Pin Email 59 Shares

The Wizards of the Coast ("WOTC") v. Cryptozoic/Hex Entertainment ("Cryptozoic") case has only just started, but the fun has already begun.

For all intents and purposes, only the second (important) document has been filed: Cryptozoic's answer to WOTC's complaint. Most times, an answer to a complaint states, "Deny, deny, deny," and little more. Cryptozoic's, however, bucks tradition, and instead launches into a ranting "Introduction," where it gives its opinion of WOTC and the case:

Fearing competition in the trading card game industry, and frantic about the loss of its monopoly position due to the expiration of its patent two months ago, Wizards seeks to eliminate Hex: Shards of Fate through litigation rather than fair marketplace competition.

Cryptozoic's answer also tells the judge that the Magic the Gathering community is "yearning for innovation," which WOTC's actions are attempting to stifle by "eliminat a competitor which is creating truly competitive and innovative products."

Legal aside: It's much easier to convey the theme of your case by calling the plaintiff "frantic" and afraid of competition in an industry "yearning for innovation" (which you allegedly provide), rather than just saying, "DENIED."

This is a risky but powerful way to respond to WOTC’s alleged bullying tactics. Since Cryptozoic's answer is the first document the judge will see from it, it’s bold to go beyond just "denying" WOTC's alleged basis for its case, and instead explain not only why it should win, but why the other side should lose.

Beyond the rhetoric, Cryptozoic makes three arguments against WOTC's three causes of action—patent, copyright and trade dress—asserted against it:

1) For the patent claim, the patent expired two months ago,

2) The copyright claim is "vague as to what is allegedly infringed," and

3) The trade dress infringement claim (which requires WOTC to show a "likelihood of confusion" between Magic the Gathering and Hex) relies on "hearsay and unknown bloggers" while "fail to identify a single individual who has been actually confused." In fact, Cryptozoic points out that really, the "unidentified, bloggers clearly knows the difference between the Magic and Hex: Shards of Fate games."

While Cryptozoic's "Introduction" is not what's supposed to be in an answer, I like it. WOTC's complaint is lengthy, but convoluted. Therefore, an explanation to the judge is necessary.

Sometimes, Copying is Legal

In certain instances, copying is not only legal, it's encouraged.

The Founding Fathers (cue the "National Anthem") wrote copyrights and patents into the Constitution for two main reasons. First, to give those who have improved the arts or technology a limited time period in which they could exclude others from copying their original/new works. This way, the author/inventor could cash in on their inventions/works (if they can).

The second reason: the invention/work at some point needs to fall back into the public domain so that anyone can copy and improve upon it.

Basically, authors/inventors get a limited time period to try and get rich from their works/inventions, and then after that window passes, the works/inventions fall into the public domain so everyone can improve upon them.

Legal aside: As Isaac Newton wrote in a letter to Robert Hooke, "If I have seen further it is by standing on ye sholders of Giants."

The real purpose of copyrights and patents is to encourage copying…just after the copyrights and patents die. And that's how the arts and sciences get better, by everyone building on each other's ideas -- eventually.

And here, that's what Cryptozoic alleges it is doing with Hex.

The "rules" for Magic the Gathering could only be protected by patents, but the WOTC patent is allegedly already dead. So, as part of the "deal" that WOTC struck with the U.S. government, since its 20 years of exclusivity are over (in which no one could copy Magic's rules), now everyone should be able to so they can improve on them.

Given the patent claim can't stop Hex, WOTC falls back on copyright and trade dress to try and protect the rules. But this is improper.

WOTC's Copyright Claim Can't Protect "Rules," Only "Art."

Here, copyright should only protect the "art" on the cards or the selection and arrangement of the materials on the card provided the selection and arrangement is non-functional (legal translation: it does not serve a purpose, it just looks pretty) and is creative (legal translation: it's a work that has some amount of originality to it). Because of this, the copyright claim is really weak because if WOTC wins, at best it'll only be able to knock out specific cards or how the cards generally look. A win here doesn't mean it'll knock out the whole game.

Let me over simplify a copyright analysis. Basically, it turns on the plaintiff's attorney showing the jury 1) the copyrighted work in one hand, 2) the alleged infringing work in the other, and 3) saying, "Look how similar the copied work is to my client's work! It has to be infringing!"

Given this, side-by-side analyses make copyright cases easier for people to understand.

The below images were selected by WOTC in its complaint, so I assume this it is one of its stronger copyright claim. Therefore, it is a good measure of the strength of its case.

WOTC's Vampire Outcasts card is on the left, while Cryptozoic's Corrupt Harvester is on the right.

I believe a side-by-side analysis emphasizes how weak this claim is. At best for similarity I see two cards with what could have vampires on both (even though the Hex card is called "corrupt harvester"). Art-wise, I don't see copying of the works, unless WOTC is somehow awarded the ability to exclude others from making vampire cards.

WOTC also argues that there's copyright infringement due to the "selection and arrangement" of the cards. To win here, WOTC will need to show that its cards' "selection and arrangement" is aesthetic and not functional, and that it contains sufficient creative elements to be protectable.

Showing that the cards' arrangement is not functional will be difficult enough, and I'll rely on a famous copyright case called Brandir International v. Cascade Pacific Lumber to show why.

Remember when bicycle racks were ugly?

Before they looked cool?

Well, the company—Brandir—that developed the cool racks tried to protect them with copyright, and then when others made similar racks, Brandir tried stopping them. The court, however, said that Brandir was trying to protect functional components not purely aesthetic components, so copyrights were the wrong way to go.

The inventor of this bike rack needed to protect the functional elements with a patent.

Legal translation: Patents protect inventions, like how things work. Copyrights protect the prettiness.

And that's exactly what is going on here. The arrangement of Magic's cards is functional, and that functionality was protected by its patent. The patent is dead, and therefore WOTC should not be able to protect the functional elements by converting its copyright into an in-essence patent.

Beyond this, I do not think the selection/arrangement/designs of WOTC's cards show sufficient creativity to be protectable. To me they look generic, because when I compare them to Pokémon and Yu-Gi-Oh cards, the arrangement is very similar.

For all four brands of card, at the top of each card, there's a name of what is pictured on the card. Then there's a picture box. Then there's a description of the cards "abilities" in another box….it's all the same to me.

So, given the art doesn't match, the arrangement is functional and not creative, I don't see a "win" here for WOTC on its copyright claims.

WOTC's Trade Dress Argument Should Focus on Likelihood of Confusion, Not Similarity.

To prevail on its trade dress claims, WOTC needs to show a likelihood of consumer confusion as to the affiliation/ownership/sponsorship between the products to win. While WOTC's complaint pays lip service to a "confusion" analysis, it focuses more so on the "similarity" of the two games, which is only one factor in a likelihood of confusion analysis.

Legal translation: The analysis should focus on whether or not consumers are likely to think that Hex is created or endorsed by Magic.

As Cryptozoic's answers points out, WOTC relies on hearsay from the Internet for support "confusion," and includes statements like:

"I have played a lot of CCGs , and for the most part, CCGs are very similar to each other. However, I’ve never seen a CCG that is as similar to another as Hex is to Magic." "I am a game designer, so I can say that design-wise Hex=Magic. Hex is not "like" Magic, Hex is Magic, with a few tweaks to take advantage of the digital environment." "I'm not very worried about calling it a "clone" or not. But it is VERY similar to Magic. I may be wrong but I feel that people who say "it's not THAT similar" or "any 2 games in the same genre will be similar" probably don't know many TCGs. I have played many TCGs, paper and digital, and none of them come as close to Magic as HEX. Yes, there are some digital tricks (most of them could be made to work in Magic, although with clumsier bookkeeping required) and a slightly different resource system, but otherwise is almost like a new skin over the same game. So the thing is, if HEX cannot be called a Magic clone, no other TCG can. HEX may not be a “clone” but it's the closest to one we have in the market."

Sure, these quotes emphasize an alleged similarity between Hex and Magic, but that's only one factor in a likelihood of confusion analysis. But they miss an important point. As Cryptozoic correctly points out the "unidentified, bloggers clearly knows the difference between the Magic and Hex: Shards of Fate games."

I agree. These posts show that the consumers are not confused as to whether WOTC is behind Hex, or endorses Hex. They all easily acknowledge it's from a different company.

The focus of the posters is on how similar the game play is. And that will not give WOTC a win for trade dress.

Cryptozoic's Introduction Sells Its Theme to the Judge Well

I think Cryptozoic's non-traditional answer is powerful. And I agree with its assessment of the case: WOTC is desperately clawing to keep control of its game by throwing all of its IP at Cryptozoic. Since WOTC is larger, and therefore has more resources, it can play bully. It can win, even if the issues are weak, because Cryptozoic might not have the money to fight back.

I hope that's not what's going on (or what will happen). I would like to see this fight continue to a court ruling. Any ruling here, would have implications for sports trading cards.

The issue raised is how much copyright and trade dress protection should be afforded to the "look and feel" of trading card designs? Especially for card design elements that are generic throughout the industry.

This question has been hanging over this industry for a while (see, e.g., the Topps v. Upper Deck litigation over the O-Pee-Chee design).

We may just get those answers here, too, because both parties have good reasons to continue fighting. For WOTC, it needs to either shutdown Hex, or have Cryptozoic overhaul the games' rules. Otherwise, it opens up the floodgate to other Magic the Gathering type clones. Cryptozoic might also need to take the case all the way to protect the alleged million-plus dollars of Kickstarter money it has invested in the game.

So, while I normally predict early settlements for most cases, this one, might continue.

The information provided in Paul Lesko's "Law of Cards" column is not intended to be legal advice, but merely conveys general information related to legal issues commonly encountered in the sports industry. This information is not intended to create any legal relationship between Paul Lesko, Simmons Hanly Conroy or any attorney and the user. Neither the transmission nor receipt of these website materials will create an attorney-client relationship between the author and the readers.

The views expressed in the "Law of Cards" column are solely those of the author and are not affiliated with Simmons Hanly Conroy. You should not act or rely on any information in the "Law of Cards" column without seeking the advice of an attorney. The determination of whether you need legal services and your choice of a lawyer are very important matters that should not be based on websites or advertisements.