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Valve Bullying Cybercafes Over Licensing?
The Importance of writes "Yesterday, as mentioned on Slashdot, Valve announced arrests relating to the theft of Half-Life 2 code. Gabe Newell, Valve's CEO, was quoted as saying, 'Everyone here at Valve is once again reminded of how much we owe to the gaming community.' Demonstrating its appreciation of the gaming community, Valve also threatened to sue a cybercafe offering Counter-Strike without the correct licensing. This may sound fair enough, but while companies like Microsoft allow cybercafes the right to offer games as long as they buy each copy of the games they use, Valve has what are generally considered the worst cybercafe licensing terms there are. Moreover, instead of merely sending a cease and desist letter ('knock it off or we will sue'), Valve sent a ' pay us big bucks for a license or we'll sue letter'. In other words, unless the cybercafe prepays for a one-year license starting at the time the letter was received, they will be sued."
Since I'm about to open a game center this month, I have been following this issue closely. Valve has always been a sketchy company. They offer poor to non-existant support for their products. Their products run poorly (anyone use Steam lately?). As for licensing, they have been backtracking and restating information about the license program. After seeing all this, I refused to carry Valve games.
As for other centers... Intially when Valve came out with the new license, everyone found it ridiculous and continued running their centers as usual. A few spokesmen for Valve said that if they continued with the licensing scheme, they would issue cease and desist orders to any center using their games and not paying the license fees. So game centers would be allowed to remove the games to avoid legal action. Most game centers figured they would continue running the games and, in the worst case, be forced to remove the games.
A year or so went by with no change in Valves statements about enforcing the licenses.
Valve suddenly decides, out of the blue, to issue lawsuits to all game centers with CS. Instead of issuing the cease and desist order like they said though, they decided to force game centers to pay for a yearly license. That's about $2400-$3000 up front. That's painfully difficult for most game centers which barely break even. A typical game center makes around $500 a month in profit. 99% of game centers are mom & pop shops run by 1 person and 2-3 employees. They generate little income.
Personally, I think Valve downplayed the licensing issue to get as many centers using their software as possible. Then they attacked all the centers to force them to pay license fees or be sued out of existance. Kind of like MS's policy of allowing foreign countries to pirate their software. Then when lots of people have the software, threaten legal action and create a huge new revenue stream. I am no longer supporting Valve products.
Outdoor digital photography, mostly in New Engl
Apparently he thought that just buying the games from a shop would have been enough. *bzzz* wrong in this case. on top of it valve didn't originally have this licensing scheme in place(I'd suppose they didn't even except half-life to grow so fast due to a community made mod named counter-strike), instead, they have instituted this later(changed the 'contract' afterwards the 'deal' was made to purely their beneficiary).
I don't suppose you sell your programs to people with a license to use them and then when they get widespread(legal) usage you tell them that hey, you have to pay yearly for that! - this was what I was disputing of being possibly non enforceable by them.
In the end of the day they are allowed to be stupid, true, but that doesn't make it right either. They have to make some unbeliviable progress with cs2 and hl2 to keep their community on the level it used to be(cs community is already breaking into shards because of widespread cheating and the engines total inability to cope with it)..
world was created 5 seconds before this post as it is.
Furthermore they seem to be cornering him in this fantastically worded acusation:
As you know, the retail versions of Valve products are not intended for, nor are they licensed for, commercial exploitation (such as use in a cyber café/LAN center). Unauthorized duplication and use of computer software products constitutes copyright infringement.
If he says that he legitimately bougth separate copies, they can counter that he knew that this was insufficient as they lead off with "As you know...". An a priori acusation, if you will, that carries insinuations both ways. Much like the statement: "Have you stopped beating your wife?" Insinuates you have been beating your wife whether you have or not.
If he did not buy the copyies they not only nail him with "commericial exploytation" but with copyright infrigement as well. This is important since the commercial exploytation has less legal ground to stand on.
Las Vegas used to have Super Bowl parties where you paid admission for food&drink to watch the game. Since the NFL saw it as selling tickets to watch the game, they threatened legal action if a licensing agreement wasn't worked out and if they continued. But the NFL didn't threaten to sue unless they bought a agreement. Vegas had two non-lawsuit choices: stop or pay.
In conclusion, if the cafe owner wasn't acting in bad faith (copyright infrigement) and simply wasn't aware of the restrictions (EULA's have yet to be desively tested in court(IIRC)), it will be hard to successfully sue if he shows that he has stopped using their software.
...is that this cyber-cafe has legal copies of CS and HL. However, Valve's license doesn't allow you to make money from your use of HL or the HL engine (imagine if MS did this with Windows or Office). Since the cyber-cafe charged people to play the games, they are in violation of Valve's license. Valve has every right to do this. However, the cyber-cafe has probably already given Valve thousands of dollars by purchasing HL for each of the computers. Is this any way to treat one of your better customers? I only bought one copy of HL. This cyber-cafe bought dozens. Consequently, I will no longer be supporting Valve by playing their games. The same is true for any company that expects me to pay $50+ to use (not own) a copy of software they wrote, and they won't even let me run it on my favorite OS.
In the world of commercial game licensing Valve stands alone for being one of the most difficult and unreasonable developers. Valve is inflexible, unwilling to listen, unwilling to compromise, and shrill in their approach to game centers; the same game centers that are responsible for keeping for so many years the interest of players in their jewel game: Counterstrike. A game center is a powerful tool for developers and publishers to deliver their content directly to the customers who matter most: gamers. Many game publishers understand the strength and penetration of this marketing channel and have developed commercial use policies that are much more favorable to game centers. Their policies serve to promote their games and create an environment where game centers are enticed to continue to support the games and the customers' interests by facilitating a variety of competitive events on local, regional, and national levels.
Operating a gaming center is no small task. There is no single-point licensing scheme like there is in music industry. The variety of fragmented game licensing schemes makes for a difficult operating environment and drives up overhead. If Valve succeeds in forcing game centers to pay unreasonable fees to use their software, how long will it take for the other publishers to demand the same thing? Imagine each publisher demanding $3000/year for a game title. If an average gaming center carries only 10 game titles, the total price for just making the games available to the customers will be a staggering $30,000/year. What if there are 20 titles? That's $60,000/year! Most gaming centers don't see that kind of money in an entire year. Forcing game centers to pay these fees will most certainly destroy the gaming center industry in the United States.
umm, let me get this right. 9 bucks, per PC, per month. That is NOT a lot of cash. If it was too much for this particular business to afford, I suspect they have trouble meeting their other obligations. If they failed to purchase legitimate licenses for the software they are using to generate income, then Valve is being very generous in giving tham an amnesty. What would Micro$oft or say, SCO do in this circumstance?
"Small business forced to pay its' bills. Film at eleven!" - hardly material for a FPP...
If they have attempted to change the licenses retrospectively, then they are well and truly in the wrong. In such a case I would expect that their terms are unenforcable and may open them to possible litigation in return.
However, if the cafe owner was using the software for a purpose that wasn't specifically allowed then he may possibly have problems. While IANAL it is not too large a stretch to compare the sofware's use in a cafe with a software rental company where special licensing terms are usually required. Maybe someone is making such a stretch.
Does anyone have any more detailed information on the case and possibly links to copies of the licenses that applied?
IANAL but valves license is probably illegal. There is little difference between what valve is trying to do and what the RIAA has tried to do unsuccessfully to restaurants.
If you own a restaurant you can go 2 ways about putting music in your business. You can buy home equipment, CD's and a radio receiver, or you can purchase commercial equipment. If you take the first route you pay once and never a licensing fee. If you take the second you pay the terms the RIAA dictates.
The reason for the difference in licensing terms is some large restaurant chains were able to mount the legal fight and get what is obviously fair use declared fair use by the courts. If the cafe isn't carging specificaly for the game, they are well within fair use. The problem here is that valve is large relative to the cybercafes. Patent and Copyright litigation costs can easily escalate. As Don Lancaster used to say "If you have a only a million dollar idea it doesn't pay to patent it."
Once again this demonstrates the real problem with our legal system. The idea that right makes might, when in fact its more often money that buys might.
Well, Microsoft lets the cybercafes use the games as long as the center buy legitimate copies.
The $9/month may not seem like much, but it adds up to about $540 per computer per copy of Counter Strike, had they been using it since the beginning.
Moreover, it is the principle of the thing. If every software company charged that much, there is no way even well-run businesses could survive. It may not seem a lot to you, but multiply that number by ten or twenty. Then figure out how much money you can make when you are charging no more than $4 an hour (on average, including membership discounts and what not) for gameplay.
Think about it. If the center has to pay $90 a month per system, the PC has to be used for about 22.5 hours before the center can start paying off its other expenses.
The average center has about a 25% usage rate. If they are open 12 hours a day, that is 3 hours of chargeable time per day, which means that the first week of every month goes to simply paying for the games.
That doesn't leave a lot of spare room in the budget for things like employees, rent, etc.
I don't think that this was necessarily a nice move in business, but it is business; you can't always be nice. This guy might not've known about how to license, but he really should've. If this was, say, a one-time fee-based lan party that some college kids threw and they get this letter, I'd be pissed off with Valve too. In that case being unknowledgeable about licensing schemes could very well be a legitimate excuse. However, we're talking about a place that is out to sustain profit and operates regularly. A place that should have known better.
I think that the bigger question, the one that Valve is probably asking, is: How could they not know?
If this person truly didn't know, they should've went to Valve first and try to work something out regardless of what stated in the letter. If Valve acted like a jerk in response then you could let it go to court and hope for leniency there. But this should be a very important lesson to them; know what you're doing first.
I'm guessing that Valve doesn't see this guy as some schmuck. His site design might make you think so but check out the pictures as well. He seems to have a good handle on that end. When it comes to something like a gaming center, it's not unreasonable at all to expect that they have their licensing issues settled before allowing the game to be played. If they knew enough to get a T1 line (as stated on their site), set up a lan, and run a for-profit business, making sure that you can do so legally isn't too much of an expectation. Valve probably felt that this was a glaring enough issue that a reasonable business would know to have it settled beforehand either by their own good sense or by a lawyer's. And, therefore, not taking care of the issue could only be in bad faith (yes, I read the AC's response to your post).
If this person was truly stupid enough to not find out that he needed a special license beforehand, than anybody remotely close to him, anybody who has an ounce of compassion for him, should force him to close up immediately. I just don't buy that he's that stupid when he's in the business already.
Until Slashdot fixes the funny modifier, use insightful or interesting. The poster knows your intentions.
It's fashionable to bitch about Valve and Steam, but Steam is a great system, and Valve has been great to its community. First off they hired Bram Cohen, the Bittorrent author, so they have serious technical chutzpah under the hood. Secondly, for a SEVEN YEAR OLD GAME I bought once for like $30-50, I have in my game list: Counter-Strike, Day of Default, Half Life, Team Fortress Classic, Death Match Classic, and Opposing Force, all games produced by Valve, for, you guessed it FREE. That is not to mention Ricochet (which is pretty useless) and tons of other mods I have (Natural Selection being probably the best). Now with these FREE games I get: A builtin server browser, a friends list, and guess what FREE UPDATES. Mod authors also get a channel to deploy their mods. For now it is, um, FREE, but they will in the future be able to license their games. Now for me, Joe Freeloader, that's not so great, but for mod authors that kicks ass. Where else has a company said: well, you're making a great mod for our game, you know what, we'll let you sell it, in OUR distribution channel on OUR bandwidth!
I think that is a hell of a lot for some piece of software I bought 7 FREAKING YEARS AGO. I think that is a pretty good deal. And if they perhaps want to get a cut from somebody else making profit off THEIR distribution and update system, that seems ok to me. I don't know the details of this particular incident, and perhaps Valve could have been more tactful, but Valve in general has been GREAT to the community. They even run forums wherein every luser on earth gets to post: "St34m 4re t3h suks. I h4te you. G1ve m3 m0re g4mes b1tch. kthxbai."
It's 10 PM. Do you know if you're un-American?
I question whether it's even legal to try to enforce that sort of licensing. It seems ridiculous. I don't need any special license to loan books from a library. There's no copying or distribution here. He's got legitimate (I assume, for the sake of argument) copies of half-life that're installed on machines. Every person playing has a legit copy that's not used by anyone else at the same time. Are they trying to claim it's public exhibition, because they aren't playing in private or something?
I would like to point out that ID has provided what can be termed the "ultimate" support. They released the source code to their old games. As a result, I can play old ID games on modern machines with modern machines and snazzy graphics, and the games are maintained by people who do it as a labor of love.
Valve is doing a major disservice to the gaming community.
With the death of arcades, gamers are at a loss for places to socialize with eachother. Cyber Cafes are the new kind of arcade. But if every game costs $3000 to license then that is going to put many cyber cafes out of business, and keep many from starting up in the first place.
No game company should have the right to prohibit someone from renting time on a PC and using the software contained on it. Imagine if car companies could do the same for cars... You'd be paying 10x as much whenever you needed to rent a car when traveling.
Why should a software company be allowed to do this?
We allow software licenses, because software is not a physical commodity. It is easily duplicated, and we need to protect it from being copied.
We also allow licenses because software can be buggy and software companies would be sued out of existence if they could not protect themselves from such lawsuits.
But nobody ever intended for software licenses to allow software developers to create new, machiavellian ways of controlling how you use the software. What if Microsoft could put in a license agreement that no copy of Microsoft Windows is allowed to be used to write a review of Microsoft software which is not positive? The way license agreements are going, this is the state we will be in at some point in the future.
Valve should have NO right to prohibit me from selling time on my PC. And no right to prohibit a cyber cafe from selling time on their PC's. So long as each PC has one copy of the software, and only one user can use it at a time, that should be the extent of Valve's rights via software license.
If Valve persists with these lawsuits, I will not be buying Half Life 2, and I will encourage my freinds online to boycott it as well. As a gamer, I do not want their crazy licensing costs to be passed on to me when I use a cyber cafe, and I do not want cyber cafes I use to shut down as a result of being unable to afford the license, and as a fellow game developer, I will not support a game company that pulls egotistical greedy crap like this. It is BAD ENOUGH that Valve's steam software now uses POP UP ADS to alert you when a new product comes out that they want to push. The banner ads were annoying as it was.
You cannot rent movies and videogames without specific permission of the copyright holder.
It's all there in Title 17 of the US Code. http://www4.law.cornell.edu/uscode/17/
Personally, I do not see the language of Title 17 as particularly clear in this matter. I see an argument that a cybercafe is renting time on a computer to access the software, not renting the software itself. Therefore, no special license is necessary for the software being used. You could bolster that argument if you charged the same fee regardless of the software being used.
I do not think it is so clear cut and depends entirely on how the situation is framed. Would you need a special Microsoft Windows license because it is a publically accessible computer? How about MS Office if the person is using Word or Excel?