Delhi High Court holds stock trading feature in Fantasy games not original- sets aside injunction granted to Hulm Entertainment

Two entities in the online gaming industry vie for their rights before the Delhi High Court. The Plaintiff, Hulm Entertainment Pvt. Ltd (Hulm) filed the suit against the Defendants, Fantasy Sports Myfab11 Pvt. Ltd and Ors, (Fantasy Sports), alleging copyright infringement, unfair trade practice, etc. Hulm sought an injunction against Fantasy Sports from making available for downloads or in any manner unauthorizedly using their copyrighted work through the MYFAB11 app or any other app.

The High Court, at the admission stage, granted an ex-parte injunction in favour of Hulm that is challenged by Fantasy Sports. The rival applications filed by the parties, Hulm, for confirmation of the injunction and the one filed by Fantasy Sports for setting aside the order were considered by the Court.

Hulm in the suit states:

  1. They are developers and operators of the unique Fantasy Sports Mobile Application Exchange22, which incorporates Fantasy Sports League and Stock Market features.
  2. They have formulated their own Fantasy Sports Mobile App, which is different from the prevalent Fantasy Games Leagues. Fantasy Sports Game is registered under the Copyright Act, 1957, being literary/dramatic work, the copyright work includes detailed working of the fantasy game.
  3. They devised a ‘first of its kind’ fantasy league gaming platform for cricket, football, basketball, and kabaddi, and what sets it apart from the other fantasy gaming Apps is that it incorporates the unique traits of ‘share market trading’ which allows the user to buy/sell the players in the same manner as one would buy/sell shares.
  4. They have developed an attractive ‘Graphical User Interface’ (GUI) with a unique program structure and placement of information, which is easy to access with an investment of labour and money. They seek the protection of their copyright in the GUI of the mobile application. GUI is an ‘artistic work’ capable of protection under the Act.
  5. Fantasy Sports has introduced a new update on its Fantasy Sports League Mobile App MYFAB11 in the form of a new feature titled ‘Stocks,’ and they have copied not only the concept of Hulm but also its working, features, and execution of buy/sell interface.
  6. Hulm has carved a distinct niche for itself in fantasy gaming leagues and is entitled to protection against unlawful use by third parties, including Fantasy Sports.

Fantasy Sports seeks vacation of the injunction on the following:

  • Hulm is guilty of suppression and concealment of material facts and misrepresentation, which resulted in the passing of the ex-parte injunction order, which ought to be set aside on this ground alone.
  • Hulm has suppressed that the offending ‘buy/sell’ feature in the Fantasy Sports application forms only a small part of the application, whereas the primary feature allows its users to select players and build a team like many other Fantasy League Applications, which are prior known and existing.
  • Hulm has misled the Court and not disclosed that the concept is not new and has existed in Fantasy Sporting market for decades and they are not the first to come up with the idea of combining Fantasy League with Stock Market.
  • Given the similarity of features with several pre-existing Apps, Hulm has failed to establish ‘originality’ in the concept, which is a sine qua non for claiming infringement under the copyright regime. Concepts and ideas cannot be protected under the Act as only ‘expression of ideas’, is granted protection.
  • Hulm is guilty of shifting their stand to contend that there are differences in the features of their App and other Apps, which is an admission that the initial stand taken to obtain an injunction was false.
  • On receipt of the legal notice Fantasy Sports, without prejudice to the rights and contentions and to avoid conflict changed the User Interface to the “kharid/bech” feature, which makes the two applications wholly dissimilar.
  • The injunction is affecting the reputation of Fantasy Sports and causing substantial financial loss.

The Court, after considering the pleadings, arguments, and case laws, held:

  1. The moot question in the instant dispute is whether Hulm has made out a prima facie case of infringement of copyright in the concept note and GUI by Fantasy Sports to confirm the interim injunction.
  2. In the pleadings, Hulm contend that the registered copyright work comprises detailed working of the fantasy game, including the game’s object and the components explaining each step the user experiences on its mobile application, such as ‘Home page,’ etc.
  3. Hulm claims that the stock/trading feature is the ‘original feature,’ which is substantially copied by Fantasy Sports, resulting in copyright infringement. Moreover, the GUI developed by Hulm has been brazenly copied by Fantasy Sports.
  4. The ex-parte injunction was granted based on Hulm’s originality of the stock feature and substantial copy of the GUI, which has been opposed by Fantasy Sports both on merit and gross suppression and misrepresentation of facts.
  5. The pleadings point to a claim that the trading/stock feature in Hulm’s gaming application is original and first of its kind, which on prima facie view, appears to be factually incorrect. Moreover, there is no material on record to substantiate the said plea. Fantasy Sports has filed documents evidencing several third parties had launched apps incorporating the stock/trading feature before Hulm.
  6. Originality, though not novelty, is the underlying feature for claiming injunction founded on copyright infringement. In view of the documents relied on by Fantasy Sports evincing prior use of similar apps by third parties, the claim of originality emphasized by Hulm stands dented.
  7. It is relevant to note that Hulm misrepresented that their gaming application is the first of its kind with a unique stock market feature at the time of obtaining an ex-parte injunction. The existence of prior apps with similar stock market features enabling an option to buy/sell players, prima facie, belies the claim of Hulm being the ‘first of its kind Fantasy League Gaming platform for cricket, football, basketball and Kabaddi’ on which ground alone the injunction deserves to be vacated.
  8. The burden is on Hulm to substantiate that despite the existence of earlier apps containing the stock market/trading feature, their gaming mobile app was developed in a manner that the expression of the idea made it distinct from the rest.
  9. The comparison of the features of the prior existing third-party apps with Hulm’s mobile app, strengthens the stand of Fantasy Sports that the distinguishing features are not enough for Hulm to cross the threshold of idea-expression dichotomy to claim originality and consequently protection in the gaming app and copyright infringement.
  10. With regard to the concept note Fantasy Sports has established the existence of gaming applications both in India and abroad with the trading/stock feature prior to the launch of Hulm’s app. Thus, no originality can be claimed in the concept note and consequently, there can be no monopoly and infringement of the copyright therein.
  11. On the issue of alleged infringement of the copyright in GUI, Hulm has only compared the GUIs of the two rival applications by taking screenshots of the various features incorporated therein. The pleadings do not emphasize in which element of the GUI Hulm claims copyright and is thus infringed.
  12. Comparing the screenshots of the respective parties’ GUIs, the Court is unable to come to a conclusion even prima facie there is a substantial copy by Fantasy Sports as the dissimilarities outweigh the trivial similarities. This is more so considering that Fantasy Sports has made changes to GUI upon receiving the legal notice.
  13. Hulm, at the admission stage, misrepresented that they have launched ‘first of its kind Fantasy League Gaming platform for cricket, football, basketball and Kabaddi‘, which formed the basis of the ex parte injunction order, a relief in equity.
  14. In the instant case, documents on records evidence that prior-existing gaming apps defeated Hulm’s claim to originality in the alleged unique feature of stock trading and therefore, no monopoly or protection can be granted.

In light of the above, the Court held that no copyright infringement is made out by Hulm and set aside the ex-parte injunction order granted in the matter.

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