United States: Cheaters Never Prosper—And They Also Can Be Liable For Copyright Infringement

On August 16, 2018, a district judge in the Southern District of New York held that the creation of a program that allows players to cheat when they play a video game infringes the copyright to the game. At issue in the case are two programs—Menyoo and Absolute—that David Zipperer created to allow users to cheat when they play the video game Grant Theft Auto V (“GTAV”). According to Take-Two, the owner of the copyright to GTAV, the programs allow the players to both advantage themselves and interfere with (or “grief”) other players, and they irreparably harm Take-Two in a variety of ways. Take-Two brought suit, and on August 16, the judge granted Take-Two’s motion for a preliminarily injunction. Take-Two Interactive Software, Inc. v. Zipperer, No. 18-cv-2608 (S.D.N.Y. Aug. 16, 2018).

Before considering the merits of Take-Two’s case, however, the court addressed a number of Zipperer’s threshold contentions, including that the court lacked subject matter jurisdiction and also that it lacked personal jurisdiction. It easily rejected both.

First, the court found that the complaint adequately stated a claim for copyright infringement and that it thus had jurisdiction over the subject matter of the case. As the court found, Take-Two’s allegation of copyright infringement was sufficient because it alleged both that Take-Two owned a valid copyright in GTAV and that Zipperer created and distributed computer programs that were alternative versions of GTAV—i.e., derivative works—both without Take-Two’s authorization and in violation of the user license agreement between Zipperer and Take-Two.

Second, the court found that because the license agreement contained a forum selection clause, Zipperer had consented to the court’s exercise of personal jurisdiction over him. Moreover, in reaching that conclusion, the court rejected Zipper’s argument that it would be unfair to enforce the forum selection clause. The court found that the clause was in clear and unambiguous language, and was enforceable despite being in small print. Also, the court found it “immaterial” whether Zipperer actually read and understood the clause, concluding that because he had affirmatively accepted the license agreement, he would be presumed to have read and understood it—and agreed to be bound by all its terms.

Turning to the first factor that must be considered in deciding whether to issue a preliminary injunction—likelihood of success—the court concluded that Take-Two had submitted unrebutted declarations showing that Zipperer committed copyright infringement in two ways. First, it found that in developing his cheat programs, Zipperer had created “alternative versions” of GTAV that included “added elements” that enabled features not available in the original version of GTAV. The court held these alternative versions likely constituted “derivative works” that only Take Two is legally allowed to create under the copyright law. Second, it noted that the user license agreement authorized Zipperer to run GTAV on his computer only if he complied with the agreement’s terms—which prohibited modifying the program, cheating, and creating derivative works. But Zipperer had failed to abide by the agreement’s terms. Each time he ran GTAV on his computer after he created his cheat programs was, the court concluded, “likely beyond the scope of his license” and constituted infringement.

The court then addressed the three other factors that are relevant in determining whether to issue a preliminary injunction—irreparable harm, the balance of equities, and the public interest—and found that all three factors favored granting the requested relief. More specifically, the court found that Take-Two would suffer irreparable harm absent an injunction in a variety of ways, including that cheating players cause Take-Two to “lose control over” how the game is supposed to be played and also harm Take-Two’s reputation. Further, the court found that the balance of equities favored Take-Two, noting that Zipperer did not identify any harm that he would suffer if an injunction issued. And finally, the court found that the public interest favored issuing a preliminary injunction—stating both that “legitimate users” of GTAV are harmed because the users of the cheat programs are given “unlimited digital currency with which to purchase added features that GTAV’s legitimate users do not have access to or must purchase from Take-Two” and also that the public has an “interest in protecting Take-Two’s investment in creating video games.” Thus, the court granted Take-Two’s motion and issued a preliminary injunction broadly preventing him from (among other things) directly or indirectly infringing Take-Two’s copyrights in GTAV and its other video games, creating derivative works based on GTAV or any of Take-Two’s other copyrighted video games, or producing or distributing any programs that alter GTAV or any of Take-Two’s other copyrighted video games.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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