Legal Archives | Broken Joysticks

Trendy Entertainment is probably not a studio you have heard of, Studio Wildcard probably is, or at least you have heard of their big game: Ark: Survival Evolved. The Dino taming, survival game that was last years smash hit on steam, that sold over 2 million copies. We even recently had the opportunity to interview Jessie Rapczak at GDC. Ark is quite popular even spawing a spin off king of the hill type of game they are giving away for free, in addition to the 2 million in sales on Steam alone! Some simple back of envelope math puts the worth of Wildcard with those sales at over 60 million USD in sales as of October of last year. So its no surprise that when you make a lot of money someone is going to want a piece of that money. In this case it was Trendy Entertainment former home of Jeremy Stieglitz, and developer of Dungeon Defenders. Jeremy is listed as one of the founders of Wildcard, and was recently sued with his former company alleging that he had tried to recruit other developers at the studio to the Ark project, clearly violating the contract he signed when he left Trendy which had a clause forbidding him from poaching any of Trendy’s developers. Poaching for those not in the industry refers to the practice of recruiting an employee from a direct competitor. This week Trendy and Wildcard have settled out of court documents filed with Alachua County Clerk(requires log in and capta to view) show. This filing form April the 6th shows that the claimant (Trendy) believes that Trendy owes them over 20 million dollars in damages.

The writ says in part: “This amount does not include the substantial damages that Insight incurred as a result of Stieglitz’s failure to honor the right of first refusal, nor does it take into account the tens of millions of dollars by which Wildcard was unjustly enriched by using Trendy’s intellectual property”

To summarize Trendy isint ready to stop at 26 million. Trendy’a filing also levels some other interesting points: “Plaintiff believes that the Stieglitzes will continue to remove their assets from Florida until they are effective judgment proof”. Indicating that that the plaintiff believes that Stieglitze is holding money in off shore accounts. It goes out to level the very serious accuasation of perjury and even name a specific country (Singapore) as the place the money would be stored.

Now Kotaku is reporting and filings seem to indicate that before this could ever see the light of a courtroom its been settled out of court for a massive sum of 40 million dollars. Kotaku has links to a text message which purports to show Mrs. Stieglitze’s phone with the number 40 million as the settlement. So if we belive the filing (which we can) then the case is settled and if you belive a screen shot that appeared on reddit the settlement was 40 million dollars. Considering we know that Ark sold at least 60 million in direct sales, this doesnt seem reasonable unless there was much more money involved than just my back of envelope math showed.

Either way, this just goes to show how ugly intellectual property and small video game developing can be. This is not the first, nor will it be the last case of a someone moving on from a mediocre company, having great sucess with similar (or the same) people and tools, elsewhere, and thus drawing the ire of the old company.

An Australian court has found Valve is in violation of Australian consumer protection law by not having a refund policy in place for Australia. The Australian Competition and Consumer Commission (ACCC), has ruled that Valve had no refund policy in place which ran contrary to Australian Consumer law. This has since been corrected but this suit was filed in August 2014 before the current policy was put in place. Valves main defense was that it does not sell consumer good in Australia rather its selling a digital product, and that product comes from their headquarters in Washington state.

The Australian Federal Court ruled that Valve had made “false or misleading representations in the terms and conditions contained in three versions of its Steam Subscriber Agreement and two versions of its Steam Refund Policy”. These include:

Consumers were not entitled to a refund for digitally downloaded games purchased from Valve via the Steam website or Steam Client (in any circumstances);
Valve had excluded statutory guarantees and/or warranties that goods would be of acceptable quality; and
Valve had restricted or modified statutory guarantees and/or warranties of acceptable quality.

the ACCC seemed pleased with the decision as Chairman Rod Sims said “The Federal Court’s decision reinforces that foreign based businesses selling goods and/or services to Australian consumers can be subject to Australian Consumer Law obligations, including the consumer guarantees,” and went on to specifically mention digital goods “This is also the first time Courts have applied the extended definition of ‘goods’ to include “computer software” in the ACL. It will provide greater certainty where digital goods are supplied to consumers through online platforms.”

The ACCC had asked Valve in the initial court documents to:

• Provide an email address that specifically deals with refunds as per Australian Consumer law.
• Provide a 1800 number to help consumers address any refund issues.
• Provide a PO Box address for consumers to deal with refunds.
• Appoint representatives (the ACCC refer to this person as a contact officer) to reply to consumers regarding refunds.

The judgement by the courts means that Valve will need to pay out for pocket some damages, and all of the legal fees that the ACCC have inured during the two year long trial.

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Ark Survival Evolved lawsuit settles for 40 million USD

Valve Found Guilty for Breaking Australian Law