Publishers agreement

Ask.

A.

Lawyer.

~Josh

PS - Seriously.

Part of this is confusing, because, without knowing more about the business deal, I'm not sure who is the LICENSOR and who is the LICENSEE. _IF_ you are the one licensing a game to them, then you are the LICENSOR and they are the LICENSEE. Further, you are providing the language out of context, so it's difficult to see if I'm drawing the appropriate conclusions, so you should swallow these interpretations with a shaker of salt.

I personally would not sign this contract without consulting with a lawyer, and, from what little I saw, I wouldn't sign this bloody contract even if I did consult with a lawyer.

Either sign a short term exclusive production licensing agreement (where all rights revert to you upon termination or expiration, and where they CANNOT sell their stock after X days beyond the expiration or termination of the agreement); or, sell them the game outright with the requrements that they:

a) must give you development credits;
b) and must give you X% of sales of the game (whether via direct sales or via sublicensees), all translations, derivative works, or substantially similar works;
c) and set minimum sales prices on the game (or a minimum per game dollar value that is owed to you).

Make sure you have audit authority over their books regardless of what you do.

Get 'net wholesale' defined if it's not defined. By definition, 'net' may be the 'gross' less some discounts, so list what those are. Also, ditch the word "wholesale". You want 5% of net sales, not 5% of the net wholesale price. If they sell direct, you want 5% of 100%, not 5% of 40%.

If it means what I believe then what it means is this, "At any time, at the LICENSEE's request, LICENSOR shall execute any necessary documents to assign all copyrights in the licensed products to the LICENSEE, however if this occurs the LICENSOR shall receive no additional money for making this copyright assignment."

If it means this, then at the drop of the hat that they can force you to sign over all your copyrights to your product without getting an additional dime for that. You better make damn sure you read EVERY word concerning termination of the contract, 'cause what you don't want is any situation where the copyright is assigned, where the contract can be terminated, and where they can then start producing the game again at a later date without paying you a dime (because if the contract terminates and they own the copyright, they no longer have ANY legal relationship to you except as otherwise expressly provided for in the contract).

The first part of this sentence is totally rational. However, unless you are fully intent on assigning them your copyright, you should utterly reject "and LICENSOR acknowledges" and everything after that. If they were protecting YOUR interests then they would affix a copyright notice in YOUR name, and they wouldn't even mention their name. Typically the owner's name is the one listed as the party in a copyright designation.

Don't let them sell and produce on any terms they wish to establish unless you are intending to sell them the game outright. Make the terms such that the sublicensee is either directly or indirectly answerable to you, and so that payments on items sold by sublicensees are based on an identical fee structure to those sold by the LICENSEE.

I don't like these terms. Consider this, you license something to me. My friend really wants the license, and not me. I don't produce ANYTHING. NOTHING. I sublicense it to my friend for 5% of his net sales. Now I owe you 3% of my friend's net sales, and I make an additional 2% for myself. You were expecting to get 5% of net sales. You just got shorted 2%.

Again, whenever you see the word 'net', you should get it defined.

This is not particularly unusual. People don't want to cut you monthly royalty checks typically. If you want to make more money, as for a guarantee to be paid up front annually, a guarantee against future royalties due.

You didn't include paragraph 17, so I can't properly interpret this. Effectively (paragraph 17 aside), however, this paragraph is very odd and looks like it is a perpetual contract provided they sell at least one unit per year to keep you on the hook with them. Now, if paragraph 17 has something to counter this interpretation, then I can't say.

Again, you have failed to provide the necessary details to allow for contractual interpretation, but from what you have posted, this contract is obfuscatory, it has bad business terms in it, and it is very one-sided. I haven't seen the rest of the contract, so take those conclusions with a grain of salt.

I work a lot with lawyers but I am NOT a lawyer. I have worked for lawyers on legal cases, however. You are NOT my client. I am NOT establishing a legal relationship between us. This is NOT legal advice.

The most important things Lee said were:

and

You are in a very unique situation, in which you are in the UK, have 5k copies of your game printed and in your hands, and are looking to enter into a business arrangement with a company in the US. No one here has been in that specific situation, and you should not take anyone's advice as to whether this is a good arrangement or not. This is an issue you must take up with your lawyer. You owe it to both yourself AND to the company you're looking to deal with to subject this to the scrutiny of a professional who is qualified to evaluate contracts. Negotiating a contract on the basis of advice you might get from the folks here could be a very serious mistake.

-Jeff

(Incidentally, I am pretty sure I know what company you're looking to deal with, and if I'm right, it seems unlikely that Lee's intimation, that you may be getting a raw deal, is accurate. But it could be. Only a lawyer can really tell you...)

I was actually coming looking for a draft publisher's agreement and happened to see this post.

Again, it's tough to tell without the full document, and legal advice is certainly smart but this really doesn't sound like a rip off contract--I was negotiating a contract for my first game (Kersplatt!) way back in 1992, in the UK, and most of these conditions sound very familiar.

The "Copyright" condition sounds scary--but I think it parses OK--if you look at your games collection you'll see that that's absolutely standard--for example I'm looking at Drunter Und Druber and it's (c) 1994 Hans Im Gluck, not (c) 1994 Klaus Tueber. Furthermore, while the game design is yours, the artwork is not and things like the rulebook layout, etc. could be a grey area. It sounds like the 'acknowledge' clause reads as "You'll let them use (c) Their Company Name because they're only doing it as your publisher (i.e. LICENSOR’s licensee = Designer's Publisher), not as the copyright owner"

The "Outside North America" clause basically says that they'll see if they can hawk your game in other countries and then split the profits--if you're already publishing yourself in the UK you should probably ask for it to be struck out, but it's not an unreasonable clause in its own right--I was goig to give this to my UK publisher originally, and on the basis they were looking at setting up US & DE deals I could never have managed myself

I didn't find anything for our industry, but I did get some good responses from other industries when I googled "sample publishing agreement". I've lost my UK contract so I'm planning to cobble something together from the various sources I found and then use an old Amigo contract I have (which is in German) to make sure I didn't miss anythign important.

You might take a look at :

http://www.mundania.com/contract.html

They're a book publisher, but they provide a nice real english commentary for the legalese

The language (except for one or two clauses) seemed quite clear. I believe my interpretations to be sound. If you doubt my interpretations, I can explain to you what I believe everything says on a word-by-word basis. Phrases like "consideration" and "copyright assignment" have common meanings at law.

That said, note that some things which are absolutely and utterly INSANE clauses may be industry standard clauses. The fact that they are standard clauses does NOT make them satisfactory, bilaterally drafted clauses. But it may be the best you will get. Now that latter point is worth considering. Even if some of the clauses are ugly, if you can't get any better, then there is a business reason to consider them.

I just spent two years negotiating a licensing agreement with a major company and one or two of the clauses were incredibly unilateral against us, but we took the contract anyway, for business reasons. That does not in any way tarnish an analysis that says that a clause is unilateral. It just says that you might take it any way IN SPITE OF that analysis. Depends on your business needs and how bad you want the business agreement and what good things the other party is giving you. Somebody might ask for some insane things but give up some insane things.

If you go to www.onecle.com you will see a lot of licensing contracts. Some of these provisions in your contract are quite unusual, at least for other industries. They are really unilaterally favoring the other party. They would not be uncommon if they were licensing stuff TO you, but you are licensing stuff to them, making some of those provisions rather unilateral. It looks like a hybrid copyright assignment/licensing agreement contract. I personally would prefer to sign one or the other, not one that leaves that decision utterly in the hands of the licensee. That said, you posted only a small part of the contract. If, for example, you failed to post the part where there's a half a million dollar guarantee to you, then I'd say it was a great contract. You really have to view a contract this one-sided through the lens of what other things the contract provides you in terms of visibility, financial gains, etc.

What I can tell you, is that when we licensed intellectual properties from another company, there is just no way in hell they would let us sublicense under any terms we feel like to anyone we wanted. There is no way in hell that they would accept LESS money on a sublicense than if we produced it ourselves. There's no way that if you licensed something from DC comics, for example, that they'd let you take Superman and put "(C) John Doe" and do it "on their behalf". The contract would be VERY explicit about who owns what copyright on what elements and then each side would DEMAND that some appropriate notice was on the licensed product to protect each party's needs.

That stuff is just not in your contract (or not in the parts you sent us).