The video game industry around the world and in Canada is booming. Not only does this market create new and varied forms of entertainment, it also creates jobs and generates staggering sales revenues. Industry statistics for the United States show sales of computer and video games having increased from $10.1 billion in 2009 to $24.5 billion in 2016.
In Canada, the Electronic Software Association of Canada 2015 Industry Report states that it identified 472 active studios in operation across Canada in 2015, compared to 329 studios in 2013. Such increases are fast and substantial. Over the years we have also seen accessibility to gaming increasing via different platforms from consoles to mobile and we have seen the gaming industry attract a wider audience across the ages of children, men and women.
With all this industry growth comes increased creativity and technological advancement. As a result, there can be great value in the intellectual property associated with video games and/or gaming companies. Knowing what intellectual property is, how it applies and how to protect it are critical considerations for those involved in the development and commercialization of video games. This article will discuss the key areas of Canadian intellectual property that are relevant to the gaming industry.
What is Intellectual property?
Intellectual property (“IP”) relates to intangible assets, including inventions, brands, new technologies, source code and artistic works. More specifically, IP pertains to patents, trade-marks, copyright and industrial design. IP also extends to trade secrets and confidential information; however, these latter two categories are not governed by a specific statute, unlike the other kinds of IP in Canada. Outlined below is a brief description of some of the main characteristics of each of these areas of IP.
Patents: Patents provide a time-limited protection for an invention. A patent entitles the patent owner to the exclusive right to make, use and sell his or her invention in exchange for full and clear disclosure on how to work the invention. This is often referred to as the quid pro quo that is required in order to obtain the fixed term patent monopoly. An invention means any new and useful art, process, machine, manufacture or composition of matter, or any new and useful improvement in any art, process, machine, manufacture or composition of matter.
A patent essentially places a fence around your invention in an effort to prevent others from using your intellectual property during the life of the patent, which is 20 years from the date of filing in Canada. Unlawful making, using and selling of an invention can result in a finding of patent infringement and relief including damages and injunctions. By obtaining a patent, a patent owner benefits from the presumption of validity. Patent rights can be a valuable asset to the patent owner and/or any licensee.
Trade-marks: A trade-mark is unique and identifies the source of the goods and services with which it is associated. It may consist of a combination of letters, words, sounds or designs that distinguishes one company’s goods or services from those of others in the marketplace.
A trade-mark may come to be recognized and associated with more than the goods and services of a company – it may become associated with the company’s reputation or goodwill. It is part of your brand.
By registering a trade-mark, you protect your mark from misuse by others. A registered trade-mark entitles the trade-mark owner to exclusive right to use that trade-mark in association with the identified goods and services throughout Canada for 15 years. The term for trade-mark protection is renewable. Trade-mark rights may also arise through use of a trade-mark at common law. Although certain IP protection exists for non-registered trade-marks, registration provides additional benefits to the owner including additional remedies in the event of trade-mark infringement and passing off.
Copyright: Copyright relates to new original artistic, literary, dramatic or musical works. It provides for the exclusive legal right to produce, reproduce, publish or perform an original literary, artistic, dramatic or musical work. The owner of the copyright is usually the creator of the work but this is not always the case, where for example an employer has the copyright in work created by employees. These relationships and ownership issues may be governed by law and contract. Copyright automatically subsists in the work created. Copyright may also be registered, which provides further support for the presumption of validity. The general term for copyright protection is the life of the creator plus 50 years. This term is not renewable unlike with trade-marks; but similar to patents once the term of copyright ends, the intellectual property that had been subject to exclusive rights then becomes part of the public domain.
Industrial design: Industrial design relates to the features of a product that appeal to the eye. This includes things like the pattern on a clothing garment, the shape of a computer console, the contour of a bottle. Distinctive and attractive features may give a product marketplace advantages and as such can be an important part of your IP assets.
Registration of an industrial design provides exclusivity for your use and protection in the design for up to 10 years in Canada. As with other forms of IP, you may sell, assign or license your IP rights to others to make, use and sell your industrial design. Improper use of an industrial design may result in infringement and relief may be sought by the proprietor of the design.
It is important to appreciate that registration of an industrial design does not protect what the product is made of, how it is made or how it works. It is all about the product design appeal.
As with the case of patents, you need to apply for your industrial design early because as soon as the design is published in Canada or elsewhere, you have one year within which to file the application for registration in Canada. If you miss the deadline, you miss the opportunity to obtain registration and to protect your industrial design.
Trade secret and confidential information: Trade secret typically refers to things like formulae, processes and patterns and more generally to valuable technical information that is kept confidential. Confidential information typically refers to valuable information that is not public and is kept confidential and may apply to things like price lists, client lists and other customer information.
The value of the trade secret and confidential information is maintained as long as the relevant information remains confidential. This can be a valuable asset to the owner of the secret or confidential information. However once the “cat is out of the bag” the value cannot be restored and the “secret” is exposed. There are various kinds of remedies, available through legal action, to recover from the damage of unintentional disclosure and/or breach. As such, care and caution must be exercised to diligently and properly protect this information in order to keep its value and to ensure secret information is used properly.
In the world of video games there is a convergence of various kinds of IP.
How does intellectual property apply to video games?
In order to appreciate how IP applies to video games, the table below sets out the various types of IP discussed above and provides examples of what aspect of a video game may be protected by which area of IP. In addition, the table below also raises the important consideration of licenses and assignments relevant to IP rights. Ownership and licensing interests can arise in the development and commercialization of video games and are key to properly protecting and enforcing your IP.
|Copyright||Trade-marks||Trade Secrets and Confidential Information||Patents and Industrial Design||License and Assignments|
· Box design
· Website design
· Derivative Works
· Technological Protection Measures “TPM”
· Personality rights/moral rights
|· Company brands
· Company name
· Game branding
· In game product placements/ advertising
· Parody/false endorsements
|· Client lists and other contact lists
· Contracts with Third parties e.g. Developers and publishers
· Development tools
· Deals and pricing
|· Game design elements
· Network or database design
· Hardware technology
· Shape of game accessories e.g. special console
|· Assignments from game designers, programmers, engineers and or contributors
· Ownership agreements, licenses and assignments
· Derivative work related licenses
· User agreements
The above information is intended to facilitate associating key aspects of your video game’s artistic and technological content and its identifiable IP interest. Understanding these factors allows for early identification of IP interests thereby making protection of those interests easier.
Because of the creative and technological fusion in video games, certain more complex questions arise in the context of IP, including: how does live game play impact copyright? How to best protect derivative works in game characters? What balance to strike between accessibility to source code while protecting a valuable asset? What licenses and assignments are needed? How can technological protection measures (TPMs) be used in your game? Is there game hardware that should be the subject of patent protection? What about in-game mechanics? How does Canadian IP protection for video games differ from other key target markets?
Many of these considerations will require case-specific application to the legal and factual circumstances of each case. With the ongoing advancement in this space, interesting legal challenges will continue to arise. Being alert to IP issues will assist in identifying your rights and will also help to avoid unintentionally infringing on IP rights of others. In certain cases, knowing where someone else’s IP begins will be as important as knowing the scope of your own rights.
How to protect your intellectual property?
The first step in protecting your intellectual property is to recognize what kind of IP rights you or your company may have. You then want to invest in protecting those rights to ensure you do not inadvertently lose them and to ensure you maximize the value of the game and/or company.
In an ideal world you would protect all the various kinds of IP that apply to your video game and company. However the reality for many in the video game industry is that funding can be limited and advances in technology can happen rapidly. Both of these forces can pose obstacles in protecting your IP. In such circumstances you should consider focusing on protecting your core IP assets first, as those will be most important for development and commercialization purposes. You should also consider if you have IP that is time-sensitive, like in the case of patents and industrial designs. Ensuring the necessary filings take place within the relevant deadline is a critical consideration in evaluating what aspects of your IP to protect and when. Understanding your business objectives, plans for further development and consulting with legal experts will ensure the best strategy is adopted.
In conclusion, being proactive in understanding and protecting your IP is a critical part of the gaming industry. While setting out to design and develop a creative new video game, take time to design a coherent IP strategy and get your IP game on!
Jordana Sanft (email@example.com / +1 416 216 4798) a Partner in Norton Rose Fulbright Canada’s Intellectual Property Practice.
Stephen E. Siwek, Video Games in the 21st Century: The 2017 Report (Entertainment Software Association, 2017) at 20, online: <www.theesa.com/wp-content/uploads/2017/02/ESA_EconomicImpactReport_Design_V3.pdf>.
Nordicity, Canada’s Video Game Industry In 2015 (Entertainment Software Association of Canada, 2015) at 3, online: <www.nordicity.com/media/20151210faaebhea.pdf>.
A Canadian patent has a term of 20 years from the date of filing. See Patent Act, RSC 1985, c P-4, s 44.
Patent Act, supra note 3, s 27(3).
Ibid, s 2.
Ibid, s 43(2).
Trade-marks Act, RSC 1985, c T-13, s 2.
Ibid, s 22.
Ibid, ss 19-20, 46.
Ibid, s 20.
Ibid, s 7(b).
Copyright Act, RSC 1985, c-42, ss 2-3, 15, 18, 21, 26.
Ibid, s 3. See also Copyright Act, supra note 12, ss 27, 29.
Ibid, s 13.
Ibid, s 5.
Ibid, s 34.
Ibid, ss 6-7, 9, 11.1, 12.
Industrial Design Act, RSC 1985, c I-9, s 2. See also CIPO, “What is an Industrial Design?” (November 16, 2015), online: CIPO <www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr03717.html>.
Industrial Design Act, supra note 18, ss 9-10.
Ibid, ss 13, 15. See also Industrial Design Act, supra note 18, s 11.
Ibid, ss 17-18.
Ibid, s 5.1.
See e.g. XY, LLC v Canadian Topsires Selection Inc., 2016 BCSC 1095, 140 CPR (4th) 101.