Protection from Chaos, Part VIII: Intellectual Property Law Primer

This is a repost of the article appearing in my article series, Protection from Chaos, on Loremaster. That series addresses general principles of intellectual property law as it relates to the gaming industry.

Protection from Chaos, Part VIII: Intellectual Property Law Primer

In my last article, I briefly mentioned an incident in which I was watching “You Don’t Mess with the Zohan” on FX Network’s DVD on TV series. At one point, the female host of the show said that Michael Buffer had copyrighted the phrase, “Let’s get ready to rumble.” No, he didn’t, but saying he did is a very common mistake. While I was finishing this article tonight, I saw the movie, “the Social Network,” for the first time. I understand that this was a fake dramatization of the Facebook lawsuit, but the movie recklessly interchanges accusations of “you stole our source code” and “you stole our idea.” As you will see (if you don’t already), the latter of the two accuses Zuckerburg of nothing inappropriate. If Zuckerburg really did steal the idea for “the Facebook” from the Rip van Winklevoss brothers, it doesn’t matter. All that matters is whether he stole the source code. Ideas require very little work, so they have very little value. What matters is the work.

For all these reasons, I’m going to go over each of the areas of intellectual property (“IP”) law very briefly and give an example of how a game publisher might use each one to protect their work. A few paragraphs cannot do any of these subjects justice. Obviously, I’m leaving out a lot of important stuff, but then again, I’m not offering legal advice here, so you shouldn’t be relying on me to be thorough. Besides, more details are available in my other articles, including those I’ll eventually write.

Patents

Patents are inventions. They must be useful, novel, and non-obvious. Right now, everything that’s out there and not available for patenting is called the “prior art.” If you create a useful thing-a-ma-gig that has never been created before and isn’t an obvious modification of prior art and isn’t an obvious combination of more than one items of prior art, then you might get a patent. You’ll need to jump through all of the required administrative hoops, which can be both expensive and frustrating, but those are the requirements for patentable subject matter.

Patentable Subject Matter

What’s a thing-a-ma-gig? It can be a process, machine, article of manufacture, or composition of matter, or any new and useful improvement of one of those things. For example, a car is a machine, so the first car was patentable. A Ferrari Testarossa is a better car, so the Ferrari was patentable as an improved machine. A super plastic and a process for strengthening rubber also qualify. One example of a category of “thing” that isn’t patentable is the formula E=mc^2. Why? Because it’s a law of nature, and how could I possibly not infringe on that? I have no choice but to obey that law.

Having a patent in something means, very specifically, that you can exclude others from making, using, selling, importing, or offering to do those things. What if I own the patent for a car, but you own the patent for a Testarossa? Well, because I own the patent for a car, you can’t build your Testarossa. It’s still a car, so building and selling a Testarossa violates my car patent; I can exclude you from making any car. On the other hand, though I’m permitted to make most cars, I can’t make a Testarossa because you have that patent, and therefore can exclude me from Testarossa production and sale.

Market Power

By having such a strong power to exclude others (a legal monopoly), everyone with an idea races to the patent office to get a patent. It can be worth a fortune if the patented idea is actually marketable (i.e., it will sell). As a result, the microwave oven was probably created decades before it would have been if there weren’t patents. Another result is that the microwave oven is expensive to buy for the 17 year life of the patent. However, the patent term eventually expires, at which point the invention passes into the public domain, and our lives are made better because of it. I wish Starlite had been patented because it would have been great to have had that in the public domain right now. The technological non-progress of the Starlite story might be typical if patent law didn’t exist.

Vagueness

When I was in law school, the percentage of court decisions overturned on appeal hit 51%. That means trial judges were now in a position where flipping a coin was more reliable than their legal analysis. That’s pathetic, but that’s also why you shouldn’t expect easy answers to IP questions.

Copyrights

Copyrights are tangible expressions of creative ideas. A lot of people are idea-men, but they’re largely worthless. Ideas are a dime a dozen, and they provide no value in and of themselves. The real value to society is when someone actually does at least a little work and expresses that idea in a tangible form. That’s a copyright.

For example, I have a great idea for a software program that will improve air traffic control safety for all of America. My gosh; I’m a visionary! May I have some money now? Heck no. To make a living, I’m going to have to write the damn software, thus actually improving air traffic control safety for all of America. Then I’ve got something I can sell.

The same is true of a novel. Tom Clancy and I had a great idea for novel about a Russian sub commander who decided to defect. Then Tom and I had a fight, so we went our separate ways. A couple years later, he wrote the Hunt for Red October. Am I entitled to a percentage of the profits for my idea? Good news: Absolutely! Bad news: The percentage is zero. I didn’t actually do anything. I didn’t do any work, and I didn’t provide the world anything more than a one- or two-sentence outline. What I did lacks the minimum amount of creativity necessary to be protected by copyright.

Because copyrights relate to creative works, something that is merely functional is not copyrightable. What’s functional? For the sake of this article, assume it’s everything I mentioned above that’s covered by patents.

As with patents, the copyright monopoly can be fairly strong. Who the heck wouldn’t want a piece of the Transformers or Star Wars franchises? The copyright monopoly isn’t as strong as the patent monopoly, but then again, the bar for obtaining a copyright is set much lower. It’s easier to get because it doesn’t protect as much. Again, the result is an environment rich in creative works that might not be there otherwise.

As with patents, eventually the copyright term expires, and the work passes into the public domain, at which point everyone can copy it, perform it, etc. freely.

Trademarks

Trademarks are distinctive logos, words, or combinations of words that are used as a brand to identify the source of goods and/or services. That is, you can see on a shoe’s packaging a brand name (“Nike”), a catch phrase (“Just do it”), and a logo (the Nike “swoosh”), and that instantly tells you which particular company made the shoe. If you like that company, you’ll know that you’ll probably like the shoe. If the mark relates to a product, it’s a trademark. If a mark relates to a service, it’s a service mark. If a mark relates to both, it’s a trademark, and that’s why discussions like these always use the word “trademark” exclusively; it’s the default term.

Types of Word Marks

Word marks are considered generic, descriptive, suggestive, arbitrary, or fanciful. Generic words can’t receive trademark protection. Otherwise, I’d be able to make “Spoon” brand spoons, and no one else selling spoons would be able to call them spoons, essentially removing the word from the English language (at least for business purposes). Sometimes a mark can lose its distinctiveness and become generic. For example, cellophane was once a trademark, but it became the only way to describe the product to the public at large. Xerox might be next to lose its mark because a lot of people say, “I’m going to go xerox this,” instead of “I’m going to go photocopy this.” So far, Xerox has maintained a miracle and still has the mark.

Descriptive words (e.g., “Super Sweet Ice Cream”) can receive trademark protection, but only if the owner of that brand can show that the mark has acquired distinctiveness (i.e., a strong indication of who makes the ice cream) over the course of a long period of time in the marketplace. Suggestive marks require you to use a bit of imagination to figure out what they mean. For example, Coppertone wouldn’t tell you a thing, but once I told you it represented suntan lotion, you’d have an “Oh, I get it” moment. That leap of logic is what makes a mark suggestive. Arbitrary marks are ones that have no connection between the mark and the product it represents (e.g., “Apple” brand for computers), and fanciful marks are words that have no meaning at all prior to registration (e.g., “Kodak” and “Xerox” were completely made up by the companies that used them).

Using foreign words or words that indicate geography create additional wrinkles in trademark law that I won’t cover here.

How You Acquire Rights

Trademark law is one of the few areas of commerce in which principles of Federalism are still respected. As a result, the Federal government can’t regulate trademarks unless your mark is used across state lines. Of course, with the Internet and the overall ease of interstate travel, virtually all products and services are offered across state lines, so everyone should be considering federal trademark registration.

If you’re using a word mark in commerce, you automatically acquire “common law” rights to a trademark in any jurisdiction in which you’re selling to the public. As I said, if you sell your products or services in two or more jurisdictions (Washington, DC is a separate jurisdiction for these purposes), then you qualify for a federal trademark. Unlike the common law trademark, though, a federal trademark gives you rights in all United States jurisdictions, even those in which you’re not doing business. However, if some little guy in Houston, TX has acquired common law trademark rights first, then your federal trademark will apply everywhere [U]except[/U] the Houston metropolitan area. She had rights in that area first, so she’s the “senior trademark holder,” and you’re going to have to buy her out in order to get rights there. This is why many businesses do a “clearance search” before registration to make sure the mark isn’t being used already. Simply going to the USPTO website and searching for existing federal trademarks isn’t nearly good enough.

Trademark No-nos

Stealing someone’s trademark is called trademark infringement. The standard for trademark infringement is “likelihood of confusion.” That is, if I see the Nike swoosh, or even something very close to it, on a Keds shoe, I might be confused as to who makes the shoe, then I might buy an inferior shoe (or at least one I don’t like). This is why we can have so many great beer commercials. Budweiser and Miller Lite can use each other’s trademarks freely in their commercials because they’re obviously making fun of each other. There’s no way you’re going to buy Miller Lite because you like Budweiser and see a Miller Lite logo in the commercial. That is, there’s no way you’re ever going to get confused.

There’s also a concept called trademark dilution, in which someone uses a “famous” mark (e.g., Budweiser, Coca-Cola, Nike; one that most of the public knows very well) to sell other types of products. Although you’re using Nike to sell computers, and there’s no showing of confusion as to the fact that you’re selling them rather than the Nike, Inc., you’re still making the mark less distinctive (i.e., taking away its “famous-ness”), and so Nike, Inc. can stop you. This protection isn’t available for most trademarks because most aren’t “famous.”

By the way, as of June 15, 2011, Google is the most valuable trademark coming in at a value of $44.3 billion.

So Far, It’s Really Is All About You

You might have picked up on a theme throughout all of this. Although these first three forms of IP grant a set of rights to their owner, in theory, they do so ultimately for the sake of the public. These two ends of the IP spectrum are often at odds with one another. For example, because of some recent copyright law garbage (Eldred case anyone?), there’s a ton of controversy surrounding whether the pendulum of rights has swung too far in favor of the copyright owner (vs. the public). For those that know what I’m talking about, I agree that Eldred was a horrible decision extending the copyright term way too far, but many of those that complain are overstating their arguments, calling for a weakening of the copyright monopoly itself. However, this is outside the scope of this article, so we’re just going to accept the law as is. Whether they’ve struck that balance properly is another discussion for another day.

Trade Secrets

A trade secret is informally defined as anything that’s the subject of a non-disclosure agreement (“NDA”). An NDA is a contract in which you agree to keep your mouth shut about something. Like all contracts, though, both parties must receive consideration (something of value), so you have to receive something in exchange for your silence. Unlike patents, copyrights, and trademarks, there’s nothing stopping you legally from talking. You’re consciously making a trade of your right to speak in exchange for whatever you’re getting in return.

The classic example of a trade secret is the formula to Coca-Cola. Because it’s kept secret and is complex enough to make it difficult to replicate, it has a lot of value. Nevertheless, it doesn’t fall into any of the other categories, so trade secret law was the best way to go. Also, even if it did fall into another category, its monopoly would have expired decades ago. Keeping it a trade secret has turned out to be a wise move. Another example is super high-end software, such as the code for the Windows operating system, which is generally protected as a trade secret rather than a copyright because enforcing the copyright can be impossible (practically-speaking).

Right of Publicity

Are you ever annoyed when celebrities complain that people won’t stop saying hello to them on the streets? Obviously, some people go too far and harass, or even threaten, celebrities, but it seems awfully obnoxious for these snobs to make millions of dollars off of the blind devotion of their fans, and then complain when their fans express that devotion. Well, the law sort of agrees.

Celebrities certainly have less privacy rights than we do, but they shouldn’t be complaining. They’re compensated by heightened publicity rights. Simply put, because they’re public figures, you’ll be able to follow them around in ways that might be considered harassment (legally-speaking) towards ordinary folk, but your ability to profit off of their image is more limited. While the paparazzi (technically, the “press”) can take as many photos as they want, you can’t take a photo of Brittany Spears in line at your supermarket and use that photo in an advertisement for your store. If you took a photo of me and did the same thing, you’d probably be okay. This trade-off results in ungodly amounts of money going to the celebrities. Really, they should shut up unless actually threatened, or their non-celebrity family members are bothered.

This, by the way, is why there are “celebrity voices impersonated” disclaimers on commercials. This is Jerry’s Subs and Pizza’s way of telling the public, “Well, President Bill Clinton doesn’t really endorse our food products, and we have no idea whether he actually likes bacon . . . though we have our suspicions.” This resulted from a combination of cases, the most famous of which involved impersonations of Bette Midler and Tom Waites, both of whom had distinctive voices.

How Does This Play Out?

So, what’s protected in gaming?

Patents

There will be very little to be found patentable in gaming. Everything is likely to be found obvious, which is why my brother and I were able to buy and play Easy Money, a monopoly rip off, when we were kids. The game system wasn’t patented, so anyone is free to use it. If the game had modeled itself after Atlantic City, a particular creative expression, then there might have been a problem, but it didn’t, so the game was produced legally.

Still, because gaming is a collection of processes, a game can be patented in theory. Wizards of the Coast (“WotC”) did so with Magic the Gathering, though those patents (‘332, ‘374, and ‘957) have been criticized soundly by many people in the industry, and not just those with an axe to grind.

Copyrights

Perhaps surprisingly to most of you, as I discussed in Part V of this series, there isn’t a ton of protection here either. A lot of games are simply applications of mathematical principles, not even patentable, and certainly not subject to copyright. There’s also a functional aspect to games which, while theoretically patentable, are not copyrightable. That leaves the particular expression being used, but much of that is public domain as well. For example, WotC holds a copyright monopoly in neither dungeons nor dragons. Anyone can base their game on a dungeon environment in which you might fight some dragons. Instead, what WotC can protect is a particular dungeon (e.g., Undermountain), a campaign setting, or a character so long as the material is detailed enough to rise to the level of the minimum amount of creativity to justify copyright. This is a difficult line to define when speaking in theory, so I won’t try to pin it down any further. Just understand that all that’s protected is the details of a work that’s fairly considered to be sufficiently creative.

So, what really holds back the rest of the industry from taking much of what WotC does is that the consumers will see such taking for what it is: a lack of creativity on the part of the other company. Still, people do it all the time, and to an extent, it’s okay.

Trademarks

This is where the real money is. Love them or hate them, WotC and parent company Hasbro have some serious brand recognition. So do Hero Games, Green Ronin, and others. If you see the Green Ronin Publishing logo on a product, you know it’s well-conceived, because Chris Pramas is one hell of a game designer. So, imagine how well my game would sell if I put that logo on it. If I did so without permission, Chris could sue me. If I did so with permission, I could get in a lot of game sales. That brand name carries weight and legitimacy, so Green Ronin would be in a pretty good bargaining position if I tried to license their brand for my own game.

This is what I was trying to say in Part V of this series. Because there’s very little that’s protectable in the copyright area, I can easily, legally, and morally produce products for Dungeons & Dragons without using the Game System License (“GSL”); however, because of trademark law, operating under the GSL has a tremendous business value that I can’t dismiss without giving it some serious consideration. Using the GSL grants me the right to slap a WotC logo on my product, and that translates to more sales then I’d otherwise get. All WotC asks for in return is that I agree to something they can’t force on me through IP law: conform to their basic structure of the game. They maintain game integrity, and I get more sales. Not a bad deal, though there are still good reasons to operate outside the GSL. I’ll leave you to your own business decisions.

One last trademark note: Remember the discussion above on the Budweiser v. Miller Lite commercials and likelihood of confusion? If you are operating outside the GSL, or writing for games where no such license exists, make sure that within your product you identify the trademarks of the other companies and who owns them. It also wouldn’t hurt to disclaim directly any affiliation with those companies.

Trade Secrets

I signed a non-disclosure agreement with a gaming company. As a result, I can playtest their unreleased material. This idea was a long-overdue. Game publishers have a ton of competent testers in their fan base that can provide excellent feedback. The problem with the agreement is that I’m not sure what my “consideration” is. (Consideration is something of value that passes to each party and forms the basis of a contract’s enforceability.) In fact, the name of the document is “Form Unilateral NDA.” They have the standard “for other good and valuable consideration, receipt of which is acknowledged,” language, but without something of value actually passing to me, I’m not sure the agreement is enforceable.

Still, they have little reason to worry. Even if no court would enforce the contract, playtesters see a tremendous value to being a playtester. They know that if they open their mouths at all, they’re no longer playtesters, and they don’t want that.

There can’t be much of a budget for payment, so I would suggest that gaming companies give their playtesters PDFs of the final materials (after revisions) of any material they playtested. Is that enough? Probably, but at least it’s a start. Of course, with playtesters unwilling to blab for fear of losing their “jobs,” publishers might not have a great motivation to do this, at least not until the first major disclosure occurs and a lawsuit fails.

In any case, you can see how trade secrets can be used in the industry.

Publicity

There aren’t a lot of examples of how game publishers can leverage their own publicity rights, but they must remain mindful of the publicity rights of celebrities before attaching them to their games. On the back of Jason Morningstar’s Faisco sourcebook, he has a quote from Wil Wheaton. I hope he got permission for that, even if the quote came from a tweet. (I asked; he did.) Don’t mooch off of someone else’s celebrity. That’s a property right to them. You might as well steal their wallet, and you should expect a similar response.

Conclusion

People, this is just a start. There is a ton more depth to these subjects. If you need more information, do some more reading from actual IP attorneys (which can include my other articles). If you have a specific set of facts that need to be addressed, though, you need to speak with someone that does this for a living. Don’t rely on internet threads. They’re filled with people that learned the buzz words but don’t really understand them. Those same people also have no appreciation for the big picture and subtle consequences. Even worse, it’s impossible to tell them apart from the knowledgeable people. If you want free advice, you’ll be getting advice as valuable as what you paid for it.

Follow me on Twitter at @PropertyAtty
Follow Wizards of the Coast on Twitter at @Wizards_DnD
Follow Green Ronin Publishing on Twitter at @GreenRoninPub
Follow Jason Morningstar on Twitter at @jmstar

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Filed under Copyright Law, Intellectual Property Law, Patent Law, Publicity Law, Trade Secret Law, Trademark Law

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