Legal Considerations and Challenges

[Segev]

The real irony here is that MMOs are one of the few kinds of game where piracy is just not a concern. Not of the standard thing players install on their machines, anyway.

So you got the software for the client for free? Great! You still have to pay to use the server. (In fact, most MMOs give away the client as a free download for that precise reason.)

[Codewalker]

Not really directly applicable, but I found this in the 2011 NCSoft detailed audit report and thought it was interesting. It's just a list of legal actions that the company was involved with at the time.

As December 31, 2011, the Company is a defendant in one pending lawsuit with total claims amounting to ₩64 million in the Republic of Korea. The Company is also a defendant in pending overseas litigation with regards to unfair acts on uncovering fraudulent user accounts and the addictive nature of an online game, Lineage 2, filed by Craig Smallwood, a user of Lineage 2. The Company is also a plaintiff in 11 pending lawsuits to claim the delivery of a building (the Kyungam building) filed to current occupants. As of December 31, 2011, however, no estimate can be made at the time of settlement, or the incremental amount of obligations, which could arise, if any, upon such settlement.

What's especially interesting about the Craig Smallwood case is that the district court ruled that the EULA clause disclaiming liability was invalid and allowed the case to proceed. (Edit: to clarify, they ruled that liability due to gross negligence cannot be waived, not that the EULA didn't apply)

[avelworldcreator]

I strongly agree, and I think this is a critical point to keep in mind, regardless of the entity structure that ends up being used.  Those of you who've followed my career on the official fora (if all two of you are reading this) know that I've often argued that the players' emotional stake in CoH, while important, doesn't and shouldn't give them creative control over the game as a whole.  Players can have good insights.  On the other hand, players are not developers.  "Vision" is not a dirty word.  (The remedy where the vision is cloudy is to take your money elsewhere, not to demand a change.)

It may be hard or impossible to get the original devs, for the reasons I discussed above.  It would sure be great if we could, though.  Heck, I'd just appreciate some industry insider advice at this point.

To that end, it might be helpful to put together a list of some experts or fields of expertise we might need.  I'll start:

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• Someone with experience in game design and publishing.  This is necessary to find out the customs of the industry, as well as what works and what doesn't (in a business, as well as a game systems, sense).
• Someone with business experience.  This person can provide advice on setting up an entity, entity choice, how things should be structured, capitalization, and the like.
• An accountant, to handle things like tax returns and keeping track of funds.
• An attorney to handle legal issues related to the business in greater detail than we can do in this thread.
• Investors.  Ideally, we find an existing publisher for the existing game, relieving us of the need to found both our own publisher and our own development studio.

.
[/list]

Feel free to add more ...

Just for the record, if it hasn't been discussed further on, I'm a member of the game development industry even though our company is still only in its startup phase. I have been in the position of recruiting development staff. What I have learned is that such staff often have very unstable employment histories. The companies hire for limited contracts and it is common not to renew. As a consequence such people are often migrating, looking for new contracts. In such an environment, non-compete clauses would tend to be rare, but non-disclosure would be very common. Why? Because to do otherwise would be to destroy available talent but the companies would still need to protect their IP. I've either worked for, freelanced, or been an officer for 3 game companies for the record: Global Games (board games), Kenzer & Company (RPG and other games), and Kingdom Come Games (officer & software lead).

[Victoria Victrix]

What I think should be reasonable is a "creator's bill of rights."  One that incorporates the same "use it or lose it" language as book contracts.

In a book contract, the publisher is obligated to keep the book in print.  If the publisher does not do so in some form, in X years (varies by publisher, author, and how aggressive the author's agent it), the rights go back to the author to be resold or redistributed as the author sees fit.  The only one of my books to ever go out of print has recently reverted, and the Marion Zimmer Bradley Trust is putting it back in print in e-format.

This would prevent firms like NCSoft from squatting forever on an IP, which I think is only fair.  Given how fast things move in the game industry, I think a 1 or 2 year limit on IP squatting is reasonable.  This would also give firms the incentive to sell while they still can.

[avelworldcreator]

What I think should be reasonable is a "creator's bill of rights."  One that incorporates the same "use it or lose it" language as book contracts.

In a book contract, the publisher is obligated to keep the book in print.  If the publisher does not do so in some form, in X years (varies by publisher, author, and how aggressive the author's agent it), the rights go back to the author to be resold or redistributed as the author sees fit.  The only one of my books to ever go out of print has recently reverted, and the Marion Zimmer Bradley Trust is putting it back in print in e-format.

This would prevent firms like NCSoft from squatting forever on an IP, which I think is only fair.  Given how fast things move in the game industry, I think a 1 or 2 year limit on IP squatting is reasonable.  This would also give firms the incentive to sell while they still can.

Ooh! I can still amend the license agreement for that! You, of all people, should be familiar with IP issues and publishing. I can add  sections to allow one year, two year, and indefinite transfer. Actually, because of the length production can take in this industry three years should be an option, and the default one at that.

[Victoria Victrix]

Ooh! I can still amend the license agreement for that! You, of all people, should be familiar with IP issues and publishing. I can add  sections to allow one year, two year, and indefinite transfer. Actually, because of the length production can take in this industry three years should be an option, and the default one at that.

In book contracts, the "obligated to keep in print" dates from the month of first publication.  Yes, it can take three years from the time a contract is signed to the time the book first is published.  I would amend your license agreement of "use it or lose it" to amend from date of first publication, which should be defined as your choice of Actual or Beta rollout.

[avelworldcreator]

In book contracts, the "obligated to keep in print" dates from the month of first publication.  Yes, it can take three years from the time a contract is signed to the time the book first is published.  I would amend your license agreement of "use it or lose it" to amend from date of first publication, which should be defined as your choice of Actual or Beta rollout.

Needs a default there. Final Release or Beta? I'm leaning towards beta, but I consider you as having expertise based on real world experience.

[Victoria Victrix]

Needs a default there. Final Release or Beta? I'm leaning towards beta, but I consider you as having expertise based on real world experience.

I'd say Final Release (or perhaps Release of last Update).  So long as the game is live, the reversion option won't get triggered, which would save old warhorses like Everquest from the Glue Factory.

In fact, if we are going to go on the book model, we actually should count from Shutdown Date, which corresponds best to "last publication date," which is how book right reversions are counted.  On the other hand, we really don't want to give any encouragement to the vultures who will sit on the corpses of games until there is nothing there but dust and bones.

[avelworldcreator]

I'd say Final Release (or perhaps Release of last Update).  So long as the game is live, the reversion option won't get triggered, which would save old warhorses like Everquest from the Glue Factory.

In fact, if we are going to go on the book model, we actually should count from Shutdown Date, which corresponds best to "last publication date," which is how book right reversions are counted.  On the other hand, we really don't want to give any encouragement to the vultures who will sit on the corpses of games until there is nothing there but dust and bones.

Thanks. I'll make that modification. I'll go with two years after shutdown and that there must be at least a beta version using the material within 3 years of its contribution (that allows for production delays). That means you can't just sit on contributions indefinitely. I won't add any modifier sections for this part.