LitArb
Bungie Triumphs in USD 4.3m Arbitration Case Against AimJunkies
Bungie has secured a win against cheat provider AimJunkies. The game developer was awarded a sum of USD 4.3 million in damages and fees.
Bungie’s Legal Battle
Bungie’s legal battle against AimJunkies has been a topic of discussion in the gaming community for some time. As per reports from TorrentFreak, the arbitration process was conducted privately. Judge Ronald Cox, overseeing the case, ruled in favor of Bungie. The game developer had raised allegations against AimJunkies for violations of the DMCA anti-circumvention provisions, trafficking violations, breach of contract, tortious interference, spoliation, among others.
However, this is just one facet of the legal dispute. Another segment, focusing on copyright infringement, is yet to be resolved and is scheduled for trial later this year.
The Role of Developer James May
A pivotal figure in this legal drama is developer James May. Initially introduced as a manager at AimJunkies’ parent company, Phoenix Digital, it later emerged that May was not an employee of either entity. Instead, he functioned as a third-party developer for the cheat software.
In the verdict, Judge Cox highlighted May’s testimony, where he admitted to using reverse engineering tools on Destiny 2 to create a cheat for the game. Despite being banned by Bungie multiple times, May continually sought ways to bypass these bans and sidestep Bungie’s protective measures against reverse engineering.
Given that May was developing software for Phoenix Digital, the company was deemed responsible for his violations. Judge Cox described these infringements as “malicious.” He further stated, “They are likewise liable for the circumvention by the many users of the cheats sold by Phoenix on the website.”
A Timeline of the Case
Bungie initiated the lawsuit in June 2021, accusing Aimjunkies and associated defendants of creating and distributing cheat software that provides players an undue advantage in Destiny 2 and its expansions. Bungie’s stance is that these cheat codes violate several registered copyrights and trademarks.
In a countermove, Aimjunkies sought to dismiss the lawsuit in January 2022, alleging Bungie’s misuse of the legal system to target cheaters. Aimjunkies argued that Bungie couldn’t demonstrate how the cheat software constituted an unauthorized copy of copyrighted material. They further claimed that Bungie’s complaint was “woefully inadequate” in pinpointing any legal violations by Aimjunkies.
By April 2022, Judge Zilly partially approved Aimjunkies’ motion, directing six of Bungie’s claims to arbitration. He noted that Aimjunkies had consented to address certain issues outside the court when they engaged with Destiny 2. However, Bungie was undeterred and re-filed its lawsuit. AimJunkies responded by seeking another dismissal of the lawsuit, but their request was denied in August 2022.
AimJunkies filed a countersuit in September 2022. However, by November, this too was dismissed. The judge ruled that AimJunkies could not substantiate their claim that Bungie had accessed a personal computer without permission.
In a subsequent ruling in June 2023, the judge upheld an arbitrator’s decision from February 2023, which mandated Aimjunkies.com, Phoenix Digital, and other defendants to compensate Bungie with damages amounting to USD 3,657,500, along with USD 598,641 in attorney fees, USD 101,800 for expert witness fees, and an additional USD 38,281 in miscellaneous expenses.
On 16 October 2023, U.S. District Judge Thomas Zilly made a further series of decisions. He approved parts of a motion for summary judgment from Bungie Inc., specifically in relation to three claims on James May’s Computer Fraud and Abuse Act (CFAA) counter allegations. However, he declined to dismiss a Digital Millennium Copyright Act (DMCA) counterclaim.
The court highlighted that for a claim to be valid under the CFAA, a minimum loss of USD 5,000 is required. While May claimed to have spent thousands on new computer equipment, the court observed that his equipment remained undamaged and functional even after Bungie’s alleged unauthorized access. Judge Zilly stated, “May has not presented evidence sufficient to create a dispute of material fact as to whether he sustained at least USD 5,000 in damage as a result of Bungie’s allegedly improper access.”
Furthermore, a breach of contract counterclaim from defendant Phoenix Digital Group LLC was also dismissed by the judge.
However, when it came to May’s DMCA counterclaim, Judge Zilly refrained from making a decision, citing unresolved factual issues that prevent a summary judgment at this point.
Image source: Bhop on YouTube
Bungie Inc v. Aimjunkies.com (2:21-cv-00811) District Court, W.D. Washington
Counsel to AimJunkies and Associated Parties
- Mann Law Group Pllc
- Philip P Mann
Counsel to Bungie Inc.
- Perkins Coie LLP
- Partner William C Rava, counsel Christian William Marcelo, and associate Jacob P Dini in Seattle
Labor&Immigration
Moist Esports’ Legal Battle with U.S. Immigration over B1-Visas
The esports industry has recently been thrust into a legal spotlight due to Moist Esports’ initiation of a lawsuit against the U.S. Department of Immigration. This action follows a series of visa denials for the Australian contingent of their Apex Legends team, a pivotal challenge given the team’s qualifications and the implications of their participation in critical esports tournaments. This article offers an in-depth analysis of the legal and procedural aspects of the case, referring to foundational visa policies as discussed in our previous coverage on esports and U.S. immigration law.
Table of Contents
Case Background
Charles ‘MoistCr1TiKaL’ White Jr., the founder of Moist Esports, has publicized the organization’s struggles with obtaining U.S. visas for its players. Despite qualifying for a major tournament in Los Angeles, the team faced repeated visa rejections. The U.S. immigration authorities challenged the veracity of the team’s professional status and ranking, leading to initial visa applications being denied. Subsequently, the players were compelled to abandon their team visas and individually apply for B-1 business visitor visas instead of P-1 or O-1 visas, which are typically issued for attending conferences or consulting with business associates. The last-minute approval of these visas allowed the players minimal preparation time for the tournament.
Legal Foundations of the Dispute
The lawsuit is built on allegations of procedural mishaps and the potential misinterpretation of eligibility criteria under U.S. immigration laws concerning professional esports players. As detailed in “An Overview of Esports and United States Immigration Law,” the specific visa requirements and criteria for esports athletes are intricate and often subject to the discretionary powers of immigration officials. The denial of P-1A visas, intended for internationally recognized athletes, to Moist Esports players suggests a significant disconnect between the recognition of esports in legal versus operational realms of immigration policy.
Challenges in Legal Proceedings
The case unfolds under the shadow of sovereign immunity, which may limit the scope of recoverable damages against a government agency, as hinted by MoistCr1TiKaL’s commentary on constitutional constraints. The discretionary nature of visa issuance, particularly under the P-1A category, often leaves substantial room for subjective decision-making by immigration officers. This aspect makes legal challenges arduous and sets a high bar for proving any claims of improper handling or bias in visa processing.
Economic Impact and Organizational Disruption
The visa denials and subsequent legal battles have wrought considerable financial strain on Moist Esports. The inability to compete under the organization’s banner not only resulted in direct financial losses but also diminished potential sponsorship and earnings from the tournament. These disruptions underline the significant stakes that immigration decisions hold over esports organizations, which operate in a rapidly globalizing competitive field.
Concluding Observations
This lawsuit may serve as a critical juncture for the recognition and handling of esports professionals within U.S. immigration frameworks. It challenges the consistency of the application of immigration laws to esports athletes, a relatively new area where traditional sports and modern digital competitions intersect. Whether or not Moist Esports succeeds in its legal claims, the outcome will likely influence future policy considerations and the operational practices of immigration authorities dealing with similar cases.
Image source: VisaService.de
Labor&Immigration
Tribunal Judiciaire de Paris: Rethinking the Esports Employment Contract
The Paris Tribunal Judiciaire issued a landmark ruling on 27 March 2024, that has significant implications for the contractual relationships within esports. This decision, which reclassified an esports player’s service contract as an employment contract, marks a pivotal shift in how employment relationships are perceived and regulated in the rapidly growing esports sector. The ruling not only emphasizes the need for a clearer understanding of employment laws in new-age digital and entertainment industries but also potentially sets a precedent for future contractual disputes in esports across jurisdictions.
Table of Contents
Statement of Facts
The case, TJ Paris, ps ctx protection soc. 3, 27 mars 2024, n° 22/02668, involved an esports player who had entered into a contractual agreement with an American esports club to participate in Counter-Strike competitions from 2016 to 2017. The employment contract in question was titled a “self-employed worker contract,” under which the player was ostensibly hired as an independent contractor. This classification has significant legal and financial implications, primarily regarding tax and social security liabilities.
The French URSSAF Caisse Nationale, responsible for the collection of social security and family benefit contributions, challenged the contractual classification. URSSAF initiated a recovery action claiming that the income derived by the player under this contract should be subject to contributions as “non-commercial profits,” according to Article L131-6 of the French Social Security Act. The agency’s position was that the player’s engagement bore all the hallmarks of traditional employment rather than those of an independent contractor.
The player contested URSSAF’s assessment, arguing that despite the contractual designation as a self-employed worker, the actual terms and conditions of his engagement demonstrated a dependency and subordination typical of an employment relationship. This challenge led to judicial scrutiny of the nature of the contractual relationship between the player and the esports club.
Legal Framework and Tribunal’s Analysis of the Employment Contract
The tribunal’s analysis centered on distinguishing between self-employed status and employment based on the degree of subordination to the employer, as characterized by French labor law. Article L.8221-6-1 of the French Labour Code defines independent contractors as follows:
“is presumed to be an independent contractor, any individual whose working conditions are defined exclusively by himself or in a contract, in conjunction with his customer”.
The French Labour Code stipulates that individuals registered as self-employed service providers are generally assumed not to have an employment contract with their clients while carrying out their activities. Nevertheless, this assumption can be challenged. The same legal provision notes that an employment contract may still be recognized if the registered individual delivers services in circumstances that create a continuous subordinate relationship with the client.
The judges meticulously reviewed the contractual obligations and daily activities imposed by the esports club on the player, which included:
- Mandatory participation in specific competitions as directed by the club.
- A set schedule for training and streaming that the player was required to follow.
- Requirements to wear the club’s uniform during official events and partake in promotional activities.
These conditions, alongside regular monthly payments and the provision of accommodations and travel arrangements by the club, clearly illustrated an employer-employee relationship, as the club exerted substantial control over the player’s professional activities.
Analysis of the Tribunal’s Ruling
The judges’ assessment focused on various aspects of the player’s contract and daily work engagements that pointed toward an employment relationship. The following elements were particularly influential in the tribunal’s decision:
- Subordination and Control: The club required the player to participate in specific competitions, adhere to a strict training schedule of 15 hours per week, and engage in a minimum of 20 hours of streaming per month. Such requirements are indicative of an employer’s control over the employee’s work activities.
- Contractual Obligations: The contract stipulated that the player wear the team uniform during competitions and participate in marketing activities dictated by the club. These obligations demonstrate the club’s control over the player’s professional image and public engagements, further evidencing an employment relationship.
- Economic Dependency: The regular payment between EUR 4,000 and EUR 5,000, alongside provisions for accommodation and travel for competitions, indicated an economic dependency typical of an employment relationship rather than freelance or self-employed arrangements.
- Termination Conditions: The contract allowed the club to terminate the agreement if the player failed to meet the set obligations or was unable to provide services for at least 30 consecutive days. This level of control and the potential for penalization align with the characteristics of an employee-employer relationship.
Implications of the Ruling
For Esports Clubs: The reclassification of service contracts to employment contracts suggests that esports clubs need to meticulously review and possibly revise their contractual practices. Clubs may face increased financial liabilities due to obligations to pay social security contributions and potential penalties for previously undeclared work, as outlined in articles L8223-1 and L8211-1 of the French Labour Code. This ruling may compel clubs to establish clearer, more structured employment agreements, potentially increasing operational costs but providing more stability and clarity for both parties involved.
For Players: Esports players may find this ruling beneficial as it provides a clearer path to securing employment benefits, including social security, health insurance, and guaranteed wages. This could also empower players to challenge unfavorable contractual terms and seek reclassification as employees to gain the protections and benefits that employment status confers.
For the Esports Industry: The decision may prompt a broader reevaluation of how esports professionals are classified across the industry. It challenges the current contractual norms and may lead to more standardized employment practices. While this could increase costs for esports organizations, it also has the potential to professionalize the industry further, attracting more stable investments and improving the overall working conditions for players.
Conclusion
The Paris Tribunal Judiciaire’s decision of 27 March 2024 is a very important one for the esports industry. As the sector continues to grow and professionalize, the legal definitions and frameworks that govern these professional relationships will be crucial. Esports organizations and players must take these changes carefully into account, balancing competitive interests with legal compliance and fair labor practices.
Via: Victoire-Avocats
Gambling
Alleged Video Games Addiction Leads to Lawsuit (Updated)
In a developing legal battle reminiscent of the Colvin et al v. Roblox Corporation et al case that challenged Roblox’s alleged facilitation of illegal gambling with minors, a new lawsuit has been filed in Missouri against major players in the video game industry alleging video games addiction.
Table of Contents
This lawsuit, just like Casey Dunn et al. v. Activision Blizzard et al., on which ELN reported before, accuses companies, including Epic Games, Mojang Studios, and Roblox, of designing games that create an excessive video games addiction in children, leading to serious detrimental effects on their physical, social, and mental health.
Context and Background of the Case
In a legal filing that marks a significant escalation in the scrutiny of video game companies’ practices, a lawsuit has been filed in the U.S. District Court for the Western District of Missouri, Central Division. The case, bearing the number 2:24-cv-4055, has been initiated by Carey Courtwright, representing her minor child K.C. This legal action addresses serious concerns about the design and operation of video games that allegedly lead to addiction among young players. K.C., who began engaging with video games at the tender age of six, is presented as a victim of these manipulative gaming practices.
Defendants in the Lawsuit
The defendants listed in this lawsuit are some of the most prominent names in the gaming industry:
- Epic Games, known for Fortnite
- Mojang Studios, the creators of Minecraft
- Meta Platforms, the conglomerate formerly known as Facebook
- Roblox Corporation
These companies are accused of creating and maintaining gaming environments that exploit psychological vulnerabilities in children.
Detailed Allegations of Video Games Addiction Triggers
The lawsuit articulates specific tactics employed by the defendants which are purportedly designed to foster addiction:
- Reward Systems and Feedback Loops: Games are structured to release dopamine in response to achievements within the game, perpetuating a cycle of engagement that can lead to excessive and unhealthy gaming habits.
- Limited Transparency and Predatory Monetization: The true costs of in-game transactions are often concealed or minimized, exploiting cognitive biases and leading players, particularly young ones, to spend money without a full appreciation of the cumulative costs.
- Fear of Missing Out (FOMO): By introducing time-limited events and exclusive in-game items, the games tap into a player’s fear of missing out, which can compel continuous or increased expenditure to remain competitive or included in gaming communities.
- Targeting of ‘Whales’: These companies strategically identify and exploit major spenders within their games — often referred to as “whales” — by encouraging them to spend large amounts of money through tailored incentives.
- Lack of Parental Controls: The complaint criticizes the insufficient mechanisms provided to parents to monitor and control their children’s gaming activity effectively, which exacerbates the problem of unregulated access and expenditure.
Human Costs and Plaintiff’s Burden
The complaint vividly describes the adverse effects on K.C.’s life due to the alleged gaming addiction. These include a noticeable decline in academic performance, social withdrawal from peers and activities, and the development of physical symptoms such as pain in the hands, eyes, and back, as well as disrupted eating patterns. Moreover, K.C. has reportedly suffered from mental health issues, including depression and anxiety, which were intensified by the inability to disengage from gaming. The plaintiff, Carey Courtwright, shares the emotional and financial burden inflicted by this ordeal, emphasizing the considerable expenses accrued through medical treatments and in-game spending by K.C.
Legal and Industry Implications
This lawsuit is part of an emerging trend where legal actions are increasingly highlighting the potential negative impacts of video games on minors. Similar to the issues raised in Colvin et al v. Roblox Corporation et al, this case underscores the urgent need for the industry to adopt more ethical practices in game design and marketing. The outcome of such lawsuits could potentially lead to stricter regulations and standards governing game development and marketing, particularly regarding the mechanisms that promote prolonged engagement and spending in games.
Entertainment Software Association’s Statement (Update)
Having read our article, the Entertainment Software Association (ESA) has provided a statement that offers a broader industry perspective. The ESA, a trade association that represents the U.S. video game industry and includes several of the defendants in the lawsuit as its members, has articulated its stance on the issues central to the lawsuit.
The ESA emphasized its commitment to player safety and digital wellness, stating:
“Video games are among the most dynamic, widely enjoyed forms of entertainment in the world. We prioritize creating positive experiences for the entire player community and provide easy-to-use tools for players, parents, and caregivers to manage numerous aspects of gameplay.”
Moreover, the ESA addressed the claims made in the lawsuit directly, noting:
“Claims that say otherwise are not rooted in fact and ignore the reality that billions of people globally, of all ages and backgrounds, play video games in a healthy, balanced way.”
This statement underscores the ESA’s viewpoint that while the lawsuit raises important concerns about player safety and addiction, the claims do not necessarily reflect the broader reality of gaming as an activity enjoyed healthily by a vast global audience.
Conclusion
This lawsuit could set important precedents regarding the accountability of video game developers and platforms in safeguarding the well-being of their youngest and most vulnerable users. The broader implications for the industry could include a reevaluation of game design ethics, the introduction of more stringent parental controls, and a more transparent communication regarding the costs associated with in-game content. The video game industry may need to balance commercial interests with a heightened responsibility towards its user base, especially children, in light of growing legal scrutiny.
Image source: DallE3
Carey Courtwright, individually and on behalf of K.C., a Minor v. Epic Games et al
Court: United States District Court for the Western District of Missouri, Central Division
Case No.: 2:24-cv-4055
Defendants
- Epic Games
- Counsel not listed
- Mojang Studios
- Counsel not listed
- Meta Platforms
- Counsel not listed
- Roblox Corporation
- Counsel not listed
Plaintiff
- Carey Courtwright (Individually and on behalf of her minor child, K.C.)
- Counsel to Carey Courtwright:
- Tyler W. Hudson, Eric D. Barton, and Melody R. Dickson of Wagstaff & Cartmell LLP
- Breean “BW” Walas, Tina Bullock, and Danielle Ward Mason of Bullock Ward Mason LLC
- Charles M. Stam of Thompson Stam PLLC
- Counsel to Carey Courtwright: