Streaming in eSports, Who Owns What? -- Legal Essay

                As most Americans are beginning to find out, eSports or competitive video gaming is a phenomenon that is here to stay.[1]  Fortune.com recently predicted that by 2017 eSports will usurp the NFL in sheer number of fans. [2] Last year there were more unique viewers for the League of Legends World Championship than for the MLB World Series and the NBA Championship combined.[3] On April 25, 2015, ESPN 2 broadcast Blizzard Entertainment’s Heroes of the Storm tournament titled “Heroes of the Dorm.”  The winners had their full undergraduate tuition paid off.  The tournament did not go unnoticed as Heroes of the Dorm was the top trending topic on twitter over an hour after its completion.[4]  With the rise of the eSports industry comes the creation of new, untackled, legal issues.  Not much attention has been paid to these issues and when an academic journal has tried to discuss such compelling issues like proprietary rights in avatars, there has hardly been any consensus amongst the scholars.[5] One untouched issue in the eSports world is the issue of Copyright law.

With the large number of people watching eSports there is now a demand to have access to highlights and gameplay at all times.  Youtube channels such as “GamerGraphy” had dedicated themselves entirely to retransmitting eSports tournaments through Youtube.[7]  As recently as last week GamerGraphy’s Youtube channel was given a strike by Youtube for being in violation of its Copyright Policy.[8] GamerGraphy, like many other Youtube channels would take tournament Hearthstone play which was hosted and streamed on a website entitled “Gfinity” and rebroadcast it through Youtube.[9]  Normally one would think that Gfinity should be able to protect its broadcast and control its reproduction as is standard for 106 Copyright rights.[10]  The difficulty lies in determining whether Gfinity actually owns any rights to begin with.  Gfinity is not the developer of any of the games featured in the tournaments it hosts. As such, it might be reproducing the content of those games without the permission of the game developer. This essay will discuss game streaming proprietary rights and how the eSports industry is beginning to realize that with four major parties: the player, the game developer, the streaming platform, and the tournament host, who owns what is not so clearly defined.

DMCA Takedowns

DMCA takedown notifications are a relatively new part of America’s copyright law.[11]  Instead of choosing to completely overhaul the copyright system, by enacting the Digital Millennium Copyright Act the drafters sought to “clarify the liability faced by service providers who transmit potentially infringing material over their network.”[12]  Section 512 of the DMCA sets forth safe harbors for internet service providers, like YouTube or Twitch.tv who transmit a user’s alleged infringing content. [13]

The safe harbor will only apply if the service provider: (i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing; (ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or (iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the materials.[15] To meet these requirements and the requirements of section 512(c), service providers like YouTube have set up departments to receive DMCA takedown notifications.[16] Upon receipt of such a notification a service provider acts according to 512(c)(1)(C)’s instruction and expeditiously removes the alleged infringing material.[17]

SpectateFaker

A DMCA notification was sent to streaming service provider Twitch.tv by its primary competitor Azubu.tv in February.[18] The dispute focused in on the core issue outlined in the GamerGraphy case.  Few people in the industry are aware of who owns what proprietary rights.  In this instance, Lee "Faker" Sang-hyeok the best League of Legends player in the world signed a deal with Azubu.tv where he agreed to broadcast all of his exhibition games exclusively through their platform.[19]  Much was made about this deal at the time although deals like it had been handed out across the gaming industry.[20]  A large number of players agreed to broadcast their non-tournament games exclusively on Azubu.[21]  Azubu executives even referred to the deal as “the biggest one in their history.”[22]  What makes this deal so big is the immense amount of advertisement and subscription revenue generated by a streaming platform through its unique viewers.  One individual went so far as to calculate a mid-level streamer’s revenue intake from a streaming website like Twitch and determined he made $216,000 a year before taxes.[23]

After a few months of exclusive match streaming on Azubu beginning in November 2014, the website op.gg launched a new spectate feature.  Using this feature, any website user could spectate a game being played by a player in the Diamond or Challenger bracket. To do this op.gg utilized the spectate feature Riot, the game developer of League of Legends, created whereby anyone playing its game could view an individual player’s match so long as they were “friends” with that player or it was being broadcast.[24]  Op.gg expanded this and made any match of any player who met the qualifications available to the viewing public even if they were not playing the game.  One individual, referred to only as “Spectatefaker” took this a step further.  Spectatefaker used the new spectate feature on op.gg to view Faker’s match on his screen.  He then broadcast his own screen through the Twitch.tv service.  Notably, using Spectatefaker’s Twitch feed did not allow Twitch users to gain access to Faker’s commentary or his display which was otherwise provided on Azubu.  Nevertheless Twitch users were still able to view Faker’s gameplay.  Azubu viewed this is a violation of its exclusive rights to broadcast Faker‘s matches, they proceeded to send a DMCA takedown notification to Twitch.[25] 

As a clarification of the procedure it should first be noted that Twitch cannot be held contributorily or vicariously liable for any infringement of a user without “objective” evidence which would make them, or a reasonable person, aware of an infringement; or actual knowledge of the infringement, which would come from an Azubu DMCA takedown notice.  Twitch has come under much criticism for taking down Spectatefaker’s broadcast but what those criticizing Twitch should understand is that noncompliance was as the time, not an option.

Title II of the DMCA was enacted because service providers perform a useful function, but the great volume of works placed by outsiders on their platforms, of whose contents the service providers were generally unaware, might well contain copyright-infringing material which the service provider would mechanically ‘publish,’ thus ignorantly incurring liability under the copyright law.[26]

In Viacom v. YouTube, the appellate court held that general knowledge of infringing content does not satisfy the knowledge required for secondary liability.[27]  What is required is “knowledge or awareness of specific infringing activity.”[28] After gaining knowledge or awareness of the infringing activity the safe harbor protection is retained if “it acts expeditiously to remove or disable access to the material.”  In this instance, Twitch was served with a takedown notice by Azubu making it aware of the infringing activity. Twitch then immediately took down the alleged infringing material.

Spectatefaker was presumably presented with notice of his infringement by Twitch.  According to Section 512(g) of the DMCA, Spectatefaker would be entitled to file a counter notification asserting that his stream was not a copyright infringement and that it was taken down by mistake.[29] 

Assessment of Legal Rights and Who Owns What

Had Spectatefaker submitted a counter notification he would be able to make compelling legal arguments.  He would also have set off a tsunami in the eSports industry. The industry is in desperate need of clarity regarding the issues of in-game proprietary ownership.  In initially filing a DMCA takedown notice the filer must assert that he is the rightful owner or representative of the copyright holder.  Puzzlingly, it is not clear that Azubu could legally claim to be the owner of Faker's stream despite the existence of their exclusive rights to Faker's broadcast as it may not even be said that Faker is the owner of his game play.

What Faker is actually streaming on Azubu.tv is a live broadcast of his desktop screen and commentary about the game he is playing.  While Faker certainly owns the commentary he provides, the desktop screen features game play from Riot’s League of Legends.  To play League of Legends, each player must sign a Terms of Use Agreement.  Those terms dictate that:

[a]ll rights and title in and to the Properties. . . are owned by Riot Games or its licensors. . .  Riot Games and its licensors reserve all rights in connection with the Properties, including, without limitation, the exclusive right to create derivative works therefrom. You agree that you will not create any work of authorship based on the Properties except as expressly permitted by Riot Games. Additionally, except as otherwise set forth in this Section IV.A, Riot Games does not authorize you to make any use whatsoever of any Riot Games trademarks, service marks, trade names, logos, domain names, taglines, and/or trade dress under any circumstances without a written license agreement.[32]

After reading this agreement, it would seem that the right to broadcast the game play belongs to Riot, the creator of the game play and owner of intellectual property associated with its game.  Assuming Faker’s agreement with Azubu to broadcast his game play was done without a written licensing agreement or express permission from Riot, then it was not an assignment of any comprehensible right.  

Since the purpose of this essay is to ascertain the stream's ownership before any agreement to convey, the remaining portion of this article will discuss the legal issue outside the context of Riot's Terms of Service or any other Riot related license.  The inquiry is purely hypothetical and serves to examine the industry at large whereas clearly  the existence of these contracts change the context ownership questions must be discussed in.

Since Riot owns the copyright in League of Legends the only argument to be made for Faker's ownership of the stream would be under fair use.  Section 107 of the Copyright Act provides “the fair use of a copyrighted work, including such use by reproduction in copies . . .  for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.”[35]  Bearing in mind the purpose of the Copyright Act is to promote the progress of science and the useful arts, Faker and Azubu may not be infringing on Riot’s copyright.[36]  What Faker does is provide commentary during his game play.  Like most streamers, Faker analyzes game mechanics and discusses game strategy.  Game analysis, from the best League of Legends player in the world, is not available anywhere but his stream.

The fair use doctrinal standard shapes the evaluation in four separate categories:

(1) the purpose and character of the use, 

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.[37]

The first factor evaluates the purpose and character of the use.  This factor is “the heart of the fair use inquiry.”[38]  “If the original work is used as raw material, transformed in the creation of new information, new aesthetics, new insights and understandings, this is the very type of activity that the fair use doctrine intends to protect.”[39] Here Faker is providing unique high quality analysis as opposed to strictly displaying the gameplay Riot provides. 

The second factor is in essence a discussion of the type of work being used. Courts typically favor fair use when the work being used is factual or informative as opposed to fiction.  While that is not the case here, there is no question that Riot's right of first publication is not being infringed.   Also, the second factor “may be of limited usefulness where the creative work [being used] . . . is being used for a transformative purpose.”[44]   

The third factor assessed, the amount of the copyrighted work used, should be the determining factor.  That analysis seems to go against Faker.  He is using all of Riot’s gameplay and use of all of the gameplay is essential if he is going to provide commentary and criticism of game mechanics and strategy.   In the landmark case Cariou v. Prince, all of the copyrighted works were used.  The only alterations were additions to the paintings.  Here the only alteration to the gameplay is commentary and a live stream display of Faker playing the video game. Nevertheless, it was said by the Cariou court that once the alterations were made the original paintings were completely different, in character and appearance to the newer paintings.  The same cannot be said here as Faker is still broadcasting the game made by Riot. The reason he is able to gain subscriptions and revenue is because he is capitalizing on Riot’s game.  As was the case in Cariou the fourth factor of bridging the gap likely has little or no relevance here.  Obviously no one but Faker can provide Faker’s analysis. 

While Azubu and Faker may or may not be infringing on Riot’s copyright, Spectatefaker, the subject of the original analysis, is certainly not infringing on Faker’s.  Faker’s fair use can only be classified as a derivative of Riot’s gameplay. Spectatefaker is not displaying any of Faker’s commentary or even Faker’s webcast.  The only thing that is being shown is Faker’s actual game play which is owned by Riot.  As a result, Azubu likely would not have prevailed if Spectatefaker had filed a counter notice to Azubu's takedown.  With that said, Spectatefaker is certainly infringing on Riot’s copyright by broadcasting to the public Riot's gameplay.  

Harping back to the  initial GamerGraphy problem, it is unclear whether Gfinity has any rights to its broadcast absent a license from Hearthstone game developer Blizzard Activision.  While Gfinity displays Blizzard’s Hearthstone interface it also adds commentary and a broadcast which may or may not qualify it for fair use protection.  

Most importantly, as illustrated in this legal analysis is the reality that the game developer controls almost every aspect of the game’s play.  Unlike hockey, baseball or football, it cannot be said that the NHL, MLB or NFL owns all video footage of its player’s playing their respective sports.  Here the player is playing a sport owned by a developer, that developer will necessarily be involved in all aspects of its game’s reproduction.  

[1] eSports can soon be a billion dollar industry.  Watching other people play video games could soon be a billion dollar industry, FORTUNE, (April 20, 2015), http://fortune.com/2015/04/20/esports-billion-dollar-industry/

[2] Id.

[3] League of Legends is a MOBA or Multiplayer Online Battle Arena.  Players are split into teams of 5 and the basic objective is to destroy the other team’s “nexus” or base.

[4]

[5] Oliver A. Khan, Me Myself and My Avatar: The Right to the Likeness of our Digital Selves, 5 I/SL J.L & POLICY FOR INFO. SOC 447 (2010); Tyler T. Ochoa, Who owns an avatar? Copyright, Creativity, and Virtual Worlds, 14 VAND. J. ENT. & TECH. L. 959 (2012).

[6] DMCA TAKEDOWN ABUSE; https://www.eff.org/deeplinks/2015/02/absurd-automated-notices-illustrate-abuse-dmca-takedown-process

[7] GAMERGRAPHY CHANNEL, https://www.youtube.com/user/tournamentsreplays/about

[8] DISASTER US. https://www.youtube.com/watch?v=GD-M1BoU428

[9] These videos are called “VODs”

[10] 17 U.S.C. § 106

[11] Viacom Intern., Inc. v. YouTube, Inc. 676 F.3d 19, (2nd Cir. 2012)

[12] Id.

[13] 17 U.S.C. § 512

[14] Id.

[15] Id.

[16] COPYRIGHT POLICY, https://support.google.com/youtube/answer/2807622?hl=en

[17] Id.; 17 U.S.C. § 512.

[18] http://www.pcgamer.com/league-of-legends-e-sports-controversy-sparked-over-twitch-stream/

[19] AZUBU KESPA DEAL, http://www.dailydot.com/esports/azubu-kespa-deal/

[20] Id.

[21] Id.

[22] Id.

[23] Id.

[24] http://leagueoflegends.wikia.com/wiki/Spectator_Mode

[25] http://www.pcgamer.com/league-of-legends-e-sports-controversy-sparked-over-twitch-stream/

[26] Viacom Intern., Inc. v. YouTube, Inc. 676 F.3d 19, (2nd Cir. 2012)

[27] Id.

[28] Id.

[29] 17 U.S.C § 512 (g)(3)                                    

[30] Id.

[31] Id.

[32] League of Legends Terms of Use Agreement (Last Modified: October 23, 2012), http://na.leagueoflegends.com/en/legal/termsofuse (Last visited March 3, 2015).

[33] The rest of this essay will proceed under the assumption that there was no authorization from Riot to Faker.  That was not the case as Riot's legal jibber jabber page expressly permits Faker's use.  The purpose of this is to clarify proprietary rights outside of an assignment or relinquishment.  In other similar instances there may be no permission given by the game developer.  It is these instances I wish to speak to.

[34] For a contract to be considered adhesive the contract must be negotiated between two unequal parties and it must employ substantively unconscionable clauses.  Without further analysis of this contract it should suffice to say that Faker, an 18 year old individual who does not attend a university, is not negotiating the Terms of Use at arm’s length with Riot Games.  The contract is also not favorable insofar as Faker may invest his entire life into playing League of Legends and creating creative works and videos but he may be unable to reap any reward for those creations. In Bragg v. Linden Research an ingame virtual transaction was the subject of the lawsuit.  Linden sought to enforce the arbitration agreement found in the terms of use but the contract was found to be unconscionable.

[35] 17 U.S.C. § 107

[36] Castle Rock Entertainment, Inc. v. Carol Pub. Group, Inc. 150 F.3d 132 (2nd Cir. 1998)

[37] 17 U.S.C. § 107

[38] Cariou v. Prince 714 F.3d 694 (2nd Cir. 2013).

[39] Id.

[40] Id.

[41] Id.

[42] Campbell v. Acuff-Rose Music, Inc. 510 U.S. 569 (1994).

[43] Id.

[44] Cariou v. Prince 714 F.3d 694 (2nd Cir. 201