COURT THROWS OUT PART OF MARVEL vs. CITY OF HEROES

[MattBrady]

In a ruling Wednesday, a US District Court judge dismissed several key claims brought by Marvel, and limited the scope of the suit, and the damages Marvel was seeking against NC Soft and Cryptic Studios, makers of the massively multiplayer online roleplaying game (MMORPG), City of Heroes.

Marvel brought suit against the game publisher and developer on November 10th, 2004, alleging that, among other things, City of Heroes allowed players to create characters that violated Marvel’s copyrights and trademarks. Marvel also claimed several of CoH’s proprietary characters, such as Statesman, were in violation of Marvel copyrights as well.

According to a press release issued by NC Soft, the ruling by Judge R. Gary Klausner “agreed with NCsoft that some of Marvel’s allegations and exhibits should be stricken as ‘false and sham’ because certain allegedly infringing works depicted in Marvel’s pleadings were created not by users, but by Marvel itself.”

That is, according to the defendants, the exhibits used by Marvel to show how easily characters could be created that were similar to Marvel characters were in fact, created by Marvel or its legal team, not characters that actually existed within the game. As the judge agreed, this is an important point, as everyone and their MMORPG-playing mother, since the suit was announced, has tried to create characters that were similar to Marvel characters to see if there was ay weight in the comic company’s argument.

As has been pointed out many times since, creating a character and playing a character in Paragon City (the game's virtual environment) are two very different things, as NC Soft and Cryptic's EULA specifically states that players are forbidden from having their characters resemble or be named after copyrighted characters.

The press release also states:

”The judge also dismissed more than half of Marvel’s claims against NCsoft and Cryptic Studios, including Marvel’s claims that the defendants directly infringed Marvel’s registered trademarks and are liable for purported infringement of Marvel’s trademarks by City of Heroes’ users. In addition, he dismissed Marvel’s claim for a judicial declaration that defendants are not an online service provider under the Digital Millennium Copyright Act. The judge dismissed all of these claims without leave to amend, meaning that Marvel cannot refile these claims."

What was left intact then, includes several of Marvel's copyright claims, which are distinct from the dismissed trademark claims. Specifically, the Judge let stand the claims of direct (by NC Soft and Cryptic) copyright infringement, and contributory (the publisher and developer provided the tools to the players, who then violated Marvel's copyrights). Both claims are still quite serious for both parties, and will be dealt with at a later, to be named, date.

From the NC Soft press release: “Although the judge allowed certain claims to survive the motion to dismiss, NCsoft and Cryptic Studios are pleased with the result and are confident that both the law and the facts will support their case. In fact, citing a 1984 Supreme Court case holding that the sale of video cassette recorders did not violate copyright law, the Court noted that 'It is uncontested that Defendants’ game has a substantial non-infringing use. Generally the sale of products with substantial non-infringing uses does not evoke liability for contributory copyright infringement.' Only 'where a computer system operator is aware of specific infringing material on the computer system, and fails to remove it, the system operator contributes to infringement,' the Court stated.

“The defendants have 10 days in which to answer and dispute Marvel’s allegations and to assert legal defenses to the remaining claims as well as to assert any counterclaims.”

Newsarama has obtained a copy of the Minutes from the Judge's meeting. Boiling it down -

Claims allowed to stand: (again, the judge did not rule in Marvel's favor on these claims, he merely agreed that Marvel did, in fact, have a legitimate claim, as defined by the law and legal precedent)

1) Direct Copyright Infringement - the judge agreed with Marvel, ruling that the plaintiffs are not required to identify the times, similarities or other details of the alleged infringements in their pleading, as the motion to dismiss as filed by the defendants had requested.

2) Contributory Copyright Infringement - the judge also agreed that Marvel had a valid claim in regards to the developer and publisher knowing or should have known that several players were committing a direct infringement of Marvel’s characters.

In terms of how this was spun - the above quote from NC Soft’s press release about “Generally the sale of products with substantial non-infringing uses does not evoke liability for contributory copyright infringement” came from the portion of the judge’s decision wherein he ruled that Marvel’s claim for contributory copyright infringement could stand.

3) Vicarious Copyright Infringement – the judge agreed that Marvel did have a claim in this regard as well, stating that they had sufficiently pled a casual connection between the alleged infringement by game users and a financial benefit to the defendants. That is, the judge agreed that Marvel had a claim when it alleged that people were induced to buy City of Heroes because they could create characters that infringed Marvel copyrights.

4) Direct Infringement of a Common Law Trademark – defendants stated that Marvel failed to plead what mark was allegedly infringed. The judge stated that Marvel did identify the mark that was infringed in their complaint – it was Captain America, and thus the claim is allowed to stand.

5) Intentional Interference with Actual and Prospective Economic Advantage – the judge agreed with Marvel that the defendants knew, or should have known about Marvel’s deal with Activision/Universal, and its copyright infringements have now damaged that relationship. That is, Marvel’s plans for its own MMORPG have been damaged by the copyright infringement alleged by Marvel in CoH. The judge allowed this claim to stand.

Claims Dismissed: (these were dismissed by the judge so that Marvel cannot amend and refile them)

1) Direct Infringement of a Registered Trademark – the judge agreed with NC Soft/Cryptic that “Statesman” by name or appearance, infringed on the trademark of “Captain America.”

2) Contributory Infringement of a Registered Trademark – the judge ruled that as no players are using any characters with alleged copyright infringement in commerce, there is no contributory component by which the defendants would be liable.

3) Vicarious Infringement of Registered Trademark – see above.

4) Contributory Infringement of Common-Law Trademark – Again, related to use of the marks in goods or services, which, the judge ruled, the defendants had not used.

5) Vicarious Infringement of Common-Law Trademark – see above.

6) Declaratory Judgment – Marvel’s claims that the defendants should not be allowed protection under the Digital Millennium Copyright Act do not resolve the controversy between the parties, but merely seek determination of a collateral legal issue governing certain aspects of the dispute. Defendants could use the DMCA as an affirmative defense, and therefore, Marvel cannot seek an advance ruling on it, that is, since the DMCA may be part of the defense, it cannot be thrown out at this point.

[Evan Waters]

Does anyone know which claims were allowed to survive?

[TCJohnson]

Very cool! I can understand why Marvel felt they had to sue, most of their case was BS.

[Sesshomaru]

bah we all know marvel probably just wanted to secure a spot for a MMO , without dealing with such a strong opponent as COH .

Its even stupider when its unlikely they would not allow us to play wolvie , and any known characters , and forces us to create clones and new characters just like in CoH.

[divebomb]

Can I create a character named Thor?
After all he is a Mythlogocal character!
Hercules??
Odin?

[Kingbobb]

Marvel doesn't own the name Thor...it does, however, own the likeness of a character named Thor that (last I looked, leastways) wore a kind of dorky (by today's standards) costume with a viking hemlet with little wings, and swings a hammer around his head to fly.

But if you based your Thor on the Norse godling, and didn't try to copy Marvel's version, they'd have no suit against you.

Ditto for Odin, Herakles, Hercules (or other spellings). In fact, both DC and Marvel use a version of the greek demigod Hercules/Herakles, and there's even some visual simularity between the two. But that's because both are based on classical/historical depictions of him.

Copyright only protects original creations.

[absherlock]

Clarification please-

A claim against Direct Infringement of a Common Law Trademark was upheld but a claim against Direct Infringement of a Registered Trademark was dismissed. What's the difference between a Common Law Trademark and a Registered Trademark?

[Redmond]

What about pencil and paper makers? Anyone can combine both to violate Marvel's trademarks and copyrights making them lose millions of dollars.

[nappymunro]

I can't believe Marvel created the characters themselves that they were complaining about. They used there own lawyers to make copies of their characters. How stupid.

It leads me to believe that the whole case is bogus. I mean if they couldn't come up with evidence that game players were copying them they would have no case. It also seems a lot like falsifying evidence to me.

[OcCaM]

It does seem silly that they needed to fabricate characters. I've seen the legitimate ones on this stupid game that my s.o. plays. And they don't get shut down right away. Hell, he's written complaints to the powers that be, and all they'd say is "we're looking into it." Meanwihle, weeks go by with the real names of Marvel (and DC) characters still around.

He, like many of us eagerly await Marvel or someone to make a decent game because CoH is one boring lame game!

[John Osen]

I'm a player and this is why I don't buy Marvel books.

[Lyle]

Originally posted by OcCaM
It does seem silly that they needed to fabricate characters. I've seen the legitimate ones on this stupid game that my s.o. plays. And they don't get shut down right away. Hell, he's written complaints to the powers that be, and all they'd say is "we're looking into it." Meanwihle, weeks go by with the real names of Marvel (and DC) characters still around.

Quite the opposite experience from what I see. I frequently report infringements and set myself to track the ones that have infringing names, they are frequently changed by the next time I log on. I have only noticed one occasion where I reported something and it wasn't changed and that wasn't an IP infringement, but a different part of the EULA.

He, like many of us eagerly await Marvel or someone to make a decent game because CoH is one boring lame game!

It's an amazingly well-designed game, in my opinion. It's nicely designed for team or solo play, with different types of characters having different purposes and even more subtleties within. For an action game, it requires a lot of strategic thought, a slight change to your team can require me to rethink my strategy.

[Babbster]

Originally posted by absherlock
Clarification please-

A claim against Direct Infringement of a Common Law Trademark was upheld but a claim against Direct Infringement of a Registered Trademark was dismissed. What's the difference between a Common Law Trademark and a Registered Trademark?

The difference is just like it sounds. A registered trademark is one which is taken to the Patent and Trademark Office and registered there as such. A common law trademark is one that has become a trademark through use. In other words, you don't HAVE to register a trademark in order to be protected, though any lawyer would tell you you're far better off doing so if for no other reason than common law trademarks are limited by geography (not applicable here since Marvel has sold comics and other products in every state).

For example, let's say Marvel registered the name "Spider-Man" as a trademark. Now, his costume design may or may not be included in the registration depending on how they went through the procedure. However, if someone designs a character using a costume that is the same or too close, Marvel could sue over that even if the costume is not officially registered as a trademark. Marvel might be able to claim, for example, that a ridiculously large green humanoid wearing purple pants is a violation of their common law trademark stemming from the design of the Hulk.

Note - I'm not a lawyer but I'm pretty well read.

[wilee4]

this is great news!!! hopefully the enitre case will be thrown out

[Lyle]

Originally posted by wilee4
this is great news!!! hopefully the enitre case will be thrown out

Some of the legal begles that play the game have commented that at this point the judge is only asking if Marvel has a valid case if all of their allegations are true, not on if they are true or not... so the judge said that Marvel's trademark claims don't apply here and that Marvel cannot complain about a defense that might be brough up (the ISP safe harbor bit).

Plus this is all pending appeal. A higher court may decide that the claims are valid and worth discussing.

So, now Marvel's got to make a case that Statesman is a "blatant ripoff" of Captain America.

[MisterClock]

Originally posted by Lyle
Some of the legal begles that play the game have commented that at this point the judge is only asking if Marvel has a valid case if all of their allegations are true, not on if they are true or not... so the judge said that Marvel's trademark claims don't apply here and that Marvel cannot complain about a defense that might be brough up (the ISP safe harbor bit).

Plus this is all pending appeal. A higher court may decide that the claims are valid and worth discussing.

So, now Marvel's got to make a case that Statesman is a "blatant ripoff" of Captain America.

I still can't believe Marvel sees the Statesman as a rip-off of Captain America. So he wears red, white, & blue colors. So what. Doesn't the Statesman fly & doesn't caring a shield?

[wilee4]

Originally posted by MisterClock
I still can't believe Marvel sees the Statesman as a rip-off of Captain America. So he wears red, white, & blue colors. So what. Doesn't the Statesman fly & doesn't caring a shield?

yes, which is why the cap thing is rediculous...i was at marvel whe the whole freedom force thing was brought up, it was nothin but b.s. if the characters were rip-offs of marvel i'd say marvel should sue, but this isn't the case here...

IMHO, and feel free to disagree, this is comparable to creating marvel characters in Heroes Unlimited, Champions, V&V or any table top rpg, who's to stop people from creating these characters and using them, in their EXACT image and likeness in an old school rpg. I understand the differences in representation but the basic principal applies that theae are FAN created characters and NOT used for profit.

and i'm seriously hopin that the Marvel MMO gets off the ground. peter mathews got it off to a great start and Ames is AWESOME!!! marvel games have never loooked better but this kind of thing needs to stop!

[allagecomics]

Anyone know if players are/were actively creating their characters to look like Marvel characters and if NC Soft or Cryptic Studios were proactively asking those players to delete/modify them?

[Batmite79]

From everything I've seen, it's a ridiculous lawsuit.

Either Marvel's out for a quick buck, or they want to do their own game... In either event, I'd imagine you could create characters that look like DC ones, but we don't see them suing (this isn't me looking for a DC-Marvel debate, just a true fact). It'll be interesting to see how this whole thing plays out...

And I'm waiting for them to release the damn game here in Aus...! (That and BloodRayne 2 )

[EmeraldGuy32]

While I'm happy from a 1st ammendment standpoint I am saddened because my Marvel stocks might go down. Oh well.

[Dildo_Baggins]

Originally posted by John Osen
I'm a player and this is why I don't buy Marvel books.

Word, altough Runaways is cool! They should make a RPG out of it.

[Nat Gertler]

Originally posted by wilee4
IMHO, and feel free to disagree, this is comparable to creating marvel characters in Heroes Unlimited, Champions, V&V or any table top rpg, who's to stop people from creating these characters and using them, in their EXACT image and likeness in an old school rpg. I understand the differences in representation but the basic principal applies that theae are FAN created characters and NOT used for profit.

Ah, but while the fans aren't doing it for profit, the company is charging the players to distribute their creations and to have interaction with other players. The company's involvement after the creation of the characters differentiates this from the tabletop RPG category. (Which is not to say that I think Marvel will or should win on the merits, but there is indeed a substantially different legal question involved.)

Folks with an interest in the legal questions involved may want to take a look at this lawyer's blog posting.

[stargazer]

What a bunch of hypocrites! Didn't Marvel spend the whole Golden Age and 2/3 of the Silver Age ripping off artists with the whole 'work for hire' business? And now they dare claim to be a victim? I'm tossing all my old X-mens into the shredder!

[starvenger]

Originally posted by Batmite79
[b]From everything I've seen, it's a ridiculous lawsuit.[b]

Remember that some of Marvel's claims WERE allowed to stand, so it really isn't that ridiculous. Granted, 11 claims is a lot (especially since 6 were dismissed) but I suppose that it was done to cover all bases, and because when you're the prosecuting lawyer, you try to go for more than you know you can get.

[MShivers]

Originally posted by stargazer
I'm tossing all my old X-mens into the shredder!

Yes, my friend! Express your outrage!

Only ... wouldn't it be better to send your old "X-mens" to your loyal pal MShivers? I'll be certain they meet a dasterdly fate that will have Marvel thinking twice about it's ill-gotten gains ...!



-MShivers

Loves them ol' X-Mens