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Interactive Gaming–To Boldly Go…

In a recent article in the Los Angeles Times, Michael Bay, renowned film director with cinematic blockbusters such as “The Rock,” “Armageddon” and “Pearl Harbor” to his credit, is quoted as saying, “I make world-class images. Why not put those images into a game?” Indeed! The new investor and co-chairman of Digital Domain, the effects studio evolving into a production studio, is making a bet on convergence—the application of digital technology to reduce costs and expand the horizons of entertainment and new media.

Remember watching those old cowboy movies and pretending you were the new sheriff in town? Did you secretly imagine you wielded an elegant light saber and might save the Galaxy with Luke Skywalker? How many times did you imagine yourself as Legolas, drawing an imaginary bow in the air to shoot an arrow and save Middle Earth?

But even in Middle Earth—where presumably there were no computers—there are digital effects. You trivia buffs will enjoy knowing that Orlando Bloom’s eyes are really brown. But as Legolas in Lord of the Rings, his eyes are blue, thanks to CGI technology. For example, watch Lord of the Rings: The Return of the King, and right outside the Black Gates, in a close-up, you can see his eyes are CGI blue. However, in a scene right after that, Gandalf is in the foreground and Legolas is in the near background—and Legolas’ eyes are clearly brown.

We love to be entertained, but we also love to play—play is the basis of leisure time, enjoyment, learning, and game and number theory. Play makes us active participants with interactive relationships and activities that are make-believe—in much the same way that motion pictures can move us with stunning visual sequences and transport us to places we might never see or even imagine in real life.

The computer game market represents a new—or rather a different—frontier. New motion pictures have spawned merchandising for decades—dolls, action figures, and stuffed animals, from Tarzan and Mickey Mouse to Spider-Man and G.I. Joe. In fact, product placements in motion pictures, which have gone mostly unregulated in the United States, have been used for years by advertisers to promote both reality in the movies and brand awareness to consumers. See the logo on an airplane taking off—someone paid for that. Picking up a soft drink can at the stadium with a familiar brand—someone paid for that. Watch Jack Bauer drive away or make a phone call—recognize that car or that mobile phone—someone paid for that. Do you really think Microsoft paid an estimated $6 billion for Internet advertising company aQuantive, because it does not understand the importance of convergence? Wonder why Apple Computer changed its name to “Apple”? Go to China or India or Brazil—which has more brand and name recognition, a MAC or the iPod? Which creates more buzz, the iPhone or a new operating system code named “Leopard”?

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The Empire Strikes Back?

You can’t possibly have missed the flurry of articles in the press over the past few years regarding identity theft and the measures being taken (or vulnerabilities exposed) to protect the non-public, personally identifiable financial information consumers access, use and provide in the course of routine payment transactions—both off and online. Indeed, several years ago, the Payment Card Industry (“PCI”) began formulating it’s own self-regulatory standards governing the protection of consumer information relating to the processing of credit, charge and debit card transactions. This has led to the development of the PCI Data Security Standards (“DSS”) and corresponding Data Security Audit Guidelines. In broad terms, the PCI DSS requires the protection (by encryption or other effective means) of personal information in the payment card process—whether in storage, card processing, point of sale/purchase, recordkeeping—in every link in the chain of payment using a payment card or device linked to an account at a financial institution.

As a result of the furor over the release of private information—including releases from governmental agencies and databases (e.g., social security numbers, drivers license numbers)—more than 30 states have passed specific legislation requiring companies that know, or reasonably suspect, that data, databases or electronic/digital information involving personal information of consumers has been compromised or actually leaked, to disclose and notify consumers affected (or potentially affected) by the security lapse or potential breach. Federal legislation has been proposed, although nothing has yet been enacted, and the states have stepped in to fill the perceived gap and protect the information of its citizens, and to regulate the conduct of companies doing business within their borders.

Much of the angst over the private sector, commercial transaction compromises over security—starting most visibly with ChoicePoint several years ago and continuing in a steady stream thereafter—arises from the fact that retail merchant establishments have traditionally not had to worry about privacy and the secure management of customer personal and financial information, primarily because they haven’t been regulated or needed to do so. Enter the digital age of information and the ability of marketing and advertising gurus (within and for retailers) to data-mine and use vast amounts of previously cumbersome and often unattainable information about customers. If information has always been power, than digital information transforms that power exponentially, at the speed of light (literally for those physics majors masquerading as lawyers or marketing professionals).

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Strange But True Courtroom Tales–Google Loses Round 1

Move aside file-sharing, user-generated content, and DMCA “take down” notices for copyright infringement; here come the trademark and brand protection lawyers taking on Google again. Just this month, a Federal Court in the Northern District of California refused to dismiss charges brought by American Blind & Wallpaper Factory (yes, they sell window blinds) that Google is illegally selling American Blind’s trademark as a keyword that consequently triggers sponsored links to competitors’ ads when they do a “Google” search. As you know, selling keywords is a huge source of revenue for Google, and the judges’ refusal to grant Google a summary judgment dismissing the case breathes some new trademark life into an old story. Google had argued its AdWords program is not a “use” of trademarks of others in “commerce” within the meaning of the federal law that regulates trademarks—the Lanham Act. In asking the court to dismiss the case, Google relied on two federal cases in the Southern District of New York.

In one case, the court held that unless the trademark was placed on the goods or their packaging or in advertisements, if the search word was invisible to the public—it wasn’t being “used” in the trademark sense and therefore wasn’t infringement. In the second case, Merck claimed that an online pharmacy infringed Merck’s trademark: it bought the keyword “Zocor”—a drug manufactured by Merck—and was using it to generate advertising and sponsored links to the online pharmacy’s generic version of that drug. The court analogized the use of a keyword to private thoughts or mental categorization, and upheld the pharmacy’s right to buy the word from Google for search purposes.

The court in California distinguished these cases from those decided in New Jersey and some unreported decisions emanating from Delaware and Minnesota, where search engines were considered to be infringing when they sold trademark keywords to competitors, noting that these transactions were trading on the value of a company’s trademarks—thus prohibited. Stay tuned. Round 2 is coming up.