OGDE Wrap Up

RossThis past weekend Suzanne Jackiw and I participated in a video game law panel at the Ohio Game Developers Expo. We were joined by Andrew Trafford, of Porter Wright LLP, and Chris Volpe, of Multivarious Games. Together we discussed a wide spectrum of legal issues in games. Business planning, capital raising, trademark, trade dress, patent, copyright, constitutional law, and the right of publicity were all covered in brief and at the speed of 100mph.

Talking fast left a lot of time for audience questions and that was probably the best part of our presentation. We were truly blessed to have an engaged and enthusiastic audience. They put our knowledge to the test and let us know what legal issues are most important to people making and playing games. It was amazing how many people from diverse disciplines and backgrounds were at OGDE. Artists, musicians, programmers, and even engineers traveled to Columbus to share their appreciation of video games and play a game of “stump the law students” with us.

OGDE was a very unique experience. I’ve been to many conventions and expos but I’ve never experienced the same sense of belonging and community I felt this weekend in Columbus. Speakers and attendees stuck around to hang out after hours and get to know each other rather than bolting for their hotel beds. There was a midnight screening of The King of Arcades at Studio 35 hosted by Walter Day. There were games to be played (and many things to drink) at the local barcade 16 Bit. There was even a late night shindig at (secret) Arcade Super Awesome.

Whatever the venue, the scene was the same. Men and women from different backgrounds, home towns, and life paths were embracing their similarities and transcending their differences. It was no small feat to be sure and it brought a smile to my face. With all the dissent and controversy that has permeated gamer culture lately it’s reassuring to know that those differences could be trumped by what created this community in the first place: a devout shared love for games.

Special thanks to Chris Volpe, Andrew Trafford, Mike Geig, Walter Day, and of course my esteemed colleague Suzanne Jackiw.

ogde-logo

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Ross & Zed Talk Games: Releasing Unfinished Games

Suzanne Readers!

We’re back from the Ohio Game Developers Summit and we had a blast. It was fantastic meeting and speaking to so many of you and I’m hoping those of you I didn’t get to speak to will reach out. You all seemed like an amazing group.

In other news, Ross from Loading Law and I got together again to talk about law and games. This time we chatted about what impact releasing unfinished games has on consumers and major publishers. Let us know what you think in the comments!!

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Cancelled

SuzanneI hear quite often that patents aren’t something the software side of video games should worry about – patents aren’t applicable and patent litigation is rare. This is false.

Since December 2012, McRO has filed patent infringement suits against Capcom, Naughty Dog, Square Enix, Disney, Treyarch, EA, Sega, Obsidian, Konami, Namco Bandi, Shiny Entertainment, Sonic Team, Incomniac, Viceral, THQ, Valve, Atlus, Tecmo Koei, Ubisoft, Deep Silver, Sucker Punch, Infinity Ward, Activision Blizzard, LucasArts, Codemasters, Sony, and WB, among others. Since McRO does business as Planet Blue, an effects company, it does not fit the definition of non-practicing entity, so frequently touted as proof of being a troll; but, some still claim, due to the sheer number of lawsuits that McRO is a troll.

In some cases, the defendants in these litigations have settled. THQ settled for $600,000 in 2013. Other defendants have chosen to see their cases through, a long and expensive process. Even if a company wins a patent infringement case, that company will not recoup lost time, attorney fees, or anything lost in pursuing the case. The best outcome a defendant can hope for is a cancellation of the patent under the Supreme Court “Alice” decision.

On September 25, 2014, that’s what Activision Blizzard got through defending a patent infringement case against McRO.

The district court invalidated McRO’s patents, which covered methods for animating 3D character faces, sighting that the claims were more related to abstract ideas than inventive concepts. Since patents must be inventive and cover specific methods to be registerable, the judge ruled in favor of Activision Blizzard. Activision Blizzard’s legal team was naturally pleased with the decision, saying: “Meritless patent cases such as this stifle innovation and the creative process across the industry.”

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Protecting Your IP at Petal Et Al.

Sam sprite forwardThis Saturday, I’ll be speaking at an event put on by the fine folks at Petal Et Al.: Protecting Your Intellectual Property, Designing & Managing Your Game.  I’m up at 5:30, followed by Ron Williams, II of the Aurora Game Development Club.  Join us at 659 W. Diversey, Chicago, IL.

After the presentations, there will be a general meeting/hang-out of several indie game developers, so feel free to stick around, meet people, see what others are working on, and show off your own project, too!

© 2014 Sam Castree, III

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I Found a Great Artist on DeviantArt to Design My Character (or logo)—What Should I Be Worried About?

frontMyth: If I hire someone to create art assets for me, because I paid them to do so, I own the copyright in the end product.

This harkens back to basic copyright law. If you understand that, then you’ll understand who owns what when you’re making a game. Luckily, it’s pretty easy to understand.

Copyright Law Basics

Copyright law protects creative works set in a tangible medium, such as a canvas, on paper, or saved on a computer. The person who creates the work is the copyright owner because they are the one to put pen to paper, so-to-speak. They get that (copy)right (and protection) automatically, regardless if they register the work with the copyright office or not.

This means that if you have someone design a character, art assets, logo, music, dialogue, etc. for your game, without more, YOU ARE NOT THE COPYRIGHT OWNER. It doesn’t matter whether you paid them to do the work for you—without an actual document stating that they are assigning (legally transferring) their copyright to the work to you (in whole or in part), then any oral agreement or understanding you have does not make it an assignment. It may still not be enforceable even if they say something informally in an email, like ‘you get the rights to this’. They would still be the owner of the work, despite the fact that you already paid them, because they did not officially write down on paper (or digitally) that that they assigned their copyright in the work to you.

 A copyright assignment is one of those situations that actually requires a contract to be written to be enforceable (in most cases). It makes sense, though, if you look at it from the creative person’s point of view:

Say you are an author who wrote a bestseller and are pitching it to a publishing house. Say, then, that the publishing house wants it, but doesn’t want to pay the author for it. The publishing house then says that “there was an oral agreement that Author transferred all his rights in the book to us, so we can publish it and make oodles of money off it without paying him.” How fair would that be to the author if they didn’t actually or intend to transfer the rights?

Thus, to protect the rights of creators everywhere (in the USA, anyway), the law is that whomever created the work owns the work, unless otherwise agreed to in writing. That writing also does not need to be registered with the copyright office, but goodness knows that never hurts your legal rights.

To further illustrate, I shall give an illustrative illustration illustrating my point (click to enlarge and see my mad drawing skills):

 

copyright comic

That’s right – even if you did all the legwork to get the right scene, framing, lighting, designing, etc. – the person who actually clicks the button owns the work—even if it’s your camera (or computer)!

NOW—that’s not to say that an artist who makes a rendition of your character owns YOUR CHARACTER. No, the artist merely owns the artwork they created. But, unless you both work out an agreement as to the distribution of that piece of artwork, things could get messy.

MOVING ON. Yes. Your character, in your game, is still your copyrighted work, although that particular drawing of them would not be, unless your artist signed a copyright assignment (or license–more on that in a bit).

 What is a Copyright Assignment?

A copyright assignment is a contract which transfers the rights the creator has in the work to another person (or company).

An assignment can be exclusive or non-exclusive. An exclusive transfer means that all the rights (listed in the next section) are transferred, and the person receiving those rights is then effectively considered the legal copyright owner of the work, and all previous ownership of the work does not matter. An exclusive transfer must be in writing (discussed below) and signed by the copyright owner (the person giving away the rights).

A non-exclusive transfer doesn’t necessarily require a written contract (meaning oral agreements could be binding).

 What Can Be Assigned?

Copyright law tells us that there are six copyrights in a piece of work—all of which may be assigned (or licensed) separately or together. Or in pairs…sequences…combinations…you get the idea.

 The Bundle Of Rights in Copyright Are the Rights To:

  1. Reproduce/Copy the Work

  2. Make Derivative Works (e.g. games based on other games/books/movies/etc.)

  3. Distribute Copies (sharing)

  4. Perform the Work Publicly (e.g. YouTube, concerts, ballet, poetry readings)

  5. Display the Work Publicly (e.g. galleries, movie theaters, book stores, video games etc.)

  6. Perform the Work Publicly for Sound Recordings (specifically digital audio transmission)

Any one, combination, or all of those rights can be assigned. If you’re planning to use art assets (or a logo) in your game which were created by someone else, you may want to consider asking for an all out copyright assignment. Remember, however, this is not legal advice, but merely something to consider when commissioning a piece of work.

While a copyright assignment is a relatively simple document to create, there are many levels of protection which can be included that would very strongly benefit you in the event of a legal battle, but also could make the artist balk and think twice about the amount you paid them. If you ever feel unsure about something like this, it would be a great idea to consult a lawyer about it—the lawyers at New Media Rights, for instance, frequently draft these.

Common copyright assignment pitfall: you realize only after the fact that

1. You needed an assignment, and

2. You’ve already paid them and received the work without one.

This is not the end of the world. Assignments don’t NEED to happen at the time of exchanging the art for the payment, although it’s a really good business practice to do it then. If you find yourself in the situation where you realize you probably need an assignment, but don’t have one, just ask a lawyer about drafting one up for you, and discuss with them the potential issues you may face (e.g. your artist may want more money, they may be cool and just sign it, or you may not be able to ever get a hold of them).

In the event you can’t get a hold of them, and you can’t get an official assignment from them, all is not lost. Most likely a court would find that you have, at the very least, a non-exclusive license to use the work in your game as agreed upon in your communications (oral or written).

Copyright Licenses

In its most basic form, a license is legal permission to do something.

Licenses are used in the creation of video games all the time. Music is a great example. Unless you have the money (or talent or time) to create music for your game, it’s often easier just to pay the licensing fee to get permission to use the song in your game. The same could be said for art assets, and possibly logos.

In the event that you can’t get a copyright assignment from your artist, but you NEED to use their art in your game, you may have to consider just getting a license from them, which is a right to use the work in exchange for a fee (it could be one-time, recurring, royalty-based, etc.). In the situation above, where you couldn’t get a hold of your artist, it would likely be assumed that you have a license to use the work as agreed (but not beyond that agreement).

A big issue with licenses is the scope of the license (the permitted uses you have with the work).

With licenses, you may only use the work within the scope of the license. If you go outside the scope/limitations of the permitted uses for that work (e.g. you try to sell it at Comic Con under your name), you could find yourself in breach (violating the terms) of the license.

A frequent problem game devs have with licenses is that the license doesn’t include the magic language that will adapt the agreement to technological advances (like new consoles or streaming) or unforeseen uses (like using for military training or in conjunction with ballet…or something that makes sense).

For example, say you get a license to use the work and distribute your game for console X. Great! Congrats! But, if you don’t have anything in the agreement with regard to console Y, and console Y is now an option for you to expand your market, you’ll have to revisit your license with the artist to negotiate the use of their work on console Y, which would likely include a new licensing fee.

One final note: remember, these theories of copyright ownership apply to everyone you have working for or with you on a game, not just artists.

It includes your best friend, that weirdo code monkey you hired five years ago, and those voice actors you hired (even if they’re your siblings). Be mindful about who is creating what, and be sure you have the paperwork together in the beginning, so that people don’t get ideas (or hurt feelings) later on down the road.

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Amazon and Microsoft Pay Big For Twitch and Minecraft

RossThe video game industry has experienced some surprising and high profile business acquisitions lately. The summer started strong in May with rumors of Google purchasing video game streaming giant Twitch. By August, gamers and financial analysts alike were equally surprised when news broke that it would be Amazon, not Google, purchasing Twitch. The price? 970 million dollars. Cash.

Then, just a few weeks ago, Microsoft decided it would follow suit in using deep pockets to gain an even tighter grip on the gaming industry. Microsoft announced it would be purchasing Mojang, the developer responsible for immensely popular title Minecraft, for 2.5 billion dollars. It’s been an expensive summer.

It’s not that exorbitantly expensive mergers and acquisitions are uncommon in this industry. Square and Enix merged in 2002 for over 764 million dollars. Electronic Arts bought Bioware/Pandemic in 2007 for 860 million dollars. Last year Activision Blizzard even bought itself out for 8.2 billion dollars. The video game industry spares no expense. However, understanding why a certain game, developer, or platform is worth a fortune is the name of the game, and what makes the recent Twitch and Minecraft purchases so intriguing.

Read more at Loading Law…

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No Laughing Matter

Sam sprite forwardEditorial time.  Yesterday, I was at a legal conference.  One of the presentations was about data privacy, and, as an aside, the presenter mentioned a few recent purchases by big data aggregators, including Twitch.tv being courted by Amazon.  Then the presenter said the following (which is paraphrased, based solely on my memory): “For those of you who don’t know what Twitch.tv is, it’s a website where you can…watch other people play video games.”  His tone after the pause, when he said “watch other people play video games” was kind of embarrassed, and maybe even apologetic.  The crowd, made up mostly of middle-age-and-older legal professionals, then broke into incredulous laughter.  I, on the other hand, was rolling my eyes at the crowd, rather than at Twitch TV.

Plenty of other people have made the points that I’m about to make, and I’m sure that I’m not going to break any new ground.  Still, it needs to be said.  Why are video games seen as this quasi-embarrassing thing?  You’d never say something like, “For those of you who don’t know what The NFL Channel is, it’s a TV station where you can, *sigh* watch other people play football (I know! I’m sorry for bringing it up!).”  At least, you wouldn’t say it in hopes that someone would take you seriously.  Similarly, I’ve never heard the Indy 500 derisively described as “watching other people drive a car,” or the Olympics as “watching other people play in a swimming pool.”  No, we take these things very seriously. Likewise, people can wear a basketball or football jersey out in public, and no one will pay it much attention.  You could even wear a shirt that features your favorite movie or TV show, and that would be fine.  But if you wear, say, a shirt with Pikachu on it, and are no longer in grade school, people just might give you funny looks.  And when I explain what my Ace Attorney badge is (a replica of the attorney badge from the video game Phoenix Wright: Ace Attorney (and yes, I wear that to court and to professional meetings)), I’m not surprised by the blank stares; honestly, I never was.  Which is the problem.  Or just compare these two statements: “Who would ever want to watch a movie on the Internet?” vs. “Who would ever want to watch a video game on the Internet?”

Well, you know what? I like watching other people play video games.  Even besides the practical utilitarian aspects – like seeing a game in action and deciding to buy it (or not), or hanging out with friends in other parts of the country (or other countries entirely) – I still find it interesting to watch other people playing games.  Paradoxically, I am often more interested in playing a particular game after I watch someone else beat it on Twitch.  Moreover, there are plenty of video games that are much more exciting than most professional sports and games.  The World Poker Championships are regularly broadcast on national television, so why not Street Fighter or Mario Kart tournaments (which are way more interesting than poker)?  I like baseball well enough, but watching baseball isn’t very exciting much of the time, even when the players are very talented.  On the other hand, watching a skilled player speed-running Castlevania 3 is a sight to behold.  A fellow called Zoast holds several world-records for speed-running Super Metroid, and he is incredible.

The worst part about all of this is that video games are clearly a mainstream medium.  Gaming is a multi-billion dollar industry.  Just about everyone is playing video games these days.  And clearly watching video games is a big enough deal if Amazon was willing to spend close to a billion dollars to buy Twitch.  Other countries have it right.  Starcraft is Korea’s national pass time (I’m really not sure whether that’s a joke, anymore).  Japan regularly has professional concert orchestras playing music from Mario, Zelda, Final Fantasy, and many other franchises.  And these aren’t fringe productions.  Japanese music stores have entire sections devoted to game music, and they sell rather well, from what I’ve heard.

So, in closing, there’s nothing wrong with watching video games.  Some games have better stories than big-name TV shows or movies.  Some gamers are more impressive than some professional athletes (I’m looking at you, golf). And if you like to watch golf for some reason, go for it.  I don’t, but I will not begrudge someone else doing so; nor for playing golf, for that matter.  In return, playing or even watching video games should not be a reason for mockery.  It’s time for people to give video games their due.

© 2014 Sam Castree, III

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I Want to Build an App for My Job and Sell It to Them—Can I?

frontI’m not a licensed attorney (yet), and none of this should be considered as legal advice–just general information.

A buddy of mine used to work as tech support for a software company which did not, at the time, have an app (he’s now in the dev dept. for the same company). He approached me and asked my thoughts about developing an app for the company, and then selling it to them.

My initial reaction? Of course not!

Obviously, he required a bit more explanation than that, so I figured I’d discuss it just a little bit here as well. See, my buddy thought that because he wasn’t (yet) in the development department, developing an app wouldn’t be within his job description, so he’d be in the clear for doing something like that and then own the rights such that he could sell the app to his company.

 

So, why couldn’t he? In brief, his employment agreement.

Granted, he never got me a copy of the agreement, so either he never found it and he just moved on, or he found it and read what I assumed he would find in it: a clause stating that he, the employee, agreed that any intellectual property he developed in relation to his employment would be the property of his employer.

Now, some employers—particularly those in the IP development industries—have much broader language (meaning it encompasses a lot more situations) that could include literally any intellectual property you develop, whether or not related to your work, on your own time, or with your own tools. Those agreements mean that the stuff you create would belong to them, and they’ll thank you for your hard work on their way to the bank.

When I worked at Barnes & Noble, there was similar, albeit far more limited, language stating that I agreed any intellectual property I developed at or for work would be the property of the company. Since I wasn’t into tech development, I couldn’t care less. But, it made even more sense for them to include it when I started because that was right before they launched the Nook eReader device. While it wasn’t specific to me, I know that they wouldn’t have wanted their employees, who would have access to the device and its software, creating competing products.

Myth: If what I want to create has nothing to do with my job description, my employment agreement doesn’t cover it and it’s my IP.

This is a toughie, because it’ll always depend on the language of your specific employment agreement. As game developers, you have a further difficulty in coming to a job with previously developed intellectual property, and that’s something you’ll need to address when reading over your development or licensing agreement. This applies both to whether you’re working as an independent contractor or as an employee. If you don’t know the difference, check out the video I did for New Media Rights on the topic here (2nd video).

As a developer, particularly in the app or games industry, you are frequently going to be entering into agreements with people to develop technology for them. In return for paying you to do that work, they will likely expect to be the owners of that end product or technology, because they need that ownership to function as a business—either for promoting it on their own or to sell it later on down the line.

Trouble arises when the language of the contract is vague with regard to PRIOR TECHNOLOGY or tools. Since you’re not about to reinvent the wheel every time you go work on a project, you’re bound to have your own tools and techniques to make work go faster so you can be sure to pay your internet bill on time. But, you want to be on the lookout for clauses in a contract that purport to grant ownership rights in literally ALL the technology included in the end product, as that could potentially mean that you’re giving away your rights to your own intellectual property (tools, software, etc.) to your client.

How to deal with it? You guessed it: ask a lawyer to look over you agreement and see if the phrasing creates any grey area in which they could argue ownership over your stuff in court. Phrasing like that can generally be negotiated out, unless the point of the agreement is that you’re developing the product like an engine or something for which they intend (and pay big bucks) for you to transfer your prior technology rights to them.

 Myth: No one reads the contract anyway.

Now, I know you’re likely too savvy to be swayed by this myth, but it bears at least a few sentences of warning (or, after having written it, a few paragraphs).

It can take months to years to finalize a contract, true. And it’s also true that after everything’s inked and signed, no one reads the dang thing because…well, because it’s an 80 page contract full of legalese! BUT…you know who does read it? The person looking for a way out.

It could be a client who, nine months and several hundreds of thousands of dollars in, realizes that their idea is complete crap and they don’t want to foot the bill for the rest of the project. That’s right, it could be that it has nothing to do with you, the developer, who has met all the milestones and even surpassed expectations. But, when one party (person in the contract) wants out of the deal, they’re going to have their lawyers scour the contract and find some loop hole or technicality (e.g. ‘all modifications must be in writing and signed by both parties’, and some weren’t) to get them out of the deal.

Then again, it could be that the client is difficult to work with, communicate with, or maybe they want to add on things which weren’t in the original deal, and are incredibly difficult/expensive to add. Oh, and, of course, they don’t want to pay extra for it. At that point, you may want to just cut your losses and move on to a better-looking gig that’s guaranteed to pay you. But, you’ll run into problems if you’re in breach (violating the terms of the agreement), so you’re going to want to know that your interests (and exit plan) are accounted for in the agreement, among many other things.

Finally, a jury or judge would be potentially a reader of the contract (or, more likely, an arbitrator). You probably want to avoid that when you can, since it’s highly doubtful that they will have any experience in your industry, let alone understand the trends or customs in which you conduct business, so they’ll only have the contract for reference. This is another reason to make sure it says what you want it to say.

 

Take-Aways:

  1. Read your employment (or development) agreement & see what it says about IP.

Especially for prior technology, if that’s an issue for you. If you work for a tech or software company, it’s highly likely that there will be broad language in there transferring rights to your employer for things you develop. It may be that you just wait until you’re no longer employed by them to make that project (depending on whether there are other provisions in there, such as a non-compete clause), because you don’t want to chance them owning your work.

On the other hand, you could also request to add into the agreement something like a list of your previous technology or intellectual property, so that it’s clear where the boundaries are of their ownership, at least so far as the IP you’ve already developed.

There are many ways to approach it, but the best way is with an attorney who will look out for your interests.

  1. Read your employment agreement for an exit strategy.

You may be surprised by what you agreed to way-back-when. Discuss with your lawyer about exit plans in the event something goes south so that you have a tolerable way out of the deal, as well as ensuring that you won’t be totally screwed if the other side backs out.

 

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