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PRE-SUBMISSION LEGAL CONSIDERATIONS

Pre-Submission Legal Considerations
by Thomas H. Buscaglia, Esquire

The publishers you submit to are business people and, just like with your game documentation and demo, they expect you to be professional and competent as business people in basic legal and business areas. So, take the time to get your legal matters in order before you submit. It will add to your credibility with the publishers you deal with and help convince them that if they invest in your project you have not only the technical ability and artistic talent to make you game, but that you have the business acumen and maturity to deliver it.

There are several additional reasons why it is important to have the legal aspects of you project in order before you submit to a publisher. First, you are in the process of marketing the joint work of your development team to a publisher. You need to have the complete ownership (or in some cases, the appropriate license) secured before you pitch your game. Quite simply, you cannot sell what you don't own. If you have not taken care of these matters before you meet with a publisher issues may arise either during the negotiations, or worse, later in the project after you have signed, that can kill the project and possible have a very detrimental impact on your long term prospects in the industry.

GAME ASSET OWNERSHIP

Ask yourself these questions:

Who owns the assets in the game?

Are there any problems with the assets that would prevent the game from being taken to market?

The majority of the assets of the game are subject to copyright. Under copyright law the person who creates the “work” (for example, the code, artwork, music or model) owns that work, unless it was done while being paid as an employee of another. In that case the work is considered “work for hire” and the employer owns in. The problem with many self-funded team efforts is that no one is employed by anyone. People contribute their work in the hope that the game will get funded. So, legally each team member owns what he or she contributes to the project and the developer owns nothing.

The danger, of course is that an alienated initial team member can create a huge problem for the rest of the team if these ownership issues are not resolved by claiming by asserting ownership of some of the assets. Similar problems can arise from unlicensed third party assets. So, make sure that everyone contributing to the project has signed a “work for hire” agreement of assigned or licensed their work to the developer before you meet with the publisher. This can usually be taken care of with a well-written “Employee/Consultant Agreement.”

GAME DEVELOPER OWNERSHIP

The other legal related questions that should be asked before you submit are:

What legal entity will the publisher deal with?

Who on the team gets what if the team succeeds?

These questions relate to ownership as well. But not the ownership of the game assets, ownership of the developer itself. Forming a company is essential to being able to deal with a publisher because it is the company that will own the assets we discussed above and sell or license them to the publisher. And it is the company that will sign the contract with the publisher, if you are fortunate enough to get one. So, you need to form the company before you submit.

Take the time to form an appropriate corporation, limited liability company or partnership before you start trying to sell you game. These legal entities (Corporations, Limited Liability Corporations and Partnerships) provide many useful advantages. Some regarding taxes and expensing of capital investment, others like health insurance and even retirement benefits. But the most important benefit to a corporate form is the ability to assign specific ownership interests in customized proportionate amounts.

Make sure that everyone on your team is clear about what ownership interest, if any, they have in the company. The best time to resolve the ownership issues regarding the company is when it is being formed. Then everyone on the team knows where they stand and there can be no misunderstandings.

Games are by their very nature collaborative works involving the combined efforts of several people. Often inexperienced developers are so involved in making their game that they do not take the time to assure that everyone on the development has a clear understanding of their ownership position in the project. This can result in huge problems for the team later.

Conclusion

So, remember, game development is the best business on earth. You get to do what you love and get paid for it -- a real blessing. But it is a business and needs to be treated as such. If you have to, learn this stuff and do it yourself. If you can, hire a professional.

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