Legal Eagles

2011 is set to be an interesting year, legally speaking, for the computer gaming sector. The pending changes to the CAP Code and data protection laws will affect the ways in which the sector interacts with users. In addition, the European Court of Justice is due to answer questions this year which could change the playing field for interaction between gaming companies. Here, Brett Farrell and Katie Hill from Barlow Robbins LLP discuss the potential impact of these changes.

CAP Code Extension - The Digital Remit

Game publishers and console manufacturers will undoubtedly be aware of the Advertising Standards Authority, CAP Code and the BCAP Code in relation to advertising. From March 1, 2011 the Digital Remit of the CAP Code will apply to:

Advertisements and other marketing communications by or from companies... on their own websites, or in other non paid-for space online under their control, that are directly connected with the supply or transfer of goods, services, opportunities and gifts.

Advergames, in the sense of videogames used to promote products or the organisation which appear on the company's website or in other non paid-for space under the company's control are also now covered.

The phrase "directly connected with supply or transfer of goods, services" aims at the heart of the intent of an advertisement or other marketing communication. It is interpreted broadly and if the advertisement is trying to sell something, even if there are no prices displayed nor immediate call to action, it will be covered by the Digital Remit.

To determine whether material is an advertisement or marketing communication within the scope of the Code there needs to be a careful, case by case, assessment of its content and the context in which it appears. Two assessment criteria which may be helpful, but certainly not exhaustive are that the advert:

• has appeared in a same or very similar form as an advertisement in a paid for third party space; or
• may make reference to "an invitation to purchase" as defined by the Consumer Protection from Unfair Trading Regulations 2008. Simply put, it somehow communicates the characteristics of the product and the price in a way to enable the consumer to purchase it.

User generated content (UGC) is now also directly covered by the Digital Remit in two ways. Either you solicit UGC from the game community or a member of the game community gives it to you unsolicited. If you have adopted or incorporated the UGC into your marketing communications, then it is likely the UGC will be regarded as a marketing communication and must comply with the Codes.

Heritage advertising or advertising that is not part of the current promotional strategy and is used in an appropriate context will not be regulated by the Code.

Although there are attempts to set out principles to help users assess whether or not the Code will apply, in reality it's just not that simple. Application of existing principles in the Codes to your own website will undoubtedly present questions in the very grey area within your website of what constitutes a marketing communication to which the Code now applies where it didn't before.

Consider online trailers of a new title about to launch, arguably now covered by the Code. Perhaps the nature and layout of your website is such that the Code will apply to it. Checking compliance with the Digital Remit is going to be a big undertaking.

The extension will apply from March 1, 2011. In the meantime companies have a grace period to ensure that their advertising which is now covered by the extension complies with the Digital Remit before the Advertising Standards Authority starts reacting to complaints about companies (quite possibly through no fault of their own) allowing marketing communications, which now breach the CAP Code, to appear on their websites.

EU data protection changes

There are two important changes looming in the EU about data protection. Marketing and community managers take note: The first is the EU's review of the Data Protection Directive. The EU is intending to modernise this Directive in response to new technological changes. The Commission's goal is to ensure coherent application of data protection rules taking into account the impact of new technology on individuals' rights and freedoms.

It seems this is primarily in response to the rise of social networking sites. Given the gaming sectors use of personal data, these changes will undoubtedly impact the way in which it deals primarily with its customers - particularly with any behavioural advertising. It may require you to seek a user's explicit consent before downloading any personal data and making it possible for the user to permanently delete any personal information. Draft legislation is expected sometime during 2011.

The other matter for the EU to contend with is publishing its first review of the Data Retention Directive. Any review of the Data Retention Directive may affect the gaming sector particularly where the review is aimed at matching data retention obligations with law enforcement needs (maybe keeping log files for six months is just not enough given the length some investigations take), and an undoubtedly higher level for protection of personal data will be imposed.

UK data protection changes

The United Kingdom also has some changes to make in the data protection arena. The most notable for the gaming sector is in relation to the E-Privacy Directive which was amended by the Citizens Rights Directive. The Citizens Rights Directive will be implemented on May 25, 2011 and means that the use of cookies will only be allowed if the user has consented or been provided with clear and comprehensive information about the purposes of such processing.

This has introduced an opt-in requirement for cookies.

Theoretically this means that each and every cookie placed on a user's computer would require that user's express consent. Leaving aside for the moment that this runs contrary to the way in which the world wide web actually operates, the administrative burden of getting such consent would be impracticable.

How this legislation is going to be adopted in the UK remains something of a mystery. The Department of Business Innovation and Skills has proposed that this opt-in requirement should not work in such a way to mean users would have to consent to every cookie. Instead the BIS favoured an approach that acceptance may be expressed by using the appropriate settings of a browser or other application. That is, at practical level nothing should change in the United Kingdom. In April 2011 we will see the actual implementation of this legislation and what requirements will be imposed upon the UK and if the BIS gets its way.

Football Dataco Versus Yahoo UK

Football Dataco Limited ("Dataco"), a company who collates and sells football fixture lists, had a busy 2010 bringing actions against various companies who they alleged infringed its copyright and database rights. In one case Dataco sued YAHOO! UK in the English Court of Appeal referred some questions to the European Court of Justice dealing with how Article 3 of the Database Directive should be interpreted in relation to football fixture lists. The decision in this case could also affect the gaming sector.

Section 3 of the Database Directive gives a database author rights in the database, however the question referred was whether a football fixture list was one which, by reason of a selection or arrangement of the contents, constituted the author's own intellectual creation. If it did, the data is protected. Considering the types of data available for use in creating games and how that data is compiled, an adverse finding against Football Dataco could mean that the data providers also by analogy have their rights eroded and would lose ability to protect their data from being used by developers.

SAS Institute Versus The World Programming

SAS are a market leader in statistical analysis software and WPL created a software product and emulated much of the SAS functionality as closely as possible. What is interesting is that WPL did not have access to any of the source code, so a claim for direct copyright infringement could not be made out. SAS then argued, amongst a few other things, that WPL had infringed the Software Directive and the Information Society Directive (aka The Copyright Directive). Various questions were then referred to the European Court of Justice.

The ECJ must now give a ruling around the controversial issues on copyright protection for computer software as set out in the Software Directive. The scope of the questions to the ECJ include whether or not programming languages, screen interfaces and functional aspects of the programme are excluded from the protection of the Software Directive.

Further, they must answer whether or not someone who emulates software function in a rival piece of software infringes the original software. The outcome could have a profound impact on developers and publishers.

Depending on the mood of ECJ and the ruling it gives, it could create an opportunity for developers to easily emulate competitors' software and systems and other developers could be open to competition without much recourse to protect the investment they have made in their games.

Article written by Brett Farrell, an associate, and Katie Hill, a trainee, at Barlow Robbins LLP.