You are a game designer. You've finished creating your first digital game, have finalized the copyrights, and trademarked the title of your masterpiece. You get in touch with a number of software game companies about the possibility of licensing your game with them. You finally hear back from an executive and meet with him over lunch. He seems very accommodating and you negotiate the deal to your satisfaction. You get the contract in the mail the following day (with a note suggesting you think about a job with the company) and it looks just as you expect it to. Then you spot a line near the end saying that "all rights convey to the licensee."
Answer the following questions in your analysis:
- What does this clause mean?
- What would you do next?
- Would you take his offer of employment? Explain the reasons for your answer.
This problem is a case study that is meant to illustrate a classic problem most successful freelance game designers, writers, artists, and similar creative people will encounter sometime in their careers, namely precisely which rights they should sell to their works.
In one way this looks like a great offer for a young game designer. As well as a contract which promises royalties, the designer would have some artistic control over the work. Bill's company will be taking on the risks and costs of moving the game through final development into alpha and beta testing, marketing expenses, packaging, and the logistical end of bringing the game to market, things that are normally not only hard for an indie developer but time consuming and boring.
The phrase "all rights convey to the licensee" means that if the designer signs the contract, Bill's company will own all rights, including rights to publish sequels and license the game's name and design for books, toys, and movies. Obviously, if the game becomes the next GTA or Mario, selling subsidiary rights is a very bad idea. Realistically though, most games do not become mega-hits, and if the designer is any good, she will have many future ideas for other games. Having one game published by Bill's company would be a great boost for her career.
Taking the job is an interesting possibility. Certainly Bill's company would have a big development budget, allowing the designer to create the sort of first-class graphics and use big-name voice actors no indie developer could have access to. On the other hand, it does limit the designer's freedom, and not all game designers want to be part of a big corporation. The key to whether the offer is worth taking lies in "non-compete" clauses or options on future games.
One important question to ask about the contract is whether any work done at the company would be "work for hire," including all rights, or whether there would be some form of profit-sharing, stock options, or royalties. The next question would be whether the designer would be free to quit and go back to designing her own games, or whether that freedom would be restricted by non-compete clauses. It's not really possible to answer whether accepting the job offer is a good idea without that information. Definitely, though, the designer should get a good lawyer experienced in this area of contract law before signing anything.