New Game Plus

How Stephen McArthur turned his gaming passion into a niche practice

Published in 2016 Southern California Rising Stars — July 2016

When Stephen McArthur was in high school, he kept a secret. As the winner of the 18-and-under Junior Super Series tournament in 1999, he was one of the best Magic: The Gathering players in the world, but he didn’t want anyone to know. It just wasn’t cool. He felt it was the opposite of cool. 

“I hid it,” McArthur says, laughing. “There were kids that would play Magic in the cafeteria at lunch break. Even they didn’t know I played.”

In college—paid for by the scholarship he won in the Magic tournament—McArthur went on to compete in the Cyberathlete Professional League and earned top world rankings in titles such as Counter-Strike and Warcraft III; but it still wasn’t anything he shared.

Cat’s out of the bag now. McArthur has leveraged his gaming industry know-how to become an up-and-comer in the constantly evolving field of video game law. After stints at Cravath, Swaine & Moore, Irell & Manella, and Stubbs Alderton & Markiles, he founded the McArthur Law Firm in Los Angeles to focus more of his time on soft IP work for midsize game companies.

His clients include mobile- and PC-gaming companies such as Fig, Humble Bundle, Sirlin Games, Kumobius and Big Duck Games, whose Flow Free has about 200 million downloads worldwide. He participates in industry events like E3, GDC and PAX, speaking about legal issues in the gaming world. 

“Gaming is a unique industry and there are a lot of scenarios where it’s important to really understand the industry well,” he says. “The customers in the gaming industry are very connected, very opinionated, and if you do things the wrong way, they can turn against you in the blink of an eye. The last thing you want is to draft a terms of use or file a trademark application that can be misconstrued, and the next thing you know there’s a Twitter hashtag against it or you’re the top post on Reddit with people calling for your head. You see this happen once every couple of months. I am part of the community, so I think I’m very good at catching that kind of stuff.”

Example: Taking a second look at a contract drawn up by another attorney, McArthur spotted a clause that, in a very roundabout way, forbade the company from releasing its game on platforms run by companies originating in Japan. “A very strange clause, but the other party wanted it in,” he says. “The other attorney didn’t understand the significance of it. If they had signed this contract, they would never be able to release their game on [Sony’s] PlayStation console.”

One of the big trademark issues faced by McArthur’s clients happens when gameplay mechanics are copied, or “cloned,” by shady, often Third World developers, who then register a trademark in their country and put their cloned game on the market. “You’ll get a cease-and-desist letter because someone went out and trademarked your name in a first-to-file country like Germany or Russia. They use that trademark to get your entire game removed from the app store,” McArthur says. “They either want to capture the market for their own game and monopolize the market, or they’re just looking for a settlement.”

McArthur prefers to work with clients to ensure their trademarks are properly registered in the first place. But if cloning does happen, he works with Apple or Google to make sure his client’s work isn’t removed but the clone is. That brings its own set of challenges. “Apple is the Wild West,” he says. “Apple kind of makes the developers, with the two competing apps, deal with it amongst themselves. It can be frustrating for whoever has the better legal argument.”

McArthur left the competitive gaming scene before the days of huge cash prizes—some tournaments now have prize pools nearing $10 million. “The world championship for Counter-Strike when I played was $250,000 and that was split five ways,” he says, “so you’re talking $50,000 each, which is chump change nowadays.” 

Indeed, if there’s a downside to his success, it’s this: “Having your own firm is a full-time hobby as well as a full-time job,” he says. “I just don’t have time to sit down and play 80 hours of League of Legends a week or [reach] the max level in World of Warcraft. I mostly play mobile games now because you can play for five minutes.”

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