Tag: Lawsuit

IPE Update: Class Action Lawsuit v. Trion Worlds Responds To Amended Complaint


It’s been quite a while since we last checked in on the ArcheAge class action lawsuit, so I figured we’d go ahead and see if anything has changed over the past few months.

First, a recap for those keeping score. Back in what feels like the far flung past of September 2015, two individuals by the names of Aaron Van Fleet and Paul Ovberg launched a lawsuit against Trion Worlds regarding ArcheAge. It’s probably irrelevant to most readers, but noteworthy that they didn’t “launch” a class action lawsuit but filed a lawsuit and are seeking class action status that won’t be ruled on until 2019, just an oversight that a lot of people (including myself) probably haven’t made clear.

The plaintiffs were willing to admit under oath that they had purchased the $149.99 collector’s edition of ArcheAge, and are now suing for a myriad of reasons including the infamous 10% discount and allegations that ArcheAge’s lootbox system violates California law on illegal lotteries.

In my initial discussion on the lawsuit, I noted my doubts that the lottery claims would hold up and that the plaintiffs might be damaging their case by including their exhibit A (and only exhibit) as 50 pages of random players complaining in the forums about loot boxes. Trion Worlds attempted to have the lawsuit moved to arbitration and lost, appealed their case to the First District Court of Appeals…and also lost there. Then the lawsuit went back to the San Mateo County Court and the plaintiffs were given an opportunity to file an amended complaint.

Well they’ve filed their amended complaint and of all that has changed, well, there isn’t much of it. James Longfield has been named as a plaintiff, the screenshots are of much higher quality in the copy available on the court’s website. Apart from one sentence that is changed from present tense to past tense, this is exactly the same complaint, word for word. Nothing outside of the addition of a new plaintiff has been amended in this amended complaint.

Which means that the lawsuit’s pitfalls are still there. The plaintiffs make virtually no attempt to show how Trion’s loot boxes violate the lottery penal code, nor does it actually explain the penal code in any real capacity, an oversight to be sure since it’s basically a large portion of the lawsuit. As far as I could find in the docket, they didn’t even bother citing the penal code that they are attempting to prove violation of. I noted the California lottery penal code in my previous article, the plaintiff apparently didn’t bother and still has not done so. There is also the matter of the 50 pages of forum complaints that are hardly relevant to the case at hand and basically come down to players musing the idea that “this is probably illegal because I don’t like it.”

Trion Worlds has filed a demurer, an objection that questions the validity of the plaintiff’s claims, and unsurprisingly it mostly targets the question of the illegal lottery claim. The demurer mostly attacks on the basis that items obtained in ArcheAge have no measurable value, and thus can not be covered by the penal code definition of property. In addition, Trion argues against the idea that the plaintiffs can claim that they lost money or property, as they exchanged real money for digital goods and received exactly what they paid for. Finally they attacked the lottery on the same merits that I did, that the plaintiffs didn’t really bother staking a claim on the rules of the penal code or how Trion even allegedly violated them.

Notably absent from Trion’s demurer is commentary in relation to whether or not the 10% discount offer change constituted misleading advertising, but presumably the demurer is to carve up the lawsuit and get rid of the extra fat so that the main points of contention can be handled either during the trial phase or in a supplementary demurer. Considering this lawsuit has now gone on for three years and has rulings and applications for various statuses dated for early to mid 2019, I’m sure Trion is just trying to bring this closer to some kind of resolution.

I have included a link to the docket down below, thankfully San Mateo’s county court allows you to view their dockets at no cost. MMO Fallout will continue covering this lawsuit when any noteworthy events happen.

(Source: San Mateo Docket)

PUBG Corp Drops Lawsuit Against Epic Games


PUBG Corp believes that Epic Games illegally plagiarized the Battle Royale mode, and has even gone as far as to comment its concerns that Epic Games might steal internal modifications to the Unreal engine and use it in their own game Fortnite. In any case, PUBG Corp found the concept actionable enough that just a couple of months ago they took Epic Games to court, filing an injunction in South Korean court against Fortnite and alleging that Epic Games stole their idea.

Except the lawsuit is over before it truly began, with PUBG Corp pulling out and sending a notice of withdrawal to Epic Games attorneys, according to GI Biz. As of now, neither company is willing to comment on the matter.

(Source: Games Industry)

It’s Official, PUBG Corp Is Suing Epic Games


It’s official, PUBG Corp has filed a copyright lawsuit against Epic Games according to Korea Times. After previously mulling further action for a genre that it did not create and does not own, at least not in the legal view of the United States or Europe, PUBG has officially filed a complaint against Epic Games. In Korea. The firm has filed an injunction and alleging copyright infringement in the Seoul Central District Courts.

PUBG Corp already has an active lawsuit going against NetEase, one that includes claims of ownership over concepts like frying pans as a weapon. While very concerned with the idea of others stealing concepts that they claim ownership of, PUBG has had run ins itself with theft, including plagiarizing a community ad for its game as well as several employees from Bluehole Studios being sentenced to prison for stealing from NCSoft.

(Source: Korea Times)

In Plain English: An ArcheAge Lawsuit and the Fraudulent 10% Discount


(Legal Disclaimer: I am not a lawyer, and as such nothing in this column constitutes legal advice. All opinions expressed are my own and based on research into case precedent and interpretation of relevant laws and statutes, as well as discussion with the MMO Fallout legal team)

It has been four long years since ArcheAge launched in the west and some people are still wondering: How did Trion Worlds avoid getting sued for its rather blatantly false advertising regarding that 10% discount for Patrons that never surfaced, and was the advertising of the game against the law?

If you’ve forgotten or just weren’t around, when Trion Worlds was initially pitching its founders packages to the west, they advertised a perk for Patrons that included 10% discounts on cash shop purchases. The page advertising the promotion had been stealthily edited close to launch to include the wording that the perk wouldn’t be applied immediately, only for Trion to throw their hands up months later and admit that not only would the perk not be coming, but that they had no concrete knowledge that it was ever going to happen. The discount was replaced with a 10% bonus to credits purchased and not applied retroactively to people who picked up their credits during the beta or to credits received from the Founder’s pack. All because Trion Worlds and XL Games no longer felt like programming it in.

I pointed out at the time that if anything in the world of forum users threatening to sue had the most weight, it would probably be this, and I was not wrong. In September 2015 a class action lawsuit was filed in California court by plaintiff Aaron Van Fleet against Trion Worlds in regards to the 10% discount as well as making claims that ArcheAge’s loot boxes constitute an illegal lottery. MMO Fallout missed this story, personally I’m blaming the editorial team who haven’t shown up for work since 2009.

1. $1000 In Cash Shop Purchases and the Digital Lottery

The lawsuit charges that the 10% bonus is an inadequate replacement as it excludes head start credit purchases, founders pack purchases, and those who buy credits through in-game purchases (APEX). Furthermore, the plaintiffs note that Trion Worlds made false statements to the existence of the 10% discount despite knowing that those claims were false, that the discount did not exist at the time, and that it may not exist at all.

This charge is a hard one to deny, and depending on how Trion Worlds makes their defense may come down to how the court views advertising. Trion Worlds mounted an early defense publicly by claiming that the page on the website and Trion’s streams didn’t constitute advertising. Someone might point out that No Man’s Sky was cleared of charges surrounding its misleading advertising, however that ruling was made by a UK court and would not have an effect on how a California court would implement differently worded state laws. This is likely going to come down to whether the court views the replacement as adequate, whether Trion’s justification for not implementing the discount is satisfactory, and how much of their claims leading up to launch can be considered binding advertising.

Now let’s talk about the illegal lottery bit of this lawsuit, which I will start with this snippet from the docket:

Many ArcheAge players have spent more than $1,000 each to purchase supply crates that offered the chance at a Rare Prize Many players have expressed in online forums that they feel they were cheated by Trion’s sale of supply crates. For example, m January 8 2015, a player posted on Trion’s public forum a message board thread titled, “Whelp this is why gambling is illegal online.” Several users complained about the amounts they spent on supply crates and Trion’s entire business model (e g, “spent almost 15k creds and only got 11 about 500G worth of useless Junk”). A true and correct copy of the thread is attached hereto as Exhibit A.

In my humble opinion as a non-lawyer, this is where the lawsuit loses its footing. The docket cites California Penal Code to try and kick the cash shop lootboxes as an illegal lottery, seeking restitution in the form of Trion Worlds being forced to offer refunds. I’m no lawyer, but I have high doubts that this charge will hold up in court given the low likelihood that the judge would qualify digital goods as property in the sense that they would be covered under California’s lottery laws. The kind of impact that this would have on the industry is massive, would effectively criminalize countless companies, and would set major precedent where it doesn’t currently exist. I don’t see the court making this kind of decision, particularly not over this lawsuit.

California defines a lottery as “any scheme for disposal or distribution of property by chance, among persons who have paid or promised to pay any valuable consideration for the chance of obtaining such property,” and I highly doubt that a loot box in a game would be viewed by the court as existing in the same category as sweepstakes and promotional giveaways. Disregarding the idea that this is clearly not a lottery system, Trion Worlds would likely be safe even classified as a lottery, as an illegal lottery would require forced payment to participate (credits can be acquired without paying real money) and a clear win-lose with the prize (loot boxes always distribute prizes). This is why all of those sweepstakes you see from TV to cereal boxes have “no purchase necessary” written on them, it’s so they don’t get caught up in state lottery laws.

Exhibit A is literally about 50 pages of threads from the ArcheAge forums of people complaining about the cash shop, a notion that not only strikes me as a massive waste of the court’s time but also irrelevant to the case at hand, potentially damaging to the plaintiff’s argument, and one likely to be ignored by the court. It paints a picture that the plaintiffs are merely attempting to stretch the definition of California’s penal code to include the loot boxes because they are feeling buyer’s remorse, not out of genuine belief or concern that the loot boxes violate the law.

2. Binding Arbitration and the Supremacy of the Terms of Service

Here is where the lawsuit gets interesting.

We know from Bassett v Electronic Arts that generally arbitration clauses are accepted by the courts as binding (at least in New York they do), but what happens when one agreement contradicts another? Trion Worlds has an End User License Agreement and Terms of Use, two separate documents. It came out during the proceedings that while Trion’s TOU compels arbitration, that their End User License Agreement states that the venue for any claims is the San Mateo district court. Trion in turn attempted to compel arbitration, citing its Terms of Use.

Unfortunately Trion wrote themselves into a corner, as the court ruled that not only does the Terms of Use state that the use of Trion’s game clients is governed by the EULA, but that the specific language used in the EULA makes the venue mandatory under California law. Trion further tried to claim that its EULA agreed to upon creating an account does not apply to its games, which the court rejected as the EULA contains several pages referring to the purchase and use of digital goods. The court did find that Trion’s belief that the Terms of Service applied to the claims was reasonable, albeit incorrect, so nothing malicious was going on here.

Despite this ruling, Trion Worlds attempted to have the case dismissed and taken to arbitration. The two parties held a hearing with the presiding Judge on April 8, 2016 and on June 8 the court rejected the claim for arbitration. As ruled previously, Trion’s End User License Agreement, which stipulated that any claims must be taken to San Mateo County Court, superseded the Terms of Use which called for forced arbitration.

Additionally, the court rejected Trion’s claim that the EULA and TOU are agreed as part of the same transaction, noting that the EULA is agreed upon at account creation and the Terms of Use not until the user downloads the game, meaning the former can be agreed to without the latter. The decision goes on to note that some parts of Trion’s Terms of Use may be illegal as they conflict with state laws regarding liability, which Trion acknowledged.

In August 2016, Trion Worlds appealed the court’s denial of arbitration and now we slide on out of the San Mateo District Court and into our new home in the First District Court of Appeals.

3. The First District Court of Appeals Says No

Trion Worlds’ appeal regarding their motion to compel arbitration took us to the California 1st District Court of Appeals and since then, well, not much has happened. Both parties were given a ten minute oral argument and on the second of April, just over a week ago, the court ruled against Trion Worlds. Apparently the explicit instructions that the EULA supersedes the Terms of Service translates exactly the same no matter what California court you happen to be in.

But don’t take my word for it, read this statement from the court:

“Trion’s Terms of Use does contain an arbitration clause, but it also provides it is “in addition to, and does not replace or supplant” the ArcheAge EULA, and, in the event of a conflict or inconsistency, the ArcheAge EULA “shall supersede” it. Based on this provision in the Terms of Use, we conclude the parties did not agree to arbitrate their dispute, and we affirm the trial court’s order denying the petition to compel arbitration.”

In its appeal, Trion Worlds attempted to claim that the EULA incorporates the TOU, which the court promptly ignored and didn’t answer as it had already ruled that the governing document, the EULA, demanded trial in the San Mateo County court and the burden of proof is on the party demanding arbitration to prove otherwise.

“Thus, when addressing the threshold question of whether the parties agreed to arbitrate their dispute, which relates to purchases associated with the ArcheAge game, the Terms of Use provides we must start with the ArcheAge EULA. It does not provide for arbitration. Based on the clear language of the applicable agreements, the agreement to litigate any state law cause of action relating to the ArcheAge EULA in San Mateo County supersedes the agreement to arbitrate other kinds of disputes. Trion cannot satisfy its burden of proving the existence of a valid agreement to arbitrate this dispute.”

4. Back To County Court We Go

Unfortunately this is where the story ends for now. It looks like we’ll be heading back to San Mateo County Court to continue the lawsuit as both sides prepare their arguments. MMO Fallout will have more details on this case as it appears.

[Column] PUBG’s Ridiculous Ownership Claim on the Frying Pan


PUBG Corp has finally decided to pull up its britches and sue NetEase for copying Playerunknown’s Battlegrounds, a move that will certainly make for some monumental court precedent. While I do have coverage coming for this 155 page complaint once I get done reading it, one bit that caught my eye was on PUBG Corp’s list of concepts it claims copyright ownership of, the frying pan as a weapon.

Especially the part where PUBG Corp claims that ‘previous shooter games did not include the use of a frying pan.’

“One very beloved aspect of creative expression in BATTLEGROUNDS is the game’s iconic frying pan. Previous shooter games did not include the use of a frying pan… When
so equipped, as a purely artistic and creative expression injecting humor into the game, the frying pan is the only indestructible armor in the game (i.e., armor that can absorb infinite hit points without deteriorating), providing complete protection against projectiles aimed at a character’s posterior. “

Right, except the frying pan has been a comedic weapon in literature popular media for decades, if not longer, likely longer than many of the PUBG Corp employees have been alive. If you want to keep the conversation strictly limited to video games, the frying pan as a humorous weapon has become iconic as far back as 1996 with Princess Peach and the release of Super Mario RPG but can be found in games like Earthbound (1994), Fable (2004), and Conker’s Bad Fur Day (2001). Dead Rising had a frying pan weapon and Dead Rising 2 even utilized the mechanic of having said frying pan block bullets.

Left 4 Dead 2 (2009) had a frying pan as arguably its most powerful melee weapon, which was then transplanted to Team Fortress 2 in 2010 with the sound effect of a successful hit meant to be both humiliating for the player on the receiving end and humorous for the game as a whole.

Full coverage of the lawsuit is on its way, but this is just one of a large number of concepts that PUBG Corp is claiming copyright ownership of that it had veritably no hand in creating, including the phrase “winner winner chicken dinner,” and the concept of starting with nothing and building up an arsenal, or virtually every RPG since the 80’s as well as the Unreal Tournament games, to name two examples.

In Plain English: Lohan Loses GTA Lawsuit Appeal


Lindsay Lohan has lost her appeal in New York State Court today in a privacy lawsuit against Take Two.

Lohan sued Take Two Interactive in regards to allegations that the company illegally used her likeness in Grand Theft Auto V. In the game, players assist a celebrity by the name of Lacey Jonas escape the paparazzi. Lohan’s lawyers argued that the Jonas character was a likeness of Lohan’s image and personality and thus constituted an invasion of privacy.

The appeals court ruled that the image of Lacey Jonas constituted an “indistinct, satirical representations of the style, look, and persona of a modern, beach-going young woman” and thus were not recognizable as Lohan. In the ruling, it was also noted that a character in a video game would fall under the laws governing using the likeness of a living person for purposes of selling a product, however the character used in Grand Theft Auto V was not close enough to Lohan to constitute a likeness of her.

“Here, the Jonas character simply is not recognizable as plaintiff inasmuch as it merely is a generic artistic depiction of a “twenty something” woman without any particular identifying physical characteristics. The analysis with respect to the Beach Weather and Stop and Frisk illustrations is the same.”

The court did not address the advertising and trade elements of Lohan’s appeal. The court also struck down the appeal of Karen Gravano against Take Two, a similar case to Lohan’s, citing similarly that the game did not appropriate her likeness when creating the character Andrea Bottino.

(Source: NYS Court of Appeals)

Epic Games Ends Another Lawsuit With Permanent Injunction


Back in January, MMO Fallout reported on the latest lawsuit filed by Epic Games in the district of Northern California court. The lawsuit followed the similar pattern set forth by its predecessors, seeking permanent injunctions and utilizing the natural legal progression of a DMCA takedown notice against the defendant’s Youtube videos. This lawsuit, however, charged defendant Yash Gosai, a New Zealand resident, with creating/finding an exploit that would allow him to obtain V-Bucks, Fortnite’s real money currency, without paying for them. Gosai posted the exploit on his Youtube channel and, when the video was taken down on Epic’s DMCA notice, filed a counter-claim.

Epic alleges that Gosai created, developed and/or found an exploit for Fortnite’s Battle Royale game mode; Gosai then created and publicly displayed a video on YouTube to advertise, demonstrate, and distribute the exploit; Gosai’s video contained gameplay from Epic’s Fortnite Battle Royale game; and that using the exploit, Gosai obtained Fortnite V-bucks without paying for them.

Less than a month later, the lawsuit is over with Epic Games claiming the victory. The court found in favor of Epic Games on the charges of copyright infringement, breach of contract, and conversion. The court’s decision, which cannot be appealed by either party, permanently restrains Gosai from finding, creating, promoting, sharing, or otherwise interacting with any program/cheat that interacts with any of Epic Games’ titles. As with its other lawsuits, Epic Games is not seeking monetary damages and as per the court’s ruling both sides will be responsible for their own attorney’s fees.

Since October 10, 2017, Epic Games has filed seven lawsuits against people creating/promoting cheats for Fortnite, of which four have been successfully settled. For two of the three remaining lawsuits, Epic appears to be having trouble serving the summons. In the third, filed against a Russian citizen, is allegedly being ignored.

(Source: PACER Court Documents)

Epic Settles Lawsuit Against Minor Fortnite Cheater


Epic Games has agreed to voluntary dismissal and settlement in its lawsuit against a minor filed last year in the eastern district of North Carolina court. As part of the lawsuit and due to the defendant being a minor, certain documents have been sealed on order of the court and the defendant has since been simply named by his initials M.F. Epic had instigated the lawsuit after filing a DMCA takedown notice against the defendant’s video allegedly advertising cheats in their game Fortnite. When the defendant counter-claimed the video, Epic issued its complaint to the court.

Plaintiff Epic Games, Inc., by and through its attorneys, hereby gives notice of the settlement and dismissal of this action. Each party shall bear its or his own attorneys’ fees and costs.

The terms of the settlement are not being made public. Epic’s other lawsuit against another minor is still being pursued, with a recent court document submitted detailing issues that the prosecution had with finding and serving the defendants.

(Source: Court Dockets)

In Plain English: Crytek V Cloud Imperium Games (and RSI)


1. Dismissal Sounds Unlikely

Let’s start off at the same station and make a few things clear: Despite what is being tossed around on the internet, this case is not a slam dunk for either side (at least not evident from the statements being thrown back and forth). It is very likely that this case is going to go to trial, as there are a ton of allegations being made and accusations that are going to require the backing of email communications and witness testimony. We are not at the point in the case where either side is trying to convince a judge/jury, that won’t come for months down the road.

What Cloud Imperium Games is doing with its response is attempting to have the case dismissed by convincing the judge that the accusations have no merit and including comments that there are no damages to be recovered regardless of Crytek’s claims of breach. Since this is a gigantic lawsuit, I wanted to go down the list of points that I found interesting so far. This is not comprehensive and will certainly be followed up with when more details are presented.

2. The Definition of Exclusive

With this lawsuit between Crytek and Cloud Imperium Games, it looks like we’re diving back into the Clinton era legal argument about what the definition of ‘is’ is. A major point of contention that Crytek is bringing forward in this lawsuit is the definition of exclusive, how it was applied when forming the agreement, and what exactly it means for both parties.

Section 2.1.2 of the Game License Agreement states that this contract gives CIG the rights (and I’m quoting) “to exclusively embed CryEngine in the Game and develop the Game which right shall be sublicensable pursuant to section 2.6.” Here’s where we get to the definition of “is” as Crytek is claiming that this passage means that CIG agreed to use the CryEngine and only the CryEngine in Star Citizen, as seen in this section of the original complaint:

“Crytek and Defendants subsequently formalized their relationship by entering into a Game License Agreement. In that Agreement, Defendants promised, among other things, (i) to use the CryEngine game development platform exclusively and to promote that platform within the video game...”

CIG is naturally going to fight this claim, and understandably the wording in the license agreement is incredibly vague for the kind of contract where every line should be worded to remove any doubt or wiggle room for interpretation. To the layman, the wording of the agreement seems to indicate that the license does indeed require CIG to exclusively embed CryEngine and no other engine. As far as contracts like this go, however, such a definition of exclusive is not standard by a long shot. Exclusive in these sorts of agreements is generally understood to mean that Crytek would be granting the license to CIG alone and no other company in the agreement, rather than obligating CIG to use said engine.

CIG’s response:

The GLA further shows that CIG has an exclusive right, not a duty, to use the Engine in the Game. Through hiding the GLA, Crytek contorts the word “exclusively” to argue that the word means that CIG somehow is required to use the Engine in the Game. The plain language of the GLA where the grant of rights to CIG appears, plus the well-established concept of an exclusive license, instead establish that the word “exclusively” simply means that CIG’s right to use the Engine in the Game is exclusive to CIG and Crytek may not give that right to anyone else.

Right, except that this agreement seems to be anything but plain language, and the license agreement actually differentiates the two concepts. Where 2.1.2 allegedly requires CIG to exclusively use the Crytek engine, the question about sublicensing is taken care of in the previous step of the agreement.

2.6 of the agreement basically just says that CIG can sublicense the engine only to contractor developers, with prior written approval by Crytek, for the purpose of developing the Game. This is one of those lines that is likely going to require witness testimony on what exactly the companies negotiated, assuming the Judge/Jury doesn’t accept either definition of exclusive as a given fact.

3. Do You Understand Crytek’s GLA? Does Crytek?

Here’s an interesting note: You may notice in the passages from the lawsuit and license agreement that both parties say “the Game” (emphasis on the capital G in Game) regularly instead of Star Citizen when referring to terms that both parties agreed upon. There is a legal reason for this.

“The Game” is the legal definition given in the license agreement to, and I’m quoting the agreement here:

“the game currently entitled “Space Citizen” and its related space fighter game “Squadron 42, together hereafter the Game”

No that wasn’t a mistake on my end, yes the GLA actually gets the name of the game wrong and refers to Star Citizen as Space Citizen, but that’s not the key issue here.

This rolls into one of Crytek’s other claims, that the existence of Squadron 42 is a breach of the agreement because while it began as a mode for Star Citizen, it had since branched out into a separate purchase and, according to the license agreement, Cloud Imperium only has the rights to develop one game. Any time you see the word “Game” with the capital G, it is referring to “the game Star Citizen” and “the game Squadron 42,” combined together. Another section of the agreement goes further and states that the agreement does not include any game not accessed through the Star Citizen game client, or sold for a separate fee.

This is why clarity is necessary, and here is where we lead to another issue that the court is going to have to decide. Crytek’s contention with Squadron 42 is that CIG announced in December 2015 that Squadron 42 would be a standalone product. By December 2016, CIG announced that both Star Citizen and Squadron 42 would be moved over to the Amazon Lumberyard engine, and Crytek is going after the year that the game may or may not have been in development under their engine, claiming loss of royalties and upfront payments that would have been owed had CIG licensed a second copy of the engine.

The big question is whether or not the license agreement which appears to explicitly recognize Star Citizen and Squadron 42 as separate games, but licenses them both together, is at odds with Crytek’s claim that selling Squadron 42 as a standalone product is a breach of the terms against selling separate products, or whether any of this is even applicable since neither game is using the engine.

3. Crytek’s Negotiations: A Blank Check In A Used Car Dealership

Another thing you’ll see crop up more than once if you read Crytek’s complaint is how the company graciously negotiated a substantially lower sum than its usual licensing fee on the grounds that Cloud Imperium Games would exclusively use the license and also heavily promote the CryEngine to its base. Since CIG is no longer using the engine, thus depriving Crytek of further licensing fees, the company feels that it’s been substantially damaged by not receiving the full, usual license fee. Money that they willingly gave up in negotiation.

The licensing fee negotiated under the GLA reflected a substantial reduction from Crytek’s usual licensing fees in view of the promotional consideration and other consideration that Defendants promised to Crytek in Sections 2.8.1, 2.8.2,and 2.8.3 of that Agreement. In view of the fact that Crytek has been deprived of that promised consideration, Crytek has been substantially damaged, and has failed to receive the balance of its full, usual license fee.

Crytek is apparently so angry about the conclusion of this agreement that they’ve taken to potentially slandering some individuals involved in the negotiation process. They actually call out by name Crytek co-founder Ortwin Freyermuth, who was a former Crytek employee and negotiated the deal on behalf of CIG, for apparent conflicts of interest and never recused himself from the negotiations or resolved that conflict of interest, despite apparently knowing confidential information about Crytek.

“Notwithstanding that he had confidential information about Crytek’s licensing practices that would unfairly advantage Defendants, Freyermuth never recused himself from those negotiations and never resolved that conflict of interest with Crytek,”

Except that claim is allegedly a complete and outright lie. In the declaration presented to the court by CIG lawyer Jeremy Goldman in support of the motion to dismiss, who also kindly submitted a copy of the license agreement that Crytek for one reason or another had withheld, Freyermuth’s conflict of interest was never in question. In fact, Crytek not only didn’t have an issue with Freyermuth’s involvement at the time, they went as far as writing and signing a conflict waiver allowing him to take part. Goldman has this conflict waiver, apparently, and no doubt we will see it once this case goes to court.

It seems like a lot of this lawsuit is intended to force CIG to keep paying Crytek royalties, because the company made the arguably poor decision to substantially lower its licensing fees on what they may have seen as a huge long term earner, they negotiated a contract that may or may not say what they think it does, and now they’re angry that the money train has stopped so they’re also throwing the guys who did the negotiations under the bus.

4. Why Would Anyone Write No Damages Into a Contract?

One tactic that Cloud Imperium is using to quash this lawsuit before it ever goes to court is to point out that the license bars either party from seeking damages in the case of a breach of contract. If there are no damages that can be recovered, and in consideration of the fact that this lawsuit is popping up because CIG stopped using the engine and considers the contract scrapped, bringing this case to court would just be a massive waste of the court’s time, which when you’re trying to get a lawsuit dismissed this is a pretty logical avenue to go down.

Crytek’s claim for damages — an essential element of any breach of contract claim — is precluded by express language in the GLA barring either party from seeking any damages from the other. The FAC also seeks various forms of monetary damages and equitable relief that are unavailable under the GLA or as a matter of law, including statutory damages and attorney’s fees under the Copyright Act, punitive damages, and an injunction.

I read this response and honestly my first reaction was that CIG had grievously misread or is really reaching for something in the license. For the sake of clarity and the fact that it’s one of the few ALL CAPITAL LETTERS parts of the license, let’s look at that part of the agreement in its entirety.

So neither party can be held liable for damages incurred by either party or a third party, even if advised beforehand on the possibility of damages. In their response, it looks like CIG is going for a more in-your-face approach to their motion to dismiss.

House of cards pleading? Sham interpretation? Someone’s going for the jugular.

5.  Comments, Disclosure, and Public Access

In wrapping up this first bit of coverage, I’d like to share some disclosures. First, I am not a lawyer and nothing in this coverage or anything else on MMO Fallout should be interpreted as legal advice. As such, I try to refrain from making any judgement calls or act as armchair lawyer on how these lawsuits will proceed or which side has the more solid case, rather In Plain English has always been about presenting the allegations as-is and lining them up with publicly known facts and prior cases.

Another note that I didn’t mention is that Roberts Space Industries is a defendant in the lawsuit even though the company claims it isn’t part of the contract as it didn’t sign. Indeed, RSI didn’t sign the GLA and isn’t even mentioned in the list of sublicensed companies, however they did license Autodesk from Crytek who are claiming that that is enough to keep them involved in the lawsuit. RSI is a subsidiary of CIG.

I will be maintaining a publicly accessible Google Drive folder with the pertinent documents at this link here. Feel free to leave any thoughts or allegations of collusion/bias in the comments section below.

Epic Strikes Again: Sues Over Fortnite V-Buck Exploit


Since last October, Epic Games has launched at least six lawsuits against individuals creating or advertising cheats for Fortnite, and as of last week you can add another one to that list. Epic has filed another lawsuit in the Northern District of California court, this time against an individual Yash Gosai, over his advertising of exploits in Fortnite Battle Royale.

While Epic’s previous lawsuits targeted creators and distributors of aimbots, this lawsuit deals with an exploit surrounding Fortnite’s premium currency V-Bucks. According to the lawsuit, Gosai is accused of developing and publicizing an exploit allowing people to gain free v-bucks without paying real money. Epic Games took the action of removing the video via DMCA takedown notice, which the defendant counter-claimed, and now the case is going to court on three claims: Copyright violation, breach of contract, and conversion (monetary damages).

Unlike the other cases we’ve covered where Epic Games is mostly seeking injunctive relief, barring the defendants from playing/cheating in their games, the fact that Gosai is being accused of both using and distributing an exploit to illegitimately acquire RMT currency for Fortnite makes this lawsuit one of the few where Epic is actually pursuing monetary damages. Epic is seeking unspecified damages plus interest and lawyer fees. As Yash Gosai is a resident of New Zealand, this case might take a while.

Both parties are scheduled for a meeting in April.

(Source: North California Court Docket Case 3:2018cv00152)