Video Game Developers and Work For Hire Agreements

Indie developers frequently outsource portions of game development to independent contributors (i.e., contractors). But depending on what agreements, if any, the primary devs have in place with any contracted contributors, the primary devs might not own their game outright.

Even so, when devs start making a game, one of the last things they think about is contracts. That can be a problem, especially if a game blows up.

A major reason why not having contracts can be a problem is copyright. Copyright is a form of intellectual property (think property like real estate, but the creative type) that protects original works of authorship as soon as those original works are created. Components of games, like any game artwork or code or music, are original works of authorship. And whoever makes those original works of authorship owns them from the moment of creation except in certain circumstances. We’ll talk about two circumstances in particular where the maker may not own the copyright: (1) employment relationships and (2) contractor relationships with a work-for-hire agreement.

In an employment relationship, the law generally assumes that the employer owns the employee’s work for the employer unless something else changes that general assumption (like a contract that says otherwise or legal exception). So, if a dev is employing contributors, the law presumes that the dev owns the contributor’s contributions to the game. In the case of contractors, devs need what’s called a work-for-hire agreement, which is an agreement that says the dev owns the contractor’s work provided under that agreement. The law actually treats the dev as the author in a work for hire agreement.

A quick aside, in California, if a dev enters into a work-for-hire agreement with a contributor, that contributor can be presumed to be a statutory employee. Because many devs want to avoid treating contractors as statutory employees, they instead are often entering into assignment agreements. Under an assignment agreement, the dev won’t own the contributor’s work at creation, but the contribution will be assigned to them through the contract.

So, now that we’ve discussed employment and work-for-hire agreements, consider the scenario where a dev has hired a bunch of contributors as contractors at different times over the life of their game and the game finally blows up. If those contributors were never employees or never signed a work-for-hire agreement when they provided their work on the game, they may be due royalties for their work. They may sue to enjoin sales of the game. They may claim they were a “partner” in the business of the game. Or, if a company comes along and wants to buy the dev’s game, the dev may have trouble showing that it owns the game, which could hinder or destroy the sale transaction.

To avoid these issues, best practice is for the dev to either employ its contributors or to make sure the dev has a work-for-hire agreement with its contractors (or an assignment agreement depending on the contractor’s location). Have questions? Reach out!

Ryan Fairchild

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