Ark: Survival Evolved and Mythic Empires Copyright Dispute
Big Picture
Last week, I gave an “Exploring the Metaverse: a Legal Primer” talk to the Los Angeles Copyright Society in which I discussed some of the early Second Life cases. One of those cases involved a plaintiff’s attempt to obtain a temporary restraining order (TRO) from a district court forcing the defendant to withdraw DMCA take-down notices that the defendant had sent to the game publisher (Linden Lab). Amaretto Ranch Breedables, LLC v. Ozimals, Inc., 790 F.Supp.2d 1024 (N.D. Cal. 2011). That tactic — as well as the fact that you can find an expert with impeccable credentials to testify to anything you want — as this ongoing dispute shows, remains alive and well. This current copyright clone dispute involves DMCA takedown notices sent to both a game distributor (Valve) and server host (Tencent Cloud), as well as motions for a TRO and preliminary injunction, respectively, both of which were denied by the district court. An appeal is pending.
The Parties
Plaintiff (and counter-defendant): Suzhou Angela Online Game Technology Co., Ltd. and Imperium Interactive Entertainment Ltd.
Plaintiff’s Firm: Hughes Hubbard & Reed, LLP
Defendant (and counter-plaintiff): Snail Games USA Inc. and Wildcard Properties LLC d/b/a Studio Wildcard
Defendant’s Firm: Quinn Emanuel Urquhart & Sullivan, LLP
Third Party Defendant: Tencent Cloud, LLC
The Games
Ark: Survival Evolved - an action-adventure survival game “inspired by real-world paleontology”
Myth of Empires - the alleged knock-off
The Complaint
On December 9, 2021, Angela Games, the developer of Myth of Empires, sued Snail Games and Studio Wild Card for three things:
a declaratory judgment of non-liability for copyright infringement;
a declaratory judgment of non-liability for trade secret misappropriation; and
violation of 17 U.S.C. § 512(f).
Angela Games alleges that on December 1, 2021, Snail Games and Wildcard, the developer and publisher (respectively) of Ark: Survival Evolved, sent a cease-and-desist (C&D) letter to Valve — the operator of the Steam platform where Myth of Empires is distributed to players. In the letter, Snail Games and Studio Wildcard (collectively, “SWC”) allege that Myth of Empires purportedly “was built by: (1) stealing the Ark Survival Evolved source code and (2) using the stolen source code as the gameplay foundation for Myth of Empires.”
On December 7, 2021, Valve complied with the C&D letter and removed Myth of Empires from the Steam Platform. Angela Games filed suit two days later.
The Cease-and-Desist Letter
In their C&D letter to Valve, SWC alleges that in 2020, at least one employee of SWC’s parent company (Snail Games China) who previously had access to source code for Ark: Survival Evolved left to form Angela Games. When Myth of Empires was released, SWC was concerned about some identical gameplay mechanics not found in other games. To investigate, SWC compared code “headers” found in the executable files of both games. SWC alleges that Angela Games copied hundreds of “class,” “variable” and “function” names, such as variable names: “bOnlyUseExpireTimeMultipliersIfActivated” and “SpawnInventoryOnDestructionLifeSpan.” The letter attaches an exhibit which explains how anyone can recreate the results of the analysis and contains numerous comparison images, like this one:
Ex Parte Application for TRO, an answer and counterclaims
On December 17, 2021, Angela Games filed an ex parte application for a temporary restraining order forcing SWC to retract its DMCA take-down notice contained in the cease-and-desist letter and its separate DMCA take-down notice sent to Tencent Cloud, LLC (“Tencent”).
On December 20, 2021, SWC filed an Answer to the Complaint. In addition, in classic Quinn Emanuel style, SWC filed not one, but two sets of counterclaims: (1) one set against Angela Games and Imperium; and (2) another set against a third party defendant, Tencent.
In its Answer, similar to what it said in its C&D letter to Valve, SWC provides more details about how a former employee who worked at Snail China quit and allegedly took source code with him to Angela. In addition to straight-up calling Angela and Imperium “pirates” and “thieves,” SWC alleges:
In Angela’s haste to profit from its larceny, Angela also neglected to remove non-functional portions of Wildcard’s code. These portions include distinctly identifiable log messages or comments, as well as other Wildcard code that does not appear to be running within Myth of Empires but nevertheless remains in its executable code. Wildcard has located those stranded “relics” in the Myth Of Empires code. Absent Angela’s copying, there is no way to explain their presence in Angela’s game code.
Equally appalling, a Wildcard vendor who wrote unique code modules specifically for Ark: Survival Evolved has told Wildcard that its same code modules appear in Angela’s pirated game—verbatim. The only place to find that code is in the Wildcard source code. Here, too, it would be impossible for Angela to have independently written the identical code, line-for-line, over and over again.
For its counter-claims against Angela and Imperium, SWC claims that Angela and Imperium infringed SWC’s copyright interest in Ark by creating an unauthorized derivative work, distributing it, etc., and that they misappropriated SWC’s trade secrets (i.e., its source code).
For its counter-claims against Tencent Cloud, SWC alleges that, in addition to the DMCA take-down notice it sent to Valve, the distributor, it also sent a DMCA take-down notice to Tencent Cloud, the owner of the servers that host Myth of Empires. SWC claims that “each time that Tencent runs the Infringing Game on a server, Tencent is publicly performing the game and creating yet another copy of the Infringing Game….” SWC additionally claims that Tencent is secondarily and vicariously liable for copyright infringement because it refused to comply with SWC’s DMCA take-down notice and continues to host the allegedly infringing game despite that notice.
The Court’s Order on the Ex Parte Application
On December 23, 2021, the court issued its order on Angela Games’ ex parte application for a temporary restraining order and for an order to show cause (OSC) regarding preliminary injunction against the defendants. The court concluded that “based on the current record, plaintiffs have not made a showing that they are entitled to a temporary restraining order requiring withdrawal of defendants’ DMCA takedown notices.” On the likelihood of success on the merits factor, the court pointed to the “plethora of circumstantial evidence” offered by SWC in support of its counterclaims “sufficient to defeat plaintiffs application for a TRO,” including:
(1) evidence that of the 82 Angela Games employees who worked on Myth of Empires, 60 are ex-employees of Snail Games who quit to join Angela Games in 2019;
(2) evidence that at least one of those employees, Yang Li Ping, was given access to the Ark: Survival Evolved code base;
(3) a December 12, 2021, preliminary code analysis which shows that the gameplay codes for Myth of Empires and Ark: Survival Evolved include hundreds of near-identical function names such as “bOnlyUseExpireTimeMultiplierslfActivated” and “SpawninventoryOnDestructionLifeSpan”; and
(4) the declaration of a third-party expert, who found on a limited record that “[t]he extent of similarities already identified . . . raises serious concerns that computer source code for [Myth of Empires] was copied from [defendants’] computer source code”
Angela and Imperium responded by presenting a declaration from Yang stating that he never transferred the source code to anyone, but the court didn’t buy it — at least when considered against the other evidence in the record. Thus, the court denied the request for a TRO, set a hearing for January 31, 2022 on the request for a preliminary injunction and ordered supplemenetal briefing.
The Court’s Order on the OSC re Preliminary Injunction
The court starts its January 31, 2022 Order with a recitation of the facts, including the various expert witness declarations submitted by Angela and Imperium on the one hand, and by SWC, on the other. Angela and Imperium’s expert argued that with respect to the allegedly copied function and variable names, SWC “manually selected, artificially re-ordered, and presented [them] side-by-side in an apparent attempt to create a false impression of similarity.” SWC, of course, disputed this and offered not only their own expert testimony, but also testimony from their anti-cheat vendor who testified that the anti-cheat vendor’s code, as integrated in the Ark code, was also copied by Angela, complete with typos.
In evaluating the four prongs of the Winter test (applicable to requests for preliminary injunctions), the district court basically concluded that the first factor favored SWC and then repeatedly pointed back to this fact in the analysis of the other factors:
Likelihood of success on the merits: the court repeated its earlier findings from the TRO order, and reiterated that Angela and Imperium’s “limited evidence,” particularly when evaluated in conjunction with SWC’s evidence, was not sufficient to establish either a probability of success on the merits or a serious question as to whether the law and facts “clearly favor” Angela and Imperium’s position.
Irreparable harm: the court found that Angela failed to identify any immediate, irreparable harm. The court concluded that while “reputational harm and being forced out of business absent an injunction can be sufficient to establish irreparable injury,” Angela nevertheless failed to submit “any evidence to support its claims besides its own employee’s conclusory testimony.” This doesn’t seem entirely true, however, since the court later analyzes other submitted evidence that isn’t employee testimony; namely, a PC gamer article that talks about the lawsuit and some negative comments directed towards Angela Games. Still, the court finds all of this insufficient to demonstrate irreparable harm “especially given plaintiffs’ inability to show a likelihood of success on the merits.”
Balance of hardships: the court found that this factor favored neither party since both parties’ injuries are likely compensable by money damages that may be demonstrated at trial.
Public interest: the court found that the public interest didn’t favor issuance of a mandatory preliminary injunction and points back, yet again, to plaintiff’s failure to show likelihood of success on the merits.
What’s Next?
After denying Angela Games and Imperium’s request for a preliminary injunction, the court ordered the parties to meet and confer regarding source code comparison and to select a mutually agreeable independent expert. If the parties can’t decide by the end of February, the court will help them decide pursuant to FRE 706. In the meantime, Angela Games and Imperium have immediately appealed the district court’s order denying their request for a preliminary injunction.
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