Cheaters Never Prosper, but Video Game Developers Might

Bloomberg Law

Cheating in video games is nothing new. But the methods by which game developers now seek to punish such conduct are changing.

Recently, developers have tried combating cheating by filing civil lawsuits under federal copyright law against individual gamers. But the potential damages, defenses, and impact on the player community (not to mention the developer’s bottom line) surrounding this untested approach are all open questions.

Zero Sum Game

Since releasing its smash hit Fortnite in July 2017, Epic Games has filed several copyright infringement lawsuits against players who “hack”—i.e., modify—the game, often to cheat.

Among the lawsuits is Epic Games Inc. v. Rogers (No. 5:17-cv-00534), pending in the Eastern District of North Carolina. In that case, Epic alleged a then-14-year old Rogers created and publicly displayed an unauthorized derivative work in violation of federal copyright law “by injecting unauthorized computer code into the copyright protected code of Epic’s popular Fortnite® game” to gain unfair advantages when playing the game.

Epic also took issue with Rogers’s use of YouTube to promote his modified version of Fortnite, alleging that Rogers’s “cheating, and his inducing and enabling of others to cheat, is ruining the game playing experience of players who do not cheat.” According to Epic, Rogers’s conduct caused Epic to sustain lost sales and profits.

But did it?

While some gamers may be turned off by players who are impossible to beat, Rogers (and others like him) garner significant followings; millions of gamers tune in to their YouTube channels to watch them play. It could very well be that cheaters and other players who modify the game drum up additional enthusiasm for the game, leading to increased sales. 

The ‘Hey, I Did You a Favor’ Defense

In some contexts, courts employ a “netting” or “offset” analysis pursuant to which there can be “no unjust enrichment where a claimant has actually benefited from the alleged wrongdoing of another.” (See Apex Oil Co. v. DiMauro, 744 F. Supp. 53, 55 (S.D.N.Y. 1990)). The rationale behind this principle is “a plaintiff both injured and enriched by illegal activity cannot choose to recover for his injuries yet retain his windfall.” (See Minpeco S.A. v. Conticommodity Servs. Inc., 676 F. Supp. 486, 488 (S.D.N.Y. 1987)).

Courts do not appear to have addressed this argument in the context of copyright damages. They have, however, considered similar arguments regarding the traditional “fair use” defense.

When considering a fair use defense to copyright infringement under Section 107 of the Copyright Act, courts evaluate several factors, including “the effect of the use upon the potential market for or value of the copyrighted work.”

In Amsinck v. Columbia Pictures Indus. Inc., 862 F. Supp. 1044 (S.D.N.Y. 1994), the court considered whether a film’s portrayal of a copyrighted children’s mobile constituted fair use. The court found the mobile’s “use in the film might actually increase the demand for mobiles in general, thereby benefiting plaintiff indirectly.” Although the court acknowledged the other fair use factors, it held “this key factor all but requires a finding of fair use.”

Another court reached a similar conclusion in Haberman v. Hustler Magazine Inc., 626 F. Supp. 201 (D. Mass. 1986), where a copyright holder’s sales of artistic postcards increased after their unauthorized publication in Hustler Magazine.

Rogers could make a similar fair use defense. But he could also challenge the damages element of Epic’s claim, arguing Epic has not actually sustained any damages and, if anything, has actually benefited from Rogers’s cheating.

This kind of “netting” defense on the issue of damages might face some obstacles under the copyright laws. Under 17 U.S.C. § 504, a victim of copyright infringement may elect to pursue one of two types of damages. It can pursue its actual damages or, assuming it properly and timely registered its copyright under Section 412, it can pursue statutory damages. Here, Epic registered the copyrights on Fortnite long before releasing the game and filing its lawsuit, so it could elect statutory damages.

In a case of willful infringement, statutory damages can reach $150,000. But the statutory damages could also be as low as $750, and, if Epic were to elect the statutory damages remedy, Rogers would be entitled to a jury trial “on all issues pertinent to an award of statutory damages under § 504(c) of the Copyright Act, including the amount itself.” (See Feltner v. Columbia Pictures Television Inc., 523 U.S. 340, 355 (1998)).

Were this issue to go to a jury, Rogers could invoke a beneficial infringement defense.

End Game

Because the fair use analysis depends on multiple factors, the beneficial infringement theory may not always be a winner. Indeed, hacking a video game to cheat might not win points with judges. But a jury might be more sympathetic to the argument when evaluating damages. One of these video game infringement lawsuits could serve as an excellent test case for this issue.

Epic cannot expect the average teenage gamer to take a federal lawsuit to trial. Nor can it expect to recover substantial sums from players.

It thus appears that Epic’s true goal with lawsuits like Rogers is to protect the sanctity of the player experience from unscrupulous, in-game cheaters. But how many lawsuits would Epic have to file to rid Fortnite of every cheater?

As more than 125 million users have downloaded the game, with more than eight million playing at a given time, Epic cannot possibly hope to stymie every cheater through the courts. The Fortnite blogosphere agrees, and continues to acknowledge that cheating is still rampant in Fortnite, even after Epic has initiated a slew of these lawsuits.

In a world where professional eSports has gone mainstream, and the stakes in popular online games are high, game developers may see litigation as an attractive deterrent against cheaters.

So far, courts have not had the opportunity to opine on the “beneficial infringement defense” in the context of in-game cheaters. But if this thorny legal issue were decided in favor of the cheater, it may be “game over” for the developers’ novel approach to stemming this tide of player misconduct.

“Cheaters Never Prosper, but Video Game Developers Might,” by David M. Perry, Jeffrey N. Rosenthal, and Ethan M. Simon was published in Bloomberg Law on March 29, 2019. Reproduced with permission from ©2019 The Bureau of National Affairs, Inc. (800-372-1033)