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):
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:
Reproduce/Copy the Work
Make Derivative Works (e.g. games based on other games/books/movies/etc.)
Distribute Copies (sharing)
Perform the Work Publicly (e.g. YouTube, concerts, ballet, poetry readings)
Display the Work Publicly (e.g. galleries, movie theaters, book stores, video games etc.)
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).
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.