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Legal Issues in E-Sports

20 Jan Legal Issues in E-Sports

The popularity of e-sports, or competitive video games, has risen dramatically over the past decade. In 2018, the industry was projected to reach more than $900 million in revenue. In 2017, the championship for League of Legends had 43 million viewers, which was comparable to the NBA finals that year, which attracted 44.5 million viewers.

Despite the new medium and new games hitting the market, classic legal issues come into play, including contractual matters, and intellectual property rights issues.

Contracts

One of the most important issues players and participants in e-sports should look out for are contracts. Often, participants are teenagers under the age of 18, which in many jurisdictions means that they can not sign a contract. Instead, a parent or legal guardian would be responsible for making the legal arrangements.

If a player agrees to participate in e-sports for compensation, he or she should insist on having a contract that lays out the rights and responsibilities on both sides. A handshake deal may not result in either the agreed-upon promotion or salary. One solution is to create minimum standards for paid players, such as can be found in the Overwatch League, the same way the NBA has a uniform player contract. This sort of standardization can be beneficial both to players and leagues.

When signing contracts, participants and their legal guardians should take time to understand all the contractual terms and consider a variety of “worst-case” scenarios. For example, one e-sports player found himself unable to play after being benched by his team and being unable to find another team to buy out his contract. Clarifying any questions at the outset can be beneficial both to players and to the league itself because of the reduction in disagreements down the road.

Intellectual Property Rights

Intellectual property rights will continue to play an important role in video games and e-sports. In addition to questions over whether dance moves can be copyrighted, we will likely see an increased number of “real world” brands appearing in virtual reality. For example, Nike shoes have appeared prominently in the 2K Sports basketball games for years. Similarly, we can expect to see an increased number of “real world” clothing and accessories bearing logos or references to popular e-sports brands as licensing deals between the games and clothing manufacturers ramp up.

Additionally, as their games increase in popularity, e-sport developers will need to file for trademark protection of their brands and continuously monitor for unauthorized use of the brand name and any logos. Without diligent enforcement of trademark rights, game owners risk losing those marks.

Licensing rights are also important, as e-sports games and tournaments will be available to view across multiple online streaming platforms, on broadcast television, and in international markets. Failure to obtain proper rights can result in streaming services receiving DCMA takedown notices or being banned from hosting future events.

This article is for informational purposes only and does not provide legal advice. To schedule an appointment with an experienced entertainment law attorney, contact Heerde Blum LLP today.