The esports industry now generates $1 billion in revenue, and is expected to grow to $1.8 billion in revenue by 2022. Recognizing this massive growth, along with the myriad legal issues the industry will face as it grows, Quinn Emanuel has a practice group dedicated exclusively to esports. The group brings together attorneys worldwide who specialize in a number of areas relevant to esports, including intellectual property, traditional sports, media and entertainment, data privacy, consumer products, finance, corporate governance, and antitrust.
We have represented or currently represent companies influential in the development of every aspect of esports, including:
- game publishers (such as Activision Blizzard, Electronic Arts, and Riot Games);
- streaming platforms or broadcasters (such as YouTube and ESPN);
- competition platforms (such as Skillz);
- tournament organizers (such as FIFA);
- content licensors (such as the National Football League);
- team owners (such as Robert Kraft and the Baltimore Ravens);
- sponsors (such as Coca-Cola); and
- betting platforms (such as FanDuel).
We have listed below representative examples of our relevant experience. Whether you are facing intellectual property issues, which inherently arise when a protected work serves as the underlying sport, issues involving rights of publicity, data privacy issues, complaints from game players, consumers, or regulators, financing issues arising from the need to raise money privately or publicly, disputes or concerns over team management, contract disputes, or allegations of market power or other antitrust concerns, we have deep experience to address those issues. Even if you are not facing an actual dispute, we can provide advice to minimize the risk of future disputes.
Representative Intellectual Property Experience
Patents for Streaming Systems: We were engaged by our client, Netflix, Inc., in two inter partes review proceedings before the Patent Trial and Appeal Board (PTAB) challenging the validity of patents owned by Affinity Labs of Texas, LLC relating to streaming systems for digitally stored audio, video, and textual content. Following the hearing, the PTAB issued Final Written Decisions in each proceeding finding that all challenged claims were unpatentable.
Patents for Online Payments and Content Distribution: We represented Samsung and HTC in a case involving patents related to the online payment for and distribution of content, such as apps, videos, and music. Weeks before trial, we obtained a reversal of the district court order denying a motion to stay the case pending covered business method review of the patents by the PTAB. Smartflash v. Samsung Electronics & HTC (Fed. Cir. 2015)
Patents for Online Game Prizes: We represented Zynga, Sony Online Entertainment, and Blizzard in the District of Delaware against Agincourt Gaming LLC’s allegations that our clients infringed three patents directed to awarding prizes based on game outcomes. We obtained a favorable settlement after filing Markman briefs and winning a critical discovery motion in two jurisdictions. Agincourt Gaming LLC v. Zynga, Inc., et. al. (D. Nev. and D. Del. 2014).
Patents for Pop-Up Advertising: We represented Vendare in a patent infringement case involving the use of pop-up advertising on online gaming sites. Before the client had to incur any significant costs, we were able to settle the case on terms favorable to our client.
Rights in Videogames: We represented Activision in multiple cases involving the popular Guitar Hero® video game, one of the best-selling video games of all time. In one case filed by Activision against Gibson Guitar, seeking a declaration that the accused video game did not infringe a patent owned by Gibson directed to a “System and Method for Generating and Controlling a Simulated Musical Concert Experience,” we won summary judgment of non-infringement, disposing of all patent claims in the case. Activision Publishing Inc. v. Gibson Guitar Corp. (C.D. Cal. 2009). In another case brought by members of the ‘80s rock band “The Romantics,” who asserted that the use of their signature song “What I Like About You” in the game violated their rights of publicity and constituted an implied endorsement, we secured a complete dismissal on the merits. The Romantics v. Activision Publishing, 574 F. Supp. 2d 758 (E.D. Mich. 2008).
We also represented Electronic Arts in litigation challenging the rights to content contained in various popular videogames, including Madden NFL Football and Dune. In one recent action, all claims were voluntarily withdrawn after we removed the complaint from state to federal court in New York and persuaded the federal court that the claims were both legally unfounded and time-barred.
Streaming Rights: We are defending iTalk Global, Inc. in the Western District of Texas for the allegedly unauthorized display of several Chinese television programs on the “iTalkBB Chinese TV” platform, a popular Internet-based television platform for Chinese speakers in the U.S. and elsewhere. The case raises complex issues regarding the enforcement of foreign copyrights in the U.S., international licensing arrangements, and the display of copyrighted works through internet-based platforms with both streaming and recording capabilities. On iTalk Global’s behalf, we filed a motion to dismiss for forum non conveniens based on the fact that Plaintiffs suit could be brought in China and it would far less expensive and burdensome for the parties to litigate the case there. Beijing iQiya Science & Technology Co. v. iTalk Global (W.D. Tex.).
Rights Impacted by Online Video Hosting: We represent Vimeo, one of the most popular online video-hosting sites in the U.S., in a groundbreaking copyright case brought by major record labels alleging that Vimeo was liable for hosting thousands of user-uploaded videos that incorporate the labels’ musical compositions or sound recordings. In the first phase of this case, we convinced the district court to dismiss the majority of the labels’ claims based on the “safe harbor” protections afforded by the Digital Millennium Copyright Act (DMCA), which allows websites to avoid liability when they remove videos upon receiving either actual or “red flag” knowledge of their presence. The district court ruled, however, that the DMCA does not apply to sound recordings fixed prior to February 1972. On appeal to the Second Circuit, we convinced a unanimous panel that the DMCA does apply to pre-1972 sound recordings. We further persuaded the Second Circuit to recognize that mere awareness of a video that incorporates an entire song cannot on its own defeat a motion for summary judgment on safe-harbor grounds. In 2017, the U.S. Supreme Court denied the Plaintiffs’ petition to review the Second Circuit decision. Capitol Records, LLC, et al. v. Vimeo, Inc. and EMI Blackwood Music, Inc., et al. v. Vimeo, Inc. (2d Cir. 2016).
We also won summary judgment on behalf of YouTube and its parent Google in a precedent-setting, billion dollar copyright case brought by Viacom in a New York federal court. Viacom argued that YouTube should be held liable for the presence of allegedly unauthorized, infringing material on the site. In a decision that helps to establish the rules of the road for Internet services that host user-generated content, the district court agreed with us that YouTube and Google are fully protected by the safe-harbor provisions of the DMCA. Viacom International, Inc. v. YouTube Inc. (S.D.N.Y. 2013).
Sports Logo and Publicity Rights: We successfully represented the National Football League (NFL) and the Baltimore Ravens professional football franchise in a series of copyright actions stemming from the adoption by the Ravens of an inaugural logo for its 1996-1998 seasons that plaintiff Frederick Bouchat alleged was substantially similar to a copyrighted drawing he had submitted for consideration. After the jury had found for the plaintiff on liability (litigated by another firm), we were brought in to try the damages case. We obtained a jury verdict of zero damages and persuaded the jury that the logo infringed did not drive any revenue generating activity but, rather, such large revenues were solely the result of the inherent power of the NFL brand and the sport itself. The verdict was affirmed by the Fourth Circuit and the Supreme Court denied cert. Bouchat v. NFL Properties LLC, et al. (D. Md. 2013).
We also represented the NFL and Green Bay Packers in a trademark infringement and trade secret case against a company that had obtained publicity rights from various Packers players to use their names and numbers on football jerseys. Notwithstanding that the defendant had obtained those rights from the players, because it had not received approval from our clients, the jury in Milwaukee rendered a verdict in our favor, which was upheld by the Seventh Circuit.
Trademark Rights in Sports Competitions: We represented ESPN, the owner and creator of the nation’s premier action sports competition known as the X Games, in an action for trademark infringement in federal court in New York against The X Channel, Inc., which intended to launch a national television channel featuring action sports. After obtaining a temporary restraining order, the court quickly set a preliminary injunction hearing and the case settled promptly.
Representative Data Privacy Experience
California Data Privacy: We defended IBM Corp. and its subsidiary, TWC Product and Technology, LLC—owner of The Weather Channel Mobile App—in a high-profile lawsuit brought by the Los Angeles City Attorney on behalf of the People of California, alleging that TWC’s purported failure to disclose its use and sharing of users’ geolocation data for advertising and other commercial purposes violates California’s Unfair Competition Law. The People sought penalties of up to $2,500 for each alleged misuse of user geolocation data, which could amount to billions of dollars. The lawsuit settled in August 2020.
European Union Data Privacy: We are representing Google in the very first class action to be launched in France since the extension of this type of procedure to personal data matters in 2016. Major French consumer association UFC-Que-Choisir filed a claim in June 2019 before the Paris Civil Court and alleged Google breached the EU General Data Protection Regulation (GDPR), more specifically its information and consent requirements. The plaintiff is seeking an award of up to EUR 27 billion in damages for an alleged class of French users of terminals equipped with an Android operating system and a Google account.
Biometric Information Privacy Act (BIPA): We successfully defended Take-Two Interactive, publisher of the NBA 2K basketball video games, against class action alleging violation of the BIPA, based on use of user photographs to create customized game players and transmission of them to third party users when playing in multiplayer mode. The decision was affirmed on appeal. Vigal v. Take-Two Interactive, 235 F. Supp. 3d 499 (S.D.N.Y. 2017), aff’d, (2d Cir., Nov. 21, 2017).
Video Privacy Protection Act: We successfully defended Hulu in consolidated putative class action cases involving the Video Privacy Protection Act and related privacy statutes, and the allegation that the defendant knowingly disclosed personally identifiable information about its users. We defeated class certification and obtained summary judgment on liability. In re Hulu Privacy Litig., 86 F. Supp. 3d 1090 (N.D. Cal. 2015).
Data Breach Advice: We are overseeing a data breach matter for a multinational entertainment company concerning 50 state law notification rules, counseling reactions against the hacker(s), potential class action cases, and notification to litigants and courts where documents subject to “litigation hold” notices were compromised.
Representative Experience With Other Consumer Complaints
Lawsuit Against Skillz: We represent Skillz Inc., a mobile competitive gaming platform, in a lawsuit brought by players who claim they lost money because Skillz allegedly failed to act against a high-stakes cheater, refused to honor its policies and rewards program, and violated consumer-protection laws prohibiting fraudulent advertising and online gambling. We successfully moved to compel arbitration based on the terms and conditions signed by the players. Ball v. Skillz Inc. (D. Nev. 2020).
Lawsuit Against Electronic Arts: We successfully represented Electronic Arts in two consumer class action cases in the Northern District of California, involving claims under the Consumer Legal Remedies Act, Section 17200 and the Copyright Act relating to digital rights management technology in the video game maker’s products. The cases were resolved at a very early stage with no monetary relief to the class.
Lawsuit Against Sega: We successfully defended video game publisher Sega and video game developer Gearbox Studios in a consumer class action claiming that the Aliens: Colonial Marines video game’s features and customer play experience were overstated in advertising and promotion. Defeated class certification and convinced plaintiffs to dismiss lawsuit. Locke and Perrine v. Sega of America, Inc. and Gearbox Software LLC (N.D. Cal.).
Lawsuit Against FanDuel: We represented Nigel Eccles, CEO and Co-founder of FanDuel Ltd., in connection with the New York Attorney General Office’s lawsuits against FanDuel alleging false and deceptive advertising practices.
Representative Experience With Financing and Team Management
Financing and Governance Disputes: We regularly advise managers and members of limited liability companies, shareholders of closely held corporations, and partners in limited partnerships regarding financing and governance disputes. For example, we represented Swiss-based Highlight Group in a shareholder dispute about a joint venture in the area of international sports. The dispute arose after one shareholder caused a deadlock by refusing to provide promised financing and by challenging decisions of the board of directors. We defended against all actions and secured our client a controlling stake in the company.
Liability Arising from Financing Alternatives: We routinely represent both plaintiffs and defendants in cases alleging liability arising from every type of financing, including initial public offerings (IPOs), direct listings, special purpose acquisition companies (SPACs), private equity, letter of credit facilities, and secured and unsecured debt. We also have a restructuring practice to resolve problems that arise when companies are unable to satisfy their debts.
Team Management: We advise clubs with respect to internal investigations, communications with the leagues regarding personnel conduct policies, workplace conduct violations, and potentially unlawful conduct by team employees. We have conducted numerous internal investigations related to sexual harassment, discrimination and retaliation in the workplace.
We specifically were retained by the NFL Players Association to conduct an independent internal investigation of the NFL and Baltimore Ravens’ disciplinary proceedings in the Ray Rice matter.
We also were retained by the Carolina Panthers immediately prior to Sports Illustrated’s publication of a December 2017 article that raised various allegations of race and sex discrimination within the Panthers’ workplace. Our representation included developing and implementing a crisis management strategy that was later characterized by Sports Illustrated as “brilliant,” as well as representing the team’s interests in connection to a related investigation conducted by the NFL that was led by the former Chair of the U.S. Securities & Exchange Commission Mary Jo White.
Representative Experience Involving Contracts Disputes
Game Development Agreements: We successfully represented plaintiffs, creators of the multibillion-dollar video game franchises Call of Duty and Modern Warfare, in dispute over nonpayment of nine-figure bonuses and unauthorized development of sequels and other games. Case settled on favorable terms the day before jury selection was to begin. Jason West and Vince Zampella v. Activision Publishing, Inc. (L.A. Super. Ct.).
Employment Agreements: We successfully enforced our client’s tournament agreement with a world champion boxer, who had publicly withdrawn from a high profile international boxing tournament. We achieved this through an ex parte injunction obtained from a Swiss court, which compelled the boxer to announce on his social media platforms his return to the tournament, and which led the international boxing federation to threaten the boxer that his world championship title would be withdrawn if he failed to comply with his obligations under the agreement with our client.
Broadcasting Agreements: We successfully represented the Washington Nationals in a dispute with the Baltimore Orioles and the Mid-Atlantic Sports Network over the parties’ broadcast agreement. Washington Nationals Baseball Club, LLC v. TCR Sports Broad. Holding, LLP d/b/a Mid-Atlantic Sports Network (N.Y. Sup. Ct.; N.Y. App. Div.).
Representative Antitrust Experience
Sports Promotion: We defended Haymon Sports and its CEO, Alan Haymon, the most prominent boxing manager in the sport today, in a $300 million antitrust lawsuit by Oscar De La Hoya and his Golden Boy promotion companies. The plaintiffs alleged that Haymon attempted to monopolize the market for promotion of Championship-Caliber Boxers through a “tie-out” clause in their management contracts, as well as a series of exclusive contracts with free network television and basic cable networks. On summary judgment, we demonstrated to the Court that Golden Boy’s claims were factually and legally meritless, and the Court agreed, dismissing all antitrust claims with prejudice and throwing the case out.
Sports Events: We represented FIFA in a federal antitrust class action whereby plaintiffs alleged that FIFA and its co-defendants engaged in a conspiracy to force individuals who wished to attend the 2014 World Cup to purchase more-expensive hospitality packages instead of face-value tickets in order to drive up profits. At stake was not only hundreds of millions of dollars, but also FIFA’s reputation as the leader of the World Cup, the world’s most elite soccer event. In less than a year, not only did we get this action kicked out of court for lack of subject matter jurisdiction, but the court issued a scathing opinion finding that “plaintiffs engaged in a number of questionable actions.”
Broadcasting Rights: We represented Madison Square Garden and The New York Rangers in defense of federal class action antitrust claims that the National Hockey League, regional sports networks, Comcast, and DIRECTV conspired to inflate prices for television and internet broadcast of NHL hockey games.