"Famous Last Words"

When Confidentiality Becomes Control - Part 2 (January 2005)

Last month we discussed how a publisher's desire for confidentiality and control can extend beyond issues of the game and its own business secrets, into areas like the developer's ability to promote itself as the developer of the game, and even to add the publisher to its client list.

This month we will consider strategies that may help a developer find a way to loosen these restrictions.

One example of contract language cited last month, and which limits the developer's rights is:

“Except and only to the extent set forth in this Agreement, neither Developer nor any employee, officer, director, agent, contractor, parent, subsidiary, affiliate, joint venturer or partner of Developer (each a ‘Developer Party') or other party shall acquire any right under this Agreement to use, and Developer shall not use, or allow or assist any Developer Party or other party to use, the name of Publisher, any element of the game or any other Intellectual Property Right which are incorporated into the game for any purpose. Developer shall not directly or indirectly issue or permit the issuance of any publicity regarding, or make any public statements concerning, Publisher, the Game, this Agreement or Developer's services hereunder without prior coordination with and approval by Publisher, which may be granted or withheld in Publisher's sole discretion.”

The first consideration is that if the publisher is hell-bent on preventing any use of its name or material from the game, no matter what, there may be no way to negotiate this and the only response is, “thank you but we decline to take the work under these circumstances.”

I believe credit and the right to use the association with the game is an important element of the deal, has great value to the developer and each development team member (up to and equal to the dollar value of the deal), and if taken by the publisher, must be compensated. Each developer must figure the dollar value of these rights and add it to the tab for development.

Once a publisher sees this has become a dollar issue, or may jeopardize the deal, it may be more open to negotiation.

The language above provides that developer will not make or issue any publicity or public statement without prior coordination and approval of publisher. This suggests to me that developer has that right, and publisher can not arbitrarily deny or reject developer's release. Publisher's sole discretion should be modified, at the very least, to provide that such discretion will be reasonably exercised.

When discussing and redrafting this language, it should be made clear that developer has an affirmative right to issue its own statements and publicity, that publisher will work with developer in good faith to review and approve copy, and that developer will co-ordinate with publisher on the timing so as not to interfere with publisher's own marketing efforts for the game.

Find out who at publisher would review your materials, and build a relationship with that person. If you know the people in publicity, they are more likely to contact you when they need up-to-date information about the game. You may even find yourself quoted in publisher's releases!

More troubling to me than the restriction on publicity or public statements is language prohibiting any mention of the name of publisher, or any use of elements of the game by developer and a laundry list of people associated with developer. Remember that the clause says, “Developer shall not use, or allow or assist any Developer Party or other party to use, the name of Publisher, any element of the game or any other Intellectual Property Right which are incorporated into the game for any purpose.”

This makes developer the policeman with the responsibility to prevent any team member from listing the game on his or her resume, or including screenshots, etc. on a demo reel. Any such use means the developer is in breach.

Developer should never agree it will not “allow” any third party to do anything. No one can control the acts of any other person. Developer can make agreements concerning its own actions or conduct, but should never take on the role of policeman to others. I believe it is an invitation to inevitable breach.

Why should a publisher want to restrict use of its name or game elements by developer and its employees? Publishers say it to prevent developer from claiming an endorsement by publisher. But adding a name to a client list, in alphabetical order and in type no larger or more prominent than any other client, is hardly the same as an endorsement.

Publishers may claim they want to prevent unauthorized use of their trademarks or trade names. But use on a client list is not the same as a use in commerce, and developer can offer to include disclaimer language at the bottom of the page identifying “X” publisher mark and name as the property of “X”.

Publishers may claim they are only looking out for their intellectual property rights and that any use of elements of the game would constitute infringement of those rights. However, under United States copyright law, certain uses are recognized as “fair use” and may be permitted.

US copyright law requires analysis of four factors to determine whether a use is a fair use. To oversimplify a very complex subject, these are:

1. Is the use in a for-profit or not-for-profit context? Use of material on a resume or reel is not for profit, but its intent is to lead to work.
2. What is the nature of the work that is taken? If it is fictional, like most games, there is a higher standard than in the case of a work of non-fiction; if it is an unpublished work, the standard is even higher. Taking elements of an as-yet unpublished game which is at its core a work of fiction may very well doom any claim of fair use.
3. What is the amount of material taken and how critical is it to the work? Taking a small element that is not the climax or heart of the work has a better chance of satisfying this factor. Using an element of an interactive work in a linear, non-interactive context may work in favor of the taker.
4. How does the taking affect the current and potential future market for the work? This may swing the analysis in favor of the taker. Use of a small segment in a reel or resume would not appear on the surface to affect the market for the game. As above, use of a linear, non-interactive element of an interactive product would be less likely to affect the future market for the game.

Publishers may try to severely limit developer's and developer's team members right to use their relationship to the game and publisher to continue to advance their careers. By focusing on the details of these issues, developers may have the opportunity to lessen these limitations in a way that benefit them over the long haul.