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Epic Games, Inc. v. Altmeyer

November 5, 2008

EPIC GAMES, INC., PLAINTIFF,
v.
ROGER ALTMEYER (D/B/A SAINT LOUIS MOD SHOP), DEFENDANT.



The opinion of the court was delivered by: Reagan, District Judge

ORDER ISSUING TEMPORARY RESTRAINING ORDER

A. Background

On October 31, 2008, Epic Games filed this action alleging copyright infringement and conversion (Doc. 3). Epic seeks preliminary and permanent injunctions to stop the alleged infringement. Epic also seeks that the illegal copies of its copyrighted material be destroyed and that Defendant pay damages. Epic Games now moves for an ex parte TRO and impoundment order (Sealed Doc. 4).

Epic is a designer and developer of video games. One of Epic's most successful games is Gears of War, which has sold over 5 million copies and has received numerous awards. On November 7, 2008, Epic will release Gears of War 2, a game for which Epic is the exclusive owner of all rights, title, and interest, holding several copyright registrations and one pending copyright application (Doc. 3, Exh. A). Epic has invested a great deal of time and money in developing and marketing these games. Counsel indicated to the Court that Epic will offer copies of Gears of War 2 for sale at the approximate retail price of $75.

Epic alleges that Altmeyer somehow obtained a copy of Gears of War 2 and has been selling pirated copies of the game, playable on the Xbox gaming system. On October 21, 2008 Altmeyer allegedly posted an advertisement on craigslist.org in which he offered advance copies of Gears of War 2 for sale (Doc. 5, Exh. B). The advertisement provided phone numbers to a person or business in Granite City, Illinois and stated:

GEARS OF WAR 2 FREE WITH XBOX 360 MOD. YES WE HAVE IT EARLY FULL WORKING GAME. WHY WAIT. ALL MODS ARE DONE STEALTH SO YOU WONT GET BAND FROM LIVE. OTHER PRE-RELEASE TITLES AVAILABLE.

APPT AVAIL TODAY At some point, that ad was removed, but on October 31, 2008, Altmeyer allegedly posted another advertisement indicating the early availability of Gears of War 2 (Doc. 10, Exh. A). This advertisement states:

GET YOUR 360 MODDED TODAY, AND GET 3 GAMES OF YOU CHOICE FREE, YES WE HAVE GEARS OF WAY 2 ALSO! OVER 400 TITLES TO CHOOSE FROM, ALL NEW GAMES TOO. WE HAVE BEEN IN BUSINESS OVER 3 YEARS, THIS IS FROM A PROFESSIONAL! DON'T TRUST A KID IN HIS MOMMYS BASEMENT, TOO MANY SYSTEMS ARENT MODDED CORRECTLY. CALL THE PRO!

The advertisement states that the contact is "Roger - Saint Louis Mod Shop" in Saint Louis / Granite City and provides the same phone number as the initial advertisement.

Additionally, the Saint Louis Mod Shop, has a page on myspace.com wherein it advertises modifications of certain gaming systems, including Xbox (Doc. 5, Exh. C). An entry on that page states:

MODDIFYING YOUR GAMING SYSTEM

AT OUR MOD SHOP WE MODIFY YOUR XBOX 360, Wii, PSP, XBOX TO ALLOW THEM TO PLAY DOWNLOADED, COPIED/BURNT GAMES. THIS WILL SAVE YOU TONS OF $$$. WHY PAY $50-$70 FOR A GAME WHEN YOU CAN GET IT FREE OR AT A VERY LOW PRICE.

The entry goes on to provide a price list, an email address, and the same phone numbers that appeared on the craigslist.org advertisements. It also indicates that the user of the page is a 39-year-old single male living in Granite City, Illinois.

Some background on the advertised modification is helpful at this point. At the Court's November 4, 2008 hearing, counsel elaborated on the nature and purpose of modifying the gaming system. The Xbox includes certain software that identifies the particular video game being played so as to ensure that users can only play legitimate games. In other words, the Xbox is programmed to stop users from playing pirated copies of games. The Xbox also has the capability to allow users to "play live," which means that players can connect to the internet and engage in a multi-player game format with other individuals at remote locations. To do so, players must connect to each other through an official website. The software involved in playing live is also programmed to detect modifications to the Xbox and to recognize pirated games. If a modification or piracy is detected, a user is typically banned from playing live. Some users have apparently determined how to modify an Xbox so that neither the system itself nor the live software can recognize pirated games or any modification. It is this type of modification service that Altmeyer allegedly offers so that his customers can use the pirated games he sells without being banned.

To confirm what it had already found in Altmeyer's advertisements, Epic hired a private investigator who called the numbers listed on these websites in an attempt to obtain a modification of his Xbox 360 and a pirated version of Gears of War 2 (Doc. 6, Exh. D). The investigator spoke with a male who indicated that he did offer modification services and could provide a pirated copy of Gears of War 2. The investigator met with the individual at 3027 Mockingbird Lane, Granite City, Illinois 62040 on October 23, 2008 and the pair went to a garage behind the home. After looking at the investigator's Xbox, the individual stated that he could not modify the Xbox because it was too new and suggested that he obtain a different version so that the modification could be performed. The individual stated that upon completion of the deal, he would provide Gears of War 2 along with another free game. However, the investigator was never able to make further in-person contact or obtain an actual copy of the game.

Epic now seeks an ex parte TRO to stop distribution and production of pirated copies of Gears of War 2 and any other titles to which Epic owns the copyright. Epic also seeks the impoundment of all pirated copies and the seizure of any devices used to circumvent copyright protections, including all computer hard drives and Xbox consoles. For the reasons explained below, the Court GRANTS IN PART AND DENIES IN PART Epic's motion (Doc. 4).

B. Motion for Ex Parte TRO

Epic seeks that Altmeyer, his agents, and employees be temporarily enjoined from (1) manufacturing, advertising, marketing, distributing, transferring, selling, or destroying unauthorized, pirated, or otherwise infringing copies of DVDs of the Gears of War and Gears of War 2 computer games, (2) performing, advertising, marketing, distributing, and selling game console modification services, and (3) destroying or transferring any tools, software, or hardware used to create any such modification of gaming systems or infringing copies of Gears of War and Gears of War 2.

1. Legal Standards for the Issuance of a Temporary Restraining Order

FEDERAL RULE OF CIVIL PROCEDURE 65(b) authorizes the issuance of a temporary restraining order (TRO). The Seventh Circuit has emphasized that, although Rule 65(b) expressly contemplates the issuance of ex parte TROs, the circumstances under which an ex parte TRO should be granted are extremely limited. Rule 65(f) specifically provides that it applies to copyright impoundment proceedings.

District Courts within this Circuit hold that the standard for granting a TRO and the standard for granting a preliminary injunction are identical. See, e.g., Charter Nat'l Bank and Trust v. Charter One Financial, Inc., 2001 WL 527404 (N.D. Ill. May 15, 2001) (unreported). The movant must make an initial showing that (1) its case has a likelihood of success on the merits, (2) no adequate remedy at law exists, and (3) they will suffer irreparable harm if injunctive relief is not granted. See, e.g., Hodgkins ex rel. Hodgkins v. Peterson, 355 F.3d 1048, 1054-55 (7th Cir. 2004). If the movant meets the burden on these three requirements, then the Court considers two additional criteria: (4) whether the balance of harm to the ...


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