The Law of Ideas in Game Development

[Music] So about this talk, not to flatter myself or anything, but if this is not the most important talk you will hear, here we go. If this is not the most important talk you're going to hear at this conference, this is certainly the most relevant. There is not a single aspect of game development that does not touch on IP. So to that extent uh here we go. So as far as who I am uh I work with Interactive Entertainment Law Group. We are based out of Elsa Gundo, California which is quite nearby. Um and we represent game developers almost exclusively. Almost all of our clients are interactive entertainment clients. I mean we have independent developers, we have publishers, we have uh you know just designers in and of themselves but we represent all aspects of of the game

development community whether it be mobile console uh digital sales uh straight to PC. So this is what we do. This is our stock and trade and almost everything that we do involves IP transactions. So that includes licensing which is something that we're going to go in quite a bit here. So this is just to give you an idea of what we are going to cover. First I'm going to give you kind of a summary of what intellectual property is. I'm going to try to let the slides speak for themselves and just harp on the points that you need to take away from this. Otherwise this talk could go on for about five or six hours and nobody wants to deal with that. So uh after that we're going to talk about how to protect your IP and uh what your IP portfolio actually is so you have an idea of what it is you're trying to protect. So the first one uh the first thing that we have to take into consideration is going to be what are intellectual

property rights? What are these rights that we're talking about? And uh the one thing that you really need to to take away from this is that there is no straightforward answer when it comes to intellectual property. It's something that you can't really touch. You can't really get your hands on and quite frankly neither can the law. So there are a lot of um different considerations that that come into play whenever we're talking about intellectual property. And the most common answer you will ever hear to any question you ask of any lawyer is going to be it depends. I'm sorry. It depends. There is no yes or no when it comes to intellectual property law. So everything is going to be on a case- by case basis. And uh there are certain types of IP. Obviously I think most people are probably pretty familiar with the big three which is copyright, trademark, patent. These are the ones that we always hear about. It's part of the trips agreements. It's something that you see talked about every day when we

hear about, you know, trademark issues in the King case. Um, patent trolls, things like that. Uh, but there are also a lot of nonfederal IP issues that come into play and, you know, so the ones that don't really get talked about as much, although there has been some issues recently with the whole Oculus Rift trade secret issue. By and large, they don't really get as much attention as they should. And that's kind of a problem because when it comes down to cases, literally a common law case for a name and likeness or defamation issue is going to be just as costly and troublesome as a copyright claim. So it's important to bear in mind that the entire body of intellectual property law is something that you need to be mindful of. So first question is what is copyright? And you have the textbook explanation here. I just kind of want to briefly look it over. Uh the one thing that you really need to pay attention to here is that original does not necessarily mean

unique. Just because it's something that you've created originally, there is something called independent origin, which means that two people can create identical works so long as neither one has access to one another. There is no copyright infringement. So that's something to bear in mind. Original does not mean unique. And the other thing that you absolutely have to pay attention to with this is it has to be fixed. It actually has to be in in some sort of physical medium. You have to be able to physically touch it or see it or have some record of of your work. So what are copyrights? Like what this is kind of the plain English version of of of what copyrights are. Uh it goes beyond Eureka. Uh, one of the most dangerous things, one thing I hear all too often, uh, one of the most dangerous things a developer can say is, "Let me tell you my game idea whenever they haven't done anything with it." And the reason that

is is because there is no protection for your idea, especially if you're broadcasting it. Uh, there is no copyright protection. There is no trademark protection, but uh, you don't have any real protections for your ideas. So let me tell you about your my game idea is not something that you ever want to say as a developer. As far as the methods of fixation um as I as you can see you have books saved documents um as so long as you have some record of your copyrighted work something that you can submit to the copyright office if you decide to register uh you will be protected so long as it's obviously not infringing. it has to be for a legal purpose. So, that's another thing to keep in mind. If your work isn't in and of itself infringing, um you're you're probably not going to obtain the types of protections that you want. So, what copyright is not, as I said,

it's not your idea. It's a this is an issue that I have to harp on a lot because um this is the most common area where people get confused. It's like, this is my idea. They stole my idea. Isn't it protected by copyright? Well, no, it's not unless you've actually done something with it. Um, and even a treatment, things like that, like, and what I mean by treatment, if you're not quite familiar, it's basically like a summary, um, or, you know, like a design document. A good example, something like that can give you the requisite copyright protection that you need, but until you've taken your your work or your idea to that stage, you're not going to be entitled to the type of protection that you probably want. uh as far as what else it is, it can't be something that you can use and it's it can't be useful. It can't be um it can't be a product or service, for example. It has to be something that

is purely creative and useless in in in the simplest way to to put it. And I I don't want people to get confused by this. What I mean by that is that you can have creative components in a useful product. Um for example, the Coke bottle is a good a good example. The Coke bottle is a good example of a lot of things. Uh and and one of the ways is you know the actual design of the Coke bottle itself is separable from the um the function of the Coke bottle. So to a certain extent, maybe not copyright, but there going to be certain protections to that design itself that uh that you're going to want to that that you need to take into consideration whenever um so another thing, it's not perpetual. Um you do have a limited term. So 90 years from the life of the author, 120 years from publication.

Um, oh, what I was going to say about the usefulness, uh, a good example, probably the best example that we can talk about here is game mechanics versus the creative content of a game. So, the mechanics themselves are going to be considered there's always I'll talk about software patents later, but there's always going to be an issue. Mechanics are never going to be copyrightable because they they are a method. They are a process. They are something that is useful. Uh but the creative elements, the characters, your story, uh the world you create, uh the music that you use, these are things that are going to be copyrightable and they kind of make your work distinct, distinctive and they give you the copyright protection that you want. So what is copyright infringement? Uh there are a few forms of infringement and the requirements that I have here for direct infringement but you also have contributo and vicarious

infringement. A vicarious infringement typically revolves around having a financial stake in that infringement and contributo infringement uh involves actively facilitating that infringement. So it's a slightly different standard from direct. The direct infringer is the one who's actually doing the copying. the vicarious and contributo infringers. I'm sure you guys have probably heard of Napster and Groster. That's where we hear about these things. Uh that's where you're going to have your your vicarious and and contributo infringement. So, what are the rights you get whenever you get a copyright? Because it's not something it's not a property right. Well, it is, but it's not a physical property right. It's not like you get a deed or a title. uh it's not something that you can physically take a hold of and carry with you. It's intangible which is a problem in a lot of cases because unless you have some record of that intellectual property uh

it's difficult to prove. So as far as the rights that you get though obviously the right to reproduce uh the one thing that I really want you to take away here apart from derivative works just be mindful of what a derivative work is uh is moral rights and author's rights and I say that because um they are not commercial and they tie directly to the author. So even if you have a work for hire agreement for uh for instance if you're outsourcing to uh another company to do some some work product for you or if you are you know contracting with an independent contractor based out of Europe uh they're going to be a body of rights that those individuals have that even if they have a work for hire agreement with you which is something that we go into in licensing um you can't get rid of those rights. They're difficult to to wave away. They're difficult to to push away in any

way. So, you need to have some sort of workound in your agreements uh that deals with those rights and and how to address them so that they can't come back later on and tell you, okay, well, we want you to pull this because we feel that it's uh it does not adequately represent what we we wanted to create. So, a couple of notes. Um, defenses. I I don't harp a lot on this because at the end of the day, you have to bear in mind that it's a defense, which means that somebody has to sue you first. And ideally, if you're a developer, you don't want it to ever get to that point. Uh, you never want to be the target of a of a lawsuit. But, as far as what defenses can be raised, as I said before, independent origin is a big one. Senapair uh is is is kind of another thing that you need to uh take into consideration and that's something that's really really common. It's it's

kind of common to a genre. So the example that you might want to say is like a zombie horror flick and you know the zombies like the way that zombies move and things like that can be considered Santa affair. Um and and that will take it outside of the scope of copyright protection. nominally uses this whenever a use is so minuscule that it's not really an issue. And there are also exceptions and every few years the copyright office re-evaluates these exceptions and adds new ones and the most recent ones this year happen to be parody and private copies. Note that these were not in the actual DMCA until this year. So while these usually fell under the purview of fair use and could be raised as a defense, now they fall squarely within the copyright exceptions, which means that you can't really bring a claim even if uh if it qualifies as a parody or it

qualifi qualifies as a private copy. Now the problem with that is that what is a parody and this is something that is highly disputed and it varies from from country to country from jurisdiction to jurisdiction circuit to circuit. Uh the EU standard of parodies is going to be very different from the United States standard of parodies because we have very different senses of humor. Uh but yeah, so again, this is where I have to say it depends. You don't know until it gets litigated. So, but it it is a clearly stated exception now. So, it's something that you can you can you know take to the bank with you if you if you do plan on implementing parodies in the way that you market your product or in the way that you execute your product. Moving on, we've got trademarks. Um, this is again the legal definition.

I'm not going to recite it. Uh, the easiest way to understand trademarks that it is your brand. It is how you market yourself. It is how people identify you in the marketplace. It is your logo. It is the way that your goodwill is reflected on the world. Uh and you have some examples here. Some really interesting examples are going to be things like sound marks and those are really fun. I did a talk on that uh pretty recently actually and uh it's interesting how much audio plays a role in how we recognize things like I had some examples like the Lord of the Rings music like things like that can um can qualify you for trademark pro protection. Some other things that are uh pretty useful are like trade dress. And the cool thing about trade dress is as far as your IP portfolio goes, is that it can cover a

lot of things. It can cover like the look and feel of your product. Uh the types of colors that you use, like your color scheme, which may not be original enough to qualify for copyright protection. It can qualify you for trade dress. So I have like I I represent a lot of app developers. I I spent a lot of time representing app developers when I started out and um a lot of apps are really really simple like stupidly simple but they're a lot of fun and people like them and uh they are very easy to infringe upon and you can't always claim copyright protection to some of this stuff because sometimes the only thing they seem to claim are going to be the mechanics and maybe some of the uh look and feel elements like the UI trade dress is a very good idea and and you know trademark and unfair competition law is a very good way to protect those particular elements that fall outside of copyright protection but you still want

to be able to you know send a send a cis letter out for so what is the trademark infringement standard and I also want to I I kind of want to point out that trademarks don't really have a term uh they exist for as long as you use them now they can be abandoned and the the typical term for abandonment is 3 to 5 years and I'm not saying this just for the US that is internationally um Egypt I think is 5 years but most other countries are about three 3 to five so abandonment just means that you're not using it in commerce and token uses don't qualify so you actually have to be actively using your brand in commerce for it to qualify for trademark protection it's actually is something that is like going back as far as uh what it is. The the really important thing to note about trademarks is that you actually have to be using it

in commerce and whether that means you're using it to market your product. Uh you have to be selling something under it essentially. And that doesn't necessarily mean that you have to earn a profit. a lot of people don't. It also doesn't mean that it doesn't apply to like nonprofits and things like that. Um, it when I say selling, it means that it has to be generating some kind of goodwill. That's how I like to think about it in terms of, you know, actually procuring uh trademark protection. Even if you're not receiving income from it right now, so long as you are marketing a product or service that is generating goodwill and that is generating um a a connection with your product or the thing that you're doing uh that can qualify you for trademark protection. So just registering your logo without actually using it or without actually creating that brand and marketing and

creating that affiliation between your product and the logo isn't going to be sufficient. And I'll talk about registration here in a bit. So what is trademark infringement? Uh like copyright infringement, it is it does kind of have a strict liability element to it and uh that is the likelihood of confusion standard. So, even if you even if you're not intending to infringe on somebody's mark, um you can still be prohibited from using your own mark in commerce because it creates that likelihood of confusion. And what that typically means is would the ordinary consumer look at those two brands like look at look at two competing brands or two brands that are in the in a related marketplace or or or competitors. would they be confused? And this kind of it is not related. It is not limited to strictly competing marks, right? Anything that um qualifies as

like a related class can create that problem. And now when we're talking about famous marks, when we're talking about Sony, when we're talking about Coca-Cola, when we're talking about, you know, Pepsi, um you have this other element of dilution and tarnishment. And dilution comes into play whenever even if it's not in a related market, if you use the brand name, it can be prohibited. uh and tarnishment is obviously you know certain kinds of disparagement or associating a product associating a brand uh with a product that might create some kind of disparagement to that product to that brand. Uh trademark law is not limited to just trademarks. It's part of the LAN act and so it it uh also uh implies certain levels of unfair competition. Unfair competition is exactly what it sounds like. It is

some kind of fraud, some kind of implicitly wrong act. Whether and and while there are legal standards to this, it is it is kind of vague. It is kind of somewhat open-ended as far as what constitutes as unfair. There are obviously some standards. It can't just be ordinarily like the things that happen during the ordinary course of business, an ordinary course of competition. Has to be kind of a step up above that. Um whether it be, you know, openly disparaging your competitor in a way that is untruthful. For example, like any kind of fraud is obviously going to implicate unfair competition. And then obviously, you know, counterfeiting goods, counterfeiting marks. And I raise unfair competition because the trademark act only applies to registered marks. So you don't get full trademark protection unless you've registered.

Now moving on to patents. Uh there are three different types of patents. The only ones that we really pay attention to are utility and design because plant patents literally mean like physical plants. And I don't know well plants versus zombies would not apply. But utility and design patents are very very relevant to the games industry. Um we see a lot of litigation coming out from various big names concerning utility patents, controllers, any kind of hardware that people develop. Design patents less. So a lot of people don't go in for design patents because there is considerable overlap between design patents and copyright and trademark. kind of protects some of the same elements and some of the same um infringement standards are used determining infringement standards are used. So trademark protection and design patents do tend to overlap a lot. Uh not many patent attorneys that I know

generally go into recommending design patents unless there is a a pressing reason to do so. Utility patents on the other hand are very important not just in if you decide to go into the business or if you are in the business of developing hardware but also if you are licensing hardware or if you are uh in the business of manufacturing such things uh it has to be useful. Um business methods actually are are patentable. uh so are to some extent software patents and I'm going to go into that here in a bit. Uh but the the key elements is that it has to be new. It it can't be something that's that's been created before. It has to be non-obvious to a person in that in that field and it has to be useful. So that's what so anything that is patentable is not copyrightable and vice versa. Those two are mutually exclusive.

And the uh I don't think the term for utility patents has changed. The term for uh design patents has however it used to be 14 years. It was 14 years for quite some time and just recently they added a year and I could not begin to tell you why. Just a heads up we don't do a lot of patent work. Uh, I have a sociology, social psychology double major, so I never will, uh, unless I go back to school, but, um, you have to have a scientific background in order to do that. Uh, but I do have enough understanding to kind of tell you when you might need a patent and and when patent infringement might be an issue. So there are some differences and at least as far as copyright goes for a design uh for design patent a lot like trademark it is kind of strict liability but also it doesn't require access which

is another element of the trademark thing. Uh way more overlap with trademark than with copyright. Give you some time to read these because it's kind of dense. So this is probably the most contentious issue for patent law in our industry and uh software problems are kind of problematic and um it it's not always easy to tell when a software patent applies. I don't really want to spend a lot of time talking about this because this this in and of itself is is worth a talk um and I just don't have time to start going down this road. But if you do have questions about the software patent issue uh obviously after you know after the talk uh

whenever we have some questions you can raise those. So what is patent infringement? Again you know you kind of have the strict liability thing. What I mean by strict liability is that it it's not intentional. A lot of federal a lot of criminal claims, a lot of you know torches claims, all of those require intent. You have to have you have to have a certain mindfulness to do that. Now mindfulness does come into play or or you know being aware of the infringement does come into play whenever you know what you're doing is wrong and you're doing it you know you're doing it um in bad faith because it plays into damages. Uh a lot of courts are obviously going to award punitive damages in the event that you are acting in bad faith. uh you can limit you while it is a strict liability tor and you know you can get injunctions imposed against you from doing it. You can limit

the the harm to yourself by showing that you know was an accident. Officer I didn't mean to to speed that. Okay. So moving on personality rights. This is kind of a fun area of the law because again it is it is kind of a it depends thing. It it literally changes from state to state and not just I mean just the names of of whether or not like name and likeness and appropriation totally interchangeable depends on the state you're in. Uh right of privacy less so intrusion is is kind of self-explanatory. Um there are a few overlaps but actually very careful distinctions between things like public dis public disclosure of private facts and false light

defamation. Uh a lot of it comes down to whether there is economic harm. Uh a lot of it comes down to whether it is more injury to the individual from a psychological standpoint. And that's that's kind of the difference between publicity rights and privacy rights in general. Publicity rights are almost exclusively economic and commercial. Privacy rights are almost exclusively you really hurt my feelings and you know you you caused me you know a lot of personal harm caused me a lot of psychological damage. As far as publicity rights go when I say it's commercial I mean that the person their stock and trade is their name. Uh you have like celebrities are a great example where name name and likeness issue comes up. Uh I actually was speaking with somebody yesterday about the Lindsay Loan um GTA case where she's claiming that um her name and likeness is being used in that

game there. And you know as far as raising the defamation issue, there's always defamation proof characters and we have an example of one right there. Uh but what is defamation? Uh the biggest thing I want you to take away from defamation is one, it has to actually be published. It's not something that you say to that person. It has to be something that you share with third parties. It has to be something that you publish. Uh and another thing is it has to be stated as a fact. So, it can't just be your opinion. You can have a really negative opinion about somebody. You can say some horrendous things about another human being. Um, provided you don't move into the threat category. Uh, you can say some terrible things about another person and so long as it's

couched in the uh in the form of of an opinion, there's very little anybody can do about it. Now, if you imply anything that even touches on a possible fact or assumes that something is true, then you trigger defamation. So, that's something that you need to be careful of. And this isn't limited to just how you say it because this isn't just limited to words. It's how you portray people. So if you're using uh a particular likeness of somebody in your game and you are portraying that likeness or that uh that that parody of a person in a way that implies that that person is actually like that to an extent that it it is disparaging. It is it can create you know some kind of commercial or psychological harm. um you run the risk of of being the target of a defamation suit. Honestly, the threshold issue is if they are pissed off enough to bring a legal

claim against you, it's it's already kind of a problem. As I said, you while you can't always be risk averse, um to the extent that you can limit creating these issues for yourself, you should. There are defenses obviously truth uh to that extent the whole defamation proof thing comes up you know if if somebody really is a horrible person and they have done horrible things and and you can show that well not much you can do about it. Uh, also consent. Consent is kind of a tricky issue because what constitutes incent consent? If somebody gives you um a license to use their name and likeness, how far can you go with that as far as a defamation claim is concerned? So, that's something that you need to take into consideration as well. Um, accident kind of a trickier issue in and of itself just because how do you prove

that it's an accident? I mean, you're you're saying how do you show that you did not know that it was false, right? How do you show goodwill? And then privilege. people like me can pretty much get away with it whenever we're dealing with a court proceeding but otherwise privilege is pretty limited. So trade secrets whenever I was talking about the worst thing a developer can do is let me tell you my idea this is where this kind of comes in. You can do that if you have something that is creating a trust between people as far as confidentiality. So, if you say, "Let me tell you my idea, but first sign this NDA." All good. What is a trade secret? The uh key takeaway here is it has to have economic value and it has to be something that you're actually keeping secret, which means that you're actually taking

reasonable steps to keep it from being disclosed to the public. The another thing to take away is that it doesn't have to be fixed. It doesn't have the same standards of um the same the same requirements that you have for copyright and things like that. And that's kind of why trade secrets are attractive. That's kind of why they're sexy because it's a lot cheaper than a patent because patents can run you, you know, anything from 25 to 40 grand just to apply. That and that has nothing to do with enforcement. Um, but trade secrets, all you have to do is just keep it secret and and try to keep other people from talking about it. So, what is trade secret infringement?

uh in every contract I've ever drafted and almost every single one has to contain a confidentiality provision or NDA. You have a you have a a thing that that triggers and and you have this with a lot of different provisions. You have this for like if you have a work for hire issue, you also if you have a work for hire provision, you also want to have an assignment. Whenever you have a confidentiality provision, you also have to have the exceptions. And the exceptions are basically, you know, what will not constitute infringement. And that's things that um have to be disclosed for like court reasons, like if if there's a judicial reason for it. Uh things that are disclosed by third parties or things that you already knew about prior to engaging or developing this trust. um things that are known by third parties and disclosed to you through that

channel so long as they are not also bound by confidentiality. There are certain exemp exceptions that uh that are going to apply whenever we're talking about um trademark infringement. One of the big things to bear in mind it has to be wrongful. It has to actually be you know doxing is a good example. any kind of hacking, things like that is going to is going to create that that improper behavior thing. We've been hearing a lot about that lately. So, it's something to keep in mind. Uh, and there's also, you know, that obligation of trust. There's that if you are subject to an NDA, if you and you need to check your employment agreements, you need to check your independent contractor agreements, master services agreements. All of these things are going to possibly create that level of trust that is going to expose you to risk if you decide to disclose this information improperly. So, moving on uh to the part that that we have fun with because this is pretty

much what we do. uh everything concerning my practice touches on your IP portfolio to some extent. So what is your IP portfolio? It is not just the IP that you have. It is not just the IP that you may be infringing on. It's all of your licenses. It's all of your uh documents relating to your to your licenses. All of your documents relating to your registration. It's your paper trail to a certain extent. It's also the intangible aspects of it. It's those rights that attach to those little pieces of paper that tell you you own this. Um, it is your bread and butter. And this is why it's important because at the end of the day, your IP is all you really have as a game developer. It is the it's your stock and trade. You may put

out physical products, but at the end of the day, what you're really making money off of is your IP. And that's why I said it's not the most important. I would still say that this talk is probably the most important. Yeah. Another thing that this this last point about work for hire agreements, bear in mind that it's not like whenever we hear about work for hire, you know, you hear about all the the the ownership transfers to the employer or the person who's commissioning the work, but that's not 100% true because there's there going there even as somebody who only does work for higher work, it doesn't mean that you don't have IP. I mean, you're still going to have IP. How else do you do business if you don't have a trademark? If you don't have uh goodwill generated by the work that you're producing. So that's an intangible asset that makes it proprietary that makes it IP.

So So this is again like what is your what is your IP portfolio? Uh you obviously have the IP that you own, the things that you create, your trademarks, um trade desk, all of those all of those things that all those intangible uh components that that become a part of your business. Uh and also your licenses and not just the licenses that you have from third parties, but the licenses you put out are going to be a big issue. And why I say that is because it limits the value of your assets. So, we're talking about IP portfolios. You want to think of it as kind of like a registry of what you're worth. And a lot of that is going to be determined by what rights do you still have a hold of? Because all of these rights are severable. Like whenever you assign a copyright or whenever you give a license for a copyright, that doesn't necessarily mean that it's to all of your copyrights. I mean, they were

enumer enumerated before. it. You can just assign the right to publicly display it. You can just license non-exclusively um the right to reproduce it and distribute it, but not the right to make derivative works. So, where your value lies is what you still hold on to, how much what you're licensing out is worth, and how much you're getting back from it. and also your third party licenses. Whenever you have an exclusive license to something, it means you have the right to exclude others from doing it. So, if you get a license to make a Frozen game for the iPhone and it's exclusive, you are the only one who has the right to do that, which means that you won't have you should not have competitors for that same IP. And if you do that's that's the area of where we talk that's when we talk about

protection. So let's look at let's look at some of the licensing models that we have here. Work for hire versus a license. These are not the same. Actually they're kind of mutually exclusive. Work for hire is not an assignment. A work for hire implies that ownership originally lies with the person commissioning or commissioning the work or employing you to create this work. So it is a default in employment relationships. Um and it is a common provision in a lot of independent contractor agreements you may be required to sign. As I said before, you know, the moral rights issue does come into play whenever we're talking about work for hire because those moral rights are separable from the commercial rights that are owned by the company. Um, so at least in some cases that's not

always true. There's some workarounds to that, but by and large it's good to assume that the moral rights will always lie with the individual who's created the work. Anytime you see a work for hire deal or a work for hire provision, as I said, whenever I was talking about confidentiality, have those triggers, right? The trigger that you're going to find with a work for hire is going to be an assignment because there are going to be cases where work for hire will not apply. Uh there's a pretty actually work for hire is very very limited according to the the scope of copyright and while um collective works are included in that which kind of covers in a lot of cases video games and things like that it's not conclusive. So for work for hire provisions, if you are the one, you know, for example, procuring this, you want to have an assignment in there saying that even if it doesn't qualify

as worth for hire, you still have those rights assigned to you and you're still the person who owns the rights, you own the property. If you are the one who is being hired, if they don't have it in there, you just kind of want to be quiet so you can come back for it later on if they decide not to pay you. Just happened several times. Uh there are a lot more benefits to a license. However, at least from the standpoint of the contractor or uh the the the IP owner, the person who's creating the work, a license gives you a lot more flexibility. Um it enables you to you know sever rights as I said or or you know parcel out certain properties work for hire like from a statutory perspective seems really only applies to copyright. There are some trademark and and patent uh considerations for that as well. The actual term of art work for hire it originally comes from copyright.

I think it's been co-opted by some other areas of intellectual property, but it originates with copyright. You have a lot of different license types. Um, obviously exclusive, non-inclusive, whether or not somebody else can use the work in addition to, you know, other people. The thing about licenses is that you can handicap people. You can totally handcuff them from from their ownership rights. So to the extent that a license is exclusive that means that even you don't have the right to use it once you exclusively license something. So why is portfolio management important? First and foremost you need a paper trail. You need to document everything. And this is going to be important from a business audit standpoint. Um uh anytime you mean just like doing your taxes, this is something that you need information on uh because it it directly

relates to your company's value, right? It directs to your profit margins. It directs to your budget. Having these assets and having a record of these assets is mandatory. Um as I said, it's your primary asset asset. this is what you are building your trade on. This is what you're building your game around. Uh and there are times whenever you absolutely need to show ownership. Uh you are going to find this a lot in whenever you're getting venture capital or trying to get funding for your game. Uh you're going to find this whenever you hopefully or maybe not hopefully a lot of people are against this concept, but if you are in the luxurious position of getting bought out, we've had quite a few deals where a a good part of our due diligence relates specifically to um your IP assets and what licenses are where, what

you've licensed out, what you have licenses to. um you know all of your registrations have to be in place. Chain of title becomes important. Uh typically you hear the the the term of art chain of title whenever we're talking about real property. It also applies to intellectual property and that is the chain of ownership um and any kind of third party IP that you uh have a right to as well as any IP that you've developed and who you've licensed it out to. So chain of title becomes very important. Also, if you get errors and omissions insurance, which I actually highly recommend if you are putting out a game and it's it's seeing some kind of economic success, it will cover you for most IP claims, which may not always be covered under your typical commercial insurance standard. Uh, so it's something to to keep in mind. And if you are going to get that insurance, you need to have records of ownership for your um for your IP for

your portfolio because that's that's what's going to be protected. Anything that you don't have a record of, anything that you don't have in writing falls outside of the insurance scope, which is a problem. So, how do you protect it? It's fairly simple with copyright because it costs like 35 bucks, right? And then if you if you have an attorney do it because it it can be kind of confusing at times. Um you know it's it takes like an hour a couple hours work if that. So and we ship it off to a parillegal. It it's not it's not a difficult process to get your copyright registered. So you have no excuse for failing to register your copyright. And it's what's more it does it gives you that paper trail that you need. it. You also I would also recommend when if you do license out works or if you do procure a license an exclusive license you register that with the copyright office as well because that also shows your chain of title. It also shows a record for that and you can you don't

just register the copyright in and of itself. You can register those add additional documents and you can do that with trademark patent uh copyright all of them. Uh so some of the benefits of copyright protection, it doesn't entitle you to money damages that you wouldn't get if there is no actual financial harm or if they didn't see a profit from the infringement. Um and you also cannot sue anybody until you're registered. But by and large, I still say having a paper trail in general and having having that in writing is really important. So protecting your trademark uh you don't have as I said before you don't have trademark protection until it's registered. You have unfair competition protection to a certain extent but that is vastly less secure than what you're going to find under the trademark act. So the only way to get trademark protection is by registering. Certain

states also have uh trademark protection to a limited extent. So you can register with the state as well. But uh for for the real, you know, meaty trademark issues, you want you want to register with the US PTO. Some of the benefits is three times statutory damages if somebody counterfeits your work and if you can show that it's in bad faith. Uh this is something that I like to threaten with whenever I send out cease and desist based on those apps that I was mentioning before. uh if it was like a really really popular app and it's pretty obvious that somebody just directly ripped it off and changed the color scheme, just say it's a counterfeit and therefore entitled to three times monetary damages for any potential loss profits or any profits that they've made from it. Um, also if you have a registered mark, it becomes incontestable. And what this means is that I think it's like after 5

years of being registered, it becomes very difficult for somebody to come after you for infringement based on based on your trademark or for likelihood of confusion. At that point, you have obtained enough of a position in commerce, provided you've used it continuously and provided you can show that use, you have achieved that level of protection where if somebody comes after you based on your registration, uh the it's it's going to be pretty much ignored. It's going to be very difficult to push the the burden shifts entirely on the plan. Also, uh, anybody who's going to be registering a mark or or typically anybody who's going to be coming after you for trademark infringement, um, they're going to have access to the pto.gov website. So, uh, they this kind of puts them on notice if they do if they do if doing a USPTO.gov

search is extraordinarily simple. You just type in the mark. Not that hard. So it'll pull up identical marks. There there are other search parameters that obviously come into play whenever you're actually trying to register a mark. Um Google is also a good resource for this. But for the registration itself for for protection purposes, it does put people on notice that you that you are the rifle owner. Protecting your patents like trademarks, the only way to have protection. There is no such thing as an unregistered patent. Uh you can have an applied patent. You I mean you can have an apply for patent which can give you some limited protection as far as patent pending but uh as far as a a patent that has not even been applied for doesn't exist. You have trade secrets for that.

Uh and speaking of which, how do you protect your trade secrets? Um confidentiality provisions as I mentioned before. Uh non-disclosure agreements are or part for the course. The biggest thing though is because all of these things are kind of worth the paper they're written on, right? The the big issue is going to be what are you doing to protect that information? What are you doing to protect your information? Obviously creating these relationships, we're m we're creating we're creating that confidential relationship is very very important. Um but you need to also make sure that people cannot improperly get that information. You have to do what you can to prevent people from being able to dox that information. You have to keep it uh from being published. And doing that, you know, it typically involves taking proper security measures, password protecting things, uh making sure certain things are under lock and key, not telling your employees about it

unless they absolutely need to know about it. And these are things that you're also going to want to include in your confidentiality provisions. You need to be very specific about what is protected under your trade secrets, which is kind of it seems counterproductive because you actually need to provide a list of what is covered under trade secret like what you are treating as a trade secret. Um because that makes it that much clear that that relationship exists. This is what it applies to. Uh so as far as you know the trade secret issue and the documents that you need um your licenses must always be in writing. Uh there are lots of like clip licenses and and things like that where people say oh yeah sure go ahead. A really good example of this is like the King's Quest um Activision issue with uh Silver Lining. If you guys are familiar with

that title, it was an independent title for the King's Quest series. If you guys don't know what King's Quest is, I'm very, very sad and I'm going to feel very very old, but it is one of the best games ever. Best series ever as far as I'm concerned. But uh so originally, you know, basically what it comes down to is that Activision just kept waffling on whether or not these guys had the right to do it. And the problem is that they never really like the the company never really got anything in writing. Uh so this is why stuff like this is important. If you if you do get if you do get permission, you need to make sure that you can prove that you have permission to do it. That includes non-exclusive licenses. Uh obviously, you know, if you guys are not sure what a master services agreement is, it's kind of like an independent contractor agreement except it covers all of your work and not just,

you know, one one statement of work. It covers you all future work orders, things like that. It's kind of like a a parent contract to all of the future work that you do for that client. Um, you obviously want to have make sure that you have a a pretty straightforward employee policy like employee handbook that stipulates what is confidential, how confidential information is treated. Also, intellectual property in general, what they can take home with them or what what they can consider their own IP and what's protected there, what kind of work they can do outside of the workplace that does not belong to you. And vice versa, if you're an employee, if you're if you're contracting with this other company, you need to kind of know if you are working for multiple clients, is there going to be any bleed through between those agreements, right? Like is the work that you're doing for one client going to uh fall under the ownership claims of another. Um so these are things that you kind of need to pay attention to and why having

something in writing and why understanding what's in writing is really really important. And with that, so I have four minutes, five minutes for questions. So if you guys have any questions, do you have to patent a game? You said game take two years to get approved. Okay. He's asking if you have to patent a game. No, very rarely. Now there are, as I said, like there are software patents and things like that. Absolutely not mandatory. There's a lot of question as to whether software patent should even exist. Um, a lot of people are really against it. Patenting your game is very rarely even an option unless we're talking about mechanics and rule sets because so much of a game is going to be creative, right? It's going to be entertainment. Uh, your story cannot be patented. Your characters cannot be patented. The music that you have cannot be patented. your color scheme. Well,

unless we have a design patent cannot be patented. So, uh so no, a copyright will will generally protect you with with regard to the actual game itself. You would register typically either you can register the literary work uh which would be a portion of your code. It's like 25 the first the first and last 25 pages of your code or uh audiovisisual work which is a copy of the of the physical game itself. Yes. developers, development studios that close down, not necessarily acquired or bought by anybody, but just decide we're out. We're going to shut the company down, but we still own IP or have licenses that we own. How do you transfer that? Okay, he So, he's asking what happens whenever a studio shuts down and actually this is typically handled in the winding up provision of your uh if you have an operating group. It depends on if you if you're an LLC, you would have an operating agreement. If you are

a a CC corp or an S corp, you'd have bylaws. That's something that would be handled in in the winding up provision of your agreement. If it's not, it should be. And essentially you can either cut your losses, try to sell off that IP and um you know sell it to third parties or you can have it transfer to the individual owners. That IP is always going to exist. Someone is always going to own it. And you know when when it comes down to winding up, you know, if whatever your operating agreement says about assets will apply to your IP if it's not if it's not expressly handled in the agreement itself. Does that answer your question or or I'll get your part. Okay, sounds good. Yeah. Again, that kind of again it depends, right? Like it's very much an it depends situation. Okay.

There's no there's no real solid answer I can give you with that except for like the default depends on your agreement. Other questions? Well, if you have any specific questions because that seems to be what typically happens when I give a talk. Uh by all means do approach me after the conference. I'll be in the winding up room. So I that's it for me. Thank you. [Applause]