A judge has dismissed another chunk of Crytek’s Star Citizen engine lawsuit

    
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Happy Christmas, Cloud Imperium.

MOP readers will recall that almost exactly a year ago, Crytek sued Star Citizen developer CIG, alleging that CIG infringed its copyrights by using CryEngine to develop non-Star Citizen game assets (i.e., Squadron 42) and deleting Crytek logos round about the time of the CryEngine-to-Star Engine switchover. Crytek demanded $75,000 and a slice of CIG’s profits in compensation for this supposed breach of contract and copyright infringement.

CIG called the lawsuit “meritless,” and in its motion to dismiss a month later, it defended itself by claiming that it wasn’t even using CryEngine anymore and that Squadron 42 was an extension of Star Citizen’s online universe that didn’t constitute a new game. It also pointed to the licensing agreement it and Crytek signed, limiting liability and damages from contract breaches.

In August, the judge presiding over the suit granted the motion to dismiss on the the claim on CryEngine exclusivity and the pursuit of punitive damages, but she denied CIG’s motion to dismiss on the breach of contract and copyright infringement grounds, and she allowed Crytek’s pursuit of injunctive relief and other damages.

Now it appears the judge has granted another chunk of CIG’s motion to dismiss. This time, following Crytek’s August filing, the judge examined the licensing agreement revolving around CryEngine with respect to Star Citizen, finding that contrary to the claim, CIG had not “engage[d] in the business of designing, developing, creating [or] promoting” a competing game engine in connection with Star Citizen, nor had it had been “promoting” its own engine with frequency or continuousness as defined by precedent. It had pretty much just replaced CryEngine with StarEngine and wasn’t attempting to farm the engine out.

If you ever thought your English teacher was a tool for harping on the importance of using the right prepositions in your writing, this decision should change your mind, as a great deal of it hinges on the line between “licensing to a third party” and “licensing from a third party.” In context, the judge found, the original contract covers whether CIG was allowed to license a game engine to other companies, not whether it was allowed to purchase a license for a new engine from (in this case) Amazon, putting CIG in the clear.

Finally, the judge found that CIG was not obligated to promote CryEngine as Crytek claimed and rules that a single trademark display (as offered as evidence by Crytek) was “insufficient to show Defendants engaged in the business of promoting Lumberyard.”

Crytek was granted leave to amend, so it’s not over, but it’s not looking so great for them.

The whole saga so far:

Source: Reddit, DocDroid. With thanks to DK and Schmidt!

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Lord Klaus

Crytek… they should rename themself just Cry :D

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Knut Gerber

Small correction: “Star Engine” was just an inside joke addressing the extensive changes and additions CIG has made to the original engine. They switched to Lumberyard, not to “Star Engine”.

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Lord Klaus

Wrong. StarEngine is the “unofficial” name of CIG Engine, and is not pure Lumberyard, but the Amazon’s Engine is integrated in the so called “starengine”. This means is not possible to know which version and which part of Amazon’s engine is included into “starEngine”.

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Knut Gerber

Yes, it’s the unofficial internal name of the engine that signifies the extensive changes and additions CIG has made to the engine. Chris Roberts has descibred it is as an inside joke. That’s irrelevant in the legal sense though, and that’s what matters here. CIG is using Lumberyard with all legal obligations like showing the Amazon copyright in the files, showing the Lumberyard logo in the splash screens, and whatever else the parties have agreed too in their GLA (rest assured that CIG is not operating under the “download and use it for free” license). We are talking about game engines as legal constructs, not about inside jokes. Star Engine is not a legal construct. It’s not a product.

P.S.: And it is absolutely possible to know which parts of the underlying code were written and provided by which company. They have version control that keeps track of all the changes made to the code. Crytek probably hopes to gain access to the entire version history of the project and to find signs of copyright infringment in that pile of data. CIG in return will probably want to show that they moved the entire codebase to Lumberyard before they announced SQ42 as a standalone game.

deekay_000
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deekay_000

they rebranded from cryengine to star engine about 3-9 months prior to rebranding to lumberyard.

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Tee Parsley

I still think that if Crytek can get the case to discovery, they’ll have enough blackmail material to get CIG to settle out of court.

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primal

its clear crytek is just grasping at straws

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Knut Gerber

The case will go to discovery since the argument about the scope of the GLA is still in the air and was not touched by the MTD. And CIG will settle out of court because that’s what parties usually do in the civil court. But after the last couple rulings in this case Crytek’s complaint looks a lot less threatening now. Two of their three central complaints were shot down, the scope of the discovery was limited, and punitive damages are off the table. This is not a world of pain anymore, but merely nuisance for CIG.

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primal

they tried to settle out of court but failed thats why its gone to court but with those things thrown out its more likely crytek will be more reasonable now as i reckon they wanted a substantial amount of money

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Schmidt.Capela

The way I see it, even if Crytek were to win the remaining claims there’s a good chance it still wouldn’t cover the cost of continuing the lawsuit, or what remains of it. This makes a settlement bloody likely.

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primal

yeah the major one would of been if they could prove the claim that CIG tried to claim the engine is there own and not cryteks anymore. with that gone it reduces it substantially

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Armsman

The MTD was granted in full (with leave to amend) and until (and IF) Crtek chooses to file a third ammended claim (FYI – The Judge did that to covwer if Crytek attempts to appeal).

Read the ruling for yourself:

From the above:

On August, 16, 2018, Plaintiff Crytek GMBH (“Crytek”) filed the operative Second
Amended Complaint (“SAC”) against Defendants Cloud Imperium Games Corp. (“CIG”) and Roberts Space Industries Corp. (“RSI”), alleging breach of contract and copyright infringement.[Doc. # 39.]

On September 6, 2018, Defendants filed their motion to dismiss (“MTD”), now
before the Court, seeking dismissal of Crytek’s claim for breach of contract based on Section 2.4 of the GLA. [Doc. # 42.] Having considered the parties’ written submissions, the Court GRANTSDefendants’ motion with leave to amend.

and

In light of the foregoing, the Court GRANTS with leave to amend Defendants’ MTD. Within 21 days from the date of this Order, Plaintiff shall file a Third Amended Complaint addressing the deficiencies discussed in this Order or notify Defendants and the Court that it does not intend to amend. Thereafter, Defendants shall file their response within 21 days.

IT IS SO ORDERED.

Again – two times a Judge has stated effectively Crytek is mis-interpreting their own agreement and their arguments are invalid. The only group that’s going to see any money are the Lawyers (for their fees.)

The big money is in punitive, not statutory damages, and right now, even with what remains Crytek has no real claim that would allow them to receive punative damages. What they might get in statutory damages wouldn’t cover their legal fees at this point, so if they try to re-file again given the above ruling they’re just throwing money away.

They (Crytek) were praying somehow a Judge would grant their Discovery motion (which was basically “We need EVERY RECORD and LINE OF CODE CIG has created…” <— Which was overly broad, and no Judge would grant unless said Judgfe some something truly egregious on CIG's part); because they knew that CIG would settle (read pay them more money, and possibly a share of SC future profits – if any) — but unfortunately (for Crytek_) they were assigned a Judge well versed in Licensing Agreement law who basically told Crytek — Your claims are ridiculous based on your actual agreement.

It's RARE that an MTD is granted in full in a Civil case. That CIG's MTD was, really shows how bogus Crytek's claims were; and again, they were hoping CIG would 'Blink' and just settle quickly to make this all go away. But CIG didn't and Crytek lost – BIG..

deekay_000
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deekay_000

just so you know there’s a few more complaints still on the table including the question of copyright infringment on multiple counts.

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primal

Derek Smart game developer, scientist, biologist, astrophysicist, medical doctor in every field and of course the best lawyer in the world got his assessment of the situation…. wrong :D

not surprising seeing he is absolutely none of those things and hes barely a game developer, he craps all over leonard french’s and the other lawyers’s interpretation saying there all wrong and hes right and i suppose he should march down to that Judges office and tell her how to do her job as well!!!

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Mr.McSleaz

Someone head to the rooftop & light up the DS Signal, I wanna see what he’s got to say.

anarresian
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anarresian

Sounds about right.

Godnaz
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Godnaz

Super quick rundown (updating as I read through it):

• CIG weren’t “engaging in the business” of selling StarEngine, so Crytek have no grounds to say that they were “designing, developing, creating or promoting” an engine which competes with Cryengine.

• Their GLA permits adapting Cryengine to suit CIG’s needs.

• The GLA only prohibits CIG from licensing to a third party. Not licensing from another party i.e: Lumberyard
CIG aren’t obliged to promote Cryengine. The promotion of Lumberyard is not sufficiently evidenced.

• Crytek can file a third and final ammended complaint addressing these issues, but until then the MTD is granted.

Copypasta per Bribase Lots of correction/interpretations so don’t hurt me.

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Oleg Chebeneev

Cant wait to hear Derek Smart about this. Dude predicted this case will be a killing blow for CIG. Topkek

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Utakata

When does that windbag get anything right? Especially when he’s feeding off the dissatisfaction of games he doesn’t like. o.O

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silverlock

I remember that a few years ago their was a labor case that was literally decided on the absence of a single coma. If a contract is important enough it might be worth it to have an English professor give it a read through.

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Schmidt.Capela

Actually, it sounds like Crytek was trying an unconventional — and, at the time the contract was written, unintended — interpretation of it; the judge dismissed Crytek’s claim because while that single sentence, taken out of context, could be read as supporting the claim, when you take the nearby contract clauses for context it becomes clear that the interpretation Crytek was pushing for was never the intended one.

It’s still a good idea to get someone very well versed in the English language to read the full contract with a focus on anything that could potentially have multiple interpretations, though. Getting a judge to rule on which interpretation is correct is far, far more expensive than getting someone to eliminate the ambiguity in the first place.

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Knut Gerber

The GLA was indeed badly written. In all fairness, for the initial scope of the project in 2012 the agreement was probably fine. If CIG had known back then that they would develop a 200 million Dollar game, they would have probably paid more attention to the exact wording of the contract – and Crytek wouldn’t have granted them an indie license. But you are right, this case shows how important proper language in contract case. Crytek’s complaint is mostly based on “How can we twist these words around?” and having a long discussion in court about the language of the agreement.

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Schmidt.Capela

Apparently the only claim not yet struck down is about CIG licensing the engine for use in one game (Star Citizen) and using it to concurrently develop a second one (Squadron 42).

Even if CIG lost that one I doubt it would amount to much, though, because SQ42 isn’t using CryEngine anymore (as alleged by CryTek itself), having changed engines before the game was ever made available for anyone, and because this latest ruling explicitly says CIG was allowed to license Lumberyard.

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Armsman

Um – the licencing agreement itself NAMES both games – although it mis-named ‘Star Citizen’ and ‘Space Citizen’ – but Squadron 42 is named in the signed agreement, so that particular argument in itself has always been a non-starter.

Crytek’s argument was (in their eyes) SQ42/SC are the same game – and CIG only ‘ran into trouble’ when it separated SQ42 a couple years after the original Kick Starter – somehow it’s no longer covered; BUT, I don’t think Crytek can claim the agreement (or the GLA language included as part of the agreement) allows Crytek to control/have a say in how CIG markets its own products. Also, if anything – CIG could just say: “Hey you’re right; but, we’ve been using Lumberyard since before we split it off, so why is it a Crytek issue at this point?…”

The CIG MTD was granted in full – but Crytek can do yet a third amended complaint to try and argue the case in yet a third different manner; but given how the Judge ruled, I doubt they’ll find an argument left to stand on – but we’ll see.

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syberghost

Honestly that’s just the judge covering her ass against being reversed on appeal. At some point they’ll give up filing amended complaints. This suit is down to lawyers wasting money at each other at this point.

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Schmidt.Capela

The motion to dismiss was granted in full, yes, but the motion was only about the claims that referenced Section 2.4 of the GLA; everything else that wasn’t previously dismissed is still at play.

Of course, there doesn’t seem to be enough still at play to make the lawsuit worth Crytek’s time (and lawyer fees), even if it was to win on all remaining claims.

@syberghost
Yep, seems like it. From what I’ve read, allowing a new amended complaint sends a strong signal to the plaintiff, and to the appeal courts, that if the plaintiff can’t even amend the complaint it doesn’t have a leg to stand on, and thus an appeal might basically amount to frivolous litigation.

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Knut Gerber

Other claims that are still on the table:
– Ortwin Freyermuth allegedly used his inside knowledge of Crytek to somehow trick them into an agreement that was favorable for CIG (good luck proving that).
– CIG has allegedly shown CryEngine source code on Bugsmashers (so far no such incident was discovered, and even if these exist, they are probably covered under fair use)
– CIG has allegedly shown CryEbgine source code to third parties, Faceware to be specific (that happened after the move Lumberyard and after Crytek and Amazon have mode the source code available, so what’s the damage?)

These claims will go nowhere. Probably just extra material to make the discovery process a bit larger. But so far the court seems to do a good job at reducing the complaint and the necessary discovery to what is plausible and justified.

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Schmidt.Capela

– Ortwin Freyermuth allegedly used his inside knowledge of Crytek to somehow trick them into an agreement that was favorable for CIG (good luck proving that).

CIG seems to have a waiver signed by Crytek prior to the negotiation starting that allows Ortwin Freyermuth to negotiate on CIG’s behalf.