in high-tech industries – the so-called “concepts and inventions assignment clause.” This clause essentially assigns all of the employee’s inventions, innovations, and discoveries that they make or create while working for the employer to the employer. And even in the absence of such a clause, the employer may claim rights as work-for-hire, or have limited rights under the “shop right doctrine.”

A “concepts and inventions clause” is a contractual obligation that is becoming increasingly standard in employment documents. It can be stand-alone, part of an employment contract, or even hidden in an employee handbook or manual. The clause gives the employer automatic and exclusive rights to inventions, conceptualizations, and other ideas created during the employer-employee relationship. The idea is that since the employer is paying the employee to dedicate 100% of his or her time to the business, and the employer is also providing the tools, space, and other means for the employee to work, the employer owns all of the fruits of the employee’s labor. The scope and breadth of the contract is up to the parties. However, some states (most notably California), limit the scope of such agreements by law. In those states, the agreement may not cover independent inventions – meaning inventions that are created on the employee’s own time without using any of the employer’s resources. For example, if an employee is a software designer, but goes home and creates a new type of mechanical circular saw in her garage during evening hours. Even if there is a general assignment clause, it likely would not be enforceable. Michigan does not have a law limiting the scope of the assignment clause/contract, which means that a Michigan employer could potentially claim rights to the new saw design, even if the invention has nothing to do with the employer.

In a high-tech context, a “concepts and inventions clause” may also list express exclusions. If Company A is hiring an inventor, the inventor would list all of the prior inventions that Company A has no rights to and the inventor retains. At the same time, the list benefits Company A because the inventor cannot later claim rights to an invention that is not on the list. Additionally, the clause (whether it is stand-alone or part of a broader employment agreement) often contains an integration clause, which prevents parties from claiming they had a side-deal or different understanding. And, there are “teeth” to provide that in case of a litigated dispute, the losing party would pay the prevailing party’s attorney fees, thereby discouraging lawsuits over ownership of an invention.

A similar situation occurs when an employer hires an employee for a specific purpose – that is to create a work-for-hire. Even without a contractual assignment clause, the employer will own the rights to any resulting invention where it is the outcome of the specific employment relationship. For example, Company A hires an engineer to invent a new chassis platform to use across Company A’s pickup truck line. The work results in a patentable invention and Company A owns 100% of the rights to the chassis. Even if the inventor did some of the work on his or her own time or otherwise made out-of-work contributions to the project, it would be considered a “work-for-hire” where the employer – or the “hirer” – owns all rights to the resulting innovation. The owner Company A is then free to license, sell, or otherwise assign the patent rights, and keep all of the profit, without providing the inventor with any additional compensation.

What about the situation where there is no “concepts and inventions clause” and there is no specific “work-for-hire” arrangement? Does the inventor always own 100% of the rights to his or her invention, even if created on company time? No, because of something called the “shop right doctrine.” The doctrine is a common-law concept (meaning it is a principle created by the courts, as opposed to the legislature). In general, the doctrine allows the employer to continue using the invention, but precludes the assignment or licensing of the invention to third-parties. In other words, the employer gets a royalty-free limited license to use the invention, but cannot sell it. The doctrine also requires that the invention be created using an employer’s resources, such as a laboratory, computer, or analytical equipment. The shop right doctrine is a defense to patent infringement that the employer can rely on if sued by the inventor – it is not an affirmative or assignable right.

What does this mean for employers and employees? If you are hiring or being hired, and anticipate the relationship may produce a valuable invention, concept, or other innovation, you should consult with an attorney to ensure your rights are protected. After-the-fact litigation is not only costly, but incredibly uncertain in outcome, and should be avoided as much as possible. As an employer, you want to make sure to have solid and well-defined assignment clauses for your employees to sign. And, because at least 9 states have statutory limitations on the scope of the assignment agreement, it is best practice to draft any assignment to be enforceable across the entire United States. As an employee, you need to make sure you are not inadvertently signing away more rights than you intend to, and are fully aware of your respective rights and obligations.

On a final note, these concepts (as well as other intellectual property concerns) also apply in the university context. Professors and graduate students are constantly innovating and creating, but whether they or the university own the final outcome may be something that they have not considered. In a famous example, Larry Page (one of the founders of Google), is listed as an inventor on one of the key patents that served as the foundation for Google. However, Stanford University owns the patent because Larry Page was a Ph. D. student there at the time of the invention. Consequently, Google had to license the patent from Stanford University for a hefty nine-figure sum. So while a university may not claim rights to inventions made by students as a matter of policy, they will likely claim rights to inventions made by employees. A graduate student or a post-doc is like a professor, in the sense that they are often employees of the university. Your specific institution likely has a tech transfer department, as well as its own policies and regulations. Again, an experienced attorney can help you protect yourself and stay informed of your rights and obligations.

Questions or concerns about your situation? Contact Artaev at Law PLLC to set up your initial consultation or call or text Dan today.

Disclaimer: This guide is for general informational and promotional purposes only. Nothing herein constitutes legal advice. Every situation is different and faces its own unique set of challenges. Do not take any action or sign any contract until you have obtained specific guidance from a qualified professional.


© 2021 Artaev at Law PLLC. All rights reserved.

So You’ve Designed a Board Game. Do You Need a Patent, Copyright, or Trademark?

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Board games are still big business. Even before the pandemic limited entertainment options, the board game industry already accounted for $1.8 billion of sales in 2013 – or almost 10% of the entire toy market in the United States. In the first half of 2020’s lockdown, Hasbro reported a 4% increase in gaming revenue over the same six month period in 2019. The global board game market is projected to grow to over $20 billion by 2025, and the ubiquity of online retail has made board games a truly global industry. And, digitization of board games (making them available on smartphones and tablets) has only increased the popularity and accessibility of these products for mainstream consumers.

Although the board game market is not as big as video games, board games have significantly lower development costs and can be designed without specialized knowledge like graphic design, coding, etc. Like writing a book, anyone can do it, so long as they come up with a good concept, it is entertaining, and the execution works. For example, one of the most popular games that has made millions of dollars is Cards Against Humanity. An R-rated version of Apples of Apples, the design and concept is extraordinarily simple – it consists of questions or concepts on black cards, and words or sentences to create an absurd/funny/offensive response on the white cards. Yet the concept was so well-executed and entertaining that it became an instant hit.

The relative simplicity of board game design however poses a host of unique legal issues. As a developer, you may have already been threatened with legal action, or worse, have had to defend yourself from a lawsuit. Or, perhaps you are considering legal action against a blatant copy of your original idea. Protecting your concepts and business requires an understanding of the three primary forms of intellectual property protections: copyright, trademark, and patent law. So what do you need? As always, the answer is “it depends.”

Copyright

Intuitively, board games should enjoy some sort of copyright protection. After all, they consist of booklets, printed boards, and other materials not dissimilar from literary works. As a general rule, the rules, boards, artwork, and other aesthetic or literary elements to a game are copyrightable and protected as such. These protected elements are referred to as the “theme” of the game. Distinct from the “theme” of the game are the game mechanics, which cannot be copyrighted. “Game mechanics” is the actual gameplay – which can be as simple as roll the dice and move a token. The United States Copyright Act codifies this concept and expressly states that copyright protection does not extend to “any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” 17 USC 102(b). As an example, the “Monopoly” name, mascot, property names, and token designs would all likely be protected under copyright law. However, the game play concept itself – that is moving around the board, buying up properties, and charging rent to other players who land there – is not. There is no bright line rule however, especially given the increased complexity of board games and card games, and each situation will be driven by its own unique factors.

Trademark

Trademark protection exists chiefly to prevent customer confusion and to protect the integrity of a brand. In the board game context, trademark will primarily protect the name of the game, but can also protect unique “trade dress” elements that constitute unique game board designs, cards, and tokens. For example, in addition to owning the trademark for “Monopoly,” Hasbro also registered recognizable designs from the game, including the railroad symbol, the “jail” and “go to jail” images, and the layout of the “Monopoly” game money. As an aside, the actual status of the “Monopoly” trademark is unsettled, as following years of legal proceedings, a 1983 appellate court case decided that “Monopoly” had become a generic terms and no longer was associated with the source publisher, Parker Brothers. Congress responded to the ruling by amending the Lanham Act to clarify that purchaser motivation is not the test and that a mark can only be deemed generic when its “primary significance” to the general public is the generic description of particular goods or services.

Patent

Patents are most often associated with scientific discoveries and mechanical devices. In the board game context, a patent may be available to protect a game’s unique mechanics. Again, we are not talking about general methods of play here, but rather something truly unique. A so-called utility patent could be available if the mechanics meet the unique and non-obvious test. However, patent protection is fairly expensive to obtain and to police, so while patent protection may be available, it may not be practical. Also, any sort of public disclosure, such as playtesting, may defeat patent claims. “Monopoly” was actually patented in 1935 by Parker Brothers, with the description including the rules, the “apparatus of a board game consisting of a continuous path around the board,” and other claims, including the Chance and Community Chest cards. The patent has little value however, as it expires in 20 years, and is so specific that it likely limits the protective scope of the patent itself.

Other Intellectual Property Concerns

The most two common questions designers ask are: (1) I am making a game; how can I prevent someone from copying it? and (2) I am making a game that is similar to X; how do I avoid getting in trouble for copying? While you may have taken steps to protect your intellectual property, the fact is that board games are especially vulnerable to knockoffs and plagiarism. The low development cost and lack of “trade secret” type secret components make it simple for an unscrupulous developer to simply take a game, rebrand it, and release it as their own. International law may even become an issue if an overseas company takes and repurposes your idea. By hiring an attorney as part of your team, you can ensure that you have taken the right steps to obtain copyright protection for your rules, art, etc., and that you have properly registered your trademarks. An attorney can also ensure that any contractors – such as artists – properly assign all rights back to the game developer through “work for hire” agreements. Licensing agreements with any publisher must also delineate the rights and responsibilities of all parties. Royalties and assignments must be fair, clear, and definite. If you have a co-designer or a business partner, you must absolutely have a business agreement before your idea starts making money, so there are no surprises or hard feelings. If there are copyright concerns or knockoffs, a DMCA takedown notice or demand letter is often an effective tool to dissuade would-be thieves. Conversely, if you are receive a takedown notice or demand from another designer, you need to have an effective and prepared attorney ready to respond.

Contact Artaev at Law PLLC to set up your initial consultation. We are Michigan’s gaming law firm and we specialize in the unique concerns that you may encounter as a game designer.

Disclaimer: This guide is for general informational and promotional purposes only. Nothing herein constitutes legal advice. Every situation is different and faces its own unique set of challenges. Do not take any action or sign any contract until you have obtained specific guidance from a qualified professional.


© 2021 Artaev at Law PLLC. All rights reserved.

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Beer, the Lions, and Intellectual Property: An Updated Cautionary Thanksgiving Tale.

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Update: Since I originally published this article, Eastern Market Brewing has resolved its issues with Barry Sanders and no longer uses his likeness on the beer can. Same Old Lager is available again, and instead of a Lions player wearing the number 20, the brewery’s mascot graces the can against a pixilated, video-game style football field. The marketing and slogans still stand and continue to play on the Lions’ reputation for mediocrity – and perhaps Eastern Market can capitalize on the Lions’ recent coaching and GM change to push their cleverly branded lager.

Still, many lessons here for any enterprising business owner. Intellectual property law has many hidden pitfalls, and falling into one not only will cost legal fees to defend against a cease-and-desist, but also disrupt your marketing and sales.

Detroit’s own Eastern Market Brewing Company came up with a genius marketing idea: a beer called “Same Old Lager,” a clever play on the “same old Lions” saying that has become familiar to Detroit football fans after years of mediocre results. The slogan for the crisp 4.5% ABV lager is “don’t set your expectations too high” and the beer itself was announced the same day the Lions suffered a crushing 20-0 defeat to the Panthers, and just about a week out from the Lions’ annual Thanksgiving game. Clever marketing, impeccable timing, free media attention. Hit product, right?

Wrong. Apparently someone forgot to run the new product by their lawyer or if they did, their lawyer missed a big problem. The day after the new lager was announced, it was removed from sales in response to Barry Sanders’ cease-and-desist for unauthorized use of his likeness on the cans. The retro-video-game-style logo featured a pixelated football player in a Lions uniform with the number 20 (Barry Sanders’ famous number) carrying a football against a gridiron backdrop. Mr. Sanders quickly took to social media to disclaim any affiliation with the product and announced that his image was being used without his permission. As quickly as the new beer was announced, production and sales were halted. Opportunity lost and a genius marketing plan derailed.

I have previously written about Peloton and how the billion-dollar publicly-traded behemoth was facing millions dollars in liability for unlicensed use of music in their workout videos. In today’s digital world, intellectual property rights are more critical than ever, and the Eastern Market snafu is just the latest example of how (presumably inadvertent) infringement can happen. So what did the company do wrong? And how could they have done it right?

What did they do wrong?

The brewery’s marketing ploy was actually very clever. Nothing in the slogan or description expressly referred to the Lions. The Detroit Lions is a valuable trademark, along with the logo, so Eastern Market obviously did not want to pay for its use or licensing. A marketing campaign that riffs on the Lions’ reputation for consistent mediocrity, but does not expressly reference the Lions does not violate the trademark itself. In a nutshell, trademark law prohibits unauthorized use of a mark in a manner that is likely to cause confusion about the source of the goods or services. When something is clearly parody, let alone does not use the actual mark, there is no trademark violation. In other words, no one can reasonably claim that they think a beer called “Same Old Lager” is somehow actually endorsed by the Detroit Lions.

The problem was not trademark law – rather, it was the “right to publicity.” A pixelated video-game likeness of a Lions player wearing Barry Sanders’ famous number 20 jersey graces the front of the can. Generally, a celebrity like Mr. Sanders owns the rights to his own image and has the right to control its distribution. Here, the brewery used Mr. Sanders’ likeness on the beer, implying his endorsement. Accordingly, his legal team took action, which lead Eastern Market to take down its new product, likely pending a new can design. Even if Eastern Market decided to make the case in court and fight back, the campaign momentum has been disrupted, and even so, Mr. Sanders’ case appears to be fairly strong and supported by decades of caselaw. The “right to publicity” is a concept dating back to the 1950s and is related to copyright law, although they two are not the same. There are cases that have protected everything from Vanna White’s likeness that Samsung tried to replicate as a robot, to Bette Midler’s voice, to Johnny Carson’s catchphrase “Here’s Johnny,” to a human cannonball circus act. And, of course, there is a number of exceptions, including when a likeness is used for educational purposes, news items, public issues, and even “entertainment and amusement concerning interesting aspects of an individual’s identity.”

How could they have done it right?

The brewery should have requested a legal opinion from an attorney approving the marketing as well as the packaging. Once the attorney flagged the right to publicity issue and the possible misuse of Barry Sanders’ likeness, a minor redesign would have likely taken care of the issue. Changing the number of the player, removing the number, changing the uniform colors, or any other number of tweaks are possible options. Another potential issue is the design’s likeness to the beloved retro football game “Tecmo Bowl” – and an attorney should have researched and cleared that issue (potential copyright infringement) as well before the design went to print.

The bottom line is that the marketing team can get ahead of the legal team. Copyright, trademarks, patents, licensing, and the “right to publicity” are all important concepts that all business owners should be aware of. Doing it right may cost a little bit more in the short run, but can avoid significant costs down the line.

Need a legal opinion about your marketing campaign? New logo? Design? Product? Contact Dan Artaev by email or by text or call today to set up your free consultation.

Disclaimer: This article is for general informational and promotional purposes only. Nothing herein constitutes legal advice and is the author’s individual opinion. Every business is different and faces its own unique set of challenges. Do not take any action with respect to your business until you have obtained specific guidance from a qualified professional.

© 2020 Artaev at Law PLLC. All rights reserved.

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