High Court grants summary judgement for breach of contract and copyright infringement in relation to “cheat” software designed for Grand Theft Auto V

Take-Two Interactive Software Inc is the publisher of the best-selling video game of all time, Grand Theft Auto V.

Take-Two issued proceedings against five individuals for breach of contract and copyright infringement in relation to cheat software called Epsilon. The claims against the first, second and third defendants were settled by way of consent orders. Both the fourth and fifth defendants admitted that they were involved in developing Epsilon, but denied liability.

Epsilon is a kind of cheat software known as a “mod menu”, which are software programs that alter the operation of a game while it is being played so as to enable players to gain various advantages, such as “spawning” copies of weapons, vehicles or ammunition, generating “spoofed” virtual currency for use in the game, and interfering with other players’ gameplay experience.

The game, Grand Theft Auto V, can be played online by up to 30 players together. Take-Two said that if one or more players had the benefit of the Epsilon software, the gameplay experience for other players was seriously harmed. They said that it also allowed cheating players to generate virtual goods and currency that they would otherwise either have to buy using real money or “earn” during the course of (legitimate) play.

Take-Two claimed breach of contract, arguing that the defendants had breached various terms of the end user licence agreement, as well as the terms of service and online code of conduct, to which all players of the game must agree in order to install and play the game.

Take-Two also claimed that the defendants had knowingly induced breach of contract by the defendants’ customers, i.e. the users of the Epsilon mod menu.

Take-Two also claimed copyright infringement, claiming: (i) that the defendants had, contrary to s 16(1)(a) of the Copyright, Designs and Patents Act 1988, copied the game’s executable file (which contained instructions to run the game on the player’s computer) and libraries (which provided the graphics, sound and other artistic material used in the game), and made adaptations contrary to ss 16(1)(e) and 21; (ii) that the defendants had authorised infringement (in the form of copying and adaptations) committed by users of the Epsilon mod menu contrary to s 16(2) CDPA; and (iii) that they had a claim under s 296 CDPA on the basis that Epsilon incorporated a circumvention of technical devices built into the game, which normally protected its operation against unauthorised tampering and hacking.

Take-Two applied for summary judgment against the defendants.

Mrs Justice Falk found that the defendants were in clear breach of contract. The defendants did not deny that the purpose of Epsilon was to enable cheating. The contract contained a specific prohibition both on cheating in any form and on providing guidance or instructions to any other individual or entity on how to cheat.

Falk J declined to grant summary judgment for breach of contract against the fifth defendant, however, as he was a minor at the relevant time and was therefore not bound by the contractual terms. She was not persuaded that the fifth defendant had no real prospect of successfully defending the claim for breach of contract.

Falk J also granted summary judgment against the defendants for inducing breach of contract. She found that the purchaser of the Epsilon mod menu who had also installed and played the game had agreed to be bound by the end user licence agreement. By cheating they had breached those terms. Further, the defendants had persuaded, procured or induced this to happen by marketing and supplying Epsilon for the express purpose of allowing or encouraging individuals who acquired it to cheat. In addition, both defendants admitted knowledge of the existence of the end user licence agreement. They were also aware that their customers were regularly getting banned from playing the game. They therefore knew that what they were doing was unauthorised and a breach, meaning that intention to procure a breach of contract was established.

As for the copyright infringement claims, Falk J was satisfied to summary judgment standard that, by providing the Epsilon cheat to consumers, the defendants had authorised copying of the game program or substantial parts of it.

Falk J noted that s 17(6) of the CDPA expressly provides that copying includes the making of copies that are “transient”. The defendants might not have committed any copying of a lasting nature (as no permanent or lasting change occurred to the player’s hard drive and the game continued to exist on it unaltered), but Falk J found that they had made transient copies. For example, Epsilon would allow a player to access weapons or other objects which would not be available to a player not using Epsilon, by taking information from the game’s libraries in relation to the object and reproducing the image and functions of such object, instantiated in the game, so allowing the cheater to use it in gameplay. In Falk J’s view, that clearly involved copying.

Falk J was not, however, convinced to summary judgment standard that such process also amounted to making adaptations under s 21 of the CDPA.

Falk J also found that the defendants had authorised infringement under s 16(2). The defendants had supplied the means of infringement and had an ongoing relationship with purchasers of Epsilon, for example by providing patches, updates, instructions and assistance. They clearly had a high degree of control over the features of Epsilon and its functionality. Further, when Epsilon was used as intended, infringement of copyright was inevitable because Epsilon involved at least some element of copying of the software and in-game assets.

Falk J rejected the fourth defendant’s decompilation defence under s 50B. She said that s 50B describes decompilation as the process of converting a computer program expressed in low-level language into a version expressed in higher-level language. That did not fit with the description of how the Epsilon product was produced as given by the fourth defendant in evidence.

Falk J considered that there was no other compelling reason to proceed to trial. Accordingly, she granted summary judgment in favour of Take-Two. (Take-Two Interactive Software Inc v Nathan James [2020] EWHC 179 (Pat) (29 January 2020) — to read the judgment in full, click here).