Pillsbury Winthrop Shaw Pittman

Copyright assignment termination after 35 years: the video game industry comes of age

By Sean F Kane

A little-known section of the Copyright Act allows designers and developers of video games to terminate copyright assignments granted after 1 January 1978. Section 203 of the act was intended to give creators of copyright-protected works, including video games, the opportunity to regain rights they may have previously transferred when they had little-to-no bargaining power. As the termination of the assignment may be made on the 35th anniversary of the grant, the earliest Section 203 terminations of transfers may take effect in 2013. Therefore, both creators and publishers of video games should consider their copyright assignment termination rights and remedies/defences as part of any robust intellectual-property protection strategy.

In 1972, Atari released its simulated table tennis game, Pong, which went on to become the first video game to reach mainstream success. In the early years that followed, many other seminal video games were released — Asteroids, Galaxian, Pac-Man, Pitfall, Frogger, Donkey Kong, etc — which helped to launch a multi-billion-dollar industry. From the birth of the industry, video game creators/developers have entered into contracts transferring their copyright interests to publishers. With very little negotiating power, the creator or developer was often presented with a ‘standard’ contract assigning all intellectual-property rights to a publisher in perpetuity in exchange for funds to develop the game and/or a royalty against sales. However, while not widely known in the video game industry, 35 years is a magic number when it comes to termination of copyright assignments, even ones that are by their language perpetual. As certain video games begin to reach the age of 35, this termination option may become a possibility and potentially a lucrative option. Therefore, it is now ripe to consider whether the creators/developers of video games can rescind a previous copyright assignment, as is becoming more prevalent with other types of copyright-protected works. Moreover, publishers of video games should begin to consider which older properties still retain significant value and what steps they can take to avoid the possibility of the termination of a copyright assignment…

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