Epic Games, Inc. v. Mendes
| Decision Date | 12 June 2018 |
| Docket Number | Case No. 17-cv-06223-LB |
| Parties | EPIC GAMES, INC., et al., Plaintiffs, v. JAMES MENDES, et al., Defendants. |
| Court | U.S. District Court — Northern District of California |
Plaintiffs Epic Games, Inc. and Epic Games International S.à.r.l. (collectively, "Epic") are the authors of Fortnite, a multiplayer survival-and-building action video game. Epic alleges that the defendants — James Mendes, Konstantin Vladimirovich Rak, and Oleksey Olekseevich Stegailo — created software "cheats" that allow players to modify Fortnite to give themselves unfair competitive advantages over other players, thereby undermining the integrity of Fortnite and ruining the game-play experience for players who play without cheats. Epic brought claims for (1) copyright infringement, 17 U.S.C. § 501 et seq., (2) contributory copyright infringement, 17 U.S.C. § 501 et seq., (3) trademark infringement, 15 U.S.C. § 1114, (4) false designation of origin, 15 U.S.C. § 1125(a), (5) breach of contract, and (6) violations of the California Unfair Competition law, California Business and Professional Code § 17200 et seq.
At issue is Epic's motion for default judgment against Mr. Rak. On January 29, 2018, the undersigned granted Epic leave to serve Mr. Rak with the summons and complaint by email. Epic Games, Inc v. Mendes, No. 17-cv-06223-LB, 2018 WL 582411 (N.D. Cal. Jan. 29, 2018) (Epic I).1 On February 14, 2018, Epic served Mr. Rak with the summons and complaint at his email addresses konstantin.rak1@gmail.com and rak13@spaces.ru.2 Mr. Rak has not appeared in this action and has not filed a respond to the complaint.3 After the Clerk of Court entered default,4 Epic moved for default judgment against Mr. Rak on its direct-copyright-infringement, trademark-infringement, and false-designation-of-origin claims.5
Epic does not ask for any money damages from Mr. Rak. Instead, it limits its claim for relief to a permanent injunction barring Mr. Rak from using Epic's copyrighted works or trademark in connection with the advertising, demonstration, or distribution of any video, or sale of any goods or services, and/or developing or distributing any item that modifies Epic's protected computer code.
The undersigned is inclined to recommend that Epic's motion for default judgment be denied, primarily due to questions regarding the merits of Epic's claims and the sufficiency of its complaint.6 Before making a recommendation, however, the undersigned grants Epic the opportunity to amend its complaint, file a new motion for default judgment that addresses the deficiencies identified below, or both. If Epic submits any new filings, it must serve on Mr. Rak certified Russian translations of its filings (along with the native English versions) and write acover letter or email to Mr. Rak in both English and Russian, and must file both the English versions and the certified Russian translations on the docket. To allow Epic time both to prepare its filings and to obtain translations, the undersigned grants Epic 30 days from the date to file an amended complaint or to file a new motion for default judgment if it does not amend its complaint. (If it amends its complaint, it must obtain a new entry of default before it can file a new motion for default judgment.) If Epic does not file an amended complaint or a new motion for default judgment within that timeframe, the undersigned will direct the Clerk of Court to reassign this case to a district judge and will recommend that the newly assigned judge deny Epic's motion for default judgment.
Founded in 1991, Epic Games, Inc. is a leading video game developer for PC, console, and mobile platforms.8 Epic is the author of Fortnite, a multiplayer survival-and-building action video game where players explore, scavenge gear, build fortified structures, and fight waves of monsters who want to kill the player and her friends.9 Fortnite is an extremely popular game with over ten million players.10
Epic Games, Inc. is the author and owner of all copyrights in Fortnite, including but not limited to its maps, items, characters, user interface, and software.11 Epic owns copyrights in Fortnite, including U.S. Copyright Registration Nos. TXu 1-895-864, TX 8-186-254, TX 8-254-659, and TX 8-352-178.12
Epic began using the FORTNITE mark in commerce at least as early as October 11, 2013.13 Since its first use, Epic has continually used the FORTNITE mark in connection with video-game software.14 Epic has invested substantial resources in marketing, advertising, and distributing video games under the FORTNITE mark.15 Fortnite — the video game bearing the FORTNITE mark — has more than ten million players.16 Epic has attained substantial goodwill and strong recognition in the FORTNITE mark, and that mark has come to be associated with Epic.17 Epic owns United States Patent and Trademark Office ("USPTO") Registration No. 4,481,629 for the FORTNITE mark.18 Epic also has a pending application for FORTNITE, USPTO Serial No. 87,484,706, for use in association with "[e]ntertainment services, namely, providing on-line computer games."19
To use or access Epic's websites, services, products, or content, a user must agree to Epic's Terms of Service ("Terms").20 The Terms provide that "[t]he Services, including all content, features, and functionality thereof, are owned by Epic, its licensors, or other providers of such material and are protected by United States and international copyright . . . laws."21 Additionally, the Terms state that users 22 Under the Terms, users "must not reproduce, sell, or exploit for any commercial purposes any part of the Services, access to the Services or use of the Services or any services or materials available through the Services."23 Moreover, users 24 Mr. Rak had an account with Epic and agreed to be bound by the Terms by registering that account and by using Epic's services.25
To use or play Fortnite, a user must affirmatively accept the Fortnite End User License Agreement ("EULA").26 The EULA grants users "a personal, non-exclusive, non-transferable, non-sublicensable limited right and license to install and use one copy of the Software on a device for . . . personal entertainment use."27 Under the EULA, Fortnite users may not, among other things, "use it commercially or for a promotional purpose," "copy, reproduce, distribute, display, or use it in a way that is not expressly authorized in this Agreement," "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."28 Mr. Rak agreed to abide by the EULA by downloading and accessing Fortnite.29
Fortnite was first released in or about October 2013.30 Epic publicly released Fortnite's free-to-play "Battle Royale" game mode on or about September 26, 2017.31 In Fortnite's Battle Royale game mode, players drop into an environment via a glider from a flying battle bus and engage in intense player-versus-player combat until only one player remains standing.32
Cheats modify games to give a user an unfair competitive advantage over other players.33 Cheats give a cheater the power to do or see things that other players cannot do or see.34 For example, a cheat may enable the user to see through solid objects, teleport, impersonate another player by "spoofing" that player's user name, or make moves other players cannot, such as a spin followed by an instant headshot to another player.35
Epic does not allow or support cheats in Fortnite, including in the Battle Royale game mode.36 Players who use cheats ruin the game play experience for those who play without cheats and undermine the integrity of Fortnite.37
Mr. Rak downloaded and accessed Fortnite.38 Mr. Rak created, developed, and/or wrote a software cheat for Fortnite's Battle Royale game mode.39 Mr. Rak created and posted a video onYouTube to advertise, demonstrate, and distribute his cheat.40 The video features Epic's FORTNITE mark.41
To use Mr. Rak's cheat, users must download the cheat and then "inject" the cheat computer code into the copyrighted Fortnite code.42 Once the cheat is injected into Fortnite, the cheat modifies the copyright-protected game code, altering the game and the experience of those who play it.43 The game, after being altered by Mr. Rak's cheat, also contains the FORTNITE mark.44 Epic has not authorized Mr. Rak to use Epic's FORTNITE mark or copyrighted work in this manner.45
In or about October 2017, Mr. Rak posted a video along with a post on YouTube that was available at http://www.youtube.com/watch?v=9gcP1eElxsU ("Rak Video") that demonstrated and provided a link to download his cheat.46 The Rak Video and associated post contained instructions on how to download and install the cheat and showed full-screen gameplay using the cheat.47...
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