[Editor's note: This is a guest post by Thayer Preece, an associate at Silicon Valley law firm Sheppard Mullin, where she is part of the Intellectual Property group. The post was previously published at a Sheppard Mullin blog, Law of the Level.]

The rise of social games has changed the face of the gaming industry in countless ways. With lower barriers to entry than traditional game development, new titles are launching essentially non-stop, not only from larger companies, but from a multitude of start-ups as well.

As a game developer, you are creating a product that you believe is innovative and compelling. But how do you make your game stand out in this throng―and how do you protect yourself against the horde that will try to ride on your success? By using trademarks effectively to promote and protect your brands.

Ingredients for a Strong Trademark

Naming a new game can be a challenge. You want a name that stands out and draws players in, but you also want to tell potential new players something about the game you’re offering. One of the main problems that many developers encounter stems from this second desire—descriptiveness.

The strength of a trademark (its ability to identify the source of goods or services), is measured on a sliding scale, with generic words (“cake”) on one end, and purely fanciful marks, that is, words that have no inherent meaning, (“cakiala”) on the other. Generic words can’t be protected on their own as trademarks. Fanciful marks and arbitrary marks (words that have no relation to the goods on which they’re used) are the strongest trademarks.

In between these two extremes are the categories where most social game titles fall—descriptive and suggestive marks. The line between these two categories is pretty blurry. Descriptive marks, as the name suggests, describe a quality or characteristic of the goods. Suggestive marks, on the other hand, do not outright describe a quality of the goods, but merely suggest it.

Hypothetical example—PastryPlay is a successful new social game developer using its first rounds of funding to create a game where players plant and grow delicious magical cupcake plants.  A descriptive name for this game might be “Cupcake Farm.” The name describes exactly what the content of the game is.  In contrast, a suggestive name could be “Sprinkle Harvest.” The name evokes the content of the game without expressly describing it.

So why should you care whether your mark is descriptive or suggestive?  Because suggestive marks are considered inherently distinctive and therefore automatically entitled to trademark protection. On the other hand, descriptive marks do not, on their own, merit full trademark protection. Only once a descriptive mark has been used and advertised extensively, so that it serves to identify that one specific game, can it get full trademark protection.

When a social game is published, it is instantly viewable by millions of potential players—and countless competitors. If a game is successful, chances are it will breed imitations. In the example above, PastryPlay can’t stop its competitors from coming out with their own cupcake-farming games. And because the terms “cupcake” and “farm” simply describe the content of the game, PastryPlay can’t prevent other developers from using those words in their game titles. Social gaming giant PlaySweet can then sweep in with its newest title “Cupcake Ranch,” and there’s nothing that PastryPlay can do to stop it. If PastryPlay had chosen a suggestive name, on the other hand, they would be in a good position to challenge anyone who used a confusingly similar title for another social game.

Sifting through the Competition

Once your company has chosen several potential names for your new game, it’s time to find out if you are the first person to use that trademark. In the United States, trademark rights are based on first use in commerce, so if someone has used anything confusingly similar to your potential name before you for related products, you could be in trouble.

Searching for prior trademark use is an absolutely necessary part of the branding process. Performing a trademark search before a game title (or other company name or product, for that matter) is adopted is exponentially less expensive—and annoying—than fighting a legal battle over your title at some point in the future. This is why you want to choose several potential names for a new game—it is entirely possible that you may be blocked from using one of the names by a prior use, particularly with the huge number of social games that are already on the market.

The searching stage is where you want to get your trademark attorney involved. It may seem simple to perform some quick Internet searches to find any really obvious obstacles, but a trademark attorney brings a couple of desirable qualities into play—knowledge of search techniques for a wide range of sources, including trademark databases, and the experience to know which search results are likely to cause conflicts.

In the social game space in particular, because the barriers to entry are so low, there are an incredibly large number of games out on the market. While many of these games are not huge success stories, and may have a limited number of players, trademark law doesn’t care how many monthly active users you have—only who used the mark first.

Suppose that PastryPlay didn’t perform any trademark searches before adopting the game title “Sprinkle Harvest.” The game is released, and thanks to creative genius, effective marketing, and word of mouth, it’s a huge success, with over a million monthly active users in just a few weeks. Unfortunately for PastryPlay, Bill Baker, a retired software engineer, coding in his spare time, had published a similar game called “Sprinkle Harvester” about a month before. His game isn’t as sophisticated or popular. He only has about 2,000 monthly active users. But if he files a lawsuit, he could force PastryPlay to change the name it has spent so much time and money promoting, and he could also be entitled to a lot of money in damages.

Prepare in Advance

The good news is that there are ways to protect your new game title before the game is published. The United States Patent and Trademark Office allows you to file an Intent-to-Use (“ITU”) trademark application. Essentially, this application allows you to reserve your rights in a trademark that you plan to use. Protection for ITU trademarks dates back to the moment the application was filed.

Let’s re-visit our prior situation, but with slightly different facts. PastryPlay settles on the name “Sprinkle Harvest” about halfway through its development process and immediately files an ITU trademark application for the title. Shortly after PastryPlay files its application, Bill Baker releases his “Sprinkle Harvester” game. PastryPlay then releases “Sprinkle Harvest” about a month later. In this scenario, PastryPlay is now in control, with the basis to claim trademark infringement against anyone using the name after its trademark application date, including Bill Baker, who will likely have to change his game title. And, because PastryPlay’s application was on record, and Bill had a duty to search trademark records before adopting his mark, he may now have to pay a higher amount in damages than if PastryPlay had simply used the mark first.

As you can see from this example, the filing date of an ITU application is incredibly important. By being proactive about your trademarks, you can gain the right to prevent future developers from using any titles that are confusingly similar to your own. The date from which you can first establish trademark rights could prove to be the difference between maintaining the goodwill of your brand or losing your investment.

You Have Your Cake. Now Eat it, Too.

Having trademark rights is all well and good, but you don’t maximize the benefit from having those rights unless you enforce them. Enforcement is an integral part of both maintaining your legal rights in a mark and retaining the distinctiveness of your brand.

The first step of enforcement is keeping an eye out for infringing uses. If someone on your team notices a game with a similar name, send it to your trademark attorney to find out if it’s going to be a problem. You can run periodic searches of social game platforms, or have your attorney do it for you. Your attorney can also order watching services that will monitor new trademark filings, both in the United States and abroad, in order to identify potential new threats as quickly as possible.

Once a potentially infringing use has been identified, you need to address it. The most typical way to do that is to have your attorney research the situation, then send a cease and desist letter if appropriate. Ideally the letter will lead to a quick resolution, but in some cases, further legal action may be necessary.

Back to the delicious dealings of PastryPlay—Fiona Frosting is an artist working on Sprinkle Harvest. While surfing the Internet one night, she discovers the infringing Sprinkle Harvester game and notifies PastryPlay’s CEO. The CEO decides that because the infringing game is so small, he will just ignore it. This leads to a couple of potential problems—

First, PastryPlay does decide to go after a more popular, nautical-cupcake game called “Sprinkle Harbor.” The makers of Sprinkle Harbor point to Bill Baker’s Sprinkle Harvester game as evidence that PastryPlay’s trademark lacks distinctiveness, and that coexistence should be possible, since Sprinkle Harvest is already coexisting with a more similar mark. This could cause complications if PastryPlay tries to bring a lawsuit, and almost certainly puts it in a weaker position when negotiating a settlement.

In a second scenario, PastryPlay has ignored the Sprinkle Harvester game until seven years later. During that time, Sprinkle Harvester was acquired by industry giant PlaySweet, which upgraded its graphics, and launched a massive marketing campaign. Now an active competitor, PastryPlay decides to sue. But PastryPlay has waited too long. PlaySweet is able to mount defenses based on implied consent, laches, and the statute of limitations for trademark claims, and it is now too late for PastryPlay to protect its brand.

As a developer, your game titles are one of your most valuable assets. The value in your titles comes from their ability to identify your game. The more competitors there are in the market with similar names, the less your title serves as a unique identifier. As a result, it’s vital to address any infringement in order to maintain that value.

Sweet Satisfaction

Trademarks are one of those areas where handling things properly from the beginning can save a lot of trouble and heartache down the road. There is no substitute for getting trademark advice directly from your attorney, but hopefully this article has given you a basic recipe to keep in mind while cooking up your game brands.

[Editor's note: This is a guest post by Nicholas Talarico, former social games director at Sibblingz and director of publisher development at Offerpal Media. He is currently working on a stealthy social media & social gaming-focused company. The below article builds on an answer provided by Talarico on Quora.]

Social gaming companies have long been interested in monetizing international markets. While developing nations are part of that picture, they pose additional challenges and should be considered separate from developed markets, in which the quickest way to move the revenue dial is often to simply integrate the most adopted local online payment method.

While lack of adopted payment methods is an issue in the developing world, discretionary spending power is the key concern. To compensate for this, some developers have tried offering more favorable exchange rates for those locales. This exchange rate, based on the game’s existing rate, can be calculated with a simple formula that includes per capita GDP, internet penetration, and some guess work. This method poses significant economic risk, however, for two main reasons.

First, the increased currency source for that set of IPs will cause make economic measurement more difficult, because it becomes tough to separate this planned source from other, mismanaged sources. When game economies become difficult to measure, key revenue decisions are more difficult to make, which is detrimental or devastating in this fast-paced games-as-service environment.

The second – and probably more important – risk with altered exchange rates in developing countries is that some users from developed nations with higher spending power will invariably proxy into the IPs with favorable exchange rates for increased “earning” power. This may tilt the game’s economy out of control.

As a result, very few developers employ the tactic of favorable exchange rates in the developing world.

It is possible, however, to do this if the favorable exchange rate is tied to a method rather than to an IP. For example, if a user needs a Filipino cell phone to successfully complete a transaction for virtual currency, the game developer can more safely bet that said user isn’t proxying into a Filipino IP from Germany for a preferred exchange rate. I’ve begun testing this method with significant success and optimization to follow.

Game Localization, and Culturally-Relevant Content

While I was at Offerpal, a director of monetization for a top-5 social games firm remarked to me that rather than optimizing across payment providers or grinding for higher revshare, he discovered that strategic virtual merchandising and inventory management is more powerful to sustainably increase revenues. I was surprised that this was an epiphany, but many social game companies are still determining best practices when it comes to monetization.

As game developers and content managers, our most fundamental revenue responsibility is to maintain high demand for our virtual currencies. We can do this through diligent measurement of our economies and virtual inventories, as well as simply staying on top of consumer trends in the “real” world and applying them to our game commerce. We’ve seen this time and time again with holiday-themed virtual goods (think jack-o-lanterns in Barn Buddy or Fourth of July-themed items in Mafia Wars).

This should also be applied to developing nations, too, and can be IP-targeted. Christmas-themed goods, for example, play well in the US, but may not in India, where Diwali-themed goods may be better. Know your users, where they come from, what their likely behaviors will be, and what they like to do/buy. It might seem logical to get this information from Wikipedia or a book, but we’re talking about the smallest of cultural nuances; many of the top firms have opted to partner with people or companies from that specific culture.

Along with complete game localization, payments coverage (both direct payment and alternative payment) is essential to monetizing international markets and the developing world. Below, I explore various strategies for both direct pay and altpay.

AltPay Coverage

We all know that there are a number of qualified alternative payment platforms available through quick and free integration: Offerpal, Super Rewards, Gambit, Peanut Labs, TrialPay, Ultrawall, and more. We’re all tempted to test each of these against one another, and my mantra has always been to test everything and leverage competition for better treatment.

I have and probably will continue to test providers against one another. But I recommend doing so only with a UID-based AB test (for example: odd numbers see Ultrawall and even numbers see Gambit), and I always flip the buckets after a few days — a couple of whales can inaccurately tip the test. It has to be pointed out, however, that testing providers can be very bad for the industry.

Let’s say I’m a Lucky Train player and I prefer CPA offers as my means to acquire LuckyBucks. We’ll pretend that A Bit Lucky (Lucky Train’s developer) is ABing Offerpal against Super Rewards. I, as a user, first see Offerpal on Monday. I sign up for Netflix in exchange for 100 LuckyBucks. On Tuesday, I go back to Lucky Train’s ‘Points’ page and Offerpal is still the provider showing. I try to sign up for Netflix again, but Offerpal’s system knows I’ve already signed up for Netflix and won’t allow me to do so. Netflix avoids a bad lead and advertiser payout rates are preserved.

On Wednesday, however, I go to Lucky Train’s ‘Points’ page and, as part of their test, A Bit Lucky is now showing me Super Rewards. I click on Netflix and because Super Rewards doesn’t have the historical data that I’ve already completed this offer, I’m allowed to continue and earn my virtual currency. However, at month’s end, Netflix sees that this is a poor lead and issues chargebacks and scrubs rates. I, the user, got my virtual currency but somebody (Netflix, Super Rewards, or A Bit Lucky) isn’t going to get paid – and that’s usually passed down to the developer. It’s bad for the industry. We’re all part of this insane growth and we should protect it as such.

Here are some of the specific offer types:

CPA, CPI, CPV, etc.

CP_ (cost per: Action/Acquisition, Install, View) has become a proven method of alternative payments over the past 3 years, especially in the developed world where marketing budgets are focused and where online marketing is king. However, some CP_ offers are available for developing markets. CPI, specifically (when the paying action of an offer is the install of another game or app), is often available to all users, regardless of which country they come from. Payouts are typically low (due to poor quality installs), but CPI offers are free and easy for anyone, so the volume can make up for lower payouts.

Surveys

Surveys, like CP_ campaigns, have their largest budgets in the developed world. However, marketing for many products is growing in the developing world and corresponding market research is needed. Peanut Labs, the market leader in surveys, has increased its international (and developing world) survey reach in the past 6-12 months, which has helped their international monetization significantly. Surveys are free and are available to whoever they’re targeted (based on user demo data).

Tasks

Micro-tasks in exchange for virtual currency is a near-global monetization option, and I anticipate that as UIs and presentations improve, this method will become a more viable part of the virtual currency ecosystem. Gambit already partners with Crowdflower, and Offerpal has Mechanical Turk Tasks on its platform. That said, there’s a lot of work that needs to be done. Re-engagement and re-targeting by the micro-task companies is weak, and inventory is a big issue.

BringIt

A new player on the scene, BringIt acts as both a source and a sink in game economies. That means that users can both gain and lose virtual currency within the BringIt environment. The platform allows users to “bet” a game’s virtual currency on themed mini-games within the game frame. The product is yet to be fully localized or translated, but is free for users (it costs them virtual currency, which acts as the sink) and is available to anyone.

Direct Pay — Coverage and Optimization

As it relates to developing markets as well as overall international coverage, having all the right direct payment methods is key. Aside from payment platforms like Playspan, Allopass, and Moneybookers, the two leading altpay and direct pay monetization suites, Offerpal and Super Rewards, have a large number of direct payment methods to complement their altpay focus. Each supports over 100 international payment methods either through direct integration or through “deep links” from an aggregation partner. Many of these methods are promoted in developing countries.

What hasn’t yet been nailed, however, is historic targeting. It’s good to start a user off with all methods available to them for their country (altpay and direct pay). However, as time passes and transaction data accrues, users should be shown payment methods more strategically. Otherwise, clutter and distraction can become overwhelming, negatively impacting conversions.

As an example, consider an Italian user who has come to an app’s ‘Points’ page every three days for 3 months to buy or earn currency. Initially, the user did a few incented CPI offers (installing another app in exchange for the current app’s currency), then they began doing PayPal transactions routinely for the past 10 weeks. The user has clearly adopted their preferred payment mechanism. They no longer need to be shown all the other options. A collapsible UI that holds PayPal in a frame above a few simple offers would likely be the optimal scenario for improved conversions for this user and others in the same bucket.

Overall, users should be bucketed according to past behavior and more granular tests (price points, default package selection, etc.) should be run on each bucket. It’s work, but I’ve seen as much as 50 percent lift if this is done properly.

Mobile Coverage Doesn’t Mean Mobile Conversions

It’s no secret that mobile payments are the preferred, adopted form of payment in many international markets. The extent to which the mobile payment companies (Zong, Allopass, Boku) have gained international coverage in the past couple of years is staggering. It wasn’t long ago that US coverage was “coming soon.” However, coverage doesn’t lead to transactions if the UI isn’t right. Much of the time, users are unaware that they can pay via mobile (in their country). In other cases, users need a nudge that many of the payment companies aren’t successfully giving them. Over the past few months, I’ve experimented with various presentation strategies on this matter with very clear (and in some cases dramatic) increases in conversions and revenue.

Having the method is only part of the battle, and that goes for any method – not just mobile.

Summary

Discretionary spending power plus availability of locally-adopted payment methods equal increased transactions and revenue.

In countries where one, the other, or both don’t exist, developers should dig deeper and get creative for solutions. Having looked at the numbers backward, forward, and sideways for the past few years, this is easy for me to say. However, making the right moves often means real improvements in conversions and transaction sizes.

Overall, there’s a ton of opportunity to sustainably monetize international and developing markets, and if educated and committed, it can be a very profitable exercise.