This article is written by Devashish Jaiswal, pursuing a Diploma in Intellectual Property, Media, and Entertainment Laws from Lawsikho.com.
Table of Contents
The author through this article aims to clear the relationship between Esport and IPR. In this article the author has tried to make clear what is Esports, what are the protection provided by law and why is the protection required.
What is Esports?
Esports is a platform to showcase gaming skills for professional gamers. Esports popularly known as electronic sports is a form of competition in online games. Esports organisation consists of professional players who compete in online multiplayer or individual games. The games have evolved and become more competitive. In the current time, gamers require more skills and knowledge to become professional players and increased competition.
Evolution of Esports
Esports is said to have originated back in 1972 when there were 10,000 participants for a Space Invader Championship. In 1998 the Legendary Starcraft 2 tournament had crossed 50 million viewers in total out of which,17 million were from Twitch. Esports started picking up pace in the 2000s. Many tournament hosts started debuting and one of the most prominent hosts in Esports is Major League Gaming. According to data from Esports earning MLG has raised and awarded $9,523,437.01 from 324 tournaments. Apart from these, there are many other tournament organisers. The highest prize pool in Esports history till now is of The International 2019:Dota 2 Championships which is $34,330,069.00. Esports has come far and have started to be recognised in the Olympics as a sport. Esports legitimacy is questioned when it comes to sporting events in Olympics but Esports has been featured in some multinational events in Asia. There had also been discussions with the International Olympic Committee to include Esports in Olympic events. Esports is also now recognised by Indian Olympic Association as the Esports Federation of India, which is the leading governing body of Esports in the country.
Why should Esports get the protection of IPR?
Esports is gaining recognition at a fast pace. It has started to catch the eyes of angel investors and started to be seen as a business opportunity too. Esports athletes use platforms like Twitch and YouTube for streaming, which has resulted in attracting a large number of audiences. The Esports player who has won the highest prize money to date is Johan Sudstien popularly known as “NOtail” in the Esports community. His highest-earning was from The International 2019 which is estimated to be $3,124,036.20. He became a professional gamer at the age of 17 years and by 27 years he won $6,978,817.80 just from playing Esports tournaments. Esports isn’t the only way for professional gamers to earn money. They also get sponsors, even get paid a monthly salary, get financial support in form of super chats or online money transfers and sponsors for advertising products. A popular gamer and streamer named “Ninja” earns around one million a month from just playing and streaming games on Twitch and YouTube. When such a large amount of money is involved in the intellectual property like copyright, trademark acts as a legitimate source of an Esports organization for angel investors and sponsors.
According to Forbes, Esports has a larger audience than major league baseball. In the year 2017 335 million total viewership of Esports is expected to be near about 646 million in 2023. According to Business Insider, the number of monthly gamers is predicted to jump from 167 million to 276 million between 2018 and 2022. Esports has a bigger audience than Major League Baseball, according to Forbes. Its 2017 total viewership of 335 million is expected to balloon to 646 million in 2023, and the number of monthly gamers is poised to jump from 167 million to 276 million between 2018 and 2022, according to Business Insider. Additionally, 30% of esports viewers and 35% of esports players are women, according to NBC News.
Esports: The latest trend today
You might be wondering how these things are growing at such a pace and receiving such admiration? Well, the answer to this is not a simple one. Firstly, it’s because gamers and content creators have been very good as content creators as well as gaming skills. Gamers look up to other gamers to learn and observe and some do it just for entertainment. Secondly, gamers have also created a soft corner among their audiences by organizing charity streams. These gamers have brought up huge financial donations with the help of their viewers. As reported by Direct Relief in the year 2019, gamers have donated $145 million to charity since 2011, including $42 million in the year 2018 alone, according to figures sourced from the Amazon-owned company. A gamer “DrLupo” through his annual charity stream raised more than $3.68 million for the fight against cancer. He also received a check of $1 million from Twitch. Thirdly, brands contribution in Esports is increasing, they see Esports as an opportunity for a promotion at a large scale due to an increase in viewership. The statistical data in the picture below shows the increase in overall viewership in the past years.
Lastly, the growth in Esports tournaments and live streaming platforms also played a major role in making Esports a trend. Tournaments and platforms provide gamers to show their skills and also entertain people. Apart from that, these platforms and tournaments also provide a livelihood to many gamers. As per the Venture Intelligence report, since April 2020, venture capital funds have invested $438 million in Indian gaming start-ups. Inc 42 Plus reported a similar trend where the total venture capital funding in Indian gaming startups was estimated to be $448 million between 2014 and 2020. Apart from that, the Indian government has finally elected to push for Esports to be properly recognised as a sport by the Indian Olympic Association (IOA). Esports also made an appearance at the 2021 Tokyo Olympics.
Relationship of Esports and intellectual property rights
In the gaming industry, there is protection provided to the developers in form of patents and copyright. Game engines are protected by patents and their name is protected by trademark. In the case of Unreal Engine, their gaming engine itself is protected by a patent and the logo of an Unreal Engine is protected under trademark. Similarly, when it comes to the content of the games, those are protected mostly under copyright. But when it comes to esports, there is always a debate for granting rights as provided to any other sports player. There are some similarities when it comes to a sports athlete and an esports athlete but in the current era esports has started to be recognised as a sport. In India though the Copyright Act, 1957 does not provide protection for video games but the videos of gameplay cannot be protected as cinematograph films, which is defined under Section 2(f) of the Copyright Act. There is no law protecting the gameplay of any video game. Though, different platforms have different policies regarding violation of content on their platform.
Battle of intellectual property between games
PUBG vs Fortnite
Fortnite has a similar concept as PUBG of 100 people competing with each other but differs by letting players build fortifications similar to Minecraft and using more cartoon-like graphics aimed at younger players. The two companies have a complicated relationship. Epic Games provides PUBG with its Unreal Engine technology, which was used to create PlayerUnknown’s Battlegrounds. PUBG Corp., an affiliate of South Korean studio Bluehole Inc., is suing the Korean unit of North Carolina-based Epic Games, arguing that its smash hit Fortnite copies many of the characteristics of its own PlayerUnknown’s Battlegrounds. The suit, alleging copyright infringement, was filed in South Korea. The Korean game developer filed the lawsuit in January alleging that Epic copied “Fortnite” elements from “PlayerUnknown’s Battlegrounds” (PUBG). This followed earlier complaints where PUBG accused Fortnite of being very similar to its own game. Whether the companies have agreed on a settlement to resolve this dispute is unknown, but PUBG and its law firm confirmed that the case is over. Both Fortnite and PUBG have been very successful over the past year, bringing in hundreds of millions of dollars. The below image may give a clear understanding of the rights held by Epic Games and Tencent.
In addition to the aforementioned case, this also triggered several other copyright infringement lawsuits.
PUBG vs Rules of Survival & Knives Out
In the United States, PUBG recently filed a separate copyright infringement lawsuit against the developer of the mobile games “Rules of Survival” and “Knives Out,” accusing these of copying specific elements from PUBG. It asked that both games be removed from Apple’s App Store and Google Play and demanded $150,000 “per infringed work,” according to a court filing. This case is still ongoing.
Esports and patents
Esports comprises 3 main things which are an organisation, professional gamers and the game itself. In Esports the one and only thing which can be protected by the patent is the game itself. Before getting into more details, there are some basic things about patents everyone should know. First, a patent provides protection for only 20 years since the date of registration. Second, patents take about 4 years to be registered. Since patents are done to protect inventions it takes up to 4 years to complete the process of examination. Lastly, patents can only provide protection to products that are innovative, novel and are of industrial use. If any of the above lacks then a patent won’t be granted. Works not covered under invention are described in Section 3 of Patent Act, 1970. The patent doesn’t provide protection to the person playing the game. The patent protects the invention which is used in creating the game. Like in the case of PUBG Mobile, the unreal engine used to create the game is protected via patent by its developer. A utility patent is used to protect the science and technology aspect of the game.
Esports and trademarks
Trademarks and brand names are also valuable assets of a business. According to a Forbes article, the trademark “Google” is valued at $44 billion. Names, logos, images, shapes, taglines, slogans and any such thing that can be written or graphically visible can be protected by trademark. Esports have a tendency to attract audiences and get recognition by their name. To avoid misuse of the name, logo and slogan of an Esports trademark is necessary. Cloud 9 a popular Esports is the most valuable Esports and is valued at $310 million. Their name logo and slogan is protected by trademark and if used by someone without permission for monetary gains or attracting audiences. Cloud 9 can sue him for such infringement.
Apart from Esports organisations trademarks also helps in protecting the Intellectual Properties of a game. The trademark protects the name, slogan, characters as well as the distinctive packaging of a game. For example, the slogan of Sony “Live in your world, play in ours” is protected by trademark.
Esports and copyrights
A common misconception among many comes to light when it comes to a gameplay video of games. It is a common misconception that gameplay can be protected by copyright as cinematograph films defined under Section 2(f) of Copyright Rules. Copyright is granted to any person who is a creator of an original work. It protects artistic works, cinematographic films, musical works, literary works, dramatic works, sound recordings, as well as computer software. When it comes to the gaming industry, copyright provides protection to things like source codes and object codes of digital games, such as video games, user manuals of the game, characters of a video game, background music in a game, other multimedia content of a game, other artistic content associated with the game.
Esports and industrial design
Industrial design is a process of designing any product so that it drives more innovation, builds business success, and leads to a better quality of life through innovative products, systems, services, and experiences. To make it more clear, here is an example. For example, an automobile company has its own engineers and manufacturers who build up the whole working mechanism of a vehicle. Industrial designers are not like the engineers and manufacturers but they work with them and try to make the product (vehicle) more innovative with a better design or a different body. Industrial designers do a lot of surveys and practice to make products much better for users.
In the case of Esports industrial designers also exist. The gaming industry also uses industrial designers to create better avatars, characters, and 3D effects. In video games, and industrial design might protect for example the appearance of a character in the game, the appearance of the gaming devices, or the graphical user interface. All of which are novel creations. Industrial designers also play a role in boosting the revenue of the game. Industrial designers make gaming characters more attractive, add emotes, 3D effects in guns skins and simple gun skins too. These designers create a mesmerizing experience for gamers. Such designs help in revenue generation and attracting gamers. Logos are also provided protection by Design Act 2000.
Importance of intellectual property rights in Esports
Due to the lack of gaming laws, IPR plays a major role in protecting rights in Esports. Esports is expected to become a $3 billion industry by 2022. It is seen as a business opportunity and also attracting angel investors. Apart from that, there are also major international tournaments that receive sponsors as well as distribute huge prize money. If we think of it as a business opportunity, even the brands won’t sponsor an unregistered company. In the same way intellectual properties like trademarks, patents, copyright act as a security of Esports and a guarantee for the investors/sponsors.
Copyright provides protection to various intellectual properties in Esports. If copyright is not available for original work in games and gaming software, then source codes and object codes of digital games, such as video games, user manual of the game, characters of a video game, background music in a game, other multimedia content of a game, other artistic content associated with the game can be used for monetary gains. It was because of these rights PUBG sued Rules of Survival & Knives Out. Apart from that, a game does not always hold all rights by itself. For example, A designs a 3D effect gun skin which creates a tombstone when a player is killed by the skin. If any game likes such an effect then they can use the effect by getting an exclusive or non-exclusive license or get an assignment of rights for consideration.
As we already know that patents should be innovative, novel and are of industrial use. Inventions protected by patent are not some mere. It precludes others from making/using/offering for sale, etc., without his consent, the patented product in India. It also precludes others from using the patented process or using/offering for sale/importing, etc. any product obtained directly from that process in India.
Trademarks are arguably the most valuable business assets. They protect the goodwill and reputation associated with the game as a brand. Trademarks protect the name of the game, taglines, and logos of the game from being misused. In case of trademark infringement, heavy fines are imposed.
Other legal aspects dealing with Esports
Some more legal aspects dealing with Esports are performance rights. In terms of music performance rights are the rights required to perform the music publically. In the same way, games also have their policies about videos being live-streamed on different platforms. Games basically provide two types of license, a general game license and a specific game license. General game license means anyone can stream the game, this means that there are no restrictions in streaming the game. In games that prohibit streaming, one needs to acquire a specific game license to avoid getting their stream getting taken down. Many tournament organisers and Esports organisations that organise tournaments including prize money or sponsors use licenses to avoid any such infringement.
Other things like gun skins, character appearance, clothes also come to light when we talk about legal aspects in Esports. Guns skin, characters, avatars, and other 3D effects are also a form of art or design and are granted protection through copyright. If a person designs or is asked to design a skin or any other character to make the game more attractive. In that case, the artist himself has all rights to that art. Though there are cases when an artist lets a company have full rights for consideration. In India, such artists and industrial designers have laws like Design Act 2000 and Copyright Rules 1957 to safeguard their rights.
The relationship between Esports and IPR is a complex relationship. There are rights to safeguard original as well as novel works. Esports is continuously growing bigger and bigger as well as it has started gaining recognition. But there are still things to which one can still want answers.
Should gamers who upload their gameplay videos be granted protection as cinematograph films defined under Section 2(f) of Copyright Rules? There are options like DMCA takedown and Twitch provides the option of Twitch Takedown notice. So even if there are no proper laws to govern the gameplay part of gamers, protection for content is available.
Esports is protected by various IP Laws and facts and figures suggest great growth overall either it is gamers, audience/viewers or be it, investors. Gamers get sponsors and sometimes even free goods for promoting products or services with their audience.
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