@esportslaw

Hey Everyone,

This sub has exploded with anger over the handling of ESL Genting and ESL’s decision to issue DMCA takedown notices to a wide array of streams broadcasting the games on Twitch. While some of the public dialogue surrounding these issues shows a good understanding of the underlying legal concepts, the majority of it does not. I figured I’d drop in here and make sure everyone has a full grasp of the legal nuances of this situation, as well as to give my own take on how this should/will play out. Before I do, I’ll include some quick info on my qualifications/background so you know who I am and why I’m in a position to analyze all of this. Feel free to skip that section if you don’t care (which, btw, you should because a lot of people are trusting bold statements with little support) or skip all the way to the bottom for the TL;DR if you want to avoid the massive wall of text I’m about to write.

My background: I’ve practiced law since 2013 and own the world’s only law firm that is solely dedicated to esports (www.esglaw.com). My client base includes esports teams, broadcast talent, and esports-focused businesses. I also want to mention that I work with BTS—while everything I’m about to say is my own opinion and does not reflect viewpoints of BTS, the bias here is worth noting as they had a stream taken down as well. FWIW, I also have a number of personal friends working on esports at ESL and Facebook as well, so it’s not like my biases only flow in one direction. Through my work in this industry, I have dealt with the DMCA on behalf of dozens of clients in a wide array of contexts. If you want a more full bio, here you go.

The basics of copyright law:

Under Title 17 USC § 106 of the Copyright Act, copyright holders have the exclusive right to publicly perform the work and to reproduce copies of the work. However, copyright holders can grant licenses to others to use the protected work at the discretion of the copyright holder.

Typical streams include several discrete elements: The game, oral commentary, video showing the face(s) of the player(s), background music or other audio, etc. It’s important to separate these elements, because each potentially implicates a separate copyright holder. When it comes to the game itself, the IP rights belong exclusively to game’s publisher (in this case, Valve)—the images, sounds, and underlying code are all wholly owned by Valve and the use of that IP is subject to Valve’s policies on the subject. This means that Valve could prevent anyone from streaming its game in any context, in its sole and absolute discretion. However, like most game publishers, Valve has chosen to go an entirely different route, and maintains a blanket policy that people are allowed to stream Dota gameplay. It’s good advertising, after all.

The Digital Millennium Copyright Act (DMCA):

The rights and obligations of parties under the DMCA are somewhat complex, and have been the subject of billion-dollar litigation. For our purposes, the most important aspect of the DMCA is the safe harbor provision, which is intended to shelter service providers from the infringing activities of their users. This provision states that a service provider (such as Twitch) cannot be held liable for copyright infringement on its site if it does not have actual knowledge of the infringement, is not aware of facts or circumstances from which infringing activity is apparent, and, upon obtaining such knowledge or awareness, acts expeditiously to remove or disable access to the infringing material.

In theory, this provision makes a hell of a lot of sense. There is way too much content published on Twitch, YouTube, etc. for those sites to constantly scour new posts and determine whether or not they infringe on any of the copyrights that exist in the ether. The DMCA shifts the burden of handling the issue to the content creators themselves through the takedown notice system. However, in order to gain the vital liability protection provided by the DMCA, a service provider must act “expeditiously to remove or disable access to the infringing material” once the copyright holder affirmatively identifies the infringement.

In short, if Twitch receives a takedown notice that checks all of the boxes, they HAVE to take down the content. On the flip side, the content creator can file a counter takedown notice with Twitch and if that checks all of the boxes, Twitch MUST reinstate the content. The process is well articulated in an image tweeted by Twitch VP Justin Wong a few months ago.

With me so far? Ok awesome. Now let’s apply your crash course in copyright law to this situation…

Who is the rights holder?

It completely depends about which rights you’re talking. ESL is producing the event, and they maintain a wide array of copyrights in and to various elements of that broadcast (overlay, shoulder content, casting, etc.). This means that someone could not simply re-broadcast the ESL stream on another platform. However, that’s not what’s happening here; instead, third parties are simply broadcasting the same gameplay, which is made available through DotaTV, and adding their own casting, etc. on top of that gameplay. Absent some form of contractual agreement on the subject between Valve and ESL [NOTE: this could exist, though it would be unusual], the rights in and to the actual gameplay and assets are not ESL’s to control. The problem is, Valve’s stance on the streaming of gameplay from a third party event isn’t clear at present…

Valve’s Role & Statement:

As noted above, Valve’s base policy allows all gameplay to be broadcast. However, there is a wrinkle; Valve’s October 13, 2017 statement tackled the issue of broadcasting gameplay from a tournament organized by a third party. This statement was partially quoted in ESL’s response to the controversy. I’m going to include the most relevant paragraph below, in full:

To that end, in addition to the official, fully-produced streams from the tournament organizer itself, we believe that anyone should be able to broadcast a match from DotaTV for their audience. However, we don’t think they should do so in a commercial manner or in a way that directly competes with the tournament organizer’s stream. This means no advertising/branding overlays, and no sponsorships. It also means not using any of the official broadcast’s content such as caster audio, camerawork, overlays, interstitial content, and so on. Finally, this is not permission for studios to broadcast each other’s events. In general, everyone should play nice together, and we think the boundaries should be pretty clear.

Unfortunately, this statement isn’t particularly clear. It does say that “anyone should be able to broadcast a match from DotaTV for their audience,” but it also says that such broadcasts cannot be done in a “commercial manner” OR “in a way that directly competes with the tournament organizer’s stream.” Though they provided more context on what qualifies as commercial (“no advertising/branding overlays, and no sponsorships”), Valve did not define what they mean by “directly competes,” and reasonably minds can undoubtedly differ on that point. The caveat at the end of the statement only further muddies the waters—I don’t know what qualifies as a “studio” in Valve’s eyes, which makes it impossible to tell who is and is not permitted to stream gameplay from another party’s event.

Contrary to Valve’s concluding sentence, the boundaries aren’t particularly clear. And while I appreciate the fact that they’ve begun to tackle the issue, we’re a long way from having clearly articulated rules that will govern these types of issues and how Valve wants them to be resolved.

Applying the current, vague standard to this dispute:

While I hope Valve will further clarify its position moving forward, we still have a present dispute to resolve. Let’s go party by party.

Twitch: Anyone blaming Twitch just doesn’t get it. The framework of the DMCA functionally requires Twitch to do exactly what it did in this case. A content provider as massive as Twitch needs the liability shield offered by the DMCA. There is simply too much content on Twitch for it to identify all infringing content that it posted on its site—the only way for Twitch to avoid liability is to make sure it “acts expeditiously to remove or disable access to the infringing material” as soon as it is identified by a third party. And while I would like to see the law changed so that a higher bar is set for determining when a claim of infringement is sufficiently valid to result in a takedown, Twitch’s actions were the most legally and economically sound option presently available.

ESL: On a basic level, I get it—they have a presumptively lucrative deal with Facebook, and it has to be frustrating to see various Twitch channels pulling in significant viewership based solely on the gameplay from their event. I also think the esports community is absurdly short-sighted and ignorant to the various business dynamics that drive the content they love to consume, and should be far more patient as industry leaders strive to strike the proper balance between monetization and fan demands.

Valve has expressly stated that a third party cannot broadcast content from DotaTV “in a way that directly competes with the tournament organizer’s stream,” and ESL is interpreting that language to protect its interests. How reasonable is ESL’s interpretation? That requires a case-by-case analysis of each takedown request they issued. My cursory review suggests that some probably fit Valve’s vague criteria, while others did not. But the core problem here is that the standard itself is vague, leaving room for both sides to be upset because they’re interpreting it through their own, self-interested lens.

With that said, absent some form of agreement between Valve and ESL on this issue (which seems unlikely), ESL doesn’t have the legal right to have content removed from Twitch based on alleged infringement of IP rights it doesn’t hold. The underlying gameplay made available via DotaTV is owned by Valve, not ESL. I recognize that ESL is simply acting based on its interpretation of Valve’s statement, but that statement doesn’t shift any legal rights from Valve to a tournament organizer; it merely articulates additional principles related to the rights grant made by Valve to stream Dota gameplay. ESL is in a tough position, but from my seat I’m not sure I’d be filing a bunch of takedown notices to solve the problem.

Twitch Streamers: Anyone streaming this type of content needs to make sure they learn the DMCA. If you believe your content was taken down improperly, you have the right to file a counter takedown notice. As has been noted in other threads, you may also have the right to file suit against ESL under 17 U.S.C. § 512(f)(1), which establishes civil liability for any party that “knowingly materially misrepresents under [the DMCA] that material or activity is infringing.” Of course, litigation is extremely expensive and time consuming. I’m by no means endorsing this option and think it’s incredibly unlikely anyone files suit in this case. I just wanted to point out that it exists and add a statutory reference so people can better understand what this does and does not mean; for example, the people saying ESL reps can go to jail for this aren’t well-grounded in reality.

Valve: As the rights holder in this instance, Valve has a great deal at stake in the resolution of the issue. While ESL was merely trying to enforce its understanding of Valve’s position, those takedown claims have the potential to threaten Valve’s broad and substantial IP rights with respect to the game it publishes. Valve does not want to cede any ownership over their raw gameplay. If they did, they would lose an incredible amount of leverage/control as it relates to the growth and monetization of their game.

The ball is squarely in Valve’s court. By far the best way to resolve this dispute and any similar disputes down the road is for Valve to (1) clarify it’s policy on what is and is not permitted, and (2) enforce that policy. At present, Valve is putting all competition organizers in an impossible position; assuming for the moment that Valve’s policy was clearly articulated and ESL was correct that the Twitch streams shouldn’t have been allowed, only Valve is in a position to actually issue those takedown requests to ensure that everyone follows the rules.

[*SIDE NOTE: There have been some very interesting arguments made that a player's actions can be original/transformative, thereby creating some form of independent IP rights in and to gameplay (example 1 and example 2, but these are just theories. There is no court decision on point and I've talked to a handful of 30+ year IP attorneys that see this as a non-starter. Valve owns raw gameplay. Period.]

Reasonable minds can disagree over what policy would be best in this instance. Fans want to consume content on whatever platform and from whatever source they desire, so they will always want the most open policy imaginable. Competition organizers, on the other hand, invest a lot of time and money into their events and don’t want their potential monetization undercut by third party broadcasts. Whatever your personal opinion, remember that there are directly competing interests here that may have broader implications for both Dota and the esports industry as a whole.

TL;DR: Copyright law is complex. The DMCA required Twitch to take down the streams once properly noticed by ESL, and the streamers can file counter takedown notices that will allow them to put their streams back up if they believe they have the right to stream this content. ESL’s DMCA takedown notices likely aren’t appropriate because they don’t own the underlying gameplay, but they’re in a tough position and I think the hate is largely unfair and misses the nuance of the situation. The core problem here is that Valve’s policy is vague. Valve needs to clarify its position on the streaming of gameplay from a third party event, and then actively enforce that policy so that everyone can have clear expectations surrounding what they can and cannot do, thereby enabling them to make informed business decisions from the outset. Also, copyright law is complex.