December 20th sees the release of the Assassin’s Creed film; the first motion picture in a media franchise that began with a video game back in 2007. The game chronicled the adventures of the Assassin Altaïr and his many-times-over-grandson Desmond, as they combat the Templars, a sinister secret society bent on world domination by way of perfect knowledge and order. Over the years, the Assassin’s Creed series has gone everywhere from Renaissance Italy to the high seas of the Caribbean, collecting fans, and leaving slowly cooling Templar bodies as it went.
But what if you’re just a budding game developer, not yet as close to the dream of evil empire as the Templars or Google? Still, you have your head in the right place, and your eyes on the prize; you’re cocked, locked, and ready to rock. But what do you need? How do you protect what you’re looking to build? How can you make sure no pesky Assassins scamper off with all of your hard work?
Well, friend, you’ve come to the right place, because I’m here to help. So, without further ado, here are the top three things to look out for as a strapping young gaming business, or any tech business really.
(1) IP ASSIGNMENT
So you might have heard the saying that “possession is 9/10ths of the law.” Well, authorship is 9/10th of copyright; and unless you’re superhuman, you will probably not be writing your entire game by yourself. Realistically, you’ll have artists, coders, designers, the butcher, the baker, and the candlestick maker all creating content for you.
But who owns it? Without IP Assignment agreements, the answer is, maybe not you or your firm. And that’s bad. Because it’s YOUR (firm’s) game. Having good IP Assignment agreements is probably THE most important single thing you can do in protecting your business. By having all IP created by employees and contractors assigned to the firm, you are doing two things:
INSURANCE: you are insuring against someone trying to “take” their portion of the work with them when they leave. Otherwise, a disgruntled employee could decide to hold his portion of the work hostage, forcing your firm to pay them to buy back work for which the former employee has already been paid. Don’t let this happen.
BUILDING VALUE: at the kernel (pun sort of intended) of things, you are a software firm, and your value is in your IP. It’s your capital. Your backbone and your lifeline. Remember, if you ever want to go public or sell, this is what investors will look at first, and last. Making sure that all IP rights created are properly assigned, is like making sure that a manufacturing plant actually owns its machinery. Without properly protected IP, all you have is a name.
(2) ENTITY FORMATION
So, you might have noticed that I keep referring to “your firm” and not “you.” That’s for very good reason. No matter how small you are, you’re going to need an entity. Now, whether that takes the form of an LLC, a closely held corporation, or a more unusual form like an LP or LLP depends on various factors, and is a question for you to go over with your attorney; but you will need something. Entity formation helps protect you by allowing for IP to be assigned to the entity independent of your employees, and yes, even you.
This is important because for two reasons (1) it protects you from liability; and (2) it makes your company easier to sell.
LIABILITY PROTECTION: let’s face it, being an entrepreneur is pretty brave (and sexy) but it’s also hard (and risky). By forming a limited liability entity, you can protect yourself from some of that risk by separating the liabilities (debts) of the company from your own personal finances. This is actually more complicated to ensure than just forming an entity, and will probably show up in a future post in greater detail, but formation is the first step.
SELLING: I know, I know, your project is your baby, and you may not be thinking of selling, but on the flip side of risk and liability is success and value. And that can mean passing the torch to a willing buyer that will be able to expand your franchise even further. By forming a business entity early, you are creating a neat little bundle of property that will be much easier to sell; and probably demand a higher price to boot.
(3) STRONG NDA PROTECTION
From the CIA to the Coca Cola Company, everyone’s got secrets. Non-Disclosure Agreements, or NDA’s, help us little people protect them. NDA’s create a civil cause of action to enjoin (“gag”) anyone that tries to blab about what makes your game tick, but that cannot be reduced to copyrightable matter like written or recorded media.
A good example is, actually, Assassin’s Creed. In the original marketing for the original Assassin’s Creed, the game was presented as being set around the 11th Century in the Middle East. The entire Animus pseudo-time travel plot kept was kept under strict NDA until after the game launched. This allowed for the Animus to be a total surprise and twist to gamers, an element that would have been lost has Ubisoft not properly protected itself.
But NDA’s go much much further. They can help protect anything from the drop rates on your loot boxes to some brilliant coding workaround or kludge that may not be rendered easily as a single string of copyrightable code. They can be the ultimate catch-all insurance of intellectual property, but, like any tool, they must be well crafted. An NDA is only as good as the attorney that drafts it, and LegalZoom will only ever get you so far.
Well, that’s all for now folks. Keep your eyes out for more as I’ll be posting on tech/gaming/general nerd-dom topics and IP law. Also, I might do a post on certification marks because they are bizarre and the public deserves to know.
Anton Leonov is a Trademark Attorney with LegalForce RAPC. From an early age, he has been experimenting with (others may call it “breaking”) computer hardware, in an effort to get the most out of every slice of silicon. Although his “just to see what happens” overclocking days are behind him, he is still a sucker for all things tech, and loves the opportunities that his IP legal career gives him to live at the crossroads of creation and the law. He holds a BA in Economics from UC Irvine, and a JD with honors from the Sandra Day O’Connor College of Law at Arizona State University. He is admitted to practice law in Arizona.
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