Esports, short for electronic sports, are competitive video games that are typically broadcasted online and sometimes on television, i.g., TBS’ ELEAGUE. Esports is a booming market, according to a report by market researcher Newzoo. By 2019, the sports industry is expected to generate nearly 1.1 billion dollars worldwide. As this industry continues to grow, there will be more opportunities for leagues, teams and players to exploit the underlying intellectual property. As such, it is important for all parties involved to fully understand what rights they may have in such intellectual property.
Let's take a closer look at how eSports and intellectual property connect, as well as a few challenges regarding IP protection in eSports that lie ahead.
Intellectual property in traditional sports
In traditional sports, like in many businesses and industries today, intellectual property can be used to generate significant revenue. These assets, which in this context will generally consist of trademarks and/or copyrights, can be quite valuable to their owners. All parties involved in eSports should have an understanding of what they own or control in terms of intellectual property so they are aware of how to best exploit such property.
Intellectual property protection and eSports
eSports pose unique issues in intellectual property as it is typically the game developers and publishers that own the underlying intellectual property, not the teams or players. For example, the avatars (created characters) being used by the players are owned by the aforementioned commercial entities, not the player who created them. This means that teams and players alike must develop intellectual property separate and apart from the game itself for commercial exploitation. The typical example of this is a stylized logo.
Like traditional sports, gambling plays a big role in Esports. This has encouraged a desire to obtain intellectual property protection for the competition itself. U.S. Patent No. 8,882,576, which is called "Determining game skill factor" protects an algorithm that determines the outcome of variances between skill and chance. Another patent, U.S. Patent No. 9,349,246, also known as "Integrations portal for a peer-to-peer game platform" gives game developers the opportunity to allow peer-to-peer wagering as well as a tournament management platform through self-service.
What IP challenges could teams and players face?
Obtaining IP rights for eSports is possible, but that doesn't mean it's always easy. As stated by IP Watch Dog, "Enforcement of the patents described above could be thwarted by a subject matter eligibility challenge at the district court, and the court could find that the patent claims are ineligible subject matter."
The patented technologies could be instead disputed as "abstract ideas" not directly tying them to a specific computer. Could these claims survive a challenge? According to Isaac Rabicoff and Kenneth Matuszewski, “[i]t is uncertain whether the claims could survive a challenge under a subject matter eligibility challenge during district court litigation because the success of the subject matter eligibility challenge is highly dependent on the type of patented technology being challenged.”
Additionally, the eSports market run will into issues with regard to copyright law since, as stated above, the teams and players do not own the video games and its underlying content. Accordingly, it is critical that teams and players sit down with developers to discuss how they can commercially exploit the intellectual property.
If you're interested in becoming an eSports player and would like to learn more about intellectual property, reach out to one of the attorneys at Scarinci Hollenbeck. Our experienced professionals can further explain IP protection as well as information on contractual agreements, legal counseling, protection and more. Otherwise, for more general eSports questions and concerns, don't hesitate to contact us at 201-806-3364.