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Videogame Company Awarded $4.3 Million in Damages for “Cheats”

Bungie wins millions
In “Destiny” cheat dispute

Bungie, a video game company that created the “Halo” and “Destiny” game series, has been awarded $4.3 million in damages in an arbitration against a creator of cheat software.

The respondent, AimJunkies (a subsidiary of Phoenix Digital Group), was ordered to pay Bungie $2,500 for each of its 102 violations of the Digital Millennium Copyright Act (DMCA), plus $3.4 million for selling its cheat codes.

Destiny 2, the game at issue in the dispute, is known as a “first person shooter.” Players can shoot at adversaries and perform other activities that may lead to rewards within the game.

As the arbitrator’s decision notes,

“Cheats” are devices designed to give an unfair advantage to those videogame players who purchase them over other players who do not have these devices. They constitute unauthorized third-party manipulation and/or copying of a videogame’s software that circumvents protective measures in that software.

“Aimbots” are examples of a feature in the cheats in this case. These allow the cheater to automatically aim a weapon in a game. “ESP” is another feature in the cheats in this case. This provides a cheater information that would not otherwise be available (e.g., the location of another player behind a wall or other visual obstruction).

The net adverse effect of cheats is to make the game less enjoyable for those who do not use the cheats. In turn, this negatively impacts Bungie in that its Destiny 2 product is less enjoyable to its customers.

Bungie uses various methods to protect its games from unauthorized intrusions and access, including

code obfuscation, user account bans, anti-process attachment tools, anti-reverse engineering tools, hardware bans, auto-eject tools for injected code & evacuation threads, and cheat detections: data manipulation detections and code manipulation detections.

According to the decision, James May, who worked with Phoenix and its owners, obtained access to Destiny 2 using a cheat. On sign-in, he was required to accept Bungie’s Limited Software License Agreement (“LSLA”). These terms contain prohibitions regarding use of the license to Destiny 2.

According to the arbitrator,

One of the terms of the LSLA prohibited a licensee from reverse engineering of Destiny 2. Nevertheless, this is exactly what May did a number of times. This activity allowed Phoenix to modify and sell through its website,, a beta version of a cheat for Destiny 2. The beta version of the cheat was followed by revisions that included “ESP” and then the full Destiny 2 cheat.

Bungie sent a cease-and-desist letter to respondents demanding that they stop selling the game cheats, alleging that the sales violated both the software license and US copyright law.

Bungie eventually initiated sued for:

copyright infringement, trademark infringement, false designation of origin, circumvention of technological measures, trafficking in circumvention technology, breach of contract, tortious interference, violation of the Washington Consumer Protection Act, and unjust enrichment.

The dispute then partly moved to arbitration.

The arbitrator noted that

The DMCA Anti-circumvention law prohibits the (1) circumvention of (2) a technological measure that effectively controls access to a (3) copyrighted work. The evidence shows that respondents violated this section of the statute.

As the arbitrator explained,

[T]o “circumvent a technological measure” means to descramble a scrambled work, to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deactivate, or impair a technological measure, without the authority of the copyright owner.

May testified that he connected reverse engineering tools to the game to develop a cheat.

Also, the DMCA prohibits:

(1) manufacturing, importing, offering to the public, providing or otherwise trafficking any (2) technology, product, service, device, component or part that (3) meets any of the following criteria: (a) is primarily designed or produced for the purpose of circumventing a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof; (b) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof; or (c) is marketed by that person or another acting in concert with that person with that person’s knowledge for use in circumventing a technological that effectively protects a right of a copyright owner under this title in a work or a portion thereof.

The arbitrator found that the respondents had engaged in trafficking in that they sold more than 1000 copies of the cheats and the cheat loader that was used to inject the cheats into the game.

The arbitrator found that the respondents breached the software license by engaging in reverse engineering, and also found for Bungie on other claims.

This appears to be the first cheat-related dispute to produce a written decision (rather than be settled). It also appears to be the first matter in which statutory damages were awarded for breach of the DMCA.

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