Game Over: Copyright Issues in the Modern Video Game Landscape

Photo by Aleks Dorohovich on Unsplash

Bennett Herbert, Associate Member, University of Cincinnati Law Review

I. Introduction

With the rise of online capabilities, video games have progressed far beyond the isolated and indoor subculture they used to be. Video games now provide an interactive virtual community and a booming business that is part artistic expression, part sporting competition, and part massive entertainment.[1] Some prominent gamers have become bona fide celebrities, like Tyler Blevins, or “Ninja,” who made $500,000 per month in 2018.[2]

This elevated exposure brings legal questions for the creators of games and consoles. For decades, consoles have been modified (“modded”) to give users capabilities further than the creator intended.[3] Some modifications are non-infringing, while others are explicitly infringe on the author’s intellectual property,[4] and it has not been easy for courts to discern. Copyright issues amongst online tournaments have caused some companies to send cease-and-desist orders to prevent the competitions from taking place.[5] Online streaming sites like Twitch have allowed gamers to connect with millions,[6] but bring issues with respect to music copyrights.[7]

Part II will provide a background to the technical and legal progression of modding, online tournaments that video game companies have shut down, and the copyright issues of streaming sites. Part III will recommend solutions to the global split in how modding is enforced, explain why video game corporations might benefit from not always seeking to protect their copyrights, and how streaming sites can protect artists’ copyrights without harming the users’ experience.

II. Background

In 1996, the World Intellectual Property Organization (“WIPO”) signed the “internet treaties,” including a provision prohibiting illegal circumvention.[8] Later, Congress amended the DMCA to give authors more copyright protection.[9] United States v. Reichert 747 F.3d 445 (6^th Cir. 2014) is a case from the Sixth Circuit that examines enforcing the DMCA on those who modify consoles,[10] and C-355/12 Nintendo Co. Ltd. and Others v. PC Box Srl and 9Net Srl 2014 E.C.R. is a case from the European Court of Justice to contrast the American and European approach.[11] Video game companies have shut down online competitions over copyright issues, leading to a riff in their relationship with fans.[12] Streaming services have created a new set of intellectual property issues for video game companies, users, and third parties.[13]

A. Technological Circumvention

Technological protection measures (“TPMs”) are technologies used to control or restrict access to digital content or electronic devices.[14] TPMs limit the functionality of a device or program to a particular use, thus protecting copyrights by preventing unauthorized duplication and/or access.[15] This is a useful way for authors to protect their creations, but overly restrictive TPMs can interfere with consumers’ ability to use the technology in other, legal ways.[16] As a result, the legality of technology created to circumvent TPMs is a gray area.

In gaming, TPM circumvention most often comes in the form of modification chips (“mod chips”).[17] These computer chips are installed into a console to enhance its capabilities or add to its functionalities.[18] Some enhancements are illegal infringement, such as allowing the user to play unauthorized copies of video games, while others are legitimate and non-infringing, such as backing up copies of legally purchased video games, fixing bugs in failing consoles, or allowing a console to play DVDs that it otherwise could not.[19] Because mod chips can serve both non-infringing and infringing purposes, it is not always easy to determine their legal status. 

B. WIPO Internet Treaties and Subsequent Legislation

In 1996, the WIPO Copyright Treaty (“WCT”) and WIPO Performances and Phonograms Treaty (“WPPT”) were adopted by the member states of WIPO.[20] Known together as the “internet treaties,” these agreements provided copyright protection in response to advances in information technology.[21] The agreements included a prohibition of circumventing TPM’s.[22]

In 1998, Congress enacted the DMCA to implement the “internet treaties.”[23] The DMCA contains a provision that prohibits circumvention and the trafficking of circumventing technologies.[24] To prevent adversely punishing non-infringing uses of circumvention, several exceptions have been added.[25] While some courts like the Sixth Circuit have accounted for these exceptions,[26] others like the Ninth Circuit have treated the DMCA as a broad prohibition on circumvention as a whole, even those with an incidental relation to copyrighted works.[27]

C. United States v. Reichert

In United States v. Reichert, the Sixth Circuit analyzed whether someone who intentionally modded and sold a video game console, but was possibly unsure of whether such acts were illegal, was guilty of violating the DMCA.[28]

Jeffrey Reichert was convicted for trafficking a modified Nintendo Wii to a federal agent acting as a prospective customer.[29] Reichert installed a mod chip that allowed the Wii to play unauthorized video games and sold the Wii to the agent for a $50 profit.[30]

The Sixth Circuit affirmed Reichert’s conviction,[31] relying on Reichert’s own online postings — he knew his conduct was “a gray area” and that “we aren’t technically supposed to do it (mod consoles)” — to conclude that he was willful of his conduct and its illegal nature.[32]

D. Nintendo Co. Ltd. and Others v. PC Box Srl and 9Net Srl

In Nintendo Co. Ltd. and Others v. PC Box Srl and 9Net Srl, the European Court of Justice ruled that Article 6 of Directive 2001/29 of the European Parliament provided copyright protection to both video games and their consoles, and established a balancing act for evaluating when products that circumvent a console’s security measures constituted infringement.[33]

Nintendo sued PC Box for marketing Nintendo consoles with additional software that circumvented the console’s TPMs.[34] This software enabled use of unauthorized video games.[35]  PC Box argued the software was intended to enable the user to play MP3 files and movies on the console.[36] The lower court referred to the Court of Justice as to: (1) do the Article 6 protections provided for video games extended to video game consoles as well?; and (2) when considering a product whose purpose is to circumvent a TPM, what should a court should consider?[37]

The Court of Justice answered in the affirmative to the first query, explaining that it was paramount to video game authorship for protections to cover both video games and consoles.[38] As to the second question, the Court ruled that it was relevant to consider the relative costs that a particular TPM imposes on consumers, how effective the TPM is in protecting the owner’s intellectual property, the intended purpose of the circumventing technology, and evidence of how users are actually using the circumventing technology.[39]

E. Online Tournaments

The growth of competitive gaming or electronic sports (“eSports”) has led to a profitable marketing opportunity for video game companies,[40] but copyright issues have spurred cease-and-desist orders against some prominent tournaments.[41]

For decades, gamers have competed to determine who is the best player (and often for a cash prize).[42] These competitions have grown more popular, especially with online play allowing gamers to compete with opponents across the world from the comfort of their home.[43] Many video game companies have even partnered with professional gamers and eSport organizations,[44] providing the companies with a share of the revenue and/or greater marketability.[45]

In November of 2020, Nintendo sent a cease and desist to a Super Smash Bros. Melee (“Melee”) tournament known as Big House,[46] claiming that the use of a software program called Slippi infringed on Nintendo’s copyright.[47] Slippi is a program that allows users to play older games like Melee online.[48] Without Slippi or similar software, Melee can only be played in-person.[49] The tournament was cancelled and many fans were frustrated,[50] particularly because they felt that since Nintendo had not sold Melee since 2008, the company had little financial interest in the matter.[51] Some also noted that Slippi’s primary function was merely to make the game’s online play smoother, versus downloading illegal copies of games.[52]

F. Copyright Issues in Online Video Game Streaming

While streaming has increased gaming’s popularity and created groundbreaking avenues for the industry, it has brought copyright issues that involve vicarious liability for the site.[53]

A major reason gaming has increased so much in popularity lately is online streaming sites that allow users to stream what they are playing to viewers online.[54] The most popular of these sites, Twitch, saw 140 million unique monthly users in 2020.[55] This increased exposure has led to prominent gamers earning money, endorsements, and even becoming celebrities.[56]

In copyright law, vicarious liability applies when a party is liable for another’s infringement.[57] In order to be vicariously liable to infringement that occurred, a party must: (1) not be the party directly infringing; (2) have the right and ability to supervise the infringer(s); and (3) financially benefit from the infringement.[58] It is common for streamers to play music in the background. Over the last few years, various record companies and musical artists have threatened litigation against popular streamers for copyright infringement for using this music.[59] More significantly, some have threatened to sue Twitch for being vicariously liable for broadcasters’ conduct.[60] In response, Twitch deleted tens of thousands of videos from streamers’ profiles in October of 2020, without giving the users viable notice.[61] Streamers were upset with their inability to dispute the claims and criticized Twitch for its broad application of sanctions.[62]

II. Discussion

Given the growing popularity and technological advancements of the industry, the copyright issues in gaming are more likely to exacerbate than diminish. The language of the Internet treaties and DMCA is ambiguous, and until either is amended, American courts should approach enforcement of mod chips similarly to how the European Court of Justice has applied Article 6. For their part, video game corporations would benefit – both financially and in fans’ esteem – if they did not vehemently seek to protect their copyrights at every possible turn. Lastly, online streaming companies should creatively and proactively seek ways to protect third parties’ intellectual property, while simultaneously providing a convenient experience for users.

A. American Courts Interpretation of the DMCA with Respect to Modding

The United States and European Union typically see eye-to-eye on copyright issues.[63] However, as seen in United States v. Reichert and Nintendo v. PC Box, American courts have interpreted the circumvention prohibition in the DMCA differently than European courts have interpreted the Information Society Directive. This split in enforcement exists despite interpreting similar laws that were both enacted to enforce the same treaty. It is uncertain what to make of treaties like the WCT if economic powers cannot agree what the treaty requires of them.

Modding video game consoles can be used for illegal purposes, such as infringing on a creator’s copyright by allowing play of an unauthorized video game, or for legitimate, non-infringing purposes, such as allowing users to back up games they have legally purchased.[64] This conflict, combined with the DMCA’s ambiguous language, has caused different circuits to apply varying levels of sanctions to modding chips that circumvent video game consoles’ TPMs.[65]

International negotiators could recognize the split between American and Europeans courts. This could lead WIPO nations to adopting a new WCT provision that more explicitly directs how to enforce TPM circumvention. This language could include the balancing test of factors that the European court laid out in Nintendo v. PC Box.

If the WIPO nations do not reconcile this split, Congress can alleviate the disparity in American circuits by amending the DMCA to include more explicit language that guides courts to effectively protect authorship and permit benevolent circumvention. This could include more narrow language that reflects the European court’s considerations in Nintendo v. PC Box by: (1) regulating particular types of modding; (2) incorporating for factors that indicate whether a mod chip is used to infringe; and (3) accounting for the costs to users for different TPMs. Congress can amend the DMCA in a similar way it did with the Unlocking Consumer Choice and Wireless Competition Act. In 2014, Congress passed that act to carve an exception to make it legal for users to circumvent their cell phone carriers’ locks when changing carriers.[66] This allowed users to change cell phone carriers without needing to buy a new cell phone.[67] Congress can carve out similarly explicit exceptions for mod chips that are primarily used for non-infringing purposes.

Until WIPO nations or Congress amend language to help alleviate the difference in enforcement, American courts should interpret the DMCA’s circumvention provisions in a similar way the European Court of Justice interpreted Article 6 in Nintendo v. PC Box. By carefully considering the breadth of a given console’s TPM, the intended purpose of a circumventing technology, and the evidence of how users are actually utilizing the mod chip, courts can protect authorship and encourage harmless modding in a more consistent manner.

B. Video Game Corporations Approach to Infringement in Online Competitions

The massive and increasing appeal of online video game competitions has provided video game companies with an opportunity for revenue and marketability that was not available to them in decades past.[68] In 2018, ESPN broadcast an eSport gaming tournament on primetime for the first time.[69] At its peak, the 2019 Big House tournament for Melee garnered over 85,000 simultaneous spectators.[70] However, corporations like Nintendo consistently shut down these opportunities at the first sign of modding that might infringe on their intellectual property.[71] They threaten legal action even when modding is the only way for the online tournament to operate, and even when the competition involves a video game that has not been in production for over ten years.[72] Nintendo’s actions have led to fans protesting and boycotting, and has prevented the eSports community from embracing Nintendo’s games.[73] Competitive gaming is one of the primary reasons Melee became a cult sensation in the mid-2000’s,[74] and Nintendo’s actions are all but ensuring the newer Ultimate will not reach the same level of popularity.

Video game companies should conduct a cost-benefit analysis shutting down these popular online tournaments that occasionally infringe on their copyrights. Doing so will likely reveal that the benefits of pursuing legal protection of their intellectual property in every online tournament that uses modding technology is outweighed by the benefits that will be obtained via revenue, marketing, and reputation through greater exposure in the eSports community.

C. Streaming Services Approach to Infringement

Online streaming sites like Twitch must balance the interests of avoiding vicarious liability from their users conduct, and allowing a convenient and appealing experience for users to comfortably create content. Doing so will take creative and proactive steps that go beyond simply mass-deleting thousands of videos every time a record company threatens litigation.

Twitch recently created a catalogue of music that is not copyright protected for users to choose from.[75] This effort could help alleviate the problem, but most streamers who still play music do not choose from this catalogue.[76] Taking this idea a step further will likely be needed to halt the barrage of threats from musical copyright holders. Twitch and similar sites should negotiate a license with music labels and artists, and then offer that licensure to its streamers. This would allow artists to be compensated from the users listening to their music on a stream, and allow Twitch streamers to comfortably play music without fear of having their video deleted.

Since any solution is unlikely to alleviate 100% of all copyright infringement that broadcasters conduct, it is also important for sites like Twitch to establish a process that regulates and reviews claims of copyright infringement with more nuance and due process. While the sweeping act of deleting thousands of videos at once will help prevent copyright infringement, it is an overbroad solution that is likely to inadvertently violate non-infringers freedom of speech. 

IV. Conclusion

Between the rise of modding, online gaming, and streaming, it was natural for Congress to better protect video game authors from copyright piracy. The DMCA has provided video game corporations greater copyright protection,[77] but the provision’s ambiguous language has led to confusion in the courtroom and over-regulation of benevolent modding.[78] Until international bodies agree on the WCT’s enforcement of circumvention technologies – or further amendments to the DMCA are made – American courts should interpret this issue with a similar approach as the European Court of Justice did in Nintendo v. PC Box. This will provide clarity among the circuit courts and prevent harmless modding from being punished.

For their part, video game companies could benefit financially and in reputation by lowering their guard and reducing how proactively they seek out legal action against any and all infringers. Streaming services such as Twitch must avoid vicarious liability by prohibiting its users from infringing on musical artists, but can do so without ruining the users’ experience by proactively seeking musical licenses and monitoring claims of infringement with greater nuance.

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[1] Scott Alan Burroughs, A Twitch in Time: Legal Issues Catch Up With Popular Game-Broadcasting Platform, ABOVE THE LAW (Sep. 5, 2018), https://abovethelaw.com/2018/09/a-twitch-in-time-legal-issues-catch-up-with-popular-game-broadcasting-platform/?rf=1.

[2] Id.

[3] United States v. Reichert, 747 F.3d 445, 456 (6th Cir. 2014).

[4] United States v. Reichert, 747 F.3d 445, 456 (6th Cir. 2014).

[5] Peter Morics, Nintendo Pulls the Plug On Massive Smash Bros Online Tournament, SCREENRANT (Nov. 19, 2020), https://screenrant.com/nintendo-ban-smash-bros-tournament-online/.

[6] Scott Alan Burroughs, A Twitch in Time: Legal Issues Catch Up With Popular Game-Broadcasting Platform, ABOVE THE LAW (Sep. 5, 2018), https://abovethelaw.com/2018/09/a-twitch-in-time-legal-issues-catch-up-with-popular-game-broadcasting-platform/?rf=1.

[7] Id.

[8] S. Treaty Doc. No. 105-17 (1997); 2186 U.N.T.S. 203; 36 I.L.M. 76 (1997).

[9] United States v. Reichert, 747 F.3d 445, 448 (6th Cir. 2014).

[10] United States v. Reichert, 747 F.3d 445, 448 (6th Cir. 2014).

[11] C-355/12, Nintendo Co. Ltd. and Others v. PC Box Srl and 9Net Srl, 2014 E.C.R.

[12] Max Mastro, Nintendo Shuts Down Super Smash Bros. Ultimate College Tournament, SCREENRANT (Dec. 19, 2020), https://screenrant.com/super-smash-bros-ultimate-nintendo-tournament-shut-down-playvs/#:~:text=community%20when%20reports%20of%20rampant,game%20to%20enable%20online%20play.

[13] Banner Witcoff, Twitch Deletes Content for Copyright Infringement Without Warning, LEXOLOGY (Oct. 23, 2020), https://www.lexology.com/library/detail.aspx?g=6285c2b1-214b-484f-b10d-af90b97ac421.

[14] United States v. Reichert, 747 F.3d 445, 456 (6th Cir. 2014).

[15] United States v. Reichert, 747 F.3d 445, 456-457 (6th Cir. 2014).

[16] United States v. Reichert, 747 F.3d 445, 456-457 (6th Cir. 2014).

[17] United States v. Reichert, 747 F.3d 445, 459 (6th Cir. 2014).

[18] United States v. Reichert, 747 F.3d 445, 459 (6th Cir. 2014).

[19] United States v. Reichert, 747 F.3d 445, 459-460 (6th Cir. 2014).

[20] S. Treaty Doc. No. 105-17 (1997); 2186 U.N.T.S. 203; 36 I.L.M. 76 (1997).

[21] Id.

[22] Id.

[23] Digital Millennium Copyright Act (DMCA) (1996).

[24] Id.

[25] United States v. Reichert, 747 F.3d 445, 457 (6th Cir. 2014).

[26] Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1203 (6^th Cir. 2004).

[27] MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 948 (9^th Cir. 2010).

[28] United States v. Reichert, 747 F.3d 445, 448 (6th Cir. 2014).

[29] United States v. Reichert, 747 F.3d 445, 448 (6th Cir. 2014).

[30] United States v. Reichert, 747 F.3d 445, 448 (6th Cir. 2014).

[31] United States v. Reichert, 747 F.3d 445, 455 (6th Cir. 2014).

[32] United States v. Reichert, 747 F.3d 445, 452-453 (6th Cir. 2014).

[33] C-355/12, Nintendo Co. Ltd. and Others v. PC Box Srl and 9Net Srl, 2014 E.C.R.

[34] C-355/12, Nintendo Co. Ltd. and Others v. PC Box Srl and 9Net Srl, 2014 E.C.R., paragraph 66.

[35] C-355/12, Nintendo Co. Ltd. and Others v. PC Box Srl and 9Net Srl, 2014 E.C.R., paragraph 65.

[36] C-355/12, Nintendo Co. Ltd. and Others v. PC Box Srl and 9Net Srl, 2014 E.C.R, paragraph 68.

[37] C-355/12, Nintendo Co. Ltd. and Others v. PC Box Srl and 9Net Srl, 2014 E.C.R., paragraphs 71-73.

[38] C-355/12, Nintendo Co. Ltd. and Others v. PC Box Srl and 9Net Srl, 2014 E.C.R., paragraph 98.

[39] C-355/12, Nintendo Co. Ltd. and Others v. PC Box Srl and 9Net Srl, 2014 E.C.R., paragraph 99.

[40] Esports Continues to Lead Online Gaming Industry Growth, PR NEWSWIRE (Mar. 5, 2021), https://www.prnewswire.com/news-releases/esports-continues-to-lead-online-gaming-industry-growth-301241107.html.

[41] Peter Morics, Nintendo Pulls the Plug On Massive Smash Bros Online Tournament, SCREENRANT (Nov. 19, 2020), https://screenrant.com/nintendo-ban-smash-bros-tournament-online/.

[42] Esports Continues to Lead Online Gaming Industry Growth, PR NEWSWIRE (Mar. 5, 2021), https://www.prnewswire.com/news-releases/esports-continues-to-lead-online-gaming-industry-growth-301241107.html.

[43] Peter Morics, Nintendo Pulls the Plug On Massive Smash Bros Online Tournament, SCREENRANT (Nov. 19, 2020), https://screenrant.com/nintendo-ban-smash-bros-tournament-online/.

[44] Kevin Vanstone, Esports Platforms and Partnerships Enabling the Next Generation of Gamers, INN (Sep. 21, 2020), https://investingnews.com/daily/tech-investing/gaming-investing/esports-investing/esports-platforms-and-partnerships-enabling-the-next-generation-of-gamers/.

[45] Id.

[46] Id.

[47] Id.

[48] Id.

[49] Id.

[50] Id.

[51] Id.

[52] Id.

[53] Scott Alan Burroughs, A Twitch in Time: Legal Issues Catch Up With Popular Game-Broadcasting Platform, ABOVE THE LAW (Sep. 5, 2018), https://abovethelaw.com/2018/09/a-twitch-in-time-legal-issues-catch-up-with-popular-game-broadcasting-platform/?rf=1.

[54] Id.

[55] Id.

[56] Id.

[57] Id.

[58] Id.

[59] Id.

[60] Id.

[61] Id.

[62] Id.

[63] Kinga Kijak-Markiewicz, Copyright Law: EU Countries vs. US, PHOTOCLAIM (Oct. 10, 2017), https://photoclaim.com/en/copyright-law-eu-countries-vs-us-part-1/.

[64] United States v. Reichert, 747 F.3d 445, 456 (6th Cir. 2014).

[65] United States v. Reichert, 747 F.3d 445, 456 (6th Cir. 2014).

[66] Julian Hattem, House Votes to Allow Cellphone ‘Unlocking,’ THE HILL (July 25, 2014), https://thehill.com/policy/technology/213361-house-votes-to-allow-cellphone-unlocking.

[67] Id.

[68] Kevin Vanstone, Esports Platforms and Partnerships Enabling the Next Generation of Gamers, INN (Sep. 21, 2020), https://investingnews.com/daily/tech-investing/gaming-investing/esports-investing/esports-platforms-and-partnerships-enabling-the-next-generation-of-gamers/.

[69] ESPN is going to air the first e-sports league final match ever in prime time, TECHNOLOGY REVIEW (July 12, 2020), https://www.technologyreview.com/2018/07/12/240413/espn-is-going-to-air-the-first-esports-league-final-match-ever-in-prime-time/.

[70] The Big House 9 detailed viewer stats, ESPORTS CHARTS (July 7, 2019), https://escharts.com/tournaments/ssb/big-house-9.

[71] Peter Morics, Nintendo Pulls the Plug On Massive Smash Bros Online Tournament, SCREENRANT (Nov. 19, 2020), https://screenrant.com/nintendo-ban-smash-bros-tournament-online/.

[72] It is worth noting one exception to the DMCA’s circumvention prohibition is to allow access to video games distributed on formats that have become obsolete.

[73] Max Mastro, Nintendo Shuts Down Super Smash Bros. Ultimate College Tournament, SCREENRANT (Dec. 19, 2020), https://screenrant.com/super-smash-bros-ultimate-nintendo-tournament-shut-down-playvs/#:~:text=community%20when%20reports%20of%20rampant,game%20to%20enable%20online%20play.

[74] Zane Bhansali, The Smash World Tour, boasting a $250,000 prize pool, wants to make Smash a tier one esport, THE WASHINGTON POST (March 12, 2020), https://www.washingtonpost.com/video-games/esports/2020/03/12/smash-world-tour/.

[75] Scott Alan Burroughs, A Twitch in Time: Legal Issues Catch Up With Popular Game-Broadcasting Platform, ABOVE THE LAW (Sep. 5, 2018), https://abovethelaw.com/2018/09/a-twitch-in-time-legal-issues-catch-up-with-popular-game-broadcasting-platform/?rf=1.

[76] Id.

[77] United States v. Reichert, 747 F.3d 445, 455 (6th Cir. 2014).

[78]  United States v. Reichert, 747 F.3d 445, 457 (6th Cir. 2014).