United States: It's Dangerous To Go Alone! Take This - Intellectual Property Tips For The Esports Industry

Last Updated: April 28 2017
Article by Eric Ball and Kunyu Ching

With the annual Game Developers Conference spectacular in our rearview mirror, and the NBA's partnership with Take-Two to launch an esports league for the NBA2K game on the horizon, game developers and professional gamers should consider how to best protect themselves and their intellectual property as they enter the new arenas of VR and esports.

More Reality, More Problems

The development of more realistic games comes with the potential for more real trademark and copyright infringement problems. Under copyright law, developers can accurately reflect the exterior of buildings in their virtual reality or augmented reality games. Section 120 of the Copyright Act provides that the copyright in the architectural design of a building does not cover representations of the building if the building is ordinarily visible from a public place. This exception allows developers to accurately represent the new Salesforce Tower in San Francisco and One World Trade Center in New York City.

But the same exception may not apply to the interior of buildings or other copyrighted works inside or outside of a building. If, for example, an augmented reality game places a virtual game token on a sculpture inside a building, has the game created a derivative and infringing version of the sculpture? In a similar context, some graffiti artists have already sued for the reproduction of their works on clothing or in restaurant décor, such as Tierney v. Moschino (alleging copyright infringement based on the use of a graffiti artist's work on clothing; case settled while there was a pending motion regarding whether graffiti was copyrightable) and Berreau v. McDonald's, No. 2:16-cv-07394 (C.D. Cal.) (alleging copyright infringement of a graffiti artist's work by putting copies of the graffiti on the décor of a McDonald's; case dismissed on personal jurisdiction grounds). These graffiti artists could file a claim against a game developer who recreated their works in a hyper-realistic virtual reality game or if an augmented reality game modified the graffiti enough to create a derivative work. We have already seen similar copyright infringement claims against the NBA2K game for its realistic reproduction of NBA players' tattoos in Solid Oak Sketches v. Visual Concepts, No. 1:16-cv-00724 (S.D.N.Y.).

For trademarks, the Rogers defense continues to allow game developers to use a third party's trademarks without a license where the use of the trademark has artistic relevance to the game and is not explicitly misleading. Accordingly, a game developer can generally use the Starbucks mark in the representation of a coffee shop to show a realistic version of downtown Seattle. The Rogers defense has recently been used to knock down trademark claims both in advertisements for the game and advertising in the game in cases like Mil-Spec Monkey v. Activision Blizzard (granting summary judgment on trademark infringement claims against a commercial showing a clip of game play that included the third-party mark) and Virag v. Sony (dismissing trademark infringement claims regarding in-game advertisements).

But Rogers is not a cure-all. Developers should be cautious about using another's trademark in the name or logo of the game itself. In CI Games v. Destination Films, No. 2:16-cv-05719 (C.D. Cal.), the plaintiff alleged trademark infringement based on confusion between its movie, Sniper: Ghost Shooter, and the defendant's game, Sniper: Ghost Warrior. The defendant asserted a Rogers defense in a motion to dismiss, but the court punted the decision, finding instead that the Rogers defense is better evaluated at the summary judgment stage. The court reasoned that if a plaintiff could show that a defendant intentionally named its game something similar to the plaintiff's movie, then this intent would fail the "not explicitly misleading" prong of the Roger's defense. CI Games potentially takes the teeth out of a Rogers defense because defendants could be forced to wait until summary judgment—and incur significant costs in discovery and motion practice—before knowing whether the defense is available.

Our Trade Secret is in Another Castle

A trade secret is information that (1) is not generally known to the public, (2) provides economic benefit as a direct result of its secrecy and (3) is subject to reasonable efforts to maintain that secrecy. The classic example of a trade secret is the recipe for Coca-Cola.

If professional gamers have special techniques or methods that have brought them competitive and financial success, they should not expect those techniques to receive protection under the law once those moves are shared with the public. Broadcasting gaming techniques removes them from trade secret protection because they become known to the public. To protect a gaming technique as a trade secret, gamers should limit disclosure and require nondisclosure and/or confidentiality agreements within gaming teams and with third parties when possible. An esports team's secret playbook or specific combination of multiple players' moves—if properly protected from public disclosure—could be considered a trade secret. And a trade secret misappropriation claim might arise if one of those team members switched teams mid-season and shared their knowledge of the first team's playbook with the new team.

All Your Publicity Are Belong to Us

The right of publicity is the right of an individual to control the commercial use of the person's name, image, likeness or other identifiable personality aspect. Generally, the right of publicity works to prevent unscrupulous use of an individual's image in advertisement without permission. For example, a company cannot use a celebrity's image to create the false impression of that celebrity's endorsement for its product.

Professional gamers may find themselves embroiled in publicity battles similar to those of professional athletes. Signing sponsorship deals or a team agreement may affect a gamer's right of publicity to the extent it requires a gamer to appear in certain advertisements or if it permits the sponsor or team to use the individual gamer's image for advertisements in their capacity as a gamer. This is similar to the limited right of publicity enjoyed by professional football players. The Eighth Circuit ruled in Dryer v. National Football League that the NFL is permitted to use players' names and likenesses in game footage and interviews for historical documentaries because such films "represent speech of independent value and public interest." Additionally, the Ninth Circuit recently ruled in Maloney v. T3 Media, Inc. that former NCAA athletes' right of publicity claims are preempted by the Copyright Act "when a likeness has been captured in a copyrighted artistic visual work and the work itself is being distributed for personal use."

By contrast, NCAA college football and basketball players have sued Electronic Arts for using their likenesses in video games that replicated the athletes' height, weight, build, skin tone, hair style, facial features and other individually identifying information in In re NCAA Student-Athlete Name & Likeness Licensing Litigation (holding that EA's unauthorized use of student-athletes' likenesses in its video games was not transformative and not protected by the First Amendment; the plaintiffs' class action suits eventually settled). Use of a professional gamer's likeness or name without his or her consent in advertisements, videos, or video games could create similar right of publicity issues, as in Lohan v. Take-Two Interactive and Gravano v. Take-Two Interactive.

Player Used CDA 230: It's Super Effective!

Section 230 of the Communications Decency Act states that "[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." This statute creates a defense for companies that provide a stage for speech in the United States from liability coming from the actions or speech of their users.

Under § 230, a gamer's controversial speech on a sharing service or a message board generally cannot be used to hold the service or message board responsible. However, this does not mean that gamers can say whatever they like without consequences. A gamer's speech might still be subject to contractual obligations under the sharing platform's terms of service/use, which could lead to severance of the platform's relationship with the gamer or even the banning of the gamer from the service if his or her speech is abusive or otherwise improper. Recently, a popular YouTube vlogger had the second season of his original gaming video series canceled by YouTube and his relationship with a Disney-owned network severed as a result of his controversial speech. Gamers may also be subject to additional behavioral standards under contract if they are on a gaming team or receive a sponsorship.

As powerful as § 230 is, there has been a recent pullback in its protections at the motion to dismiss stage. Message board operators, especially those that actively curate their users' communications, should not presume that a court will hold they have complete immunity under § 230's safe harbor. For example, in Enigma Software v. Bleeping Computer, the court held that § 230 may not bar defamation and false advertising claims against a message board operator based on conduct of a moderator. And in Darnaa v. Google, a federal court in California held that § 230(c)(2) immunity did not bar a claim for breach of the implied covenant of good faith and fair dealing where YouTube removed a video based on suspicion that the uploader inflated view counts.

With these recent developments in the gaming world, game developers, professional gamers and other players in the virtual reality and esports space should be mindful of how to protect their own intellectual property rights while not infringing on the rights of others.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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