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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.