UK: Intellectual Property Law And Entertainment Software

"Intellectual Property" ("IP") refers to the ownership of the product of creative thought. IP law therefore deals with the way this ownership is protected and exploited and by whom. In the UK this will mean "copyright" and "trade marks" and perhaps "patents".

Copyright, as its name suggests, is the right to copy and the right to prevent any other person from copying. It protects written (including software code), drawn, musical and dramatic expressions of ideas and arises automatically as soon as a creative work is made. People sometimes talk, confusingly, of "copyrighting their work" but in the UK there is no copyright registration or similar process. IP owners must therefore rely on the use of copyright notices and maintaining adequate records to prove and therefore enforce their copyright.

Copyright is owned by the person who created it except when that person does so as an employee - in which case it will generally belong to the employer. Contrary to popular misconception, if a person is paid to create a copyright work, such as an animation or a graphic, as a freelancer, then the copyright in that work will belong to the freelancer and not the person paying for it. He or she only gets an implied licence to use it. In these circumstances the only way to own the copyright in the work outright, is get it expressed in writing, signed by all the parties (an assignment).

The implications of this are significant. Take for example the situation where a developer commissions a designer to produce graphics for a PC title without an assignment. If that title is successful and the publisher and developer want to convert it to console format then the designer may prevent the use (copying) of the graphics for that purpose without the payment of additional fees.

If the publisher / developer goes ahead without permission of the designer it may be liable for copyright infringement, ordered to stop its sales and required to pay compensation.

As a result many publishers now require developers to assign all the IP to it. Developers should do likewise in respect of all the work done for it by having appropriate contracts in place. If a developer does not but purports to assign everything to its publisher, then the developer may be in breach of contract and liable to pay hefty compensation.

The alternative is for a developer to grant the publisher a licence (permission to use). This is particularly useful where the developer has created proprietary software such as a 3D engine which it wants to use in more than one application. It must be careful therefore to retain the right to do so and by carefully defining the terms on which publishers may use copyright works i.e. the countries, the formats and the royalties, the developer can exercise control over its creations and keep it options open as to further opportunities. For example "Michael Owen’s World League Soccer", released by EIDOS on PC & PSX was also released by THQ on the N64.

Such a licence may be of the complete package or just the 3D engine with an assignment of all the other copyright in the game. Alternatively a developer may licence others to use the engine only, as in the case of the "quake" and "unreal engines". The licensor will therefore continue to profit from its work and the licensee will avoid the costs of developing its own engine.

Another important consideration in relation to entertainment software is trade marks. These are signs capable of graphical representation that distinguish or identify goods and services such as logos and names. Consequently, trade marks can have enormous value and examples include Mario and Lara Croft as logos, and Nintendo and Play Station as words.

In the UK a trade mark can either be registered (®) or unregistered (™) but since 1994 only registered marks have the benefit of trade mark protection such as statutory rights to use them and stop others using identical or confusingly similar marks in the UK. If a mark is unregistered the owner must look to the notoriously expensive and difficult to prove common law of "passing-off" to prevent infringement.

The line over which one must not step is not clear, recently the Football Association failed to stop Konami using the name "Konami Premier Soccer" because it claimed there was a likelihood of confusion with the mark "Premiership". However had Konami called the game "Premiership Soccer" they would almost certainly have succeeded.

Trade marks may also be subject to licences and many popular titles are the product of bright licensing deals. Fifa 97 (98, 99, 2000 etc) is a typical example of the use of a valuable mark to add kudos to a title and the same is happening in reverse, with Lara Croft now marketing Lucozade.

For developers and publishers alike it is therefore crucial that they determine and protect the value in their titles, characters and logos.

Perhaps the most intimidating IP right is the patent. This grants a complete monopoly to exploit the idea / invention or creation in its geographical area. Until recently software patents have been impossible in the UK but the Patent Office has relaxed this policy so that software or processes that make hardware do something inventive, novel and industrially applicable may be patentable. This has been prompted by developments in the USA where the stream of patents for internet applications and processes has been alarming and has led to successful applicants seeking injunctions against developers and publishers who developed their technology before the patent holder.

The majority of software patents may be unenforceable, such is the state of the prior art, however developers and publishers should not discount them. More importantly all developers should keep comprehensive record of their developments to protect themselves in the event that a patent holder makes a claim because evidence of earlier knowledge will defeat a patent.

Intellectual property is perhaps the single most important asset any publisher or developer owns. An appreciation of its value and the law affecting it cannot be underestimated.