Tag Archive for Tim Langdell

Understanding “Without Prejudice” in terms of confidentiality

August 12, 2009 Current Affairs No comments

    The dispute between Edge Games/Tim Langdell and Mobigames has devolved into a bit of a media disaster, but it has brought about several issues worth discussing. In light of Edge Games recent publication of settlement communications, perhaps the most glaring issue at the moment is confidentiality. In several of those communications, Edge Games (ironically) points out that because the communications were submitted under the heading “Without Prejudice”, they should not be disclosed to third parties.

    “We reserve all or rights in this matter, and note this communication is sent under banner of ‘without prejudice’ which means it cannot be used in any legal proceeding and should     not be revealed to any third party, the press, or etc”—July 28, 2009 communication from Edge Corp. to David Papazian

    In one communication Langdell suggests that sharing the communication with the media is in violation of U.S. Law.

    ”You quoted on a public forum from a communication that was sent to you under a “without prejudice” header which is not in accord with US law (and it was on a US website). Please     be aware you are not permitted to quote from such correspondence that is written as part of settlement resolution, as all this correspondence between us has been.”—June 3, 2009 communication from Tim Langdell to David Papazian.

    The irony in all this being that Dr. Langdell and his company subsequently disclosed ALL communication under the heading “Without Prejudice” to third parties through its “Edge Studio” website. However, this raises the question of whether the phrase “Without Prejudice” offers any kind of protection, what kind of protection it provides, and whether other statements or contractual provisions would better serve the problem of confidentiality in settlement disputes.

    The heading-phrase “Without Prejudice” in a communication between two opposing parties has a relatively specific application, which has its roots in English Common Law. This application is, under current federal and state evidence law, somewhat redundant. “Without Prejudice” implies that anything contained in the communication is intended for settlement purposes only and cannot be used against either party as evidence or precedence in the event of litigation. The purpose of this statement is to facilitate candor between the parties because it is in the interest of public policy to facilitate the settlement of disputes without court action. The words are intended to free parties from the concern that the admissions and statements made by them in the course of settlement will later be used against them in court. See Am. Eagle Outfitters, Inc. v. Lyle & Scott Ltd., 2008 U.S. Dist. LEXIS 96375 (W.D. Pa. Nov. 26, 2008)

    In today’s usage the phrase does little more than suggest that the communication is, in fact, intended for settlement. As a legal term of art it provides minimal protection under the predominant weight of US law due to Federal Rules of Evidence 408 and its mirror rule in almost every state’s evidence laws. These rules automatically render compromise and settlement communications inadmissible. Under Rule 408, “conduct or statements made in compromise negotiations regarding the claim, except when offered in a criminal case and the negotiations related to a claim by a public office or agency in the exercise of regulatory, investigative, or enforcement authority,” are not admissible evidence.

    Furthermore, using the phrase “Without Prejudice” when it is clear that the communications have gone beyond the point of possible settlement makes the use of the phrase ineffective. If a court could imply that the use is an empty one and the communication does not reflect conduct intended for settlement or compromise purposes, the court will ignore it and any admissions or statements contained therein may be used against either party.

    However, use of “Without Prejudice” in a communication doesn’t render the communication confidential or imply it as such. Generally speaking, settlement communications are only confidential by law if they relate to a court-ordered settlement conference or mediation conference and local rules render communications during and relating to those conferences confidential. In those cases, using “Without Prejudice for purposes of Settlement” may be useful to show that the communication is made in connection with a mediation conference or a court-ordered settlement conference. However, communications made prior to an official proceeding may not be subject to the same protections.

    In communications such as those between Mobigames and Langdell made prior to mediation or court-settlement, confidentiality hinges on an agreement between the parties to keep that information confidential. This may be accomplished via a confidentiality/non-disclosure statement at the end of each communication prohibiting the distribution, disclosure, and copying of communications relating to possible settlement. Better yet, leave such communications to your attorneys. An attorney isn’t allowed to disclose communications arising from representation, nor may they make disclosures to the media or public that may prejudice a case. Furthermore, it would probably reduce the chances of those communications getting as personal and antagonistic as the ones between Mobigames and Langdell.

Trademark Fair Use

July 13, 2009 Intellectual Property No comments

I realize that this has little to do with game development or games law, but as an ode to free speech and the internetz, it’s a hard Fail to resist. Since we’re on the topic of Trademarks, here’s an interesting case concerning trademarks and what I would probably consider an abusive use of a cease & desist letter.

FailBlog

FailBlog received a cease and desist for the use of GWR’s trademark in a screen capture. This brings up some very basic questions as to when someone can legally use a trademark and what constitutes fair use, which is sometimes trickier than it sounds. Traditionally trademark fair use is a far cry from the fair use you may expect under copyright law. Unfortunately these two standards are frequently confused.

There are a few forms of fair use under trademark, and it’s worth becoming familiar with them. In the event that you receive a cease & desist like the one linked above, or want to use a particular mark in a way that may or may not fall under fair use, this will hopefully give you enough information to know when you should start seeking out an attorney to protect your rights.

  • Note: This is a point I’ve made in the past, but it bears repeating—a fair use is an affirmative defense. It is not a right. It is a shield you can raise in the event that your use is legally challenged. If you don’t want to go through the trouble of defending your use against rightful trademark registrants/owners, you’re better off not using the mark at all. However, I’m not a fan of cease & desist letters that brazenly disregard valid fair uses because exposing people to litigation costs is frequently threat enough. So while it’s no one’s right to urge you to challenge a cease & desist, it may still be useful to know when you can.

Classic Fair Use

A “classic” fair use under trademark law permits a defense where the protected mark is used only to describe the goods or services of an opposing party. Marks that are more descriptive than distinctive are frequently the subject of classic fair use, because they contain terms that may identify something other than the origin of the product or service. For instance, if a company used the trademark “California Car Repair,” this would create a problem for every other car repair located in California unless some limits were placed on the scope of protection for the mark. As a result trademark law does not allow a trademark holder or registrant to “appropriate a descriptive term for his exclusive use and so prevent others from accurately describing a characteristic of their goods.” Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir. 1980). Simply put, if your mark is made up of terms that do little more than describe the product or service you’re selling as opposed to something suggestive or distinctive (e.g., something that fancifully suggests the kind of product you’re selling, or a made up word or a term or word generally unrelated to the type of product/service you’re selling), you do so at your own risk. Others may use those same descriptive words in connection with their own product on a limited basis.

This sounds deceptively simple, but there are some excellent examples that arise in game development, particularly when it comes to media publications. For instance, Game Developer Magazine is almost purely descriptive—there is little to nothing that is distinctive in the term used in the brand, and therefore another magazine that uses the term “a game developer magazine” to describe its own product may have a valid classic fair use claim.

It’s important to note that to qualify for a classic fair use defense the term itself cannot be used as a trademark—for instance, if another company called itself “Game Developer Magazine,” it wouldn’t be subject to a classic fair use defense. On the other hand, if someone used trademark “X” and described the product in publications and its website as “a game developer magazine”, the classic fair use defense would probably apply. Furthermore, the defense only applies when the trademark in question has both a primary and a secondary meaning, and the classic fair use employs the primary meaning. In this case, a game developer magazine’s primary meaning would be a magazine dedicated to game developers and game development. Its secondary meaning would be the existing brand, Game Developer Magazine. Use of the primary meaning to describe your own product is a classic fair use. Use of the secondary meaning is not.

Meanwhile a publication like Gamasutra experiences considerably more protection because the mark is non-existent in the English language and therefore can’t reasonably be used to describe anyone else’s product.

Nominative Fair Use

So what happens if you want to use Gamasutra’s mark, or a competitor’s mark, or even the name of a brand, product, or company in a review or publication? Another fair use defense, called “nominative fair use”, exists when a defendant uses the plaintiff’s mark to describe or identify the plaintiff’s own product. In short, if you’re using another company’s mark to identify that company’s product as opposed to your own, your use of that mark is a nominative fair use. This is the case even if your ultimate goal is to describe your own product. An example of a nominative fair use that is ultimately intended to describe your own mark is the use of another mark to encourage consumer comparison: “Like X brand games? Then try my product!”

This comes down to the simple philosophy that it is impossible to refer to a company’s brand or product for purposes of comparison or criticism without using their mark. Trademark and Unfair Competition law therefore permit a defendant to raise a nominative fair use defense when the use of the mark clearly identifies the mark’s registrant. It’s assumed that this use is unlikely to raise a lot of consumer confusion—if you’re accurately attributing the mark to the mark holder, and it’s clear that you’re not using the mark as your own, there’s less of a chance of consumer confusion.

However, one problem that may arise is “false endorsement”, which renders null the nominative fair use defense. This means that your use of the mark suggests that the other company or brand is endorsing or sponsoring your product. This is a tricky area and is the reason why it is almost always dangerous to use popular brands in your game without permission or a license. For instance, if you create a racing game where your cars are “sponsored” by certain brands, or the brand names of the cars themselves are readily identifiable, the trademark owner may argue that those uses suggest sponsorship or endorsement of your game. This would destroy any nominative fair use argument you may want to raise.

This is, however, exactly where GWR’s cease & desist fails and where a nominative fair use is painfully obvious. There is no question that GWR’s mark is being improperly used to suggest endorsement, nor does it falsely identify the origin of the work. On the contrary, FailBlog is more or less dedicated to humorously pointing out failures, and they have no intention of misleading their audience in believing that the failure is their own.

First Amendment Protection

In the case of creative and artistic works (including video games, for reference see E.S.S. Entm’t 2000, Inc. v. Rock Star Videos, Inc., 547 F.3d 1095, 1099 (9th Cir. Cal. 2008)), it is generally accepted that the public interest in avoiding consumer confusion must outweigh the public interest in free expression for a trademark infringement/Lanham Act claim to survive. This is an incredibly steep test, actually; according to the 9th and 2nd Circuits, an artistic work’s use of a trademark that would otherwise violate the Lanham Act isn’t actionable “unless the [use of the mark] has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, unless [it] explicitly misleads as to the source or the content of the work.” Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894, 902 (9th Cir. 2002). As most pornographic works survive the Miller obscenity test based on the “artistic relevance” test alone, it’s fair to say that anything above zero artistic merit is sufficient. Humor and parody are typically viewed as having at least some artistic relevance, even if the humor is somewhat tasteless. There is also little to suggest that FailBlog’s use of the mark improperly misleads consumers—on the contrary, it points directly to the actual source of the Fail.

I’m using the FailBlog example pretty liberally, because it’s an easy example. The First Amendment protection is particularly appropriate, however, when looking at the use of trademarks in games; because video games, no matter how crude or grotesque, are typically protected under first amendment due to their artistic value, they may be subject to greater first amendment protection than a product website that uses another company’s mark as a basis of comparison. This is something you may want to consider when weighing the risks of using a trademark or a parody of a mark in your game.

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