What are Esports? A Video Q&A with IP Attorney Anna Chang
Alt Legal Team | February 16, 2021
Esports, or electronic sports, is a fast-growing industry involving multi-player competitive video gaming. As of 2019, Reuters reported that global Esports revenues hit $1.1 billion. This 27% increase in revenue over 2018 was primarily as a result of revenues from advertising, sponsorship, and media rights. As Esports continue to grow, IP attorneys can expect to handle matters related to Esports, particularly with trademarks and licensing. IP attorney and Esports fan Anna Chang joined us to discuss Esports and what you’ll need to know as you take on Esports clients. Watch the video interview and review our breakdown below.
Let’s start with some background info on Esports. Can you tell us what are Esports?
Esports is a comprehensive term referring to competitive video games. So long as there have been multiplayer games, people have always wanted to prove that they’re the best. What started out for many as playing on a couch with a sibling or going to a local arcade has exploded in the last decade into a billion-dollar industry worldwide. So now we have tournaments with multimillion dollar prize pools that are broadcast with the same production value as many traditional sports events with many million viewers worldwide. We have players being paid multi-million-dollar salaries, teams partnering with household name brands and training in state-of-the-art facilities, and franchise leagues with multi-million dollar buy-ins. It’s still a young and growing industry and a lot of people want in.
What are the most popular games?
Just as the term “sports” captures different games including basketball, football, golf, and gymnastics, so does the term “Esports.” Some of the most popular Esports titles include first-person shooter games including Counter-Strike, Overwatch, Fortnite, and Call of Duty; MOBAs (multiplayer online battle arenas) including Dota 2 and League of Legends; and fighting games such as Super Smash Bros., Street Fighter, and Tekken.
Where is Esports broadcast? What is Twitch?
Esports are usually broadcast on Twitch which is an online streaming platform that is completely free to watch. If you go to Twitch.tv there is an Esports tab that will pull up live matches for almost all of the top Esports. This is a great way for people who are interested in the industry to get plugged in.
Can you explain how people are investing in teams?
The Esports industry is gaining a lot of attention. Teams are getting investments from traditional venture capital firms, celebrities, and professional athletes. Several traditional sports teams have started operating their own Esports teams, for example the Golden State Warriors operates a League of Legends team called the Golden Guardians. Teams are also attracting a lot of big-name sponsors from other brands. Initially, a lot of sponsorships in the industry involved gaming peripherals, keyboards, mice-makers, and energy drink makers. But now, a lot of non-endemic brands including Adidas, Marvel Entertainment, and Chipotle are partnering with Esports brands. There’s a lot of interest and a lot of money coming in.
What sort of IP issues are you seeing in relation to Esports?
Despite the huge growth of the Esports industry, I’ve found that there are a lot of weaknesses when it comes to trademark registration and brand protection. Even out of the top teams, very few even have a trademark portfolio and at best, it is just a handful of registrations and maybe covering a few foreign countries. There is definitely room to grow and improve in that area.
There are several reasons why many Esports teams and players do not have developed trademark portfolios. Esports is very grassroots. It started off with people bringing their computers to a conference room to play a game together. Also, the Esports industry tends to skew younger, so oftentimes there is a lack of understanding or education about why trademark registrations and brand protection is important. Another reason brand protection may not be prioritized is because the revenue structure is very top-heavy in Esports. Even with some of the top teams, people are working out the road to profitability. So perhaps the cost or perceived cost of getting a trademark registration could be a hurdle. But as the industry continues to grow and get more sophisticated, I anticipate that teams will focus on brand protection and trademark registration given how much value a team name can have. But this is certainly an area that can be improved.
What types of marks are lawyers trademarking in relation to Esports? Who are the owners?
For teams, the team name and team logo are the most important marks to get registered right away. Some individual players may look into getting their gamer tag or user name trademarked depending on how famous their name is. The owners for the team names would be the team organizations themselves. The players would own their own trademark for their gamer tag and work with their organization or team to license or monetize it.
Where should attorneys be looking to file trademark applications in relation to Esports?
The primary jurisdictions I would recommend looking into are the US, China, and the EU, where Esports are very popular. There are different factors to consider including the Esport and where the organization or individual is located. It is organization- and individual-dependent, but in general, Esports is a global industry. Having a global trademark portfolio in this industry is definitely something to keep an eye on.
What trademark classes should attorneys be looking to file trademark applications in relation to Esports?
The primary class would be Class 41 for entertainment services. Teams could also look into Class 25 for clothing or other classes for related merchandise. They can also consider Class 9 for computer peripherals such as mice and keyboards given that this is an easy brand partnership and licensing arrangement for some of these teams. Getting registrations across a broad number of classes is especially important for combatting trademark squatters and also for enforcement in the anti-counterfeiting context.
Why is it important to conduct clearance searches for team names or gamer tags?
You don’t want to invest your energy, time, and resources in a brand that you ultimately can’t establish rights in and protect. Securing trademark registrations and looking at what is on the register before you is particularly important. Things in Esports move very quickly. Sometimes when you’re just starting out and if you don’t have the time or funds, you can’t do a clearance search. Also, sometimes there’s a general understanding “If there’s not a team called ‘X’, then it’s ok for me to use the name.” But in reality, we know that when the USPTO examines an application, the analysis is much broader than that. Therefore, it’s best to conduct a clearance search as early as possible so that you can see what’s out there and build a brand protection strategy.
Similarly, for individual players, it might be a little more difficult because a lot of Esports professionals begin using their gamer tags when they are in their early teens. By the time that they establish themselves as a professional, they’ve been using their name building brand equity for years. In that situation, while a re-brand wouldn’t be feasible, having an idea of what’s out there gives you an idea of what challenges or opportunities a certain gamer tag or brand would have.
What are some bar associations and organizations to join if you want to get more involved with the Esports community, find clients, etc.?
Social media is huge for Esports so it’s very important to get plugged in. The easiest way to get involved is to get on Twitter. You have so much direct access to any number of Esports teams, players, and organizations. There is an Esports Bar Association which I am a part of. It is a relatively new organization, but it’s a great way to meet fellow attorneys who are working in the Esports space. Lastly, I recommend being engaged. You don’t have to be an expert on every single game or know the complete history of Esports. Being interested in learning and having a basic understanding of how the industry works and what are the most popular games and teams goes a long way.
Anna Chang represents businesses and individuals in connection with trademark counseling, prosecution, licensing, and enforcement. Ms. Chang has litigated disputes before the U.S. Trademark Trial and Appeal Board and in state and federal court and also advises clients on general business matters and contracts.
Prior to joining Sideman & Bancroft, Ms. Chang was an associate at boutique litigation and trademark firms. She graduated from the University of California, Berkeley with a degree in economics and earned her law degree, cum laude, from the University of California, Hastings College of the Law. While in law school, Ms. Chang served as the executive articles editor for the Hastings Business Law Journal and as a certified law student at the Hastings Civic Justice Clinic.