CIG being sued by Crytek. This could be a real problem for Star Citizen

CIG being sued by Crytek. This could be a real problem for Star Citizen

The Star Citizen drama continues today with news that Crytek is suing Cloud Imperium Games.

Anyone who has been following the progress of Star Citizen will know that in the early days CIG and Crytek worked closely on the project prior to CIG moving over to the Lumberyard engine.

Crytek is now pointing out in the court documents that without their assistance and input the Star Citizen crowdfunding would not have been a success. Crytek also states that a relationship was formulated between the two companies both parties entered into a Game License Agreement.(GLA).

This agreement stated that CIG had promised to use CryEngine exclusively for the game’s development, to collaborate with Crytek on CryEngine development, and protect Crytek’s IP. Crytek now claims that CIG has “utterly failed to follow through on those promises, and their actions and omissions constitute breaches of contract and copyright infringement and have caused substantial harm to Crytek.”

Crytek is now seeking damages as they claim that CIG will profit “unjustly” at Crytek’s expense.

It goes a little deeper than this though because CIG co-founder and legal expert Ortwin Freyermuth negotiated the deal with Crytek but had also represented Crytek in similar negotiations with third-parties. Freyermuth, therefore, had an advantage and knowledge of Crytek’s licensing practices when negotiating the CIG deal.

Crytek state that Freyermuth did not recuse himself from the negotiations between CIG and Crytek which was a conflict of interest. The negotiations were also led by Carl Jones on behalf of Crytek who later left Crytek and became an employee of CIG.

The document goes on to state that CIG was to pay a reduced license rate for CryEngine in exchange for prominent placement of the Crytek trademarks and copyright notices within Star Citizen. Despite raising more and more cash through crowdfunding, Crytek states that CIG infringed Crytek’s copyrights in CryEngine and they breached “several promises” made in the agreement.

Star Citizen
In the latest promotional trailers, there are no Crytek or CryEngine logos.

In 2014, Crytek was running into financial difficulty which prompted a statement from CIG when questioned if it would impact the game and their use of CryEngine.

“We did an outright buyout of the engine last year and have the source code, so while we hope all the noise about Crytek blows over, as they are great partners and friends to the project, if the worse happened we would be ok, as we’ve already branched the engine and have a large team that is adding features and supporting it every day here at CIG. So even in the worst case scenario we should be fine, but obviously we hope it does not come to that.”

This statement now makes little sense and it also contradicts Crytek’s claims. It’s likely this was thrown out there to keep backers from going into a state of panic.

Crytek points to a comment made by Chris Roberts on September 16, 2016, where he said, “we don’t call [the video game engine] CryEngine anymore, we call it Star Engine”. Shortly after this, the Crytek trademarks were removed from the game. This would breach the GLA according to Crytek.

Whoops. Chris Roberts calls it Star Engine in this interview.

When Star Citizen was announced, there was one game which included a single-player component which was Squadron 42. However, that model was changed and Squadron 42 became a separate entity which means CIG are now effectively creating two AAA titles. The agreement with Crytek was to only cover one game and therefore CIG would now be breaching the initial agreement.

The complaints continue with Crytek stating that CIG did not provide bug fixes and optimisations to Crytek for CryEngine which was part of the agreement. In 2015, Crytek state they requested the fixes but CIG, “did not make a good faith effort to provide Crytek with the promised bug fixes and optimizations to the CryEngine as a complete compilable version.” Crytek then chased this again in November 2017 and received nothing from CIG according to the filing documents.

CIG has also been using their weekly video series called Bug Smashers to show what’s being worked on and then fixed. However, some of the information that’s been shown contains confidential CryEngine information which is in breach of the GLA.

Finally, you know that Faceware technology that was revealed this year? Well according to Crytek, Faceware gained access to “underlying technology for CryEngine” and this information was not disclosed to Crytek.

All of the above is a huge problem for CIG, partly because most of these breaches have been in full public view. Crytek is now seeking a minimum of $75,000 indirect damages, indirect damages, consequential damages (including lost profits), special damages, costs, fees, and expenses incurred by the breach of contract and copyright infringement. If Crytek were to win this case in court, it would likely be substantaily more than the stated minimum.

The claim also goes on to include Crytek being awarded actual damages and disgorgement of CIG’s profits with interest and legal fees.

CIG has responded now that the court filing is in the public domain.

“We are aware of the Crytek complaint having been filed in the US District Court. CIG hasn’t used the CryEngine for quite some time since we switched to Amazon’s Lumberyard. This is a meritless lawsuit that we will defend vigorously against, including recovering from Crytek any costs incurred in this matter.”

There’s a lot to digest in the documents and this case could run for some time.

Because Star Citizen development has been so public, it’s not going to be easy for CIG to simply brush this aside. Whatever happens, backers will not be pleased if their crowdfunding money gets chewed up by legal fees or a payout to Crytek because of incompetence at CIG should Crytek win what could turn out be a complicated case.

This is not good news for CIG or Star Citizen and it could take some time to play out.

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  • Paul Younger

    Founder and Editor of PC Invasion. Veteran PC gamer of over 22 years.

    • Tufao

      And now the House of cards starts to fall… no surprise here. Backers have been alerted from ages now and decided to be stubborn instead putting this company in the right path, as they could.

      I doubt that this will be the only one, even that this is terrible enough. More is coming.

      And RSI, as always, ruined even more himself in their official statement. Basically declared itself guilty in their first public and official answer to the issue!
      LoL

      It’s almost like if they “wanted to ruin the whole thing”, like if they have already earned all that they could and deviated all that they could and now, all that they need is a good excuse for an exit plan, blaming the “evil foxes” of the industry, just playing the “incompetent”/”passionate” developers. But that would be too much to believe, after all, Roberts and Ortwin are just newbies, in their first venture and never bankruptcy any company or business before, leading them to huge personal profit regardless.
      LoL

      And now, those claiming that this is “not a scam” because “spending money in dev and release stuff, would be the worst scam”, learn how to actually make a proper scam, walks free and richer, like a hero, while the backers cry and the game industry and crowdfunding suffer!

      The fact is that Roberts/Ortwin have been doing the same level of deception when doing business, be publishers, partners, investors, consumers or engine companies, for ages now, as far as I see. If you don’t believe, go ask Kevin Costner or Microsoft.

      • Tufao

        https://uploads.disquscdn.com/images/d70480c1a10321130b332ec671eceb39860e3a31508164539e0ee2fa3078381f.jpg

        That’s how you learn how they false advertise in their forums and chats and how they disrespect their backers in a shameful way.

        • Joe Blobers

          Tufao your hate of CIG make you blind… this is not new but still it is always embarrassing…

          No company is allowed to discuss publicly law point when a complain is raised. Period. Not a word except those given officialy by CIG and visible in Paul’s article here above.
          This is not direspect, this is on contrary respect of law, as CIG respected their contract with Crytek despite their claim.

          • Torb Inator

            You talk bollocks about information you cant possibly have,

    • Harvey Price

      I’ve only been peripherally been following the Star Citizen debacle, and I have the law expertise of a dead stoat … but why is it that all I am thinking about this is “uh oh”?

    • Joe Blobers

      Another day, another “drama”… 🙂

      Those nay-sayers will cry to the end as they did already hundreds times since past years… each year supposed to be worst than the previous one… each year prophecies of Doom countered by facts and numbers.

      – “Worst Anniversary sales in 2017?”: … It was the best of all past years…
      – “terrible netcode not able to even handle 8 players, broken for ever”: … Last patch allowed 30 to 50 players… at 25/30 FPS versus 5 FPS weeks ago.
      – “Seamless from space to planet decades away!”: … available to thousands of backers now in 2017…

      To make it short about this new one, we have one dying company Crytek, looking desperatly to grab a portion of future SC profit… They do not care about those minimum 75K$… no company would let lawyers lost time for such baseless amount. Crytek tried several times to abuse the contract signed. CIG ignored them… Crytek failed to scare CIG despite the fact they did know that Crytek will raise a complain based on U.S. pratice to sue everything with a wallet 🙂
      99.99% sure that Crytek will complain if they can’t get a good % of the pie…..

      So without surprise, here is Crytek complain. Several points that Crytek pretend to be valid… that are all rejected in block by CIG with no ambigious answer:

      “This is a meritless lawsuit that we will defend vigorously against,
      including recovering from Crytek any costs incurred in this matter.”

      Which mean, you have nothing and you will get nothing. If an individual or a company is threaten by someone else, there are two options:
      – pay (this is nothing but a robbery. Pure and simple in that case).
      – Counter attack with precise point. It is costly in time and money but I 100% support CIG as my backer money is not there to pay anyone if they do not have to be paid.

      CIG and Backers will emerge strengthened from this new “drama”.

      Pefect timing to give visibility to SQ42 newsletter to new Readers! 🙂

      • T_0_m

        You really have been busy Joe. I think someone needs to write a Star Citizen extension for Chrome which replaces any criticism of the game with pictures of kittens. Alternatively, purchase a bucket of sand and place your head in it for the duration of the court case – this seems to be the approach everyone in the SC subreddit has settled on. Either way it’ll do your blood pressure some good.

        Failing that, perhaps you should anger-purchase some Star Citizen real estate in their upcoming Holiday Land Sale (the Crytek legal fee edition).

    • Torb Inator

      Get a refund Commando.

    • Joe Blobers

      Update. We are now 21 days after this new “drama”. CIG has now answered to Crytek lawsuit.

      Here are all the filed documents:
      https://drive.google.com/drive/folders/1mPjfXrjAf9RUq3_5cJgd-hF-I5XoCQta

      Of course, that is not the end of the story. Crytek will obviously claim that breach of contract are real…. but I can’t resist to copy Voroxpete’s comments:

      Highlights:
      * CryTek attempted to sue RSI even though RSI didn’t actually exist when CIG negotiated the original agreement. They only created that company a few years later as a publicity arm for Star Citizen.
      * CryTek tried to accuse Ortwin of not recusing himself even though he actually got a waiver from CryTek before negotiating the agreement. Owned.
      * CryTek never showed the court the actual agreement they claim CIG violated, because it flat out disproves all of their claims.
      * The agreement clearly states that CIG can use CryEngine for both Star Citizen and Squadron 42. Slam dunk.
      * The claim that CIG has some kind of duty to only use CryEngine and nothing else is basically total bullshit, and really obvious bullshit at that. Like, we’re talking “A first year law student could spot that this case has no merit” levels of bullshit. CryTek are asking the court to ignore almost a century of established law in order to accept their interpretation of “exclusive”.
      * As any sane person would expect, the whole “removing CryTek logos and copyright notices” thing is ridiculous because they only took them off after they stopped using CryEngine.
      In short, CIG have unleashed the Ortwin. CryTek got rekt.

      In short, we see the reason why the complaint was amended to list everything as being done ‘intentionally’… Then CIG goes and drops a metric ass-ton (that’s bigger than an Imperial ass-ton) of case-law into why that wont fly…. 🙂