Can anyone tell me what legal "red-tape" is involved in selling games through a budget publisher? I am beginning to work on a game and when it is all done if I think it is worthy of being published I may submit it to a budget publisher. Specifically, what I am wondering about is if you need a business license or anything like that in order to sell games through budget publishers, or do you just need to claim the income on your tax return? I realize I am getting a bit ahead of myself with this question (being I have not completed the game yet), but (for future referance) I would really like to know what''s involved. NOTE: I live in the United States, so I am wondering about this in relation to the US laws. Thanks, Jon

Let''s see. From what I remember, not ever using a budget publisher before - lawyers looking for similar ideas to something already out there, contracts...I can''t remember other stuff.

AFAIK the US situation is roughly the same as it is here in the UK:

1. If you anticipate making a decent amount of money, have a proper lawyer check over the contract. Otherwise you could find yourself signing away all rights to future versions of your game, or even your source code & engine.

2. You don''t need to be set up as company to sell a product - you do however have to declare any money you recieve to make sure you pay the correct income tax.

3. If you''re going to be in debt to anyone for any reason during the devlelopment and are hoping to offset this against money recieved at the end, then setting up a company is a good idea. Particularly a limited liability company (Limited/Ltd. in the UK, LLC in the US AFAIK). Also if you''re hiring people and doing import/export etc, setting up a company is probably necessary.
If you''re just doing this as a hobby then don''t bother forming a company.

--
Simon O''''Connor
Creative Asylum Ltd
www.creative-asylum.com

quote: Original post by S1CA
1. If you anticipate making a decent amount of money, have a proper lawyer check over the contract. Otherwise you could find yourself signing away all rights to future versions of your game, or even your source code & engine.

Are contracts really that obscure? I''m no lawyer, nor have I ever studied law in any capacity, but I''ve never come across a contract that I didn''t understand. I can''t possibly see how someone intelligent enough to write computer games could miss something as serious as the examples you gave.

You'd be surprised!. The nasty clauses don't assign obvious ownership, but leave the _potential_ for problems (i.e. you're not legally watertight unless you have all potential problems covered).
We used Osborne Clarke (www.osborneclarke.co.uk) when were doing Pac-Man:AIT and we were amazed at how such simple wording could imply or give away so much.


An example from Tatiana Kruse (Theodore Goddard) published in Develop magazine (MCV media):

From a real contract:
"Each party undertakes to maintain as confidential and disclose only on a need to know basis within its organisation the Confidential Information of the other... On completion of its Development Obligations (or on termination of this Agreement if earlier), the Developer shall deliver up to the Publisher all materials containing Confidential Information of the Publisher or destroy such materials if the Publisher shall so direct... For these purposes, Confidential Information shall mean information of a confidential or proprietary nature including but not limited to trade secrets, customers, business associations, financial arrangements and technical or commercial affairs"

A translation by Tatiana:
"Seemingly innocent and quite standard. But the developer should check what belongs to the publisher. In this agreement, the publisher commissioned the development of the game and obtained the rights to the technology in the game so that, after completion of the project, the developer would have been obliged to destroy its copies of the technology or deliver them to the publisher. If the developer is negotiating the right to use the technology to develop other games (it will often wish to do so), this obligation will not be acceptable to it."

Scary huh?!

And thats one of the more obvious ones!!! - indemnities were bad for us - the original contract offered to us would have made us liable to pay for any problems, even if they were the publishers fault (e.g. if the publisher made a spelling mistake on the box, we would be liable for the costs to fix it...)

The other biggies for us related to intellectual property - 1)making sure that our technology remained our property and 2)making sure our logo appeared on the box.

Personally if I were in a situation which could be worth quite a bit of cash I'd always use professional legal advice (>£8000 may be a lot for high end advice, but it could save you millions [depending on the project...])

--
Simon O'Connor
Creative Asylum Ltd
www.creative-asylum.com

Edited by - s1ca on September 22, 2001 11:13:09 PM