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September 6, 2006

Game Attorney Gamecloud Interview

Filed under: Game Law Articles — Tom B @ 9:52 pm

I did an interview for Gamecloud.com…but since they have changed their format and the article is no longer available online, I thought some of my readers might enjoy checking it out. So, here’s my Gamecloud interview from December 2005.

1. First, can you give us a brief background on your legal career?

1. Well I was a late bloomer. I’d taken a sabbatical from undergraduate school for about 12 years to save the world through rock and roll. Then, after successfully saving the world, I returned to school. Eventually I decided pursue a career in law. I was fortunate enough to get admitted into the Georgetown University Law Center in Washington, DC and when I came out was recruited to a position in a large commercial law firm in Miami. So for the first 3 or 4 years of my career I practiced commercial litigation in a big downtown firm. Then, I moved out to a small boutique litigation firm that was doing some fairly complex Anti-Trust and commercial law suits. Shortly after that, I setup my own firm.
One of the problems for anyone starting their law career who wants to do trial work is getting into the courtroom. In a larger law firm, it is less likely for you to actually get into the courtroom since the senior partners are the ones who actually try all the cases. So in order to put myself on the fast track and get some real courtroom experience I applied to the Criminal Justice Act panel. The CJA panel attorneys are the ones who are appointed to represent people in federal court who cannot afford an attorney. So, while I continued to practice commercial litigation, I also handled some fairly large and lengthy criminal cases including two racketeering trials, one that lasted 3 months and another that lasted 5 months. I continued to do commercial litigation and also began doing Intellectual Property law.
I discovered the internet around the same time that I withdrew from the CJA panel and stopped actively pursuing criminal defense work, in the mid 1990’s. Around the same time I discovered the internet, I discovered computer gaming. In 1997, I began playing Quake online which led to the formation of FaTe’s Minions with me as FaTe[F8S], its’ Supreme Warlord. I was hooked. In 1998 I attended my first E3 in Atlanta and was totally blown away. I didn’t really tell anyone there I was an attorney because I was sort of ashamed. The following year I made it to my first GDC and immediately became involved in the then Computer Game Developers Association which morphed into the IGDA.

2. How did you become interested in working on video and PC game legal issues?

2. It was my passion for games that brought me into the industry. In 1998, I went to E3 for the first time in Atlanta, Georgia and then the following year attended GDC. At first I did not let anyone know I was attorney because I was kind of ashamed. I mean really, lawyers don’t make anything; Developers are geniuses who build these wonderful games. So I started volunteering my time through the IGDA and tried to help where I could. The rest kind of grew out of that. I began to speak at GDC and other game related conferences like the Indie Games Con. I also founded and became the chapter coordinator of the South Florida IGDA chapter. These things led to me representing developers and sort of dedicating myself to helping independent developers with their business and legal matters. Eventually I realized that, just like the Programmers and Artists, I had something to contribute to games. Maybe not something that shows up on the screen. But something that developers really needed; legal expertise and business savvy. So, I finally found my place in the industry. Then about two years ago I relocated my firm and home to the Seattle area and now only do game related legal work. It is pristine!

3. What do you think are some of the bigger legal issues that game developers find themselves in?

3. Two Areas; Business and Intellectual Property. Many developers, especially those who are just starting out, don’t have any idea what Intellectual Property is and what are the rules and regulations that are the laws that govern it. They, “just wanted to make games.” The problem is, if you just want to make games, then that’s all you are going to get to do. But, you are not going to get to make any money.
I guess the first issue would be developers that fail to secure intellectual property rights in the content for their games. You know, games are collaborative efforts. The problem is that all this creative work is owned by the person who created it, unless all the contributions are from fulltime employees. But otherwise there has to be a written agreement transferring those intellectual property rights to the studio. A lot of startup developers fail to secure their IP before they go out and try to sell their game and that can cause real problems.
And it is not just startups. I recently had a situation where a developer that has been making games for over 10 years released one of his employees from employment and continued to use him as an independent contractor. Unfortunately, the developer didn’t get a written agreement from the former employee concerning the Intellectual Property rights to his work. It could have been a real mess if the former employee hadn’t been willing to cooperate since the game had already gone gold and been delivered to the publisher. That could have been one huge problem.
The other business problem for new studios is a failure to have a clear understanding of what it is to run a business and doing everything that it takes to do just that. Developers want to make games. But if they want to continue to make games, their first obligation has to be building a solid studio. Many developers really don’t want to do that. If you don’t want to run a business then you should work for someone else.

4. What sort of interesting legal cases involving video and PC game issues have you worked on recently?

4. Right now I am involved in a case against Gizmondo. My client Hand Held Games, a Seattle developer that specializes in smaller screen platforms, entered into a contract with Gizmondo to develop Chicane: Jenson Button Racing. A binding letter of intent that was entered into between the parties gave Hand Held Games the exclusive right to produce the game. Gizmondo was a little slow getting the Dev Kits and other materials to HandHeld in a timely manner, but that wasn’t the big problem. The big problem was that ultimately they pulled the game away from Hand Held Games and gave it to somebody else. Interestingly enough, the CEO of Gizmondo recently resigned among allegations that he had diverted several games, including the Chicane game, from developers that had been working for Gizmondo to his own Development Studio at prices well beyond what was called for in the Hand Held Games contract. I am sure Tom Fessler, the President of Hand Held Games, was really pleased to see that the game was made for almost 3 times as much as what he was going to charge. Eventually the whole Gizmondo company ended up in receivership with pretty much everyone getting screwed.

5. You sell what you call the GameDevKit for start up game developers. How did the idea for this project come about?

5. The GameDevKit came out of a perceived need and my desire to help. I actually came up with the concept on the flight home from the Indie Games Con in Eugene Oregon. As I mentioned above, one of the big problems that startup developers have is that they don’t understand nor do they have a methodology for securing the Intellectual Property assets in their game. Over the years I developed what I felt was a very competent Contributor Agreement that I’d used both with established developers and even for mod teams who were becoming developers. The agreement applies equally to contributors, sub-contractors and employees and effectively conveys all their Intellectual Property rights to the company. The problem I saw was that most startup developers: 1.) Don’t have a company; and, 2. Don’t have any sort of contributor agreement. I have been customizing this agreement for game developers at a discounted price of $1,500 for the last several years. I realized that for most startups, even the discounted price of $1,500 was more than they could afford to spend.

So, after my attendance at the Indie Games Con out in Eugene, Oregon, I decided that I should do a generic version of the Contributor Agreement and then sell it at a flat rate of $300. Now, keep in mind that is less than I charge for one hour of legal advice as an attorney. So, this is a huge deal. Well, I talked to some of my friends about it and they all said “Well Tom you can’t just sell one contract, you’ve got to add more.” So, I started with a section on how and why to start a company with links to the big websites that can facilitate that and do it for a fairly nominal fee like MyCpropration.com. Then I did a section on securing the Intellectual Property assets for your game and included as an attachment the Contributor Agreement.
Now you have a company and you have your assets secure in the company. So I did a section on communications with third parties about your game and explained about the need for Confidentiality in terms of protecting any trade secrets with the company. And I included a Unilateral and a Mutual Non-Disclosure Agreement and explained how and when to use each. The next section has to do with U.S. Copyright Law. I explained what and how copyright law applies to game assets. It also has attached to it the U.S. Copyright Office’s application form that people can use to apply for Copyrights that has a very comprehensive explanation on how to file a copyright included on the form. Finally, the last section of the kit is a listing of links that people involved in Game Development probably already know but in case they don’t, I put them in there.

That’s the history of the kit and I sell it through GameDevKit.com at $295.00. I don’t sell a lot of them and I have even had a few people complain that it was too expensive in spite of the fact that, compared to a the cost of even bad legal advice, it’s a damn good deal. I think I have helpd many small developers and created a great deal of good will in the process.

6. Right now the game industry is under attack by certain people and groups about the content of their games. How do you feel about these attacks in your profession as an attorney?

6. I think that Jack Thompson is sort of like the Organ Grinder’s monkey without the Organ Grinder. He is just dancing around for attention and doesn’t seem to have much concern for whether what he is saying is true or not. He just wants people to listen to him. I think the really sad thing about him is that he has been pretty much a laughing stock in the Legal Community in South Florida for years since he was back attacking 2 Live Crew and anybody else that he doesn’t think meets his “moral” standards as far as Pop Culture. But frankly the main thing that bothers me about Jack Thompson is that anybody listens to him at all. Of course, now Wackie Jackie has been disbarred and pretty much defanged in the process.

That is not to say that everything in games is good. But certainly everything in games isn’t bad - there are no pedophile cookies in the Sims. Games should be treated the same as films and books. Not held to a different standard to treated differently under the law. And for the most part, courts agree with this point, even if Wacky Jackie does not!

I have had a couple of people ask me if I would debate him and I suppose I would. But I wouldn’t bother to call him and set it up. (This part of this interview had a very interesting result - http://gameattorney.com/blog/?p=13 ).

7. As games become more and more expensive to develop, will the relationships between game developers and publishers grow better or worse in your opinion?

7. As far the relationships between Developers and Publishers, I think they will continue to be what they are. Some of them are good, some of them are bad. What I think we will see more of is alternative funding models and this includes the recent Pandemic/Bioware/Elevation Partners in forming their new Super Studio (later purchased by EA). What Elevation Partners brings to the table is enough money so that they will never have to look to Publishers to fund games again. Seamus Blackley, one of the driving forces behind the Xbox at Microsoft who now works at Creative Artists Agency as a game agent, has been pitching independent funding sources for games for years. It looks like his dream is finally becoming a reality.

I think that independent funding sources and self funded games are really going to take a lot of pressure off Publishers because they won’t have to front the money to make the game and it will also put the Developers, or the Developers in association with the funding parties, in a position where they can retain their own Intellectual Property and in the process create long term value in the studios. That is something that hasn’t been able to happen in a long time and it has created a very desperate relationship between traditional publishers and developers. Hopefully, the advent of these new funding sources is going to make the relationships between Publishers and Developers better because Publishers can then do what they do best which is manufacture, distribute, and market games and not have to act as a bank.

8. How do you feel about game developers trying to self publish their titles or using an Internet download service to sell their games? Are there any legal issues to deal with in those cases?

8. Certainly for PC Games, digital distribution is the future. I have developers right now that have games that have received a tremendous amount of critical acclaim that hardcore games certainly know of and would probably be willing to buy. But, since they didn’t have a big display at E3 and the buyers for Wal-Mart and the other big retail chains never heard of their game, the Publishers won’t touch it. Right now, decisions of whether or not to green light a game for publication is initially made by the Product Acquisition team. But then the final decision is made by the marketing people. The marketing people go the retail chains and ask them how many copies of this game are willing to pre order. If the buyers say we never heard of it so we will take a couple of thousand, that game doesn’t get made. There are a lot of great games that don’t get made. The other thing is for a PC title 100,000 units should be a successful game but under the standards that are now being applied by many of the Publishers 100,000 unit sell through would not be a good enough return on investment, even if the game was completely self funded.

On the other hand Derek Smart, the creator of the Battlecruiser Millennium series, recently released his latest version of Universal Combat through digital distribution. If my memory serves me, according to Derek, he sold over 35,000 units in the first 11 days. That level of sell-through was more than sufficient to put him in the black within the first two weeks. Brick and mortar distribution brings with it a lot of costs. Direct digital distribution eliminates those costs which creates much lower threshold for financial success of the game.

In addition, these Pop(ular) Games, what are often referred to as casual games, are another way that a developer can make a lot of little games and sell a couple of thousand and make a decent living at it. If you sell $4,000 worth of games on a 50/50 split you get $2,000 a month. You really can’t build a studio on that. But if you got 20 games doing that, all of a sudden it starts to look a little more attractive. And if the sell through is a little deeper and goes up 100-200% you get a couple of hits the next thing you know you got a PopCap sort of deal going.

9. What other legal issues do you see looming for game developers and publishers in the future?

9. I really got caught short on this one. Several years ago somebody contacted me and asked me about virtual property. I thought it was a joke, theoretical things created in a virtual world having real life value….I just didn’t see it. Well, I have to admit I was wrong. There was an article on the front page of the Business Section of the Miami Herald today about someone who purchased an online resort in an online Massive Multiplayer game for $100,000 and then explained his plan to turn it into a profitable business. And you know what, I think he’s right. IGE is the Ebay of online assets where people can buy Gold, Weapons and even characters for thousands and thousands of dollars. It has been reported that the sale of in game assets is a $50 Million dollar a year industry and growing.

Recent buzz at the development conferences that I have been is that the next generation of MMOGs are going to be free games, no subscription fee, but paid content. That is, the revenue will be derived from items that you have to buy in order to excel in the game world. This is going to create some legal issues that I think that will undoubtedly have some long term ramifications. Imagine someone dies and their estate contains several million dollars worth of online assets that are located…where? The International Jurisdictional issues alone will be enough to give any legal scholar a headache.

10. Finally is there anything else you wish to say about your work specifically and legal issues for games in general?

10. I guess the only other thing I would say about my work or legal issues is that for me being The Game Attorney is Da Bomb! It is a real opportunity to work with the creative people that create these great games and I absolutely love this stuff. Everyday is work. But everyday is fun. For me it is just a real honor to serve the Game Industry.

Answers © 2005 & 2008 Thomas H. Buscaglia

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