Before I pursued the life of a professional game designer, I went to law school. I didn’t particularly enjoy the experience, but the insights that I learned there have served me well in both my design career and in starting my own business. One key takeaway: you always need a good lawyer on your side. Lawyers, however, can be very expensive and intimidating. When do you need a lawyer and what legal issues impact you as a designer or entrepreneur in the gaming industry?
To help answer those questions, I interviewed my good friend Stephen McArthur.
Stephen is a brilliant attorney and an expert in gaming IP law. Stephen isn’t just a lawyer, though. He is a gamer at his core and his passion shows in the interview. The first few questions are about Stephen’s background, and we get into the useful information towards the end. Enjoy!
- Hi Stephen, Please tell us a little about yourself and your background
I was a competitive gamer since before “Esports” was a word. Indeed, I was born and raised in the dark, dark times of “Cyberathletics”. I used my tournament winnings from competitive gaming to fund my way to an Ivy league law degree, which I earned nine years ago. Since then, I’ve devoted my life to the nexus of gaming and the law, representing everyone from the largest game publishers in the world to startups and indie developers. I even represent a few standard “entertainment” companies like Legendary, though my passion will always be with the video game industry. I even go to every PAX and Gencon and write it off as a business expense even though I’m attending as a fan. Shhh, don’t tell the IRS.
- What got you interested in doing game IP law specifically?
My first job in law school was as a clerk at an intellectual property boutique in NYC where we represented Dan Brown in a copyright lawsuit against another author. I thought the legal issues were fascinating, so I took every class Columbia offered on copyrights, trademarks, and patents. Out of law school, I got a job at a white-shoe NYC firm representing the RIAA against Limeware, the very service I had just used a few years earlier to download Weezer’s entire Pinkerton album. While I was still passionate about the subject matter of the law I was practicing, I wanted to focus on different clientele – obviously video game companies. So, I moved out to L.A. and joined an IP firm in the entertainment industry.
Unfortunately, it did not have very many video game clients except for one giant litigation involving Call of Duty with about 25 attorneys involved. Through dealing with other attorneys who represented video game companies, I realized that none of them were gamers, and were mostly Hollywood “entertainment lawyers” that just happened to represent video game companies. The rest were students just out of law school with no actual experience or legal training that could not offer the quality of work that any serious game company needs. There was a huge, unfulfilled need for game companies to hire a sophisticated and professional attorney who knew their industry inside and out. So, I created my own boutique law firm about two years ago to fill the gap.
- Many people are confused about the world of trademarks, patents, and copyrights. Can you please clarify these three items and how they apply to the game world?
In short, a copyright is any creative work fixed in a tangible medium of expression. For games, that means source code and all game assets, including art and music.
A trademark is a symbol, word, or sound that represents a company or product and shows the source of that product. Your game title is a trademark. The name of your company is a trademark. The logo and slogans are trademarks as well. An easy way to think about it is in the context of Nike. The word “Nike” on a shoe is a trademark because it shows you the source of that show. The swoosh is a design/logo that also shows that the source of the shoe is Nike. The phrase “Just Do It” is the same: a slogan that shows you that the source of the show is Nike. Thus, all are trademarks.
A patent is a new invention. Patents are less applicable to games than trademarks or copyrights, especially since the Supreme Court gutted software patents a few years ago. However, patents are extremely important to any company on the cutting edge of gaming and especially hardware companies such as those in the virtual reality space.
- How do you advise an aspiring game designer with regards to protecting their game idea / IP?
The first step a game designer or CEO of a game company needs to make is to educate himself on the basics of intellectual property. There are innumerable pitfalls a company can make if they do not know where to look. One basic example is the independent contractor issue. Common sense tells you that if you hire someone to do work for you, such as programming, and you pay them to do it and tell you what the end product should look like, then you would own that code that they create. Unfortunately, relying on “common sense” in the legal world is a fool’s error. The independent contractor actually owns the underlying copyright in the above situation and is simply licensing it to the company to use on a limited basis. Only if the independent contractor agreement specifically names all of the contractor’s work as a “work for hire” will the copyright be assigned to the Company. It is incredible how many CEOs make that error and how badly it can screw their company and software under the right circumstances.
But the single most important thing you can do to protect your brand and game is to simply register the trademark for your game name the second you settle on a title. Trademark registration is immensely useful, not expensive, and can be done up even on an “intent to use” basis up to three years before you actually release the game. Consequences for failing to register, or for failing to have an attorney do a good clearance search and encroaching too close on someone else’s registration, can be dire.
Even Blizzard made exactly this mistake a few months ago when its attorneys got lazy and did not do a proper clearance search before they tried to register Overwatch as a game title: http://www.smcarthurlaw.com/blizzard-settles-overwatch-trademark-lawsuit. The owners of the previous Overwatch mobile game trademark registration could have gotten a preliminary injunction and a court order to prevent Blizzard from releasing its game. I’m sure they were given a very nice payout by Blizzard to settle the case.
The basic steps every game company needs to make to protect their IP are:
(1) draft a written partnership agreement or create the proper corporate structure to ensure ownership of valuable IP stays with the company;
(2) have a work-for-hire agreement with each independent contractor that does any work at all with the company;
(3) register the trademark on their game title the day they come up with the name, even if it is years before release; and
(4) register the copyright on their source code and game assets within three months of releasing the game.
- How important is it to protect your game or company Brand? What are the best tools to do this?
If you want a game that is more than just a flash in the pan, it is incredibly important. Using a tool like Legalzoom is penny wise and pound foolish. It does nothing for you but provide a wizard to fill out the same forms you could fill out yourself on the USPTO website, and does not provide you any substantive guidance or legal advice. While I am obviously biased, I strongly recommend hiring a brand protection attorney in the games space like myself to advise you on what steps to take and how to properly register. Attorneys can evaluate your unique product and company and tell you exactly what you need to do and why you need it. When it comes to your brand and your intellectual property, you do not want to screw around with non-attorney services or cheap, “value” attorneys.
- Do you have advise for structuring a partnership agreement or working relationship for people who want to work on a game together?
A partnership agreement can help to lay out the terms of the relationship and ownership of the IP. But it doesn’t give any liability protection. So forming an LLC or some other business entity is preferred. The exact type of business entity and the state you want to incorporate in depends on where your business is principally located, your goals for the company, and how it is funded.
- What book or other resources do you recommend for people to learn more about the legal side of gaming?
Fellow games-lawyer Zachary Strebeck has written an e-book here: http://www.strebecklaw.com/legal-moves/
I also recommend the several articles I’ve written for Gamastra on video game law, which can all be read here: http://www.smcarthurlaw.com/articles/
- How can people get in touch with you?