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Crafting an Industry: An Analysis of Korean Starcraft and Intellectual Properties Law

Copyright Commentary Notes

Written By: Jacob Rogers Edited By: Jeffery Habenicht Editorial Policy


On November 18th-20th, 2011, Major League Gaming hosted a Starcraft II tournament in Providence, Rhode Island, where over 250 professional players competed for a $100,000 prize. Starcraft and Starcraft II (collectively “Starcraft”) are a pair of video games set in a futuristic universe in which players compete against each other by controlling armies of humans with advanced technology or one of two alien races, the enigmatic Protoss, or the swarming Zerg. This Comment addresses the legal ramifications of publicly broadcasted videogames used as a sport by analyzing Starcraft, one of, if not the most  powerful professionally competitive game. Section I addresses the background of real-time strategy games (“RTS”) and provides an introduction to the professional Starcraft industry. Section II analyzes the recent lawsuit and settlement between Activision Blizzard, Inc. and Korean Starcraft broadcasters and considers how it might have been resolved had it not settled. Section III recommends a change to improve copyright law in light of the unique characteristics of game broadcasting. I argue that Starcraft has transformed into a quasi-public good with governmental, corporate, and private stakeholders, which should limit its creators’ right to enjoin its use through copyright law.

Section I: A Brief Introduction to Starcraft

a. What is Starcraft? Starcraft is a science fiction game that depicts the conflicts of three futuristic alien races as they vie for control of a distant sector of the galaxy. The three races are the Terrans – a human analogue, the Zerg – a swarming bug-like race, and the Protoss – an advanced but reserved alien civilization. As explained by the Cornell Law Review, game play requires two opponents to compete against each other by gathering resources, building a base, and then creating an army based on the technology or alien creatures available for each race. The game places a premium on player speed by making optimal game play require more actions per minute than the average human being is capable of taking.{{1}} The distinction between the original game and Starcraft II, is that each race has different specific units for its army, and that the sequel has upgraded graphics. b. Creation of a Professional Starcraft Industry In addition to doing American and European releases, Blizzard chose to release Starcraft in Korea. The Koreans quickly differentiated Starcraft game play from the casual hobby culture in America and Europe, and transformed Starcraft into something akin to a spectator sport. After Starcraft became a spectator sport in Korea, it was exported back to the rest of the world in its new form. Today, Starcraft is played by professional athletes around the world and viewed by thousands of people in many countries, including the United States. Starcraft had reached Korea at an especially auspicious moment for networked gaming. At the turn of the millennium, Korea boasted a first-class broadband infrastructure.{{2}} As the gaming blog Rock Paper Shotgun reported, with access to such fast Internet, Korean gaming culture developed a bent towards competitive multiplayer games that did not grow at the same rate in either the United States or Japan (the two other leading nations in videogame development). In the period around 2000-2003, international players such as Grrrr... (Guillaume Patry) and Korean players such as Slayers_Boxer (Lim Yohwan), started to achieve personal fame.{{3}} The popularity of individual players demonstrated that there was an audience that wanted to watch Starcraft, rather than merely play it. The growing audience led to televised games with commentators and, ultimately to the founding of two networks to broadcast games and sponsor tournaments: OngameNet (OGN), and MBCgame (MBC). This in turn lead to sponsorship of players by Korean companies, and ultimately the involvement of the Korean government in the form of the Korean e-Sports Association (“KeSPA”), which considers itself a major part of the foundation of “e-sports,” short for electronic sports. c. Export Worldwide The Korean professional scene was initially a local phenomenon, but the release of Starcraft II with worldwide support caused a spike in viewership that allowed professionals to support themselves by playing Starcraft.{{4}} Major League Gaming in America chose to add Starcraft II to its lineup, as did the Intel Extreme Masters tournament and the Dreamhack tournament, which are both held in Europe. Today, it can fairly be said that professional Starcraft is an international sport.

Section II: Copyright Control

From 2007 to 2011, Starcraft was actually involved in a controversy regarding its broadcasting rights. This began with requests for fees from Blizzard and culminated in a settled lawsuit in 2011. a. Introduction to the Blizzard vs. Broadcasters Lawsuit The lawsuit began with a disagreement between Blizzard Entertainment and the Korean broadcasters over licensing rights to Starcraft television broadcasts. Shacknews, a games review and journalism website, reported that according to Blizzard CEO, Mike Morhaime, the company had begun to negotiate with KeSPA in 2007 in order to “get them to recognize [Blizzard’s] IP rights.” Blizzard further clarified the meaning of “IP rights” in an open letter written to the Korean e-sports community on May 27th, 2010. In this letter, Mike Morhaime explained that Blizzard was dismayed that KeSPA had sold broadcasting rights without Blizzard’s permission. Blizzard therefore chose to bypass KeSPA and license its rights to Starcraft and Starcraft II to Gretech Corporation, which broadcasted games under the name Gom TV. Blizzard provided the other television stations a grace period lasting until August 2010, after which it would require them to cease broadcasting altogether. KeSPA prevented Gretech from running any leagues by forbidding all the teams from sending any players to the Gretech leagues. Blizzard responded to these moves by breaking off negotiations entirely, then filing suit in October 2010, first against MBC and then against OGN and KeSPA. The parties settled in mediation in the summer of 2011 and now the companies have a 2-year agreement in place for broadcasting rights. b. Copyright Analysis The lawsuit leaves open two unanswered questions about the copyright of Starcraft broadcasts. First, whether the creator of a computer game has the right to control broadcasts of the game or whether such broadcasts are a fundamentally different work than the original program and therefore controlled by the creators of the broadcast. Second, whether the broadcasts are a right accruing to the original copyright holder, or whether broadcasts like Starcraft fall under the protection of fair use. i. Infringement Copyright law in the United States has traditionally protected motion picture and radio broadcasts.{{5}} However, the broadcast of a computer game is a new problem. Unlike motion pictures or music, computer games require interaction from their players, an aspect that is removed when rebroadcasted. United States case law establishes a broad right for broadcast controls in order to encourage the creation of music, movies and television.{{6}} To infringe, a work must either copy literally from a copyrighted work, or it must be “substantially similar” to the copyrighted work. Id. In addition, Cartoon Network v. CSC Holdings held that a new work must be fixed in a tangible medium in order to infringe copyright.{{7}} Copyright infringement can be difficult to establish because it requires proof that the defendant has copied a specific, protected form of expression.{{8}} Unlike a movie, which receives protections for its plots according to Nichols v. Universal Pictures Corp{{9}} and for sufficiently delineated characters according to MGM v. Honda,{{10}} a professional Starcraft match does not have unique characters within the game, nor is the result or sequence of events within the game known before it happens. Moreover, although every broadcast of the game uses the same art for the units and the battlefield, it broadcasts that art at 32 frames per second, storing it for significantly less time than the TV broadcast in Cablevision, which might mean that individual pieces of art are not infringed because they are not fixed.{{11}} The video and audio do, however, constitute much of the immersion in the game. The artistic portrayal of these in-game models is something uniquely created by Blizzard that required years of development.{{12}} The reproduction of this art, to the extent that it is adequately fixed, is probably an infringement of copyright. Moreover, all copies of Starcraft are licensed, rather than purchased, following the ruling in Vernor v. Autodesk, which held that licensed software is not protected from copyright infringement claims by the first sale doctrine or the essential step defense.{{13}} Blizzard’s software license does not include broadcast rights, which means that any broadcast is likely to run afoul of contract law, even if it does not violate the actual copyright statutes. Id. The difficulty in this case is that the core of a computer game is the interaction of the user and the program. The broadcast shows someone else playing; it is not giving out a copy of the software code to the viewer, nor is it making a permanent version of the game art.{{14}} The shift from active game play to passive viewing could be seen as a change of medium that avoids making an exact copy of a protected aspect of Starcraft. Because there may not be a specific aspect of the work that is exactly copied, the question then becomes whether broadcasts contain a substantial amount of the original work that makes up Starcraft such that they become derivative works subject to control by Blizzard. The answer is that they probably do. Blizzard would argue that a complete game of Starcraft constitutes most of Starcraft’s creativity by demonstrating the unique look, movement, and feel of the game. On the other hand, broadcasters could claim that their broadcasts were different enough in character to make the limited use of Starcraft insufficient to constitute infringement. However, this argument is substantially weakened by the doctrine that an infringer may not prove his innocence by showing how much of his work he did not copy.{{15}} KeSPA would probably lose under existing doctrine because Blizzard would only have to show that some part of the art and music was subject to Blizzard’s copyright in order to prevail. ii. Fair Use Even if they are infringing, Starcraft broadcasts might fall under the fair use exception, which allows copying of works for uses such as criticism and academic commentary, which are deemed valuable enough to society to deserve an exception to copyright law. In Campbell v. Acuff-Rose Music, Inc., the United States Supreme Court held that a fair use analysis consists of four factors, none of which is determinative in all cases. Id. at 577. These factors are 1) purpose and character of the use, including whether it is for profit, 2) the nature of the copyrighted work, 3) the amount and substantiality of the amount used compared to the work as a whole, and 4) the effect of the use upon the potential market or value of the original work. Id. Purpose and character of the use: The purpose and character inquiry is both whether the use is for-profit and also whether the new work supersedes and supplants the original work or is a transformative work that alters the original expression. Id. at 579. While the broadcasts are for profit,{{16}} the broadcasting of Starcraft gave rise to a new e-sports industry with numerous stakeholders. The networks add commentary and analysis to the games, as well as a live audience and a physical spectacle. Where the purpose of the original game is to provide an enjoyable and engaging game-play experience to the user, the purpose of the broadcasts is focused on demonstrating the highest level of skill and strategy and explaining and commenting on the original game.{{17}} Because the broadcasts are transformative, this factor weighs slightly towards allowing the broadcasts. Nature of the copyrighted work: Starcraft is a computer program, explicitly protected under U.S. and International law. However, the broadcasting of a computer game for an audience is fairly unprecedented, so the fact that the original work is clearly protected by copyright does not add much to the analysis of its broadcasts. Computer Associates v. Altai discussed that computer programs are also considered to be more functional and something of a new problem as compared to the traditional core of copyright such as novels and music and therefore deserve lower protection.{{18}} Substantiality of the amount used: On one hand, the broadcast plays the audio and video elements of the game, insofar as those elements see use in any individual match. However, a televised match does not show the actions of the players or how each individual player is viewing the match.{{19}} The announcers can make it difficult to hear the game and the video often cuts to the players or the announcers and away from the game visuals. Id. The lack of interaction with the game may constitute a significant loss of the amount used compared with purchasing and playing the game for oneself. The audio and visuals do still immerse the viewer in the setting created by the game, but without any way to interact with the game directly, the broadcast of a televised match may be less substantial than it would first appear. This factor is likely neutral or in favor of allowing the broadcasts to continue. Effect on use on the market for the original: Like professional sports, Starcraft broadcasts encouraged young people to play the game and Kotaku reports that the broadcasts were heavily responsible for continued sales of the original Starcraft long after its release in 1998. More people purchase and play Starcraft because of the popularity of e-sports. This factor strongly urges allowing the continued broadcasts as a fair use because it actually benefits the holder of the original copyright. Overall, if this case were decided primarily as an issue of fair use, the argument would likely come down to whether the large profits generated by these broadcasts of full video and audio of the game should be available to Blizzard, or whether the transformative and beneficial nature of e-sports would allow broadcasts as a fair use. This would probably be a very close case in the United States.

III. Recommendations

As the law stands, KeSPA probably made an excellent decision by settling the case. Fair use would have leaned towards allowing the broadcasts, but the lawsuit potentially offered Blizzard the complete power to shut down the industry if it desired. This settlement leads to an odd result: because everyone else is afraid of the industry being enjoined, Blizzard can dictate the licensing fee for an industry that it had no hand in developing. Yet, Blizzard cannot demonstrate that it suffered any economic harm from the broadcasting industry.{{20}} Can it be said that rewarding an author for the use of a copyrighted work in a manner that the author had never intended furthers the purported goal of encouraging the creation of arts and science? Further, does incentivizing the creation of original works outweigh the loss caused to all the interested parties by giving full control of a video game broadcast to the game developer? It would be better to make a rule that protects the interests of all stakeholders in order to do the most total good, rather than protect the author above all else. To that end, I propose that the courts or the legislature adopt the following narrow exception. If a work has become the basis for a new sport or industry, unintended by the original author, the author of the work should be barred from enjoining its use. Further, even if the use was intended by the author, courts should carefully consider whether there is a showing of irreparable harm before issuing an injunction. The author could still be eligible for fees related to product licensing and derivative works and could sue to recover such fees, but the author should not have the unilateral power to dismantle a fledgling industry. The use of “unintended” and a careful consideration of irreparable harm ensure that no incentive to create new artistic works would be lost. This is because the author either did not consider the field at all ex-ante (in which case incentive to create could not possibly have been affected), or the author can be made whole entirely with monetary damages, in which case an injunction should not issue according to the Supreme Court’s ruling in eBay v. MercExchange.{{21}} There are two potential objections to this exception: first, that an exception would be too vague and would lead to erroneous decisions from the courts, and second that it would still act to discourage the creation of some IP to the detriment of society. Regarding the first objection, it must be remembered that the exception proposed is only for an entirely new sport or industry. This exception represents the adoption and transformation of a work from its original form and purpose. If the situation were more ambiguous, (e.g. the use was unintended, but only a few people were involved) it may not be appropriate for courts to limit the rights of authors by preventing them from obtaining injunctions, although any unintended use should receive careful consideration as to whether it represents irreparable harm to the author. To the second objection, I would respond that yes, authors knowing that they might receive lower fees for future applications of their work could lead to some borderline IP never being made due to cost-benefit analysis. However, because the author could still sue for a fair license fee, the only IP cases that would be affected would be those where an injunction provides an unfair amount of control{{22}} or those copyrights with so little value that a lawsuit could not be justified. Of course, if some games could be used cheaply while others required expensive licenses, it would probably incentivize the broadcasting industry to move towards the cheaper products. However, this would actually encourage creativity by requiring that any licensed product represent a significant improvement over other, cheaper products in order to make licensing fees worthwhile. This rule would be unlikely to affect other industries that rely on copyright. For example, although a book or movie could be used as the basis for a new sport or industry (e.g. Quidditch from Harry Potter), the lack of interactivity means that the copying is almost never of a protected form of expression. The number of cases outside of computer programs to which this exception would apply is small enough that it would have essentially no effect on the incentive to create. CONCLUSION Although Blizzard originally developed Starcraft as a normal computer game, the surprising entertainment of its matches led to the creation of high money tournaments, an incredibly skilled player base, and ultimately corporate and governmental investment into an emerging e-sports industry. This led to the unsatisfactory conclusion that the whole e-sports industry hinges on the successful renegotiation of a licensing fee every few years, introducing uncertainty into any long-term plans for minimal gain. My proposed solution is to treat Starcraft as a quasi-public good and protect the right of its continued existence for all stakeholders by making it difficult to enjoin broadcasting of the game, even if Blizzard is entitled to a licensing fee. More generally, if a work becomes so important that the interests of many stakeholders would be ruined for the protection of the author, the courts or the legislature should consider the situation and see if they can find an outcome that leads to the greatest good for society.
A note on sources
This Comment relies heavily on news and translation work done by staff and members of the website Although is not a formal news agency, it maintains a number of staff translators and its administrators retain editorial control over the contents of postings and articles that it hosts. After finding that a number of other English language news sources referred back to work done by Teamliquid, I feel confident in saying that it is the most reliable source of factual information on Starcraft available in English.
[[1]]For those interested in what this speed looks like in practice, the following video provides an explanation of the 200-300 actions per minute taken by Nada and Moon, two Korean professional gamers, as well as showing what their hands look like while they are playing.[[1]]
[[2]]Junseong An, E-Korean Dsl Policy: Implications for the United States, 20 J. Marshall J. Computer & Info. L. 417, 418 (2002). See also Sam Paltridge, The development of Broadband in OECD Countries, Organization for Economic Co-operation and Development, Committee for Information, Computer and Communications Policy, (Oct. 2001), 32-33 (discussing broadband trends in Korea).[[2]]
[[3]]See also, VioleTAK, Starcraft Interview with Grrrr, Youtube (July 29, 2006) (Showing a 26 minute broadcast of the talk show Heart-to-Heart in which the host, Ahn Jung-hyun, interviews Grrr... for twenty-six minutes).[[3]]
[[4]]See e.g. 2011 MLG Pro Circuit: Providence, Teamliquid (July 30th, 6:22 P.M. 2012) (Listing a top 32 bracket containing players from seven different countries).[[4]]
[[5]]Warner Bros. Entm't Inc. v. WTV Sys., Inc., 824 F. Supp. 2d 1003, 1009 (C.D. Cal. 2011) (explaining that copyright law protects the rights of public performance, meaning either to display a work in a public place or to transmit the work to the public in disparate locations).[[5]]
[[6]]149 A.L.R. Fed. 527 (Originally published in 1998).[[6]]
[[7]]Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121, 130 (2d Cir. 2008) (holding that a broadcast of a television station that was copied and buffered in a data server, which held any single piece of data for 1.2 seconds, was not fixed in a tangible medium and did not infringe).[[7]]
[[8]]Arnstein v. Porter, 154 F.2d 464, 468 (2nd Cir. 1946) (holding that whether a defendant copied and whether the copying infringed some protected aspect of the original work were two separate questions).[[8]]
[[9]]Nichols v. Universal Pictures Corp., 45 F.2d 119, 121 (2d Cir. 1930)(holding that a plagiarist can be liable for stealing a plot from a work of fiction).[[9]]
[[10]]Metro-Goldwyn-Mayer, Inc. v. Am. Honda Motor Co., Inc., 900 F. Supp. 1287, 1294 (C.D. Cal. 1995) (explaining two distinct tests for protection of characters, of which the easier test is for the character to be clearly delineated).[[10]]
[[11]]It is worth noting that every game of Starcraft does automatically create a fixed replay file of the game. However, this file is not necessary for a live broadcast and there is no requirement that it be distributed to viewers.[[11]]
[[12]]Blizzard first announced the development of Starcraft II in 2007 and did not release the game until 2010. Charles Onyett, Blizzard's Worldwide Invitational -- The StarCraft 2 Announcement, IGN, (May 18, 2007), (discussing Starcraft II’s initial announcement and features).[[12]]
[[13]]Vernor v. Autodesk, Inc., 621 F.3d 1102, 1111 (9th Cir. 2010) cert. denied, 132 S. Ct. 105, 181 L. Ed. 2d 32 (U.S. 2011).[[13]]
[[14]]Assuming that a replay computer file is not distributed.[[14]]
[[15]]This comes up often in photography where a picture could be found to infringe for stealing specific elements from another photograph even though several parts were different.  Mannion v. Coors Brewing Co., 377 F. Supp. 2d 444, 462 (S.D.N.Y. 2005) (holding that there was a genuine issue of material fact between a photograph of Kevin Garnett and a similar photograph for a beer commercial following extensive analysis of common details such as the shared “cloudy sky” and use of “bling” in both photographs).[[15]]
[[16]]Ongamenet Starleague Supra[[16]]
[[17]]Campbell 510 U.S. at 579 (holding that parody, commentary, and criticism of a work are fair use); See also Perfect 10, Inc. v., Inc., 508 F.3d 1146, 1165 (9th Cir. 2007) (holding that literal copy of plaintiff’s photographs was fair use because Google web search was a transformative purpose).[[17]]
[[18]]Computer Associates Int'l, Inc. v. Altai, Inc., 982 F.2d 693, 696 (2d Cir. 1992) (noting that computer programs are a relatively new problem for copyright law and discounting functional aspects of a computer program when performing copyright analysis).[[18]]
[[19]]See e.g. Fantasy vs. Jangbi, which positions the camera via a neutral observer who has additional information not available to either player during the game.[[19]]
[[20]]Lost licensing fees should not count for this purpose, as they are only harm if Blizzard deserved copyright protection in the first place.[[20]]
[[21]]eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391(2006) (holding that a showing of irreparable harm is required for the issuance of an injunction and noting that this specifically applies to copyright claims).[[21]]
[[22]]Id. at 396 (“When the patented invention is but a small component of the product the companies seek to produce and the threat of an injunction is employed simply for undue leverage in negotiations, legal damages may well be sufficient to compensate for the infringement”) (Justice Kennedy concurring).[[22]]