Casino trademark attacks on video game developers require class rethink, says industry lawyer 30 Jul 15
A growing number of large casino companies are threatening small video game developers with legal action over alleged trademark infringement, a New York lawyer has told World Trademark Review. Ryan Morrison, who runs a firm that specialises in representing independent games companies, claims this has been caused by a trademark classification system that is not keeping pace with the development of new technology.
Casino games (eg, gambling and slot machines) are in the same class (Class 9) as video games, says Morrison, and this has caused friction between the two industries. “If you look at the major casinos’ list of US trademarks, you'll see they have absolutely flooded Class 9, which is also home to video games. In my opinion, they aren't shy about utilising those marks in a bullying fashion,” he states. “Many of these larger casino companies will send around a plethora of cease-and-desist letters to small-time video game developers who have created gaming apps. These major casino companies will come at the developer with some twisted logic that since gambling machines are games, it makes perfect sense that the public would consider the two coming from the same source. Truth be told, the actual law doesn't matter here, and neither does whether or not these developers are truly infringing. All the video game developer knows is that they put out a game that hasn't even netted them $100 in sales, and are now being threatened by a company or law firm demanding thousands of dollars. They aren't going to try and fight it, they are going to beg for mercy and do whatever the casino wants.”
Morrison claims that there has been a lack of coverage about these disputes due to non-disclosure and non-disparagement clauses contained in subsequent settlement agreements. This means there are few examples in the public record. However, further investigation reveals a number of trademark disputes on record from leading slot machine manufacturer Bally Technologies, which offer an insight into the type of developers being approached.
To date, Bally has 541 filed or registered US trademarks in Class 9. In Bally Gaming Inc v Joseph P Muzio IV (Case No 2:15-cv-1904) Bally alleged that Muzio infringed a number of its trademarks for his free iOS app Ultimate Texas Holdem. The trademarks allegedly infringed include one matching the name of the game, ULTIMATE TEXAS HOLD ‘EM, as well as CASINO WAR and PAIR PLUS. Muzio’s response to the action included the statement: “My business is in apps, not in casinos or real gambling establishments.” He claimed that the two entities do not compete because Bally does not have an “Ultimate Texas Hold ‘Em” app on the iOS store. He also denied the relevance of the other two marks. The case is ongoing, with the latest development being an order to conduct mediation.
Responding to a number of questions from World Trademark Review, a Bally Technologies spokesperson was clear about the company’s need to avoid consumer confusion: “We are a manufacturer, developer and supplier of innovative products and services for the casino gaming industry. The presence of unauthorised games bearing our logos, unfortunately, jeopardises the high quality associated with our brands by misleading our consumers into believing a third-party game is in some way authorised or associated with our games. Importantly, this confusion leads to the consumer simply not getting the game experience they have come to expect from Bally. Like almost all owners of valuable IP interests, we are put in the difficult position of having to protect the high quality of products and services provided to our customers through enforcement actions. Those actions better ensure that casinos and players encounter authentic Bally games in each of our markets and channels.”
Morrison, however, views such actions from casino companies as “attacks” on “legitimate and hardworking folks just trying to make some money off of their hobby”. He acknowledges that there is a need for more trademark education in the indie gaming space, especially around trademark searches and protection, to understand the risks of putting a product on the market. But, he claims, there is a big difference between taking precautionary measures in the videogame space and attempting to do the same in a number of unrelated sectors: “It's one thing to search for the name of a game that's already around, so indie game developers will usually conduct a Google search and check the relevant app stores for names clashes. It's ridiculous they have to now also search the thousands of slot machines in the USPTO as well,” he says. “Indie developers registering their own marks would be the ultimate protection here, but most can't justify the cost on an app that may potentially bomb.”
Ultimately, Morrison concludes, it comes down to how the trademark class system has been structured and therefore means these enforcement measures by casino companies will continue unless it is changed. “I'm not going to pretend I have some magic solution, but I do know that the gaming industry is not what the USPTO thinks it is,” he states. “I do think the classes need to be re-examined, since video games have turned into so much more since these classes were decided. Gamers, even casual gamers, are sophisticated purchasers who know what they are buying and what the source is. I've seen video game trademarks denied because of reasons ranging from Hot Wheels cars to slot machines to actual books. No member of the gaming community is going to be confused between a video game and a toy car, but to the USPTO they are too similar. That needs to change, and it needs to change fast, as this industry isn't slowing down.”
Realistically, a modification of the trademark class system in such a way is unlikely or will be a very slow process. In the meantime, the only solution is educating video game developers - even those releasing free apps as a hobby - on the importance of trademark searches. Whether they like it or not, those that conduct business in industries within Class 9’s goods - and that currently includes video game developers – have a responsibility to take the necessary measures to avoid unknowing infringement. Others have a responsibility to decide whether that should continue to be the case.
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