DOJ Asserts Wire Act Opinion Doesn’t Cover Lotteries

In an effort to side-step the lawsuit filed against it by the New Hampshire Lottery (and others), the Department of Justice (DOJ) asserts that its recent reinterpretation of the Wire Act doesn’t apply to lotteries. As we previously reported, the New Hampshire Lottery has sued the DOJ to prevent enforcement of the DOJ’s opinion (issued in January 2019) reinterpreting the Wire Act. As we also reported, the January 2019 DOJ opinion reversed the position it took in 2011 that the entirety of the Wire Act is limited to sports betting. The new opinion concluded that only one of four parts of the Wire Act apply to sports betting, while the other three apply to any online betting. Continue Reading

Caution to Game Companies: PTAB Continues to Preclude PTAB Challenges That It Views As Untimely

In a proceeding that included Patent Office Director Andrei Iancu on the panel, the PTAB issued an order this past week denying institution of 3 IPRs filed by Valve. The decision demonstrates that the PTAB continues to tighten its standards for institution of post-grant challenges, including based upon considerations related to what it perceives as fairness to patent owners. Continue Reading

FTC Loot Box Workshop Announced

The Federal Trade Commission FTC has announced that it will hold a public workshop on August 7, 2019 to examine consumer protection issues related to video game “loot boxes.” As we have previously reported, loot boxes have been under scrutiny by regulators around the world. In the U.S., these issues were recently raised in a November 27, 2018, Congressional oversight committee hearing. During this hearing, Senator Maggie Hassan (D-N.H.) described loot boxes as “endemic in the video game industry,” adding that “children may be particularly susceptible to engaging with these in-game purchases, which are often considered integral components of video games.” In response, FTC Chairman Joe Simons assured Sen. Hassan that the FTC would “investigate these mechanisms to ensure that children are being adequately protected and…[would] educate parents about potential addiction.” Continue Reading

Unpacking Recent Loot Box Updates

As we have previously reported, as loot boxes have become increasingly popular in high-profile video games, they have come under greater legal scrutiny. Several jurisdictions have indicated they are not illegal gambling, but other jurisdictions have found some implementations to be illegal gambling. Even in the jurisdictions where loot boxes are not deemed gambling, regulators have raised concerns about whether loot boxes raise other issues. One alleged concern is the potential impact on children and the potentially addictive nature of loot boxes, though little, if any, hard evidence to date supports this. Continue Reading

DOJ Sued Over its Reinterpretation of the Wire Act

It didn’t take long. The New Hampshire Lottery has sued the Department of Justice (DOJ) to prevent enforcement of the DOJ’s opinion (issued last month) reinterpreting the Wire Act. As we reported last month, the DOJ reversed the position it took in 2011 that the entirety of the Wire Act is limited to sports betting. It newly concludes that only one of four parts of the Wire Act apply to sports betting, while the other three apply to any online betting. Continue Reading

Failure to Launch: Not Identifying the Proper Parties Can Prematurely End an Video Game IPR Challenge

Most video game patents that are asserted in litigation are also challenged at the PTAB through IPR or PGR petitions. Patent Owners looking for new ways attack such challenges have turned to the failure to disclose real-parties-in-interest (“RPI”). Under 35 U.S.C. § 312(a)(2), “[a] petition . . . may be considered only if . . . the petition identifies all real parties in interest[.]” Additionally, under 35 U.S.C. § 315(b), “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” These requirements can pose unique questions for video game companies based on their relationships and business process.  Continue Reading

DOJ Opinion Leaves Industry Hanging: If UIGEA Exclusions Don’t Modify the Wire Act What Does That Mean for Intrastate Gambling Transactions?

The recently released Department of Justice (“DOJ”) opinion (“DOJ Opinion”) concluding that the Wire Act prohibits both sports and non-sports related Internet betting and wagering, leaves the industry with the burning question of “what about intrastate Internet gambling?”  On its face, the Wire Act prohibits using a wire communication facility for the transmission in “interstate or foreign commerce” of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of such wagers, for information assisting in the placing of bets or wagers.  In its analysis the DOJ Opinion applies the modifier of interstate or foreign commerce to all four prohibited types of transmissions. Continue Reading

DOJ Wire Act Update – 90 Day Window for Compliance

This is a follow up to our recent blog post regarding the DOJ Opinion on its interpretation of the Wire Act. In a memo dated January 15, 2019, the Deputy Attorney General declared:

Department of Justice attorneys should adhere to the Office of Legal Counsel’s (OLC) interpretation, which represents the Department’s position on the meaning of the Wire Act. See 28 C.F.R. § 0.25. Continue Reading

DOJ Does High “Wire Act” – Flip Flops on Legality of Online Gambling

The Department of Justice (DOJ) has issued an opinion (DOJ Opinion) that reverses its 2011 Memo, in which it opined that the prohibitions of the Wire Act are limited to sports betting. In the DOJ Opinion, the DOJ has concluded that the 2011 opinion was wrong! It now opines that only one of four parts of the Wire Act apply to sports betting, while the other three apply to any online betting. It also concludes that the 2006 enactment of the Unlawful Internet Gambling Enforcement Act (UIGEA) did not alter the scope of the Wire Act.

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