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"The Basic Guide to Navigating Legal Issues for the Movie-Turned-Video Game" by Layla Tabatabaie


The Basic Guide to Navigating Legal Issues for the Movie-Turned-Video Game
by Layla Tabatabaie

The trend for adapting movie to video games has gained speed over the last decade as evidenced by recent adaptations such as Resident Evil, Tomb Raider, and The Prince of Persia. There are several issues that exist in the movie-turned-video game realm that a publisher should be ready to address should it decide to travel this route. This essay will focus on the steps a publisher must take before entering into a negotiation with a developer to begin production on a video game based on a movie.

Step 1: Hunting down the copyright holder & obtaining a copyright license

The first step in the move-turned-video game journey is for the game publisher to strike an agreement with the copyright holder of the movie. A copyright holder in a movie is normally the author of the screenplay, or the production company that spends the money to make the movie.

Sometimes the copyright can change hands several times before it settles in one group. The Bourne series is a great example of novels turned movies turned video game that made tracking the copyright in the film tricky. The first game company to have the license to create a video game based on the Bourne franchise was Ludlum Entertainment ("Ludlum"). Vivendi Games ("Vivendi") acquired the license from Ludlum, and Sierra Entertainment, then a subsidiary of Vivendi, published the game. In June 2008, High Moon Studios developed and Sierra Entertainment published the game Bourne Conspiracy for Xbox 360 and PlayStation3, loosely based on the Bourne movies but devoid of Matt Damon's image and voice.

In 2008, Vivendi Universal merged with Activision to become Activision Blizzard ("Activision"). The merger gave Activision the option of developing a Bourne video game under the license Vivendi had already acquired in 2007. However, a week after deciding not to exploit the license, Ludlum reacquired the license and announced in 2009 a multi-year, multi-national, exclusive partnership with Electronic Arts ("EA"). The three parties involved in the Bourne chain of copyright title shows that even when a video game based on a movie has been produced, it does not necessarily mean the game publisher still is the copyright license owner.

Step Two: What type of Agreement to Execute

Next, the game publisher must make three judgments: what type of agreement it wishes to execute with the holder of the movie copyright, what the value of the video game license truly is, and who owns the right to merchandising.

One type of common agreement used in the movie industry is the Option Purchase Agreement ("OPA"). This type of agreement is desirable when the publisher wants to receive the exclusive rights to all the intellectual property ("IP") in the film. See Siegel v. Warner Bros. Entertainment Inc., 2009 WL 2014164 (C.D. Cal. 2009). This type of agreement lists all of the property contained in the film that will pass onto the game publisher, and is especially useful if movies that are a part of a series. In Siegel, the OPA stated that Warner Bros. Entertainment would pay D.C. Comics for the IP rights to Superman with an option to buy all the film rights in the entire Superman series by a certain date. Id. at *3.

The value of the movie must also be monetized and memorialized in the agreement. In Siegel, the court suggested that the best way to determine the value of the Superman television license agreement and the Superman film license agreement was to compare them with "arms-length transactions for the film licensing rights to other notable and contemporaneously popular comic book characters." Id. at *7. Using movie-turned-video game license agreements in the same genre can help determine the value of the desired license.

An example of this process would be adapting the movie Scream into a video game. The most likely publisher to adapt Scream would be The Weinstein Company, which announced they were diving into video game creation with their new game company, TWC Games ("TWC"). Scary video games that have already been adapted into a movie can be used along with the box office success of the film to determine the value of the video game license. For Scream, TWC could look to Capcom's Resident Evil and Konami's Silent Hill as references.

Determining who owns the right to merchandising, how the rights will be partitioned, and how the payments will be scheduled are important parts of the copyright license. The more popular the characters in a video game become, the more the publisher will want the exclusive rights to merchandise. Square Enix, the developers of Final Fantasy VIII, have a website where fans can buy action figures, jewelry and posters. Some of these items sell for hundreds of dollars and continue to sell way past the release date of the game, which can translate to copious amounts of money.

The merchandising section of a license may divide payments into three parts that work together: (1) a contingency basis (2) a percentage movement in favor of the copyright holder, which is an agreed upon anchor percentage that has potential to ascent to a higher predetermined percentage ceiling (3) a percentage split. See Siegel at *12. The Iron Man film agreement stated any money made in excess of a certain amount would be split 50/50 and a base 25 percent deduction fee with a ceiling of a 40 percent deduction fee in favor of copyright holder, Marvel Comics. Id. at *13. As this essay will discuss later, a publisher may not receive the rights to merchandise all items digitally reproduced in the game.

Step Three: Right Of Publicity

A movie house must acquire licenses for a celebrity's image and likeness, including procuring the rights to use the celebrity's name, nicknames and personality traits for promotional materials. The commercial use of a celebrity's image and likeness is known as rights of publicity. Developers will want as much creative license as possible to change settings and characteristics of the digital avatar of the actor to remain true to the game. The publisher must try to gain as many rights in the IP bundle when negotiating a contract with the actors to build as much creative leeway possible for the developers.

However, merely obtaining a license to an individual's image and likeness is not enough to stave off litigation. As shown in No Doubt v. Activision Publishing Inc., litigation can ensue by a failure to clearly delineate how the individual's image and likeness will be used in the game. 192 Cal.App.4th 1018 (Cal. App. 2d Dist. 2011). In No Doubt, the California federal district court affirmed the lower court's decision finding the use of the musical group's likeness was not transformative use, and therefore was not afforded First Amendment protection. Id. at 1.

The license agreement between No Doubt and Activision included some detail. The agreement provided that Activision would have the "non-exclusive worldwide right and license to use the Licensed Property." Id. at 2. The band's image and likeness could be used on all platforms and all promotional materials, but Activision had to receive prior written approval from the band members for any in-game use of their images. Id. Per this agreement, the band had allowed digital scanning in order to create avatars for promotional purposes. Id. However, the band claims that Activision did not notify them that their avatars could be unlocked for in-game use to sing their own songs, other songs, perform solo or with other bands, and that their voices could be used to sing in both male and female voices. No Doubt at 2.

Activision countered the fact the band could perform songs in the game that they swore they would never perform showed that the use of the images was transformative. Id. at 10. The court rejected this argument, noting two important points. First, the use of the images "exceeded the scope of the licensing agreement." Id. Second, the use was not transformative, because the avatars were literal reproductions and their only action -- performing rock songs -- was an identical representation of the band's function. Id.

The court compared this dispute with a previous case, Kirby v. Sega of America, Inc., where a California court did find transformative use of a musician's image. Id. at 9; See Kirby v. Sega of America, Inc., 144 Cal. App. 4th 47 (Cal. App. 2d Dist. 2006). The court found that the costume, dance moves, occupation as a news reporter, and hair style of the video game character were creative elements that changed the image, and, coupled with the setting of 25th-century outer space, demonstrated transformative use. Thus, Sega's alleged use of the star's image fell under First Amendment protection. Id.

Having well-known individuals enter into a Professional Services and Character Licensing Agreement with well-defined parameters may be tedious to negotiate, but will prevent misunderstandings that can trigger a lawsuit. The issues raised in No Doubt must also be addressed for any actors whose voice or likeness is used in the game. Description of the characters and their actions are especially important when the character in the video game will be in an entirely new setting and storyline.

Not all actors will agree to a digital depiction. Most notably, when EA created the Godfather game, Al Pacino barred his image and voice from being used. As a result, the character of Michael Corleone had to be changed to a generic Italian actor. In 2005, however, Pacino gave permission to Vivendi to use his image, but not his voice in the video game rendition of Scarface: The World Is Yours. Publishers should be prepared to expect a similar decision from noted actors who may allow voice or image rights, but not both.

Voice recordings of the actor will normally be tucked into the publicity rights agreement, with the actor understanding that some or possibly none of the voice recordings may make the final cut for the game. The publisher should include a provision that clearly states that another voice actor may be used as a substitute without requiring forfeiting any of the payment already made to the original actor. It would also be wise to include a provision stating that international versions of the game may require over-dubbing, as is famously done in many of Sony Computer Entertainment's Final Fantasy games. There should not be much of a problem here, unless the publisher tries to use a Rambo-like voice for a celebrity's Princess Peach-like avatar.

Step Four: Advertising

What is included and excluded in the movie copyright license will determine how much of the film's integrity the game must maintain. Game publishers and developers may want to recoup their invested money sooner, and with game advertising, it is possible. However, the film and game's integrity is what may be compromised in exchange for more immediate cash flow.
Advertising in games can come in several different fashions. First, there can be in-game advertising where the ads are literally within the world of the game, such as with Guitar Hero III. Advertising normally appears on external promotional materials of the game, such as the box containing the game, or video or screen advertising that is only in the beginning of a game when it loads and maybe during the intermediate scenes when loading a new scenario or level.

The genre of the game and the world in which it takes place normally dictates what sort of advertising is appropriate. The game Metal Gear Solid received negative forum comments when the protagonist of the game was seen occasionally wearing an "Axe" T-shirt. The branding for that game was peculiar, because the time period of the game is set in 1974, nine years before the brand's introduction in France and 28 years before that brand achieved popularity in the United States.

The platform on which the game is served can also determine what type of advertising fits best. Advertising alongside the game Farmville on the social media platform Facebook is not a problem, but that sort of advertising for World of Warcraft would likely cause an uproar. Advertising decisions are a tight line to walk, as too much advertisement or the wrong type of advertisement for the game in question can lead to a public backlash.

Step Five: Key Art -- Use of Props/ Property in the Movie

Not every element of the movie will be neatly inserted into the license agreement for the video game, because sometimes even the copyright holder of the movie does not possess them. Using the example of TWC wanting to create a video game out of Scream, copyright holder Miramax, does not have the rights to some of the most obvious elements of the movie. For instance, R.J. Torbert, who owns the copyright to the Ghostface mask used by the killers in the entire Scream series and the trademark to the actual name "Ghostface," is known for being protective of third-party displays to both the masks and the name(s) on products. Torbert probably allowed for the masks to be used in Scream, but kept the remaining merchandising rights. In addition, Torbert fashioned a slightly different Ghostface mask for each Scream movie, so he might want to create a different version of the mask for the video game. In any case, TMC would have to obtain a license from Torbert directly instead of Miramax for the use of any version of the mask in the game.

Important props that are closely identified with the movie and subsequent video game, like the Ghostface mask, is known as "key art," and licenses for these props should be secured before using them on promotional materials like posters. See Gary S. Morris & Richard A. Beyman, Licensing Intellectual Property in Business & Legal Primer For Game Development 207 (S. Gregory Boyd & Brian Green eds., 2007).

Final Step: Tying Up Loose ends

Other loose ends that need tying before entering serious negotiations with a developer would be considerations like what partnerships with which companies are needed if the game will be distributed internationally. Does the publisher need to file copyrights and trademarks in other countries to ensure protection of the game? If the title for the game is not the trademarked name used for the movie title, then the publisher should conduct a trademark search to ensure that the title is free to use. The publisher must also acquire the necessary rights for any musical compositions and music recordings that are played in the course of the game.

Most video game scripts, even if based on a movie, are original works created just for the game. However, as the saying goes, there are only seven basic story plots that are varied to create a multitude of stories. That old expression should alert publishers that original scripts are not immune from claims of copyright infringement. Documentation of the entire process of writing the script and developing the game will be important evidence to show independent creation should another writer sue the publisher. See Sheldon Abend Revocable Trust v. Spielberg, 2010 WL 3701343 (S.D.N.Y. 2010). If new elements are added in the video game that are not present in the movie, they should be checked to ensure there is no infringement by their use. In E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc., the court found the creator of a creative element in the video game -- a club called "Pig Pen" -- did not infringe on plaintiff's strip club in either the trademark of "Play Pen," or trade dress of the club. 444 F.Supp.2d 1012 (C.D. Cal. 2006).

The success of titles like The Chronicles of Riddick: Escape From Butcher Bay, based on the movie Black Out, and the failure of titles like the Bourne Conspiracy, based on the movie Bourne Identity, shows that publishers have not yet found the precise balance between remaining true to the movie and creating a new, fun game experience for the movie-turn-video game. Undoubtedly, using existing movies as material for video games is bound to expand in the future, and production giants like TMC have taken a large step in securing the truth of that prediction. As a Role Playing Game and thriller fan, this author personally hopes to one day read a press release presenting a new video game with the heading "Do you like scary movies?"
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Layla Tabatabaie is part of the Class of 2012 at New York Law School. Her studies focus on Entertainment, Intellectual Property and Litigation law. She was Social Media Director for the 2010/2011 academic year, and will be an Editor in Chief for the 2011/2012 academic year for the law school's video game legal blog "allyourlawarebelongtous.com." Layla is also currently an art law research assistant.

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This page contains a single entry from the blog posted on June 1, 2011 6:59 PM.

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