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LGJ: Serious games with serious regulations


Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games:

One of the areas in which the law firm I work for focuses on is international trade, which many of us might assume doesn't have a significant impact on the video game industry. Surprisingly, there is a growing sector of the industry that has a great potential for international trade problems. That sector is often referred to as "serious games" (or games with a purpose other than pure entertainment). In fact, there are a few specific areas that serious game developers need to be particularly wary of to avoid problems with US Customs.

Before getting into the specifics,let's delve into a brief overview of international trade regulation. After all, the new administration has noted trade enforcement as a top priority, so it could potentially impact many different people in the community; like it impacted the mod chip importers not too long ago. In short, the primary areas of trade regulations are on imports and exports, although other related areas like the Foreign Corrupt Practices Act are starting to get a lot more attention. Imports (in other words, anything you bring into the country) have to be classified so that the proper taxes can be paid on the goods. Exports (anything you send out) have to be classified so that the government can track and prevent certain products from going to certain people and places. These are two different concerns, but if you don't follow the rules, it can land you stiff fines, penalties, and even a prison sentence.

There are potential export issues with serious games.

So what do international trade laws have to do with serious games? Well, there are potential export issues with serious games that other games aren't likely to face. Exports, generally, are controlled to keep certain items and certain technologies out of the hands of countries and people designated by the government. The technology for your average video game isn't likely to be controlled, although consoles might be if their computing specifications meet certain benchmarks. Serious games, though, aren't just games. They're often designed to train people for certain tasks with realistic parameters. It's those parameters which may make them problematic.

There are two major sources of export controls: the International Traffic in Arms regulations (ITAR) and the Export Administration Regulations (EAR). ITAR deals in goods that relate primarily to military functions, and it's feasible to have a serious game that does just that; for example, a training sim for a specific military plane or tank (see Steel Beasts; pictured). Even relatively innocuous-seeming modifications, like painting a civilian laptop with camouflage, may move the item into ITAR controls. By the same token, anything developed in conjunction with DARPA is assumed to be controlled by ITAR.

Of course, even serious games designed with civilians in mind may still fall into the realm of export controls. Say you designed a game that taught users how to manage a particular nuclear reactor. That would likely be controlled under EAR Category 0; not to mention, potentially being controlled under other government regulations (in this case, the Nuclear Regulatory Commission).

If you don't follow the rules, it can land you stiff fines and even a prison sentence.

This isn't just the simple matter of whether you send an item out of the country in a box or through an e-mail. There's another concept known as "deemed exports," which, in short, says that if you send something to someone who is in the US, but is not a citizen or green card holder, then the act is treated the same as sending the item to that person's country of origin.

So how does one navigate all these rules? Simply put, you have to follow the documentation and filing requirements, and if something needs to be sent to a particular location that is controlled for that item, then a license needs to be secured from the government. Whether that's an actual export (and the license allows the product to actually leave the country) or a license related to someone working on developing software governed by ITAR or EAR, the process is relatively similar. Of course, I haven't even begun to address the lists of people -- like the Specially Designated Nationals list -- who are completely barred from receiving any exports or controlling for re-exports, where a controlled technology is sent to one country and then sent to another.

It's the areas of government regulation like international trade in which the gaming community hasn't had much past experience -- the kind of area likely to become problematic in the future. Given the new climate of increased enforcement, you're likely to see and hear a lot more about rules and regulations that many people have been completely unaware of for years; even though they've been on the books. As always, if you're trading in the international marketplace, seek assistance from your friendly neighborhood attorney.

Mark Methenitis is the Editor in Chief of the Law of the Game blog, which discusses legal issues in video games. Mr. Methenitis is also a licensed attorney in the state of Texas with The Vernon Law Group, PLLC and a member of the Texas Bar Assoc., American Bar Assoc., and the International Game Developers Assoc., where he is a board member of the Dallas chapter. Opinions expressed in this column are his own. Reach him at: lawofthegame [AAT] gmail [DAWT] com.

The content of this blog article is not legal advice. It only constitutes commentary on legal issues, and is for educational and informational purposes only. Reading this blog, replying to its posts, or any other interaction on this site does not create an attorney-client privilege between you and the author. The opinions expressed on this site are not the opinions of AOL LLC., Weblogs, Inc.,, or The Vernon Law Group, PLLC. As with any legal issue that may confront you in a particular situation, you should always consult a qualified attorney familiar with the laws in your state.

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