In Brief:   Hacks to cheat on popular video games results in massive damages.

Here’s What Happened:

Bungie, Inc. develops, distributes and owns the intellectual property rights in the popular video games, including “Destiny 2”.

Mihai Claudiu-Florentin, is a Romanian citizen and the developer and proprietor of  Mihai hacked the Destiny 2 software, created cheats and then sold the cheats to gamers.

Bungie brought suit in District Court in Seattle Washington. Bungie alleged that Mihai’s actions were copyright infringement, violated the Digital Millennium Copyright Act (DMCA), breached the license for the Destiny 2 software (to which Mihai had to agree to gain access); tortuously interfered with Bungie’s relationship with its users, and violated the Washington Consumer Protection Act.

Mihai failed to appear and defend the case. The court granted Bungie’s motion for a default judgment in the amount of $12,059,912.98 consisting of: (1) $11,969,000.00 in statutory damages under the DMCA; (2) $146,662.28 in actual damages for copyright infringement; and (3) $217,250.70 in attorneys’ fees and costs. Bungie also obtained a permanent injunction barring Mihai from engaging in the complained of actions in the future.

While some courts would have been content with just entering the award, this court went further and issued a written opinion outlining the basis for entry of a default judgment of this magnitude.

The court held that it had subject matter jurisdiction because federal statutes were involved and the state cause of action was supplemental to them. The court had personal jurisdiction over Mihai because he consented to jurisdiction in the terms of service of the Destiny 2 software.

The court discussed each of the causes of action brought by Bungie and its support for the damages judgment.

When discussing the basis for granting the permanent injunction, the court acknowledged that hacks and cheats cause irreparable harm to Bungie’s goodwill and reputation. 

Why You Should Know This: There are two primary lessons to be learned here. The first is not to hack someone else’s software. It should go without saying but sometimes a lesson must be stated bluntly. The second is that the terms of service can have far reaching affects. Courts have consistently held that consenting to terms of service is binding on a contractual basis, including the choice of venue.

An open question is how Bungie can enforce the judgment against Mihai. He lives oversees. He may or may not have assets in the US. So it may be a hallow victory.

Case Information: Bungie, Inc. v. Mihai Claudiu-Florentin d/b/a, Case no. 21-01114 (Docket No. 43)(US Dist. Ct. West. Dist. Washington, April 26, 2023.)

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