On November 5th, current and former employees of Riot Games filed a class action lawsuit against the publisher, alleging that Riot denied them equal pay and stifled their careers solely because they were women. Additionally, the two women allege that they encountered constant harassment in a work environment that punished them for speaking up. The complaint contains multiple allegations against Riot including: (1) a violation of California’s Equal Pay Act; (2) a discrimination and retaliation claim in violation of that same Act; (3) discrimination, harassment, and retaliation claims in violation of the Fair Employment & Housing Act; and (4) a claim for failure to prevent discrimination.
This lawsuit comes on the heels of an investigative report published by Kotaku in August that discussed Riot’s toxic working environment and the sexist culture of the company. In that report, Jessica Negron, a former employee and current plaintiff, shed light on her experiences within the company, including multiple incidents of harassment, discrimination based on her gender, and a pattern of pay inequity. In one instance, Negron recounted an experience where she did not receive adequate compensation or a change in her job title after assuming the role of her recently departed manager. After fulfilling the manager’s job duties for a lengthy period of time, management denied her request for increased pay and eventually filled the role with three consecutive male employees.
The complaint reiterates many of the incidents that were written in the Kotaku article and includes additional experiences in detail. In another instance of the alleged toxic work environment at Riot, Negron alleges that a former supervisor expressed his appreciation for the lack of diversity within the company, “because gaming culture is the last remaining safe haven for white teen boys.”
The second plaintiff, current Riot employee Melanie McCracken, described numerous occasions where her coworkers allegedly subjected her to sexism. In one specific encounter with her former supervisor, the supervisor allegedly communicated an outright opposition to hiring women for senior employment roles. The complaint states that the supervisor told McCracken that he would “feel weird having a male” as an assistant. Later, when McCracken filed an anonymous complaint with Riot Human Resources department, the HR employee relayed the encounter to management, which allegedly led to McCracken’s former supervisor advising her that she had five months to find a new position or be fired.
If all the incidents described in the complaint are proven to be true, including class action certification (which is difficult to achieve), it would seem likely that the plaintiffs would prevail on their claims should this case reach verdict. However, many of these kind of cases never reach verdict due to a settlement being reached. Settlement is oftentimes seen as a means of helping prevent negative PR stemming from the lawsuit and its allegations. Nonetheless, the alleged incidents described in the complaint and Kotaku’s article should be deemed a cautionary tale to other companies within the video game industry, which has an unfortunately long history of alleged discriminatory practices.
(This post was contributed by Alan Conklin. Alan is an intern for Roger Quiles, Esq. and a recent graduate of the Villanova School of Law)
On October 10, Epic Games filed complaints against Charles Vraspir and Brandon Broom (the “Players”) alleging the Players made and used software that allowed users to cheat in Fortnite, a co-op survival action video game developed by Epic Games.
The Players were alleged associates of the website Addicted Cheats, where users pay a monthly subscription of $5 to $15 for botting services that aim and kill enemies in PvP games. In order to create the cheats used to enable this service, the Players allegedly reverse-engineered and modified the game’s source code.
Cheating in video games is an important issue for game developers, as cheating typically makes games more difficult for other users to play and alters how the gameplay experience from what the developers intended., often causing those users to play the games less. For games that have only been around for a short period of time, this user exodus can be devastating.
Fortnite: Battle Royal, which was released to the public on September 26, 2017, has impressively passed the seven million-player mark in the short amount of time, but the game’s developer took swift action in response to the discovery of the cheating service. In a statement made to Polygon last week, Epic stated,
“When cheaters use aimbots or other cheat technologies to gain an unfair advantage, they ruin games for people who are playing fairly. We take cheating seriously, and we’ll pursue all available options to make sure our games are fun, fair, and competitive for players."
One of the available options was apparently taking legal action against Vraspir and Broom, who had already been banned from Fortnite at least nine times.
In two separate complaints, Epic makes four similar arguments against each individual:
First, Epic argues that the Players violated the Copyright Act by creating an unauthorized derivative work of Epic’s copyrighted Fortnite code. Epic alleges the Players used computer software to inject code into Fortnite’s code, which materially modified and changed the code. This created work was never authorized by Epic. Accordingly, Epic believes the Players infringed on Epic’s copyrights and are liable for direct and willful infringement.
For this violation, Epic seeks: (1) an injunction prohibiting the Players from using the service; (2) actual damages, including lost sales and profits as a result of the Players’ contributory infringement; (3) any additional profits made by the Players; (4) alternatively, statutory damages up to $150,000 for the Players’ willful infringement; and (5) attorneys’ fees and costs.
Contributory Copyright Infringement
In the second claim, Epic alleges the Players contributed to the direct and willful infringement of Epic’s copyrights while working in their capacity for Addicted Cheats. Epic states the Players touted the cheats to other users in online forums, actively encouraging the other users to purchase the cheats. Additionally, Epic believes the Players helped users in their use of the cheats by “providing help and support to cheaters and would-be cheaters who ask for support using the cheats.”
As a result of this violation, Epic seeks: (1) an injunction prohibiting the Players from using the service; (2) actual damages, including lost sales and profits as a result of the Players’ contributory infringement; (3) any additional profits made by the Players; (4) alternatively, statutory damages up to $150,000 for the Players’ willful infringement; and (5) attorneys’ fees and costs.
Breach of Contract (North Carolina law)
The third claim against the Players is a breach of contract claim asserting that the Players violated Epic’s Terms of Service and Fortnite’s End User License Agreement (the “EULA”).
In order to create an account with Epic, use its services, and download Fortnite, all users, including the Players, must agree to both the Terms of Services and the EULA.
Epic’s Terms of Service expressly prohibit users from ““copy[ing], modify[ing], creat[ing] derivative works of, publicly display[ing], publicly perform[ing], republish[ing] or transmit[ting] any of the material obtained through [Epic’s] services.”
Fortnite’s EULA prohibits players from ““reverse engineer[ing], deriv[ing] source code from, modify[ing], adapt[ing], translat[ing], decompil[ing,] or disassembl[ing Fortnite] or mak[ing] derivative works based on [Fortnite]” and “creat[ing], develop[ing], distribut[ing], or us[ing] any unauthorized software programs to gain advantage in any online or other game modes.”
By reversing engineering Fortnite’s source code and materially altering it to make a cheating service, the Players created an unauthorized derivate work, thus violating their agreements with Epic and Fortnite.
For this violation, the Epic seeks: (1) an injunction prohibiting the players from continuing to the use the work; (2) compensatory damages; and (3) attorneys’ fees and other costs.
Intentional Interference with Contractual Relations (North Carolina law)
The last claim against both Players also involves the Terms of Services and EULA. In this claim, Epic argues that the Players intentionally interfered with contractual relations by encouraging and inducing Fortnite users to purchase and use the Players’ cheats, despite having knowledge of the Terms and EULA between Epic and its registered users, which prohibit the use of cheats in Fortnite.
For this violation, Epic seeks: (1) an injunction to restrain and enjoin the players from continuing to use the service; (2) damages for loss of goodwill among users of Epic’s services, decreased profits, and lost profits from users whose accounts were terminated for violations of the Terms and the Fortnite EULA; and (3) the proceeds the Players received from the sales of the cheats (unjust enrichment).
Circumvention of Technological Measures in Violation of the Digital Millennium Copyright Act (Broom only)
In addition to those claims, Epic asserted another claim Broom individually. This claim alleges that Broom violated the DMCA, by using a cheat that was primarily designed for the purpose of circumnavigating Epic’s security measures used to prevent unauthorized access to Fortnite’s copyrighted work. In continuance of this claim, Epic argues that Broom, as a moderator and support person for AddictedCheats.net, materially contributed to the sale, distribution, and use of the Fortnite cheats while actively assisting other cheaters in their pursuit to circumnavigate Epic’s technological security measures.
For Broom’s suspected actions, Epic seeks injunctive relief, actual damages and Broom’s profits attributable to this violation, maximum statutory damages and attorneys’ fees and costs.
Copyright infringement suits have become one of the most common remedies for game developers in the fight against cheating services like Addicted Cheats. In March 2017, Blizzard Entertainment successfully sued the German company Bossland GmbH, famous for creating bots known as “Honorbuddy” and “Hearthbuddy”. In that suit, Blizzard was awarded $8.6 million in damages for approximately 43,000 instances of copyright infringement.
While there is no doubt game developers will continue to use legal remedies against cheating services, it is important for cheaters to recognize that in this case, Epic took action against the Players individually. Instead of suing Addicted Cheats, the service that used the Fortnite cheats, Epic decided to come after Vraspir and Broom, in hopes of holding them individually liable for any damages it may receive.
Although this may not become a trend going forward, since individuals usually do not have as much money as the companies providing the cheating services, game developers may still use this strategy as another way to deter future cheaters and maintain the integrity of their games.
A copy of Epic’s complaints can be read below:
(This post was contributed by Kaylee Sauvey, a rising 3L at the Fowler School of Law and intern for Roger Quiles, Esq.)
On July 2, 2017, recording artist Dion DiMucci (“Dion”) sued Zenimax Media, Inc. for failing to obtain his consent before using his song “The Wanderer” in advertisements for Fallout 4, the newest installment in the Fallout video game franchise.
The Complaint acknowledges that a valid contract was executed between the makers of Fallout and Universal Music, who owns the song’s copyright, for the song’s use in advertisements for Fallout 4. Despite this, the following elaborate argument details why Dion believes that he was entitled to personal consultation before the song’s public use.
Dion authored “The Wanderer” for Laurie Records in 1961, which had adopted AFTRA’s National Code of Fair Practice for Phonograph Recordings (modernly “SAG-AFTRA National Code of Fair Practice for Sound Recordings,” hereinafter “Phono Code”). Dion argues that because of this, he is entitled to benefit from any collective bargaining agreements made under AFTRA; because his music was being used in a commercial advertisement, Dion alleges that the SAG-AFTRA Commercials Contract – formed for the benefit of SAG-AFTRA members to regulate compensation and working conditions on the set of a commercial – applies to him.
In the Commercials Contract, there is a provision stating that the producer of a commercial must separately negotiate with a “principal performer” before a photograph or audio recording in which he is featured can be released to the public in a commercial advertisement.
The Universal/Zenimax contract guarantees that Dion would be paid at least the minimum amount offered under an applicable collective bargaining agreement, as well as “other economic benefits having a substantially equivalent cost.” These “economic benefits,” he argues, include the ability to be consulted before his songs are used in any public way. Dion alleges that the Commercials Contract “affords the artist the right to control the use of his performance to the same extent as a copyright or trademark owner licensing his intellectual property,” and because the “goodwill attached to a recording artist’s performance is his asset,” this qualifies as an economic benefit covered under the agreement for the song’s use in Fallout 4.
In the Dion case, the existence of a valid contract with the record company for the use of “The Wanderer” is procedurally accurate. Song use requires consent from the artist’s record company and/or publisher – those that hold the copyrights to songs. Obtaining a license for use from the copyright holder is the procedurally correct method of legally using a song.
The argument that personal consultation with a recording artist is required goes against the established principles of music law. If an artist had a legal right to object to any use of their music, then the proprietary function of record companies and publishers would cease to exist. This argument – disregarding a valid contract and saying that the Commercials Contract is binding – is unique, but inaccurate.
ISSUES WITH COMMERCIALS CONTRACT/PHONO CODE
On its face, the Commercials Contract is not even applicable to a recording artist in Dion’s situation. The Contract is specifically applicable to “principal performers” operating under the jurisdiction of SAG-AFTRA. The multi-part description of “principal performers” in the body of the Contract makes reference to actors and stuntmen of all varieties, but never makes reference to recording artists. In fact, in the Complaint, Dion has included the seemingly-applicable provisions of the Contract, but has replaced the phrase “principal performer” to instead say “Plaintiff.” This certainly appears to be a technique to manipulate the court into believing the provision applies to recording artists, even though, in reality, it does not.
Like the Commercials Contract, the Phono Code does not grant a recording artist permission to control his music, but is instead used to regulate compensation by establishing a royalty rate.
PROBLEMS WITH THIS ARGUMENT
Ultimately, there are many problems with Dion’s argument.
First, the argument that the Commercials Contract and the Phono Code overwrite the valid license for the use of “The Wanderer” is unsound because this suggests that the copyrights retained by the record company and publisher are secondary to the moral right vested in a recording artist. If this is true that a recording artist could overwrite valid agreements made to use their music, what purpose would it serve to have another entity hold the copyright to a recording artist’s music? Furthermore, Dion argues that he has the right to control his music “to the same extent as a copyright or trademark owner,” which, by its very nature is absurd, as he has surrendered the rights to his music to other entities that thereafter dictate how the music is used. Ultimately, the end result of this argument is that anyone following the proper procedure and obtaining a valid license for song use could still potentially face litigation by a recording artist.
Secondly, the applicability of the Commercials Contract to “principal performers” at no point specifically includes recording artists. However, the Complaint suggests that the relevant provisions of the Contract are applicable to “Plaintiff,” a recording artist, even though the original provision suggests otherwise.
Third, the attempt to label personal negotiation with an artist as an “economic benefit” is a creative argument at best. The argument is problematic in the sense that, while true that the “goodwill” attached to an artist’s image is vital, it is not by default an “economic benefit” that would be owed to him under a collective bargaining agreement.
Finally, both the Commercials Contract and the Phono Code are procedural agreements created to ensure fair treatment under a union standard. They regulate compensation and working conditions for those covered by SAG-AFTRA. They are not meant to ensure that a recording artist can bypass the rights of a copyright holder with respect to creative content.
If Dion’s argument is accepted by the court, it has the potential to change the way the world licenses music for videogame and advertisement use, as well as the function of music entities and the rights they hold to a recording artist’s music. It may invalidate otherwise valid licenses and result in a wave of litigation by disgruntled artists seeking to control their music even without possessing a valid copyright to do so. It seems unlikely that the court will accept Dion’s argument, but we will have to wait for a resolution to see what the court holds.
(This post was contributed by Kaylee Sauvey, a rising 3L at the Fowler School of Law and intern for Roger Quiles, Esq.)
Enforcement of copyright law is a very dense and subjective process, as seen in the Blizzard/Valve v. Lilith/uCool case, which is rooted in ownership of rights to the mod of Warcraft III called “Defense of the Ancients,” (“DotA”). In brief, teenage developer Eul created this mod and may have released his ownership of it on an online forum. He later sold his rights to Valve. DotA appeared to have been the basis several other popular mods, the rights of which were also sold to Valve and Blizzard by their “owners,” and eventually, two unlicensed smartphone apps were released by Lilith and uCool. One of the main issues in this case is whether the rights acquired by Valve and Blizzard are valid if the release of ownership was also valid.
Relevant Copyright Law
A copyright is created at the moment someone fixes something creative in tangible form. The second you take that picture or write down those song lyrics, you have a valid copyright. For example, as soon as you take a photo, you have an exclusive right to Photoshop, publish, sell copies of it, etc. Let’s say you Photoshop it and then save a copy. You have just created a derivative work. Someone sees your original and decides to Photoshop it and then publishes it as their own. While this is also a derivative work, it may be an infringement on your copyright because you hold the exclusive right to use your original. If, however, you no longer wanted to own the rights to your photo, you could abandon the copyright and anyone could use it without asking your permission; this requires “some overt act indicating an intention to abandon.”
Now let’s take a look at the Blizzard case.
2002: Blizzard releases “Warcraft III: Reign of Chaos,” which included the development program called “World Editor” for creating settings and other content to modify the game, but restricted use to non-commercial uses in its End User License Agreement (“EULA”). The EULA did not ensure that the rights to all intellectual property created using the World Editor would be retained by Blizzard. Eul developed DotA using the World Editor and then locked the mod to retain creative control.
2003: DotA: Allstars is created by a third party and the mod is not locked. Guinsoo builds off of Allstars and locks the mod.
2004: On September 23, Eul posts the following message on a gaming community forum:
“from this point forward, DotA is now open source. Whoever wishes to release a version of DotA may without my consent, I just ask for a nod in the credits to your map.”
2005: Guinsoo quits and Icefrog is enlisted to work on DotA.
2006: Icefrog is hired by S2 Games as a designer for “Heroes of Newerth.” Initially, Icefrog retains his intellectual property rights to his contributions to Heroes, but S2 later changes his contract to retain all rights.
2010: Icefrog and Eul sell their rights in DotA and Allstars to Valve. Guinsoo sells his rights in DotA and Allstars to Riot Games, which then sells them to Blizzard in 2011.
2013: Valve releases Dota 2.
2014: Lilith releases “DotA Legends” an app based on DotA. Six months later, uCool releases “Heroes Charge” – a similar app.
2015: Blizzard and Valve sue uCool and Lilith for copyright infringement.
Commercial Use? Open Source? Who Owns the Rights?
The second issue is whether Eul’s forum post was an actual abandonment of any rights to DotA or if the addition of his request to credit him would be considered a retention of some rights. If DotA is actually open source material, the case is strongly in favor of Lilith and uCool. If, however, Eul did retain some rights, the case is stronger for Eul that he had some rights to sell to Valve and Valve may actually own the rights to DotA.
What This Means for Game Developers
This problem could have been solved in favor of Blizzard at the outset if they had included a provision in their EULA for the World Editor in which they retained the intellectual property rights to any content created using the World Editor. In the aftermath of this lawsuit, programs like the World Editor, which may produce similar user-generated content, will likely include a provision retaining these rights for the developing company. This would make any content created by any user the automatic intellectual property of the development company and eliminate any legitimate, subsequent claims of authorship by other parties.
If the jury finds that Eul’s “open source” statement is actually an effective abandonment of his rights, despite his request for credit, then independent developers such as Eul would be encouraged to keep their mods locked and actively maintain them to strengthen their claim of ownership. Any permission given openly for use or distribution would also be deemed an abandonment of ownership. This may result in more mods being sold to other users for a price instead of encouraging free use and distribution.
(Photo used under creative commons by David Wees)
(This post was contributed by Alan Conklin, a third year law student at the Villanova University School of Law and intern for Roger Quiles, Esq.)
On March 14, 2017, Blizzard Entertainment (“Blizzard”), popular developer of games such as Overwatch and World of Warcraft, decided to move forward with its lawsuit against Bossland GmbH (“Bossland”), a company known for creating cheat engines for games, filing a motion for entry of default judgment.
Last July, Blizzard filed a complaint in the Central District of California, accusing Bossland of contributory copyright infringement, unfair competition, and a number of other claims including a violation of an anti-circumvention provision in the Digital Millennium Copyright Act (“DMCA”) and a violation of its End User Licensing Agreement. For these claims, Blizzard sought to recover $8.5 million in damages. After the Court denied Bossland’s motion to dismiss for lack of jurisdiction, Bossland “elected to voluntarily default rather than defend [the] case on the merits.” The Court’s clerk entered the default on February 16, 2017, and Blizzard subsequently filed its motion.
Bossland is a German-based company known for making several game cheat engines, including Watchover Tyrant, Honorbuddy, and Demonbuddy. Blizzard believes that these cheat engines are detrimental to its business because they are used by “cheaters, hackers, or others who seek to manipulate the game experience (either for their own personal gain or simply to disrupt and annoy others).” In turn, Blizzard thinks these manipulations have ruined the games for many legitimate players, causing millions of dollars in lost sales.
For years, Blizzard has been engaged in a battle against cheat software developers. Since July 2013, Bossland has sold approximately 118,939 units to consumers in the United States alone. Blizzard projects that 36% of these products were cheats for its games. As a result, Blizzard alleges that Bossland is guilty of 42,818 infringements and seeks to receive the minimum statutory copyright damages of $200 per infringement.
Blizzard’s main accusation is based on its belief that Bossland’s programs have been used solely for the purpose of circumventing Blizzard’s anti-cheat measures that it had put in place to effectively control access to its copyrighted work. Under copyright law, “[n]o person shall circumvent a technological measure that effectively controls access to a [protected work].”
Blizzard’s anti-cheat measure, a program named Warden, “prevents unauthorized access to the Blizzard Games, restricts users from loading unauthorized copies of the Blizzard Games, and otherwise monitors the game client and environment for malicious or unauthorized software processes.” The program is also used to detect any third-party programs that facilitate cheating or the modification of gameplay unauthorized by Blizzard. In this case, Blizzard alleges that Bossland has violated the law by creating a program that was designed to evade Warden’s detection capabilities and violates its intellectual property rights.
Will Blizzard Benefit?
Although Blizzard appears to make a solid argument, a judgment in the company’s favor may not actually benefit Blizzard much because the Central District of California may not be able to enforce the judgment over the German-based company. Bossland has stated many times that it has no ties to the United States because it does not have any offices or employees in the United States, and it does not advertise or do any business on the country’s soil. It also does not use any United States based companies for its transactions. These factors will make it hard for the court to actually enforce any action placed against Bossland, a company that holds most of its assets abroad. To enforce its judgment, Blizzard would need to attempt to have the judgment localized in Germany, which would be difficult.
Nonetheless, a positive ruling can still have an impact on the on-going battle between cheat software programmers and game developers. Blizzard believes a ruling against Bossland will deter other third-party software developers by showing them that it will do whatever it takes to in order to protect its brand and the integrity of its games.
Legislative Protections for Game Developers
Given the substantial size of the gaming industry, countries are now starting to enact legislation to protect game developers from similar harms. South Korea, one of the most progressive countries in the esports industry, passed a bill last November that protects game developers from cheating programs similar to those created by Bossland. The bill prohibits the manufacturing and distribution of programs not permitted or provided by the game developer. Violators are subject to a fine of $43,000 USD (50 million KRW) and/or up to a maximum sentence of 5 years in prison.
Currently the United States does not have any laws that specifically regulate cheating software issues similar to issues in Blizzard’s case; however, with the growth of esports, game developers, including Blizzard, may see more laws with similar protections being passed in the United States in order to maintain the integrity of their games.
Quiles Law is an esports and sports law firm based in New York City.
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