Everything you wanted to know about the gaming industry (LEGAL TOPICS)

Kristina Janković,
Executive Manager, SGA
The Ask Me Anything series is dedicated to everyone who faces challenges in the gaming industry when it comes to legal, tax, administrative, financial, and other aspects of the business.

Your questions on legal topics were answered by partners and associates from the Karanovic & Partners team, and in this text, we bring you some of the answers. Watch the entire session with more detailed answers on our YT channel.

We have an idea for the game. When and how to protect it?

The idea as such is not in itself suitable for legal protection. What is protected is a materialized idea, the way in which it is realized – in this case, a game. Visualization and code enjoy the right to protection because it is a copyrighted work – which is protected automatically, through copyright from the moment you create it. At an early stage, you can protect the game with de facto, strict contractual obligations with the team and all associates. A physical copy of the game may be deposited with the Intellectual Property Office, for evidentiary purposes only. This deposit is often a condition for tax incentives. You should also pay attention to that.

How do we know if the title we are planning for the game is available to use?

If you have a brand, characters, game name – you should investigate whether those names are free. The importance of this must be understood at the very beginning, without research one does not enter the project. This can also be a problem when attracting investors. There are publicly available sources with databases where this can be checked. For example, the Global Brands Database pulls data from all countries and all Offices, completely free of charge, to get some starting perspective.

We work with freelancers, we do not have a registered studio. How do we make sure they don’t steal our idea?

You must have a signed contract with them, not only for the sake of confidentiality but also if you are looking for investments, you must justify all the hours invested and all work that was done on the game, as well as the right of ownership on the IP. The entire IP must be in the company. Every contract is better than none, there are NDA templates on the Internet that can be used, although we recommend that you make them according to your needs.

We have decided on a publisher? Should we have a negotiating lawyer?

Ideally, you need a lawyer, especially if it is a capital project on which the future of the team depends. Legal advice is really recommended. First, you need to know why you are looking for a publisher – if you have a finished game and need someone to support the marketing and launch of the game, it is crucial to see exactly what rights we give them. Do we limit them for territories, for platforms, is there a revenue share, what is included in that calculation, who covers the cost of the campaign, is the revenue reduced when a player asks for a refund, who bears that cost of this. Contracts can be specific and complex, attention must be paid. There is often a struggle over control of the creative process. Sometimes the publisher’s input is valuable, sometimes it is undesirable.

How does signing a project contract work?

The contract is binding from the moment of signing. Contracts are not always subject to certification. The question of who is authorized to sign the contract is also important. If the investor enters the purchase of the company, a virtual data room is opened first, ie the base for storing the contract, investors, lawyers and tax advisors should review everything. The contract must contain in detail all the necessary information.

How do I, as an employee, know if I have the right to a share in the company?

In Serbia, this is still extremely rare. It is seen as an additional benefit. Everyone has the right to be questioned and to be openly told by their employer. An employee can get a contractual right to a share, regardless of whether you are one of the first employees, a completely new employee, or even an external associate. In case of termination of employment, it depends on what is defined by the contract. There are countless modalities. Everything is very flexible and works well.

How do we decide when to open an LLC? We are announcing our first game soon.

It depends on the team. The last moment to open an LLC is when you start to have income because that is the best way to regulate it. The second situation is if you are expecting an investment. Everything you create within an unregistered team is the property of individuals. So it is also extremely useful on the part of the IP for that IP to belong to the company. DOO in itself is not too expensive if you expect a stable income. If you do not have an LLC, the relationships between team members are not clearly regulated.

What does going public mean?

You list shares or ownership on the stock exchange. If you have a limited liability company, ownership on the stock exchange is an impersonal thing, anyone can buy the company’s shares, from a broker, and not from an individual, which means that the company has achieved great success. The conditions for going public are very rigorous. And you have to be sure that the shares will be sold, otherwise, the value of the company will fall.

In addition to these topics, we also talked about opening a company in a foreign country, double taxation, advertising the benefits of the employer, contracts, and regulations on work, acquisitions, and investments, going public, and a new guide on IP for creative industries. Watch the entire session with more detailed answers on our YT channel:

We spoke to the Karanović&Partners team:
Ivan Nonković, Partner
Goran Radošević, Partner
Igor Radovanović, Senior Associate