Case 2:22-cv-00981-RAJ Document 22 Filed 05/09/23 Page 1 of 10
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` THE HONORABLE RICHARD A. JONES
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`BUNGIE, INC., a Delaware corporation,
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`Case No. 2:22-cv-0981-RAJ
`Plaintiff,
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`
`ORDER GRANTING IN PART
`AND DENYING IN PART
`DEFENDANT’S MOTION TO
`DISMISS
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`v.
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`L.L., a minor,
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` Defendant.
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`
`INTRODUCTION
`I.
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`THIS MATTER comes before the Court on Defendant’s Motion to Dismiss
`(“Motion”). Dkt. # 18. Having reviewed the briefing, the relevant record, and applicable
`law, the Court GRANTS IN PART and DENIES IN PART the Motion.
`II.
`BACKGROUND
`The following is taken from Plaintiff’s complaint, which is assumed to be true for
`the purposes of Defendants’ motion to dismiss. Sanders v. Brown, 504 F.3d 903, 910
`(9th Cir. 2007); see also Dole Food Co. v. Watts, 303 F.3d 1104, 1107 (9th Cir. 2002).
`On July 15, 2022, Plaintiff Bungie, Inc. (“Bungie”) filed a complaint against
`Defendant L.L. for (1) breach of contract, (2) copyright infringement, (3) fraud, (4)
`Digital Millennium Copyright Act (“DMCA”) anti-circumvention, and (4) violation of
`the Washington Consumer Protection Act (“CPA”). Dkt. # 1. Plaintiff developed a first-
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`Case 2:22-cv-00981-RAJ Document 22 Filed 05/09/23 Page 2 of 10
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`person shooter video game called Destiny 2. Id. ¶ 1. Plaintiff claims that Defendant
`breached the Limited Software License Agreement (“LSLA”) when he used cheating
`software to gain a competitive advantage, streamed himself on Twitch playing Destiny 2
`using that cheating software, and sold Destiny 2 emblems (digital art badges obtained by
`in-game achievements) on “OGUsers,” a hacking and selling forum. Id. ¶¶ 1, 2, 5, 6.
`Moreover, Plaintiff claims Defendant committed fraud and circumvented Plaintiff’s
`technological measures when he continuously agreed, then subsequently violated, the
`LSLA by making new accounts (thirteen in total) every time he was banned for cheating.
`Id. ¶¶ 2, 173-175. Lastly, Plaintiff claims Defendant also circumvented Plaintiff’s
`technological measures by using cheat software designed to avoid detection by Plaintiff’s
`anti-cheat software. Id. ¶¶ 164, 169, 172.
`Plaintiff also provides statements from Twitter written by Defendant that detail his
`alleged cheating, streaming, and selling. Id. ¶¶ 65-77, 87. These statements also detail
`purported threats to Defendant’s content moderators. Id. ¶¶ 54-64.
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`Pursuant to RCW § 26.28.030, Defendant properly disaffirmed all contracts
`between himself and Plaintiff due to his status as a minor. Dkt # 17. Defendant moved to
`dismiss for failure to state a claim, which is currently before the court. Dkt. # 18.
`III. LEGAL STANDARD
`Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a
`complaint if it fails to state a claim upon which relief can be granted. To survive a Rule
`12(b)(6) motion to dismiss, the plaintiff must allege “enough facts to state a claim to
`relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
`This “facial plausibility” standard requires the plaintiff to allege facts that add up to
`“more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal,
`556 U.S. 662, 678 (2009). While courts do not require “heightened fact pleading of
`specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the
`speculative level.” Twombly, 550 U.S. at 555, 570.
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`Case 2:22-cv-00981-RAJ Document 22 Filed 05/09/23 Page 3 of 10
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`In deciding whether the plaintiff has stated a claim upon which relief can be
`granted, the Court must assume that the plaintiff’s allegations are true and draw all
`reasonable inferences in the plaintiff’s favor. See Usher v. City of Los Angeles, 828 F.2d
`556, 561 (9th Cir. 1987). However, the Court is not required to accept as true “allegations
`that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.”
`In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).
`IV. DISCUSSION
`Defendant’s Motion argues Plaintiff’s claims for (1) breach of contract, (2) fraud
`in the inducement, (3) copyright infringement, (4) circumvention of technological
`measures, and (5) violation of the CPA must be dismissed under Rule 12(b)(6) for failure
`to state a claim. Dkt. # 18 at 1. The Court will address each claim in turn.
`A. Breach of Contract
`Defendant argues the breach of contract claim should be dismissed because there
`is no enforceable contract between Defendant and Plaintiff. Dkt. # 18 at 11-2. Defendant
`was a minor when he agreed to the LSLA and, pursuant to RCW § 28.28.030, has
`properly disaffirmed the contract for lack of capacity. Dkt. # 17. Defendant therefore
`asserts that there is no basis for Plaintiff’s breach of contract claim. Id. at 12. In response,
`Plaintiff concedes that Defendant’s disaffirmance of the contract renders the contract
`void and eliminates any breach of contract liability. Dkt. # 19 at 9. As such, Plaintiff
`recommends the Court dismiss the breach of contract claim. Id. at 10.
`Because Defendant properly disaffirmed the contract under RCW § 28.28.030,
`Defendant is no longer bound by its terms. See Paulson v. McMillan, 8 Wn.2d 295, 299
`(1941) (holding an “infant” is bound by the contract until and unless he properly
`disaffirms it). Accordingly, the Court grants Defendant’s motion to dismiss the breach of
`contract claim without prejudice.
`B. Fraud in the Inducement
`Defendant contends that Plaintiff did not rely on any misstatement of material fact
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`Case 2:22-cv-00981-RAJ Document 22 Filed 05/09/23 Page 4 of 10
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`as required for fraud because Plaintiff either knew that minors would assent to the LSLA
`or chose to “look the other way” and rely on software that provided access to anyone who
`agreed to abide by the LSLA. Dkt. # 18 at 12-13. In response, Plaintiff argues that (1)
`they have plead clearly all nine elements required for fraudulent inducement, Dkt. # 19 at
`10, and (2) reliance is a factual issue that must be taken as true on a motion to dismiss. Id.
`at 11.
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`The Court agrees with Plaintiff. There are nine essential elements that a plaintiff
`must show to bring a claim of fraudulent inducement: “(1) a representation of existing
`fact, (2) its materiality, (3) its falsity, (4) the speaker’s knowledge of its falsity, (5) the
`speaker’s intent that it be acted upon by the person to whom it was made, (6) ignorance
`of its falsity on the part of the person to whom the representation is addressed, (7) the
`latter’s reliance on the truth of the representation, (8) the right to rely upon it, and (9)
`consequent damage.” Elcon Const., Inc. v. Eastern Washington University, 174 Wn.2d
`157, 166 (2012). Reasonable reliance is a question of fact. Aliya Medcare Finance, LLC
`v. Nickell, 156 F.Supp.3d 1105, 1123 (C.D. Cal. May 26, 2015); see also Living Designs,
`Inc. v. E.I. Dupont de Nemours and Co., 431 F.3d 353, 363 (9th Cir. 2005) (holding
`plaintiffs adequately plead reasonable reliance in their amended complaint).
`Defendant’s argument that Plaintiff did not rely on any misrepresentation fails. In
`the complaint, Plaintiff states they relied on Defendant’s purported acceptance of the
`LSLA because Plaintiff had no way of knowing the account accepting the LSLA was an
`account made by Defendant. Dkt. # 1 ¶¶ 143-5. Because the Court must assume the facts
`alleged in the complaint are true, Plaintiff’s contention that they relied on Defendant’s
`misrepresentation that he would abide by the LSLA is assumed to be true. Whether
`Plaintiff reasonably relied on any alleged misrepresentation by Defendant is a question to
`be addressed at a later stage of the litigation. See Cleverly v. Ballantyne, No.
`212CV00444GMNGWF, 2013 WL 12320134, at *10 (D. Nev. Aug. 29, 2013). Plaintiff
`has alleged sufficient facts to state a claim. Id. ¶¶ 68, 75, 114, 119, 135-146. Therefore,
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`ORDER – 4
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`Case 2:22-cv-00981-RAJ Document 22 Filed 05/09/23 Page 5 of 10
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`the Court denies Defendant’s motion to dismiss the fraudulent inducement claim.
`C. Copyright Infringement
`Defendant argues the use of ancillary software to gain an advantage in gameplay is
`not copyright infringement because (1) the use of the cheat software did not create a
`derivative work, and (2) the anti-cheat language in the LSLA are covenants, not
`conditions, which requires any remedy pursued to be based in contract, not copyright
`infringement. Dkt. # 18 at 14-17. Plaintiff counters that Defendant’s disaffirmance of the
`LSLA renders each of his uses of Destiny 2 infringing and any subsequent play on new
`accounts unlicensed because Defendant fraudulently represented his intent to abide by the
`LSLA. Dkt. # 19 at 12.1 Plaintiff also asserts that even without the disaffirmance and the
`alleged fraudulent inducement, Defendant still infringed for two reasons: (1) the anti-
`cheat language in the LSLA are conditions, and (2) the cheating created an unauthorized
`creation of derivative work. Id. at 15-17.
`Plaintiff’s arguments are persuasive. To establish a copyright infringement,
`Plaintiff must show (1) ownership of the allegedly infringed material, and (2) that the
`alleged infringers violated exclusive rights granted to the copyright holder under the
`Copyright Act. Disney Enters., Inc. v. VidAngel. Inc., 869 F.3d 848, 856 (9th Cir. 2017).
`The owner of a copyright has the exclusive right to prepare derivative works based on its
`original work. DC Comics v. Towle, 803 F.3d 1012, 1023 (9th Cir. 2015). A derivative
`work is a “work based upon one or more preexisting works that recasts, transforms, or
`adapts the preexisting work.” Id. If a third party creates a derivative work without consent
`from the copyright owner, the owner may sue for copyright infringement. Id.
`First, it is undisputed that Plaintiff owns copyrights to Destiny 2 both as a software
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`1 Plaintiff indicated in their response to this Motion that they plan to amend the complaint
`to assert that all of Defendant’s “downloads, uses, and streams of Destiny 2 were infringing,
`including his initial download, uses, and streams prior to his first violation of the LSLA.” Dkt. #
`19 at 15. Plaintiff is free to amend their complaint within 14 days of this order to include the
`additional copyright infringement claims.
`ORDER – 5
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`Case 2:22-cv-00981-RAJ Document 22 Filed 05/09/23 Page 6 of 10
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`program and an audiovisual work. Dkt. # 1 ¶ 149. Second, the cheat software transformed
`Destiny 2 by manipulating the software to add visual elements overlayed on the original
`visuals in the game. Id. ¶¶ 151-2. Defendant did not have consent from Plaintiff to do so.
`See Id. ¶ 22. Plaintiff therefore sufficiently alleges that Defendant created an
`unauthorized derivative work and violated Plaintiff’s exclusive rights.
`Moreover, Plaintiff’s argument that the anti-cheat provision of the LSLA is a
`condition is also persuasive. Conditions and covenants are distinguished according to
`state contract law. MDY Industries, LLC v. Blizzard Entertainment, Inc., 629 F.3d 928,
`939 (9th Cir. 2010). Under Washington law, a breach of a condition prevents the promisor
`from “acquiring a right” or “deprives it of one.” Tacoma Northpark, LLC v. NW, LLC,
`123 Wn. App. 73, 79 (2004). Moreover, contractual terms that limit a license’s scope are
`conditions and breaches of those conditions constitute copyright infringement.
`Ticketmaster LLC v. Prestige Entertainment, Inc., 306 F.Supp.3d 1164, 1172 (C.D. Cal.
`Jan. 31, 2018).
`The anti-cheat provision of the LSLA is a condition. The pertinent language of the
`provision states that “any use of the Program in violation of the License Limitation will
`result in an immediate termination of your license.” Dkt. # 19 at 13. This language makes
`the provision a condition. By violating the provision, the violator’s license to play
`Destiny 2 will be terminated, thus depriving the violator the right to play Destiny 2 and
`limiting the license’s scope.
`Because Plaintiff has alleged sufficient facts to show the cheat software created an
`unauthorized derivative work and that the anti-cheat provision is a condition, the Court
`denies Defendant’s motion to dismiss on the copyright infringement claim.
`D. Circumvention of Technological Measures
`Defendant asserts that Plaintiff cannot show that Defendant’s use of cheat
`software disabled, descrambled, or decrypted Plaintiff’s anti-cheat software. Dkt. # 18 at
`17-18. In response, Plaintiff claims Defendant circumvented technological measures in
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`Case 2:22-cv-00981-RAJ Document 22 Filed 05/09/23 Page 7 of 10
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`two main ways: (1) he used the cheat software to avoid detection or bypass Plaintiff’s
`anti-cheat software and scrambled location data, and (2) he created new accounts and
`agreed to the LSLA every time he was banned to avoid or bypass Plaintiff’s access
`control to the game. Dkt. # 19 at 18-21. Plaintiff also contends a statement written by
`Defendant on June 11, 2022 via Twitter, shows a violation of the DMCA. Id. at 17. This
`statement, however, is not the basis for Plaintiff’s claim in their complaint. Therefore, the
`Court declines to consider it.
`The DMCA generally prohibits circumventing a technological measure that
`effectively controls or protects access to a work protected under [the Copyright Act]. 17
`U.S.C.A. § 1201(a). To state a claim under the DMCA, Plaintiff must allege that (1) the
`work at issue was protected under the Copyright Act; (2) the copyrighted work was
`protected by a “technological measure,” and (3) the technological measure was
`“circumvented” in order to obtain access to the copyrighted work. Id. at § 1201(a)(1)(A).
`Circumvention means to “descramble a scrambled work, to decrypt an encrypted work, or
`to otherwise avoid, bypass, remove, deactivate, or impair a technological measure,
`without the authority of the copyright owner.” Id. at § 1201(a)(3)(A).
`First, Plaintiff holds multiple copyright registrations for Destiny 2, making the
`game protected under the Copyright Act. Dkt. # 1 ¶ 149. Second, Destiny 2 is protected
`by multiple technological measures, namely Plaintiff’s anti-cheat software and its access
`control measures. See MDY Industries, LLC, 629 F.3d at 954 (stating anti-cheat software
`is a technological measure); see also 321 Studios v. Metro Goldwyn Mayer Studios, Inc.,
`307 F.Supp.2d 1085, 1094-5 (N.D. Cal. Feb. 19, 2004) (holding that a CSS license key is
`a technological measure that controls access to copyrighted work); see also Synopsys,
`Inc. v. InnoGrit. Corp., 2019 WL 4848387, at *8 (N.D. Cal. Oct. 1, 2019) (explaining
`“unauthorized use of license keys or passwords” constitutes “circumvention” under the
`DMCA). Third, those technological measures were circumvented by Defendant. He
`bypassed the license access control measures put in place by Plaintiff when he agreed to
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`ORDER – 7
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`Case 2:22-cv-00981-RAJ Document 22 Filed 05/09/23 Page 8 of 10
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`the LSLA with no intention to abide by it in order to gain access to Destiny 2 after being
`banned. Dkt. # 1 ¶¶ 24-53, 65-70, 75, 170, 175. He bypassed Plaintiff’s login step control
`measures when he created new accounts after being banned. Id. ¶¶ 74, 168. He used cheat
`software to avoid detection by Plaintiff’s anti-cheat technology. Id. at ¶ 169. Plaintiff has
`sufficiently plead facts that support a claim for a violation of the DMCA.
`The Court is not persuaded by Defendant’s cherry-picked reading of the DMCA
`that only establishes a violation when the Defendant decrypts, descrambles, or disables
`Plaintiff’s software. See Dkt. # 18 at 17-8. When read as a whole, the statute clearly
`states that avoiding or bypassing a technological measure violates the DMCA. See 17
`U.S.C.A. § 1201(a)(3)(A). Therefore, the Court denies Defendant’s motion to dismiss the
`circumvention of technological matters claim.
`E. Washington Consumer Protection Act
`Defendant argues that no laws prohibit the use of cheat software or the selling of
`Destiny 2 emblems in trade or commerce, and that his statements on Twitter are protected
`by the First Amendment and cannot used as a basis for a CPA violation claim. Dkt. # 18
`at 13. Using cheat software and selling emblems, Defendant claims, is only prohibited
`because the LSLA prohibits them. Id. Defendant contends that since the LSLA is no
`longer binding against him there is no basis for Plaintiff’s claim. Dkt. # 18 at 13. In
`response, Plaintiff makes three arguments: (1) a CPA violation need not allege that the
`conduct as issue violated any statute, (2) the Washington Supreme Court found that
`speech violated the CPA, and (3) Defendant’s conduct fits squarely within the purpose
`and scope of the CPA. Dkt. # 19 at 22-23.
`Plaintiff’s arguments fail. To prevail on a CPA claim, Plaintiff must show (1) an
`unfair or deceptive act or practice, (2) occurring in trade or commerce, (3) affecting the
`public interest, (4) injury to a person’s business or property, and (5) a causal link between
`the unfair or deceptive act and the injury. Burlington Insurance Company v. Blind
`Squirrel, LLC, 228 F.Supp.3d 1160, 1170 (E.D. Wash. Jan. 10, 2017); see also RCW
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`ORDER – 8
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`Case 2:22-cv-00981-RAJ Document 22 Filed 05/09/23 Page 9 of 10
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`19.86.020.
`It is unquestioned that Defendant’s alleged cheating, selling of emblems, and
`streaming is an unfair or deceptive act occurring in trade or commerce that caused injury
`to Plaintiff’s business. Dkt. # 1 ¶¶ 7-8, 20, 65-87, 100, 125, 180, 183. However, Plaintiff
`fails to show that Defendant’s alleged conduct is of public interest. Generally, a breach of
`a private contract affecting only the parties to the contract is not an act that affects the
`public interest. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d
`778, 790 (1986). The factors that indicate a public interest in a private dispute include the
`following: (1) Were the alleged acts committed in the course of defendant’s business? (2)
`Did defendant advertise to the public in general? (3) Did defendant actively solicit this
`particular plaintiff, indicating potential solicitation of others? (4) Did plaintiff and
`defendant occupy unequal bargaining positions? Id. at 790-1. Moreover, the public
`interest element may be satisfied by a showing that a statute has been violated which
`contains a specific legislative declaration of public interest impact. Id. at 791.
`Here, Defendant’s conduct only affects the parties in this matter. There is no
`statute with a legislative declaration of public interest that has been violated, and none of
`the public interest factors are satisfied. Indeed, Defendant did not engage in this activity
`as part of a business, he did not advertise to the public or to Plaintiff directly, and if
`anything, Plaintiff was in a greater bargaining position as a large corporation. While
`Defendant did made statements about his alleged conduct on Twitter, those statements
`are not the basis for Plaintiff’s consumer protection claim: they are not solicitations rising
`to the level of a consumer transaction. Dkt. # 1 ¶¶ 65-77, 87; see also Haner v. Quincy
`Farms Chems., Inc., 97 Wn.2d 753 (1982) (holding plaintiff farmer’s purchase of
`defective wheat seed from large agriculture companies was a consumer transaction); see
`also Lidstrand v. Silvercrest Indus., 28 Wn.App. 359 (1982) (stating plaintiff buying a
`defective mobile home from defendant corporation was a consumer transaction).
`Therefore, Plaintiff fails to alleged the public interest element. As such, the Court grants
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`ORDER – 9
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`Case 2:22-cv-00981-RAJ Document 22 Filed 05/09/23 Page 10 of 10
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`Defendant’s motion to dismiss the CPA violation.
`V.
`CONCLUSION
`For the reasons stated above, the Court GRANTS in part and DENIES in part
`Defendant’s Motion. Dkt. # 18. Within 14 days of the date of this order, Plaintiff may
`submit a first amended complaint if it so chooses.
`
`DATED this 9th day of May, 2023.
`
`A
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`The Honorable Richard A. Jones
`United States District Judge
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`ORDER – 10
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