Vondran Legal® Video Game Law - Software modifications ("mods") can be illegal derivative products under Copyright Law. Call us at (877) 276-5084.
Introduction
The crux of Epic Games' claim in Epic Games, Inc. v. Rogers (2021) is that by injecting modified code into Epic-created software code and Epic servers for their game (Fortnite), you are thereby creating a derivative product and thus infringing on their copyright.
Context on Fortnite
● Over 10M players (at the time)
● The plaintiffs stipulate that they made a conscious decision not to sell items to players such that they would gain a competitive advantage to ensure fairness
● Epic is the author and owner of all rights/titles/copyrights without limitation
General Facts
The defendant, Caleb Rogers (and later his mother, explained later), Epic argues, engages in material alteration and infringement by employing cheats on Fortnite.
Epic further alleges that the defendant streams videos of himself playing and cheating at Fortnite by utilizing this cheating software. Specifically, the defendant is alleged to have “promote[d] and demonstrate[d]” such cheats while also providing viewers “with a link to a site from which they can acquire the cheat for themselves.”
This software used to cheat, Epic argues, infringes the copyright in the game and breaches the terms/agreements that the Defendant agreed to prior to accessing the game. Rogers has previously been banned on Fortnite 14 times, but still persistently creates new accounts to continue to cheat and publicly perform himself cheating on YouTube. This, the plaintiff argues, is an effort to induce others to buy his cheats.
Terms and Services (“The Terms”)
To create an account with Epic games, a user must acknowledge that they've “read and agreed” to the Terms of Service. The Terms specifically delineate that a user “must not copy, modify, create derivative works of… or alter any copyright, trademark, or other proprietary rights notices from copies of materials from [Epic's services]”
"You are permitted to use the Services for your personal, non-commercial use only or legitimate business purposes related to your role as a current or prospective customer of Epic. Except as provided below, you must not copy, modify, create derivative works of, publicly display, publicly perform, republish, or transmit any of the material obtained through the Services, or delete, or alter any copyright, trademark, or other proprietary rights notices from copies of materials from the Services. However, if you are otherwise in compliance with these Terms, you are permitted to use, elsewhere and on other websites, an unaltered copy of portions of the content that is publicly available on the Website for the limited, non-commercial purpose of discussing such content."
The defendant, thus, agreed to be bound by the Terms numerous times (because of the numerous accounts Rogers made). Thus, the contract, plaintiffs argue, is valid and binding.
End-User License Agreement (EULA)
The EULA further asserts that a user cant ““reverse engineer, derive source code from, modify, adapt, translate, decompile, or disassemble it or make derivative works based on it… [or] create, develop, distribute, or use any unauthorized software programs to gain advantage in any online or other game modes.”
The Defendant's Actions
The defendant used a cheat to modify Epic's copyrighted code, which the plaintiff suggested provided him an unfair competitive advantage. The code manipulates the game's functionality, which “create[s] a different version of the Fortnite game than the Fortnite game that is generated by Epic's copyright protected software.”
Furthermore, the defendant operates two YouTube channels (“Sky Orbit” with 8K subscribers and “Sky Orbit V2”). The channels consist of videos and livestreams of Rogers cheating (i.e. one video titled: “FORTNITE HACKING (COME JOIN IM BACK)”). This video displayed Rogers instructing viewers how to use his cheat and provided a link from which that cheat could be acquired.
Rogers admits to hacking Fortnite in a video as well. To circumvent YouTube's removal of a video, Rogers created a second channel. The defendant submitted a counter-notification to the Epic DMCA takedown notice, giving Epic the choice of either dropping the claim or taking the contention to court.
Click here to watch a video about the DMCA takedown and counternotice process.
Claims & Relief
Epic pursued claims of copyright infringement (improper use of computer software to inject code into Fortnite's), contributory copyright infringement (has knowledge of infringement), breach of contract (EULA and Terms violations), and intentional interference with contractual relations (intentionally induced users to cheat despite knowledge of signed agreements).
Epic sought preliminary/permanent injunction and statutory damages.
Procedural posture
*This timeline only captures the most important aspects of the case's progression*
1) Upon submitting the complaint, Caleb Roger's (14 years old) mother submitted an ex-parte letter to the court, essentially rebutting some of the complaint's claims.
2) Epic Games then moved for a motion to default, arguing that the defendant did not respond to their complaint within the proper timeframe.
3) The court denied the motion, construing Roger's mother's letter as a motion to dismiss.
4) Epic Games responded to the construed motion to dismiss, and the court subsequently denied Roger's mother's motion to dismiss.
5) Epic Games, once again, moved for a motion to default, which the court struck down.
6) To move the case beyond the entry of default, the defendant must be represented by some guardian or fiduciary (since he is a minor).
7) Epic Games moved to consider Roger's mom or any other (as the court finds appropriate) as the appropriate guardian in this case. The court agreed. Epic moved to appoint attorney Pamela Chestek as guardian ad litem for the defendant. The court agreed.
8) Both parties enter into a confidential settlement agreement. The court approved it.
Rodger's Mom's Letter
The following letter, submitted by Rodger's Mom, after Epic Games' submission of complaint, was later construed by the court as a motion to dismiss. Claims from the letter include:
● Epic Games can't bind underage users with their EULA agreement. And she did not issue parental consent
● A EULA agreement involves a contract between licensor and purchase. The game is free and as such, there is no purchase of the game
● Epic must prove that Roger's cheating directly caused some mass profit loss
● Variations of the claim that Epic cannot sue a 14 year old
First Motion for Default
Upon the plaintiff's initial motion for default, the court construed the mom's letter as a motion to dismiss. The plaintiff responds and the court denies the mother's motion to dismiss.
Second Motion for Default
*This section concerns the second motion for default, the motion submitted after the court construed and later denied the mom's letter as a motion to dismiss*
- Plaintiff's Motion
Epic Games emphasizes that despite not answering the complaint, the defendant continues to engage in unlawful conduct detailed in the complaint.
● He tells his viewers to go to his backup channel “Sky Orbit” and livestreams further cheating conduct, similar in nature to his previous livestreams
● The defendant has also begun tweeting Fortnite cheats
The plaintiff makes the following claims in this second motion for default:
1) Subject Matter Jurisdiction is Met
Clearly, Epic's federal claims arise from the Copyright Act and EULA/Terms force jurisdiction in this court's district. Additionally, “default judgment may be entered against a minor only if represented by a general guardian . . . who has appeared.” Fed. R. Civ. P. 55(b)(2). This was met via Ms. Rogers (showing herself as the defendant's representatives).
2) Epic's Well-Pleaded Complaint Pleads Each Element of Direct Copyright Infringement in Violation of the Copyright Act and Establishes a Claim of Intentional Interference With Contractual Relations
To not delve into repetitiveness, these factors aren't discussed here. They mirror the facts from the factual background section and are applied across each legal standard.
3) Epic respectfully requests that this Court issue a permanent injunction
Again, repetitiveness is avoided; Epic explains why it suffices the eBay factors.
- The Court's Ruling
The court denied the second motion for default: “there has been no official appearance by anyone on behalf of the minor defendant”.
However, an amended default is submitted.
Guardian Ad Litem
Since the defendant is a minor, they must be represented by “a general guardian, conservator, or other like fiduciary who has appeared.” The plaintiff moves to consider Roger's mother as that guardian, or any other guardian ad litem.
The plaintiff notes that under Federal Rule 17(c), a parent qualifies as the general guardian to act on behalf of a minor, without formal appointment.
Despite Ms. Rogers decision not to answer and condoning of son's unlawfulness, the case law still considers Ms. Rogers as a viable guardian. Additionally, the defendant discussed in a video that his mom “knew it all”, displaying his faith in Ms. Rogers.
Epic Games also notes that guardian ad litem rests with the sound discretion of the district court and will not be disturbed unless there has been an abuse of its authority.” Sam M. ex rel. Elliott v. Carcieri, 608 F. 3d 77, 86 (1st Cir. 2010).
In the end, the court agreed to identify Pamela S. Chestek (Ms. Chestek) as a well-qualified attorney to act as a guardian ad litem for Rogers for the rest of the proceeding.
Settlement
“The parties apparently entered into a confidential settlement agreement and have filed papers to move the Court to enter orders (1) approving the Settlement Agreement and (2) sealing the Settlement Agreement and Order of Approval.”
Other Relevant Cases
Universal City Studios, Inc. v. Corley, 273 F.3d 429 (2d Cir. 2001)
Facts
● “Corley publishes a print magazine and maintains an affiliated web site geared towards "hackers," a digital-era term often applied to those interested in techniques for circumventing protections of computers and computer data from unauthorized access.”
● “In November 1999, Corley posted a copy of the decryption computer program "DeCSS" on his web site… DeCSS is designed to circumvent "CSS," the encryption technology that motion picture studios place on DVDs to prevent the unauthorized viewing and copying of motion pictures.”
Legal Ruling
● While “communication does not lose constitutional protection as "speech" simply because it is expressed in the language of computer code”, Corley's published works is inherently detrimental.
● “... dissemination itself carries very substantial risk of imminent harm because the mechanism is so unusual by which dissemination of means of circumventing access controls to copyrighted works threatens to produce virtually unstoppable infringement of copyright.”
Lewis Galoob Toys, Inc. v. Nintendo of America, Inc. (1992)
Facts
● Game Genie is a video game accessory that allows users to alter the transmitted code between a game cartridge and Nintendo
● The game cartridge is a separate physical attachment in addition to the original Nintendo game
Legal Ruling
● Game Genie, as the court ruled, did not create any new “permanent” work. There is no derivative work of Nintendo's game that the company is creating.
● The work is not “concrete or permanent form”.
● Nintendo also failed to show any economic harm or revenue loss as a result of the company's actions.
Contact Vondran Legal® Video Game and IP Practice
If you are dealing with a contractual or intellectual property related dispute, including circumvention or trafficking claims, fair use, or right of publicity issues, contact us to discuss at (877) 276-5084 or fill out the contact form on the side of this page.
