Hello citizens! Today, I’m going to talk about a little game that’s been flying under the radar and I think deserves some air time: Star Citizen. I’m obviously being a bit facetious here as Star Citizen is no stranger to the limelight or drama. This week I want to review the Crytek v. Cloud Imperium Games lawsuit filed back in 2017 that’s now finally stumbling to a close.
I read the entire case history of Crytek v. Cloud Imperium Games, creator of Star Citizen, and in seven minutes or less, I can get you to the main deciding factor of this lawsuit and why it’s important. There are several hundred pages of complaints, motions, memoranda, and general legal chicanery attached to this suit so far, and frankly I’m going to skip over most of it. Chances are I left something out that someone feels is super important, and if so, drop me a note in the comments and I’ll try to address it.
But within the scope of this piece, there are a total of five documents we are going to focus on: the First Amended Complaint (FAC) from Crytek, the Second Amended Complaint from Crytek (SAC), the Order on the Motion to Dismiss the FAC, the Order on the Motion to Dismiss the SAC, and the Game License Agreement (GLA). It’s going to be an acronym-heavy one, folks. You may also want to dive in to our coverage from the last year and a half of the suit, where we’ve addressed additional points of the case that we won’t bring back up here:
The First Amended Complaint
In the FAC, Crytek lists five complaints it says justifies Breach of Contract and therefore entitles it to damages. Four of those complaints are almost entirely dependent on the 5th, so I’m going to skip those in favor of the really important one. On Page 8, Line 1 of the FAC, Crytek alleges that the “Defendants [Cloud Imperium Games and Roberts Space Industries) Broke Its Promise to Exclusively Use CryEngine for the Game.”
Paragraphs 36 – 39 go to cite the GLA in section 2.1.2 and its use the word “exclusivity,” which Crytek interprets like so: “Section 2.1.2 of the GLA contained a critical promise from Defendants that they would not develop the Star Citizen video game using any other video game engines.” This means that Crytek believes that when CIG pivoted to using Lumberyard, it breached its contract.
This is important because Crytek needs to show not only that did CIG break the contract in December of 2016 but that it is still in breach of the contract. The other complaints are all predicated under the idea that CIG is still under contract and is still obligated to use CryEngine – and is therefore in violation for the other points.
A few days after Crytek filed the FAC, CIG filed its first Motion to Dismiss.
Order on CIG’s Motion to Dismiss
Fast forward to August 2018 when Judge Dolly Gee (amazing name) released her order on CIG’s Motion to Dismiss the complaint. On the surface, it looked like a solid win for Crytek: Judge Gee denied the Motion to Dismiss for everything except for punitive damages and the exclusivity argument we just talked about. Under California Law, the contract terms must be interpreted “in their ordinary and popular sense that a lay person would attach to them.” Under this requirement and looking at the rest of GLA, Judge Gee ordered that the exclusivity language governed only CIG’s ability to use CryEngine and did not constitute an obligation to do so.
Yeah, we saw that one coming.
The rest of the complaints from Crytek started to fall over at that point either because they require the actual use of the CryEngine to be valid or because the amount of time they could potentially claim damages for is now minuscule. Some complaints could get damages for about a year, others for only a few months if at all. It was really bad for Crytek even though it looked good on paper.
Interestingly though, Judge Gee seems to take pity on Crytek and points it to section 2.4 of the GLA with a wink and a nudge that it might have a case there. Thus was born the Second Amended Complaint.
The Second Amended Complaint
This complaint is almost exactly the same the FAC, except for the exclusivity section on Page 8, line 1. It now reads, “Defendants Broke Their Promise Not to Compete with CryEngine by Adopting And Promoting a Competing Game Engine.” Crytek points to, no surprise, section 2.4 of the GLA as justification:
“During the Term of the License, or any renewals thereof, and for a period of two years thereafter, Licensee, its principals, and Affiliates shall not directly or indirectly engage in the business of designing, developing, creating, supporting, maintaining, promoting, selling or licensing (directly or indirectly) any game engine or middleware which compete with CryEngine.”
Crytek alleges that CIG violated section 2.4 on two different occasions: in September of 2016 when Chris Roberts made mention of “Star Engine” in place of CryEngine and then in December 2016 when CIG announced that it was moving to Lumberyard. Those two instances, Crytek argues, constitute a breach of contract because they are promoting a competing engine.
As expected, CIG files a second Motion to Dismiss to go with the Second Amended Complaint.
The Order on CIG’s Motion to Dismiss the Second Amended Complaint
So now we jump ahead a few months again and Judge Gee is back with her Order for CIG’s Motion to Dismiss. In what I can only assume is a coup de grâce of judicial trolling, Judge Gee grants the motion to dismiss because based on section 2.4 of the GLA, which she pointed Crytek toward in her first Order, CIG was not “in the business of” promoting a competing game engine. The two singular references to Star Engine and Lumberyard were not enough to justify a breach or establish that CIG was in the business of promoting either of those engines. Even worse, Judge Gee says that even repeatedly mentioning either Star Engine or Lumberyard still wouldn’t have been enough to breach section 2.4.
There’s also a section in section 2.4 about licensing “to a third party” vs. “from a third party,” where Crytek again unsuccessfully argues that section 2.4 prevents CIG from licensing Lumberyard (hearkening back to its exclusivity argument from the FAC) because section 2.4 prevents licensing from a third party. Judge Gee points out that the language governs whether CIG could license to a third party when taken in the context of the rest of section 2.4, which again, it is required to do as part of California law.
At this point, Crytek has lost the ability to mandate that CIG has to use CryEngine, which has summarily the same effects on the four remaining complaints, which no longer apply because they govern only when the CryEngine is in use, and the amount of damages Crytek could be awarded is less than the cost of actually pushing the case forward.
Several weeks after Judge Gee’s order, Crytek responded that it was not going to submit a Third Amended Complaint. While there are technically still four complaints Judge Gee didn’t dismiss, it’s probably not worth the time and especially the legal fees to pursue them.
The settlement
As MassivelyOP reported back in March 2019, legal proceedings have since moved to “alternative dispute resolution.” This likely means that Crytek is trying to settle out of court to avoid the frankly astronomical legal feeds that it would be obligated to pay to CIG because of the failed lawsuit. The current date for the hearing is June 28th, 2019, so either way, we should have an end to this particular bit of Star Citizen drama soon.
Finally, I would love to claim all of this legal know-how for myself, I would be remiss to not mention YouTuber Law, whose video was super helpful in helping sift through the piles of court documents to confirm the stuff that really matters.
Every other week, Andy McAdams braves the swarms of buzzwords and esoteric legalese of the genre to bring you Massively OP’s Lawful Neutral column, an in-depth analysis of the legal and business issues facing MMOs. Have a topic you want to see covered? Shoot him an email!
Thanks Andy that was interesting to read.
At each steps of the procedure, it could have taken another direction because justice decision can be sometime very surprising.
It looks so far that the project is totally safe from Crytek claims and potential financial or technical consequences.
This is a great news for backers, at least those who add a real doubt about the positive issue.
Let’s see what is coming next and let’s enjoy the free week :)
wot?
One of the ironies involved in the lawsuit is that Lumberyard is a branch of CryEngine. Amazon bought it from Crytek (and then expanded it and integrated it with AWS/Twitch/etc…)
From https://aws.amazon.com/lumberyard/faq/
Q: Is Lumberyard based on other technologies
A: Lumberyard is made up of proven technology from CryEngine, AWS, Twitch, EMotion FX, and Double Helix. We’ve hired some of the best game technologists in the world, who have already made over 3,300 improvements, new features, and fixes to Lumberyard since launch…
Reports indicated they bought the rights to make Lumberyard for something like $70 million ( https://www.gamesindustry.biz/articles/2015-04-07-amazon-licensing-deal-may-have-saved-crytek-report ) At the time Crytek was having difficulties paying its employees.
This is why it was even possible to move Star Citizen to Lumberyard. The version of CryEngine Amazon bought was very similar to the version CIG based Star Citizen on, so integrating the game into Lumberyard wasn’t a total re-write, and allowed them to leverage AWS and the other improvements Amazon was making. Improvements Crytek was in no position (either fiscal or talent-wise) to make.
So Crytek was/is suing CIG for moving Star Citizen to another version of CryEngine they licensed to Amazon, knowing Amazon was going to license it to others. It seems improbable that they did not realize the most likely customers of Amazon’s new branch were existing CryEngine licensees who were making games with large networking needs.
It was never likely that this was going to end well for Crytek. Hopefully this won’t go down the SCO vs. IBM zombie-lawsuit-of-doom route, and it will be over soon.
i honestly felt the strongest part of the whole thing was the copyright infringement stuff from bugsmashers.
i always forget what came of that part of the thing but probably got dismissed because amazon could give them permission to broadcast that stuff.
It came down to 1) being able to prove it was their code, then 2) being able to prove actual damages. They didn’t actually register their copyright in the US until 2017, and SC announced to switch to Lumberyard in late 2016, bug masher videos started in 2015. So you’d have a grand total of about a year to show actual damages – they weren’t entitled to statutory damages because they didn’t have the copyright registered until 2017–after the time when SC stopped using CryEngine. The amount they could have gotten from that is tiny, if anything.
afaik registering copyright gives you a firmer paper trail for your copyrights but it should’nt affect anything beyond that??
ahh i see, the US doesn’t quite follow the berne convention:
https://en.wikipedia.org/wiki/Copyright_registration
The observation that registration is not required in the United States, however, has been described as misleading.[2]:86–87 This is partly because registration remains a prerequisite to filing an infringement suit,[2]:87 and also because important remedies depend on prompt registration—such as attorneys fees and statutory damages.[2]:90 At least one commentator has questioned whether the conditioning of legal recourse on registration is inconsistent with the United States’ obligations under the Berne Convention regarding “formalities”.[2]:90 n.11
but seems in this case the registration would still fit the scenario described as being the pertinent use of registering?
anyways TIL.
found this further down
In the United States, the United States Copyright Office accepts registrations. For works created in the US by US citizens, a registration is also required before an infringement suit may be filed in a US court. Furthermore, copyright holders cannot claim statutory damages or attorney’s fees unless the work was registered prior to infringement, or within three months of publication.[6]
This is good content. Seeing more article this well researched would be nice.
Got to feel for Crytek on this one. No doubt the intent of the clause, but Judge Gee is right.
CIG is like a “producer” that signs a new musical act in a bad contract. CIG has no honor.
If that was the intent of the clause then I don’t feel sorry for them because instead of creating a product that CIG wanted to use, they tried to force them with legalese to use it.
“Exclusivity” deals are almost always bad for the consumer.
Actually, in this singular case, I think CIG was actually in the right. When you read the complaints and how Crytek deliberately took pieces of the GLA out of context to support their claims. It’s also worth noting that exclusivity when it comes to licensing agreements common refers to the right to use, exclusive to licensee. I have never seen it interpreted as ‘obligation’ to use a particular piece of software.
More than that, it wouldn’t make sense in most cases to mandate the inclusion of a piece of software because you paint yourself into a corner from a development perspective. If you get far enough along and realize that the software doesn’t meet your needs, or that’s actively delaying your product due to architectural decisions, you are basically SOL.
You would “paint yourself into a corner” because working closely together on a project both companies would benefit from the press. (hopefully, both would have a better product also) This is why you see the CEO’s of different companies at product launches. Not unusual in the least.
Why would you have any clauses stating a relationship like this, if that was not your intent?
They didn’t. They interpreted it as per their “intent” and “spirit” of the GLA. You should look that up too. It’s rather enlightening.
You should have spent more time reading the GLA and the Crytek complaint.
They gave them a break on the license in exchange for exclusivity and marketing. They screwed up in the GLA wording, and the judge sided with CIG on that singular point of exclusively. Such deals aren’t uncommon. In fact, they happen all the time, and in all forms of media. e.g. Nike pays athletes to exclusively promote their brand. That was the understanding between the parties; but they didn’t make the contract airtight enough. Which is why the judge’s decision on that sole issue surprised most of us who have, for decades, done licensing agreements.
MtD Rulings:
Yes, The judge was right I agree. She had to rule this way.
IMHO CIG knew what they were doing when they wrote this contract, and how to screw Crytek over.
Yeah, that’s the thing with contracts – they can be worthless down the road if litigation ensues. Even when they are airtight, you can always end up spending money enforcing them.
My bias aside, I firmly believe that given the context and intent of the GLA, and standard industry practice, that both parties agreed that they would exclusively use CryEngine and free marketing in exchange for a price break etc. It’s not far-fetched at all, because deals like that happen all the time. But as that part was ambiguous, unless something shows up in discovery that supports the Crytek position, the judge’s ruling is the final word on that aspect.
Quote: “My bias aside”
Good to acknowledge it DS. After all there is a particle of honesty remaining, knowing it is just and excuse to keep hammering even harder :)
You said times ago they were defenseless. The story is not over yet but we can clearly see sign about the end.
That’s why professional judge are involved and not “internet expert”.
You was wrong again DS… just to say without any aggressiveness.
Another proof that your bias behavior as always been you worst enemy.
Get a grip, do release LOD, swallow reviews from independent sites (MOP for instance) and get a life at last without all yours daemons.
I think what you were trying to illustrate using the sports endorsement example you better stated later: “[Exclusively developing on CryEngine is] not far-fetched at all, because deals like that happen all the time.” But I would be careful using the endorsement deal as a comparison.
Nike [the customer] pays athletes [the supplier] to exclusively promote [provide a service] their [Nike’s] brand. – would result in the argument – CIG [the customer] pays CryTech [the provider] to exclusively develop a platform [provide a service] for their [CIG’s] game.
While I take your point that exclusive platform deals are common in the video game industry, the relevant GLA sections appear to be boiler plate for, “CryTech is licensing CryEngine for use in and redistribution with the single game covered by this contract and no other CIG games (section 2.1.2). Furthermore CIG will not compete in the business of game engines for a period of two years because we don’t want you learning from CryTech and our source code then competing with us (section 2.4).” These are far more common restraints when licensing software than stating that you can only use our library and no other. As such I don’t understand how folks can fault CIG for interpreting them this way or suggest CryTech intended more at the time of contract execution.
If CryTech did mean to include the less common, though still entirely plausible scenario of exclusively developing the game on CryEngine, wouldn’t they have included separate sections for each of: limitations on usage, non-compete, and game/game-engine exclusivity? One might point to section 9 of the GLA, but that’s standard for, “CryTech gets to use CIG as a reference,” not, “CIG must use CryEngine.”
i admit to having been under the impression of the position derek holds previously, but this post right here is spot on, is the better understanding on why the judge ruled that way against these claims.
what’s shady here is that the guy that wrote the contract for crytek (as crytek’s lawyer in the affair) is now a board member of CIG i believe.
so why crytek has this impression that was the agreement idk. but i also don’t know what the law firm they hired was willing to go further with this if it was so obviously not gonna work in the jurisdiction they filed in.
I forgot about that job change. I agree that could be shady. If collusion could be found that the CryTech lawyer (at the time) had intentionally misled CryTech management that the license covered more than it did in return for a later position at CIG, yes, that would be very bad indeed.
But without some seriously explicit evidence, I find that story unlikely. That scenario would require CIG getting started on CryEngine, kick the tires, figure out if they could make the changes they wanted all while planning to move to Lumberyard to gain some benefit. And CIG would have had to know all the goodness they were going to get from Lumberyard on 11/20/2012 when the relevant sections were penned even though Amazon didn’t license CryEngine until sometime in 2015 (https://en.wikipedia.org/wiki/Amazon_Lumberyard). Not saying it’s impossible. The conspiracy theorist in me could suggest that the lawyer was privy to the deal with Amazon before it was inked, knew CIG might not want to get locked in while still starting development and risked getting what might, possibly, someday be a sweeter gig in the future against the whole scheme getting found out.
However, I find Occam’s Razor pointing in the direction of malicious hindsight rather than malicious divination. That is, the simpler scenario is that CryTech currently realizes they need some cash and thought they might be able to use CIG’s action of changing engines to go after CIG now that CIG has more money than expected.
There was no “job change”. wtf are you guys even going on about? It’s as if none of you have been following this at all. Then all of a sudden, are expects.
Ortwin is Chris’s long-time biz partner.
They founded the SC project together.
At the same time, Ortwin (an entertainment lawyer) was also representing Crytek, while negotiating the GLA. It’s why Crytek had to give Ortwin a waiver, permitting him to represent both sides of that negotiation.
Crytek came back and said that Ortwin fashioned it to be favorable to CIG, an entity which he [Ortwin] didn’t disclose to Crytek at the time, that he was involved (as co-founder) in.
The judge agreed, and thus didn’t dismiss that aspect of the complaint. Which means that Ortwin is on the hook for any unfavorable (for Crytek) outcome resulting from the litigation of the GLA. It’s called double-dealing and it’s big deal for attorneys and can get them disbarred. It’s why Orwtin was so furious in those filings.
Ortwin isn’t a board member. He’s a co-founder and co-owner of the project and all the associated companies. He’s Chris’s long-time biz partner.
https://cloudimperiumgames.com/blog/corporate/cloud-imperium-games-appoints-two-new-board-members
jfc dude, it took 2 seconds to google this.
With the appointments of Mr. Offner and Mr. Klein, Cloud Imperium’s Board of Directors now consists of five members including Chris Roberts, Ortwin Freyermuth and Erin Roberts. Chris Roberts retains full control of the Cloud Imperium Board and Group.
i was wrong about sandi being a board member tho. but damn dude. damn.
Yup, I didn’t go back and check on it and was wrong there. It just sounded familiar.
While it’s true that Ortwin is on the board, it’s also true that he’s one of the founders of CIG. Also from the linked article:
That does bring the shady factor up, and the judge rightly left those claims open since no one satisfactorily addressed them. Still, it’s going to be tough to prove that CryTech intended game/engine exclusivity, that CIG knew about and agreed with that intent, that Ortwin intended to mislead CryTech in regards to the GLA, and that CIG knew such deception was happening if you want to go the whole nine yards.
As Derek points out, “Sony signs an exclusive title to sell on PS4, you can’t sell it on XB1 until that term (if any) expires.” Yes, a good number of companies do make platform exclusivity deals. But so many games come out cross platform that it’s far enough from the norm it’s a leap to assume that was the intent of the contract.
Speaking of assumptions, it being so costly for a game company to change platforms mid-development, I wonder if CryTech just didn’t think of it as a possibility. Because they didn’t think it possible, they didn’t bother to explicitly address it in discussions or the GLA. And years later here comes Lumberyard to throw a wicked curve ball at that omission. Seems the most likely scenario as people in general aren’t out to screw each other, they’re simply fallible, and running businesses can be tough.
That cross-platform is the norm, doesn’t take exclusivity off the table.
Exclusivity isn’t new, and it’s not just about games. It happens in other industries, including video cards where you can get exclusive game codes for your purchase, manufacturers paying devs & pubs to implement card exclusive features etc.
What do you think would happen if a game that was signed exclusively for Epic’s store, showed up on Steam before the exclusive term was up?
The only reason that CIG got away with the exclusivity issue, is because of the ambiguous wording in the contract. And unless something turns up in discovery that shows the “intent” of the contract, as per the judge’s ruling, that issue is over and done.
Also, one key fact that most are forgetting is that CIG would never have been able to switch (to any other engine, e.g. Unity or UE4) from base CryEngine if Lumberyard wasn’t a thing. Amazon bought a perpetual CE license in 2015. That was 4 years after Chris put his SC plan into gear back in 2011, and with a plan to release it in Nov 2014. LY was released in Alpha in mid 2016. CIG claims to have switched “during 2016”.
Enjoy the egg face. He’s talking about Ortwin. Do you actually know anything? Anything – at all?
ps. read his follow-up post below.
you were the one who claimed ortwin was this or that.
you gonna keep milking this comment section for shots in the dark?
don’t @ me. and stop pretending you know anything about star citizen the law or anything you vomit onto the internet.
You are making the same mistake that people who don’t understand how contract law works, make. And the judge, in her MtD ruling, actually pointed that out.
The language of a contract isn’t subservient to it’s intent.
This means that regardless of what the language says, if it is legally challenged, and found to be ambiguous, the “intent” is what prevails. It’s how we have an appeals court, as well as a supreme court. Things such as contract, or even established case law, can be shown to be ambiguous – all the time. And they can get overturned.
My “exclusive” comparison still stands because Crytek already painstakingly, in their filings, explained the “intent” of the contract. That being, they gave CIG a break in the license, in exchange for exclusively using CryEngine for SC, and to also market CryEngine.
That Quid Pro Quo is no different from any branding deal, and is outside the scope – though related – to your “endorsement” deal example, which is completely different. When nVidia pay devs via cash or marketing incentives to use nVidia specific tech in their games, you do that exclusively for a time; and you can’t do it on AMD during that time. When Sony signs an exclusive title to sell on PS4, you can’t sell it on XB1 until that term (if any) expires. This Crytek intent is no different because that’s how industry exclusive deals are constructed. I would know because I’ve done several of them over the years.
The judge’s MtD ruling leaves room for Crytek to appeal if if they lose the case on that ground down the road. It’s why they didn’t bother with a 3rd amended complaint even when she gave them the opportunity to do so.
this is so very r/pcgaming it hurts.
Your example with NVidia is much better than your endorsement example with Nike. I hope it provides better context for others in the discussion. Specifically, it’s good that you point out there’s more quid pro quo in these video game deals than an athlete getting some free shoes from Nike. All I was trying to point out in a poor way was that the different types of deals have very different intent.
And I agree with you that intent is the factor that carries more weight. The problem is, that the courts need to discern that intent through documentation from the time the contract was executed: the contract itself, red-lines, emails, and any other recorded communication. That’s the kind of evidence that overturns cases. Not statements made very much so after the fact in court filings. Not statements made by other software developers that, because exclusive platform deals can happen, that’s what was intended in this case.
And in this particular case the only documentation the court has are the exhibits provided by CryTech. If CryTech’s intent at the time was game/engine exclusivity, where are the emails that unambiguously show that intent and that CIG agreed with it? Where are the red-lines from before the first GLA execution and the executed amendment, Exhibit B, that show CryTech intended game/engine exclusivity? These quid pro quo deals, while not the norm in software licensing, are far from uncommon as you point out. So why didn’t CryTech find a non-ambiguous clause from an example contract and run with that?
I understand that a lot of negotiations occur face to face and such documentation is not always in abundance. But that’s even more reason to make sure the documentation unequivocally reflects the intent at the time. And so far, the court, and most people agree, that game/engine exclusivity is not reflected in the provided documentation.
My Nike example wasn’t about getting free shoes. It’s about exclusively wearing Nike apparel at events. e.g. in golf, the makers of apparel, gear etc pay for players to exclusively wear their apparel, use their gear etc. Some deals are exclusive, some are not. e.g. in race cars, you can find a single sponsor all over the car, while you can find several sponsors on other cars.
Agreed. And that’s basically why you have an opportunity to produce more facts, case law etc in amended complaints. And during discovery, if something supports a previously dismissed issue, it can be re-introduced in a supplemental filing. And even after a case, you can still appeal on even slimmer grounds.
That’s where discovery and depositions come in.
Pulling these conversations together:
I think we’re talking at cross purposes on the sports endorsement deal example. I’m saying that, in the endorsement deal the company is paying the other party to remain exclusive, and CIG is paying the money but they’re expected to remain exclusive? The example doesn’t carry much weight one way or the other interpreting CryTech’s intent. As opposed to your use where I think you’re putting it up as an example of different types of exclusivity? I can’t argue with that if so.
Yes, CryTech gave CIG a discount, in effect paying CIG, but the GLA explicitly defines the marketing benefits to be gained in section 2.8 and subsections that make no mention of game/engine exclusivity. That argument doesn’t eliminate the possibility on its own, but we don’t know for sure based on giving a discount. Said another way, quid pro quo does not imply exclusivity.
I also didn’t mean to take game/engine exclusivity off the table entirely when talking cross platform. Apologies if it came across that way. I commented on it because it you seemed to be saying CryTech definitely intended exclusivity because one option to arrange deals is platform exclusive. I was pointing out that we can’t infer CryTech’s intent either way based on possible deal structures because both are likely.
The discovery will be interesting. But discovery is usually about finding out what information the opposition has. If CryTech had less ambiguous evidence of their intent, why not submit it with their other exhibits when filing the case? It would have given them a better chance because, as you noted, their chances slim down when appealing. I don’t think it likely that CIG is going to have more detailed artifacts pertaining to one of their vendors than that vendor should have on every customer. Just a guess. It will be fun to see though.
Interesting how discovery ties into the Ortwin angle. In order to prove if Ortwin misled them, CryTech would need to provide/find proof of their intent and that Ortwin lied about the meaning of the contract. Two birds with one stone. Though, that’s going to be a rough road.
I realize that we’re probably never going to agree on the rest of this unless a smoking gun is ever found, but:
That’s exactly the curve ball Lumberyard threw at this whole thing I was referring to. I think the most plausible scenario is that because changing platforms would have been so expensive (before Lumberyard) no one considered it. Combine that understandable lack of foresight with the fact that in the court’s opinion as well as many others, section 2.1.2 is common software license boilerplate for limitations on using a vendor’s tool and/or framework, and not for limiting the customer on which other tools may be used, it says to me that at best some parties might have assumed CIG would never switch, but game/engine exclusivity wasn’t specifically discussed. Unfortunately that assumption doesn’t mean that game/engine exclusivity was intended or agreed to. A fine hair to be sure. But if this is what happened, CIG would be going out of their way to be nice by sticking with a less useful platform when not contractually obligated. Again, if…
Yeah, we went down the Rabbit hole on that one, and lost something in context.
I was giving examples of how exclusives work.
In the case of Crytek/CIG, according to Crytek, they gave CIG a break on the licensing. And in exchange/incentive, CIG was to market CryEngine while exclusively using the engine. Which is why, when CIG switched to Lumberyard, Crytek cried foul. And the judge sided with CIG due to the ambiguity of the GLA wording, regardless of the clarity in the Crytek pleadings as to their understanding and intent of the GLA.
From the complaint
Your points on discovery are correct. Also, I don’t think that Crytek has the smoking gun they need or they would have attached them to the filing. So they are going to go on a fishing expedition. Which probably explains why they rebuffed CIG’s settlement talks last year, opting to wait until discovery concluded; because if there is such a smoking gun, then they have a better settlement standing if that claim comes back into scope, as opposed to being dismissed.
“In fact, they happen all the time, and in all forms of media. e.g. Nike pays athletes to exclusively promote their brand. ”
Yeah true..but you don’t see cases where athletes pay Nike to be obliged to wear only their shoes.
What are you even talking about?
Nike pays Athlete A to wear their shoes exclusively. The SC equivalent would be Crytek paying CIG to exclusively use Cryengine.
What you are claiming is that CIG paid Crytek so that CIG would be obligated to exclusively use Cryengine. The equivalent of the shoe example would be Athlete A paying Nike so Athlete A would be obliged to use Nike’s exclusively. It makes no sense.
interesting, but I wonder what is left to arbitrate? seems like a broad win for CIG
I also wonder if losing this case would be the camel’s straw for Crytek
It is a broad win. In theory they could continue with litigation a few of the other complaints, but like I said the amount they could feasibly get from it wouldn’t even cover the costs of pursuing it.
In California an ADR conference is REQUIRED for a Civil case to move forward in the litigation process.
However, the fact Crytek has basically no case left means that it’ll be a 5 minute conference with CIG telling Crytek to go away and “see you in court” if Crytek is stupid enough to think they’ll come out with a decision favorable to them in a trial.
I think they are throwing in the towel since they didn’t file a Third Amended Complaint — and CIG was asking for legal fees – I think it was about $3m. Chances are they are waiting till ADR then resolve out of court for (hopefully) a much smaller amount than what CIG is asking for
They didn’t need a third amended complaint. The lawsuit survived enough in the MtD for the case to proceed to trial. CIG knows that too, which is why they came up with this bond (it’s immaterial, as there are companies that do that all the time) issue – and rightfully so – since Crytek is an international company.
The lack of a third amended complaint has zero basis on whether or not the lawsuit moves to trial.
Are you even serious?
Yup
I wouldn’t be so sure. CIG tried the settlement route last year, and Crytek refused – opting to wait for the discovery process to conclude.
They will probably settle. The defining factor will be how much money is involved.
Well written article summarizing the hilarity to date. Nicely done.