2010 presentation to game developers at SXSW on when and why they need legal counsel. The goal was to make attendees better consumers of legal services by introducing them to major legal concepts. Topics addressed include key areas where legal counsel are essential: HR, M&A, licensing, funding, open source, EULA, TOS, transactions, contracts and IP. The presentation also covers how to find, evaluate and retain good legal counsel for the issue at hand.

1. Game
Developers
Need
Lawyers:
When
and
Why
.
.
.
And
When
They
Don’t!
Frank
Coppersmith
VP,
Finance
&
AdministraAon
Challenge
Online
Games,
Inc.

2. About
Me
Let’s
get
this
out
of
the
way...
Frank
Coppersmith
is
Vice
President,
Finance
and
Administra1on
for
Challenge
Online
Games,
Inc.
In
this
posiAon,
he
serves
as
a
senior
member
of
the
execuAve
team
overseeing
the
company's
financial
and
human
resources
operaAons,
and
providing
legal
counsel
to
the
board
of
directors
and
senior
management
on
a
wide
variety
of
strategic
issues.
Prior
to
joining
Challenge
Games,
Mr.
Coppersmith
served
as
general
counsel
to
Toppan
Photomasks,
Inc.
(formerly
DuPont
Photomasks,
Inc.),
a
globally-­‐operaAng
supplier
of
semiconductor
materials.
Prior
to
his
promoAon
to
general
counsel
at
Toppan,
Mr.
Coppersmith
had
served
as
deputy
general
counsel,
plant
producAon
manager
and
customer
service
manager.
Mr.
Coppersmith
has
also
served
in
a
variety
of
roles
with
the
US
Air
Force,
including
tours
as
counsel
to
NATO
and
deployments
to
Iraq
and
Qatar.
Mr.
Coppersmith
is
the
president
for
the
AusAn
Chapter
of
the
AssociaAon
of
Corporate
Counsel
for
2010.
Mr.
Coppersmith
earned
a
bachelor's
degree
in
Electrical
Engineering
from
the
Citadel
in
Charleston,
SC
and
a
law
degree
from
Samford
University
in
Birmingham,
AL.
He
also
holds
an
MBA
from
the
Wharton
School
of
the
University
of
Pennsylvania
with
majors
in
Finance
and
OperaAons
Management.
Mr.
Coppersmith
first
began
playing
video
games
on
an
Atari
2600
and
has
an
original
white
box
ediAon
of
Dungeons
&
Dragons.
“Microchip”
Level
80
Warlock
Suramar
Destruc1on
Spec

3. Challenge
Online
Games,
Inc.
We
make
engaging
games
for
social
pla1orms
with
high
produc7on
values
Images
are
©
2010
Challenge
Online
Games,
Inc.;
WarstormTM,
Ponzi,
Inc.
®
and
Gridiron
LiveTM
are
the
trademarks
of
Challenge
Online
Games,
Inc.;
All
rights
reserved

4. What
is
this
presentaAon
about?
• NOT
a
sales
pitch.
.
.
– Spending
more
money
on
lawyers
– Confusing
you
with
legal
jargon
– Legal
sclerosis
(i.e.
paralysis
by
legal
review)
• GOAL
is
to
make
you.
.
.
– A
beber
consumer
of
legal
services
No
crystal
ball
needed
– A
beber
client
– A
beber
decision-­‐maker
for
legal
related
issues
• HOW?
– Give
you
the
tools
to
idenAfy
whether
and
when
an
issue
or
problem
needs
legal
input
– What’s
the
most
cost-­‐effecAve
way
of
going
about
it?

5. Everyone
Hates
Lawyers
• But
why?
– Too
expensive
• $300/400/500/hr?
OMGWTF?
– Give
confusing
/
contradictory
advice
• “On
the
one
hand.
.
.but
on
the
other.
.
.”
– Advice
isn’t
useful,
helpful
or
acAonable
Empty
suit.
• “Legal
sclerosis.”
– Just
slow
things
down
• “The
lawyers
got
involved
and
screwed
everything
up.”

6. All
of
Those
Complaints
Are
True
• Why?
– Didn’t
set
expectaAons
ahead
of
Ame
– Engaged
too
early
or
(more
typically)
too
late
– Insufficiently
engaged
with
the
client
– Wrong
experAse
(generalist
vs.
specialist)
– Needed
fee
alignment
up
front
Actual
angry
clients.
.
.

7. Legal
Landscape
Corporate
Forma1on
M&A
Transac1ons
&
Contracts
Licensing
TOS/TOU/EULA
Open
Source
Compliance
Funding
Employment
Publishers
Intellectual
Property
Li1ga1on
(Land
of
Barbarians)

8. Why?
Worst
Case:
Lawsuit
“LiAgaAon
only
happens
to
poorly
managed,
unethical
companies,
not
a
well-­‐run
company
like
mine.”
• DistracAon
and
Uncertainty
– 260
pleadings
in
18
months
– Dev
vs.
Engine
Licensor
• LiAgator
View:
this
is
all
normal
ü DeposiAons
ü Discovery
Borrowed
from:
ü DuraAon
©
2009
Henry
W.
Jones
III
ü Costs
§ Not
normal
to
you
.
.
.
unless
you
like
being
deposed
on
video
§ Comes
with
territory:
more
products,
channels,
customers
=
more
likely
chance
of
a
legal
dispute
Li>ga>on
is
bad.
Maybe
not
this
bad.
DISCLAIMER:
This
is
the
only
scary
slide.

9. When
Do
I
Need
a
Lawyer?
• Core
business
acAviAes
– If
something
goes
wrong,
does
it
cripple
the
company?
• LiAgaAon
– No
alternaAve;
need
to
stop
this
before
it
starts
– “Bet
the
company”
stakes
• Highly
specialized
info
– Patent
filings,
securiAes
Your
lawyer
has
a
nicer
office
than
you.
I
blame
“LA
Law.”
• Maybe
others
– Depends
on
capabiliAes
of
current
employees
and
availability
of
leadership
team
– Time
/
cost
tradeoff

10. But
Really,
When?
Misc.
Topics
• Corporate
FormaAon
/
Secretarial
FuncAons
– Cheap,
easy
to
file
on-­‐line
if
simple
– Not
simple:
stock
opAon
plans,
divided
ownership
• TOS,
TOU,
EULA,
Privacy
Policy
What
privacy
policy?
– Don’t
just
d/l
one;
it’s
worth
having
an
expert
give
this
a
once
over
every
Ame
your
business
operaAons
change.
• “Standard
Agreements”
– Good
to
get
a
stable
of
typical
NDAs,
consulAng
agreements,
invoice
templates,
employment
agreements,
IP
assignment,
etc.
– Many
affordable
choices
– Pay
now
or
pay
later
• Intellectual
Property
– Trademarks
/
copyrights
are
“do
it
yourself”
(www.uspto.gov)
– Patents
are
another
maber
–
must
have
specialist
legal
support
• M&A,
VC
Funding,
IPO
– Who
are
you
kidding?
Get
the
best
you
can
afford

11. • Employees
When?
Employees
– You
can’t
build
games
without
employees
– BUT:
employees
can
represent
the
greatest
legal
exposure
your
company
faces
– FMLA,
discriminaAon,
wage
&
hour
–
numerous
pitalls
for
the
unwary;
compliance
training
is
a
must!
– Good
news:
employment
law
is
a
commodity
and
priced
as
such;
lots
of
flexibility
and
availability
– Get
support
early
(employment
agreements,
invenAon
assignment,
confidenAality
of
trade
secrets)
and
oXen
(discipline,
terminaAon)
– Want
to
go
it
alone?
www.dol.gov/elaws
Q:
Which
employee
is
going
to
sue
you?
A:
Trick
ques>on:
all
of
them!

12. When?
Contracts
• Contracts
are
the
lifeblood
of
any
business
• Must
do:
–
–
–
–
–
–
–
–
–
What
are
the
deliverables
on
both
sides?
When
are
these
due?
How
much
do
we
get
paid
/
or
do
we
pay?
What
happens
if
we
fail?
How
/
when
can
we
terminate?
Who
owns
the
IP?
Who
owns
the
deliverable?
Who
owns
derivaAves?
If
we
disagree,
how
is
it
handled
(e.g.
ADR)?
Dis-­‐incenAvize
liAgaAon.
• No
such
thing
as
a
“standard”
agreement
– But
not
every
agreement
merits
legal
review
– Use
own
documents
as
much
as
pracAcable
– www.USLegalForms.com
Claiming
the
salamander
ate
the
contract
won’t
help.
• Get
legal
support
to
establish
a
set
of
agreements;
review
of
key
documents
(such
as
those
with
publishers,
IP
rights
holders,
engine
licensors,
etc.)

13. How
Do
I
Find
the
Right
Lawyer?
• Referral
– The
absolute
best
way
to
find
the
right
lawyer
is
to
get
a
referral
from
someone
in
your
space
who
understands
your
needs
• Talk
to
more
than
one
– Fit
is
incredibly
important
–
Ideally
you
want
an
advisor-­‐counselor
who
understands
you
• Fees
on
the
table
up
front
– Good
lawyers
won’t
mind
talking
about
it
– Watch
out
for
up
front
retainers
• In-­‐house
general
counsel
– Just
hire
your
own
lawyer
to
work
for
you
• Outsourced
general
counsel
– If
you
don’t
need
a
full-­‐Ame
in-­‐house
counsel
• Specialist
versus
generalist
– IP,
liAgaAon,
securiAes
(IPO)
all
require
special
experAse
Slightly
easier
than
finding
a
unicorn

14. Wrap
Up
• Why?
– Avoid
catastrophic
legal/
business
risks
• When?
– Core
business
operaAons,
areas
of
highly
specialized
knowledge,
some
employment
mabers
and
contracts
• How?
Big
scary
monster.
Probably
not
a
lawyer.
– Referral
from
industry,
interview,
fee
discussion
and
experience

15. Had
Enough
of
the
Farm?
hbp://apps.facebook.com/ponzi_inc/
hbp://apps.facebook.com/warstorm/
Thanks
for
listening!

16. Credits
He’s
finally
done
talking.
Party
>me!
Frank
Coppersmith
VP,
Finance
&
AdministraAon
Challenge
Online
Games,
Inc.
frank@challengegames.com
512
560
7026
SubsAtuAng
for.
.
.
Henry
W.
Jones,
III
Law
Office
of
Henry
W.
Jones
2002
Mountain
View
Road
AusAn,
Texas
78703
memphishank@aol.com
512
695
4673