Digital Assets and Gameplay – Ipr in Esports

30th November, 2024 - 6:51 am Categories: AI 0 Comments

INTRODUCTION

Esports appear to be a rapidly growing industry, and its market is likely to reach $2.11 billion in 2024 with their CAGR being 20.05% through 2029.[1] These include increased live streaming, higher viewership, and increased investment in respect to infrastructure and events. Despite the advancements in esports, IP is the foundation for protecting the creative artistic in the sector comprising of game designs, characters, and narratives, as esports becomes mainstream.[2] Thus, this blog will enter into the discussion of digital asset safeguarding and the role of IP in the context of gameplay creation while exhibiting how strong IP can contribute to the longevity and development of the esports space.

INTELLECTUAL PROPERTY RIGHTS IN THE ESPORTS ECOSYSTEM

Copyright and Trademark in the esports market are among the forms of IPs and can involve aspects like; characters, gameplay, items, and logos.[3] To begin with, protection of game content is covered by copyright since developers design original sounds, images and ideas for the game; trademark covers things like team nicknames and logos. The actors that compose the ecosystem are the video game developers and the players, the streamers and the event organizers, all improving the industry in their own way. For instance, developers own the copyrights to the games and the players, and the teams use their intellectual property rights for advertisement and commercialization.[4] Therefore, the importance of IP is not unique to the legal framework; it plays an important role in determining monetary utilization and market developments. Thus, by properly handling their IPs, stakeholders are capable of using new income sources which will prevent the esports business from stagnation and promote its further development as interest in it grows worldwide.

LEGAL PROTECTION AND CHALLENGES OF DIGITAL ASSETS IN ESPORTS

Esports has several financial instruments such as virtual currencies, skins, and in-game items as major features of the sector. Such assets are sometimes of intrinsic value and can be bought and sold; this has created a highly charged legal environment regarding the ownership and protection of such assets. Trademark legislation is closely connected to the measure where copyright law serves to protect these digital assets since it prevents the usage of original products from commercialization, which includes other aspects such as audiovisual features of a character, or the source code of the games themselves.[5] Licensing is also crucial when establishing the rights of these assets especially when the creators or platforms of assets are not directly affiliated. However, it has not been easy to enforce these rights, especially to combat piracy and other counterfeit products. As a result, traditional tangible commodities and other lawful resources are replaced by pirated products, and the stakeholders have to implement stringent piracy checks and endorse the DRM measures to safeguard their investments.[6]

It is essential to consider gameplay innovations and copyright issues as one of the largest concerns of digital asset protection. Rights to ownership of the creative content belong to the players, which in turn leads to issues such as ownership of the mod or the rights to stream a particular gameplay. For instance, a rather well-known case concerned the violation of the rights associated with a Twitch channel where gameplay of a popular player was broadcasted without the right holder’s consent, it was removed following a DMCA takedown notice.[7] This can be seen to pose some of the questions that come with ownership when many stakeholders contribute to content production. In addition, specific questions regarding fair use are of interest to streamers and content creators who integrate game mechanics and assets in their streams. It remains crucial to find the middle ground between developers’ rights and the fairness of players and streamers regarding the use of several things in the esports setting regarding the protection of property rights.[8] Over time, understanding and appeasing these laws becomes essential for maintaining growth and ensuring that all parties involved in the industry are working fairly and within compliance with the existing legal system.

TRADEMARK ISSUES AND CONTRACTUAL ROLES IN ESPORTS IP MANAGEMENT

Trademark registration in the esports industry concerns the shielding of logos of the teams participating in such contests, T-shirts, caps or any materials that may be used in the organization of events so that consumers do not confuse one event for the other. Trademarks protect vital stakes; organizations have a legal right to prosecute in cases of violation. Some of the landmark trademark infringement authorities are Riot Games v Riot Squad Esports LLC[9] which underlines why trademarking is essential for branding and protection of reputation against similar market players.[10] These examples show what has been understood or taught in terms of the need to exercise appropriate trademark preservation to prevent the creation and use of fakes and unauthorized copies of brand images, names, or logos, which can downplay the brands’ value and revenues.

FUTURE TRENDS AND SOLUTIONS IN ESPORTS IP MANAGEMENT

New technologies, led by blockchain, are believed to transform the concept of Digital Rights Management in the context of the esports business as the currently trending decentralized system with transparency will enhance the protection of digital resources, inclusive of in-game items and other sites of virtual space and currencies. Blockchain can facilitate how assets are transferable between platforms so that players may engage those platforms effectively; it is also useful in solving cross-border IP issues due to the localization of esports markets. With the increasing customer interest in online games, its investment in Digital Rights Management solutions via blockchain technology is expected to propel significant growth in the market and potentially reach $0.92 billion in the next six years at a compound annual growth rate of 54.3 percent.[11]

For enhanced and strong IP enforcement mechanisms, the stakeholders should therefore consider the use of the modern Digital Rights Management technologies that harness the development on blockchain in rights management and royalties. These measures are necessary to prevent employees and market participants from misusing or exploiting intellectual property and to ensure that players and others in the esports supply chain can build and innovate.

In conclusion, the management of esports industry IP needs to focus on positive identification, active IP protection to avoid encountering difficulties in digital asset protection, and new technologies. Companies and other players in this industry should focus on the issues of innovation and rights protection to assure their positions and the effective development of this field in modern conditions.

Author: Sahil Singh, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

[1] https://www.grandviewresearch.com/industry-analysis/esports-market

[2] https://www.sonisvision.in/blogs/intellectual-property-in-the-video-game-industry-navigating-complex-rights

[3] https://www.hartdavidcarson.com/news/2021/december/intellectual-property-in-esports-what-you-need-t/

[4] https://www.euipo.europa.eu/en/news/game-on-navigating-intellectual-property-in-esports

[5] https://www.venable.com/insights/publications/2021/10/ip-and-advertising-considerations-for-esports

[6] https://blog.ipleaders.in/e-sports-underlying-intellectual-property/

[7] https://www.hartdavidcarson.com/news/2021/december/intellectual-property-in-esports-what-you-need-t/

[8] https://blog.ipleaders.in/e-sports-underlying-intellectual-property/

[9] Riot Games, Inc. v. Shanghai Moonton Technology Co., Ltd., 2:22-cv-03107, (C.D. Cal.)

[10] https://www.pinsentmasons.com/out-law/analysis/the-role-for-trade-marks-in-e-sports-brand-protection

[11] https://www.giiresearch.com/report/tbrc1484929-blockchain-digital-rights-management-global-market.html