Richmond Journal of Law and Technology

By: Zaq Lacy, Associate Executive Editor

Whether you love it, hate it, or simply do not care, it is a nearly foregone conclusion that you have heard of Fortnite Battle Royale, Epic Game’s free-to-play online massive multiplayer action shooter game,[1] which features a frenetic combination of firefights and construction with highly customizable characters. Released in August of 2017, it has grown to have over 200 million users, a number nearly that of the population of Brazil.[2] Despite being free-to-play for those who do not wish to purchase the standard or deluxe editions,[3] Epic Games raked in a record $2.4 billion dollars in 2018 alone from in-game purchases, mostly from character customization,[4] which can include outfits and celebratory dance moves that cost up to $20 apiece.[5]

It is these dance moves that have been the focus on legal troubles for Epic over the past few months.[6] The issue that has risen is that several of these moves were drawn from various sources of pop culture, from hip-hop artists to YouTube stars to actors, without permission or recompense.[7] This has resulted in several copyright infringement lawsuits being leveled against Epic by rap artist 2 Milly for their use of his dance move “Milly Rock,”[8] rap artist BlockBoy JB for their use of his dance move “The Shoot,”[9] YouTuber Russell Horning (aka “the Backpack Kid”) for their use of his viral dance move “the Floss,”[10] and actor Alfonso Ribeiro (The Fresh Prince of Bel-Air) for their use of his classic dance move “the Carlton.”[11] The complaint for 2 Milly’s lawsuit argues that “Epic has unfairly profited from exploiting [2 Milly’s] protected creative expression and likeness.”[12] Moreover, 2 Milly argues that the “Milly Rock” dance move is his ‘signature,’ and that “everybody would tell you, from here to Alaska, ‘Hey, that’s the Milly Rock.’”[13] Unfortunately, it does not seem like argument will be able to overcome the applicable law set out by Congress.[14]

The Copyright Act provides guidance for the general subject matter that is covered by copyright.[15] Regarding dance, it provides that “pantomimes and choreographic works” are covered,[16] though Congress made it clear that “‘choreographic works’ do not include social dance steps and simple routines.”[17] Further, the U.S. Copyright Office has stated that “the combination of these three dance steps is a simple routine that is not registerable as a choreographic work.”[18]

Despite the clarification, the differences between dance moves and actual choreography are subtle. For example, another YouTuber, choreographer Gabby David, successfully reached a settlement with Epic games[19] after Epic ‘borrowed’ a ten-second section of a dance routine that she posted on YouTube.[20] The reasoning behind the settlement seems to be because, even though the ten second clip only contained a few of the dance moves, not dissimilarly to those involved in the active lawsuits, they were part of a larger portion of choreography developed and recorded by Ms. David.[21] Seemingly, the only difference between the dance moves in question and that of Ms. David were the fact that the aforementioned moves consisted of a limited number of movements that simply repeated while Ms. David’s were part of a larger performance.

With the prevalence of social media and other mediums that are borne of the technology that is now available to nearly every creative person that wishes to share a particular skill, such as sweet dance moves, it is necessary to revisit the statute that was last truly updated in 1976,[22] long before the internet had even been truly invented. From a policy perspective, the antiquity of this law could potentially have a stifling effect on the creativity of countless individuals if they feel they cannot develop a signature move that popular culture recognizes as their own simply because someone else can take it, assimilate it into their own medium, and charge a substantial amount for it. However, barring any unexpected court rulings, until Congress takes fresh look at § 102(a)(4), it seems that Epic’s own move, “the Hustle,” is safe from the threat of lawsuit as long as they do not take their moves from a fully choreographed routine.

 

[1]See FortniteBattle Royale, Epicgames.com, https://www.epicgames.com/fortnite/en-US/buy-now/battle-royale (last visted Mar. 7, 2019).

[2]See Christopher Palmeri, Fortnite Now Has 200 Million Players, up 60% from the Last Count, Bloomberg LP (Nov, 26, 2018), https://www.bloomberg.com/news/articles/2018-11-26/fortnite-now-has-200-million-players-up-60-from-the-last-count.

[3]SeeFortnite, supra note 1.

[4]See Matt Porter, How Much Money Did Fortnite Make in 2018?,Dextero.com(Jan.16, 2019), https://www.dexerto.com/fortnite/how-much-money-did-fortnite-make-in-2018-285995.

[5]SeeDevon Pendleton & Christopher Palmeri, Fortnite Mania Fuels Epic Growth up to $8.5 Billion, Bloomberg LP(July 24, 2018), https://www.bloomberg.com/news/features/2018-07-24/fortnite-phenomenon-turns-epic-game-developer-into-billionaire.

[6]See Madeline Schrock, Why Fortnight’s Dance Animations Are a Can-of-Worms Copyright Problem, Dancemagazine.com(Dec. 13, 2018), https://www.dancemagazine.com/fortnite-2623060212.html.

[7]See id.

[8]See id.

[9]See id.

[10]SeeSteve Knopper, Why Fortnight Is Accused of Stealing Dance Moves, Rolling Stone(Dec. 19, 2018), https://www.rollingstone.com/music/music-features/fortnite-epic-games-2-milly-stealing-dance-moves-769344/.

[11]See id.

[12]See id.

[13]See supranote 10.

[14]Eric Garrett, ‘Fresh Prince’ Actor’s Lawsuit Over ‘Fortnite’ Dance Gets Surprising Update, Comicbook.com(Feb. 14, 2019), https://comicbook.com/gaming/2019/02/14/fresh-prince-actor-lawsuit-fortnite-dance-surprising-update/.

[15]17 U.S.C. § 102

[16]17 U.S.C. § 102(a)(4)

[17]Circular 52 Copyright Registration of Choreography and Pantomime, U.S. Copyright Office, at 3 https://www.copyright.gov/circs/circ52.pdf (last visted Mar. 7, 2019).

[18]See supranote 14.

[19]See supranote 6.

[20]Gabby J. David, “Bad & Boujee” – Choreography, YouTube.com(Jan. 26, 2019), https://www.youtube.com/watch?v=LcAFlWXlql8.

[21]See supranote 6.

[22]H.R. Rep. No. 94-553, at 2545 (1976).

Image Source: https://fortniteintel.com/youtuber-lawyer-discuccess-epic-games-emote-lawsuits/9203/

By: Florian Uffer

A Background on Cryptocurrency

The relatively recent rise in cryptocurrency has significantly affected the financial world. As it becomes evident from the stock price, Bitcoin, the name generally associated to cryptocurrency, experienced a growth of about 2020% between January 2017 and mid-October 2017.[1] For 2017, the S&P 500’s average total return was 9.7%.[2] In light of such a return the growth that Bitcoin posted during that year is unfathomed. In order to realize such a growth in investment, however, an investor would have had to time it perfectly. Indeed, since that peak in mid-October, Bitcoin has plummeted and lost 82%.[3] This example elucidates the constant uproar around cryptocurrency, as its financial attributes are both cherished among bullish investors, while also disapproved of by risk-averse financial players.

The financial world was not the only one affected by the surge of cryptocurrency. The law has had trouble grasping this movement and is still struggling to effectively govern it: as a consequence, cryptocurrency still lacks a single regulatory body.[4] The main hurdle facing regulators consists of a difficulty in properly classifying the range of cryptocurrencies that exist.[5] This analysis, however, will only focus on cryptocurrencies used as a medium of exchange and provide a proposed answer as to whether the SEC has the ability to regulate them as securities. This analysis concludes that the SEC does not have the authority to regulate cryptocurrencies used as a medium exchange as investment contracts.

The Howey Test

The 1934 Securities Act’s definition of a “security” provides a catch-all provision – an “investment contract.”[6] The Supreme Court in S.E.C. v. W. J. Howey Co.stated that “an investment contract for purposes of the Securities Act means a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”[7] Put differently, an investment contract exists if there is a contract, transaction, or scheme and the following elements are present: (1) a person invests money (2) in a common enterprise and (3) is led to expect profits (4) solely from the efforts of the promoter or a third party.

The Howey Test Applied to Cryptocurrency as a Medium of Exchange

There are two main ways to acquire Bitcoin: (i) buy it from one of the many exchanges, or (ii) acquire it as payment for the delivery of goods or services.[8] In the first instance, it seems clear that in order to purchase Bitcoin, one has to come forth with a sum of money. Consequently, a purchaser would be investing money in order to obtain it and it would thus seem that purchasing Bitcoin would meet the first requirement of the analysis. As to the second instance, the Supreme Court in International Brotherhood of Teamsters v. Danielnoted that “[i]n every decision of this Court recognizing the presence of a ‘security’ under the Securities Acts, the person found to have been an investor chose to give up a specific consideration in return for a separable financial interest with the characteristics of a security.”[9] But, the Court continued, “[t]his is not to say that a person’s ‘investment,’ in order to meet the definition of an investment contract, must take the form of cash only, rather than of goods and services.”[10] Therefore, the first element of the Howey test is likely met.

            As to the second element, there are three ways of showing the existence of a common enterprise: horizontal commonality, broad vertical commonality, and narrow vertical commonality.[11] Circuits are unanimous in holding that horizontal commonality satisfies the second Howey factor, but are split as to whether either type of vertical commonality is sufficient.[12] When obtaining cryptocurrency, one does not pool his assets into an enterprise along with other investors; rather, one simply exchanges money or services for an alternative method of payment. A simple analogy can be drawn to exchanging U.S. Dollars for a foreign currency. Horizontal commonality is therefore lacking. Further, neither of the vertical commonalities are applicable to cryptocurrencies used as a medium of exchange. There is simply no promoter or third-party upon which the value of the “investment” in cryptocurrency depends. Instead, its value depends on government regulation, political and economic upheaval, and media and trader enthusiasm.[13]Consequently, cryptocurrency as a medium of exchange most likely does not meet the second factor.

The third factor of the Howey test is likely met. Although Bitcoin is used as a currency, its value drastically changes over time, even from day to day. Furthermore, the economic reality is that many people buy Bitcoin with the hopes that its value will rise and that they will be able to exchange it for more value. Therefore, it is reasonable to conclude that people investing in or buying Bitcoin have an expectation of profit.

Finally, the nature of cryptocurrency leaves the fourth factor of the Howey test hard to determine. Although just like stock, purchasers of Bitcoin are hoping that outside factors will cause its value to go up, there is no “effort” or “work” in the background which affects the value of Bitcoin. Rather, the value largely depends on government regulation, political and economic upheaval, and media and trader enthusiasm.[14] Whether these factors could be considered as “efforts of the promoter or of a third party” is difficult to determine. However, because the second Howey factor is not met, such an analysis is not required.

Conclusion

This analysis concludes that cryptocurrency used as a medium of exchange is not an “investment” contract under the Howey standard. Therefore, the SEC would not have the authority to govern it as such.

 

[1]Bitcoin USD (BTC–USD), Yahoo Finance(last visited Feb. 6, 2019), https://finance.yahoo.com/quote/BTC-USD?p=BTC-USD.

[2]Michael Santoli, The S&P 500 has Already met its Average Return for a Full Year, but Don’t Expect it to Stay Here, CNBC (June 19, 2017, 9:19 AM), https://www.cnbc.com/2017/06/18/the-sp-500-has-already-met-its-average-return-for-a-full-year.html.

[3]See supra note 1.

[4]See id.

[5]See Daniel Araya, The Challenges of Cryptocurrency Regulation,The Regulatory Interview(Oct. 9, 2018), https://www.theregreview.org/2018/10/09/araya-challenges-cryptocurrency-regulation/.

[6]See 15 U.S.C. § 78c(a)(10) (1934).

[7]See S.E.C. v. W. J. Howey Co., 328 U.S. 293, 294–296 (1946).

[8]See 5 Easy Steps to Get Bitcoins and Learning How to Use Them, Weusecoins (last visited Feb. 7, 2019), https://www.weusecoins.com/en/getting-started/.

[9]International Brotherhood of Teamsters v. Daniel, 439 U.S. 551, 559 (1979).

[10]Id. at 560 n. 12.

[11]“[H]orizontal commonality requires the pooling of assets from multiple investors so that all share in the profits and risks of the enterprise … Broad vertical commonality requires that the well-being of all investors be dependent upon the promoter’s expertise … [N]arrow vertical commonality requires that the investors’ fortunes be ‘interwoven with and dependent upon the efforts and success of those seeking the investment or of third parties.” See S.E.C. v. SG Ltd., 265 F.3d 42, 49 (1st Cir. 2001).

[12]See generally SG Ltd, 265 F.3d at 49–50.

[13]Why is Bitcoin’s Price Going Up or Down?, Finder (last visited Feb 7, 2019), https://www.finder.com/why-is-bitcoins-price-going-up-or-down.

[14]See supra note 13.

By Sarah Alberstein

Despite the fact that Amazon has quickly become the center of e-commerce, it has essentially evaded antitrust scrutiny.[1] But, it seems that this pattern of antitrust evasion is changing. In 2017, Lina M. Khan published a Yale Law Journal Note titled Amazon’s Antitrust Paradox.[2] In it, Kahn posits that Amazon’s business and marketing scheme has resulted in a low-profit yet overwhelmingly expansive business presence which has seeped into the consciousness of the average consumer – and, the consumer loves it.[3] One of Amazon’s main tactics has been to undercut pricing of brick-and-mortar stores until the stores go out of business, and then Amazon takes over the physical space once the original stores are gone. [4] This combination of consumer preference and satisfaction, price-cutting and retail takeovers, while still generating negligible net profits, Kahn argues, have allowed Amazon to essentially evade antitrust scrutiny while still benefiting from the marketplace evil antitrust law attempts to stamp out – anticompetition.[5] It seems, however, that international regulatory bodies are catching on.

Austria has become yet another country to launch an antitrust probe into Amazon’s practices.[6] The Austrian Federal Competition Authority (“BWB”) stated that it “will examine whether Amazon is discriminating against smaller stores using its platform and is favoring its own products on the Amazon marketplace.”[7] This investigation is similar to a 2018 European Union antitrust probe designed to “determine whether or not Amazon puts…third-party sellers at a disadvantage by using their sales data to boost Amazon’s own sales.”[8] Also in 2018, yet another investigation was launched by the German antitrust authority, The Bunderskartellamt.[9] The German investigation centered around determining whether Amazon is preventing fair e-commerce competition by overpowering other German online retailers, and forcing consumer and seller dependence on Amazon.[10]

Like the international shifts towards stricter application of antitrust law to Amazon, similar shifts are gaining ground in the United States.[11] Lina M. Kahn, the aforementioned author of Amazon’s Antitrust Paradox, was recently hired at the Federal Trade Commission and will be participating in hearings on competition and consumer protection.[12] Additionally, Congress is starting to pay attention to large tech company business practices through an antitrust lens.[13] Ranking member of the antitrust subcommittee of the House Judiciary Committee, Rep. David Cicillene, D-R.I. has stated his vision for the subcommittee as to “figure out the responsible way to regulate these large plaforms so that we are promoting competition, protecting privacy and making them responsible stewards of lots and lots of data” by “hold[ing] congressional hearings with the companies and technology experts, craft regulations, and…engage the public on issues of limiting corporate power.”[14]

Both scholastic and legislative scrutiny has emerged, prompting local and international attention to Amazon’s business practices and impact on the e-commerce marketplace. While Amazon has grown to become a giant within the e-commerce, and general retail space, without much antitrust scrutiny, it seems that the beginning of the end of this period is near for Amazon.

[1] Lina M. Kahn, Amazon’s Antitrust Paradox, 126 Yale L. J. 3 (Jan. 2017), https://www.yalelawjournal.org/note/amazons-anttrust-paradox.

[2] Id.

[3] Id.

[4] Chris Sagers, Crack Down on Amazon, Slate (June 19, 2017), https://slate.com/business/2017/06/yes-there-is-an-antitrust-case-against-amazon.html.

[5] Id.

[6] Boris Groehndahl, Amazon’s Legal Woes Grow in EU as Austria Opens Antitrust Probe, Washington Post (Feb. 14), https://www.washingtonpost.com/business/on-small-business/amazons-legal-woes-grow-in-eu-as-austria-opens-antitrust-probe/2019/02/14/34a7289a-3050-11e9-8781-763619f12cb4_story.html?noredirect=on&utm_term=.018fe4232048.

[7] Id.

[8] Sara Salinas, Amazon hit by EU Antitrust Probe, CNBC (Sept. 19, 2018), https://www.cnbc.com/2018/09/19/eu-probing-amazons-use-of-data-on-third-party-merchants.html.

[9] David Reid, Amazon is Being Investigated by the German Antitrust Autority, CNBC (Nov. 29, 2018), https://www.cnbc.com/2018/11/29/amazon-investigated-by-the-german-antitrust-authority.html.

[10] Id.

[11] Priya Anand, Amazon Antitrust Push Slowly Gains Ground, The Information (Jul. 19, 2018), https://www.theinformation.com/articles/amazon-antitrust-push-slowly-gains-ground.

[12] Id.

[13] April Glaser, Antitrust in the House, Slate (Jan. 16, 2019), https://slate.com/technology/2019/01/antitrust-david-cicilline-congress-facebook-google-monopoly.html.

[14] Id.

 

By: Kara Powell

Now more than ever, some people tend to post their whole lives on social media. Not only “friends” are seeing these posts anymore – photos and messages on social media may end up in court. New York State Supreme Court Judge Michael Corriero explains his experience with social media as follows: a defense attorney for a weapons charge tells Judge Corriero “he’s never had a weapon in his life, judge.”[1] Judge Corriero goes “on Facebook and [he] see[s] the kid there with two guns in each hand with a big smile on his face.”[2]

Social Media and Discovery:

A trend has been emerging to allow discovery of social media posts and messages, both public and private.[3] For example, the Florida Court of Appeals held both private and public photographs on Facebook are discoverable evidence in a civil suit.[4] The court explained that “Facebook itself does not guarantee privacy. By creating a Facebook account, a user acknowledges that her personal information would be shared with others. Indeed, that is the very nature and purpose of these social networking sites else they would cease to exist.”[5]

However, the Florida Court of Appeals distinguished the Nucci case from Root v. Balfour Beatty Construction, LLC.[6] The Root court ordered a much broader production of evidence from Facebook.[7] The requested material included videos, postings, photos, statuses, and likes, without any limitation.[8] The Root court held the discovery request was “’overbroad’” and compelled “’the production of personal information . . . not relevant to’ the [party]’s claims.”[9] In general, as long as the request is not overbroad, social media posts and messages are discoverable evidence.

Social Media and Bail Hearings:

Due to the increasing discoverability of social media posts and messages, such evidence can come in against defendants at every stage of the adjudication process. Even before trial, social media posts can affect defendants at bail hearings, determining whether a defendant is released or detained pending trial.

Federal judges must consider four factors set out in 18 U.S.C. § 3142(g) when determining whether a defendant should be released pending trial. A defendant’s Facebook posts are most relevant to the second factor: “the weight of the evidence against the person.”[10] For instance, if the government presents evidence of a defendant’s social media posts with photographic proof of the defendant committing the alleged crime, this increases the weight of the evidence against the person. In United States v. Choate,[11] the firearm with which the defendant was charged was “identical to one that [d]efendant can be seen holding in a video posted to Facebook.”[12] The judge determined the weight of the evidence (the second factor under § 3142(g)) was substantial, and noted the “alarming content” of the defendant’s Facebook posts.[13]

In addition, in United States v. Tolbert, the court concluded the weight of the evidence against the defendant was strong because the government introduced evidence of a Facebook message the defendant sent on the day of his arrest which included threats to the victims of his alleged crimes.[14]

At any point in the adjudication process, past posts and messages from Facebook can come in against defendants. In sum, be careful what you post.

 

[1] Eames Yates, A Judge Explains How Facebook Can Be Used Against You in Court, Bus. Insider (May 14, 2017, 7:19 AM), https://www.businessinsider.com/judge-explains-how-facebook-social-media-photos-can-be-used-against-you-in-court-2017-5.

[2] Id.

[3] See Heather Antoine, Judges Increasingly Allow Discovery of Private Facebook Content, IPWatchDog (Apr. 23, 2015), http://www.ipwatchdog.com/2015/04/23/judges-increasingly-allow-discovery-of-private-facebook-content/id=57060/.

[4] Nucci v. Target Corp., 162 So. 3d 146, 153–54 (Fla. Dist. Ct. App. 2015).

[5] Id. (internal quotations omitted).

[6] See Root v. Balfour Beatty Construction, LLC, 132 So. 3d 867 (Fla. 2d DCA 2014).

[7] See Id. at 869.

[8] See Id.

[9] Nucci v. Target Corp., 162 So. 3d 146, 154–55 (Fla. Dist. Ct. App. 2015) (citing Root v. Balfour Beatty Construction, LLC, 132 So. 3d 867, 868 (Fla. 2d DCA 2014)).

[10] 18 U.S.C. § 3142(g)(2).

[11] See United States v. Choate, No. 18-30179, 2018 U.S. Dist. LEXIS 58869, at *4 (E.D. Mich. Apr. 6, 2018).

[12] Id.

[13] United States v. Choate, No. 18-30179, 2018 U.S. Dist. LEXIS 58869, at *9 (E.D. Mich. Apr. 6, 2018).

[14] See United States v. Tolbert, No. 3:09-CR-56-TAV-HBG, 2017 U.S. Dist. LEXIS 198744, at *16-18 (E.D. Tenn. Dec. 4, 2017).

 

By: Kirk Kaczmarek

Pirates exist all over the world – not of the swashbuckling Captain Jack Sparrow variety, but the digital. Napster, Limewire, and The Pirate Bay are all popular platforms for sharing digital media freely and illegally. All three platforms have lost their preeminence due to litigation. However, even without their proverbial ships, the pirates remain. The music industry loses $12.5 billion to pirates annually.[1] Current trends project the film and television industry will hit $52 billion in losses to pirates by 2022.[2] And in 2014, Tru Optik estimated the video game industry lost $74 billion to pirates.[3]

To place these losses into perspective, consider global revenue. In 2018, the global video game industry produced $135 billion in revenue.[4] By comparison, the global music and film/television industries produced about $130 and $286 billion respectively.[5]

Digital rights management (DRM) has emerged as video game developers’ solution to the piracy problem. Transactions with DRM typically are not sales. Rather, the consumer pays a one-time licensing fee for access to the content. The DRM itself is a technology that prevents consumers from copying software. For the consumer, the transaction feels like a sale. For the business, the transaction protects copyrighted material by preventing piracy. However, this layer of security comes with drawbacks for consumers – law-abiding consumers cannot create additional copies for personal use, nor sell the original copy.[6] Furthermore, DRM is hardly a foolproof defense. Hackers regularly crack DRM and distribute the software.[7]

The music industry has already run its experiment with this form of DRM. In the early 2000’s, Apple, Microsoft, and other music distributors attached DRM to their digital music files. In the old days, people could go buy a vinyl record, an 8-track tape, or a CD and play it on any machine capable of reading the data; people could make as many copies as they wanted, or sell the original copy. With DRM, this kind of activity became impossible – for example, a song purchased on from Apple’s digital marketplace could only work on Apple devices and could not easily convert to a CD.[8] Additionally, consumers who purchased music with DRM ran the risk of losing that music if the servers hosting the media ever shut down.[9] Consumer outcry, (ultimately unsuccessful) antitrust lawsuits, and the advent of streaming services prompted digital music distributors to drop this form of DRM.[10] Streaming services like Spotify still attach DRM to the music files, but consumers view this as less intrusive – they aren’t paying to “own” the music. The film and television industries followed a parallel pattern, resulting in streaming services like Netflix.

Digital video game marketplaces today mirror those of the early 2000’s music and film industries. For example, Valve’s industry-leading digital video game marketplace for PC, Steam, attaches DRM to all game files.[11] To play a game via Steam, the consumer must launch the Steam application and either have an internet connection, or place the account in “offline mode” and reauthorize that mode on a bi-monthly basis; this prevents people on other computers from accessing games associated with that account. Consumers cannot make copies of the game, nor sell the original copy.[12] And because all the games require access to Steam’s servers, consumers are completely locked into the Steam ecosystem – if Steam were to go out of business, then presumably all 125 million of its users would lose access to the games they have “purchased.”[13]

And yet DRM remains a false barrier. Hackers invariably break the DRM and release the software, and pirates invariably steal it. If DRM does not prevent piracy and hurts the consumer, then why have it? Elmar Fischer, sales director for leading DRM technology firm Denuvo, claims initial sales are the focal point. DRM is only intended to actually function for a few weeks.[14] Thus, DRM and its associated licensure contracts are tools poorly suited to fighting an unwinnable war against piracy.

Furthermore, Fischer’s explanation cannot fully explain DRM’s prevalence. Because DRM is only briefly useful against piracy, and because consumers do not like DRM, why not allow it to expire following its usefulness? A short thought experiment may reveal some of the rational. If you are a developer, then you can place your game with Steam and other distributors – like the Xbox marketplace – to sell with DRM. This DRM locks the software into that distributor’s gaming application. If consumers purchase your game on Steam, but also want to play it on their Xboxes, they will need to buy additional copies for their Xboxes too.[15]

Some distributors, however, are pushing the industry away from this type of DRM. Notably, CD Projekt’s GOG only sells DRM-free games through its digital marketplace, though its catalogue of games is older and much smaller than Steam’s.[16] Additionally, free-to-play mobile games circumvent this particular issue altogether by basing their pricing plans on micro-transactions made during gameplay. However, traditional and free-to-play games appeal to different markets, and therefore a discussion of their different anti-piracy and contracting strategies may not be directly comparable.[17]

 

[1]The True Cost of Sound Recording Piracy to the U.S. Economy, RIAA (2019) https://www.riaa.com/reports/the-true-cost-of-sound-recording-piracy-to-the-u-s-economy/.

[2]DTVE Reporter, Piracy Cost to TV and film industry US$52bn by 2022, DTVE (Oct. 30, 2017), https://www.digitaltveurope.com/2017/10/30/piracy-to-cost-tv-and-film-industry-us52bn-by-2022/.

[3]See Luke Graham, Can Can video game piracy be stopped in two years?, CNBC (Jan. 14, 2016), https://www.cnbc.com/2016/01/14/can-video-game-piracy-be-stopped-in-two-years.html.

[4]See James Batchelor, Global games market value rising to $134.9bn in 2018, Gameindustry.biz (Dec. 18, 2018), https://www.gamesindustry.biz/articles/2018-12-18-global-games-market-value-rose-to-usd134-9bn-in-2018.

[5]Films Industry – Statistics & Facts, statistahttps://www.statista.com/topics/964/film/.

[6]See Digital Rights Management and Technical Protection Measures, Office of the Privacy Commissioner of Canada (Nov. 2006), https://web.archive.org/web/20160414002554/http://www.priv.gc.ca/resource/fs-fi/02_05_d_32_e.asp.

[7]See Ian Birnbaum, The Best Video Game DRM in the Business Is Getting Cracked Before Games Even Launch, Motherboard (Nov. 12, 2018), https://motherboard.vice.com/en_us/article/3k9qnw/the-best-video-game-drm-in-the-business-is-getting-cracked-before-games-even-launch.

[8]See Josh Lowensohn, Jury Finds Apple not liable of harming consumers in iTunes DRM case, The Verge (Dec. 16, 2014), https://www.theverge.com/2014/12/16/7402695/jury-decision-in-iTunes-iPod-DRM-case; Is it possible to burn Apple Music songs to CDs?,  NoteBurner, https://www.noteburner.com/apple-music/burn-apple-music-to-cd.html.

[9]See Mike Masnick, Reason #9,358 For Not Buying DRM’d Music: Walmart Shuts Down DRM Servers, techdirt (Sep. 29, 2008), https://www.techdirt.com/articles/20080929/0004132388.shtml.

[10]See id.  

[11]See Jennifer Menendez, How Steam Employs DRM & What That Means For Your Game, Black Shell Media (Jun. 28, 2017), https://blackshellmedia.com/2017/06/28/steam-employs-drm-means-game/.

[12]See id.

[13]See id.See also Taylor Soper, Valve reveals Steam’s monthly active user count and game sales by region, GeekWire (Aug. 3, 2017), https://www.geekwire.com/2017/valve-reveals-steams-monthly-active-user-count-game-sales-region/.

[14]See Haydn Taylor, Denuvo: “There is no uncrackable game. What we do is protect initial sales”, Gamesindustry.biz (Aug. 29, 2018), https://www.gamesindustry.biz/articles/2018-08-29-denuvo-and-irdeto-on-protecting-early-sales-from-piracy.

[15]See Charlie Osborne, Google engineer: DRM has nothing to do with piracy, ZDNet (Mar. 20, 2013), https://www.zdnet.com/article/google-engineer-drm-has-nothing-to-do-with-piracy/.

[16]See About GOG.com, https://www.gog.com/about_gog.

[17]See Max Preusse, The Dual Audience Dilemma: Appealing to Both Traditional and Crypto Gamers, Medium (May 23, 2018), https://medium.com/the-notice-board/the-dual-audience-dilemma-appealing-to-both-traditional-and-crypto-gamers-d75c584de84e.

Image Source: https://www.publicdomainpictures.net/en/view-image.php?image=119017&picture=pirate-ship-silhouette

By: Eric Richard

A big question floating around the legal industry these days is “what’s next?” There are mounting threats from artificial intelligence (AI), machine learning automation, and alternative legal service providers (ALSP) that seem to grow without hindrance on a regular basis.[1] There’s even competition specifically from four of the largest accounting firms that are threatening to siphon off work usually done by big law firms.[2] The legal industry has always been fierce with competition, such is a hazard of the profession, but what is changing the game recently is competition coming from other industries, as just mentioned.[3]

Deloitte & Touche, Ernst & Young, KPMG, and PricewaterhouseCoopers (the “Big Four”) are the four largest accounting firms in the world.[4] Over the past ten years, the Big Four have been creeping in on services traditionally offered by big law firms.[5] While the Big Four are not able to provide legal services in the U.S., they can in fact provide services that are “legal adjacent,” like e-discovery.[6] “Legal adjacent” meaning services that are able to be performed by those without a legal education and are usually done in preparation for services that do require them to be performed by a licensed attorney. E-discovery is a good example because anyone or any company is capable of gathering information in preparation for litigation, but only a licensed attorney can litigate the issue being researched. This selection of services is carving out a niche for itself among providers that can accomplish the tasks at less of a cost than the average law firm.[7]

So, what exactly has been the effect of these alternative legal service offerings from non-law firms? According to reports, approximately 23 percent of large firms and 21 percent of medium firms say that they have lost at least some of their business to the Bog Four over the previous year.[8] It’s not just individuals and business capitalizing on ALSPs, it’s law firms themselves as well.[9] In another report performed by Thomson Reuters in 2019, 87 percent of law firms that responded said that they were utilizing ALSPs 56 percent more than the rate of use in 2015.[10] This shows that not only do firms themselves have to worry about losing business to ALSPs, but the lawyers working for those firms are losing out as well. After all, faced with competition, what other choice do firms have than to incorporate the new business practices in order to keep up with the changing market?

Often this is referred to as “future proofing.” It’s the practice of taking steps now to take advantage of innovative ideas or practices in order to transition a business more successfully into the future.[11] In further efforts to “future proof” law firms have also begun looking inward for adaptation and not just to what is being offered by ALSPs.[12] Firms are even beginning to grapple with the concept of cryptocurrency when it comes to estate planning and accepting payments for services.[13] While this adaptations may seem small to some, they are an indication of drastic change to come in both the way law firms operate and the type of services that are likely to be offered.

[1] See Jason Tashea, ABA Techshow to delve into ‘future proofing’ law practices, A.B.A.J. (Jan. 29, 2019), http://www.abajournal.com/news/article/techshow-to-deal-with-future-proofing-the-practice-of-law.

[2] See Jason Tashea, Should BigLaw firms worry about increasing competition from the Big Four accounting firms?, A.B.A.J. (Sept. 2018), http://www.abajournal.com/magazine/article/law_firms_competition_accounting.

[3] See id.

[4] See id.

[5] See id.

[6] See Jason Tashea, Alternative legal services providers come into their own as major players, says news report, A.B.A.J. (Jan. 30, 2019), http://www.abajournal.com/news/article/alternative-legal-service-providers-worth-over-10-billion-come-into-their-own-says-new-report/.

[7] See id. See also Jason Tashea, Should BigLaw firms worry about increasing competition from the Big Four accounting firms?, A.B.A.J. (Sept. 2018), http://www.abajournal.com/magazine/article/law_firms_competition_accounting.

[8] See Jason Tashea, Alternative legal services providers come into their own as major players, says news report, A.B.A.J. (Jan. 30, 2019), http://www.abajournal.com/news/article/alternative-legal-service-providers-worth-over-10-billion-come-into-their-own-says-new-report/.

[9] See id.

[10] See id.

[11] See Jason Tashea, ABA Techshow to delve into ‘future proofing’ law practices, A.B.A.J. (Jan. 29, 2019), http://www.abajournal.com/news/article/techshow-to-deal-with-future-proofing-the-practice-of-law.

[12] See id.

[13] See id.

By: Annie Mullican

These days, it is hard to read an article or get on any form or social media or television without hearing about politics, and how terrible everything is. Every headline is a scandal or a mean quote by one public figure about another public figure. I gave up looking forward to a time when Democrats and Republicans would begin to work together years ago. But I was pleasantly surprised when I saw a news article about the PACT Act that is projected to be passed by Congress this session. The PACT Act stands for the Preventing Animal Cruelty and Torture, and it is a bill that would make animal cruelty a federal felony. Having taken an Animal Law class, I am keenly aware of the little protections that animals are afforded legally. However, I think many people both in law school and throughout the country will be most shocked by this law because they will realize that animal cruelty is actually not a federal felony. Videos depicting animal cruelty are considered a federal crime, but the underlying acts of cruelty themselves right now are not, which makes no sense. In my opinion, this law is monumental for our government in many ways right now.

 

The men behind this movement are two Florida congressmen: Ted Deutch (Democrat) and Vern Buchanan (Republican).^[1] These two congressmen say that they believe this law will close a large gap in our federal laws.^[2] Right now, all 50 states have laws that outlaw animal cruelty at the state level.^[3] However, if those criminals were to take animals across state lines, the original state would have no jurisdiction, and thus no power to go after those criminals.^[4] I think these two Congressmen are right – this bill will close a gaping gap in our country’s laws federal laws, and immensely aid law enforcement in catching abusers – especially those involved in animal fighting. Congressman Ted Deutch stated, “This is common sense, bipartisan legislation to bring some compassion to our animal laws.”^[5] So, if this is such a common sense law (which it is) why hasn’t it been passed already? According to these two Congressmen, in the past, the PACT Act has received unanimous support in the Senate, with over 284 bipartisan House cosponsors.^[6] In fact, the only reason the act has not passed in the past, according to these Congressmen was because House Judiciary Chairman Bob Goodlatte prevented it from coming to the floor.^[7] The Congressmen are optimistic that the bill may be passed with new Chairman Jerrold Nadler (D-NY) serving.^[8] The bill of course contains exceptions for hunting, veterinary care, or any actions to protect life or property from a serious threat from an animal.^[9]

 

I, too, am optimistic about this law. In a world where it feels like values and compassion have been abandoned, it is very nice to know that kindness and compassion for our furry friends is what continues to bring people together.

^[1] Proposed law could make animal cruelty a federal felony,”WECT NEWS, (Jan. 28, 2019) http://www.wect.com/2019/01/28/proposed-law-would-make-animal-cruelty-federal-felony/

^[2] Id.

^[3] Id.

^[4] Cole Higgins, “A Proposed Law will Make Animal Cruelty a Federal Felony,” CNN, (Jan. 28, 2019) https://www.cnn.com/2019/01/28/us/animal-cruelty-federal-felony-bill-trnd/index.html

^[5] Id.

^[6] Id.

^[7] Id.

^[8] Christopher Brito, “Proposed Law Would Make Animal Cruelty a Felony Across the U.S.” CBS, (Jan. 28, 2019) https://www.cbsnews.com/news/animal-cruelty-bill-re-introduced-congress-pact-vern-buchanan-ted-deutch/

^[9] Id.

By: Tevin Bowens

Have you ever heard of the term JUULing? It refers to using a JUUL e-cigarette to heat up and vaporize liquid to be inhaled through the mouth. While there are various kinds of e-cigarettes on the market, the JUUL is by far the most popular of them all.[1] The JUUL device was designed and created by James Monsees and Adam Bowen of PAX Labs who later formed JUUL Labs.[2]

The JUUL Device

A JUUL is a small hand-held device that has the outward appearance of a thumb drive and was created for the purpose of helping cigarette smokers make the transition away from cigarettes. Brandishing a $49.99 price tag for its starter pack, a JUUL device uses nicotine salts found in leaf tobacco as its core ingredient[3] and uses a closed loop temperature control algorithm designed to deliver the ideal amount of power at any given time to the JUULpod.[4] The JUULpod, located at the top of a JUUL, is a refillable pod filled with glycerol, glycol, and other ingredients.[5] The most notable of those other ingredients is nicotine. The nicotine content in a JUULpod ranges from 23mg to 40mp per pod,[6] which amounts to the amount of nicotine found in 1-2 packs of cigarettes.

JUUL’s Target Demographic

As of today, JUUL Labs asserts that JUUL was created to provide an alternative option for adults who wished to no longer smoke cigarettes and that their product is not intended for anyone else.[7] JUUL requires a minimum age requirement of thirty-five years old and a person must be a previous cigarette smoker if they wish to model in JUUL’s advertisement campaign. But this was not always JUUL’s strategy.

Back in 2015, JUUL used models as young as twenty-one years old and they also advertised heavily on social media platforms—locations known for high teenage use. The popularity of the JUUL device and its use among teens was so widespread that the topic was the primary focus of an episode of the Comedy Central show South Park.[8] This popularity amongst teens continued to rise and spread through the onset of 2018 until the Food and Drug Administration finally stepped into the picture. Initially, back in April of this year, the FDA sent a collection letter to JUUL labs seeking documents “relating to marketing practices and research on marketing, effects of product design, public health impact, and adverse experiences and complaints related to JUUL products.”[9] Five months later, the FDA conducted a surprise investigation of JUUL labs seizing documents relating to the company’s sales and marketing practice. [10] Finally, the FDA ordered that JUUL find a way to address youths having access to their devices or risk having their flavored pods banned in the country.[11] In response, JUUL Labs pulled its flavored pods out of retail stores, created an age restriction system on its website, and deleted most of their social media accounts.[12] All done in the effort to prevent youths from having access to JUUL devices.

The Future

            JUUL Labs is currently worth around $15 billion.[13] These changes are a step in the right direction, but it appears to be too little too late. There is evidence showing that this outcome may have been the intention of JUUL labs. Dating back to 2015, management for JUUL Labs was apparently aware that the devices were appealing to teenagers.[14] But nothing was done for nearly three years and even that came only after being threatened by the FDA.

The damage is already done. For nearly three years teens have been using and becoming addicted to JUUL pods. JULL’s prevention measures in place will do little in terms of stopping teenagers from procuring flavored JUUL pods. At best, the age restriction will slow teens down from getting their hands on flavored JUUL pods. Even if the FDA fined the company JUUL would still come out ahead. It is well-known that nicotine is a profitable business and JUUL just enlisted almost an entire generation of people who will buy their products for many years to come. While the FDA determines its next course of action, we are left to determine the sincerity of JUUL efforts to thwart the use of teenagers using their products.

 

[1] Will Yakowicz, Why Juul, the Most Popular E-Cig on the Market, Is in Trouble, Inc. (May 11, 2018), https://www.inc.com/will-yakowicz/juul-has-a-problem-its-too-cool.html.

[2] Rakesh Sharma, Which Company Is Behind Popular E-Cigarette, JUUL?, Investopedia (December 7, 2018), https://www.investopedia.com/news/which-company-behind-popular-ecigarette-juul/.

[3] Alyssa Stahr, New Product: PAX LABS Introduces E-CIGARETTE JUUL, VapeNews (June 01, 2015), https://vapenews.com/vape-news/new-product-pax-labs-introduces-e-cigarette-juul/.

[4] JUUL Support, https://support.juul.com/home/learn/faqs/juulpod-basics.

[5] Id.

[6] Id.

[7] Korin Miller, What Is Juuling And Is It Really That Bad For Your Health?, Women’s Health (September 12, 2018), https://www.womenshealthmag.com/health/a18377132/juuling/.

[8] David Hookstead, the new ‘south park’ episode will cover vaping. Check out the hilarious preview here, The Daily Caller (October 17, 2018), https://dailycaller.com/2018/10/17/south-park-vaping-tegridy-farms-preview-video/.

[9] Food & Drug Administration, JUUL Document Collection Letter, https://www.fda.gov/downloads/tobaccoproducts/labeling/rulesregulationsguidance/ucm605490.pdf.

[10] Jen Christensen, FDA seizes thousands of documents from e-cigarette maker Juul, CNN Health (October 2, 2018), https://www.cnn.com/2018/10/02/health/fda-juul-e-cigarette-surprise-inspection-bn/index.html.

[11] Anna Edney, FDA Threatens to Pull E-Cigarettes to Fight the Rise of Kids Vaping, Bloomberg (September 12, 2018), https://www.bloomberg.com/news/articles/2018-09-12/fda-threatens-to-pull-e-cigarettes-to-fight-rise-of-youth-vaping.

[12] ABC Chicago, Juul to eliminate social media accounts, stop retail sales of flavors, abc7 Chicago (November 13, 2018), https://abc7chicago.com/health/juul-to-eliminate-social-media-accounts-stop-retail-sales-of-flavors/4681584/.

[13] Olivia Zaleski, E-Cigarette Maker Juul Labs Is Raising $1.2 Billion, Bloomberg (June 29, 2018), https://www.bloomberg.com/news/articles/2018-06-29/e-cigarette-maker-juul-labs-is-raising-1-2-billion.

[14] Matt Richtel and Sheila Kaplan, Did Juul Lure Teenagers and Get ‘Customers for Life’?, NYTimes (August 27, 2018), https://www.nytimes.com/2018/08/27/science/juul-vaping-teen-marketing.html.