Employer Insight: Sheridans - Commercial Aspects of the Gaming Industry

Taylor Davies' background is surprising and certainly not your typical 18-year-old who did a 3-year law degree before falling into entertainment law.  He is a creative, who at 18 years old went to London to study drama. Alongside his work within music and acting he became acutely aware of the necessities of and perhaps lack of knowledge of commercial agreements, tax laws, licensing and how a business actually runs. As Taylor introduced himself, these were his reasons for getting into entertainment law - to help others not run aground. 

What is unique about Taylor Davies’ talk is that we hardly ever touch on these important areas of setting up games companies and true they are a bit dull and not the exciting stuff however the enormity of what happens if you don’t know about IP, copyright, trademark versus company name and creative tax relief or being sued and losing huge amounts of money or potentially losing your original ideas. 

Sheridans are a major entertainment law firm representing large players within the games and music industry.

The first question is what is IP? 

Intellectual property can be any of the following - the creations of the mind, such as inventions, literary and artistic works, designs and symbols, names and images used in commerce, ideas/concepts, as fixed expressions and knowledge.

Simply put, having intellectual property protects you and your creation. Investors will tell you that IP is your most valuable asset - why you ask because considerable value sits under your Intellectual Property. If your work isn’t protected, the risk is immeasurable.

Clearly it is important to note that if you assign the IP of a creation you are basically giving them all rights to that creation. You are giving everything away from that moment on. There is no going back, even when something you initially created makes millions!

Sometimes you can license part of the game/creation/animation and you can then say for how long a distributor can have it and a list of agreements of what they can do with it.

There are different types of Intellectual property but today’s talk focuses on copyright and trademarks and confidential information/Trade Secrets and that all important NDA.

It seems that thinking and acting on IP is not something to put off. It is a must when setting up a company or designing a game. Generally, if you are creating or inventing something new, or you want to collaborate with others, use someone else’s work or others want to use your work then establishing who owns the IP is a necessity.

Any form of collaboration with another person, friend or business partner could potentially cause issues with the ownership of the IP of a creation. Say you are designing something and you tell a friend about it, nothing big, no investment required at this stage and then suddenly a year down the line and your animation, game whatever you created is the biggest thing ever.  Who owns the IP? Everyone wants a part of it. How do you divvy it up or say hey this was all mine? 

Copyright

In the UK copyright law automatically belongs to the creator of the work. Creator means the person who creates the design document in its original and substantial state but be aware it is the expression of the idea NOT the idea - so in its tangible form.

Let’s put it more simply, say you are creating a game and you design how it works and a year later someone copies your idea then you are only protected by copyright if you have documented and dated design documents. So, take note that any designs you create make sure you keep a track history of design documents dated from the very onset.

Interesting question put to Taylor Davies about what happens if a student does a job for a company but does not have a contract in place who does the copyright belong to?

If there is no contract in place, then the IP will belong to the person who created the work (i.e., the student). However, in most cases, the student will be expected to sign a work-made-for-hire agreement assigning all of their IP rights over to the employee.

Trademarks

As we will find out later, a trademark is different to simply registering your company.  A trademark is the sign which identifies you as the owner of the company. X-box, PlayStation you know exactly who and what they are. A trademark is how your customers find you, recognise you.

Another issue to really take note of is that you need to think about your trademark at the beginning of your journey. It is not something you want to have to change because you didn't check whether the name was being used by someone else. 

There is a difference between the name you give as a Trademark and the name you register at Company house which is what makes you eligible to pay taxes etc. It can be the same. They can be different.  Check with both to make sure your suggested name is not on either list.

At the moment the process is around 5 months to ensure there is time for other companies to respond. You can register the trademark yourself or through a lawyer. You could always start the process yourself and then if things get a bit difficult with other companies saying this trademark is too close to their name or infringement of rights then you have to then be able to react to this and this is probably the time to call on a lawyer!

You don’t want to end up in the war of the caterpillars and infringement of trademarks! 

NDA - shhh! 

If you have information that needs to stay a secret then a non-disclosure agreement is key. It is free to create but often difficult to enforce. You need to ensure that all reasonable steps were taken to protect your idea/creation/thought. If an NDA has been signed, then you can’t say anything about it.

Interestingly if you are a freelancer then normally anything you do will belong to the employer no matter how amazing your piece of software is, it will still belong to the employer. Therefore, do make sure you read the agreement incredibly carefully and if what you are offering is vital or unique then negotiating a percentage would be a reasonable action to take.

Creative Industry tax relief

This very exciting government incentive covers setting up a business in several categories such as animation, film, games, TV, children TV and charity. Say you invest 10K into a game you can get a creative industry tax relief of 20 % back so that is an automatic 2K return which you can reinvest into your next project. There are obviously a few more details to it than that and a good place to look at is the gov.uk website

So, if you are like me, this was a whirlwind of information and things to explore and look into more deeply especially if you are thinking about setting up a creative company not just within games.