In the Media Law course I assist the students were given a real world type scenario and were told to give their opinion on what the designer in the scenario should and shouldn’t do.

I will post my reasoning with you. First read the following scenario:

You have created your first digital game, registered your copyrights, and submitted the title of the game for trademark protection. You have also contacted several toy companies to see if they are interested in your game idea. After about two months, you receive a call from an executive from one of the companies, Mr. Bill Broker. You set up an appointment to meet with him and discuss your project over lunch.

Several days later, you meet Mr. Broker at his very impressive office. Mr. Broker-Bill as he’s asked you to call him, is very nice. He gives you a full tour of the manufacturing plant, shows you some of the latest projects they are working on, and even gives you a few toys to take home for your daughter. After that, he drives you over to a very expensive restaurant for a delicious meal.

Over lunch, Bill tells you that his company is very interested in your idea, that they think it will be a big success, and that they would like to license it from you. Naturally, you are interested, and begin negotiating.

As it turns out, Bill is really easy to negotiate with. He agrees with just about all of your conditions and offers a larger than expected advance on royalties with modest royalty payments after that. He even asks you if you think the playing pieces would look nicer if textured in antiqued metal or cast glass.

By that afternoon, you have reached an agreement on every possible detail and shake on it. Bill says he will send a copy of the licensing agreement to you the next morning. As soon as you sign and return it, the company will issue a check for your advance.

Well, you are so excited that you barely sleep that night. At ten o’clock the next morning an overnight delivery package arrives at your door with the contract and a prepaid return envelope. There is a friendly note from Bill suggesting that you might consider a job with them and asking that you come to them with any new ideas first. Then, you take a look at the contract.

You read through it. It looks great. Everything is laid out as you discussed over lunch, the money and everything else, right down to the playing pieces being textured to look like polished glass. Then you notice a single line toward the end of the contract that says, "all rights convey to the licensee." You think to yourself, "it’s just some standard legal jargon" as you pick up your pen, but you hesitate before signing.

Now read my reasoning:

**Please note that for this response the designer’s name will be Bob.**

Don’t do it Bob!

At least not yet.

You should at least consult your attorney before you sign your rights to your game away!

Mr. Broker is not your friend Bob… he has no problem taking the rights for your game. Sure, you’ll receive a hefty sum for your initial game, but royalties? Yeah, you can kiss that idea good bye if you sign your John Hancock on the dotted line!

If you don’t already have an attorney I would suggest finding one who specializes in creative professionals… you know, authors and designers and such?! An attorney who works with clients who have special needs such as yours, licensing and royalties and such, could really save your butt and possibly earn you much more money than you’ll spend on the attorney’s fees!

But, don’t leave good ole Mr. Broker hanging while you have your attorney read the contract. You should be considerate and give him a ring, ask him about the wife and kids… don’t forget Fido. Then just casually mention that there were a few things in the contract that you wanted some legal guidance on and that as soon as you discussed it with your attorney you would send that signed contract over and wait for that check… unless your attorney advises you to seek an amendment regarding the licensing terms. Which, let’s face it, a decent attorney would strongly advise you to ask for an amendment. After all, if you make more money from royalties of your game, then you’ll be able to afford those steep attorney fees!

If good ole Mr. Broker won’t amend the licensing agreement then I’d say it’s time to part ways and end the potential budding relationship. There are other toy manufacturers out there in the sea of retail!

Of course Bob, it is up to you. If you can live with watching kids all over the world play your game, read books spun off from your idea, action figures and movies… all without ANY royalties, then by all means, sign on the dotted line! I think you’re smarter than that, though, Bob.

Oh, and that friendly note offering you a job? Yeah if you take that job guess what!? That means that all of those really awesome ideas you have dancing around in your head will belong to Mr. Broker and his company if you ever decide to begin development. Under that work for hire contract Mr. Broker so eagerly wants you to agree too, "the creator is not considered the author of the work and is not entitled to copyright protection." (Waxer & Baum, 2006, p. 26-27) This means Mr. Broker and company will own your newest work and you won’t so much as get credit for it.

Citation

Waxer, B., & Baum, M. (2006). Internet surf and turf - Revealed: The essential guide to copyright, fair use, and finding media. Boston: Thomson.

One of the students asked the following question:

Is there any circumstances that would make it okay or even beneficial for good ‘ol Bob to sign away his rights?

The following website states that, “Capital gains treatment — which offers some tax benefits, including lower tax rates — is available only when you sell "all substantial rights" to your work.” Tax breaks hold quite a bit of weight in many professional decisions. What do you think? - Samantha

Samantha poses a good question.

I’m actually developing a game of my own like the guy in the scenario. I’ve been approached by a guy just like Bill Broker. Regardless of any tax breaks there may be for selling the rights away, I’ll make more money on my own. If there will be games, books, merchandise, etc spun from my idea, I will have a say in it. I actually am about to start selling merchandise soon early next year with the grand opening of the website and beta release of the game.

There are always tax benefits out there, regardless if you sell the rights or not. It is advisable to seek the help of an accountant and financial planner/manager/agent who specializes in creative professionals.

Think about the Harry Potter franchise… J.K. Rowling did not sell her rights away when she sold movie rights and such… she is raking in money from every kid who wears a HP costume on Halloween, who plays a game spun from it, who buys toys and such, etc…