Working and Indie'ing

Hey all,

I have a question in respects to the legal rights of workers in the game industry. I have a friend who works at a studio in Aus, and is also an indie. When that person first started, the company said it was no problem with him being an indie. However they have since changed their mind, and said he can no longer produce any content for his indie projects. Now I didn't have an answer when he asked me, but I'm curious as I'm in the same position, I do full-time work for a studio and I work as an indie in my spare time. Obviously the difference here is that my company knows about my work and has given me written permission (and even offered to help out cos they are THAT awesome) ;). But I was wondering about legal rights, is a company actually legally allowed to prevent you from doing work like that in your free time?

Does anyone have any experience in this, or anywhere I can get advice from? It seems a bit unfair to me, I guess if I was making a game that was identical in every way except name to theirs, potentially that is different.

Anyhow, thanks for any help!

Anonymous's picture

I'm sure the contract he's signed says that the company owns all his work inside the computer games domain (and possibly beyond) unless they specifically say otherwise. Now, you could challenge that contract in a variety of ways, and I have no idea how that might fall out. For that you'd need to go see a real lawyer, hourly rate and all.

I can tell you that "It doesn't seem fair," doesn't generally constitute a legal defense.

If he has it in writing that they were okay with his original status, there may be a challenge to the change in status. I doubt it though - my guess is they're entirely in their rights. Certainly that's what most big studio contracts look like these days - they own everything you do, without exceptions.

Anonymous's picture

Has your friend got a contract? Read it. If it's not in there, it's fine. Some contracts have anti-competitive clauses, some do not.

Anonymous's picture

There are a number of issues to be considered here. His contract is not the 'be all and end all'. If his employer has stated in writing that he cannot produce content of his own, then this may be conisdered a lawful direction of his employer, and as such could any failure to comply with this direction could result in disciplinary action.

It may be worthwile having your friend request the reasons for the decision in writing. He should also be aware that if he continues to produce work when he has been directed not to, then proceeds to make money from it, he may find himself having to pay some, if not all of that money, plus court costs, to his employer, as he may not necessarily own the intellectual property.

It is a legal minefield, one that I would advise him to keep out of.

Digitalos's picture

Just reading around, and is there a distinction between it being a hobby and it generating revenue? ie The work he does doesn't generate revenue for him, he volunteers as it's not his day-job and he can only put in limited hours in his free time. It does generate revenue for other people though - does this matter? He does it as it's enjoyable and a hobby and is why he works in the game industry in the first place. Not sure, as you say it's a confusing area. There is a contract, I guess I can suggest he read that and take it from there. Legally, when I say it seems 'unfair' of course that isn't a legal defence, I wouldn't venture that as one. What I mean is the law is there to protect interests and rights, and so in this instance it seems to be being abused to limit someones rights without justification.

Anonymous's picture

Difficult situation to be in.

If the original contract between your friend and their employer did not prohibit them from doing outside work , the employer is not allowed to change this clause without your friends agreement. A party to a contract is not allowed to change the terms unilaterally, nor can they threaten your friend for not agreeing to new terms.

Even if the original contract did prohibit external work and your friend asked for permission and this was granted it could be held to be a valid variation to the original agreement. (these things do not always have to be written)

In the real world however, arguing too strongly about these types of issues may lead to your friend having a harder time at work or suddenly becoming and indy developer full time.

Bottom line is: How important is this issue to them? What are they prepared to risk to resolve it?

Anonymous's picture

No they are not allowed to prevent you doing anything in your spare time unless it's negatively impacting on their business some way.

I've been through this situation myself before.

Sounds like their employer is a total asshole having some power trip.

Anonymous's picture

"Just reading around, and is there a distinction between it being a hobby and it generating revenue?"

No, there's not.

"What I mean is the law is there to protect interests and rights, and so in this instance it seems to be being abused to limit someones rights without justification."

That's just saying "It's unfair," in slightly different words.

If you tell us what studio it is, we'll have a pretty good idea what the contract looks like. If it's any studio owned by a multinational US based company, then there's no way their contract doesn't take all rights to everything he does - regardless of whether its for profit or not.

Anonymous's picture

You're wrong in both fact and law.

Anonymous's picture

Obviously you haven't read the Copyright Act.

Anonymous's picture

are you a lawyer, can you link this statement to something that backs you up, cause if not then your view is just as valid or invalid as all other would-be lawyers (at least most people said to go seek professional advice before coming up with drivel like yours).

Anonymous's picture

lol, this is meant to the guy I've replied to, not the comment directly above me; also, just because it's a contract doesn't automatically make it a LEGAL contract, we've actually gone through this in uni when we had the business law course

Anonymous's picture

oh so you are suggesting the Copyright Act is drivel now is it?

Anonymous's picture

I presume you're referring to the section that declares "Under Australian law, where an employee is the author, the first owner of copyright is the employer"

Or maybe not, given that would contradict your position.

Anonymous's picture

So, there's two points here :

1 - Does the contract declare that any work done (even out of hours, even on separate projects) belongs to the employer?
2 - Is that clause enforcable.

I'm going to presume that the answer to point 1 is yes, given that's generally the case with game developer contracts in Australia. If anyone would like to call out specific companies that do or do not have that clause, go crazy. I know for a fact there's a similar clause in all EA and THQ contracts. I presume the same is true of other major companies, and not the case for small indies. Everyone at Firemint will be signing a new, EA style contract shortly, for example.

As for 2, while it is true that a contract isn't necessarily legal simply by virtue of being a contract (for example, you can't sign away your right to sue someone for criminal negligence, no matter what ski-lift operators would like you to think). HOWEVER, unless someone can point to an example of this (very common) clause being determined illegal in Australia, it's better to assume that the clause would stand if challenged, UNLESS you have legal advice to the contrary.

Frankly, saying "In Uni I learned that some contracts are illegal, so don't take it for granted," is a poor reason. Presume contracts are legal and enforceable, and don't sign then unless you intend to be bound by their clauses. If you need to challenge them, then seek our a lawyer.

Anonymous's picture

I'm afraid you'll have to do better than that - can you quote the section that you believe makes it unlawful to assign rights to your work to your employer?

Because that's what we're talking about, and it's covered very clearly in the copyright act, and it proves the opposite of what you seem to be claiming.

Anonymous's picture

Specifically :

"(4) A consent may be given by an employee for the benefit of his or her employer in relation to all or any acts or omissions (whether occurring before or after the consent is given) and in relation to all works made or to be made by the employee in the course of his or her employment."

To repeat - you're wrong in fact, and in law. And reading comprehension.

Digitalos's picture

Well it seems that as often is expected, people do include a load of things which are unenforceable by law in contracts, EULAs and similar. For instance saying they own everything you do inside and outside of work is a ludicrous statement. I'm sure they would love to own your life and everything you think, do and create, but legally it's totally unenforceable. I'm not a lawyer obviously but some statements are just credulous such as the 'we own everything' one.

In regards to whether or not it's a hobby or generating revenue, I cannot imagine a company having legal control over your outside-of-work-activities. First of all in respects to how they would even know about them, but secondly, you cannot choose careers that share no common grounds with your hobbies, your partner's hobbies or your friends hobbies. So trying to prevent engaging in those hobbies due to a perceived conflict of interests, or competitive conflict, seems unsustainable.

Of course those are just my thoughts, the best advice in this thread is to seek out professional information from a laywer or server, but of course that's something for my friend to do as opposed to me. I was just curious as to what the general belief is - and there seems not to be one. ;)

Thanks for the comments though.

Anonymous's picture

"We own everything" might be hard to enforce. "We own the stuff you do that relates to our business, ie games, and that's what we're paying for" is in fact the standard work-for-hire style contract. It's specifically called out in the copyright act for that reason.

You keep coming back to "I don't think this is fair" as if it has some kind of legal weight. "I cannot imagine a company having legal control over your outside-of-work-activities" - it doesn't really matter, there's years of contract law to suggest that's the case.

If you've come away from this with the thought that there's no consensus then you're making the mistake of trusting people who are totally uninformed (like yourself) making statements about what they "think things should be like," rather than the way they actually are in law. Even ten seconds research would show this.

Anonymous's picture

Did they give a reason why the company don't want him to work on his indie projects?

Risk of being unproductive at work due to tiredness from working all the time?
Conflict of interest?
IP ownership issues?
It was OK before but now we've realized you make money from it please stop doing it because we are jealous!

Also did this come down from the top of the company or just some manager?

I don't think I worked at a single Aussie games company where a good portion of people didn't work on hobby projects in their own time. I think the employers need to understand that employees are going to become creatively frustrated at times and that working on hobby projects is a way for the employee to further develop their skills in the industry. A lot of employers actively encourage employees to do this because they know how important it is and sometimes allow the employee to work on something of their own during company time at specified hours (although the IP ownership of that work is another issue in itself) at least it gives an opportunity for the employee to experiment and try things out freely rather than under the strings of their task master!

Anonymous's picture

actually it's a great reason, in uni I've learned that some contract are illegal regardless of their wordings, which (by your own admittance is true) makes some contracts illegal regardless of their wording. It's actually not that hard to understand.

Go see a lawyer, knowing that some contracts are illegal means you can look out for things which are suspicious and seek help. It's not better to assume anything, it's better to ask and assume things can change; hell, why would I negotiate my contracts at all if I just "assumed" that it's all solid as a brick?

The OP's situation sounds suspicious, my suggestion is go see a lawyer and also quit, I wouldn't want to work for a company which means to steal my ideas. This isn't 1940, employees have rights and employers should understand that treating the staff well will yield a much stronger product than abusing them. Game development isn't the high and mighty occupation it used to be (and even then it wasn't really), the entry price into game development is fairly cheap.

Digitalos's picture

I think you are getting a little excited about what was just a general enquiry.

In regards to doing some research, for my own benefit since I am in a similar, though much nicer situation, call around. I called some free legal advice services and they had the following to say. It 'depends'. If there is an established overlap or conflict of interests, then there are legal grounds to ensure that the company and the individual is protected. If there is not an established overlap, then the best bet would be to open a discussion with the company themselves to see their concerns. There is no one-size fits all solution, or black and white answer like you seem to think and assert there is.

Which is exactly what I said my thoughts were, as a blanket "You can't do that." there is no legal grounds for this, unless there are some precidents established - such as an overlap in interests. 'Working on game development' isn't a credible overlap or conflict. The reason I mentioned that it feels a bit weird, is because the very nature of the law is to protect and restore, not to violate and destroy. It's based on our moral intuitions and enforced in an objective as possible manner. You seem to want to make it a very black and white issue, and so far the advice given to me by legal professionals doesn't support that view.

Also if you read my previous reply, I specifically said I never ventured forth my feelings on this as a legal argument, they are merely my feelings on this. Simply saying that this doesn't feel right, I may look into this more, which is a perfectly rational and reasonble thing to do.

designerwatts's picture

Going to put my opinion in here. But is completely that. An opinion and nothing more.

Most companies and studios have a few paragraphs in their contract that states that you cannot produce related-industry work in your spare time. The reasons I speculate and have herd from others before are:

- They don't want a employee who's only half invested into their studio. If you're working on indie stuff or other related-industry projects then that puts into question your commitment to that studio. Are you simply using them to earn a pay and then put your real creative input into your own stuff? Are you invested into their company? Do you want to add value to it and go up the ladder?

- If your indie project grows huge? What if you leave unexpectedly because of it? Or you start to poach people from the studio to your indie project? Your indie project may very well undermine the studio you work for in some capacity either large or small

- What if your using their resources to make the game? This could be as simple as peoples time or as bad as using their software and hardware after hours.

Companies don't disallow people making their own projects because they're assholes. They do it because the idea of an employee dedicating their time and attention creatively outside work hours is an unknown variable they can't control. It may well be the case that more often then not it's completely harmless and nothing bad will come of it. But in an industry like ours it's a risk businesses don't want to take.

Many companies counteract this issue by having periods of rapid prototyping or dedicating one day a week for employees to work on their own projects that could turn into company projects.

I understand that some developers working in studios creating game they may not be invested in might dedicate time to something out of hours. But consideration needs to be made from the employer side as much as the employee.

Digitalos's picture

No that I know of anyhow. My friend is offline currently, so I will ping him later for some updates. It's interesting how different companies perceive this sort of thing. Some are so paranoid, and some are pretty ok, with an understanding that your work has no significant overlap. Like, if I was working for a place making steampunk FPS games, and that just so happened to be my personal project, then sure even I can see a conflict there. But if I make IOS TBS games, and they make desktop FPS games, then I'm not sure I can see an issue. In respects to being tired, I mean anything and everything can cause that, staying up late reading Wheel of Time, can/has made me tired. ;) It just feels a bit too knee-jerk-reaction'y to me I suppose.

Anyway as I replied to the ever-so-exciteable poster above you, I did actually all around as it seemed like something I should know about since I'm in the same situation, although my employer is pretty cool in that regard. The general advice, (other than speak to a lawyer) was that it really depends on the situation, when all is said and done, and you remove any concern about job loss or what have you - ie speaking from a purely legal standpoint of what is what, and what can happen, it entirely depends on the specifics. In this case I think my buddy should be fine, as his work has zero overlap with his indie stuff, other than being about games on a high level. But of course he will need to sort that our his side.

But for anyone else reading, the bottom line is, "It depends". It's ultimately about the overlap of interests, and if your employer is reasonable and will talk to you about it, you can likely discuss it and reach a conclusion with them. It's not suggested to nod and smile and sign their contract, and then just go ahead and violate it by doing your own thing out of hours, as even though they may not find out about it, if it does become and issue, you have essentially no legal ground to stand on whatsoever. So don't do that, make sure the law and facts are on your side. :) Cheers!

Anonymous's picture

A couple of studios I worked at had clauses relating to IP ownership but they never had anything in them that said the employee was not allowed to work on their own stuff.

Where next? employees must not have any hobbies at all?

Digitalos's picture

Yeah your reasons are good and valid, and I agree completely.

Since I can't talk about my friend, I can use my case where I work for a company (been there 7 months) who has given me a green flag to carry own with my own work, which does generate a revenue. To address the points you raise in that context, whilst the game I work on isn't what I would call 'my sort of game' it is fun, I do like it and I am interested in it and making it great. In respects to my own company taking off, would I leave - yes sure I would, and they know this. However I've committed, as have they, to at least another 12 months which will see the end of this current project for them, and then we will review things then, and that's good from both sides I think as it ensures someone integral to their project won't just leg it, and it also I think acknowledges the employees own need to pursue their goals outside of work. In regards to using their resources and tools, that's just an outright no. I have my own tools (as I work from home) and they send me any specifics which I don't have already for my own use, and I use them only for what they are intended.

I guess I think my waryness in laying down a black/white statement on this (taking into account the advice I've been given and from thinking through it all more) is that there seems to be distinctions which should be made, and it seems like they are not often made. But good points in your post. :)

Anonymous's picture

What was asked is :

Is this contract illegal, regardless of its wording?

Your answer ("Some contracts are illegal, regardless of their wording!") is of no value to anyone. It doesn't tell us anything about this specific issue.

My response is

1) That's a very common clause to find in employment contracts for IP development related jobs.
2) I've never encountered a piece of case law in Australia challenging it.

Which means that in order to actually challenge it, you're going to need to set a precedent proving that it is unenforceable. Without any existing case law to draw upon, that will be expensive.

See how your answer doesn't add anything to the understanding of this specific case, but mine does (ie, I know of no existing case law, without existing case law challenging would be very difficult).

Anonymous's picture

"'Working on game development' isn't a credible overlap or conflict."

If any of your legal advice has told you this, they are incorrectly informed. If it's just another thing you've made up because you "feel that should be the fair way, so that's probably the law" then fair enough. You're wrong.

Anonymous's picture

Yeah, that's the general situation - you can work on whatever you like, but it's owned by the studio you work for. Obviously they can't tell you what to work on in your spare time, but that can take ownership of it if that was in the contract.

Anonymous's picture

Ok there seems to be some mis information floating around here. I will give some general advice but you should check with your lawyer about your own circumstances before you act.

Firstly, a distinction needs to be made between those of you who are employees, and those of you who are independent contractors. As an independent contractor the provisions of the Copyright Act apply differently to how they apply to employees . You are likely to be an independant contractor if you are hired to do a certain job (provide music for a game for eg) and there is a definite finish line to what you have been hired to do.

If you are employed (you have signed an employment contract, your boss takes out your tax from your pay and you have to be at a certain place at a certain time etc etc) the basic rule of thumb is that your employer cannot claim that work you do in your spare time belongs to the employer. The employer can (and will) claim that the work you do while at work does belong to the employer.

The difficulty is when what you are doing in your spare time comes precariously close to the work you are doing for your employer.

To illustrate, if you are employed to come up with ideas for games, it is going to be difficult to prove that the game you just thought of after hours was not done in the course of your employment. However if you are employed to write code, and in your spare time you come up with a game idea, it will be easier to prove. This is why when you are starting a new job you need to be as clear as possible on what it is that you are being paid to do. Make sure this is clear in the contract.

As an answer to Digitalos's question, an employer cannot on the face of it prevent you from producing content for your indie projects in your spare time. However, the devil is in the detail because it really depends on what it is you are hired to do. Think about what you are employed to do, and what it is that you plan to be developing in your spare time. In Digitalos' example it sounds like what has occurred is that the employee has started off doing one job and has drifted into doing another one. If it is a real problem I suggest he/she seeks some advice.

As a side note, it is important to remember that work you have done for your employer will normally be owned by it. This means that the code you just came up with at your office does not belong to you. You cant take it home and plonk it neatly into your own work and carry on as this would be an infringement of your employer's copyright

Anonymous's picture

"in the course of his or her employment."

That's what they have hired an employee to do and given them instruction to do in return for renumeration. What the employee does outside of work is not in the course of their employment.

If your saying otherwise then in theory the company owns everything they create which would extend to photos they take, blog posts they write, facebook posts they make. etc.. A company cannot attempt to "own" someone like this because that is illegal.