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Derek Smart @dsmart
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(thread) Yesterday Crytek filed their rebuttal to the motion to dismiss (MtD) which RSI/CIG filed on Jan 5th, amid much fanfare.

You can read it in all its apocalyptic glory on Pacer or at the link below.…
We already knew that a response to the MtD was coming; but since many delusional people had taken one look at the PR laden response by CIG and given them a win, most didn't know what to expect from the Crytek response.

I certainly wasn't expecting the beatdown Skadden delivered.
In fact, back (below) when I wrote my opinion on the CIG response, and stated that Ortwin had basically drawn the battle lines with open hostility, I knew that it was going to set the tone going forward. Boy did Skadden deliver.…
Before I go any further, I just want to point out that the Skadden response highlights all the reasons why people who are quick to rush to judgement by taking sides while not having all the facts, are doomed to be disappointed when facts are revealed.
Because of our biases, we all tend to do this; especially when debating things we care the most about, whether it be about sex, drugs, politics, birth control, movies, the price of rice in China, gaming loot boxes, corrupt media, or religions like The Cult Of Star Citizen.
As polarized as Star Citizen fiasco is, one thing is certain, this lawsuit has not only served to increase the divide, but also created a new target for the cult to direct their ire at.

If you look at the Skadden or Crytek feeds, you should see the usual suspects already at it
I would be remiss if I didn't also point out that when YouTube lawyers like Leonard French, and that other dude, Lior Leser, pander to the backer masses with completely irresponsible and unprofessional bullshit, you end up with the nonsense that has gone on since Jan 5th.
It all started with French.

Though he has since walked back his original comments from the video, the damage was already done because the clueless toxic backers were all over the place spreading blatantly bullshit information from French, while attacking dissenting opinions.
This is French's original video (there is a short/edited version) in which, not having even read the GLA or the entire case filing, nor understanding the mechanics of the 2 game conflict, claimed that we he the judge, he would rule in favor of CIG. Without even seeing a rebuttal.
French, on the record before he later started walking back his most ludicrous comments.

For the record, him being a Star Citizen backer isn't all that relevant, except that anyone with a functioning brain, can easily see the bias in his opinions.

AFAIK, while has has a website, French no longer practices law.

He has a Patreon and makes YT videos for which he earns an average of about $135 per video from viewer donations, excluding ads.
So this is a guy with a law degree, who, for all intent and purposes, is of sound mind and body, but who has seemingly...well, this is what I said to him.

While it's easy to scream fake news! Opinions! Discussions! Remember, his channel is being promoted as a professional IP lawyer whose opinions on case law any common person would probably pay attention to.

All the more reason to expect professional and unbiased opinions.
But enough about French, as I've made my point. While I am certain he means well, I think he has been completely biased in his discussions. And yesterday's stream was only slightly better.

As for Lior Leser, I'm only going to link his video. You be the judge.

These guys have law degrees btw and you would think they ought to know better.

I don't even care about giving them views by linking, I want people to see what I'm talking about.

So this Crytek lawsuit only serves to increase the polarity of the Star Citizen discourse and hilariously there are more discussions and articles about it, than there are about the all but DEAD game.
Moving on...

Skadden opened their filing by repeating all the 5 key points of contention in the complaint.

Shortly after that, the hilarity began...
#1 Crytek is alleging that CIG breached section 2.1.2 of the GLA.

This heavily argued section led to the hilarious attempt by CIG to re-define the meaning of the word "exclusively". But we'll get to that in a bit.
#2 Crytek is alleging that CIG failed to display their marks in the game and marketing materials.
#3 Crytek is alleging that the GLA only granted a license for one game, Star Citizen. Instead, CIG were developing and selling a second game, Squadron 42.
#4 Crytek is alleging that CIG failed to share their improvements to the CryEngine source code.

Such improvements btw would be restricted to only CryEngine itself, not the custom code that makes up Star Citizen, and which CIG is calling Star Engine.
#5 Crytek is alleging that CIG failed to protect the confidentiality of the CryEngine source code, and made it available to third-parties without prior approval.
Since this lawsuit was filed, one of the odd things I noticed and talked about, is why CIG was trying so hard to have RSI dismissed from the lawsuit. It made no sense to me as I said a few days ago.…
If CIG were confident that the case would be dismissed (as per their filing), and that as part of that RSI wouldn't even be an issue in the case, why was this such a big deal to them?
When you license software which comes with its own sub-licensed middleware, you have to assign those licenses to a third-party using your software.

e.g. When we licensed Havok Vision Engine, it came with licenses for FMOD, RakNet etc. We didn't need to get those licenses.
In some cases you would need your own license for the middleware, even if the engine you are licensing has support for it.

For example in the past when licensing Unreal Engine which has support for Scaleform, you would need your own Scaleform license to use it.
Another example. The EmotionFX animation engine was a separate license. A few weeks ago, Amazon bought a license (like they did with CryEngine in 2015), integrated it into Lumberyard (CE derivative) and made it free to all licensees who no longer have to pay for their license.
So this Autodesk sub-license in Exhibit 4 of the GLA, is just like that. Crytek has sub-license rights, and assigned those to the parties signing the GLA.

Those being RSI and CIG.
Do you read 1.4?

Good, now read 1.5.

By signing that exhibit, the signing parties are bound by that license, which is part of the GLA.

It is hilarious to suggest that RSI would have a license to exhibit 4, without the GLA that INCLUDES it.

But that's CIG's argument.
So it stands to reason that Chris Roberts, having signed exhibit 4, made both RSI and CIG a party to the GLA.

And that is why Crytek are claiming that RSI is party to the GLA, and thus the alleged breaches therein.
My opinion is CIG are trying hard to remove RSI from this lawsuit, even though it's just a shell corp with no employees or liability insurance. This leads me to believe that this is part of a tactic to protect that entity if they have to scuttle CIG as a result of this lawsuit.
2nd part of the summary is even more damaging. Not only does it shred any hopes of the MtD succeeding, but it also lays bare the fact that CIG have already admitted to breaching the GLA, and now have the burden of proof. Let me explain...
If CIG switched (as they have admitted to) engines when they were NOT allowed to, they're screwed.

If CIG switched engines when they WERE allowed to, they have to PROVE it. If ANY code from CE3 is in the game, they're screwed.
This one aspect is the minefield that CIG constructed by their many public statements, and their admission in their answer.

As a dev, I can safely say that even with the similarities between CE3 and LY, figuring out whether they switched and when, is patently trivial.
Also, even if they switched, and the court finds that they were allowed to, they still won't get around the fact that the GLA simply DOES NOT TERMINATE just because they switch. Why? Because it does NOT have an "at will" termination clause in it.
It's interesting to note that in that same section, they start to hint at what is come later in the filing for Ortwin.

It only gets worse from there.
As I pointed out in my opinions on this, Skadden has now also pointed out that if the GLA is defective and in dispute, then the court should look to the one person in the middle, and to hold that double-dealing person responsible.
As expected, Skadden also points out the fact that CIG in their response, basically ignored several of the items in the complaint.

1st being the issue of CIG sending updates of the engine back to Crytek.

And Skadden came in hard and fast.
CIG never addressed why they failed to provide Crytek with their updates, even having spent so many years talking up all the advancements they had made to CryEngine.
In order for CIG to have created a custom engine from CE3, to the extent that they were then calling it Star Engine, they had to have made substantial changes and fixes to the base CE3.

As far back as 2014, and as recently as 2016, both Chris Roberts and his brother Erin, went on the record saying they "bought" their CryEngine license, made extensive revs to it etc.…
The GLA requires CIG to make ALL of those improvements available to Crytek.

The fun part.

The GLA hasn't terminated.

Even if CIG did in fact switch to LY, they are still obligated to continue providing any/all custom revisions they make, to Crytek.

It gets worse...
As the GLA hasn't terminated, and for the purposes of compliance, not to mention the incoming discovery process, the fact that they will have to provide these code changes, will PROVE whether or not they switched to LY.

Lumberyard code repo is public. The last time I checked, I see no code submissions by CIG or F42 in there.

That finding should lay to rest the bullshit that backers have said, in that CIG is sharing their awesome (lol!) code with Amazon.
As a dev, I still maintain that CIG have NOT switched to LY, that they are STILL using their custom CE3, while using LY parts (e.g. AWS SDK) which are required by Amazon in order to use their engine.

I remain 100% confident that I am RIGHT, and that they're going to be exposed.
The argument that because LY uses CE3 and so the switch was OK, falls flat when you consider that a license to CE3 is NOT a license to LY.

And this is why we have version control repo logs.

Goddamn! I want to be on that discovery forensics team.
Moving along, as some of us have pointed out, CIG failing to address key parts of the complaint, basically meant that they knew their MtD would not succeed. PR aside, they were probably hoping to see WHAT would succeed.
Again, as we pointed out, even when toxic Shitizens and those YouTube "lawyers" were crying foul & accusing Crytek of concealing a document that was highly PRIVATE & CONFIDENTIAL, Skadden addressed that with the aplomb befitting a firm with $1000/hr lawyers.
It is absolutely hilarious to me that CIG (or anyone with a brain) would seek to conclude that somehow the parties won't have access to the same GLA.

Not to mention the fact that it would have been presented (under seal) during discovery anyway.
It's even more hilarious when you consider that the judge would have requested it during her reading of the MtD, as it contained information that was not only relevant to the complaint, but also to the MtD that CIG files.
Skadden then went on to point out the other two aspects of the complaint which CIG just basically ignored; but were somehow thinking a judge would grant an MtD, while ignoring material aspects of a serious complaint.

Ortwin is an idiot. This is all him.
It's almost as if CIG decided that if any part of the MtD survived, that it would somehow put them in a better position to settle (for less) with Crytek on the other issues. This despite the fact that they were staring right at a multi-million copyright infringement claim.
Further along, we see how Skadden shoved CIG into the minefield they created. Then they tossed a grenade into Ortwin's lap.

This is the result. It's beautiful.
If the court finds that RSI was not a party to the GLA, then CIG would have breached it by giving that entity access to the engine, tech, etc

If the court finds that RSI was a party to the GLA, then it too is on the hook, just like CIG.

The real fun begins when Skadden gets into not only the 2 game license issue.

tbh, I don't even know how people are arguing over this issue. It seems so clear.
Squadron 42 was a feature of Star Citizen. Just like the other features such as Star Marine, Arena Commander, Persistent Universe etc.

1 engine. Multiple features.

The GLA even allowed for DLC which DO require the main game in order to operate.
They could have sold all those features as separate DLC to Star Citizen, without being in breach of the GLA.

When they decided to sell SQ42 separately, is when they would have run afoul of the GLA.

Key here is that they pre-paid their royalties on Star Citizen - at a discount
As long as SQ42 isn't classified as DLC, thus not requiring Star Citizen, they have a problem.

So it seems to me that Crytek would have been entitled to royalties and license fee under the GLA for a separate title - but not DLC.
It has been argued to death why SQ42, though being part of Star Citizen, wasn't supposed to be a separate product. And from what I know, I have ZERO doubt in mind that this will be proven during discovery.
In fact, it can be argued that in the early days during when Crytek was making tech demos for the game, they were dubbed Squadron 42, not Star Citizen.

In fact, some of those trailers are right there on YouTube.

And they bear NO similarity to what later became SQ42 proper.
I skipped this one because of how the answer was constructed, but without going too much into it, please read Skadden's response to the "exclusively" part of the CIG response.

It's remarkable in its dissent.
The entire section shows, not only does 2.1.2 imply exclusive use of CryEngine, but in concert with 2.4 and other sections, expressly shows how it was intended to be an exclusive use of the license.

Now it's up to the judge, who I hear is a Goon. So I think we win.
The final part of the response was dedicated to a brutal and exceptional take down of Ortwin.

This guy.

From the onset I had said that the CIG response of Jan 5th read like it was either penned or directed by Ortwin.

Both FKKS and Skadden are professional law firms. Though the latter are also reputation protection firms, there was no reason for the open hostility in their answer.
As I had pointed out in my write-up back then, notwithstanding the hostility within, putting the Rule 11 threat in the public complaint was a completely bullshit and PR move. There was no reason to make it public. At all.
Even though Skadden went to the trouble of amending the complaint and editing out conflicting statements, that simply wasn't enough for CIG.

Here, I did a diff of both the original & the amended complaint.
As you can see, while CIG were raging on about a non-issue, while posturing as if their Rule 11 threat had any impact on the amendment, the diffs clearly show that Skadden, being professionals, amended it AFTER Ortwin sent them the waiver letter.
It should be noted that while CIG and our Internet "lawyers" were going on about Crytek concealing the GLA, nobody said anything about the fact that Ortwin didn't include his waiver in his complaint.

A waiver that they spent so many pages bitching about.
These are all the reasons why Skadden's response was brutal, while professional.
Unlike CIG who were completely unprofessional in including a highly PRIVATE & CONFIDENTIAL doc in a public filing, rather than filing it under seal/camera, Skadden went the other way. They opted not to include the Ortwin waiver. Instead said they would produce it if needed.
Basically, Skadden's attitude appears to be

"OK, we were done with this, but since you want to keep making a big deal out of it, here, shove this."

To me, that's epic.
All Ortwin has done now is continued to call into question the same reputation he was fighting to protect.

He failed.

In fact, Skadden's response went into even more depth as to why I believe that he is going to get disbarred if this goes as far as I think it will.
Fact is that Ortwin, being the long time business partner of Chris Roberts, had to have already known, or already was, a principal partner in the venture. And he would have had to disclose this to Crytek.

Sources tell me that the waiver doesn't say a SINGLE WORD about that.
If sources are correct, and the waiver was signed in Feb 2012, here is my timeline:

CryEngine eval, tech demos etc: 2010 - 2011

Ortwin waiver: Feb 2012

CIG LLC formed: April 2012

GLA: Nov 2012

RSI Corp formed: April 2013

GLA amendment: Sept 2014

RSI LLC formed: Nov 2017
It should be noted that Chris Roberts made RSI a party to the GLA when he signed Exhibit 4 on Nov 6, 2013.

That's 1yr after the GLA itself was signed on Nov 20, 2012.…
With Orwin representing both parties, then allegedly not disclosing that he was a principal in the venture, he has basically created a HUGE problem for himself.

And Skadden has highlighted this conflict in the strongest of terms.

CIG forced their hand.
There isn't a SINGLE attorney who I have discussed this issue with, who hasn't expressed shock at just how exposed Ortwin is. Not only in terms of the conflict (which is a referral to the Bar association) but also in any deficiencies and disputes arising from the GLA.
To me he KNOWS this. That's why:

1) they spent so many words defending his virginity in a case that didn't even list it as a cause of action

2) they didn't include the waiver would show and PROVE that he never disclosed that he was a principal in the venture he was negotiating
Skadden, in what I think is a fantastic strategy, opted not to include the waiver. Instead, they're holding it back. I believe it is going to be a HUGE bargaining chip if/when settlement talks get underway, as I expect that they will, following the judge's Feb 9th MtD ruling
If this case goes to discovery and depositions, not only are ALL the ex-Crytek guys now at CIG/F42 going to be in the hot seat, but from what I have learned, the most damning material is yet to come - and it's absolutely amazing.
That's my take on the Skadden answer.

I knew it was going to be brutal, but I honestly wasn't expecting the extent to which it ended up being so.

I hope that instead of just licking their wounds and wait for the Feb 9th ruling, that Ortwin plants more land mines by responding
I have friends all over the industry. Being old school, things like loyalty, honor, trust, & integrity, are very important to me. Those know me, know this well enough.

Industry is small enough that everyone is talking, and we ALL know what is REALLY going on with Star Citizen
As a blogger, there is NO circumstance under which I'm EVER going to give up my sources.

So it's irrelevant to me how people view sourced material. Believe what you want, I don't care. And nobody cares what YOU think.
I maintain that regardless of how the Crytek lawsuit goes, Star Citizen evolved into a scam.

The execs have unjustly enriched themselves by taking advantage of gamers whereby SEVEN YEARS and $176 MILLION DOLLARS later, they haven't even delivered 20% of the TWO games promised.
Thus concludes my write-up of the Skadden response.

Now we wait to see what CIG does. God, I hope they respond.
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