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Intellectual Property Law

: Video Game Law Blog

Microsoft Faces XBOX Live Lawsuit

By Chris Bennett, Tudor Carsten, Michael R. Coburn, Sarah Dale-Harris, Pablo Guzman, Danielle (Dani) Lemon, Chris Metcalfe and David Spratley

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Microsoft's XBOX Live network, an on-line system which allows subscribers to access content and play games over the Internet, experienced difficulties over the holiday season due increased demand. Microsoft has acknowledged that the service problems are not acceptable, and has promised that subscribers will be given a free game to make up for the connection difficulties. However, apparently that is not enough for some -- 3 individuals in Texas have sued Microsoft for breach of contract and negligent misrepresentation over the system outages.

The lawsuit, which is filed on behalf of the individual plaintiffs and other XBOX Live subscribers, alleges that Microsoft should have known that there would be increased usage over the holidays (due in part to new subscribers), and should have made sure there was enough server capacity to keep things running smoothly. The suit claims damages of over $5 million.

While the system difficulties obviously had near devastating impact on the plaintiffs, their claim will have to address the XBOX Live terms of use. This contract, to which all subscribers agree, expressly states that the XBOX Live service is provided "as-is", "with all faults" and "as available", and that Microsoft gives no express warranties, guarantees or conditions. It also limits liability to direct damages, up to an amount equal to one month's service fees. Disclaimers and limitations of liability are not always enforceable, but unexpected network outages and system overloads come with the territory and most on-line agreements contain clauses addressing these issues. The lawsuit seems to have little merit, but it will be some time before there are any further developments.

Coverage at GameSpot.

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Full post as published by Video Game Law Blog on January 07, 2008 (boomark / email).