Let me start by saying this – one of my hobbies, in my rapidly decreasing free time, is board games. I enjoy getting a group of people together at my house to open a bottle of wine and sit down and play a few games while chatting, laughing and shooting the proverbial shit.

Inevitably, one of the games is made by the German game giant Ravensburger. Their game catalog is extensive and includes games of all shapes and sizes including games with such basic titles as

• ABC Game
• Labyrinth
• Scotland Yard

And of course

• Memory

One of the most basic, and most replicated game models of all time. As a German company, they have the German trademark on the use of the word Memory, especially as it comes to use with games that involve flipping over two things to see if they match.

A few months ago, on 8/13/09, un-noticed by most, Ravensburger Digital GmbH (a subsidiary of Ravensburger) sent Apple a lenghtly letter informing them of the trademark violation and demanding that Apple remove the offending applications from iTunes.

“You will certainly understand that our company cannot and will not tolerate the unauthorized use by third parties of its trademark Memory®, for designating games and toys as being offered, inter-alia, in your company’s highly popular iTunes store. We therefore kindly invite you to take the appropriate measures to remove from your platform those products offered under the designations which interfere with the trademark rights of our parent company and to confirm that his has been effected in due course.”

(complete letter can be downloaded HERE)

One of the reasons you haven’t heard about it until now is because Apple simply didn’t do anything about it. A few months later with a little more persistance, the lawyers at Ravensburger tried again, this time with slightly stronger wording and a spreadsheet of all the apps they found that were infriging on their German trademark:

“In accordance to German law you are obliged to make sure that products offered on your internet platform are not infringing our rights in the trademark “memory” … You have not complied are you are still not complying with your obligations under German law … As a final attempt to avoid a legal conflict, we hereby ultimately ask you to remove from your platform all applications using our trademark “memory” as listed in the file attached hereto no later than October 22, 2009. Should we still find one of the infringing applications after October 22 on your platform, we do not see any other possibility than to immediately take the appropriate steps.”

Appropriate steps?! Rhut Roh… threaten the Big Apple with a lawsuit and suddenly the gears get turning. A letter was promptly sent out to potential culprits which basically washed their hands of the problems and left it up to the developer to due something or either be removed from the app store, or face legal action from Ravensburger. (Apple’s developer agreement puts any liability for apps in iTunes squarely on the head of the developer).

Okay. Lets stop the insanity for a minute and take a good look at this.

Ravensburger has only trademarked the word in Germany, however because Apple does not provide for country by country changes to apps, they cannot simply pull the memory apps from one country, they are asking anyone who uses ‘memory’ as part of their app name to remove it from the store.

Apples products are in many countries around the world. What happens now that the precedent has been set that this kind of trademark law abuse is allowed? If I register Solitaire in Italy, can I get Apple to pull down other Solitaire games and force my competition out of the game?

I understand when a company like Tetris trademarks their name that they have made popular over the years. Can they trademark the actual game play? Is any game of “falling blocks that you rotate to make complete lines and make them disappear” subject to the same intellectual property laws? It may not matter, because without using the term Tetris, I cant see how anyone would search for a game like this.

The big difference is that “Memory” is a common English word, while Tetris is a made up brand. Even applications that have nothing to do with “flipping over of cards to see if they match each other for removal from the board”  could be subject to this ban. What about a flashcard language app that helps with your Spanish Word Memory? Is it safe in a plural form? Can there be an app about happy memories? Can someone write their memoirs?

Ill leave you with the definition of fair use as it related to trademarks from wikipedia:

”

Most trademarks are adopted from words or symbols already common to the culture, as Apple Computer is from apple, instead of being invented by the mark owner (such as Kodak). Courts have recognized that ownership in the mark cannot prevent others from using the word or symbol in these other senses, such as if the trademark is a descriptive word or common symbol such as a pine tree. This means that the less distinctive or original the trademark, the less able the trademark owner will be to control how it is used.

A nonowner may also use a trademark nominatively—to refer to the actual trademarked product or its source. In addition to protecting product criticism and analysis, United States law actually encourages nominative usage by competitors in the form of comparative advertising.

The fair use defense in trademark law is not precluded by the possibility of confusion, according to the U.S. Supreme Court in 2004.^[1] However, courts may consider the possibility of confusion in analyzing whether a use is fair or not. Intent to sow confusion is also relevant; hence, the general rule that no more of the trademark should be used than necessary for the legitimate purpose. For instance, use of a word mark is preferred to a logo, and a word mark in the same style of type as surrounding text is preferred to a word mark in its trademarked distinctive type.”

As part of the promotional mix, many iPhone apps have started using various sales promotions that include a number of different types of sweepstakes, contests and giveaways in order to drive downloads. While a sweepstakes or contest can be great for promoting your app, there are a few things to keep in mind.

GunSmoke uses a Re-Tweet promotion to virally promote their app

One of the most common questions I get from app developers when it comes to these is “What is the difference between a sweepstakes, a contest and a lottery?” Why do they ask? Because a “lottery” has very strict rules and generally can only be legally operated by a state government. There are some legal loopholes when it come to Vegas and Indian Casinos, but as we are talking about iPhone apps here, that have national distribution (If not global – we will get to that in a minute) -you have to be legal across the country. Running an illegal lottery will quickly land you in front of a judge and you could be subject to some pretty heafty fines.

There are three components that we need to take a look at:

1. Prize

Does your promotion include some sort of prize? It can be monetary(Many apps give away iTunes gift cards), physical (some sort of actual gift), digital (software) or even experiential (some sort of experience that would be hard to get someplace else).

2. Chance

Is there some element of chance involved? This is opposed to a game of skill such as having to be the first person to beat a specific level of a game, answer a set of questions correctly or collect specific items from within your application.

3. Consideration

Consideration is a legal term which translates into: “I had to pay for it” (The lawyers will say “an undertaking in response to a promise”). Mind you that consideration is not always financial – it can mean an investment in time or effort as well. A great example is a car dealership that requires you to  “come in and test drive” to participate. Because you had to get to the dealership and probably spend gas money (or bus fare for you first time car buyers!), many courts would define that as consideration. There are ways around consideration however – which is where the infamous “No Purchase Necessary” comes into play. Just because there is a “paid ” method of playing, doesn’t mean there can’t be a free method as well. Often this comes in the form of a sent in 3×5 card or an online form. It doesn’t have to be easy (sure, hide the free online form deep in your site, I don’t care), but it has to be available and explained in the official rules.

So what happens when you have two of the three?

Prize + Chance: This is your typical sweepstakes. You enter, you have a chance to win. Pretty straight forward. What you do need to keep an eye out for is the monetary value of your prize. A few states require that prizes over a specific monetary value (often $500) require your prize to be bonded.

Prize + Consideration: Well… not to be blunt… but this just means you are selling something! You paid (consideration) for an item (Prize)

Chance + Consideration: Not really sure WHAT to call this other then, well, a donation.

Finally… what happens with you have all three?

A lawsuit.

Having all three makes you a lottery, of which is not allowed by anyone but the state.

Looking for help putting together a winning promotion? Give us a shout – we would be glad to help you out, following all applicable state laws of course!