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This article has been written by Karthik Venkataraman, a student of NALSAR, Hyderabad.

Introduction

Although excessive regulation is frowned upon by many, certain activities need government intervention in the form of legislation, to ensure the rights of the interested and effected parties are protected. The more an activity attracts people, the more there are chances of conflict and disputes. If the activity is of the kind which involves human intellect, possessory rights over such creation is inevitable. One of the recent trends which has raised IP concern is eSports and the underlying softwares of the games.

eSport is a competition between people by means of computer or video games of different genres (e.g., real time strategy games, ego-shooters, or sports simulations). eSports had 323 million viewers in 2016, and shot up to 385.5 million viewers.[1]  

The International Olympics Committee has recently announced that eSports or video games can be recognised as a sporting activity.[2] eSports has had a tremendous growth in the recent years and has created a huge market for media outlets and game producers.  But the other side of the debate is whether eSports can actually be considered as a sport. The relevant issue in this paper would be about the implications Intellectual property on eSports.

In this paper, the author attempts to analyse the eSports industry and the interaction of this industry with intellectual property. The first section of the analysis has compared eSports with regular sports to understand the nuances of them for a better application of copyright law. The comparison involves the analyses of how IP plays out differently in sports and in eSports. The next section deals with game modifications, which is to understand the clash between the player and the creator over copyright claims over these modifications. The analysis also covers a brief section to bring to light the legal trends in other jurisdictions on the recognition of eSports in copyright laws. The final section deals with an IP apart from copyright that could persist in video games- trademarks.

Analysis

There are some proponents of IPR regime for eSports who want the protection after drawing comparisons between normal sports with eSports. They claim that since there are protections available for sports, that could be enough of a reason to award such a protection to eSports. This line of argument would not stand and eSports would lose a protection, which it needs. In the following section would analyse this argument of the proponents who equate eSports with Sports.

Sports v. eSports

There are many similarities between eSport and sport if looked carefully- both require skill, training, technique and judgement. Both of them are very competitive, they get the fans very involved in, both in an emotional and passionate way. Both have a lot of major events scheduled every year.

These aforementioned similarities, however, do not go too far while making an argument for granting protection to eSports. There are multiple core differences which persist between the two. There is a complex regulatory system under which the sports industry operates. There is a lot of internal and external regulation in this industry apart from the carefully protected rules of the sport. In sport, the events and the partners are granted the “official” status. This even includes the game developers of eSports. This is done to establish control over the representation of the game. The core aspect of a sport is its rules and they are carefully developed over the years. On the other hand, eSport has evolved on the basis of youth culture and the market trends, since eSports mostly attracts young people. This usually contradicts with the established order of sport. The main attraction of eSport is because of its pure entertainment factor. As eSports protect the format of the game and its characters through copyright laws in some countries, the regulation of rules has become less important and is sometimes wholly irrelevant. A popular example of this maybe that of the newly released FIFA 19, where Electronic Arts (the game developers) broadened the scope of the game by involving new features which are blatantly against the core rules of FIFA.[3] One of the modes allows the players to not worry about the basic rules such as bad tackles or hand balls, this comes under the survival mode of FIFA 19. This is a perfect example of eSport not considering the core rules of the game.[4]

Another important difference is that sport mostly always grows with time. On the other hand, sometimes eSports have a phase in which they are popular. They are in the nature of a trend or a fad.

Sports and Intellectual Property

With respect to Copyright Law, Sports Performance is not the same as a musical performance or a dramatic performance. The depiction of Sports Performance in media coverage such as TV or Online streams does involve Intellectual property rights in various jurisdictions. In the year 2000, Active Rights Management was in deliberation with the International Olympics Committee to extend the ownership of sports performance representations into the digital representations.[5]

In dealing with the cases of Football Association Premier League v. QC Leisure and Karen Murphy v. Media Protection Services Limited, the European Court of Justice concluded that “Sports events such as football matches cannot be considered intellectual creations or works and so cannot be protected by the Copyright laws.”  However, the Court noted in its obiter that sports events can also have exclusive and authentic aspect that could make them worthy of protection. The European Union held that it should be the decision of the Member States whether or not to give recognition of these rights and majority of the States have not done so yet.

The debate over the Intellectual Property Rights has significantly expanded due to the increase in the revenue from Sports and the media sector. Sportsmen are trying to secure rights over what they think is a legitimate price for the efforts and skills that are put in. All these hurdles have now entered a completely new aspect of rights with the rise in eSports. The people behind eSports such as game developers, publishers, content makers, and players all wanting an equal footing with the normal Sports.

eSports and Intellectual Property

The creators of video games do not design a scripted single experience, but an interactive system. The protection of video games under copyright law is only to those authorships which do resemble non-interactive works.[6] Today, the creators benefit from the labour of some player’s authorial creativity. Copyright law insufficiently protects the authorship of the players by routing the economic benefits towards the platform owners rather than players. Chris Crawford, who was the first notable game developers who also theorized on the art of computer game design in 1984,[7] aspired to develop an aesthetic theory of designing video games in response to skeptics who called them to be too trivial to be called art. He criticized video games for not meeting the standards of visual, literary and musical art, since traditional games are usually not understood as art, but aimed for this to change.[8] However, video games are not the same as traditional one, since the game rules in the former are encoded into software.[9] Titles of the video games are sold as replicated copies of information and marketed just like books and films.

When it comes to the common practice in the industry, it is the United States which becomes an exemplar and hence game companies from across the world try to comply with their law when developing any title. Even though there are jurisdictional limitations to the laws, copyright laws in many countries were inspired by the United States.[10]

eSports disturb the complex equation between sport and Intellectual Property in the following two ways:[11]

  1. There is a huge gap between the legal protection which is available to eSports and Sports. There might be laws that identify Intellectual Property in the virtual eSports, whereas it might not do the same in sports events, since a sports performance would not be considered as a copyright work. In the case of eSports there is creative work involved in developing the game and eSports can be protected due to these reasons.  If sports performances are not covered by generic rights, there is really nothing that can stop the eSports makers from replicating the same. This causes a lot of confusion in the debate between recognising eSports under IP law while not recognising sports in general.
  2. Secondly, eSports may involve huge reputational hazards for sport. Sportspersons are usually looked upon for inspiration and are role models for millions across the globe by indulging in fair play. Sports Governance aims to keep up this value system. Therefore, to compare the two formats would be in vain, since they differ with each other in many ways. By drawing comparisons, the already complex application of IPR to eSports, would get further complex.

https://lawsikho.com/course/diploma-intellectual-property-media-entertainment-laws

The interaction between eSports and intellectual property can be analysed on two levels. First, the need for legislative intervention due to the increase in eSports and the underlying IP involved in developing the game. Second, the existing methods in which game developers try to protect their IP and the failure of these methods.

Outlining the scope of protection under copyright is important in any litigation and the scope of an IP right is akin to the metes and bounds of any real property.[12] While doing this, courts make comparisons across media for similarities, like- novels are compared to film adaptation. However, video games are inchoate media, since no two players play it in the same manner. The software code, underlying the game is its unchanging core and jurists concluded that this code should be protected as “literary work” under copyright law.[13] However, this did make things simpler. It is still difficult for average lawyers and judges to differentiate between a creative code and a routine and functional code, without expert testimony. Therefore, in cases where the code has been not copied verbatim, the game’s performance was more accessible to the jurist than the code itself, even though the performance varied for all players. Therefore, while comparing two works, it was a struggle to discern the work of the player from the interaction of the player with the interface of the video game.[14]

“Game Modding”

The gaming industry has gained a significant traction in the decentralized form of content creation, which gives leverage to the creativity of the players. The players are increasingly involved in not only consumption [playing the game] but also the creation and production of content. This practice of creating content for games is referred to as “game modding” in general parlance, derived from ‘computer game modifications’ [game mods].[15]

The question that arises now is whether and to what extent can player-made game mods constitute as original expression, in which copyright may subsist in accordance to the law. Further, it should also be considered whether the rights in game mods may be independent of the copyright in the original computer game.[16]

There is a practice of acquiring rights in player-made creations through assignment or license clauses included in the standard terms associated with a computer game, i.e. the End User License Agreement [EULA]. This contractual practice is usually termed as standard form contracts and can lead to unfair contractual terms. However, apart from certain contract laws issues, this practice also raises certain IPR issues.

For the protection, under copyright law, of the end-products of “game-modding” the requirements they are subjected to are the same as any other subject matter. Hence, only those player-contributions are protected by copyright law if they constitute the own intellectual creation of the author, i.e. original work. In light of this, there are many versions of creations through game-modding like gameplay levels and in-game avatars that can reach the protection threshold under copyright light. However, this protection depends on each country’s legislative recognition and practices.[17] 

The players of eSports usually prefer using their original elements like skins in a video game. Skin can be defined as a “graphic or audio file, which can be used to change the appearance of the user interface to a program or a game character, weapons and other elements shown in the video game.”[18]

But the issue here is that the competitor can only use such skins upon getting the usage rights. They might not be allowed to use any third-party IP rights before getting the owner’s permission to use the same. Sometimes the usage of such skins might also lead to violating the privacy rights of someone.[19]

Cheat bots have caused a lot of debate in the field of competition law and Intellectual Property Rights. It is defined as a “software that autonomously processes certain tasks in a computer game.” They are used in order to improve the skills of certain game characters while wasting time and indulging in activities that require very less energy.[20]

One of the successful games of all time generating $ 1 million a day just on mobile devices is Fortnite Battle Royale by Epic Games. The game does not have advertisements, but it relies only on in-game purchases to generate revenue, where the players have to customize their “skins”- the appearance of their avatars. However, the real reason and legacy behind this game’s success is believed to be its impact on user-generated video game mods and the resulting IP disputes.[21]

Neither are game mods new nor is litigation around them. In the 1980s, owners of Pac-Man machines purchased enhancements kits for their machines which could modify the software to make the game more challenging for the experienced players. However, when these unlicensed kits were being promoted and sold by third-parties, there were trademark and copyright litigation which ensued.

Sometimes the modified version of a game becomes more successful than the original one, for instance Dota, which is a modified version of Warcraft III by Blizzard Entertainment. Players purchased Warcraft III so that they could play the mod, i.e. Dota. The concern that arises is when a player or a “modder”, without the permission of the developer, creates a standalone game, and this new game takes away market share from the original one.

In the case of World of Warcraft I, The German Federal Court of Justice extensively debated about the legal permissibility of the cheat bots. In this case, the defendant downloaded the client software of the petitioner and used the same to run the games developed by the plaintiff on their computers. The German Copyrights has provisions which speak about “authorized personnel shall be entitled, without the right owner’s authorization, to observe, to study or test the functioning of the said program to determine the ideas and principles which underlie any element of the program.” In the case of World Warcraft II, the German Federal Court of Justice decoded a case involving the question of the cheat bots’ sales for the sole purpose of using it in games and held it be illegal.

Giants in game development such as Blizzard are focusing on the commercial aspects of streaming the video games. They allow the gamers to stream content of their own performance free of cost. Another gaming company-Atlus- tried to protect its content of the game “Persona 5”, by threatening to file a suit against people who streamed this game. This was done to protect the storyline of the game “Persona 5” from being copied. But they had to take a step back and apologize to the gaming community due to the criticism received for their actions. This is an example of a case where even though the developers own certain patenting rights which they can very well enforce, they might still receive criticism from the gaming community, market and the consumers of these games.

Concerns in the intersection of mods and IP

The first concern is the use of the IP of a third party by the modder. The consequences of this are not uniform. It depends on the third party wanting to exercise the right of protection or not. For example, Major League Baseball enforced its right by pulling the plug on the David Ortiz mod in Fallout 4, claiming the use of the marks to be an infringement of their rights. If all third parties decide to follow suit, there could to be a complete halt of the creation of non-commercial modifications.[22]

The second concern, which is a major one, is when the question of the ownership of copyright over the modification arises. Whether it is with the creator of the mod or the creator of the game. Greg Lastowka argues that the former should hold the copyright.[23]

Legal Trends in Other Jurisdictions

Until as recently as 2015, game mods were considered illegal in the US and “modders” were arrested for violating the Digital Millennium Copyright Act (DMCA) facing prison terms to the likes for 5 years. The DMCA was enacted and brought into effect in 1998 and prohibited, inter alia, “circumvention of technology measures that control access to copyrighted works”.[24] These anti-circumvention provisions were put in place to prevent piracy of IP. The Librarian of Congress (of which the US Copyright Office is a part) has the authority to grant exemptions from these provisions is it is shown that “access-control technology has had a substantial adverse effect on the ability of people to make non-infringing uses of copyrighted works”.[25]

Upon a petition filed by the Electronic Frontier Foundation and a Harvard law School student before the Library of Congress, it proposed an exemption in the DMCA to permit circumvention, however, this exemption “would not apply to video games whose audiovisual content is primarily stored on the developer’s server, such as massive multiplayer online role-playing games”.[26]

Trademarks

Coming back to the differences between eSports and sports, there is another immediate one from the perspective of intellectual property. The organizations or teams in regular sports do get their logos, names or other associated brands trademarked. However, the sport being played in itself cannot be trademarked. On the other hand, the games being played in the eSport tournaments are almost entirely consisting of multiple forms of intellectual property.[27]

Although, the developers of the game are very often the sponsors of a tournament, but that is not the case all the time. This opens the floodgates to a host of IP concerns in deal with in the development, promotion and structure of such events not sponsored by the developers themselves.[28]

Another important area here is that of Trademark Sponsorship, this field is still in the developmental phase and has not become prominent yet. Providers of streaming services like ESPN, and a few non-streaming sites have already featured eSports on their platforms. But this is very little progress as many of the games are still not very popular among people. This also means that Trademark Sponsorship has still not reached its peak yet.

Gaming IDs, Team names and IP

Trademark is basically a brand name, it could possibly include word, name, symbol, device, or any combination which is used to identify and distinguish the services of one provider or seller from others in the same category, and is also used for the purpose of indicating the source of the service.[29]

The team names or gaming names are very important in the field of eSports since it is the only form of recognition available to players on the digital platform. Having said this, there have been several teams like EnVy, Liquid, Evil Geniuses and several others who have realised the importance of protecting their identity and have acquired trademark rights for their team names.[30] Jonathan Wendel is popular gamer who has acquired rights in order to safeguard his “FATAL1TY” gamer tag.[31]

eSports players have to participate in video game competitions to acquire rights of trademark in the US. It is important to get these trademark rights as they help in acquiring better sponsorship deals and funding for the players. Sponsors prefer teams that have acquired IP rights during any legal agreement.

The important factor which needs to be considered involved in securing the trademark rights is that the person who is establishing the trademark on his/her name should ensure that the team name or the gamer ID is not already in use in the Esports by another user.

In the Tencent Game case, Riot Games filed a suit against Moonton Technology CEO, Xu Zenhua for copyright infringement of its subsidiary company Tencent Holdings. The respondents in this case are known for making the famous mobile game- Mobile Legends. Tencent won a massive amount of 19.4 million Chinese yuan (RMB) in the case. The suit was originally filed in California in the year of 2017. This suit was dismissed because of forum non conviens. Basically, it was not allowed as the jurisdiction did not fall in California but was supposed to be filed in China. Tencent is a company based out of China. In their lawsuit against Moonton on the basis of non-disclosure and non-compete agreements. According to the initial agreement Xu Zenhua, the CEO of Moonton was supposed to pay 2.6 million Chinese yuan to Tencent. But the court decided that this compensation was not correct and gave a new amount.

In the suit that was filed in California, Riot games claimed that Moonton had copied a lot of the software made by the petitioner’s and used it in their popular mobile game, Mobile Legends. Many of the features of the game Mobile Legends were very similar to that of League of Legends, a game developed by Tencent Holdings. There were several other games developed by Moonton which seemed to have copied characters from the League of Legends game, and these were mentioned in the arguments of Riot games.[32]

Conclusion

The presence of eSports in the media landscape of 21st century is quite widespread, but the discourse on their protection under copyright law is still complex. Earlier traditional doctrinal approach prohibited copyright protection in video games by arguing that player interactivity cannot be protected as copyright. However, as has been discussed in the paper, there is an increased level is authorial tools embedded into these games, thereby making it obvious that the software of video games can actually lead to diverse forms of authorship by the players. As has been the case till now, most players simply contribute to the game platforms by creating new modifications without an expectation of any monetary, legal and commercial rewards, that usually accompany copyrighted creations. 

Notwithstanding the above, there have been innumerable litigations and disputes since video games became mainstream and popular. This makes it indispensable that we have a legal framework in place to address and resolve the disputes. eSports is becoming rampantly popular is taking the form of a professional sport and not a mere hobby or addiction. In India too, eSports is gaining popularity with participation and tournaments being held on regularly. This means that there is enough player interaction for the possibility and already existing practice of player modifications and creations, thereby raising questions of copyright claim. The copyright law in India is inspired by the United States, but we do legitimize these “borrowings” through the legislative or judicial process.

We, therefore need to be prepared for litigations surrounding eSports and the persisting IP. As evidenced in the United States it is not a problem with an easy solution of application of law; rather it has been a very complex question which needs a lot of analysis, case-specific technological understanding for efficiently handling the disputes. Jurisdictional questions of the creator and the player need to be addressed for each case.

Endnotes

[1] Roman Brtka, “Intellectual Property in the World of eSports”, Available at: https://www.ipwatchdog.com/2018/04/02/intellectual-property-esports/id=95245/.

[2] Isaac Rabicoff and Kenneth Matuszewski, “The Rise of eSports creates a Complicated Relationship with IP”, https://www.ipwatchdog.com/2017/03/25/rise-esports-complicated-ip/id=79418/.

[3] Stephen Townley and Annie Townley, “eSport: Everything to Play for”, WIPO Magazine, February 2018, Available at: http://www.wipo.int/wipo_magazine/en/2018/01/article_0004.html.

[4] Brianna Howard, “Protecting Intellectual Property rights in the billion-dollar world of virtual gaming”; Available at: https://techcrunch.com/2018/01/23/protecting-intellectual-property-rights-in-the-billion-dollar-world-of-virtual-gaming/.

[5] Brianna Howard, “Protecting Intellectual Property rights in the billion-dollar world of virtual gaming”; Available at: https://techcrunch.com/2018/01/23/protecting-intellectual-property-rights-in-the-billion-dollar-world-of-virtual-gaming/.

[6] Greg Lastowka, Copyright Law and Video Games: A Brief History of an Interactive Medium.

[7] Chris Crawford, The Art of Computer Design: Reflections of a Master Game Designer.

[8] Supra n. 7.

[9] Supra n. 6.

[10] Ibid.

[11] Scarinci Hollenbeck, “As Market Continues to Boom, IP Protection in eSports becomes more Prevalent”, June 2017, Available at: https://scarincihollenbeck.com/law-firm-insights/intellectual-property/ip-protection/ip-protection-in-esports/.

[12] Greg Lastowka, Copyright Law and Video Games: A Brief History of an Interactive Medium.

[13] Mortensen, Torill Elvira (2009) Perceiving Play: The Art and Study of Computer Games. New York: Peter Lang.

[14] McGonigal, Jane (2011) Reality Is Broken: Why Games Make Us Better and How They Can Change the World. New York: Penguin Press.

[15] Christopher Pearson, The IP Implications of Video Game Mods, 29 February 2016, NYU Journal of Intellectual Property & Entertainment Law, Available at: https://blog.jipel.law.nyu.edu/2016/02/the-ip-implications-of-video-game-mods/.

[16] Ibid.

[17] Postigo, Hector (2008) ‘Video Game Appropriation through Modifications’, Convergence: The International Journal of Research into New Media Technologies 14(1):59–74.

[18] Mortensen, Torill Elvira (2009) Perceiving Play: The Art and Study of Computer Games. New York: Peter Lang.

[19] Ochoa, Tyler (2012) ‘Who Owns an Avatar? Copyright, Creativity, and Virtual Worlds, Vanderbilt Journal of Entertainment and Technology Law 14:959.

[20] Ibid.

[21] Postigo, Hector (2010) ‘Modding to the big leagues: Exploring the space between modders and the game industry’, First Monday 15.

[22] Scarinci Hollenbeck, “As Market Continues to Boom, IP Protection in eSports becomes more Prevalent”, June 2017, Available at: https://scarincihollenbeck.com/law-firm-insights/intellectual-property/ip-protection/ip-protection-in-esports/.

[23] Brianna Howard, “Protecting Intellectual Property rights in the billion-dollar world of virtual gaming”; Available at: https://techcrunch.com/2018/01/23/protecting-intellectual-property-rights-in-the-billion-dollar-world-of-virtual-gaming/.

[24] Lauri Donahue, “Game Mods and Car hacks now Legal under Copyright law”, Available at: https://www.freeadvice.com/news/Intellectual+Property/game-mods-and-car-hacks-now-legal-under-copyright-law.html.

[25] Ibid.

[26] Ibid.

[27] Nadaline Webster, “Esports, Sports and Trademarks”, Available here: https://www.trademarknow.com/blog/esports-sports-trademarks.

[28] Ibid.

[29] Emilia Uusitalo, “eSports- Are your IPRs Protected?”, Availble here: http://hannessnellmanblog.com/2018/03/08/esports-are-your-ipr-protected/.

[30] Colleen M. Raimond, “What’s in a Name? Choosing and Protecting Your Esports Brand”, Nixon Peabody LLP, Available at: https://medium.com/@Nixon_Peabody/whats-in-a-name-choosing-and-protecting-your-esports-brand-bc544c5eb955.

[31] Emilia Uusitalo, “eSports- Are your IPRs Protected?”, Availble here: http://hannessnellmanblog.com/2018/03/08/esports-are-your-ipr-protected/.

[32] Michael Lee, Riot Sues “League of Legends” Look-A-Like “Mobile Legends”, available at: https://morrisonlee.com/riot-sues-league-of-legends-look-a-like-mobile-legends/.


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