In a lawsuit, filed in the U.S. early January 2022, videogame giant Activision targeted German companies EngineOwning UG and CMN Holdings S.A, plus various individuals connected with their operation.

Running along similar lines as several other lawsuits filed by competitor Bungie, Activision claimed that the defendants trafficked in circumvention devices, in violation of the DMCA. The company aimed to hold the alleged cheat makers to account while sending a deterrent message to others considering the same conduct.

For more than a year, the EngineOwning defendants and their United States-based attorneys put up quite a fight. Characterizing the lawsuit as a battle between a $50 billion dollar company and mostly overseas defendants with limited resources to fight back, the defendants argued that being dragged all the way to the United States would be unfair, not to mention unnecessary; two of them are already being sued by Activision in a German case, they claimed.

These complaints appeared to have little effect on Activision. In February 2023, two of the defendants – Ignacio Gayduchenko ( 1 ) and Manuel Santiago ( 2 ) – broke ranks and settled with the plaintiffs for $2m and $1m, respectively. Court documents suggest that money wasn’t the first thing to be handed over.

Motion to Dismiss

This January some of the defendants (Valentin Rick, Alex Kleeman, Bennet Huch, Leon Frisch, Leon Schlender, Leonard Bugla, Marc-Alexander Richts, Pascal Claβen, Remo Löffler) filed a lengthy motion to dismiss in response to Activision’s amended complaint which had added new claims under the Computer Fraud and Abuse Act, and two further counts of racketeering (RICO).

In brief, the German defendants predicted the lawsuit would face difficulties. Evidentiary problems and the physical attendance of the defendants at a trial in California, for example. There was also the question of whether unwilling witnesses could even be compelled to travel. Beyond that, it might even prove difficult to enforce any judgment, they added.

Activision Pulls No Punches

Activision’s response was robust. The “disingenuous” representations of the defendants to avoid appearing in a U.S. court failed to take into account their “hugely profitable online business” which had generated millions of dollars in revenue from 400,000 mostly U.S.-based customers, at Activision’s expense. But more was to follow.

With help from two former EngineOwning participants, Activision had gained access to internal and private correspondence in which the defendants “routinely trade detailed instructions on how best to illegally launder” their shared profits, “engage in fraudulent tax-dodging schemes” and “concoct a story that EngineOwning had been sold to unknown buyers in 2018.

As for the objections against traveling to the United States, the defendants shouldn’t have profited from illegal activities there, Activision informed the court. And besides, traveling hadn’t been a problem in the past.

“Defendant Rick used [EngineOwning] profits to fund far more substantial international travel costs than those contemplated in his declaration, including rental of a ‘presidential suite in a hotel in Zurich’ for several weeks,” the company added.

In January 2022, not long after Activision filed its lawsuit, the company’s legal team at Mitchell Silberberg & Knupp claimed that the defendants had trolled and harassed them online, including making Steam groups called ‘suck my d***, Activision’ and using the initials of the law firm, ‘MSK Crime’.

That was always likely to act as a motivator, even over a year later.

“Elsewhere, Defendant [Marc-Alexander Richts] sneeringly ponders whether it is better to spend [EngineOwning] earnings on ‘a random lawyer in the US’ or ’10k cocaine,’ before he admits the real reason he would like to avoid U.S. travel. He simply does not ‘plan visiting (sic) that shithole country’.”

Claims that Activision is already suing the defendants in Germany along broadly the same lines were also dismissed.

“The actual complaint asserts wholly different claims under German law, by a different entity. The German lawsuit is focused on the European market, does not address U.S. distribution or damages, does not assert claims for trafficking in circumvention technology, does not include most of the defendants in this action, and will not resolve the issues presented here,” the company informed the court ( pdf ) .

Can’t Take Attorneys’ Calls Anymore

The Court subsequently issued an order denying in part and granting in part the motion to dismiss filed by defendants Rick, Bugla, Frisch, Richts, Kleeman, Schlender, Huch, Classen, Loffler, and EngineOwning UG (‘foreign defendants’). Activision was given the opportunity to file a second amended complaint, which it did not. After agreement was reached on a series of extensions, the defendants were given time to file their answer to the first amended complaint.

In the wake of several lengthy filings ( pdf ) and a lawsuit that now names more than 25 defendants ( pdf ) plus a company in Belize, Activision has been serving defendants in Europe under the Hague Convention ( pdf ) . In the background, however, the relationship between the ‘foreign defendants’ and their U.S. attorneys appears to have collapsed.

Court records describe a “breakdown in communications.” Due to the difference in time zones, contact between the parties had taken place over email and text messages. That had worked for well over a year, until the Court allowed the lawsuit to continue.

“Despite the Firm’s efforts in attempting to communicate with the Foreign Defendants on more than a dozen occasions, including reaching out to Markus Kompa, EngineOwning’s and Mr. Rick’s attorney in the German litigation, this breakdown in communication has not been resolved,” the defendants’ attorneys informed the Court.

Not All Defendants Maintain Silence

The law firm advised the defendants by email, text message, and letter, that they intended to withdraw, and because there was no response, the company concluded that meant there would be no opposition ( 1 , 2 ) .

The defendants were advised to inform the Court if they have retained new counsel and file a status report by June 2023. Since EngineOwning cannot proceed pro se, failure to appoint new counsel would result in an entry of default on the first amended complaint.

The Court extended the deadline to file an answer until July 17, 2023, but for up to four of the defendants, the end of this dispute may come a little sooner.

In a letter to the Court dated July 4, Marc-Alexander Richts confirmed he would be defending himself moving forward ( pdf ) . However, a letter dated late June reveals that new levels of cooperation may be the way forward.

In the meantime, it appears to be business as usual for EngineOwning.

From: TF , for the latest news on copyright battles, piracy and more.

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Cheating in computer games has existed almost as long as gaming itself. The difference today is that single-player games have mostly given way to multiplayer experiences featuring human competition.

Poking around in 8-bit gaming code was something enjoyed in isolation. Deploying a commercial cheating product to ensure ‘victory’ in a multi-player environment is something else entirely.

Activision vs. Call of Duty Cheat-Makers

Activision is among several companies leveraging copyright law to send a message to cheat-makers. A lawsuit filed early January 2022 in the U.S. targets German companies EngineOwning UG and CMN Holdings S.A, plus a growing list of both named and yet-to-be-identified defendants.

EngineOwning UG and ten named defendants filed a 53-page motion to dismiss last month, characterizing the lawsuit as a battle between a $50 billion dollar company and mostly overseas defendants with limited resources to fight back. Two of those defendants, EngineOwning UG and Valentin Rick, are already being sued by Activision in a similar lawsuit in Germany.

In broad terms, appeals to dismiss the U.S. lawsuit center on Activision’s decision to sue foreign defendants, with limited ties to the United States, in a California court. Germany would be a more appropriate and ultimately more practical venue, the motion argues.

Germany has competent courts, meaning the defendants wouldn’t have to incur huge costs to defend the same actions thousands of miles away. And since Activision has offices in Germany, a local proceeding shouldn’t be a burden for the plaintiffs either, the defendants insist.

A decision in the German case is expected to arrive soon and according to the defendants, it will be resolved “one way or another.”

Two Defendants Decide to Settle

With the prospect of potentially prolonged legal action ahead, two of the named defendants in the United States action have reached agreements with Activision.

In two separate filings dated February 14, Activision and defendants Ignacio Gayduchenko and Manuel Santiago request entry of consent judgments to bring their respective matters to an end.

In broad terms, both defendants have agreed to permanently cease and desist from knowingly or intentionally performing any of the activities detailed in a comprehensive list. The image below contains a small sample.

The agreements are customized based on details specific to each individual, their alleged role and other circumstances, but the overall message is extremely clear: stay away from cheat-related behaviors connected in any way to Activision’s business or face the consequences.

Gayduchenko agrees that judgment shall be entered against him “in the amount of two million dollars ($2,000,000), to be due and payable solely pursuant to the terms set forth in the Parties’ Confidential Settlement Agreement and Release.” Manuel Santiago agreed to the same terms but just half of the money – $1,000,000.

“The Parties irrevocably and fully waive any and all rights to appeal this Judgment and Permanent Injunction, to have it vacated or set aside, to seek or obtain a new trial thereon or otherwise to attack in any way, directly or collaterally, its validity or enforceability,” both documents continue.

“Nothing contained in this Judgment and Permanent Injunction shall limit the right of the Parties to seek relief including, without limitation, damages for any and all infringements of any Intellectual Property rights or for violation of the anti-circumvention provisions of the DMCA occurring after the date of this
Judgment and Permanent Injunction.”

Entry of these judgments and permanent injunctions require the judge’s signature, but for defendant Katerina Disdle, things are more straightforward. On February 10, Activision voluntarily dismissed her from the case. The reasons for that are unknown but since the dismissal is without prejudice, Activision has left the door open for further action, if that’s ever required.

Judge Warns Remaining Defendants

When regular people represent themselves in complex legal battles against rich opposition and then win , people make movies about them. The other cases where most lose? Not so much.

A self-representation order placed on file by District Judge Michael W. Fitzgerald notes that one or more defendants in this matter intend to appear without an attorney. That’s completely within their rights but since proceeding pro se has significant risks, a few should be pointed out.

“Generally speaking, non-attorney litigants are less like to be victorious than those assisted by counsel. The opposing party may have a lawyer, and that lawyer’s duty is to achieve victory for his or her client. He or she will take every step legally permissible to that end,” the Judge warns.

“The Court is a neutral adjudicator of the law. The role of the judge is to resolve disputes arising between the parties in accordance with the law. As such, the judge cannot assist you, cannot answer your legal questions, and cannot take sides in the dispute, nor can any members of the judge’s staff.”

Simply stated, when you elect to proceed pro se, you are on your own and become personally responsible for litigating your action in accordance with the rules. You must become familiar with these rules. You will be held to the same standards as a lawyer as far as complying with the Court procedures and the rules and regulations of the court system

The next few pages in the order cover some of the basics ( pdf ) but since much more is required, additional defendants may be persuaded to settle.

The proposed joint stipulations and voluntary dismissal can be found here ( 1 , 2 , 3 , pdf)

From: TF , for the latest news on copyright battles, piracy and more.

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