Making the Game part 5 – Legal Stuff – Trademarks and forming an LLC
Previous entry: Part 4
Welcome back to my blog series Making the Game, in which I talk about the process of creating my card and dice game, Chaos & Alchemy. In Part 4, I discussed working with a graphic designer to develop a cool-looking card face and how it evolved from rough sketches to a polished product.
Once I had decided that I was really going to try to publish my game, I knew that I would have some questions for a lawyer. I’m a fan of the Law of the Geek podcast, so I had some idea of the intellectual property issues involved with game design, but I didn’t know anything about business structure and I wasn’t sure if I needed to be worried about patents, trademarks, etc. So, I started searching for a lawyer.
Finding a lawyer
I began by calling the office of the local lawyer who helped my wife and I draft our wills. Unsurprisingly, they don’t handle intellectual property stuff, but the receptionist told me that she’d have one of the lawyers email me a list of local attorneys I could try. I never did receive that list; hm. I did later learn that the guy who drafted my will is a gamer – when I called weeks later to ask him if this game company would mean I need to change my will (answer: no), he asked if Chaos & Alchemy is like Dominion, which is a game he enjoys. Yay for having a gamer lawyer!
Since the local lawyer search wasn’t going anywhere, I turned to the internet. I used the Law of the Geek contact page to send a message to Geoff and Melina; unfortunately Geoff’s reply ended up in my spam folder for over a week! I did eventually talk to Geoff on the phone, and he had some excellent advice for me, but by that time I had already found another attorney to work with.
Thanks to a Twitter tip from Paul Baalham, I ended up seeking out a friend of Matt James who is a lawyer and who writes a column on Matt’s site called Protection From Chaos. The lawyer in question is Rob Bodine, and he practices law in Virginia. Rob is a gamer himself and is very interested in the legal side of gaming; he’s working on building a reputation as a “gaming lawyer”. Since I was starting a game company to produce a game, Rob was interested in working with me.
Copyright, trademark and patent
Let me start by saying that I am not a lawyer, so please don’t take any of this as actual advice! But I’ve had to learn a few things about copyright, trademark and patent over the course of making Chaos & Alchemy (although I learned much of this previously from Law of the Geek).
Copyright covers a creator’s right to be the person to make and distribute copies of his or her work. You don’t have to file for it – you automatically have it whenever your creative work (words, art, music, whatever) is “fixed in a tangible medium”, which even includes a file saved on your computer’s hard drive. The words on my game cards and the words in the rules are copyrighted automatically when I write them, for instance. The game mechanics, however, are not protectable by copyright.
Trademark covers my use of the name Chaos & Alchemy, for instance, or my logo. Technically you can get trademark rights just by making use of the trademark in promotional materials and such, but if you want to really protect it you can register it with the US government (there are also state trademark registrations, which are cheaper). My understanding is that the fee to file for a trademark is about $300, and you’ll likely need to pay a lawyer for his or her time on top of that to actually put together and file the paperwork.
Patent could theoretically protect a game mechanic if it’s innovative enough, but that’s unlikely in my caes. I understand that Wizards of the Coast has a patent on “tapping” a card by turning it sideways from Magic: The Gathering, for instance (although some people think that the patent shouldn’t have been granted; I’m not going there!).
My needs in talking to a lawyer were:
- Figure out if I need a patent (nope, that was pretty clear from the start – it’s just too expensive)
- Figure out if I needed to worry about infringing on someone else’s patent (probably not, but doing a thorough search to find out is too expensive for my tiny company)
- Figure out if I need to register any trademarks (probably a good idea for the name of the game and the logo)
- Get a contract that I can use with artists to handle the transfer of their copyright in the work they create to me once I buy the work and the rights (doable in about two pages)
- Learn about setting up a company to publish the game (cheaper and easier than I expected, actually!)
Rob and I exchanged a couple of emails, then had a 45 minute phone conversation to establish the points above (no patent work, yes on a trademark registration or two, yes I could hire him to draw up an artist contract, and yes I should start a company). It was a pretty painless process, and I would definitely recommend Rob for other game designers who need some legal advice.
Setting up a company
One part of my conversation with Rob where I took detailed notes was around setting up a company to publish my game. While I could just publish the game under my own name as a sole proprietor, it would be a good idea for me to set up an LLC – a limited liability company – to publish the game. An LLC is quick and cheap to set up, it doesn’t require complicated paperwork to run, it can have just me as the single member, and it protects my own assets from any liability claims (such as if someone injures himself on my game or someone sues the game publisher for some reason). The LLC is only liable up to the amount of capital that I put in (plus any profits if they materialize, I guess) as long as I set it up correctly.
The steps I followed to set up my LLC were:
- Pick an available name for the LLC
- Go to the appropriate web site for my state government and fill out a few pages online, paying a $50 fee to register the company
- Go to the IRS web site and apply for an Employer Identification Number (EIN) – basically my company’s Social Security Number (no cost)
- Go back to my state government’s web site and apply for a state business license, which mainly sets me up to pay sales tax for in-state sales ($60 or so for Colorado)
- Check to see if I need a local business license (in my case I don’t, but that’s apparently unusual)
- Head to a local bank to set up a bank account for the company
The first step – picking a name – was harder than it should have been. I could have called the company Chaos & Alchemy LLC, but if I ever publish a second game that might seem weird. I liked the idea of Chaos Games LLC, but there’s already a retail store in Colorado with a similar name (Chaos, Games and More). The store name isn’t quite the same, and I could legally use the name I wanted, but I called the store owner as a courtesy and it was clear that he wasn’t thrilled with the idea of me starting a company with a similar name. Since this is exactly the kind of store that might one day carry my game on its shelves, I didn’t want to alienate him!
So, after much brainstorming with my wife, I settled on the idea of picking a card from the game and using its name: Clay Crucible Games LLC. Tagline: Concocting fun with cards and dice!
Handling all of the online paperwork took about took about 30 minutes, if that. I thought I was going to have to wait for something in the mail in order to open a bank account, but I actually could have done it right away.
Opening a small business account at a local credit union required the Articles of Organization that I had submitted to the state online, a certificate of good standing (which the credit union was able to print out on the spot by going to the state’s web site), and my LLC’s bylaws. I didn’t have bylaws, so I asked if I could write them out longhand right there in the credit union, which I did.
Boom: I have a business bank account! And with that, I was off and running; paying lawyers and artists, setting up PayPal, getting a Square reader account, heck yeah!
So far, of course, the money has only been flowing out. But I’m finally to the point that I’m ready to take pre-orders for Chaos & Alchemy over on the game’s web site. I’m offering the game at a 10% discount from its regular price to pre-order customers (normally $25, but only $22.50 for pre-order), and I’m throwing in free shipping for US buyers. This means that I won’t be making much of a profit on these games, but that’s okay – I’m mostly curious to see if there’s any interest out there! I’ll be delivering games in early August and the price will go up once the game goes to print, so hop on over if you’re interested.
- Michael the OnlineDM