Delhi High Court: In a suit filed by Digital Collectibles Pte. Ltd. (plaintiff), a company incorporated in Singapore and carries on its business in India and worldwide under the trade name “Rario,” primarily through its website and related mobile applications seeking relief of permanent injunction, on account of unlawful use of player marks and other attributes of plaintiffs no. 2 to 6, which amounts to unfair competition (including passing off); unjust enrichment; tortious or unlawful interference with economic interest of the plaintiffs; and, (iv) breach of personality rights of plaintiffs no.2 to 6. Amit Bansal J. held that the defendants were already running their game for almost six months and the grant of an ex-parte injunction order would gravely prejudice the business of the defendants, who are direct competitors of plaintiff 1 in the Online Fantasy Sports industry.
What is Online Fantasy Sports?
The present case highlights the exponential growth of Online Fantasy Sports in India. OFS games are a form of online gaming offered on the internet that allow users/fans of sports to create and manage their own virtual teams based on real athletes in formats set by online gaming platforms. Such online games allow users to compete against each other in various virtual gaming events/leagues centered around real-world sporting events and are based on, inter alia, the statistical data of the performance of sportspersons. To participate in the fantasy sports games offered by these online platforms, users are generally required to pay an entry fee. Once a user pays the requisite entry fee, they can use their skill and knowledge to enter the online events/leagues and earn points on their players, change the composition of their teams by adding and/or removing players, and ultimately win awards and prizes.
Factual Background
Plaintiff 1 is involved in the creation of an online marketplace where third-party users sell, purchase, and trade officially licensed “Digital Player Cards” of cricketers having license and authorization to exclusively use, inter alia, their names, and photographs on the Rario Website. It uses its unique software code embedded in the officially licensed Digital Player Cards to distinguish it as original and authentic.
Defendant 1 carries on business under the name ‘Mobile Premier League’ (MPL). Defendant 2 runs a mobile application by the name “Striker,” listed on MPL. The defendants carry on business under the trade name “Striker Club” through their website, and mobile application “Striker,” creating an online marketplace where third-party users can purchase, sell, and trade Digital Player Cards using NFT technology to authenticate player cards for the Striker Website. Unlike plaintiff 1, the defendants do not have authorization or licenses from well-known Indian Cricketers (plaintiffs 2 to 6) to use their names, surnames, initials and images or other attributes of their personality for their business.
Issue
The main grievance is that the defendants have a similar business model to that of plaintiff 1. The defendants do not have any license or authorization from plaintiffs 2 to 6, yet they use Digital Player Cards with NFTs which include artistic drawings of plaintiffs no.2 to 6 along with their names. The entire value of the digital art collectibles/NFTs available on the Striker Website is derived from the names, likeness and personalities of the players and not on account of the artistic contents of the images.
Observations and Analysis
The Court noted that the Indian Courts have recognized the right of publicity of an individual, the Court also observed that the said right is not unrestricted and cannot be overemphasized considering the right to freedom of speech enshrined under Article 19(1)(a) of the Constitution, exceptions being exceptions caricature, lampooning, parodies and the like, that may not constitute an infringement of an individual’s right to publicity. The extent of right of publicity also must be considered in the context of the ‘right to freedom of speech and expression’ protected under Article 19(1)(a) of the Constitution of India.
The Court further noted that the use of the name and/or the image of a celebrity along with data regarding his on-field performances by OFS platforms is protected by the right to freedom of speech and expression under Article 19(1)(a) of the Constitution of India. Therefore, even if the defendants are using players’ names, images, and statistics for commercial gain, this would be protected under Article 19(1)(a) of the Constitution of India.
Further, the information used by Striker i.e., player name and data concerning a player’s real-word match performance, is freely available in the public domain and can be used by anyone as well as cannot be owned by anybody, including the players themselves. Therefore, such publicly available information cannot be the subject matter of an exclusive license by the player in favour of a third party.
The Court observed that the plaintiffs cannot claim to have an exclusive right over the use of NFT technology. NFT is a technology that is freely available. The defendants used the NFT technology to ensure security and authenticity as a means of proof of ownership of its cards and to keep a record of transactions on a blockchain. A perusal of the Digital Player Cards being used by the defendants on the Striker platform would show that the said cards do not suggest any kind of endorsement or association with the player concerned. Nor do they claim that the cards have been autographed or officially licensed by the players. Further, the NFT Player Cards offered by Striker do not contain the original photograph of a player and only use artwork.
The Court remarked that a collector or a fan of a player would be less inclined to buy such a card as memorabilia when other NFTs using the actual photograph/video moments of sportspersons are available to purchase on the Rario platform. Since the Digital Player Cards are available for all current players that are available for selection, it cannot be said that the defendants are claiming any endorsement from a player or promoting its game based on the personality of a player.
Conclusion
The Court concluded that considering that the defendants were already running their game for almost six months and the grant of an ex parte injunction order would have gravely prejudiced the business of the defendants, who are direct competitors of the plaintiff no.1 in the OFS industry, the application filed on behalf of the plaintiff seeking exemption from advance service, in my opinion, was not bona fide.
Decision
The Court held that even on the parameter of the balance of convenience and irreparable harm, all the factors are in favour of the defendants and against the plaintiffs. Thus, an injunction granted at this stage would result in the closure of the business of defendant no. 2 and would cause huge financial losses not only to defendant no. 2 but also to the users of the Striker platform.
[Digital Collectibles Pte Ltd. v. Galactus Funware Technology Pvt. Ltd., 2023 SCC OnLine Del 2306, decided on 26-04-2023]
Advocates who appeared in this case :
Mr. Sandeep Sethi and Mr. Rajshekhar Rao, Senior Advocates with Ms. Shwetasree Majumder, Mr. Aditya Verma, Mr. Prithvi Singh, Mr. Rohan Krishna Seth, Ms. Parkhi Rai and Mr. Rigved Prasad, Advocates for the Plaintiff;
Mr. Dayan Krishnan, Sr. Advocate with Ms. Raj Latha Kotni, Mr. Anuridh Ramanathan and Mr. Anoop George, Advocates for the D-1;
Mr. Amit Sibal, Senior Advocate with Mr. Maanav Kumar, Ms. Tara Narula, Ms. Nupur, Ms. Bijaharini G., Mr. Rishab Sharma and Mr. Saksham Dhingra, Advocates for the D-2;
Mr. Akhil Sibal, Senior Advocate with Mr. Aditya Gupta, Ms. Kruttika Vijay, Mr. Dhruv Garg, Mr. Utkarsh Srivastava, Mr. Rahul Bajaj, Mr. Sauhard Alung and Ms.Sanya Kumar, Advocates for the All India Gaming Federation/Intervener;
Ms. Shilpa Gamnani and Mr. Nishtha Chaturvedi, Advocates for the Intervener in I.A. 4443/2023.