John Cotterill of affiliate member Eaton Smith Solicitors shares his insights from his recent visit to EGX. John is a big games fan and can always be found at Game Republic events. Some great tips in this piece for game developers.
I recently had the opportunity to attend the first day of EGX 2023 at the ExCeL Convention Centre in London.
I spoke with many developers and publishers about a variety of matters. The topics of discussions of course had a legal focus, and they mainly centred around:
- Intellectual Property Rights
- Publishing and Funding
This article is intended to give insight into recurring themes that arose, in the hope that it might be relevant to some of those reading.
If you do read anything of interest and want to discuss matters in more depth, please do get in touch with me via email (JohnCotterill@eatonsmith.co.uk). I would be more than happy to assist you with any queries you may have.
Intellectual Property Rights
As always, both developers and publishers alike were mainly concerned about intellectual property rights in their games. This is unsurprising given that intellectual property is arguably the cornerstone of video games content.
I spoke with several indie developers about how they can ensure that they are effectively dealing with intellectual property rights in their commercial arrangements, particularly when they are outsourcing work through third-party contracts.
A common misconception was that if you pay a third-party contractor to create a piece of work/asset, then you are purchasing both the asset and the intellectual property in that asset automatically. Unfortunately, that isn’t the case as the legal position in the UK is that an assignment of intellectual property rights must be made in writing. That is why it’s so important that the contracts that game developers are using demonstrably deal with intellectual property rights. The contracts need to ensure that the developers are either taking the intellectual property entirely (by way of an assignment) or that they are receiving a suitable and adequate licence to use the intellectual property in a way that fits their requirements.
There are also other considerations to be had in “cross-border” arrangements. As an example, I was recently asked about a contract with a German musician (resident in Germany). The headline issue was that the relevant intellectual property in Germany cannot be assigned, only licenced. Accordingly, in such an arrangement, it’s important that the contract provides a suitable and wide enough licence that fits the developer’s requirements.
I spoke with a game developer who had been a victim of their own success in that merchandise of their in-game characters was being created without their permission. There followed a conversation about copyright infringement.
Game Publishing and Funding
For studios, bringing their creative vision to life requires money. Money can be sourced from a variety of places, be that from publishers, venture capitalists or other types of investors. I saw some absolutely incredible games showcased at EGX, some of which had publisher backing, and some of which were still seeking further funding.
The important thing to remember is that securing funding has two main elements. Firstly, the person who is going to invest in you/your business needs to believe in your creative vision (meaning they have to believe that your game/project is marketable and has the potential to turn a profit for them). Secondly, they need to believe in your business acumen (meaning they have to believe that you and your business is investable and sustainable). Inspiring confidence in the latter mainly comes down to how you operate as a business, which includes (amongst other things) the contracts you use and the cashflow projections you work from. The benefits of having professional contacts such as lawyers and accountants is that we can assist you with keeping the business in trim, with a view to getting you “investor ready”. The intention is that when the time comes, your business practices align with your creative vision and thus you appear more investable to potential funding partners.
Marketing Your Game
Another area encountered was marketing, particularly influencer/content creator marketing. I spoke with several smaller to medium sized studios who said that this was a major method they used to generate hype around their games.
The content creator/influencer ecosystem can be tricky to navigate from a legal perspective, particularly in light of the updated influencer guide that was published by the Committee of Advertising Practice back in March 2023. There has been confusion about when hashtags like #AD should be used, with the misconception being that this was only required when money was being used as an incentive for influencers. This is not the case, as the guidance states that where any incentive is being received by an influencer/content creator (including free video game keys), they should be clearly specifying that the content that is being created is an advertisement.
Getting it wrong can lead to investigations and sanctions from the Advertising Standards Authority (ASA) in the event of a breach of the guidance by influencers engaged (as Studios retain a level of responsibility over those influencers).
There are risks involved in engaging with content creators/influencers. This could include activities that could offend public morality. It is possible to include morality clauses (or reverse morality clauses if requested) in these types of agreements, these allowing termination in favour of the “innocent” party where the other party does something that tends to cause outrage or has a negative effect on public relations.
My own experience at EGX was both fun and productive, and I hope that the same can be said about anyone else who was in attendance.
If you’ve read anything of interest in this article and want to discuss matters in more depth, feel free to reach out to me via email (JohnCotterill@eatonsmith.co.uk).
This is not legal advice; it is intended to provide information of general interest about current legal issues. You should seek specific legal advice before acting in reliance on any of the information provided.
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