SEGA OF AMERICA SUED BY NIKE OVER GAME AD

In suit filed in U.S. Dist. Court, Portland, Ore., Nike charged that ad for new Sega game NBA 2K2 was nothing more than “virtual scene-by-scene reenactment” of Nike’s “Frozen Moment” 1996 TV ad depicting Chicago Bulls-L.A. Lakers NBA basketball game sequence featuring Michael Jordan. In that ad, fast-paced basketball action shifted to slow motion as onlookers watched Jordan move toward his signature slam-dunk -- all while being oblivious to events and accidents happening all around them. Sega ad, which started running last month, features realistic basketball action from game that shifts into slow motion as onlookers become so caught up in game they become oblivious to what is happening around them. Nike suit said Sega ad “copies the sequence, theme, tone, characters, mood, pace, music and setting” of “Frozen Moment,” with only subtle differences.

In addition to charging Sega ad “infringes [on] Nike’s copyright,” Nike accused game company of engaging in “unfair competition.” Suit said: “By virtue of Nike’s widespread dissemination of ‘Frozen Moment,’ Sega and Leagas Delaney had a reasonable opportunity to view it and become familiar with its contents. When both Nike ads were originally broadcast, [SOA’s] current Pres.-COO Peter Moore was senior vp of mktg. of Reebok, a major competitor of Nike’s and a company also active in marketing basketball footwear and apparel. Alternatively, the similarities between the 2 works are so striking as to preclude the possibility that Sega and Leagas Delaney independently created the Sega ad without reference to the Nike ad.”

Nike said in suit, which was posted at company’s Web site, that it “has been and will continue to be irreparably harmed by Sega’s wrongful infringement” and therefore was “entitled to a preliminary and permanent injunction prohibiting Sega, Leagas Delaney Inc., and all persons acting in concert with them from further acts of copyright infringement and an order impounding all copies of the Sega ad.” Nike also said it was “entitled to… statutory or actual damages for harm Nike has sustained and for any gains, profits and advantages obtained by them as a direct result of their willful acts of infringement; the precise amount to be established at trial.” But Nike said that in lieu of damages it was willing to accept “a reasonable royalty on all sales” of Sega’s game. Nike also asked to receive damages or royalties from game sales based on claims that: (1) Sega’s actions were in “violation of common-law unfair competition.” (2) “Defendants’ use of Nike’s distinctive work to promote Sega’s own product is likely to mislead, and implies inaccurately that Sega and its products are endorsed or sponsored by, or are otherwise connected or affiliated with, Nike and its products.” Nike said Sega’s actions on latter front were in violation of Lanham Act.

Commenting on suit Fri., SOA spokeswoman would say only: “Sega has seen Nike’s press release. However, to our knowledge, we have not yet received an official complaint from the company. Therefore, we cannot discuss this legal issue at this time.” Leagas Delaney hadn’t returned call for comment by our deadline. Meanwhile, Reuters reported from Marseille that French court ruled against Nike last week, saying company no longer could distribute its line of Presto sportswear in France after small company based in Marseille -- Texto -- argued it had brand name first.

Meanwhile, BSI said it sued Mythic after game maker attempted to stop it from selling virtual items from Mythic’s massively multiplayer online role playing game (MMORPG) Dark Age of Camelot online via eBay auction site and other online locations, including BSI’s own CamelotExchange. BSI described itself as group of individuals who played, bought and sold items in various MMORPG titles online. Saying it grew from one person almost 2 years ago to current 7, BSI said it had developed market to supply MMORPG players with gaming currency, characters or other items from game worlds at competitive prices. While Mythic is attempting to protect what it views as its own copyrighted property, BSI Sales Dir. Lee Caldwell argued: “It is unfair of Mythic to stop those who wish to sell their items, currency or even their own accounts, which were created with their own time. Mythic, in my opinion, and hopefully the court’s, does not have the copyright ownership to regulate what a player does with his or her own time or determine how much that time is worth on the free market… Mythic’s attempt to stifle competition in their own game makes it possible for only full-time gamers to succeed in the game and most MMORPG players can’t compete on that level.”

While Mythic-BSI case in and of itself isn’t likely to receive much attention, case has copyright implications for entire game industry as game makers enter online gaming arena in force. Suit, filed in U.S. Dist. Court, L.A., contended that Mythic had “attempted to exert monopoly-like control over uncopyrightable material.” BSI asked court to provide “judicial declaration on behalf of themselves and all online gamers that software giants cannot misuse their copyright laws to prevent individual players from selling their accounts (or the items, money or equipment developed by their characters) to other licensed players.” BSI also asked for “monetary damages for the unlawful business practices and interference with business advantage committed in this case.” Company said eBay had suspended its registration and temporarily shut down all of its sale listings after Mythic told eBay that BSI’s items violated game maker’s copyright and trademark. Mythic spokesman told us Fri. company had “no comment on this matter right now.”