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	<title>Virtual Worlds Archives - Technology &amp; Marketing Law Blog</title>
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		<title>A First-Hand Look at the Messy Underbelly of DMCA 512(c) Takedowns</title>
		<link>https://blog.ericgoldman.org/archives/2026/02/a-first-hand-look-at-the-messy-underbelly-of-dmca-512c-takedowns.htm</link>
					<comments>https://blog.ericgoldman.org/archives/2026/02/a-first-hand-look-at-the-messy-underbelly-of-dmca-512c-takedowns.htm#comments</comments>
		
		<dc:creator><![CDATA[Eric Goldman]]></dc:creator>
		<pubDate>Wed, 18 Feb 2026 18:37:41 +0000</pubDate>
				<category><![CDATA[Copyright]]></category>
		<category><![CDATA[Derivative Liability]]></category>
		<category><![CDATA[Virtual Worlds]]></category>
		<guid isPermaLink="false">https://blog.ericgoldman.org/?p=28596</guid>

					<description><![CDATA[<p>From 2009-2013, I used Scribd as my primary hosting service. I posted nearly 800 files there over a roughly four year period. Progressively, I became disenchanted with Scribd, including their efforts to put my uploads behind their own paywall and...</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2026/02/a-first-hand-look-at-the-messy-underbelly-of-dmca-512c-takedowns.htm">A First-Hand Look at the Messy Underbelly of DMCA 512(c) Takedowns</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>From 2009-2013, I used Scribd as my primary hosting service. I posted nearly 800 files there over a roughly four year period. Progressively, I became disenchanted with Scribd, including their efforts to <a href="https://personal.ericgoldman.org/scribd_puts_my/">put my uploads behind their own paywall</a> and to <a href="https://blog.ericgoldman.org/archives/2012/11/scribd_botches.htm">broadcast members&#8217; private reading activities</a>. I eventually switched to using SCU&#8217;s Digital Commons as my primary hosting service, and I almost never go to Scribd any more.</p>
<p>You can imagine my surprise when Scribd emailed me in early February 2026, saying that one of my uploads had been taken down due to a DMCA takedown notice. Even more shocking was the removed file, &#8220;<a href="https://www.scribd.com/doc/47037695/Amaretto-v-Ozimals-Preliminary-Injunction">Amaretto v Ozimals Preliminary Injunction</a>,&#8221; which I uploaded in early January 2011. (If you don&#8217;t remember that case, it was the super-interesting dispute between <a href="https://blog.ericgoldman.org/archives/2011/01/second_life_ord.htm">the Second Life virtual horses and virtual bunnies</a>). Why is a 15-year-old upload getting DMCAed now?</p>
<p>And this file in particular! Federal court documents aren&#8217;t eligible for copyright protection per 17 USC 105, so I felt certain that my upload was in the public domain and didn&#8217;t infringe anyone&#8217;s copyright. I found Scribd&#8217;s counternotification procedure (they didn&#8217;t direct-link to it in their notification to me) and submitted a 512(g) counternotification.</p>
<p>The next day, I got another notice from Scribd saying that my content was taken down due to a DMCA takedown notice. I couldn&#8217;t tell if this was a new takedown request or more details about the one Scribd already effectuated. The targeted URLs in the takedown notice related to education materials, but buried in the list of dozens of targeted URLs was my upload:</p>
<p><a href="https://blog.ericgoldman.org/wp-content/uploads/2026/02/scribd1.jpg"><img fetchpriority="high" decoding="async" class="aligncenter size-full wp-image-28597" src="https://blog.ericgoldman.org/wp-content/uploads/2026/02/scribd1.jpg" alt="" width="929" height="616" srcset="https://blog.ericgoldman.org/wp-content/uploads/2026/02/scribd1.jpg 929w, https://blog.ericgoldman.org/wp-content/uploads/2026/02/scribd1-300x199.jpg 300w, https://blog.ericgoldman.org/wp-content/uploads/2026/02/scribd1-768x509.jpg 768w" sizes="(max-width: 929px) 100vw, 929px" /></a></p>
<p>The DMCA notice purportedly &#8220;identified&#8221; the copyrighted works that I allegedly infringed:</p>
<blockquote><p>Users on [Scribd] have uploaded The Daring English Teacher, Inc. resources. These materials can be found here: https://www.teacherspayteachers.com/Store/<wbr />The-Daring-English-Teacher.</p></blockquote>
<p>My involvement in this DMCA notice made no sense. I posted a federal court document. What does that have to do with teaching resources?</p>
<p>It appears there are 863 paywalled items available at the identified URL, so I did not try to confirm if the preliminary injunction was somehow embedded in any of them. That seems extremely unlikely given the niche-y nature of this particular court document.</p>
<p>[Query: 512(c)(3) says the notice must identify &#8220;the copyrighted work claimed to have been infringed, or, if multiple copyrighted works at a single online site are covered by a single notification, a representative list of such works at that site.&#8221; Does a notice indiscriminately pointing to a URL enumerating 863 paywalled items satisfy this requirement?]</p>
<p>Plus, even if an identified work contained a copy of the preliminary injunction, it&#8217;s in the public domain. It does not appear that Scribd invested any effort to address the notice&#8217;s very obvious public domain problem.</p>
<p>In response to my counternotification, Scribd replied to me:</p>
<blockquote><p>We are in receipt of your DMCA counter-notification. We appreciate your patience as we notify the complaining party and await their response. The complainant has a maximum of fourteen (14) business days to:<span class="im"><br />
</span></p>
<ul dir="auto">
<li>rescind the original notification,</li>
<li>ignore the counter-notification, or</li>
<li>notify Scribd of their intent to pursue further legal action.</li>
</ul>
<p>We are prohibited from displaying or restoring the content until the matter is resolved. We can restore the content only if the complainant rescinds the original notification, or after 14 days if the complainant fails to respond.</p></blockquote>
<p>Say what??? This procedure is a pastiche of 512(g) concepts that deviate from 512(g) in important ways:</p>
<ul>
<li>Scribd&#8217;s response says &#8220;We are prohibited from displaying or restoring the content until the matter is resolved.&#8221; WRONG. 512(g) says that the service MUST restore the file in 10-14 business days of my counternotice UNLESS the copyright owner has filed a lawsuit.</li>
<li>Scribd&#8217;s response says &#8220;We can restore the content only if the complainant rescinds the original notification, or after 14 days if the complainant fails to respond.&#8221; WRONG. Scribd MUST restore the content NO MATTER WHAT the complainant tells Scribd&#8211;other than the copyright owner saying it has filed suit. Scribd&#8217;s procedures say that if the complainant responds to Scribd but doesn&#8217;t rescind the notice, then Scribd will not restore the content. That&#8217;s not what 512(g) says.</li>
<li>The response says the complainant can &#8220;notify Scribd of their <strong>intent to pursue</strong> further legal action.&#8221; Why? The complainant&#8217;s declared intent is irrelevant to 512(g). Per 512(g), within the 14 business day window, the complainant can block the restoration ONLY if the complainant &#8220;<strong>has filed</strong> an action seeking a court order to restrain the subscriber.&#8221;</li>
</ul>
<p>Of course, Scribd can choose to forego its eligibility for 512(g)&#8217;s safe harbor. Many services make that choice because uploaders don&#8217;t have many tenable claims that 512(g) could apply to. Based on the procedures Scribd has adopted, I think Scribd has chosen to forego 512(g). I wonder, however, if they intended to do so, or if this was just a sloppy or thoughtless implementation of DMCA procedures.</p>
<p>Ten days after the initial takedown, I received an email from Rachel Andruczyk, the copyright agent (apparently not the copyright owner) who submitted the DMCA takedown notice governing the Daring English Teacher. (<a href="https://lumendatabase.org/notices/search?term=%22Rachel+Andruczyk%22&amp;term-exact-search=true&amp;sort_by=">Rachel appears 12 times in the Lumen database</a>). She wrote me:</p>
<blockquote><p>Since Scribd has temporarily removed access, I cannot see the material.  Several URLs were reported in this notice and there is a chance that one was captured in error.  I would be happy to retract the notice if you could please just send me an image of the material in question so that I can identify it one way or another.</p></blockquote>
<p>I replied:</p>
<blockquote><p>It sounds like you don&#8217;t know how to use the Wayback Machine?</p>
<p>You can see it here: https://web.archive.org/web/20110130221240/https://www.scribd.com/doc/47037695/Amaretto-v-Ozimals-Preliminary-Injunction</p>
<p>To speed things up, I have included a PDF from the Wayback Machine.</p></blockquote>
<p>She replied:</p>
<blockquote><p>I have already sent the retraction notice to Scribd and it should be restored shortly.</p></blockquote>
<p>I replied:</p>
<blockquote><p>Thank you, but I remain confused how the error occurred in the first place. Could you please help me understand?</p></blockquote>
<p>She replied:</p>
<blockquote><p>I work for several authors to find and remove copyright infringements.  This involves entering their watermarks, key words, names, etc.  Line by line, I am scanning and reporting.  Somewhere in the URL with the content belonging to you, there must have been some commonality in the search terms.  I am human and most likely clicked a line above or below the intended target in the list. This is an extremely rare occurrence in all the years I have been doing this.  Once again, I apologize.</p></blockquote>
<p>Say what? &#8220;I am human and most likely clicked a line above or below the intended target in the list.&#8221; Seriously, sloppy mousing is the purported reason why a public domain document got knocked off the Internet? There is no &#8220;oops&#8221; excuse for sending wrong DMCA takedown notices. 512(c)(3) notifications are powerful legal tools. They need to be accurate. This notice wasn&#8217;t.</p>
<p>Now, if you&#8217;re a long-time reader, I know what you&#8217;re thinking. We already know that 512 is a cesspool of bogus takedown notices that 512(f) has failed to curb. This particular incident is at most a mildly interesting example demonstrating those well-understood phenomena. Fair enough.</p>
<p>Still, I think my experience highlights a few details about the collapse of the 512 notice-and-takedown bargain. Some of the possible lessons:</p>
<ul>
<li>takedown notice senders don&#8217;t care if their notices are accurate or not, and many senders don&#8217;t have adequate QA processes to prevent obvious errors.</li>
<li>most uploaders would not have counter-noticed in this circumstance. The typical uploader wouldn&#8217;t have the same degree of confidence I have about 17 USC 105 or 17 USC 512(g) to push back. So the takedown notice and resulting removal are almost always going to be dispositive for targeted uploads.</li>
<li>512(f) is worthless. Could I sue Rachel Andruczyk for her self-admitted error? Per Rossi, to survive a motion to dismiss, my claim probably would need more damning proof of her subjective intent. &#8220;Mere&#8221; dereliction may not be enough.</li>
<li>takedown notice senders can get their takedown notices honored even if they only make indeterminate gestures towards the copyrights they purport to represent.</li>
<li>Scribd was <a href="https://www.bloomberg.com/news/articles/2021-07-15/audible-rival-scribd-eyeing-going-public-at-1-billion-valuation">thinking about going public at a $1B valuation</a>, so it&#8217;s not a small company. Yet its DMCA procedures are clearly not industrial-grade, especially its garbled implementation of 512(g). Smaller and less well-funded services have even worse DMCA practices.</li>
<li>most people already assume that services essentially automatically remove content in response to takedown notices, no questions asked. This removal of public domain material fits that stereotype.</li>
<li>more generally, in the triangle of copyright owner-service-uploader, the service will almost always side with the copyright owner over the uploader. Scribd did not protect my interests as an uploader, despite the obvious merit of my position and Scribd&#8217;s 15 year history with this item.</li>
<li>as a result, be careful entrusting any uploads you care about to third-party UGC services. The only true way to be in control of your online fate is at a website and servers you operate and control.</li>
</ul>
<p>(I&#8217;ll note that SCU has removed some of my uploads of court filings to the SCU Digital Commons in response to plaintiff complaints that they don&#8217;t want their litigation antics so visible. At this point, if I really care about keeping files online, I host them at my website. Even then, <a href="https://blog.ericgoldman.org/archives/2012/06/another_failed.htm">my web host has been targeted based on my uploads</a>. It&#8217;s a rough world out there for uploaders, regardless of their carefulness and expertise).</p>
<p>To close the story, 10 days after the initial takedown, Scribd replied to me:</p>
<blockquote><p>The DMCA notification that resulted in removal of your content was rescinded by the complainant. Your documents were restored (along with likes, view counts, and other metrics) to their original links. The complainant&#8217;s action renders the counter-notification moot and so we consider this matter closed.</p></blockquote>
<p>The matter involving this particular upload may be closed in Scribd&#8217;s mind, but everything else raised by this blog post remains very much open.</p>
<p>A reminder of my short essay, &#8220;<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2589751">How the DMCA&#8217;s Online Copyright Safe Harbor Failed</a>.&#8221;</p>
<p style="text-align: center;">* * *</p>
<p>Scribd&#8217;s comms department sent me the following comments in response to a draft of this post I sent them:</p>
<blockquote><p><i>Scribd complies with applicable copyright laws, including the DMCA. We respect the rights of copyright holders and have established processes for reviewing and responding to copyright infringement. When we receive a valid DMCA notification, we remove the identified content.</i></p>
<p><em>The DMCA framework anticipates that mistakes can occur and provides a process for correction. In this case, that process led to the restoration of the material.</em></p>
<p><em>More details about Scribd’s copyright policies are available <a href="https://support.scribd.com/hc/en-us/articles/210129026-Frequently-Asked-Questions-about-Copyrights-and-the-DMCA" target="_blank" rel="noopener" data-saferedirecturl="https://www.google.com/url?q=https://support.scribd.com/hc/en-us/articles/210129026-Frequently-Asked-Questions-about-Copyrights-and-the-DMCA&amp;source=gmail&amp;ust=1771524805377000&amp;usg=AOvVaw07_Dgr2TrOSaEY8mhMhiSg">here</a>.</em></p></blockquote>
<p>The post <a href="https://blog.ericgoldman.org/archives/2026/02/a-first-hand-look-at-the-messy-underbelly-of-dmca-512c-takedowns.htm">A First-Hand Look at the Messy Underbelly of DMCA 512(c) Takedowns</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
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			<slash:comments>2</slash:comments>
		
		
		<post-id xmlns="com-wordpress:feed-additions:1">28596</post-id>	</item>
		<item>
		<title>Section 230 Applies to Gamer&#8217;s Complaints About Griefing&#8211;Haymore v. Amazon</title>
		<link>https://blog.ericgoldman.org/archives/2024/11/section-230-applies-to-gamers-complaints-about-griefing-haymore-v-amazon.htm</link>
					<comments>https://blog.ericgoldman.org/archives/2024/11/section-230-applies-to-gamers-complaints-about-griefing-haymore-v-amazon.htm#comments</comments>
		
		<dc:creator><![CDATA[Eric Goldman]]></dc:creator>
		<pubDate>Wed, 20 Nov 2024 17:01:06 +0000</pubDate>
				<category><![CDATA[Content Regulation]]></category>
		<category><![CDATA[Derivative Liability]]></category>
		<category><![CDATA[Virtual Worlds]]></category>
		<guid isPermaLink="false">https://blog.ericgoldman.org/?p=27031</guid>

					<description><![CDATA[<p>This is a pro se/in pro per lawsuit. Andrew Grant Haymore played the MMORPG &#8220;New World&#8221; and used the New World discord server, from which he was banned. He alleges the ban diminished his investment of 10k hours and $1,700...</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2024/11/section-230-applies-to-gamers-complaints-about-griefing-haymore-v-amazon.htm">Section 230 Applies to Gamer&#8217;s Complaints About Griefing&#8211;Haymore v. Amazon</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><a href="https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-scaled.jpg"><img decoding="async" class="alignright size-medium wp-image-20910" src="https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-300x139.jpg" alt="" width="300" height="139" srcset="https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-300x139.jpg 300w, https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-1024x474.jpg 1024w, https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-768x355.jpg 768w, https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-1536x711.jpg 1536w, https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-2048x948.jpg 2048w" sizes="(max-width: 300px) 100vw, 300px" /></a>This is a pro se/in pro per lawsuit. Andrew Grant Haymore played the MMORPG &#8220;<a href="https://en.wikipedia.org/wiki/New_World_(video_game)">New World</a>&#8221; and used the New World discord server, from which he was banned. He alleges the ban diminished his investment of 10k hours and $1,700 into the game. He sued Amazon for $7B in compensatory damages and $70B in punitive damages. He doesn&#8217;t get a dime.</p>
<p>His complaint alleges that other New World players cyberbullied, cyberstalked, and griefed him. The court treats his claims against Amazon as an easy Section 230 case:</p>
<p><em>ICS Provider</em>. New World qualifies.</p>
<p><em>Publisher/Speaker Claim</em>.</p>
<blockquote><p>Plaintiff seeks to impose liability on Amazon based on its role publishing and transmitting allegedly harmful user-generated messages within the New World video game. This theory falls in the heartland of Section 230 because it seeks to premise liability on Amazon&#8217;s alleged publication and dissemination of the third-party speech it makes available on its services. The only way Amazon could avoid liability on Plaintiff&#8217;s theory is by declining to publish the allegedly harmful user messages, and by monitoring all content available on its platforms to ensure that access to any harmful content—here, “cyberbullying”—is removed. Section 230 protects online services from exactly this type of claim.</p></blockquote>
<p><em>Third-Party Content</em>. &#8220;Plaintiff&#8217;s claims also concern “harassing” comments posted by other New World “users,” not content that originated with Amazon itself.&#8221;</p>
<p>The court concludes its Section 230 discussion: &#8220;Section 230 precludes claims that the design of New World facilitated harmful speech by other players or that Amazon otherwise failed to regulate those players’ speech&#8230;.Amazon is immunized from liability for the statements (“grief” and “griefing”) made by other players within New World.&#8221;</p>
<p><em>Other Topics</em></p>
<p>Haymore also attacked the way Amazon ran the game, including its gameplay design. The court doesn&#8217;t take the bait:</p>
<blockquote><p>Amazon&#8217;s action in failing to design a game the way Plaintiff wants and in banning him from the game cannot rise to the level of “extreme and outrageous”&#8230;</p>
<p>Plaintiff&#8217;s belief that New World has become unplayable for certain players like himself is not outrageous. Being banned from a game platform also cannot be outrageous conduct. A social media company is not liable for IIED when it disables a user&#8217;s account due to a purported violation of the platform&#8217;s community standards</p></blockquote>
<p><em>Jargon Watch.</em> Haymore made a reference to the game&#8217;s &#8220;dungeon lobby,&#8221; prompting this footnote from the court: &#8220;It is not entirely clear what the &#8216;dungeon lobby&#8217; is, though, through context, it would seemingly be a virtual space within New World.&#8221; I did a search in the Westlaw and Lexis databases, and this appears to be the first caselaw reference to &#8220;dungeon lobby.&#8221;</p>
<p><em>Case Citation</em>: Haymore v. Amazon.com, Inc., 2024 WL 4825253 (E.D. Cal. Nov. 19, 2024)</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2024/11/section-230-applies-to-gamers-complaints-about-griefing-haymore-v-amazon.htm">Section 230 Applies to Gamer&#8217;s Complaints About Griefing&#8211;Haymore v. Amazon</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
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			<slash:comments>2</slash:comments>
		
		
		<post-id xmlns="com-wordpress:feed-additions:1">27031</post-id>	</item>
		<item>
		<title>First Amendment Protects Videogame&#8217;s Depiction of Tractor&#8217;s Trade Dress&#8211;Saber v. Oovee</title>
		<link>https://blog.ericgoldman.org/archives/2022/10/first-amendment-protects-videogames-depiction-of-tractors-trade-dress-saber-v-oovee.htm</link>
		
		<dc:creator><![CDATA[Eric Goldman]]></dc:creator>
		<pubDate>Tue, 11 Oct 2022 14:02:01 +0000</pubDate>
				<category><![CDATA[Content Regulation]]></category>
		<category><![CDATA[Licensing/Contracts]]></category>
		<category><![CDATA[Marketing]]></category>
		<category><![CDATA[Trademark]]></category>
		<category><![CDATA[Virtual Worlds]]></category>
		<guid isPermaLink="false">https://blog.ericgoldman.org/?p=24524</guid>

					<description><![CDATA[<p>This case involves the Polish tractor manufacturer Kirovets&#8217; K-700 tractor: Saber makes the videogame MudRunner. It exclusively licensed the right to depict the K-700 in its videogames, including the right to enforce the exclusive license in court. Oovee make the...</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2022/10/first-amendment-protects-videogames-depiction-of-tractors-trade-dress-saber-v-oovee.htm">First Amendment Protects Videogame&#8217;s Depiction of Tractor&#8217;s Trade Dress&#8211;Saber v. Oovee</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>This case involves the Polish tractor manufacturer Kirovets&#8217; K-700 tractor:</p>
<p><a href="https://blog.ericgoldman.org/wp-content/uploads/2022/10/k700.jpg"><img decoding="async" class="aligncenter size-full wp-image-24525" src="https://blog.ericgoldman.org/wp-content/uploads/2022/10/k700.jpg" alt="" width="427" height="284" srcset="https://blog.ericgoldman.org/wp-content/uploads/2022/10/k700.jpg 427w, https://blog.ericgoldman.org/wp-content/uploads/2022/10/k700-300x200.jpg 300w" sizes="(max-width: 427px) 100vw, 427px" /></a></p>
<p>Saber makes the videogame MudRunner. It exclusively licensed the right to depict the K-700 in its videogames, including the right to enforce the exclusive license in court. Oovee make the videogame Spintires. The court says: &#8220;Users interact with the virtual world by selecting a vehicle (which is like a character) and by navigating the virtual environment.&#8221; Spintires added a depiction of the K-700 as a playable vehicle. Saber sued Oovee for Lanham Act false designation of origin and related state claims.</p>
<p>Note the unusual posture of this lawsuit: the plaintiff is a videogame manufacturer suing another videogame manufacturer for violating the rights of a third-party trademark owner, creating the possibility that any adverse precedent would hurt both parties  long-term. I hope Saber is playing a smart game of 4D chess, because as an outsider it looks like an attempted own-goal. Both parties should be working to facilitate the free and unlicensed depictions of third-party elements in their games, not reifying existing property rights schemes.</p>
<p><em>First Amendment Defense to Lanham Act Claim</em></p>
<p>The court applies the Rogers v. Grimaldi test, consistent with the (uncited) <a href="https://blog.ericgoldman.org/archives/2020/04/humvee-cant-stop-depictions-of-its-vehicles-in-the-call-of-duty-videogame-am-general-v-activision-blizzard.htm">AM General v. Activision</a> case (Humvee v. Call of Duty).</p>
<p>Expressive work: Videogames are expressive works. It helps to have a Supreme Court case (Brown) standing for that proposition.</p>
<p>Artistic relevance: Saber &#8220;does not explain how Oovee’s use of the K-700 is artistically irrelevant.&#8221;</p>
<p>Explicitly misleading: Saber argued that videogame players expect that game manufacturers have licensed any actual vehicles depicted in the simulation (boo). The court says that&#8217;s not enough to show that Oovee explicitly misled consumers.</p>
<p>Saber also attacks this disclaimer in Spintires:</p>
<blockquote><p>All other trademarks are the property of their respective owners. All characters and vehicles appearing in Spintires ® are fictitious (except where licensed). Any representations to real-life persons (living or dead), or real-world vehicle designs (except where licensed), is purely coincidental.</p></blockquote>
<p>The court says &#8220;the disclaimer is far from a model of clarity.&#8221; It&#8217;s certainly not a disclaimer I would have advised.</p>
<p>Saber claims the disclaimer represents that either a depicted vehicle is either fictitious or licensed. The court tendentiously reads the disclaimer to say that it indicates that the K-700 wasn&#8217;t licensed because Oovee never disclosed the license, unlike a different vehicle where it did license and disclose. This raises the obvious question of why Oovee licensed some vehicle depictions and not others (I assume Saber&#8217;s exclusive license had something to do with that). The court&#8217;s reading also necessarily implies that Oovee&#8217;s depiction of the K-700 was either &#8220;fictitious&#8221; or &#8220;purely coincidental,&#8221; neither of which are true. So this disclaimer put the court in a pickle that it resolves in a less-than-satisfying way. I do agree with the court&#8217;s bottom-line that the disclaimer &#8220;does not <em>explicitly</em> mislead consumers into believing that Saber or PTZ is affiliated with <em>Spintires</em>.&#8221;</p>
<p>Motion to dismiss for Oovee. The court concludes: &#8220;Under the Rogers test, Oovee did not impermissibly infringe on Saber’s mark and trade dress. As a result, Oovee was not required to obtain a license.&#8221;</p>
<p><em>Implications</em></p>
<p><em>Rogers v. Grimaldi Test</em>. Yay for the Rogers v. Grimaldi test for helping structure/organize First Amendment considerations in Lanham Act cases. But&#8230;I always cringe a little when I see the Rogers v. Grimaldi test used outside of its original context of titles for expressive works. Turning Rogers v. Grimaldi into a general-purpose First Amendment defense risks putting more strain on the test than it can handle.</p>
<p>Plus, it&#8217;s a bit nerve-wracking to think of Oovee&#8217;s depiction as requiring a First Amendment defense, rather than relying on the organic prima facie elements of the claims. I hate seeing cases turn into Constitutional litigation where it can be avoided.</p>
<p><em>Permission</em> <em>Culture</em>. It&#8217;s easy to see how permission culture took root in this corner of the videogame market. Once a game manufacturer pays for an exclusive license, they stop being a potential defendant and turn into a litigious plaintiff seeking to recoup their investments. This then motivates rivals to get their own exclusive licenses, and it&#8217;s a race to the (very expensive) bottom. But if everyone could freely proceed without a license, the entire industry will benefit. So Oovee is working towards a public good.</p>
<p><em>Implications for Videogames and the Metaverse. </em>We&#8217;re in the midst of a battle royale over the legally permitted verisimilitude of commercial videogames and immersive environments like virtual worlds and the metaverse. It seems obvious that game designers should be able to depict real-life without running into a rights thicket, which almost certainly would make verisimilitude financially and operationally infeasible. Yet, the rulings in this genre are not all good news. It&#8217;s great to see First Amendment limits on trademark claims, but that doesn&#8217;t extend to copyright claims&#8211;leading to troubling rulings like the <a href="https://blog.ericgoldman.org/archives/2022/10/jury-awards-damages-to-tattoo-artist-for-video-game-depiction-alexander-v-wwe-2k-guest-blog-post.htm">Orton case</a>, where one heavily tatted wrestler can single-handedly turn into an insurmountable rights thicket. As we spend more of our lives in these virtual realities, we need clarity ASAP about whether they can accurately depict our physical reality.</p>
<p><em>Case citation</em>: <a href="https://storage.courtlistener.com/recap/gov.uscourts.wawd.303126/gov.uscourts.wawd.303126.51.0.pdf">Saber Interactive Inc. v. Oovee, Ltd</a>, 2:21-cv-01201-JHC (W.D. Wash. Oct. 6, 2022)</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2022/10/first-amendment-protects-videogames-depiction-of-tractors-trade-dress-saber-v-oovee.htm">First Amendment Protects Videogame&#8217;s Depiction of Tractor&#8217;s Trade Dress&#8211;Saber v. Oovee</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
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		<title>If TOS Formation Fails, Bad Legal Outcomes Are Likely to Follow&#8211;Doe v. Roblox</title>
		<link>https://blog.ericgoldman.org/archives/2022/05/if-tos-formation-fails-bad-legal-outcomes-are-likely-to-follow-doe-v-roblox.htm</link>
		
		<dc:creator><![CDATA[Eric Goldman]]></dc:creator>
		<pubDate>Tue, 17 May 2022 14:29:39 +0000</pubDate>
				<category><![CDATA[Derivative Liability]]></category>
		<category><![CDATA[Licensing/Contracts]]></category>
		<category><![CDATA[Privacy/Security]]></category>
		<category><![CDATA[Virtual Worlds]]></category>
		<guid isPermaLink="false">https://blog.ericgoldman.org/?p=23946</guid>

					<description><![CDATA[<p>This case involves Roblox, a virtual world. Allegedly, a majority of Roblox users are under 13. Roblox has an in-game currency, Robux. Users can manufacture virtual items in-game, and other users can buy those items using Robux, with Roblox taking...</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2022/05/if-tos-formation-fails-bad-legal-outcomes-are-likely-to-follow-doe-v-roblox.htm">If TOS Formation Fails, Bad Legal Outcomes Are Likely to Follow&#8211;Doe v. Roblox</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>This case involves Roblox, a virtual world. Allegedly, a majority of Roblox users are under 13. Roblox has an in-game currency, Robux. Users can manufacture virtual items in-game, and other users can buy those items using Robux, with Roblox taking a cut of the transactions. As I read the opinion, if Roblox discovers a virtual user-made item violates its TOS, Roblox nukes the item&#8230;but apparently didn&#8217;t refund the buyers&#8217; money, so buyers lost both their money and the item. (The buyer also claims that Roblox deletes items to induce buyers to buy them again).</p>
<p>I doubt anyone has a problem with Roblox nuking violative items. Indeed, I&#8217;m sure many critics feel Roblox should be more aggressive on that front. However, Roblox&#8217;s policy not to refund buyers in those circumstances is head-scratching&#8211;especially when so many buyers were pre-teen. After this lawsuit was filed, Roblox perhaps recognized its untenable position and refunded buyers; it even offered to pay reasonable attorneys&#8217; fees. Apparently these moves didn&#8217;t satisfy the buyers/plaintiffs&#8217; lawyers, who pressed on with the lawsuit.</p>
<p>The moves also didn&#8217;t satisfy the judge. This opinion is filled with bad news for Roblox.</p>
<p><em>Contract Formation</em>. Roblox&#8217;s TOS said that &#8220;Roblox may &#8216;at any time and without prior notice, screen, remove, edit, or block any [User Generated Content (&#8216;UGC&#8217;)] that in our sole judgment violates these Terms or is otherwise objectionable&#8217; and that the user agreed &#8216;to waive, and do waive, any legal or equitable right or remedy you have or may have against us with respect to UGC.'&#8221; Other favorable TOS provisions include a class action waiver and a 60-day negotiation period before filing suit.</p>
<p>None of this matters. The court says the TOS formation failed with the named plaintiff in part because the formation process wasn&#8217;t sufficiently clear to minors.</p>
<p>Here is the TOS formation screen:</p>
<p><a href="https://blog.ericgoldman.org/wp-content/uploads/2022/05/roblox.jpg"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-23947" src="https://blog.ericgoldman.org/wp-content/uploads/2022/05/roblox.jpg" alt="" width="560" height="749" srcset="https://blog.ericgoldman.org/wp-content/uploads/2022/05/roblox.jpg 560w, https://blog.ericgoldman.org/wp-content/uploads/2022/05/roblox-224x300.jpg 224w" sizes="auto, (max-width: 560px) 100vw, 560px" /></a></p>
<p>This looks like a typical clickthrough formation process (a/k/a &#8220;sign-in-wrap&#8221;&#8230;blech) that I&#8217;d normally rate as 90% likely to succeed. Roblox could have bumped up the enforceability to 99% with a second click; indeed, the court cites the absence of the second click against Roblox. (Reminder: a second click is best practice because it reduces risk of contract formation failure, like what happens here). Even so, as applied to an adult audience, this formation process probably works.</p>
<p>However, the named plaintiff was 10 at the time of TOS formation, and the court says this matters: &#8220;Even if the notice would be sufficiently conspicuous and understandable for an adult, it is not for a child&#8230;.A child—even a reasonably prudent one—would not be on inquiry notice that she was assenting to an agreement from this set of facts.&#8221; The court makes it clear that it&#8217;s not voiding the contract due to the minor status; it&#8217;s adjusting the &#8220;reasonably conspicuous&#8221; standard to reflect Doe&#8217;s minority.</p>
<p>(There is a related but unanswered question here: COPPA spells out formation requirements for under-13s, including the need for parental consent. I&#8217;m not clear how Roblox was complying with COPPA and why that process didn&#8217;t cure the TOS formation failure. The plaintiffs alleged &#8220;Roblox does not include any sort of age-related protections that some other websites use, such as requiring parental permission,&#8221; but that allegation suggests an obvious COPPA problem).</p>
<p>As a result, the TOS fails. This knocks out the pre-litigation negotiation requirement, the TOS&#8217;s protective provisions, the TOS&#8217;s disclosures, the TOS&#8217;s licenses (which nukes Roblox&#8217;s defense to a conversion claim), and more. The court doesn&#8217;t specify what contract terms gap-fill in the TOS&#8217;s absence, but those default rules won&#8217;t be as favorable to Roblox as their TOS.</p>
<p><em>Section</em> <em>230</em>. Roblox invoked Section 230 as a defense. The court disagrees:</p>
<blockquote><p>Doe does not seek to treat Roblox as a publisher or speaker of the user-generated content. Liability would instead attach for Roblox’s own failure to disclose that it can delete previously purchased items with no warning. Roblox is essentially functioning as a seller of virtual merchandise, not a publisher of information [cite to <a href="https://blog.ericgoldman.org/archives/2019/05/ninth-circuit-chunks-another-section-230-ruling-homeaway-v-santa-monica-catch-up-post.htm">HomeAway</a>]</p></blockquote>
<p>&#8220;Failure to disclose&#8221; is a troubling workaround to Section 230 because plaintiffs can always creatively style their claim this way. Also, Roblox&#8217;s TOS seemingly did make the disclosure, but the court apparently treats TOS&#8217;s failure as mooting the disclosure.</p>
<p>The court distinguishes the <a href="https://blog.ericgoldman.org/archives/2021/02/section-230-protects-app-store-from-liability-for-apps-with-loot-boxes-coffee-v-google.htm">Coffee v. Google</a> loot box case because this lawsuit &#8220;does not seek to tell Roblox what it can and cannot post from third parties; it seeks instead to have Roblox disclose to consumers that it has the ability to delete purchased content.&#8221;</p>
<p><em>UCL. </em>Doe lost money. &#8220;While Roblox cites cases that have held that purchases of in-game currency are not a sufficient economic injury in some circumstances, they did not address a situation based on a failure-to-disclose claim. Many are premised on the idea that consumers got exactly what they expected, they just did not like the results.&#8221;</p>
<p><em>Implications</em></p>
<p>15 years ago, one of the buzziest cyberlaw topics was ownership of assets in virtual worlds, like property acquisitions in Second Life. Lots of academics and bloggers wrote about the topic, but we had very few actual court cases addressing it. All you Second Life pundits, here&#8217;s an opinion you were waiting for!</p>
<p>Standard online account termination and content removal discretion looks weird when consumers buy in-game/in-world virtual assets. This issue puzzled me for years because those buyers spend their money knowing it&#8217;s predicated on a shaky TOS foundation, eventually resulting in <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1934310">this article</a>. Today, I think it&#8217;s clearer that services may not be able to freely terminate users or remove paid-for items without making the users financially whole&#8211;or at least having a solid TOS warning users of the risks of losing their money.</p>
<p>Once the court struck down Roblox&#8217;s TOS, many of its defenses fell apart. I have stressed many times over the years: FAILURE ISN&#8217;T AN OPTION WHEN IT COMES TO TOS FORMATION. That&#8217;s why you need two clicks, not one, for formation&#8211;better safe than sorry. And as this opinion indicates, if your clientele involves minors, you need a kid-friendly interface; adult-focused UI tactics may not cut it.</p>
<p><em>Case citation</em>: <a href="https://www.govinfo.gov/content/pkg/USCOURTS-cand-3_21-cv-03943/pdf/USCOURTS-cand-3_21-cv-03943-1.pdf">Doe v. Roblox Corp.</a>, 2022 WL 1459568 (N.D. Cal. May 9, 2022)</p>
<p>BONUS: Compare <a href="http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&amp;Path=Y2022/D03-24/C:21-2247:J:Easterbrook:aut:T:fnOp:N:2851325:S:0">K.F.C. v. Snap, Inc.</a>, 2022 WL 871996 (7th Cir. March 23, 2022). KFC was 11 when she signed up for Snap. Snap restricts accounts to 13+, but she lied about her age. She later sued Snap for allegedly violating BIPA violations. Snap sought arbitration per its TOS. The court says KFC&#8217;s contract with Snap is voidable, not void, so any questions about defenses to contract formation go to arbitration. Cite to <a href="https://law.justia.com/cases/federal/appellate-courts/ca6/21-1089/21-1089-2021-12-02.html">IC v. StockX</a>.</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2022/05/if-tos-formation-fails-bad-legal-outcomes-are-likely-to-follow-doe-v-roblox.htm">If TOS Formation Fails, Bad Legal Outcomes Are Likely to Follow&#8211;Doe v. Roblox</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
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		<title>Section 230 Preempts Game User&#8217;s Lawsuit Over Game Moderators&#8217; Behavior&#8211;Quinteros v. Forge of Empires</title>
		<link>https://blog.ericgoldman.org/archives/2022/03/section-230-preempts-game-users-lawsuit-over-game-moderators-behavior-quinteros-v-forge-of-empires.htm</link>
		
		<dc:creator><![CDATA[Eric Goldman]]></dc:creator>
		<pubDate>Tue, 29 Mar 2022 15:34:02 +0000</pubDate>
				<category><![CDATA[Content Regulation]]></category>
		<category><![CDATA[Derivative Liability]]></category>
		<category><![CDATA[Licensing/Contracts]]></category>
		<category><![CDATA[Virtual Worlds]]></category>
		<guid isPermaLink="false">https://blog.ericgoldman.org/?p=23763</guid>

					<description><![CDATA[<p>This lawsuit involves the freemium videogame &#8220;Forge of Empires.&#8221; The plaintiff, Penny Quinteros (a/k/a TwoCents), claims she became addicted to the game. She played the game virtually every day from 2016-19&#8211;over 10,000 hours worth&#8211;and spent over $9,000 on in-game transactions....</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2022/03/section-230-preempts-game-users-lawsuit-over-game-moderators-behavior-quinteros-v-forge-of-empires.htm">Section 230 Preempts Game User&#8217;s Lawsuit Over Game Moderators&#8217; Behavior&#8211;Quinteros v. Forge of Empires</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>This lawsuit involves the freemium videogame &#8220;<a href="https://en.wikipedia.org/wiki/Forge_of_Empires">Forge of Empires</a>.&#8221; The plaintiff, Penny Quinteros (a/k/a TwoCents), claims she became addicted to the game. She played the game virtually every day from 2016-19&#8211;over 10,000 hours worth&#8211;and spent over $9,000 on in-game transactions. She also claims that she was harassed by in-game moderators who are &#8220;volunteers&#8221; but compensated with extra in-game privileges and currency. She reported the harassment to support staff, but in profane and impolite messages that themselves might be construed as harassing. Eventually, it appears the game restricted her access. She sued pro se for a variety of claims. The court dismisses them all.</p>
<p><em><a href="https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-scaled.jpg"><img loading="lazy" decoding="async" class="alignright size-medium wp-image-20910" src="https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-300x139.jpg" alt="" width="300" height="139" srcset="https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-300x139.jpg 300w, https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-1024x474.jpg 1024w, https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-768x355.jpg 768w, https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-1536x711.jpg 1536w, https://blog.ericgoldman.org/wp-content/uploads/2020/03/IMG_8558-2048x948.jpg 2048w" sizes="auto, (max-width: 300px) 100vw, 300px" /></a>Section 230</em>. Section 230(c)(1) provides immunity for claims based on third-party content. In addition, &#8220;Defendants are immune from Plaintiff&#8217;s claims related to their restriction of her access to Forge of Empires in an effort to prevent her from publishing &#8216;obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable&#8221; content.&#8217; Another 230(c)(2)(A) defense ruling on the heels of <a href="https://blog.ericgoldman.org/archives/2022/03/vimeo-wins-section-230c2a-ruling-on-motion-to-dismiss-daystar-v-vimeo.htm">Daystar v. Vimeo</a>.</p>
<p><em>Negligence</em>. Her negligence claims included: &#8220;sexually explicit advertisements&#8221; promoting Forge of Empires creating &#8220;an unsafe environment for women players;&#8221; negligent supervision of &#8220;moderator-players,&#8221; negligence per se for failing to protect her confidential information, &#8220;unsafe advertisements,&#8221; and other complaints related to conduct from other users of Defendants&#8217; game. The court says Section 230 preempts most of those claims. In addition, &#8220;Plaintiff has not cited any duty of Defendants to protect Plaintiff from alleged harassment by third parties in a video game.&#8221;</p>
<p><em>Defamation</em>. The plaintiff claims the defense said she was &#8220;crazy&#8221; and &#8220;a liar&#8221; and disparaged her &#8220;mental status.&#8221; The court says these are not provable fact statements. Plus, Section 230 applies to any statements made by third parties.</p>
<p><em>IIED.</em> &#8220;alleged inconsistent enforcement of community standards in an online video game does not raise to the level of extreme and outrageous conduct.&#8221;</p>
<p><em>Consumer Protection</em>. &#8220;any injury to the Plaintiff caused by cheating or unfair play in this game was reasonably avoidable, the harm did not affect the public interest, and it did not cause injury to her business or property.&#8221;</p>
<p><em>Products Liability</em>. An online videogame isn&#8217;t a &#8220;product.&#8221;</p>
<p><em>Breach of Contract</em>. The alleged breaches appear to be the game&#8217;s failure to enforce possible contract breaches by other users. Among other problems with the claims, Section 230 applies to third-party conduct.</p>
<p><em>Implications. </em>This lawsuit raises so many key issues of Internet Law, including what steps games need to take to address online harassment (especially gender-based harassment), the legality of &#8220;addictive&#8221; games, liability for &#8220;unsafe&#8221; online environments, the implications of the freemium business model, the legal consequences of &#8220;inconsistent&#8221; content moderation, the implications of in-game &#8220;cheating,&#8221; the legal responsibility for volunteer moderators, customers&#8217; harassment of CSRs, and legal claims for account termination/restrictions (I can&#8217;t tell if this case fits our dataset of such cases or not). The court&#8217;s opinion breezes through most of these important and complicated topics, mostly due to the plaintiff&#8217;s pro se arguments and Section 230.</p>
<p><em>Case citation</em>: Quinteros v. Innogames, 2022 U.S. Dist. LEXIS 55640 (W.D. Wash. March 28, 2022)</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2022/03/section-230-preempts-game-users-lawsuit-over-game-moderators-behavior-quinteros-v-forge-of-empires.htm">Section 230 Preempts Game User&#8217;s Lawsuit Over Game Moderators&#8217; Behavior&#8211;Quinteros v. Forge of Empires</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
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		<title>Snapchat Photos Don&#8217;t Constitute &#8220;Virtual&#8221; Physical Presence&#8211;People v. White</title>
		<link>https://blog.ericgoldman.org/archives/2021/03/snapchat-photos-dont-constitute-virtual-physical-presence-people-v-white.htm</link>
		
		<dc:creator><![CDATA[Eric Goldman]]></dc:creator>
		<pubDate>Sun, 28 Mar 2021 16:01:08 +0000</pubDate>
				<category><![CDATA[Content Regulation]]></category>
		<category><![CDATA[Internet History]]></category>
		<category><![CDATA[Virtual Worlds]]></category>
		<guid isPermaLink="false">https://blog.ericgoldman.org/?p=22477</guid>

					<description><![CDATA[<p>The defendant was a high school teacher and coach. She sent photos to one of her students, WB, via Snapchat. The court says WB and the defendant never discussed the photos. The court describes the photos as &#8220;somewhat risqué&#8221; because...</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2021/03/snapchat-photos-dont-constitute-virtual-physical-presence-people-v-white.htm">Snapchat Photos Don&#8217;t Constitute &#8220;Virtual&#8221; Physical Presence&#8211;People v. White</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>The defendant was a high school teacher and coach. She sent photos to one of her students, WB, via Snapchat. The court says WB and the defendant never discussed the photos. The court describes the photos as &#8220;somewhat risqué&#8221; because they featured her partially uncovered breasts. Using a separate phone, WB took photos of the Snapchat photos (this avoided Snapchat&#8217;s notifications for screenshotting).</p>
<p>The state prosecuted the defendant for sexual exploitation of a child (Illinois Criminal Code Sec. 11-9.1(a)) on the theory that the defendant exposed herself in a child&#8217;s &#8220;virtual presence&#8221; (a statutorily defined term). The court says virtual presence occurs when:</p>
<blockquote><p>software, such as webcam video software, creates an &#8216;environment&#8217; in which the child is virtually in the defendant&#8217;s presence&#8230;.the legislature has in mind a computer artifice that apes physical presence: a webcam video or something like it. To meet the description of “ ‘[v]irtual presence,’ ” the software has to “create[ ]” a you-could-be-there “environment.”</p></blockquote>
<p>The court says photos on Snapchat don&#8217;t satisfy this requirement:</p>
<blockquote><p>They were merely the digital equivalents of Polaroids, only more ephemeral&#8230;.Snapchat did not create the illusory environment of presence that the legislature had in mind by its use of the term “virtual presence.” Unlike Zoom, for instance, which is the video communication app that we used for oral arguments in this case, the Snapchat app that defendant and W.B. used was not a stand-in for physical presence.</p></blockquote>
<p>As a result, the court overturned the defendant&#8217;s conviction. The court doesn&#8217;t discuss whether other crimes might have applied or why the prosecutors chose to fit the facts into this crime.</p>
<p>This ruling addresses a classic Internet Law topic: the distinctions between &#8220;virtual&#8221; and &#8220;physical&#8221; activity and when those matter to the legal outcomes. The court doesn&#8217;t unpack the assumptions underlying the legislature&#8217;s extension of the crime to &#8220;virtual&#8221; presence, but apparently synchronous interactions are required. Even then, I wonder if virtual synchronous interactions are equivalent. For example, virtual interactions lack the implied threat of immediate violence or compulsion that exist in physical space.</p>
<p>This ruling possibly conflicts with <a href="https://blog.ericgoldman.org/archives/2017/05/how-is-texting-a-dick-pic-like-masturbating-in-a-persons-presence-state-v-decker.htm">State v. Decker</a>, which held that texting a dick pic constituted criminal sexual conduct, i.e., “masturbation or lewd exhibition of the genitals in the presence of a minor under the age of 16, knowing or having reason to know the minor is present.” The court found sufficient &#8220;presence&#8221; because the defendant sent the photo in the context of an active chat thread. Perhaps this case can be distinguished because there didn&#8217;t seem to be an active chat thread; or because the statutory definition of &#8220;virtual presence&#8221; differed from the &#8220;presence&#8221; definition in Decker. It&#8217;s also possible these cases reached different results based on varying norms about the importance of physicality in these crimes. As the White court implies, if sending Snapchat photos is covered by this crime, then it&#8217;s likely the crime would extend to showing &#8220;somewhat risque&#8221; &#8220;polaroids&#8221; to a third party in physical space.</p>
<p><em>Case citation</em>: <a href="https://courts.illinois.gov/Opinions/AppellateCourt/2021/4thDistrict/4200354.pdf">People v. White</a>, 2021 IL App (4th) 200354 (Ill. App. Ct. March 25, 2021)</p>
<p><em>Some Related Posts</em></p>
<ul>
<li><a href="https://blog.ericgoldman.org/archives/2019/04/an-email-inbox-isnt-a-place-for-purposes-of-florida-privacy-law-hall-v-sargeant.htm">An Email Inbox Isn’t a “Place” for Purposes of Florida Privacy Law–Hall v. Sargeant</a></li>
<li><a title="Court Allows “Battery by GIF” Claim to Proceed–Eichenwald v. Rivello" href="https://blog.ericgoldman.org/archives/2018/06/court-allows-battery-by-gif-claim-to-proceed-eichenwald-v-rivello.htm" rel="bookmark">Court Allows “Battery by GIF” Claim to Proceed–Eichenwald v. Rivello</a></li>
<li><a href="https://blog.ericgoldman.org/archives/2017/05/how-is-texting-a-dick-pic-like-masturbating-in-a-persons-presence-state-v-decker.htm">How Is Texting a Dick Pic Like Masturbating in a Person’s Presence?–State v. Decker</a></li>
<li><a href="https://blog.ericgoldman.org/archives/2016/12/tweeting-death-threats-isnt-juvenile-delinquency-in-re-r-d.htm">Tweeting Death Threats Isn’t Juvenile Delinquency–In re R.D.</a></li>
<li><a title="Sending Emails Isn’t Workplace Stalking–People v. Marian" href="https://blog.ericgoldman.org/archives/2015/07/sending-emails-isnt-workplace-stalking-people-v-marian.htm" rel="bookmark">Sending Emails Isn’t Workplace Stalking–People v. Marian</a></li>
<li><a title="When Does Online Criticism Become “Stalking”?–Ellis v. Chan" href="https://blog.ericgoldman.org/archives/2014/10/when-does-online-criticism-become-stalking-ellis-v-chan.htm" rel="bookmark">When Does Online Criticism Become “Stalking”?–Ellis v. Chan</a></li>
<li><a href="https://blog.ericgoldman.org/archives/2010/10/politically_cha.htm">Sending Politically Charged Emails Does Not Support Disturbing the Peace Conviction — State v. Drahota</a></li>
<li><a title="Online Game Network Isn’t Company Town–Estavillo v. Sony" href="https://blog.ericgoldman.org/archives/2009/10/online_game_net.htm" rel="bookmark">Online Game Network Isn’t Company Town–Estavillo v. Sony</a></li>
<li><a title="Web Developer Didn’t “Convert” Website–Conwell v. Gray Loon" href="https://blog.ericgoldman.org/archives/2009/06/web_developer_d.htm" rel="bookmark">Web Developer Didn’t “Convert” Website–Conwell v. Gray Loon</a></li>
<li><a title="Compartmentalization v. Immersion in Virtual Worlds" href="https://blog.ericgoldman.org/archives/2005/05/compartmentaliz.htm" rel="bookmark">Compartmentalization v. Immersion in Virtual Worlds</a></li>
</ul>
<p>The post <a href="https://blog.ericgoldman.org/archives/2021/03/snapchat-photos-dont-constitute-virtual-physical-presence-people-v-white.htm">Snapchat Photos Don&#8217;t Constitute &#8220;Virtual&#8221; Physical Presence&#8211;People v. White</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
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		<post-id xmlns="com-wordpress:feed-additions:1">22477</post-id>	</item>
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		<title>Defendants Keep Getting Arbitration Despite the Anarchy in Online Contract Formation Doctrine</title>
		<link>https://blog.ericgoldman.org/archives/2020/03/defendants-keep-getting-arbitration-despite-the-anarchy-in-online-contract-formation-doctrine.htm</link>
					<comments>https://blog.ericgoldman.org/archives/2020/03/defendants-keep-getting-arbitration-despite-the-anarchy-in-online-contract-formation-doctrine.htm#comments</comments>
		
		<dc:creator><![CDATA[Eric Goldman]]></dc:creator>
		<pubDate>Tue, 03 Mar 2020 14:41:11 +0000</pubDate>
				<category><![CDATA[E-Commerce]]></category>
		<category><![CDATA[Evidence/Discovery]]></category>
		<category><![CDATA[Licensing/Contracts]]></category>
		<category><![CDATA[Virtual Worlds]]></category>
		<guid isPermaLink="false">https://blog.ericgoldman.org/?p=20846</guid>

					<description><![CDATA[<p>Online contract formation law has gotten strange. The proliferation of &#8220;wrap&#8221; variations has tied up judges in knots. Despite the increasingly baroque and incoherent legal doctrines, the bottom line has largely remained the same: most online contracts are properly formed...</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2020/03/defendants-keep-getting-arbitration-despite-the-anarchy-in-online-contract-formation-doctrine.htm">Defendants Keep Getting Arbitration Despite the Anarchy in Online Contract Formation Doctrine</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>Online contract formation law has gotten strange. The proliferation of &#8220;wrap&#8221; variations has tied up judges in knots. Despite the increasingly baroque and incoherent legal doctrines, the bottom line has largely remained the same: most online contracts are properly formed under current doctrine and thus are likely to work in court. As evidence of that, I present three online contract formation cases that recently popped up in my alerts. The defendants successfully invoked arbitration clauses in all three:</p>
<p><strong>Hosseini v. Upstart Network, Inc.</strong>, 2020 WL 573126 (E.D. Va. Feb. 5, 2020)</p>
<p>The plaintiff obtained an $18,000 loan in 2014 via the defendant, an online financial matchmaker. In 2016, he had the loan discharged in bankruptcy. He sued because the lender allegedly didn&#8217;t properly report the discharge. The matchmaker invoked the arbitration clause in its &#8220;Platform Agreement.&#8221; Here is the contract formation page:</p>
<p>&nbsp;</p>
<p><a href="https://blog.ericgoldman.org/wp-content/uploads/2020/02/hosseini-screenshot-1.jpg"><img loading="lazy" decoding="async" class="size-full wp-image-20847 aligncenter" src="https://blog.ericgoldman.org/wp-content/uploads/2020/02/hosseini-screenshot-1.jpg" alt="" width="401" height="781" srcset="https://blog.ericgoldman.org/wp-content/uploads/2020/02/hosseini-screenshot-1.jpg 401w, https://blog.ericgoldman.org/wp-content/uploads/2020/02/hosseini-screenshot-1-154x300.jpg 154w" sizes="auto, (max-width: 401px) 100vw, 401px" /></a></p>
<p style="text-align: left;">If you can&#8217;t read that, here is a closeup of the page bottom:</p>
<p><a href="https://blog.ericgoldman.org/wp-content/uploads/2020/02/hosseini-screenshot-2.jpg"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-20848" src="https://blog.ericgoldman.org/wp-content/uploads/2020/02/hosseini-screenshot-2.jpg" alt="" width="759" height="196" srcset="https://blog.ericgoldman.org/wp-content/uploads/2020/02/hosseini-screenshot-2.jpg 759w, https://blog.ericgoldman.org/wp-content/uploads/2020/02/hosseini-screenshot-2-300x77.jpg 300w" sizes="auto, (max-width: 759px) 100vw, 759px" /></a></p>
<p>The court calls this formation process a &#8220;hybrid clickwrap agreement&#8221; because the terms are hyperlinked and not displayed on the page. While the distinction between &#8220;clickwrap&#8221; and &#8220;hybrid clickwrap&#8221; agreements is a little disconcerting, the court says both are &#8220;routinely found to be valid, enforceable contracts,&#8221; citing <a href="https://blog.ericgoldman.org/archives/2012/01/court_cant_deci.htm">Fteja v. Facebook</a>. (So&#8230;why distinguish the two flavors?) Thus, the court says the arbitration provision is enforceable.</p>
<p>Not giving up, the plaintiff challenged the agreement&#8217;s authenticity. The defendant fought back with:</p>
<blockquote><p>three declarations and several exhibits which defendant argues establish that plaintiff affirmatively agreed to the Platform Agreement and the arbitration clause contained within it. Anna Counselman, the Head of Operations and co-founder of defendant, averred in her affidavit that, at the time plaintiff applied for a loan in July 2014, the Upstart Platform “required him to accept” the Platform Agreement and other agreements “by affirmatively checking an ‘I Agree’ box or clicking an ‘I Agree’ button on the form.” Counselman also stated that “the prospective borrower cannot complete the loan application or use the Upstart Platform” without agreeing to the terms of the Platform Agreement and other agreements. Counselman reviewed defendant’s records and determined that plaintiff created his account and agreed to the Platform Agreement at 11:19 a.m. PST on July 10, 2014. The information included in Counselman’s affidavit is echoed by the declaration of defendant’s Head of Information Technology, Saikat Maiti. In a second declaration, Maiti provides a screenshot of the page depicting the “I Agree” box that appeared in July 2014 (through 2015)&#8230;Maiti states that the “I Agree” box provided a link to the Platform Agreement.</p></blockquote>
<p>These declarations do the trick. &#8220;Defendant has provided undisputed testimony indicating not only that it was impossible to proceed to obtain a loan without agreeing to the Platform Agreement, but the exact time when such agreement took place.&#8221; Not every service can provide such a definitive time-stamp of contract formation for a specific individual, but it&#8217;s powerful evidence if available. The plaintiff argued that he never physically signed the agreement, which the court correctly says is irrelevant: &#8220;a physical manifestation of plaintiff’s signature seems even more unnecessary where defendant keeps a record of the date and time when plaintiff clicked the &#8216;Agree&#8217; button and agreed to the Platform Agreement.&#8221;</p>
<p><strong>Walker v. Neutron Holdings, Inc.</strong>, 2020 WL 703268 (W.D. Texas Feb. 11, 2020)</p>
<p>This is a Lime electric scooter case. The plaintiff claims the scooter had bad brakes, leading to physical injuries. Lime invoked its arbitration clause. Here&#8217;s the contract formation process:</p>
<p><a href="https://blog.ericgoldman.org/wp-content/uploads/2020/03/lime.jpg"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-20869" src="https://blog.ericgoldman.org/wp-content/uploads/2020/03/lime.jpg" alt="" width="395" height="675" srcset="https://blog.ericgoldman.org/wp-content/uploads/2020/03/lime.jpg 395w, https://blog.ericgoldman.org/wp-content/uploads/2020/03/lime-176x300.jpg 176w" sizes="auto, (max-width: 395px) 100vw, 395px" /></a></p>
<p>I don&#8217;t love this presentation. First, the lime-green &#8220;next&#8221; button is at the very top, but there is visual separation between the &#8220;next&#8221; button and the purportedly binding legal text. This is similar to the &#8220;download now&#8221; exhortation that undermined Netscape&#8217;s SmartDownload contract formation in Specht v. Netscape. Second, if users look beyond the &#8220;next&#8221; button&#8211;which they have no reason to do&#8211;they could easily overlook the tiny grey font with the TOS call to action. It&#8217;s the smallest and faintest font on the screen. The plaintiff claimed (fairly IMO) &#8220;the text of the User Agreement notice is &#8216;small, faint, gray typeface, far below Lime&#8217;s invitation to ride,&#8217; and is &#8216;practically illegible.'&#8221;</p>
<p>The court deems this a &#8220;sign-in wrap&#8221; (I can&#8217;t write those words without saying UGH). The court says sign-in wraps are enforceable &#8220;where the user had reasonable notice of the existence of the terms, i.e., where the notice was reasonably conspicuous,&#8221; evaluated by the standards of a reasonably prudent smartphone user (cite to <a href="https://blog.ericgoldman.org/archives/2017/08/meyervuber.htm">Meyer v. Uber</a>). After an uninspired recap of 5 cases, the court says conclusorily that &#8220;a reasonable user would view the Lime App signin screen and see that the User Agreement is part of the offer to proceed with the transaction by clicking &#8216;NEXT&#8217; or &#8216;Continue with Facebook.'&#8221; Motion for arbitration granted.</p>
<p><strong>Troia v. Tinder, Inc.</strong>, 2020 WL 619855 (E.D. Mo. Feb. 10, 2020)</p>
<p>This is an age discrimination lawsuit over Tinder Plus, which charges an extra fee to Tinder users over 30 years old. The plaintiff acknowledges agreeing to Tinder&#8217;s TOU. In a footnote, the court explains: &#8220;Tinder uses a sign-up wrap. Plaintiff consented to the TOU by tapping the Tinder Log In button directly below a disclosure that clearly explained that doing so constituted agreement to the TOU, which itself was accessible via a hyperlink in the disclosure.&#8221; While he acknowledged the standard TOU, he disputes agreeing to Tinder Plus&#8217; TOU. The court says that the standard TOU arbitration clause incorporates his dispute over the Tinder Plus TOU.</p>
<p>Nevertheless, the plaintiff argued that the &#8220;hybridwrap&#8221; didn&#8217;t provide sufficient notice of the arbitration clause.</p>
<p><a href="https://blog.ericgoldman.org/wp-content/uploads/2020/03/tinder.jpg"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-20870" src="https://blog.ericgoldman.org/wp-content/uploads/2020/03/tinder.jpg" alt="" width="324" height="686" srcset="https://blog.ericgoldman.org/wp-content/uploads/2020/03/tinder.jpg 324w, https://blog.ericgoldman.org/wp-content/uploads/2020/03/tinder-142x300.jpg 142w" sizes="auto, (max-width: 324px) 100vw, 324px" /></a></p>
<p>The court notes that the &#8220;terms&#8221; and &#8220;privacy policy&#8221; are hyperlinked, but this screen is so busy that the links required careful scrutiny to see the links. Nevertheless, the court concludes that &#8220;Troia was provided access to the TOU and accepted those terms, even if those terms were not presented on the same page as the acceptance button&#8230;.The Court holds that this screen provides adequate notice under the case law that Troia would be bound by the TOU and the privacy policy.&#8221; Motion for arbitration granted.</p>
<p>The plaintiff&#8217;s unconscionability argument goes poorly. Troia worked for the plaintiff&#8217;s lawyer as a computer expert. &#8220;Troia created a Tinder account, subscribed to Tinder Plus less than two minutes later, and then filed this lawsuit on the same day. Troia admitted he specifically looked for arbitration agreements and TOU, but he does not dispute that he agreed to the TOU as part of his application for the Tinder service&#8230;.given Troia’s clear knowledge of the TOU and prescience as to the arbitration agreement, the Court finds that this agreement is not unconscionable because there is no unfair surprise or oppression.&#8221;</p>
<p>The plaintiff has already appealed this ruling to the Eighth Circuit.</p>
<p><strong>Want to Read More? </strong>A reminder that I&#8217;ve posted <a href="https://ssrn.com/abstract=3201352">my entire Internet Law book chapter on online contracts</a> for free download from SSRN. It covers all of the issues discussed in this blog post and much more.</p>
<p><strong>Bonus Content: </strong><strong>Kater v. Churchill Downs, Inc., </strong>C15-0612-RBL (W.D. Wash. Nov. 19, 2019).</p>
<p>Sorry, this one got stuck in the blog queue. This case involves Big Fish Casino, no stranger to this blog. In what can only be described as a jerk move, Big Fish Casino nominally amended its TOU to expand its existing mandatory arbitration and class action waiver. The amendments expressly said they did not apply to the 3 named plaintiffs in a pending class action lawsuit. Everyone else could opt-out of the amendments by providing notice within 30 days. After posting the amended terms, Big Fish displayed this screen:</p>
<p><a href="https://blog.ericgoldman.org/wp-content/uploads/2020/03/big-fish.jpg"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-20872" src="https://blog.ericgoldman.org/wp-content/uploads/2020/03/big-fish.jpg" alt="" width="438" height="724" srcset="https://blog.ericgoldman.org/wp-content/uploads/2020/03/big-fish.jpg 438w, https://blog.ericgoldman.org/wp-content/uploads/2020/03/big-fish-181x300.jpg 181w" sizes="auto, (max-width: 438px) 100vw, 438px" /></a></p>
<p>Can Big Fish get away with a stunt like this? Probably not:</p>
<blockquote><p>Big Fish’s new pop-up, in conjunction with the revised Terms of Use, is coercive and misleading. The pop-up message presents putative class members with a stark choice: relinquish your class action rights and continue playing or maintain your rights and forfeit access to Big Fish’s games. This ultimatum is made more coercive by the addictive nature of Big Fish’s games and the fact that many players have already purchased chips that can only be accessed by agreeing to the terms. With such pressures at play, the pop-up, and revised Terms, are clearly intended to steer putative class members away from participating in these cases.</p>
<p>Nor is the coercive effect negated by the existence of an opt-out procedure. The pop-up window makes no mention of opting out; instead, it states very simply that clicking “I agree” and accessing the game precludes participation in a lawsuit. This seemingly binary choice gives users no reason to believe an opt-out provision exists somewhere in the Terms—indeed, as Plaintiffs point out, the word “mandatory” leads them to believe the opposite. The opt-out provision itself thus does not mitigate the coercion, and Big Fish’s attempt to hide the opt-out provision through a false ultimatum is misleading.</p></blockquote>
<p>The court also said that Big Fish&#8217;s approach didn&#8217;t constitute proper communications with class members.</p>
<p>The court issued the following relief:</p>
<blockquote><p>The existing pop-up is coercive and misleading as to those players who are putative class members in either lawsuit. Big Fish claims that some 90% of its players never buy chips. If it is feasible to do so, Big Fish may show a revised pop-up only to those players who have purchased chips during the relevant time periods and are therefore members of the putative class(es). The Court will not interfere with Big Fish’s communications with new players or old players who did not purchase chips in the relevant time frames. However, if Big Fish cannot find a way to separate its communications with putative class members from those with its general customers, Big Fish will have to abide by the following limitations in all pop-ups or whatever other method of communication regarding Terms that first reaches putative class members.</p>
<p>Any pop-up or other initial communication directed to putative class members must do the following. First, it must reference the ability to (and provide instruction on how to) OPT-OUT of arbitration and out of the agreement to WAIVE a player’s status as putative class member in either litigation. Second, it must briefly explain the rights at issue in these lawsuits such that an average user would understand what they are giving up by agreeing to the Terms. Finally, it must advise players to contact an attorney for advice on any of the legal terms and provide contact information for the Plaintiff’s attorneys with respect to the class action lawsuits. (Examples: “If you have questions about the legal effect of these provisions, you should contact an attorney.” “Plaintiffs in the putative class actions are represented by [Plaintiffs’ attorneys’ contact information].”).</p></blockquote>
<p>Though not unprecedented, it was nice to see the judge acknowledge that virtual chips have value. We&#8217;ve long known that virtual items can have real-world economic value, but that doesn&#8217;t always translate into court.</p>
<p>Big Fish appealed the court&#8217;s order, but last week the Ninth Circuit dismissed the appeal for lack of jurisdiction.</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2020/03/defendants-keep-getting-arbitration-despite-the-anarchy-in-online-contract-formation-doctrine.htm">Defendants Keep Getting Arbitration Despite the Anarchy in Online Contract Formation Doctrine</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
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		<post-id xmlns="com-wordpress:feed-additions:1">20846</post-id>	</item>
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		<title>YouTube Isn&#8217;t a Company Town (Duh)&#8211;Prager University v. Google</title>
		<link>https://blog.ericgoldman.org/archives/2018/03/youtube-isnt-a-company-town-duh-prager-university-v-google.htm</link>
					<comments>https://blog.ericgoldman.org/archives/2018/03/youtube-isnt-a-company-town-duh-prager-university-v-google.htm#comments</comments>
		
		<dc:creator><![CDATA[Eric Goldman]]></dc:creator>
		<pubDate>Tue, 27 Mar 2018 17:14:06 +0000</pubDate>
				<category><![CDATA[Content Regulation]]></category>
		<category><![CDATA[Derivative Liability]]></category>
		<category><![CDATA[Licensing/Contracts]]></category>
		<category><![CDATA[Marketing]]></category>
		<category><![CDATA[Virtual Worlds]]></category>
		<guid isPermaLink="false">https://blog.ericgoldman.org/?p=18478</guid>

					<description><![CDATA[<p>Prager University produces videos designed to convert teenagers into conservatives. It has posted over 250 videos to YouTube. YouTube has placed some of those videos into &#8220;restricted mode,&#8221; which blocks the videos&#8217; availability to YouTube users who voluntarily operate in...</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2018/03/youtube-isnt-a-company-town-duh-prager-university-v-google.htm">YouTube Isn&#8217;t a Company Town (Duh)&#8211;Prager University v. Google</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>Prager University produces videos <a href="https://www.buzzfeed.com/josephbernstein/prager-university">designed to convert teenagers into conservatives</a>. It has posted over 250 videos to YouTube. YouTube has placed some of those videos into &#8220;restricted mode,&#8221; which blocks the videos&#8217; availability to YouTube users who voluntarily operate in that mode. Prager University claimed that YouTube censored its videos due to anti-conservative discrimination. Actually, <a href="https://www.techdirt.com/articles/20030612/article_lite.php?sid=20030612/1320251">YouTube routinely places videos from major producers of all stripes into restricted mode</a>, so Prager University&#8217;s discrimination claim rings hollow.</p>
<p>In a highly publicized case,  Prager University sued YouTube to override YouTube&#8217;s editorial classification decision. Though this case could have been resolved on YouTube&#8217;s <a href="https://ssrn.com/abstract=755884">Constitutionally protected free speech/free press rights</a> or <a href="https://ssrn.com/abstract=1934310">Section 230</a>, Judge Koh says Prager University fails to make its prima facie case.</p>
<p><em>YouTube as Company Town</em>. Prager University argued that YouTube was a state actor, which would have the legal consequence of subjecting YouTube&#8217;s handling of user content to First Amendment limitations. Arguing that private Internet services are state actors is a venerable one; many virtual world academics made this argument a decade ago, for the same reason as Prager University&#8211;they sought a legal tool allowing virtual world participants to override the service&#8217;s editorial discretion (indeed, I wrote a <a href="https://ssrn.com/abstract=755884">counter-narrative to the state action argument</a> back in 2005). Unfortunately for plaintiffs, the argument was completely devoid of merit then, and it remains devoid of merit now.</p>
<p>The court first rejects the general claim that YouTube performs traditional government functions:</p>
<blockquote><p>Plaintiff does not point to any persuasive authority to support the notion that Defendants, by creating a “video-sharing website” and subsequently restricting access to certain videos that are uploaded on that website have somehow engaged in one of the “very few” functions that were traditionally “exclusively reserved to the State.”</p></blockquote>
<p>The court then rejects Prager University&#8217;s more specific argument that YouTube is like a company town like Marsh v. Alabama:</p>
<blockquote><p>Marsh does not compel the conclusion that Defendants are state actors that must comport with the requirements of the First Amendment when regulating access to videos on YouTube. Unlike the private corporation in Marsh, Defendants do not own all the property and control all aspects and municipal functions of an entire town. Far from it, Defendants merely regulate content that is uploaded on a video-sharing website that they created as part of a private enterprise.</p></blockquote>
<p>The court acknowledges that Marsh contains broader language that might help Prager University, but the court does a detailed analysis explaining how subsequent Supreme Court jurisprudence overturned the broader language.</p>
<p>The court also rejects the <a href="https://blog.ericgoldman.org/archives/2017/06/does-the-packingham-ruling-presage-greater-government-control-over-search-results-or-less-guest-blog-post.htm">currently-chic argument</a> that the <a href="https://blog.ericgoldman.org/archives/2017/06/ban-on-sex-offenders-using-social-media-violates-first-amendment-packingham-v-north-carolina.htm">Supreme Court&#8217;s ruling in Packingham v. North Carolina</a> restricts Internet services&#8217; editorial discretion. The Packingham opinion had several broad statements about the social importance of social media, but the court correctly reads Packingham as limiting state restrictions on access to social media, not social media providers&#8217; discretion:</p>
<blockquote><p>Packingham did not, and had no occasion to, address whether <em>private social media corporations</em> like YouTube are state actors that must regulate the content of their websites according to the strictures of the First Amendment.</p></blockquote>
<p>The court summarizes its conclusion:</p>
<blockquote><p>Plaintiff has not shown that Defendants have engaged in one of the “very few” public functions that were traditionally “exclusively reserved to the State.” Defendants do not appear to be at all like, for example, a private corporation that governs and operates all municipal functions for an entire town, or one that has been given control over a previously public sidewalk or park, or one that has effectively been delegated the task of holding and administering public elections. Instead, Defendants are private entities who created their own video-sharing social media website and make decisions about whether and how to regulate content that has been uploaded on that website&#8230;.The Court likewise declines to find that Defendants in the instant case are state actors that must regulate the content on their privately created website in accordance with the strictures of the First Amendment.</p></blockquote>
<p>Cites to Howard v. AOL, Nyabwa v. Facebook, <a href="https://blog.ericgoldman.org/archives/2017/11/facebook-defeats-lawsuit-by-user-suspended-over-bowling-green-massacre-shulman-v-facebook.htm">Shulman v. Facebook</a>, <a href="https://blog.ericgoldman.org/archives/2007/03/kinderstart_v_g_2.htm">Kinderstart v. Google</a>, <a href="https://blog.ericgoldman.org/archives/2007/02/search_engines_3.htm">Langdon v. Google</a>. and Cyber Promotions v. AOL. The court also could have (but didn&#8217;t) cited <a href="https://blog.ericgoldman.org/archives/2009/10/online_game_net.htm">Estavillo v. Sony Computer Entertainment</a>.</p>
<p>This is a district court ruling, so it&#8217;s not the final word on whether online services can be treated like company towns. Still, the court&#8217;s analysis is cogent, well-cited, and persuasive. I&#8217;m sure it won&#8217;t kill the online-services-are-company-towns meme because it&#8217;s too irresistible to plaintiffs, but those who continue to advance the arguments will increasingly look like judicial activists.</p>
<p><em>False Advertising</em>. Prager University also tried to cite YouTube&#8217;s words against it via Lanham Act false advertising claims. This fails too.</p>
<p>Prager University argued that putting its videos in restricted mode falsely implied the videos were &#8220;inappropriate.&#8221; The court says that any message communicated by YouTube via the restricted mode characterization wasn&#8217;t really commercial (&#8220;Plaintiff alleges no facts that remotely suggest that Defendants restricted access to Plaintiff’s videos for any &#8216;promotional purpose'&#8221;) and didn&#8217;t have sufficient consumer reach to qualify as advertising.</p>
<p>Prager University also cited various statements in YouTube&#8217;s policies and guidelines, but the court says those don&#8217;t count as advertising; &#8220;Defendants’ policies and guidelines are more akin to instruction manuals for physical products.&#8221; Also, any injury Prager University wasn&#8217;t attributable to YouTube&#8217;s statements but instead to YouTube&#8217;s technical configuration of the restricted mode.</p>
<p>Prager University also cited various public statements by YouTube about how it enables everyone&#8217;s voices to be heard (and similar remarks). The court dismisses all of those statements as puffery because the statements aren&#8217;t quantifiable. Also, like the prior point, the court says that any injury is due to YouTube&#8217;s technical configuration, not the statements.</p>
<p>Finally, Prager University cited various statements in YouTube&#8217;s TOSes, such as YouTube “help you grow,” “discover what works best for you,” and “giv[e] you tools, insights and best practices for using your voice and videos,” which caused Prager University to choose to transact with YouTube. The court responds that these statements fall &#8220;well short&#8221; of false advertising because they are puffery. Also, Prager University lacks Lanham Act standing for these claims because it&#8217;s claiming to be a consumer of YouTube, not a competitor or other market participant in the relevant standing zone.</p>
<p><em>Implications. </em>The court dismisses the case with leave to amend and releases jurisdiction over the state court claims. This means Prager University could try again in federal court and potentially appeal to the Ninth Circuit, or it could give up some claims and switch the battle back to state court. (It could alternatively give up entirely, but I doubt that). I&#8217;ll be interested to see what they choose.</p>
<p>There are a spate of other similar lawsuits making similar arguments, including Johnson v. Twitter and Taylor v. Twitter. I expect all of these conservative-voices-hardship cases to meet a similarly hostile reception. Perhaps these cases collectively form a solid wall of precedent that will discourage further plaintiffs from seeking to strip Internet services of their editorial discretion.</p>
<p><em>Case citation</em>: <a href="https://digitalcommons.law.scu.edu/cgi/viewcontent.cgi?article=2688&amp;context=historical">Prager University v. Google LLC</a>, 2018 WL 1471939 (N.D. Cal. March 26, 2018)</p>
<p style="text-align: center;">* * *</p>
<p>[The remainder of this post was intended as a separate blog post, but I decided to combine the two given the 100% topical overlap.]</p>
<p>The Knight First Amendment Institute at Columbia University is running an essay series called <em><a href="https://knightcolumbia.org/emergingthreats">Emerging Threats</a>, </em>which it says &#8220;invites leading thinkers to identify and grapple with newly arising or intensifying structural threats to the system of free expression.&#8221; I initially thought the papers would actually identify, and advocate against, threats to free speech. Instead, several of the series papers gleefully champion censorious agendas, so I now realize that the series papers themselves may be the titular &#8220;emerging threats&#8221; to free speech.</p>
<p>See, for example, Heather Whitney&#8217;s <a href="https://knightcolumbia.org/content/search-engines-social-media-and-editorial-analogy">Search Engines, Social Media, and the Editorial Analogy</a> from a few weeks ago. It tries to show that Google&#8217;s search engine and Facebook&#8217;s newsfeed are not best analogized to newspapers for First Amendment purposes. Instead, it stretches other analogies (including the company town analogy and Packingham language, both of which Judge Koh just rejected) to show how regulators can advance censorious agendas.</p>
<p>I don&#8217;t like writing response essays&#8211;it&#8217;s more fun to advance my own writing agenda than to critique others&#8211;but I decided it was time to coalesce some of my views in a short and easy-to-read response piece, <a href="https://ssrn.com/abstract=3133496">Of Course the First Amendment Protects Google and Facebook (and It’s Not a Close Question)</a>. It makes two main points: (1) Google, Facebook and other UGC services publish third party content, so of course they are covered by the First Amendment&#8217;s protections for free speech and press, and (2) if Google, Facebook and other UGC services are state actors, the legal consequences will destroy their value proposition, so I&#8217;m a little hard-pressed to see how the pro-censorship champions have a winning endgame (unless the annihilation of the Internet is their goal, which is possible). In any case, I hope you&#8217;ll check it out.</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2018/03/youtube-isnt-a-company-town-duh-prager-university-v-google.htm">YouTube Isn&#8217;t a Company Town (Duh)&#8211;Prager University v. Google</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
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		<post-id xmlns="com-wordpress:feed-additions:1">18478</post-id>	</item>
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		<title>Appeals Court Affirms Rejection of Gambling Claims Against Machine Zone</title>
		<link>https://blog.ericgoldman.org/archives/2017/03/appeals-court-affirms-rejection-of-gambling-claims-against-machine-zone.htm</link>
		
		<dc:creator><![CDATA[Venkat Balasubramani]]></dc:creator>
		<pubDate>Sat, 18 Mar 2017 16:41:23 +0000</pubDate>
				<category><![CDATA[E-Commerce]]></category>
		<category><![CDATA[Licensing/Contracts]]></category>
		<category><![CDATA[Virtual Worlds]]></category>
		<guid isPermaLink="false">http://blog.ericgoldman.org/?p=16998</guid>

					<description><![CDATA[<p>This is a lawsuit against Machine Zone relating to the &#8220;Game of War&#8221; in-app game of chance mechanics. Players download GoW—an online strategy game—for free. However, they can purchase virtual gold at prices ranging from 4.99 to 99.999. They can...</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2017/03/appeals-court-affirms-rejection-of-gambling-claims-against-machine-zone.htm">Appeals Court Affirms Rejection of Gambling Claims Against Machine Zone</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><a href="https://blog.ericgoldman.org/wp-content/uploads/2017/03/Screen-Shot-2017-03-17-at-1.31.41-PM.png"><img loading="lazy" decoding="async" class="alignright wp-image-17002 size-medium" src="https://blog.ericgoldman.org/wp-content/uploads/2017/03/Screen-Shot-2017-03-17-at-1.31.41-PM-300x157.png" alt="Screen Shot 2017-03-17 at 1.31.41 PM" width="300" height="157" srcset="https://blog.ericgoldman.org/wp-content/uploads/2017/03/Screen-Shot-2017-03-17-at-1.31.41-PM-300x157.png 300w, https://blog.ericgoldman.org/wp-content/uploads/2017/03/Screen-Shot-2017-03-17-at-1.31.41-PM-768x402.png 768w, https://blog.ericgoldman.org/wp-content/uploads/2017/03/Screen-Shot-2017-03-17-at-1.31.41-PM.png 854w" sizes="auto, (max-width: 300px) 100vw, 300px" /></a>This is a lawsuit against Machine Zone relating to the &#8220;Game of War&#8221; in-app game of chance mechanics.</p>
<p>Players download GoW—an online strategy game—for free. However, they can purchase virtual gold at prices ranging from 4.99 to 99.999. They can use the virtual gold within the game. They can also use their virtual gold to purchase chips which they can then use at a virtual casino (to spin a wheel and win prizes). The prizes varied in value and sometimes resulted in awards of &#8220;basic items&#8221; and other times more valuable items. Plaintiff, on behalf of herself and a putative class, argued this amounted to gambling. Plaintiff also pointed to the secondary market in which players could sell their accounts.</p>
<p>Plaintiff argued that this violated Maryland&#8217;s gambling statute as well as the California penal code and also stated a claim under California&#8217;s UCL. The district court dismissed the claims. Plaintiff appealed the dismissal only as to the claim under Maryland statutory law. The Fourth Circuit affirms. (A link to the trial court ruling is here: &#8220;<a href="https://blog.ericgoldman.org/archives/2016/01/virtual-casino-doesnt-violate-californias-gambling-law-mason-v-machine-zone-guest-blog-post.htm">Virtual Casino Doesn’t Violate California’s Gambling Law–Mason v. Machine Zone</a>&#8220;.)</p>
<p>The <a href="http://law.justia.com/codes/maryland/2010/criminal-law/title-12/subtitle-1/12-110/">statute</a> allows a plaintiff who &#8220;loses money at a prohibited gaming device&#8221; to recover. A &#8220;gaming device&#8221; is a device &#8220;at which money or any other thing or consideration of value is bet, wagered, or gambled.&#8221;</p>
<p>The court assumed the virtual casino was a prohibited &#8220;gaming device&#8221; and found that plaintiff did not &#8220;lose money&#8221;:</p>
<blockquote><p>Instead of losing money in the virtual casino, Mason paid money to obtain virtual gold, which she later used to accrue virtual chips, all while playing Game of War on her mobile device. Later, when Mason participated in the virtual casino, she used only virtual chips, which are not redeemable for money. Thus, when Mason “spun” the virtual wheel, there was no money at stake. Rather, as a result of that action, she only could receive either virtual gold, which she concedes does not amount to money, or she could receive other virtual resources that likewise were not money or redeemable for money. Accordingly, based on the manner in which the Game of War casino operates, Mason could not have lost or won money as a result of her participation in that virtual activity.</p></blockquote>
<p>The court looks to the definition of money and finds it unambiguous (citing to Blacks Law Dictionary, which defines money as &#8220;[t]he medium of exchange authorized by a government as part of its currency,&#8221; and &#8220;[a]ssets that can be easily converted to cash&#8221;). While the definition of &#8220;gaming device&#8221; references money and other forms of consideration, the recovery portion of the statute only says a plaintiff could recover &#8220;money&#8221; that is lost. Thus the court embraces a narrow construction of the term. The court also rejects plaintiff&#8217;s argument that the secondary market changes the calculus. While it takes plaintiff&#8217;s allegation regarding the secondary market at face value, it notes that virtual chips are not typically sold on the secondary market. It further notes that plaintiff did not allege she tried to sell her own account or any objects in that market.</p>
<p>__</p>
<p>This is one of several online gambling lawsuits percolating through the courts. Others include those against <a href="https://blog.ericgoldman.org/archives/2016/01/big-fishs-virtual-casino-doesnt-violate-washingtons-gambling-statute.htm">Big Fish</a> (dismissed, appeal pending), <a href="https://blog.ericgoldman.org/archives/2016/10/federal-court-rejects-online-gambling-lawsuit-against-steam-mcleod-v-valve.htm">Valve</a> (dismissed in federal court, re-filed in state court).* The virtual casinos have all the indicia of gambling with the big caveat that the participants do not wager money and most online terms allow participants to purchase credits but not cash them out. In some form or other, courts usually rely on this to say that there&#8217;s no money lost at the point of gambling (although perhaps it&#8217;s lost at the time people &#8220;buy in&#8221; to the system).</p>
<p>As Eric noted in his comments to the trial court ruling, Machine Zone got the benefit of virtual world exceptionalism, as the court &#8220;dismiss[es] the virtual currency losses as &#8216;just a game.'&#8221; It would still be gambling if Machine Zone awarded a car as opposed to cash, and should still be the case if Machine Zone awarded a virtual car or virtual currency. Certainly players are enticed enough by the prospect of winning something to want to spend their credits on the chance to do so. The appeals court relies on the closed loop aspect of the system, pointing out that the virtual chips are not redeemable for money, but this relies on a narrow definition of the statute. Presumably the player would have used the gold for something else and by wagering chips derived from gold the player is losing the gold. Certainly there can be no dispute that Machine Zone benefits monetarily from the availability of in-game gambling.</p>
<p>The existence of a secondary market is interesting and something most plaintiffs point to. But plaintiffs have not been very successful in convincing the courts that the secondary market fundamentally changes the analysis.</p>
<p>All of these are based on state gambling statutes, which vary in their scope. So while a ruling here is perhaps persuasive in other cases, it is not determinative.</p>
<p><strong>Case citation</strong>: <a href="http://www.ca4.uscourts.gov/Opinions/Published/152469.P.pdf">Mason v. Machine Zone, Inc.</a>, Case No. 15-2469 (4th Cir. Mar. 17, 2017).</p>
<p><strong>Related posts</strong>:</p>
<p><a href="https://blog.ericgoldman.org/archives/2016/10/federal-court-rejects-online-gambling-lawsuit-against-steam-mcleod-v-valve.htm">Federal Court Rejects Online Gambling Lawsuit Against Valve–McLeod v. Valve</a></p>
<p><a href="https://blog.ericgoldman.org/archives/2016/01/big-fishs-virtual-casino-doesnt-violate-washingtons-gambling-statute.htm">Big Fish’s Virtual Casino Doesn’t Violate Washington’s Gambling Statute</a></p>
<p><a href="https://blog.ericgoldman.org/archives/2016/01/virtual-casino-doesnt-violate-californias-gambling-law-mason-v-machine-zone-guest-blog-post.htm">Virtual Casino Doesn’t Violate California’s Gambling Law–Mason v. Machine Zone (Guest Blog Post)</a></p>
<p>* I am involved in one as well on the plaintiff side.</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2017/03/appeals-court-affirms-rejection-of-gambling-claims-against-machine-zone.htm">Appeals Court Affirms Rejection of Gambling Claims Against Machine Zone</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
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		<title>Federal Court Rejects Online Gambling Lawsuit Against Valve&#8211;McLeod v. Valve</title>
		<link>https://blog.ericgoldman.org/archives/2016/10/federal-court-rejects-online-gambling-lawsuit-against-steam-mcleod-v-valve.htm</link>
					<comments>https://blog.ericgoldman.org/archives/2016/10/federal-court-rejects-online-gambling-lawsuit-against-steam-mcleod-v-valve.htm#comments</comments>
		
		<dc:creator><![CDATA[Venkat Balasubramani]]></dc:creator>
		<pubDate>Wed, 05 Oct 2016 16:55:27 +0000</pubDate>
				<category><![CDATA[E-Commerce]]></category>
		<category><![CDATA[Evidence/Discovery]]></category>
		<category><![CDATA[Marketing]]></category>
		<category><![CDATA[Virtual Worlds]]></category>
		<guid isPermaLink="false">http://blog.ericgoldman.org/?p=16515</guid>

					<description><![CDATA[<p>This lawsuit alleged that Valve “allowed an illegal online gambling market” based on its videogame Counter Strike Global Offensive (CSGO) and its Steam platform, an online marketplace where players can buy and sell virtual items and make payments. This lawsuit...</p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2016/10/federal-court-rejects-online-gambling-lawsuit-against-steam-mcleod-v-valve.htm">Federal Court Rejects Online Gambling Lawsuit Against Valve&#8211;McLeod v. Valve</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><a href="https://blog.ericgoldman.org/wp-content/uploads/2016/10/Screen-Shot-2016-10-05-at-7.26.10-AM.png"><img loading="lazy" decoding="async" class="alignright wp-image-16519 size-medium" src="https://blog.ericgoldman.org/wp-content/uploads/2016/10/Screen-Shot-2016-10-05-at-7.26.10-AM-300x58.png" alt="screen-shot-2016-10-05-at-7-26-10-am" width="300" height="58" srcset="https://blog.ericgoldman.org/wp-content/uploads/2016/10/Screen-Shot-2016-10-05-at-7.26.10-AM-300x58.png 300w, https://blog.ericgoldman.org/wp-content/uploads/2016/10/Screen-Shot-2016-10-05-at-7.26.10-AM.png 512w" sizes="auto, (max-width: 300px) 100vw, 300px" /></a>This lawsuit alleged that Valve “allowed an illegal online gambling market” based on its videogame Counter Strike Global Offensive (CSGO) and its Steam platform, an online marketplace where players can buy and sell virtual items and make payments. This lawsuit is similar to ones brought against Machine Zone and Big Fish. Both of those lawsuits were dismissed and are pending on appeal.</p>
<p>Here is the court’s description (citing the complaint) of how players participate in, and gambled via, the marketplace, and Valve’s involvement in the process:</p>
<blockquote><p>CSGO players can purchase CSGO Skins (Skins), virtual weapons with different &#8220;textures&#8221; that can be used during gameplay, through Steam. Skins can then be &#8220;traded and used as collateral for bets placed on Skins Gambling Websites through linked Steam accounts.&#8221; Plaintiffs contend that Skins are like casino chips that have monetary value outside the game itself because of the ability to turn Skins directly into cash through these third-party gambling sites. All Skins are &#8220;put into a large pool, and one winner is chosen at random to take all of the Skins.&#8221; These Skins can then be sold and converted into cash. Valve allegedly takes a 15% fee on the sale of each Skin through its Steam marketplace and Skins allegedly &#8220;never actually leave Valve&#8217;s servers.&#8221;</p></blockquote>
<p>In addition to Valve, plaintiffs sued a third party service (CSGO Lotto) that allegedly allowed gambling. Plaintiffs, proceeding as a putative class, brought numerous state law claims plus a single federal law claim: a RICO claim.</p>
<p>The court says that plaintiffs failed to meet the RICO standing requirement. Ninth Circuit RICO jurisprudence makes clear that “gambling losses are not sufficient injury to business or property for RICO standing.” Plaintiffs tried to buttress their RICO standing by pointing to other malfeasance by defendants, but the court says neither of these are sufficient:</p>
<ul>
<li>state law and common law gambling violations</li>
<li>separate or additional allegations of fraud or dishonesty (the CSGO Lotto CEO’s alleged failure to disclose his ownership interest when he promoted the service)</li>
</ul>
<p>Plaintiffs also alleged state law claims, but the court says it does not have jurisdiction over these claims. There is no diversity jurisdiction. The court says plaintiffs’ allegations fail to satisfy by a preponderance of evidence that the amount in controversy exceeds $5,000,000 (to support jurisdiction under the Class Action Fairness Act). Plaintiffs said it is “common sense” that (1) CSGO is popular and (2) Valve allegedly made more than $567M in revenue from CSGO last year, so plaintiffs must have over $5 million in damages. The court says these speculative allegations are insufficient. Given the dismissal of state law claims on jurisdictional grounds, plaintiffs can re-file these claims in state court.</p>
<p>__</p>
<p>This lawsuit received a lot of attention when it was filed. Unlike the other online gambling lawsuits that merely dealt with purchases of in-game virtual property, Valve allegedly promoted (or its platform &#8220;powered&#8221;) actual gambling sites where people were clearly betting on the outcome of games. The other lawsuits turned on whether buying a chance to receive valuable in-game property constituted gambling, but this lawsuit seemed different, given the use of Valve&#8217;s platform. Indeed, the attention led to Valve issuing cease and desist letter to actual gambling sites who utilized the Steam platform. (See <a href="http://kotaku.com/valve-issues-cease-and-desist-letter-to-23-counter-stri-1783975845">Valve Issues Cease And Desist Letter To 23 <em>Counter-Strike</em> Gambling Sites</a>.)</p>
<p>The big question was how a RICO claim—widely viewed as a tool of choice for crackpot internet commenters—would play out. Apparently the court did not think much of it. The decision will likely be appealed. It will be interesting to see what the Ninth Circuit does with it. Although it wasn&#8217;t addressed in this ruling, I&#8217;ll note that section 230 may have been another hurdle to plaintiffs trying to hold Valve liable for the actions of participants on its platform.</p>
<p>NB: Valve brought a motion to compel arbitration, but since the court resolved the case on CSGO Lotto&#8217;s 12(b)(6) motion, it does not resolve the arbitration issue.</p>
<p><strong>Added</strong>: &#8220;<a href="http://esportsobserver.com/valve-ordered-stop-gambling-related-skin-transfers-washington-state-gambling-commission/">Valve ordered to stop all gambling-related skin transfers by Washington State Gambling Commission</a>&#8221; (The Esports Observer)</p>
<p><strong>Case citation</strong>: <a href="https://docs.justia.com/cases/federal/district-courts/washington/wawdce/2:2016cv01227/235035/38">McLeod v. Valve Corp.</a>, 2016 U.S. Dist. LEXIS 137836 (W.D. Wash. Oct. 4, 2016). The initial <a href="https://www.scribd.com/doc/316578160/Michael-John-McLeod-et-al-vs-Valve-Corporation">complaint</a>.</p>
<p><strong>Related posts</strong>: <a href="https://blog.ericgoldman.org/archives/2016/01/big-fishs-virtual-casino-doesnt-violate-washingtons-gambling-statute.htm">Big Fish’s Virtual Casino Doesn’t Violate Washington’s Gambling Statute</a></p>
<p>The post <a href="https://blog.ericgoldman.org/archives/2016/10/federal-court-rejects-online-gambling-lawsuit-against-steam-mcleod-v-valve.htm">Federal Court Rejects Online Gambling Lawsuit Against Valve&#8211;McLeod v. Valve</a> appeared first on <a href="https://blog.ericgoldman.org">Technology &amp; Marketing Law Blog</a>.</p>
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