Posted by: David Medina
April 10, 2015
Since the development of the micro computer, video games have become an international obsession. Although people who played video games were initially viewed in the same light as those who played Dungeons and Dragons, after just a few short years, video games became an integral part of popular culture in the United States, Korea, Japan, and countless other countries. As of today, the best estimates suggest that more than 1.2 billion people are playing video games worldwide, and about 700 million people play online games.
Just as the first international explorers brought their own cultures to the newly indigenous people as they met them, video games have been bringing the culture of the countries that produced them to new audiences. Although most people readily recognized and embraced the new cultural differences brought overseas by way of the video game, the vast majority of video game players have yet to realize that one more aspect of culture has been traveling overseas as well: the law. Although most video games sold for consoles were initially sold as goods, and not licensed to individuals, almost every online video game has been licensed, not sold. Because online video games are licensed to individuals, the game makers have been able to include binding terms of service agreements that govern the relationship between the game player and the game maker. Despite the fact that game players live in numerous countries across the globe, game makers have assumed that their terms of service agreement is enforceable and actually does govern the relationship. If terms of service agreements are binding and enforceable on game players from around the world, then it is likely possible for legal concepts from one country to be transported to another, despite the fact that the receiving country may not recognize certain legal rights. This blog post seeks to highlight some of the issues these internationally applied terms of service agreements raise.
For decades, the United States has been trying to get other countries to adopt stricter intellectual property and anti-piracy laws. And for just as many years, the United States has been ineffective at convincing its neighbors to do so. Despite all of the centralized efforts of the United States government, domestic video game manufacturers may be accomplishing that goal without officially changing international law.
Every online video game can be expected to have a term of service agreement. Examples of these agreements can be found from Blizzard, Squaresoft, Valve, and countless other game creators. All of the terms of service agreements dictate the rights of the game player, the relationship between the game player and the game maker, and how various activities of the game player affect intellectual property rights. Among other things, terms of service agreements often include substantive law provisions, procedural law provisions, and jurisdiction provisions. By including all of those provisions, game makers effectively assure that rights granted in their home country (often the United States) are recognized internationally. The following sections will discuss how terms of service agreements extend the legal effectiveness of United States law into countries that wouldn’t otherwise adhere to it.
Terms of service agreements are often filled with substantive law clauses. Among these are the waiver of warranties clause, the effect of copyright law on the parties, and limitation of liability clauses. All of these clauses affect the actual rights of the parties. Importantly, the same rights or ability to waive certain rights may not be available in other countries. Although it is beyond the scope of this article to detail precisely which laws are available in which country, one could easily imagine that some countries may not be inclined to allow parties to contract around a waiver of warranties or a limitation on liability.
Furthermore, many countries do not recognize the same level of intellectual property rights that the United States does. Despite the fact that some countries do not have the same intellectual property law as us, almost every country has some body of contract law that will typically bind two parties that contractually agree to do so. Since online video games are licensed and not sold, they come with a terms of service agreement that arguably binds the parties. By using a terms of service agreement, United States companies can extend the geographic jurisdiction of United States intellectual property law. Thus, online video game players in other countries are bound to follow United States copyright law because the online video game terms of service agreement requires them to do so.
Following the same logic as above, United States companies can extend the geographic reach of various procedural provisions by way of a terms of service agreement. Many of the clauses in online video game terms of service agreements address procedural issues. Among these are arbitration clauses, class-action clauses, as well as others.
By mandating that online video game players attempt to resolve their issues in arbitration, United States companies can extend the use of the United States arbitration system overseas. In many countries, alternative dispute systems may not be fully developed, and therefore, people from those countries may not be familiar with alternative dispute systems. For a number of reasons, alternative dispute systems could be significantly more advantageous for game creators to employ to resolve disputes. By forcing international game players to adhere to United States arbitration clauses, United States companies can make their dispute resolution system more uniform and risk free.
Lastly, through terms of service agreements United States companies can gain the benefit of United States law in countries that absolutely would not normally follow it. Most terms of service agreements contain clauses that require game players to resolve their disputes in specific states (typically the home state of the game creator), and to apply specific laws to those disputes. To be sure, there will be a number of situations where local lawsuits in a foreign country do not adhere to the requirement that lawsuits be filed in the home state of the game creator, but even in those situations, it may be entirely reasonable for the local court to apply the law of the forum the game creator specified.
Prior to the proliferation of the Internet, United States law was geographically limited to the United States. With the endless growth of video games, and online video games in particular, contractual provisions are extending the geographic limits of United States law across the globe. While it is true that some foreign countries refuse to enforce the license agreements created in the United States, the vast majority do recognize that game players within their jurisdiction have given their consent to be governed by United States law.