From July 10 to August 4, 32 patent applications filed by Nintendo were made public in Japan, 31 of which concern the game mechanics in “Legend of Zelda: Tears of the Kingdom”.

The hottest patents that are being discussed relate to specific mechanics, the player character’s abilities, and loading sequences.

While patents are not common in the video game industry, Nintendo has always been considerably active – A well-known example includes Nintendo's patent related to Wiimote’s (Nintendo Wii remote controller) motion-tracking capabilities. Nonetheless, with this splurge the company seems to be on a spree right now, likely due to the success of Tears of the Kingdom.

Although patents are not a developer’s go to tool for protecting a game’s inherent value due to the costs and difficulties involved with acquiring a patent, there have been noteworthy attempts to patent mechanics and features which often are not protectable otherwise. Famous examples include Bandai Namco’s patent to loading screen minigames, and Warner Brothers Interactive Entertainment’s patent to the Nemesis system used in both Middle-Earth: Shadow of Mordor, and its 2017 sequel, Shadow of War.

What we know now of Nintendo’s spree is that the patents that are the topic of discussion are filed in Japan. Given that patents are territorially limited in their scope, it may very likely be that Nintendo attempts filing in other jurisdictions and countries. Further, since the patent application process usually takes between two and three years from the filing date in Japan, they will likely all be processed by May 2026.

Author: Jesper Rantatulkkila

First Published: 8/15/2023 on linkedin

An NDA is a versatile document that can either save your project or create a lot of damage. Knowing how and when to use an NDA correctly can make or break a project, business relationship, or even a company.

In this article, we will teach you about this document, how to use it, and its strengths and risks,including claiming confidentiality, protecting your intellectual property (IP), and preventing unwanted obligations in the future.

The scenarios an NDA covers run from soliciting business (e.g. pitching, discussing projects, or hiring process) to identifying confidential information during a business relationship, all the way to how to treat information after the relationship ends (e.g. not to speak about certain details of a break up).

The Core Mechanic: Keeping Things Secret

Regardless of whether you are loosely discussing some fancy monetization ideas with peers, invited to an interview, launching a closed Beta, negotiating a publishing deal or a company buyout, or breaking up a business relationship – there will always be sensitive information about art, tech, business, or personal matters you want to keep secret from others.

A Non-Disclosure Agreement will mandate that one party or all parties involved cannot discuss the details of the relationship with any non-involved personnel or publish the information discussed on any public platform. To do that, the NDA has to include the following basics: i) which relationship it is referring to, e.g. employment between certain parties, pitch of game X, etc.; ii) what is confidential information, from dates, to names, to business practices, to deal terms; iii) who is bound by it, i.e. is it mutual or unilateral; and iv) what happens if the obligated party discloses this information in breach of the NDA, e.g. demanding for monetary relief.

What About Work Unprotected by the Law?

Let’s say you are early in development and pitching for funding, or you are in an interview for employment or winning a project for contract work, and you are showing off ideas and concepts rather than finished content. This unfinished or new content can be a vertical slice, novel business model, or any other solution that came to your mind in that meeting. Regardless, it’s enough to pitch, or convince, and in that situation it is your most valuable prospective business asset.

The problem: the receiving party (publisher, employer, company) may decide it likes what you are showing, and, well, runs with it. Can they do that? Don’t you have IP protection in your work? As it turns out, you might not, depending on what you brought. Copyright law protects “expressions”, not ideas (see one of our previous articles on Copyright), and Trademark law wouldn’t apply because your idea has not yet been used in commerce (See also: one of our articles on Trademark, and its uses and purposes). You can’t claim it’s a trade secret either because you just disclosed it to someone outside of your business.

Your NDA is your safest bet to protecting you, because if the receiving party cannot disclose, they will have a hard time using the content. Further, an NDA can (and should) also speak to who owns/keeps what is being discussed within the “walls of confidentiality.” Ideally, the NDA says: all my bases are belong to me, allowing you to walk out of that room with what you came into it.

Easter Eggs in an NDA: How an NDA can seriously hurt

New Scenario—this time you are being courted and are being presented with an NDA. A big publisher wants you to develop a project for them, or perhaps you’ve been headhunted for an exciting employment opportunity. Before they can tell you the details of the project, they want you to sign their NDA.

Unlike the NDA you have written for your company, their NDA has some interesting additions. The company has added an ownership clause or residual clause (depending on what the clause is designed to do). If agreed to, the subject of your meeting with the other party, or the underlying idea, may be entirely owned by that (other) party. This situation occurred in dramatic fashion in recent years when John Carmack jumped ship from Zenimax to work with Palmer Luckey at Oculus.

Similarly, obligation clauses may rope you into a situation you did not intend to enter. It may impose an obligation on you as a party (or, in the reverse, disclaims a party of any obligation to you aside from the present solicitation) to do whatever the clause describes.

Be sure to carefully read the obligations you are agreeing to beyond promising secrecy and whether what you are contributing is run off the mill or important tech or other specialized knowledge to the project.

But! Do NDA’s Actually Work?

Yes! At least they are supposed to – do note, contracts are not magic (stay tuned for a piece on this blog on how to enforce contracts). If a party breaches an NDA, you still have to enforce it. However, like with any contract, writing it, signing it, and having it on file is so much more than hoping the other party will keep things confidential – that includes having to enforce monetary relief agreed to in an NDA, like Epic did a couple years back against a leaky Fortnite playtester named Ronald Sykes.

NDAs also have other issues though: What if the other party does not want to sign, it scares them off, they are allergic to lawyers, etc.? What if there is not the time – you are in a trade show five-minute meeting – or you don’t have time to write a bespoke contract with a connection at the bar (because the best ideas come over a beer). What do you do now? First of all: always have the simplest, most general of NDAs in your figurative – i.e. digital – “back pocket.” If that does not work, here are some options: you either i) place in bold, red and all caps CONFIDENTIALITY in the footer/ header of all documents you want protected or in the email or ii) you say: “this is confidential” and stop right there until you hear an “understood,” “agree,” or “gotcha,” etc. You then follow up later by email and reiterate that and ask for confirmation.

The beauty of the NDA is it is versatile. You can gear its content and form to the situation you are in. However, that does not mean you are good without. An NDA has become a good example of a break it or make document.

To paraphrase those nutty toymakers over at Nintendo: “Take this [NDA]--it's dangerous to go alone!" ~The Legend of Zelda, 1986.

Author: Edward Baxter and Daniel Koburger

First Published: 03/16/2023

In early October, CD Projekt Red, arguably the most recent “Cinderella Story” rags-to-riches video game developer since Bioware, announced that they ...

... were implementing a Mandatory Crunch policy in order to meet their deadlines for the hotly anticipated Cyberpunk 2077. This came as a shock to gamers because CD Projekt Red was previously boasting about remediating their reportedly toxic work practices.

So, what is Crunch? Is it legal? Is it wrong? If my studio needs to Crunch, should we be like CDPR and get out in front of it? In this article, we will be giving you a survey into Crunch in its many forms, and what you should have on your radar as indie dev employer or as employee of AAA.

What is Crunch?

Crunch, broadly defined, refers to any period of mandatory or optional overtime work (either by addition of workdays on weekends or extension of hours on existing workdays) implemented in order to meet a deadline which is otherwise unmeetable without Crunch.

Crunch isn’t uniform in its implementation or experience. For the sake of discussion, we are postulating four varieties of Crunch:

  1. Mandatory Crunch: where the managers of a development studio formally implement overtime with full disclosure to employees, and employees are aware of the implementation and additional compensation they will receive.
  2. Optional Crunch: where the managers of a development studio permit its employees the option to work paid overtime, but neither require it nor penalize non-overtime employees for declining. This one is rare, especially when compared to…
  3. Quasi-mandatory Crunch: This, along with Mandatory Crunch, are the most widely reported-on. This occurs where the official policy laid out by a Dev's managers is that overtime is entirely optional, but a corporate culture emerges where employees are intimidated into working overtime for fear of retaliation from their managers should they opt not to work overtime. Functionally, this is the same as “Optional Crunch”, but for a work environment which unfairly pressures an employee into working overtime where they otherwise would not.

Wait, isn’t this a legal blog?

Yes! Let’s talk law. Crunch itself occupies an area of law not typically discussed by our Blog. Most video game law is concerned with various Intellectual Property, as well as more general business law. Crunch is firmly within the context of labor law, which is mostly dictated differently by each city, state, and country. This complicates the discussion—as video game development is frequently an international issue, whether it is a multinational AAA studio or a small team with employees in two different U.S. states.

For this Blog we have to make a pick though – we don’t have time or space for a compendium on labor laws worldwide, and how they affect video game developers’ working hours. For that, we’ll focus on U.S. federal labor laws, as well as New York and California labor laws.

Is Crunch Illegal?

No, Crunch generally does not violate the labor laws of the states surveyed for this article. However, Crunch can be implemented in a way which is illegal, if an employer is not paying attention to its jurisdiction’s labor laws.

Before we go down the rabbit hole of what the labor laws say, you can use the following rule of thumb:

  1. If you have implemented Mandatory Crunch, and you are not paying your employees or are paying only the same amount as they would make during their normal working hours, then your implementation is likely illegal – unless there is an exemption under local state or municipal laws;
  2. If you are implementing a version of Crunch we have mentioned, and are paying your employees for their overtime hours worked according to state and federal guidelines, then you are most likely in the clear;
  3. If you are implementing Optional Crunch, but are retaliating against your non-crunching employees, then your implementation is likely illegal.

What the Law says about how many hours are legal?

The Fair Labor Standards Act (FLSA) is a federal law which lays the framework for overtime, and the rest is meant to be filled in by state legislature—including limitations to the number of overtime hours mandated by employers. In other words: labor practices which fly in New York may not fly in California, or vice-versa.

Under the FLSA, a typical working day lasts 8 hours, and a typical work week lasts five working days. Any work done beyond 8 hours in one day is overtime, and employers are required to pay an employee working overtime 1.5 times their typical hourly wage for all overtime hours worked.

In New York, mandatory overtime (or mandatory crunch) is legal, and common in certain markets. However, regardless of whether overtime is elective or mandatory, New York employers are required to pay employees 1.5 times their normal hourly rate for all hours over 40 per week worked. Failure to pay overtime rates in New York may subject an employer to substantial liability. The New York State Attorney General has demonstrated a history of prosecuting wage theft. Additionally, New York requires that an employer grant their employee at least 24 hours of consecutive rest per week. In sum, while overtime is regulated in New York, these regulations are still rather loose with respect to the wide latitude an employer may have in implementing any of the three varieties of Crunch common in GameDev.

California is a little bit more restrictive than New York, but not by too much. Like in New York, California employers are legally able to mandate overtime hours for their employees, but employees must be paid 1.5 their normal rate for all hours in excess of 8 on a given workday, and double their normal rate for all hours in excess of 12 for a given workday. Note that bump in pay for continuing overtime, but then consider the following: unlike New York, California Labor Law does not require a period of consecutive rest in a given work week, however beginning on the seventh consecutive day of work from an employee, all hours worked are subject to overtime pay in the amount of 1.5 the normal rate of compensation. This approach both permits more crunch than New York, but disincentivizes an employer to mandate unreasonable amounts of Crunch. Further, California’s approach guarantees an employee more pay if an employer deems extensive Crunch necessary.

And what about retaliation?

Both New York and California prohibit employer retaliation provided the retaliation occurred as a result of a lawful exercise of the employee’s rights. Retaliation can take the form of dismissal, involuntary reduction of workable hours, withheld pay or benefits, overly critical supervision, or abusive verbal conduct. Employers may not engage in this behavior as a result of an otherwise permissible action by an employee, such as issuing a complaint, notifying an employee of a labor code violation, or opting not to work non-mandatory overtime hours.

What do I take away from this as indie dev employer or AAA employee?

The following recommendations are applicable regardless of the type of Crunch and whether you are a two-person studio, or a multinational AAA developer.

  • Amount of workdays per week: Do not require more than 6 workdays per work week for your employees. (In NY State, doing so would violate the law.)
  • Amount of hours per day: Do not require overtime such that your employees could not reasonably expect 8 hours of sleep.
  • Want to implement or are subject to? Consult legal counsel with respect to your jurisdiction's Labor and Overtime laws, determine who is and is not eligible for overtime pay, and ensure you are properly compensating your employees for their extra work.
  • You have implemented it? Follow the guidelines above and maintain as much transparency as possible with your employees with respect to your Crunch policies while considering giving your employees a voice in creating a Crunch policy should the need for Crunch arise.
  • Are there alternatives? If possible, consider alternatives to Crunch, e.g. delaying a game may throw a wrench in marketing and timing of runway but could also go a long way in ensuring employee health and a quality product.

A Final Word: Is Crunch Bad?

Well, that’s a tough question to answer. Is it good? Most industry experts and lawyers agree: No. Is it bad? Not in a vacuum. That said, many instances of Crunch are likely to be found to be unreasonable, and we should all aspire to be reasonable employers. Unreasonable employer practices can lead to lawsuits and, depending on the industry, strikes and collective bargaining (but the state and future of GameDev unions are another article). The key is in the implementation.

On the “not bad” side of things, consider how scale may affect a project. An indie dev may believe in their project with their heart and soul and would be willing to work more hours than the average in order to meet their deadlines. Famously, Eric Barone, the sole developer of Stardew Valley, developed his game while working a separate full-time job. However, even independent developers are likely to find Crunch not quite so romantic if their health is on the line.

But an independent developer often has more latitude in deciding their release window and development runway. AAA studios like Ubisoft or Rockstar manage much bigger entities and are often at the mercy of choices made by those not directly involved in development. As a result, AAA employees rarely have a say in the hours they are expected (or required) to work, which is part of why AAA studios tend to come under the most fire for Crunch.

If you plan to implement Crunch of any kind, consider the decision with the weight it deserves. Listen to your colleagues, your lawyer and, most importantly, your employees.

Author: Edward Baxter and Daniel Koburger

First Published: 12.3.2020

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