"Famous Last Words"

Why Contracts Are Important (March 2004)

Dear Jim,

I wonder if you could give me some advice?

I am in a bit of a strange legal situation and am not sure how to handle it. Here's the story so far...

I was commissioned by a developer to write some music (including some musical conversions) for the GameBoy Advance version of a game based on a well-known television property. There is no contract but I do have a credit in the game.

They failed to pay; however the publisher has just released the game.

The developer says it has no money left - I can take them to court but would get nothing because they have nothing and would simply go bust, their assets going straight to the bank to pay off loans etc.

I have mentioned to the publisher that effectively they are selling unlicensed music, sound effects and sound driver code in their game but they say it has nothing to do with them and that the responsibility lies with the developer.

I strongly suspect that the developer is about to go under and that would leave the publisher selling my work without ever having paid for it and refusing to pay me anything.

Any thoughts?

Dear Distressed:

Your situation reminds me of a game of three card monte. That's where three cards get shuffled around on a tabletop and no matter which card is turned over, it's not the one you want.

There are a couple of considerations here that may work in your favor. I'd suggest that unless there is a written contract that provides that ownership of the music is assigned or licensed, a strong argument could be made that you retain copyright of your work and this unauthorized use by the publisher is an infringement of your IP rights.

This is because Section 102 of the United States copyright law provides that copyright subsists in an original work of authorship from the time it is fixed in a tangible form of expression. This copyright is retained by the author until it is transferred.

The developer may claim you had an oral agreement to supply the music. The developer may even claim to own the music as a work-for-hire. This is typical in development contracts. But Section 101 of the Copyright Act defines work-for-hire (paraphrasing) as "a work specially ordered or commissioned for use as a contribution to a collective work, as part of a motion picture, or other audiovisual work. if the parties expressly agree in a written instrument signed by them that the work will be considered a work made for hire." ( Emphasis added )

While nothing in life is 100% certain, this seems reasonably clear. No writing = no work for hire.

The publisher may further claim you had an oral contract with the developer to provide the music for the game. You may consider the words of Samuel Goldwyn that "an oral contract is not worth the paper it is printed on" and respond (if this were the case) that if there was a contract, it was to your understanding a unilateral contract that provided no rights would be licensed until payment was received. In legal-ese, receipt of payment would be a "condition precedent" to granting a license for use of the music in the game.

This may leave your developer in a bad position. I'm sure the developer represented to the publisher that it had all rights, including rights to your music. The fact that it did not probably gives the publisher a cause of action for breach of contract and indemnity against the developer (may be useless given the developer's financial condition) but may not affect your position against the publisher as an infringer of your copyrights.

And here's a further thought. If you not only composed, but also produced or performed the music you delivered, there may be two infringements here. The first, as we have discussed, is infringement by the publisher of the copyrights in your original musical compositions. The second is infringement of your rights as producer or performer of the musical score that was integrated into the game.

Finally, be sure and register the copyright in your music, and the sound recording if you produced and/or performed it, with the United States Copyright Office. Registration is a pre-requisite to bringing a lawsuit for infringement. A serious discussion with a copyright litigator should be your next step.