Addressing legal issues with the latest technological developments and social media trends.
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VGBA.pngSean F. Kane will be a featured panelist at the upcoming Video Game Bar Association’s inaugural Game Business & Legal Affairs conference. The conference will provide an in-depth analysis of the prevalent and pertinent legal and business issues within the video game industry.

Sean will be serving as a panelist during the “Adventures in Finance” session which will take place on Tuesday, May 21st at 9:00am.  Working capital drives development, and this panel looks at the finance landscape, including new trends and legal details for crowdfunding, raising venture capital, structure of exits, and where tax credits for development and research can be maximized across an organization.

The panel will include the following:

MODERATOR

Steve Goldstein, Chair, Interactive Entertainment and Video Games Practice at Stubbs Alderton & Markiles

 

PANELISTS

Justin Bailey, VP of Business Development at Double Fine Productions

Sean F. Kane, Attorney at Pillsbury Winthrop Shaw Pittman

Mark Stevens, Partner at Fenwick & West

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Hiring a lawyer for a general counsel role – either in-house or by retaining outside counsel to perform that role – can benefit organizations in countless ways. Unlike outside attorneys who are consulted on a piecemeal basis, corporate or general counsel are very familiar with the organization’s operations, leadership, and goals. Because they are often privy to and included in discussions of key business decisions and developments, they can ground their legal advice on a thorough understanding of the organization and its history. That intimate connection to the organization’s business life, however, operates as a double-edged sword. As some court decisions illustrate, the regular inclusion of general counsel in business communications can strip communications with corporate counsel of the presumption that they are protected by attorney-client privilege.

For more information, please click here.

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social-media-work.jpgAs use of social media continues to increase, so do concerns by employers regarding employee use of social media as it relates to the workplace. In response, many employers are drafting new or revised policies covering use of social media particularly as it pertains to confidentiality, privacy, intellectual property, and contact with the media and government agencies.

The Acting General Counsel of the National Labor Relations Board (“NLRB”), Lafe Solomon, has released a report on employer social media policies.  In many cases, some or all provisions of employers’ policies governing the use of social media by employees have been found to be unlawful. Provisions are found to be unlawful when they interfere with the rights of employees under the National Labor Relations Act. Consider the following examples, which may be surprising.

In one case, the NLRB addressed an employer’s rules on communication of confidential information via social media.  The employer’s social media policy provided in relevant part:

If you enjoy blogging or using online social networking sites such as Facebook and YouTube, (otherwise known as Consumer Generated Media, or CGM) please note that there are guidelines to follow if you plan to mention [Employer] or your employment with [Employer] in these online vehicles . . . Don’t release confidential guest, team member or company information. . . .

The NLRB concluded these rules were unlawful as they could chill the exercise of Section 7 rights (e.g., self-organization, collective bargaining, etc.) in violation of the National Labor Relations Act. More specifically, the instruction that employees not “release confidential guest, team member or company information” was interpreted as prohibiting employees from discussing and disclosing information regarding their own conditions of employment as well as the conditions of employment of employees other than themselves.

In another case, the NLRB focused on an employer’s social medial policy for protecting company information, which provided in relevant part:

Employees are prohibited from posting information regarding [Employer] on any social networking sites (including, but not limited to, Yahoo finance, Google finance, Facebook, Twitter, LinkedIn, MySpace, LiveJournal and YouTube), in any personal or group blog, or in any online bulletin boards, chat rooms, forum, or blogs (collectively, ‘Personal Electronic Communications’), that could be deemed material nonpublic information or any information that is considered confidential or proprietary. Such information includes, but is not limited to, company performance, contracts, customer wins or losses, customer plans, maintenance, shutdowns, work stoppages, cost increases, customer news or business related travel plans or schedules. Employees should avoid harming the image and integrity of the company and any harassment, bullying, discrimination, or retaliation that would not be permissible in the workplace is not permissible between co-workers online, even if it is done after hours, from home and on home computers. . . .

The rule prohibiting employees from posting information regarding the employer that could be deemed “material non-public information” or “confidential or proprietary” was found unlawful by the NLRB. This was chiefly due to the terms “material non-public information” and “confidential or proprietary” being vague and/or overbroad, and the associated risk of limiting Section 7 rights.

Some other trends in the guidance provided by the NLRB include that expression of opinions by employees is largely protected, and prohibitions on activities in social media used by unions for communication or organization are particularly safeguarded.  On the other hand, the guidance appears to enable employers to protect themselves against “rants” by individual employees, and to enforce important workplace policies (like sexual harassment, workplace violence, and/or other workplace policies) in employee use of social media.

As can be seen from the examples above, employers should work with counsel to carefully craft their social media policies to both protect their own interests while not impeding employee rights under the National Labor Relations Act.

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The parent company of online poker site PokerStars has put in a bid to buy the brick & mortar based The Atlantic Club Casino in Atlantic City, New Jersey. This appears to be the first time an online-only gambling site operator has attempted to buy a land-based operation. It remains to be seen whether the bid will be accepted, as it is already being challenged by the American Gaming Association (which represents land-based casinos). http://news.yahoo.com/pokerstars-ac-bid-sparks-battle-153442498.html

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Online-Gambling.jpgIn late February 2013 the New Jersey Legislature passed legislation allowing on-line wagering, subject to certain limitations.  This legislation was signed into law by Governor Chris Christie.  Under the new law, licensed operators will be allowed to offer online versions of a wide variety of games currently permitted in Atlantic City casinos.  This includes table games like roulette, craps and black jack as well as slot machine games. The new law will not take effect until the State Division of Gaming Enforcement sets a start date, which is expected to be from 3 to 9 months away. A year ago Governor Christie vetoed similar legislation on state constitutional grounds.  Supporters of the legislation argued that the constitutionality was not in question as the law requires the computer equipment being used to be located in Atlantic City.  According to the new law, by having the computer equipment in Atlantic City, the bets placed using that equipment would be deemed to have been placed in Atlantic City.

The new law purports to avoid running afoul of the 1961 Federal Wire Act by requiring the gamblers to be in New Jersey to place bets and by not allowing sports betting.  This results from a 2011 Department of Justice opinion that held that intrastate on-line gambling does not violate the Wire Act unless it involves sports betting.  Notwithstanding the in-state gambler requirement, the proposed law would allow out of state bets from other states that have a reciprocal agreement in place with New Jersey.

New Jersey’s new law represents another significant step forward for on-line gambling in virtual casinos.  Nevada and Delaware already have enacted legislation to allow on-line gambling.  Given the proliferation of state authorized gambling, other states are expected to follow and enact similar legislation and enter into reciprocal agreements to allow interstate gambling between those states. However, most if not all of this legislation will also require operators to be licensed. In Nevada, for example, even though the law that was passed is broader, licenses are only being accepted for online poker.  While Nevada has approved a number of licenses, it has not authorized any entity to actually commence online poker operations.

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IAPPWhy do you need to act urgently even if you feel your data handling is compliant?

If you are a US headquartered company do you need to bother with these new EU laws and significant changes proposed?

2013 has already seen the frenetic pace of change from last year continue regarding new data laws and fines that will affect how all companies, regardless of business sector, use employee or customer data. The European Union, confirmed in the January 2013 Albrecht report, is indeed planning to dramatically amend its EU Data Protection Directive with a new Regulation.

This will tackle recent developments in social media, mobile apps and cloud computing as well as deal with a perceived serious lack of compliance thus far, particularly over use of customer data, lack of proper consents and more invasive marketing and advertising.

Some were hoping that after much discussion and lobbying some of the more serious proposals might be further watered down or deleted, such as the “nuclear” 2% of global turnover/revenue fine for serious breaches of EU data law. However, the recent report from the EU Parliament’s Jan Philipp Albrecht confirms the perceived need for even tougher fine levels and more aggressive enforcement. This is all on top of recent changes which saw fines dramatically increased in a number of EU countries, for example in the UK with new powers to issue fines of up to £500,000 (approx $800,000) per breach, and increased fine levels being pursued in France, Spain and so on. These major fines are not theoretical or proposals. They have already come into force and are being used. The “nuclear” option will be in addition.

Other hopes from some in industry that new proposed rights such as that “to be forgotten” might fade away were also dashed. Businesses will have to consider seriously what the impact will be of such changes and also note that such proposals have also highlighted existing requirements, such as not holding onto data for longer than necessary, which are already law and which enforcers are looking to more closely. This, along with the new Binding Corporate Rules (BCRs) for data processors that took effect on 1 January 2013, are just some of the recent changes with respect to privacy in the EU that need immediate attention and consideration even if the business is not EU based.

This week many stakeholders are meeting in Washington DC to take part in a major conference (as is your author) on such issues and it will be interesting to see if the feedback from industry sessions makes its way into deliberations and further fine tuning of the proposed new Regulation. Some further twists and turns are likely but the core new elements will almost certainly not be going away. What is certain is that companies cannot assume they are fully on top of what is arguably the fastest moving area of the law currently. A review of where the business is now and identification of what needs addressing is without doubt a current business imperative.

This blog was originally posted in Pillsbury’s SourcingSpeak blog.

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Thank you to everyone who joined us in both New York and Washington, DC for our Social Media Week events – Game On!

Special thank you to all of our panelists: Randy Leibowitz, Mike Scafidi, Tim Ettus, Lou Kerner, Peter Corbett, Jim Gatto, Sean Kane, Lauren Lynch Flick and Tina Kearns (many featured in the picture and video below). 

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Please join us on May 1-2 at the Neurogaming 2013 Conference and Expo :  where your mind and body meet game play.  Neurogaming.jpg

  • Over 50 companies involved in neurogaming
  • Coolest neurogaming technologies
  • Over a dozen mind blowing panels
  • Insight into how neurogame design work 

Neurogame developers are using the latest emotional, cognitive, sensory and behavioral technologies to create radically compelling experiences to engage and entertain gamers worldwide. You’ll experience everything from brain-controlled games to true augmented virtual reality experiences and even cognitive enhancing devices that send mild electrical pulses to your brain to improve concentration during game play, and so much more.

·         NeuroGaming 2013 Conference will bring together all the players from across the emerging neurogaming industry and beyond to share insights and visions.  Meet with the key people who are coming together for this first ever event including rock star CEOs, VPs of corporate development, venture partners, angel investors, VP Monetization, game designers, game producers, and more.

·         NeuroGaming 2013 Expo will let you get your hands and minds on all these amazing new neurogaming technologies.  We are bringing together all these cool technologies for you to play with in a floor expo that will blow your mind.

James Gatto will be moderating the first panel of the conference titled, “The Next Interface: Sensory Gaming Platforms” which is scheduled for 10:15am, Wednesday, May 1. The panelists are:

  • Stanley Yang, CEO and Founder, Neurosky
  • Anders Grunnet-Jepsen, Perceptual Computing Lead, Intel
  • Amir Rubin, CEO and Founder, Sixense Entertainment
  • Ali Israr, Immersive Gaming Lead, Disney Research

This panel will discuss how new sensory gaming technologies like gesture and voice control, brain-controlled feedback, haptic stimulation and other sensors, are transforming the gaming experience.

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MP900449113.JPG  A weekly wrap up of interesting news about virtual worlds, virtual goods and other social media.

 

 

Path Inc. to Settle Charges Over Collecting Kids’ Data
Path Inc., a maker of a popular social networking app, agreed to an $800,000 settlement with the Federal Trade Commission over charges it collected children’s personal information without their parents’ consent, regulators said Friday.

Feds Urge App Makers, Mobile Operating Systems to Do Better On Privacy
The Federal Trade Commission on Friday issued a list of recommendations of how those who make mobile software can do a better job of protecting user’s privacy and making clear what information is being collected.

What the Proposed Apps Act Would Mean for App Developers
Mobile applications have been the subject of a lot of recent attention during the past several months. Back in the fall of 2012, California Attorney General Kamala Harris warned app developers of the need to disclose their privacy practices in order to comply with California’s Online Privacy Protection Act and shortly thereafter commenced an action against Delta Airlines for its failure to have displayed a privacy policy on its app.

Fed. Circ. Aims For Clear Rules On Software Patents
A case set for oral arguments before the full Federal Circuit on Friday has the potential to provide much-needed clarity on when inventions implemented using a computer are eligible for a patent, attorneys said.

Brazil: The Social Media Capital of the Universe
Brazil’s expanding middle class is increasingly growing online, and social media are particularly popular because of Brazil’s hyper-social culture, social-media executives say.

Is Online Gambling Legal If Bitcoins, Not Dollars, Are At Stake?
With no government ties, Bitcoin is used to buy everything from blogging services to Brooklyn-made cupcakes. Theoretically, millions of dollars are being kept in the digital currency, and it’s increasingly being used by specialized online gambling websites. But is Bitcoin gambling legal?

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NEW YORK CITY

In conjunction with Social Media Week, please join us in our New York office on Wednesday, February 20th from 5 – 7 pm for Game On! Social Media Contests, Sweepstakes and Promotions.

The use of social media-based contests, sweepstakes and other promotional techniques is rapidly increasing. So too is the regulatory scrutiny and enforcements of them. The social media slant to these long-used tools creates new legal issues that must be understood and addressed.

Our panel, led by Jim Gatto and Sean Kane, will discuss some of the most important issues and trends relating to social media contests, sweepstakes and promotions.

Topics will include:

•           Understanding the FTC Endorsement Guidelines as they relate to blogging and endorsement

•           Avoiding crossing the line into illegal gambling

•           Rewarding consumers for creating product reviews or recommendations

•           Protecting your unique business model

•           Leveraging endorsement-based advertising

•           And much more…

As always, along with the great business opportunities come some legal and regulatory issues of which companies need to be aware.

WASHINGTON, DC

Please join Jim Gatto, Steven Kaplan, and Laura Lynch Flick in our Washington, DC office for a similar program on Thursday, February 21st from 3 -6 pm. Following the session on Social Media Contests, Sweepstakes and Promotions, we will have another panel on Social Media Audits: Why you need one.

The rapidly increasing use of social media is changing the way companies do business. However, companies are not adapting their legal practices and corporate policies as quickly to reflect these changes. Additionally, the law is changing quickly in some respects, but it lags behind the rapid advances in social media technology and business methods in others. Companies have been caught by surprise as the legal decisions and regulatory enforcements unfold. For these reasons, every company needs to be more proactive in this area.

Our panel will cover some of the most important components, including:

•           Developing a Written Social Media Policy

•           Intellectual Ownership and Protection

•           User Generated Content (DMCA)

•           Virtual Currency, Virtual Goods and Stored Value

•           Mobile Applications

•           Privacy and Date Use