The legal issues in the esports arena

Over the past five years, esports has become increasingly more popular which means there is a lot of monetary investment and intellectual property rights at stake on the part of esport participants and organisations.

According to the 2017 ESPORTS Market Report, the global esports audience reached 385.5 million viewers in 2017 and this figure is expected to grow to 589 million by 2020 (newzoo 2017 ESPORTS Market Report). This growth has led event organisers, sports leagues, sponsors and traditional sports clubs to establish their own esports divisions.

In this context, intellectual property law plays a key role in the esports arena and there are some crucial elements that organisations need keep in mind in order to avoid potential liability when becoming active in this sector. This analysis is primarily based on German law, but similar questions are being considered in other jurisdictions, so it’s important for organisations to take these in to account, especially if they are thinking of creating their own sports divisions.

Do esports participants have performance rights?

This is currently a heavily discussed topic in the esports world. According to section 73 of the German Copyright Act, performers (singers, actors, etc.) have the right to recognise their performances as their own. For example, performers have the exclusive right to record their performances on video or audio recording media (section 77 German Copyright Act) to make their performances available to the public or to broadcast them (section 78 German Copyright Act).

The question is whether egamers are to be regarded as performers in the same sense as singers, authors etc. and consequently have copyright protection for their style of play. The prerequisite for a corresponding ancillary copyright would be that egamers create an individual interpretation of the work when playing a certain computer or video game. “Real” athletes, such as football players, are not regarded as performers within the meaning of section 73 of the German Copyright Act since the focus lies on exertion and the course of the game is overall rather spontaneous or influenced by coincidence.

By contrast, computer and video games can principally be regarded as works within the meaning of Section 2 (2) of the German Copyright Act.  In this case, it could be argued that an ancillary copyright subject to the respective computer or video game should be granted (at least to professional gamers). For example, strategy games require egamers to develop comprehensive strategies in order to be successful, which might be considered sufficient for granting an ancillary copyright. On the other hand, classic ego-shooter games only require a certain degree of dexterity and responsiveness. Therefore, it might seem to be rather uncertain that they could be interpreted in individual ways, especially as the boundaries seem to be quite blurred.

The question as to whether or not a corresponding ancillary copyright for egamers’ performance should be recognised has yet to be decided by German courts. With this in mind, those involved in esports events are well-advised to address the legal implications in their contractual terms. For example, organisers of esports events should consider including provisions in their terms and conditions, which authorise them to make use of the performances of the egamers participating at their events.

Do the organisations of esports events have any virtual domiciliary rights?

Traditional sports clubs, such as football clubs, possess domiciliary rights in relation to their stadiums in order to control the behaviour of both players and attendees alike. In principle, the clubs might e.g. prohibit attendees from taking photographs in their stadiums and they can decide whether a match shall be broadcasted or not.

However, eSports competitions do not only take place in stadiums, but in virtual reality. This raises the question of whether organisers of eSports events are entitled to virtual domiciliary rights in order to control the behaviour of participants (e.g. misconduct) in addition to the contractual controls that they can include in their participant terms and conditions. The Regional Court of Munich I and the Court of Appeal of Munich are of the opinion that, at least in cases where the hardware on which the game is installed is owned by the organiser, the organiser should have such a virtual domiciliary right. Whether or not organisers can also be granted virtual domiciliary rights in cases where the software is installed on the servers of third parties has not yet been decided.

It would therefore be advisable for organisers of esports events to ensure that they enhance the protection mechanisms in their terms and conditions – especially when putting on a competition using software on third party servers. This will give them sufficient control for regulating the behaviour of participants and it also allows them to ban players from the competition for misconduct, if necessary.

Esports is an exciting new area – not only in the sporting industry but also in legal terms. There are various key players like egamers, game publishers and organisers of esport events, who are facing the challenge of sufficiently protecting their rights. There is still a considerable amount of legal uncertainty when it comes to intellectual property in the world of esports so it’s  vital that  all parties involved in this space  protect their interests though adequate contractual provisions.