Tom: Activision
takes an active role in the development by providing “editorial
feedback and substantial creative and technical input in all aspects of
the Product design and development” (4.2.1). And you thought you have
problems with your publisher’s producer! This provision guarantees
Activision creative and technical control over the games, from start to
finish.
Chris & Dave:
Section 4.2.1 requires Activision to give Spark a game engine for the
first game. However, the section doesn’t specifically give Spark a
license to use the engine. This license is implied, but what are its
terms?
Activision will also provide end user
telephone support (4.2.2), handle packaging, including design, (4.2.3)
and handle distribution and sales (4.2.4).
Section
4.2.2 only requires Activision to provide end user support in portions
of the world where Activision makes that support available. In other
words, Activision is only obligated to provide support if it decides to
do so. This is a great way to draft your obligation clauses if you’re
the publisher!
Tom:
Here, Activision agrees to provide Spark with certain Development Aids
(4.3.1) that are set out in detail in Exhibit D to the Agreement. But
they charge the developer for the depreciation on these assets. The
“Activision Development Aids” are defined (4.3.2) to include both
Activision’s and Third Party development tools and services, including
the console dev kit and debuggers (4.3.2). Of course, Spark is
prohibited from using any of these “Aids” for anything other than the
Games developed under the contract (4.3.3).
Development Team and Updates
- In a situation like this one, where the development team is
experienced, but the company is new, it makes sense for Activision to
require the developer to retail its leads throughout the term of the
contract (5.1). These leads, listed in Exhibit B as Key Employees, were
required to work exclusively on the first two games.
Activision
also required that these Key Employees sign employment agreements with
Spark sufficient to keep them on board for the projects. And Activision
has the right to approve the terms of these minimum four year
contracts, so you can bet they had non-competes in them.
Chris & Dave:
Requiring the Key Employees to sign long-term employment contracts
might give Activision some comfort, but there’s nothing stopping an
employee from quitting at any time. Non-competition clauses are one way
to convince employees to stay, but these clauses are controversial and
difficult to enforce in many jurisdictions. More on this in a bit.