Emily Xiang is an is an IPilogue Writer, President of the Intellectual Property Society of Osgoode (IPSO), and a 2L JD Candidate at Osgoode Hall Law School.
There is no question that the virtual gaming and e-sports industry has seen exponential growth in the last decade or so. In 2021, global e-sports revenue is said to have reached a whopping $1 billion USD, and is projected to increase to $1.6 billion USD by 2024. Moreover, there are currently about 474 million people who are said to be following e-sports worldwide, with that number expecting to climb to 577 million in the next few years.
Part of what makes the question of intellectual property in e-sports so unique is the myriad of overlapping rights that exist, being held by a vast number of potential stakeholders including game designers, sound engineers, programmers, user interface developers, the players themselves, broadcasters, event/league organizers, advertisers, sponsors, and even spectator fans. But among these actors, whose rights can really be enforced? E-sport tournaments are an amalgamation of various intellectual contributions from a variety of actors. This is in stark contrast to traditional sporting events—after all, it cannot be said that the NBA or MLB own the IP rights to basketball or baseball!
It is accepted that the copyright (or the “exclusive legal right to produce, reproduce, publish or perform”) to the source code, maps, sound effects, and characters of a game is held by the game publisher. As a result of the considerable power held by video game publishers in the e-sports industry, the associated IP regime is often considered as having a “top-heavy” power structure, in which a few actors own all the IP. Game publishers can decide what teams/players may compete, who may host tournaments, and how tournaments are advertised and broadcasted.
However, much of this power is effectuated contractually through end-user license agreements or applicable terms of service with individuals and tournament organizers. Moreover, these rights can then be further assigned to others through contractual means. For instance, in 2015, a Twitch streaming channel named “SpectateFaker” was issued a takedown notice by Abuzu, another video game streaming service. SpectateFaker had broadcasted games played by popular e-sports player Lee Sang-hyeok. Azubu, having contractually obtained the exclusive streaming rights for Sang-hyeok’s games, filed a complaint against Twitch alleging copyright infringement. Interestingly, Riot Games—the publisher who owned the copyright to the game—was not involved in the dispute at the time. The matter never ended up being litigated.
Other disputes have arisen involving video game copyrights, though none such matters have yet to meaningfully challenge the status quo of the “top-heavy” e-sports regime in the courtroom. For instance, in the late 2000s, Blizzard Entertainment began demanding licensing fees from tournament organizers seeking to use their games, including from Korea e-Sports Association (KeSPA). After years of failed negotiations, Blizzard decided to license the exclusive right to broadcast its game StarCraft to another South Korean organization and brought lawsuits against KeSPA.
The matter was ultimately settled outside of court, but it calls into question whether any other actors in the e-sports industry can assert some kind of right to their content. For example, can players enforce some kind of copyright or performer’s right in their gameplay? Many argue that mere gameplay or one’s “style of playing” is comprised of too much spontaneity, that it cannot be reproduced, or that it is too general/abstract to be protected by copyright. That being said, it may also be argued that skilled gamers employ the use of considerably nuanced strategies and creative plans, which ultimately dictate how the game will go.
The gaps and barriers between IP and e-sports certainly will stop at copyright protection. As the industry continues to grow, we can expect to see more IP-related disputes, including ones involving trademarks for things like game titles, gamer tags, team brands and merchandise, or even popular characters, as well as patents protecting gaming consoles, software programs, and user interfaces. Several gaming patents have already been filed, such as U.S. Patent No. 8,882,576, or “Determining Game Skill Factor”, which denotes an algorithm that evaluates the proportionate dependence of an outcome on skill versus chance. And while traditional sports and entertainment industries have long been regulated by established rules and best practices, Canada in particular has “yet to establish cohesive standards—whether international, national or provincial—for the professional video-gaming industry” (as stated by Erika Carrasco, partner and chair of Field Law’s Emerging Technologies Group). Having a robust IP strategy in place for such a rapidly developing industry with enormous economic prospects makes the most sense.
