A delicate balance

With uncertainty over how the law can be used to combat content piracy in the video games industry, Paul Groves and Michael Lister examine the position of rights holders

There is currently a great deal of uncertainty about how, and how effectively, the law can be used to combat content piracy, particularly within the video games industry. The legal landscape is in a state of flux with a number of reports and consultations underway, new legislation on the horizon and a number of important cases going through the courts. Enforcement of legal rights is also a delicate issue, with recent examples suggesting that attempts to actively pursue existing rights of action against infringers can backfire from a consumer relationship perspective. 

In the UK, the Digital Economy Act provides for increased co-operation between internet service providers (ISPs) and rights holders, with the onus being placed on the ISPs to supply details of infringers. However, the ISPs are fighting against its implementation on the basis that the act represents disproportionate interference with the rights of the ISPs and internet users. Similarly, in the US proposed legislation in the form of the Stop Online Piracy Act and Protect IP Act was seen to be too restrictive and faced widespread public criticism. As such, we are seeing public resistance to new statutory measures designed to enhance the legal protections afforded to rights holders.

In any event, it seems that the legislative programme adopted by a country will most likely only ever be part of the solution to the problem of content piracy. The relationship with consumers and potential consumers is key. For example, when games publishers have aggressively pursued alleged pirates within the UK, such actions were derided as witch hunts and resulted in negative publicity for all concerned.

There have also been high-profile instances of gamers claiming that overly aggressive digital rights management measures, such as those that restrict the number of times a game can be installed, justify the widespread use of pirated versions, which is a classic example of how well intended anti-piracy measures can sometimes become a commercial own goal. In other words, the trend of increased piracy is often worsened by a disconnect between games companies and their consumers.

In the context of all this uncertainty over the legislative regime and how effective it can be in practice, content developers, publishers and industry bodies within the video games industry are starting to take a long hard look at what they can do to effectively deal with piracy – both from a legal perspective and a practical commercial standpoint.

In particular, there is a dawning realisation that, while the law may offer some tools that can be used to target known pirates, with copyright infringement actions being most common, the industry itself must begin to adopt more innovative measures rather than focusing solely on how to prevent piracy of their games. For example, a number of games publishers and developers are adopting new business models in order to offer video games in a manner and at a price that appeals to the masses, including would-be pirates, offering the carrot where the stick has not proved effective. Business models such as so-called freemiums – where a game is made available free of charge but a premium is charged to advance beyond a certain point – and/or free-to-play models – where later monetisation is achieved via means such as advertising and in-game micro-transactions – are continuing to prove particularly popular.

In the future a series of new legislative measures may make it easier to clamp down on pirates but it will be some time before the latest set of proposals and measures from the Government are fully adopted and tested in practice. Evidence in recent years shows that any robust and wide-ranging legislative proposals that are brought to the table to deal with piracy are met with heavy criticism and even public protests in some countries, from people who feel that freedom of speech would be eroded by measures that result in tighter controls over the distribution of material over the internet.

As such, the Government should continue to seek to alter the public’s perception as to the acceptability of content piracy and try to ensure a fair legal framework in which the games industry can operate. However, the games industry itself will also need to continue to find new and inventive ways for consumers to access high quality games and additional content so as to enhance the legitimate product, reduce the demand for pirated games and procure new revenue streams for games companies.

Paul Groves is a senior associate and Michael Lister is a solicitor in the interactive entertainment group at Harbottle & Lewis