UK: The Games Industry And Sporting Licenses

Following on from CTW’s report on (issue 792 – 2 June 2000) that Sony, Electronic Arts, Eidos and Infogrammes are being sued by a number of footballers and clubs, this week Alex Chapman looks at the use of famous names in games and the legal implications for the games industry, developers and publishers.

Since the early 80s sportsmen have been happy to lend their names to games, in return for which they have shared in the game’s success.

Using a sportsman’s name in a title will usually result in increased sales, the bigger the name the bigger the sales. Using the names of all the sportsmen in a particular sport within a game may also impact on sales but in a different sense - there are few things more frustrating than getting a game home and finding that David Beckham has become Bavid Deckham or Nigel Mansell is Nigel Mainsail.

However as the recent case of footballers including Euro 2000 stars Abel Xavier, Georgie Hagi and Andre Ilie and clubs including Feyenord and Slavia Prague illustrates, there is a danger that this frustration to customers is a small price to pay for the piece of mind that it will bring for a publisher or developer.

The legal position in relation to the use of sportsmen’s names in products has never been clearly defined in the UK and games have therefore been released with and without proper names. There have been incidents where sportsmen have been conspicuous by their absence from sticker albums but since we are so used to seeing sports papers containing player ratings and images it has seemed illogical for the same names not to be part of a game. However with most sports clubs and sports stars recognising the value of their names as brands and with that value now capable of being represented on the company balance sheet, so the importance of protecting that value has increased.

This has been apparent from the wave of disputes arising from opportunistic domain name registrations. It was therefore only a matter of time before the games industry would be hit, the potential causes of action in England being:

• passing off (a misrepresentation of association with the subject, likely to deceive the public and causing damage to the subject in the course of business)
• trade marks (use of a mark identical or similar to and for similar goods and services to a registered trade mark)
• defamation ("false" words communicated and likely to reduce the subject person in the eyes of a right thinking recipient - libel / slander).

Legal action has been resisted to date because the value of the games companies and names hasn’t justified the expense in what would be the most costly and risky of litigation. An outlay of up to £500,000 may be required in circumstances where a claim could fail if the publisher could show for example that:

• a description (player rating) was fair comment;
• the public would not associate the product with the person the inclusion was incidental; or
• the use of the name was not in the course of business or not in a trade mark sense.

English law has long held that there is a distinction to be made between representing that a person endorses or is associated with a product and incidental inclusion. It has not however been determined whether the inclusion of a name of a footballer like Ronaldo or a club like Manchester United is incidental.

It is also very difficult to obtain a registered trade mark in England for sportsmen or sports clubs. Registration guidelines mean that a person’s name may not be registered if the surname appears more than 30 times in the phone book and a name that includes any geographical location name may not be registered because it describes the place. Tottenham Hotspur for example may claim registrable rights in respect of Hotspur but not Tottenham. There are ways round this such as registering a stylised version of the name or logo or a series of photos of the particular sportsman but the enforceability of these methods is clearly less.

The games industry awaits the outcome of the case running now in Belgium which is brought under laws unique to that country and others with a similar legal system which give individuals special rights in their name and the use of that name. If Abel Xavier and co are successful it may open the floodgates to further litigation including the possibility of action in the English courts. However with the increasing popularity of online gaming and the Internet as a distribution medium no publisher or developer can ignore the impact of foreign laws.

For this reason developers and publishers will be wise to take another look at their dev-pub agreements. This is because many standard games development contracts require the developer to indemnify and hold harmless the publisher in respect of legal action against it for infringing the intellectual property rights of a third party. Such an indemnity may mean that the developer must compensate a publisher in full if it is sued, the objective being to protect the publisher if the developer copies someone else’s code, graphics or designs.

However if such a clause is defined sufficiently broadly, it may apply to trade mark infringement, passing off or even Belgian personality rights. As we have seen above this puts the developer in a difficult position. Alternatively the clause may be such that the publisher is only covered in relation to copyright infringement and therefore applicable to code and designs but not names. The publisher will then only have itself to look to.

For the future developers and publishers will have to be careful of these issues when contracting but there are other ways in which they may help themselves including the use of appropriate disclaimers and proper enquiries in relation to the potential pitfalls. They may also want to reconsider whether it is worth using the names of real people in their games without asking them first - but where would the fun be in that!