State of Play 2009 - Sean Kane on EULAs
Jun 19, 12:15 PM
Here are my notes on Sean Kane’s 15-minute discussion of EULAs at State of Play 2009. Comments in [brackets] are mine, and any misinterpretations are my fault alone!
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I’m talking about the idea of a EULA. Top 10 commandments to minimize EULA risk. [Not sure that there were 10.]
The takeaway should be: balance is the key. We need to balance the player interest and the developer interest.
One of the issues with the Bragg case was that there was not balance. One arbitration position in the Second Life EULA was imbalanced, inconscienable. To the extent that we can give players some rights, that’s what I think will go a long way to later on when those EULAs are tested. And I don’t think there’s a successful game out there that won’t have its EULA tested. Some judges are smart and understand what a VW is, and some judges like the one in the Bragg case shock everyone and write a 50-page decision with personal politics coming in to play.
Drafting: make things as clear and simple as you can make them. That’s an issue that comes up with judges reading contracts of any sort: if a person can’t understand it as written, and if a LAWYER can’t, that’s a black mark against the contract. Use simple declarative sentences, avoid compound sentences, use unadorned words and customary words (within the context of a language, an industry, or legal). Have a lawyer write these things that understands what you do. Don’t hide things. Lawyers are taken to task by judges because they’re trying to argue that X sentence in Y provision means “I win.” Judges ask where that provision is and if it’s buried in 15 sentences of misc crap, judges look poorly on that. If you want to be able to say you can change a EULA, make sure you say that at the top of your EULA, bold it, and say it plainly. It’s hard to argue that they missed that. In a EULA you should be careful to reference outside documents.
Give access to the EULA. Don’t just make them click on it, generate an email with it and send it to your client. Display it pre-purchase, post-purchase. Make sure that people can get to it if they need to. Make links all over your website to it. Who accepts the EULA? Child? Parent? How can you tell (credit card)?
Virtual Property. Source of rights: external legislation, some countries have case law dealing with VP. EULA can define whether you have virtual property. Most EULAs say “you don’t own any property, you get a limited license to access an aspect of this game, license is revokeable.” How about dispute resolution? There are lawyers in the sports area who put up a dispute resolution system for fantasy football, the companies sign up for it and if there’s a dispute those lawyers arbitrate. What happens if the game goes down? You want to include these sorts of points in your EULA to disclaim liability. The IP ownership is one of the biggest things. Some games say “we own everything,” others state “within the context of this game you have certain ownership rights.”
Q from audience: there’s someone out there that has a two column EULA. On the left hand is the dense stuff. On the right hand side is three or four simple words describing the gist of that paragraph. What do you think about that idea?
I’ll tell you about a conversation I had with Erik Bethke. He came to me and said there’s research that people can only keep about 7 things in their minds at once. I want a EULA with seven sentences to cover everything. He told his seven, and I said off the top of my head a bunch more things. He said, “Oh, we have to include that.” I think simple version is fine as long as it’s clear to the parties that you’re agreeing to the legalese, not the simple points. That’s okay as long as you’re not burying things later on.
Arbitration. You don’t want to be in court on these things, arbitration much less expensive than court. You want to be clear and conspicuous about your arbitration clause. You can include specific detail about how arbitration works beyond “there’s going to be arbitration in city X.”
Choose your forum and law. Different states have different laws on the books.
Class waiver. There aren’t that many EULAs that have class waivers in them. Having the ability to bring a class in a lawsuit, that can put a lot of force behind a lawsuit. Having a provision against class actions may be a good tihng, but you could get a negative community reaction, and there may be enforcability questions. You need to understand your users enough to know where there’s going to be backlash.
If you give away a little, you might get back a lot!!
