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From Intellectual Property Law Daily, March 9, 2018

Most of ‘Warcraft’ game developer’s new copyright attacks against ‘Soul Hunters,’ ‘Heroes Charge’ go forward

By Thomas Long, J.D.

In the latest chapter of the saga pitting video game developers Blizzard Entertainment, Inc., and Valve Corporation against competitors Lilith Games (Shanghai) Co., Ltd., and uCool, Inc., the plaintiffs’ second amended complaint contained plausible allegations that Lilith’s "Soul Hunters" game and uCool’s "Heroes Charge" game infringed protectable elements of several of the plaintiffs’ games, including the popular "Warcraft" and "World of Warcraft" series, the federal district court in San Francisco has ruled. The new pleading contained specific examples of game characters and elements of the defendants’ games that allegedly were substantially similar to copyrightable elements of the plaintiffs’ games. The plaintiffs failed, however, to allege sufficient details to state a plausible claim that Lilith’s "Soul Hunters" game infringed the plaintiffs’ "Diablo" and "Starcraft" games, although the court gave them permission to amend their pleadings once again (Blizzard Entertainment, Inc. v. Lilith Games (Shanghai) Co., Ltd., March 8, 2018, Breyer, C.).

Blizzard and Valve were well-known video game developers and the copyright owners of the popular video game franchises "Warcraft," "World of Warcraft," "Warcraft III," "Starcraft," "Diablo," "Defense of the Ancients" (or "DotA" and "DotA 2"), and others. The plaintiffs also asserted copyright ownership of a variety of related products and merchandise. The plaintiffs originally alleged that uCool’s "Heroes Charge" game for mobile devices infringed the plaintiffs’ copyrights in the asserted works. In December 2015, the court granted uCool’s motion to dismiss the claims against it, and the plaintiffs filed a first amended complaint. In April 2016, the court denied uCool’s motion to dismiss the amended complaint and in May 2016 also denied uCool’s motion for partial summary judgment.

SAC. The plaintiffs then filed a second amended complaint (SAC). In the SAC, the plaintiffs expanded their references to Lilith’s game "Soul Hunters" and made it clear that their infringement allegations included that game. The plaintiffs also added other defendants related to uCool whose alleged involved in the infringement was uncovered during discovery. Otherwise, like the first amended complaint, the SAC alleged that the defendants used in their games specific elements derived from, and substantially similar to, elements in the plaintiffs games, including: (1) visual depictions of, and skills given to, individual characters, (2) in-game icon artwork, (3) visual depictions of locations and landmarks, (4) musical compositions, and (5) the overall look and feel. Lilith and the uCool Defendants moved to dismiss parts of the complaint, arguing that the plaintiffs failed to make plausible allegations of infringement.

Lilith’s motion to dismiss. The court agreed with Lilith that the SAC failed to state a plausible claim that Lilith’s "Soul Hunters" game infringed the plaintiffs’ "Diablo" and "Starcraft" games, but not with respect to the plaintiffs’ other games. As an initial matter, the court rejected Lilith’s argument that the plaintiffs insufficiently identified which works "Soul Hunters" allegedly infringed. The complaint identified numerous copyrights and their respective owners. The plaintiffs also clearly identified the allegedly similar elements of the parties’ respective works, and alleged that these elements were copyrightable. The SAC provided several representative examples of plausibly copyrightable characters, depictions of landmarks, in-game artwork, and musical compositions. These copyrightable elements were consistent across different game versions, according to the plaintiffs. In addition, the complaint compared the alleged protected elements in the plaintiffs’ games to elements of "Soul Hunters." Therefore, the pleading put Lilith on fair notice of the factual allegations against it. Because the plaintiffs sufficiently allege representative examples with respect to at least one version of the "Warcraft" games, "DotA," "Dota 2," "Hearthstone," and "Heroes of the Storm," they stated a plausible claim of infringement against "Soul Hunters" with respect to these games.

However, the SAC contained no specific examples of infringing similarities between "Soul Hunters" and the plaintiffs’ "Diablo" and "Starcraft" games. The SAC indicated that "Diablo" and "Starcraft" were entirely different franchises from the "Warcraft," with different game universes and different characters. Nothing in the SAC suggested that any of the representative examples of "Soul Hunters" infringing the plaintiffs’ other games extended to "Diablo" or "Starcraft." Therefore, the claims against "Soul Hunter" based on alleged infringement of "Diablo" and "Starcraft" were dismissed. The plaintiffs were given leave to amend their allegations with respect to those games.

uCool’s motion to dismiss. The uCool Defendants moved to dismiss the SAC’s claims against "Heroes Charge" relating to "Starcraft," "Diablo," and "Heroes of the Storm." They argued that (1) "aggregating" the plaintiffs’ games was not a legally cognizable theory, (2) "Heroes Charge" was not substantially similar to "Diablo" or "Starcraft," and (3) the plaintiffs were unable to plead access to "Heroes of the Storm" because Blizzard released it to the public after "Heroes Charge" was released.

The court rejected all of the uCool Defendants’ arguments. First, the plaintiffs were not relying on an "aggregation" theory—that is, "mixing and matching" elements from multiple works to manufacture substantial similarity—the court said, but instead set forth infringement claims regarding several specific games. Second, the plaintiffs clearly and specifically alleged that the depictions of two characters in "Heroes Charge" were substantially similar to two copyright-protected characters in "Diablo" and "Starcraft." The SAC plausibly referred to features of the plaintiffs’ characters that were not generic or unprotected scenes a faire, in the court’s view. Finally, even if a copyright registration dated June 2015 was evidence that "Heroes of the Storm" was "published" after the August 2014 release of "Heroes Charge," the court noted that proof of access was not necessary to show copying. Even without evidence that the uCool Defendants had access to the plaintiffs’ game, they could make out a case of infringement by showing that the works were "strikingly similar." Moreover, the fact that "Heroes Charge" was "published" in June 2015 did not necessarily contradict the claim that the game was first "released to the public" in March 2014. Members of the public might have been allowed to test the game before it was published and widely released in June 2015. Construing the pleadings in the light most favorable to the plaintiffs, as the non-moving parties, the court denied the uCool Defendants’ motion to dismiss.

The case is No. 3:15-cv-04084-CRB.

Attorneys: Andrew C. Spitser (Mitchell Silberberg & Knupp LLP) for Blizzard Entertainment, Inc. and Valve Corp. Colin H. Murray (Baker McKenzie LLP) for Lilith Games [Shanghai] Co. Ltd. Claude M. Stern (Quinn Emanuel Urquhart & Sullivan, LLP) for uCool, Inc. Cheryl Ann Cauley (Taylor & Patchen, LLP) for Huwa, Inc.

Companies: Blizzard Entertainment, Inc.; Valve Corp.; Lilith Games [Shanghai] Co. Ltd.; uCool, Inc.; Huwa, Inc.

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