Employee T&Cs (Part 2 – Intellectual Property)

This post continues on from the previous one on the Employee Terms and Conditions we use here at Black Company. The second part concerns Intellectual Property, an important facet of any game development studio’s work.

Intellectual Property

[clauses 13.1 through 13.6]

Pretty much most of game development is about creating things. Creating content, creating game ideas, and creating code to realise the vision. Often the work is done on behalf of another party – a publisher or other client – who will actually retain the intellectual property of that work. If a developer is lucky, they are working on their own properties, and will retain the IP themselves. But in both cases, it is important that the relationship between any employees and the studio with regards to IP ownership is made clear. I won’t claim to be an IP lawyer, or that our T&Cs cover every facet of IP ownership. But they do lay out a clear basis for where the IP rests. Since each sub-clause covers a different major point, I’ll go through them in detail.

13.1

Basically, any IP created by employees, either on their own or as a team, needs to rest with (be owned by) the business, and not by the employee. Also, there is never a point at which the IP is owned by the employee, and then transferred to the business. All the IP created by the employees in their day to day work is the studio’s. This is not just a nicety for the business, it is a requirement, usually stipulated in all of the contracts with other parties. If you are developing a title for a publisher, the IP is passed to the publisher as part of the work for hire contract between the studio and the publisher. There is no room for some of the IP to be held by the employees, it has to all unambiguously be held by the studio, so that it can all be transferred to the other party.

Note this vital part to the clause: “while working on activities for the Company at whatever location“. One of the most important parts of the IP protection is that it balances the employee’s ability to create, with the company’s need to retain its IP without ambiguity.

I have in the past signed a contract which stated that whatever IP I created, regardless of whether I created it on company time, on company property or not, everything I did was owned by the company by default. Of course that means that any work I did at home, on my own machine, at the weekend, was theirs as well. This is unacceptable to most game developers – we all have our own hobby projects, and it’s vital to our morale and sense of personal creativity that we be allowed to develop those ideas. To have your employer effectively grab those ideas away from you, even if they don’t want them and never use them, such that you have to beg just to get them back, is stifling, unfair, and counter-productive.

I can understand the reasoning behind it: the same contract I signed also had the clause which said that I could be asked to work any hours, in any location, if the business needed it. If the company asserted that only work done during normal hours or on company property was owned by them, then any work I did on company projects on my home machine, or off-site in some way might be considered to be mine rather than the companies, even though I was clearly working on company business.

The phrase “while working on activities for the Company” is key here. IP created whilst working on company activities belongs to the company, regardless of when it happens, or where. IP created under any other circumstances may remain with the employee. While there is still scope for ambiguity, this should be minimised by having a clear separation between work activity and personal activity. Employees may do whatever they want on their own time, including being creative on their own personal projects. If they want to be creative on their own time that’s great, but it should be done outside of the office and on their own equipment, so they are safe from any possible insinuation that their work belongs to the company. In turn, the company can benefit from having motivated and creative individuals who don’t feel that their employers are heartless IP-stealing bastards.

13.2

This is a clause about fairness for the employee. If they come up with an idea or other piece of IP which they think is valuable, but which the company does not, they may ask the company to relinquish the rights back to them, so they can then use them as they see fit. This is often the case with game concepts – a game studio might see dozens or hundreds of game ideas from their team. Some are taken up, some might be taken up at a later date, but some might just be the wrong fit for the business, or just not something that can be made the most of. The company loses practically nothing by giving these ideas back to the employee, but gains good favour from that employee. Crucially, note the “for no consideration” part of the clause. Basically, if the employee asks for it back, it’s most likely they aren’t going to pay to do so.

If any IP is given back to the employee in this way, it should always be done so in writing, to make it clear what ideas are being handed off, and so that there are no repercussions at a later date. For employee hobby projects this isn’t a big deal, but any project that is a potential money spinner might cause legal wrangles at a later date if the relationship with the studio turns sour and the exact IP that was transferred wasn’t well specified.

13.3

Not just intellectual property, but also copyright needs to be transferred. Specifically, the business needs to be treated as the author of any created work, as it pertains to copyright legislation. So in this clause the employee is agreeing to relinquish any authorial rights they have. I’m not entirely clear on the details, but I believe that authors have the right to stop certain ‘detrimental’ things being done to their works by others. Obviously again this is a right which would make things messy unless the employee agreed up front to relinquish this.

13.4

Certain parts of intellectual property protection, such as trademarks, patents, etc. do need the involvement of a creator, in person. This clause stipulates that the employee must join with the business in securing those items, and in protecting the business’s interests (for example if the business needs to litigate against someone else who is infringing a trademark). There are two things that are key to note here: 1) the employee needs to help with these applications even after they have left the employment (crucial since such applications can take a long time), and 2) all the expenses and decisions are the employers (i.e. the employee shouldn’t be financially impacted by this responsibility).

13.5

This is simply a reinforcing clause like 13.4, pointing out that the employee needs to do whatever is necessary to make sure that the IP is assigned to the business properly, even after they’ve left, and that the business should carry any expenses incurred to make it happen.

13.6

This clause is the flip side to IP creation – it requires the employee to ensure, to the best of their abilities, that they aren’t infringing anyone else’s IP. As long as they exercise due care, they should be immune from any legal action directed at the business. That is, the studio can’t turn around and simply blame the employee for any infringement unless it is demonstrably their fault.

Next Time

And that’s it for IP. In the final post in the series, I’ll cover the remaining clauses which are games industry specific.

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Last modified: August 14 2014.