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Russia’s Controversial Esports Law: Bypassing Game Publishers in Licensing Agreements

In a move that has sparked controversy and debate within the global esports community, Russian lawmakers have drafted a groundbreaking proposal. This initiative, which circumvents the traditional process of obtaining licensing agreements directly from game publishers, could significantly alter the esports landscape in Russia and potentially influence global esports practices.

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Esports Tournaments Without Direct Licensing

The proposed legislation is designed to allow esports tournament organizers to conduct events without the need to enter into direct licensing agreements with intellectual property holders. This shift in the legal framework could have far-reaching implications for how esports tournaments are organized, potentially changing the power dynamics between game developers and event organizers.

The Three-Year Holding Mechanism

Central to the proposal is the creation of a public-law company (PLC), tasked with managing the licensing fees associated with the use of games in esports tournaments. These funds will be held for a period of three years, after which unclaimed money could be redirected to support Russian game developers or the Russian Esports Federation. This aspect of the proposal has raised concerns about the potential disregard for the rights of intellectual property holders.

State Duma’s Pivotal Role in Esports Future

During a significant meeting of the State Duma Committee on Physical Culture and Sports, key representatives from various sectors, including the Ministry of Digital Development and the Russian Esports Federation, convened to discuss the implications of these legislative changes. The meeting underscored the complexities involved in altering the current licensing framework within the esports industry and highlighted the potential for significant impact on both domestic and international levels.

Defining ‘Innovative Sports’ and Free Use

The proposed amendments introduce the term “innovative sports,” encompassing sports that integrate physical activity with digital technologies, and suggest a regime of free use of software in Russia for such sports. This legal redefinition raises questions about the balance between encouraging innovation in esports and protecting the intellectual property rights of game developers.

Implications for International Game Publishers and Esports Athletes

With the “Games of the Future” scheduled for 2024, featuring popular games like CS:GO and DOTA 2, the proposed changes have significant implications for international game publishers and Russian esports athletes. The potential for restricted access to international competitions and the broader use of games without explicit permission from rights holders are among the contentious issues being debated. The proposed amendments could potentially impact Russian esports athletes’ access to international competitions and create ambiguity in the legislation regarding the definition of video games, leading to broader use of various objects without the permission of rights holders.

Legal experts in the field of sports law, such as Vsevolod Rozhkov of Game-in-Law, have highlighted the traditional ways tournament organizers interact with intellectual property holders: through open license conditions or direct agreements. Rozhkov points out that violating open license conditions can lead to prohibitions on game use and legal disputes, adding a layer of complexity to the proposed legislative changes.

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The Future of Russian Esports Amidst Global Tensions

The necessity for this legislative mechanism is partly attributed to the current geopolitical climate, particularly the sanctions and strained relations between Russia and certain other jurisdictions. This has led to difficulties in organizing esports competitions using video games from intellectual property holders in these unfriendly jurisdictions, who often ignore or refuse licensing requests from Russian organizations.

Industry Reactions and Ongoing Negotiations

The “Games of the Future” organizers are currently in negotiations with key publishers, navigating the complex landscape shaped by these proposed legislative changes. The esports community, both in Russia and globally, is closely watching these developments, which could set a new precedent in the relationship between esports tournament organizers and game publishers.

Via: kommersant.ru

Image: L-BBE, CC BY 3.0 https://creativecommons.org/licenses/by/3.0, via Wikimedia Commons

Author

  • Leonid Shmatenko

    Leonid Shmatenko is part of Eversheds Sutherlands’ data protection and technology law team. He has vast experience in regulatory and general issues in the areas of eSports and Blockchain. He advises eSports associations and clubs on all legal issues, advises and supports crypto startups in all matters from planning, preparation to execution of private and public token offerings (so-called Initial Coin Offerings or ICOs). Furthermore, Leonid Shmatenko specializes in international arbitration and has participated in several arbitration proceedings (SAC, ICC, DIS, UNCITRAL, ICSID, ad hoc) as a party representative and secretary of the tribunal. Leonid Shmatenko studied at the Heinrich Heine University in Düsseldorf and is currently pursuing a PhD in international law. After his successful first state examination (2011), he completed his legal clerkship, inter alia, at the German Embassy in Lima and within international law firms in Düsseldorf and Paris. He passed the second state examination in 2015. He is an external lecturer at the National Law University of Ukraine “Yaroslav Mudryi”, where he teaches International Investment Law. He is admitted to the Bar in Switzerland and Germany. Before joining Eversheds Sutherland, Leonid Shmatenko worked as an attorney at leading law firms in Geneva, Munich and Paris.

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Moonton and Riot Games Reach Historic Settlement in Copyright Dispute

Moonton and Riot Games, two titans of the esports and gaming industry, have concluded their prolonged copyright dispute through a mutual settlement, marking a significant chapter in the evolution of intellectual property rights within the digital entertainment sector. This resolution concludes a series of legal challenges that had not only captivated the attention of the gaming community but also set a critical precedent for copyright law’s application in the fast-paced world of video gaming.

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Settlement Montoon and Riot Games

The Genesis of the Dispute between Moonton and Riot Games

The legal battle began when Riot Games, the maker of League of Legends, accused Moonton, the creator of Mobile Legends: Bang Bang. Riot Games claimed that Moonton copied essential elements like character designs, game modes, and overall style from League of Legends, leading Riot to take legal action to safeguard its creative assets and copyright.

Riot Games first took legal action in the United States but eventually had to to pursue the claims in China due to complex international copyright laws and challenges with jurisdiction, as both companies are heavily present there. This action highlights the challenges of dealing with copyright conflicts in a worldwide digital market, where intellectual property moves across borders easily and legal systems differ greatly in different regions.

Ever since starting in 2017, the legal dispute between Riot Games and MOONTON has evolved into a convoluted narrative, highlighting the fierce competition and legal complexities in the gaming sector. The main reason for this extended conflict revolves around the top games of each company: League of Legends (LoL) from Riot Games, a giant in the esports industry, and Mobile Legends from MOONTON, a rising competitor gaining fast popularity, particularly in the Southeast Asian mobile gaming sector.

The legal battle began when Riot Games accused MOONTON of copying key gameplay elements, character designs, and abilities from League of Legends for their mobile game Mobile Legends. The first legal case in the United States sparked a series of legal battles, as Riot Games claimed that Mobile Legends: 5v5 MOBA was not just inspired by but copied LoL.

Despite the US court deferring jurisdiction to China, MOONTON was still required to reach a USD 2.9 million settlement with Riot Games for copyright infringement, which also resulted in Mobile Legends being temporarily removed from app stores. However, MOONTON decided to make adjustments and relaunch the game as “Mobile Legends: Bang Bang,” in an attempt to address the controversial copyright problems.

Even with these changes and the significant agreement, the conflict was still ongoing. In May 2022, Riot Games launched another legal attack on MOONTON, accusing them of copying intellectual property from their mobile game, League of Legends: Wild Rift, including its unique promotional tactics.

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The ongoing legal disputes between Riot Games and MOONTON have sparked extensive debates within the gaming community and among industry experts. Some believe MOONTON intentionally copied League of Legends to benefit from its popularity, while others argue that similarities in MOBA games are common and shouldn’t lead to legal action. These disagreements emphasize the fine line between finding inspiration and blatant copying, showcasing the continual difficulties in protecting intellectual property in the highly competitive gaming sector.

The Settlement

Yet, the parties decided to settle the dispute. The legal communication from Montoon reads:

“After several rounds of communication, the two parties recently officially signed a settlement agreement, and Riot Games has decided to formally withdraw the corresponding lawsuits.”

The settlement not only ends a period of legal confusion but also sets the stage for a gaming sector that, with any luck, prioritizes cooperation, respect for intellectual property, and legal honesty. It acts as a powerful symbol of the fragile equilibrium between encouraging creativity and honoring the legal protections for that creativity. As the gaming industry keeps developing, the knowledge gained from this conflict will probably have a significant impact on determining its future, particularly in terms of intellectual property rights.

Industry stakeholders and legal experts are closely monitoring the agreement between Moonton and Riot Games, as they are interested in deciphering its impact on upcoming copyright disputes in the esports industry. It catalyzes game developers and publishers to align their creative aspirations with the need to uphold intellectual property rights, guaranteeing a dynamic industry future rooted in innovation, respect, and legal integrity.

Final thoughts

The settlement between Moonton and Riot Games demonstrates the importance of negotiation and highlights the value of intellectual property rights in today’s digital era. It indicates a shift toward a future where businesses participate in ethical actions, protecting the ever-changing environment of esports and gaming by being innovative, respectful, and following legal guidelines. As we move ahead, the gaming industry is at a critical point, with the resolution of this disagreement paving the way for a cooperative, respectful, and legally sound future.

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Case Overview

Plaintiff: Riot Games, Inc.

Defendant: Shanghai Moonton Technology Co., Ltd.

Court: United States District Court for the Central District of California

Case Number: 2:22-cv-3107

Counsel for Plaintiff – Riot Games, Inc.

Kirkland & Ellis LLP

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  • Dale M. Cendali
  • Joshua L. Simmons
  • Miranda D. Means
  • Yungmoon Chang

Counsel for Defendant – Shanghai Moonton Technology Co., Ltd.

Keker, Van Nest & Peters LLP

  • Ajay S Krishnan
  • Christopher S Sun
  • Edward Andrew Bayley
  • Michelle S Ybarra
  • Travis Scott Silva

Author

  • Leonid Shmatenko

    Leonid Shmatenko is part of Eversheds Sutherlands’ data protection and technology law team. He has vast experience in regulatory and general issues in the areas of eSports and Blockchain. He advises eSports associations and clubs on all legal issues, advises and supports crypto startups in all matters from planning, preparation to execution of private and public token offerings (so-called Initial Coin Offerings or ICOs). Furthermore, Leonid Shmatenko specializes in international arbitration and has participated in several arbitration proceedings (SAC, ICC, DIS, UNCITRAL, ICSID, ad hoc) as a party representative and secretary of the tribunal. Leonid Shmatenko studied at the Heinrich Heine University in Düsseldorf and is currently pursuing a PhD in international law. After his successful first state examination (2011), he completed his legal clerkship, inter alia, at the German Embassy in Lima and within international law firms in Düsseldorf and Paris. He passed the second state examination in 2015. He is an external lecturer at the National Law University of Ukraine “Yaroslav Mudryi”, where he teaches International Investment Law. He is admitted to the Bar in Switzerland and Germany. Before joining Eversheds Sutherland, Leonid Shmatenko worked as an attorney at leading law firms in Geneva, Munich and Paris.

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Steamboat Willie entered into the Public Domain 95 years after its release: What is the Impact on the Gaming Industry?

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Steamboat Willie - The Walt Disney Company

The copyright on Disney’s 1928 short film Steamboat Willie expired in the US on January 1, 2024, 95 years after it was released. It means the early versions of Mickey and Minnie Mouse featured in the film – their first screen release – can be used without incurring a cost. The termination of US copyright protection for Steamboat Willie, has triggered a surge of creative projects featuring the iconic character. Shortly after this milestone, two horror films and a video game starring Mickey Mouse were swiftly announced.

Mickey Mouse – Inspired Game: Infestation: Origins

The game, named Infestation: Origins, was revealed via IGN just hours after the character’s earliest renditions entered the public domain in the US. Infestation: Origins offers players a cooperative horror experience, pitting them against sinister versions of classic characters and urban legends, with Mickey Mouse taking centre stage as the primary antagonist.

Originally introduced as “Infestation 88,” the game underwent a name change following concerns raised on social media regarding the connotations of the number “88.” The developer, Nightmare Forge Games, promptly addressed the issue, expressing regret over their oversight and swiftly rectifying the situation. Nightmare Forge Games appears unyielding, emphasising in both the game’s Steam store and trailer that it draws inspiration from works now in the public domain and has not been officially endorsed by the original creators or copyright holders.

This game is inspired by works that are now in the public domain. This independent creation has not been authorized, sponsored, or otherwise endorsed by any original authors of said works. All content in this game is used under appropriate public domain guidelines, and is not affiliated with, related to, or endorsed by any existing intellectual property or trademark holders.

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Copyright Protection and Expiration

The evolution of Mickey Mouse’s copyright protection has been a subject of contention over the years. Initially set to expire in 1984, Disney successfully advocated for legislative changes, extending protection until 2003. Subsequent lobbying efforts, including the infamous Mickey Mouse Protection Act, further prolonged copyright terms, safeguarding Steamboat Willie until the conclusion of 2023. However, with the expiration of copyright in the US, creative opportunities have flourished, although the landscape remains complex due to varying international copyright laws.

Does this extend worldwide?

While individuals in the US have the liberty to utilise the 1928 short for crafting new narratives and artistic creations featuring Steamboat Willie, the global applicability of this freedom varies. In certain jurisdictions, where copyright protections extend for 70 years after the death of the last surviving author or creator, Steamboat Willie will retain protection until at least 2042. This is particularly pertinent considering that Steamboat Willie’s co-creator, Ub Iwerks, passed away in 1971.

However, in some countries, Steamboat Willie may only benefit from the copyright protection afforded by the nation in which it was originally created. Consequently, it may enter the public domain in those jurisdictions as well. For those interested in utilising Steamboat Willie in their creative endeavours, it is imperative to conduct thorough research into the copyright laws of their respective countries.

The Fine Line: Utilising Public Domain while Respecting Trademarks

While the public domain status of Steamboat Willie in the US allows for new interpretations, it’s essential to recognise that Mickey Mouse’s distinct characteristics (as we know him) and trademarks remain under Disney’s ownership. Thus, creators must tread carefully to avoid infringing on copyrighted and trademarked elements while exploring the possibilities offered by the public domain.

Author

  • Dr Despoina Farmaki

    Despoina, a pivotal member of Esports Legal News, seamlessly blends her fervour for Intellectual Property and Internet law with a specialised focus on the vibrant Video Game industry. In her current role as the Programme Element Leader for Pre-Masters and Lecturer at Brunel University London Pathway College, she navigates the realms of academia and legal practice, with a particular emphasis on the digital domain. Despoina’s commitment to advancing the legal understanding of the video game industry is evident in her Ph.D thesis, titled “The Interpretation of Copyright Protection in Video Game Streaming in Europe” which delved into the intricate relationship between copyright protection and the emerging phenomenon of video game streaming in the European context. Her dedication to this field ensures that she remains at the forefront of legal developments. With a Master of Laws (LLM) degree in International Commercial Law from Brunel University London, Despoina has solidified her expertise in the legal facets of the global business environment, providing a sturdy foundation to navigate the legal challenges within the esports and video game industry. At Esports Legal News, Despoina not only brings her academic rigor and legal expertise but also plays a crucial role in the coordination of a major ELN project, which, while still confidential, promises to be a significant contribution to the esports industry. She ensures that the intersection of Intellectual Property, Internet law, and the video game industry is navigated with precision, depth, and foresight, contributing to the ethical and legal progression of the esports industry.

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Palworld vs. Pokémon Company – We have 111 Problems, but Plagiarism ain’t one?

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Palworld Pokemon

The remarkable success of Palworld has sparked discussions online, drawing comparisons between the game and Pokémon. Speculations have arisen regarding potential legal implications due to their similarities. Palworld offers an immersive open-world multiplayer experience, focusing on survival and exploration. Players embark on a journey where they hunt and strive to survive, encountering and capturing charming creatures known as Pals along the way. While Palworld shares similarities with the Pokémon series in terms of creature capturing mechanics, it’s important to note that it is not a Pokémon game. Instead, it introduces a unique blend of gameplay elements from various genres, including open-world RPGs and survival games.

While games resembling Pokémon have surfaced before, Palworld’s unprecedented triumph has intensified scrutiny. This scrutiny has manifested in side-by-side comparisons, online discussions, the emergence of an unofficial mod (later taken down), and a public statement from The Pokémon Company addressing the matter for the first time.

Pocketpair, the small development team behind Palworld, faces challenges related to server issues and ongoing bug fixes amid the game’s rising popularity. The recent attention drawn to comparisons with Pokémon adds another layer of complexity to their workload.

Recent Developments

As developments unfold, here’s what we currently know about the parallels between Palworld and The Pokémon Company, including the latter’s official response regarding an “investigation into another company’s game”.

Palworld was released into early access for Xbox Series X/S and PC on January 19, 2024. Since its launch, numerous individuals have noted resemblances between Palworld and the Pokémon franchise.

On January 25, the Pokémon Company issued a statement, indirectly addressing Palworld. Although not explicitly naming the game, the statement expresses concern about the unauthorised use of Pokémon intellectual property and assets in a game released in January 2024. The statement emphasises the company’s commitment to investigating and addressing any infringement on Pokémon-related intellectual property rights. Prior to this, Pocketpair CEO Takuro Mizobe confirmed that Palworld underwent legal reviews and emphasised the team’s commitment to respecting other companies’ intellectual property.

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Comparison between Palworld and Pokémon

The primary point of comparison revolves around creature designs, highlighted in various online videos. While similarities exist, it’s important to note that other games, such as Digimon and Temtem, have featured similar designs without legal repercussions. Certain naming conventions, like Palworld’s Paldeck (similar to the Pokédex) and Pal Sphere (resembling the Poké Ball), have also drawn attention. However, Palworld differs significantly from Pokémon in its gameplay mechanics, focusing more on survival and base building elements.

Side by Side Comparison

Palworld’s Future

The Pokémon Company’s statement signals its intent to investigate potential copyright claims in other games but has not initiated legal action against Pocketpair or any other developers. While speculations abound regarding potential legal outcomes, the situation remains uncertain. Some anticipate a takedown, while others argue that Palworld merely imitates rather than directly copies Pokémon, potentially mitigating the risk of a lawsuit. For a similar discussion on the idea/expression dichotomy in copyright law, please see a previous post on Alan Wake 2.

As we await further developments, Palworld remains available in early access on Xbox Series X/S, Xbox One, and PC.

Author

  • Dr Despoina Farmaki

    Despoina, a pivotal member of Esports Legal News, seamlessly blends her fervour for Intellectual Property and Internet law with a specialised focus on the vibrant Video Game industry. In her current role as the Programme Element Leader for Pre-Masters and Lecturer at Brunel University London Pathway College, she navigates the realms of academia and legal practice, with a particular emphasis on the digital domain. Despoina’s commitment to advancing the legal understanding of the video game industry is evident in her Ph.D thesis, titled “The Interpretation of Copyright Protection in Video Game Streaming in Europe” which delved into the intricate relationship between copyright protection and the emerging phenomenon of video game streaming in the European context. Her dedication to this field ensures that she remains at the forefront of legal developments. With a Master of Laws (LLM) degree in International Commercial Law from Brunel University London, Despoina has solidified her expertise in the legal facets of the global business environment, providing a sturdy foundation to navigate the legal challenges within the esports and video game industry. At Esports Legal News, Despoina not only brings her academic rigor and legal expertise but also plays a crucial role in the coordination of a major ELN project, which, while still confidential, promises to be a significant contribution to the esports industry. She ensures that the intersection of Intellectual Property, Internet law, and the video game industry is navigated with precision, depth, and foresight, contributing to the ethical and legal progression of the esports industry.

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