GUEST POST: HARSHIT JADOUN: GOING BEYOND THE LEGALITY OF FANTASY SPORTS WEBSITES

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The online sports industry has witnessed an exponential growth in the recent past. A recent report titled ‘The era of consumer A.R.T – Acquisition Retention and Transaction, released in March 2020 by Federation of Indian Chambers of Commerce and Industry in collaboration with Ernst and Young, revealed that online gaming is the fastest growing sector amongst the other media and entertainment segments.

Statistics reveal that, in India, the online gaming industry witnessed a growth of 40% in 2020 whereas the popularity of fantasy sports increased by 100% since 2018. The online gaming industry can be further divided into transaction-based (real-money) games and cashless games. Some of the contemporary examples related to cashless games which succeeded in inducing major audience includes PUBG, Temple Run, Candy crush etc. Whereas the transaction based games at present are led by fantasy sports platforms, such as Dream11, Myteam11, StarPick etc.

The debate with respect to the legality of fantasy sports got settled in the case of Shri Varun Gumber vs Union Territory of Chandigarh and Ors,  wherein the Punjab and Haryana High Court declared fantasy sport to be a game of skill owing to the involvement of judgment and skill while playing the game. The same was also reiterated recently by the Rajasthan High Court in the case of Chandresh Sankhla vs. State of Rajasthan. However, the story does not end here, on March 6, 2020 a three bench judge of the Hon’ble Supreme court stayed the Bombay High Court order in case of Gurdeep Singh Sachar v Union of India & Ors which dismissed Gurdeep Singh Sachar’s PIL and confirmed Dream11 to be a game of skill. This development has again hung the sword on legality of the Dream11 platform which got settled through various decisions of High Courts declaring online fantasy games to be out gambling laws purview.

The objective of this article is to throw light on the relevance and role of intellectual property in fantasy sports websites and to deliberate on the scenarios where the use of the team logos and names by unauthorized fantasy operators can amount to infringement. Most importantly it underscores the challenges and opportunities before Federation of Indian Fantasy Sports (FIFS) to determine the future course of action for the fantasy operators as to how they could continue with offering their services in concord with other operators in the industry.

Interplay of Intellectual Property with Fantasy Sports Websites

Fantasy sports are essentially games where the participants are required to create a fantasy team based on their experience and knowledge of the game and the players scheduled to play the live game on a given day. This prima facie makes it apparent that any entity providing fantasy sports services in the market, owing to the nature of the sport, would be required to display certain facts ranging from the statistics of individual players, name of the teams, logos of the leagues being offered and could possibly also include player images.

It is apparent that the players and the leagues invest substantial time and energy to build their popularity, identity and reputation in the industry which in turn provides them various commercial opportunities to ride on. Hence, there arises a need to monitor the use of these intangible but valuable rights of the teams, league logos, players images by the online fantasy sports platform. Broadly, the major intellectual property concerned can be divided into the following two categories:

  1. Copyright with respect to the facts related to teams, tournaments and players
  2. Questions of copyright and trade mark law with respect to the Teams and League Logos

In India, the position with respect to the copyrightability of facts got settled in the case of Eastern Book Company v D.B Modak, wherein the court stated that mere facts are not entitled to copyright protection. In view thereof, reflecting mere facts such as scores, centuries, wickets or number of goals scored by a player while offering fantasy sports services cannot be actionable. However, as stated in Ladbroke v William Hill that the statistics being used by any entity on its platform should not be a blatant copy of any “compilation” by any other operator or sports body since the same might invoke an copyright infringement suit against the entity.

Considering the humongous growth of fantasy sports platforms and with more than 100 million users in India, sports leagues have commenced collaborating with different fantasy sports operators to enhance their popularity and outreach. Some of the major leagues, namely Indian Premier League (IPL), T20 Mumbai League, Karnataka Premier League (KPL), Indian Hockey Federation (FIH), license the rights to fantasy sports operators in the market to use their team names and logos while offering their services. In India, DREAM11 is currently the talk of the town as it has partnered with maximum number of tournaments/leagues as their official fantasy sports operator and acquired close to 90% of the market share.  With this as the backdrop setting, at this juncture, analysis of the permitted use of the intellectual property by several market players other than the exclusive licensee becomes imperative.

The team logos and images of brands are protected under the Copyright and the Trade Mark Act ab initio from the moment they are turned into a form of expression.  The use of any team logo or names of any league by any fantasy sports operator without due permission of the proprietor of the logos will be an unauthorized use and amounts to an act of infringement. In order to bring a claim of trade mark infringement under Section 29(1) of the Trade Marks Act, the proprietor of the trade mark is required to establish that the fantasy operator was using a mark identical or deceptively similar to its trade mark unauthorizedly during the course of it trade for identical or similar services in respect of which the trade mark is registered.

In order to prove infringement, it is sine qua non to establish that the use of its mark by the infringer was likely to be taken as a use of trade mark. The use of the team logos while offering their fantasy services results into giving off a false impression of the concerned operator being an official fantasy operator for the particular league. Consumers accessing the platform for playing fantasy sport would associate its services as that of an official fantasy operator for the concerned league.  In order to explain the aforementioned quandary of establishing infringement in a better way, we can consider the following scenario:

Let’s say there is an official fantasy sports operator by the name “F11” which has the rights to use the official logos of IPL teams on it platform while offering fantasy sports services and is therefore the exclusive licensee of the IPL team logos. Ergo, “F11” would be entitled to bring a claim of infringement against any other fantasy sports operator which is found using IPL logos while providing fantasy services. Now, consider there is an entity called “Champs11” which is not a fantasy sports operator and its services are restricted to providing predictions and tips for IPL games for winning fantasy sports on different platforms and in furtherance of the same is found using the IPL logos. The same will not fall afoul to the trade mark law of infringement. The rational being that the latter entity is using the logos for dissimilar services for which F11 is not the exclusive licensee. Therefore, any kind of informative or denominative promotional use of the trademarks wherein the intention of the user is to focus on some activity of the trade mark owners will not amount to infringement.

What Next?

In view thereof, the question to mull over is to figure out an alternative for all the fantasy sports operator which are not the official partners of the leagues and tournaments.

In the case of B.K. Engineering Co. vs Ubhi Enterprises, Justice Avadh Behari while citing Lord Scarman emphasized on the need to bear in mind “the balance to be maintained between the protection of an entity’s investment in his product and the protection of free competition”.  Therefore, in the interest of fostering free competition in the market, it is vital to figure an alternative if any, which the Trade Marks Act provides to these operators to use the logos without being labelled as unauthorized users. Furthermore, considering the rudimentary stage at which this industry is functioning at present in India, how far is an idea of codifying a legislation for online fantasy sports operator practical and what can be intricacies associated with it.

At the regulation front, the Federation of Indian Fantasy Sports (FIFS), which is a regulatory body governing the operations of 33 fantasy operators who are its members at present, has a colossal task to persuade other operators which are around more than 100 to align and become its members. The myriad opportunities which the technology provides to these fantasy operators for expanding their business horizons makes it further essential for the regulatory bodies to remain a step ahead and have a vision to identify the areas where these operators are likely to step in and accordingly prepare the regulatory frame work for governing those issues.

Illustratively, fantasy operators like DREAM11 and MyTeam11 in addition to providing fantasy sports services are now contemplating expansion of their areas of business through mobile applications named Fancode and Sports Tiger for live streaming matches pursuant to acquiring broadcasting rights for specific leagues. The possible issue that arises here is that if FIFS is restricted to regulating fantasy sports, then will the aforementioned mobile applications fall outside the purview of its regulation. FIFS in future will need to device a mechanism to bring all the operators within its regulatory framework in order to have a uniform modus operandi for all the operators to coexist.

The Article 1.7 of FIFS charter refrains any of its member to use any team name, logos or the player images or show any association with any sports body without due authorization. However, it would be interesting to see along with the rapid increase in the operators, whether FIFS could come up with an idea of collective licensing of trademarks as an incentive for all the operators to be a part of the regulatory body. The idea of a self-regulating body can only succeed if it can create an ecosystem wherein all the operators can coexist and adhere to the bye-laws framed by the body which could provide stability and uniformity to the industry.