Unless you’ve been living under a rock, you’ll know that Rockstar Games released the trailer for Grand Theft Auto 6 (GTA 6) on Monday 4th December. This was slightly earlier than they planned, with Rockstar having to react to a leak of the trailer that appeared online (we won’t go in to the legalities of that here!).

Clearly Rockstar made the right choice, as the trailer has since gone on to almost break the record for the most views on YouTube within 24 hours (nearly 100 million views were recorded in those first 24 hours, which is nothing short of incredible). This shows just how excited fans are for the next instalment of the open-world action adventure series, which is unsurprising given the last instalment (GTA 5) was released nearly 10 years ago. If rumours are to be believed, the overall budget for GTA 6 will be in the region of $2 billion, which would comfortably make it the most expensive game ever developed (and to contextualize this, GTA 5 had an estimated overall budget of around $265 million).

Rockstar is a titan of the video game industry and probably has the resources to deal with the majority of development “in house”. However, for many smaller studios, a lack of capacity or expertise in certain areas means that outsourcing work to freelancers or other studios (such as art studios) is vital in their development process.

This article is intended to give studios a brief overview of the intellectual property considerations that they will need to have regard to when outsourcing work to third parties.

Passage of intellectual property permissions is generally dealt with in two ways:

• Assignments (taking ownership of intellectual property); and
• Licences (obtaining the right to use someone else’s intellectual property)

In this article, we will only consider assignments of intellectual property, and not licences.

Taking Ownership of Intellectual Property (Copyright)

Intellectual property is the cornerstone of video game development. Pretty much every element of game development will have intellectual property considerations, and so it’s vital that studios are including measures in their contracts that address the position on intellectual property.

One common misconception is that because you pay for development work to take place (say for example you pay for some 3D art or coding which you will later use in your game), that you own the intellectual property (copyright) in the finished “product”.

This is not the case, as section 11(1) of the Copyright, Designs and Patents Act 1988 (CDPA 1988) confirms that the author of the work is the first owner, and section 9(1) of the CDPA 1988 confirms that the “author” is the person who first created the copyright work (there are exceptions relating to work created by employees under section 11(2) of the CDPA, but of course outsourced contractors wouldn’t be classified as employees and so this wouldn’t apply).

Additionally, section 90(3) of the CDPA 1988 confirms that an assignment of copyright is not effective unless it is in writing signed by or on behalf of the person who is making the assignment.

To summarise all that, the owner of copyright is the person who first creates the work in which copyright subsists. If you want to take ownership of the copyright from the first owner, there needs to be a clear, unambiguous assignment of copyright made in writing that is signed by the person giving it away. This will of course be dealt with in the contract.

International Contractors

Many smaller studios will utilise contractors in different jurisdictions, as these can often have greater levels of expertise (and they are often far cheaper). However, there are legal considerations that need to be had when obtaining intellectual property rights from individuals/companies located in different jurisdictions. In such cases, it is important that studios consider and comply with any formalities required for an effective assignment of intellectual property in the specific jurisdiction in question and not just in their own.

Recognising country specific requirements/formalities and addressing/complying with them (even where the governing law of the contract remains the law of England and Wales) lowers the risk of the assignment of IP rights being found to be invalid at a later stage (which could allow a contractor to assert rights in the intellectual property at a later stage, or worse, bring infringement claims against a studio).

Conclusion

This is intended to be a brief overview of some of the intellectual property considerations that need to be had when outsourcing video game development work. If you need legal advice on any proposed outsourcing work, please contact me at JohnCotterill@EatonSmith.co.uk.

This is not legal advice; it is intended to provide information of general interest about current legal issues. You should specific legal advice before acting in reliance on any of the information provided.