This is one of a series of ongoing responses to business and legal questions on gamedev.net. I hope that we will be able to provide some useful information for developers and those interested in becoming developers concerning legal and business matters of interest. And, like any good lawyer, I will clarify my responses in advance by saying that this series of articles is for informational purposes only and, while relating to legal matters, do not constitute formal legal advice of counsel. So, remember that this is general advice and it's always best, when possible, to ask an attorney directly for any specific questions you have.
Today's question comes from Soren Dreijer as follows:
Question: Protecting game ideas
I have something I've given a bit of thought lately. Say you have this brilliant idea for a game or some software but you need a publisher or someone who can finance your project. You then setup a meeting with an interested company. How can one assure that when you've told the the other party about your great idea that they won't just "steal" it (in the sense that they some months later release an almost identical product)? How can one make sure the other party won't just take your idea?
While the content of your game is protected by copyright, the ideas and other aspects of your project and company are not. Under the laws of copyright it is only the expression of an idea that is protected by copyright, not the idea itself. So, Soren correctly wonders, how does he talk about the ideas behind his game without putting his entire project in jeopardy?
Let's start with a little general background on this type of intellectual property (IP). Confidential information is technically referred to as Trade Secrets. And any information, including ideas for games and gameplay, are protected as Trade Secrets so long as these ideas took special talent and time to develop and the company treats them as secrets. Information released to third parties or to the public is not protected under Trade Secrets law, but information that is treated as secret is. When this confidential information is revealed to a third party its status as Trade Secret information is jeopardized. So, it is not just concerns about the trustworthiness of the person that you want to talk about your game to that is the issue here. In order to protect your confidential information from losing its status as Trade Secret or from unrestricted distribution it is important that developers use a Non-Disclosure Agreement (NDA) anytime that they communicate with third parties. It is also just as important that they treat the ideas or other materials that they think are confidential as such internally by treating them as secrets. This means that you don't make public posts about your confidential materials and that you and everyone else who is involved in your project sign contributor agreements acknowledging that fact that this stuff is secret and agreeing to keep it secret.
There are different types of discussions that will occur in the life of any developer. So, there are different types of NDAs. When a developer is discussing his game with a third party that is not in the game industry, such as potential investors, or non-creative employees, a Unilateral NDA is appropriate. A Unilateral NDA protects the developers creative materials that are retained in a confidential environment from being divulged by any third parties not within the scope of the developer's business. The signatory acknowledges the confidential nature of the information being provided and agrees not to disclose it to anyone else without the Developer's written permission.
While a Unilateral NDA is great for dealing with people outside of the industry, they are of little use when dealing with publishers or other developers. That is because publishers and other developers have their own confidential information that they need to protect in conjunction with their discussions with the developer. The solution to this dilemma is the Mutual NDA. The Mutual NDA allows for the exchange of confidential information between developers, or between developers and publishers in a manner that allows both of their property to be protected and still revealed to specific individuals on a need to know basis.
It is not unusual for a publisher to provide their own special Mutual NDA for execution prior to talks with any independent developer. But be sure to read what you are signing. At times publishers will use these agreement to shield themselves from exposure while at the same time stripping the developer of any real protection. For example, I reviewed a Mutual NDA from one publisher that included language that while acknowledging the confidential nature of the materials provided to the publisher by the developer, stated that any discussions between the publisher and developer were not confidential. This additional provision pretty much gutted the developer's protection. If you are that close to a real deal take the time to carefully review the NDA you are being asked to sign. Or better yet, pay a competent lawyer to review it for you. That way, at least you understand fully what you are signing before you take the plunge.
That's the legal advice. Now for some practical advice. When you are pitching your deal to potential investors you should endeavor to instill in them a sense of value in you and your game project. After all you are asking them to invest their money in you and they need to achieve a decent comfort level before they will consider doing so, unless they already know and trust you. Presenting a potential investor with a unilateral NDA before you discuss the details of your project, or give them a business plan or design document to review, shows them that you are serious about what you are doing and competent enough to protect your and their financial interests. So, do not look at asking a potential investor to sign and NDA as a burden. It is actually a great opportunity to show them you are serious and competent.
Publishers are used to Mutual NDAs and usually have their own ready for you. Though some publishers don't like to sign them at all. Sometimes this is because they have so many internal projects in the works that they feel the risk of signing an NDA and then releasing a game similar to yours and incurring possible exposure is not worth it to them. Sometimes it is because they are looking for free ideas! If a publisher does not present you with their mutual NDA, give them yours. If they say they do not sign NDAs, try telling them that you need it because if you tell them your super secret idea without one it will no longer be a secret and anyone, including your employees who you made sign confidentiality agreements, could use the idea with impunity. If that does not convince them to sign your NDA then you have to simply decide how desperate you are to show your stuff and take a shot or walk.
In reality most legitimate publishers see so many ideas a year (literally thousands) that they could care less about your idea no matter how cool you think it is. But without the legal protection of an NDA you leave yourself open to the unscrupulous quasi publishers that often prey on start up developers looking to take advantage of them any way that they can. And that does include poaching ideas if they are good enough. So go for the NDA and if they are refusing to sign one, check them out before you show your stuff by searching the game development forums or even ask for references from other developers who have dealt with them to make sure that they are worth dealing with. After all, there are worse things than not getting a deal with a publisher. One is getting a deal with a publisher who takes advantage of your passion to make games by stealing your work! So, be careful out there....
Until next time - GL & HF!
Tom Buscaglia - Lawyer, Game Industry Evangelist, and Hardcore Gamer.
Tom Buscaglia is an attorney practicing technology law in Miami, Florida. In addition to obtaining his Law degree from Georgetown University in 1985, he holds a B.A. degree in Philosophy from S.U.N.Y., Buffalo, with honors in Phenomenology and the Philosophy of Law. Tom is a principal in the law firm T.H. Buscaglia and Associates in Miami, Florida, where he practices law for a living and plays computer games and philosophizes on the side. Tom's firm's web site is www.gameattorney.com.
Tom is dedicated to the computer and video game industry, assisting developers in all aspects of their legal and business needs and has been representing game developers since 1991. Tom was the main business and legal presenter at the 2004 Indie Game Conference in Eugene, Oregon, speaking on Effective Developer Contracts as well as Legal Issues to Consider When Starting a Game Development Studio. He presented again this year at the Game Developer's Conference in San Jose on developer/publisher deals and contracts in a presentation called The Negotiation and a round table discussion on the Publishers "Rules of Acquisition". Tom was on the Game and Simulation panel at the The Interservice/Industry Training, Simulation and Education Conference (I/ITSEC) and was the Keynote Luncheon Speaker at the 2003 Summer Simulation Multiconference in Montreal, Canada, sponsored by the Society for Modeling and Simulation speaking on The Game and Simulation Industries: Convergence or Collision. He wrote the chapter entitled "Effective Developer Contracts" for the book, The Secrets of the Game Business. He is a contributor to numerous International Game Developers Association, Business and Legal Committee, publications including: the Publisher Contract Walkthrough white paper, on Game Documentation and Trade Show Demos and Termination Provisions; the Game Submission Guide on Legal Issues and the soon to be released Intellectual Property white paper on IP Contracts Independent Developers Sign. Tom published a series of online articles on www.GIGnews.com to assist "rookie" game developers on the legal issues they should consider when starting out in the game industry entitled Initial Legal Issues, What are these games made of...legally speaking and Completing your Contract Arsenal. Tom was a presenter at the 2002 Game Developers Conference, in San Jose, California, on the topic of "The Phenomenology of Game Design". Tom has been a guest lecturer at Full Sail in Orlando, Florida, giving a presentation to the Game Programming students on Intellectual Property and what to look for, and look out for, in their first employment agreement.
Tom is the Founder and Executive Director of Games-Florida, a non-profit committed to building the Computer and Video Game development industry in Florida by bringing Florida to the Game Development industry and bringing the Game Development industry to Florida. www.games-florida.org He also sits on the Advisory Board of the Digital Media Alliance of Florida www.dmaflorida.org recently participating in a DMAF Panel Discussion with Florida game industry leaders at Full Sail in Orlando on The Future of the Game Industry in Florida." Tom has been the Chapter Coordinator for the South Florida Chapter of the IGDA since its inception, and is a moderator for the Business and Legal forums on IGDA web site, www.igda.org.
As FaTe[F8S] Tom is the founder and Supreme Warlord of FaTe's Minions, an online gaming "clan" that has been competing in various online competitions since January, 1998. www.f8s.com As a "hard-core" gamer, Tom plays online on a regular basis and has a gamer's appreciation and understanding of the game industry.