Buscaglia: Developers Should Beware Of Post-Release IP Traps

Author: by Staff

Talking as part of a new Gamasutra feature, veteran game lawyer Tom Buscaglia has been advocating for careful developer negotiation when signing publisher deals, pointing out a newly introduced contract clause that would re-assign the game IP to the publisher, post-release, if the title was successful. Buscaglia, who works as a lawyer on behalf of many developers, including more than one Independent Games Festival finalist, explains of the publisher-developer relationship: "In a deal with a developer the easiest way for the publisher to minimize risk is to put as much risk as possible on the developer. So, back-end loaded budgets, long payment procedures and the necessity of the publisher owning the IP is standard "policy" for many publishers. Well, as a professional negotiator, I'll tell you what I hear when someone says "it's policy" or "it's the standard deal in the industry." I hear nothing. If the publisher cannot provide a realistic logic-based justification for an adverse contract provision, make them or don't agree to it. And if the best they can come up with is "reduction of our risk" be extremely skeptical. I recently ran into a really clever ploy by publishers. In order to overcome the objection to IP assignment for original IP games, instead of demanding the IP ownership in the deal, publishers are now allowing the developers to retain IP ownership until after the game is released. However, the publisher retains an option to buy out the IP (and in the process the developer's rights to a back-end royalty in the process) if the game performs above a certain level. What level, you ask? Well, it is inevitably some time before the advance recoup point when back-end royalties would normally kick in if the game is a hit! You really have to admire their guile. If the game sucks, the developer can keep the IP. But if the game is a hit, the publisher owns it and the developer gets screwed out of any back-end royalties in the process!" You can now read the full Gamasutra feature on the subject, including lots more advice from Buscaglia on how to understand and correctly address negotiations between developer and publisher on game contracts.