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I'm currently talking with a design studio for the artworks of my game. They are saying they want to still own the IP of their chracter graphic in my game as they want to sell merchandise with my character idea and their artwork.

I'd like to know what kind of stuffs should I look out for in such an agreement. Does owning the character graphics mean, later they can come up and say me I can't use it in my game?

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-1, legal question. – user744 Nov 6 '10 at 17:18
+1, legal question. – Nicol Bolas Aug 25 '11 at 1:40
If you do eventually sign a contract that lets them keep the IP, make sure you get a serious discount on buying a license :) Don't pay full price just so they can build their portfolio. – Cyclops Aug 25 '11 at 12:09
up vote 21 down vote accepted

Hire an attorney.

There is no substitute to having some actual legal advice, especially in an instance like this. No one here can give you the advice you need.

Business folks who are after a contract over "IP" are usually looking for a way to screw you over. You need an attorney to help you avoid losing your rights.

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This is the only correct answer, nobody but a lawyer reading the actual exact language of the contract can answer this and any real lawyer is not going to advise you on this without doing it "officially" and through the proper channels. – Jason Morales Nov 7 '10 at 10:49

Ownership gives someone the right to decide who can use something. Allowing someone to use property you own is called a licence. If you get a licence to use the item that they own, you can use it. If you don't, you can't. Any exceptions to that will depend on the precise legal issues in your country, their country, and the relative skills of your lawyers. But the only way you will be sure about what you can use is to either (a) own it, or (b) get a licence from the owner that tells you exactly what you can do with it.

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Looks to me like they create the artwork and own everything, but you buy the right for like one game. So if you have the right contract they cannot say you can't use it in your game, but any later game they can say that. And you probably will have to buy the rights again for any later game. But this is all in what you sign. If the contract say you can use the caracter in all later games and they have the rights for any other merchandise - then that's the agreement.

I'd say just read and understand the contract before signing...

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As far as I understand it, you have the IP of that character without the graphics, and they have the IP of the graphics without any reference to your character. So, if they want to sell merchandise, you might want to profit from your property and decide where and how it will be used.

Think about your well crafted character with its character name and all the effort you put into that character creation and the graphics you used in a sexual offending picture on a good selling cheap t-shirt. Your game will be disliked and they make money out of it.

If you do not have the exclusive rights of using those graphics, then think about why you want to pay for it at all: They still could give those artwork away for free to anyone, right after selling them to you for big money.

Compare it to this:

  1. You buy the exclusive rights.
  2. You sell them some rights back, where you can prevent them to abuse your property.
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You should also consider if they're able to sell the artwork at a later stage. What if your game is a success and they decide to sell your characters to a rival company. Or hold you to ransom for your sequels. Contracts for these things need to be very, very specific; there's no room for ambiguity within a contract like that, if the terms can be interpreted in more than one way then you could have a fight on your hands in the future. And as greyfade said, the only way to do that the contract is clear, concise and far to both parties is hire a lawyer yourself to go through the contract. It's money well spent.

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