The French Parliament has recently released a report on the legal status of videogames, following a six-month study led by MP Patrice MARTIN-LALANDE between May 30 and November 30 2011 upon the request of the Prime Minister (the “Report”)1. The goal of the Report is twofold: (i) assessing the current legal status of videogames with regard to copyright, and (ii) assessing whether a specific framework should be created for videogames within the copyright framework. The ultimate aim of this research is to understand if copyright has so far been an obstacle to the development of the videogames industry in France, or if it could be an incentive for the growth of this sector.

Such governmental move is not hazardous. It is dictated by the fact that the French economy has suffered from the relocation of a number of actors of the industry abroad, especially to Canada, where tax incitements and public subsidies have attracted most industry players. As mentioned in the Report, the biggest French industry player relocated to Canada in 1997. Today, it employs about 4,700 employees in Canada and only 560 employees in France. This must be even harder to point out for the government when one knows that, according to Newzoo (a consultancy agency dedicated to the gaming industry), the French videogames market in France generated a gross revenue of €3.2b in 20112. An ulterior motive of the government could be to benefit from the recent opening of the online gambling market to extend its welcoming policy to gaming industries in general so that France could become a globally competitive market.

Anyway, blaming more or less the current situation on the complex French copyright system and the lack of incentive for this industry, the government is now trying to remedy this.

It is true that the legal regime of videogames has much evolved over the past ten years. This is not overly surprising, given that videogames are very recent additions to copyright history. Yet, strangely enough, despite recent legal amendments, videogames have still not entered the French Intellectual Property Code, especially Article L.112-2 which enumerates, non-exhaustively, copyrightprotected works. The question of its legal status has hence been addressed by case law. Two issues have been specifically addressed by courts: the scope of copyright protection and the ownership of copyright on videogames.

Regarding the scope of protection, the French Supreme Court upheld in the first decisions about videogames, that “sounds and pictures encompassed in the game cannot be detached from the computer programming required for a videogame”3. Nine years later, the Supreme Court basically reversed its opinion in the Cryo case, ruling that a videogame is “a complex work which shall not be reduced to its mere software aspects, however important the latter may be”4. A Court of appeal decision of 26 September 20115 followed and confirmed the new legal videogame apparel by upholding that “a videogame is a complex work in which each feature is subject to a specific legal regime; thus the software part of the videogame is subject to the derogatory regime applicable to software whereas other features of the games, such as its audiovisual, graphic and sound features, are protected by the general copyright rules” 6.

As to the ownership of copyright on videogames, courts have hesitated between joint authorship and co-ownership, but seem to be in favour of joint authorship. Such choice is consistent with the analysis of videogames as complex works. Indeed, it means that for a single videogame, several copyrights can individually and respectively arise on the various components of the game, i.e. the pictures, the music, the software itself, etc.

However, several practical issues result from this qualification. From a business perspective, it is likely that it will complicate the life of videogames developers.

First, videogames developers employ teams of creative minds and computing engineers. In such context, the issue at stake is to determine who shall be granted copyright for the created works. In common law countries, statutory provisions clearly state that rights on works created in the course of employment (‘work made for hire’) belong to the employer. To the contrary, in France, the rights on works created in the course of employment belong, in principle, to the employee, unless the latter consents to assign his rights to his employer. Therefore, if each one of the creative employees has to be granted copyright for their work on a videogame, it means that companies need to check that all employment contracts include a copyright assignment clause. This is true for all ‘creative’ content (music, pictures, etc.) but not for software which benefits from a business-oriented derogatory provision. That is where the puzzle starts for videogames developers. Whereas they did not have to care about assigning the employees’ rights before, they now have to distinguish between ‘creative’ employees and ‘technical’ ones (e.g. software programmers), and ensure that they are assigned the former’s rights and have properly addressed the question of such assignment remuneration.

The Report identifies another significant practical issue for videogame developers related to collective right management societies. Such issue is all the more sensible for musical works that may be incorporated in videogames, as their use systematically requires authorizations from these societies and incur payments of royalty to them. Formalities incurred by the necessary intervention of these societies are deemed to slow down and impede the creative process, and as such the whole videogame industry.

In this blurry and complex legal landscape, the Report identifies several areas of improvement for the legal status of videogames aiming at addressing the abovementioned issues, and ultimately, making of France a competitive market.

The first conclusion drawn by the Report is that no specific legal instrument needs to be created for videogames, and that the current copyright framework should just be adapted to fit the industry’s needs. In that respect, the Report makes several proposals among which lay two very interesting ones. First, the government proposes to federate all industry players and help them getting structured into national syndicates or associations similar to those existing for the film industry. Such organizations would be able (i) to discuss and learn how to deal with French copyright - like how to work with collective right management companies - and (ii) defining sector policies, bargaining collective agreements (with employees’ representatives, for instance, to ensure that employees’ rights are protected).

Such sector organization should be incentivized by implementing a public subsidies policy and enlarging the scope of current tax deduction schemes to enable videogames developers to benefit from them.

In this context, gaming industry stakeholders should keep an eye on upcoming developments in this field. It is highly likely indeed that a public consultation will be launched in the next months.