E-sports is perhaps the most revolutionary introduction to sports in recent history. It’s not just a different set of rules, but a combination of the elements of skill and strategy of the physical world and technology’s virtual reality. A forum of the International Olympic Committee (IOC) and the Global Association Of International Sports Federations (GAISF) followed by their establishment of an E-sports Liason Group and e- sports being a demonstration event at the 2018 Jakarta Asian Games have been big strides in the formalisation of e-sports in the past year. First, we must understand what e-sports is. eSports describes the world of competitive, organized video gaming. Competitors from different leagues or teams face off in the same games that are popular with at-home gamers: Fortnite, League of Legends, Counter-Strike, Call of Duty, Overwatch and Madden NFL, to name a few.[i]This is what separates it from ‘gaming’ and ‘fantasy sports’. While gaming may or may not be competitive, e- sports are essentially competitive. That’s why India got a bronze in e-sports at the 2018 Asiad when Tirth Mehta won bronze at Hearthstone, a card based e-sport![ii] And from fantasy sports in the sense that it is based in a virtual world whereas fantasy sports is based on the outcome of other athlete’s in the real world. However, as the e-sports movement progresses, it creates several unresolved legal issues. A large chunk of these issues pertains to the field of intellectual property and especially copyrights.
Game Developer’s Rights
The field of e-sports creates intellectual property in the form of patents, which protects scientific inventions such as the technology employed by a game and copyrights, which protect the works of art of an author. These arts can be literary, cinematographic, dramatic and musical amongst others.Two parts of a video game can be protected under copyright law- the code of the game and its audiovisual content. The authors or creators of video games possess the copyright in the audiovisual content of the games.[iii] In India, s. 2 (o) of the Copyright Act, 1957 protects literary works including computer programs.[iv] The code of a game is protected under this section. Indian courts have protected the code behind video gaming devices too, in the case of Sony Computer Entertainment Europe v. Harmeet Singh[v], where the software of gaming consoles was treated as a valid copyright and protected from infringement. Section 2 (f) of the same Act refers to ‘cinematographic films’, the scope of which extends to any process/method analogous to cinematography including video films. Therefore, it may be interpreted that the reference to “any process analogous to cinematography” could mean that video games can fall within this definition but without relevant precedents, this contention remains uncertain.[vi]
Leveraging these copyrights gives developers the right to manage a game’s rules, events, game-play streams and live streams. Take for instance ‘Riot Games’ which set up its’ own e-sports department in 2011. Typically, it had been the role of third-party tournament organizers such as the Electronic Sports League (ESLGame publishers allowed, supported or even paid these third parties to host tournaments and leagues, which act as a marketing arm for their game(s) globally.[vii] After the setting up of the department, Riot Games took over the organization of events of it’s game ‘League of Legends’.The protection against copyright infringement with regard to organizing events unauthorized by the developer has found its way into the End User Licensing Agreement of several games including League of Legends and Dota 2. The EULA of League of Legends s. I unambiguously state that the user “may not sell, copy, exchange, transfer, publish, assign or otherwise distribute anything you copy or derive from the Software or the Game.”[viii] Since tournaments require an audience and hence, necessarily cause distribution of content it is not possible to host league of legends tournaments without the prior permission of the publishers, Riot Games.
The publishers have also created a game platform called ‘battle.net’, access to which is a necessary condition for the purchase and play of all of the company’s more recent games, largely includes similar clauses as LoL (see EULA battle.net s. 12 and 19, banning commercial use without express authorization, s. 17, prohibiting the creation of derivative works).[ix] However, it permits ‘community tournaments’ with the restriction that the total prize money shall not exceed $10,000 and entry must be free. The EULA of Dota 2 are short and do not mention public performance or derivative works in the form of tournament broadcasts. This simply leaves the standard statutory rule that both rights are assigned to the original author unaltered and makes both actions’ legality dependent on his prior permission.[x]
A game-play is when players, especially senior ones stream their play for fans to use. In the world of online video and streaming game-play, individuals typically license the right to play a video game from the game publisher by way of an end-user license agreement or applicable terms of service.[xi] Several developers however, are now permitting the incorporation of gameplays into video content as long as it is not charged or used for commercial purposes.
This virtual monopoly may seem anti-competitive as it prevents other parties such as tournament organizers from entering the market by abusing its’ dominant position. However, let’s take a closer look at this. To establish an abuse of dominant position under s.4 of the Indian Competition Act, 2002[xii], especially preventing the entry of a new player into the market under 4(c), we must establish what the relevant market in question is. Each game is separate under e-sports and is a relevant market on its own. The games are the copyrighted works of the game publishers, and hence, event organizers have right over its derivative works, which include its player skins, and the broadcast and use of its work during events.
Game publishers are not the only rights holders in question. An interesting question arises concerning the rights of game players. Do they create intellectual property over the modifications and customizations that they contribute to a game? A commodity that they might create interest in is that of their virtual being known as a ‘skin’. A skin is a graphic or audio file, which, for example, can be used to change the appearance of the user interface to a program or for a game character, weapons, and other elements shown in the video game. Normally, skins don’t affect the game or the gameplay.[xiii] While this is a creation of a gamer, it would not stand on its own without using the code of the game publisher and is in fact an authorized adaptation of the work of the game developer itself. This has been discussed in the American courts in the case of Stern Electronics, Inc. v. Kaufman where the court held that the players generated only a variation on the plaintiff’s game, and declined to consider what degree of player control would be necessary before the game producer would not have contributed enough to the output to be considered an author.[xiv]
A more recent case was that of Micro Star v. FormGen, Inc.[xv] in which the publisher, Duke Nukem 3D provided gamers with the option of making their own gaming levels which were not distributed by the publishers. The respondent, Micro Star collected the MAP files from the website and marketed them on compact disks without the publisher’s or the players’ permission. The levels were held to be derivatives and hence, protected expressions of the game publishers.
In India too, s. 2 (a) (v) of the Copyright Act, 1957 defines adaptation to extend to ‘any use of such work involving its rearrangement or alteration,’[xvi] while s. 14 (a) (vi) gives the copyright holder the right to ‘make any adaptation of the work’.[xvii] Hence it can be safely said that the ‘skins’ and other modifications in content, created by gamers are derivative works which are a permitted adaptation of the game publisher’s work and require their permission for commercialization.
An interesting development in the field of e-sports is that various software manufacturers and electronics manufacturers are tying up with game developers to produce VR gaming leagues. Examples of this are Halo teaming up with Microsoft to make the game VR compatible and Intel tying up with ESL and Oculus to launch a VR league. The game developer owns the content of the game, but as VR enables the user to interact with the content in a variety of ways, clear-cut ownership may get lost amidst the grey legal areas surrounding the virtual world. The question becomes where does the developer’s right to the software providing the content end and where does the VR provider’s right to the software empowering the user’s experience with such content begin?[xviii]
Virtual Property Ownership
An emerging legal question is that of virtual property and its ownership. Niantic brought back the Pokemon brand with Pokemon Go. In 2016 a class action lawsuit was filed against them which alleged that the developer induced Pokémon Go gamers to trespass onto homeowners’ properties. The class-action settlement would force Niantic to implement stricter internal policies regarding the virtual placement of game characters on private property.[xix] The interesting question this raises is about the ownership of a virtual space. The parties arrived at a settlement, with Niantic paying the parties mentioned in the lawsuit $1000 each and making provisions for the virtual creatures to not be placed on private property and make gamers mindful of such trespass. Niantic’s payment of compensation hints towards acceptance of their responsibility and ownership of that virtual space.
Without a doubt, e-sports is owned by game developers. The dominance is to the extent that they control broadcasting, gameplays, event organization and even the physical characteristics that gamers create within the game! It is fair and square, however, as most aspects of the game are their brainchild and those that aren’t are facilitated by their work. This control over the game, in my opinion, has several benefits. The most important being that of consistency. Consistency leads to formalization and is the bedrock of the pyramid system worldwide. Since the game developers rightfully control the sport, they are entrusted with the duty of promoting and running it. Since these powers have been conferred to only them, uniformity of standards concerning gaming tournaments, their broadcasting, gameplays and player contracts can be achieved. Further, a single representative of each game makes it much easier for the representatives of these games to interact with the ‘E-Sports Federation Of India’. It simplifies reaching out to the stakeholders of the industry. As the e-sports movement grows, governments will have to consider this burgeoning industry while legislating. The single representative system plays a simplifying role here too. In fact, I would go on to say that this control being vested with Game Developers is better than a system where it is run by members of a federation. This is because the members of the federation have only an altruistic outlook towards a sport. Their responsibility is their only motive, however, in e-sports the profit generated from the sport is also an extremely motivating factor. This boosts them to promote the game and increase the number of gamers playing their game. Fortunately, gamers have other options in the e-sports industry, as several games exist in each category, may it be shooting or strategy, which prevents developers from getting too exploitative. However, game developers are often international corporations and how they expect to liaison with national e-sports federations is yet to be decided. Irrespective, the result is clear: the intellectual property possessed by game developers helps them to control the game and bring about uniformity in the entire industry.
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Emilia Uusitalia, esports- Are your copyrights protected?,Hannes Snellman Blog, 8 March, 2018,http://hannessnellmanblog.com/2018/03/08/esports-are-your-ipr-protected/
Richard Wee, Three key legal issues currently facing the Esports industry: A perspective from Asia, LawInSport, 16 May, 2018, https://www.lawinsport.com/topics/sports/item/three-key-legal-issues-currently-facing-the-esports-industry-a-perspective-from-asia-
AJ Dellinger, Pokemon Go settlement promises action on nuisance Pokestops, 15 Feb, 2019,https://www.engadget.com/2019/02/15/niantic-pokemon-go-trespassing-lawsuit-settlement/
[i]AJ Willingham, What is e-sports? A look at an explosive billion-dollar industry, CNN International, Aug. 27, 2018, 1818 GMT, https://edition.cnn.com/2018/08/27/us/esports-what-is-video-game-professional-league-madden-trnd/index.html- accessed on 10-06-2019.
[ii]23-Year-Old Gamer From Gujarat Won India’s 1st Ever E-Sports Bronze Medal At Asian Games 2018, Sept. 4, 2018, 9:39 IST,
[iii] Richard P. Flaggert, Copyright in esports: a top-heavy power structure, but is it legally sound?, DLA Piper, 27 Sept, 2018 IST, https://www.dlapiper.com/en/japan/insights/publications/2018/09/ipt-news-q3-2018/copyright-in-esports/ – accessed on 12-06-2019.
[iv]The Copyright Act, 1957, No. 14, Acts of Parliament, 1957.
[v] Sony Computer Entertainment Europe v. Harmeet Singh MIPR2013(1)101 (India).
[vi] Copyright aspects in videogames, LexisNexis India, 13 sept.,2016,http://lexisnexisindia.blogspot.com/2016/09/copyright-aspects-in-videogames.html, accessed on 12-06-2019.
[vii]Stephen Ellis, Esports is growing up: IP law and broadcasting rights, ESPN,26 Jan, 2016 https://www.espn.in/esports/story/_/id/14644531/ip-law-broadcasting-rights-esports, accessed on 12-06-2019.
[viii]JochenHarttung, The Issue of “Deep Control” In Professional Esports – a critical analysis of intellectual property structures in electronic gaming, 2015.
[xi]Supra Note 3.
[xii]The Competition Act, 2002, No. 12, Acts of Parliament, 2003
[xiii]Roman Brtka, Intellectual Property in the World of eSports, IP Watchdog,2 Apr, 2018, https://www.ipwatchdog.com/2018/04/02/intellectual-property-esports/id=95245/- accessed on 15-06-2019.
[xiv]Stern Electronics v. Kaufman,669 F.2d 852 (2d Cir. 1982). Accessed from- Dan L. Burk, Owning E-Sports: Proprietary Rights in Professional Computer Gaming, 16,Penn L.R.,1535,1545(2013)
[xv]154 F.3d 1107, 1109 (9th Cir. 1998). Accessed from- Dan L. Burk, Owning E-Sports: Proprietary Rights in Professional Computer Gaming, 16,Penn L.R.,1535,1545(2013)
[xvi]The Copyright Act, 1957, No. 14, Acts of Parliament, 1957.
[xviii]Brianna Howard, Protecting Intellectual Property Rights in the billion- dollar world of virtual gaming, Tech crunch, 5Sept,2018,https://techcrunch.com/2018/01/23/protecting-intellectual-property-rights-in-the-billion-dollar-world-of-virtual-gaming/- accessed on 15-06-2019.
[xix]Pokemon Go class action settles as augmented reality legal questions remain, Harvard Journal of Sports & Entertainment Law Blog, https://harvardjsel.com/2019/04/pokemon-go-class-action-settles-as-augmented-reality-legal-questions-remain/.
This blog is a part of the RSRR Blog Series on E-Sports in association with Ikigai Law. By Parth Mehta, Student, Symbiosis Law School, Pune.