Monday, February 15, 2010

International IP Theft for Dummies

This post comes from slightly bitter experience; Interzone Games, a place I used to work, is currently at step 4/5 of this process.

Thievering Intellectual Property for Fun and Profit
A How-To Guide

  1. Set up a nested stack of companies: [IP Owner] owns [LLC Debt Fuse] owns [Studio]
  2. [Studio] does work-for-hire for [IP Owner]. Outgoing expense contracts are with [Studio], and IP produced is owned by [IP Owner].
  3. When funding runs out, squeeze another 6-12 months of work out of [Studio] by running up debts on [Studio]'s credit. Promise anything you have to, from shares to nerf weapons to million-dollar beach condos for all after shipping. Nothing you say here is legally binding.
  4. Once all avenues of stalling debt payments and exploiting workers' good faith (and gullibility) are exhausted, liquidate [Studio]. Assets lost will be minimal (basically just some old hardware), and [LLC Debt Fuse], being limited liability, insulates [IP Owner] from any of [Studio]'s debt being passed on.
  5. Blame [Studio] for everything, set up [New LLC Debt Fuse] and [New Studio], and go to step (2).
  6. Repeat until IP is finished enough to sell. Sell IP. Profit.

Pro Tips:
  • Don't explain the corporate structure to employees, it might tip them off.
  • Establish [Studio] in a different country to [IP Owner], so public servants and government departments will put any complaints and/or legal action in the 'too hard' pile until far too late.