Nintendo Switch End User License Agreement (EULA)

Mike Whelan
Chief Community Officer
Akash Kashyap
Partner, Kashyap Partners & Associates LLP

How do you balance accepted requirements of good drafting: being both accessible and thorough? Those goals seem to contradict each other.

In this episode, Attorney Akash Kashyap addresses this conflict using the Nintendo Switch family of product’s End User License Agreement.

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Interview Transcript

Mike Whelan In this episode, attorney Akash Kashyap breaks down the Nintendo End User License agreement. So let’s tear it down. Everybody welcome back to the Contract Teardown Show from Law Insider. I’m Mike Whelan. Today I am here with Akash Kashyap. Akash? How are you today?

Akash Kashyap I’m doing good. I’m doing good. How are you?

Mike Whelan Pretty good. We are going to talk about something that apparently my kids know because I have to buy them stuff all the time. And this is the Nintendo Switch Family User Agreement. It covers the Switch family, Nintendo Switch, Nintendo Switch Lite, Nintendo Switch OLED model, which I’m pretty sure I have every one of those in my household right now. I guess what is this document that we’re looking at? When are we going to see this kind of thing?

Akash Kashyap So this is a pretty standard type of document. It is an end user licensing agreement. It’s the way that most software and most appliances that use or rely on software are distributed. It’s basically the terms on which you’re allowed to use this software. And, you know, now a large portion of the hardware that you buy from Nintendo without actually obtaining ownership, and that’s something you’ll see through this. You’ll see that when you get a subscription to Word or Acrobat, you’ll see that when you get a, you know, a streaming dongle for your television. So it’s pretty widespread now.

Mike Whelan Perfect. We’re going to dig into it. But before we do, tell us about you, Akash. What about your practice? When do you run into documents like this?

Akash Kashyap So I’m a corporate IP and immigration attorney. I’ve been practicing for about six years. And really with the intersection of intellectual property and corporate law, you see a lot of these types of agreements where you have, you know, technology licensed. Now, whether that’s in the form of an app or a website or, you know, actual software that is downloaded like, you know, Adobe Acrobat or Microsoft Word. And so this is a relatively simple form of what are usually very, very long and complex agreements. So I thought this would be a good way to sort of go through some of the pitfalls when trying to make a very simple end-user license agreement.

Mike Whelan Yeah. One of the themes that we’re seeing in this show is this distinction between drafting for consumers and drafting for businesses. My favorite part beginning this thing is there’s an all caps. This applies to your use of the game console, but then it says if you are under the age of 18, stop exclamation mark. Because my favorite thing is the idea that my children are wandering around the Nintendo website looking for where is that dang user agreement? Oh wait, wait. I cannot look at this user agreement. It’s my favorite. Let’s start sort of at the beginning. In the license area, in number one, it talks about what you get to have in terms of your use of the software in the content. And in the last sentence, it says you agree to not use the console in any unlawful manner or to access the consoles, devices, accounts or data of others, including Nintendo, without their or our consent. What do you think about this language being used, this unlawful manner? This seems kind of broad.

Akash Kashyap It is both overbroad and overly narrow to end up making it something of a legal nonsense. So on the first aspect, it’s restricting itself to unlawful matters of access and use, which is kind of silly because then then carving an exception out for unlawful conduct. And unlawful conduct is stuff that, you know, Nintendo is not involved with, you know, third party publishers are not above it. That’s just stuff that the government says is not okay. So in essence, all this does is create areas where the end user license agreement is giving you permission to act in an unlawful manner, which is. A little bit silly. Beyond that, this last portion of the sentence where it says the data of others including Nintendo without their our consent, there’s something you see a lot when people are trying to shrink down contract language to be more friendly or to be more late. But it makes it very confusing because they’ve combined essentially two groups of subjects and two groups of objects in the sentence. So where it says that of others, including Nintendo, that’s combining Nintendo’s own data and the data of users of the software, and then they’ve combined the aspect of consent. So it’s unclear the way this is constructed. If there’s a situation where a user consents to let you use software, but Nintendo isn’t asked or Nintendo doesn’t weigh in, or even if Nintendo decides that, no, you’re not going to be able to give permission. Is that controlled in that language or not?

Mike Whelan Yeah. So, yeah, a weird question on that. I’m noticing as I look through this. Normally when we’re looking at two businesses or doing a deal, you have this long definition section at the beginning that tells you what all these terms mean. And I, you know, I see words like console or capitalized. I’m expecting to see some contextual definitions, but I look at this sentence and it talks about the use of software and console and content, and I don’t see a lot of distinction between what those words mean. Is that an expansive sentence? Is that a narrow and I don’t know. What do you think about the lack of definitions for these terms that seem really important in terms of the IP.

Akash Kashyap I think it’s a huge problem in this agreement. And that’s another thing that people do when they’re trying to make it very, you know, customer facing. And we’re going to try to avoid legalese, but you have these three terms that are used in sometimes similar and sometimes distinct ways and the definitions aren’t clear. So the concept, you know, the capitalized term console is defined, you know, up above as this Nintendo video game console, which is the console. Now, given that the actual, you know, device that you’re you’re buying, it’s a combination of hardware, pre-loaded software and, you know, internal circuitry that sort of drives the line between what portion of that is hardware and what portion of that is software is not going to be, you know, easily separable into what’s a console and what software and the definition of software includes, you know, large parts of hardware as well when you scroll down there. And the concept of content doesn’t have a definition at all, which is really strange in this part of the agreement where it’s talking about content that you’re obtaining. But content doesn’t have a definition here. And you know, even when you look at how, the market for media works content is basically a catchall that means different things in different contexts – is an image content, is a sound recording content, is a screenshot content? It’s very contextual and do not have a definition for something like that, especially when it’s the subject of this operative clause is troubling.

Mike Whelan I’m going to ask a dumb question, something that I should probably know as a parent, which is – how is the content agreement being made? Right? Like, I’m imagining my kids are downloading games, you know, they do this on their Xbox a lot where they’ll just go on and they’ll download a game or they’ll go to a store and they’ll buy a game. As rare as that is now. Are they doing a new content IP authorization relationship each time they go get a game? Or is is this covering every future download that they’re going to do?

Akash Kashyap So it’s possible that every software could have a different EULA. In EULA like this, it is really something that if you get your kids you know one of these switches for Christmas, if they open it and they turn the power on this, they’ve agreed to this. And you have a limited window in which you can return the device to wherever you bought it from. Otherwise, you know, it’s ratified and it’s done. And actually, it would be applicable on you as the purchaser. That’s what this disclaimer language up here means. If you’re under the age of 18, stop, you need to get your parent or legal guardian to read and accept this agreement. What that means is that because this language is put on a screen, when they turn on the device and they didn’t show it to you, you are considered to have accepted it on their behalf. It’s a very sneaky way of doing it. But it’s how the software industry has been working for many decades now. So I don’t see it changing anytime soon.

Mike Whelan Yeah. And we’ll get to the dispute section on that. I want to go back to this definitions issue because you have this question of authorization in here. They’re using unauthorized a lot. I don’t know how to think about authorization, who’s allowed to make the decisions around that. What do you think about the use of the word or the lack of the definition of the word authorization in this document?

Akash Kashyap It’s again, this is one of those things they’re trying to make it simple, but also preserve, you know, a whole lot of discretion. And it’s unclear whether this actually makes it enforceable agreement, because when something is authorized or unauthorized in Supreme Court, like you can see in section two, where it says that you’re not allowed to make unauthorized modifications of the console or the software, the distinction between which they’ve not really drawn or use an unauthorized device – device is, again, an undefined terms. So what’s a device, is a paperclip a device, who knows? And the main issue here, though, is what constitutes authorization? Is it spelled out? So who can give the authorization, how the user is notified, whether something is authorized or is it not authorized? Taking a really basic example, you’ve got this this video game console and you’ll have other people selling their own cheaper versions of controllers or memory cards or whatever. And it’s difficult to know what constitutes an authorization. This is a different device that you’re using with the console that’s in this agreement. Is using a device like that going to void the agreement or put you in violation of these terms? And how do you know if this device is authorized? It’s unclear. And because of that ambiguity, these distinctions between authorized conduct and unauthorized conduct and authorized devices and unauthorized devices can most likely be stricken out if they’re not careful in how they’re enforcing it.

Mike Whelan Well, let’s say I’m mad about it. Let’s say I don’t like some of the terms in here. I want to go to the dispute resolution section that’s down in seven. I’m seeing we talked about before on the show this right to opt-out in 30 days, which is really, you know, ChatGPT, we talked about how it had a similar thing where A, you’re supposed to know that thing exists and B, you’re supposed to send a physical letter somewhere to kids who are downloading. What do you think about Section 7? I’m seeing a few issues in the dispute resolution section. What’s jumping out at you?

Akash Kashyap  Well, the first would be, you know, the right to opt-out. Now, one issue is, again, that 30-day period, it’s really not effective, especially because a lot of these consoles, they’re marketed to and geared toward children. So you have that one layer of, you know, of abstraction where you’re going to lose time between that child starting, you know, turning on the console, having an issue and, you know, actually getting this agreement in front of parents. And then that 30-day period that’s taking from the time that you buy it. So let’s say you do some, you know, some Black Friday shopping, you’re really looking at by the time the console is turned on, if they turn it on Christmas morning, you’re looking at one day to send out email saying, I don’t want this mandatory arbitration sticking on. So that’s especially for something marketed to children that’s just too onerous. And again, if a reasonable judge is looking at this and they try to stick you too closely to that period, they could end up losing the section of the agreement.

Mike Whelan Let me jump you to C, because I think this is: I want to read it. It talks about, so 7A is this list of, it’s basically the arbitration clause. It lists out what’s going to happen if you have a dispute or a claim. And there’s a question about what those two words mean that we can talk about. But 7A says, you know, arbitration, you’re going to arbitration. Let me read C, section 7A does not apply to any claim in which a party is attempting to protect its interest in intellectual property rights, i.e. Nintendo, such as its patent copyright, trademark trade, secret or moral rights, but not including its privacy or publicity rights. Or two, that may be brought in small claims court. 7C is pretty crafty. What do you think about the way it sort of seems to be exempting anything Nintendo cares about?

Akash Kashyap Right. So the only party that’s going to really have IP that is a commercial IP. So patents, copyright, trademark, that’s all commercial IP. And the only person that’s going to have that on the table is going to be Nintendo. They’re the ones that are providing something to you that can’t be copyrighted. You know, your kid playing the console or, you know, even an adult streamer that’s using a console, that’s not going to involve anything that you can patent. The ability to protect by copyright is pretty much negligible. Same thing with trademarks because it’s not like you’re going up and giving them your brand name. The only brand name that’s really going to be involved in this is going to be Nintendo or, you know, one of their publishers or imprints or what have you. The thing that is going to be involved is your right to privacy, is going to be your right to publicity, the right not to be granted publicity. And that is all on the user side. So what they’ve done is they’ve created what looks like an exclusion for intellectual property. But what it really is, is an exclusion for commercial intellectual property. And in the case where it’s a B2C contract between a business and an actual user, that business intellectual property is all going to be on one side of the transaction and the non-business is going to be all on the other side of the transaction. So it’s pretty clever.

Mike Whelan Pretty one-sided. Yeah. Let’s get practical as we wrap and think about this thing. Nobody’s reading this, okay? I don’t even know that my kids face this. I don’t know that there was, you know, my kids are not. Are you 18? Yes or no? No. Go tell your parents to read this document. I’m not reading the document either. Nobody’s reading this thing. I’m thinking of contract as a sort of a social tool. Maybe the purpose in this thing is to say, all right, it all goes to crap later, we need a way to defend our rights. And here’s just… Well, if that’s going to be true, why not just make a really long, hard document? You know, nobody’s going to read it. Or if you’re saying the good is no, we want people to actually read this, well, then make it an in-app thing that, you know, gamify it like you do everything else. It seems like this is kind of the worst of both worlds, where it’s too complicated to read and it’s too simplistic to be effective. Am I reading that right? What’s your take on, if you’re going to do consumer contracts like this?

Akash Kashyap So this is something that is really tricky for a lot of EULAs because there are a lot of hoops that they have to jump through to avoid being considered, you know, contracts of adhesion. And that was kind of a huge bit of jurisprudence in the early software age where you had a lot of these contracts just thrown out because they were classic, you know, open the shrink wrap. And if you opened up the shrink wrap around your desktop, you’ve agreed to these terms or you put in the CD and you automatically have agreed to these terms. So there has to be a certain level of simplicity just to make it seem legit when they’re going to court. It can’t be something that looks like, you know, nobody on earth would ever read this. It can’t be like one of those, you know, AT&T receipts that’s like three reels long because that a judge is not going to look at. They’re going to say this and say, look, you’ve got here you’ve got a 14-year-old that’s, you know, trying to play Mario Kart. And on the other side, you’ve got this massive multinational company with branches and markets, you know, across the world and a horde of lawyers. We’re not really going to kind of construe these, you know, legally against that 14 year old kid. But on the other hand, they do want, you know, predictability. They want to know that we’ve made this game by giving it to, you know, 100,000 kids for not diluting it. And they certainly don’t want to get into the headache of managing a separate relationship with each and every different consumer. That’s, you know, the other side of consumer contracts. You don’t want to have a unique relationship with your consumers. You want to have something that you can standardize and deal and manage in bulk. And a lot of companies end up falling on one side or the other. And because you’ll never really know if your contract is too simple or is too open, it’s hard to get a gauge on that. You can’t really tell what side you’re going to fall on until you’re in court and it’s too late. But it does seem like, you know, this this particular EULA, Nintendo’s fallen very far on the on the oversimplistic side. And while this whole contract they may be able to preserve, you know, there is an EULA, I see a lot of places where if there’s not really careful lawyering, they could end up getting red pens, you know, cutting the large parts out.

Mike Whelan  That is interesting. I know we’ve got a lot of contract drafters watching this who are thinking about how to do these well. So I appreciate you bringing it to us, Akash. If people want to connect with you, to learn more about your work and more about how to draft documents like this, what’s the best way to connect with you?

Akash Kashyap Okay. So you can reach me at my firm. That’s at kpalegal.com. And, you know, more specific to, you know, providing support for these type of agreements. There is a new initiative that I have started, the legalowls.com where, you know, we do handle the sort of bulk agreement drafting and, you know, providing support to a lot of lawyers and firms that are, you know, trying to make sure that the nitty gritty is get handled while maintaining their caseloads. That sort of an of counsel outsourcing solution.

Mike Whelan That’s perfect. That’s great. Well, make sure to include links to that over at lawinsider.com/resources where we’ll have the blog post for this conversation. And also, if you want to be a guest on the Contract Teardown Show and beat up documents as we do, email us. We are at community@lawinsider.com. We’ll see you all next time. Thank you again.

Akash Kashyap Thank you.

Tags: Contract Law, Contract Teardown, end user license agreement, eula

Contributors

Mike Whelan
Chief Community Officer
Akash Kashyap
Partner, Kashyap Partners & Associates LLP

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