IP Law Daily, COPYRIGHT—W.D. Wash.: A video game developer takes on an underage user, (May 10, 2023)

By Matthew Hersh, J.D.

The minor allegedly hacked the game and streamed his exploits on social media.

A minor who allegedly hacked a popular video game to give his player a competitive advantage could be on the hook because he allegedly circumvented a technological measure in violation of the DMCA and created an unauthorized derivative work in violation of the Copyright Act, the federal court for Seattle has held. The court, in denying in large part the minor’s motion to dismiss the video game developer’s complaint, also made clear that the infringement claim, as well as a related fraud claim, could stand even if the minor successfully disavowed the user agreement between the two parties (Bungie, Inc. v. L.L., May 9, 2023, Jones, R.).

The lawsuit involves Destiny 2, a popular “first shooter video game” in the words of the court. The video game developer, Bungie, Inc. came to believe that a player—later learned to be underage—used cheating software to gain a competitive advantage, streamed himself on social media playing Destiny 2 using that cheating software, and sold Destiny 2 emblems (digital art badges obtained by in-game achievements) on “OGUsers,” a hacking and selling forum. The game developer brought a wide range of claims against the minor, including copyright infringement, breach of contract, fraud, violations of the Digital Millennium Copyright Act, or DMCA, and the Washington Consumer Protection Act.

The minor moved to dismiss the complaint, leading to this opinion.

Breach of contract and fraud. The court easily dismissed the breach of contract claim, on the simple ground that the minor disavowed the contract—and under Washington law a minor has the right to do just that. The game developer’s fraud claim, on the other hand, would survive—at least for now. The video game developer pleaded that it relied on the minor’s purported acceptance of the licensing agreement when it had no way of knowing that the party on the other end of the deal was a minor. The minor argued that the video game developer did not reasonably rely on any representation because it either knew that minors would assent to the user agreement or chose to “look the other way” and rely on software that provided access to anyone who agreed to the terms. But that was a question to be addressed “at a later stage of the litigation,” the court noted—not on a motion to dismiss.

Copyright infringement. The court also kept the copyright infringement claim in the case. As to whether the minor’s revisions to the game violated the developer’s exclusive right, that one was easy. The minor’s cheat software “transformed Destiny 2 by manipulating the software to add visual elements overlayed on the original visuals in the game.” That easily qualified as an unauthorized derivative work. More interesting was the question of what role the user agreement played in all of this. To the extent the minor had disavowed the agreement, he could not use it as a defense against the copyright infringement claim. That may well have ended the matter.

But the court went on to address another question: suppose the minor had not disavowed the contract? Would the copyright claim still survive? The question turned on whether the provision of the contract allegedly prohibiting the minor’s conduct—the so-called “anti-cheating clause”—was a covenant or a condition of the contract. If the former, only a breach action would lie, but if a condition, the license would be a nullity and an infringement action would like. The issue was simple here, the court found. The contract terms said: “any use of the Program in violation of the License Limitation will result in an immediate termination of your license.” The language was a condition as a result.

DMCA claim. The court also refused to dismiss the DMCA claim. This one was straightforward. The minor argued that the DMCA applies only to a person who “decrypts, descrambles, or disables” copyright protection, while the minor was accused only of bypassing that protection. But the statute clearly defined the term “circumvention” to including avoiding or bypassing a technical measure, the court noted. This claim would stay in the case.

Washington Consumer Protection Act. But while most of the claims remained in the case, this claim would not. The Act applied only to unfair or deceptive acts “affecting the public interest,” the court noted. “Here, Defendant’s conduct only affects the parties in this matter,” the court reasoned. The claim thus easily failed.

Commentary. The question of whether the anti-cheating provision of the agreement constituted a condition or a covenant may not have been as straightforward as the court suggested. The contract did not expressly say that the license was “conditioned” on the absence of cheating. Moreover, the termination provision arguably only revoked the license on a going-forward basis, as opposed to voiding it ab initio. E.g. Aquamen Entm't, LLC v. Pigmental, LLC, CV 17-58-GW(GJSX), 2017 WL 7806619, at *5 (C.D. Cal. May 8, 2017) (in copyright action, “the words ‘terminate,’ ‘revoke’ and ‘cancel,’ all have the same meaning, namely, the abrogation of so much of the contract as might remain executory at the time notice is given, and must be sharply distinguished from the word ‘rescind,’ which conveys a retroactive effect, meaning to restore the parties to their former position”) (cleaned up); Sun Microsystems, Inc. v. Microsoft Corp., C 97-20884RMWPVT, 2000 WL 33223397, at *4 (N.D. Cal. May 8, 2000) (no copyright infringement action for pre-termination infringement where contract does not contain “any suggestion that the parties intended to allow Sun to claim copyright infringement for a compatibility breach occurring before termination of the TLDA”). That said, the difference here is largely academic as the minor no doubt continued to infringe (taking the facts of the complaint to be true) after the termination of the agreement.

The Case is No. 2:22-cv-00981-RAJ.

Attorneys: Akiva M. Cohen (Kamerman Uncyk Soniker & Klein PC) for Bungie Inc. Philip P. Mann (Mann Law Group PLLC) for L.L.

Companies: Bungie Inc.

Cases: Copyright TechnologyInternet WashingtonNews