Other forms of intellectual property
Leveraging intellectual property
The esports industry is expected to exceed $1 billion in revenue for 2021. Intellectual property is a crucial element of the esports industry and is associated with not only ownership of the games themselves, but also the advertising and licensing agreements that allow stakeholders to monetise their brands. This article explores the types of intellectual property that are relevant to esports and discusses how players and teams can leverage intellectual property to develop and protect their brands.
What requirements exist for something to be copyrightable?
In order to be protected by copyright, a work must be:
- a "work of authorship" – for example, a book, a piece of music, a film, a photograph, an artwork, a sculpture, software, HyperText markup language or a website, a separable design element or an architectural work;
- original – it must be an independent creation and involve creativity; and
- fixed in a tangible medium of expression – it must be written, recorded or otherwise captured.
Which elements of esports are copyrightable?
Video games are eligible for copyright protection. With regard to esports, this may include audiovisual elements (eg, maps, sound effects and characters) and literary elements (eg, the underlying source code). Copyright in these elements can raise questions of authorship as there tends to be several parties involved in, for example, game designing, sound engineering, programming and developing a user interface.
Match footage is also generally protectable under copyright. The tournament organiser or broadcast service typically owns the copyright in match footage; however, individuals who are casting or commenting on a match may have some IP rights on their own cast, depending on the agreements in place.
What is not copyrightable?
Copyright does not cover ideas. While musical or dramatic performances can be covered by copyright, sports performances are generally not recognised as a copyrightable work. This is because they are not scripted and cannot be reproduced and therefore do not meet the third requirement for copyright protection – that the work must be fixed in a tangible medium of expression. As a result, there are no performance rights in players' performances in an esports match.
What rights do copyright owners have?
A copyright owner has the exclusive rights to:
- reproduce the work;
- make derivative works of the work;
- distribute copies of the work to the public;
- perform the work publicly; and
- display the work publicly.
What rights do copyright owners have in the context of esports?
In most traditional professional sports, leagues and teams own and license their own intellectual property. In esports, however, the copyright in any given game is owned by the developer or publisher of that game.
Video game creators have broad control over how video games can be exploited, including the creation of video media, the streaming of gameplay and in-person tournaments. Because publishers own a substantial portion of the intellectual property associated with esports, they have a great deal of control over not only the games themselves, but also the rest of the esports ecosystem, including:
- who can compete (ie, the teams, players and leagues);
- how the choice of who can compete is made;
- who organises the competition;
- how it is advertised; and
- how it is broadcasted.
Because of this, the esports ecosystem has a "top heavy" IP power structure. The publishers' control is typically effectuated through contracts – either end-user licenses or terms of service. As a general matter, end-user licenses limit an individual's right to publicly perform the video game online either in a recorded video or via a live stream. However, these agreements usually have carveouts to enable individuals to incorporate gameplay into video content for non-commercial uses. They may also include exceptions to enable individuals to earn partnership revenues from streaming platforms.
For esports tournaments, publishers enter into agreements directly with the tournament organisers.
What requirements exist for something to be protected by a trademark?
A trademark can be:
- a word;
- a phrase;
- a symbol;
- a design;
- a combination of the above elements;
- a sound; or
- a scent.
Trademarks serve to identify and distinguish a provider's products or services from those of its competitors. They can act as a marker of reliability, dependability or quality, building up goodwill in the provider's products or services.
Trademarks are registered in specific classes for different types of goods and services and they last for as long as they are used.
Registering a trademark gives the owner:
- the legal presumption of ownership;
- the exclusive right to use the mark nationwide; and
- the ability to bring an infringement action in a federal court.
What elements of esports can be protected by trademarks?
Companies and players can trademark their brands. This might include:
- the title of a video game;
- a gamer tag or nickname (Figure 1);
- a team name;
- a logo; or
- a jersey.
Figure 1: examples of trademarked esports gamer tags
Esports players can establish rights in trademarks by using them in commerce – for example, by participating in sports competitions.
Other forms of intellectual property
Various other forms of intellectual property may be applicable in the context of esports:
- the right of publicity – this generally protects a person's right to control the commercial use of their name, voice, image or likeness;
- domain name rights; and
- trade secrets – these last as long as they are protected and have commercial value.
Leveraging intellectual property
The explosion of the esports industry in recent years, and the resulting increase in investment, has led teams and individuals to seek ways to monetise their success. Esports players are generally compensated in the form of winnings and endorsements. Endorsements can be broad and limiting, depending on the scope of the contract. However, in order to receive endorsement compensation, players must own the intellectual property that they are using.
Players and teams looking to attract sponsorship or other forms of funding must protect their brands by developing their IP portfolios apart from the game itself. It is important to develop an IP and brand protection strategy early: companies will want to see that the intellectual property has been secured, and the intellectual property will need to be registered before it can be licensed for merchandising deals. As the industry continues to grow, following proper guidelines in advertising is also essential.
For further information on this topic please contact Calvin R Nelson or William Lawrence at Venable LLP by telephone (+202 344 4000) or email ([email protected] or [email protected]). The Venable LLP website can be accessed at www.venable.com.