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The game industry is more than just entertainment; it involves complex legal matters. Game developers and companies must be aware of these issues and take proactive steps to protect their creations and ensure compliance with the law. The following is an introduction to key legal issues in game development and distribution in Taiwan.

Developing games

One of the primary legal concerns in the game industry is intellectual property protection. Game developers invest significant amounts of time and resources into creating original content, making it crucial to safeguard their intellectual property rights.

Safeguarding includes obtaining copyright for game software, characters, storylines and other creative elements. Additionally, developers should consider trademark protection for their game titles and logos to prevent unauthorised use by others.

According to Taiwanese copyright law, the creator of a work holds its copyright on its completion. The ownership of the copyright can be determined through agreements. In cases where there are no agreements:

• The copyright of a work created by an employee during his or her employment belongs to the employer; and
• The copyright of a work commissioned to a contractor belongs to the contractor.

Disputes between game developers have arisen over copyright ownership of games developed by a team. The question of whether members of a team are considered employees or contractors has led to concerns about potential infringement of the original employer’s copyright. Therefore, it is crucial for game developers to clearly outline the relationship and the ownership of intellectual property in contracts with their employees and contractors to avoid any potential disputes.

Court perspective

When developing games, it is important to avoid infringing on the intellectual property rights of others, especially copyright. Many games on the market have similar game rules or background settings, but does this constitute copyright infringement?

To address this issue, it is necessary to first examine the scope of copyright protection under Taiwan’s copyright law. Protected works under Taiwan’s copyright law refer to intellectual creations of authors which, in addition to expressing thoughts or emotions and having a certain form of expression, must also be original. Slogans, common symbols, names, formulas, numerical tables, charts, books or calendars cannot be the subject of copyright.

Taiwan’s courts have provided some valuable insights into copyright infringement cases related to games. For example, in a case involving a specific type of matrix diagram explaining game rules, a game developer argued that the design of the matrix diagram, including the connection effects and the number of patterns, allowed players to easily and quickly understand the gameplay; it therefore demonstrated a certain level of creativity.

However, a court held that the matrix diagram was simply a combination of common numbers, tables and colours, and found that an explanation of game rules should be considered an expression of the game rules. Using charts and diagrams to explain game rules is a common practice in the industry, so a matrix diagram is merely a common table and not a work protected by copyright law.

Plagiarism

Plagiarism of others’ works is a common form of copyright infringement. Taiwanese courts have identified two elements for determining plagiarism: contact and substantial similarity, with substantial similarity referring to both quantitative and qualitative similarity. The degree of evidence and standard of determination of the two elements will affect each other.

For example, if the degree of similarity is not high, a copyright owner should bear a higher burden of proof regarding the “possibility of contact”. However, if the degree of similarity is very high, then it is only necessary to prove there is a reasonable opportunity or possibility of contact.

In one litigation case, two games had the theme of a Greek sea god. They both used Greek temples and the sea as backgrounds, with the game interface featuring mermaids or golden Greek palaces as bonus symbols. However, a court compared the design details, graphic interfaces and presentation methods of the two games, and concluded that the theme of the Greek sea god was an expression of a concept that was not protected by copyright.

Therefore, others could not be restricted from using the same sea god concept for creation, as long as both games were independently created. The mere order of creation cannot be used to determine that the latter infringes the copyright of the former.

Distributing games

Prior to being listed on the market, a game must be registered on the government’s official website, and prominent classification information must be displayed on the product packaging, game downloads, initial web pages or links. This information includes the game level, plot and warnings. Games from mainland China must be distributed by Taiwanese companies and must be approved by the regulatory authority in advance.

According to the Game Software Classification Management Regulations, games are classified by content into the following categories:

• Restricted (for use by individuals aged 18 and above);
• Guidance 15 (for use by individuals aged 15 and above);
• Guidance 12 (for use by individuals aged 12 and above);
• Protection (for use by individuals aged 6 and above); and
• General (for use by individuals of all ages).

Games involving virtual currency fall under the “Guidance 15” category and above.

In Taiwan, there are relatively few independent game developers. A common formula is to act as agents or distributors for foreign games. Distributors are deemed to be operators of game businesses, and are subject to the same requirements and responsibilities as the game issuer under the Taiwan Consumer Protection Act. The responsibility for displaying classification information also lies with the game issuer or distributor.

Player contracts

When issuing games, it is crucial to also consider contracts with players (consumers). Generally, contracts between game issuers and players are formulated by the game issuer, and are subject to the regulations of standardised contracts. The terms of standardised contracts should adhere to the principles of equality and mutual benefit, and players should be given a reasonable period to review the entire contract content. Any terms that violate the principle of good faith or appear unfair to players are deemed invalid.

For games involving online game points (cards) and online game services, regulatory authorities have issued additional regulations that specify required and prohibited items in these standardised game contracts. For example, game issuers are required to specify payment methods and product information, as well as the probability and information of winning prizes for all or part of the paid goods or activities. Purchased points cannot include an expiration date.

Advertising

The advertisement of games often comes with activities such as lottery or treasure chest draws but, if the advertising of winning probabilities is found to be false or misleading, it could lead to issues of unfair advertisement. Unfair advertisement is strictly prohibited under article 21 of the Fair Trade Act.

Typically, such cases are brought to the attention of regulatory authorities by players’ reporting. A common scenario involves discrepancies between the winning probabilities announced by game companies and the actual probabilities set within games, with the latter being lower than the former.

The competent authority is the Fair Trade Commission. It holds the view that this regulation governs matters that have a soliciting effect on goods or services, including those that have an economic value and are not directly part of a transaction, but are sufficient to influence transaction decisions.

These include, for example, the provision of gifts, prizes, and the probabilities or awards of winning items or services. Therefore, when game companies advertise prizes or probabilities in their advertisements or on their websites, they are providing crucial information that influences players’ transaction decisions.

An unfair advertisement may result in a fine from TWD50,000 (USD1,700) to TWD25 million. Further penalties may be imposed for subsequent violations.

Conclusion

The game industry presents complex legal landscapes. Game developers and companies must be proactive in addressing legal issues such as intellectual property protection and regulatory compliance, to ensure the success and sustainability of their businesses in this rapidly evolving industry.

LEE AND LI, ATTORNEYS-AT-LAW
8F, No.555, Sec. 4, Zhongxiao E. Rd.,
Taipei 11072, Taiwan, R.O.C.
Tel: +886-2-2763-80005F,
Science Park Life Hub, No. 1, Industry E 2nd Rd,
Hsinchu Science Park, Hsinchu 30075, Taiwan, ROC.
Tel: +886 3 579 9911
Email: attorneys@leeandli.com