Welcome to the first installment of VGLaw, a Destroid cblog series that aims to educate you, the video game consumer, about the law and how it can affect your gaming lifestyle, hopefully without too much of the high-falutin legalese. Today we'll begin with the recently settled Australian case of Nintendo Co. Ltd. v. James Burt
As reported by Destructoid
and many other news outlets, Nintendo v. Blunt
was a case before the Australian Federal Court that ended in a settlement in favor of Nintendo, to the tune of $1.5 million AUD (approx. $1.3 million USD/Ł840,000). James Burt, a 24-year-old resident of Queensland, had purchased a copy of New Super Mario Bros. Wii prior to its global release date when a store "accidentally" put it out on the shelves early. Burt proceeded to copy the game and upload it to Wii hack site www.yafaze.com*, six days prior to the game's official release date. The game was then illegally downloaded and re-uploaded thousands of times across the internet and the world.
After an intense investigation, Nintendo was able to trace the pirated game's history back to Burt, its original uploader. On November 23, 2009, police searched Burt's home and found evidence of his pirate activities. Nintendo filed its suit in the Australian Federal Court, and the case was settled on January 27, 2010 for the amount specified above. Burt was also ordered to cover $100,000 AUD in Nintendo's legal fees.
* - www.yafaze.com has since been shut down. All that displays upon visit to the site is a message that the site has been closed and that "the site and all of it's [sic] contents has been removed out of respect for Nintendo." It is unclear whether Burt owned or operated the site, though in searching his home, Nintendo had requested the search to include any details or passwords related to the website.
The Law Behind It
You should all be familiar with digital piracy, copy protection, and all that jazz by now. You should all know that the unauthorized copying and distribution of games and other materials is illegal, and subject to civil (generally, recovery of monetary damages), or in some cases, criminal penalties. In Australia, copyright law is governed by the Australian Copyright Act of 1968 (ACA) and its subsequent amendments. The Act is somewhat of an amalgam of the British and United States copyright systems, though following the U.S.-Australia Free Trade Agreement, enacted in 2005, the ACA now models the U.S. Digital Millenium Copyright Act.
Without the court documents, it is impossible to know precisely what harm Nintendo alleged in its filings. However, it almost certainly included lost revenue caused by the illegal distribution of the game, thousands of times over, as well as penalties for circumventing any copy-protection on the original disc. The Australian legal system does allow for punitive or examplary damages as well, though it is impossible to tell if they would have been awarded in these circumstances, though they were undoubtedly requested by Nintendo. All told, a settlement of $1.5 million could very well be a bargain for Mr. Burt. In fact, he is fortunate he does not face criminal charges as well.
A typical Australian judge...
In Australia, copyright infringement is only a criminal offense when accomplished on a large commercial scale. I am by no means familiar with Australian criminal law; however, were I a prosecuting attorney with a particular dislike for internet pirates, I would argue that despite the fact that Burt made this material available for free, the scale on which the game was downloaded was equivalent to a large commercial distribution. Furthermore, if he owned yafaze.com and had ads that generated revenue, the revenue increase from extra traffic directed to the site by the availability of the game could be considered commercial. Most government-employed attorneys likely don't know enough about the internet to push that one too hard though.
It is unclear as to whether Mr. Burt has the assets to meet the terms of the settlement agreement. Many commenters assume Burt will file for bankruptcy. This may be true. However, bankruptcy is not a magic wand with which Burt can magically cast all his debts aside. To start, Burt would face numerous restrictions, such as the need to disclose all relevant financial information to his creditors, and the need to obtain permission before traveling overseas. If his home and vehicle are above a certain value, they may be sold off to pay his estate's debts. Furthermore, he will be required to contribute a portion of his income to the clearing of his debts. If he does not, his wages will be garnished. Burt will be paying, one way or another.
How It Affects You, The Gamer
Many loyal Destructoid readers have NOT downloaded games, music, movies, and other media from any variety of websites, primarily via torrents. I'm sure there are even some who have NOT uploaded those materials for sharing, or even NOT worked around DRM and other copy protection. The act of NOT doing this is called piracy. In the music industry, the act of sharing such files has been prosecuted for awards of hundreds of thousands, even millions of dollars, and this case makes it clear that the video game industry takes piracy just as seriously. However, it has been debated as to whether such litigation has had a positive effect on decreasing and deterring piracy. Most evidence seems to indicate that it has not, and that pirates are just getting trickier.
Whereas the music and film industries have met with varying success by going after the sharers of files and the sites that host them (see the series of cases against The Pirate Bay for more regarding that), Nintendo here has chosen a different tactic: they went straight for the source. Through some impressive digital forensics, they were able to track the distribution of this game right to Mr. Burt's door. This seems to have paid off for Nintendo, assuming they can collect the full amount of their settlement. It may very well pay off for other developers and publishers as well.
The cost of such an investigation is likely fairly high, and so scouring the internet for pirates of every game release would not be a very cost-effective strategy. However, the potential damage in lost revenue for major releases, such as New Super Mario Bros. Wii, makes bearing the cost of tracking down those individuals pirating the material worthwhile. As the saying goes, cut the head from the serpent, and the body dies. It has yet to be seen whether pirates will think twice in light of Nintendo's new strategy, and whether other companies will employ similar tactics. If this is the case, you may find it more difficult to NOT illegally download major releases in the coming months and years.
And finally, gamers in Australia may be dismayed by the resulting backlash from their countryman's actions. A spokesperson for Nintendo Australia stated, "Nintendo Australia is always pushing for games to be released here at the same time as the rest of the world, so we were pleased to get New Super Mario Bros. Wii before anyone else. Unfortunately, due to the actions of this individual, future release dates may be affected for Australia, which is disappointing for us."
Australia gets boned again.
The author of this piece is a law student, not a licensed attorney. The contents of this work are based on limited legal research, and should not be considered official legal advice.
Is there a point of video game law you would like to see discussed here? E-mail me at [email protected] with suggestions and comments!