In This Chapter
• Intellectual Property Rights
• Legal Agreements
• Licenses
4.1 I
NTRODUCTION
A
s a producer, you might be communicating with an attorney or the
publisher’s legal department on certain matters. For instance, a devel-
oper producer participates in negotiating development milestones in the
publishing agreement. A publisher producer might work with potential licensees
to define the details of a licensing agreement. In each instance, the producer
works with qualified attorneys to ensure that all the legalities are properly han-
dled, so it is not necessary for a producer to have a law degree. However, it is
helpful for a producer to be knowledgeable about some general legal issues that
will be encountered during game development.
Tom Buscaglia, a well-known attorney specializing in games, was interviewed
by the author for some general information about what legal issues a producer
should be aware. He has also written a series of articles on basic legal infor-
mation that developers, especially independent ones, should know. The article
information is listed in Appendix C, “Resources.” The information gleaned from
the interview is paraphrased throughout the chapter.
LEGAL INFORMATION
Chapter 4
62 THE GAME PRODUCTION HANDBOOK, 2/E
LEGAL ISSUES AND PRODUCTION
Tom Buscaglia
The Game Attorney
After the assets are secured and the initial deal is done, a producer will not be deal-
ing with legal issues on a day-to-day basis, if things are running smoothly. However,
in some instances a lawyer needs to be consulted, especially when an independent
producer is creating a game for a third-party publisher. Some examples are as follows:
the actual project is starting to deviate and exceed the original scope of work that was
detailed in the publishing agreement; minor modifications are made to a deliverable
agreement; the funding source changes; or anything else affects the quality and timing
of the agreed-upon deliverables. In cases like these, the publishing agreement must
be amended to compensate for the additional time and expenditures the developer
incurs. This is necessary to keep the developer as a viable economic entity.
Publishing contracts, like any other contract, are organic—not static—and when
necessary should be amended and reviewed throughout the entire development
process, either by the producer or the producer in conjunction with an attorney.
Additionally, if the game sell-through warrants it, an attorney’s assistance may be
necessary for a post-release audit of the game sales to make sure that the publisher
is paying out the royalties accurately.
The producer and his attorney should review all of the game assets from day
one to make sure that all of the game assets (art, 3D models, music and sound, pro-
gram code, and, of course, any third-party trademarks) are unimpaired and owned
by the developer. After all, you can’t sell what you don’t own. So, making sure that
the developer owns exclusive rights to all of the content in the game is the essential
first step to selling any game.
4.2 INTELLECTUAL PROPERTY RIGHTS
Creative ideas are a commodity in the game industry; every day, developers are
creating new characters, new storylines, new code, and new game designs, in the
hopes that these ideas will come together and create an entertaining gameplay-
ing experience. All of these elements are considered Intellectual Property (IP).
IP Rights legally protect inventions, symbols, and creative expression and can
be bought, sold, traded, given away, licensed, and so on, in the same way as tan-
gible property (like real estate). However, since an IP is an idea and, therefore,
intangible, it must be expressed in some discernable way to make it tangible and
protected by law.
Several basic types of IP are legally valid: copyrights, trademarks, trade secrets,
and patents. The differences depend on how the idea is expressed. Producers
should be familiar with the differences between these, especially independent
producers working with a publisher. If the publisher is interested in your game
and is ready to sign a deal, they will most likely demand that the copyright in
the game be conveyed to them so they can create derivative products and re-
produce the product free and clear. However, if you are a well-known developer
such as Peter Molyneaux or Wil Wright, you are in a better position to negotiate
with the publisher and are likely to retain the copyrights to your work.
Additionally, development teams must be careful that they do not include as-
sets in the game that are trademarked or copyrighted—unless the legal rights are
obtained to do so. For example, Coca-Cola® vending machines and Crayola®
crayons cannot be used in games without contacting the companies who own
these properties and finalizing a contract to use these rights. In some instances,
product placement deals can be negotiated with these companies that will ben-
efit both parties.
Copyrights
Copyrights protect an individual’s or group of individual’s original expression of
an idea into a tangible medium. Examples include literary works, musical works,
and sculptures. However, copyrights do not protect the actual idea or concept,
regardless of the form in which it is expressed. Only the actual expression of
the idea can be copyrighted. For example, you cannot copyright your idea for a
game, unless it is expressed in a tangible form, like computer code.
The good thing is that copyright protection is immediately in effect from the
moment the expression of the idea is made tangible; you don’t need to specifically
register the work with the copyright office in order to be protected. However, by
registering your copyright, you have access to all the legal benefits to enforce the
copyright in a court of law. Copyrights are governed by Federal law.
If you are an independent developer working with a group of people to cre-
ate a game that you will then pitch to a publisher, you need to have everyone on
the team assign the copyright to you or a common company, as the developer.
The publisher will take your company and game pitch more seriously if they
know you have already secured the copyrights and have the authority to turn
these rights over to the publisher.
Trademarks
Trade and service marks, both called trademarks, are identifying symbols,
words, or devices used to distinguish the trademarked good from other simi-
lar goods. For example, the Ubisoft logo is a trademark that distinguishes the
games it publishes from other games and the shape of a Coca-Cola bottle is a
LEGAL INFORMATION 63
64 THE GAME PRODUCTION HANDBOOK, 2/E
trademark that distinguishes it from other colas. Trademarks are governed by
Federal laws.
Trademark rights prevent other people from using a similar mark, but the
rights do not prevent others from making similar goods and selling them under a
different trademark. Thus, at the grocery store, there is a wide variety of orange
juice from which to choose, but it is all identified by different trademarks.
Trademarks must be distinctive so that they are truly capable of distinguish-
ing themselves from other similar goods. Some trademarks are stronger than oth-
ers and, therefore, more enforceable. The strengths of a trademark are judged
by a range of terms from weakest to strongest: generic, descriptive, suggestive,
arbitrary, and fanciful. Generic marks are weak and nondistinctive because they
use a common term that describes the actual item, such as “Coffee” or “Game.”
Generic marks are not protectable as trademarks.
Descriptive marks describe the function or intended purpose of the good,
such as “low fat” for foods that are low in fat. Again, these marks are not pro-
tected by trademark law, unless through extensive sales and marketing the marks
become closely identified with a particular good or service and acquire a second-
ary meaning, such as “Holiday Inn.”
Suggestive marks do not describe the good directly, but rather require some
thought as to how the term applies to the good. Suggestive marks are considered
distinguishing and are protected as marks. For example, “Primsacolor™” colored
pencils and “Memorex™” tape recorders. The trademarks suggest the function
of the good without describing the actual good.
Arbitrary marks are common words, symbols, and devices that have no re-
lation to the good they are distinguishing. Apple™ computers is a well-known
example. These marks are inherently distinctive and do not need to acquire a
secondary meaning when used as an arbitrary mark.
Fanciful marks are created solely for the purpose of acting as a trademark.
These are the strongest type of trademark and easily enforceable; examples in-
clude “Kodak™” and “Xerox™.”
Trademarks must be registered with the United States Patent and Trademark
Office (USPTO). Before registering, you may want to hire a company to do a full
trademark search to make sure that the mark is available. After you have submit-
ted the application, the office will determine whether the mark is unique and
register it if so.
Trade Secrets
Trade secrets are information that a company keeps secret and which give them
a competitive edge. Trade secrets cost money to develop and bring economic
value to the company that owns them. Trade secrets are governed by state laws,
and protection exists only when the information is kept confidential and cannot
be lawfully or independently obtained by other people. Examples of trade secrets
LEGAL INFORMATION 65
are methods, technique, and formulas, with a well-known example being the
secret formula for Coca-Cola.
Trade secrets also apply to commercially viable ideas, such as games ideas,
but in order to maintain the idea as a trade secret, it must be kept confidential.
This is where nondisclosure agreements (NDAs) are handy. If you want to
share your game idea with someone and still have it considered confiden-
tial, you will have someone sign an NDA before sharing the information with
them. See “Non-Disclosure Agreements (NDA)” later in this chapter for more
information.
Patents
Patents apply to inventions. Patents prevent others from making, using, or sell-
ing the invention for a fixed period of time, which is currently 20 years. In order
to obtain a patent, the inventor must fully disclose how the invention works,
including diagrams and descriptions. An idea cannot be patented. The invention
must also be new, involve an inventive step, and have a useful application. For
example, software patents can involve such things as operating systems, compil-
ers, graphics systems, and file systems.
Patents must be registered with the USPTO and are expensive to obtain.
Also, when the 20-year term has expired, the patent becomes public domain,
and anyone can make, use, or sell the invention.
4.3 LEGAL AGREEMENTS
Legal agreements are contracts between two or more parties that outline the
responsibilities and duties of each party to the other. As a producer, you might
be involved in negotiating the terms of legal agreements for external vendors,
publishers, and licensees. For example, you might determine the milestone
schedule and deliverable lists for an external development contract. This sec-
tion will give a general overview of some common legal agreements in which
you may be involved: employee/consultant agreements, work for hire, non-dis-
closure agreements (NDA), publisher agreements, and end user license agree-
ments (EULA).
Employee/Consultant Agreements
Employee/Consultant agreements are used by independent developers to ensure
that everything the development team works on is wholly owned by the company.
Essentially, each person on the team signs over their IP rights to the company.
This means the company has the authority to sell the IP rights to a publisher,
which will make your company more attractive to prospective publishers.
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