4. OSE Symposium
Speakers: Konstantin Ewald (Cologne) and Harald Riegler (Berlin)
Moderator: Attorney Christian Kast (Munich)
For the first time, an OSE symposium took a closer look at the role escrow plays in entertainment software. OSE is thus taking into account the growing economic importance of the games industry, which has long since overtaken the film and music industry. The speakers pointed out that in Germany alone, console, computer and video games generated a turnover of around 2.3 billion euros in 2007 (worldwide in 2008: 61 billion US dollars).
The speakers first outlined the process of game development on the basis of a typical development and publishing agreement. This is a commissioned production based on a contract for work and services. The publisher pre-finances the development and then takes over the marketing of the game. The development process is characterized by intensive cooperation between the developer and publisher. The marketing phase begins with the acceptance of the so-called gold master. The developer can finally participate in the market success of the game via license models, which can be found in various forms on the market.
The speakers then explained the special features of game development compared to traditional software development. In particular, it should be noted that no quality standards have yet been established for the programming of games software. In addition, the complexity of the connection with the film and “creative industries” has often proved to be an obstacle in practice. Both speakers emphasized that despite the complexity and the considerable sales volumes generated in the industry, awareness of the legal problems involved in game development is not always sufficiently developed. With regard to escrow in particular, however, an increase in awareness of the problem is discernible. Various escrow solutions are already being used in practice in the games industry. In most cases, the classic “physical” deposit of the source code on a data carrier is agreed upon after completion or even during the project. However, practice has shown that this is often precarious because it is simply forgotten. Larger studios therefore now sometimes work with “version control systems” that the publisher can access online. The source code is automatically made available on a server on a daily or weekly basis and encrypted. Only the key is stored. However, this is a technically very complex solution that also requires corresponding expertise.
The speakers concluded by stating that escrow agreements are also a suitable means of balancing diverging interests in the games industry. Escrow plays a special role in the protection of subsequent productions. The aim of the publisher is to obtain the source code in order to secure the possibility of the development of follow-up productions by third parties and not to be dependent on a developer. On the other hand, the developer also has an interest in only having to release the source code in the event that no agreement is reached on the subsequent production in return for appropriate remuneration and prior contractual protection of the know-how. In practice, various compromise options are being discussed.