Offered to me by a recent MCLE course and thought it was v helpful for anyone in the space

1. 2019 Edition
Video Game Law

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5. Video game and board game
lawyer representing small and
medium-sized game companies
throughout the industry.
• runs the Game Lawyer Blog
• hosts the Legal Moves podcast
• spoken at a number of games
industry conventions and events
• taught multiple video game law
CLE programs
Contact: zstrebeck@strebecklaw.com
Zachary Strebeck

6. 01 - the games industry
02 - video game law?
03 - company formation
04 - intellectual property
05 - game contracts
AGENDA

7. 06 - privacy law
07 - terms of use/EULAs
08 - gambling law
09 - esports
AGENDA

9. “In 2018 the industry was worth just shy of $135 billion. The
$134.9 billion market value marks a 10.9% increase over 2017.”
- Newzoo, market analyst firm, as shared with GamesIndustry.biz

10. of Americans play video
games every day
60%

11. worldwide video game players
1/3 of total global population2.2 billion
number of video game players
in the US150 million
average player age
(72% are over 18 years old)34

13. Video Game Law?
page
010
• Corporations/business law
• Securities law
• M&A
• Intellectual property and Licensing
• Contract law
• Employment law
• Regulatory law
• Privacy law
• Tax law

14. Marketing to Game Clients
page
011
• Content Marketing
• Blogging/Guest Blogging
• In-person at Game Conventions
• Panels and Q&As
• Reddit, other forums
• Social Media Marketing

15. Learning about the industry
page
012
• gamasutra.com
• gamesindustry.biz
• kickstarterlessons.com
• reddit.com/r/gamedev

16. Your clients
page
013
• What kind of clients do you work with in video
games?
• What are your client’s goals?
• What are they looking for in a lawyer?

18. Forming a game
studio
page
015
• Different business entities
• What kind of entity to form?
• Where to form the entity?
• Limiting liability

19. Forming a game
studio
page
016
• Dividing ownership in a game studio
• Even split?
• “Dead Equity” issues
• Dynamic Equity splits
• The importance of Vesting ownership

20. Forming a game
studio
page
017
• Before you draft – make sure everyone’s on the
same page
• Shared and Secret questionnaires
• What is the company’s business model?
• How will it be financed?
• What are each member’s responsibilities?
• How will ownership be divided?
• What’s the exit strategy? Is there one?

21. Forming a game
studio – Red Flags
page
018
• Do the founders trust each other?
• Do they have a solid business plan?
• Is there good communication between founders?
• Do they all understand the target market and the
costs involved in developing the game?
• Do they have different answers to the questionnaire
questions?
• Are each founders’ expectations realistic?

22. Forming a game
studio – Financing
page
019
• What do they need money for?
• Types of financing
• Crowdfunding
• Publishers
• Securities Issues

24. Intellectual
Property
page
021
• What is Intellectual Property?
• Types of IP and what they protect:
• Patents
• Trademarks
• Copyright
• Trade Secrets

25. Intellectual
Property - Patents
page
022
• Protect ideas, inventions, processes, etc.
• Must be 1) useful, 2) non-obvious, and 3) novel
• Not really common with game startups, unless they
do hardware or some novel software
• Usually, there really isn’t any novel technology in
video games that’s worthy of patent protection
• Alice Decision

26. Intellectual
Property – Patent
Costs
page
023
• Extremely Simple Patent - $7,000 to $8,250
• “Software Related” - $16,000 and up
• Plus drawings, filing fees, etc.
• Provisional Patent – much cheaper, gives you 12
months to file your Non-Provisional Patent
• Confidentiality agreements and invention
assignments

27. Intellectual
Property -
Trademarks
page
024
• Two-fold protections – consumers and trademark
owners
• Protects words, slogans, and logos
• Word or Design marks, as well as certification
marks, service marks, trade dress
• Why is it so important?

28. Intellectual
Property -
Trademarks
page
025
• Benefits of trademark registration
• USPTO and state registrations
• International registrations

29. Intellectual
Property -
Trademarks
page
026
• Trademark distinctiveness scale:
• Fanciful
• Arbitrary
• Suggestive
• Descriptive
• Generic
• Is your client’s trademark registrable?
• Counseling clients on choosing a trademark

30. Intellectual
Property -
Trademarks
page
027
• What can you register?
• Game name
• Company name
• Game logo
• Company logo
• Slogans associated with the game or company

31. Intellectual
Property -
Trademarks
page
028
• Trademark Clearance Search
• USPTO
• EU
• WIPO Brand Database
• Google
• Steam
• App Stores
• Itch.io, Game Jolt
• Board Game Geek

32. Intellectual
Property -
Trademarks
page
029
• USPTO registration tips:
• Video games are in Class 9
• Role Playing Game books in Class 16
• Board games/toys are in Class 28
• Online services (online games) in Class 41
• Video game development services in Class 42

33. Intellectual
Property -
Trademarks
page
030
• USPTO registration tips:
• How to describe your client’s goods/services
• Logo/design mark descriptions
• Intent to use applications

34. Intellectual
Property -
Copyright
page
031
• What does copyright protect?
• When do rights begin?
• Benefit of registration
• UPDATE: Supreme Court requires registration
before filing lawsuit

35. Intellectual
Property -
Copyright
page
032
• Registering a copyright – copyright.gov
• What type of application?
• Works for hire – who is the author?
• Copyright specimens for video game applications

36. Intellectual
Property -
Copyright
page
033
• Copyright enforcement
• Cease and Desist Letters
• Digital Millennium Copyright Act
• The DMCA Safe Harbor
• Takedown notice and counter notice process
• Anti-circumvention
• Lawsuits

37. Intellectual
Property – Trade
Secrets
page
034
• Trade secrets are secrets that have some value in
the industry
• Software techniques, business plans, ideas, etc.
• Protected by confidentiality agreements/clauses
• Every contract should have one
• Two requirements:
• An actual secret
• Must take reasonable steps to protect the secret

39. Types of Game
Contracts
page
036
• Employee/Contractor Agreements
• License Agreements
• Publisher Agreements
• Confidentiality Agreements/NDAs
• Music license/ownership
• Voice actors
• Terms of Use/EULA
• Privacy Policy (not technically a “contract”)

40. Types of Game
Contracts
page
037
• Contracts should be in place for everything that
touches your client’s game
• Need to make sure your client OWNS all of the
intellectual property in the game
• Other important terms:
• Term of agreement
• Ways to get out of agreement if a breach
• Confidentiality
• Governing law
• Etc.

41. Employment
Agreements
page
038
• Employees versus contractors
• Based in state law – be aware of tests
• Example – California “work for hire” agreements
under CA labor law
• UPDATE: 2018 Dynamex Case clarifies CA “ABC”
test for independent contractors
• Worker free from control and direction
• Worker performs work outside the usual
course of employer’s business
• Worker engaged in an independent trade of the
same kind

42. Publishing
Agreements
page
039
• Payments – enough to fund development?
• Approval Process
• Clear milestones
• Process for changing milestones/timeline
• Ownership of IP
• QA/Support
• Key People (“key man” provisions)
• Termination provisions

43. License
Agreements
page
040
• Ownership
• Term
• Scope
• Territory
• Compensation/Royalties

44. Confidentiality
Agreements
page
041
• Used before entering into a business relationship
or to keep things confidential when working
together
• Be sure that the scope is appropriate
• Clients are often concerned about the
responsibilities/liabilities that go with these

45. Music Agreements
page
042
• License versus Ownership
• Types of licenses
• Soundtrack revenue?
• Unions and PROs

47. Terms of Use
page
044
• Very important when you release a game to the
public
• What needs to be in there?
• Class action waiver/Arbitration
• Virtual items licensed, non-transferable, no value
• DMCA agent listed
• User Generated Content – Acceptable Use Policy
• Modding the game
• Limitation of liability/No warranties
• Set up properly – agreed to before playing
• UPDATE: Supreme Court weighs in on Arbitration
clauses

49. Privacy Law
page
046
• Different privacy laws in each country/state
• Two main ones to look at: EU (GDPR) and
California (new law goes into effect in 2020)
• A few aspects:
• Internal data security/data usage policies and
procedures
• Internal data breach and notification policies and
procedures
• Public-facing privacy policy
• User rights

50. GDPR
page
047
• What is the GDPR?
• Who does it apply to?
• What does it entail?
• How do you comply?
• Data map – what are you collecting and what
are you doing with it?
• Internal security procedures
• Internal data breach procedures
• Data Protection Officer
• EU Representative

51. GDPR
page
048
• Individuals’ rights under the GDPR
• Right to access
• Right to be informed
• Right to erasure
• Right to data portability
• Right to object
• Right to not be subject to automated decision
making

52. GDPR
page
049
• Legal bases for data collection and use
• Consent
• Contract
• Legal Obligation
• Protect vital interest
• Public interest/official authority
• Legitimate Interest
• Balancing test – individual rights versus
processor’s interests
• Catch-all, relatively untested

53. California Law
page
050
• California Consumer Privacy Act 2018 - Goes into
effect 2020
• Comparison with GDPR
• Rights of the user
• Right to know what info you have about them
• Right to request deletion
• Right to request details about sale of info
• Right to opt out of sale of info
• Right to freedom from discrimination

54. Children’s Privacy
page
051
• COPPA – Children’s Online Privacy Protection Act
• Applies when
• directed to children under 13 and you or others
are collecting PII
• knowledge of users under 13
• Third party compliance services
• https://www.ftc.gov/tips-advice/business-
center/guidance/childrens-online-privacy-
protection-rule-six-step-compliance

56. Lotteries and
Gambling
page
053
• Consideration + Chance + Prize = illegal lottery
• Sweepstakes and contests eliminate one or the
other
• How does this impact games?

57. Virtual Currency
page
054
• Using real money to buy in-game virtual items,
sometimes randomly generated
• Generally, make sure that:
• The virtual items are licensed, not sold
• The terms are clear that they are not transferable and have no value
• The developer is not sponsoring a secondary market
• But see Valve versus the State of Washington and
Big Fish Casino case
• Evolving area of law

58. Virtual Currency
page
055
• Blockchain-based games – are they in violation of
the virtual currency rules?

60. Update:
Accessibility Law
page
057
• 21st Century Communications and Video
Accessibility Act (CVAA) – applies to video games
as of January 1, 2019
• Previously subject to a waiver
• Requires that certain video game features are
operable without vision
• Includes in-game chat and user interface elements
• Also, need to keep compliance records
• Build into design of game early on

61. Esports
page
058
• Fast-growing part of the industry
• Involves issues similar to physical sports law
• Trademarks and other intellectual property issues
• Substance abuse
• Minors

62. Board Game
Clients
page
059
• What’s different?
• Other aspects unique to board game industry:
• Manufacturing contracts
• Distribution agreements
• Product labeling/testing
• Trademarks – Class 28
• Copyright specimens
• Patentable inventions
• Crowdfunding

63. Questions?
page
060
• Email me at zstrebeck@strebecklaw.com

64. contact
info
page
061
email
zstrebeck@strebecklaw.com
online
strebecklaw.com
gamelawyerblog.com
@zstrebeck
Legal Moves podcast

65. thank you.