Parker 1

Christopher Parker

Professor Leff

ENG 122

7 April 2019

Possession is 9/10s of the Law: How modern technology has altered the concept of

ownership.

Ownership is a pretty simple concept. Having come into possession of something

through means our society defines as legal, you are now the owner of that thing. You

can do with it what you wish, so long as you do not violate the law in the process or do

something you have agreed not to do. Even ideas can be owned, in their own fashion,

with things like copyrights centered around the idea that if you come up with something,

you should have some control over how that thing is used. But in the digital age,

ownership has come to mean very different things. The concept still exists, for sure, as

companies and innovators have adapted and figured out the specifics of this new

frontier, but a sad truth is that most of us have often been left out of the loop of these

changes, and those changes are used against us more often than not. It’s important to

learn how those changes now affect us all, and what they can mean for our daily lives
 Parker 2

EULAs: How Companies Abuse Your Ignorance

The computer age, especially the age of the internet, has caused great upheavals in the

nature of ownership. Legally issues of ownership have gone through many and varied trials, and

companies have adapted to the new market to best benefit themselves, and even to survive.

And while they have come up with profitable solutions to these issues, many consumers have

not kept up or been informed of how these changes affect them. Digitally, people own very few

things they believe they do, and often discover in unpleasant terms the truth of this effect when

the company levies massive fines at them. “...reveals that, unlike traditional printed books and

CDs, cassettes, or vinyl LPs, the consumer may not in fact, actually own what he or she has

purchased”(Wong 2013) And many companies often overstep the bounds of reasonable

expectation, placing undue onus on their customers legally and only informing them in ways

designed to disguise their intent. Perhaps the most well known example of this are End User

Licence Agreements, or EULAs.

EULAs are a staple of modern life. To use a new phone app, to use a word processing

program, to take advantage of online services and really, to do just about anything digitally, one

must agree to a EULA. They lay out the legal standing and agreements you must comply with in

order to use the program or service in question, and the punishments one must face if you

violate them. They are often excessively long, intentionally arcane and verbose in their

structure, and serve to hide often incredibly one sided concessions. At the base of it, these

EULAs are a legal agreement between company and consumer regarding their product, and the

basis is usually related to licencing.

Licensing is essentially a form of renting or leasing, rather than ownership. When you

purchase an app or program, you are not actually buying it; instead, you are paying a fee to
 Parker 3

conditionally use the program under the bounds the company sets. This is a contentious, but

understandable, state of affairs. Ownership allows with a large amount of freedom with the

product, including excessive modification, repurposing, and reselling, as the product is entirely

yours. The state of digital ownership, however, creates large problems with this. The limitless

ability to replicate a digital product without effort or time means that even a single program can

be copied millions of times, allowing them to easily be spread to nearly anyone interested in it.

And while this might be beneficial for the customers, the producer of this product has now lost

possibly millions of sales and profit for the work they have created.

So it is acceptable that companies wish to protect themselves from such a situation.

EULAs serve to do this, providing them with legal recourse and a signed contract saying that the

user won’t take these actions. However, many companies have repurposed EULAs to better

benefit themselves. It is common for such agreements to include clauses that limit the legal

liability of the company at the hands of consumers, preventing them from filing class action

lawsuits, forcing more favorable arbitration proceedings, or limiting the cost in fines a company

can face for issues with their product. These can also include clauses that allow the company to

often encroach onto customers in invasive ways, allowing them to repurpose their digital device

for their own ends, allowing them to access extra computing power and capabilities while the

consumer is forced to bear the burden of cost, such as reduced product lifetime and increased

electrical bills.

One of the greatest problems with EULAs is that many consumers either do not read or

do not possess the training to properly understand them. And while some blame can be placed

on the consumer for failing to read the contract they are signing, it is worth remembering that

many of these EULAs are written specifically to discourage being read. Not only can they be

excessively long, with many of them being 10,000 words or more at the very least, but they are
 Parker 4

often presented to you at the last possible moment. Computer games and programs often allow

you to purchase, download, load up, and prepare it for use before they finally present hundreds

of pages of legal jargon, all to influence people to simply push the button to agree. Indeed, there

have been examples of companies placing incredibly ridiculous agreements in their contact to

prove that few people read them. Many such agreements have made it past the populace at

large, up to and including examples such as iTunes forbidding you from creating nuclear

weapons, a videogame called Farcry enforcing the concept of morality(without defining it in any

way) or even Google Chrome claiming ownership of everything you produce while using

it.(Hoffman 2012). However, even the more mundane EULAs can have some troubling

passages. The EULA for the iPhone, for example, has a section relating to the termination of the

licence. In this agreement, “This License is effective until terminated. Your right under this

license will terminate automatically or otherwise cease to be effective without notice from Apple

if you fail to comply with any term(s) of this License.” Not only does Apple reserve the right to

end their contract with your automatically and without informing you the second you violate any

of their terms, but the section even goes on the state that all parts of the license preventing you

from accessing, modifying, or otherwise doing anything Apple does not want you doing with

their hardware or software still apply. The EULA allows them to terminate the agreement

whenever they please, but still forces you to abide by it even after they no longer must do so.

Such language is sadly common, and designed specifically to prey on those who never read the

agreements.

However, the companies cover all their bases, and they are no less prepared for those

users who do read their contracts. Many such EULAs are often legally obligated to include ways

to opt out of or object to various clauses, which can allow a person to avoid the legal burden

they impose, though such objections are often difficult to follow through. Other clauses in the
 Parker 5

contract allow the company to modify the EULA at any time, however, and automatically

assume agreement to the entire new contract, forcing one to go through the labyrinthine

process of objection over and over again for a customer to properly protect themselves.

Perhaps the most damning element of the EULAs is that there’s often no recourse to

them. Non-negotiable contracts, EULAs serve as gatekeepers to any product or service a

person may want or require. While entertainment products might simply have the alternative of

not using their service, products the modern world expects or requires a user to have access to

essentially force a person into these agreements to function. EULAs for the use of word

processing software or to view digital books are no less punishing to their users, but users such

as students and professors require these products in order to function in a classroom. Similarly,

apps and software dealing with and helping users with medical conditions can use their EULAs

to limit their legal liability, which has gross implications if such products are faulty and lead to

the worsening of such conditions or even death. And such users have no real alternative, if they

find issue with a products EULA, their only option is often to seek another product that

possesses its own EULA with all the same caveats and legalese.

The reality of the digital world means that contracts like EULAs will continue to exist, and

they serve valuable purpose. However, much can be done to limit their power and make them

more fair to users. Requirements such as a length limit to make them easier to read and

process, use of common language to make their statements understable, and a standardized

format to allow users to compare the contracts of different companies would go far to help users

better exist within these issues of ownership without exposing themselves to legal peril.
 Parker 6

Nickels and Dimes: How Microtransactions Take Advantage of the Way you Think

Fortnite, currently one of the popular video games in the world, is estimated to have

made around a three billion dollar profit in 2018, though the company has released no formal

earnings statement. This amount is an incredible achievement by any metric, but in context it is

almost unbelievable. This is because Fortnite is a free to play game, and it costs absolutely

nothing to play. This raises a question: how can a game that requires you to spend zero money

have one of the highest estimated profit numbers in the history of the industry? The answer to

that is microtransactions, a business method that at its worst can become downright predatory.

Microtransactions at their core seem inoffensive enough. When playing the game, the

user may pay a small amount of money, often in the range of 3-4 dollars, in order to either gain

some in game benefit or perhaps some cosmetic alteration or bonus. Things such as having a

character wear a special piece of clothing, having access to mechanically identical but visually

distinct items, instant access to benefits others might have to spend time grinding for, or

additional benefits when such grinding is finished are all within the realm of microtransactions.

More disputed elements of this practice are rewards that offer actual in game advantage,

making yourself more powerful or the game easier by way of spending actual money. Outcry

against the latter is often quite strong when the game features multiple people, as the

perception that money can give one a massive advantage(or even allow them to win outright)

can spell the death of a competitive game, but the former model is almost universally accepted

as a simple way for the companies to make some extra money. They offer a cosmetic benefit for

those that care and are willing to spend the money on while those who do not can simply save

their money and play the same game with zero drawbacks. Thus, the mechanical benefit model

is avoided in most multiplayer games while the aesthetics model is almost a constant in many

games today.
 Parker 7

Both forms of microtransactions are quite sinister in their details, however. Their systems

are designed to be as laberthyine as possible, often requiring you to buy their own personal in

game currency to then purchase the items, rather than simply spending money directly. This

serves to disassociate the purchase from the money spent, muddying the actual cost of the

item. If spending 8 dollars gets you 60 gems, and buying a special hat for your avatar costs 16

gems, how much money did you just spend? In addition to this, such purchases are often

designed to prey on our sense of satisfaction. Fortnite, for example, allows you to buy a “season

pass”, an in game benefit that provides you additional rewards when you advance in rank. In

this context, your money has provided you no direct benefit, but instead an indirect access to

bonus achievement for actions you already take. This serves to even further muddy the

transactional nature of the process, separating people even further from the idea of spending

money.

Pay to win schemes can be even more predatory in their process. Rarely do they offer

simple advancement for the sake of cash, instead creating more subtle bumps or nudges to the

players progress. A puzzle game that simply allows you to pay to skip a level, for example,

serves more to anger people than to invite them to spend money, as it subverts the purpose of

the game itself. Offering a player to spend to gain access to a couple extra moves before the

game ends not only places more pressure on the player to spend(as they now must weigh the

cost of restarting the level and losing their progress against the in game cost) but also serves to

trigger the players sense of achievement when they finally do win. That such games are often

designed so that a majority of players can advance quite far without need of monetary aid is no

coincidence, aiming specifically to target those players most invested in their product. In

addition, such products might also feature a limited about of playable time, with the option of

purchasing extra time for money. This also serves to ensnare a player who has already become
 Parker 8

invested, presenting them with a hard stop to their recreational activity unless they invest money

to continue to play.

These business models follow fairly established models, and deal with the concept of

“Whales”: that is, a small amount of users producing a large amount of the profit. While the

concept of this model is hardly new, it carries some very distressing overtones when one

remembers that the primary audience of many of these games are often pre-teens and

teenagers, children often as young as 8. And many of these children can often find themselves

spending hundreds of dollars every month, with the so called whales spending thousands or

more. Part of the issue here, and why these children are so vulnerable, is that the game has

become as much of a social activity as it has a leisure one. With over 250 million players, not

only do most of these kids play the game, but so do most, if not all, of their friends. So not only

do these players feel pressure from the game itself to invest in cosmetic upgrades to make their

characters more distinct and interesting, but social pressure from their peers as well. And while

this trend is hardly new to younger social circles, as it can easily be compared to the want to fit

in by wearing the newest or trendiest clothing and sneakers, a simple fact is that in the game of

Fortnite, players do not own anything they buy. While a designer hoody, for example, might still

remain a useful piece of clothing and entirely in the ownership of the person who bought it, an in

game hoody not only can only be used in the context of the game, but isn’t even owned by the

person who “purchased” it. Selling or even trading accounts is strictly against the companies

Terms of Service, and there is little to no option for swapping around the purchases already

made. So in the end, a player who has purchased an in game item only owns it as far as the

company allows him to use it. “When some players asked for refunds for either the champion

himself, or the various skins...Riot responded that there would be no refunds.”(King 2017)
 Parker 9

The last practice that can come into question is that of loot boxes, a format that is

gambling in all but name. In this model, players do not buy specific items or benefits, instead,

being provided with a chance at receiving products at random. These methods often involve no

losing: players almost always receive something for their purchase, but the level of rewards is

entirely random, with extremely rare items having a small chance to appear every time such a

box is opened. “The truth...is that they lure you in and hook you with the promise of winning or in

our case getting what you should get, and then at the end, switch it out to where they are the

ones benefiting most.” (Register, 2017) The parallels to gambling do not end at the small

chance at big benefits, these actions are designed to be attractive as possible. With large

amount of visual and graphical fanfare occuring every time a box is opened, this model is

designed, much like gambling, to create that mental high of risk and reward. And while many of

these products often offer ways of obtaining the loot boxes through in game methods, these are

usually limited in their scope, and often serve more to encourage those vulnerable to gambling

addition to begin spending money to experience more of that mental high.

Of course, this rise of microtransactions has its own issues. One major issue within the

industry is that the price point of games has stayed relatively flat for the last two decades, with

games costing roughly 50-60 dollars US across multiple platforms and generations. This has

seen a lot of companies profit numbers shrink, as while the costs of creation, marketing and

distribution of games has risen, the profit per unit has in dwindled. In addition, one of the biggest

distributors in the market, Gamestop, boasts a business model based heavily on the rebuying

from and then resale of used games, a model that excludes the creating company from a

majority of the profit. This has all but forced many of these companies to adopt the

microtransaction model to see real profits.

 Parker 10

Microtransactions have become a huge business, and in many ways, they are harmless.

Allowing a player to spend some extra money to enhance their experience during an activity

they enjoy holds no harm in and of itself. Similarly, aesthetic bonuses for the sake of prestige or

social standing might hold some distaste, but in many ways this is no different from any other

social fad, such as stylish dress or fancy cars. At the same time however, it’s important that the

customer understand that they do not own anything they have bought. Buying an expensive

sports car to impress one’s peers might be a poor financial decision, but one still owns the car,

to be resold or used. No such secondary market exists in the digital format, and thus money

spent has zero further value and the buyer has zero control over the asset they believe they

own. And the trend of games like Fortnite targeting a younger audience, those more vulnerable

to predatory practices and even less capable of concepting of the money they are spending sets

very dangerous standards.

 Parker 11

Fishing for Money: The Issues of Patent Trolling

Brainstorming an idea and then creating a product are the most common

methods of any small business to succeed. Many people seek to solve everyday

problems with creative and elegant solutions. These people often rely on patents to

protect their ideas, as a patent outlines the specifics of their invention and prevents

others from using their idea without their permission. However, there are problems with

this system, and it is being abused heavily. So called patent trolls are people who take

out a large number of vague and overly wide patents, seeking not to create products,

but instead sue others on the basis of violating their patent, intending to force them to

settle the lawsuit as going to court is often far more expensive. This has huge adverse

effects on the world of business, especially in regards to small start ups.

Patent Assertion Entity, or more collectively known as PAEs or Patent Trolls, are

companies who invent no ideas, create no product, or offer no service. Instead, they

exist solely as entities to collect patents and file lawsuits against companies they find to

be infringing on them, with the primary goal to force the company to settle for a sum of

money. It is a huge issue in the technology industry, where new ideas and methods are

constantly emerging, and the PAEs hope to prey on those advancements. Their

methods are simple: take a measure of where the market might move towards, then file

as vague and wide a patent as possible in order to take advantage of the market. For

example, a Patent Troll might file to have the right to “Transmit personal messages

wirelessly”, then file a lawsuit against any company who markets cellphones, banking

on the fact that it will be cheaper to pay them a settlement than take them to court.
 Parker 12

The issue of PAEs arises from issues in the Patent Office, which is the

government body responsible for the issuing of the patents in question. The process is

fairly simple: a person or organization files a request for a patent with the office, the

office judges if the request is legitimate or not, and then grants or refuses the patent.

However, the system is heavily flawed in many ways. For one, patent offices are funded

by fees, and such fees are higher if a patent is approved, so there is a financial

incentive for the office to approve patents. Secondly, there is nothing stopping a

company from re-filing a rejected patent again and again, hoping that either through a

different set of eyes or a desire to have the company cease, the patent will be

approved. Thirdly, senior members of a patent office often spend the least time judging

patents and more time fulfilling management duties, leaving it to more junior and

inexperienced employees to process of a bulk of the requests. Lastly, patent employees

are often only allotted a few hours to judge each patent, giving them no time to fully

appraise the real world effect of the patent in question. These flaws allow many

otherwise bogus or faulty patents to pass through, which PAEs exploit fully in their

operations.

However, it is not only the Patent Office PAEs seek to use to their own personal

gain. While a recent Supreme Court decision has shifted the issue, for a good long time

almost every patent lawsuit case was filed in the small town of Marshall, Texas, which

has a population of only 24,000. Many factors contributed to this specific town being

chosen, with its otherwise empty district court capable of handling a lot of cases quickly,

it’s unique rules forcing such lawsuits to be resolved quickly in court, and it’s population
 Parker 13

that seemed highly sympathetic to patent troll companies, the town soon became the

best place in the entire US to file patent lawsuits. Indeed, in the year of 2015 more than

2500 lawsuits were filed in this single district court, compared to the 14 in 1999(Nazer).

However, said Supreme Court case in 2017 has had a major effect on this practice. The

court ruled that patent lawsuits must be filed in regards to the defendant’s place of

business, rather than at the plaintiff's court of choice, forcing the Patent Trolls to use

untested courts and juries in their cases. This ruling has led to PAEs to often reconsider

their lawsuits, though many have instead moved to finding the next way to either

subvert or take advantage of the ruling.

A sad truth is that it is the smallest companies that are at the highest risk of

Patent Troll lawsuits. Without robust legal teams and the near limitless money

technology giants like Cisco, Facebook, or Apple possess, startup or small tech

companies are all but forced to settle cases rather than pay the astronomical legal fees.

Indeed, while fewer than 1% of defendants in these lawsuits are found to have been at

fault for violation of a patent, more than 84% of these cases are settled before going to

court, costing 84 billion dollars a year.(Lemley) Such costs heavily impact the industry

as a whole, wrapping up massive amounts of resources in pointless legal battles that

could otherwise be used to enhance, improve, or advance one of the fastest growing

industries on the planet.

It is not only small companies that are at risk of PAEs, however. Since 2010, the

PAE VirnetX has been in a massive legal battle with Apple Inc over a patent that deals

with issues of communication between two people using electronic devices, a classic
 Parker 14

example of how vague a patent can be. The case has pitched back and forth constantly,

with an almost uncountable number of appeals either affirming or denying VirnetX’s

legal standing. Even now, some courts hold that Apple holds the company nearly 440

million dollars, while others have maintained that VirnetX’s patents have no

standing.(Wolfe) This high profile case is a great example of the damages Patent

Trolling can cause, as the legal costs for these almost 9 years of lawsuits are

astronomical.

The total cost of PAEs is difficult to judge accurately. Between ongoing legal

battles, often quiet settlements, and the problems of simply keeping track of the sheer

number of patents these companies file, placing even a rough dollar value on their cost

is difficult to do without a large amount of research. However, there is no doubt that

Patent Trolling is a billion dollar industry devoted not to the creation of product or the

advancement of ideas, but instead to preying on the ones that would seek to do this

instead.
 Parker 15

The concept of ownership has changed in the digital world. Very rarely do

consumers own the digital products they have seemingly purchased, instead they have

be licensed, borrowed, or meted out without obvious difference, these nebulous phrases

and meanings controlled through agreements implicitly agreed to through ignorance and

misdirection intentionally created and fostered by the companies often born of

necessity, but then left in place solely for benefit. And this is to say nothing of the issues

of patents, where a man can claim ownership of an idea not so that he may use it, but

so that he may prevent others from using it unless they agree to pay him money. None

of these issues were born of active maliciousness or intentional misdeed, but instead

out of choices made to protect the market and the society behind it being used and

abused by those seeking personal power or profit. This means that changes are unlikely

to come quickly, as those who seek to change them must do so carefully so as to not

cause more damage than benefit. So, as a consumer, or perhaps the parent of a

consumer, or even someone who has a great new idea for a product or service, your

greatest weapon is knowledge. Understanding the methods used here can do much to

protect yourself against their loopholes, and even casual understanding can provide

powerful armor.
 Parker 16

Works Cited

EULA

Hoffman, Chris. “10 Ridiculous EULA Clauses That You May Have Already Agreed To.”

MakeUseOf​, 23 Apr. 2012, www.makeuseof.com/tag/10-ridiculous-eula-clauses-agreed/.

Newitz, Annalee. “Dangerous Terms: A User's Guide to EULAs.” ​Electronic Frontier Foundation,​

19 Jan. 2018, www.eff.org/wp/dangerous-terms-users-guide-eulas.

Wong, Claudine. “Can Bruce Willis Leave His Itunes Collection to His Children?: Inherit Ability of

Digital Media in the Face of Eulas.” ​Santa Clara Computer & High Technology Law

Journal​, vol. 29, no. 4, May 2013, p. 703. ​EBSCOhost,​

search.ebscohost.com/login.aspx?direct=true&db=edo&AN=88173750&site=eds-live.

Microtransactions

“Market Brief - 2018 Digital Games & Interactive Entertainment Industry Year In Review.”

SuperData Research | Games Data and Market Research » Market Brief - 2018 Digital

Games & Interactive Entertainment Industry Year In Review​,

www.superdataresearch.com/market-data/market-brief-year-in-review/.

Freedman, Andrew. “What Are Loot Boxes? Gamings Big New Problem, Explained.” ​Toms

Guide​, 27 Feb. 2018,

www.tomsguide.com/us/what-are-loot-boxes-microtransactions,news-26161.html​.

Duverge, Gabe. “Insert More Coins: The Psychology Behind Microtransactions.” ​Touro

University WorldWide,​ 25 Feb. 2016,

www.tuw.edu/psychology/psychology-behind-microtransactions/.

King, Chelsea. “Forcing Players to Walk the Plank: Why End User License Agreements
 Parker 17

Improperly Control Players’ Rights Regarding Microtransactions in Video Games.”

William & Mary Law Review,​ vol. 58, no. 4, Mar. 2017, pp. 1365–1401. ​EBSCOhost,​

search.ebscohost.com/login.aspx?direct=true&db=aph&AN=122981124&site=eds-live.

Register, Michael. “The Image of Rebirth in Literature, Media, and Society.” The Society for the

Academic Study of Social Imagery, 2017, pp. 42–49.

Patent Trolls

Bessen, James E., et al. “The Private and Social Costs of Patent Trolls.” ​SSRN

Electronic Journal,​ vol. 11, no. 45, 9 Nov. 2011, doi:10.2139/ssrn.1930272.

Fung, Brian. “The Supreme Court's Big Ruling on 'Patent Trolls' Will Rock Businesses

Everywhere.” ​The Washington Post,​ WP Company, 23 May 2017,

www.washingtonpost.com/news/the-switch/wp/2017/05/23/the-supreme-court-jus

t-undercut-patent-trolls-in-a-big-way/?utm_term=.a0432bad305c.

Lee, Timothy B. “These Experts Figured out Why so Many Bogus Patents Get

Approved.” ​Ars Technica​, Ars Technica, 27 Dec. 2017,

arstechnica.com/tech-policy/2017/12/these-experts-figured-out-why-so-many-bog

us-patents-get-approved/.

Lemley, Mark, et al. “Patent Quality and Settlement Among Repeat Patent Litigants.”

The Georgetown Law Journal​, vol. 99, no. 677, 2016, doi:10.31235/osf.io/7spjx.

Nazer, Daniel. “Supreme Court Ends Texas' Grip On Patent Cases.” ​Electronic Frontier

Foundation,​ Electronic Frontier Foundation, 22 May 2017,

www.eff.org/deeplinks/2017/05/supreme-court-ends-texas-grip-patent-cases.

Wolfe, Jan. “Apple Loses Bid to Undo $440 Million Judgment in VirnetX Patent Case.”
 Parker 18

Reuters​, Thomson Reuters, 15 Jan. 2019,

www.reuters.com/article/us-apple-virnetx-patent/apple-loses-bid-to-undo-440-mill

ion-judgment-in-virnetx-patent-case-idUSKCN1P91UF.