#3 Competition Laws Open sesame SesamWare is a Japanese software company responsible for the most popular open source software available on the market today. In operation since the mid 1990's, SesamWare initially gained international acclaim with an online multiplayer fantasy dimension game called ParaWorld. ParaWorld was the most popular game in the world between 2001 and 2004, with over 300 million worldwide gamers at its peak in 2003. Today, the Sesame software-initially installed as part of the bundle downloaded by hundreds of millions of gamers around the globe to play ParaWorld-is used by those same hundreds of millions of users for all other computer and online activities. The open source code was so user friendly the software was easily adapted to every facet of computer life for all platforms and operating, networking, navigation and security systems. Game on... game over Like other SesamWare software, ParaWorld was designed using the open source methodology that allowed all users to become, in essence, co-developers. Beyond the allure of the open source tactic, ParaWorld's fame grew from its real world likeness. The initial premise of the game was an uncanny replication of the current global scenario of the minutest details of everything from geography and politics to economic stability, famous individuals, and even weather patterns. The SesamWare global marketing campaign urged users to become the virtual incarnation of almost anybody in the world and to use their character status to change, subvert, continue, or improve the course of civilization. In other words, users could control the world - virtually. Global pandemonium ensued. It seemed as though every person on earth with access to the Internet accepted the licensing agreement and downloaded the open source game ware, chose a character and participated in the dynamism of the parallel world. Alarmed and eventually outraged with the attention given to their online character versions and the actions and decisions being made in their likenesses, governments, policy makers and other famous individuals called for the plug to be pulled on the game, citing IP infringements. Given the unprecedented global dispersion of its popularity, the open nature of its development (who was responsible for the infringement?) and the fact that SesamWare conducted all of its business licensing and payments) online, it took years for the cease and desist order to be enforced by the majority of nations around the world. In fact, by the time most nations got around to shutting the game down, most users had already lost interest. And the loser is... By 2004, SesamWare was by far the dominant software company in the world, having acquired many of their competitors along the way. Initially, when the licenses were first made available to users, the contract agreement obligated users to pay an annual fee of $US 5.99 to keep using the software. This low fee made it impossible for the majority of software companies to compete, and most of the competitors were either bought by SesamWare or went out of business within three years. The fee remained relatively unchanged until the competition phased out. But by 2008, the annual licensing fee had increased to $US 150. When asked to justify the increase, SesamWare cited a clause in the online contract that most users signed with the original ParaWorld software bundle agreement that stated Sesame could increase the annual licensing fee without customer notification. SesamWare was once again at the center of an international lawsuit, this time for subverting free market competition. Case Study Discussion Questions 1. Assume ParaWorld was eventually ordered to cease and desist due to IP infringement. What category of IP has ParaWorld most likely infringed? Explain the actions that constitute such an infringement. (5 Marks) 2. What are some of the anti-competitive behaviours SesamWare might be guilty of? How did/might SesamWare's behavior adversely affect free market competition upon which international trade depends? (5 Marks) 3. Is there an international law governing Sesame's behaviour? How will competition laws be enforced globally? (5 Marks) 4. If SesamWare had been headquartered in a country that had no competition laws, as is the case in many developing countries, or if Sesam Ware never entered into a contract (for example to buy out a competitor with a party from the U.S., how could the U.S. claim jurisdiction over the enforcement of its competition laws