"Fan games" are video games made by fans using a popular intellectual property, without license. Are they protected by "fair use" or are the IP holders just allowing it?
1 Answer
Short answer
Fan games are not protected by "fair use".
The IP holders probably have a solid copyright and trademark infringement case.
The IP holders may have simply not taken legal action to enforce their rights yet. But keep in mind that this doesn't prevent them from doing so within the statute of limitations for doing so. In many countries, the statute of limitations is three years for copyright and trademark infringement from discovery of the infringement.
Why might IP holders refrain from bringing lawsuits?
There are various reasons that the IP holders may not have sued. More than one of these reasons may be present at the same time and influence the ultimate decision to not seek to legally shut down fan games.
The IP holder may not know there is a serious problem
The IP holder may not be aware of the activity.
The ability to make good IP does not always overlap with having good monitoring of gray area fan activity on the Internet. Corporate IP holders may have simply not tasked employees with monitoring this activity, and individual IP creators may be do busy creating new work to be bothered with what their fans are doing.
Even if the IP holder may have some dim sense that some sort of unlicensed fan games are out there, they may not have a sense of how big they are and whether it is something worth pursuing legally.
These lawsuits are hard to bring and may not result in much money collected if they are won
Identifying defendants to name in an infringement lawsuit based upon conduct by pseudonymous people on the Internet is hard, sometimes fails to identify those involved, and takes expensive investigative work to event attempt. '
Fans are often minors or young people who have few assets from which a judgment could be collected if the IP holders won, so the lawsuits may not be economic to bring (this also makes it hard to hire IP lawyers to sue on a contingent fee basis). The IP holder might not be able to afford a lawyer on a non-contingent fee basis for reasons unrelated to the merits of the lawsuit.
The economics and P.R. of allowing fan games may make sense
The IP holder may have decided that shutting down the games is a bad public relations move vis-a-vis the fan base. The grassroots backlash that legal efforts to enforce one's rights in contexts like this can create is called the Streisand effect.
Similarly, the IP holder may have decided that the games aren't hurting their royalty income (or might even be enhancing their royalty income by generating buzz). There have been some attempts by professional economists to assess the economic impact of fan fiction, fan games, and unlicensed derivative works of copyrighted and trademarked material. Some of these studies have found it actually helps sales of the primary work that fans buy, and others have found that these works have little impact on sales of the primary work.
In something of the same vein, sometimes IP holders refrain from taking action out of professional respect for the fan works (some IP creators got started in fan works), or because the fan works stoke their ego in a way completely divorced from their corporate minions whose praise for their work is tainted by money and may not be as sincere.
IP holders could be waiting to enforce their rights in a global sweep
The IP holders could issue "takedown notices" to firms that host these games, to stop them from being used, even if the names of the people who make them and use them can't be determined.
But the IP holder and other similarly situated IP holders may be biding time to issue takedown notices to and sue everyone in the fan game marketplace at once in one big sweep in order to avoid "wack-a-mole" fan game operator tactics where one site is shut down and another other already in existence or newly created thrives resulting in little net benefit to shutting it down. There have been several of these sweeps by coalitions of IP holders since fan fiction and fan games on the Internet became a thing.
Often sweeps like this are done only in advance of a corporate decision of the IP holder to expand into a new product line, like licensed fan games, and intellectual property right enforcement against the derivative works isn't pursued until the IP holder had a plan to make money from and fill the void that the unlicensed fan made derivative works were filling.
For example, unauthorized fan translations of manga and anime used to be a big thing on the Internet before those translations were available commercially, and the IP holders mostly just let those infringements go because the translations didn't impair sales of the primary works in their original language. But when IP holders secured commercial contracts to translate, subscript and dub their works for sale abroad, the IP holders did a sweep of enforcement to shut down the fan translation sites (possibly as a requirement of the deal with the firms that were doing the translations on a paid and licensed basis).
The IP holders could be covertly licensing the games as a marketing ploy
It is also conceivable, although unlikely, that some fan games are licensed and that this fact simply hasn't been made public. It isn't entirely unheard of for the marketing arm of an IP holder to use the "guerrilla marketing" tactic of setting up a fan game or fan website that is secretly sponsored by the IP holder itself, while creating the appearance that it is illicit activity, in order to entice young fans who find petty transgressions against the law thrilling in order to create interest in their product.
A fictional example of this kind of guerrilla marketing tactic can be found at this Webtoons link (this is a pretty big spoiler in this fictional work, so don't click on the link unless you are willing to be spoiled).
answered Oct 20, 2023 at 17:15
