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Crytek v Star Citizen Lawsuit Demolished by CIG Response

Welcome to an Update to the Crytek vs Star Citizen Case, where it looks like things may be drawing to an actual conclusion now AND CIGs Lawyer’s Certainly know how to do Showmanship and Drama. I am not a lawyer so anything here is based on my own understandings and biases. What I am going to be largely quoting from and summarizing is from CIG’s Lawyers Response so it’s very much their Point of View (POV).

You could certainly argue that this video is much more bias towards CIGs POV and you’d be right… that’s because I think their POV on this is correct.

Star Citizen has been in a legal battle with Crytek let’s do a quick summary of events:

Crytek Sold it’s engine in 2014 to amazon, Star Citizen started discussing potential use of the Lumberyard Engine in 2015, April 30th 2016 Amazon Granted a license to CIG for the Engine. CIG began accepting pledges for Squadron 42s development as a separate item,

Crytek warned CIG that this may go against their GLA and CIG put out a statement that the  “You will access Squadron 42 through the same game client” and the games are connected.

December 12th 2017 Crytek Started it’s action against CIG for a variety of breaches and infringements, which have mostly been dismissed and withdrawn now. 

More recently Crytek have tried to dismiss their own case as they expected Squadron 42 to be out by the end of the case it seems and CIG gave a response in discovery that is assumed to be that CIG did not have a release date for the game yet. Crytek have asked the court to dismiss the case without prejudice and without condition so they can bring the motion back in the future, without paying CIGs fees. Also Crytek made some lofty claims that CIG had “admitted” that it had not switched to the Lumberyard Engine.

There was an analysis of this (Crytek’s Motion to Dismiss) on RedditStar Citizen lawsuit takes an unexpected turn and SQ42 release info” (that has since been deleted) that was incredibly biased towards Crytek’s Point of View and some other media sites reported on that as if it was fact posing that Crytek had proven that CIG were still using CryEngine and implying this was damning to their case using statements like “INFORMATION BELOW THAT CIG LIED ABOUT SWITCHING TO LUMBERYARD!” I would be worried though, if i pre-paid for SQ42 & implying that Squadron 42 may be years away, however if CIGs responses are to be believed then it’s more largely the work of fiction. 

Star Citizen’s Lawyers have responded to Crytek’s Motion to Dismiss with a very comicial dramatic showpiece, that I thought was fake when I first read it:

“This action should never have been brought. Dismissal is long overdue and proper. What would not be proper is dismissing the action “without prejudice without conditions.”1 Crytek launched and maintained this attention-seeking action irresponsibly from the outset. In year three, the case docket is littered with the detritus of reckless Crytek allegations, subject to fee shifting, thrown out as a matter of law or dropped under pressure. These caused enormous unnecessary expense. Crytek scrambles for its parachute as the March summary judgment and June trial schedule brought final reckoning ever nearer. “

“All of the factors applicable to the Court’s discretion cry out for the action’s dismissal with prejudice. At the very least, the Court should dismiss Crytek’s credits claim with prejudice and order that the security bond be released to CIG. Crytek should not be allowed to aim its car at CIG’s storefront window, stomp the accelerator, smash through, do doughnuts for years, then back out and drive away to maybe circle around and crash CIG again another day. Crytek richly deserves having its keys taken away for all time, so that CIG can conduct responsible business without further interference from Crytek or its series of lawyers. The security bond, which the Court generously limited in size so Crytek could make it to the end of a case it now flees, would barely cover a portion of the wreckage. The “proper” ending is the action’s dismissal with prejudice. Any other dismissal should end with the bond paid over to CIG. “

They go onto say that CIG are using a different Engine Licensed by Amazon and it also appears that CIG are Licensed to use CryEngine under that Amazon License:

There is an email between Amazon and Crytek that was given to CIG in discovery. 

Crytek sent amazon – “As you might know we are in a legal dispute with CIG. One main point of this dispute is that CIG – in our opinion – does not have a sufficient license in the Cryengine at least for the development and exploitation of Squadron42. Originally it was Cloud Imperium Games position – in our understanding – that they don’t need such a license since they have a license of Lumberyard which covers Squadron42. They now seem to have modified their argumentation and claim that they also have a license in the Cryengine itself which was granted by Amazon.

Since this claim deviates from CIG’s original argumentation and might potentially have quite some influence on our evaluation of the legal situation we would like to ask you whether you can confirm that Amazon licensed the Cryengine itself directly to CIG?” 

Amazon Responds “Normally we wouldn’t discuss a customer relationship — those relationships are confidential and we take that very seriously. However, given the circumstances, we have asked CIG for authorization to share, and they have given approval. We can confirm that yes, Amazon did license Lumberyard to CIG in 2016, and we included Cryengine (what you licensed to us) as part of that license to CIG.”

The Full extent of what that means is not fully clear… BUT means that any of the CryEngine that Amazon were allowed to license CIG could use and that sounds catastrophic for any Crytek complaints. That isn’t just CIG moving over to another engine it sounds like it could cover any errant older CryEngine Code as there was the question of are CIG using any “non lumberyard” CryEngine Code anywhere in their game that’s exclusive to an earlier version of the CryEngine.

“CIG has repeatedly pointed out that Crytek’s claim that SQ42 cannot be released in a separate game client could not even theoretically be ripe because SQ42 has not yet been released.”

Even pretending the Amazon license did not exist, the GLA expressly defines the “Game” as both Star Citizen “and its related space fighter game ‘Squadron 42,’” and whether content falls outside the scope of the license as whether players actually access the content through the Star Citizen game client. Since SQ42 has not yet been made available to players at all (a fact Crytek conceded early in discovery),3 Crytek’s claim is and has always been at best premature.

The real reason Crytek wants to walk away from its SQ42 claim is because Crytek can no longer delay the inevitable reckoning that its claim is and has always been meritless for at least two independent reasons. First, by suddenly seeking a dismissal without prejudice to preserve its right to refile “once CIG in fact releases Squadron 42,” 5 Crytek concedes CIG’s long-argued point that no breach could even theoretically occur until actual game release. Second, evidence uncovered in discovery on the Amazon license shows that in May 2019—a year and a half after launching the action—Crytek sheepishly and belatedly emailed Amazon to ask if it had truly granted CIG a license covering prior versions of CryEngine, which Amazon Confirmed they had.

Throughout this case, Crytek has sacrificed legal sufficiency for outlandish allegations designed to ignite incendiary publicity. Even as Crytek now hobbles toward the exit, it misleads the Court—and in this closely-watched case, that always means misleading the public—by falsely claiming that CIG did not switch to Amazon Lumberyard6 and pretending that “new information” came out in discovery about the timing of the future release of SQ42. In fact, nothing about release timing for SQ42 has been shared with Crytek. 

CIG say that Crytek have tried to twist a [redacted statement] potentially implying that Squadron 42 is years away from completion OR something like that.

Which apparently rather stated that CIG simply had not yet determined how players will access the game.

More over to the The GLA – Game License

After entering into the license agreement with Amazon, CIG took multiple steps to ensure that it was developing Star Citizen and Squadron 42 under the Amazon Lumberyard license and not the GLA. 

CIG also say that although Squadron 42 is purchasable as a standalone item. The last public statement on SQ42 was that It is part of the Star Citizen Universe and the games are functionally connected as well as being accessed through the same launcher.  

It seems that CIG may have been correct in their assumption that Crytek may try to walk away from the case without paying CIGs legal fees, hence why a $2 million Bond was requested by CIG from Crytek (the court later granting this for $500k)

What Crytek did not know is that the Lumberyard License also included rights to prior versions of CryEngine itself, rights which Amazon granted in order to minimize the engineering time it would take CIG to migrate to Lumberyard. 

Dismissed / Withdrawn Claims

Crytek’s initial complaint, prepared by a team of lawyers at Skadden Arps, launched a litany of contrived and baseless aspersions and claims at CIG, all smashed together in claims for copyright infringement and breach of contract. Crytek’s meritless lawsuit was designed to inflict upon CIG maximum damage and unnecessary escalation of legal expense through reputational attack and scorched-earth litigation tactics. CIG has spent more than two years successfully beating back Crytek’s claims. Crytek has achieved none of its litigation objectives – CIG say that they have disposed of all but two of Crytek’s claims: So what’s been withdrawn or dismissed?

Crytek falsely accused CIG’s Co-Founder and General Counsel of engaging in a conflict of interest when negotiating the GLA

Crytek’s leading cause of action alleged that CIG violated GLA by switching to a different game engine. 

Crytek sought punitive damages on its claims for breach of contract and copyright infringement.

In its Second Amended Complaint, Crytek added a new claim alleging that CIG violated GLA by engaging in a competing game engine business.

Crytek claimed that CIG violated the GLA’s non-disclosure provisions by sharing CryEngine source code with third-party Faceware Technologies. 

Crytek claimed that CIG violated the GLA by failing to deliver certain bug fixes and engine optimizations.

Crytek claimed that CIG violated the GLA by posting snippets of CryEngine in the video series Bugsmashers.

According to CIG there are now only 2 of Crytek’s Claims Remaining with the major one being:

That Squadron 42’s development and sale of a standalone game breached the GLA (Game License Agreement) and infringed Crytek’s Copyright.

As Squadron 42 is not released and none of it has been made playable to the public they cannot be in breach… also they have moved engine so they can do what they want.

The Other Claim I believe being Crytek’s Credits Claim, that those should still appear in Star Citizen Alpha.

Settlement/Dismissal TalksAccording to CIG’s Lawyers

Crytek refused to move from its existing position and has not been willing to fairly settle. 

CIG was willing to discuss these conditions in a negotiation of a dismissal without prejudice. 

Crytek remained unwilling to impose any conditions to their dismissal of the case.

To date, CIG has incurred over $900,000 in attorney’s fees in this case. 

CIG basically say that the case should be dismissed with prejudice and that Crytek should pay their fees, that is in fact the Lion’s Share of the document going over why that is and legal precedent for it. And any dismissal without prejudice should still pay CIG the 500k bond and that the credits claim should also be removed.

And even if there is future litigation they have incurred fees of over 500k that are useless to any future litigation as they have been dismissed or withdrawn.

CIG go on to say Crytek seeks to “avoid a near-certain adverse ruling” that the last claims are unripe, meritless, or both.

That was a huge legal document dump to summarize and as I said on the last video covering this, imo assuming CIG’s accuracy of statements the Crytek’s case is not even weak now… it’s pretty much evaporated with Crytek trying to have their own case dismissed to avoid a weak or losing position. This has certainly been a wild ride… with some very eccentric statements from either side. Crytek have until Jan 24th to reply to this and then the court will give it’s decision on the 7th of Feb.

As I said though I am not a lawyer and you can follow along with the docket and case yourself here.