Esports – battling it out online and in the courts
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Esports is in a period of rapid growth. As the level of interest, engagement and revenue in esports continues to rise, we can expect to see a greater number of disputes arising.
Indeed, two global esports players remain locked in US legal proceedings which continue to impact global competitive gaming. In 2019, Turner Tenney – the renowned Fortnite player - and streaming icon ‘Tfue’, issued complex proceedings in California against esports company FaZe Clan. At issue is the contract entered into by Tenney when he joined the FaZe Fortnite team. Tenney claims FaZe is unduly limiting his opportunities as a professional gamer, has failed to make payment of sponsorship money and has recovered some 80% of his earnings. In response, FaZe has counterclaimed against Tfue in the state of New York for breach of contract. The dispute is due to be resolved this year and has shone light on the fact that while esports share similar commercial and legal aspects to traditional sports, key differences (including the fact that they are predominately played on unregulated, global and freely accessible online platforms and facilitate a top-heavy power structure where game publishers can exert control over other stakeholders in the industry, including teams, players, leagues and broadcasters) facilitate specific and nuanced difficulties.
Litigated esports disputes typically relate to:
1. Contracts
The development of esports has created a large number of different types of agreement, including, for instance, development agreements, outsourcing agreements, distribution agreements, and licence agreements (IP or otherwise). The protection and enforcement of rights and obligations which stem from this context, naturally produce contractual disputes.
2. Intellectual Property Rights (IPR)
Esports is underpinned by several IPR (trademarks, copyright and database). IPR are specifically designed to protect the owners’ rights in their work. In the UK, IPR are largely protected by the Copyright, Designs and Patents Act 1988, together with the Trade Marks Act 1994. The use of a trademark, copyright or a patented product without due permission / authorisation is potentially infringing IPR, providing the owner with the ability to take immediate legal action.
3. Regulation
The industry continues to tackle balancing the rights and interests of its stakeholders while ensuring that such protection does not limit growth of the sector. Notwithstanding this backdrop, the burden of regulatory compliance will continue to increase across all sectors of the industry such as consumer protection, advertisement, data privacy and gambling.
Where infringement can be established, the innocent party may take legal action, framing possible action upon, for instance, breach of contract, misrepresentation, unfair competition and/or passing off, in order to obtain an injunction(s), monetary sums, and/or delivery up/destruction of, infringing items.
The dangers of infringement are real to officers and organisations alike:
- legal action taken may result in damages being awarded at the discretion of the courts;
- possible investigation by investigative and regulative bodies such as Copywatch, the compliance arm of the Copyright Licensing Agency;
- damage to reputation; and
- the diversion of resources to defend any action.
Enforcement of brands is essential to protect the good name and value of your business. We can support brand owners to enforce their rights against infringing third parties, including counterfeiters, copycats and cyber squatters including making applications to invalidate third-party trade mark registrations, acting for registrants and rights owners in domain name disputes. We can also act for defendants facing allegations of trade mark infringement or passing off and will at all times provides tailored, sector specific advice.
At the firm we seek to resolve disputes quickly and efficiently, where possible without recourse to legal proceedings. However, when this is unavoidable, our very experienced and tenacious team will vigorously pursue a strategy to achieve a successful outcome.
