How Developers Can Avoid Getting Screwed

Sean Crotty is a solicitor in the IP and commercial contracts team at Weightmans. He is experienced in advising on a wide rage of media, entertainment and commercial activities, acting for both publishers and developers in the videogames industry. In this guest editorial, he discusses how developers should use lawyers to avoid getting exploited by publishers.

Much to the dismay of most, albeit not all publishers, developers can avoid getting screwed during their journey through the dark cavernous world of game development and exploitation. Exploitation of the product, that is, hopefully not the developer.

The key is to know your worth and get a good lawyer who is experienced in the games industry on board from an early stage. Of course, as a lawyer, I would say that a good lawyer is the key, but it is true provided that you have the right one.

To choose your lawyer, find one who:

1. Knows the industry
2. Fully comprehends your needs and business goals
3. Is responsive but, above all, proactive
4. Does not 'litigate' the deal or try to bully the other side, or at least, not too much.

To get the best out of the deal, you should use your lawyer effectively. Like all avatars, to get the best out of your lawyer you should play to his or her strengths.

Your lawyer's role is to advise, assist and guide you through the myriad of the commercial and legal aspects of the deal, fight your corner (but not literally) by protecting your interests and ultimately drafting the contract which will finalise the deal you want.

There is a difference between a firm negotiating stance and taking an adversarial approach. Your lawyer must always remember that your relationship with the publisher will last years and shouldn't be ruined by being unreasonable or too hard line in closing the deal.

You should provide your lawyer with clear instructions of your needs and requirements at the outset and agree a budget for costs.

Provide him with realistic timescales, so he can ensure that the deal you require can be struck effectively and on time. Although a good lawyer will attempt to expedite by working around the clock if need be, to negotiate effectively, neither party should be needlessly rushed. Although the lawyer won't turn away a fee when instructed late, it is better for you if they are instructed early.

Treat your lawyer as a partner in the deal process and listen to his advice. Likewise, your lawyer should listen to you.

So now you have your team, as any games lawyer will tell you, once your IP assets are in a marketable state, both developer and lawyer need to plan the publishing deal strategy.

Firstly, how good - or more importantly, valuable - is the product? The more marketable and ultimately financially rewarding the product, the more you will be able to play hardball with the publisher.

In a nutshell, if you have a hit on your hands, the harder you can push the publisher in relation to advances, royalties, sequel rights, IP rights and, even, acknowledgements. Don't forget, however, the mere fact that you are in negotiation with the publisher means that the publisher believes that there is hard cash to be made from your product. Historically, and for the foreseeable future, publishers have not been charitable organisations.

As much as you may feel that you are objective enough to value the product, a balance needs to be drawn between giving your assets away on the cheap and over-egging the pudding. Don't be a charity, but don't be a deluded showbiz mom either. Take advice and speak to the experts to establish your worth.

Preparation is another important factor. Sit down at an early stage with your carefully chosen lawyer and decide which terms are 'do or die' and which terms would be nice, but not earth shattering if denied. Rank terms such as finance, IP, milestones, acceptance and sequel rights as to their importance to you and this deal. If this process is carried out effectively, your lawyer should be able to negotiate the best possible deal for you. Win the points that matter.

Speak to your peers. Do your homework and see what the publisher normally, or sometimes reluctantly, gives. Any background information will help to perhaps save disappointment or conversely mean that you ask for something that you may not have done.

Utilise your lawyer within negotiations from an early stage to save time in what is an often lengthy and torturous process. Your lawyer should focus on the key issues and not allow you to be sidetracked. It is often useful to portray your lawyer as the unreasonable member of your team who is fighting for such terms. Most lawyers don't mind being the bad guy if it gets his client the desired result.

Think about the future and retain as much IP as possible. A licensing deal is often more beneficial to the developer than an assignment. Don't enter into onerous restrictive covenants, stick to what is reasonable and, as discussed, consider sequels and who will develop them.

Also ensure that milestones and acceptance procedures are fair and workable. Many developers have fallen at these hurdles, which if impossible or, at least extremely onerous, may result in a loss of reputation and financial reward.

In conclusion, to avoid being screwed by the publisher, know your worth, be prepared, be realistic, get a good team around you and with the help of your lawyer, get the best deal possible.