On 29 January 2020, Falk J awarded summary judgment for the claimants in Take-Two v James, only the second case in which the High Court has tackled the widespread issue of the supply of cheats for online video games. The judgment is notable for being the first High Court decision that deals with the liability issues for such a claim, and whilst only in relation to a summary judgment application, it is undoubtedly a step in the right direction for the protection of the interests of video game developers, publishers and also (fair) players in the UK.

Introduction

The claimants, Take-Two Interactive Software Inc and Rockstar Games Inc, are the publishers and developers of Grand Theft Auto V (“GTAV”), which is one of the best-selling video games of all time.[i]

The defendants are software developers that collectively developed and sold cheat software, Epsilon, for use with GTAV.  Epsilon is a type of cheat software known as a “mod menu” described by Mrs Justice Falk as “software programs which alter the operation of a game while it is being played so as to enable players to gain various advantages in gameplay, such as “spawning” copies of weapons, vehicles or ammunition, generating “spoofed” virtual currency for use in the game, and interfering with other players’ gameplay experience”.

The Claim

The claim related to the development, distribution and sale of Epsilon based on three causes of action: breach of contract; inducing breach of contract; and copyright infringement, each considered in turn below.  The claimants stated that Epsilon impacted on and infringed the single player version of the game, but in terms of commercial impact, it most seriously harmed the gameplay experience for players of the online multi-player version of GTAV by giving the cheating players unfair advantages compared to non-cheating players.

The claimants applied for summary judgment on the basis that there was no real prospect of the defendants successfully defending the claim and no other compelling reason why the case should go to trial.  The first three defendants settled by consent, but the fourth and fifth defendants, whilst admitting being involved in the development of Epsilon, denied liability.

Breach of Contract

The claimants alleged that the fourth and fifth defendants breached various terms of their end user licence agreement, terms of service and online code of conduct. All players of GTAV must agree to these terms in order to install and play the game.

Interestingly, the fourth and fifth defendants did not dispute that they had entered into a contract with the claimants.  It is not clear from the judgment whether the claimants were able to prove that the defendants had purchased and played the game and therefore that they had entered into a binding contract with the claimants, or whether the defendants simply admitted to this.  Later in the judgment, Falk J notes that the defendants explained that they obtained the means to produce Epsilon by downloading information from other sites, including the source code, but it was not asserted that the defendants necessarily required the game itself in order to develop the cheat.

In any event, once the defendants had admitted to entering into a contract with the claimants, the basis for the claim for breach of contract was considered to be fairly clear. The GTAV ‘Licence Conditions’ specifically prohibit both cheating and the provision of instructions or guidance to others on how to cheat. The clear purpose of Epsilon was to enable cheating and this was not denied by either of the defendants. Therefore, Falk J concluded that the breach of contract claim was made out.

Inducing Breach of Contract

Secondly, the claimants alleged that the fourth and fifth defendants knowingly induced users of Epsilon to breach their contracts with the claimants.  Referring to the test set out in OBG Ltd v Allan,[ii] Falk J found that the four ingredients of the tort were established.

• There was a breach of contract by the user. By utilising the Epsilon software, players of GTAV were acting in breach of contract, as described above.
• The breach was caused by persuasion, procurement or inducement by the defendants. In this case the defendants marketed and supplied Epsilon for the express purpose of encouraging and enabling users to cheat and thus breach their contracts with the claimants.
• The defendants must have knowledge that what they were doing was inducing breach of contract. Falk J noted that it was not necessary for the defendants to have precise knowledge of the contract. Awareness of the contract’s existence and a deliberate choice not to enquire into its terms would be sufficient. This was evident from the defendants’ admission of the existence of the contract and their awareness that players were being banned from playing GTAV for cheating.
• Finally, the defendants must intend to procure a breach of contract. Once again, it is sufficient for the defendants to have knowledge of the existence of the contract and to turn a blind eye to the consequences of their actions.

Falk J noted that damage must be suffered for the tort to be actionable and was satisfied that it had been based on the witness evidence adduced by the claimants.

Copyright Infringement

Finally, the claimants alleged copyright infringement by the defendants under three heads of claim.

a. The claimants claimed that, contrary to s. 16(1)(a) of the Copyright, Designs and Patents Act 1988 (“CDPA”), the fourth and fifth defendants copied parts of GTAV’s executable file and libraries, at least during the development of the Epsilon mod menu.

The defendants’ defence to this was that the copies made by Epsilon were not of a lasting nature, nor caused any permanent or lasting change to the game itself on the user’s hard drive.  Instead, Epsilon makes changes to the game in operation i.e. the running program by allowing, for example, a user to access weapons or objects that a player ordinarily would not be able to access. This is done by taking the relevant weapon or object information from GTAV’s libraries/database and reproducing this information in the user’s particular game instance.  Falk J considered that this defence was unlikely to succeed because s. 17(6) CDPA expressly provides for making copies that are “transient” in nature, and noted that the reproduction of the information as described above “clearly involves copying”.  However, Falk J did not conclusively find that the defendants had directly infringed copyright on this basis.

b. The claimants claimed that, contrary to s. 16(2) CDPA, the fourth and fifth defendants authorised copyright infringement by its users.

As a preliminary but essential point, Falk J thought it clear that gamers using the Epsilon cheat software were infringing the claimants’ copyright through at least some element of copying the software and in-game assets.  In determining whether such infringement had been authorised by the defendants, Falk J referred to the principles of authorisation “by supply”[iii] which can be either express or implied. Factors that will determine an implied authorisation by supply include: the relationship between the authoriser and primary infringer, whether the equipment supplied constituted the means to infringe copyright and whether such equipment inevitably will be used to infringe, the degree of control which the supplier retains, and whether the supplier has taken steps to prevent infringement.

In this case, it was not disputed that the defendants had supplied Epsilon, being the means to infringe. Nor was it disputed that the defendants had an ongoing relationship with Epsilon users through the provision of updates, instructions and assistance in using the cheat, that they had a high degree of control over the features and functionality of Epsilon, and that the intended use of Epsilon would inevitably result in players infringing the claimants’ copyright.

The defendants attempted to assert various defences, including reliance on a disclaimer of liability to Epsilon users in relation to their online play, that they obtained the means to produce the software by downloading information from other public cheating sites, and a ‘decompilation for the purposes of interoperability’ defence under s. 50B CDPA.  However, Falk J was not persuaded that any of these defences had a realistic prospect of success.

c. Finally, the claimants alleged that the Epsilon software provided the means to circumvent technological protection measures that had been incorporated into the GTAV computer program to protect it against unauthorised tampering and hacking, i.e. anti-cheating software.  Under s. 296 CDPA the claimants claimed that this was “to be treated as akin to copyright infringement”.

This point was not determined, partly because it was not necessary to do so in order for Falk J to award summary judgment, on the basis of the other copyright infringement heads of claim, and also because the defendants’ evidence appeared to support their case that Epsilon did not in fact circumvent the GTAV anti-cheating software.

Summary Judgment

Falk J was satisfied to summary judgment standard that the claims for breach of contract, inducing breach of contract, and authorising copyright infringement were made out.   The defendants had no real prospect of defending the claims made, and there were no other compelling reasons for the case to proceed to a full trial of liability.

Comment

The first High Court case to consider the legitimacy of the provision of cheats, Blizzard v Bossland,[iv] did not proceed to a liability trial or hearing, instead the defendants accepted liability for authorising copyright infringement and inducing breach of contract.  In this second take, the High Court was given opportunity to provide some guidance on the application of these causes of action against video game cheat developers.  Although only in relation to a summary judgment application and with the defendants representing themselves, the court nevertheless determined that the facts were sufficiently clear to make a summary judgment determination and Falk J found firmly in favour of the claimant publishers and developers of GTAV.

In contrast to the Blizzard case, the defendants admitted entering into a contract with the claimants which allowed for a direct breach of contract claim to succeed.  In any event, Falk J was persuaded by the claim that the defendants were inducing players to breach their contracts with the claimants, which may be a more widely useful determination for other video game developers/publishers.

In Blizzard, the primary copyright infringement claim was that the defendants had authorised players to breach the limited licences that they had entered into with the claimants on purchase and play of the games.  In Take-Two, the claim for copyright infringement focused on the defendants authorisation of players to copy the computer program and in-game items through the use of Epsilon.  Falk J also considered the claimants claim that the defendants had directly infringed copyright in the development of Epsilon, noting that even transient copying could amount to an infringement and that this process may also amount to adaptation of a copyright work for the purpose of s. 21 CDPA.  Presumably, Falk J did not draw a conclusion on either of these points due to a lack of evidence before her to determine them to summary judgment standard.

While this case leaves a number of questions unanswered and could not deal with all of the issues at play in great detail, it nevertheless represents a big step for the UK as a forum that protects video game developers and publishers from suppliers of cheats and bots.  The Take-Two decision should provide some security to video games companies contemplating commencing action in the UK, and both the Blizzard and Take-Two cases provide the legal framework, based in contract and copyright, for such claims to be brought.

[i]  The judgment describes it as the best-selling video game of all time; this is perhaps not technically true, but GTAV certainly sits in the top three alongside Minecraft and Tetris, which have all sold over 100 million copies.

[ii]  [2008] 1 AC 1

[iii] Twentieth Century Fox Film Corp v Newzbin Ltd  [2010] EWHC 608 (Ch) per Kitchin J at [85] to [90]. 

[iv] Blizzard Entertainment SAS v Bossland GmbH  [2019] EWHC 1665 (Ch)

You can read about the Blizzard case in a previous article of ours, here.