The Godfather of Facebook: A Possible Trademark Infringement Suit in the Burgeoning Social Gaming Sector

 By Vlad Vidaeff *

The emergence of social media over the past few years has been truly unprecedented.  It took the radio 38 years to reach five million users; the television, 13 years; the internet, four years; and the iPod, three years.  For Facebook, it took less than one year to reach over 200 million users. Facebook now tops Google for weekly traffic in the United States.  As Facebook has developed new features over the past few years, one emerging trend has been the addition of social games produced by third parties.  The most notable of these applications have been Farmville and Mafia Wars; the latter being the center of a complaint filed in the Northern District of California by Digital Chocolate.

In 2004, Digital Chocolate, a mobile game developer, came out with a game entitled “Mafia Wars”.  The game has been relatively successful over the past six years as more than two million consumers have purchased Mafia Wars.  A few years later, in 2008, Zynga launched its own game on the iPhone, Facebook, and MySpace by the same name.  Digital Chocolate’s Mafia Wars is a story-driven action game capitalizing on the popular gangster genre and the elements of weapons, wealth, and violence.  Even though Zynga’s social game features many similar elements, the company has had much more success with approximately 28 million monthly active users on Facebook.  Digital Chocolate’s complaint for trademark infringement alleges that Zynga has falsely claimed to the United States Patent and Trademark Office, the courts, and the public that it created the Mafia Wars mark and holds superior rights to the name.

Trademarks protect sounds, colors, symbols, or words that differentiate goods or services from those sold by others.  If trademarks are being used in commerce, a company can hold those rights forever by renewing its trademark when necessary.  Digital Chocolate claims that it has the rights to the name “Mafia Wars” as it used these words first for its game in 2004.  As a result, Digital Chocolate is asking for an injunction prohibiting Zynga from using the name, the elimination of the use of the words “Mafia Wars” in Zynga’s websites and domain names, and the relinquishment of all revenues and profits that Zynga accumulated through its wrongful use.  This suit comes at a time when Zynga has a pending trademark application for the name “Mafia Wars” which was filed on July 1, 2009.  Digital Chocolate claims that Zynga’s attorneys sent the company a letter promising to stop using the name last year.  On the other hand, Zynga responded that it was “surprised and disappointed” by Digital Chocolate’s actions and the company plans to defend itself vigorously.

Quite interestingly, Zynga has been at the center of several lawsuits recently.  A developer by the name of Psycho Monkey sued Zynga for infringement on its rights to the name “Mob Wars.”  In addition, Zynga has sued several former employees and a developer named Playdom for allegedly stealing trade secrets.  On initial review, all the litigation in the social gaming industry seems shocking.  However, there are several factors which have led to this unstable environment. One factor is the sheer amount of opportunities in the sector as social gaming is expected to yield more than $800 million this year alone.  Another factor is the nature of the competitors in the industry as social gaming is largely made up of young entrepreneurs vying for wealth in an appealing and fast-growing market.  Lastly, due to the youth of the industry, there has not been a lot of case law on the subject, and as a result, companies are not clear on what they are allowed to copy and what is out of bounds.

According to an attorney involved in the complaint, the presiding judge may have ordered the parties to pursue alternative dispute resolution.  It will be interesting to see if Zynga provides Digital Chocolate with an “offer it can’t refuse” leading to a settlement.  If the parties cannot agree, they make take inspiration from the gangster mentality seen in their products and battle in court.  At the moment, Zynga is the largest independent publisher of social games in the world.  Digital Chocolate sits fifth on that list.  Simply put, two powerful families jostling for position and dominance in the volatile social gaming world.

 

*Vlad Vidaeff is a second-year law student at Wake Forest University School of Law and is Vice President of the International Law Society.  He holds a Bachelor of Arts in Sport Management and a minor in French from the University of Michigan.  Upon graduation in May 2012, Mr. Vidaeff intends to either practice intellectual property law, international law, or sports and entertainment law.