I haven't had a very good relationship with IP law. My 2 favorite childhood game franchises - Descent and Freespace, were thrown into IP limbo after Interplay shot itself in the foot too many times and finally fell over. As a result, I have come to utterly despise the common practice of publishers simply taking the IP of the developers for themselves, and in a more broad sense, forcing artists to give up their ownership on everything they make for a company. This becomes especially painful when they aren't just making silly UI art, but creating a universe filled with lore and character and spirit, only to watch corporate meddling turn their idea into a wretched, free-to-play money-grubbing disaster.
What can the artist do? Exactly nothing. Under current IP law, the company usually owns all rights to everything the artist does for them, no matter what. If it doesn't, it's because the company screwed up its legal contracts, which is dangerous for both you and the company. There is essentially no middle ground. That means an artist can't sue the company for screwing up their idea, because it isn't their idea anymore. They can't take it to another studio or even work on their own idea without permission from the company. It makes about as much sense as a company saying they own the rights to your startup idea because you came up with it at work one day and wrote a prototype during break. That isn't just hypothetical, either, it's a disturbingly common problem.
This is not beneficial to companies, either. Artists are increasingly aware of how little control they have over their own work. A paranoid artist who gets a great idea will be unwilling to tell anyone at the company about it until after they've been working on it in secret, distracting them from what they're supposed to be working on and making them uncomfortable and stressed. They'll worry about what will happen if they try to take the idea somewhere else and no one likes it. They could lose their only job. But if they tell anyone about the idea inside their current company, they risk losing all rights to it and then having the company decide it doesn't like the idea and burying it forever, killing the artists brainchild without any hope of resuscitation. What's worse is that an artist is just about as far from a lawyer as you can get - they have absolutely no idea how any of this stuff works and what they can or cannot do, so they tend to either screw up immediately and lose all rights to their idea or tell no one about it, ever. Your company will essentially lose an employee for months as they succumb to stress, and you might never even know about their idea because they're too paranoid about you stealing it.
So what would good handling of IP be? A more fair agreement would give the company nonexclusive rights to use ideas the artist comes up with. The company only maintains nonexclusive rights to partially or completed work the artist created while employed at the company if the artist decides to quit, not the idea itself. It can even attempt to finish partially completed work, but the artist still retains the right to take his idea elsewhere. This is a compromise between ensuring a company can use everything an artist makes for them while employed without restriction, and ensuring that the artist can still walk out with his idea and bring it to life on his own or at another company. For game development companies, there would clearly need to be a clause protecting the companies right to finish a project if the lead designer leaves.
It seems reasonable to approximate this by assigning permanent nonexclusive rights to the company instead of exclusive rights, but things get complicated very quickly. If you don't own all the rights to a copyrighted material, you can get sued if you modify the original even if you have permission to use it. It's possible such situations could also occur with IP assignments, especially when you are specifically allocating certain nonexclusive rights in certain circumstances but not in others, or revoking certain rights upon termination. If an artist leaves a company in the middle of making a game, they shouldn't be able to sue the resulting game because it used their old art, or even created new art based off their old art. Likewise, a company shouldn't be able to sue an artist if they leave and create a game on their own using their idea even if the company had already released a game based on it. How one would achieve this, I have no idea. It gets even murkier when an idea is the collaborative effort of multiple people. Who owns what part? If one person leaves, the company must still retain the right to use his ideas and ideas based off his ideas, and he should only retain the right to use his own ideas, but not everyone else's ideas or ideas based off everyone else's ideas. What happens when they live in another country?
Because of the vast complexity of this issue, most companies say "fuck it" and simply assign all rights to themselves. This is standard advice from lawyers. The mentality is that you don't have time to worry about silly little legal issues with artists. The problem is that it erodes artists' rights, which are already disturbingly emancipated. This is unacceptable.
I'm not a lawyer. I don't know how to fix this. I don't know if it can be fixed. I don't even know how to properly assign IP to my own company or write a contract. All I know is that artists are getting screwed over because IP law makes everyone an asshole.
Obligatory legal crap: The information provided in this blog is not intended as legal advice.