British Telecommunications (BT) alleges that��on-line services offered by Valve infringe on four U.S. patents held by BT. The patents at trial are broadly worded and could implicate many popular video game, social networking, and video streaming services. If [BT v Valve]��were to succeed,��they would be granted legal authority allowing them police many of the services relied upon by the video game industry, as well as many other popular websites.

David versus Goliath

Valve, founded in 1996, owns and operates ��Steam, an industry-leading software distribution and social networking application for computer gaming.��Steam, released in 2003, commands a near-monopoly over the digital rights management (DRM) and computer game distribution. Despite massive support among developers and gamers alike, ���ٱ𲹳�—a�Ի� �ղ�������—h������ .

British Telecommunications (BT) group is the oldest telecommunications company on the planet, tracing its roots to the invention of the first telephone by Alexander Graham Bell. BT is a leading communications provider in the United Kingdom. According to court documents, BT “,”��in network telecommunications.

What the suit claims

BT argued that Valve continued to operate services at great cost to the patent holder, despite multiple communications asking Valve to stop. The following patents are alleged to have been infringed:

• Communications node for providing network based information service:��

• Method for automatic and periodic requests for messages to an e-mail server from the client:��

• Communications network and method having accessible directory of user profile data:��

• Multi-user display system:��

One can��see��how Valve's services are implicated in these patents. Steam��is a digital marketplace that distributes “”; provides chat services “”; stores “”��for its users; and allows these users to “.”

Valve is far from the only company implicated by the broad language of these patents (and certainly not the most financially successful). Messaging, video streaming, and web marketplaces are endemic to the internet and the tech world. As the patent holder, BT has a choice to enforce the patent against whomever they wish. Why go after Valve?

Possible reasons:

1. This is intended as the first of many similar suits

If the court were to rule in favour of BT in this case—however likely that may be—it would open the door for further enforcement of the strict language contained by the patents-in-suit. If the court accepted the language that “BT has been damaged and continues to be damaged by Valve’s infringement,” and applied retributive, pecuniary damages, this would set a precedent allowing BT to challenge industry leaders’ social media and networking IPs.

2. BT is looking to become involved in gaming, DRM, or streaming

Video games are a multibillion dollar industry. Leading publishers and distributors, like Valve, command the industry’s continually expanding value. Social and competitive gaming services, like Valve's��Steam are at the heart of a parallel, expanding market for “e-Sports”. Video game “sport” tournaments have exploded in popularity and now host regular tournaments each year. Cash prizes range in the tens of thousands of dollars. It is not improbable that major telecommunications companies would keep an eye on this growing market. If BT had any interest in permeating the market, the ability to enforce this patent against Valve could pay serious dividends.

3. A suit against Valve will allow BT to test public opinion

Most computer gamers must interact with ���ٱ𲹳�.��As a result,����news related to Steam and Valve receives a great deal of attention. The video game consumer base is very large. An accusation against Valve is sure to gain the attention of a large audience, including many people who would not otherwise follow tech news. This is a known tactic within the video game industry to��lobby public opinion.��Kotaku.com has gone so far as to develop a separate ��news page to cover all of the grievances--material and superficial--raised against Valve/Steam.��Targeting Valve is a��sure way to determine if public opinion will allow BT to go ofter other, higher-profile internet services with patent suits (e.g., Facebook, Amazon).

What does this mean?��

Perhaps this can be dismissed as a "patent troll" case. But, granting patent rights to BT in this case might lead to controversial effects. The Trans Pacific Partnership (TPP) (albeit, with rapidly diminishing support). The TPP would permit greater US-based regulation of the public internet. If this were ratified, a decision like that in BT v Valve would support and legitimize BT and the US government's policing of many of the most popular applications and resources on the internet.

Further news related to the suit will follow in the coming months.

Christopher McGoey is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.��

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In August, the (ACCC) started proceedings against software company for its refusal to provide refunds to customers purchasing video games through its Steam online store and distribution platform. The ACCC claims that by refusing to refund in all circumstances and stating that it was excluded from statutory consumer guarantees, Valve is making misleading representations: Australian consumer protection legislation����that cannot be restricted by contract.�� Similar immutable implied guarantees can be found in consumer legislation in many Commonwealth jurisdictions, .

This is not the first time that Valve has run afoul of consumer protection groups – German consumer protection group VZBW recently brought Valve to court over users’ right to resell games purchased through Steam. , but the case illustrates the ongoing struggle between consumers and distributors of digital entertainment over rights to online purchase.��Moreover, VZBW was not a government entity, whereas the ACCC is; a regulatory agency taking action against Valve could be indicative of an increased commitment to enforcing compliance with consumer protection law.

If the ACCC prevails in court, the consequences will be felt in Canada, as Canadian courts often find Commonwealth jurisprudence persuasive in forming their opinions. The applicability of any Australian decision is likely to be further enhanced by the close similarity between the relevant Australian and Canadian consumer protection statutes. While wording of the statutory guarantees differs slightly, with the Australia Consumer Law (ACL) section 54 using "acceptable quality" and the British Columbia Sale of Good Act (SOGA) section 18(b) using "merchantable quality", both statutes include guarantees that the goods be fit for disclosed purposes. The ACL's guarantees seem to be slightly broader than those provided in the BC SOGA: under the ACL, in addition to being fit for any purpose disclosed by the purchaser, section 55 states the goods must also be fit for any purpose for which "goods of that kind are commonly supplied". Moreover, in the BC SOGA section 18(b), if the consumer is allowed to examine the goods before purchase, there is no implied condition with regard to defects that the examination would have revealed. Conversely, the ACL's section 54(4)(b)��requires that any such defects be "drawn to the consumer's attention", placing the burden on the vendor rather than the purchaser.

However, though the ACL was enacted with the intention of protecting purchasers of goods, game buyers may be less than pleased if Valve raises its famously discounted prices or introduces region-specific retail practices as a measure against financial losses incurred through refunding purchases. In the end, even if an ACCC victory in court brings about increased vigilance over online consumer protection, Valve is likely not going to be subjected to a deluge of refund requests under consumer protection legislation. Such laws only guarantee "acceptable quality" or its equivalent, which have not been defined in the context of a computer game, but likely include guarantees that the game runs on the computer systems it is made for and is free of glitches that render it unplayable. Furthermore, the actual logistics of returning a digital copy of a game complicate matters. Steam can run in an "offline mode", allowing games to be played without an internet connection. If a customer were to purchase a game, install it, then return it, he or she could potentially use offline mode or an analogous feature on another platform to continue playing the game despite having received a refund.

In the end, whether Valve wins or loses in court, the ACCC's action is yet another wake-up call to software companies and consumer protection watchdogs. As entertainment media drifts ever further from its roots in physical artifacts like CDs and cassettes, consumer protection regimes ought to evolve as well to ensure that the public is protected regardless of whether the goods they purchase are tangible or not.��The application of laws governing physical, tangible goods to digital, virtual online products will continue to be a hot topic in courts worldwide, as previously discussed in the ,��and by the ACCC��showcasing the difficulties in applying a legal paradigm of property developed for an offline world to a globally connected Internet.

Adam Chan is an IPilogue Editor and a graduate of the University of British Columbia Faculty of Law.

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