Intellectual Property Rights and the Game Industry
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Intellectual Property Rights and the Game Industry A thesis submitted to the University of Manchester for the degree of Doctor of Philosophy in the Faculty of Humanities 2017 Yudong YU School of Law 1 Table of Contents Abstract ..................................................................................................................................... 6 Declaration ................................................................................................................................ 7 Copyright Statement................................................................................................................. 8 Dedication ................................................................................................................................. 9 Acknowledgements ................................................................................................................ 10 Abbreviations .......................................................................................................................... 11 Table of Statutes ..................................................................................................................... 15 Table of Cases ......................................................................................................................... 18 General Introduction .............................................................................................................. 26 1. Reasons for Selecting the Home Console Game Industry ......................................... 26 2. Key Questions of this Thesis ....................................................................................... 27 3. Relevant Literature and Contribution ........................................................................ 33 4. The Structure of this Thesis ........................................................................................ 39 Section I ................................................................................................................................... 44 Chapter I: Understanding the Home Console Game Industry ............................................... 44 1. Introduction ................................................................................................................ 44 2. The Home Console Game Industry ............................................................................. 44 2.1 Hardware and Game Software Production ........................................................ 44 2.2 Hardware and Software Distribution and Retailing .......................................... 47 3. Economic Approaches to Organisations .................................................................... 48 3.1 Theories of Firms ................................................................................................ 49 3.2 Strategic Management Theories ........................................................................ 51 4. Competition in the Home Console Game Industry .................................................... 62 4.1 The External Environment Test .......................................................................... 63 4.2 Competitive Advantages of Console Firms and Game Companies ................... 79 5. Conclusion ................................................................................................................... 83 Section II .................................................................................................................................. 85 Chapter II: Patents and the Home Console Game Industry .................................................. 85 1. Introduction ................................................................................................................ 85 2. The Home Console Game Industry and the Semiconductor Industry ....................... 86 3. The Legal Perspective and Function of Patents ......................................................... 88 3.1 The Legal Basis of Patent Functions ................................................................... 89 3.2 Remedies for ‘Patent Crisis’................................................................................ 95 4. Patents, Vertical Disintegration and Competition ................................................... 110 4.1 Right to Exclude and Vertical Disintegration ................................................... 110 2 4.2 Information Disclosure, Transaction Costs and Vertical Disintegration ......... 112 4.3 Information Modularity and Partitioning, Capabilities and Vertical Disintegration ............................................................................................................... 115 4.4 Patents, Disintegration and Competition in Semiconductor Industry ............ 116 5. Patents and Competition in the Console Hardware Market ................................... 122 5.1 Competitive Advantages of Console Firms ...................................................... 122 5.2 Implications for Start-Ups................................................................................. 125 6. Conclusion ................................................................................................................. 127 Chapter III: Copyright and the Home Console Game Industry ............................................ 130 1. Introduction .............................................................................................................. 130 2. Copyright Protection and the Console Software Market ........................................ 131 2.1 Copyright and Console Games.......................................................................... 132 2.2 Copyright and Competition between Game Companies ................................. 143 2.3 Implications for Competitive Advantages and Bargaining Power of a Firm ... 146 3 Copyright and the Relationship between Console Firms (Platform Providers) and Game Companies .............................................................................................................. 148 3.1 Anti-Circumvention Provisions ......................................................................... 148 3.2 Exemptions and Game Development .............................................................. 151 4 Copyright and Game Piracy ...................................................................................... 160 4.1 Preventing Illegal Copies of Games .................................................................. 162 4.2 Anti-Circumventing and Circumventing Tools ................................................. 171 5 Copyright, Parallel Importing and Used Game Reselling ........................................ 173 6 Conclusion ................................................................................................................. 176 Chapter IV: Trademarks and the Home Console Game Industry ........................................ 179 1. Introduction .............................................................................................................. 179 2. Brands, Brand Equity and Trademarks ..................................................................... 180 3. Trademarks and the Home Console Game Industry ................................................ 183 3.1 Information Asymmetry and Concept of Quality ............................................ 184 3.2 Trademarks, Brands and Search Costs Reduction ........................................... 188 4. The Legal Nature of Trademarks .............................................................................. 189 4.1 Trademark Registration, Trademarks as Unique Reference Points and Market Identity .......................................................................................................................... 191 4.2 The Legal Guarantee of Trade Origin and Unitary Control of Actual Quality . 192 4.3 Trademark Legal Protection, Perceived Quality and Reputation (association) Building ......................................................................................................................... 197 4.4 Trademark Legal Protection and Maintaining Reputation .............................. 201 4.5 Trademark, Brand Equity and Competitive Advantage and Leverage ............ 202 3 5. Trademarks and Competition in Console Software Industry .................................. 205 5.1 Use in the Course of Trade (actionable use) .................................................... 205 5.2 Likelihood of Confusion .................................................................................... 208 5.3 Non-confusion Based Liability .......................................................................... 212 5.4 Defences ............................................................................................................ 220 6. Trademarks, Game Piracy and Control over Distribution ....................................... 222 6.1 Trademarks and Game Piracy ........................................................................... 223 6.2 Trademarks and Right of Distribution .............................................................. 223 6.3 Digital Distribution – One Solution Fixes All .................................................... 225 7. Conclusion ................................................................................................................. 227 Section III ............................................................................................................................... 229 Chapter