know your ip in mobile game development · mobile industry, accounting for about half the mobile...
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KNOW YOUR IP
IN
MOBILE GAME
DEVELOPMENT
p r e s e n t e d b y
Stephen SohCNPLaw LLP
October 2015
CONTENTS
1. Introduction
2. Relevance of IP to mobile games
3. What kind of IP is relevant?
4. Application to game lifecycle
5. Conclusion
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INTRODUCTION
- In 2015, Newzoo expects that mobile games will generate $30.3 billionworldwide
- The firm expects sales for the total worldwide gaming market to be$91.95 billion
- For the fastest growth, look East to emerging markets in Southeast Asiaand China, the latter of which is up 86%
- Apple’s App Store remains by far the biggest single platform in themobile industry, accounting for about half the mobile games marketrevenues in 2014. Google Play is a close second
Source - Fortune.com (15 Jan 2015)
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RELEVANCE OF IP TO MOBILE GAMES
On a scale of 1 to 10, how important is IP to mobile game development?
- It’s CRITICAL!
- Permeates the full development and exploitation lifecycle
- Other legal issues arise (e.g. privacy, data security, content regulation,monetisation, etc) arise but IP is LIFEBLOOD of the industry
- Involves tools used to develop a game, as well as game design andcontent
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WHAT KIND OF IP IS RELEVANT?
- Trade secrets & confidentiality obligations
- Copyright
- Patents
- Trademarks, tradenames & domain names
- Registered designs
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COMMON THREAD
- Intangible assets
- Creations of law
- Subject to prescribed conditions concerning:
: scope of the right
: criteria for securing protection
: exceptions to enforcement
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SCOPE OF IP RIGHTS
- Trade secrets
: ideas having economic value and shared in confidence
- Copyright
: ideas expressed in a material form
- Patents
: expressed ideas resulting in an invention
- Trademarks, tradenames & domain names
: branding associated with an expressed idea
- Registered designs
: expressed ideas concerning shapes & patterns
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TRADE SECRETS
- Must not be generally known
- Has commercial value
- Shared under an obligation of confidence
- Disclosed in breach of the obligation resulting in loss
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COPYRIGHT
- Arises automatically
- Protects `form of expression’ of an original work
- In terms of game development, includes software coding, interfaces,
character sets, screen layouts, incorporated content, etc
- Also protects derivative works based on original works
- Doesn’t protect functionality
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PATENTS
- Protects new technical solutions to existing problems and new ways of doing or making something
- Requires:
: novelty
: inventive step
: industrial application
(cf. Europe/Japan: technical solution to a technical problem)
- Protects functionality within scope of claims
- Does not protect pure software, abstract ideas, discoveries, equations, etc
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PATENTS IN MOBILE GAME DEVELOPMENT
US 8510186 B2 (Issued: 13 Aug 2013; Original Assignee: Facebook)
Creation, redemption, and accounting in a virtual currency system
ABSTRACT
A virtual currency system keeps track of virtual credits, which can be owned, transferred, purchased, and sold by participants in a virtual economy. Each virtual credit has an internal value and an external value, which define, respectively, the exchange rates for creating and redeeming the virtual credits. Upon creation of new virtual credits, the internal value for those credits is the rate for which real currency was paid per credit. The external value sets the rate at which the virtual credits can be redeemed for real currency. Each virtual credit may further have a face value, which is an apparent value of the virtual credit within the virtual economy, giving users a baseline impression for valuing the virtual currency. These features of the virtual currency enable a number of useful actions within the virtual economy, including currency seeding, couponing, and chargebacks.
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PATENTS IN MOBILE GAME DEVELOPMENT
US 8862470 B2 (Issued: 14 Oct 2014; Original Assignee: At&T IP I)
System and method for pronunciation modeling
ABSTRACT
Systems, computer-implemented methods, and tangible computer-readable media for generating a pronunciation model. The method includes identifying a generic model of speech composed of phonemes, identifying a family of interchangeable phonemic alternatives for a phoneme in the generic model of speech, labeling the family of interchangeable phonemic alternatives as referring to the same phoneme, and generating a pronunciation model which substitutes each family for each respective phoneme. In one aspect, the generic model of speech is a vocal tract length normalized acoustic model. Interchangeable phonemic alternatives can represent a same phoneme for different dialectal classes. An interchangeable phonemic alternative can include a string of phonemes.
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PATENTS IN MOBILE GAME DEVELOPMENT
US 8092309 B2 (Issued: 10 Jan 2012; Original Assignee: Igt)
Managed on-line poker tournaments
ABSTRACT
A gaming system is described that is configured to provide on-line poker games with only live participants. The gaming system may link gaming devices located in a casino or across a gaming enterprise. The gaming system may comprise a number of secure transaction terminals that are distributed throughout the gaming venue or gaming enterprise. The secure transaction terminals may be designed for operation only by a human operator. The secure transaction terminals may include one or more of mobile devices that may be moved throughout the gaming venue or the gaming enterprise, thin-client gaming devices with fixed locations and wager-based video gaming machines with fixed locations. The gaming system may include one or more servers configured to provide head-to-head poker games involving live players, monitor the locations of the secure transaction terminals within the gaming venue or gaming enterprise and limit game participation based upon the locations of the secure transaction terminals being utilized in the gaming venue. The game participation based upon location may be performed to prevent collusion among players.
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PATENTS IN MOBILE GAME DEVELOPMENT
- Innovations involving software used with hardware
- E.g. improved methods of:
: user interaction
: game mechanics
: data processing, synchronization or presentation
: mapping, tracking & profiling
: securing data
: device communication
: payments methods, etc
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TO PATENT OR NOT TO PATENT
Relevance to business model
: expected lifespan of app
: size of target audience
: scope for competitors to copy (defensive application)
: additional revenue streams (offensive application)
: enhancing valuations
Vs. anticipated cost, timing & effectiveness
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IS IT USEFUL?
Apple to Lodsys: ‘App makers are protected by [our] licence’
- A little more than a week after iOS developers were threatened with legal action
by a company that holds various patents, Apple’s legal department has struck
back
- On May 13 [2013], many iOS developers reported receiving FedEx packages
containing a threat that they risked patent-infringement lawsuits if they did’nt
pay Lodsys to licence a patent covering in-app purchasing and other app-
related matters
- In a letter sent to patent holder Lodsys, Apple says its existing license for
patents covering in-app purchases applies to iOS app makers as well
Source: http://www.macworld.com/article/1160030/apple_lodsys_license.html)
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IS IT CRITICAL?
World Intellectual Property Review (Feb 2014):
- Facebook acquires no new patents in WhatsApp takeover
- Social networking site Facebook’s $19 billion acquisition of instant
messaging service WhatsApp will not bring the company any new
patents
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APPLICATION TO GAME LIFECYCLE
Key areas of concern:
- Establishing ownership
- Avoiding infringement
- Securing protection
- Managing usage
- Unlocking value
- Enforcing rights
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GAME DEVELOPMENT LIFECYCLE
- Conceptualization
- Development
- Funding
- Maintenance
- Protection
- Monetisation
- Enforcement
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CONCEPTUALISATION
If a person discusses an idea he has with a group of his friends, with each
of the friends contributing his own thoughts and/or suggestions regarding
the idea, who owns the rights?
- Ideas are not inherently protected
- Need to impose confidentiality obligations
- NDAs and contractual provisions
- Importance of secrecy to registration rights
- Problem
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DEVELOPMENT
- Who owns the rights
: S.30(2) Copyright Act (CA) – generally the creator / author
: S.30(4) to 30(6) CA - exceptions
: S. 30(1) & (3) – subject to Part X and can vary by contract
- Use of 3P content
- Use of 3P software
- IP needs analysis
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DEVELOPMENT
- Who owns the rights
: S.30(2) Copyright Act (CA) - creator / author
: S.30(6) CA - works by employees
: S. 30(5) – commissioned photos or paintings etc
: S. 30(1) and (3) – subject to Part X and can vary by contract
: assignments and licences
- 3P content (rights clearances)
- IP needs analysis
- Licence restrictions
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DEVELOPMENT METHODS
- Self-developed
- Jointly-developed (equal interest in undivided whole)
- Employee developed (S.30(6) CA)
- Outsourced (3P commissioned works; cf S.30(5) CA)
- Open source (imposed public licensing terms)
- 3P development software (scope of licence)
- 3P content (rights clearances; royalties)
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RESOLUTION
- Assignments & licences
- Contracts of employment
- Service agreements
- Investment / acquisition agreements
- Shareholders’ agreements
- Record keeping and continual monitoring
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FUNDING
- Debt, equity or hybrid
- Friends & family
- 3P (angel, VC, private equity, funds, crowdfunding)
- Government grants
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FUNDING CONSIDERATIONS
- Ownership & title warranties
- Due diligence (chain of title & registrations, version control, access to source code)
- 3P infringement claims
- Liability & indemnities
- Valuation of IP (benchmarking & DCF)
- Dilution / loss of control
- Securitisation of IP
- Exit provisions (fund lifespan, ROI commitments)
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MAINTENANCE
- Hosting
- Data transfer
- Business process outsourcing
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PROTECTION
- NDAs
- Investment / shareholder agreements
- Employee NDAs and copyright assignments
- 3P developer undertakings
- 3P service provider undertakings
- Assignments & licences
- Registration (ACRA, domain names, TMs, patents, registered
designs)
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MONETISATION
- Platform developer terms
- EULAs
- 3P advertising
- Ancillary rights exploitation
- M&A
- IPO
- Trade sale
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PLATFORM DEVELOPER TERMS
Google Play (sample extracts)
You grant to Google a nonexclusive, worldwide and royalty-free licence
to: reproduce, perform, display and use the Products for administrative
and demonstration purposes in connection with (i) the operation and
marketing of the Store; (ii) the marketing of devices and services that
support the use of the Products, and (iii) making improvements to the
Android platform.
You grant to Google a nonexclusive and royalty-free licence to distribute
the Products in the manner indicated in the Developer Console
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PLATFORM DEVELOPER TERMS
Google Play (sample extracts)
You grant to the user a nonexclusive, worldwide and perpetual licence
to perform, display and use the Product on the Device. If you choose,
you may include a separate end user licence agreement (EULA) in your
Product that will govern the user's rights to the Product in lieu of the
previous sentence
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PLATFORM DEVELOPER TERMS
iOS (sample extracts)
You acknowledge and agree that Apple, in the course of acting as
agent for You, is hosting, or … may enable authorized third parties to
host, the Licensed Application(s), and is allowing the download of
those Licensed Application(s) by end-users, on Your behalf.
You are responsible for hosting and delivering content or services sold
or delivered by You using the In-App Purchase API, except for content
that is included within the Licensed Application itself
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PLATFORM DEVELOPER TERMS
iOS (sample extracts)
The parties acknowledge and agree that Apple shall not acquire any ownership interest in or to any of the Licensed Applications or Licensed Applications Information, and title, risk of loss, responsibility for, and control over the Licensed Applications shall, at all times, remain with You
Any master recordings and musical compositions embodied in Your Application must be wholly-owned by You or licensed to You on a fully paid-up basis and in a manner that will not require the payment of any fees, royalties and/or sums by Apple to You or any third party
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PLATFORM DEVELOPER TERMS
iOS (sample extracts)
If Your Application includes or will include any other content, You must
either own all such content or have permission from the content owner
to use it in Your Application
If Your Application includes any Free and Open Source Software
(FOSS), You agree to comply with all applicable FOSS licensing terms.
You also agree not to use any FOSS in the development of Your
Application in such a way that would cause the non-FOSS portions of
the Apple Software to be subject to any FOSS licensing terms or
obligations
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PLATFORM DEVELOPER TERMS
iOS (sample extracts)
The license granted to the end-user for the Licensed Application
must be limited to a non-transferable license to use the Licensed
Application on any iOS Products that the end-user owns or controls
and as permitted by the Usage Rules set forth in the App Store
Terms of Service, except that such Licensed Application may be
accessed, acquired, and used by other accounts associated with
the purchaser via Family Sharing
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EULAs
- Platform development terms
- Degree of interaction with user?
- Degree of potential liability?
- Download cost & in-app purchases
- Warranties
- Conditions for / restrictions on use
- Limitations & exclusions
- Termination right
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3P ADVERTISING
- Interstitials
- Full-screen takeovers
- Banner ads
- In-game placements (ads & products, static or dynamic)
- Value-exchange model
- Sponsorship
- Advertising games
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ANCILLARY RIGHTS EXPLOITATION
- Books
- Strategy guides
- Films, TV, Video
- Internet
- Sountracks
- Sequels & prequels
- Character merchandising
- Collector editions
- etc
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M&A, IPO & TRADE SALE
“What the Viki acquisition means for Singapore
The Singapore blogosphere is all atwitter: Viki just got bought for
$200MM!
That's the biggest news in Singapore startups in two decades. Not since
Creative's Soundblaster in the 1990s has a Singapore tech company
succeeded on such a spectacular scale.”
Source: The Joyful Frog Digital Incubator (Sep 2013) http://www.jfdi.asia/
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CONSIDERATIONS
- Similar to funding considerations
- Valuation
- Dilution / loss of control
- Ownership & title warranties
- Due diligence (chain of title & registrations)
- 3P infringement claims
- Liability & indemnities
- Regulatory requirements
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CONCLUSION
- IP is critical to full lifecycle of any mobile game development
- Success is heavily dependent upon adopting a sound IP strategy
- Undertake a comprehensive IP-needs analysis
- Take great care to establish and secure your IP chain of title and to
ensure all relevant rights and clearances are obtained before
launching your product
- A failure to do so can lead to the loss of your product and possible
significant liability
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