Famous Last Words January09

DISCLAIMER: This column is intended for general educationaland entertainment purposes and is not legal advice. Every situation is unique. Anyone entering into a contract should have a lawyer who can provide counsel.

Jim Charne,

Attorney at Law

Who owns IP that's NOT part of a game? (January 2009)

Dear Jim:

When I started my job, I had to sign a long agreement that said my employer owns all my work. I've had ideas that never made it into a game. I've presented concepts and designs for games that never got developed. Recently my studio got consolidated and I was laid off. Can I offer my ideas and designs to potential new employers?

Between Jobs

 

Dear Between Jobs:

It is very common for employers to require new hires to sign “employee agreements.” These contracts cover ownership of work product, protection of confidential information, “moonlighting,” and sometimes even the employee's right to take a job with a competitor for some period of time after he or she leaves the employer. We've previously discussed enforcement of these “restrictive covenants” covering employment by a competitor.

Studios want to own all your work that is conceived while you are an employee. It is IP; it has, or can have, value. And they do not want an employee to hoard or withhold his or her best work.

Employers also must have your agreement to protect and maintain confidential information that comes to you as part of your job responsibilities.

Many of these agreements also restrict an employee's ability to “moonlight” – that is, engage in competitive or potentially competitive activities while on staff.

Enforceability of these agreements may be controlled by state law. For example, in California , Section 2870 of the California Labor Code reads as follows:

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or

(2) Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”

While Section 2870 provides leeway for employee retention of “inventions,” the requirements are fairly narrow and would not appear to be applicable to the situation you describe.

One example in which the statutory protection may apply may be if a texture artist working on a first person shooter were to write a romance novel or screenplay outside work using his or her own computer. In that case, the work is developed on the employee's own time, using his or her own equipment, using no confidential or trade secret information of the employer, and being of a subject matter outside the areas in which the company is working or likely to work. Under these circumstances, it may be difficult for the employer to claim ownership of the novel or screenplay.

The fact that the ideas, designs, and materials you provided were developed at work (or even off work time), relate to your job responsibilities, the business of the company, and were developed using company equipment or confidential information, moves them under California law squarely into being the property of the company.

As company property, they may also very well be within the umbrella of confidential information described in your lengthy employee agreement. Disclosure of such confidential information, even if you are the author, and even if it has not found its way into a product, is not permitted!

Under these circumstances, I would not recommend you show these materials around without written consent of your former employer. If your material has been rejected by the company, it may be willing to transfer ownership back to you. If you left on good terms, this is worth pursuing.

And what could be the risk in taking these materials you created and showing them around?

This scenario was recently in the news. In early December, a federal judge banned toy maker MGA from making and selling Bratz dolls. Carter Bryant, the designer of the Bratz doll line, had previously worked at Mattel.

Findings in the case were that Mr. Bryant had conceived of the line while employed by Mattel. Mattel did nothing with it, Carter left and went to MGA , and the line became a huge hit. The pouty-faced dolls, which MGA had introduced in 2001, had grown from an initial introduction of four dolls to more than 40 characters, and generated millions in profits. But because development of the concept took place while Mr. Bryant was at Mattel, it remained Mattel's property, and MGA 's use was infringing.

All of this is a very general discussion of post-employment rights to work product. Such rights can vary depending on the state or nation in which the material was created. For specifics as to your own situation, it is always best to consult with a local lawyer who is knowledgeable in employment and IP ownership issues.

Is there language in your contract that has you scratching your head? Found something confusing or worse? Submit a question to Jim for developer-oriented analysis in this Famous Last Words column (IGDA members only).

Jim's Bio

Jim Charne practices law in Santa Monica, CA (www.charnelaw.com) where he represents developers, designers, and other clients in the games industry. Jim was the proud recipient of an IGDA M.V.P. Award at GDC 2006, is chair of the annual GDC legal and business tutorial, and a member of the Advisory Board of G.A.N.G. From 1998 to 2001, Jim served as President of the Academy of Interactive Arts and Sciences.

© 2009 Jim Charne. All rights reserved.