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Starting an indie studio? This is your crash course on video game law

Starting an indie studio? This is your crash course on video game law

Choose the name of your game with care

The easiest problem to fix also happens to be the most common problem that New Media Rights sees: conflicts with names. Some background: in the United States, if you name your commercial product or service something confusingly similar to another related product or service, then you could potentially have legal trouble. Your game could get taken down from the app store, or you could receive a cease-and-desist letter telling you you can no longer distribute your game at all.

This is especially true of you give your game a name just to capitalize off of the goodwill of an existing more popular product. For example, if you want to make a game similar to Tetris, don’t call it “Tetriz,” don’t call it “Tetri Blocks,” and especially don’t call it “Tetris Plus.”

Even though truthfully comparing your game with existing titles is completely allowed, using another game name in your advertising tags just to get traffic could also become a source of legal trouble. More importantly, it could encourage one of these game companies to want to get your game taken down.

Naming products and services is governed by trademark law. Since probably half of the developers who come to us have a trademark problem, we dedicated a whole 18 minute LAGD episode to trademarks.

Is your game company actually a “company” or just yourself and your own personal finances?

Indie game projects are often staffed by a motley crew of friends/Internet acquaintances/strangers. Your programmer and artist may be local, while your sound designer may live in China. Some people may be paid, and some may be volunteers. At the end of the day though, you all proudly call yourselves: Indie Game Company Name.

You put up a website: indiegamecompanyname.com . You print business cards. You get a bunch of hats and other swag with your name on it to give out at PAX. How exciting! Congratulations.

But even with all of this sweet swag, Indie Game Company Name probably still isn’t an independent entity in the eyes of the law. Every state has slightly different rules about this, but the general rule is that your game project is considered a “general partnership.” A partnership is a collection of people, not an independent entity in itself. This means a whole lot of things in terms of taxes, but it means two very important things that I’ll explain here:

Everyone who can control a commercial project and share in the profits is a “partner.” Each partner is personally responsible for the “torts” (intrusions to property) and contractual obligations or debts that other partners enters into.

This is an enormously complicated discussion, but let me hit some highlights of what this could mean for you in the real world:

A. Torts:

If your sound designer punches your artist during a meeting, you (the programmer) could be responsible for the sound designer’s medical bills as if you punched him yourself. If your artist drops a computer on your sound designer’s toe and breaks it, you could be responsible for your artist’s carelessness out of your own pocket.

B. Contracts:

Imagine your artist starts a payment plan on a $5,000 computer and productivity software package in the name of the company without telling you. Even though you didn’t want or approve this, the company is still responsible for paying for it. If the artist can’t afford to make the payments out of her own pocket, then you could be responsible for that debt, out of your own money, as if you bought it yourself. Said another way, if she defaults on her payment, the her creditor could go after you to pay the remaining balance.

Of course, none of these nightmare scenarios about accident-prone sound designers or fiscally-irresponsible artists happen very often. But they happen enough for you to understand that there are alternatives to “general partnerships”, and these include LLCs or Corporations.

We just did a column about general partnerships for our Comics Bulletin column Barely Legal, and by the end of December, we’ll have a 14-page guide on our site all about general partnerships and how to avoid problems with them.

Transfer ownership of intellectual property in writing as soon as possible, so the people who think they own the game actually do own the game

A. Remember Tip #1: work out details about ownership up front:

Well, transferring ownership of intellectual property is one thing that must be done in writing. It can’t be in a verbal agreement. It has to be done in a specific, unequivocal manner as in: “I assign my rights to X” or “I license my right to X” to be effective. Again, you don’t have to rely on a formal contract, you can work that out in an email thread that is carefully written.

You may find that the typical formal agreement used to transfers rights, “an assignment agreement,” is pretty straight forward. With enough research, you may be able to find a template and put together the basic assignment or license language on your own for a small project.

For a large commercial project, it’s extremely unwise to cut corners. After all, the intellectual property is the most valuable thing surrounding the project. If the transfers are not correct, and then someone decides to give problems, then it could mean that you can’t release your game at all, or you may have to pay someone off.

B. Remember Tip #3: whether your company is actually a company:

Let’s go back to that for a second, too. You can’t transfer ownership to something that doesn’t exist. For example, if you transfer ownership to Independent Game Company Name Incorporated and that’s not actually a corporation, that could be a huge problem.

If everyone transferred their ownership to Sam Programmer who began the game as the project lead, and then Sam Programmer drops out of the project while everyone else continues on, that’s also a big problem.

C. The default rules if you’ve been making your game without any ownership discussion at all:

When you’re making a game with more than one person, you’re combining your individual creative work with the group. Depending on the way you work, generally everyone contributing creative work will be considered a “joint author” of the work, with each person having 100% control over the work.

That’s a big problem, because each person literally has 100% control and ownership over the final work. That means one person can unilaterally enter into distribution agreements even if you, as another owner, objects. All they would have to do is account for how much money is made and pay for a share. Joint authorship is, more often than not, a big problem.

Lots of developers come to New Media Rights end up having the same issue: “We didn’t work out who owned what in writing, two artists dropped out of the project, and we’ve lost our ability to contact them to get their written permission to distribute the game. Can we still go ahead and sell it?” Try to avoid being these people if you can help it.

Understanding that people don’t often play by the rules, the law isn’t magic, and that, on balance, the legal system almost always favors the side that has the most resources (typically not indie developers).

New Media Rights exists because legal rules are complicated. More importantly though, we exist because the technical legal rules have almost no bearing on whether or not someone will give you legal trouble. Competitors, large media companies, and people who generally don’t understand these rules and exceptions abuse legal processes all the time.

These rules aren’t enforced all the time either, so it may seem strange that there are sometimes dozens of counter-examples of games that use confusingly similar names, infringe on copyrights, etc. and never get in trouble. If you don’t follow the rules, but you’re not a high profile target, or you’re doing something that no one sees as a problem, then you will probably never run into legal trouble. Even if you follow the rules very strictly, if you are seen as an economic threat to another person or if someone doesn’t like what you’re doing, you’re at risk for legal trouble.

That’s why, even though we put together educational resources like LAGD, the direct work we do defending independent creators is just as important. Every year, we put on a fundraiser to ensure we can keep doing that for another year. Since we don’t have a PR or development department, we rely on people like you in the community to raise awareness about what we do and share this through Facebook, Twitter and all of your other social networks.

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