The Legal Vacuum Within Esports

Esports has become a particular niche of possibility over the last few years. The impressive rise in the popularity of video game teams facing off against one another before a live audience has gradually become big business. But – as new evidence points out – at the center of this rise, there is a vacuum that attorneys and experts have yet to fill: intellectual property and licensing.

A new survey conducted by law firm Foley & Lardner and The Esports Observer involving over 200 esports executives and players, found that intellectual property and licensing are the most important legal matters facing the Esports sector. The discoveries bring to light a chance for firms across the world in the emerging Esports space, with executives from the industry claiming their main priority is to keep current with legal and regulatory issues.

Regarding the legal topics addressed in the survey, 70% of respondents agreed they are “Focused on staying up to date on legal issues in Esports and ensuring compliance with current laws and regulations.” Such a percentage reveals that the vast majority of figures in the Esports industry are actively seeking legal guidance to help protect and exploit their growing enterprises.

When it comes to the legal issue that poses the most “substantial risk to the esports industry,” intellectual property rights and licensing issues took the trophy, cited by 61% of respondents. Other legal issues of concern include player contracts not providing adequate protections (54%), cybersecurity and malware attacks (50%), and illegal gambling (38%).

Honing in on the intellectual property issues that are of most concern, the top is non-compete and exclusivity agreements, followed by trademark disputes (59%). Other issues of concern include rights of publicity (39%), copyright disputes (39%), and patent infringement (35%).

“The structure of the Esports industry, along with the various parties involved, gives rise to a host of complex and novel IP issues,” notes Daniel Rose, IP lawyer with Foley & Lardner, in the study.

The report’s findings also reveal that awareness is growing on trademark-related issues in the Esports industry. However, evidence suggests that the sector still lags behind in brand protection. According to the World Trademark Review, the most valuable Esports teams (most of which are valued at over $100 million) have relatively marginal trademark portfolios, such as Cloud9 (with 58 total registered trademarks), OpTic Gaming (35), Fnatic (23), Gen G (17), and Team Liquid (15).

So, what happens next? The bottom line of the survey is that Esports is growing at a rapid rate, facilitated by increased investment, expanding technology, and a wider range of audiences. Rose claims that savvy players in the Esports industry “Are developing strong portfolios of trademark protections.”

For IP law firms, this could present a significant opportunity to provide information about the necessity of effective trademark protection. Without doubt, Esports is here to stay, and given the size of the business this early, there’s no telling how big it will get – which is great news for the industry leaders as well as for any lawyers who might want to enter the field.

Sources:

https://www.lawsofesports.com/single-post/2018/04/22/Esports-Law-Multi-Jurisdictional-and-Online-Transactional-Practice-and-the-Unauthorized-Practice-of-Law

https://www.law360.com/articles/1218527/ip-rights-player-contracts-top-legal-risks-in-esports-survey

https://www.sportsbusinessdaily.com/Daily/Issues/2019/11/15/Esports-Rising/Esports-Survey.aspx

https://www.cnbc.com/2019/09/01/analyst-investors-should-pay-attention-to-esports-growth-in-the-us.html

Cover Image:

https://www.muvi.com/blogs/esports-future-of-online-gaming.html

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