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Kipple

Comic book license

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We are working on a TBS game set in an original universe. One of the members of our team has a friend who makes comic books. I believe he has a contract with a distributor / publisher but I don't know the details. My understanding is that he's pretty independent, as in he has control over what he's going to work on. The comic book creator has expressed interest in a project based in our universe. We're pretty excited about it as it would mean free advertising for our game and brand. He wants to have exclusive rights to all comic book products, graphic novels, and related merchandise. I have a few questions for whoever is familiar with the topic: 1. I'm guessing his request is pretty standard for a licensing contract. Does it seem reasonable to you? 2. We were also planning to sell merchandise (such as tshirts with our logo). I think we have two options: either split the money or have two product lines (one for the comic book, one for the game) and work that into the contract somehow. 3. I realize we're going to need an attorney to overlook the contract. Where could I find some more information about the topic before we get to that point? 4. Is it reasonable to draft an NDA and ask the other party to sign it before we start releasing details about our property? If yes, is it absolutely necessary to have an attorney review it or does it still serve its purpose otherwise? I think the answer to question 4 is "it matters if you go to court". I'm being a penny-pincher because I don't have much spare cash and I'm already going to be spending a bunch just incorporating and applying for trademarks. Thanks for reading!

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Kip wrote:
>1. I'm guessing his request is pretty standard for a licensing contract. Does it seem reasonable to you?

It's pretty standard that the party licensing IP wants all the rights everywhere for all time. Is it reasonable to give them to him? Only if you don't think he's gonna make a killing on your IP.

>2. We were also planning to sell merchandise (such as tshirts with our logo).

Your logo being an entirely different thing from the IP under discussion, of course...?

>I think we have two options: either split the money or have two product lines (one for the comic book, one for the game) and work that into the contract somehow.

There are other options as well - don't give him the license he wants, give it to him and forget making merchandise yourself (you make the game, and he makes the merchandise)...

>3. I realize we're going to need an attorney to overlook the contract. Where could I find some more information about the topic before we get to that point?

Read a book on copyright, trademark, and patent. But why do you need to find more information before hiring an attorney to help you make sense of the information? How long do you expect this guy's offer to remain open?

>4. Is it reasonable to draft an NDA and ask the other party to sign it before we start releasing details about our property?

Sure, why not. How can you expect him to keep interested in a property you aren't telling him about?

>If yes, is it absolutely necessary to have an attorney review it or does it still serve its purpose otherwise?

IOW: Is it absolutely necessary to have a swamp guide or is it a good idea to venture into the gator-infested swamp on your own? Wearing just sneakers, shorts, and a T-shirt, without any equipment of any kind. Oh, and there are snowcapped mountains in the swamp, and a lost valley of dinosaurs. And lots of snakes.

>I'm being a penny-pincher because I don't have much spare cash and I'm already going to be spending a bunch just incorporating and applying for trademarks.

Sounds like you're not ready to begin this business.
[Edit] Your attorney question may have been about solely the NDA. Not absolutely necessary to have attorney involvement for a simple NDA. [/edit]

[Edited by - Tom Sloper on June 26, 2008 12:23:42 PM]

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> It's pretty standard that the party licensing IP wants all the rights everywhere for all time. Is it reasonable to give them to him? Only if you don't think he's gonna make a killing on your IP.

I figured we would gain a lot if he makes a killing, particularly if we negotiate some royalty rate. Besides, he doesn't get the rights to make movies, novels, and whatever else. Am I looking at this wrong? On the other hand I certainly see the benefits to setting an expiration date on a licensing contract.

> Your logo being an entirely different thing from the IP under discussion, of course...?

I think this went over my head, sorry. d: I meant the logo we design for our brand. It's possible he might come up with a logo that looks like ours but has a more "hand-drawn" feel to it, for example. So now we have the comic book logo and the game logo. He could make the merchandise with the former and we would make the one with the latter. Or we could avoid brand dilution altogether and just divide the revenue.

> There are other options as well - don't give him the license he wants, give it to him and forget making merchandise yourself (you make the game, and he makes the merchandise)...

I'd like whatever arrangement we make to make everyone reasonably happy; I thought dividing revenue or having two product lines would.

> But why do you need to find more information before hiring an attorney to help you make sense of the information?

Wishful thinking - I was hoping someone might have run across some specific info on licensing IP within the game industry. Furthermore, perhaps I'm misunderstanding the attorney's role, but I don't expect him or her to have the burden of negotiating the best contract terms for me. I would have to be well informed myself.

> How long do you expect this guy's offer to remain open?

He's a friend of a friend, and we haven't yet met to talk. I'm assuming he'll start another project if we can't arrange something within a couple months.

> Sounds like you're not ready to begin this business.

Independent video game development? What makes you say that? It's true that we don't have a lot of money and that we're inexperienced, but we have a solid concept and a good plan to bring our project to completion.

Yes, the attorney question was about the NDA. I would not sign an IP licensing contract without attorney involvement.

Thanks a lot for your feedback!

Edit: Minor correction

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Quote:
Original post by Kipple
> Your [company's] logo being an entirely different thing from the IP under discussion, of course...?

I think this went over my head, sorry. d: I meant the logo we design for our brand.

You can do whatever the final license agreement says you can do. It's up to you to figure that out. And yes, a good IP attorney will be able to advise you on the terms of your license agreement.
Quote:
> Sounds like you're not ready to begin this business.

What makes you say that?

My standard thing: if you can't afford an attorney, you're not ready to go into business. Attorneys being very important.

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Good deal. There was a small misunderstanding but it was clarified: I do not plan to sign anything binding my company without an attorney looking it over. I do have enough money to afford an attorney and I understand the importance of having one.

Cheers!

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Quick note on DIY NDAs:

Be very specific about what constitutes trade secrets and/or proprietary information that may be disclosed during negotiations and is therefore subject to the NDA. While it's always risky to disclose the specific proprietary information (i.e., the trade secret itself) in the document, being specific enough to ensure that your intent is clear and unambiguous is EXTREMELY important. I can't begin to tell you how many problems arise because one party is unsure as to the scope of the NDA, and discloses proprietary information because the contract lacked specificity. Using a standard NDA may be too generic to cover your proverbial behind, so it's always advisable to have a lawyer (a walking NDA) review the trade assets that should be covered under the NDA and draft language that clearly and unambiguously covers those assets/secrets.

Best of luck!

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The legal issues have been discussed so I will just focus on the business side. I have worked on lots of IP related deals over the years and much of what they want is fine but some isn't.
Quote:
Original post by Kipple
The comic book creator has expressed interest in a project based in our universe. We're pretty excited about it as it would mean free advertising for our game and brand. He wants to have exclusive rights to all comic book products, graphic novels, and related merchandise.

Why should they get use of your IP to make money when all you get is "free advertising" for your game. If they want to use your IP they should pay you a royalty or license fee. Imaging how you would feel if the game flopped but the comic was a big hit and they made a packet from your creation.

Quote:
1. I'm guessing his request is pretty standard for a licensing contract. Does it seem reasonable to you?
No.
Comics and graphic novels yes, merchandise no. That doesn't mean that you shouldn't agree to give them the merchandise rights - in return for a royalty/fee, just that they shouldn't be given away as part of some other package.
Quote:
2. We were also planning to sell merchandise (such as tshirts with our logo). I think we have two options: either split the money or have two product lines (one for the comic book, one for the game) and work that into the contract somehow.
This is why you shouldn't include/give them away in a deal for comic books. Do them yourself or license the rights to someone else but don't confuse the issue by trying to split them - it devalues the rights and may lead to conflict later.

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Thanks, Dan! I think I've gotten some good ideas about how I should approach this deal (if it actually does happen).

Mona, I also want to thank you for your suggestion! My NDA is pretty generic but it does list specifics like code, algorithms, design notes, and such. I will get an IP lawyer as soon as I file for trademarks and I will ask him to look over my NDA as well.


Alex

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