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Community Licence

Community licences – or open licences, are standard non-exclusive licence agreements, generally providing quite strict limitations, that may be entered into between intellectual property rights’ holders and a third parties without the need for individual negotiations.

With specific reference to the esports industry, this term is used to identify licences that publishers may make available to their players’ community in order to grant the right of organizing certain types of tournaments, while maintaining sufficient control over the rules applicable to such tournaments and, most importantly, ensuring that their intellectual property rights are protected.

In fact, end-user licence agreements (EULAs) provided by publishers (also of esports titles), usually grant a limited licence to use the videogame for personal and non-commercial purposes. Thus, the activity of organizing esports tournaments and events is generally prohibited under the EULAs and need to be allowed otherwise.[1]

However, most publishers have all the interest that players’ and community’s engagement is cultivated also below the pro level, but they haven’t the means to handle the related activities directly and they are too busy to engage in individual negotiations, which is why they embrace a system of community licensing relating to tournament organization in the semi-pro and grassroots scenes.  

These community licences, which are generally made available on the dedicated videogame’s website or on the publisher’s website allow interested third parties to legally organize events, in accordance with the terms of the applicable license.

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The structure, scope and limitations of community licences (and also their existence thereof) are different from one publisher to another and sometimes also from one videogame to another. These features will depend on the approach that the publisher decides to follow in managing the esports scene related to a certain videogame and, more specifically, on whether it chooses a franchised tournament system, or an open one. [2]

It is possible, although rare, that publishers will decide not to make available a community licence or grant very narrow-scoped ones: this happens when they want to remain firmly in control of the competitive scene relating to their videogames (which happens mostly with franchised tournament systems) or have specific licenses with certain tournament organizers covering also smaller scoped tournaments.[3]

Conversely, publishers will tend to make available broader scoped community licences to interested third-party tournament organizers whenever retaining a lower level of control over their videogame ecosystem and/or adopting an open tournament system.

This said, although community licences vary significantly, it is possible to identify and explore certain features which are shared by most.   

Firstly, publishers often require that the interested party should follow a specific process and eventually notify them of the event with a view to ensuring that they have visibility over the community tournaments taking place in a certain territory (e.g., publishers may require tournament organizers to fill in a module and/or submit a specific request and possibly wait for the publisher’s express confirmation that the licence has been granted). 

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Then, the terms and limitations imposed by publishers as part of their community licences usually cover: (i) the maximum value of the tournament prize pools and/or the amount of the revenues tournament organizers are allowed to make, as publishers tend to limit community licenses to event of lesser economic relevance while negotiating some kind of revenue share when allowing more “valuable” tournaments; (ii) the possibility of requiring an entry fee for the players/teams, as this feature may entail some regulatory risks in certain countries, and publishers want to avoid bad PR risks associated with non-compliance; (iii) the possibility of using media content relating to the tournament, as this content will inevitably include the videogame’s intellectual property belonging to the publisher, and the latter may want to retain a certain level of control over its use, especially when the use may be economically relevant, as in relation to TV broadcasting; and (iv) the possibility that certain brands relating to certain categories of products could sponsor the tournaments, as publishers may want to avoid their game being associated to certain brands or products.


[1] David Greenspan and Gaetano Dimita, contributions from S. Gregory Boyd and Andrea Rizzi, Mastering the game – business and legal issues for video game developers (2nd ed, WIPO 2022) 46-48

[2] Andrea Rizzi and Francesco de Rugeriis ‘Esports: an overview of a new(ish) frontier in digital entertainment’ (2022) 3 WIPO Magazine <https://www.wipo.int/wipo_magazine/en/2022/03/article_0003.html> accessed 12 April 2024

[3] Dan Nabel and Bill Chang, Video Game Law in a Nutshell (2nd edn, West Academic, 2024), 417-457

Authors

  • Francesco de Rugeriis

    Francesco de Rugeriis is a Senior Associate at LCA Studio Legale, where he co-coordinates together with Nicoletta Serato the interactive entertainment focus team. His primary area of expertise lies in intellectual property law, entertainment law, and media and advertising law; he’s also experienced in information technology law, consumer law, and personal data protection. Francesco primarily serves clients within the video games and esports industry, as well as those in traditional entertainment and other creative sectors, supporting them in strategic transactional work, and more particularly in setting out contractual frameworks and structures, and drafting and negotiating agreements. He also assists the firm’s clients in managing intellectual property issues and in IP assets’ detection and evaluation, as well as in addressing potential contractual or IP-related litigation.

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  • Nicoletta Serao

    Nicoletta Serao is a Senior Associate at LCA Studio Legale in Milan, where she co-coordinates together with Francesco de Rugeriis the interactive entertainment focus team. She assists videogame and esports clients in complying with the applicable regulatory framework, with a particular focus on consumer law issues, e-commerce regulation, advertising law, audiovisual content regulation, regulation applicable to prize draws and contests, monetization mechanics and data protection as well as content clearance. Nicoletta also assists clients of the interactive entertainment industry in drafting and localizing B2C contracts, guidelines and regulations and in negotiating B2B agreements.

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