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Crytek Vs Star Citizen – Time to Retreat?

There has been an update on the Crytek vs Star Citizen Lawsuit which has taken an interesting turn with what appears to be Crytek trying to dismiss their own case… at least temporarily.

Please understand that I am not a lawyer and anything said here is my opinion or understanding of the case and the documents available. On the 2nd of Jan 2020 Crytek and CIG filed a joint motion to the court for approval for a briefing schedule for Crytek’s anticipated motion to dismiss the case voluntarily without prejudice; and a continuance of the current trial and related dates.

It briefly summarizes the case :

Crytek commenced this action against CIG for breach of contract and copyright infringement on December 12, 2017

The Court had set a date for trail for March 24 2020 but both CIG and Crytek later asked this to be pushed back to June 16th 2020 to make sure both parties could fully comply with Discovery. Both Parties have now requested this be moved to Oct 13th 2020.

It’s worth noting that some of Crytek’s case has already been dismissed, which was one of the key points Crytek wanted to make, that CIG were unable to change to the Lumberyard Engine and had to use the CryEngine. This in my opinion left the rest of the case very weak AND the court ordered Crytek to pay a 500k bond to continue with the case, which is supposed to be held to pay CIGs legal fees should they be the prevailing party.

However the Discovery phase has been commencing and During a telephone conference regarding settlement on December 4, 2019, counsel for Crytek noted that in addition to settlement, it was considering a motion to dismiss based on CIG’s recently served objections and responses to Crytek’s Interrogatories. Then, on or about December 11, 2019, Crytek’s counsel indicated to CIG’s counsel during a meet and confer that, based on CIG’s responses to certain written discovery, which Crytek contends revealed new information regarding the ripeness of one of Crytek’s existing claims, Crytek wished to voluntarily dismiss its claims against CIG without prejudice, with the intention of re-filing the suit against CIG following the release of Squadron 42 by CIG. The parties met and conferred to discuss the terms of a stipulated dismissal, but they were unable to reach an agreement. Crytek intends to file a motion to dismiss the case without prejudice (the “Motion to Dismiss”) and CIG intends to oppose the Motion to Dismiss. 

So what does that mean? Well Crytek’s lawyers are saying that they want to dismiss the current case, so they can re-sue later.

The Ripeness they reference refers to the readiness of a case for litigation

“a claim is not ripe for adjudication if it rests upon contingent future events that may not occur as anticipated, or indeed may not occur at all.”

What it’s suggesting here is that at least one of Crytek’s claims is dependant or at least stronger after SQ42 is released.

There seems to be 2 major theories here of what this shows in Regards to Squadron 42’s release. That either Squadron 42 isn’t releasing for ages (like it’s years away) OR it’s planned to release a in the near future just after the court case was planned for (so after October 2020).

Where as it appears it’s actually a bit more complicated than that Crytek have since filed their motion to dismiss on the 4th of Jan without prejudice and without condition.

Which will be heard by the judge on the 21st Feb 2020.

CIG is planning to respond by 24 Jan and then Crytek can reply to that by Feb 7th so there will be a little back and forth justification of why Crytek should be allowed to do that.

CIG are planning to oppose that, as they want the case dismissed with prejudice or with conditions AND with their legal fees paid.

Crytek is saying that further costs and discovery at this stage is now wasted & expensive to both parties and they might have to re-do some of the case when they refile.

CIG are saying they want to continue with the trial BUT both parties agree to have the date of the trial pushed back to October pending outcomes of the motion to dismiss.

However some additional documents are filed here to “support” Crytek’s motion to dismiss their own case with some parts redacted as they are confidential.

Crytek based its primary claims in this case on multiple public statements by CIG indicating the release of Squadron 42 as a standalone game with release set for the first half of 2020. REDACTED

Because this fact is central to Crytek’s primary claims, REDACTED

Crytek seeks to voluntarily dismiss its claims without prejudice to re-filing those claims upon the actual release of Squadron 42. No efforts taken to date will be lost, and no legally cognizable prejudice will occur. Crytek’s requested relief will promote judicial economy by allowing all claims to proceed as a unit once the Squadron 42 claims become fully ripe upon CIG’s release of that game. 

Crytek goes on to talk about what CIG in public saying being different to what is said in litigation. Referencing CIG’s switch to the Lumberyard Engine and referencing them saying the code is similar to CryEngine as it’s based on CryEngine as CIG admitting they hadn’t made a change. I’ll quote that bit for you

at the outset of this case, CIG had publicly claimed it had switched to using the Lumberyard Engine for both Star Citizen and Squadron 42, but was forced to confirm during this litigation that no such switch had taken place. The fact that CIG denied Crytek the credits to which it was due under the parties GLA without actually switching game engines is the basis for Crytek’s “credits claim” in this case.”

The quote they use from a CIG response was “(“Crytek makes much of the fact that the code is the same ”). BUT nothing noted from discovery, just an off the cuff comment to the code is similar… because it is.

Similarly, prior to this case, CIG was actively communicating that it was preparing to release Squadron 42 as a standalone game, which actions would constitute another breach of the GLA referred to herein as the Squadron 42 claim. 

According to Crytek – Various Gaming Outlets that attended CitizenCon 2016 wrote that SQ42 was going to be released as a stand alone game. Crytek, CIG’s backers, and the public were all left with that same understanding.

CIG have argued previously that their amazon license allows them to sell it as a standalone game, with Crytek further suggesting that if the game would be accessible outside of the SC Launcher then that makes it standalone and that was one of the presumptions that Crytek had sued on.

However CIG had responded that it had not decided on how the game would be released, I expect directly relating to the Launcher and would it just be another tab on there. 

Crytek then go for a bit of a low blow – While this came as a surprise to Crytek (and undoubtedly will to the public who has pre-paid for Squadron 42), assuming the truth of CIG’s response, Crytek’s Squadron 42 claim is not yet ripe

While CIG’s ultimate intent to release Squadron 42 as a standalone game remains clear, it is now equally clear through CIG’s Interrogatory response REDACTED….

Accordingly, rather than press forward a case that is not likely to resolve the full dispute between the parties, Crytek seeks to voluntarily dismiss its claims without prejudice to re-filing once CIG in fact releases Squadron 42 as a standalone game. This approach will conserve judicial and party resources by allowing all claims between the parties to be fully adjudicated in a single proceeding with a single round of discovery on a fully developed factual record. 

Crytek then go onto to say CIG won’t suffer with the motion to dismiss as effectively they are just pausing the litigation until SQ42 is released.

Also Crytek say they raised the possibility of dismissal with CIG and began working with CIG to try to agree on a fair and efficient approach. As soon it became clear that was not possible, Crytek filed its motion… basically I believe they are saying they are trying to come up with a settlement BUT haven’t reached one yet.

What I read into this is that no hard release date has been set for Squadron 42 yet internally and that CIG might have the SC and SQ42 launchers combined together but haven’t confirmed that either, heck they could even say SQ42 comes with Star Citizen and just give access to SM & AC but not the PU then technically they are not being sold separately, that was some acrobatics right there.

However it also appears to me that this is very much an escape route for Crytek to replan and potentially refile later BUT potentially not refile and try and get out of paying for CIGs legal fees BUT also an attempt to leverage for a position for settlement.

CIG have appentantly indicated they would accept the motion to dismiss if 5 conditions are met.

(1) Crytek’s breach of contract claims, including its claim for credits under GLA §§ 2.8.1 and 2.8.2 will be dismissed with prejudice; (2) CIG’s obligation to provide copyright and trademark notices under the GLA will be terminated; (3) Crytek’s copyright claim for Squadron 42 will be dismissed without prejudice and any discovery and work product from this litigation may be used in future litigation of this claim; (4) Crytek will release CIG from all claims from the beginning of time through the effective date, provided that the release will not cover any claims arising from the future release of Squadron 42 outside of the Star Citizen game client, if any; and (5) the payment by Crytek of CIG’s attorneys’ fees in the amount of $500,000. 

Crytek agrees to condition (3) the copyright claim on SQ42 being dismissed, but says CIGs remaining conditions should be rejected basically saying that the rest would put them at a disadvantage and they just want to continue where they left off later… so they shouldn’t have to pay CIG’s legal fees.

I think my favorite part was Crytek Saying – CIG has continued to insist on pushing forward with discovery despite being aware of Crytek’s clear intention to dismiss this case without prejudice. CIG should not be heard to complain about fees it seems so eager to incur. 

The reason that this is so unreasonable is that Crytek may decide NOT to refile and then wouldn’t be liable for CIG’s fees… I know it’s the job of Crytek’s lawyers to protect their client and push for as much as possible BUT saying their case wasn’t ripe is true BUT it wasn’t ripe when they originally sued either… CIG hadn’t released SQ42 when Crytek first sued either and now that Crytek has pushed for Discovery it seems to be trying to retreat to a better position, at least that’s the way I see it.

I hope it’s a smart decision for CIG to fight to have the case dismissed with conditions or continue and resolved ASAP. I said in my last video that if Crytek pushed into discovery that CIG may be more likely to fight to have all their expenses paid rather than want to settle.