Delhi High Court refuses relief to HULM Entertainment’s online fantasy sports App EXCHANGE22 in copyright infringement dispute

Delhi High Court: Two applications were filed one under Order XXXIX Rules 1 and 2 Civil Procedure Code (CPC) filed by the plaintiffs and the other under Order XXXIX Rule 4 CPC preferred by defendant 1, seeking vacation of ex-parte ad interim injunction granted vide order dated 13-04-2022, restraining the defendants inter alia from making available for downloads or in any manner unauthorizedly using plaintiffs’ copyrighted work through MYFAB11 App or any other similar App using the impugned application or computer programme so as to result in infringement of plaintiffs’ copyrighted works. Jyoti Singh, J., held that there is no copyright infringement by the defendants and the ex parte injunction order dated 13-04-2022 was vacated.

The first application was filed by the plaintiff seeking an injunction against defendants 1, 2, and 3 (‘defendants’) predicated on their claim that the plaintiffs are developers and operators of the unique Fantasy Sports Mobile Application EXCHANGE22 which incorporates features of Fantasy Sports League and Stock Market. Plaintiff 1 has been recognized as a start-up by Start Up India, an initiative under the Government of India, which assists entrepreneur platforms to network, access free tools and resources and participate in programs and challenges. Plaintiff 2 first came up with the unique idea of integrating the features of a Fantasy Sports League and Stock Market in the year 2010. Over the years, Plaintiffs 2 and 3, with hard work and toil, developed their idea into a tangible form and finally launched beta version of their application in August, 2019 to test the mobile app on the website https://exchange22.com/. Plaintiff 1 Company was incorporated on 16-09-2019 and on 21-11-2019, EXCHANGE22 mobile App was officially launched.

The fantasy sports are played online and the general way to play is that a user creates a virtual team of his own, depending upon his own analysis of the performance of the players, prior/during an ongoing sporting match and/or a sporting league. As and when the matches are played, users team competes against the other users’ team to find its place in the points ladder. Such games are played either for fun or prizes or even money. These are games of skill where a user, with his analytical skill, puts together a virtual team of real sports persons and success depends predominantly upon the superior knowledge, training, attention, experience and adroitness of the player. The user earns points based on how his own analysis is close to the actual, real-life performance of the sportsperson. Fantasy Sports are prevalent in various sports albeit predominantly in football, baseball, cricket, etc.

The case of the plaintiffs is that Defendant 1 has introduced a new update on its Fantasy Sports League Mobile App MYFAB11 in the form of a new feature titled ‘STOCKS’ and Defendants have copied not only the concept but also its working, features, and execution of Plaintiffs’ buy/sell interface and it was one day before the launch of Indian Premier Leagues’ first match, that Defendants launched the new version. According to the Plaintiffs, this amounts to exploiting their success, goodwill, and reputation and infringement of the copyright. The plaintiffs thus allege infringement of the copyright in the GUI and concept note, in addition to data theft of their curated data and unfair competition.

The defendants, on the other hand, have sought vacation of the interim injunction order on multifarious grounds by arguing that there is gross suppression of material facts and misrepresentation in the plaint as Plaintiffs have predicated their case on being originators of a unique idea of trading of sports players which sets them apart, which is contrary to their own admission that they are ‘India’s first sports stock exchange’ while documents filed by Defendants show that trading sports players as part of fantasy gaming existed in public domain long before Plaintiffs’ application.

On the aspect of whether the plaintiffs have made out a prima facie case of infringement of copyright in the concept note and GUI by the defendants, the Court noted that while a claim is laid in the plaint that Plaintiff 2 first came up with a unique idea of integrating features of Fantasy Sports League and the stock market in the year 2010, however, no material has been placed on record to substantiate the plea. The defendants have shown many documents in website details, Facebook posts, WhoIS and Wayback Machine screenshots have been filed by the defendants with respect to some of the other apps to demonstrate that these apps were created and existed prior to that of the plaintiffs.

The Court further noted that the defendants have pointed out the launch of applications Trade Stars, TradeFan, CricStocks etc. prior to EXCHANGE22 and have placed on record supporting documents which makes it prima facie evident based on the screenshots of the Wayback Machine and WhoIs data that some of the applications of the third parties were launched prior to EXCHANGE22 and do incorporate the trading/stock features, whereby players could be bought and sold by the user. Thus, the Court was unable to hold in favour of the plaintiffs that the gaming application is an original expression of an idea, to grant proprietary rights or monopoly, and injunct the defendants from using the impugned application.

The Court also observed that the plaintiffs have made incorrect averments in the plaint and are thus not entitled to an equitable relief of injunction. A party that approaches the Court for an equitable relief must do so with clean hands and disclose all material facts, that may have a significant bearing on the merits, and thus, the onus is heavier at the stage when the opposite party is yet to appear, and ex parte relief is sought. The existence of prior apps with similar stock market features enabling an option to buy/sell players, prima facie belies the position adopted by the plaintiffs of being ‘a first of its kind Fantasy League Gaming platform for cricket, football, basketball and Kabaddi’. Therefore, an ex parte injunction deserves to be vacated in favour of the defendants and against the plaintiffs.

The Court concluded that the screenshots will further substantiate similarities between the plaintiffs’ application and third parties, and this demonstrates that for a fantasy sports app for a game of cricket, some commonalities are bound to exist as the basic format of the game will remain unchanged and thus Defendants cannot be held guilty of substantial copy and consequentially, infringement. Thus, there can be little doubt that a game of cricket can only be played in a limited manner and format and if the commonality in the two rival applications touch upon the concept of overs, constitution of teams, scores, points etc., it cannot be held that the second party has infringed the copyright of the first party in these features.

Thus, the Court allowed the application filed by the defendants and vacated the ex parte injunction order as well as dismissed the application filed by the plaintiff.

[HULM Entertainment Pvt. Ltd. v. Fantasy Sports MYFAB11 Pvt Ltd., 2023 SCC OnLine Del 6591, decided on 17-10-2023]

Advocates who appeared in this case :

Mr. Sandeep Sethi, Senior Advocate with Mr. Sudeep Chatterjee, Mr. Tejveer Bhatia, Mr. Rohan Swarup and Mr. Kiratraj Sadana, Advocates for plaintiff

Mr. Akhil Sibal, Senior Advocate with Mr. Ankur Sangal, Mr. Sucheta Roy, Ms. Asavari Jain and Mr. Raghu Sinha, Advocates for D-1.