Happy Christmas, Cloud Imperium.

MOP readers will recall that almost exactly a year ago, Crytek sued Star Citizen developer CIG, alleging that CIG infringed its copyrights by using CryEngine to develop non-Star Citizen game assets (i.e., Squadron 42) and deleting Crytek logos round about the time of the CryEngine-to-Star Engine switchover. Crytek demanded $75,000 and a slice of CIG’s profits in compensation for this supposed breach of contract and copyright infringement.

CIG called the lawsuit “meritless,” and in its motion to dismiss a month later, it defended itself by claiming that it wasn’t even using CryEngine anymore and that Squadron 42 was an extension of Star Citizen’s online universe that didn’t constitute a new game. It also pointed to the licensing agreement it and Crytek signed, limiting liability and damages from contract breaches.

In August, the judge presiding over the suit granted the motion to dismiss on the the claim on CryEngine exclusivity and the pursuit of punitive damages, but she denied CIG’s motion to dismiss on the breach of contract and copyright infringement grounds, and she allowed Crytek’s pursuit of injunctive relief and other damages.

Now it appears the judge has granted another chunk of CIG’s motion to dismiss. This time, following Crytek’s August filing, the judge examined the licensing agreement revolving around CryEngine with respect to Star Citizen, finding that contrary to the claim, CIG had not “engage[d] in the business of designing, developing, creating [or] promoting” a competing game engine in connection with Star Citizen, nor had it had been “promoting” its own engine with frequency or continuousness as defined by precedent. It had pretty much just replaced CryEngine with StarEngine and wasn’t attempting to farm the engine out.

If you ever thought your English teacher was a tool for harping on the importance of using the right prepositions in your writing, this decision should change your mind, as a great deal of it hinges on the line between “licensing to a third party” and “licensing from a third party.” In context, the judge found, the original contract covers whether CIG was allowed to license a game engine to other companies, not whether it was allowed to purchase a license for a new engine from (in this case) Amazon, putting CIG in the clear.

Finally, the judge found that CIG was not obligated to promote CryEngine as Crytek claimed and rules that a single trademark display (as offered as evidence by Crytek) was “insufficient to show Defendants engaged in the business of promoting Lumberyard.”

Crytek was granted leave to amend, so it’s not over, but it’s not looking so great for them.

The whole saga so far:

