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IP in the Video Game Industry

The video game industry is a significant and vastly growing market. The industry today exceeds other creative industries such as the film and music sectors, in terms of both revenue generated and consumer demand. Given that intellectual property rights are the lifeblood of the industry, it is essential for video game companies to be able to protect their IP in order to safeguard profits and ward off unauthorised and infringing users and practices. We consider how rights holders who are active in this sector, can best protect their valuable intellectual property.

Role of intellectual property

IP is a vital element in the video game industry. This is because IP rights will be the subject of:

  • Distribution agreements
  • Development contracts
  • Advertising arrangements
  • Employment and consultancy agreements, and
  • Licensing agreements

Compared to traditional copyright-protected works, video games are inherently more complex. They represent a combination of many different elements, including computer programs, trade marks, designs, music, audiovisual content, literary works and artistic performances to name a few. Both identifying and managing the specific IP assets within video games therefore represents a real challenge for rights holders.

Copyright

Copyright is undoubtedly one of the most important IP tools for most game companies. Copyright protects original works of authorship and will apply to various game features including:

  • Source code / underlying software
  • Soundtrack and sound effects / music
  • Game characters, and
  • The script/storyline contained in games.

Assuming that appropriate IP provisions are contained in employee and consultancy agreements, a company will generally own the copyright in new software and other content generated in-house. Regarding software, copyright can protect both the literal source and the object code itself as well as aspects of the sequence. These include the structure and organisation of the software, like the general program flow and relationship between various software modules. In the context of a copyright dispute relating to Bitcoin, a recent UK Court of Appeal decision held that a Bitcoin file format could qualify for copyright protection. This was provided that it was an original work in that it was the author’s own intellectual creation. Separately, it must also be capable of being expressed in a manner which makes it identifiable with sufficient precision and objectivity.

Trade marks

It is now common for game developers to include elements in games from the real world such as real-life objects, landscapes or brands. In addition, the use of trade marks are helpful in acting as an indication of origin by enabling consumers to instantly recognise a company and its products when they see the trade mark, which is often a product name or logo.

For example, Activision Publishing Inc have registered a wide range of trade marks in the EU (EUTMs) for the Call of Duty game including the words marks CALL OF DUTY (EUTM 003993912), CALL OF DUTY BLACK OPS (EUTM 009777293) and CALL OF DUTY ADVANCED WARFARE (EUTM 013164116).

In addition, Sega Corporation have registered the below EUTM Number 000076653 for SONIC THE HEDGEHOG protecting “Games and playthings” “gymnastic and sporting articles and apparatus” and “toys” in Class 28.

Nintendo Co Ltd have registered the below image of the character PIKACHU protecting “Beers, minerals and aerated waters and other non-alcoholic drinks” in Class 32, as well as other goods in Class 5 and Telecommunications and Transport services in Classes 38 and 39.

Lastly, Take-Two Interactive Software, Inc. have registered the below EUTM Number 018129943 for the game ‘Grand Theft Auto V Five’ protecting “computer and video game programs and software” in Class 9 and “Printed materials, namely, manuals, pamphlets, booklets, books, posters and guides in the field of computer and video games” in Class 16.

IP in the Video Game Industry

A well-known US case from March 2020 involved a dispute regarding the use of Humvee military vehicles in the Call of Duty game series. The case was ultimately settled by a New York District Court which ruled that the use of AM General’s Humvee-related trade marks by Activision Blizzard in the Call of Duty games is protected by the United States’ First Amendment right to freedom of expression. In what can be seen as a win for the gaming industry, the Court held that no infringement claim arose if the trade mark is used for artistic purposes and does not mislead consumers.

Trade secrets

A trade secret is confidential business information which is used to give a business a competitive edge. The preservation of the confidentiality of the trade secret is instrumental to keeping a competitive advantage. A trade secret may also be described as ‘proprietary information’ or ‘proprietary know-how.’ In the video gaming world, trade secrets can extend to a number of components such as:

  • Algorithms
  • License terms
  • Business contacts
  • Customer lists
  • Notes on game development, and
  • Any other internal business items which are valuable to game development but not protected by other IP tools.

Patents

While software is excluded patentable subject matter on its own, patents can apply to computer related inventions involving software such as the underlying technology used in software engines and tool kits on which games are built, gaming hardware and distribution platforms.

Making a game easier to play, for example, could be patentable. An example of this is the popular football game, FIFA. In that game, the developers created a mechanism by which a player can identify fellow team members and their location on a map on the bottom left corner of the screen. This creation was awarded patent protection.

User generated content

Similar to social media, many video games encourage players to create and share so-called user generated content. Sharing content can take place on platforms associated with the game or on the game itself. Some video games are in fact, based on the concept of player participation. Developers therefore have to be conscious of how to monitor and prevent the sharing of unlawful or undesirable content on their platforms and also bear the risk that their own IP will be associated with potentially undesirable content. A clear risk related to opening up a gaming product to user generated content is the potential infringement of third-party IP rights.

Comment

Given the fast growth of the video game sector and the ongoing development of new technologies, the industry clearly presents new opportunities for many. However, IP challenges remain. As the rapid development attracts new creators and investors which in turn helps to increase competition in the market, taking the right steps to protect IP will provide significant value which can be used by companies to build a unique selling point. Conversely, failing to address IP issues will undoubtedly create expensive problems for companies such as the requirement to undertake a rebrand or to remove a game from the market entirely. A few recommended steps which gaming companies should take before launching a new gaming product include:

  • Carry out appropriate IP searches at an early stage prior to launch of a new product.
  • Ensure that all employee and consultants have written agreements in place which contain appropriate IP ownership provisions.
  • Ensure that all ‘proprietary know-how’ and ‘proprietary information’ is protected via the use of clauses providing for robust protection of confidential information in all third-party agreements. In addition, appropriate non-disclosure agreements should also be drafted and put in place before entering into confidential discussions with potential business partners.

For more information and expert legal advice on how best to protect your intellectual property rights, please contact a member of our award-winning Intellectual Property team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.



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