Legal Landscape In The Video Game Industry (Overview In Canada)

In Canada, the video game industry is a rapidly growing and dynamic field that is subject to a wide range of legal issues.?

As the industry continues to evolve and expand, it is becoming increasingly important for businesses operating in the video game industry in Canada to have a thorough understanding of the legal landscape.?

You have various players in the video game industry such as game developers, publishers, platform providers, hardware manufacturers, mobile game developers, esports companies, engine providers, service companies, and more.

If you are operating in the video game space, you are required to comply with a broad range of laws and regulations, such as intellectual property, advertising laws, licensing, data protection and privacy, and more.

In this article, I will provide you with an overview of the different areas of law that can apply to the video game industry.

Let’s get started.

Intellectual Property Rights

Fundamentally, video games represent packaged bundles of intellectual property rights owned by different stakeholders.

You can have:

• Developers writing code for a particular game;
• Individuals and companies developing game storylines and narratives;
• Designers creating unique characters;
• Characters that have the likeness of real-life individuals such as celebrities and stars;
• Third-party brands, logos, and trademarks;
• Third-party products;
• Composers and artists creating original music and audio sounds;
• Any other type of inbound or outbound licenses.

When all these pieces of intellectual property rights are combined into a video game, it becomes crucial for all stakeholders to ensure they are well protected.

For instance, AAA-rated games can cost hundreds of millions of dollars to produce and, as such, the protection of intellectual property rights of all contributors becomes legally paramount.

Copyright Laws

Copyright laws are a set of rules that govern the use and distribution of original works of authorship, such as books, music, film, and video games.

These laws give the creators of such works exclusive rights to control how their work is used and distributed, including the right to reproduce, distribute, and display the work publicly.?

In the video game industry, copyright laws can be used to protect:

• The actual video game along with its source code;
• The video game's characters;
• The video game narrative;
• The pictures and original music used in the game;
• Other creative material in a material form.

Trademark laws

Trademark laws are a type of intellectual property law that protect distinctive words, phrases, logos, symbols, or designs that are used to identify and distinguish a particular brand or source of goods or services.?

These laws give the owners of trademarks the exclusive right to use those marks in connection with the goods or services for which they are registered.?

This means that others cannot use the same or similar marks for similar goods or services without permission from the trademark owner.?

The purpose of trademark laws is to prevent consumer confusion and protect the public from being misled as to the source of goods or services.

In the video game industry, trademark laws can be used to protect:

• The video game title;
• The logo used for the game;
• The game slogan or catchphrases.

Licensing Frameworks

Licensing refers to the process of granting permission or authorization to use a particular intellectual property, such as a patent, trademark, or copyrighted work, for a specific purpose or period of time.?

This permission is granted by the owner or holder of the intellectual property rights in exchange for some form of compensation, such as a fee or royalty.

Licensing can be used in a variety of ways, such as allowing a company to manufacture and sell a product that is covered by a patent, or allowing a company to use a particular trademark or copyrighted work in its advertising or marketing materials.

Licensing is a useful way for companies to monetize their intellectual property, and for others to gain access to valuable technology or branding without having to develop it themselves.

In the video game industry, licensing can be used to:

• Obtain rights to use a creator or publisher’s creative work;
• Obtain rights from physical people depicted in sport-related or movie tie-in games;
• Obtain rights to create and sell merchandise related to the video game.

Advertising Laws

Advertising laws are a set of laws and regulations that govern the content and dissemination of advertising messages.?

Video game publishers will spend significant sums of money advertising their video games in different ways, such as:

• Online advertisements;
• TV and radio ads;
• Digital and print magazines;
• Celebrity endorsements;
• Influencer advertising;
• On social media;
• On mobile;
• In-game ads, and more.

Publishers will use advertising networks and targeted advertising to get the best returns on their advertising dollars. They will use tracking tools such as cookies, player location trackers, device identification trackers, and other data to better target their advertisements. However, this can trigger various legal consequences that video game publishers should be aware of.

The specific laws and regulations that may apply to advertising can vary depending on the country or region, but some common examples in Canada include:

• The Personal Information Protection and Electronic Documents Act (PIPEDA), a federal privacy law in Canada that regulates the collection, use, and disclosure of personal information in the private sector. This law applies to all organizations that collect, use, or disclose personal information in the course of commercial activities;
• The Competition Act, a federal law that prohibits false or misleading representations in promoting products or services in Canada. It also prohibits misleading advertising, price maintenance, and exclusive dealing.
• The Canadian Radio-television and Telecommunications Commission (CRTC) regulates telecommunication and broadcasting in Canada, which includes advertising and promoting through these mediums;
• The Canadian Consumer Product Safety Act, a federal law that regulates the safety of consumer products, including advertising and labeling requirements for such products;
• The Canadian Code of Advertising Standards represents a set of guidelines that are followed by the advertising industry in Canada. It outlines the standards of truthfulness, accuracy, and social responsibility that advertisements must adhere to.

In addition, you can have provincial laws that can apply, such as the Quebec Consumer Protection Act, the Civil Code of Quebec, An Act respecting French, the official and common language of Quebec, Quebec data protection and privacy laws, and so on.

Gambling Laws

Video games tend to use two types of “virtual currencies” where one is limited to the game itself and cannot be converted to real-world currencies and the other can have an out-of-game financial impact on the user.

The in-game currency is sometimes called “premium” currency where a user can use real currency to purchase the in-game virtual currency allowing him or her to purchase resources or make cosmetic enhancements to game characters or the like.

On the other hand, if virtual currencies that are used have an “out-of-game” impact on the user, this can inadvertently trigger a series of laws that may be detrimental to publishers.

For instance, depending on how the virtual currency is earned, it can be considered that users are essentially gambling.

Video game publishers should have a good understanding of how virtual currencies can require them to comply with gambling laws.

Financial Transaction Reporting

Video game publishers that use in-game currencies should be aware of the application of laws relating to financial transactions that may potentially apply.

Depending on how the in-game currency is structured, it can trigger financial reporting requirements and various legal obligations in Canada.

For example, FINTRAC (Financial Transaction and Reports Analysis Centre of Canada) is a Canadian financial intelligence agency monitoring financial transactions to prevent fraud, illegal activities, money laundering, and terrorist financing.

Video game developers should ensure that they structure their in-game currencies in such a way that they avoid being designated as engaging in controlled financial transactions.

Privacy Laws

In recent years, privacy laws have garnered significant attention from the public, governments, and legislators.

Many jurisdictions have adopted or updated their privacy laws to catch up with the latest technological trends.

The privacy issues applicable to the video game industry are quite complex and can include:?

• Children’s privacy issues;
• Biometric data privacy, such as fingerprint, voice, and facial recognition data;
• Player health information;
• Player location data;
• Game rating system;
• Player credit card or banking.

The users and players of video games can provide a range of data that developers and publishers can exploit. This information is sometimes utilized to enhance gaming, and other times it is used for marketing.

Although not all player information is necessarily covered by privacy rules, as such, it's crucial to know which is and what privacy problems could occur.?

Particular caution must be taken with regard to any video games that are targeted at children or situations in which children may play video games that are not intended for them because children are granted an extra layer of privacy protection when it comes to video games and other internet products.

Video game companies must implement privacy rules and be open about the kinds of information they gather from players since consumer privacy is taken seriously and legally protected.?

Additionally, they must be transparent about how they use the data they get, including whether it is shared or sold to outside parties.

Takeaways

In conclusion, the video game industry in Canada is subject to a complex legal landscape, with a variety of laws that apply to different aspects of the industry.?

Businesses operating in the video game industry in Canada must be aware of and comply with the applicable laws in order to avoid legal and financial consequences.?

It's essential for the industry players to stay up-to-date with the latest legal developments, and seek legal advice when necessary to ensure they are in compliance with the laws and regulations that apply to them.

If you are in the video game industry, be sure to consult with a qualified attorney to ensure you protect your intellectual property assets and maximize your potential to monetize your creative assets.

Good luck!