Category Archives: Video Game Publishing

Publishing Video Games in Germany

Germany has strict rules governing video game content that large studios and indies need to comply with before publishing or advertising a game in Germany.  Breaching these rules is costly as fines may total $550,000 USD in addition to (in some cases) constituting a criminal offence.  Often, the laws result in modified video game content just for the German market (see: Half-Life, Wolfenstein).

By factoring these rules into development you can facilitate a smooth release in Germany.

1. What Content is Unlawful in German Video Games?

It is unlawful to display violations of human dignity, propaganda material of unconstitutional organizations (especially Nazi symbols), glorify violence and war as well as certain pornographic content.  See Article 4 for the full list.

In addition, it is unlawful to provide content that has the potential to impair the social and emotional development of children if you don’t take precautions to shield children from the content. Depending on style and presentation, games that cover violence, sex or drug use can fall under this category.

2. Does my Video Game Violate German Law?

If you’re unsure whether your game violates German law, there are two ways for your game’s content to be reviewed:

A.  You can have it pre-assessed by the German certified self-regulation organization USK.  The organisation offers basic initial assessments at a flat rate equivalent to $330 USD. You can also apply for an official rating which will prevent your game from being put on the “index list” of restricted content allowing for legal certainty before launching. This assessment entails a test run of the game and costs up to an equivalent of $1,320 USD. For a yearly fee equivalent to $3,300 USD, you can also become a USK member, which includes customized child protection solutions and a certain degree of protection from fines and other administrative measures.

B.  If your game is sold through certain marketplaces (Google Play, Nintendo eShop and Windows Store), you can obtain classification via the International Age Rating Coalition. This system is free to developers and allows you to rate a game using a complex questionnaire.  As of October 2016, IARC will be recognized as an official age classification system by German authorities.

3.  Wont Somebody Please Think of the Children!

As mentioned above, for some games, child protection measures have to be taken.  Examples of such measures include:

A.  tagging your website with an age restriction label; and

B.  restricting game distribution to adults, for example by using an age verification system.

Content that is deemed specifically harmful to children may only be made available to adults in closed user groups.  In addition, if you act as a website provider, it might be necessary to appoint a “Youth Protection Representative” to ensure compliance.

While these requirements are not minimal, it’s important to take them into account if you plan on Germany constituting a portion of your game’s market.

Thanks to guest writer Dominika Wiesner, a German trainee lawyer  working in our office this summer, for her work on this blog post.

Top 5 Video Game Studio Legal Mistakes

We represent quite a few video game studios, many of which are indie.  Regardless of studio size, we are often called to fix legal mistakes that could easily have been avoided.  These legal mistakes frequently fall into one (or all) of the following five categories:

  1.  Don’t forget to incorporate or incorporate too close to the date of launch.  Often incorporation is left to the last minute and only happens when Steam or Apple asks for a company name.  This is a problem as game intellectual property (IP) must be transferred to the new company at its fair market value, which may be more than nominal (given that it is about to be sold) and could involve complex tax solutions.  By incorporating earlier in the development cycle, you can put in place proper agreements so that the company owns game IP from day one.
  2.  Don’t create complex corporate structures with no purpose.  If you don’t know why your company has a particular corporate structure, you likely don’t need it.  The more complexity, the more likely mistakes will be made in the future when you use a certain structure for a different purpose than originally intended.
  3. Don’t  forget to assign IP to the studio.  The company needs to own game IP as, without, it cannot sell the game since it does not own the game in the first place.  This can be remedied through employment, contractor or IP assignment agreements.
  4. Don’t use oral agreements with independent contractors.  Use independent contractor agreements to document the studio’s relationship with contractors and to ensure the company owns the contractor’s work.
  5. Don’t sign publishing agreements without review.  Have a lawyer review your publishing agreements as there is often a disconnect between the terms you negotiated and the publishing agreement terms (often unintentionally, given publisher reliance on agreement templates).

By keeping the above in mind, you should be able to structure your studio correctly and save the legal fees otherwise incurred to clean these sorts of mistakes up.  For our indie clients, we certainly understand that they would rather put money into development than into legal fees!

IP Licensing Terms to Watch for

If your startup or video game studio’s business involves IP licensing (it likely does), it’s important to understand common IP license terms.  Proceeding with an IP license without fully understanding key license terms can have a disastrous impact on your company’s future.

Let’s start with the obvious:

A.  Licensor.  The person/company granting the license.  If you own the IP and are licensing it to another, you are the licensor.

B.  Licensee.  The person purchasing the license.

Now onto an overview of (some) important terms:

  1.  Perpetual.  This is the most important term in any license.  A perpetual license is one that continues in perpetuity and will only end if the licensee breaches the license terms (rare).  If you see the word perpetual, assume that the license lasts “forever”.  This works in some cases but if you actually intended to license the IP for a fixed term, perpetual is the wrong word to use.
  2. Term.  If the license is not perpetual it has a fixed term (typically a number of years), which you must specify.  Once the term ends, the license ends .
  3. Exclusive vs Non-Exclusive.  An exclusive license is one that only the licensee may use.  For example, if you exclusively license your video game to a publisher, you cannot publish it yourself.  Conversely, non-exclusive licenses permit additional licenses.  You can limit exclusive licenses by, for example, imposing platform or geographic restrictions:  exclusive license for distribution only on the Apple iOS store in Germany.  If you still plan on using the software yourself, internally, be sure to retain rights to your own software when granting an exclusive license!
  4. Worldwide/territory/other scope.  Specify the scope of the license, such as whether it applies only to a particular geographic region, technology platform or type of end user.
  5. Sublicensable.  A sublicensable license means that the licensee can grant licenses to others.
  6. Assignable.  An assignable license can be transferred to another, removing the original licensee from the license.  Typically, licenses are assignable only upon mutual agreement, an acquisition or bankruptcy.
  7. Derivative works.  By permitting the creation of derivative works you permit the licensee to modify and create new versions of the licensed IP.  The license to make derivative works can be limited (for example, to ensure compatibility with changes in operating system versions) or broad.  It is usually the case that the license prohibits the creation of derivative works.

When reviewing an IP license agreement, I often recommend starting with a review of the license terms and to watch for the above terminology.  Each term can alter the scope of the license and you need to ensure that the license terms are consistent with the terms you previously agreed to.

Game or App Ripped Off? Here’s what to do:

Whenever a developer discovers a copied version of their app/game, their immediate concern is how to remove it.  This post aims to outline the process for removing content that infringes your copyright from major app/game stores.

All major stores operated by U.S. companies (and often foreign companies) comply with the United States Digital Millennium Copyright Act (“DMCA”).  Simply summarized, the DMCA provides a notice-and-takedown procedure whereby a notice of copyright infringement sent to a DMCA Agent leads to the take down of infringing content.

STEP 1.  DMCA Notification

The DMCA Agent should be your primary contact as the DMCA specifies a procedure for copyright infringement claims and major stores will follow the procedure.  Here are links to the DMCA Agent for each major store:

Steam:  https://steamcommunity.com/dmca/create/

Apple:  http://www.apple.com/legal/internet-services/itunes/appstorenotices/

Google Android:  https://support.google.com/legal/troubleshooter/1114905?product=androidmarket

Facebook:  https://www.facebook.com/help/contact/208282075858952

Microsoft:  https://www.microsoft.com/info/cpyrtInfrg.aspx 

You must complete and send the notice of copyright infringement contained in these forms to the DMCA Agent in order to initiate the DMCA process.  After you send notice, the DMCA Agent should remove, or disable access to, the allegedly infringing app/game and send notification of such removal to the infringer.

DMCA Agent response time varies.  Indeed, U.S. courts are currently determining what period of time constitutes a reasonable response!

STEP 2.  Utilizing Connections and Social Media

After sending the notification, feel free to contact anyone you know at the app/game store or use Twitter and other social media to push your cause.  Often a campaign will cause a quick response from the DMCA Agent.

STEP 3.  Cease and Desist

Consider sending a cease and desist letter to the infringer as well, requesting that they remove the infringing content from the store (perhaps also request sales proceeds).  Where the store or website does not comply with the DMCA, this may be the first or second step.

STEP 4.  DMCA Counter Notification and Lawsuits

The infringer may respond with a counter notification claiming that the allegedly infringing content was removed as a result of mistake or misidentification.  The DMCA Agent, upon receiving counter notification, will let you know about the counter notification and will put the  content back on the store in 10-14 business days, unless  (before the content returns) you seek a restraining order against the alleged infringer and inform the DMCA Agent of the order.

In reality, the DMCA Agent likely will not receive a counter notification in the case of a blatant ripoff of your app/game.  Nonetheless, it’s important to know the steps that follow DMCA notification.