With the development of blockchain technology, artificial intelligence and virtual digital assets, several concerns have been raised regarding the plethora of legal and ethical challenges that are likely to arise from development of these technologies, and how they will interact with the rights of individuals granted under law. We have, in a previous article, discussed the interplay of generative AI and personality rights in India. In a recent development, the Delhi High Court, in the matter of Digital Collectibles Pte. Ltd. and Others vs Galactus Funware Technology Private Limited and Another (CS (COMM) 108 of 2023), has refused to grant an interim injunction against the use of the names and likeness of certain cricketers for NFT-enabled ‘Digital Player Cards’ by an online fantasy sports platform.
In the matter, Digital Collectibles Pte. Ltd. (“Plaintiff No.1”) operates an online marketplace for the purchase, sale and trade of officially licensed ‘Digital Player Cards’ of certain cricketers, which are authenticated, distinguished and identified through the use of NFT and blockchain technology. Plaintiffs 2 to 6 in the matter (the “Players”) are famous Indian cricketers who have exclusively licensed and authorised Plaintiff No. 1 to use their names, photographs, etc. on its website and mobile platform.
Galactus Funware Technology Private Limited (“Defendant No. 1”) runs the ‘Mobile Premier League’, and Defendant No. 2 operates a mobile application named ‘Striker,’ which is offered on Defendant No. 1’s platform (jointly the “Defendants”). The Defendants also carry on business through an online marketplace for the purchase, trade and sale of their own Digital Player Cards, which contain images of players (including the Players) as well as their names, which is also authenticated and identified by the use of NFT technology. However, the Defendants had not been officially authorised or licensed by the Players to use their images, names or any other attributes for the purpose of carrying on their business.
While seeking reliefs, the Plaintiffs have averred that, “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.” They further argued that the unauthorised/unlawful use of the attributes of the Players amounts to unfair competition and passing off, unjust enrichment, tortious interference with their economic interests, and breach of personality rights by the Defendants.
In its judgement, the Court examined the jurisprudence on personality rights in India and other jurisdictions, including the United Kingdom and the United States of America, and noted that, while Indian courts have recognised personality rights of celebrities, these rights are not absolute and must be considered in light of the common law wrong of ‘passing off,’ and subject to the Right to Freedom of Expression under Article 19 of the Constitution of India.
The Court observed that violations of the Right of Publicity arise in the context of misleading or false celebrity endorsements that lead customers to believe that the celebrity is connected with or is endorsing a certain product or service. It was noted that misrepresentation and likeliness of confusion in the market would arise when the identity of a celebrity is used to show endorsement, association, or for the promotion or sale of a product or service without the celebrity’s consent. This would be tantamount to misleading customers into believing that the celebrity is associated or connected with the impugned products or services. To prove false endorsement, it is necessary to show that the use of a celebrity’s identity has mislead customers into believing that they have endorsed it, and that they have licensed the use of their likeness, image or attributes for the purpose. Therefore, misappropriation of the reputation and goodwill of a celebrity is a prerequisite in such cases, and the right of publicity is not infringed when a celebrity is merely identified, or where the defendants are making some commercial gain.
The Court further noted certain exceptions to the right of publicity, including, “for the purposes of lampooning, satire, parodies, art, scholarship, music, academics, news and other similar uses.” Further, the Defendants use artwork depicting the Players, and not photographs, for their ‘Digital Player Cards,’ and this artwork was held to contain creative elements that are distinguishable from photographs. These transformative elements and artistic contributions were said to be in the nature of caricature, and hence permissible and protected under Article 19.
The Court also observed that online fantasy sports operators use information relating to players that is freely available in the public domain to identify platers playing the game, including their names, images and on-field performance. Therefore, the Court held that information available in the public domain cannot be owned by any person (including the player), cannot be monopolised and made the subject of a grant of an exclusive license in favour of any party. Further, since facts available in the public domain cannot be monopolised, the use/publication of this information by a third party for commercial gain cannot give rise to any cause of action in favour of the Plaintiffs.
Significantly, on the issue of the use of NFT technology by both parties, the Court noted that, “the plaintiffs cannot claim to have an exclusive right over the use of an 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.” The Court also rejected the Plaintiffs’ argument that trading the NFT-backed Digital Player Cards on the Defendants’ platform was comparable to selling player memorabilia without authorisation. In this regard, the Court found that the Digital Player Cards do not suggest or establish any connection, license or endorsement by a player. Furthermore, these Digital Player Cards are not marketed as artefacts/ collectibles or officially licensed memorabilia. Since the NFT-backed Digital Player Cards of the Defendants are available for all players available for selection in a particular season, they could not be said to mislead customers regarding any affiliation with or endorsement by the Players, and since it uses information in the public domain, the Court declined to grant the relief of interim injunction to the Plaintiffs.
This judgement could have far-reaching implications on how Indian courts adjudicate on matters relating to the integration of new-age and cutting-edge technologies in our daily lives. While the holding of the Court certainly signifies embracing our new reality and a willingness to adapt our existing jurisprudence with new ideas and innovations, this area of law is undoubtedly in its nascent stages, and we will have to see whether this trend of interacting with new concepts permeates through the Indian judiciary.
Update: Digital Collectibles Pte. Ltd. and certain aggrieved cricketers, including Mohammed Siraj, have filed an appeal before the Delhi High Court on May 10, 2023, against the order of the single judge denying the interim injunction.