IP and Business: IP in the Brave New World of User-Created Computer Games

AuthorGabriel M. Ramsey/Michael W. Trinh
PositionSpecializes in intellectual property (IP) litigation involving high technology and entertainment industries/Focused on IP litigation

User-created content is a significant force in the online economy. People create and share video sensations on YouTube, publish their thoughts on blogs and collaborate to create online resources such as Wikipedia or open source software. With Microsoft's beta release of its XNA Game Studio Express, this trend will reach the console gaming industry. The XNA Game Studio Express is a suite of programming tools which enables users with relatively basic skills to develop "home-brew" games and run them on an Xbox 360 or Windows-based PC.

Development tools for video game hobbyists are not a new idea. In 1997 Sony released its "Net Yaroze" development suite, enabling user creation of games on the original PlayStation platform. The difference today is the advent of business models which make it possible to capitalize commercially on user-created content by leveraging the deep talent and varied works that flow from a worldwide body of creators. While harnessing collective creative powers is potentially lucrative, intellectual property (IP) rights issues quickly arise as these models develop.

User infringement of third-party rights

The most publicized legal question concerning user-generated content is the infringement of third party copyrights by users. For example, users sometimes include in the games they create film footage or music that belongs to large movie studios and record labels. User-developed video games face similar issues. Individuals may copy code or content, such as characters, textures, models or other game elements, which are owned by others - particularly large game companies. Beta-testers, under non-disclosure agreements, for commercial game studios may be tempted to misappropriate trade secret elements of the next big game in their own creations. Moreover, because development of video games is often collaborative, ownership disputes between multiple user-creators may arise.

The providers of development tools are potentially exposed to claims of indirect liability based on their users' conduct. If a user's game infringes a third-party copyright, the provider of the distribution tool used could face claims for "contributory" or "inducing" copyright infringement. The risk of liability is probably lower for a company that simply provides tools for creating games than for a...

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