Judge rules on motion to dismiss in Crytek v Cloud Imperium Games case - Sensationalist Headlines

https://www.docdroid.net/K7ugdJo/crytek-gmbh-v-cloud-imperium-games-corp-et-al-cacdce-17-08937-00380.pdf The only source I have is the direct upload of the ruling because the one news-y website I found talking about this links to Derek Smart as an informative source. A quick summary for those who aren't familiar: - In December of last year, Crytek sued Star Citizen developers Cloud Imperium Games (CIG) for alleged breach of contract from their switch from CryEngine to Lumberyard and a few related things - The claims Crytek has made are as follows: CIG signed a contract stating they would exclusively use CryEngine and no other engine to develop Star Citizen; by switching to Lumberyard they breached the contract The contract also states CIG was licensed to produce one game, but the single-player Squadron 42 has started being sold as a separate, standalone purchase and therefore constitutes an unauthorized second game being built, so that's another breach The contract also states CIG had a responsibility to display Crytek's trademarks and logos on their product, which they removed when they switched to Lumberyard, so there's another breach CIG's contract with Crytek included CIG sending bugfixes and technology developments upstream to Crytek; Crytek claims this tech sharing never happened and it's another breach CIG exposed Crytek trade secrets by showing proprietary engine code in Bugsmashers! video segments (in which a coder walks the viewer through how the devs fixed a recent bug) and also working with partner studios Co-founder Ortwin Freyermuth has a conflict of interest in the contract and should not have been involved in its drafting - Crytek included in its lawsuit notice to the court that it intends to seek every form of damages (statutory, punitive, etc.) available and may request a permanent injunction against the project - CIG replied with "nuh uh" and a motion to dismiss, calling Crytek's claims BS and specifically getting upset at the shittalk about Freyermuth because they have an explicit signed piece of paper from Crytek agreeing to let him be involved. Fast-forward to now, and the judge has finally ruled on CIG's motion to dismiss, with mixed results. Note that at this stage of the lawsuit, the judge is not determining or hearing arguments regarding the factual validity of claims. What is being considered is the raw legal justification for each claim and each defensive response; anything that is legally sustainable continues on in the case to be argued later, but anything that is legally indefensible gets killed off now and the court can ignore it going forward. TL;DR the judge: - upheld Crytek's claims regarding Squadron 42, the removal of Crytek's logos, the technology sharing, and the shit involving Ortwin - threw out Crytek's claim that CIG was required to use CryEngine and only CryEngine because of Crytek's completely backwards interpretation of the words "exclusively grant" - ruled that Crytek is entitled to pursue CIG for statutory damages, amounting to the original contract value of $2 million, along with monetary damages, injunctive relief, and legal fees - ruled that Crytek cannot pursue CIG for punitive damages, as those are expressly forbidden by California contract law and the Copyright Act, which severely limits CIG's exposure - gave Crytek 21 days to amend the complaint or signal they don't intend to, and then gave CIG 21 days to respond after they receive Crytek's response before the judge moves things forward So CIG's probably going to spend all Winter and next Spring complying with discovery.

Crytek requiring CIG to use cryengine was the meat of their lawsuit though wasn't it? Their isn't really much to go on now

It's absurd how at the time this was all first revealed, people were defending Crytek and saying their interpretation of the word "exclusively" in that context were right despite people explaining that wasn't what it meant. To me, that this seems to suggest either Crytek were disingenuous with their 'interpretation' of the word here, or incompetant and somehow actually signed a contract without knowing what it meant.

Squadron 42 being treated as something other than a sub-feature of the singular game the CryEngine license was for is their big tentpole now imo. There's also the technology sharing (or failure to do so) and and logo display that probably will go Crytek's way. It's unlikely that Crytek will be able to actually convince the court to issue any injunctions, temporary or permanent, against the devs, other than an injunction against using CryEngine (and CIG is using Lumberyard now so ...ok?), but the court has decided CIG has not given an acceptable legal justification to stop them from trying. The big loss for Crytek here is the court affirming California/federal law and denying Crytek's claim to punitive relief, which can be decided by the jury and could've reached tens of millions. Crytek can only recover from CIG their actual losses. The contract was for $2 million, and that plus legal fees isn't going to make that big of a dent in the project's wallet. The only hail mary they have here is that they claim that they offered CIG a substantially discounted licensing rate in exchange for promotional consideration -- having their logos be displayed on the game. The jury could possibly be allowed to assign a dollar value to this lost promotion, which Crytek is contesting by way of claiming CIG was legally required to display their logos and trademarks and is on-paper a clear win on Crytek's part. So, CIG is probably going to lose to Crytek (in my layman's opinion), but they've limited how badly they can lose. Unless they've got some great ideas/evidence to defend against Crytek's actual arguments once proving things true or false matters, CIG would probably be better off offering to settle out of court for like $4 mil plus legal fees, and that'll save them the incredibly inconvenient and expensive process of discovery on all their shit. However, I suspect Crytek would demand at least $10mil if they go for a settlement instead of a court win, but it's also been my opinion the whole time that this was a shakedown from a desperate dying company so that's my bias talking. To play devil's advocate in Crytek's defense, when the news was first revealed, it was at the first stage: Crytek serves CIG with a complaint to initiate the lawsuit. When you file a complaint, you throw everything you want to fight over into the complaint and see what sticks to the wall. The "Exclusively" bit didn't stick, and as preposterous as their claim was, they still had to try.

While I agree the majority of their claims were pretty obviously just a cash grab the technology sharing part caught my attention, it seemed like the only legitimate case they had against them so im not terribly surprised it wasn't dismissed. I like CiG but in that case, they really are at fault.

How are they at fault? Crytek's complaint was about a company called "Faceware" being involved with the game from what i remember...but that was done after the switch to Lumberyard.

It's not very strong but CIG did not give a sufficient reason to procedurally (heh) blow it out of court preemptively. Crytek has what I feel is a weak case, but they're being allowed to argue it. Also when I'm referring to Crytek's claims of tech sharing, I'm talking about the GLA obligation to send patches upstream to Crytek. The allegations that CIG improperly shared proprietary Crytek materials with their Faceware partner is a joke that depends on Lumberyard being considered Crytek's property which is LMAO Their arguments are going to have to carefully tiptoe around any claim that appears to assert that CIG is "still" using CryEngine in the form of Lumberyard. It's true from a tech evolution standpoint, as CE is what Ly was forked off of, but legally it's something Crytek lawfully licensed away to Amazon in full. I don't think they want to piss Amazon off.

From what I remembet CiG agreed that as part of their use and modification of the cryengine they would be sharing any of those modifications/improvements with crytek which apparently CiG never did. Its a bit of an odd thing to agree to but if they signed it then I don't really see a way around it