Candy Lab Inc. v. Milwaukee County

266 F. Supp. 3d 1139
CourtDistrict Court, E.D. Wisconsin
DecidedJuly 20, 2017
DocketCase No. 17-CV-569-JPS
StatusPublished

This text of 266 F. Supp. 3d 1139 (Candy Lab Inc. v. Milwaukee County) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Candy Lab Inc. v. Milwaukee County, 266 F. Supp. 3d 1139 (E.D. Wis. 2017).

Opinion

ORDER

J. P. Stadtmueller, U.S. District Judge

This case concerns a location-based augmented reality (“AR”) mobile application developed by Plaintiff Candy. Lab,- Inc. (“Candy Lab”). The app is a game- is called “Texas Rope ’Em,” and it is reminiscent of the traditional poker game from which its name derives. The game accesses the phone’s rear-facing camera during game-play and overlays visual elements onto the image of the real world as seen through the camera, including playing cards which the user can collect. Part of the game involves the user traveling to specific real-world locations to collect these cards, with the aid of the camera imáges and an in-game map.

The first runaway hit in this game genre was Pokémon Go. Although its storyline is, of course, quite different, Pokémon Go has gameplay elements very similar to Texas Rope ’Em, including location-based and AR elements that require players -to travel to real-world locations to play the game. Such locations include, at times, public parks owned and maintained by Milwaukee County.

Defendants, collectively referred to herein as “the County,” say that while playing Pokémon Go, players trashed Milwaukee County parks, stayed after park hours, caused significant traffic congestion, and made excessive noise. Their impact ultimately cost the County thousands of dollars in increased police and park maintenance services. In response, the County adopted an ordinance (the “Ordinance”) requiring those offering such games to apply for event permits and secure garbage collection, security, and medical services, as well as insurance. Offering a game without a permit can result in a fine or jail time.

Candy Lab wishes, to offer Texas Rope ’Em to County residents to use in County parks. It does not want to apply for a permit to do so, nor incur the fees associated with obtaining the services necessary to secure a permit. Candy Lab brought this action challenging the Ordinance on the ground that it violates Candy Lab’s First Amendment right to freedom of speech.

Presently before the Court is Candy Lab’s motion for a preliminary injunction against enforcement of the Ordinance and the County’s motion to dismiss the complaint for failure to state a claim. The motions are fully briefed and, for the reasons stated below, Candy Lab’s motion will be granted'and the County’s motion-will be denied.1,

[1142]*11421. BACKGROUND

1.1 Texas Rope ’Em and Augmented Reality Video Games

The relevant facts are not in dispute. Candy Lab is a company that has been developing location-based and AR software since 2011. Candy Lab not only creates its own applications but also licenses its proprietary software engine to others.

Location-based applications are those that track the real-time physical location of the device running the application, and allow the user to interact with digital content based on the device’s geolocation. “Augmented reality” refers to the digital enhancement of physical senses, most commonly sight. Candy Lab’s mobile applications augment reality by superimposing images on a live video display from a mobile device’s rear-facing video camera, creating the illusion that the image is physically present on the other side of the device.

In July 2016, Pokémon Go arrived on the scene. This mobile game uses location-sensing technology and AR imagery to create a game world in which players interact with digital content in designated geolocations, called “game stops,” and discover virtual creatures that are algorithmically generated in response to players’ locations. Pokémon Go quickly became one of the world’s most popular mobile game applications.

In March 2017, Candy Lab announced the launch of the first location-based AR poker game, Texas Rope ’Em. The goal of Texas Rope ’Em is to beat the dealer in the popular poker variant “Texas Hold ’Em.” Players begin the game with two of the five required playing cards. To build their hands, players must carry their mobile device to game stops indicated on the game map to obtain a new card. Once the player has set his or her hand, the cards are played against the dealer. If the player loses, he or she can try again. Players who beat the dealer win points and, in future versions of the game, will be able to win in-app bonuses or prizes. Candy Lab reports that none of these prizes will be worth money. See (Docket # 18 ¶ 7).

Consistent with its name, Texas Rope ’Em has a Texas theme, including graphics and a color scheme that evoke the Wild West. When a player travels to a game stop and chooses a card to collect, the game generates an animated lasso that whips forward and grabs the selected card. Candy Lab’s CEO describes this as reminiscent of “rustling up” cards like a cowboy would with cattle. Id. ¶¶ 5-6. However, there are no other characters in the game besides the player and the dealer, and the dealer is not itself represented or animated in any fashion. Id. ¶ 4.

Texas Rope ’Em is currently in “1.0” or “beta” form, meaning that although it is publicly available, its functionality is limited compared to the anticipated full public release. The game is currently playable in select cities, including Milwaukee, and is being actively showcased at technology events. The game is presently free to download and play, though later versions will likely offer in-app purchases.

1.2 Pokémon Go and the Rise of Discontent

The unanticipated popularity of Pokém-on Go in July 2016 drew thousands of users across the country outside while playing the game. One member of the Milwaukee County Board of Supervisors (the “Board”), Sheldon Wasserman (“Was-serman”), says he received complaints that large numbers of people were playing the game in his district’s Lake Park, some of whom littered, trampled the grass and flowers, and stayed past park hours. There were also reports of inadequate bathrooms for parkgoers, unauthorized vendors in the park, parking violations, and significantly [1143]*1143increased traffic congestion. Wasserman claimed that, as a result, the County was forced to spend tens of thousands of dollars on additional law enforcement and park maintenance services. See (Docket # 2-1 at 2).

Wasserman proposed Resolution 16-637, which became Section 47.03(3) of the Milwaukee County Code of General Ordinances, to regulate games like Pokémon Go by targeting the companies that publish them. Multiple supervisors spoke against dhe Ordinance during deliberations, disputing Wasserman’s claims about the game’s impact. These officials argued that the gamers were not causing disturbances and that it was a positive development to see a diverse new group of people using the parks. They perceived the true driving force behind residents’ complaints to be fear of the unknown and umbrage at an unanticipated increase in use of the nearby public parks.

Wasserman emphasized that the Ordinance was not directed against Pokémon Go players, but instead sought to regulate the businesses that profit from them. Was-serman believed that the Ordinance could help control the growing popularity of games like Pokémon Go and, perhaps more importantly, leverage that popularity to make money for the County, which was required to maintain the parks which were so heavily used during gameplay.

1.3 The Ordinance

On February 2, 2017, the Board adopted the Ordinance by a vote of 13-4.

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Cite This Page — Counsel Stack

Bluebook (online)
266 F. Supp. 3d 1139, Counsel Stack Legal Research, https://law.counselstack.com/opinion/candy-lab-inc-v-milwaukee-county-wied-2017.