01-Oct-2024
Written by: Cynthia Zeeni
The gaming industry has grown rapidly and has undergone significant changes in recent years, becoming increasingly important in the global economy, creating millions of jobs, generating much-needed tax revenues, and offering exciting opportunities for talented creators and engineers from all corners of the globe.
Behind this development and the success of game developers in general, lies a crucial aspect: the protection of intellectual property (the “IP”).
Intellectual property refers to creations of the mind, such as inventions, literary and artistic works, designs, brand names and logos used in commerce. It is an essential aspect of the gaming industry and encompasses a wide range of components.
The creation of a game involves various artistic and creative elements, such as character designs, music compositions and game scripts.
Thus, a well-defined IP strategy can help game companies secure the rights to their innovative ideas, giving them a competitive advantage. While large gaming companies are typically familiar with IP, smaller teams and independent developers may not be. However, regardless of size, all developers should have a basic understanding of their IP rights.
Subsequently, what is the role of IP rights in the gaming industry?
In this article, we will be discussing:
- the most relevant types of IP in the gaming industry and
- the importance of IP registration.
Most prevalent types of IP in the gaming industry
The most relevant types of IP rights within the gaming industry are copyrights, patents, trademarks, and trade secrets.
- Copyright: protect the creators’ original works. Not only is the game protected under copyright, but each element of the game is also eligible for protection. This includes the script, game codes, music, sound recording, visual designs, drawing, video graphic works, performance of the actors/characters.
The copyright of a video game is usually owned by the company that commissioned it, but the individual authors may also have some rights, depending on the contract and the law. These rights may range from being credited in the game to being able to remove the game from the public with compensation.
The copyright owner of a video game has the exclusive right to prevent others from commercially exploiting the game, such as by selling or distributing copies of the game.
Regarding this type of IP, we may find an example of Universal City Studios v. Nintendo Co., Ltd. (1984): Universal filed a lawsuit against Nintendo, claiming that the Donkey Kong game infringed their copyright on the King Kong character. The court ruled that Universal had no copyright on the King Kong character, and it ruled in favor of Nintendo.
- Patents: Video game patents can protect a wide range of innovative features, including hardware, software, game engines, communication methods, gaming interfaces, and methods of gameplay. These patents can protect new technological advancements, such as new communication techniques between avatars or the incorporation of new hardware elements into controllers. It is also possible to obtain patents for improvements made to existing technology.
Patent protection includes applied algorithms; displayed representation; menu arrangement; editing functions; control functions; user interface features; compiling techniques; program languages; translation methods; utilities; formulae, controlling program execution, or processing data.
The issues over patent protection, for video games, centers on whether software can be patented. Software patents cover computer functions executed by computer programs. This debate includes arguments against any protection for software and suggestions for strict conditions.
Video game development often yields patentable tech used beyond one game. Companies employ similar tech in multiple games or create game-specific foundations for product ranges. Examples include game engine platforms for first-person shooters, graphical interfaces for racing games, or communication platforms for mobile interactive games.
Securing patent protection for these technologies can provide a significant market advantage. However, to qualify, software must meet specific criteria: it must be new, non-obvious, useful, and registered.
Regarding this type of IP, we may find an example of a granted European patent within the matter of videogames is the European patent no. EP1078664, owned by NINTENDO CO., LTD. The owner of this patent protected a computer program that analyses the time of the device and, through a variable probability, spawns a creature at a given time, allowing for different creatures to be spawned throughout the day in the same area within the game.
- Trademarks: The object of a trademark is totally different to that of a patent. While the latter covers the technical matter of a given product, a trademark is the legal protection of a distinctive sign used in commerce to identify goods and/or services. This sign may be a word (or words), logos or other signs used to identify.
Trademarks allow the consumers to correctly determine the corporate origin of a given videogame; aids the consumers to determine the product’s quality based on the affixed trademark; and fosters a relationship, based on loyalty, between consumer and videogame developer. As such, with the relationship between consumer and producer in mind, the trademark system constitutes the most important intellectual right within this industry which shall be registered to make sure that no other entity may copy or usurp said trademark.
There are some types of trademarks which can be found in games which are the following: game name and logo; company name and logo; distinctive sounds and/or colors; slogans; and attributes like weapons or cars.
Regarding this type of IP, we may find an example of the type of warfare-based video games that has faced significant scrutiny and legal disputes related to the portrayal of real-world objects.
A notable case in 2020 involved a dispute over the use of Humvee military vehicles in the “Call of Duty series”. The case, resolved in a New York district court, determined that Activision Blizzard's use of AM General's Humvee-related trademarks was protected by the U.S. First Amendment's freedom of expression, applying the Rogers test established in 1989. This test allows the rejection of trademark claims if used for artistic purposes without misleading consumers.
While this case is a significant development for the gaming industry in the United States, its implications are limited to jurisdictions where the Rogers test applies. In other parts of the world, using trademarks in video games may involve different legal approaches, making outcomes less predictable. For instance, a Parisian court in 2012 allowed the use of Ferrari's logo in a Grand Theft Auto game, citing freedom of expression and the absence of consumer confusion as grounds.
- Trade secrets: encompass confidential information like formulas, processes, methods, or techniques that grant businesses a competitive advantage. In the gaming industry, trade secrets cover a wide range of elements including source code; object code; machine code; any concepts, ideas, methods, processes, or documents related to the creation of software or other game assets, including characters development, storylines, drawings, including tools and techniques; business plans and methods; marketing plans; customer lists; databases; game design, gameplay mechanics, algorithms, and more.
Trade secret would apply when developers do not release their game and asset source code to the public and take measures to prevent disclosure of this source code to both the public and competitors. This does not apply to open-source games or those games where the source code and graphics are easily viewable.
Trade secret protection affirms the privilege of a business owner or enterprise to confidentially maintain business information to enhance their operations or preserve a competitive advantage.
The protection of trade secrets in the gaming industry is vital since trade secrets provide a vital competitive advantage for game developers by allowing them to set their products apart in the market.
Maintaining confidentiality of specific information helps companies preserve their uniqueness and offer innovative gaming experiences. In addition, in the gaming industry, distinctive and captivating games attract a larger player base and higher sales, contributing significantly to revenue generation.
By protecting their trade secrets, developers can fully capitalize on groundbreaking ideas, ensuring long-term success and a sustainable business model while guarding against rapid replication or surpassing of their products by competitors.
The importance of IP registration
In such a competitive environment, it is important to protect intellectual property.
Patent and trademark are subject to registration, with the competent offices, and shall not exist without this registration.
Copyright is the main exception to the registration requirements since it is protected without the need to file a registration application. Nonetheless, the registration is highly recommended as it serves as proof of authorship and that the work existed at a given date and belongs to said author, in case of a copyright dispute.
In most state legislations and with all due exceptions, the first entity to file the registration of any intellectual rights, with mandatory registration, benefits from a legal presumption of ownership of said rights. Additionally, any intellectual property right is only effective within the territories upon which it is registered. As such, it is always necessary to determine in which countries intellectual right should be registered.
The very first step when our goal is to create and commercially explore a new product is to promote the registration of all the applicable intellectual rights.
Finally, all intellectual property rights have a limited duration which depends on each country’s legislation.
In conclusion, the act of registering all intellectual rights should be regarded as the utmost priority at the start of a new project as these rights provide a fundamental edge against all competition. In this sense, given the demanding and competing facet of the gaming industry, getting there first is the surest way to victory.