What Do I Need To Know About IP in Games: Legal Tips
When it comes to selling a game, understanding and managing Intellectual Property (IP) rights is crucial. Here are some key legal tips for sellers to keep in mind:
IP Ownership
Missing IP rights can be a deal breaker or lead to contractual liability. Ensure all IP rights belong to you in full and you can transfer these. Agreements with employees and contractors with all necessary IP rights clauses are the key step.
If you use some third-party IP ensure you have a clear license agreement. Key terms of such license agreements are the following:
- territory (where you can use third-party IP);
- license period (how long you can use third-party IP);
- list of rights (what you can do with third-party IP).
Asset Purchase Agreement (APA)
An APA is essential for transferring game assets securely. When you sign this agreement, you agree to assign all IP rights related to your game assets, and the purchaser agrees to pay for them.
Here are some key terms you need to consider and negotiate with your purchaser to avoid any misunderstanding:
- Transferred and Excluded Assets.
Transferred assets are those to be handed over to the purchaser, while excluded assets remain in your possession. The main rule in both cases is that you should specify the list of transferred and excluded assets directly in the agreement.
- Account Receivables.
This refers to money you, as a seller, could receive from different sources after the sale date but accrued for a period before or after this date, such as from Google Play or the App Store. It's more common practice when money accrued for the period after the sale date should be transferred to the purchaser. If you see such terms in the agreement, please read carefully and discuss which receivables should be transferred to the purchaser.
- Knowledge Transfer.
It includes terms for transferring knowledge and information related to the assets. To construct these terms safely we recommend to negotiate and include in your APA: Detailed Knowledge Inventory (a list of all knowledge and documentation to be transferred), timelines for transfer, Training and Support (training sessions, workshops, or consultations if necessary), access to systems and tools.
- Consideration and Taxes.
Clearly state the sale price and payment terms. Negotiate and specify any sums that could lower the sale price, such as taxes or bank commissions.
- Warranties.
Confirm the truth of warranties included in the agreement. If there are discrepancies, try and state exclusions clearly to avoid contractual liability.
By following these legal tips, you can ensure a smooth and secure process when selling your game. Watch our joint webinar with AppWill.
