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Founding: Transfer of interlectual property to a new company

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Posted (edited)

I would like to start a new company with three people.
But we have a situation in which we need a tip from you.

Following the starting situation:

Person A: Designer & Artist who has already invested a lot of work (two years of work) in three projects (design, documentation, advanced prototypes)

Person B: Producer who has been actively involved in the projects for a year and is driving the development of the company forward. Has invested money in addition to his work.

Person C Is a private investor who wants to finance the founding of the company and wants to be equally involved in the projects.

We want to hand over all project values to the company. The company belongs to all three of us. This should fairly distribute the values among us.
Thus, the exploitation and use rights to the products of the company. We want the investor to have 1/3 of all legal rights on the projects - no doubt.

The investor wants us to name him next to us as the author of the game so that everything goes fast and easy. But I am looking for the normal procedure for this kind of situation.
But the authorship is not transferable in Germany, in contrast to rights of use and exploitation. 
By the way, authorship is an important asset for the designer as it is part of his reputation. Should a game take off, then he can not refer to it by 100% - he can only say he was partly involved, even though everything is from his pen. TL;DR: We don't want to start with a lie about the authorship just because it makes something easier.


Thank you for your time.

Edited by Attila_C

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Sounds like your investor wants something he cannot have. He can buy ownership (partial or outright) but he cannot buy authorship. Some film companies credit an investor with a "Producer" credit, but the Producers Guild doesn't approve of that. You don't need to know that, so don't read it. You should hire an attorney familiar with the games industry to advise all the signatories. If the investor won't bend on the authorship issue, you may have to dump him and find another investor. But that goes back to the classic question: what is the business plan beyond this one game? One game is not a business (LoL notwithstanding).

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Posted (edited)

Hi Tom,
thank you for your response. It's very appreciated.
So you think the way to go is to go to a lawyer and transfer the assets with his advice?
I think this is something we could do of course but how does it work in the future? 

How does a company generally deal with this topic?
In a game company ideas are always born, prototypes developed and designs created. Do you have to clarify the rights every time? If I understand you correctly, then the authorship always has the respective employee: The Game Designer for the game design, the artist for the art assets and so on.

For employees, it is clear that all their work belongs to the company. This should be regulated in the employment contract. Freelancers will receive a similar contract in which the transfer of the rights of use is regulated. But what about a shareholder of the company? Does he have to hand over all his new work to the company each time in the future, or how is this normally regulated?

Thank you very much for taking the time.

(@everyone: please don't shy away to say something. Even if your contribution not correct because this might lead us into a conversation and this is really what I need here. Thank you all in advance)


Edited by Attila_C

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46 minutes ago, Attila_C said:

How does a company generally deal with this topic?

They get a knowledgeable attorney to write a contract that's fair to all and that adheres to the laws in the applicable territories. 

An attorney can answer your other questions. There's a list of attorneys pinned to the top of this board (new entries always welcome).

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