How Changing Contract Language Can Undermine the Business

Bob Tarantino
Lawyer, Dentons
Mike Whelan
Chief Community Officer

Contracts are part of the whole customer experience, and getting them wrong can undermine relationships your business has fostered for years. In a special interview, three contract experts and gaming enthusiasts tell us how Wizards of the Coast dropped the ball when they rewrote their Open Gaming License.

In this episode, we discuss

  • The history of the original Open Gaming License (find our original interview with Bob Tarantino here),
  • Wizards of the Coast’s original attempts at revising the license (read the news here and here), and
  • How contract language that’s misaligned with a company’s stated mission can undermine the business.

(UPDATE 2/3/23: Wizards of the Coast was so moved by this dust-up that they moved the Dungeons and Dragons content to a Creative Commons license. Learn more here.)

THE GUESTS:

Bob Tarantino is entertainment lawyer and Open Gaming License enthusiast. While working on his PhD research, he studied the OGL and its place in gaming culture. Bob can be found at https://www.linkedin.com/in/bobtarantino/.

Nancy Sims is the Copyright & Scholarly Communications Director at the University of Minnesota Libraries. She helps law library patrons and researchers across the world understand their intellectual property rights. Find out more about her work at copyrightlibrarian.com.

Joshua Lenon is Lawyer in Residence and Data Protection Officer at Clio. He helps lawyers understand the rules that apply to them, as well as the companies (specifically, Clio) who serve them. Connect with Joshua at https://www.linkedin.com/in/joshualenon/.

THE HOST: Mike Whelan is the author of Lawyer Forward: Finding Your Place in the Future of Law and host of the Lawyer Forward community. Learn more about his work for attorneys at www.lawyerforward.com.

If you are interested in being a guest on Contract Teardown, please email us at community@lawinsider.com.

Episode Links

The Contracts:

Open Gaming License 1.0a
(Draft) Open Gaming License 1.2

Interview Transcript

Mike Whelan In this episode, we revisit the Wizards of the Coast Open Gaming license with four super nerds slash super lawyers. So let’s tear it down. Hey, everybody, This is a special contract teardown episode where we are doing a nerd follow up. We had a previous conversation on a previous teardown with Mr. Bob Tarantino, who has joined us, but we are joined by a couple of other friends, Joshua Lenon and Nancy Sims. Hey, everybody. We are going to do something weird. The contract that the document that Bob Tarantino and I talked about in a previous episode that we will have linked below has become the subject of some controversy. And so we are going to have nerdy controversy. Let’s start with Bob Tarantino. I’m going to go to you. We are talking about our previous conversation about the Wizards of the Coast Open game license 1.0. Bob, remind us who you are and remind us about that conversation. What was is OGL 1.0?

Bob Tarantino Sure. Thanks for the invite. Appreciate the opportunity to chat about this. So I’m an entertainment lawyer in Toronto, Canada. I help people monetize their creative expression, and part of the expertise I bring to the table here is that in getting my Ph.D., I actually wrote my dissertation on the open game license. So I researched the history of it. I sort of went through the license itself and I spoke to a few dozen people who actually use the OGL in the course of their creation of content and running their companies. The OGL was originally released in 2000 by Wizards of the Coast. It was part of an initiative to try to revitalize the Dungeons and Dragons brand, which had sort of fallen fallow, particularly in the last half of the 1990s. And it was really motivated by the idea that you could take open source software principles and apply them to a role playing game. In this case, the Dungeons and Dragons. OGL was a very simple document, sort of -ish. It’s one page long. It’s about less than a thousand words, I think. And it was intended to enable players of Dungeons and Dragons to create their own content and reuse, remix, frankly, revitalize the D&D game. So prior to the implementation of the OGL, the owners of Dungeons and Dragons had taken a fairly conventional approach to how they approach their copyright rights, and they took the approach that they owned copyright in the game, and anybody who used any elements of the game were engaged in copyright infringement. The OGL marked a 180 degree turn from that position and they basically said, We are going to release the game. We’re releasing the rules of the game in something called a system reference document, and that’s already and the stuff that’s in that SRD, we are releasing it on an open basis, meaning you can use it for whatever the hell you want. So you can take the stuff in the SRD. You can make supplements for D&D. You can make new adventures, new modules. You can make your own games and release those. And critically, you can monetize those. So it wasn’t just do this, but make sure it’s noncommercial. Don’t try and make any money off of this. It was a true free, open license. Do whatever you want with the content and I’ll just for one second just try and summarize the sort of the aftereffects of that. I think that the OGL was really instrumental in a revitalization of the brand. It was released in conjunction with the third edition of D&D. For the next decade or so, there was an explosion and interest in D&D, and importantly, there was an explosion in interest in roleplaying games generally because people were using the open game license to create new games, some of which were competing directly with the original game. So there were people who were creating games that were meant to go head to head with Dungeons and Dragons. There were dozens of companies which flowered in the wake of the release of the Open Game license, creating millions of words of content, generating tens of millions or hundreds of millions of hours of enjoyment and gaming and culture. And that was really the point of the OGL.

Mike Whelan Yeah. And it you know, as one article put it that I saw, no one can dethrone D&D after just because of the progress that the OGL made and how it blew things up for them. Except the article said for D&D. And that’s how we get to the crazy news that we’re talking about now. Nancy, I want to go to you. From the way Bob’s describing it, that the license rights in the OGL are pretty beautiful, pretty well structured, pretty clear, Hey, do what you want with this thing. Attach it as you’re explaining to people their rights with licenses like this. That sounds like a pretty quick conversation. Tell us about you. Tell us about what you do and why do you think the company decided to change what seemed like such a beautiful document?

Nancy Sims Sure. Thanks. My name is Nancy Sims. I work at the University of Minnesota, and I am an attorney. I’m also a librarian. And my job is an unusual one in that I have a role for the campus. And because we’re a public university, actually beyond our campus, our state, and even across the country, to try to help people understand copyright issues and licensing issues, especially as it affects their academic work. But sometimes I get like, you know, schoolteachers calling me and saying, how does this work? And so one of the reasons I’ve been really interested in OGL and this current little dustup around it is because library people in general are very interested in things like tabletop gaming for their own personal lives, and also because they host and events and say, you know, you can have your tournament here and all those kinds of things. So, I haven’t gotten a lot of questions about the original open gaming license, I think because it was pretty clear if anybody had questions, they felt like they could answer them. My understanding, and I’ve heard a couple of different theories of exactly what might be driving the changes most recently. My understanding is that the Wizards of the Coast stuff, D&D. in particular, but they have other stuff, is a significant portion of the revenues of Hasbro, which is the company that owns them. And so one thing is that’s a company that is oriented towards toy sales and things like that, so they understand the amount of money you can make off of licensing for things like toys, etc.. There’s a new Dungeons and Dragons movie coming out. Toy licensing related to that movie has lots of potential, but the open gaming license has the potential for some of the open materials to compete, perhaps with licensed products. And then another piece of what I have heard as big explanations for why there’s been some interest in changing the open gaming license is somewhat in response to the pandemic, but just in the response to the growth of growth of streaming and the growth of remote access and remote interactions. There are lots of people playing online now who weren’t playing online a few years ago, and there are a couple of different tools by which people can share resources for playing tabletop together online. And some of them are competing with, are making money in ways where Hasbro, which perhaps would like to reclaim more of that money. Those are all different things I’ve heard as potential drivers for the latest rounds of changes. The biggest overarching thing is most people perceive this as the folks who owned Dungeons and Dragons would like to make more of the money that is made off of it.

Mike Whelan Which is not a terrible idea as a business initiative. And you can only throw money at Michael Bay to make bad Transformers movies. So many times, once you get to the sequel, it’s like we need a new plan. You need a new plan after the second sequel. Joshua, I want to get to you because you are in an interesting pseudo in-house role where you’re also helping lawyers. So you’re dealing with a lot of people who are thinking about documents like this. What did they do? What did Dungeons and Dragons? What did Wizards of the Coast do? What is OGL 1.1 and tell us a bit about you.

Joshua Lenon Thanks. I’m Joshua Lenon, I’m a lawyer in residence at Clio. And the shorthand version is, I’m a rules lawyer for a company about the rules of lawyering. So it’s a very meta thing that I get to do. And one of the things that I help clear with is things like our terms of service and our privacy policy and how they relate to our customers, but also the ethical duties of lawyers and how those impose obligations and rules and activities upon the software that we create for law firms. So I deal a lot with contracts and policy and how they all come together in execution. When we look at the OGL 1.1, what we actually have is a draft version. This is not something that was released to the public as a done deal, but instead was leaked internally out to the media. And when you read it and compared again to the OGL 1.0, it’s a night and day drafting difference. It’s now looking like a contract with the appropriate contract section. It actually has what we consider boilerplate in the legal industry, things like severability, things like choice of law, all of these things that make a contract, kind of an actual contract amongst legal professionals, as opposed to the more principled approach that was listed in the OGL 1.1. And importantly, they actually really start defining the obligations of content creators, and they do so in two categories noncommercial and commercial creators. And the noncommercial is somewhat similar actually, to the original OGL 1.0. Here’s what you can use. Here’s what’s excluded. The terms for that or of what’s excluded are a little more broad. And it includes provisions on the fact that you actually have to be able to enter into a contract to be a part of this agreement, which is something that the OGL 1.0 didn’t have. Right. And so theoretically, you know, there are 12 year olds out there relying on 1.0. In 1.1, you have to be 18 plus. And there are other obligations in terms of whether or not Wizards of the Coast, in the noncommercial instance, can object to the content that you’re creating and ask for it to be withdrawn in certain instances. And those might be based on infringement of other parties licensed content. It may be based upon the application of the Wizards of the Coast content in a setting that they find to be objectionable and so that they could ask for distributors of that to pull that noncommercial content. And then if you look at the commercial content section, which is very new, right, they define specifically what is allowed to be published, and that is gaming content that mostly exists in a print or static format. So basically the equivalent of a book on your Kindle or a PDF on your tablet. Right. You can’t do all of these other things that technology might enable, like creating these online roleplaying games that Nancy talked about. So you’re limited in scope now of what you can do with the content in a way that wasn’t discussed before. And then they’ve also imposed registration duties and mandatory royalties if you end up making greater than $750,000 in total the total revenue within a year. And so lots of people were obviously somewhat upset that one, Wizard of the Coast now gets to be kind of the central approver of OGL content that you’re required to register and that you end up owing them money. And in the draft version, again, it was only for greater than $750,000, but they specifically addressed that they would give a kind of preferred royalty rate to certain groups. They didn’t outline what that was and that they also said that the royalty rate applied to things like crowdfunding. And so crowdfunding, when you look at sites like Kickstarter or Go Fund Me, oftentimes through aggregate donations, people are able to get greater than the $750,000 amount and oftentimes actually don’t have control. They can’t like cap it right to say, Hey, we just really want to put out this new book and here’s the print room we’re going to do. And our distribution model and that’s all we’re looking for is people to help us hit that target. And instead, you could very easily end up with a viral promotion that creates this huge volume of donations. And suddenly Wizards of the Coast is stepping in from the side and going, You’re under this draft agreement. So there was a lot of upset, well, quite frankly, upset community feedback on some of these big changes, not just because the OGL 1.1 is coming into existence, but they believe that it creates an opportunity for the OGL 1.0 to be revoked in a way that was never anticipated or discussed under the terms of the OGL 1.0. And it left a lot of marketplace confusion for all of these indie publishers and well-funded publishers who have been relying upon this for a long time. And so this objection became a really big media storm in the circles and has led to a lot of backpedaling on the part of Wizards of the Coast on what they actually intend to do and how OGL 1.1 is not the finished version.

Mike Whelan Yeah. Bob, let me talk to you about that, because that was something you brought up when we talked before, that it’s almost like this document, the way you put it, which I really love, was its permission in the form of a contract. But it was more than that. As you said, it was sort of this cultural icon. I’m not sure they could have printed this on a different color of paper and people not freaked out, but they made substantive changes that changed the way the fans think about this. But tell us about the fan reaction about what other companies have done to react to this. How has this just impacted the marketplace, this proposed change, which again, was never finalized, just this change that got in the ecosystem? How did it change the ecosystem?

Bob Tarantino I mean, if I was going to sum it up in one word, I would say negatively. So, I mean, as Josh mentioned, there was this real groundswell of opposition in the community. And I think I mean, without getting too melodramatic about it, I think it was really viewed as kind of this breach of faith by Wizards of the Coast. The. And part of the history here, which I alluded to earlier, is before the open game license, TSR Inc, which was the owners of Dungeons and Dragons back then, were very aggressive enforcers of their intellectual property rights or their perceived intellectual property rights or their purported intellectual property rights. They regularly sent out cease and desist letters and started lawsuits, you know, against not only their commercial competitors, but, you know, in connection with fans like, you know, sort of fan activity on the Internet. The OGL all sort of marked this sea change where they basically planted their flag and said, look, we are taking a different approach. We are making this available on an open basis. We want to encourage this ecosystem in this community of creative activity. And this change to the OGL, which is really, you know, a complete inversion of the openness of the original OGL, was met with fury. It was met with scorn. It was met with disbelief. Partly because there were so many expectations, I think, that had been built up around how the OGL functioned originally and has functioned for close to 25 years. And also because it introduced this real uncertainty into the market, because the sort of wording around or the public pronouncements around the OGL and that draft 1.1 kind of were using concepts that weren’t totally while they were completely ambiguous are things like de authorization and revocation notions that were just fundamentally incompatible with OGL 1.0. So you had this enormous backlash brewing, I think at the fan level. And I think the other thing to keep in mind here is it’s difficult in this environment to separate out sort of who’s just a quote unquote fan or sort of just a passive consumer and who is themselves a content creator and potential competitor for what WotC, because those two kinds of roles are so inter linear, right? Like people play both roles constantly. At the more organized level. You had competitors to wizards of the coast who have, you know, commercially viable products that, you know, are released at scale and monetize that scale, banding together and basically saying, look, this is unacceptable. We don’t care what you’re thinking you’re purporting to do with the OGL. We are going to sort of reclaim that original spirit and we’re going to create something that they have referred to as the open RPG creative license, which I think is better referred to as work. So that is going to be a new license, which we haven’t seen a draft of yet, which some of the more active members, some of the more, dare I say, committed members of the open gaming community are going to use as their instrument going forward. So that spirit of openness, to the extent that we can say, well, it’s been discarded or betrayed or left behind by Wizards of the Coast is being picked up by other participants in the community.

Mike Whelan Well, Nancy, I mean, Wizards of the Coast themselves tried to make a change. They tried to make new documents. They came out. They did a little backtracking. They apologized publicly, but not really an apology. And then they started releasing parts of OGL 1.2. What is OGL 1.2? What does it do that 1.0 didn’t and 1.1 didn’t?

Nancy Sims So OGL 1.2 is a draft document that’s been shared. I think maybe last week was when it came out. It’s you know, it’s hard to summarize the whole thing. It is kind of as Bob was characterizing 1.1, it’s more. It’s still in that more formal contract mode. It’s longer than 1.0. One of the things they seem to be trying to clarify that was something that I saw a lot of concern about is this: the authorization revocation thing. So, they have a provision in here that where they say they are de authorizing 1.0. As a lawyer, I don’t actually know what de authorizing means. I spend a lot of time working with Creative Commons licenses because those are widespread in academic publications. And sometimes people cease to offer something like they had previously offered something with a Creative Commons license. Creative Commons licenses have been irrevocable for quite a while, so you can’t revoke them. That’s actually fairly clear. But you can cease to offer. And you know, when I hear de authorize, I’m like, so are you trying to revoke? And that was a big fan and derivative creator at all levels. QUESTION: Are you trying to revoke 1.0? Well, 1.2 attempts to clarify this and says we are not authorizing 1.0 anymore. That means you can’t rely on it for new content production. And they actually haven’t finalized this. There’s a space in the draft for after effective date. So they’re saying, you know, we are saying this is no, I think what they’ve clarified is they’re no longer offering 1.0. They are also clarifying that they don’t mean to try to pull this license out from under any existing content so that that people previously relied on 1.0 apparently can still. And so that is something that has calmed fear amongst a bunch of derivative creators, as far as I understand it. There’s another thing that I’ve been hearing this is I kind of am looking at 1.2 so far based on like what questions people are asking me to help them understand. So one thing people have still have questions about has to do with things like no hateful content or conduct, which is part of the, if you are relying on 1.2, you are saying you will not include content that is and a have switched over as I’m reading from the draft, you won’t include content that is harmful, discriminatory, illegal, obscene, or harassing or engage in conduct like that and that Wizards of the Coast has the sole right to decide what conduct or content is hateful. My understanding is that this is and I think WotC they’ve talked about this in some of their public conversation around this. But my understanding is there have been some specific incidents that they feel like they would like to control. I have, I really appreciate that, feel like would like to control this is where like the librarian side comes in for me though the having a license clause that says no hateful or discriminatory conduct and those related things is giving some people pause with the we are the sole arbiters of what is hateful. Partly because that is not the kind of language that is, you know, that kind of language can be used to defend people who we might want to defend if we’re trying to be inclusive and trying to make people feel like everybody is welcome in gaming. But it’s also language like that that can be used to exclude and, you know, some fairly straightforward things. You know, I don’t actually think that this is an edge case any way, shape or form. But if the people on the we are the arbiters and change. Right, who will they find hateful or problematic in other ways? One of the things that I had seen as a derived content creation that people were very excited about was the combat wheelchair mods, which were people were very excited that you can now. But there was also a lot of people who were into sort of traditional approaches to gaming who were like, There can’t be wheelchairs in D&D. And so there were lots of people who were excited that there was a way to put wheelchairs into D&D. And then there were some people who thought that this was a violation of all things wonderful about D&D. It’s not realistic to have wheelchairs in the Wizards game. And so I think that that clause is leaving people, still some people have some concerns about that clause. That’s something where people are trying to have been asking me: what does this mean? Like and, you know, I, I want there to be protections for people, but I can see why people are a little bit worried about that clause. I think, as far as I can go there.

Mike Whelan Yeah. Joshua, you see in that the conflict that Bob talked about, that this is a permission in the form of a contract. Here’s Wizard to the Coast trying to use the power of contract to, to meet some of its ends, which makes perfect sense, right. If I as a business, I have a content based. You saw this in the change of leadership at Twitter in the disaster that followed that there is through contract a lot of control on these, what are essentially platforms. Obviously, this is different than an online platform, except for it’s not. But what do you think about this overlapping this use of the power of contract? It seems to have given Wizards of the Coast the ability to do things like moderate, but also make people go, well, wait a second, you one side of the party can’t revoke the contract. Either this is a contract or it isn’t. What do you think about the use of the power of a contract in this way?

Joshua Lenon So I do think we have to look to more analogous types of contracts than publishing contracts. And that’s what’s weird here is it’s more like a terms of service when you go to like a website than it is an actual publishing contract that you might find under New York publishing law, which is where a lot of the standard publishing law comes from. And in doing so, it’s a contract of adhesion. Right. It’s not something that you get to negotiate and people are realizing that their hobby that they’ve relied upon under kind of a very loose set of permissions before is now something that might be a contract of adhesion. And they’re feeling very uncomfortable with the negotiating balance that comes from that. And unfortunately, we live under these contract of adhesions in almost everything we do. Right. I would say that we visit the website that we’re using to record this podcast right now, our transportation, our cell phones, our communications, everything is a contract of adhesion. And so seeing that kind of contract and lack of negotiating authority be pushed down into a beloved hobby is, I think, unfortunate for those people who are now feeling like they’re going to be bound by it. But I do think that the IP rights to this content allow this type of push forward under contract law, and that’s something that we have to accept and move forward on. Cory Doctorow actually came out with a really interesting set of blog post around this where he said that almost every platform because of the demand for revenue, will go through a very objectionable term that he put forward. So are we allowed to swear on this one?

Mike Whelan You know, the editors are going to let us know.

Joshua Lenon I’m not a big swearing person when it comes to recording media. But Cory Doctorow called it the in-s**tification of platforms where the demands for more and more revenue will eventually lead to a platform becoming either bland or reductive or extractive like we’re seeing here. And it’s up to the people who use that platform to decide how they’re going to proceed. Are they going to stick with that platform or move to something else? And I think we are seeing a bifurcation of the gaming community to take a look at third-party publishers. What are they doing to foster community? And comparing that against the juggernaut that is Dungeons and Dragons as a brand and now as a monetary system for a giant corporation.

Mike Whelan Yeah. Bob, I want to close with you. As you know, all of you have bona fides, both as lawyers and also as fans. And you and I had a conversation previously about the power of this contract to create fandom, to create a community. And now we’re sort of seeing the opposite the power of a contract to kill fandom, to kill community. As you are talking to the listeners of this podcast, the watchers of the show who are drafting attorneys thinking about contract as a weapon as opposed to contract as a lure. How are you thinking about the way Wizards of the Coast have done this? What do you see in this for the future of contracting and how we’re thinking about contracts? Can we realistically continue to use contracts to create community or is it the Batman line, you know, hero lives long enough to become the villain. Did this contract, did the company just last long enough eventually, we were going to make a villain contract.

Bob Tarantino Yeah, I think that’s a really interesting way of looking at it. I mean, look, you have to if you are going to release content on an open basis, you have to be really committed to being open and you have to be really committed to giving up control and you’re going to be put in uncomfortable situations where people are going to take your stuff and use it in ways that you don’t like and perhaps find, you know, reprehensible. But I think, as you’ve said, it’s an opportunity or it’s an illustration of how a contract isn’t necessarily just a contract, right? It’s not necessarily just a legal document that only the lawyers care about. Contracts can become sites of public discussion and debate and engagement, and they can be instruments for creating community. Can they still do that in the wake of this? Absolutely. I’m sure that the ORC license when it comes out is going to be one of those types of instruments. So the real question, I think, for people who are creating contracts were drafting contracts and implementing them is what are you as an organization or as a business or as an entity or as an individual, what are your commitments? Right? Like, what are your commitments on a moral basis, on an ethical basis? How do you want to act in the marketplace and how do you want to be perceived in the marketplace? And then you draft in light of that, right? So, you know, there’s no, there’s nothing to be gained by having a good sort of, you know, game and talking like game in the sense of like rhetoric or discourse and talking about being open and talking about, you know, wanting to foster creativity and then implementing a contract which locks everything down and monetizes it and dictates and, you know, restricts. You have to make sure that your contracting aligns with your commitments. So hopefully this gives and look, as you said, Mike, like that in and of itself, there’s really nothing wrong with WotC or Hasbro or any other owner deciding to change course and saying, you know what, we want to be more restrictive. We have quarterly shareholder reports that we need to make targets on. And the only way we can do that is by extracting every penny out of our content. Like in the abstract, that’s up to each company. Right? But it’s making sure that you’ve figured out what it is you’re trying to accomplish, what it is you want to do, who it is you want to be, and then drafting in light of that and in a way that, you know, advances that set of commitments in a way that people can see transparently and say, yup, everything’s lining up here and like, these are my people.

Mike Whelan Hmm. Super interesting how the lawyers are part of the marketing experience, right? That the lawyers have to capture the ethos of the company. I appreciate the three of you. These were the three ideal nerds to bring on. You guys can argue over who’s the warrior, who’s the wizard, and who’s the cleric. Are those three categories? I don’t know. But you guys can argue over who’s who. Joshua, Bob, Nancy, I appreciate you all coming on. For those of you who are watching or listening, if you want to be a guest on the Contract Teardown show and tear down contracts as we do just email us where it community@lawinsider.com, and you’ll find notes about this episode, including a link to our previous episode with Bob over at LawInsider.com/Resources. Thank you all. We’ll see you again next time.

Bob Tarantino Thank you.

Tags: Commercial Contracts, Wizards of the Coast, Open Gaming License

Contributors

Bob Tarantino
Lawyer, Dentons
Mike Whelan
Chief Community Officer

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