The LAW FIRM of DAYREL SEWELL, PLLC is pleased to announce that Mr. Dayrel S. Sewell, Esq. penned an article entitled, “Graffiti: Legal or Illegal?” that is now published in the Brooklyn Bar Association’s Fall 2020 Journal. The article explores the legal distinction between permanent graffiti and art, and the legal interpretation of the Visual Artists Rights Act as applied to the 5Pointz case.
This publication represents the continuation of our firm’s commitment to providing value to the greater NYC community and service excellence to our clients.
Established in 1872, the Brooklyn Bar Association’s primary purpose is to promote professional competence among attorneys and increased respect for the legal system.
Tattoos are permanent, often complex, creative, and original pieces of work created by a tattoo artist. Recently, litigation has come up regarding tattoos on famous athletes. While most issues involving tattoos on athletes are more easily handled — such as J.R. Smith’s tattoo of the brand Supreme on his leg1 — there are questions of whether a tattoo is subject to copyright protection when it is prominently displayed and reproduced on a famous athlete in a video game. This question is at the center of a lawsuit filed by Solid Oak Sketches against Take Two Interactive Software as well as two other producers of the popular NBA 2K video games based on the video games’ reproductions of players’ tattoos, including LeBron James.2
A similar issue arose in 2011, in which tattoo artist S. Victor Whitmill claimed to have copyright ownership of Mike Tyson’s face tattoo, with the tattoo in question given to Tyson in 20033. Whitmill sued Warner Bros., claiming that the popular film Hangover 2 infringed on his work when they reproduced Tyson’s tattoo on a main character’s face4. While Whitmill’s complaint failed to temporarily enjoin the studio from releasing the film in theaters, the case was settled out of court and now leaves an underwhelming amount of case law on the subject.5
The Copyright Act of 1976 gives protection to artists that establish that: (1) their creation is the type of work that is protectable; (2) their creation is an original and creative work; and (3) the creation is affixed to a tangible medium for expression.6 Further, § 202 of the Copyright Act states that “ownership of a copyright… is distinct from ownership of any material object in which the work is embodied.”7 This means that a tattoo artist does in fact have copyright ownership over original and creative tattoos that they give, even when those tattoos are on another person’s body. However, there is an implied license that allows people to freely and publicly display their tattoos — for example, on television, film, and magazines — so for most people, this is not a problem.8However, this issue has arisen because LeBron’s tattoos are not only being displayed, but they are being digitally reproduced in a video game, causing an issue for copyright infringement issue.9
The company Solid Oak Sketches obtained the copyrights for two of LeBron James’ four tattoos in question — the portrait of his child and the area code — before suing in 2016 because they were used in the NBA 2K series.10 Take Two argues a fair use defense, stating that the tattoos are covered under fair use and are not a critical component of the video games, seen only fleetingly or rarely.11 However, that argument may not hold water due to the time and energy put into recreating both the athletes and tattoos with incredible accuracy.12 Further, this argument did not survive the motion to dismiss, with Judge Laura Taylor Swain finding that the defenses presented by Take Two are fact-intensive and will require more evidence.13
New York University intellectual property law professor Christopher Jon Sprigman says to the New York Times that Solid Oak’s lawsuit “amounts to a shakedown and copyright trolling,” stating further that “[t]hey shouldn’t be allowed to tell LeBron James that he can’t take deals to license his likeness… the ability of the celebrity, or really anyone, to do that is an element of their personal freedom.”14 LeBron James states that his tattoos are a part of his “persona and identity,” saying that if he is not shown with his tattoos, it would not be an accurate depiction of himself.15 In a Declaration of Support for the defendants from LeBron James, he states that the four tattoos in question were “inked in Akron, Ohio,” and in each case, he had a conversation with the tattooist about what he wanted inked on his body.16
The outcome of this case will set an important precedent on whether or not tattoo artists can demand monetary compensation every time a celebrity’s likeness has been reproduced. Since the rise of litigation, players’ unions and sports agents have been advising athletes to secure licensing agreements before they get tattooed, in order to protect their future interests.17 This way, the athletes have secured their rights while giving artists have an incentive to sign rather than pass up a celebrity client who could be a walking advertisement for their art18.
1 Cam Wolf, NBA Tells J.R. Smith to Cover Up His Supreme Tattoo Or Else, GQ (Oct. 1, 2018), https://www.gq.com/story/jr-smith-supreme-tattoo-nba?verso=true (in which Cleveland Cavaliers’ J.R. Smith was told by the National Basketball Association that they would fine him for every game of the season that he failed to cover up the Supreme logo on his leg, citing the League’s Collective Bargaining Agreement, which states that ‘a player may not, during any game, display any commercial, promotional, or charitable name, mark, logo, or other identification… on his body.’).
2Jason M. Bailey, Athletes Don’t Own Their Tattoos. That’s a Problem for Video Game Developers, New York Times (Dec. 27, 2018), https://www.nytimes.com/2018/12/27/style/tattoos-video-games.html.
13 Thomas Baker, NBA 2K Tattoo Copyright Suit Offers Two Compelling Legal Arguments, but Only One Seems Practical, Forbes (Jan. 4, 2019), https://www.forbes.com/sites/thomasbaker/2019/01/04/lebron-smartly-sides-with-the-producers-of-nba-2k-in-tattoo-copyright-case-but-will-that-be-enough/#4e08f33c7663.
Copyright Protection of Non-Utilitarian Designs under the Copyright Act of 1976
Designers in the high fashion industry face many obstacles in receiving intellectual property protection for the utilitarian aspects of their clothing. Congress has provided copyright protection only for original works of art, but not for industrial designs that embody utilitarian functions. See 17 U.S.C. 101. Copyright protection does not extend to utilitarian aspects of objects because it would open up a flood of litigation over exclusive monopoly rights that would “burden competition, raise prices, and also harm consumers.” SeeStar Athletica, L.L.C. v. Varsity Brands, Inc., Brief for United States as Amicus Curiae 5-6. This proves problematic, however, when art and industrial design are intertwined, especially in the fashion industry which combines aesthetic elements with utilitarian garments. Under the separability doctrine, these pictorial, graphic, and sculptural works on the design of a useful article are copyrightable so long as they “can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” See 17 U.S.C. 101. But what happens when pictorial, graphic, sculptural works are inseparable from the utilitarian aspects of a garment? SeeStar Athletica, L.L.C. v. Varsity Brands, Inc.provided fashion designers with newfound intellectual property protection for aesthetic aspects that are incorporated into utilitarian aspects of their garments.
Obstacles Designers Faced in the High Fashion Industry Prior to the Star Athletica Decision
It is without a doubt that fashion, namely high fashion, has now become a status symbol that relies heavily on its branding and aesthetic more so than any utilitarian value its designs may serve. So much of the value that these high fashion designs derive is from its rarity and accessibility to only the elite and wealthy. Accordingly, it is not too surprising that fast fashion powerhouses have copied these high fashion runway looks along with several other brand elements available to the more general public.
Fast fashion brands, i.e. Zara or Mango, have often tried emulating high fashion ad campaigns by recreating the featured garments for an exponentially lower price. For example, Celine’s ad campaign for the 2011 fall and winter collection consisted of models in a natural setting surrounded by aloe plants. Zara later emulated this in black and white during the Spring and Summer 2014 season and again during the Fall and Winter 2015 season with a minimalist focus on a model in black and white and an aloe plant.
A few other examples of this are pictured below where Zara emulated Balenciaga’s Fall and Winter 2016 collection with its red parka and comparable styling to Lotta Volkova or a cream colored trench coat with athletic zip up wear underneath for the Burberry Fall 2016 season, which was a distinctive look for that season featuring model Chris Wu.
The similarities between the campaigns are not entirely identical, and even if they were, there were not rigidly defined protections under the Copyright Act. Zara and other fast fashion powerhouses such as Mango and Forever 21 have a legally cognizable right to provide their own independent expressions about their fashion ideas. Accordingly, they continue to use these similarities with the intention that consumers create a psychological connection between the high fashion brand and the fast fashion brand. Fast fashion powerhouses strengthen these connections by recreating the styling, colors, and design to produce the same high fashion look elite fashion designers were inspired by without infringing logos, patents, or trademark protected designs. This leaves high fashion designers left fairly powerless and unprotected by copyright laws. This all changed with the holding of Star Athletica, L.L.C. v. Varsity Brands, Inc., which provided high fashion designers with much more expansive intellectual property protection.
Star Athletica, LLC v. Varsity Brands, Inc.: Progress Toward Copyright Protection of Fashion Design
In March 2017, the Supreme Court established a test for determining the copyright eligibility of design elements in fashion in Star Athletica, L.L.C. v. Varsity Brands, Inc.Respondent Varsity Brands, Inc. obtained more than 200 copyright registrations for two-dimensional designs that appear on their cheerleading uniforms. Respondent employed designers who sketched design concepts of uniforms consisting of “original combinations, positionings, and arrangements of elements which include V’s (chevrons), lines, curves, stripes, angles, diagonals, inverted V’s, coloring, and shapes.” 137 S. Ct. 1002, 1007 (2017). RespondentVarsity Brands, Inc. sued Star Athletica, L.L.C., a competitor that also markets cheerleading uniforms, for copyright infringement for using 5 of Respondent’s copyrighted designs. Id. The District Court granted the petitioner summary judgment holding that designs could not be conceptually or physically separated from the uniforms, and therefore were not copyrightable designs. Id. The Sixth Circuit later reversed this and concluded that graphics “could be identified separately and were capable of existing independently” of the uniforms under 17 U.S.C. 101. Id. Specifically, they found that the graphic designs were separately identifiable because “the designs and a blank cheerleading uniform can appear ‘side by side’ and . . . are capable of existing independently.” Id. The Supreme Court found these conflicting perspectives on the separability analysis warranted certiorari to resolve this widespread disagreement over the proper separability test. Id.
The Supreme Court relied solely on a statutory interpretation of 17 U.S.C. 101, rather than a free-ranging interpretation of the best copyright policy for the case at hand. SeeMazer v. Stein, 347 U.S. 201 (1954). The Court looked at the “whole provisions of the law” to determine the meaning of 17 U.S.C. 101. SeeUnited States v. Heirs of Boisdore, 8 How. 113, 122 (1849). The statute provides that:
A pictorial, graphic, or sculptural feature incorporated into the design of a useful article is eligible for copyright protection if it (1) can be identified separately from, and 2) is capable of existing independently of, the utilitarian aspects of the article. 17 U.S.C. 101.
The Court focuses more on the second requirement, stating that the burden of proof for the first requirement is not that difficult to satisfy. SeeStar Athletica, L.L.C. v. Varsity Brands, Inc., 137 S. Ct. at 1010. The Court states that the trier of fact must determine whether the separately identified feature can exist apart from the utilitarian aspects of the article. Id. This means that it has to be able to exist on its own if its imagined independent from the useful article. Id. If it cannot be imagined separately from the useful article, then it is not a pictorial graphic or sculptural feature of the article itself, but rather as part of one of the utilitarian aspects of the garment. Id.
The Copyright Act provides that the owner of the copyright can reproduce this work copies on any kind of article regardless of whether it embodies a utilitarian property. See 137 S. Ct. at 1005. The Court states that this is a mirror image of 17 U.S.C. 113(a) which protects an authorship fixed on some tangible medium that is non-utilitarian and then later applied to a utilitarian object. Id. On the other hand, 17 U.S.C. 101 protects the art that is first fixed in the medium of a useful article. Id. Accordingly, the Court holds that the copyright protection extends to pictorial, graphical, or sculptural objects regardless of whether they are affixed to utilitarian or non-utilitarian objects. Id.
The Court held that this interpretation of the statute is consistent with a past holding in the Copyright Act’s history. Id. In Mazer, the Court held that the respondents owned copyright protection for a statuette that served as the base of the lamp and it was irrelevant if can be identified as a freestanding sculpture or lamp base. Id. The Copyright Office used the Mazer holding in the modern separability test to copyright law in section 101 of the 1976 Act. Id.
Using statutory interpretation and case law, this Court held that the surface decorations on the cheerleading uniforms can be considered separate under the separability test mandated in Section 101 of the 1976 Act. See 137 S. Ct. at 1006. They reasoned that if the decorations were removed from the uniforms and affixed to another medium, they would not copy the uniform itself. Id. They analogized that just as two-dimensional fine art are aligned with the shape of the canvas on which it is painted, these decorations are aligned with the shape of the uniform itself. See 137 S. Ct. at 1012. Respondents may only prohibit the reproduction of these surface designs; however, the Court holds that they have no right to prevent others from manufacturing a cheerleading uniform identical in shape, cut, or dimensions. See 137 S. Ct. at 1006
Ultimately, the design of the uniforms satisfy the requirements of Section 101 of the 197 Act because they 1) can be perceived as a two- or three- dimensional work of art separate from the useful article; and 2) would qualify as a protectable pictorial, graphic, or sculptural work either on its own or in some other medium if imagined separately from the useful article. 137 S. Ct. at 1016. Based on this interpretation, the Supreme Court affirmed the Court of Appeal’s judgment. Id.
Now high fashion designers can turn to this holding when any aesthetic design is affixed to a utilitarian design. This holding has revolutionized high fashion designers’ intellectual property interests for their designs in the high fashion industry that is victim to fast fashion’s intellectual property theft.
In the rapidly changing world of Intellectual Property Law, street art protection is less commonly discussed than that of other innovative creations. Street art is somewhat ambiguous in its meaning. It is common to associate street art with the graffiti spray-painted tags on a building or subway. However, actual street art is something created with more depth. Legally, the distinction between permanent graffiti and art is permission. Street art becomes vandalism when that permission to publicly paint is not granted. Because of the complexity of public art, the amount of protection warranted to street art is unclear. Graffiti law is not yet a legal practice; however, graffiti-related disputes have been stirring across the country.
In a case close to home, 5Pointz graffiti curators have been wrestling with building owners over their famous murals being torn down without notice in Long Island City, New York. 5Pointz, the outdoor art exhibition once praised as an international “graffiti mecca,” is undergoing construction as it transforms into two residential high-rises with luxury apartments. Strikingly, the apartments will keep the 5Pointz name. The newly constructed buildings will showcase street art-style decorations in memory of the destroyed exhibit, much to the dismay of original 5Pointz artists. The building may even display replicas of 5Pointz if the artists grant permission. That may be unlikely, though, considering their adversarial stance against the building owners.
The legacy of 5Pointz began with curator Jonathan Cohen in the early 1990s. Nearly three decades ago, the site was merely made up of unused artist studios. So, Cohen asked the building’s owners, Jerry and David Wilkoff, for permission to paint on the walls of the buildings. After agreeing to the artist’s use, Cohen went to work and, over time, local and international artists joined him, turning the buildings into the colorful outdoor art exhibit it came to be known as over time.
The building owners were issued a permit on August 21, 2013 by the City Planning Commission to convert the 5Pointz buildings into high rise apartments. On October 10, 2013, Cohen and other aerosol artists sued the owners of the buildings that housed 5Pointz to prevent their works’ destruction, asserting VARA (Visual Artists Rights Act) and common law tort claims in the Eastern District Court of New York. In the case of Cohen, et al. v. G&M Realty, L.P., the court denied the artists’ request for injunctive relief. Despite the suit, the 5Pointz artwork were quickly whitewashed in one night, erasing all artwork to allegedly prevent the property from being able to claim landmark status. The artists accused the owners of deliberately whitewashing the art so rapidly in an attempt to sabotage their plan to get the building landmarked because they had already prepared over 20,000 landmark forms for submission to the Landmarks Commission that were collected during a rally several days before the destruction. The stigma behind graffiti being an act of vandalism is blurred when building owners consent to having street art on their property, and then forcefully remove it without giving the artists an opportunity to preserve their work.
Twenty-three artists had accused Jerry Wilkoff of removing the murals without giving the artists a fair opportunity to remove and preserve their work, or even the minimum notice required by law. In March 31, 2017, Senior District Judge Frederic Block ruled against the real estate developers, who made a motion to dismiss the artists’ third and final complaint. Judge Bloc stated that: “For VARA, the plaintiffs would have no right to prevent 5Pointz’s destruction by its rightful and legal owner; hence, the plaintiffs’ “moral rights” to prevent another’s disposition of his property arise purely under VARA. Because the plaintiffs’ conversion and property damage claims wholly depend on the viability of their VARA claim, the Court finds them to be fully preempted.” This significant legal victory for the artists is meaningful for the entire art community because the judge is allowing the case to go in front of a jury who may be more sympathetic to the wronged artists than to the real estate owners and developers.
Cohen and his fellow artists asserted that their street art is protected under VARA, a federal act that grants visual artists limited rights over visual works of art they created but do not own, and thus they are entitled to monetary damages for the destruction of their visual works of art. VARA offers limited protections to only visual works of art. A “work of visual art” is:
(1) a painting, drawing, print, or sculpture, existing in a single copy, in a limited edition of 200 copies or fewer that are signed and consecutively numbered by the author, or, in the case of a sculpture, in multiple cast, carved, or fabricated sculptures of 200 or fewer that are consecutively numbered by the author and bear the signature or other identifying mark of the author.
Evidently, the 5Pointz street art exhibition can be classified as a visual work of art because the murals were spray painted at the site and signed by the artists, and Judge Frederic Block agreed. The developers unsuccessfully argued that the rights warranted by VARA were “narrow and inapplicable given that, while the artists are well-known, the works are not.”
The judge ruled that the evidence provided by both developers and artists on VARA claims were sufficient to allow this case before a jury. VARA states:
(a) Rights of Attribution and Integrity.—Subject to section 107 and independent of the exclusive rights provided in section 106, the author of a work of visual art—
(1) shall have the right—
(A) to claim authorship of that work…
(3) subject to the limitations set forth in section 113(d), shall have the right—
(A) to prevent any intentional distortion, mutilation, or other modification of that work which would be prejudicial to his or her honor or reputation, and any intentional distortion, mutilation, or modification of that work is a violation of that right, and
(B) to prevent any destruction of a work of recognized stature, and any intentional or grossly negligent destruction of that work is a violation of that right.
(b) Scope and Exercise of Rights.—
Only the author of a work of visual art has the rights conferred by subsection (a) in that work, whether or not the author is the copyright owner. The authors of a joint work of visual art are co-owners of the rights conferred by subsection (a) in that work.
(1) The modification of a work of visual art which is a result of the passage of time or the inherent nature of the materials is not a distortion, mutilation, or other modification described in subsection (a)(3)(A).
(2) The modification of a work of visual art which is the result of conservation, or of the public presentation, including lighting and placement, of the work is not a destruction, distortion, mutilation, or other modification described in subsection (a)(3) unless the modification is caused by gross negligence.
(3) The rights described in paragraphs (1) and (2) of subsection (a) shall not apply to any reproduction, depiction, portrayal, or other use of a work in, upon, or in any connection with any item described in subparagraph (A) or (B) of the definition of “work of visual art” in section 101, and any such reproduction, depiction, portrayal, or other use of a work is not a destruction, distortion, mutilation, or other modification described in paragraph (3) of subsection (a).
(d) Duration of Rights.—
(1) With respect to works of visual art created on or after the effective date set forth in section 610(a) of the Visual Artists Rights Act of 1990, the rights conferred by subsection (a) shall endure for a term consisting of the life of the author.
(e) Transfer and Waiver.—
(1) The rights conferred by subsection (a) may not be transferred, but those rights may be waived if the author expressly agrees to such waiver in a written instrument signed by the author…
Interestingly, real estate and copyright law seem to intersect where VARA applies, and so real estate owners, like those of the 5Pointz site, need to be aware of its protections. Title 17 of the United States Code, Section 106A(a)(1)(B)(3)(A) provides that the author of a visual art has the right to prevent intentional mutilation of a work, and any such mutilation is a violation of that right. Undoubtedly, the developers have violated the artists’ VARA-granted right. None of the statutory exceptions apply to the developers. The works were not naturally distorted over time or modified for improvement. Furthermore, 5Pointz comprised of original visual works based on each artist’s own perception; they were not reproductions or depictions of other works, so the third exception does not apply either. VARA grants visual artists these rights for the duration of the artist’s life, unless that right has been waived in a written instrument and signed by the artist, and there is no evidence of such waiver by the artists here.
While some perceived Judge Block’s ruling against the developers as an “unexpected turn” for the graffiti artists, it’s almost clear-cut that VARA is written in the artists’ favor. Despite the undefined realm of graffiti law, VARA is not so ambiguous as to the protections it warrants; nonetheless, it is narrowly construed. With the support of articles on 5Pointz, corporate and worldwide recognition, and “aerosol art” experts’ testimonies, it seems quite feasible that a jury will sympathize with the 5Pointz artists who, with the permission of the owners, worked on the demolished buildings. In the meantime, the art world awaits and anticipates the trial that turn out to be a landmark case for street artists in need of protection for their recognized works.
 Nicole Martinez, Street Art or Vandalism? Art Law Journal (2017).
 Marie-Andree Weiss, “Spray” the Word: Graffiti Law is a New Legal Niche, The 1709 Blog (2016), http://the1709blog.blogspot.com/2016/11/spray-word-graffiti-law-is-new-legal.html (last visited Aug. 4, 2017).
 Claire Voon, A Glimpse Inside the Street Art–Themed 5Pointz Condos, Hyperallergic (2017), https://hyperallergic.com/386244/a-glimpse-inside-the-street-art-themed-5pointz-condos (last visited Aug. 4, 2017).
 Corey Kilgannon, 5Pointz Graffiti Artists Whose Works Were Erased Will Get Day in Court, The New York Times (2017), https://www.nytimes.com/2017/04/09/nyregion/5pointz-graffiti-artists-whose-works-were-erased-will-get-day-in-court.html (last visited Aug. 4, 2017).
 Bruce Wallace, Remembering 5Pointz: A Five-Story Building That Told Plenty More, NPR (2013), http://www.npr.org/2013/11/21/246549375/remembering-5pointz-a-five-story-building-that-told-plenty-more (last visited Aug. 4, 2017).
 Jessica Meiselman, 5 Pointz Graffiti Artists Score Major Win in Suit against Developers, Artsy (2017), https://www.artsy.net/article/artsy-editorial-5-pointz-graffiti-artists-score-major-win-suit-developers (last visited Aug. 4, 2017).
 Leonard Greene, Two high-rise towers will pay homage to graffiti mecca 5Pointz, NY Daily News (2017), http://www.nydailynews.com/new-york/high-rise-towers-pay-homage-graffiti-mecca-5pointz-article-1.3207741 (last visited Aug. 4, 2017).
See Cohen v. G & M Realty L.P., 988 F. Supp. 2d 212 (E.D.N.Y. 2013).
 Laurel Babcock & Bob Fredericks, Graffiti mecca 5 Pointz erased overnight, New York Post (2013), http://nypost.com/2013/11/19/5-pointz-graffiti-erased-in-overnight-paint-job/ (last visited Aug. 4, 2017).
 Cohen v. G&M REALTY LP, Case No. 13-CV-05612 (FB) (RLM) (E.D.N.Y. Mar. 31, 2017), https://scholar.google.com/scholar_case?case=13462150384806350539&q=COHEN+V.+G%26M+REALTY+L.P.&hl=en&as_sdt=3,33&as_vis=1 (last visited Aug 24, 2017).
 Corey Kilgannon, 5Pointz Graffiti Artists Whose Works Were Erased Will Get Day in Court, The New York Times (2017), https://www.nytimes.com/2017/04/09/nyregion/5pointz-graffiti-artists-whose-works-were-erased-will-get-day-in-court.html (last visited Aug. 4, 2017).
 Cohen v. G&M REALTY LP, Case No. 13-CV-05612 (FB) (RLM) (E.D.N.Y. Mar. 31, 2017), https://scholar.google.com/scholar_case?case=13462150384806350539&q=COHEN+V.+G%26M+REALTY+L.P.&hl=en&as_sdt=3,33&as_vis=1 (last visited Aug. 24, 2017).
The term e-sports is short for electronic sports and has come to be associated with describing video games competitions. Much like traditional sports, there are amateur and professional scenes for the sports in question. There are also teams and contracts, leagues, and sponsorships. However, e-sports are very early in their lifespan and thus the infrastructure is not as well developed as traditional sports in many ways. Visas, for example, are routinely denied to competitors to go to events because they do not fit the traditional definition of an athlete or businessman. Specific contracts between players and teams are kept secret with unethical strategies being used. The basic terms of these contracts also are slanted heavily in favor of the organization, with players unable to argue for better conditions. Many of these issues do not exist for traditional sports; contracts in the NFL for example are highly regulated, teams must abide by clearly defined rules, (including forced buyouts in the NBA, such as what happened to the L.A. Clippers) and rarely are athletes denied visas to compete.
This lack of infrastructure, direct precedent, and general lack of legal knowledge on both the parts of players, organizations, and to an extent the companies, is likely the cause behind all of the issues that exist in the e-sports scene. It must be stressed that there is very little scholarly research done about e-sports, even less so in legal scholarship. For many of the issues discussed in this blog post, very few have any research of any sort conducted and most of the sources will be press articles that are not peer-reviewed or under any formal scrutiny. In this sense, the issue of lack of infrastructure also extends to the scholarship itself. This blog post seeks to be an introduction to the field of exports, while highlighting some potential issues that may exist in the field regarding copyright and trademarks.
E-sports has been growing year after year in its size and has never been bigger. In terms of viewership the largest e-sports event of 2015 was the League of Legends LCS 2016 with over 43 million unique viewers and a peak of 14 million concurrent viewers worldwide. The prize-pool for the event was $6.7 million USD. The second largest event, called the International 2016, an e-sports event featuring the game DotA 2, had a peak viewership of 8 million and an $20 million USD prize pool. Championships matches for LCS and the International have filled up entire sports stadiums and smaller events still are able to occupy large convention spaces. These statistics are not very surprising in light of the fact that over 150 million Americans play video games, with more than half of all households owning some sort of dedicated games console and 40% of Americans responding that they play three hours or more of video games each week. Of course, these statistics are not directly translatable to e-sports because the study did not specify between e-sports titles and non-e-sports titles. The study for instance, did not differentiate between individuals who played video games on mobile devices (phones, tablets) as opposed to traditional gaming devices (portable, home, personal computer). Of the largest e-sports titles in terms of revenue, sponsorship, and prize money, the vast majority of them are only available on personal computer (League of Legends, DotA 2, Starcraft II, Counter-Strike Global Offensive are all personal computer exclusive games), so it stands to reason that there may not be direct correlation between the figures.
Nevertheless, the size of the e-sports industry is hard to deny, even when it is evaluated separately from the gaming industry as a whole. According to SuperData research, the e-sports industry generates around $748 million USD in sponsorships, pro-players, ticket sales, gambling, merchandising, ticket sales, and other direct revenue. This figure does not include game sales, sales of downloadable content, or microtransactions; (in game payments which can offer direct benefits ingame, most often in mobile games such as the ability to purchase extra plays in Candy Crush) it only looks at the revenue that e-sports directly generates through competitions).
Unlike traditional sports, e-sports themselves are software that some entity has copyright control over. No individual or entity owns football for instance, so theoretically one could organize a football tournament and no one could stop the tournament on the basis of the organizers not having the rights to the game. Originally, Blizzard Entertainment (the creators of Starcraft) found it more difficult to restrict Korean broadcasting of games and tournaments. When the successor to Starcraft, Starcraft 2 was released, the game could not be played without a direct connection to Blizzard, thus allowing Blizzard to control licensing more directly. This mistake has not been repeated by League of Legends, in which the game cannot be played offline and thus allowing for Riot to have complete control over the game. Interestingly enough, both Counter-Strike Global Offensive and DotA 2 can be played on local area network (allowing for non-internet multiplayer gameplay on multiple computers) and are both owned by Valve Entertainment. However, this likely ties into Valve’s business strategy with these two games, which relies heavily on community generated content and will be detailed later in the paper.
Proprietary control is very important when it comes to e-sports. Many gaming companies have learned from the mistakes of Blizzard Entertainment, who was unable to control KESPA (Korean Esports Association, which was responsible for organizing pro players, granting licenses, scheduling showtimes on Korean television, etc.) for many years and as a result did not receive a portion of the direct revenue generated from the e-sports scene for Starcraft Brood War. For the most part, now all of the largest tournaments are sponsored and funded by the companies themselves. The International is funded by Valve, LCS is funded by Riot, Starcraft II is funded by Blizzard and they sublease broadcasting rights to several different Korean companies. Nearly all of these games have their largest tournaments broadcast on Twitch.tv, an online streaming website that allows for people to watch gameplay footage in real time. Because of the primarily online distribution of e-sports content (with the exception of South Korea) this furthermore allows the companies not to have to rely on other broadcasting companies to show their tournaments. Indeed, streaming has become so lucrative that YouTube is beginning to expand their streaming capabilities for games.
(Blizzard and Kespa reaching an agreement regarding broadcasting rights)
Third party e-sports leagues are being brought into line, but instead of shutting them down they allow them to continue with a license. A great example of this happening occurred with the Super Smash Brothers community. In 2013, EVO was sent a cease and desist letter by a lawyer in Nintendo stating that they were not allowed to broadcast Super Smash Brother Melee. However, after online backlash, especially considering that Melee had been a staple at EVO for years, Nintendo reversed the decision. To this day, there are those who believe (like myself) that this decision was actually made in error, given that the decision was immediately reversed and no such decision was made before, there is a suspicion that the lawyer may simply have been new and didn’t know what he was doing. Regardless, after the EVO 2013 incident, Nintendo started to reach out to tournament organizers and sponsored them. In 2014 and 2015, Nintendo not only licensed broadcasting rights to MLG (Major League Gaming), EVO, APEX 2015 (the premier Smash tournament where all versions of the game are played) and many other leagues, but also sponsored the events, providing money, equipment, and promotion on their Twitter and Facebook pages.
(complete sponsor list for EVO 2014)
Leasing and sponsoring the tournament also had other benefits for Nintendo. A fan-made modification to Super Smash Brothers Brawl, referred to as Project M, was very popular and featured in many tournaments. However, because Project M was not a Nintendo product, not only did they not receive money from it (it was a free download, but the makers received donations) but it also created a product that could potentially compete with their products. Many users online noted that when they played Smash 4 for the first time that the game felt similar to Project M. When Nintendo began to sponsor these tournaments, Project M disappeared from the event listings in its entirety, although this cannot be definitely linked to Nintendo, it is very likely that Project M’s omission was a stipulation by Nintendo for sponsorship. In 2015, the makers of Project M would cease their development of the mod in its entirety, the reason they claim was not because they were targeted by any legal action by Nintendo but rather because they saw it as a potential hurdle in the future and wished to avoid it.
Third party leagues are becoming more valuable as well, as their production companies, industry knowledge, and connections make them very valuable to both investors and gaming companies. It also allows for the company to have more control over their e-sports presence. In 2015, ESL (Electronics Sports League) was acquired by a Swedish Media company for $87 million USD, because the company saw the worth in the future. In 2016, MLG, (Major League Gaming) was purchased by Activision-Blizzard for a rumored $46 million USD in order to better promote their esports titles (which include Starcraft, Warcraft, Call of Duty, Heroes of the Storm, Hearthstone, etc.). By absorbing the league, it is able to better control the tournament. Another example would be in how Nintendo sponsors tournaments. At these tournaments, the traditional commercial break, where an ad would be run on the streaming website (usually Twitch.tv) was instead replaced with Nintendo commercials and promotions. For example, Nintendo brought a setup of the then-unreleased game Splatoon for attendees to play a demo of at Apex 2015. Greater company involvement and control allows for greater control of the message.
A potentially interesting issue that could have a large impact on the e-sports scene is the idea of copyrighting concepts and game mechanics. It is well established in copyright law that you cannot copyright archetypes and settings, for example while you can copyright Spiderman, you cannot copyright the idea of a superhero who has spider-based powers in New York City. Although untested in the realm of video games however, it seems that this principle also applies to game mechanics.
(comparison of Dota 2 versus League of Legends)
The U.S. Copyright Office statement on this matter seems pretty succinct. The Office states that the “methods of playing a game” are unprotected according to the statement and “similar methods” may be used. (https://www.copyright.gov/fls/fl108.pdf) This is consistent with the history of several e-sports titles. An example that highlights this is the history of DotA, League of Legends, Heroes of Newerth, Heroes of the Storm, and SMITE. The original DotA was a fan modification for Warcraft III, developed by several enthusiasts. Over time, the developer split up to pursue their own projects. Guinsoo, one of the original developers, would end up creating League of Legends and Icefrog, another original developer, would be hired by Valve to create DotA 2. Heroes of Newerth was a game that had similar game mechanics as the other two and also was derived from the original DotA. With the popularity of what was then called DotA-style games arising, other companies jumped into the mix, Blizzard created a game known as Blizzard DotA, and Hi-Rez studios created SMITE. All of these games retained elements from DotA, for example leveling, three lanes, items, 5 versus 5 games, etc. However, even though these games all derived heavily from the same source and were very mechanically similar, there were very few legal problems between all of these companies.
In fact, the only lawsuit filed within the realm of DotA-style games was filed for trademark reasons, not copyright. Blizzard, the owner of Warcraft III which is the game the original DotA was derived from, claimed that Valve could not commercialize the name because it belonged to the Blizzard community and would create confusion as to if DotA 2 was a Blizzard product. The end result was that Blizzard conceded the rights to commercially use DotA to Valve while Valve conceded that non-commercial work (the original DotA for instance) could use the DotA name freely. To that end, Blizzard changed the name of their game from Blizzard Dota to Blizzard All Stars, and the final name for the game was Heroes of the Storm.
As the newest medium to express creative ideas, video games have a long ways to go before significant legal findings are made about it. And as far as e-sport goes, there will be a long time before the legal issue present within the field get any significant attention by legal scholars…certainly when more money is involved. While it is true that the entirety of e-sports revenue generated worldwide is larger than that of the NBA, the field still needs more time to expand its audience beyond those who play video games and attract those who also do not. In the meantime however, familiarizing oneself with the history and potential legal issues of e-sports will help any lawyer who wishes to get into video games related litigation in the future. Video games are the next big frontier.
Although many legal issues, especially with e-sports, will be familiar to lawyers who are otherwise unfamiliar with video games (for example, players contracts or trademark law) there are many more potential issues that are unexplored and have potentially large ramifications. Intellectual property (IP) lawyers will be at the forefront of this effort, as they are best suited for interpreting older statutes that never had video games in mind when they were written to be applied towards video games. Already there is a growing number of lawyers involved in video games, whether it is the popular Video Games Attorney who gained notoriety by helping smaller studios sue larger companies or the legal divisions of Activision-Blizzard and other large companies. Navigating this unknown frontier of IP law requires the guidance of an experienced IP attorney.
by Henry Park, Esq. Of Counsel and Registered U.S. Patent Attorney Copyrights are territorial rights, which means that they are granted by—and limited to—the jurisdiction in which the copyright claimant seeks protection. To avoid this limitation, 171 countries have signed the Berne Convention for the Protection of Literary and Artistic Works. Under the Berne Convention, signatories recognize that the works from one contracting state must be given the same protection in each of the other contracting states as the latter gives to its own nationals. See Berne Summary at http://www.wipo.int/treaties/en/ip/berne/summary_berne.html (1) Authors shall enjoy, in respect of works for which they are protected under this Convention, in countries of the Union […] the rights which their respective laws do now or may hereafter grant to their nationals, as well as the rights specially granted by this Convention. See Berne Convention, Article 5(1) at http://www.wipo.int/treaties/en/text.jsp?file_id=283698#P109_16834. Moreover, that protection must not be conditioned upon compliance with any formality. See supra Berne Summary. (2) The enjoyment and the exercise of these rights shall not be subject to any formality[.] See Berne Convention, Article 5(2) at http://www.wipo.int/treaties/en/text.jsp?file_id=283698#P109_16834.
When the U.S. became a signatory to the Berne Convention, it amended its copyright laws through the Berne Convention Implementation Act of 1988. Specifically, the U.S. amended Section 411 to require the registration of only domestic works before a copyright lawsuit can be filed. See 17 U.S.C. § 411(a). Thus, a non-U.S. copyright claimant (i.e., foreign claimant) can initiate a copyright infringement lawsuit in the U.S. based on its foreign copyrights without registering them. The U.S., however, did not amend Sections 410(c) or 412. Section 410(c) grants a presumption of validity to registered works, which affects the order of proof. See 17 U.S.C. § 410(c). Section 412 makes timely registration a prerequisite for certain remedies: the award of statutory damages and of attorneys’ fees. See 17 U.S.C. § 412. [The committee] has concluded that the statutory incentives for registration contained in the provisions of sections 410(c), 412, and 205 of the Copyright Act are not preconditions for the ‘enjoyment and exercise’ of copyright. While those provisions substantially enhance the relief available to the proprietor of a registered work, they do not condition the availability of all meaningful relief on registration, and therefore are not inconsistent with Berne. Elsevier B.V. v. UnitedHealth Group, Inc., 93 U.S.P.Q.2d (S.D.N.Y. Jan. 10, 2010) (quoting from Senate Report No. 100-352). To avail oneself of the benefits associated with Section 412, the copyright holder must timely register its works.
– for an unpublished work, that the work is registered before any infringement – for a published work, that the work is registered within three months of its first publication See 17 U.S.C. § 412. Once timely registered, the copyright holder may claim statutory damages instead of having to prove actual damages and the actual infringer’s profits. See 17 U.S.C. § 504(c). Statutory damages are determined by the court and range from between $750 – $30,000 per infringed work, and can go up to $150,000 per work if the infringement was willful. See 17 U.S.C. § 504(c). Additionally, the copyright holder may recover its costs and, if it is the prevailing party, its reasonable attorney’s fees. See 17 U.S.C. § 505; see also Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. ___ (2016) (a court examines a variety of factors when determining whether to award attorney’s fees, but should put substantial weight on the reasonableness of the losing party’s position). Both of these benefits are particularly strong negotiating tools. Thus, foreign copyright claimants should timely register their foreign copyrights with the U.S. Copyright Office to avail themselves of all potential relief under U.S. Copyright Law.
The LAW FIRM OF DAYREL SEWELL, PLLC is pleased to announce that Messrs. Sewell’s and Ng’s recent, featured publication, “Pharell Williams and Robin Thicke told they “Got To Give It Up””, appears in this month’s IPFrontline newsletter.
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The LAW FIRM OF DAYREL SEWELL, PLLC is pleased to announce that Dayrel will be co-presenting a Continuing Legal Education (CLE) course called “Intellectual Property Fundamentals: What Every Attorney Needs to Know” on Monday, May 19, 2014 at the Brooklyn Bar Association.
Refreshments and networking will immediately follow the CLE presentation. The attached flyer contains further course and registration information. You are encouraged to attend this fun and informative event. We look forward to seeing you!