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Two Notable Ninth Circuit Orders in December
Last week, the Ninth Circuit Court of Appeals issued two important orders for cases we’ve covered extensively:
(1) in Epic v. Apple, staying the district court’s injunction against Apple pending appeal; and
(2) In Good Job Games v. SayGames, reversing dismissal and remanding to allow for jurisdictional discovery.
Epic v. Apple
On December 8, the Ninth Circuit Court of Appeals granted Apple’s motion to stay, in part, the district court’s September 10, 2021 permanent injunction pending appeal. The Ninth Circuit found that Apple demonstrated “at a minimum, that its appeal raises serious questions on the merits of the district court’s determination that Epic Games, Inc. failed to show Apple’s conduct violated any antitrust laws but did show that the same conduct violated California’s Unfair Competition Law.” In reaching this determination, the Ninth Circuit cited to previous case law that potentially casts doubt on the district court’s judgment:
[U]nder California law [i]f the same conduct is alleged to be both an antitrust violation and an “unfair” business act or practice for the same reason—because it unreasonably restrains competition and harms consumers—the determination that the conduct is not an unreasonable restraint of trade necessarily implies that the conduct is not “unfair” toward consumers.
As a result, the stay of the injunction will remain in place until the appeal is completed. As a reminder, the order had enjoined Apple from prohibiting developers to include in their:
Apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to Apple’s in-app purchase system.
It also enjoined Apple from prohibiting developers from:
Communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.
Developers who were planning on engaging in these behaviors as a result of the earlier order may now want to think twice before executing on those plans.
Good Job Games v. SayGames LLC
Back in 2020, I remarked that “[t]he most aggravating thing that happened this year was diametrically opposing CivPro results in some very similar clone cases,” in reference to:
· Good Job Games Bilism Yazilim Ve Pazarlama A.S. v. SayGames LLC, 458 F. Supp. 3d 1202, 1214 (N.D. Cal. 2020);
· Voodoo SAS v. SayGames LLC, No. 19-CV-07480-BLF, 2020 WL 3791657 (N.D. Cal. July 7, 2020); and
· Wargaming.net Ltd. v. Blitzteam, LLC, Case No.: CV 20-02763-CJC (MRWx) (C.D. Cal. Oct. 20, 2020).
All of these cases involved personal jurisdiction questions and allegations of conduct directed at California. All three cases ended up getting dismissed for lack of personal jurisdiction, but only one – the Wargaming.net case – allowed for jurisdictional discovery. I lamented that “[h]opefully, the court of appeal can clear up the confusion soon.”
On December 10, the Ninth Circuit provided at least some help in this regard. It reversed a district court dismissal and remanded to allow for jurisdictional discovery in the Good Job Games (GJG) case (that we’ve covered before). GJG, which sued SayGames for its allegedly infringing Cannon Shot! game, had alleged that Cannon Shot! was distributed in the U.S. on the Apple App Store and on Google Play, and U.S. citizens received ads on Facebook. In requesting leave to conduct jurisdictional discovery, GJG had sought specific information from SayGames, including:
· the downloads of, revenue derived from, and distribution agreements regarding Cannon Shot! in the United States;
· SayGames’ efforts to advertise, market, license, commercialize, or profit from Cannon Shot! in the United States;
· and SayGames’ ability to engage in country-specific distribution of Cannon Shot!, including the ability to choose distribution in the United States.
Thankfully, the Ninth Circuit recognized that this kind of discovery might well demonstrate facts sufficient to constitute a basis for jurisdiction. It remains to be seen, on remand, whether a basis for jurisdiction will exist, but I am dubious that SayGames didn’t direct its efforts towards the United States and remain cautiously optimistic that GJG will be able to discover and prove this. Practitioners representing developers should keep a close eye on this case going forward.