Could Esports Learn From the Music Industry’s Licensing Scheme?

Could the music industry-like licensing scheme work for esports? Credit: Dan Farrell on Unsplash

On Feb. 15, retired Call of Duty professional player Seth “Scump” Abner and OpTic Gaming founder Hector “H3CZ” Rodriguez filed a $680M USD lawsuit in Los Angeles federal court alleging that Activision Blizzard is operating a “100% monopoly” on Call of Duty esports with its Call of Duty League.

At the heart of that lawsuit is the competitive, closed ecosystem that Activision Blizzard built around its biggest IP, Call of Duty; the lawsuit alleges that in 2020 with the launch of the franchised Call of Duty League, Activision put CoD competitive behind a walled garden whose gates only open for tens of millions of dollars. 

For everyone else—third-party tournament operators, celebrity gamers, professional teams, and players in the massive Call of Duty community—there are very few viable options or opportunities. 

But maybe the solution to this problem (so few opportunities to compete) has already been established in another entertainment sector: the music Industry. 

Justin M. Jacobson, Esq., an intellectual property law attorney working at the intersection of  esports, entertainment, and music, provided The Esports Advocate with a few thoughts on an interesting course of action related to this case. 

Below are his opinions on how intellectual property owners (game publishers, developers) could use a similar system to create a hands-off solution: licensing games for use in competitions of varying shapes and sizes:

Without commenting on the specific facts of the case, the current lawsuit touches on and results from the underlying “monopoly” or exclusive rights in the game granted by copyright law to the game publishers and developers. This protection enables the game publisher/developer, in this case, Activision Blizzard, to determine and dictate any usage of their protected work (Call of Duty), especially for commercial purposes such as organized gaming leagues and tournaments. 

In an effort to placate the masses (and probably under strong legal advisement), many game publishers and developers articulated “community” guidelines which enable third-party operators to host esports events that fit within the owner’s set parameters without obtaining a publisher/developer license. Interestingly, these event exemptions are solely determined and subject to change at the leisure of the publishers and developers causing instability along with arduous and virtually non-existence licensing protocols for third-party event operators desiring to obtain a license other than a select few companies. 

Ultimately, it is clear that copyright law provides the game’s owner with the exclusive right in the title, however, the unfettered discretion and lack of streamlined licensing protocols seem challenging and are similar to those hurdles that existed in another entertainment field, the music world. 

In response to this problem, a compulsory licensing requirement was established under 17 U.S.C. §115 enabling any individual or company wishing to obtain the rights to utilize another’s musical work in certain situations to simply apply through a now digital system that processed payment and issued a limited license based on an established statutory rate. 

While this type of esports event licensing system might not necessarily resolve this particular case, the establishment of a third-party automated system with agreed upon rates could foster growth of the entire competitive gaming ecosystem and its implementation might be seen as a step to potentially alleviate some of the allegedly problematic business practices that seem to have stemmed from copyright law. 

Consequently, by permitting a more free-flowing competitive ecosystem through an easier and less costly licensing process, independent leagues and events should be able to monetize more efficiently and legally while also still permitting the game publishers/developers to be as involved as much as they want without impairing other entrepreneurs’ efforts.

It will be interesting to see how this particular case is resolved, but it is clear that copyright law provides the game publishers/developers with extraordinary power which enables them to act in any legal way that they see fit. 

Editor’s note: It should be noted that the lawsuit does not mention that there are some amateur-level leagues including Call of Duty League Challengers—run by Activision and ESL FACEIT Group in 2024, and grassroots affairs such as College Call of Duty (run by eFuse), U18 Call of Duty League (for under 18 players), and WxE (a CoD league for women). 

And tangentially related, there are also competitions for Warzone—the BR version of the game— such as World Series of Warzone and  Call of Duty League Resurgence 2023 (which won’t continue in 2024 due to the GameBattles platform being shut down by Activision Blizzard).

– Photo Credit: Dan Farrell on Unsplash.