Community Guidelines: The Death of Third-Party Tournaments

TJ Cleary, Contributing Member 2023-2024

Intellectual Property and Computer Law Journal

           

I. Introduction

            Video Game Companies have long held the right to protect their games through copyright and trademark law.^[1] This allows companies to protect their work from misuse and theft. It also allows companies to shut down fan projects and tournaments.^[2] Recently the Nintendo Co. (Nintendo) released a set of Community Guidelines aimed at third-party tournament organizers.^[3] These guidelines set strict standards for tournament organizers (TO) and have particularly affected the Super Smash Brothers community.^[4] Super Smash Brothers is a popular fighting game released by Nintendo and has an active esports community. The Copyright Act of 1976 (Title 17) provides the framework for businesses to protect their copyrighted material.^[5] The Lanham Act provides a system for trademarking intellectual property providing similar protection from infringement.^[6] Both copyright law and trademark law are applied to video games.^[7] This article will discuss the balance between the use of intellectual property law as a protector and as a tool to stifle consumer enjoyment of the protected material, particularly in the sphere of third-party esports tournaments.

II. Background

            Video game tournaments have not always been as accessible as they are now. In the 1980s and 90s video game companies organized their own competitions to advertise new and current games.^[8] Large scale tournaments were sponsored by the company producing the games and local tournaments were nonexistent. In the 1990s, fighting games grew in popularity providing direct real time competition with another player.^[9] This developed into large scale tournaments such as the Evolution Championship series or EVO.^[10]

            More importantly, the shift from arcades to home consoles and personal computers led to the creation of local third-party tournaments or “locals.”^[11] These tournaments were created to foster a community of players in the local area around a specific game.^[12] Often shrouded in obscure lingo and gatekept by experienced players these tournaments were organized by a local TO and offered small prizes to winners.^[13] Locals also serve as a gauge for players to see how they stack up against statewide competition. The local community is referred to as a scene and the size of the scene depends on the popularity of the game.^[14] Local tournaments are used to play games that are not compatible with internet technology and require a physical venue to play competitively.^[15] Additionally, there is typically a cover fee for these tournaments to cover venue cost and the prize money.^[16] Small tournaments are not only used to foster a community of competitors but also of hardcore fans.

            Intellectual Property law protects trademarked and copyrighted materials from infringement.^[17] Specifically, Section 17 protects copyrighted work and the Lanham Act protects trademarks.^[18] Section 17 states that the owner of the copyrighted work has exclusive rights over reproducing the work, creating derivatives of the work, distributing copies of the work, performing the work publicly, and displaying the work publicly.^[19] Broadcasting copyrighted content on streaming and other video sharing platforms is also subject to protection.^[20]

The Digital Millennium Copyright Act (“DMCA”) was passed in 1998 to address copyrighted material being spread on the internet.^[21] The DMCA allows copyright owners to protect their material through a takedown system.^[22] Through this system a copyright holder can contact the host or owner of a website that is broadcasting infringing material and have the website issue a takedown on the infringing content.^[23] This system has been used to successfully protected intellectual property. The legal defense against copyright infringement is that the content is fair use and transformative over the copyrighted material.^[24] An example of fair use would be a commentary or criticism of the copyrighted material or a parody of the copyrighted material.^[25] 

            The Lanham Act was passed in 1946 and created the trademark system used in the United States. The act governs the registration of trademarks and trademark infringement.^[26] For a mark to have protection it must generally be used in commerce and distinctive.^[27] Distinctiveness is generally classified into five categories. The categories in order of least distinct to most distinct are generic, descriptive, suggestive, fanciful, and arbitrary.^[28] Arbitrary, fanciful, and suggestive trademarks are always protected while generic marks are not.^[29] Descriptive marks are not inherently distinct but can acquire protection if the mark becomes attached to a product in the mind of consumers.^[30] A trademark is infringed upon if another party uses a mark that is likely to cause confusion in the mind of consumers.^[31]

Video Game companies employ both trademark law and copyright law to protect their intellectual property. These protections come in the form of Community Guidelines.^[32] As esports became a larger subculture, multiple companies developed Community Guidelines for third-party tournaments.^[33] These guidelines are created to ensure that the protected material is not being used for profit without the knowledge of the company.^[34] They are also used to ensure that the protected material is not being associated with values the company does not uphold.^[35]

III. Discussion

            It is important that video game companies preserve their intellectual property rights through trademark and copyright law. However, stifling a community through overbearing guidelines does not protect intellectual property but harms it by discouraging those who give it value, the fans.

A. Community Splintering Guidelines and Remedies

            Community Guidelines targeting third-party tournaments have received massive backlash in the past. These guidelines lead to many players feeling discouraged and unsure of the future of their hobby. Instead of fostering a community that enjoys and celebrates the intellectual property of companies, the guidelines impose harsh restrictions that cut through the very way most third-party tournaments have operated for years.

For example, the Community Guidelines released by Nintendo prohibit in person tournaments of over 200 people and online tournaments of over 300 people.^[36] Nintendo also sets the limit on cover fee at $20 and prohibits third party sponsors and limited prize value to $5,000 and below.^[37] The most a single organizer could grant in a year being $10,000.^[38] For many large-scale third-party tournaments, these guidelines are a death knell. Super Smash Con 2023, a third-party tournament, had over 4,000 entrants across multiple games.^[39] The tournament had a prize pool of up to $26,070 for one of the contests which is well above both limits set by Nintendo.^[40] Under the current guidelines this tournament would not have been able to happen.

While third-party tournaments are a valuable part of esports, video game companies have rights to their intellectual property. Without any form of guidelines there could be TO’s promoting events that undermine the companies’ values or profit from their intellectual property. A remedy that some companies have looked at instead of community guidelines is licensing. Some companies have created a process where a TO can apply with the company to get a license to hold their event.^[41] The licensing process provide much greater leeway for TO’s while also providing protection of intellectual property.^[42] Additionally, a company can ensure that no bad actors are using their IPs without creating unnecessarily restrictive rules.^[43] Some companies have even created separate licensing processes for larger and smaller tournaments.^[44] While ultimately up to the company, the adoption of loose licensing guidelines not only protects intellectual property, but also ensures that the community who values that IP is allowed to grow and flourish.

IV. Conclusion

Nintendo and other video game companies are well within their legal rights to create guidelines that protect the use of their intellectual property. However, there is a balance between protecting intellectual property and discouraging the enjoyment and celebration of that property. These games bring together thousands of people and continue to grow as new players enter the scene. Guidelines such as the ones discussed above are unnecessarily restrictive. The use of a licensing system in conjunction with less oppressive rules would allow a community to grow while still providing protection to intellectual property.

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[1] Nicole Lamberson, Find Video Games in Copyright, Library of Congress, (Sep. 12, 2022), https://blogs.loc.gov/copyright/2022/09/find-video-games-in-copyright/.

[2] Jose Otero, Nintendo Shuts Down Metroid 2 Fan Remake AM2R, IGN, (last updated Aug. 8, 2016), https://www.ign.com/articles/2016/08/08/nintendo-shuts-down-metroid-2-fan-remake-am2r; Matt Kim, Nintendo Shuts Down Smash World Tour Fighting Game Championship, IGN, (last updated Nov. 30, 2022), https://www.ign.com/articles/nintendo-shuts-down-smash-world-tour-fighting-game-championship.

[3] Community Tournament Guidelines, Nintendo Co., (last updated Oct. 24, 2023), https://en-americas-support.nintendo.com/app/answers/detail/a_id/63433/~/community-tournament-guidelines.

[4] Joshua Rabow, Smash Esports at Risk from New Nintendo Guidelines, Esports Illustrated, (last updated Oct. 24, 2023), https://esi.si.com/fgc/smash-esports-at-risk-from-nintendo-guidelines.

[5] Copyright Law of the United States (Title 17), U.S. Copyright Office, (last visited Nov. 11, 2023), https://www.copyright.gov/title17/.

[6] Lanham Act, Cornell Law School, (last visited Nov. 11, 2023), https://www.law.cornell.edu/wex/lanham_act.

[7] Lamberson, supra note 1; Anna Piechowka, When Video Games Meet IP Law, WIPO, (June, 2021), https://www.wipo.int/wipo_magazine/en/2021/02/article_0002.html.

[8] Frank Cifaldi, The Story of the First Nintendo World Championships, IGN, (last updated Jul. 14, 2016), https://www.ign.com/articles/2015/05/13/the-story-of-the-first-nintendo-world-championships.

[9] A History of Esports, CDW, (Sep. 10, 2021), https://www.cdw.com/content/cdw/en/articles/hardware/history-of-esports.html#1.

[10] Id.

[11] Dmytro Murko, Brief History of Esports – From Arcade Games to Mobile Gaming, Esports Charts, (Nov. 25, 2022), https://escharts.com/news/brief-history-esports-arcade-games-mobile-gaming.

[12] Tournament, Smash Wiki, (last visited Nov. 12, 2023), https://www.ssbwiki.com/Tournament.

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] What is Intellectual Property, WIPO, (last visited Nov. 12, 2023), https://www.wipo.int/about-ip/en/.

[18] U.S. Copyright Office, supra note 5; Cornell Law School, supra note 6.

[19] U.S. Copyright Office, supra note 5.

[20] The Digital Millenium Copyright Act, U.S. Copyright Office, (last visited Nov. 12, 2023), https://www.copyright.gov/dmca/.

[21] Id.

[22] Id.

[23] Id.

[24] Rich Stim, What is Fair Use, Stanford, (last visited Nov. 12, 2023), https://fairuse.stanford.edu/overview/fair-use/what-is-fair-use/.

[25] Id.

[26] 15 U.S.C. §1051; 15 U.S.C. §1125.

[27] Cornell Law School, supra note 6.

[28] Distinctive Trademark, Cornell Law School, (last accessed Nov. 13, 2023), https://www.law.cornell.edu/wex/distinctive_trademark.

[29] Id.

[30] Id.

[31] 15 U.S.C. §1125.

[32] Nintendo Co., supra note 3; Community Tournament Guidelines, Electronic Arts, (last visited Nov. 12, 2023),  https://www.ea.com/games/fifa/compete/fgs-21/community-tournament-guidelines; Rocket League Community Tournament Guidelines, Rocket League Esports, (last visited Nov. 12, 2023), https://esports.rocketleague.com/rules/community-tournament-guidelines/; Community License – Americas, Capcom ProTour, (last updated May 12, 2022), https://archive.capcomprotour.com/community-license/americas/.

[33] Id.

[34] Id.

[35] Id.

[36] Nintendo Co., supra note 3.

[37] Id.

[38] Id.

[39] Tournament: Super Smash Con 2023, Smash Wiki, (last visited Nov. 13, 2023), https://www.ssbwiki.com/Tournament:Super_Smash_Con_2023.

[40] Super Smash Con 2023, Liquipedia, (last visited Nov. 13, 2023), https://liquipedia.net/smash/Super_Smash_Con/2023; Nintendo Co., supra note 3.

[41] Limited Game Tournament Licenses, Valve Corporation, (last visited Nov. 13, 2023), https://store.steampowered.com/tourney/limited_license; Tournament License, Ubisoft, (last visited Nov. 13, 2023), https://www.ubisoft.com/en-us/esports/rainbow-six/siege/tournament-license;

Community Competition License Conditions for Overwatch, Overwatch Contenders, (last visited Nov. 13, 2023), https://overwatchleague.com/en-us/community-tournaments-license.

[42] Rob Fahey, Tournament Licenses are a Necessary Step in Taming eSports’ Wild West, GameIndustry, (Mar. 4, 2022), https://www.gamesindustry.biz/tournament-licenses-are-a-necessary-step-in-taming-esports-wild-west-opinion.

[43] Id.

[44] Overwatch Contenders, supra note 41.