So this story actually popped up almost two weeks ago, but because the only areas of the law that I get really excited about (mostly) aren’t the areas I practice in, I wanted to take a minute to digest the filings that I could get my hands on (one of them is redacted all to hell or costs $100 to get un-redacted). I also wanted to take a closer look at it because, while it got some coverage, not even Ars Technica, which does some great reporting, really got into the “Hoooooly shit,” aspect of the ruling and verdict.
Complaint, Motion, Verdict
Because it makes my eyes gloss over probably just as badly as it does yours, I’m not going to try and cram a class on the Federal Rules of Civil Procedure into a 2,000 word article, but stick with me for just a minute so everyone can get a handle on what went on procedurally before we talk about the meat of what’s going on (and the meat’s stegosaurus-flank size). In order to initiate civil litigation, on top of a bunch of other things, you have to file a complaint with the court. It’s going to assert the facts, that the plaintiff (Robin Antonick, the original programmer for Madden NFL Football, in this case) was damaged in some way by the Defendant (EA) and that that damage occurred because EA did something “bad.” (This isn’t a moral judgment use of the word “bad,” it just means the defendant did something which was a) criminal, but for which plaintiff can also seek civil damages [money, like in wrongful death] or b) that it was a legitimate reason that the plaintiff could sue [defendant destroyed plaintiff’s personal property.]) This is the document they hand over in movies when someone says, “Bob Jones? You’ve been served.”
So after that, there’s some other stuff that can (or does) happen. One of the first things that can pop up is the Defense will file a motion; which is exactly what EA did. Although most of Civil Procedure is boring, the motion to dismiss that EA filed is called a 12(b)(6) (see previous link). It asks the court to void the suit because the Plaintiff “failed to state a claim upon which relief can be granted.” In other words: feel free to whine, there’s nothing the court can do to help you. Try using that the next time you get in a family dispute. (And let me know how it goes; I’ve always been too chicken to try it.)
So, Defendant will make this motion and the court will determine whether or not it’s going to buy the argument. If it doesn’t (or any of the other multitude of complex legal crap that can derail a case), then the case proceeds to trial and can either go before a judge, a panel of judges, or a jury, who hears the case and then determines a verdict, and later, a judgment, which = money and other ‘relief,’ like an injunction, which is the court either forcing someone to do something (issue a public statement that you shouldn’t have banged your bro’s sister) or stopping them from doing something (no more burning, poop filled paper bags on the plaintiff’s porch).
Tired of this? Me too. Let’s move on.
So here’s the story: back in 1983, Robin Antonick hits up EA and says, “Hey, guys. You know how all of the football simulators are crap and we can’t have all 11 players on the field? What if I told you that not only could I provide you with such a simulation, it will eventually allow us to crank out a new version yearly and port the important parts of the code into basketball, college football and hockey, from which the profits will allow us to crush our competition and force them to indenture their children in order to service their debts to us?” (Paragraphs 1 and 2 of Antonick’s complaint. More or less.)
EA’s interest was piqued, because not only was Antonick a sports and math nerd of epic proportions, he had some groundbreaking IP that could change sports games. The two parties drafted a contract which had some interesting provisions. Specifically, EA agreed to pay Antonick 15% royalties of sales of works he developed, 5% on ‘derivative works’ that EA developed, and 1.5% on ‘remote derivative’ works. This all occurred over the course of several years and contracts (mostly concluding in 1986) but the important takeaway from this, the part that makes you go “Oh, daaaamn,” is how ‘derivative works’ and ‘remote derivative works’ are defined in the contract.
Derivative work (as defined by US Copyright Law, courtesy of copyright.gov): A derivative work is a work based on or derived from one or more already existing works. Also known as a “new version.” Think sequel, developed by EA, based on Antonick’s code.
Remote derivative work: a derivative work by EA that is a derivative work by EA that runs on a Microprocessor Family different from that of the Work. In other words: Madden 2, developed by EA, based on Antonick’s code, but on the XBox instead of the Playstation for which it was developed. Yeah. Starting to get the picture of how big this is? No, you’re not. Trust me.
Dr. Tyree’s Philosophy Class Is Down The Hall
Now, Antonick’s complaint alleges some 125 facts, all of which EA had to respond to in its own version of things, but here are the (fairly) undisputed ones: Antonick, a former NCAA football player, after discussions with EA founder Trip Hawkins, worked up these algorithms to make the first ‘real’ football sim. During development, between 1983 and 1986, EA contracted with John Madden to use his likeness and playbook. Antonick programmed the playbook into the game, including the ‘Ask Madden’ feature that allowed the computer to call the play that John Madden would in a similar set of circumstances. At least according to Antonick’s redacted complaint (and probably backed up by the idiotic number of copies sold), Antonick’s algorithms that used individual player stats to calculate probable outcomes under NFL rules were so far beyond anything else in sports video games it was a disruptive force all on its own. Basically, he created early AI* that was head-and-shoulders above anything else. He also made the game ‘3D’ in a way that not only looked cool, it changed the way that pass-defense worked because it introduced a Z-axis into the equation.
Part of Antonick’s contract with EA included some fairly extensive protections of the intellectual property he developed, some of which promised that if EA decided to make a version of Madden without Antonick’s source code, it could, but it would have to develop it from the ground up in a ‘clean room;’ developers and programmers would have to develop the game from scratch, with no knowledge of the source code protected by the contract.
Fast forward a few years to about 1990 – EA has figured out that it’s sitting on an absolute gold mine** – since NFL rosters change every year, they can crank out a new game and charge full price for it. They contract Park Place Productions to develop Madden for the Sega Genesis and let Antonick know that the Genesis version is more arcade-style and that Park Place Productions and EA aren’t using his code. (At all. Pinky swear.) Antonick buys this and doesn’t sue for copyright infringement – it’s called “reasonable reliance” and there was no reason he should have known EA was lying to him.
Six months later, without John Madden’s playbook, with a bunch of stats provided to Park Place Productions by EA, with the extensive help of EA employee Richard Hilleman, who worked closely with Antonick during the initial development, and with the lead Park Place Productions developer never having developed commercial software, Park Place cranks out the first Genesis version of Madden in six months. Without referencing Antonick’s work.
The Nintendo Amendment
In 1991, according to EA, because EA had reverse-engineered Nintendo’s cartridges, they were going to have to get Antonick to terminate his rights to any Nintendo royalties…but everything else was going to stay in place – if EA based their sequels on his work, Antonick would get credit, he was going to get royalties for sales, and he’d be notified quarterly about how much money EA was paying him/owed him. The complaint goes on for quite a bit longer before it gets into actually stating Antonick’s claims (if you want to see something amusing, unsurprising and infuriating, check out paragraph 107), but when it does, Antonick states that:
- EA breached its contract with him by not paying him royalties on every different version of Madden it’s produced; and
- EA fraudulently concealed its duties from Antonick, maintaining the fiction that the subsequent Madden games were not based on Antonick’s work.
Just to add some spice, Antonick’s complaint also alleges that both NCAA Football and NHL Hockey are remote derivative works because they use Antonick’s algorithms to make the games run realistically like Madden. So yeah, remember when I said that there was no way you’d guess how broad this could get? That’s why. We’re talking about every version of Madden going back to 1986, plus EA’s NHL and NCAA series’ royalties across myriad systems. And, if Antonick’s argument holds up, that’s a lot of cheese.
Remember how I brought up some arcane legal stuff earlier? This is why. Before this case went to trial “on the merits,” which means “deciding the actual important stuff instead of the ‘technicalities,'” the U.S. District Court for the Northern District of California had to figure out whether to allow EA’s motion to dismiss Antonick’s complaint for failure to state a claim for which relief could be granted. It also had to make it abundantly clear that federal justices have very little, if any understanding of what a video game is, since they refer to the Sega Genesis as a program.
Anyway, enough borderline-disrespecting the tribunal. In order for the court to dismiss under 12(b)(6), there can’t be even a hail-mary legal theory that might apply – even if it’s a stretch, the court can’t dismiss if there’s a legitimate complaint to be ruled on. It turns out, that, according to the District Court, it sure seemed like Antonick’s charges that EA breached its contract, used Antonick’s IP without paying for it and then committed fraud in order to cover it up was a legitimate legal theory that deserved to be heard by a trier of fact***.
The Jury is…in?
Then we catch up to the end of July – the jury in the case, having had a chance to hear all of the evidence from both sides relating to the Madden games prior to 1996, awarded Antonick and his legal team something in excess of $11 million dollars, plus interest. All of this is before Antonick appeals an as-yet unpublished ruling that precluded his Fraud claim and royalties on Super Nintendo games as well as figuring out if Antonick’s is entitled to royalties on the ~$3 billion in revenue on Madden games published since 1996. No word yet on whether he’s going to try going after the NCAA and EA for NCAA football (which strikes me as a no-brainer) or EA for NHL Hockey (which seems more of a stretch), but it’s always a little gratifying to see the giant company who says, “So sue me,” get their collective asses handed to them. Twice in short order is even better.
So there you go – legal procedure, video games, and David taking down Goliath. Or at least popping him a good one in the nose.
*For the record, I mean AI in the common usage to describe a game’s ‘intelligence,’ not something that could pass a Turing test.
**I was going to say ‘license to print money,’ but I have at least a ground-level understanding that that just makes money worth less.
***There’s also a ruling on whether Antonick is having an SOL problem (which is Statute of Limitations rather than Shit Outta’ Luck, but they amount to the same thing), but it’s sort of long winded and can be summed up like this: because Antonick didn’t discover the breach because of the fraud until 2009, and there was no reason for him to have, the clock on his ability to bring a claim before being barred by the statute of limitations didn’t start running until then.