Blurred Boundaries: Can Player-Generated Game Content Be Protected by Intellectual Property Law — Infringement or Innovation?

Introduction

Player-generated content refers to any creation, including images or texts, developed by a player within a game. This includes the customisation of stories, rule sets, game modes, skins, levels, maps or any other modifications. A key concern in the realm of player-generated content is that of ownership, as the legal framework does not explicitly provide clear guidelines for determining it. The conflict between the game developer and the player in this regard is where intellectual property rights come into play. The legal ambiguity regarding ownership of player-generated content varies across jurisdictions.

The role of end-user license agreements (EULAs) in concretising the rights and obligations of various participants in the gaming industry is significant and evolving. The question of whether a particular piece of player-generated content constitutes a modification, an inspiration or a derivation distinct enough to avoid infringing the original game asset remains a legally fuzzy area. Platforms that host games featuring player-generated content (PGC) have an inherent responsibility to prevent infringement of IP-protected game content and assets and to regulate the commercial exploitation of such content. The future development of the gaming industry and the regulation of player-generated content depend on identifying an appropriate path forward - either through reform or industry self-regulation - to strike a balance between innovation and protection.

 Who owns player-generated content?

One must first understand the scope and the types of player-generated content before delving into the concept of ownership of user-generated content. As an illustration, Fortnite allows for PGC in two distinct forms: Creative mode and the Unreal Editor for Fortnite. Creative mode allows players to customise the game environment by providing them with the creative freedom to create their own maps, islands and gameplay. These creations can also be published, meaning that the creator can make them available for use and discovery to other players on Fortnite. Additionally, players can interact with content generated by other players. Through the “Follow a Creator” any player can engage with any creator and follow their work. A creator can commercialise his creations by publishing them and active user engagement.[i] The Unreal Editor for Fortnite offers numerous advanced features to users to customise models, game environment, visual effects, assets and other in-game content. 

Ordinarily, intellectual property protection would imply that the owner has absolute control and exclusive rights over their creations. However, this is not the case with player-generated content and the standard practices of the gaming industry. Despite being the original creators, players only retain symbolic ownership[ii], while the platform acquires extensive rights to broadcast, monetise and reproduce the creator’s content.

In most cases, the ownership rights with regard to user generated content are governed by End User License Agreement. In the case of Fortnite, Clause 5.4[iii]  of the Supplemental Terms to the EULA of the Unreal Editor for Fortnite, states that any content that is created by the user shall remain their digital asset. There are certain exceptions such as the limited licence use that is granted to Epic (Game developer) and that it does not infringe Epic’s content or intellectual property rights. The question that arises here is, can players sue if Epic profits off their creations? Courts are unlikely to permit such suits since when they enter into the licensing agreement they unequivocally agree to surrendering the rights to broadcast and monetise the content to Epic.

In Lewis Galoob Toys, Inc. vs. Nintendo of Am., Inc.[iv], the plaintiff had developed a device called the ‘Game Genie’ which allowed players to modify up to three features (such as increasing the number of lives or adjusting the speed) on The Nintendo Entertainment System. The device enabled players to temporarily make changes to certain aspects of the game without altering the data in the Nintendo game cartridge. The court held that the said use of the device constituted fair use because the device did not make any permanent changes, did not incorporate any copyrighted portions of the original game and did not act as a substitute of the original work. Hence, the same did not lead to the creation of any derivative work. The court therefore upheld the rights of players to personalise and modify games and recognised the same as a valid form of player-generated content.

In Micro Star vs. Formgen Inc.[v], the defendants were the developers of the computer game Duke Nukem 3D. The game’s structure could be modified using a level editor called the "Build Editor," which was developed by Formgen Inc. Micro Star, a computer software distributor, compiled over 300 player generated content (custom levels) onto a CD titled “Nuke It”, and proceeded to sell it commercially without authorisation or a license. The court ruled that such user created levels fell within the scope of derivative work. Therefore, Micro Star had infringed Formgen’s copyright. This case is significant because it established that, although a particular in game element may be player generated, the ultimate control and rights over it remain with the game’s developer or publisher.

 

Roblox Case

The Terms of Use of the Roblox gaming platform[vi] state: that when a user chooses to publish their player generated content on the platform, they grant Roblox an all-encompassing license to use and make any adaption or reproduce the said content on any platform. The terms of use outline the intellectual property framework governing user-generated content. This can be understood to mean that player-generated content on the platform is regulated through rigid licensing framework.

[Image Sources: Shutterstock]

When users accept the terms and conditions of the End-User License Agreement, they waive a substantial portion of their rights over any content they create. This essentially implies that Roblox retains prehensive rights over that content. In Roblox Corporation v. Wowwee Group Limited[vii], the central issue was the commercialization of customized in-game characters—specifically, the defendant’s manufacture of physical toys under the brand name “My Avastars” that were based on customised characters in Roblox (that is user-generated content).  This according to Roblox amounted to an act of infringement. Thereafter, Roblox revised its terms of use and to concretise the licensing framework and other ownership-related rules governing user generated content.

Intellectual Property framework

Copyright is the most widely used form of intellectual property protection in the gaming industry, as both the visual elements and the game code fall within the ambit of literary and artistic work.  Concerns regarding intellectual property rights particularly arise when a user grants access to third party content on the platform, or when players begin to claim rights over their creations. This becomes contentious since gaming platforms often assert that any content created on their platforms is their asset. It is this conflict of interest that brings intellectual property rights into focus.[viii] When ownership is granted to users, the same may be represented by non-fungible tokens (NFT) which essentially represent ownership over a particular digital asset. When users are granted such NFT’s it becomes a proof of their ownership over their content and grants them broad rights over their creations. Determination of liability in cases of infringement is also complex. Where a platform claims ownership over any content on its platform, it may also become liable for any third-party copyrighted material displayed on its platform. A landmark issue in this regard is the dispute between Sony and Nintendo. When Sony launched “Dreams” as a part of the PlayStation 4, it allowed players to create and share user-generated content including characters, maps and other gameplay environment[ix]. A user created a character that was inspired from Nintendo’s copyrighted character ‘Mario’. Nintendo claimed that the said act amounted to infringement of its intellectual property. Sony complied with Nintendo’s copyright takedown request and removed the character from Dream’s server. This kind of indirect liability is what restricts the providers of game developments tools from granting users unrestricted, open-ended creation tools to gamers.[x] 

Besides this, the mere creation of a game involves several components each of which is governed by a different kind of intellectual property. For instance, while the costumes and the scenes of a game are subject to copyright laws, the names and the brand are protected by trademarks. These rights are further distributed between the various stakeholders. A detailed infringement analysis ought to be done to examine the intellectual property right violation across the spectrum of trademark, patents and copyrights prevalent in the industry. When claims for infringement are made, fair use is often taken as a defence, however determining the scope of fair use becomes tricky. When there is a significant creative improvement of an in-game element, although inspired from an already existing content, the same may qualify as fair use.[xi]

Jurisdictional challenges

It is to be noted that the legal framework governing player-generated content and intellectual property rights is not consistent across various jurisdictions. There are multiple contradictory positions in this regard. For, instance, in Hulm Entertainment Pvt. Ltd. & Ors. vs Fantasy Sports Myfab11 Pvt. Ltd. & Ors[xii], the court on the one hand observed that games, rules and schemes are not protectable under the Patents Act, 1970 and will be afforded limited protection under the Copyright Act, particularly due to the doctrine of merger, which essentially states that where the idea and expression cannot be separated, the same cannot be copyrighted. On the other hand, the court also stated that certain distinctive elements created by the author, which, although intrinsic to a game can be subject to independent copyright protection. The legal position on the same in the United States is quite concrete. Title 17 of the United States Code, Section 107 offers a safe haven for game users when developing their own content. The said provision essentially states that when there is fair use (for comment, research or criticism) there shall be no infringement.   In the fair use analysis, the determination of whether there has been a transformation that has altered the original with a new expression is examined. The Digital Millennium Copyright Act (DMCA) under Title 17 of the United States Code, Section 512 exempts the service providers from any kind of liability for copyright infringement that takes place on their platform by the users. This service provider can avoid liability if they adhere to the notice and thereafter takedown system to eliminate the infringing material on the platform.

Conclusion

The evaluation of the arena of player-generated content requires careful consideration of ownership, licensing agreements, attribution of liability and nuanced infringement analysis. The general presumption that a creator owns his creations is complicated by the challenge to differentiate between the original content and the derivative work. Despite the legal framework and service providers recognising that the creators are the original owners of their work, this notion of ownership has been reduced to mere symbolic ownership since their rights are significantly restricted through the licensing regime. The future of player-generated content depends on how effectively the legal framework is able to co-exist with the game developers and online service providers in protecting and fostering creative freedom.

Author: Bhakti Savith Salian, 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.

[i] https://polydin.com/fortnite-creative/

[ii] https://aaronhall.com/ownership-of-user-generated-content-in-platform-terms/

[iii] https://www.fortnite.com/unreal-editor-for-fortnite-supplemental-terms

[iv] LEWIS GALOOB TOYS, INC. v. NINTENDO OF AM., INC. United States Court of Appeals for the Ninth Circuit, 1992 964 F.2d 965

[v] MICRO STAR v. FORMGEN INC. United States Court of Appeals for the Ninth Circuit, 1998 154 F.3d 1107

[vi] https://en.help.roblox.com/hc/en-us/articles/115004647846-Roblox-Terms-of-Use (As of June 4, 2025)

[vii] Roblox Corp. v. WowWee Group Ltd.,No. 3:22-cv-04476-SI, 2023 WL 9010208 (N.D. Cal. Jan. 30, 2023).

[viii] https://arxiv.org/pdf/2412.13743

[ix] https://www.thegamer.com/sony-taking-down-nintendo-creations-dreams/

[x] https://www.wipo.int/web/wipo-magazine/articles/ip-and-business-ip-in-the-brave-new-world-of-user-created-computer-games-35593

[xi] https://www.theippress.com/2023/08/14/the-power-play-balancing-intellectual-property-rights-in-the-metaverse-gaming-landscape/

[xii] Hulm Entertainment Pvt. Ltd. & Ors. v. Fantasy Sports Myfab11 Pvt. Ltd. & Ors.,Delhi High Court, FAO(OS)(COMM) 252/2023 (formerly CS(COMM) 244/2022),