So I've been kind of out of game development for a while:) but Im thinking of starting it again. The thing is Im broke and I dont have the money to incorporate. I will as soon as I can but I just cant for a while. So thats more reason to be afraid of the legal troubles. My question is: is there a realistic chance for a small indie to get sued over something? (sued or get a C&D asking for XX000 sum for legal damages.) Does that chance increase a lot if you ask money for the game? (think of a game that makes about a 100$)
I think there are many of us here in a similar situation so please try to give a detailed answer.
In my case: I work alone, Im thinking of making small atmospheric games (single player / PC) with minimal number of characters, names. Im from the EU. I do intend to spend some money on a lawyer to help me out with the EULA and basic stuff. Thanks!
Legal dangers for small indies
Without knowing what your intentions are, it is really hard to rate your situation. There's a large risk difference to create a chess game with hand-made art and doing a 1:1 clone with ripped art.
Even if you create all the art yourself from scratch, there is still some risk. If (as unlikely as this is) you'd never seen Mario before but just happened to recreate him perfectly from scratch yourself and put it in a game, you would still be infringing on Nintendo's IP, even though you had no intention to and didn't even know you were doing so. So while this obviously isn't going to happen with a character as universal as Mario, there is so much content out there that there is a chance you could accidentally infringe on some trademark without knowing it.
Publishing companies (and this goes for books, movies, etc as well) have entire legal departments to ensure this doesn't happen, but for a small business this simply isn't feasible. In reality, the best you can do is just create your own world and characters and avoid any real-world names. Search any names you do come up with yourself to ensure they're not already being used. You could try image searching any art you do come up with yourself, but that may or may not work. If you do still have some money left in your legal budget you could engage a lawyer to do basic checking for you, but with limited funds, there's only so much they'll be able to do.
In the end you'll just have to decide for yourself if you're willing to take some risk if you don't have the resources to ensure you're 100% ok (if there even is such a thing).
Regarding your question about whether or not it increases the risk if you're charging for a game - no, it doesn't. IP infringement is the same whether you're making money off a project or not. That being said, if another company does decide you're infringing on their IP and sues you for damages, they're likely to ask for more money if your game has been commercially successful. Though I do believe (I'm not a legal expert) that when awarding damages, the mitigating factor is not how much money your game makes, but how much the other company may have lost due to your game.
You don't need to worry about this until you have a saleable game product.
Artwork can always be swapped out later.
Develop complete game-play which people like before worrying about legal structures to sell it.
I want to point out that it isn't only art and copy rights that can lead to a lawsuit for indie developers.
Every thing you use that was made by someone else is a potential lawsuit, from game engines to file formats and third party plugins. As a indie you will be using things made by others, making every thing yourself is near impossible and at best will waste the time you could be spending on the game.
The best you can do is to follow the law and when in doubt, you can bet you will be sued.
My question is: is there a realistic chance for a small indie to get sued over something?
Small indies often have to deal with legal matters, however you will often receive a warning allowing you to take action or prepare yourself.
Does that chance increase a lot if you ask money for the game?
I think Minecraft is a good subject to study, after it became popular people attempted to sue the developer for all kinds of reasons.
Not always. Depending on details it can be more important to get a lawyer involved earlier rather than later.
You don't need to worry about this until you have a saleable game product.
Working alone is far less risk than working with a group. When you've got a group of people you need a lawyer involved up front to ensure continuity of the project. Without proper agreements in place everyone's work is owned by the individual, so if someone leaves for any reason (move, loss of interest, death, dispute) the combined work enters a kind of legal limbo where it cannot be sold or transferred or used until the ownership of the missing person is resolved. You need proper written agreements to assign the work to a person or to a legal entity. People involved also may need to have employment agreements or collaboration agreements in place in the event of a dispute.
Working as an individual there are concerns with contracts and agreements you make. Are you signing as a person, or are you signing as a corporate entity? While it probably doesn't matter, it could make a difference if agreements are in your name or your company's name.
Any time money is involved tax law kicks in, and that's somewhere it is important to have legal and tax advice. Depending on your location and the amounts of revenue, details about how the money is collected are important, details about tax collection and turning tax money over to the government are important. If the money is going to you as a person, or if the money is on paper going to a corporate entity first and then going to you as a capital withdrawal, that can make an enormous difference. Money changes hands for many services long before you have a product for purchase.
Depending on your location on the globe, you probably want to register your copyright and trademarks with the appropriate government groups so you can enforce your rights if necessary. In the US, copyright registration is just $35 and can be done in under a half hour.
When you build your website there are law you want to respect, usually in the forms of a Terms of Service page and a Privacy Policy, but some locations on the globe have laws that you must display a cookie policy or age verification. Others have requirements that you retain logs of web requests for a minimum amount of time. Others have requirements that certain data must meet data security rules.
It gets worse as you grow. When small, people often won't take action because you don't have resources. As the business grows it becomes more valuable of a target, people assume they can invest a few hundred or thousand dollars worth of time threatening or attacking and get more than that out of you. You'll get crazy C&D orders and settlement offers for all kinds of crazy claims. I've seen "settlement offers" stating that my small business was violating ADA requirements for customers even though it is just me doing moonlighting work, claiming they will settle and agree not to sue even if I don't correct issues in my bathrooms, kitchen areas, walkways, and doorways.
Once they reach large enough status companies get a continuous barrage of legal threats. Threats that a newly announced game was stolen from someone's idea. Threats that someone once posted an idea similar to that on a forum that one time and it clearly predates the successful product. Threats that a person once submitted an unsolicited idea to someone at the company so clearly the company stole it. Threats that they're violating a patent over WiFi and can settle out of court for a low price. As you grow the risk and legal costs grow considerably.
Author
Thanks a lot! and thanks LennyLen and Frob for typing those long and useful answers!
(Further posts are welcome but I will be away from keyboard for a few days)
For an indie studio, or even a larger studio operating without much financial buffer, the biggest threat is being forced into a position of having to defend yourself in an expensive court battle (read: essentially all court battles). Whether you're in the right or in the wrong doesn't much matter when getting to the bottom of it all bankrupts you or your company, and in most cases its difficult or impossible to get the other party to cover your defense costs even if they lose. Combined with the fact that, at least in the US, courts give a pretty wide berth for a plaintiff to bring a case, one should usually operate under the assumption that they can be sued at any time, for any reason at all. The only thing protecting you from such action is whether the would-be plaintiff thinks their case can be presented strongly enough for the financial reward to outweigh the financial risk.
In the case of non-commercial trademark infringement (e.g. fan-games) the first step has almost always been a cease and desist letter; All that means is "Stop what you're doing or we'll bring you to court." -- they can't compel you to pay money to them at this time. There's no lawsuit yet, monetary demands are for settling lawsuits (they could offer you indemnification against a lawsuit, essentially a contract saying they consider the matter resolved and forfeit any future claim, which would be offered to you at a fee, but this tactic is more of a patent-troll thing, but at that point the law isn't involved.) Remember that lawsuits are expensive for plaintiffs too, and they're not any more eager to enter into one than you are. If they can get their desired outcome with a C&D, its in their best interest to do so.
In the case of commercial trademark or copyright infringement (e.g. clones, counterfeit goods, unlicensed merchandise, commercially-distributed fan-games) a plaintiff will usually seek both civil and criminal penalty (if applicable); its most likely they will not issue a C&D and go directly to involving the law. Usually for the civil portion they will prefer to reach a settlement, but awarded damages can be a substantial multiplier of actual harm in these cases, so there can be strong motivation to see the suit to its end without reaching a substantial settlement. The attached criminal charges are often a bargaining point.
Understand though, that nothing binds a plaintiff from seeking civil or criminal penalty for non-commercial infringements. Whether you've made any money or sought to make any money has no bearing on whether you can be sued, and very little to do with how much damages can be sought after. Certainly those who have made money are more attractive targets, as the plaintiff can expect to see damages paid, and as a warning to others who would do the same, but nothing in the legal system would stop Nintendo from suing a Mario Brothers fan-game made by a 12-year-old in their parents' basement.
Also understand what can and cannot be protected under the law. Primarily you are dealing with Trademark (Registered trademarks, such as titles and perhaps names of key elements, characters and their likenesses, etc) and copyright (counterfeits and direct clones, direct appropriation of code or artistic elements from a game.) With trademark law, the essential question revolves around "Would the defendant's actions and presentation cause a layperson to confuse the defendant's infringing offerings with the legitimate offerings of the plaintiff" guilt or innocence hinges on that question, more or less. With copyright, the question is whether you stole content, in whole or in part, from the original.
Gameplay generally is not offered any protection under IP law -- Super Mario Brothers doesn't mean that Nintendo owns the rights to the modern 2D platformer, for instance. There might sometimes be an issue of patents if your source code uses a patented algorithm, or your studio has appropriated a patented business process; however you don't see many of these suits except between very large companies in direct competition, or from patent trolls. Unfortunately there have been cases of patent trolls going after small, generally-successful studios using over-broad patents. In my opinion, the patent issue is not much concern for a small studio -- you should do some due-diligence, but in the end its unlikely you ever would have anticipated the direction a lawsuit would come from, simply because you're more likely to be targeted by a troll using an over-broad patent you never would have thought applies to you.
And for the usual disclaimer: I am not a lawyer and neither are most people on this website. Even if some are, no advice here should be construed as legal advice. Only *your* lawyer can provide *you* legal advice. We here always do our best to represent the truth, and many here have had interactions from which they base their information on, but we are not perfect, provide no legal advice, disclaim any responsibility, buyer beware, your mileage may vary, batteries not included, yadda yadda yadda and etc.
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