EA, Nintendo Drop Suit Vs. Yahoo

Marking the end of a year-long dispute, Electronic Arts and Nintendo Monday
dropped a lawsuit against Yahoo, which promised it would prevent pirated video devices and games from being sold on its site.

The two online game providers, in March 2000, charged that Yahoo!
permitted its users to sell illegal video games and devices. At that time,
Electronic Arts and Nintendo indicated they would ask for injunctions on the
sales and for damages of as much as $100,000 per infringement.

The resolution came with the promise that Yahoo will use its proprietary filtering
technology to screen and block sales of counterfeit game items on its
auction and classified sites.

“The software was developed in-house to block the listings of infringing items from appearing on our site,” noted Jon Sobel, Yahoo’s general counsel. “Since no automated technology is perfect, we additionally have a team available to enforce the service, respond to complaints and take down items that violate copyright issues.”

In its stand against pirates, Yahoo is additionally exploring other areas where this technology can be implemented. “It is certainly possible that we will expand the filtering technology’s use,” he said. “The technology is dedicated to eliminating items from our site that are illegal or questionable. We are presently working with about 100 companies to make sure that our auctions don’t infringe on their copyrights.”

Yahoo’s action is applauded by Asmita Shirali, a lawyer with the Cleveland-based office of Jones, Day, Ravis and Pogue, an international law firm with established technology and commerce practices.

“It is always a good thing when companies respect intellectual property rights,” she said. “People don’t realize that many times technology outpaces established laws. “There is a chilling effect on introducing products digitally for fear that copyrights will be pirated.”

Online copyright infringment is a problem that must be dealt with, noted Rosie Wenstrup, Esquire, who is with the same firm. “There needs to be a misappropriation ethic for the Internet. There are people who would never even consider stealing a piece of penny candy, but have an entirely different set of values when it comes to the Web.”

Companies must work together to conquer the problem of pirating, Sobel noted. “The best way to combat this issue is for all companies unite and be a part of the solution,” Sobel said. “We are eager to work with EA, Nintendo and other rights holders to cooperatively address these issues.”

Jeffrey Brown, a spokesperson for Electronic Arts Inc., Monday told InternetNews.com that he is
satisfied with Yahoo’s proposal to sheriff its site.

“Billions of dollars are lost worldwide due to the illegal sale of video
games,” Brown estimated. “We will be working closely with Yahoo, as we do
with eBay, to prevent this sort of crime from taking place.

“The selling of pirated video games is regarded as a theft of intelligent
properties. If someone is involved in this activity, we will find them and
prosecute them to the fullest extent of the law,” he said.

Nintendo, too, is satisfied that its consumers will not
have access to pirated goods, said Richard Flamm, vice president and general
counsel of Nintendo of America Inc.

“We are encouraged by the strides Yahoo has made in removing pirated
goods from its sites,” he said. “Working to eliminate piracy on the Internet
is one of our highest

Yahoo’s monitoring program was launched at the beginning of this year to
prevent questionable materials, such as Nazi-related items, from being
offered through its site.

The news must bring some measure of comfort to Yahoo, which saw the trading of its stock halted (along with Wall Street’s collective breath) last Wednesday.

In a news conference that evening, the online giant

said Chief Executive Officer Tim Koogle was stepping down and that it likely would post $170 million to $180 million in quarterly revenues, well below the $232 million in revenue and per-share profit of 5 cents that Wall Street analysts expected, according to First Call.

The announcement was like two weighty uppercuts to the New Econonmy’s chin, as Yahoo is considered a bellwether dot-com.

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