In today’s hyper-competitive video game industry, safeguarding confidential information is essential. In this article, we explore the importance of confidential information in the video game industry and how it can be protected.
Confidential information is a type of intellectual property (IP), protected in accordance with the laws of each jurisdiction. Unlike other forms of IP (such as trade marks, copyright and patents) which have specific criteria for protection, any non-public information may be protected as confidential information. This may include contract terms, customer and vendor lists, source code, art, game design and development notes and other internal business information. Some of these may be protected under multiple IP categories.
In Singapore, trade secrets are generally protected as a form of confidential information, which is treated as having a higher degree of confidentiality than mere confidential information. A key benefit of protecting information as a trade secret is that it is protected as long as it remains a secret. This is unlike a patent which, upon expiry (typically 20 years after filing), enters the public domain and becomes freely usable by anyone.
Confidentiality obligations are typically enforced through the common law on breach of confidence. Recent Singapore caselaw developments have strengthened breach of confidence protections by making it easier for rights holders to establish a breach.
Generally, to prove a breach of confidence, a claimant must show that information:
In circumstances where confidential information was accessed without authorisation (“taker” situations), once the first two elements above are proven, breach of confidence is presumed, shifting the burden to the defendant to prove that their “conscience is unaffected” – that is, that the defendant did not act wrongly or unfairly by using or disclosing confidential information, such as where the defendant accidentally came across the information.
To protect proprietary game elements, maintain control on publicity, prevent leaks and ensure maximum impact for game releases, it is market practice in the video game industry for developers and publishers to require staff, partners and other related persons to sign a non-disclosure agreement (NDA) before being allowed access to sensitive information.
In addition, imposing confidentiality obligations is vital for maintaining patentability of game elements (if they otherwise qualify as an invention). Confidentiality is crucial because “novelty” is a fundamental requirement for an invention to be patentable and disclosure may destroy novelty. : “Even if the matter has been made available to one person, if it is free from any obligation of confidentiality, it will generally be regarded as having been made available to the public.”] Patents can be a powerful protection for game elements – for instance, a major Japanese games developer and publisher relied on its patent rights on specific game elements in its action against the creator of a hit action-adventure monster-taming game, rather than relying on other forms of IP such as copyright or trade marks.
Confidentiality obligations in an NDA can be customised to safeguard a company’s business’s interests effectively. That said, where an NDA or confidentiality agreement exists, its scope is primarily determined by interpreting that agreement. The court would not typically impose broader obligations than what are set out in the agreement.
In recent years, video game companies have been stepping up enforcement efforts for breach of confidence. In 2024, video game developer MiHoYo (e.g., Genshin Impact, Honkai: Star Rail) obtained in China the first ever preliminary injunction on trade secrets for unreleased video game character designs and was granted an injunction and damages of RMB 500,000 (approx. USD 68,600). Furthermore, in a lawsuit between South Korean publishing giant Nexon (e.g., Maplestory, Blue Archive) against an indie studio of a fantasy dungeon-based game, Nexon succeeded in its claim of trade secret infringement after alleging that the indie studio illegally used trade secrets from a Nexon internal project. Nexon was awarded damages of about USD 5.87 million.
Given the importance of trade secrets in the video game industry, game developers should draft confidentiality agreements to be sufficiently comprehensive to cover all their sensitive information, reducing reliance on the common law on confidence. Beyond legal safeguards, practical and technical safeguards should also be implemented, such as technologically restricted access rights, physical restriction to trade secret access and employee training courses.
OrionW regularly advises clients on media and commercial matters, including in the video game industry. For more information about Singapore media and commercial law matters, or if you have questions about this article, please contact us at info@orionw.com.
Disclaimer: This article is for general information only and does not constitute legal advice.
