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FTC Reaches Settlement in First Crowdfunding Case 06/15/2015

Posted by Morse, Barnes-Brown Pendleton in Games & Interactive Entertainment.
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It took the Federal Trade Commission (“FTC”) less than 48 hours to settle its first ever crowdfunding case against a deceptive Kickstarter campaign, The Doom That Came to Atlantic City!

According to the FTC’s complaint, project creator Erik Chevalier raised more than $122,000 from 1,246 backers to purportedly “develop, produce, and distribute” a board game entitled The Doom That Came to Atlantic City.

Chevalier launched his Doom campaign in May 2012 with a funding goal of $35,000. Only 30 days later, Chevalier nearly quadrupled his goal –“But, after 14 months, Chevalier announced that he was cancelling the project and refunding his backers’ money.”

Chevalier did not provide refunds to his backers. According to the FTC’s complaint, “Chevalier spent most of the money on unrelated personal expenses such as rent, moving himself to Oregon, personal equipment, and licenses for a different project.”

Under the settlement order, Chevalier is required to honor stated refund policies and prohibited from making misrepresentations about any future crowdfunding campaign, including:

(a) the purposes for which funds raised from consumers will be used;

(b) that by making a contribution, consumers will receive a specific good, service, or other reward deliverable;

(c) the performance, efficacy, nature, or central characteristics of such good, service, or other reward deliverable; or

(d) the qualifications or expertise of any person associated with the crowdfunding campaign.

Although the settlement order also imposes a $111,793.71 judgment against Chevalier, project backers are unlikely to see any return on their contribution – at least for the foreseeable future – as the fine has been suspended “due to Chevalier’s inability to pay.”

The FTC’s action against Chevalier highlights the shortcomings of self-regulation. Kickstarter, and others like it, provide project backers with limited protection, generally dictated by the site’s terms of service.

“Many consumers enjoy the opportunity to take part in the development of a product or service through crowdfunding, and they generally know there’s some uncertainty involved in helping start something new,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “But consumers should be able to trust their money will actually be spent on the project they funded.”

In its press release, the FTC provides:

This case is part of the FTC’s ongoing work to protect consumers taking advantage of new and emerging financial technology, also known as FinTech. As technological advances expand the ways consumers can store, share, and spend money, the FTC is working to keep consumers protected while encouraging innovation for consumers’ benefit.

The Commission vote authorizing the staff to file the complaint and proposed stipulated order in federal court was 5-0.

For Kickstarter campaigners, an important lesson is to be learned – keep your promises when crowdfunding. Use funds collected for a specific purpose only for that purpose. Provide refunds when necessary and rewards when promised. Or be prepared to suffer the potential legal consequences.

Tap into the Power of Games With the MIT Enterprise Forum 04/09/2015

Posted by Morse, Barnes-Brown Pendleton in Games & Interactive Entertainment.
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Today billions of people around the world play games, and not just for fun.  Many people are now playing games to stimulate their minds, improve their health, and change their behavior, as companies beyond those traditionally thought of as game companies incorporate game mechanics and business models into their offerings. On April 13, 2015 The MIT Enterprise Forum of Cambridge will host a half-day conference, The Big Game Theory: Gaming Beyond Gamers. This conference will focus on topics of interest to companies seeking to adopt game elements, including Universal Best Practices, Gaming in Healthcare, Driving Engagement and much more!

MBBP partner Mike Cavaretta is the founder, former chair, and current steering committee member of the MIT Enterprise Forum of Cambridge’s Games and Interactive Entertainment Community Circle, which played a key role in organizing the conference.

The agenda and registration can be found here.

MBBP Client Demiurge Studios Acquired by SEGA Networks 02/20/2015

Posted by Morse, Barnes-Brown Pendleton in Client News, Computer Software & Hardware, Games & Interactive Entertainment, Intellectual Property, Legal Developments, Licensing & Strategic Alliances, New Resources, Public Companies, Publishing & Media.
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2015-02-19_10-29-40MBBP Client Demiurge Studios, an independent game developer out of Cambridge, Massachusetts, has been acquired by SEGA Networks, a multinational video game developer, publisher, and hardware development company. Founded in 2002, Demiurge Studios made the transition into mobile gaming in 2008 and found success with Marvel® Puzzle Quest™, a top 100 grossing app on the App Store and top 50 grossing apps on Google Play. Previously, they worked with world-class developers like BioWare™ and Irrational Games™ on AAA console and PC games, contributing to titles such as BioshockBorderlands, and Mass Effect. Demiurge Studios will continue to make games under the Demiurge Studios name.

Morse, Barnes-Brown & Pendleton serves as counsel to Demiurge Studios, and advised it in connection with the structuring, negotiation and documentation of this transaction.

Joe Martinez was the lead corporate attorney on MBBP’s team, which also included attorneys Mike Cavaretta, Diana Española and Hillary Peterson.

To learn more, read the full press release.

MBBP Client OYO Sports Acquires New Investors 10/20/2014

Posted by Morse, Barnes-Brown Pendleton in Client News, Games & Interactive Entertainment, Industries, Intellectual Property, Manufacturing, Retail & Service, MBBP news.
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OYO Sportstoys, Inc.MBBP client OYO Sports is getting noticed by investors and making strides towards innovative toys for kids. OYO, based in Acton, makes plastic “minifigure” toys that resemble star athletes, similar to the popular Lego toys. The local toy start-up company has raised $14 million in funding in the last year and has recently acquired a new investor. OYO’s newest investor is Mandalay Sports Media, a company chaired by Hollywood executive Peter Guber, who is also an owner of the Los Angeles Dodgers and the NBA’s Golden State Warriors. Local OYO investors include Atlas Venture and Boston Seed.

Learn more about where OYO came from and where they’re going in these recent articles by the Boston Globe and The Boston Business Journal.

Way to go, OYO!

 

MBBP Publishes Articles on Data Privacy 11/27/2013

Posted by Morse, Barnes-Brown Pendleton in Games & Interactive Entertainment, Privacy and Data Security, Publishing & Media.
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IP Licensing and Trademark Attorney Faith KasparianMBBP has published two articles on Data Privacy, both written by licensing and intellectual property attorney Faith Kasparian. The first article, FTC’s Recommended Best Practices for Mobile Privacy Disclosures, discusses the Federal Trade Commission‘s report on privacy recommendations for mobile platforms, app developers, advertising networks (other third parties), as well as app developer trade associations including academics, usability experts, and privacy researchers. For the full article, please click here.

Faith’s second article, FTC Finds Privacy Practices Lacking in Mobile Apps for Kids, covers a report released by the FTC which raises concerns with the current lack of privacy practices and disclosures for apps directed toward children. The report also announced the launch of nonpublic investigations to determine compliance with the Children’s Online Privacy Protection Act and the Federal Trade Commission Act. For the full article, please click here.

For more information on either of these topics, please feel free to contact Faith.

Giant Otter Co-Founders Interviewed by NECN 10/02/2013

Posted by Morse, Barnes-Brown Pendleton in Client News, Games & Interactive Entertainment.
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Giant Otter TechnologiesOn September 6, New England Cable News (NECN) interviewed MBBP client Giant Otter Technologies, a start-up that builds simulations to teach social and communication skills using crowdsourced artificial intelligence. Giant Otter is a finalist for MassChallenge, a four month accelerator program, and is in the running to receive the $100,000 grand prize. NECN interviewed Giant Otter co-founders Geoff Marietta and Dr. Jeff Orkin on MassChallenge and their lead product, School Life.
Click the image below to watch the full interview:

GiantOtter video

Giant Otter Technologies an “Online Game Changer” 07/16/2013

Posted by Morse, Barnes-Brown Pendleton in Client News, Games & Interactive Entertainment.
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MBBP client, and MassChallenge finalist, Giant Otter Technologies was touted as an “online game changer” in the Boston Herald and we agree!

Giant Otter Technologies creates data-driven improvisational role-playing virtual simulations that can help change behaviors and improve relationships. In short, their online games aim to teach people social skills and better human interactions.

Their first project is developing a three-dimensional, online anti-bullying game in which middle and high school students will play the role of the victim or bystander and ultimately learn to empathize. Future projects will tackle other challenging situations such as teaching the military cultural interaction skills, allowing sales people to practice with virtual customers, teaching doctors to improve their communication with patients and training managers to lead their staffs.

Keep up the good work, Giant Otter!

Developing an app? Make sure you own it! 02/20/2013

Posted by Morse, Barnes-Brown Pendleton in Games & Interactive Entertainment, Intellectual Property, Licensing & Strategic Alliances.
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MBBP Attorney Mike CavarettaOn February 11th, Adobe published an article “Developing an app? Make sure you own it!” written by MBBP Licensing, Technology and IP Attorney Michael Cavaretta. Mike advises readers on precautions app developers should take in order to ensure their ownership rights are protected.

To read the full article, please visit the Adobe Developer Connection.

For more information on developing an app, feel free to contact Mike.

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