The right to privacy and the right of publicity are both facets of personality rights. While the right to privacy has been held to be a fundamental right of all persons by the Supreme Court in K.S. Puttaswamy v. Union of India, the right of publicity, as determined by the Delhi High Court recently in Digital Collectibles PTE Ltd. v. Galactus Funware Technology Pvt. Ltd., is not absolute.
Brief (T20) Facts
The Plaintiff No. 1, Digital Collectibles (operating the Web3 platform Rario), entered into an exclusive license arrangement with prominent cricketers (impleaded as Plaintiff Nos. 2 to 6) to use their names, image and likeness (publicity rights) for the purpose of creating digital player cards (DPCs). The Plaintiff No. 1 paid an exorbitant amount as license fees to the said cricketers. The DPCs were authenticated through blockchain technology, specifically through non-fungible tokens (NFTs). The Plaintiffs' DPCswhich among other things, allows users to participate in online games including online fantasy sports (OFS). However, that is not the only function of or benefit arising from the Plaintiff's DPC.
The Defendant No. 1 and 2, are also offering an OFS platform, Striker, to their users, where entry into the game is pre-conditioned by the purchase of the Defendant's DPCs. The Defendant's DPCs contain original artistic images of all current cricketers including those of Plaintiff Nos. 2 to 6. The Defendant's DPCs are only for the purpose of the OFS game offered by the Defendants, although this is disputed by the Plaintiffs. The Defendants also make use of NFT technology for the sale and distribution of their DPCs. The Defendants had not taken any license or permission of the cricketers for the use of the same.
The Plaintiffs filed a suit for breach of personality rights, unfair competition, passing off, unjust enrichment, and tortious interference.
Narrowing the field of controversy to a gully
The Plaintiffs, it appears, were not concerned with the Defendants carrying out their operation of providing an online fantasy game using the information available in the public domain, including the player's name and on field performance. This is an essential feature of all OFS games. However, the court did note that each OFS operator has a different format of the game offered by them. In the instant case, the Defendants were offering their DPCs as an entry point for their version of the OFS game. The Plaintiffs main objection was to the use of the name, image and likeness of their licensed cricketers are part of the NFT enabled DPCs issued by the Defendants.
The court rightly held that the use of NFT/blockchain technology would not impact the assessment of the matter. The said technology is only a medium of distribution used by both parties to leverage its benefits such as authentication, proof of ownership, keeping records of transactions, etc. The court's assessment was thus largely limited to the use of the name, image and likeness of the cricketers on the DPCs of the Defendants.
The Plaintiffs relied upon the judgment of the Supreme Court in K.S. Puttaswamy v. Union of India,stating that publicity rights are recognised as a facet of the fundamental right to privacy. They further relied upon the judgments of the cognate benches of the Delhi High Court in DM Entertainment v. Baby Gift House and Titan Industries v. Ram Kumar Jewellers which recognised the breach of right of publicity as a tort and the act of false endorsement as passing off.
The Plaintiffs also relied upon a catena of US judgments where courts granted relief against false endorsement of a celebrity's personality on their products. As per the Plaintiffs, using artistic images of the cricketers without their due permission amounted to false endorsement and hence passing off.
The Defendant's main contention was that publicity rights in India are not absolute and are limited to the extent of restraining false advertisement or endorsement. The Defendants have used publicly available information for the purpose of creating their DPCs which can be used commercially and without any restriction. The Defendants relied upon the principles of commercial free speech enshrined under Article 19(1)(a) of the Constitution of India.
The Defendants also argued that US law would not apply in India, as unlike the US there is no statutory recognition of publicity rights in India. However, the Defendants cited the US judgments being CBC v. Major League Baseball and Daniels v. Fan Duel which, despite statutory enactment, state that the use of facts and information available in the public domain can be used for commercial purposes without falling foul of the law. With respect to the cricketers' images on the DPCs, the Defendants argued that they are original artistic images created without using any images available in the public domain.
Anticipating far reaching consequences of the dispute on the OFS gaming industry, the court allowed interventions by: (i) All India Gaming Federation (AIGF, an industry body); and (ii) WinZO Games (a popular online gaming platform). The intervenors put the Plaintiffs on the back foot by establishing a healthy partnership with the Defendants. In addition to the stand taken by the Defendants, the intervenors argued that:
- In India, there is no specific law covering publicity rights, and the rights in the name, image and likeness of a person would be governed by the tort of passing off recognised under section 27(2) of the Trademarks Act, 1999.
- Applying the principles of passing off, it will have to be established that the defendants are representing the images of the cricketers on their DPCs in a manner that would mislead the consumers to believe that the said cricketers are endorsing the goods and services of the defendants.
- AIGF further argued that the use of original artistic renditions of the cricketers' image would be considered descriptive or nominative use which will fall within the boundaries of permissive use.
- WinZO took a free hit by bolstering the Defendant's arguments on commercial free speech.
The above points form the crux of the court's decision. The same is discussed below.
The Defendants' adjudged Not Out
Umpiring on the Plaintiffs' appeal, the court adjudged the rendition of the cricketers' images on the Defendants' DPCs to: (i) not be in violation of the cricketers' publicity rights; (ii) not amount to passing off; and (iii) be covered under the right of commercial free speech. The broad findings of the court have been summarised below:
- Commercial Free Speech
The court relied upon the observations of a cognate bench of the Delhi High Court in DM Entertainmentto hold that the right of publicity is not an unrestricted right and would be subservient to the fundamental right of free speech. The court in DM Entertainment, while upholding and enforcing the rights of the plaintiff, had observed by way of caution, that use of an individual's personality traits for the purposes of caricatures, lampooning, parodies, etc. would be considered free speech and not amount to infringement of the individual's publicity rights. Keeping the same in mind, the court, in the present matter, found the artistic rendition of the cricketers by the Defendants on their DPCs as an exercise of commercial free speech and thus not amounting to a violation of the cricketers' right of publicity.
The court also relied upon the judgements of US courts in Cardtoons LLC v. Major League Baseball and Winter v. DC Comics where parody trading cards using recognizable caricatures of sportspersons and celebrities were being used by the defendants therein. The US courts held that the right of publicity is an economic right and not a right of censorship. Where a significant creative component has been added to the celebrity's identity, the work would be considered transformative and covered by free speech. The court in the present matter noted that the right to free speech trumps the right to publicity despite being covered by statutory laws. In contrast, the right to publicity under Indian law is governed by common law principles which too cannot take away the fundamental right of free speech.
- Passing off
The court recognised that like other common law countries, publicity rights in India would be covered by the tort of passing off. Applying the test of whether the Defendants' use of the cricketers' attributes amounts to passing off their goods and services as being endorsed by the said cricketers, the court held in the negative. The court held that passing off has to be adjudged on the misappropriation of the goodwill and reputation of the celebrity and cannot merely be on the basis of a celebrity being identified. The court, inter alia, cited the following reasons for its decision:
- Parodical use of the cricketers' attributes would not amount to causing consumers to believe that the Defendants' goods or services are endorsed by the said cricketers. The court noted that the use of original artistic rendition of the cricketers is only to provide an elevated consumer experience to the users of the Defendants' OFS platform. The use of the cricketers' attributes for the DPCs was considered descriptive or nominative use.
- The Defendants had specifically disclaimed any affiliation or endorsement by any of the cricketers on its OFS platform. This further obviates confusion, if any.
- The Defendants' DPCs cover all current cricketers and not just the five cricketers impleaded as Plaintiffs in the suit. Therefore, there is no occasion for the consumers to be misled that the Defendants' OFS game is endorsed by the Plaintiff cricketers. The court relied upon the US court's decision in CBC v. Major League Baseballto support its assessment.
- The Defendants' DPCs are 'in-game' assets i.e. their use including, sale and transfer, is limited to the Defendants' OFS platform solely for the purpose of playing the game. The Defendants' DPC, unlike the Plaintiffs' DPCs, cannot be used or transferred outside the Defendants' OFS platform and cannot be used as memorabilia. Further, the cards are only for currently active players and not for retired players. Therefore, there is no occasion for the Defendants' DPCs to overlap with the Plaintiffs' digital memorabilia market for which they have been granted exclusive rights by the cricketers.
- Commercial Harm
The court also rejected the Plaintiff's claim of unfair competition, unjust enrichment and tortious interference: (i) holding that commercial use of information available in the public domain would not impinge upon the economic rights of the Plaintiffs and therefore they cannot not have a right to object to the same; and (ii) relying upon CBC v. Major League Baseball stated that the cricketers in question earn handsomely through participation in tournaments, sponsorships, and endorsements. The latter could perhaps be an argument on balance of convenience.
- Irreparable Harm and Balance of Convenience
The court observed that whilst the Plaintiffs had disclosed the cause of action having arisen in January 2023, the parties were in fact corresponding with each other on the issues in the suit as far back in September 2022. The court gave credence to the Defendants' plea that the motivation for filing the suit at a belated stage was to shut down their business operations and stifle competition on the eve of the Indian Premier League 2023.
Plaintiffs' right to Appeal (DRS)
The review system in cricket is objective where even the faintest edge off the bat, caught on hotspot and snick-o-meter, may instantly declare you out, the legal review system is more nuanced. As seen with the judgment of the Single Judge, even a recognisable edge off the bat could be covered by permissive use and free speech and declared not out. Therefore, parties in court proceedings are given 120 days to file an appeal, as opposed to 15 seconds in cricket. Keeping in mind, the commercials at stake, it is likely that the Plaintiffs will prefer an appeal. The appeal court may uphold, alter, or altogether overturn the judgement upon its independent appreciation of facts and application of law. A few questions, purely in my assessment, which the appeal court may have to consider are:
- Whether the exception carved out in DM Entertainment
has been properly applied to the facts of the present case by the
- Whether the name, image and likeness of the cricketers qualify
as 'information available in the public domain' and hence
be freely used by any third party?
There is a fine distinction between 'publicly available information' and 'information in the public domain'. While the latter will not be entitled to any statutory or common law protection, the former could still be protected by law. For example: the contents of a book can be publicly available but still be protected by copyright, however, it will only come into the public domain upon expiry of the term of copyright. The appeal court may need to determine whether the same would be applicable to the common law right of publicity. Further, the US court's decision in CBC v. Major League Baseball, relied upon in the judgement, seems to have only considered the use of the name and information of certain baseball players and not their likeness, image, or renditions thereof. However, parodical use of a celebrity's image is covered in Cardtoons LLC v. Major League Baseball.
- Whether the manner of use and commercialisation of the DPCs by
the Defendants goes beyond nominative and descriptive use of the
cricketer's name, image and likeness and thus amounts to false
The factors that may play in here are: (i) whether the Defendant's DPCs are indeed 'in-game' assets; and (ii) what draws the users to the Defendant's to purchase the DPC cards – to merely participate in the OFS game or the persona of the cricketers? It is also to be noted that the factors determining the price of the DPCs is not solely through the performance of the players but a variety of the other factors which are in the sole control of the Defendants.
Post Match Analysis (Impact on Industry)
The online gaming industry is an amalgamation of the tech and creative industries and has always been at the forefront of innovation and adoption of new technologies. The judgement of the Single Judge (if it withholds the scrutiny of the appeal courts) would be a victory for the larger creative industry with the charge being led by the gaming industry.
Upholding free speech and defining the contours of right to publicity will have a larger impact on how content is created, distributed, and ultimately structured as a commercial product by the industry players. What one needs to be mindful of is that they do not structure their products and services in a manner that: (i) amounts to false endorsement; (ii) is not defamatory; and (iii) does not impinge upon the right of privacy of an individual. One needs to be wary of the reasonable restrictions on free speech.
Does this imply that a celebrity's right of publicity and ability to license their personality rights is severely diluted? The answer is 'No'. As noted by the Single Judge, celebrities have plenty of opportunities to license their persona through sponsorship and advertisements. Acquiring rights to exploit a celebrity's persona can benefit licensees, such as the Plaintiffs, to provide a higher 'elevated consumer experience' as opposed to an unlicensed entity.
Further, with the Cambrian explosion of new technologies, their applications, and interoperability, it may become increasingly important for entities to seek appropriate licenses. Licensed users thus have more room to play with in this battle of creativity between a licensed and an unlicensed entity. While the conventional model of operating an OFS platform remains undisturbed, the elevation of the consumer experience is where the rub with the law is most likely to occur, as it did in the present case. Although the use of NFT/blockchain may not have impacted the facts of the present case, it will be interesting to see a scenario where other technologies such as AI, extended reality, metaverse, holographs, haptics, 3D scanning, etc. are introduced in the online gaming ecosystem. Use of each technology will attract a separate set of legal compliances and the need to acquire appropriate licenses. The more interactive the technologies become, the more likely that the boundaries between free speech and passing off get blurred, and resultantly underscore the need for licensing.
Therefore, the law as laid down in the judgment does not dilute the right to publicity entirely but merely holds that the said right, as opposed to the right to privacy, is not absolute. The court recognises the large pie that publicity rights are and carves out a sliver of an exception in the form of free speech. If used creatively and within the bounds of law, it is a fillip for the smaller industry players who may not have the means to acquire licenses but will still be able to compete in terms of creating a unique user experience. The judgement, if upheld, creates a fine balance for the industry, avoids creation of monopolies, and gives the little guy a fair chance to compete using innovation and creativity. 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.
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.