Why is Nintendo so Overprotective of its Intellectual Property?

business decisions often occur at the intersection between the law and psychology in other words the law sets the boundaries and tells you what you need to be aware of it tells you what you can and cannot do to protect the property that you own the law sets the stage but we individuals are the actors and depending on our experiences the way we perform on stage can be very different despite the stage directions being fundamentally the same Nintendo is often criticized for being fiercely overprotective of its intellectual property we've seen just recently 25 year old strategy guides being taken down thousands of copyright strikes issued against music YouTubers some of whom are obvious paradists and much more as a lawyer with some let's say professional interest in corporate law and intellectual property Nintendo's decision making has never been a surprise to me I may not agree with their decision making as a fan but in its context both legally and psychologically it all makes sense to me as a lawyer I'm also of the opinion that Nintendo will become less overprotective as time goes on as a consequence of older less legally Savvy leadership leaving the company we'll explore that theory towards the end of the video but in any case let us begin why is Nintendo so overprotective of its intellectual property we will start with a story of Law and psychology when leadership in a company changes you will often find that the business philosophy of said company will change relative to how powerful the leadership was Nintendo company was founded in 1889 by one pusajiro Yamauchi at the time the company produced hanafuda a sort of Japanese playing card after fusajiro Yamauchi passed away in 1951. his grandson hiroshiyamoji began to shift the focus of Nintendo away from traditional Japanese games and as part of the changes he implemented the younger yamoichi expanded Nintendo to work on other forms of entertainment media including video games by 1977. Nintendo had begun sales of several of its new video games in the lucrative American Market 1977 was also the year in which a young Shigeru Miyamoto was brought onto the company as an apprentice in the planning department Nintendo would soon thereafter announce a subsidiary location in my home state of New York in around 1979. and in order to break into the American Market Yamauchi tasked young shigaru Miyamoto to convert unsold radar scope arcade units into a new arcade game Miyamoto would come up with a story involving a love triangle between a gorilla a carpenter and a woman set in New York City the game we are referring to is of course Donkey Kong and Donkey Kong became an instant hit taking arcades by storm and as profits flowed into Nintendo's coffers an onlooker observed with jealousy you see video gaming was a relatively new industry at the time one which every Media Company wanted to get a piece of in Universal Pictures known otherwise as Universal City Studios was no different Universal was actively looking for a way into the video game Market when Donkey Kong made its Splash in the United States in Donkey Kong Universal saw an opportunity you see Universal had produced a King Kong movie in 1976 along inside this movie Universal had ostensibly secured its ownership of King Kong as an intellectual property or so it thought Universal would soon intend out in the infamous Universal City Studios Incorporated versus Nintendo Company Limited a 1984 legal case heard by the U.S District Court for the southern district of New York in which Universal Studios alleged that Nintendo's video game Donkey Kong was infringing on their intellectual property rights in King Kong but in what appeared to be a miraculous Victory Nintendo at the time a mere guppy facing down the shark of Universal Studios prevailed judge Robert W sweet ruled that Universal had no right over the name King Kong or the characters and story that there was no possibility for consumers to confuse Nintendo's game and characters with the King Kong films and their characters the verdict was upheld on appeal as well the victory established Nintendo as a major player in the interactive media industry it gave a fledgling Nintendo confidence to push forward in the American Market Nintendo even named a new character after the lawyer who represented them the lawyer's name was John but consider what this lawsuit meant to Universal it caused them to decisively lose their attempt to own King Kong to this day the rights of King Kong remain only in various interpretations of the character writes to various films and takes on the characters are owned by their respective holders but each interpretation is held by a different party nobody owns King Kong this early lawsuit evidently traumatized much of Nintendo's leadership to follow everyone at Nintendo got a first hand look at how even a titan-like universal could lose a property as valuable as King Kong out of mere carelessness having seen what had happened to Universal debt Nintendo would make sure that such a mistake would never happen to them this story informs what in my opinion is the psychological aspect of why Nintendo is so overprotective Nintendo as a company has a core traumatic memory from its childhood one which its leadership internalized deeply there is however another aspect as to why Nintendo is so overprotective of its intellectual property and that is the legal side to explain why Nintendo acts as it does I'm going to break down the legal aspects into three parts one what Nintendo actually owns IP wise two what Nintendo fears will happen to its IP and three finally why Nintendo feels it's necessary to take such extreme steps to protect its IP so let us begin with part one what Nintendo has to understand why Nintendo is so fierce in protecting its intellectual property you must first understand what it is that Nintendo actually possesses I want you to First consider a different Media Company the final boss of intellectual property law let's take a look at the Walt Disney Company Disney is a massive massive company you don't need me to tell you that it is the number 46th largest company in the world by market cap it owns some of the most valuable media franchises in the world Titans of profitability like the Disney Princesses Star Wars the Marvel Cinematic Universe and Mickey Mouse himself now let us ask this question how much are these franchises worth it's hard to measure that right but one way we can attempt to measure the worth of a franchise is in how much revenue it generates how much money it makes in the aggregate now Wikipedia though not usually the best source gives us some pretty useful and reliable figures in this respect we can see here that the Disney Princess franchise is a total revenue of 46.4 billion dollars that's an incredibly large amount it's five billion dollars more than the GDP of the entire country of Serbia what about the mouse himself well Mickey Mouse and friends has a total revenue of 82.9 billion dollars now when you consider that the Google trademark is estimated by Forbes to have a value of 44.3 billion and that Microsoft's trademark is valued at 42.8 billion you start to understand how Titanic these numbers truly are Disney's 46.4 billion and 82.9 billion dollar franchises are not to be sneezed at but what if I told you that Mickey Mouse is not the media franchise with the highest revenue can you guess which media franchise the number one slot might be well the answer is Pokemon Pokemon has the highest total revenue of any media franchise in the entire world and it is not even close Mickey Mouse and friends has earned 81 billion since its Inception in 1924. Pokemon has a total revenue of 110 billion dollars with an Inception date of 1996. Mario has a total revenue of 47.5 billion since 1981 and that figure doesn't include Donkey Kong which has produced 5 billion dollars on its own The Legend of Zelda's total revenue is recorded at 4 billion but that does not include merchandising and so what does Nintendo have Nintendo has some of the world's most valuable media franchises under its belt Nintendo is sitting on top of an unspeakably large gold mine have you ever asked yourself just what game freak and Nintendo are doing with Pokemon how they so desired they could be doing so much more with Pokemon related content different kinds of RPGs or adventure games and Tamagotchis and just so many things right in that even with the meager amount that game freak and Nintendo have done what fans often complain about as being the bare minimum Pokemon has generated more Revenue than Mickey Mouse and friends by a factor of Spider-Man and about a quarter of the time with this understanding we have the first piece of this puzzle we know that Nintendo owns some of the most valuable franchises in the world and that it Bears more resemblance to Disney than it does to Sony or Microsoft now we must look into what Nintendo fears [Music] imagine for a moment that you are a member of the upper middle class but not unspeakably wealthy you live in a nice place in a good neighborhood but life still has its struggles now one day you discover that your property sits on top of the largest oil Reserve in the world and that it is all light sweet crude of an extraordinary quality news of this breaks and you are suddenly flooded with offers companies and Nations alike want to buy your oil and you become fabulously wealthy with this wealth and attention though comes competitors big oil companies rear their heads at their new competitor with valuable property wealthy investment funds and short sellers Circle your business like metaphorical Hawks seeking opportunities to profit from you you even have a few close calls where it looks like you might lose everything but manage to survive by the skin of your teeth you see in the deep dark Forest of corporate capitalism you cannot trust anyone weaknesses are opportunities for profit and there are always Predators circling waiting for the right moment of weakness to strike Nintendo is sitting on top of that oil field on top of that gold mine it knows this Nintendo is also not relatively speaking a very big dog it's a very large company sure by market cap Nintendo is the 285th largest company in the world at time of writing it was Nintendo's richest company of 2020. but anyone who follows any competitive video game knows that the difference between the 285th best player in a game and a player in the top 50 is enormous when Starcraft 2 wings of Liberty came out I was very briefly a top 200 player on the ladder but arguable number one best player Maru I am not and if Maru played me even at my Prime he could probably beat me in 100 out of 100 games even with a substantial handicap such is the nature of competitive play big business is ranked competitive capitalism an intellectual property is one of the most important Arenas of combat other companies are constantly looking for holes in your defenses to take what belongs to you Nintendo is a big dog it's me and Starcraft two wings of Liberty but its primary competitors are Sony at rank number 122 and Microsoft at rank number three and Google at rank number four Facebook at number eight and Amazon at number five are looking very hungrily in Nintendo's Direction you can be assured that these Mighty predators are merely waiting for opportunities a million smaller scavengers too are looking to take their own bites of the prize Nintendo does not have the sheer capital resources of Microsoft it does not have the century of business infrastructure that Disney has it does not have the massive government supporting kaide to business integration that Sony has Nintendo has very much to fear and everything to lose it is a company totally dependent on its franchises in Nintendo's eyes these franchises these intellectual properties are pillars that hold up the entire edifice of the company any damage to these intellectual properties whatsoever is damage that cannot be afforded even if it's just some acid rain corrosion or chip damage there is no measure of Defense too unreasonable as there is simply too much to lose and it is ever ever so easy to lose when your opponents are quite so good Nintendo is always playing defense because it must Nintendo's giant War chest of cash reserves exist also not as offensive investment Capital but primarily as a massive defensive shell and there is a reason why Nintendo acts so defensively you see the history of the corporate world is littered with the corpses of once promising companies that fail to protect their intellectual property Nintendo itself had a razor-close shave and it has no desire to repeat that experience again so now let's take a look at part three why Nintendo acts so harshly but before we begin first a quick word from our friends at the velcro Corporation [Music] go you see the scratchy hairy Fastener and you say hey that's Velcro but even though we invented this stuff our patent lives 40 years ago now no matter who else makes it you still wanna call it velcro you think it's awesome for us we're famous but then it's causing us being broken it's all here in this short legal brief and we know that this is confusing because [Music] hold on [Music] thank you velcro very helpful now that we know what Nintendo has and what it fears we can finally ask why Nintendo acts so protective of its intellectual property but to answer that we need to talk about parallel universes no just kidding I mean we need to talk about the law which is arguably worse and even more confusing and specifically I mean the laws of the United States of course intellectual property laws in Europe and Japan are important as well but the United States is a massive market and intellectual property damage here is detrimental and presidential it is foundational damage that Nintendo cannot afford I'm also not going to get too deeply into the weeds with the law for the sake of length this was supposed to be a short video but it has become quite long if you're curious about the very specific details on how IP law works let me know and I'll make a follow-up video where we can get in depth on that topic let's start with a very quick primer on intellectual property law intellectual property is commonly defined as being creations of the Mind used in Commerce the legal definition of intellectual property or statutory intellectual property in the USA is defined as one United States patents and patent applications of any kind two United States works of authorship mask Works copyrights and copyright and mask work registrations and applications for registration three trademarks and four any rights or licenses in the foregoing as an addendum I will state that these rights and licenses include trade names trade Styles trade dress indicia of origin service marks domain names and so on and so forth in other words intellectual property in the United States refers mostly to patents copyrights and trademarks and the concepts associated with those things there are other facets here that are not relevant and that we won't get into of these three patents copyrights and trademarks we are mostly concerned with copyrights and trademarks to paraphrase the law a patent is an exclusive right to commercially exploit an invention in exchange for public disclosure of the invention think a new Nintendo console a copyright is the exclusive legal right to produce and distribute including sell something one has made and a trademark is a design used to distinguish the goods of one entity from those of another and to indicate the source of those goods in plain language copyright is the right to copy something you've made to sell a trademark is your symbol that makes the thing you invented different from other people's things let's illustrate this to nail the point home take a look at this game box the intellectual property is Kirby Nintendo gets to sell copies of this game Kirby and the Forgotten land because it holds the copyright to Kirby Kirby is distinguished from other 3D Platformers by Merit of it being a Kirby game that is a trademark the game cartridge itself if it has any unique technology might be patented for Nintendo all three of these matter in varying degrees you can think of the patent as being protection for the actual design of Nintendo's technology the trademark as being Nintendo's branding and the copyright as being the right for Nintendo to reproduce and sell what it makes of that branding you might notice that most internet discussions surrounding Nintendo's overprotectiveness concern the topic of copyright and yes this is the mechanism by which Nintendo enforces its intellectual property rights Nintendo says you cannot make music channels using our copyrighted music you cannot put scans of our strategy Guides Online without permission and you cannot make a fan games without our approval it is only natural to assume that Nintendo's behavior stems from its overprotectiveness of copyright and from that lens none of Nintendo's Behavior seems reasonable if you look at Nintendo's behaviors more carefully though you will note that Nintendo's great concern is not that others are profiting off of their exclusive right to sell their copies their copyright it is instead an act to protect its trademarks this is because intellectual property is a body of many parts patents copyrights and trademarks are all separate rights that combine into the body of intellectual property or some companies the protection of the patent is a more important aspect than the protection of the trademark for others like Nintendo the value of a trademark is of Paramount importance and while of course the copyright represents the ability for a company to utilize its trademarks or patents to produce profit if the trademark or patent is without value or is compromised the value of the copyright also becomes substantially lessened consider the case of Bayer Pharmaceuticals which lost its trademark for aspirin in the United States to something called trademark genericization or what we lawyers sometimes call generic side Bayer failed to reinforce and properly associate their brand the trademark aspirin with a specific product that they produce other companies called their product aspirin and Bayer failed to take action thus since every consumer Associated aspirin as being a generic product and not a trademark Bayer lost its exclusive right to name the medicine aspirin in the United States and then profit exclusively off of that product name for a pharmaceutical company like Bayer though while this might be a substantial bloke it is not the end of the world for a media company like Nintendo which is built upon the success of its trademarks almost exclusively this is a danger to be avoided at any and all costs as we saw before Nintendo's revenues are generated by their brands their media franchises their trademarks what we are seeing is merely Nintendo's best attempt at Disney's don't f with the Mouse Disney like Nintendo is a media company and they protect their trademarks ferociously because any damage to those trademarks is fundamental foundational damage to their intellectual property that cannot be afforded Nintendo does not want to end up like Universal Nintendo doesn't want to end up like Bayer or Motorola either Nintendo knows that everyone wishes that they could take a bite out of the Pokemon pie such as Digimon Monster Rancher Dragon Quest Monsters all kinds of different Indie Games Yokai Watch Etc or the Zelda pie the Zelda likes like tunic Nintendo has had close calls before Nintendo's legal department knows that the trademark Nintendo itself is at risk of being genericized it has known this since the 90s when everybody's mother used to call any video game console a Nintendo a big question remains though that I'm sure many of you are asking is it really this complicated isn't a much simpler and easier explanation just that Nintendo is greedy and wants you to buy what it produces and use its services it doesn't want fan games or ROMs or reproductions of its content because it wants to sell them to us isn't that the obvious answer to which I will say you are right in one respect it is absolutely all about profit and to a certain extent yes Nintendo might want to sell you some of the things it's taking down instead of having you enjoy it for free but the profit and most importantly the property that Nintendo might stand to lose is incalculably more valuable than selling Niche old school fans a 20 year old strategy guide Nintendo is not afraid that your scan of their 20 year old strategy guide will hurt their ability to sell out later Nintendo is afraid that your posting of said guide without permission is acting as calculus on their water faucet as termite damage in their Foundation as erosion on their beachfront as a straw on their camel's back Nintendo is acting primarily out of fear or its intellectual properties and a distance secondarily out of trying to nickel and dime you Nintendo would if it could manage its Community more closely to permit some fan works or allow certain lesser evils to persist that might otherwise provide free marketing but its edifice is too large already its intellectual properties too unwieldy and its resources stretched too thin to commit to this kind of community micromanagement a company like Microsoft can maneuver more carefully due to its enormous Manpower and resources a company like senka can maneuver more carefully due to the much smaller scale of its IP but Nintendo has neither of these advantages and so out of necessity treats every identified threat as a harmful one there's a great deal of more legal complexity all of which pertains to trademarks and the interaction between copyrights and trademarks that I haven't gotten into in this video what you need to know though is that ultimately though copyright protection is something that Nintendo cares about the harshness with which it enforces its copyrights is not so much about the dollar it isn't making about the 100 it could stand to lose copyright is used as the bludgeon it is not Nintendo's actual concern in my mind I am a game developer but in my heart I am a gamer [Applause] [Music] have you ever noticed how almost every channel associated with video games seems to use video game soundtracks with relative impunity I've used music from all kinds of different video games in this video all of which are from Nintendo games many game Publishers specifically allow for the use of in-game soundtracks for YouTube videos and streaming others know that it's relatively pointless to go after YouTube videos in which their copyrighted music is used in a transformative way otherwise known as fair use if Nintendo could allow for fan games if it could allow for scans of strategy guides and Fan Music in a way that was absolutely safe it would do that it already does this to some extent by either allowing or not enforcing its copyrights with concerns to its music and YouTube videos like this one Nintendo's leadership for a long time has been developer driven think Miyamoto and Iwata these remain a vision but not of business they experienced the Donkey Kong lawsuits and they experienced being a very small fish in a very big pond they were not businessmen they were developers doing business and so their leadership treated the intellectual property side of things without nuance now the corporate leadership of Nintendo is now much more business oriented some of the changes that will come may not be consumer friendly but will be very profitable for our friends at ntdoy with these changes however I would expect will come a more business savvy legal department one which may be more willing to play along the borders of intellectual property law to build consumer Goodwill instead of coming across as overprotective this is not a guarantee but we are already seeing a few moves in this direction the Universal Studios theme park for example being a rather uncharacteristic move for Nintendo with a new Mario movie don't believe so with this context in mind what can a content creator do to protect themselves from the big end what can you or I do to prevent Nintendo from seeing us as a threat before I answer that let me first state in clear terms that nothing in this video should be considered legal advice and that I am not your lawyer let's say you are a hypothetical internet archivist looking to preserve a hypothetical 25 year old strategy guide what could you hypothetically do to prevent a completely hypothetical takedown well if your interest is in the archival of such documentation and not in the display of such then archive it maybe even share it with an archivist organization but don't digitally reproduce it on the internet for the public that's a bit silly though isn't it what's the point in archiving a 25 year old strategy guide if nobody can look at it the most obvious step then is to ask for permission I know it's annoying you have a strategy guide you want to Archive and share it and Nintendo might not ever respond but you should still try it doesn't hurt you may even find Nintendo shares your interest in preservation or you may discover a legal potentially contractual reason why Nintendo cannot give you permission that might make a lot of sense their hands are legally bound perhaps the copyright could be shared with another party and Nintendo might be legally obligated to act as they currently do you may even find that some archival organizations have permission to display such works Nintendo trusts the video game history foundation with its intellectual property much more than it trusts you a random redditor for example you could of course also simply keep quiet no name no contact no fuss Nintendo cannot issue a takedown to something or someone that they don't actually know exists now can they but what about a fan game well remember that Nintendo's primary concern in protecting its IP is its trademarks and secondarily its right to distribute if you want to borrow say Nintendo's platforming mechanics or its game design that's not something the big n tends to have a problem with just don't use its copyrighted characters and don't use its trademarks the idea applies to most big media companies as well it's not Pokemon it's monster indie game this isn't Harvest Moon It's story of Seasons this isn't breath of the wild it's Phoenix Rising it's Genji impact you know you can even call it a tribute game in your marketing just don't imply your work as a part of Nintendo's intellectual property as that implies that Nintendo's intellectual property belongs in part to you which they will not take kindly at all and of course what you really don't want to do is to try and commercially exploit material that is in fact Nintendo's intellectual property this kind of activity is by far the most damaging to Nintendo's trademarks Nintendo often doesn't even go after copyright violations that don't have some Avenue for commercial exploitation which includes self-promotion if you think dmca copyright takedowns are bad I can assure you that lawsuits are much much worse and unfortunately this is just how it is this is how intellectual property Law requires Nintendo to function it's not unreasonable behavior it is the only reasonable Behavior [Music] foreign like almost any company cares most about its profits its actions seem overprotective to us as consumers because these actions appear to detract from our ability to experience the intellectual properties that we love and the ways that we want to enjoy them be it through fan tribute Games music remixes or archived historical materials Nintendo is a top 300 company with intellectual properties of the top 50 companies in the world would do almost anything to get Nintendo's decision making must take into consideration their limited Capital limited Manpower and limited reach these factors are also why Nintendo's online gaming and matchmaking their switch eShop and other such consumer-facing operations seem so behind the times Nintendo does not have the resources to commit to these things at the level of Microsoft or Sony when faced then with trying to guard an invaluable intellectual property treasure against very powerful competitors who have an interest not just in taking for themselves but just in weakening said intellectual property rights Nintendo has everything to lose and insufficient resources to afford the Nuance necessary to handle the distribution and usage of its intellectual property at the molecular level that its fans want from it intellectual property laws in the United States are finicky in just such a way that any little damage the Oedipus of an IP can mean huge problems down the road and so Nintendo is almost forced into taking an apparently overprotective very harsh Approach at least for the time being Nintendo is fiercely protective of its copyrights because it needs to be in order to protect its trademarks and the entire value of its company is in its Brands its trademarks [Music] so this episode turned out much longer than I had expected I hope though that you found it informative if you have any questions please leave a comment and I will do my best to answer I've purposefully tried to keep the legal side of this episode a little bit more digestible let me know if there's any interest in exploring this aspect more deeply it's also taken me almost a whole year to release a new episode due to some real life busyness I'd like to see about making more of these videos for you this year so we'll see how that works out I've been your host Mooney and as always thank you for tuning in to Moon Channel thank you but if you keep calling these velcro shoes our trademark will get killed yeah

Channel: Moon Channel

Views: 643,764

Keywords: Nintendo, Video Games, Video Essay, Copyright, Intellectual Property, Mario, Donkey Kong, Moon Channel, Moony, Sony, Universal Studios, Universal, Nintendo World, Miyamoto, Iwata, Shigeru Miyamoto, Doug Bowser, Law

Id: i13hrynnGNY

Length: 33min 40sec (2020 seconds)

Published: Sat Jan 28 2023