The issue of how - and how effectively - the law can be used to combat content piracy in the video games industry remains highly uncertain. The legal landscape is in flux, with reports and consultations underway, new legislation on the horizon and a number of significant cases proceeding through the courts. The enforcement of legal rights is also a delicate issue. As recent instances have shown, attempts to pursue existing rights of action against infringers can damage the customer relationship.

In the United Kingdom, the Digital Economy Act provides for increased cooperation between internet service providers (ISPs) and rights holders, with the onus on ISPs to supply details of infringers. However, ISPs are fighting the implementation of the act on the basis that it represents disproportionate interference with their rights and those of internet users. Similarly, the proposed Stop Online Piracy Act and Protect IP Act in the United States were seen as too restrictive and received widespread criticism. There is greater public resistance to new statutory measures designed to enhance legal protection for rights holders.

It seems that the legislative programme adopted by a particular country will only ever be part of the solution. The relationship with consumers and potential consumers is crucial. For example, when games publishers have aggressively pursued alleged pirates in the United Kingdom, their actions have been derided as witch hunts and have resulted in negative publicity for all concerned.

There have also been high-profile instances of gamers claiming that overly aggressive digital rights management measures, such as those restricting the number of times that a game can be installed, justify the use of pirated versions - a classic example of a well-intentioned anti-piracy measure proving counterproductive in commercial terms. Such problems demonstrate how the trend towards increased piracy is often exacerbated by a disconnect between games companies and consumers.

Faced with uncertainty over the legislative regime and the extent of its practical effects, content developers, publishers and organisations within the video games industry are looking for more effective ways to deal with piracy, from both a legal perspective and a practical commercial standpoint.

In particular, there is a dawning realisation that although the law offers tools for targeting known pirates (with copyright infringement actions being most common), the industry must adopt more innovative measures, rather than focusing solely on how to prevent piracy of its games. For example, a number of games publishers and developers are adopting new business models in order to offer games in a manner and at a price that appeals to the mass market, including would-be pirates - offering an incentive where the deterrent has proved ineffective. Business models which are proving particularly popular include 'freemiums' (whereby, generally speaking, a game is made available for free, but a premium is charged to advance beyond a certain point) and free-to-play models where later monetisation is achieved through advertising, in-game micro-transactions and other means.

New legislative measures may make it easier to clamp down on pirates in future, but this is far from certain and it will take time for the government's latest proposals and measures to be fully adopted and tested in practice. The evidence of recent years has shown that robust and wide-ranging legislative proposals for dealing with piracy are met with heavy criticism and even public protests in some countries, from people who feel that freedom of speech would be eroded by measures that result in tighter controls over the distribution of material over the Internet.

The government should continue its attempt to alter the public perception of the acceptability of content piracy and try to ensure a fair legal framework in which the games industry can operate. However, the industry itself must continue to find new and inventive ways for consumers to access high-quality games and additional content in order to enhance its legitimate products, reduce the demand for pirated games and procure new revenue streams for games companies.

For further information on this topic please contact Michael Lister or Paul Groves at Harbottle & Lewis LLP by telephone (+44 20 7667 5000), fax (+44 20 7667 5100) or email ([email protected] or [email protected]).