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Video games and IP rights: how to manage intellectual property rights to secure their commercial exploitation

Video games and IP rights: how to manage intellectual property rights to secure their commercial exploitation

What you need to know

Video games are identified legally as complex works. They are protected by intellectual property law, but each component of the game (software, database, gameplay, music, …) is subject to the rules applicable depending on its nature. To ensure that their commercial exploitation doesn’t infringe IP rights, the video game studios must carefully manage the rights of the different contributors.

As soon as 1986, the French courts characterized video games as intellectual works, protected by intellectual property law. These are however complex intellectual works which include several types of technical and artistic components. After hesitating between a unitary legal characterization, reducing video games to software or to audiovisual works, the French Cour de cassation held that they are complex works and that each component of the game remains subject to the legal regime which is applicable due to its nature. Complex works means complex protection system, and the need to manage these rights appropriately.

1. Video games are multimedia works subject to intellectual property

    1.1 Video games are not limited to software

The code of intellectual property does not include video games in the list of works protected by intellectual property. IP protection was however granted through two decisions rendered by the Cour de cassation on March 7, 1986. (1) But the issue regarding the applicable legal regime was not resolved, the multimedia nature of video games making such characterization a difficult matter.

French case law has been indecisive for a long time: should video games be subject to the legal regime applicable to software or to the regime applicable to audiovisual works? A video game is indeed a complex intellectual work which includes technical elements - software, database, together with artistic elements - scenario, gameplay (usability and evolution of the actions in the game), game design (game mechanics and rules), characters and background, music, …

In its decision rendered on June 25, 2009, the Cour de cassation finally opted for a distributive legal characterization, and held that “a video game is a complex work which should not be reduced to the sole software dimension, regardless of its scale, so that each component is subject to the regime which applies to it given its nature.” (2) This analysis was then confirmed by the EUCJ in the Nintendo case, rendered on January 23, 2014. (3)

The consequence of this distributive characterization means that one must “deconstruct” the video game, component per component to apply to each one its relevant legal regime: the software component will be subject to the specific legal regime applicable to software, the database component will be subject to the specific legal regime applicable to databases, the scenario component, graphics and music will be subject to the general IP regime, etc.

    1.2 The components of the video games are protected, subject to being original

If the video game is original, then it is protected by IP law. Originality has been defined as “a unique intellectual contribution and personalized effort by the author.”

Regarding software, originality is defined as an intellectual contribution by the author characterized by “a personalized effort that goes beyond the mere implementation of a restrictive automated logic.” (4) The artistic quality or the “aesthetic merit” of the work is not taken into consideration to decide whether the work is original under IP law. (5)

Regarding databases, the criteria used to determine whether it should be protected is the notion of substantial financial, material or human investment, and not the sole principle of originality. (art. L.341-1 CPI)

    1.3 The identification of the rights owners

Since the different components of a video game are protected according to the regime which applies to them, identifying the rights owners of these components can be a delicate exercise. Several people are involved in the creation of a video game. It is therefore necessary for the studios to identify the rights attached to the different game components as well as their owners, and then manage these rights appropriately to be able to exploit the game legally, without infringing IP rights.

    a. The rights owners of the technical components

Software and databases are subject to particular protection regimes which determine who owns the intellectual property rights.

Whereas the IP rights are usually owned by the author of the intellectual work, article L.113-9 of the code of intellectual property provides that, by way of exception, the property rights of software developed by one or several employees within the scope of their employment or according to their employer’s instructions are automatically transferred to the employer.

This exception must however be construed in a restrictive manner. The transfer of IP rights to the employer only applies to software developed by one or several employees. Software developed by independent contractors (free lance), interns, corporate officers or that are subcontracted to a third party company are not affected. The IP rights remain with the developers, not employed by the studio, unless such rights were regularly assigned to it.

The rights on the databases developed for the video game belong to the producer of the database. The producer is defined as “the person who takes the initiative and the risk of the corresponding investments.” (art. L.341-1 CPI)

The studio which develops the game internally will then be considered as producer of the database.

    b. The rights owners of the artistic components of the game

The artistic components of the video game (scenario, gameplay, game design, characters and background, music, …), whether these works are of a literary, audiovisual or musical nature, remain subject to the common IP rules. These elements are not subject to any derogation to IP law in terms of who owns the rights, such rights belonging to the authors / contributors of each element, whether they are employed by the studio or are independent contractors. (6)

The multimedia components, including the video and animation elements, are considered audiovisual works. (art. L.112-2 6° CPI) Such works are presumed to be works of joint authorship (collaboration works) in which two or more natural persons have participated. These individuals are considered joint rights owners of these works, such rights having to be exercised based on their mutual consent.

2. IP rights management: securing the contracts between the studios and the creators / contributors

The video game studios must manage the IP rights of the contributors to be able to produce and exploit the game commercially.

Each new video game development project involves a team of several people with different and complementary skill sets : game designers, game artists, graphic designers, character designers, sound designers, music composer, software developer, gameplay programer, … These people may be employed by the studio or be independent contractors. Parts of the project may also be sub-contracted by the studio to third party companies.

It is necessary for the studio to manage the IP rights of these contributors through contracts. Except for software developers employed by the studio and the database designers, the contracts signed with the other types of contributors must include an IP rights assignment clause for the game components that will be developed.

Under French law, an assignment of IP rights must be made in writing and be specific. Each right assigned must be identified in the assignment document and the scope of exploitation of the assigned rights must be detailed (scope, purpose, territory and term of the assignment). (art. L.131-3 CPI)

The payment terms may be managed component per component and may be differentiated. For example, the individuals composing the music may receive a proportional compensation whereas the software developers may receive a fixed remuneration.

A global assignment of IP rights on future intellectual works is null and void. (art. L.131-1 CPI) It is therefore not possible to include, in the employment contract of a new employee, a global IP rights assignment clause which would include all the intellectual works that this individual will create and develop during his/her employment by the video game studio. A new IP rights assignment agreement will have to be signed by each creator / contributor upon the launch of a new video game development project. This document will have to be as specific as possible about the works covered by the assignment agreement. Likewise, if the development of certain components of the game are subcontracted to third party companies, an IP rights assignment clause will have to be included in the agreement between the studio and the subcontractor.

Lastly, it is recommended to register the name of the video game as a trademark (including its verbal and figurative forms) as well as the names of the main characters with the French trademark office (INPI) or the European office (EUIPO) to protect them from competitors.

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(1) Cass. Ass. plén., March 7, 1986, case n°84-93.509, Atari Inc. v. Valadon Automation and Cass. Ass. plén. March 7, 1986, case n°85-91.465, Williams Electronics Inc. v. Claudie X and Jeutel

(2) Cass. Civ., 1st ch. June 25, 2009, case n°07-20.387, Sesam v. Cryo

(3) CJUE, case C‑355/12, January 23, 2014, Nintendo Co. Ltd e.a. v. PC Box Srl et 9Net Srl

(4) Cass. Ass. plén., March 7, 1986, case n°83-10.477, Babolat Maillot Witt v. J. Pachot

(5) Cass. Ass. plén., March 7, 1986, case n°84-93509, Atari Inc. c. Valadon Automation

(6) On this subject, a decision rendered by the district court of Lyon (tribunal de grande instance) characterized the game “Alone in the dark” as a work of joint authorship and analyzed the IP rights ownership in the different components of the game, including the gameplay, to determine whether Atari had infringed the IP rights of the authors during its commercial exploitation. TGI Lyon, 3rd ch., Sept. 8, 2016, Raynal v. Atari et al.


Deleporte Wentz Avocat

February 2024