Posted on January 12, 2008
Filed Under Web 2.0 Kool Aid |
Fortune writer Josh Quittner “Is Hasbro just a stupid Potato Head?” The maker of the popular board game Scrabble has taken action against Scrabulous, a popular Facebook application written by two brothers in India that allows Facebook users to play the game online.
Scrabulous is a blatant violation of Hasbro’s trademark rights. Copyright is a little more nuanced, however an analysis of the court’s decision in Allen v. Academic Games League of America, Inc. seems to indicate that Scrabulous is likely in a problematic position:
The term “play” has not been extended to the playing of games. To do so would mean interpreting the Copyright Act in a manner that would allow the owner of a copyright in a game to control when and where purchasers of games may play the games and this court will not place such an undue restraint on consumers.
Whether privately in one’s home or publicly in a park, it is understood that games are meant to be “played.” In this situation, the games are being played by students who come together for the purpose of friendly, academic competition. There is no indication that this nonprofit corporation, AGLOA, and the individual respondents are making the subject games available to the public for a fee. The students, schools, and school districts use their own games, purchased from Allen, in the tournaments, and respondents are merely organizers of this event. Moreover, AGLOA’s tournaments are limited to students who participated in regional competitions which also involved the playing of Allen’s games.
Even if the playing of games could constitute a performance, we would have to recognize the applicability of the fair use doctrine under Section 107 of the Copyright Act. This section allows the fair use of a copyrighted work in such instances as for nonprofit educational purposes and where the effect of the use upon the potential market for or value of the protected work is limited. As indicated above, AGLOA tournaments are held not for profit, but for encouraging education among young students. The potential market for the subject games has in all likelihood increased because participants of the AGLOA tournament have had to purchase Allen’s games.
In the case of Scrabulous:
- Players are not required to have actually purchased Scrabble, thus part of the AGLOA defense does not appear to be applicable to Scrabulous. Clearly there is an effect upon the potential market for or value of the protected work because Hasbro has recently licensed the online rights to a third-party.
- The fair use defense is not appropriate because the creators are admittedly running the service as a for-profit enterprise.
Given the fact that it appears Hasbro has valid claims against the creators of Scrabulous, the only surprise to me is that it took so long for the company to take action against two brothers who are profiting from the game Hasbro owns to the tune of “over $25,000 a month.”
Well, there is another surprise actually: the fact that so many people, like Quittner, apparently live in a world where intellectual property rights holders should reward those who steal that intellectual property. The debate over pirated music and movies aside, the case of Scrabulous is one where individuals appropriated intellectual property that they didn’t have the rights to in order to build a product while conveniently turning it into a money-maker once that product became popular.
Quittner naively comments:
If I were an evil genius running a board games company whose product line spanned everything from Monopoly to Clue, I might do this: Wait until someone comes up with an excellent implementation of my games and does the hard work of coding and debugging the thing and signing up the masses. Then, once it got to scale, I’d sweep in and take it over. Let the best pirate site win! If I were compassionate, I’d even cut in the guys who did all the work for a percentage point or two to keep the site running.
Perhaps Hasbro will decide to cut a deal, but I’d also say there’s a good reason Quittner is writing for Fortune and not running a Fortune 500.
Some of the comments on TechCrunch’s coverage of this news are equally naive:
January 11th, 2008 at 11:48 am
What do you expect from a company run by a 64-year-old CEO? I bet this guy still dictates emails to his secretaries.
Earth to Peter: most major corporations are run by “old” CEOs. Even Google!
January 11th, 2008 at 12:01 pm
The worst thing that could be done is for Scrabbulous to put its code in the public domain. Hasbro should buy scrabbulous if they want to keep them quiet. They actually have fewer options to manage this situation than Jayant. I’m pretty sure they couldn’t sue everyone who recreates scrabbulous - given the millions of programmers throughout the world - from the public code. I’d say $3 Million would be a more than fair price (I would push for $5 Mil myself, but that’s just me).
Apparently Doug does not understand the position of leverage. He who owns the intellectual property rights that are blatantly being violated controls the negotiations. Any move by the creators of Scrabbulous to release the source code in an effort to wreak havoc would probably not be beneficial to the creators.
January 11th, 2008 at 12:49 pm
Supposing Hasbro did want to pay…Adonomics has the Scrabulous valuation at $2.9 million (thanks to Center Networks for pointing to that site). FWIW…
Hasbro could look at this as paying for a technology trial they didn’t have to deal with. Now they might see their inventory of games has a whole new “value”. “Value” in the sense of spreading the word about their games. Not sure how many people would pay to use the games.
The technology is not sophisticated and the notion that an application that infringes somebody else’s rights is worth $2.9 million because Adonomics “thinks” so is asinine.
January 11th, 2008 at 1:02 pm
Call me libertarian, but board layouts and rules shouldn’t get copyrights. Wouldn’t nintendo be able to sue every sidescrolling game after mario. Or how about every shooting game after duck hunt. If Scrabulous had added one more row and column, would this still be an issue? Also, what real damage does this do to scrabble’s potential online market. I’d argue none, as they’ve done nothing in the social space, and until they do and fail, I’d assume they just just don’t have it in the scope of their business.
Now arguing Scrabulous is jocking their name…maybe.
Maybe…Shane should lobby Congress to change the law. The law is what it is right now and I’m amazed that a person who can use as sophisticated a word as “Libertarian” could be capable of making such make such an irrelevant and baseless comparison as the one to Nintendo’s “rights” to sidescrolling games.
Assumption is the mother of all fuckups too; as noted, Hasbro has licensed its intellectual property rights to Electronic Arts and has significant plans in the space.
January 11th, 2008 at 3:10 pm
The comparison to CD sales is silly. CD sales may be down, but iPod sales are definitely not. You cannot compare apples and oranges (lame pun intended). As for board sales, I personally bought a new board because of Scrabulous, and I know several people who did the same. Surely, that is not enough evidence to support the assumption that sales took off for Hasbro as a result, but it is an interesting observation nonetheless.
Scrabulous has rejuvenated interest in the game, pure and simple. Look at the numbers on Facebook. Now, nobody’s saying (or at least,not me) that Hasbro should not defend their rights, but simply that they should look at this little app that managed to become one of the most active on Facebook, with 500,000+ members, and not punish all the members who are enjoying it by shutting down the site; instead, they should acquire it and rebrand it, or maybe quickly write their own and brand it Hasbro. Fine, nobody cares what it is called. What people care about is having fun playing Scrabble. If Hasbro act like asses and shut everything down just because they can, I can tell you I will never buy any Hasbro product in the future, clear and simple. Customers rule, period.
Also, note that the Scrabulous author mentioned that they repeatedly sent requests to Hasbro to obtain the necessary rights. So, at least, they will have that in their favor, even though the lack of response surely did not give them the right to proceed with copyright infringement. At any rate, copyright law is extremely complex, and any black and white statement regarding the matter is simply uninformed. Cheers!
I agree that the CD sales comparison is an apples to oranges one, but I find it amusing that Jean-Michel says he’ll never buy another Hasbro product in the future if they shut Scrabulous down, as he just bought a new board. Last time I checked, these boards last a long time unless you’re eating foie gras off them.
Additionally, the fact that the creators of Scrabulous sent requests to Hasbro but did not receive a response does not give them the right to go ahead and steal the intellectual property anyway. There is no law requiring that intellectual property rights holders respond to two 20-something kids in India who wanted to build an online version of their product. And if Hasbro does decide to take a hard stand, this will not assist the creators: contrary to their admission that they moved ahead “without thinking through the legal aspect at the time,” their requests to Hasbro demonstrate that they had prior knowledge that their actions might be infringing.
January 11th, 2008 at 4:07 pm
I think you guys are off the mark. If it was a physical board game it would be different–it would be competing with sales and taking money out of their pocket. But it’s not. It’s virtual and if anything makes people more interested in Scrabble, introduces it to this younger generation, and sparks board sales.
The point of copyright is to protect people’s ability to make money with their product. If it doesn’t hurt the brand and hamper the ability to to monetize it then it should be fair use.
Does “jb” stand for “just bullshit”? I think 99.9% of the people I’ve met who throw around the word “fair use” don’t even know what it is.
Fortunately, there were quite a few intelligent comments as well, but it’s clearer to me everyday that either the most ignorant people are involved in Web 2.0 or on average, everybody is just getting dumb and dumbr. Honestly, I suspect the latter but I’d like to delude myself and pretend that it’s a Web 2.0 thing.Print This Post