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eSports: Reflective Points to Consider in Regard to Intellectual Property

posted 11 months ago

eSports viewers may reach 29.6 million per month by the end of 2022, beginning of 2023, according to Insider Intelligence.

The eSports ecosystem may surpass $1 billion in revenue this year. NewZoo the leading resource for analytics and market research, projects a potential revenue to hit $1.8 billion.

eSports is most certainly a new industry with projected high value and the intellectual property rights of eSports needs to be protected adequately.

So, what are eSports?

As defined by the website dictionary.com, eSports refers to competitive tournaments of videogames, especially among professional gamers. This covers all videogames, including virtual simulators of traditional sports and their tournaments.

Protecting the brand for eSport tournaments

The eSport tournament is a sports competition but it is also an entertainment as well.  Therefore, it is recommended to secure trademark rights targeting both “sports activities” and “entertainment” in class 41 (although the links between sports and eSports are somewhat controversial, it is recommended to aim at a larger scope of services).  Services, which are more specifically related to competitions, must also be designated such as “organisation of competitions” or “organisation of games and competitions, using the Internet”.

If the company organising the competition, where in some cases, may be the Game Publisher, also offers promotional products for sale, the trademark must be protected in the corresponding classes.  For example:  class 25 for clothing, class 9 for NFT collectibles, class 16 for posters.

This is essential, especially if licences are subsequently granted to certain partners. The “Advertising” in class 35 may be referred to if the organiser offers advertising services for the benefit of sponsors during tournaments.

Protection must be considered for the verbal element to be protected and for the logo that will be used. In respect to this point, it is necessary to ensure the transfer of the copyright in regard to the visual is obtained, especially if it is realised by a third party or an employee.

Exploitation of a tournament: What happens with the copyright licences?

A traditional sporting event, such as a football match, cannot be protected by copyright as an intellectual creation or work. (See Football Association Premier League v QC Leisure and Karen Murphy v Media Protection Services Limited C-403/08 and C-429/08).

In comparison, according to the Court of Justice of the European Union (CJEU), the “video games […] cannot be regarded simply as computer programs but complex multimedia works expressing conceptually autonomous narrative and graphic creations. Such games must therefore be regarded as intellectual works protected by copyright” (see Nintendo Co. Ltd, Nintendo of America Inc., Nintendo of Europe GmbH v. PC Box Srl, 9Net Srl Decision No. C-355/12).

In retrospect, there is no owner of a traditional sport.  However, with videogames, the Game Publisher may have property rights to the game or its elements including source codes, characters, music, landscape, etc. These are all protected through copyright, providing that they are actually original. 

In the decision of the French Court of Cassation dated 25 June 2009, the judge found that a video game is a complex work requiring the application of a distributive regime. It should include the regimes of software, audio-visual work, as well as the musical work, and other specific elements.

The Publisher acquires the different rights for distribution and commercial exploitation purposes. The exploitation may be done in the form of video game sales, tournaments, or sales of licenses to “players” for non-commercial use.

It is important to note that the organizers of eSports events will be required to obtain the necessary user rights to make the videogames publicly available at tournaments or through other distribution channels, such as online streaming services (eg. Twitch or Youtube).

In the ecosystem of eSports, competitions are filmed and broadcast on social networks and on video. 

Earlier, in 2022, Goldman Sachs predicted that for eSports, revenue streams for media rights and sponsorship could amount to 40% and 35% respectively.  To date, however, there has not been an applicable regime associated to eSports in respect of broadcasting rights, sponsorship and gamers’ Intellectual Property rights under French jurisdiction.  Therefore, concerned Actors would be well advised to integrate these revenue numbers into their operating strategy.

Most recently, the French Ministry of Culture has proposed a new law No. 2021-1382 dated 25 October 2021 seeking to find a comprehensive solution for videogames whereby the legislator has given the Chairman of the National Gaming Authority the power to block injunctions after an accelerated judicial procedure on request, against circumvention websites.

It is crucial to have a legal plan to self-protect before organising an eSport competition, interms of trademarks, to be ready to come up against  infringements, as well as in terms of copyright, to avoid infringing the publisher’s rights.

As a complex ecosystem, the intellectual property rights to eSports are governed by a web of contractual documents due to the lack of national and international regulations. They are usually drawn up by the Publisher in collaboration with their intellectual property counsels. While a complete specific legal framework is still pending, the rules today are mainly in the hands of the Publisher.

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