18 November 2020TrademarksRory O'Neill

IP tops e-sports executives’ fears as industry grows

The e-sports industry could be an unlikely beneficiary of COVID-19 lockdowns, but IP rights and licensing issues remain a major obstacle, a new report has found.

Just less than half (48%) of 250 e-sports executives said IP and licensing were the biggest threat to the e-sports industry, in a report published by law firm Foley & Lardner.

The vast majority (75%) believe the pandemic will generate greater investment in the industry in the final quarter of this year and lead to further growth.

The first wave of COVID-19 lockdowns and a general increase in internet traffic coincided with the breaking of an e-sports record when 1.3 million viewers watched professional NASCAR drivers take part in a virtual race in March.

Most executives believe a “lingering fear” of attending large in-person events and the continuation of social distancing behaviour means the industry could continue to grow into the near-future.

Last year, 61% of respondents named IP and licensing issues as the biggest threat to the industry, marking a 13% decrease in this year’s report. Cybersecurity followed as the second biggest risk at 41%, but also fell (by 9%) from last year.

“It’s understandable that—while still topping the list of risks—IP and cybersecurity issues have declined a bit in importance as technology improves and the e-sports industry becomes more adept at protecting its IP and consumer data,” said Jon Israel, co-chair of Foley & Lardner’s sports and entertainment group.

Specifically, executives are worried about major video game developers asserting their IP rights. While this has “not been a major threat to the industry to date, it remains an issue looming in the background that executives are keeping an eye on as the e-sports ecosystem continues to evolve and expand,” the report found.

Julie McGinnis, a member of the firm’s sports and entertainment group, said that as the industry grows, brands are becoming more concerned about protecting their own IP rights.

“As various stakeholders in the e-sports industry become more concerned with protecting their personal brands, trademark-related issues are moving more to the fore. While it has been less common in e-sports for teams to seek registered trademark protection, the industry has recently become savvier about registering trademarks and protecting their growing enterprises,” McGinnis said.

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