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:
- 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.
- 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 .
- 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!
- 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.
- Sublicensable. A sublicensable license means that the licensee can grant licenses to others.
- 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.
- 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.
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:
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.
Not every change to your software requires an amendment to the ToS, EULA or PP. Where the change is encompassed by the language of the documents, no amendment is required. Conversely, if the change adds a new, or changes a current, feature, collects additional information or uses information differently and that is not reflected in these legal documents, then an amendment is likely required.
Ideally, your documents should constantly evolve, lockstep with your software’s evolution, and allow you to avoid the effort and cost involved in drafting new, or substantially amended, documents every few years. Where you believe that a software change is not reflected in your ToS, EULA or PP, I recommend consulting with your legal counsel to determine whether an amendment to these documents is needed.