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James Gatto

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Jim Gatto is a partner in the Intellectual Property Practice Group in the firm’s Washington, D.C. office. He is Co-Leader of the Artificial Intelligence Team, the Blockchain & Fintech Team, and Leader of the Open Source Team.

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Introduced in response to certain digital media sellers (e.g., game publishers) revoking consumer access to purchases with little to no recourse, AB 2426 forces sellers of “digital goods,” such as movies, apps, games, books and music to clarify what a consumer is actually receiving in connection with their “purchase.” Often companies refer to the “purchase” or “sale” of digital goods, yet the associated terms of service make clear that the buyer only receives a revocable license to the such goods. In some cases, if a buyer violates the terms of service, the license is revoked and the user is denied further access to the digital goods. In other cases, a buyer may be denied access to digital goods it has “purchased” if the digital media platform shuts down.Continue Reading New California Law Targets Sellers of Digital Goods

“NFT” was 2021’s word of the year.  This isn’t too surprising—they’re everywhere!  The market cap for NFT transactions jumped from roughly $400 million at the beginning of 2021 to over $7 billion by year’s end.  What’s next and how can brands and other content creators leverage NFTs to bring value?
Continue Reading Thinking of Jumping on the NFT Bandwagon – Are you Prepared?

The United States Securities and Exchange Commission (“SEC”) has indicated that nearly all initial coin offering (“ICO”) filings they have seen are securities offerings. Based on this expansive view, it may be more likely to find a Unicorn than an ICO that is not a securities offering. Ironically, a recent lawsuit was filed against Unikrn, a block-chain based betting platform, primarily focused on esports betting.
Continue Reading Is there a Unicorn Among ICO Issuers?

Advertising for new games can present some troublesome legal issues, if due care is not taken. A recently concluded matter in the UK highlights an example of the potential issues. Hello Games was investigated by the Advertising Standards Authority (ASA), based on complaints from customers that advertised features of its game (No Man’s Sky) either did not actually appear in the game or did not appear in the way advertised. The ASA ruled, in this case, that the advertising was not in fact legally misleading. Notwithstanding this ruling, game publishers need to be careful when advertising new games.

Continue Reading Don’t Game Your Players with False Advertising

A Federal Court in Washington state dismissed a Plaintiff’s class action claims that social casino games using purchasable virtual casino chips  constitute gambling under Washington state law. The Court found that the virtual chips have no “value” and therefore the game did not constitute gambling because Plaintiff was not “staking or risking something of value.”
Continue Reading Another Gambling Class Action Fails – Court Finds Social Casino Games Not Gambling

A Maryland Court recently dismissed a case in which Plaintiff alleged that a virtual currency casino within a social game constituted illegal gambling, despite the existence of a secondary market for the player accounts. For purposes of assessing whether the game was skill or chance-based game, the Court found that the social game, as a whole, was a game of skill, and refused to adopt the Plaintiff’s approach of considering the “casino” itself a chance-based game. This ruling is significant for social game companies that use virtual currency to engage in gamblification (i.e., the use of gambling mechanics for non-gambling purposes).
Continue Reading Court Rules Virtual Currency Casino Not Illegal Gambling Despite Secondary Market