Guest Writer: Attorney Stephen McArthur Explains the Importance of Trademarks

Esports teams are failing at trademarks and branding. As a former esports competitor and now intellectual property lawyer, one of the biggest mistakes I see teams and players make is failing to register the trademarks of their team names and player names. The esports competitive video game scene has exploded over the past decade. When I competed back in the early 2000s, events with first-place prizes that reached six figures were rare and highly anticipated. These days, those same championships would be considered blasé as prize pools regularly top millions of dollars for a single tournament. Moreover, many players can make that much money without even winning a single event by streaming their gameplay on Twitch.

Along with this increased popularity and legitimacy comes the opportunity for esports players to build a brand around their team and player names. esports competitors stand to make serious money from their branding, whether it comes from corporate sponsorships, merchandising, licensing, or from leveraging the size of their audience for advertising dollars. As with any other brand, however, esports teams need to be concerned with trademark law and its effect on their business.

What is a Trademark?

A trademark is a word, slogan, logo, or symbol used to represent a company, product, or service. Think of “Coca-Cola”—when you see that name or logo, you know what product you’re getting. Razer, Turtle Beach, and DXRacer are other famous trademarks that represent their brands and set them apart from competitors in the esports world.

Similarly, the name of an esports competitor (Fatal1ty, for example) or team of competitors (such as Evil Geniuses) can represent their brand and their “product.” Whether they are sponsored by a company or starting up their own YouTube or Twitch channel, that trademark signals to consumers the source of the product or endorsement.

Trademark rights are gained from either the actual use of the mark to sell products and services or from filing a trademark registration with the U.S. Patent and Trademark Office (the “USPTO”). Unregistered rights are known as “common law” trademarks, and offer very little protection.

Trademark Ownership in esports

Currently, there is a huge disparity between the amount of money being made by esports teams and the extent of the legal protection of their trademarks. I researched the IP registrations of the top U.S. esports teams and players and what I found was shocking: the vast majority of even the top teams have not secured their trademark registration rights. The following chart illustrates the issue:

*Another interesting note is that some of the above teams actually did apply for trademarks within the past few years but the applications were rejected because the teams tried to apply through self-help services. This is a perfect example of why “saving” money on services like LegalZoom is being penny-wise and pound-foolish. If you’re going to spend the money on a trademark, hire a lawyer and do it right.

While some teams like Evil Geniuses and FNATIC are savvy enough to realize the value of registration, the vast majority of esports teams have ignored this low-hanging fruit. Furthermore, I could find only a single player who has registered the trademark in his name: Fatal1ty. Fifteen years after his days as a famous Quake player, his brand (i.e., trademark) is still valuable, and I saw it plastered around E3 booths this year.

With teams and players bringing in so much money, their brands are becoming increasingly valuable. Leveraging a strong brand, whether for a team or an individual player, is a great way to maximize merchandising and licensing profits. Failing to register a team or player name is a critical mistake that could lead to a number of serious business issues, including

• Dilution of the value and distinctiveness of your brand name if the USPTO grants to other parties trademarks that are similar or identical to yours;
• The inability to capture maximum value from licensing and merchandising of the brand name;
• Confusion and potential legal disputes over who actually owns your team name or player name;
• The inability to effectively police the trademark;
• Lower valuation if your team is purchased and you have not properly protected your IP; and
• Confusion in the minds of consumers as to which of your products and services are officially licensed and which are not.

The Importance of Early Registration

Each day that you do not file a trademark registration with the USPTO, you risk someone else coming in and registering a similar trademark. When approving a new trademark registration, the USPTO only checks it against other trademarks in its database. What if tomorrow someone tries to register names such as “SoloMid,” “TSM,” “Luminosity,” or “Dignitas” for esports tournaments and merchandise, gaming and entertainment services, or video game streaming? The USPTO would probably allow it since the current teams have not registered their trademarks and their names don’t appear in their database. In such a situation, an outside party could wedge into the legitimate teams’ legal space and force them to enter expensive litigation or cancellation proceedings to protect their common law rights to their brand. These expensive disputes may cause the esports teams to lose their rights altogether or walk away with much narrower rights than they would have had if they simply filed a registration earlier. Such risk is simply unnecessary and can be avoided by consulting an attorney and registering with the USPTO.

Conclusion

Many of the biggest names in the esports and streaming industries have neglected to secure proper ownership of their brands and trademarks even though the costs associated with doing so are low. It is not worth enduring the problems and risks associated with not having a protectable brand just to save a few dollars on proper trademark registration. You should budget about $1,000 for the attorneys’ fees to register a trademark. In the grand scheme of things, it is a small price to pay to legally protect your entire brand and revenue source.

*edit: the trademark registration graph included in this article only examines United States trademark registrations.

Stephen McArthur, aka The Video Game Lawyer, has been practicing at the intersection of gaming and IP law for nearly a decade. Make sure to visit his website and follow his Twitter for the latest updates.