Game Development and Copyright Infringement: Valve, South Korea, and <em> Dark and Darker </em>
This case study illustrates how intellectual property affects the fastest-growing entertainment medium in the world through an analysis of the legal drama surrounding Dark and Darker, a hit indie game that was delisted from digital storefronts following allegations of copyright infringement.
Attribution
© Kevin Chang, CC-BY-SA 4.0, via Wikimedia Commons
Global revenue from video game sales is projected to have reached 184 billion dollars in 2023, surpassing both the film and music industries. Both copyright law and patent law are implicated in video game development, as the final product involves both creative expression and technical design. Video games are defined by the conjunction of these elements. In this booming industry, allegations of copyright infringement can result in tremendous financial and legal consequences for aspiring game developers. The legal drama surrounding the unpublished video game Dark and Darker provides an illustrative example.
Developed by South Korean studio Ironmace, Dark and Darker belongs to the same ‘battle royale’ genre as extremely popular titles like Fortnite or Apex Legends. Ironmace released a paid playtest of Dark and Darker, allowing customers to access a version of the game while still in development. The game was made available to download on Steam, a video game digital distribution service owned by the Valve Corporation, an American video game publisher.
Valve’s Steam service features a digital storefront called the ‘Steam Store.’ In 2008, Valve released a software development kit allowing publishers to publish their game on Steam. In exchange for hosting the game, Valve receives a flat revenue share from all direct Steam sales and transactions. In return, independent game developers such as Ironmace benefit from advertising and distributing their products through Valve’s service.
In 2021, it was estimated that over 34,000 games were available for purchase on Steam. Rather than contracting with publishers to advertise their games on the Steam storefront, Valve uses algorithms to display popular titles to all Steam users. As a result, titles such as Dark and Darker may ‘go viral’ on Steam, experiencing a surge of success and netting its publisher significant gains. During the duration of Dark and Darker’s paid playtest on Steam beginning August 8, 2022, it reached an all-time peak of 69,533 concurrent in-game players, a monumental success in light of the fact that the game was still under development. Dark and Darker appeared to have the makings of a viral hit.
Nexon, a South Korean video game company, issued a cease-and-desist notice to Ironmace on March 24, 2023, to halt development on Dark and Darker on the bases of copyright infringement and misappropriation of trade secrets. Nexon also filed a Digital Millennium Copyright Act (DMCA) notice with the Valve Corporation in the United States, which advises a website owner that they are hosting copyrighted content without the permission of the copyright holder. Steam subsequently delisted the game, meaning Dark and Darker could no longer be purchased through the Steam Store or launched through the Steam app. Nexon then filed a copyright infringement lawsuit against Ironmace in the Western District Court of Washington.
Nexon’s complaint alleged trade secret violations in that Ironmace solicited former Nexon associates to join in recreating Nexon’s game, developed under the name P3, using assets transferred from its files to a private server. Nexon claims this gave Ironmace a significant commercial head start over Nexon in allowing it to release a substantially similar game before Nexon could bring their product to market. Nexon argued that it had taken reasonable measures to protect its trade secrets and argued that Ironmace had misappropriated these trade secrets for commercial gain.
Nexon further alleged that Ironmace infringed on its copyrighted expression. Nexon claimed that both Dark and Darker and P3 are based on the identical idea of a first-person shooter game set in a medieval setting inspired by the board game Dungeons and Dragons. As support, Nexon cited the selection of player-controlled character classes common to both Dark and Darker and P3, the visual appearance of the player-controlled characters, and the distinguishing abilities of the player-controlled classes. Nexon also argued that the narrative premise of Dark and Darker was identical to that of its own project.
Before being heard on the merits, Nexon had to show that the Western District Court could exercise jurisdiction over the defendant. Nexon alleged that jurisdiction in the United States was proper because the defendants had targeted the forum by making its playtests available on Steam, an American company. Nexon also claimed that the U.S. market share of Dark and Darker players was 38.67%, with the next highest share being 7.94% in Japan.
Although Nexon successfully argued that the court could exercise personal jurisdiction over Ironmace, the court’s decision turned on the distinction between venue and jurisdiction. In response to Nexon’s pleading, Ironmace released a statement that the alleged infringement was without merit and that the lawsuit should be settled in South Korea, not the United States. Ironmace then filed a motion to dismiss for forum non conveniens, which the court granted. In its decision, the court affirmed that while the DMCA did not preclude forum non conveniens, Ironmace properly met its burden of showing that there was an adequate alternative forum. In its motion, Ironmace argued that it already accepted service of process in South Korea and that the matter was being litigated there. The burden then shifted to Nexon to convince the Court that there were relevant factors weighing against dismissal. Nexon claimed that the South Korean court had less power to compel discovery, reducing the odds of their success, but could not produce any case law which showed that the South Korean forum would be inadequate. The court was not convinced and dismissed the case.
As of now, Dark and Darker remains delisted from Steam. It was released in ‘Early Access’ on August 7, 2023, on Ironmace’s website and the South Korean copyright infringement case has yet to resolve. No matter the outcome, Ironmace and Valve may have both lost significant revenue from Dark and Darker’s delisting. Whether Nexon’s claim stands in South Korea on its merits or not, the case of Dark and Darker is a fascinating example of how intellectual property law governs the development and sale of entertainment products in a globalized economy.