Who owns your video game?
An issue between the NFTS and its students has raised questions about IP ownership -- Sheridans' Tim Davies is here to help
In December 2019 an issue arose between the National Film and Television School (NFTS) and former students of its renowned Game Design and Development Masters program. It drew attention to universities and educational institutions owning the intellectual property rights in the works created by students while those students are enrolled at the institution.
In this recent occurrence, NFTS was asking students that wanted to develop, finish and sell the games they had started during the MA program to pay the school a minimum amount of £1,200 per game to "buy-back" the intellectual property rights. This sum could be paid as a single "buy-out fee" but, for most developers and students without the financial means to make such payment in one go, the former students would be required to pay the school an indefinite share of at least 7.5% of the revenues they would receive from commercialising each of their games.
A number of current and former NFTS students suggested that this position was unfair given that NFTS' annual fees for the MA program are currently £14,800 per year -- with students from outside of the EU required to pay annual fees that are roughly double.
How is it possible that an institution such as NFTS can claim ownership over all intellectual property rights in its students work? Below I will look at the legal position in the UK around intellectual property, and specifically copyright, ownership and how this can be unknowingly assigned to a third party -- such as a university or school.
Know what you own
For current and prospective independent game developers -- especially those currently studying at, or fresh out of, university -- it is crucial to understand who owns the various intellectual property rights in the games that you are making, or want to make.
How is it possible that an institution such as NFTS can claim ownership over all IP rights in its students work?
There are several reasons why this is important but, most crucially, for any developers looking to raise finance, all publishers and investors that you speak with will want confirmation that you own all of the intellectual property rights in the respective games that you want them to publish or fund. In fact, many game publishing and investment agreements will include a clause to this effect, which tends to look something like the following:
"The Developer warrants [legally promises] that it is the owner of the Game and all Intellectual Property Rights therein."
The consequences of not having all of the intellectual property rights in your Game means a developer would be in breach of this particular clause. Not only does this have the potential to jeopardise any commercial relationship with the publisher/investor, but breaching such provision is likely to trigger an indemnity (compensation) clause in any publishing/investment agreement. Such provision may require a developer to reimburse the publisher/investor in respect of any and all development funding or investment that it has received for the development of the game in question.
On top of all that, you may also find yourself having to respond to any legal action from the actual intellectual property owner, which in itself could be an expensive and stressful headache.
Intellectual property -- a very brief refresher
Intellectual property (IP) is an umbrella term for several rights that exist under English law -- as well as other countries around the world -- which includes the following individual rights: copyright, trade marks, designs, patents, and database rights.
A game is, in essence, a collection of various different types of IP, and these terms cover a wide range of contributions that go into a finished game -- such as the source and object code (copyright), art (copyright), music (copyright), your studio logo (copyright; trade marks), the name of your game (trade marks), bespoke middleware or other software (copyright; and potentially patents), and certain UX features (design rights).
While all forms of IP have their uses, the most commonly used IP rights for game developers are copyright and trade marks. Broadly speaking, copyright covers practically all of the elements that go into your game, whereas trade marks cover the brand that you create for your studio and game. While all forms of IP have their role in game development and publishing, I have focussed on copyright and trade marks for the purposes of this article.
Copyright, in particular, covers lots of key elements that go into a game, such as the source and object code, music, in-game text/dialogue, game art and character designs. Additionally, the creation of copyright is instant and, in the UK at least, will arise automatically without the need for any registration or additional formality.
After copyright, trade marks are probably the most important form of IP for game developers. However, unlike copyright, which arises automatically upon the creation of the relevant work, a trade mark should be registered for it to be most effective.
Common examples of trade marks that are applicable to game developers include the name and logo of their studio or company, or the game title. For example, the word "NINTENDO" and the Nintendo company logo are both trade marks of Nintendo Co. Ltd in the EU. Similarly, the title of the game "Forza Horizon" is a trade mark of Microsoft Corporation in the EU and elsewhere.
Rules of ownership
In reality there is a lot of nuance around IP ownership... and each case will ultimately turn on its facts
How can you be sure that you own the relevant IP rights in your game?
Since trade marks need to be registered to have the most effect, a simple search of the trade mark register will usually reveal the name of the owner, or the owner of any similar marks. The nuance here is that: (1) trade marks are territorial so you will need to search the trade mark register in each territory that concerns you; and (2) unregistered trade marks, which won't show up on the register, can still be enforced in the UK under a common law action called "passing off" -- provided that the owner can show that their mark has a reputation, through prior and current use, and that unauthorised use of that mark amounts to misrepresentation that is causing or likely to cause damage to the reputation of their mark.
The legal position in the UK with respect to copyright ownership is that the "author" -- the person who created the work itself -- is the first owner of any copyright in that work. However, this rule is subject to the exception that the copyright in any works created during the course of an individual's employment will be owned by that individual's employer, unless there is a written agreement to the contrary allowing the employee to keep the copyright.
An additional wrinkle here is that a copyright owner can assign the copyright that it owns to another person, company or entity. This is common in the games industry, as most work-for-hire and freelancer contracts will contain provisions where the works created by the contractor -- and all intellectual property rights, including copyright, existing therein -- will be assigned to the party commissioning, and paying for, the works in question.
In reality there is a lot of nuance around IP ownership that cannot be fully expressed in an article such as this, and each case will ultimately turn on its facts -- which was demonstrated by the situation between NFTS and its current/former students.
Can NFTS own copyright in students' work? How can this happen?
The short answer to the first question is, yes.
As described above, the first owner of any copyright work is the individual who created the work in question. So, in the case of the NFTS students, they would actually be the first owner in any copyright in the games that they create on the MA program. However, as mentioned above, an owner of copyright can assign this to a third party. For this to be legally effective such assignment must be: (A) in writing and; (B) signed on behalf of the copyright owner.
(A) In writing
The legal contract between each NFTS student and NFTS is set out in the school's Terms and Conditions (NFTS T&Cs). These terms also incorporate the school's various Policies and Regulations that students are required to accept and abide by during their enrolment at the school. These policies cover matters such as Admissions, Attendance and Conduct, Bullying and Harassment, and also Copyright and Intellectual Property Rights (NFTS IP Policy).
In particular, the NFTS IP Policy is important here, as this contains the details of the IP assignment from all of its students to NFTS itself. In fact, paragraph four of the NFTS IP Policy states that each student:
Students may first learn about IP law as part of the NFTS course itself, by which time they have already legally agreed to the IP assignment
"Hereby assigns to the NFTS with full title guarantee... all such right and title as [the student] owns in the intellectual property rights which... subsist in the [materials created or contributed by you as part of your course, including written or artistic works, film, video or sound recordings, musical compositions, set designs and other audio or audio visual works)]".
Essentially, this says that all intellectual property rights existing in anything and everything that the students create during their enrolment on an NFTS course are assigned by the students to the school. Since the NFTS T&Cs incorporate the NFTS IP Policy, this IP assignment forms part of the legal contract between the school and the students, thereby addressing the requirement that such assignment of copyright needs to be "in writing".
(B) Signed by the copyright owner (in this case the NFTS students)
If the NFTS T&Cs set out the legal agreement between the school and its students, how does NFTS get students to agree to this if it means signing away all of their intellectual property rights?
Taking an educated guess based on the practice of many institutions, I would presume that the NFTS T&Cs are referred and incorporated into any offer letter that a prospective student might sign and return to the school when they accept their place on a course at NFTS. In this case the NFTS T&Cs are effectively the "small print" that students must accept if they wish to take their place on their respective course. Regardless of whether a student has read the NFTS T&Cs, and the school's various policies and regulations, by signing and returning their acceptance of the NFTS offer letter they are legally agreeing to the copyright and IP assignment set out in the NFTS IP Policy.
Hiding in the small print
It might be easy to deride a student for not reading the NFTS T&Cs, but consider this: there are more than 20 individual policies listed on the NFTS website that are likely to be incorporated into the NFTS T&Cs, and which students will be expected to accept to take their place on, and remain on, their course. As such, I would say that it is reasonable to assume that not everyone starting on NFTS' Game Design and Development Master's program will understand or recognise the importance of copyright and IP rights when looking over all of those policies before starting their course.
It is even more unlikely that a prospective student would ask a lawyer to review these policies before signing their offer letter, not understanding that they are entering into a binding legal agreement. In fact, students may first learn about IP law as part of the NFTS MA course itself, by which time they have already legally agreed to the IP assignment.
Couple this with the fact that accepting the terms of the NFTS IP Policy is a condition for accepting their place, and remaining, on the course, then students are left no viable alternative short of applying for a different course at a different institution.
What is the position on IP ownership at other universities or schools?
It is clear that NFTS' position on owning student IP is not shared by all universities and schools
It is clear that NFTS' position on owning student IP is not shared by all universities and schools. In fact, the default position at other institutions across the UK running prominent game design, development and production courses is that the students keep the IP in the works and games that they create -- save in exceptional circumstances, for example where the project/works were funded by an external funder, in which case the IP in any student created works is treated much the same as a work-for-hire arrangement.
Institutions with game design programs that implement this student-friendly approach include Abertay University, Canterbury Christ Church University, Manchester Metropolitan University, and University of the Arts London (UAL).
What is striking is the stark contrast between NFTS' approach and that of, say, UAL. UAL's IP Policy not only states that non-employee students own their work -- unless they have separately given it up as part of a funding arrangement -- but also explicitly provides that, even if IP is owned by UAL, if such IP is commercially exploited then the students get -- generally, most of -- a share of the income. On the other hand, NFTS' approach appears to be that it owns all works that its students create during their time on the course irrespective of whether it was created using funding from or connected with NFTS.
Certain students will, of course, enrol at NFTS with their eyes open, fully aware that they are giving away ownership in the IP rights that they create on the course -- and that's fine. There is nothing wrong with agreeing to something if you understand and accept the consequences of such agreement. However, my concern is that most students who enrol on the course are likely unaware that they have signed away their intellectual property rights until after they have graduated and want to continue working on their games.
Why might NFTS take this approach?
Putting the matter of money to one side, there are other reasons why the NFTS might take this stance on IP ownership. One such reason is that this approach might reduce issues between individuals who have collaborated on a single project. As noted above, the position on copyright ownership in the UK is that the creator is the owner of the copyright in it, so without a written agreement to the contrary, the programmer owns the code, the artist owns the art, and the musician owns the music. All of these individuals can come together and create a game without issue, but if one walks away from the project that leaves the other two having to replace code, art, music (as applicable).
The approach taken by the NFTS removes this as an issue since these individuals assign everything to the school. That puts some onus on the school to grant the IP rights created in the game to the individual who leads the project, or split these between the team equally. However, charging students to "buy-back" IP rights does not seem equitable, and presumably has stopped many promising projects by NFTS from ever seeing a commercial release.
A grey area
For any aspiring or current indie developer it is important to take the time to understand whether you own all of the IP in your game
As with most IP ownership disputes there are always shades of grey and, as I mentioned above, a lot of nuance in each case.
In this particular case, NFTS may have provided its students with funding of around £1,000 to spend on marketing and/or assets for their games. This strengthens the school's legal position in terms of owning its students' IP rights, since it is providing students with additional monetary consideration for those students to commercialise their games. However, it is also understandable that some students would get upset about an approach where they have paid fees upwards of £14,000 per year for a place on the course at NFTS.
Additionally, there are complications when assessing the contribution of a supervisor to a student's project. In certain cases a university or school could argue that the results of a project -- in this case, a game or part of a game -- were the result of the student simply following the supervisor's instructions. In such case the intellectual input to a project might be expected to reside with the supervisor instead of the student.
Things can get even more complicated where the project is the end result of input from both student and supervisor since, depending on the circumstances, the IP in the project may be jointly owned by the student and the university/school -- the IP of the supervisor would be owned by the institution, as the supervisor is their employee. NFTS' approach avoids these complications by taking ownership of all student IP outright, but the result is arguably just as problematic -- especially in asking those students who cannot afford to pay the £1,200 "buy-back fee" for a perpetual revenue share from the commercialisation of the project.
This approach may be justifiable where a student project was created with the additional input of one or more collaborators, with such revenue share payment going towards remunerating those collaborators. Otherwise, such revenue share payments seem, to my mind, unjustifiable given the course fees paid by the students.
TL;DR -- Checking what your own
For any aspiring or current indie developer it is important to take the time to understand whether you own all of the IP -- and especially copyright -- in your game. If not, take steps to ensure that you do, or at the very least remove those elements from your game so that you are not infringing on someone else's rights.
Here's a quick check guide for checking what you own:
- If you are a current or prospective university student: Check the university's IP policy to see what the position is regarding ownership. If it is not clear then ask the university/school to explain the position to you.
- If you are working with others or engaging contributors for your game: Ensure that you have written agreements in place with any freelancers or contributors who work on your game, so that you are either assigned the IP in the work that they produce, or have permission to use the work they have created, and the IP therein, in and as part of your game.
- If you are employed by someone else, but are working on a game in your spare time: Check your employer's policy and/or employment contract to determine their position on "works done by employees."
- If you have a cool name or logo for your game and/or studio: Check that someone hasn't already beaten you to the punch. Carry out a Google search, and check online trade mark registers to see if anyone if using the name or logo for their business. If something similar exists, are they using it for video games or any other digital media? If not, then you might be ok but check with a lawyer first to be sure.
Tim is a games, IP and finance lawyer in Sheridans' renowned Interactive Media team. He is widely regarded as the “go to” legal and commercial advisor for independent game developers, having been recognised by GamesIndustry.biz as one of the “rising stars in the games industry,” and listed in The Legal 500 as a Next Generation Lawyer for his advice to games companies. Tim is also a huge advocate for indie games and helps run Bonus Stage, an indie games showcase that takes place each year as part of London Games Festival. You can find him on Twitter at @tagdavies.