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Growing Popularity of eSports Raises New Copyright Issues

 

What was once every child’s dream of working as a professional video game player has now virtually become a reality. The rise of eSports (electronic sports) over the past decade has made it possible for avid gamers to profit from an industry that has traditionally viewed them as the target audience for its products. The statistics speak for themselves. In 2013, tickets to the League of Legends’ World Championship event at Staples Center sold out within two hours of going on sale. In 2015, Dota 2’s premiere tournament ‘The International 2015’ had a prize pool of over $18 million USD.  The University of British Columbia fosters one of the strongest intercollegiate eSports teams in North America, consistently winning competitions for some of the most popular videos games in the world. Canada’s video game industry, as a whole, employs more than 35,000 people and contributes $3.0 Billion annually to the Canadian GDP.

As the industry continues to grow, associated intellectual property issues may become more complex. The audiovisual elements of video games make them remarkably similar to other forms of screenplay performances (movies, television). Yet, online streaming of video game footage has not yet encountered as many copyright-related problems as the illegal distribution of such other types of works.  Hence, there is interest in developing an understanding of the Canadian courts’ potential perspective on novel copyright issues that have arisen due to the growth of eSports.

Potential issues relating to eSports include piracy of video games, enforcement of copyright in public performances and online streams of game play, and the copyright interests of game players themselves in the streams they create.  This article examines each of these potential issues.

(i) Unauthorized Distribution of Copies of Video Games

In terms of potential piracy of video games themselves, video games are protected under the Copyright Act as computer programs [1], and enjoy similar protection as other types of software. The Canadian courts have been clear that unauthorized distribution of software is copyright infringement, and have shown little hesitancy to penalize those who distribute pirated software. In Adobe v Thompson [2], the Federal Court awarded maximum statutory damages in the amount of $340,000 against the defendants for selling counterfeit reproductions of the plaintiffs’ software programs through Kijiji and Craigslist. Individual non-commercial infringers (i.e. someone who downloads pirated video games for personal use) can also be sued for damages capped at up to $5,000 under provisions implemented by the Copyright Modernization Act [3].  Thus, direct piracy of video game software carries significant penalties.

Large potential penalties notwithstanding, for practical reasons, large scale piracy of copies of video games is unlikely to pose a major issue.  At present, the majority of the most popular video games in world, which happen to coincide with those featured in eSports competitions, are free-to-play (“F2P”) games played on the personal computer. Users do not have to pay up front to play the game, but may choose to do so to access premium features of the game. Hence, there is little incentive for gamers to download pirated video games, since they can play the F2P games regularly without cost, and afford the occasional pay-to-play (“P2P”) video game that they especially enjoy.  Some developers for smartphone games have also adopted a similar F2P business model, where gamers can play the entirety of a game for free, but may elect to pay to make the game easier to “beat”.  Thus, traditional software piracy is of lesser concern for video games than for other types of computer programs.

(ii)  Copyright of Game Developers in Public Performances and Online Streaming of Game Play Footage

In view of the large selection of F2P games available, video game streaming services such as Twitch.tv (“Twitch”) have emerged as platforms that allow gamers to share their gaming experiences.  Twitch allows any user to record their gaming footage, and broadcast it in real-time to viewers worldwide. A Twitch “stream” typically comprises real-time gameplay footage, a real-time webcam view of the player, background music, and commentary from the player. Streams of eSports competitions usually incorporate additional content like live interviews and analyst breakdowns in between games. Streams of single player P2P games are also popular. Unlike multiplayer eSports games that emphasize competition, traditional P2P games maintain appeal to gamers for their graphics, storyline, and overall gameplay experience. “Playthrough” streams of these types of games provide a way for viewers to enjoy the audiovisual elements of the game for free.

Twitch streamers can profit in several ways, including: receiving a share of Twitch’s ad revenue, and receiving “donations” from viewers in the form of monthly “subscriptions” to a streamer’s channel, so there is an incentive for players to stream their footage.

The issue of whether it is possible for end users to stream around copyright infringement in Canada has been previously discussed in our recently published article. While it remains uncertain whether viewers can be held liable for receiving unauthorized streams of copyrighted content, the penalties for streaming unlicensed copyrighted material for commercial purposes can be severe. In Twentieth Century Fox Film Corporation v Hernandez [4], the Federal Court ordered $10 million in statutory damages in a default judgment against the defendant for streaming episodes of The Simpsons and Family Guy online.

For the most part, the Canadian courts have not had to address potential copyright-related issues associated with the streaming of video games, as game developers have incentives to make such content available to the general public. Services like Twitch also usually draw up express licensing agreements with game developers to ensure compliance with copyright laws.  However, the eSports space has not been developing without controversy. Nintendo has threatened to shut down unauthorized streams of Super Smash Bros. Melee tournaments organized by third parties in the past. Capcom requires for-profit tournament organizers to obtain licensing agreements to use its games in competitive settings.

At present, Canadian case law has not conclusively determined the extent to which performances of video games, including streams of video game footage communicated via the Internet, should be afforded copyright protection. As eSports continue to gain recognition, it may be helpful to examine the courts’ views on copyright issues related to traditional sports. In Canadian Admiral Corporation Ltd. v Rediffusion Inc., the Exchequer Court  expressed the view that a football match, by itself, is not subject to copyright protection as the games are not “planned in advance or fixed in writing” [5]. The US Court of Appeals for the Second Circuit’s decision National Basketball Association v Motorola also held that while broadcasts of NBA games are entitled to copyright protection, the games themselves are not. The court specifically stated that “unlike movies, plays, television programs or operas, athletic events are competitive and have no underlying script” [6].

The important distinction to be drawn for eSports is that video games are developed by a team of game designers, who own copyright in the artistic, dramatic and musical works that are publicly performed in the course of playing the video game in public. For example, the Ninth Circuit of the US Court of Appeals held in Allen v Academic Games League of America that playing a board game is not a “performance” within the meaning of the US Copyright Act since it is well understood that board games are meant to be played. Video games are also “meant to be played”, but comprise a much more complex matrix of artistic, dramatic and musical works than a board game.  It is not immediately clear from a policy perspective why video game developers should be entitled to more copyright protection than board game designers for simply designing a work with more complex audiovisual elements. Some online games (i.e. Blizzard Entertainment’s Hearthstone: Heroes of Warcraft) are arguably trading card games in disguise [7], and can potentially be redesigned to be played without electronic devices.

With that said, the U.S. courts have recognized protection for video games as audiovisual works [8], and those active in the eSports industry appear to respect that the developer of the game has copyright in the audiovisual work created by game play, and that the performance of that audiovisual work in public, whether in a tournament setting or online as a stream of a player playing the game, are protected by copyright and cannot be carried out without permission, unless some fair dealing exception applies.  Accordingly, we have not yet seen challenges to the rights of the game developers in these contexts because the participants have not pushed the issue.

(iii)  Copyright of Game Players in Gameplay Footage Streams They Create

A third issue to consider is whether streamers create original works that are themselves eligible for copyright protection, or whether their streams may be performances of the underlying works that entitle the gamer to protection of his or her performer’s rights.

With regard to the possible creation of original works by game players that are themselves protected by copyright, CCH Canadian Ltd v Law Society of Upper Canada [9] is the leading case on the threshold of originality in Canadian copyright law. In that case, the Supreme Court of Canada (“SCC”) held that an original work must be a product of an author’s exercise of skill and judgement. The SCC qualified skill as “the use of one’s knowledge, developed aptitude or practiced ability in producing the work”, and judgement as “the use of one’s capacity for discernment or ability to form an opinion or evaluation by comparing different possible options in producing the work” [10]. At first blush, it may be difficult to appreciate how gameplay footages could possibly be considered as original dramatic works. There appears to be very little creativity involved in button smashing. For example, the United States Court of Appeals for the Federal Circuit has previously held that “playing a video game is more like changing channels on television than it is like writing a novel or painting a picture” [11]. Since a video game’s character models, environments, and soundtracks are all predefined, a player’s creation of a particular stream of that video game could be argued to be no different from rebroadcasting a movie with trivial contributions.

However, one who is well versed in the eSports industry would argue that there is a high level of skill and judgment involved in creating the content of a gameplay footage. Whereas movies, novels, and almost every other form of artistic work follow a predefined script, video games are interactive. Gamers have control over what they see and hear, and no two playthroughs are ever identical. It could be argued that a gamer creates original content each time he or she plays the game, just as a musician creates music each time he or she plays a solo.  Even though a gamer’s creativity may be capped by the preprogrammed bounds of a video game, skilled players are capable of generating video contents that are not replicable by amateurs.

In addition to broadcasting different gameplay content every time, a streamer also incorporates original elements, such as commentary, while playing the game. A stream, viewed in its entirety, can be argued to be a new work that expressly showcases a streamer’s ability to evaluate different possible options in producing the ultimate dramatic work (a video). A gamer must constantly make decisions throughout the game, and the outcomes of those decisions are directly shown in the video that viewers see. There should be no issue with the fixation requirement for acquiring copyright, as competitive streams are almost always recorded by the streaming platform.

(iv) An Example of Potential Copyright Issues in eSports

League of Legends recently experienced a copyright debacle that touched on two of the aforementioned issues when Azubu (a video game streaming service) issued a DMCA takedown notice to a Twitch stream for streaming allegedly unauthorized content. Azubu had a contract agreement with a famous League of Legends player which gave it exclusive rights to stream his games on Azubu’s platform. It is clear that as the developer of League of Legends, Riot Games owns all intellectual property associated with the game’s graphics and character models. Hence, Riot Games has the right to issue a takedown notice to the Twitch stream if it wants to do so. It is also arguable that the famous League of Legends player creates his own original content, and is therefore entitled to prevent an unauthorized Twitch stream from reproducing his content.

The complication in this dispute is that the Twitch stream was not a direct re-stream of the Azubu stream; rather, it was a stream of an omniscient perspective using a sanctioned third-party client. Riot Games expressly allows players to create videos using Riot Games’ intellectual property for non-profit purposes. Certainly, a streamer’s copyright would not displace or override the developer’s, but could potentially add a second layer of copyright protection to complicate the matrix of rights involved. While the case was ultimately settled between the parties, it illustrates the complexity of potential copyright infringement issues that may ensue in the eSports industry.

Conclusion

The growth of eSports and the popularity of video game streaming platforms like Twitch have introduced novel copyright issues in the video game industry. The Canadian courts have not conclusively determined the extent to which public performances of video games should be afforded copyright protection, as developers, tournament organizers, and streamers have adhered to licensing agreements and avoided lawsuits. As eSports continues to evolve into a form of mainstream entertainment, streamers should be aware of their rights and understand the copyright issues that surround the games they use and the content they create.

By Jeff K.Y. Sun and Jennifer A. Marles

Endnotes

[1] Copyright Act (R.S.C. 1985, c. C-42) – Section 2 reads: “computer program means a set of instructions or statements, expressed, fixed, embodied or stored in any manner, that is to be used directly or indirectly in a computer in order to bring about a specific result.”

[2] Adobe Systems Inc. et al. v Thompson, 2012 FC 1219

[3] Copyright Modernization Act (S.C. 2012, c. 20)

[4] Twentieth Century Fox Film Corporation v Nicholas Hernandez, John Doe and Jane Doe, 3 December 2013, T-1618-13

[5] Canadian Admiral Corporation Ltd. v Rediffusion Inc., 20 CPR 75 at pp. 78-79

[6] National Basketball Association v Motorola Inc, 105 F3d 841 (2nd Cir. 1997) at para 21

[7] American Heritage dictionary defines trading card as: A card with a picture or design printed on it, often one of a set collected and traded by children.

[8] Atari, Inc v Amusement World, Inc, 547 F.Supp. 222 (D. Md. 1981)

[9] CCH Canadian Ltd v Law Society of Upper Canada, [2004] 1 SCR 339

[10] CCH Canadian Ltd v Law Society of Upper Canada, [2004] 1 SCR 339 at para 25

[11] Midway MFG Co v Artic International, 704 F2d 1009 (7th Cir. 1983) at para 9

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