Sidhe Interactive
Intellectual property issues
The following questions were put to Sidhe Managing Director Mario Wynands in late 2007 by Susan Corbett, of Victoria University of Wellington, as part of her study, Intellectual property in Technology teaching, identifying intellectual property implications and issues that emerge from selected Techlink case studies. Their replies take the form of edited reported speech.
- You use the term 'economic impact' – would you agree the economic value of a successful game is in its intellectual property?
- 'Work for hire' is a United States term – not used in New Zealand; is a contractor commissioned to carry out a project?
- Employee ideas – If an employee's idea is used in a game, such as Gripshift and there is no IP in an idea, who owns the IP of the developed product? The company as the employer?
- Is there a confidentiality clause in Sidhe employment contracts?
- Ideas developed into protectable expression – relevance of marketing considerations. NZ specific market?
- "Proprietary code” and "middleware”. Explain the IP ownership of these.
- Art development process – copyright trail? Dated etc?
- Any thoughts on IP ownership for the players?
That the economic value of a successful computer game lies in its intellectual property (IP) (most of which is protected by copyright law).
The original idea or concept for a new game is not legally protected (except by keeping it secret) until it is developed further. Once the idea or concept is developed further by the Sidhe team it is legally protected. It is protected by copyright at each stage of its development – written specifications, flow charts and diagrams, descriptions and drawings, music and dialogue, and finally the playable game. This process can take many months of work by a number of Sidhe employees.
The development of the idea into the game is the IP of the game, and is the valuable part of the game. The physical object upon which the game is 'platformed', (for example many games are platformed and sold on compact discs), is not valuable in itself. The economic value is in the experience of playing the game, or in other words in using the IP in the game. This experience is what the gamers pay for.
Many people do not understand that copying the game for a friend is copying the IP in the game and is stealing from the owner. Stealing IP is sometimes called piracy. Mario Wynands estimates that Sidhe loses thousands of dollars to piracy each year.
The term work for hire is a term used in the law of the United States. It is not commonly used in New Zealand. A more usual term in New Zealand is commissioned work. This simply means carrying out work for somebody else who is not your employer, usually for a fee.
Sidhe also develops some games for well-known overseas producers such as Sony, Microsoft, and Nintendo. Sidhe is commissioned to develop the games by the overseas producers. For IP purposes this situation is similar to an employer and employee relationship described below, but it can be varied by legal agreement between the producers and the company or person who is commissioned to do the work for the producers. Under copyright law the IP in the completed game belongs entirely to the company which commissioned the work.
Alternatively, the law allows this arrangement to be altered by agreement between the two parties. For instance, it might be agreed that the IP will be shared between Sidhe and the other company, perhaps not in equal shares but in some other proportion.
As an alternative to developing games for other games producers as described above, Sidhe also develops and produces some new games under its own label, often using ideas from its team of employees. This is a good way to proceed because Sidhe then owns all the IP in these games. On the other hand, Sidhe must bear the costs of developing these games and they might not sell as well, particularly overseas where they will need to compete with more well-known producers such as Sony, Microsoft, and Nintendo.
Sidhe involves all its employees in the creation process by encouraging them to put forward their ideas for new games in 'pitching rounds'. The best ideas from the pitching rounds will be developed into new games by the Sidhe team using the company's resources.
Because the employee who thought of the original idea for a game did so as part of his or her employment, he or she will not be the owner of the IP in the finished product. By law the IP created by an employee as part of their job belongs to their employer, in this case, Sidhe. After all, it is the employer who provides the resources to develop the 'great idea' into a product that can be sold. However, if a new game sells particularly well, then sometimes the employee who had the original idea will be given a bonus.
At the early stages of development secrecy, or confidentiality, is very important. An idea cannot be legally protected except by keeping it secret. All Sidhe employees have to sign a confidentiality agreement. This is a legal document which says that they must not tell anyone outside their employment about the new games that Sidhe is developing.
There is a need for extra secrecy when a new game is being developed that is based upon a new book or movie. The author or publisher of the book or movie will first agree that Sidhe may develop a game, but they will generally insist that the new game is not to be made available to the public until after the book or movie is first released. If someone was to learn details of the new game before it was released, they would also learn the ending of the book or movie and this could ruin any marketing plans for the new book or movie.
Sidhe usually tries to give its games a New Zealand flavour; for example in its game, Gripshift, the developers have included a silver fern skin on one of the cars, as well as the music from eleven different New Zealand bands on the sound track.
In the game "Rugby League II”, which was developed for Microsoft's Xbox, Sidhe has included an authentic Ngatitoa version of the haka. Sidhe realised that the haka is a traditional part of Māori culture and that it might be offensive or show a lack of respect to use it in a commercial setting such as a computer game. For this reason, Mario Wynands and his team first consulted with representatives from Ngatitoa to make sure they agreed to this and that they approved of the version that would appear in the game.
Even games that are to be sold overseas, such as those that Sidhe makes under a commissioning arrangement for an overseas producer, will sometimes include music from New Zealand bands. The intellectual property in the music belongs to the band and to the composer of the music. It cannot be used without their permission. Usually the band and the composer will agree that Sidhe can use their music for the sound track of a game in return for a fee or royalties from the sales of the game.
This is a different situation from the haka and other traditional cultural performances, including folk music. These things are not protected by our current IP legal system because they have been in existence for hundreds of years and the IP system only protects developed ideas for a certain term of years. After that time they become part of the 'public domain' and anyone can use them for free.
Another reason why traditional culture is not protected is because it is difficult for the law to decide who should own it.
Some people think this situation is wrong and that a new system should be developed to give legal protection to traditional culture. They believe that the respect and honour owed to traditional culture should mean that it is never permitted to become part of the public domain for anyone to use in any way they choose.
'Proprietary code' means computer code for which the IP is owned by Sidhe – including the code for development tools and processes and project management tools. The IP in computer code is protected by copyright law and sometimes also by a patent.
'Middleware' is a term used for computer code for which the IP is owned by another person or company to allow other persons or companies to make use of it for a fee. The person or company who wants to use the IP in middleware will usually have to sign a legal agreement called a licence. The licence will say that they are permitted to make use of the IP in the middleware for a certain time and in a certain way. The licence will not, however, give them ownership of the IP in the middleware.
Sidhe will sometimes use middleware for part of the game development process because it is faster and cheaper to use than requiring the Sidhe development team to develop its own computer code for certain processes.
Sidhe generally develops new artworks and designs for its games. It is careful not to incorporate logos or designs from other companies even by accident, as this would be an infringement of the other company's copyright in its art and design.
Although Sidhe is increasingly selling its games online over the internet, it does not, as yet, see a rule for players creating their own IP as they play the game. Mario Wynands explains that a game like Gripshift, which is available online in the United States, is not set up for original development by its players. Gripshift and games like it are different from an online virtual world game like 'Second Life' in which players participate in life events using virtual dollars. The producers of Second Life have recently announced that players will own the IP they create in the virtual world.
