他们创造了应用，然后通过苹果的App Store，Google Play，Steam和Xbox Live等平台去管理销售和市场营销。尽管所有的这些平台能为数千新兴游戏开发者们创造巨大的机遇， 但是却很少有人意识到自己在发行一款游戏时需要承担怎样的法律风险——在过去这通常都是由发行合作者所面对的。
几年前，一个独立开发商为一家顶级发行商创造了一款中等价位的赛车类游戏。游戏中所使用的汽车都是获得授权的，包括一款常见的美国跑车品牌。而这款游戏的问题就在于开 发商在Route 66（从芝加哥到洛杉矶的高速公路，沿途是各种加油站，旅馆和独特的美国休息站）沿线创造了一栋独特的建筑。
开发方的美术人员是在网上搜索时发现了这栋建筑，并认为该建筑便是他们在寻找的东西。实际上他们并不想窃取该图像。相反地，他们创造了自己的内容去渲染它，然后将该资 产设置在游戏中。孰不知，该建筑与现今许多建筑一样，是受到某一建筑版权的保护。所以在游戏发行后，他们的发行商便受到来自该版权保护者的公告，而他们也想办法即时解 决了该问题。
在今天直接面向消费者的分销世界中，传统发行商通常都不再发挥作用，从而导致很多问题的出现。独立开发者总是未拥有足够的专业知识能够独自解决版权侵犯问题，并且不幸 的是，侵犯别人的版权往往会遭致实际损失或法定赔偿（如果是故意侵权的话），通常是每件版权作品达750美元至15万美元不等，还要加上律师公费。不管怎样，不经许可便在电 子游戏上使用别人的照片，歌曲，甚至是收版权保护的建筑设计等都会为你招致不必要的麻烦。
在2013年1月，苹果的App Store中已经有77万5千款应用，并且单在2012年，便有来自世界各地的用户下载了将近200亿的iOS应用。谷歌在Android平台上也取得了同样的成功，并 且很多人相信Google Play商店将能在今年提供超过100万的应用。
我所知道的一个数字产品企业最近使用了一个设计团队去创造一系列图像布局，计划将其用于一款在线社交媒体产品的发行中。不幸的是，在支付给设计师大量的费用时，他们才 发现这些设计并不适用。该企业便解雇了这些设计师，但是很快却收到了来自他们的一封信，即要求收回自己所创造的所有内容。于是这家企业便惊讶第发现，自己即使支付了费 用却不能保证拥有这些权利。
基于美国的版权法，创造者对于作品（游戏邦注：不管是计算机代码，数字艺术，音乐还是游戏设计）的拥有权是从创造的时候开始生效，除非协议或环境（如雇员）有其它规定 。同样地这些权利还受到IP传输或雇佣协议条款的保护。适当的合同协议所具有的另一大优势便是，它能在一开始便为所有人设定了期望值，从而帮助协议双方避免面对大起大落 的结果。
Mike Kerns出身于南加州的一个中产家庭。受Band of Brothers的自立、聪明和忠诚的信条的影响，他从来不惧表达自己的观点。那就是Peter Morris欣赏他的地方。Peter认为 Mike会为他的小型游戏咨询公司做出巨大贡献。
Six legal mistakes app developers make – part 1
by Dan Rogers
Until recently, video game developers generally focused on the creative and technical aspects of developing an interactive game, while their publishers handled issues of sales, marketing, and legal. But in the world of direct-to-consumer digital distribution, indies do both.
They build apps, and then manage sales and marketing through Apple’s App Store and Google Play, and inside environments like Steam and Xbox Live. While all this has created significant opportunities for thousands of emerging game developers, few realise the legal hazards they undertake when launching a game – risks that their former publishing partners often assumed on their behalf.
In this two-part series, we’ll discuss what I consider the top six legal mistakes app developers make when launching a new game in the digital marketplace.
Mistake #1 – Unintentionally Infringing Another’s IP Rights
Several years ago, an independent developer created a mid-priced racing game for a top publisher. The automobiles used in the game were appropriately licenced, including a well-recognised American sports car brand. The mistake made, however, was in recreating a unique building found along Route 66, the iconic highway stretching from Chicago to Los Angeles, filled with kitschy gas stations, motels, and unique Americana rest stops.
The developer’s artists discovered the building while searching the Internet, and they thought it visually representative of the look they were trying to achieve. They didn’t intend to steal the image. Instead, they created their own digital rendering of it, and then placed that asset in the game. Unbeknownst to them, the building is protected by an rchitectural copyright, as many are these days. After the game launched, their publisher received notice from the copyright owner, and promptly settled the dispute on behalf of everyone.
In today’s world of direct-to-consumer distribution, where traditional publishers are often out of the picture, things might not have gone as smoothly. Independent developers seldom have the expertise necessary to navigate delicate copyright infringement issues on their own, and unfortunately, infringing another’s copyright can result in either actual damages or statutory damages of $750 – $150,000 per copyrighted work, plus attorkney fees, if the infringement is willful. Regardless, using a photograph or song or even a copyrighted architectural design in a video game without permission can land you in hot water fast.
Mobile and social game developers are often so busy building and launching their games that they don’t take time to perform a proper due-diligence of the assets their artists and programmers use. But even innocent infringement is copyright infringement nonetheless, and developers should carefully clear all the assets and software tools used in their games prior to launch. More often than not, it’s not conflicts they see that will get them, but the ones they don’ t.
Mistake #2 – Failing to secure copyrights and trademarks before an infringement is discovered
In January 2013, Apple proudly announced that 775,000 apps were available in its hugely successful App Store, and in 2012 alone, nearly 20 billion iOS apps were downloaded by consumers around the world. Google’s success is similar on the Android platform, and many believe their Google Play store will be the first to offer over one million apps this year.
With more than 641 mobile apps being launched every da, copyright and trademark infringements are bound to occur. With the odds of a conflict only going up, prudent developers should secure their copyrights and trademarks before they discover an infringement. Delay doesn’t necessarily mean they can’t protect their intellectual property rights, but there are distinct advantages in registering early.
For one, the statutory damages for the copyright infringement are not available for non-registered works. As a practical matter, it means that a significant leverage in settling a dispute out of court (which most do, by the way) evaporates. The reality is that actual damages are difficult and expensive to prove, and opposing counsel probably knows this. On the other hand, when faced with a properly registered work, infringers are more likely to settle, recognising that if they lose they could end up paying both statutory damages and attorney fees as well.
Similarly, registering a trademark with the United States Patent and Trademark Office offers powerful advantages:
1. It allows the trademark owner to bring suit in federal court without having to show minimum damages, which today is $75,000. For most small app developers, this could be a significant hurdle.
2. Registering a mark enables the owner, in some cases, to receive triple (called “treble”) damages, plus attorney fees. Faced with the prospect of paying three times actual damages, an offender is more likely to comply with a trademark owner’s demands.
3. Registering gives others nationwide notice of your mark, which could discourage potential infringers. It also may enable you oust cyber-squatters sitting on your Internet URL.
Copyright and trademark registration isn’t rocket science, but there is an art to it. Retaining a knowledgeable attorney – especially where trademarks are concerned – offers the protections mentioned above, and provides valuable advice regarding the overall strength of a mark and potential conflicts you might have.
Mistake #3 – Failing to use properly drafted contracts with contractors
A digital entrepreneur I know recently used a design team to create a series of artistic layouts that the entrepreneur planned to use in the launch of an on-line social media product. Unfortunately, after paying their designers a substantial amount of money, it became clear that things weren’t working out. The entrepreneur fired the designers, and shortly thereafter received a letter from them demanding a buy-out of the work they created. The entrepreneur was surprised to learn that the money they paid didn’t secure the rights they assumed they owned.
The mistake was in not signing a properly drafted contractor agreement, but what’s surprising is that many app developers don’t use contracts at all, relying on email messages and phone conversations to finalise the terms of their contractor agreements. That’s living dangerously.
Under US copyright law, the creator of a work – whether that work is computer code, digital art, music or a game design – owns that work from the moment of creation, unless an agreement or other circumstances (an employee, for example) provide otherwise. Commonly, these rights are secured through an IP transfer or stipulation in a work-for-hire agreement. The added benefit of a well-built contractor agreement, by the way, is that it sets the expectations of veryone
at the beginning, when it’s easiest to manage, often saving everyone a rollercoaster ride later on.
In the case of the entrepreneur, the agreement failed to properly articulate IP ownership rights, so, at most, they had purchased a non-exclusive licence to use the developers’ work. That wasn’t what they were looking for, and after an expensive bout of legal wrangling, they were finally able to secure the exclusive, worldwide, unfettered rights they thought they had purchased in the first place.
Treat your legal work as you do your development.
There are far too many legal landmines in the app marketplace to navigate these digital waters without knowing what you might encounter. Apps are a significant growth business worldwide, and sophisticated publishers, entrepreneurs, and legal eagles troll it closely. Regardless of your size, take care of your app’s legal business early on; it could save you major headaches later.
In the final installment of this two-part series, we’ll discuss three other legal mistakes app developers make: failing to properly incorporate, failing to create bulletproof partnership agreements, and failing to understand the legal implications of third-party investments.
A recent Game Developer’s Conference study found, unsurprisingly, that 53 per cent of the attendees they polled identified themselves as indie developers, with nearly the same percentage saying that they work in companies with ten or fewer people.
With the explosion of mobile and casual gaming, this has created exciting times for entrepreneurs, but the reality is that most independent game developers lack the legal expertise necessary to navigate this new publishing world.
Many will make it through unscathed. Others, unfortunately, won’t be as lucky.
In the first half of this series, we discussed three legal mistakes that indies make more often than they often realise: unintentionally infringing another’ s IP rights, failing to secure copyrights and trademarks before an infringement is discovered, and failing to use properly drafted contracts with contractors.
We continue now with three more common indie legal mistakes.
MISTAKE #4 – FAILING TO PROPERLY INCORPORATE AND OPERATE
C Corp. S Corp. LLC. No Corp. Most indies understand that a corporation is a legal entity that provides them a certain level of liability protection, but few realise that ignoring corporate formalities can render this shield vulnerable to attack.
The legal term for breaking through a corporation’s structure and reaching the principals and officers inside is called ‘Piercing the Veil’, and it’s fairly descriptive of what happens: a legal death ray essentially cuts through the corporate force field, leaving the individuals inside liable for the torts and infringements of the company they thought was protecting them.
How the corporate veil is pierced is generally determined on a state-by-state basis, but here are some common ways it can happen:
- Ignoring corporate formalities. Generally, corporations exist in the eyes of the court so long as they operate as such. Corporations, for example, are required to hold regular meetings, have adequate funding, and faithfully keep maintain their business records and transactions.
C Corporations that fail to do so risk being deemed an alter ego of the principals and stockholders running the organisation. When this happens, these same people can be liable for the corporation’s acts and debts.
- Co-mingling personal and corporate money. Similar to the above, when a party can show that the corporation is nothing more than fa?ade, proven by a lack of distinct and separate corporate funding and monies, the corporation’s protective armor can be penetrated.
- Fraud. Where the court finds a corporation is a sham to hide illegal activities, the parties inside can be liable for acts of the organisation.
Another issue raised is in the corporate form itself. When and how you chose to incorporate – whether as an LLC, C Corp, or otherwise – will mandate what procedures you are required to follow.
Failing to pay attention to these details can be fatal. And one thing you can count on: those who bring suit against your corporation will look at this very closely.
Finally, consider that while LLCs and S Corps may, in some ways, be easier to manage, venture and angel funds generally prefer to invest in entities where stock and options of various flavors can be issued and tax issues minimised
MISTAKE #5 – FAILING TO CREATE BULLETPROOF PARTNERSHIP AGREEMENTS
Mike Kerns (fictitious name) was raised in a middle-class neighborhood in Southern California. Self-reliant, street-smart, with a loyalty tenet cast from Band of Brothers clay, he was never shy about expressing his opinion. That’s what Peter Morris (name also fictitious) liked about him. Peter believed that Mike would make a great addition to his small but profitable video gameconsulting firm.
So Peter brought Mike on board with the idea that Mike would eventually become a full partner. Two years later they were bitter enemies, and Peter acknowledges that if not for the partnership agreement he insisted Mike sign, things would have ended much worse.
Surprisingly, few take the time to create clearly thought-through partnership agreements, despite the fact that, according to Harvard Business School, 90 per cent-to-95 per cent of all start-ups fail.
Think of a partnership agreement like a marital prenuptial, and then consider what it clarifies:
- Ownership of technologies created prior to the partnership and use thereafter.
- Who’s in charge and how decisions are made.
- Whether a spouse can become involved in the business at the death or disability of a partner.
- How profits are divided and when.
- What expenses the company will pay.
- Whether and what type of health plan the partners can participate in.
- What happens when a partner leaves voluntarily.
- How partners can be removed.
- What happens when the corporation dissolves.
- How new partners will be brought into the company.
Each of these issues can turn into a powder keg where partners have failed to agree in advance. On the other hand, for those who take the time to create solid partnership agreements, a break-up may be painful, but at least the rules of the road are defined.
MISTAKE #6 – FAILING TO UNDERSTAND THE IMPLICATIONS OF THIRD-PARTY INVESTMENTS
Cash is king, especially when a business is in start-up mode. But where you get your investments and how you treat them afterward can have significant legal implications, especially with regard to Security and Exchange Commission regulations.
The laws in this area are complex, and it takes an experienced lawyer to help you through them. For simplicity sake, however, alarms should ring when you are thinking about:
- Selling, offering to sell, or exchanging your company stock, since these activities require compliance with complex SEC regulations. While there are exemptions – including private placements, sales to accredited investors, seed capital, and crowd-funding (discussed briefly below) – you’ll need competent legal advice to know if you qualify and what obligations and filings are necessary.
- Advertising or making general solicitations to market securities. What’s a security? Any sort of investment or interest in a company, which can mean anything from stock to a percentage of a corporation’s assets or profits.
- Selling securities or promising future profits to investors who make less than $200,000 annually or with a net worth of less than $1 million.
- Issuing early stage equity, since this can greatly impact mergers or acquisitions later.
Crowdfunding has also become a popular way for game developers to finance their projects. Be aware that while this activity is recognised in the United States, things have been moving forward rather quickly and loosely.
As a game developer, two concerns should be on your mind before you launch your next crowdfunded project:
- Lawsuits initiated by disappointed backers are becoming more common. Recognise that your donation-based campaign creates a contractual obligation, and over promising or under delivering can be grounds for a breach of contract claim. So before launching your next campaign, make sure you’re properly incorporated.
- Equity based crowdfunding, meaning you offer an interest in your company or profits, is complex and the rules are still being finalized. While everyone is anxiously awaiting for SEC rules inthis area, for now it’s probably best to hold off.
Who would have thought five years ago – when EA, Activision, and Ubisoft were dominating all the distribution channels – that a handful of young programmers and artists working from their garage could develop, market, and launch a game that not only competed with them, but could beat them soundly.
At the same time, the legal risks involved in app development are growing. The six issues we’ve discussed are common but by no means comprehensive. These days a prudent indie needs to make sure their legal ducks are as orderly as the code that’s driving their next hit game.
This information is not legal advice. This article is provided for commentary purposes only, and is not legal advice nor does it create an attorney-client relationship between the author and any reader.