S&A Newsletter Spring 2013
DO NOT GET SHOT BY the Misuse of Intellectual Property

Video games are not just fun pastimes and a lucrative $24 billion revenue industry. They are prized assets with intellectual property rights for their unique design, art, audio and code. Some games are created by innovative individuals, while others are licensed and owned by different parties for publicity and efficiency reasons.

An estimated 67 percent of U.S. households play video or computer games, with most of them enjoying sports or action games. With the amount of consumers and moneymaking opportunities, it is no wonder that the industry must protect its intellectual property rights and flex its legal muscles when needed.

Trademarks, copyrights, patents, trade secrets, and rights of publicity enable innovators and companies to develop new games that competitors cannot touch. Experienced video game companies and innovators know that their intellectual property is “golden.”

Trademarks protect a company from copycats that want to steal the success of a popular brand, character, title or symbol. By registering the trademark, no competitor can use the name or similarly confusing name, thus protecting the reputation and marketing efforts.

Copyright laws guard the software itself as well as the characters and icons or weapons, scenes, music, videos, pictures and dialogue. A good test for copyright infringement is to first determine whether the defendant had access to the copyrighted work and then to compare one of game A’s screenshots to game B’s screenshots. If they are qualitatively and quantitatively similar and an ordinary person would look at both and think they are copycats, then infringement will likely be found. Many software piracy cases involve this facet of the game and penalties have high monetary damages.

With the explosion of “apps” for cell phones and computers, many consumers are amazed by how some games are looking similar to each other. The developer Twisted Pixel could go after Capcom because it mimicked Twisted’s Cut the Rope game with Rope Cut and The Blocks Cometh. So far though, the developer has not pursued legal action on them. “Since we owe Capcom so much for its many contributions to all of our childhoods, we will just keep our focus on making new games,” Twisted Pixel CEO Michael Wilford told Pocket Gamer. “That way [Capcom will] have something else to use for ‘inspiration’ next year.” Capcom responded, “ We are saddened by this situation and hope to rebuild the trust of our fans and friends in the gaming community.”

Innovators and companies must look after every part of their game. Enrolling for a patent ensures the technological exclusivity and original designs for 20 years typically. Patents involve user interfaces, algorithms, scene rendering, menu, editing and display choices. For example, U.S. Patent No. 4,662,635, Video Game With Playback of Live Events, uses pre-recorded live action sequences in specific video games. The patent owner and the game company sent many cease-and-desist letters to competitors as it was the first to develop this specific technology.

Trade Secrets assist businesses to keep select information secret. From business and marketing plans, to customer lists, and concepts and processes to creating the software and game assets, these are critical pieces of knowledge to keep under wraps.

Partnership Agreements Vital to Business Success

Century Park PlazaIt is a must to have a partnership agreement when two or more people are the entrepreneurs of a company. Without a written agreement, the viability of the long-term business can be compromised. At the start of a business, it is close to impossible to forecast how the company will evolve over time. As such, a formal agreement helps to create a foundation between partners that should define significant business issues such as how funds are distributed, how disputes will be handled, and the job duties expected of each partner.

The structure of a partnership agreement should be tailored to fit the business and management style. It should state the compensation, including the profits, losses, and draw each partner will take. Moreover, and surprising to many new partnerships, it is also commonly considered as wise for one partner to have more shares than the other(s). Otherwise, it can become a situation where the company becomes stalled with equal decision makers at the top.

The agreement should additionally show the contribution each partner has made to the business, including property, funds, and services. It should further list how new partners can be added at a later time, when applicable. Of equal importance are outside business activities a partner might take on, and what is permitted.

Basics such as who has check-signing privileges and decision making authority or voting rights is also very important and should be included. And while legalese to many, miscellaneous provisions that cover matters like how the agreement can be revised at a later date to meet the growing needs of the business should also be incorporated into the partnership agreement.

Of particular importance are the portions of the agreement that define what action will be taken if a partner leaves or can no longer perform the job duties. This facet is also important for financing as lenders want to see a rational agreement that will help the business maintain stability should this occur.

Stipulating what will happen should a dispute ensue is also critical. Partners should think this through as arbitration or mediation can be a better route than litigation in most cases.

Partners should get a skilled business attorney to create the contract and review it to ensure that each person’s rights and obligations have been addressed and are fair. Without legal representation, the agreement might be so threadbare that state law might override it during a dispute. It might feel awkward to think about all of the “what ifs” during the infancy of the business, but it is crucial to ensure that the business can develop in a healthy way. Time spent with a qualified business attorney will pay off later.

In California, Los Angeles business attorney Anthony Spotora, of Spotora & Associates, P.C. is accomplished in counseling business partners to create solid partnership agreements. Their team of Los Angeles business lawyers helps many businesses, from California companies to major international corporate entities. They are known for their high-quality services and prompt attention to a client’s business needs.

Anthony Spotora is a Los Angeles entertainment lawyer and Los Angeles business attorney.

Business Savvy Meets Law When Starting a Record Label

In the age of new media, record labels and artists have many opportunities to make money, but also must be cautious about downloading royalties, copyright licensing, and protecting their income streams. High-profile artists such as Eminem, Jay-Z, and Madonna and their labels must constantly watch over iTunes downloads, YouTube streams, Wii games, and other emerging digital players to see if their rights are being violated and profits diminished.

New technologies are created so often, and with that new providers of entertainment products and content are jockeying to attract consumers. Whether you are starting a record label or are an established music heavyweight, it is crucial to have a lawyer that knows how to guide you through the new media and music laws.

Entertainment attorneys will structure, negotiate and update contracts and agreements for Internet and new media outlets. As advertisers and marketers look to deliver information and entertainment to the masses, lawyers will counsel on finance, production, licensing, and the sale of intellectual property to be broadcasted on the Internet, cell phones and wireless devices, interactive and video game platforms and other digital channels.

Product placement and brand integration ventures in feature films, television, and new media are also areas where a lawyer can ensure both the business and creative rights of the label and artist are upheld. Many labels are also creating “360 deals” to increase revenue streams through tours, concerts, merchandising and new media partnerships.

Record labels realize the importance of YouTube, for example, to virally show off their artists. It is hard to control postings of copyrighted materials by fans, so labels work with their lawyers to negotiate licensing terms for their songs and videos that appear on the popular website. And with increasing sales of digital music and fewer CD sales, downloading royalties can rack up to millions of dollars in revenue for artists and labels.

Any size record label can benefit from a savvy entertainment lawyer to establish the label name, website presence and connect them with start-up capital opportunities and marketing professionals. From business plans to product launches and artist contracts, they can buffer the label and artist from the cutthroat music industry.

For those that are starting record labels, lawyers will give you vital advice to build the record label of your dreams. Armed with an excellent entertainment lawyer, a record label can last longer and protect their image and creative brilliance.

The Law Offices of Spotora & Associates has decades of experience representing musicians and record labels in Los Angeles, Southern California and the world. They have worked with some of the biggest talent in the industry and have a hands-on approach to give their clients the utmost in individualized attention.

Anthony Spotora is a Los Angeles entertainment lawyer and Los Angeles business attorney. To learn more, visit Spotoralaw.com.

DISCLAIMER: The information provided herein is intended to provide general information and does not constitute legal advice. You should not act or rely on such information without seeking the advice of an attorney and receiving counsel based on your particular facts and circumstances. Some of the legal principles mentioned might be subject to exceptions and qualifications which are not necessarily noted. Furthermore, laws are subject to change and vary by jurisdiction. Please see our entire web site disclaimer, available in our menu options and incorporated herein by this reference.
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