Contracts offer a lot of flexibility when it comes to resolving disputes and disagreements. This is a major benefit to having a contract in the first place—at the outset of an agreement you can limit the costs and burdens of any potential dispute by the simple expedient of forethought. In any union or deal disputes are going to happen. Alternative Dispute Resolution (ADR) allows you to handle these disputes without destroying your business relationships or emptying your wallet. It is therefore to your benefit to make sure ADR is a part of your agreement.

In the U.S. most ADR is regulated by the American Arbitration Association (AAA). This organization sets the guidelines and procedures that parties should follow when attempting to resolve a dispute through ADR. They also offer access to trained mediators and arbitrators who have experience with dispute resolution. There are different kinds of dispute resolution. The three most common are unofficial negotiations, mediation, and arbitration. Occasionally the media will use terms interchangeably. However, it is important to understand that each of these methods is distinct and unique. Below is an explanation of each and how they’re used in the dispute resolution process.

Informal Negotiations

Informal negotiations are self-explanatory—the parties agree to negotiate a settlement informally and between themselves. There are no set guidelines or procedures. When the parties agree to first enter informal negotiations to settle a dispute they are basically agreeing to “talk it out.” The parties or the parties’ representatives will communicate their concerns about a potential dispute or breach and will attempt to reach a compromise. During this process a lot of information and admissions or denials of wrongdoing may come out, so it is important that both parties understand the need for confidentiality (a matter discussed at length here). Every letter or e-mail should contain a statement about confidentiality and both parties should make an effort to respect that confidentiality.

More importantly unofficial negotiations should be made in good faith. For unofficial negotiations to achieve anything the parties need to genuinely want to resolve the dispute professionally and responsibly, if not amicably. If the parties enter unofficial negotiations with the intent of overwhelming or attacking one another very little is going to be accomplished through this method; if anything it will cause more ill-will and harm than good.


If informal negotiations have reached a stalemate mediation may be appropriate. Generally when parties enter mediation they want to resolve the dispute in a manner that permits them to continue working together. The dispute usually hasn’t become totally adversarial and the stalemate is a result of an inability to find a fair compromise. If you submit to mediation through the AAA you will be assigned a neutral mediator (usually selected by the parties) who will work with you and the other party to find a fair compromise. However, unlike arbitration or litigation the mediator has no authority to bind the parties to any settlement. In mediation the decision to settle still rests with you. The mediator provides a neutral perspective and usually has experience in resolving similar disputes, so they know what may work best for both parties.

There is some process, preparation and procedure in mediation:

1) the parties must first mutually agree to submit the dispute to mediation with the AAA;
2) mediation is initiated when any party to the dispute makes a request for mediation with the AAA. Whoever makes the request is required to notify all other parties to the dispute. Furthermore, parties may have legal representation if they so choose;
3) The mediation selection process can be somewhat involved. The parties can go online and review the available mediator list, which includes mediator profiles. Hopefully, both parties will agree to the same mediator. If they can’t agree each party eliminates unacceptable candidates from the list, then each submits a list of the mediators they would accept in order of preference. Based on the lists of acceptable mediators the AAA will attempt to find a match acceptable to both parties, and the mediator will be invited to assist in the dispute;
4) The mediator performs a conflicts check to make sure he/she can meet the requirement of neutrality. It should be noted that if the mediator is an attorney, he or she also has a duty to disclose that they are not representing either party in the dispute as counsel;
5) The mediator then meets at a prearranged time with the parties to reach a settlement. If a settlement is reached, the parties sign a settlement agreement. If the parties are unable to resolve the dispute they move on to the next phase of dispute resolution.

As with informal negotiation it is important to mediate in good faith. It is also important to be respectful to the mediator and the other party despite opposing viewpoints. Maintaining civility is the purpose of ADR—you waste the mediator’s and the other party’s time when you use mediation sessions as an opportunity to blame, berate or argue.

Binding Arbitration

Binding arbitration is the last resort before litigation, and is most often used as an alternative to litigation. Binding arbitration may be used at the point where the dispute has become adversarial and can no longer be resolved amicably, although that is by no means always the case. In arbitration the parties submit the dispute to one or more (usually up to three) impartial arbiters who resolve the dispute by rendering a final binding judgment (referred to as the Award) that binds both parties. While this sounds a bit like litigation it differs in many ways. The proceedings are more informal and the discovery and admissible evidence rules are substantially more lax. Motion practice is usually ignored. Most importantly, the parties can customize their own rules and procedures for the arbitration. This includes the method of choosing the arbiter, so it’s important to think this through when drafting your agreements. Fortunately, although an award granted through binding arbitration is enforceable in court, arbitration is by no means as painful or tedious as the litigation process.

Arbitration does follow some rules. For instance, one party cannot force the other party to arbitrate without a prior agreement. The disputed contract must contain an arbitration clause that refers to the specific AAA rules, and it must state that the parties agree that the award will be enforceable in any competent jurisdiction. Furthermore, you have to follow the appropriate guidelines for your dispute—not all AAA guidelines are the same, and the AAA has different guidelines for different kinds of disputes. If the dispute is commercial, you need to follow the commercial guidelines.

While by and large informal, arbitration procedure is more formal than mediation. The parties must attend both a preliminary hearing and a final hearing. Arbiters may require that necessary documents and evidence be submitted to the arbiter and to one another. It is usually recommended that the parties seek representation, and once again arbiters are bound by conditions of neutrality and no conflicts of interest may exist. If the arbiters are attorneys or judges they must disclose that they are legal professionals but do not represent any party in the dispute.

Alternative Dispute Resolution is a useful practice and one that many businesses swear by. It also demonstrates that litigation is almost always avoidable if the parties are willing enough—and you should always be willing enough.

There are a few misconceptions in the indie development community concerning the definition and legality of clone games. Some take it as given that a legal clone can be a fan game including many of the same visual and sound elements as the original. Others believe that because some game companies don’t enforce their IP rights against fan game developers all fan games must be legal. Some may even believe that a game is simple and general enough to not warrant IP protection. This entry is designed to dispel some of the confusion and inaccuracy surrounding clone games and fan games.

Let’s say you’re a huge fan of Zelda, you’re a programmer and competent indie developer, and you and your friends want to create a tribute game to the world of the Hylian race, Princess Zelda, Ganon, and, of course, Link. In your game you will likely create something akin to fan fiction as far as your storyline and script, and you want to implement the same characters in some way because you are, like most of us, somewhat attached to those icons. Obviously you want to use similar game rules and mechanics. Can you? Should you? What legal complications will arise, what risks are involved, and how can you avoid threats from the very entity to intend to honor?

Defining a “Clone”

According to Wiki a video game “clone” is a game that is “very similar” to or “heavily inspired” by another game. This is woefully vague from a legal perspective. A “legal” clone is one that does little more than implement unpatented game mechanics, rules, operations, and physics. Some “ideas” for games may also fall into the legal clone category for the simple reason that they are so common or vague that they no longer warrant copyright protection as unique expressions—for instance, a platformer or RPG with a male protagonist seeking a kidnapped princess is so common to the genre as to constitute scènes à faire under Copyright law.  On the other hand an illegal clone relies heavily on the creative content of a game—namely the trademarks and trade dress of a game product, as well as the unique audiovisual and scripted elements of that game. Note that game clones containing patented mechanics may also run afoul of intellectual property law.

Layers of Protection

Games aren’t all about code. Just because you wrote your clone or fan game from scratch does not guarantee that it is legal. The intellectual property contained in a video game is truly vast. For instance the copyrights alone may include (but are by no means limited to):

  • Audiovisual display
  • Sound recordings
  • Voice recordings
  • Script
  • Screenplay
  • Background drawings
  • Sprite drawings
  • Musical compositions
  • Source Code
  • Object Code

Furthermore you have trademark, trade dress and unfair competition claims in the original work to worry about, including:

  • Game name
  • Company name
  • Character names
  • Character appearance and clothing
  • The game’s look and feel
  • game packaging

And last but not least you may even have some random claims out of left field by game actors/SAG members, including:

  • Name and likeness
  • Defamation
  • Privacy rights

If you use any of this in your “clone” game, you may draw unwanted attention and create a legal risk for yourself. The Tetris Company has relied on several of the above-mentioned rights, including “look and feel” under both trademark and copyright law, to enforce IP rights against games that closely resemble its product. Furthermore the risk of legal action isn’t limited to clones of video game products. Creating a video game clone of board games, card games, and the like could create just as many problems. One famous example is the suit brought by Hasbro against the developers of Scrabulous, a well-known Facebook application.

As far as programming and code goes, commonplace commands are exceptions to the general rule of copyright protection. This is notable only because the most frequent argument I’ll hear concerning a person’s clone or fan game is that the “code is different” or that they “created the game from scratch”. Unfortunately the law doesn’t really care and is not on your side here if you relied on or used any of the other elements noted above. Even if you create the images, sound recordings, etc. from scratch, if those same components are clearly derived or ripped off from the original game, all your hard work may mean absolutely nothing from a legal perspective.

Protecting your Clone/Fan Game

You have a few choices here:

1. Make a “legal” clone. Rely on unprotected game elements, mechanics and processes that are so common and prolific in the game industry as to no longer warrant protection, copyright, patent or otherwise. If you’re unsure whether your particular idea falls into that category, contact an attorney.

2. Ask permission. Yes, this does put you on the owner’s “radar”, but show some respect. If you’re making a clone or fan game, at least be sincere about it—obviously you enjoy the game, so show some respect to the game’s creators and publishers and inform them of what you want to do. If they say yes, you have carte blanche right to use whatever you’ve told them you wanted to use in your product. If they don’t respond, you have a good faith laches/waiver defense. In English this means that the company/publisher has waited, with knowledge of the fact that the infringement was going to happen, until you’d already put yourself past the point of no return as far as production and distribution, before acting. Generally this conduct is frowned upon by the Court and is therefore treated as a “waiver”; otherwise the Court will honor your laches defense—this is especially true if notice to the company came in the form of a request for permission.

If the company says no, you’ve probably chosen the wrong IP to clone.

3. Come up with your own game. This is probably the best approach. If another game has inspired you, that is a wonderful thing. Let that propel your own creativity and make something unique that is truly worth playing.

In the beginning, most independent developers don’t think about hiring employees. Much of the work is done on an independent contractor basis, and the projects are small enough to not require additional labor. However, once you earn a reputation and you begin pulling down more projects, you may find that hiring additional employees is necessary to manage your workload.

Employment and labor law differs from state to state, country to country. Workers’ Compensation, employee discrimination, and sexual harassment are all very serious issues that employers have to consider when setting up their business. There are also other logistics, such as managing payroll and tax withholdings that may require additional software or accounting to ensure state and federal tax compliance. If you are considering hiring employees, it’s always smart to consult an attorney that is versed in employment and labor law. Failing to do so could lead to failure to comply with certain jurisdictional guidelines. Furthermore, lawsuits by disgruntled former-employees can create serious problems for developers and can often be avoided if certain quality of life and human resource issues are addressed prior to the hiring process.

The following checklist has been adapted to address issues peculiar to developers.

1) Get your tax information squared away.

This means a) filing an SS-4 for your EIN for federal taxes, b) registering with your state’s labor department to pay unemployment taxes, and c) set up a payroll system for state and federal withholdings. Turbotax is a great program for setting up payroll tax withholdings and is the one currently recommended by accountants. To determine what forms you will need to file come tax season, visit the IRS website (federal) and the FTA (state) for more information.

2) Get insured

Employers are required to carry workers’ compensation insurance to cover on-the-job injuries. You have to comply with your state’s guidelines when you file for insurance, and you can typically do so in one of three ways—self-insurance, state-administered insurance plans, and private insurance. To get insured, first figure out what your state requires and/or permits. Next, do your homework and determine which option is best for your purposes.

3) Develop Safety and Quality of Life Guidelines

Companies are required to comply with OSHA (Occupational Safety and Health Act), which sets out the baseline requirements to ensure the safety and health of your employees. Health and Safety becomes an issue for developers when you’re dealing with a lot of computers in a small space. There is the possibility of fire, electrical outages, electrical shock, improper grounding, spills, and various other risks and hazards that must be addressed. You must also comply with any applicable municipal building codes. Make sure your electrical wiring is up to date and provide employers with guidelines for how to properly handle certain situations. Make sure your fire alarms are all fully functional, and have appropriately spaced and well-marked emergency exits in your place of work. You may also be required to admit the fire marshal to ensure building code compliance, so be sure to notify your employees on the day she or he will be in the building.

4) Comply with Department of Labor posting requirements

Visit the DoL website to determine what information and notices you need to provide to your employees. You are required to inform them of their rights under federal (and some state) law. Make sure to comply with the posting requirements as well.

5) Create Personnel Files

Every employee should have their own file that contains their application, their signed NDA, their resume, other work related documents, their I-9 and their W-4. The file may also include employee evaluations, complaints, and other information relevant to their employment. Any medical information MUST be kept separate from the main file and locked away due to HIPPA and state health care privacy laws. Disclosure of any health care related information could lead to both civil and criminal sanctions depending on your state’s laws.

6) The employee handbook

Your employee handbook should describe office procedures, complaint reporting requirements, sexual harassment policies, anti-discrimination efforts, disciplinary measures, and confidentiality requirements. It should describe how you want your employees to behave. It should also describe your goals as a company and your standard business practices. It is important to enforce your disciplinary procedures, particularly in the areas of confidentiality/non-disclosure to maintain protection of trade secrets. You may also want to describe any employee benefits that employees can apply for if you’ve taken steps to provide a 401(k) or health insurance policies to your employees.

7) Annual reporting

You need to fill out a form 940 or a form 940-EZ every year for your federal unemployment tax. A form 940 is required if you are required to pay unemployment taxes in more than one state or if you failed to pay all of your unemployment taxes by January 31 of that year. Otherwise you may fill out the 940-EZ. You are also required to pay those taxes you withheld in you employees’ paychecks. These withholdings account for federal income taxes, medicare taxes, social security taxes and FICA. You can find all of the appropriate federal filing information at the IRS website. In particular you will need to fill out forms 941, 943, 944, and an annual W-2. A copy of the W-2 must also be provided to employees. Note that these are just for your federal tax filings. You must also comply with state tax filings.

Caveat: A lot of developers hire programmers and designers from other countries. If those employees are relocating to the United States, they MUST obtain the proper work visas and fill out an I-9 form. For more information on I-9, visit the USCIS website.

With each new employee that you hire, you must do three things:

1) Notify your state’s employee reporting agency;

2) Every new employee must fill out an I-9 to show that they are allowed to work in the U.S. This is required for both US and non-US citizens.

3) Have the employee fill out a W-4 and withholding allowance certificate.

A friend of mine told me that most independent game developers refuse to acquire legal counsel for a variety of reasons. These reasons range everywhere from prohibitive costs to intimidation to fear of getting too wrapped up in the “business end” of things. This obviously creates a few problems if you seriously plan on doing business. Think of your legal matters (i.e. contracts, negotiations, accounting, litigation) in terms of programming. Would you be able to write a full game after only reading one or two websites on coding? Would you be able to fix bugs without knowing the programming language? Would you be able to make your own game by relying entirely on someone else’s code, without knowing what that code does? I’m stretching the metaphor a bit, but by now you should be getting the point—there’s a reason lawyers exist, and that reason is to help you navigate the legal mine field you’re walking into when you do business.

In this post I’m going to try to dispel some of the myths and fears that seem to surround the legal profession. I’m also going to give some general good advice on how to determine whether your lawyer is a good fit.

Myth #1: I can’t afford to pay a lawyer

Simply put, if you can’t afford to pay a lawyer to look over a contract, you shouldn’t be doing business. Lawyers want to help you. Some lawyers will review a contract for free or for a reduced rate if you inform them of your financial situation. Others will agree to do the work in exchange for a percentage of the deal. Still others will agree to a reduced flat fee. Many permit payment via installments, and several firms and solo practitioners now take credit cards and alternative methods of payment. The cost of having a contract reviewed is a cost of doing business; just as purchasing certain software is a cost of game development.

Myth #2: I can do it myself

Representing yourself has several drawbacks. First, you are probably inexperienced with legal documents. You may not understand the strategy of choice-of-law, the benefits of arbitration, the breakdown of royalties, and the nuances of intellectual property law both domestic and international that all play significant roles in game contracts. You probably aren’t terribly familiar with your available remedies in a breach of contract versus a material breach of contract. You’re probably confused by a lot of the boilerplate that exists in contracts—don’t worry, you’re not alone. There are many attorneys without transactional experience who aren’t aware of why certain provisions exist in a contract. A good attorney, however, will know where to get the answer. The attorney you want is one who can explain why that language exists and more importantly, can change the language in a way that benefits you; otherwise he or she can at least point out why the language poses a risk to you.

Second, it’s unprofessional. Honest, experienced business people understand the necessity of lawyers. They anticipate lawyers in the negotiation process. They expect agreements to be reviewed by competent, diligent counsel, and if you show up without an attorney, you are at a distinct disadvantage.

Third, and on a related note, honest, experienced business people have lawyers, and will expect you to have a lawyer. Anyone who suggests that you shouldn’t get a lawyer or that lawyers will only “complicate things” is very likely trying to screw you. Be very wary if the person you’re contracting with tells you that you don’t need a lawyer. They are either inexperienced or they have every intention of taking advantage of you.

Myth #3: All lawyers are evil

I’ve heard this one a lot, and I really think that many people believe this. Everyone has a lawyer horror story or has more than likely heard a lawyer horror story that they feel bears repeating.

There are honest lawyers. They love what they do, they have a passion for their work, and they aren’t in it strictly for the money. The legal profession is first and foremost a profession, and people who go into it for the money don’t last long. Simply put, practicing law requires discipline, dedication, love, and a desire to help others. Without those basics a lawyer will be very dissatisfied with their chosen profession. There is a lot of heartache, disappointment, injustice, unpaid fees, and politics that lawyers have to put up with. If they don’t love what they do, you’ll probably know the moment you meet them. They give off a distinct air of “I don’t have enough time for you and I’d rather be doing something else.” Otherwise they’ll spend more time talking about what they can do for you instead of learning what they can do for you by listening to what you have to say.

Simply put, lawyers are people. They have hobbies, friends, relationships, and families, most of which come second to their profession. They are not all business suits and sleaze. Granted, there are plenty of bad lawyers out there who have manifested in the horror stories you’ve heard— but every product or service produces its own brand of garbage, lawyers and game developers being no exception to the rule. The best way to avoid bad lawyers is to check out their product—ask the lawyer for previous clients who can provide a reference. From the client list provided you can determine 1) whether the attorney will have time to manage your workload; 2) whether the attorney has experience with your type of product and; 3) obviously, whether (s)he’s any good. If you’ve picked up a new/young/fresh after the bar attorney, ask for information regarding former employment, mentors, etc.

Remember that you must rely on your lawyer. Good lawyers want you to feel comfortable trusting them, will trust you, and will actually care about you and your business. A good lawyer is your priest, your therapist, your defender, your confidante, and your most honest friend. They’re a bit like house elves, actually—they keep your secrets while servings your needs. They’re just slightly better dressed.

Myth #4: All lawyers are naturally adversarial

This is a myth with some seeds of truth to it. Attorneys are advocates. They are obligated to zealously defend their clients in court. Some attorneys take this zealous spirit to the negotiating table, where it is sometimes less effective. Deals can fall apart when a lawyer puts his own ego before his client’s needs. It’s been known to happen, and the best way to avoid it is to know your attorney and know his or her reputation. You want your attorney to go to bat for you—you don’t want your attorney to hit the person sitting on the other side of the negotiating table in the teeth with said bat.

Only 2% of civil cases go to trial in the US. Most cases are settled out of court. Settlement requires that the parties settle on what is tantamount to a contract. Lawyers, regardless of their chosen practice area, are primarily negotiators. They may argue vehemently for their clients in memoranda of law to the courts prior to going into settlement, but once they enter into settlement negotiations, the goal is to reach a decision that both parties can stomach.

Transactional and entertainment attorneys are probably better suited to deal with the particular contracts you will have to deal with. However, it is also important to note that a good lawyer will avoid litigation, but will not be afraid to litigate if necessary. Oftentimes you will need an attorney experienced in litigation when your rights are infringed upon or when you’re being sued.

The bottom line is that your attorney must be aware of your needs. They must know what you want and need out of a deal, what you as the client will and will not accept. While an attorney should zealously attempt to get the best deal possible, an attorney who lets his or her own ego or adversarial nature get in the way of a perfectly good deal is a huge liability to your business.

In any business relationship, the best advice I can give you is to know who you’re dealing with. This is true for lawyers, business consultants, financial consultants, accountants, and publishers. This is especially true for your lawyer. A good lawyer will explain the terms of the contract to you in detail. A good lawyer will return your calls within 2-4 hours, or at least within the same day. If they don’t, they’ll e-mail you or find some other way of getting in touch with you to let you know the status of your case or deal. They will let you know how they spend their time, and they will provide you with documentation, research, memos to justify their fees. A good lawyer will find a way to make representation affordable. Most of all, a good lawyer will look out for your best interest and will be in a position to protect you in ways that you are not able to protect yourself.

Ironically (or maybe not so ironically), my first post will not be a legal post. While video game law in and of itself
is an interesting topic, my primary concern when it comes to any entertainment
industry is the business itself. While there are legal implications to business
models and business structures (i.e., business formation, financial planning,
taxes, contracts, et cetera, et cetera) entertainment attorneys don’t rely on a
lot of case law.

A colleague and I were discussing this very fact earlier today—according to my
colleague it is easier to teach musicians entertainment law and contracts than
it is to teach experienced lawyers entertainment law. Lawyers are taught that
contracts require good faith negotiation. Entertainment lawyers know that there
is little of anything resembling good faith in industry contracts between, say,
an artist and a record label—entertainment lawyers therefore aim to get the
best deal out of a guaranteed bad deal. In short, non-entertainment lawyers
rely on the law when examining a contract or an infringement claim.
Entertainment lawyers rely on industry standard.

So this particular post, my first post, isn’t about the law. If you want the law, I
urge you to visit It’s an excellent resource for a variety of

Anyone familiar with the recent development in Acclaim’s brand already knows that the
brand and David Perry are putting out new MMOs almost as quickly as Blizzard puts
out patches for its one MMO (slight exaggeration… on second thought, no, it isn’t).
David Perry is fairly innovative when it comes to MMO business models. Like
NCSoft’s Dungeon Runners, a game like 2 Moons uses a blended business model that
combines advertising and subscription services to make the free software
profitable. Considering the substantial threat of piracy in today’s PC game
market, finding profitability via any channel but software sales is a great

A while back David Perry came up with a new concept/gimmick. Project Top Secret is a
competition for the MMO/game designer community. This competition encourages community
game designers (such as those alpha and beta testers who think they could make
a better game with the same resources, and who, let’s face it, are sometimes
right) to get together and collaborate on a game design that they want to see
developed. One winner of the competition gets directorship of the development
of a new MMO, and Acclaim will front $1 million or so plus license fees in development
costs to the winning developer.

There’s a design document new contributors to the project are encouraged to read. There’s
daily discussion on the forum to hash out game ideas and mechanics. It’s
recently been released that the game will be a racing MMO.

MMOs typically seem to fail for one or several of three reasons– A) The primary MMO
market (RPG) is cornered; B) The game crushes under the weight of its own
expense and technology; and/or C) The game developers stop listening to the
community and decide that they are going to make the game they want to play as
opposed to a game that will actually generate subscriptions/players. In other
words, a lot of games fail because the developers didn’t listen to the

Whether there is a market for a racing MMO is beyond the scope of this entry. The
concept itself is novel, but the real question is whether or not this is just a
gimmick. An MMO doesn’t ship like console or stand alone games on release—a lot
of small time MMO developers use release as a second Beta. Release is followed
by a constant stream of new builds, patches, hot fixes, updates, changes in
game mechanics, and little game breaking changes that alienates ¾ of your
player base. Allowing your community to come up with the game concept and
design is a brilliant idea, and it will definitely get press, attention, and
hopefully a lot of brand loyalty. But what happens after the game’s release?
Will the winning developers control the game after release? If not, is there a
dev team in place to take over the game once it’s in the pipeline for release?
Will the new dev team listen to the community, implement the appropriate
changes and fixes to keep the player base happy, or will they, like many other
developers, choose to take the game down a different road?

The success of the game will probably hinge on Acclaim and David Perry’s commitment to the community. It would be
nice to see a game like this succeed, because it would reaffirm the already
widely held belief that MMO makers need to love and listen to their

This issue has a lot of angles and typically two or more sides to each story. On the one hand you have the enforcer, or anyone who owns original IP. An example of the stereotypical enforcer includes Microsoft, who put a complete stop to the independent development of a Command and Conquer “HaloGen” mod that employed Halo’s intellectual property, developed by a small studio called Slipstream. MS subsequently went on to have Ensemble develop Halo Wars, which is, you guessed it, a Halo RTS. Another philosophically controversial “enforcer” example is Apple, who has worked continuously to enforce its EULA against the owners of jailbroken iPhones.

At the other side of this debate is the alleged infringer, which could be an indie like Slipstream or, more problematically, the crackers and black hats who hack DRM and pirate games in a manner that damages the entire industry. This is, in fact, one of the biggest problems arising from jailbroken iPhones; it has rapidly become a problem that creates constant strain in the application and casual game markets.

Regardless of your personal philosophy concerning the identity of the enforcer or the infringer, IP enforcement is an important aspect of protecting what you create. It’s as important in commercial works as it is in open source projects even though the ideals behind enforcement may differ. The issue here is control and access, and who has that control and access. Without this article will explain intellectual property enforcement methodology without touching on personal philosophy or the identity of the infringer or enforcer. It is my belief that it is just as important for independent developers to protect their IP as it is for the majors, and as such the tools for enforcement should be available to all.

Getting it in Writing

Contracts such as EULAs, licenses, and employment agreements are the first line of defense in IP enforcement. The more clearly your contracts set out your intellectual property rights and your remedies in the event of infringement or breach, the more likely the people you contract with are to comply. This is particularly true with regard to proprietary technology, trade secrets, and ideas you want to keep confidential.

Identifying Intellectual Property. The first step in protecting your IP is identifying what you consider protected under the shield of the contract. In the case of employment agreements and NDAs you need to be as specific as possible with regard to trade secrets and proprietary technology. With regard to EULAs you need to identify all components of what you want to protect, including content you’ve licensed from third parties. One example of how this can be done* is demonstrated in the World of Warcraft EULA, which identifies IP in two places: it sets out the game, patches, and manuals in the introduction, and expounds on those basics in the “Ownership” section further down.

Identifying Permissible Use of Intellectual Property. The next step in protecting your IP via contract is clearly stating what the licensor/end user/employee CAN do. Explain what is permissible: in the case of your game’s EULA, explain what users can do with your software; in the case of your employee agreements, explain how and when employees may access or use information; in the case of non-disclosures and confidentiality agreements, explain who information may be disclosed to or when confidentiality may be waived.

Identifying Impermissible/Infringing Use of Intellectual Property. Once you’ve explained what people CAN do with your IP, you need to explain what they can’t do. For example, in the case of games, computer programs, and hardware, one major issue of contention is reverse engineering. Under the Copyright Act reverse engineering is generally (but be careful, because this is a devilishly tricky area of the law) permissible if it is done exclusively for the purpose of interoperability. However, you may not want your game or software to work on jailbroken iPhones or other gaming devices that you plan on porting to down the road. This is something that may arguably (although this is by no means settled law) be limited by the EULA. Most major content owners seem to think so. If it’s something you deem necessary to protect your future interests, you should consider including it.

Identify Remedies and Damages. This is where you let the people you’re contracting with know what they risk if they infringe or impermissibly use your IP. You should include all available equitable remedies (remedies not grounded in monetary damages), including injunctions and restraining orders, as well as statutory and actual damages or profits resulting from infringement.

DRM and Keeping Secrets. If you’re using DRM technology, you need to let people know that you’re using it. You also need to explain that the disruption or removal of that DRM will expose them to additional Copyright Act liability if they choose to crack it. In the case of employment agreements, if you’re trying to protect trade secrets you must take steps to keep information secret. This includes DRM, password protection, encryption, and making it clear to employees that disclosing that information to anyone outside of their department is a big No No.

Cracking Skulls

There’s always a possibility that someone will breach your contractual provisions, or your game will be cracked and pirated, or you’ll find an inferior clone that passes itself off as the original. You will be angry and you will want to do everything you can to stop this from happening. First, calm down. Immediately calling a lawyer and filing a complaint or otherwise throwing a fit is expensive and probably bad for your health and peace of mind. Next, evaluate the validity of your claim. Do you have a claim? Is it really infringement? Would you know if it weren’t? For example, if the product is similar or identical to your own but released prior to or very shortly after your own, there’s a strong presumption of independent creation (which isn’t infringement under Copyright Law). You may want to talk to an attorney before going further. Take a deep breath and review the suggestions below, from most cost efficient to least. In some cases you may want to skip the first option, but as you’re an independent developer you may garner more sympathy from other small collectives, pirates, or studios who are (perhaps unwittingly) infringing on your rights.

Contact the people directly. A polite phone call or casual e-mail as a first step can go a long way in preventing future ill will or the need to lawyer up. If the infringer isn’t aware that the material is infringing or if they don’t understand the basics of IP law, they may comply with a friendly request without any further cost to you. This isn’t always the case, but as I said above, you’re an indie. There’s camaraderie among your fellow compatriots and there’s nothing wrong with taking advantage of that good will to protect your IP.

Send a Cease & Desist. If the first approach is unrealistic or ineffective the next option is a more formal C&D. This should typically come from a lawyer, but if you’re still trying to avoid the need to lawyer up you will want to at least include the following:

  • An introduction that sets out your name, your product, and where your product can be found;
  • A description of the rights you hold in the work, including any music, artwork, engines or code you’ve exclusively licensed;
  • A description of their work, and how it is infringing;
  • A citation of the laws being infringed, including Copyright law, Copyright Circumvention laws, trademark and unfair competition;
  • A list of actions that they must cease and desist;
  • A request for damages, if relevant;
  • A “respond to by” date;
  • Your preferred contact method.

Before you go any further. Have you registered your work/trademark? Under U.S. law you can’t bring an action for copyright infringement against anyone until you’ve filed your application, paid your fee and submitted your deposit. In the case of trademark, monetary damages including profits aren’t available unless your mark is registered and you’ve included the ® symbol or some other notice of registration. The sooner you register the better. Under Copyright law you’re entitled to statutory damages so long as the infringement occurred after you’ve fully completed your application and submitted your fee/deposit, or within three months of the infringement. Since the minimum statutory award is $750 for each infringement registration really shouldn’t be put off. In fact you should make it a policy to register as soon as you complete a project and have something to submit to the copyright office.

Send Takedown Notices. Send takedown notices wherever you find your infringed work. Bear in mind that the DMCA safe harbor only applies to those sites with a registered DMCA agent. If the site or service provider doesn’t have an agent you may want to instead send another C&D explaining why they are also infringers.

File a Complaint. This is certainly the point of no return. If you haven’t lawyered up yet, do so now. If your C&Ds have gone ignored or the infringer has sent a put back up notice in response to your take down, the only way to get that infringing material taken down again is to file a complaint and send a copy of that complaint with a second take down notice. Most websites with DMCA provisions will explain that process in their EULA. You will likely be filing your complaint in federal court and you will want to include every possible cause of action available, including all possible state claims.

At this point the conflict could take a few turns. If this catches the infringer’s attention, you can try to achieve settlement quickly or use some of the mediation or arbitration techniques described previously. It’s typically at this point that enforcement gets pricy and time consuming, but it may be a necessary step to protect your rights.

Mallory the Mythical developer and two of her good buddies are big fans of “Katarina’s Conquest”, a FPS loosely based on the Bolshevik Revolution of 1917.The game incorporates modern weaponry in a historical, beautiful, and immersive environment. Unfortunately when the game was released the original developers, October Industries, didn’t expect the game to achieve such a high level of success; the servers are unable to handle the number of new users and haven’t stayed up for more than 3 hours at a time since launch.

In response to this issue Mallory and her two good buddies decide to host a private server where they can play the game with a handful of friends across the globe without worrying about the server shutting down. To do this they will have to use reverse engineering to translate the game’s network protocol so their game clients can communicate with the new server. Mallory, being an experienced and business savvy developer, immediately realizes that there may be some legal problems here.

Mallory is right—reverse engineering can be a risky endeavor and shouldn’t be attempted without first consulting an attorney. Below I’ll discuss what reverse engineering is and how it’s accomplished and, more importantly, when reverse engineering will put you and your development team at risk.

What is Reverse Engineering?

Legally speaking, the reverse engineering of computer software is any method of studying a program for the purpose of obtaining useful and detailed information about the functional components and mechanisms of the program in question. The Supreme Court defined it as a “fair and honest means… [of] starting with the known product and working backward to divine the process which aided in its development or manufacture.” This can be as simple as observing game play to determine the functional elements of the game’s rule set, or as complex as decompiling a file and analyzing its components to learn how ads are displayed across the game server.

Tools used to reverse engineer a game include debuggers, disassemblers, and network protocol analyzers (packet sniffers) to name a few. The essential function of these tools is to give the programmer access to data that reveals the precise functions and mechanics of a program so those functions and mechanics can be reproduced with minimal or no use of the original source or binary code.

Traditionally this method of learning functions and processes has been viewed as fair game and, indeed, to some extent is still protected under fair use. As a result inventors in the field of technology and software have relied on reverse engineering for decades. For example, while the Copyright Act protects the three-dimensional patterns and designs of a microchip, it expressly allows the reverse engineering of those patterns and designs (referred to by the Act as a “mask work”) to analyze the concepts or techniques embodied in the chip. Similarly many courts have found that analyzing a computer program for the sole purpose of learning and reproducing its precise functions (provided those functions are not otherwise protected under patent law) is typically fair use.

This does not, however, mean that all reverse engineering is treated equally under the law. In software and games in particular the practice of reverse engineering has been under assault for a while.

Copyright and the DMCA Anti-Circumvention Act

Machine code and source code are protected as literary work under the Copyright Act. The copying of either without permission is copyright infringement. Using any part of someone else’s code in your own project, particularly non-functional code, without permission will almost certainly make you an infringer.

Sometimes during the process of reverse engineering the programmer may want to copy a data file or the entire program; typically that type of copying isn’t permitted under the Copyright Act, although there are a few very limited exceptions for backing up files for a legal purpose (such as repairing or debugging a lawfully owned program so the program can function).

Yet Copyright Act’s protection of computer programs goes well beyond the question of whether you’ve copied anything. In fact you don’t need to copy one iota of code to run afoul of U.S. Copyright law. 17 U.S.C. 1201, the Anti-circumvention provision of the DMCA, prohibits the circumvention of any technological measures that control access to any part of the work. It also prevents the distribution of software that enables circumvention of an access control.

Circumvention under the Act means descrambling or decrypting a work, or otherwise bypassing, removing, deactivating or impairing any technological measure without permission. A few classic examples of technological measures: remember those old Sierra games that required you to input a word from a specific paragraph on a specific page of the user manual before you could play the game? That’s an access control. Data file encryption is a more specific application of an access control. CD Key and license key encryption are another classic and oft-used example. Circumventing key encryption to access the content is typically illegal under the DMCA—but that isn’t the only scenario where a programmer could find himself in hot water under the Copyright Act.

This is particularly relevant in Mallory the Mythical developer’s case; if Mallory’s new server doesn’t provide the safe guards used to control access to the original game servers, such as a CD-key or version verification protocol, her own server is circumventing access controls to the online component of the game; by distributing the program, means (such as DIY instructions), or code to access servers that don’t use the game’s original access controls she would be running afoul of the anti-circumvention provision. According to at least one court decision this is sufficient to constitute a breach of 17 U.S.C. 1201.

Note that this does not mean that all aspects of reverse engineering are prohibited under the DMCA— for instance, analyzing un-encrypted machine code in order translate those processes and functions to source code is generally permissible. However, because the definition of “circumvention” is so broad under the act it is important to be mindful of any encrypted or otherwise protected data contained in a program or program file when you are attempting to lawfully reverse engineer a process or function.

There is one major exception to the DMCA: bypassing or decrypting encrypted data files of a legally owned copy of a program for the sole purpose of making that program interoperable with other legal software (for instance, a different operating system) is expressly permitted under the DMCA. However, this does not mean that you can distribute a way to bypass a CD-key or other cracking or decrypting software to make that software playable. This is why most interoperability projects, such as ScummVM, require end users to legally own the games they make playable. They cannot legally provide a means of playing cracked games, even if the primary purpose of the project is interoperability. Interoperability must be the only purpose.

It is important to note here that this exception can be waived if you agree to an EULA that prohibits reverse engineering.

Contractual Safeguards

A less confusing but no less treacherous risk comes from EULAs, NDAs, and other agreements or contracts a programmer might subject themselves to when they legally license the software they want to reverse engineer. For years courts in a variety of cases have upheld contract provisions that limit the end user’s right to reverse engineer a program for any purpose. Click-wrap and shrink-wrap agreements are generally considered enforceable.

For instance, if Katarina’s Conquest includes an EULA that expressly prohibits reverse engineering and Mallory the Mythical Developer has clicked the “I Accept” button when installing the program, Mallory would likely want to shelve her hopes of creating a private server by reverse engineering the client. A programmer can be liable for breach of contract and a slew of other causes of action, including misappropriation of trade secrets, by violating the EULA.

You can’t legally circumvent the EULA for a few of reasons. If it’s a shrink-wrap agreement you’ve accepted once you’ve purchased the software. If you didn’t legally purchase the software you don’t own a legal copy. In the case of click-wrap agreements, your legal use of the program is dependent on accepting that agreement. If you don’t accept you don’t have a license to use the software. Second, the EULA’s “click-wrap” process is an access control in and of itself. Bypassing that access control so you don’t have to agree to the license has a purpose beyond interoperability that doesn’t fall under the DMCA exception.

Pay close attention to the EULA of any game or program you want to reverse engineer. Even if you hope to reverse engineer the program for legal purposes you would still be prohibited if you’ve accepted the EULA’s terms in any manner—this includes purchasing a product with a shrink wrap license or clicking the “I Accept” button during the installation process.

Privacy Rights

In almost all cases of reverse engineering of a game the only network communications Mallory the Mythical Developer can or would want to monitor are her own client’s communications with the game server. This typically won’t raise many legal issues, and in almost all cases it would be impossible to virtually “sit in the middle” and monitor an encrypted communication between a game client and a game server. That’s what the encryption is designed to prevent. However, if you’re working on the kind of project where inspecting network packets that aren’t yours come into play you should be aware of a couple of laws.

The first is the Electronic Communications Privacy Act, which is part of the Wiretap Act, (18 U.S.C. 2510 et. Seq.). Under the ECPA you can’t intercept electronic communications, which includes data packets or any other transfer of information between a client and a network provider, server, or other computer or system, while that data is en route on a network unless you’re the network provider or an official (police or other government agency) authorized to access that information for investigative purposes under the Act.

The second is the Stored Communications Act (18 U.S.C. 2701 et. Seq. ). This Act is designed to prevent unauthorized access to ISPs and network service providers that allow the transfer of private electronic communications; accessing the data temporarily stored at those points without authorization, or otherwise exceeding your authorization and obtaining data you shouldn’t have access to, can expose you to criminal liability under this Act.

Both of these laws are designed to prevent you from accessing private communications, including data packets sent over a network or temporarily stored on a network. For this reason alone, reverse engineering projects that require monitoring communications you don’t have permission to observe or analyze should be avoided.


Reverse engineering isn’t inherently illegal. However, it does implicate a variety of legal issues. This isn’t the type of project you want to pursue if you’re risk avoidant; after all, reverse engineering is traditionally done for the purpose of recreating the useful functions of someone else’s work. That alone is typically enough to get more attention from content owners than you may want or need.

However, you can mitigate your risk by contacting an attorney and learning the steps you need to take to protect yourself and your project.