Maryland Bar Bulletin
Publications : Bar Bulletin : September 2007

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Like many independent filmmakers, the video game developer is often all about the artistic vision, with business plan to follow. Also similar to film production, video game development is a collaborative effort. Game designers, artists, writers and programmers work together as a team to develop a new video game. Developing a first-class demo of a new video game title can easily take a year or more and require a substantial financial investment. Failure to secure title to the intellectual property created by the game development team, or secure licenses to use third-party IP incorporated in the game, can result in disputes, missed deadlines, increased development costs and lost opportunities.

For game developers, copyright is king. All of the artwork, scripts, music, sound recordings and computer code created by or for the developer are copyrightable game elements. Under U.S. copyright law, each of the creators of such elements can be a joint author and potential co-owner of the video game unless their rights are effectively conveyed to the developer.

When intellectual property is created by employees, vendors or even volunteers, the developer must ensure that it acquires from each the rights it will need later. Suppose a developer engages a freelance programmer to write code for the video game pursuant to a written contract that provides detailed specifications for code deliverables but is silent on copyright ownership. In that case, the programmer would own the copyright in the code, and may re-license and reuse that code for other customers, including other game developers. The default rules under the U.S. Copyright Act, which apply when no written agreement expressly addresses copyright ownership or exclusive license rights, give specific and often unanticipated rights to independent contractors. A copyrightable work may be created “for hire”, but unless certain specific statutory requirements are met, it is not a “work-made-for-hire” under the U.S. Copyright Act, and as such, copyright would be retained by the contractor.

With certain exceptions, the “author” of the work is the copyright owner. Accordingly, the person who writes code for the game owns the copyright, unless the code is created by (a) an employee within the scope of his or her employment, or (b) an independent contractor pursuant to a written contract that specifically assigns copyright to the contracting party. If an employee is hired by the developer to write code, the developer/employer automatically owns the computer code as a work-made-for-hire and is considered the statutory “author” of the code under U.S. copyright law. If a contractor writes the code, the copyright must be assigned in writing; otherwise, the most that is conveyed is a license, the scope of which may be subject to later debate.

Copyright concerns are not limited to ownership of newly-created content. Copyright issues arise when third-party materials such as images, plot lines, characters, music, sound recordings and computer programs are incorporated into the video game. It is essential that the developer own the original elements of the game and also confirm that all non-original game elements are either in the public domain or properly licensed from the intellectual property rights holder. All intellectual property rights in game content must be assessed early for rights clearance issues, and ownership or usage rights secured before investments are made. It is far preferable (and much less expensive) to seek permissions and negotiate licenses in advance, rather than be forced to respond to a cease and desist letter, or negotiate a license after the investment has been made (and options to substitute other materials are limited).

While copyright ownership is coin of the realm for the video game developer, it is just one of several forms of intellectual property that must be considered when developing a video game. Ultimately, the game’s commercial viability will depend on the acquisition or clearance of rights in all game elements and associated IP sufficient to satisfy the requirements of the eventual publisher. The publisher will require the developer to warrant that worldwide distribution rights can be exploited without infringing patents covering functional aspects of the program; trademarks covering the title of the game, character names or logos; rights of publicity of persons depicted in the game; copyright in musical compositions and sound recordings incorporated in the game; or rights claimed by vendors or contractors on the developer’s team that did not assign intellectual property rights to the developer.

Without attention throughout the development process to the intellectual property issues inherent in video game development, it is possible for a visionary video game developer to invest substantial time and resources in the development of a first-class video game demo that cannot be published owing to a cloud on the chain of title or rights clearance problems. Fortunately, a developer that considers intellectual property rights issues throughout the development process may be fortunate enough to see his or her artistic vision become a gaming reality.

E. Scott Johnson is Chair and Jonathan M. Holda is an attorney in Ober | Kaler’s Intellectual Property Practice Group, which represents video game developers and other clients in the entertainment, media and technology fields.

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Publications : Bar Bulletin: August  2007