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

What you need to know

Video games are legally classified as complex works. They are protected by intellectual property law, but each component of the game – whether software, database, gameplay, music, etc., is governed by the rules applicable based 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 each contributor.

As early as 1986, French courts recognized video games as intellectual works, protected by intellectual property law. These are however complex intellectual works which combine several types of technical and artistic components. Initially, legal characterizations fluctuated, with attempts to classify video games solely as software or audiovisual works (unitary legal approach). Ultimately, the French Cour de cassation established that video games are complex works, meaning each component is subject to its respective legal regime. This complexity necessitates a nuanced approach to IP protection and the need to manage these rights appropriately.

1. Video games are multimedia works subject to intellectual property law

    1.1 Video games are not limited to software

The French Intellectual Property Code does not explicitly list video games among works protected by intellectual property law. However, IP protection was granted through two pivotal rulings by the Cour de cassation on March 7, 1986.(1) But the question 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 – the storyline, gameplay (usability and evolution of in-game actions), game design (mechanics and rules), characters and settings, music, etc.

 

In a landmark decision 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 that cannot be reduced solely to its 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 later confirmed by the European Court of Justice (ECJ) in the Nintendo case on January 23, 2014. (3)

 

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

    1.2  Protection of video game components requires originality

For a video game to be protected under IP law, it must meet the criterion of originality. Originality has been defined as “a unique intellectual contribution and personalized effort by the author.”

 

For software, originality is characterized by the author’s intellectual input, reflected in “a personalized effort that goes beyond the mere application of a restrictive automated logic.” (4) The artistic quality or the “aesthetic merit” of the work is irrelevant when determining originality under IP law.(5)

 

Regarding databases, protection is determined by criteria of substantial financial, material or human investment rather than originality alone. (art. L.341-1 of the French Code of intellectual property)

    1.3 Identifying the rights owners

Since video game components are protected under various legal frameworks, determining the rightful owners of these components can be a complex process. Given the collaborative nature of game development, studios must carefully identify the rights associated with each component and its respective owner to legally exploit the game without infringing on IP rights.

    a. Rights owners of the technical components

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

 

While IP rights typically belong to the author of the intellectual work, article L.113-9 of the code of intellectual property provides that, by way of exception, IP rights of software developed by employees within the scope of their employment or following their employer's instructions are automatically transferred to the employer.

 

A second exception was introduced with article L.113-9-1 of the code of intellectual property, extending the transfer of IP rights to the employer for software developed by individuals who are not employees of the company but who work under a contractual arrangement within a research context. This transfer is contingent upon these individuals receiving compensation and working under the supervision of a manager within the company. This provision is generally understood to apply to interns and doctoral candidates.

 

However, this exception must be interpreted narrowly. The transfer of IP rights to the employer is limited to software created by employees, interns, and doctoral candidates. Software developed by independent contractors (freelance), corporate officers, or subcontracted third parties is not covered by this provision. For these cases, the IP rights remain with the external developers unless these rights have been formally assigned to the studio.

 

For databases, the rights belong to the producer, defined as “the individual who undertakes the initiative and bears the risk of the corresponding investments” (article L.341-1 of the code of intellectual property). When a game is developed internally, the studio is then considered the producer of the database.

    b. Rights owners of the artistic components of the game

The artistic components of the video game, including the storyline, gameplay, game design, characters, settings, and music, whether these works are of a literary, audiovisual or musical nature, remain subject to the common IP rules. Ownership rights belong to the authors or contributors of each element, regardless of whether they are employed by the studio or are independent contractors. (6)

 

The multimedia components, such as video and animation, are classified as audiovisual works. (art. L.112-2 6° of the code of intellectual property) These 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 mutual consent.

2.  Managing IP Rights: securing the contracts between the studios and the creators / contributors

To commercially produce and exploit a video game, studios must carefully manage the intellectual property (IP) rights of all contributors.

 

Each new video game development project involves a multidisciplinary team including game designers, game artists, graphic designers, character designers, sound designers, music composers, software developers and gameplay programmers. These contributors may be studio employees, independent contractors, or third-party companies subcontracted to handle specific tasks.

 

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, contracts with other contributors must include an IP rights assignment clause for any game components they create.

 

Under French law, an assignment of IP rights must be in writing and be specific. The agreement must clearly identify each right being assigned and itemize the scope of exploitation of the assigned rights (scope, purpose, territory and term of the assignment) (art. L.131-3 of the code of intellectual property)

 

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.

 

It is important to note that global of IP rights assignments on future intellectual works are invalid under French law. (art. L.131-1 of the code of intellectual property) Therefore, an employment contract cannot include a blanket IP assignment clause covering all intellectual works an employee may create during their tenure with the video game studio. Instead, a separate IP rights assignment agreement must be signed at the start of each new game development project, specifically detailing the works covered. Similarly, if components of the game are subcontracted to third-party companies, the subcontracting agreement between the studio and the subcontractor must include an IP rights assignment clause.

 

Lastly, studios are advised to register the name of the video game as a trademark (both in 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 potential infringement by competitors.

(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) TGI Lyon, 3rd ch., September 8, 2016, Raynal v. Atari et al. In this decision the court 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.

Bénédicte DELEPORTE
Avocat

Deleporte Wentz Avocat
www.dwavocat.com

February 2024