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Understanding the Wizards v. Hex Lawsuit (in plain English)

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Hello! In addition to being a director of this site, I also lawyer around. I run my own practice, which mostly involves business law and estate planning. Like you, I heard about the WOTC v. Hex suit yesterday and I'm going to break it down into understandable bits. Let's set some ground rules first, though:

1. This isn't legal advice, don't rely on it as such.

2. I'm not going to entertain discussions of "all IP law is bad/restrictive/awesome/strangling" etc. That's for another day.

3. In America, you can sue anyone for anything.

4. Although I like IP law a lot and I studied it a lot, I don't currently practice it and I welcome other informed opinions.

5. Magic and Hasbro and Wizards of the Coast may or may not kill games, actively kill gamers, destroy the industry, spawn irresponsible manchildren, deliberately poison wells or launder cartel money. We're not going to talk about how evil they are here, either.

6. A great deal of IP law is made in courts, not federal statutes, and different federal courts can decide the same thing different ways.

7. The law is complex. This article is not. I am purposely avoiding throwing intense legal doctrine at you. Please read the words "most of the time, and there are exceptions" into any sentence you're about to argue with me on.

Great, let's dig in!

Reading The Complaint

When you file a lawsuit, the "thing" you file is called a complaint. You list out the facts and what laws the defendant has broken. The other side then gets to answer with defenses and denials. Let's look at the Wizards complaint:

Wizards of the Coast v. Cryptozoic Entertainment et. al

The first section lists out some facts and explanations of just what the heck Magic is. The second and subsequent ones list out why Wizards thinks it's entitled to win the lawsuit. You'll note that they cite the Copyright Act, Lanham Act and Patent Act. Those are the laws they'll be suing under.

When a lawyer reads a complaint like this, they ask "what is the central question of this case?" I think it is the following:

"Can you re-skin/clone a video game legally? If you cannot, why not?"

 

Why did I focus on it being a video game? Simple: the attorneys for Wizards focus on it. You see, Hex is digital-only and Wizards can draw closer comparisons by demonstrating that the digital version of their game is too close to Hex.

Civil Procedure geekery: Wizards requested a jury on this, which is wild. Trademark law depends on "will this confuse a consumer?" so I see the jury selection process (venire and voir dire) may involve a bit of trying to stack the jury with either super-geeks or super-clueless people. Also, Hex is a different company than Crypto, but WOTC wants to join them here - it's a bit of corporate law litigation attempting to say that two companies are actually operating as one and share all liabilities.

The First Claim: Copyright Violation

Let's begin with what a copyright is. A copyright is basically a legal protection for an original expression on a fixed medium. So a song on a record, words on a page, ballet steps written down, and paint on a canvas are all copyrightable things. A phone book is not copyrightable (it's not original). A copyright only protects the expression and not the underlying idea. Marvel does not have a corner on men in mechanical suits who fight crime - they only have the particular expression of that idea in Iron Man comic books.

Confused? That's okay. Copyrights are pretty complex things. A lot of what can be copyrighted is figured out in court when people fight over it. The basic test that the court will pose in this case is "is the expression original? Does the potentially infringing work actually borrow from the original expression?"

Wizards contends that Hex copied the "cards, plot, elements, circumstances, play sequence, and flow of Magic." This is tricky to claim, because some of these things are not copyrightable. Remember that idea-expression issue? I cannot copyright the way to play Yahtzee - that's an idea. But I can copyright the rulebook I write for it. (This may be patentable - we'll get to that later). So I'd say that the fact that Hex uses cards and has a similar play sequence is not an expression - I don't see that as deserving copyright protection. I have no idea what "flow of Magic" is and I've played for twenty years. Regarding the plot, Wizards will have to show that Hex appropriates copyrighted expressions (things like the Mirran/Phyrexian story arc, the Brothers' War, etc). I don't know enough about Hex to say whether it rips off the Magic plot. I'm guessing they were smarter than that.

The complaint goes on: "Cryptozoic copied the physical layout and ornamental aspects of Magic cards." Hex may not have copied it - they may be paying tribute or building on it. This is what we call a "question for the jury." Did Unreal appropriate Wolfenstein's first-person shooter model? The legal phrase is "derivative work" and that means that the piece borrows substantially from a copyrighted work. It may or may not be protected - the piece has to show substantial originality. Hex's cards look more like a "tribute" to me than a blatant copy. They have the same elements, but they are arranged differently.

The complaint continues: "Players in both games are confined to the same parameters based on an initial dealing of seven cards and play progresses in a substantially identical manner. Players must efficiently use their skill and calculation to assemble their initial decks and then in suitable selection and play of the various cards."

That's trying to sneak in patent law into a copyright claim. Good for the lawyers for trying, but there's nothing in the copyright law that protects games in which seven cards are dealt.

In previous cases, courts have held that some rules and functions of games can serve as an expression worthy of copyright. The important takeaway for you is that this is not a solved matter in the legal system.

The Second Claim: Trademark Violation and Consumer Confusion

A trademark is a distinctive mark (usually a logo) that lets a consumer identify a product uniquely. Recall how the Coca-Cola logo tells you that what's in the can is a Coke. Problems come up when someone takes that Coke logo and uses it to sell milkshakes - as a consumer, you would probably think that something bearing the Coke logo came from the Coke plant. Trademarks protect consumers from buying ripoff products.

Wizards says that Hex rips off the "trade dress" of Magic. Trade dress is the concept of packaging and the product's visual aspects. Think of the color of a bottle of Tide detergent, for example. The color has no function for the product - it doesn't work any better or worse because of that color. It's only there to catch your eye and let you easily identify the Tide on the shelf. If you grabbed a bottle with that orange color, you might be pretty annoyed when you got back and found out it was something else.

 

I would not be surprised if P&G, which owns Tide, is currently suing the makers of Tandil to get it off the shelves.

With Magic, the trade dress includes the packs. However, with Magic Online and Duels, the trade dress gets a lot murkier. There's no physical appearance of a product on a shelf; no pack to unwrap.

Wizards contends that the game play, rules, player interaction with the game, layout and arrangement, visual presentation, sequence and flow and scoring system constitute the "overall look and feel" of the game and are trade dress - and that's ridiculous. Trade dress must have no function to be considered trade dress. Do you get that? Remember that orange Tide bottle. The orange doesn't add anything to it. That handle on the jug may add function, but it may be ornamental. You could fight on that. But you can't fight that the scoring system has no function and is merely aesthetic.

See, what Wizards' lawyers are trying to do is use trade dress as a backdoor copyright. This happens a lot, so don't act shocked here that good lawyers are trying a good lawyering technique. What I mean about backdoor copyright is that Wizards is trying to assert what should be a copyrightable matter - the aesthetics of the packaging - through an entirely different law. With Tide's bottle, the orange isn't copyrightable - it's not original. But it can be trademarked, since the orange lets consumers know what the brand is.

The ways that trademarks and copyrights intersect is pretty advanced. Let's break it simply: a copyright protects an original expression of an idea that you have. A trademark protects a customer of yours from buying the wrong thing.

Wizards' own lawyers blow it in their complaint when they say "The distinctive design of the Magic cards is not essential to the use or purpose of the game nor does the design affect the cost or quality of the cards; the design is merely an ornamental arrangement of features, some of which are functional."

First, the design of the card - the casting cost and name at the top, for example, serve a function in the game - they let you easily hold the cards in your hand and see what you're looking at. Second, trade dress can't have any function - it  "must not serve a utility or function outside of creating recognition in the consumer’s mind." So if putting the name of the card at the top has a function (it does) then it's not part of trade dress. The lawyers really blow it when they admit that some of the features are functional. I think you'll have a hard time telling a court that several functional features, when put together, make a functionless trade dress. Adding up a bunch of somethings does not make a nothing.

The Third Claim: Patent Wackiness

First, a caveat: I am not a patent lawyer. Patent lawyers are very specialized and intelligent attorneys and the rest of us defer to them just about all the time.

A patent protects a unique invention or process. It protects it by preventing someone else from duplicating your invention/process for a period of time (typically 20 years).

Yes, Richard Garfield patented tapping. The patent, by my reading, runs out on June 22 of this year (2014). Wizards went back and tacked on some other parts to that same patent, which you can read here. The patent covers just about everything you could imagine in a TCG. It covers building decks, casting spells, the process of trading with others and more.

Wizards is saying that Hex violates a lot of its patents. Hex probably does. Here's the problem:

Those patent claims are beatable.

For example, they might be too abstract. They might be too broad. Having a patent does not guarantee that it will be valid in the face of someone challenging it. And importantly, if they run out when I think they will, Hex/Crypto can limit the damages they pay out to only the infringing time. After that, Hex isn't infringing on any sort of patents held by Wizards. They're probably still infringing on all the patents that early adopters lined up on the internet regarding downloads, backups, dropboxes and other horror stories. Litigating patents takes an incredible amount of money, especially when you're trying to get it declared invalid one way or another.

That said, I feel that Wizards has got a good chance of winning on the patent issue if the court determines that they're still valid. The patents protect just about everything patentable in Magic and Hex is as close to Magic as I've ever seen from another TCG.

Some Excellent Further Reading If You Want To See Legal Decisions Behind These Concepts

I am indebted in this section to my friend and fellow attorney Jacob Johnson, who sent along these links as we were chatting this morning about the case.

Tetris v. Xio Interactive deals with cloning a Tetris game. Xio made a Tetris clone and Tetris sued them and won on copyright infringement and trade dress. Regarding copyrights, the court said this:

"I find the following elements are also protected expression and further support a finding of infringement: the dimensions of the playing field, the display of "garbage" lines, the appearance of "ghost" or shadow pieces, the display of the next piece to fall, the change in color of the pieces when they lock with the accumulated pieces, and the appearance of squares automatically filling in the game board when the game is over. None of these elements are part of the idea (or the rules or the functionality) of Tetris, but rather are means of expressing those ideas. I note that standing alone, these discrete elements might not amount to a finding of infringement, but here in the context of the two games having such overwhelming similarity, these copied elements do support such a finding. It is the wholesale copying of the Tetris look that the Court finds troubling more than the individual similarities each considered in isolation."

Emphasis is mine. Wholesale ripoffs draw the ire of a judge. Note that this case came from the federal district in New Jersey and the Washington Court does not have to follow their reasoning.

That case has also got a good trade dress breakdown if you're interested.

Spry Fox v. Lolapps (lolwut?) is in the same district as Wizards' case and outlines copyright and Lanham Act laws. I'm wagering that it will be cited in the opinion in this case. You'll see a (poorly-reasoned) Lanham Act claim that the judge threw out and a copyright claim that survived to trial. The copyright claim discusses copyrighting elements of a game. It says, for example, that coins or points in a game are not copyrightable - they are "scenes a faire," something that a storyteller or game designer needs to include in the genre. The court won't grant a monopoly on collecting coins or saving princesses. It also contains the phrase "bears and yetis are both wild creatures." Thrilling to a legal reader!

Use it or lose it.

Wizards may be the bully here, picking on another game designer. On the other hand though, parts of Intellectual Property law requires that you actively defend your property against infringers or else you lose the protections.

If Wizards does not sue here, they may give up substantial rights in the future.

Where It Goes From Here: The Procedural Steps

Wizards has filed a complaint. Hex will file a response, where they raise defenses and deny claims from Wizards. It may read something like "we affirm paragraph 17 and deny all other paragraphs."

Wizards and Hex will then file for summary judgment. This means that they say "look judge, you don't need to have a trial - we have the law on our side already!" Hex will say "Wizards doesn't have any valid claims and they're reading the law wrongly." Wizards will say "look at the complaint and rule in our favor." A court only grants summary judgment when there are no facts that need to be decided in the case - the evidence is already there, in the form of sworn statements and other pre-trial materials.

The Tetris and Spry Fox documents linked above are both rulings on summary judgment. They are not final trial rulings, except where the court has granted summary judgment. That said, they're great for reading the legal concepts behind the IP issues here.

Where this can all go horribly wrong for Hex is in the discovery phase. Discovery is when you say "okay, opposing party, give me everything you've written about this matter." That means that if Hex has a file with Form of the Dragon in it and a note that says "this is great, let's copy it!" then they have to turn it over to Wizards. That's really painful to do and if that kind of evidence exists, it will brutalize Hex's chances of successfully defending against claims of copying.

Hex may settle with Wizards, but Wizards probably does not want a digital-focus Magic clone that's leagues better than Magic Online. They want to kill that kind of competition. So Wizards will only accept a settlement that says "we won't make Hex in its current form anymore."

If I'm a lawyer for Cryptozoic, I try to get CZE off of the lawsuit and have it only deal with Hex. That way, I don't lose more than the ~$2mil that Hex has from Kickstarter. This is company-killing litigation if Wizards prevails on its claims AND gets all the damages that it wants. It means that if Wizards wins on either the second or third claim, the court could permanently prevent Hex from making the game.

A victory for Wizards here does not mean that all other TCGs die. It doesn't mean that Hearthstone goes away. It will probably only mean that you cannot copy Magic's IP so closely as Hex does.

I predict that Wizards will win on its patent claims, it has a good shot at winning on copyright claims, and it will lose on its Lanham Act claims.

I'm definitely open to discussion!

Douglas Linn

Doug Linn has been playing Magic since 1996 and has had a keen interest in Legacy and Modern. By keeping up closely with emerging trends in the field, Doug is able to predict what cards to buy and when to sell them for a substantial profit. Since the Eternal market follows a routine boom-bust cycle, the time to buy and sell short-term speculative investments is often a narrow window. Because Eternal cards often spike in value once people know why they are good, it is essential for a trader to be connected to the format to get great buys before anyone else. Outside of Magic, Doug is an attorney in the state of Ohio.  Doug is a founding member of Quiet Speculation, and brings with him a tremendous amount of business savvy.

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119 thoughts on “Understanding the Wizards v. Hex Lawsuit (in plain English)

    1. This really was a fantastic article, and kudos to the writer for the deep legal exploration.

      I wanted to chime in, here, and offer a bit of character history for Cryptozoic.

      This company has been around for a few years (founded 2010). They began by taking over the development for “The World of Warcraft Trading Card Game” in the same year– after Upper Deck lost the rights to publish it (which is a separate, interesting event in of itself).

      The following remainder of the post is purely subjective, so this is just one man’s opinion:

      Cryptozoic is widely considered to be a “mediocrity peddler”. The have a lengthy history of cashing in on brand-names and pop-culture while churning out unoriginal mechanics. Simply clicking on their wikipedia entry will give you a short list of the products they have created. I have demoed a number of these products (I manage a card game and hobby store), and find most of them insipid, uninspired and formulaic.

      Their most recent display of PR was to “bail out” a board game that was funded on Kickstarter, and then summarily had a rather large scandal follow it. The move was clearly meant to generate goodwill for the company, but frankly, it seemed an incredibly transparent attempt at slapping their Cryptozoic label on the work of someone other than themselves in order to differentiate their product from the rather bland offering they’ve made heretofore.

      I have no sympathy for Cryptozoic, whatsoever, due to these previous events. The laziness is their design is utterly unsurprising, and frankly, it was only a matter of time before they got caught by the neck of some juggernaut (in this case WotC), violently shaken and hauled into a tree.
      Their response to the pending lawsuit, too, clearly seems meant to be phrased as an appeal to emotion. “We’re being picked on!”
      Please.

      Anyway.
      Again, this is strictly my opinion. But a quick search around a handful of boardgame forums (Shut Up and Sit Down share my opinion on the quality of Cryptozoic products) show I’m not the sole dissenting voice when it comes to the quality of their intellectual production.

  1. Great article, thanks. I don’t really understand MTG’s patent on “tapping”. I’ve always understood that you just could call it “tapping”. There are countless card games that use the exhaust/kneel/ready/corrupt mechanic and it is always functionally identical to MTG’s tapping, but by a different name. Are these just examples of WotC not enforcing their patent?

    1. Magic was the first to come up with tapping, since Magic was the first TCG to begin with. If I remember right, there was a wave of litigation with the other TCG makers when WOTC got the patent, where they essentially said \”pay royalties or die.\” L5R paid up and eventually was bought by WOTC anyway.

      Whether the tapping patent is a valid patent is another question and one that I\’m not educated enough to answer.

      1. Sorry if my post was confusing, I mistakenly said “could call it tapping” rather than “couldn’t call it tapping”. As others have mentioned, games like WoW TCG and most of FFGs LCGs use a “turn sideways” mechanic, but call it something other than “tapping”. Anyway, thanks for the response.

        1. http://www.google.com/patents/US5662332?dq=5662332

          I believe this is the patent in question. Here’s the relevant section:

          “In accordance with another aspect of the present invention, the step of executing a turn includes the step of tapping a mana card when it is used by turning the mana card approximately 90 degrees from an original position or orientation on a playing surface to thereby flag the card to all other players that the card is in use; and further including a step of untapping mana cards at the end of a turn by turning the mana card back to its original position to thereby unflag the card to all other players that the card is now available for use. Turning the card at other angles such as 30 degrees, 45 degrees, 60 degrees or other angle may also be done to flag a card. Flagging may also be accomplished by marking the card with nondestructive, removable markers or other similar method.”

    2. The weird thing about the tapping mechanic in Hex is that on a computer screen it is, imho, a really, really crappy way of indicating that a card has acted this turn. There are any number of other ways it could have been depicted (e.g. Hearthstone’s litle “zzz..” snooze bubble) which would have been nicer. And of course Hex doesn’t use the term “tapped”. So in this one case, they set themselves up for accusations of copying when it didn’t make sense to copy.

  2. One thing with nothat that the Hex team also made the WoW TCG, and there’s likely some of that copyright claim or more that can be argued as prior art. I never played it, but I’m fairly sure that in WoWTCG, you indicated an “exhausted” creature by turning it 90 degrees, which is also what Hex does.

  3. That was very interesting, i have a few qüestions::

    1- how l’any time has CZE to respond?

    2- Will be the respond made públic?

    3- what conseqüències for jex do you think Will have your prediccions?

    4- how much do you think the procés Will cost for CZE?

    1. CZ will probably respond pretty quickly. Their response will be public. If this proceeds, Hex will probably not exist in its current form. It’ll probably cost in upwards of $50,000-$100,000 to litigate for CZ but could run to $1,000,000 or more if it goes to trial.

      1. If this case is fully litigated, experts and expert discovery alone will cost, at a minimum, $150k+ for each side. If this goes through trial, this will cost each side $2m-$5m, very possibly more for WotC. I think the case settles within 6 months, and the best case scenario for Cryptozoic is that they completely overhaul the UI, change at least a couple of the main functions of the game, and remove each and every card that is in any way similar to a MtG card. I just don’t see them having the $ to fight it. (IP litigator here…)

    2. 1. Specifically, under Federal Rule of Civil Procedure 12(a)(1)(A), CZE has 21 days to file an answer if they required service of process, or 60 days to file an answer if they waived the requirement of service of process (which in this case would be the only rational decision). They can either file an answer or file a motion to dismiss.

      2. Either an answer or a motion to dismiss would be a public document, as would any briefs filed, court rulings, etc. (Things can be sealed by order of the court, but it’s unlikely in this case.) However, discovery documents are typically not public. Also, settlements are very rarely public, so if CZE and WotC agree to settle the case (which is usually how cases resolve–few cases actually go to trial), we’re unlikely to ever know the terms of the settlement.

  4. Fellow lawyer here — I believe only trademark law has the “use it or lose it” provision.

    I come down on the other side of the copyright issue: I have a hard time seeing any copying of any protectable elements in the “cards, plot, elements, circumstances, play sequence, and flow of Magic.” I don’t know Hex well enough to say for sure about the plot, but the cards look to me to be sufficiently distinct from Magic cards that any copied elements would be unprotectable. However, I’m working from general knowledge of case law and not from anything specific to Washington. And, as you said, judges hate wholesale copying, which means we may get bad case law out of this.

    I can see a greater case for the similarity of the UI to Duel of the Planeswalkers. The copied UI elements should probably be covered under merger — there are only so many ways to show which cards are going where during combat, for example — but I could easily see a judge or jury deciding otherwise. (Jury! Wild.)

    I haven’t looked at the patent yet. History has shown that I have little intuition as to what patents will be upheld at court. As you point out, while it may stop them prospectively, the patent will run out soon if it hasn’t already. I had never heard of Hex, so I don’t know if it’s even in production yet — aren’t patents normally limited to injunctive relief and actual damages? Can WotC get anything if they succeed on this claim?

    I was doing some patent research the other day for work, so I had this statistic handy: median cost of patent litigation is ~$5.5M. Plaintiffs win damages in about a third of cases, with median damages of another $5M. I wonder how much of this is just an attempt to bankrupt Hex with legal fees to destroy a would-be competitor. WotC has much deeper pockets than the defendants.

    Good analysis, though. I’m pointing people this way.

    1. Yep, Trademark has the most clear “use it or lose it” but laches remains an affirmative defense to raise. They’d probably lose on laches, but it’s a thing. Good observation.

      I’m surprised that they did not bang on the UI of DOTP more! You’re spot-on that there’s good ground in pointing out those similarities.

      I see both sides showing the cards side by side to a jury and saying “are these similar? Is one a copy?”

      1. As a veteran MTG player who has never played Hex, I was amazed by the similarity of the UI pics they included in the complaint. If you show a jury the MTGO interface, the Duels interface, and the Hex interface, I guarandamntee you a large number of jurors would say Duels and Hex are the same program and MTGO is some janky competitor.

  5. As a fellow lawyer, I’ve been a bit frustrated by a lot of the uninformed discussion of this lawsuit, so thanks for a clearly written and thorough explanation. I think you’ve done a lot to raise the level of discourse about this lawsuit.

    A couple quick thoughts: I think the references to the “plot” of MtG is intended to make allegations in line with Spry Fox v. Lolapps language: “A video game, much like a screenplay expressed in a film, also has elements of plot, theme, dialogue, mood, setting, pace, and character. Spry Fox took the idea underlying Triple Town and expressed it with its own characters, its own setting, and more. These objective elements of expression are within the scope of Spry Fox’s copyright.” If I were WotC’s lawyers, I would be tempted to argue that there is a plot within each game of Magic (not the plot at a macro level of blocks and sets and such); the plot of a game of Magic is two Planeswalkers dueling, gathering their resources and summoning increasingly powerful creatures and casting increasingly powerful spells in an effort to reduce their opponent’s life to 0. It’s a pretty thin plot, but you can still argue that it is a plot, and then argue about whether Hex copies that plot. (For comparison purposes, think about the “plot” of a game of Netrunner–it’s very, very different.) Again, the reason to talk in terms of the plot of each game is to try to fit this in to Spry Fox’s language.

    A minor civil procedure point: Spry Fox was decided on a motion to dismiss (a 12(b)(6) motion), not a motion for summary judgment. There’s a significant chance that Hex/Cryptozoic will move to dismiss (either in lieu of filing an answer or shortly after answering) because that would mostly allow them to avoid discovery entirely if they prevail (or avoid discovery on some of the claims if they prevail as to those claims). If they answer and do not make a dispositive motion until a motion for summary judgment, then discovery will start and proceed for a while before the motion for summary judgment. That will of course cost a lot of money, but it will also take a bunch of time for the folks at Hex/Cryptozoic to respond to. (For example, designers and developers and execs will get deposed, they’ll have to make documents available, etc.) So I think it’s likely that they’ll try to make a 12(b)(6) motion, rather than waiting for a summary judgment motion. And if they lose the 12(b)(6) motion, they may then try to settle rather than face the full costs of discovery. But that’s where Spry Fox starts being a big barrier for them–Hex may or may not infringe, but it seems like if you accept all of the facts in the complaint as true, the reasoning of Spry Fox applies straight up to the copyright claim. Which means Hex/Cryptozoic may have to fight this at summary judgment, but that’s a lot later and more costly than they would like.

    One additional note: the Hex/Crypto alter ego stuff makes a lot of sense because the Kickstarter was originally done under Cryptozoic’s name–so if Hex LLC has been set up to try to cabin liability to the subsidiary’s assets (which are presumably limited essentially to the game Hex), the claim that Cryptozoic committed infringement originally as part of the Kickstarter may be a way to get after the assets of both LLCs, instead of just Hex, and my read is that’s adequately plead to allow them to develop that theory later in the case, even if the court rejects the idea that the two orgs are just alter egos.

    1. Excellent commentary, Adam! Good read on the plot point. The plot of Magic and Hex is the same – summon monsters, cast powerful spells and duel a fellow wizard to the death. I was thinking earlier about whether a game that rips off all of Magic but does it where you’re playing Sim City on paper would be distinguishable. (yes, I know that a Sim City card game existed…)

      Good commentary on the CivPro point regarding the 12(b)(6), too. I admire attorneys who have a good handle on civil procedure. The finer points aren’t exactly in my bailiwick!

      It seems pretty clear that Hex and CZ are the same company, just nesting. If CZ tries to separate itself and fails, they might stand to lose a whole lot more because their general assets are open to loss.

      1. The timing of all of this is also fairly disastrous for CZ/Hex.

        I am actually a back on Hex, and if you look at the Kickstarter for the game (https://www.kickstarter.com/projects/cze/hex-mmo-trading-card-game), the actual ideas put forward and the end goal described are actually very different from duel of the planeswalkers and magic in general.

        Where the catch comes in is that it’s in closed beta, and almost none of the features that are supposed to set it apart from magic (cards that have 3 sides, gaining xp to level a card up, individually tracked stats that follow the card even if you trade it to someone else, etc) are in the game yet (there are some, like being able to socket gems in cards or changing the cost/power/defence/etc of a random card in your opponents deck) but they are still very, very similar where the beta is concerned.

        It does make me wonder if Wizards chose to do this now, rather then giving Hex time to differentiate itself more.

      2. 12(b)(6) is for failure to state a claim. I strongly doubt that if Wizards’s assertions are true they fail to state a valid claim. That’s the 12b6 standard and the only one I think they could possibly B6 is the copyright claim. If I am Wizards I would show “Murder” vs. “Murder” and demand the right to do discovery on how CZE wrote their card text.

        1. Actually, that comparison may not go as well for WoTC as they, or you, would hope…

          Interestingly enough in ~20 years, magic NEVER printed a straight 3 cost card that unconditionally killed a single creature.

          Hex has been in design since 2011. Murder was printed for mtg in 2012.

          You think Hex “didn’t” start design balance to include a shard’s prime removal spell?

          I’d be both unsurprised and highly amused if Hex’s design for murder predated wizards.

          Also it would create a situation where Hex gets to differentiate its resource system. 6 “resources” and only two of them black? One mtg murder for you! 6 resources and “even” one of them ebony? Two hex murders for you!

          I seriously hope the PR backlash kicks WoTC/Hasbro fair in their “stockholders”… Hex plays VERY differently to magic as is (character abilities, sockets, transform/revert, permanent cost and attribute changes, creation of cards in zones that aren’t tokens in play) and that’s not counting ALL the stuff to come (3 face cards, character equipment, PVE in its entirity, etc), it’s still in closed beta FFS!…

          …and much of it’s look has been known since the kickstarter. They wait until NOW? When as much of the money from the KS has been utilised as possible, but before aspects which differentiate the design even further are implemented and their (BS) patent expires?

          Do they think everyone who put 100+ into it will forgive them?

          I wont. I can assure them I would have spent more than $5000 in my next 20 years of life (a couple of boxes a year, adds up, eh?) even while playing Hex AS WELL, so, they betting there’s not 1000 like me?

    2. You can see similarities in MANY card games, The Spoils is MUCH farther from MTG then Hex (Although it was designed by pro MTG players, even Jon Finkel helped). The Spoils has a MUCH more open turn structure, any card can be played from hand face down as a “generic” resource. The cost system is VERY different (Hex got this from Spoils). Also the faction cards allow for the game to be as different as they want it to be (different starting “life”, hand size, turn order, deck size, everything really.

      Spoils combat is also WAY deeper then MTG with a LOT less rules. Overall, Spoils is a much different game then MTG (Also very much worth taking a look at if you love MTG) and that is why it has never had any issues with MTG and lawsuites.

  6. As someone who has their last 1L exam today (in 5 hours), and just had a property exam last week – I enjoyed this article a lot more than I thought I would. Thanks!

    (And don’t worry, the last exam is just international law. A lot easier than IP for me.)

    1. It is typical to ask for a jury at the beginning of civil litigation. Sometimes, you’d rather have a judge decide, especially if it’s a very complex issue that hinges only on a few legal terms. You might go with a judge on the patent issue but want a jury for the trademark issue, so you end up asking for a jury in the end. Mostly I am excited by the idea of giving jurors decks of Magic to play with.

      Juries are unpredictable.

      1. Additionally, they can always waive the jury later. If they don’t ask for the jury up front, it’s waived and they can’t get it back.

  7. I don’t know, there are a lot of hex cards that I could mistake for magic cards if I was just getting into magic and didn’t know about hex. The layout of cards is almost identical to that of future shifted cards in future sight. Cost in same place, power/toughness in same place, type line, art, abilities, rules text all in same place.

    1. I’ve played a LOT of tcg’s, and that is almost universal… why? Because in your hand cost and name are most important, text second (if it’s so complicated as to be difficult to remember exactly… most of the time, you should know, you put the card in the deck!) and P/T/whatever last…

      In play the reverse is largely true.

      So what layout is most conducive to conveying this information from everywhere it could be read?

  8. As a patent attorney, I can give some insight into possible challenges the MTG patent may face:

    First, it’s priority date is its filing date of June 22, 1994. In patent law, there is what is called an “on-sale bar” that bars the issuance of a patent if the invention was “. . . in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States. . .” Therefore, simplifying a bit, if MTG was in use or on-sale before June 22, 1993, then the patent is invalid.

    Of course, Richard Garfield did a TON of testing of MTG before releasing it at Origins game fair, on July 13, 1993. See http://en.wikipedia.org/wiki/Limited_Edition_(Mag… and http://en.wikipedia.org/wiki/Origins_Game_Fair discussing the initial release. See http://www.wizards.com/magic/magazine/article.asp… for a discussion of the game development.

    However, there is an R&D exception to the 102(b) public use or on-sale bar. It’s obviously complicated, but essentially if the public “playtesting” done by Richard Garfield prior to June 22, 1993 was absolutely necessary to the creation and invention of MTG, then the 102(b) public use or on-sale bar does not apply in this case. To challenge the patent, HEX may have to find out more details about each and every time the cards were seen in public prior to June 22, 1993. If they can show that any public sight of the cards occurred prior to that date, the patent is invalid.

    It’ll be interesting, that’s for sure.

    1. Thanks for your insight, JLV! Do you have thoughts on the overbroadness of the patent that some people are reading? I imagine that \”overbroad\” to a patent lawyer is a much different term than it is to the general public reading a patent.

  9. Also, the kickstarter page says “by Cryptozoic Entertainment” I don’t see how they can claim it isn’t theirs when they raised 2 million dollars on the premise that it was.

    1. I know, right? You can\’t exactly use LLCs as a sword and a shield at the same time. I can understand making it a wholly-owned subsidiary, but it depends on whether their corporate governance was followed closely enough to demonstrate two distinct companies – and not just a puppet.

  10. I am a long time MTG player that was a Kickstarter backer for Hex. I’ve been playing Hex for some time now and will be streaming if you want to check out the game play for yourself. I’ll be streaming tonight at about 7PM

    twitch.tv/juzamjedi

  11. great article, I have a question though. In writing this did you find any past legal action between wizards of the coast and The Spoils. The spoils is another print card game which is possibly more similar to mtg than hex. They could have even chosen to take a legal jab at cryptozoic’s WoW tcg.

    1. The spoils differs enough that it isnt a blatant 1:1 copy:

      Card layout is different
      Units have a 3rd stat (speed)
      You start play with 2 resources in play (2 lands in play essentially)
      There are little to no “Tribute” cards
      The color pie is different
      I believe the pack distribution is also different.

    2. The Spoils is MUCH farther from MTG then Hex (Although it was deisgned by pro MTG players, even Jon Finkel helped). The Spoils has a MUCH more open turn structure, any card can be played from hand face down as a “generic” resource. The cost system is VERY different (Hex got this from Spoils). Also the faction cards allow for the game to be as different as they want it to be (different starting “life”, hand size, turn order, deck size, everything really.

      Spoils combat is also WAY deeper then MTG with a LOT less rules. Overall, Spoils is a much different game then MTG (Also very much worth taking a look at if you love MTG)

  12. Thanks for the writeup.

    I’m a little confused by your conclusion:

    “I predict that Wizards will win on its patent claims, it has a good shot at winning on copyright claims, and it will lose on its Lanham Act claims.”

    I had the strong impression from reading this throughout that you thought none of the claims were particularly solid. For example, you wrap up the patent section by pointing out:

    “Those patent claims are beatable.”

    Do you just think that CZE/Hex lacks the bankroll to defend?

    1. Beatable like a turn 3 Progenitus is beatable. There are ways, but it\’ll probably still get you. Thing is, Wizards\’ patent only runs for another month. They can possibly/probably win on the patents unless CZE wants to hyper-litigate them. There may be \”prior art,\” which is to say, \”you didn\’t invent this – someone else did.\”

      If the court accepts that the patents are valid, then Hex will lose to them – they appropriated wholesale many patented things that Wizards owns.

      On the copyrights, it depends on whether the court wants to see some of the functional things in the game of Magic as copyrighted expressions of an idea. They tend to look down on that view, but since Hex is so blatant, I feel like a judge is going to slide a little against Hex and protect Magic.

  13. What’s the worst-case scenario if (as you predict) WotC prevails on its patent claims?

    Could they obtain anything more than an injunction against selling Hex before June 22, 2014?

    More generally, is there anything illegal about using a patented invention during R&D of a product that is only sold once the patent has expired?

  14. “Wizards may be the bully here, picking on another game designer. On the other hand though, parts of Intellectual Property law requires that you actively defend your property against infringers or else you lose the protections.

    If Wizards does not sue here, they may give up substantial rights in the future.”

    THIS explained the ENTIRE Thing. Thank you

  15. This is a company crusher for CZE. If they can not pop off the lawsuit to Hex only from CZE, CZE is gone. They can not afford to litigate this at all, past getting the two companies separated. As not doing so will kill both companies. It is their only option. Hex is gone no matter what, by just having the lawsuit filed, unless the settlement is very gentle and quick, which I would not expect it to. Maybe CZE will survive, but I am doubtful. They do not have the cash at all to cover this.

    1. How do you know any of that? You’re making a lot of absolute statements that seem to be more like assumptions.

      For instance, how do you know not separating the two companies will kill both? How do you know Hex will be gone? How do you know CZE doesn’t have the cash? Do you have access to CZE’s finances?

      If you don’t, you seem to be guessing.

  16. If the patents Magic holds are found as enforceable, how would this not apply to every ccg/tcg? For example Hearthstone uses a method to denote when a card has been activated. A “Zzz” bubble is placed on top of the card, but WotC’s patent specifically references markers or objects placed on top of a card. Further, they also claim that a deck (subset of all cards available used to play a match) is patentable. Using “mana” to cast spells or summon creatures is also patented.

    Is this just a situation where a patent is more likely to be enforced as the games Hex and Magic look visually more similar than Hearthstone and Magic?

    1. This actually isn’t true. The Zzz symbol indicates “summoning sickness” in Magic terms. There is no way to tell which cards have acted without attempting to take another action with them. This is one of the things that always seemed like an obvious oversight in Hearthstone, but learning of the patent explains it perfectly.

    2. I suspect Wizards is aware that the “deck” concept is one of the aspects of the patent that won’t hold up and they aren’t going to waste money and get bad publicity trying to use it.

      This phrase from Doug’s article- “Hex is as close to Magic as I’ve ever seen from another TCG”- probably sums up why Wizards is bothering on this occasion and hasn’t bothered with so many other CCGs/TCGs. They appear to have started by copying Magic wholesale and then just changed little bits here and there.

      As Doug said, discovery will be crucial, and in my experience creative and sales staff tend to put the worst possible things in writing, and they usually sound worse when put into a pleading or affidavit than when they were written. I remember a case where a business had legitimately done nothing wrong, but the sale staff DID hate the customer who made the complaint and said stuff in their internal emails about screwing him over… even though they actually didn’t, they were just venting, it made it a much more difficult case to win than should have been the case (although we did win).

  17. Thank you very much for this write-up Doug, it was very informative! I do have one question I was hoping you’d weigh in on: Let’s say, worst case scenario, WOTC wins on every portion of this lawsuit. How would that work with Hex being funded by Kickstarter money? If Hex gives WOTC their Kickstarter money, wouldn’t Hex then be in violation with all of its backers? (for not providing the product promised) Could this case turn into complete craziness – for example, Hex pointing the finger at their Kickstarter backers and telling WOTC “It was their money, you’ll have to sue them if you want to get it!”??

    I realize there may not be a precedent set for something like this, but I’d be interested just the same in hearing your thoughts. Thanks!

  18. “Wizards may be the bully here, picking on another game designer. On the other hand though, parts of Intellectual Property law requires that you actively defend your property against infringers or else you lose the protections.

    If Wizards does not sue here, they may give up substantial rights in the future.”

    Seeing how many other tcg’s are out there, and how many of them use these “Intellectual Properties” in one manner or another, couldn’t CZ/Hex start breaking down these individually showing how they have been used for many years and not defended?

    Can it be argued that they’ve already given up most of these protections?

  19. I am not a lawyer. And the most irritating issue here is: How can WotC sue a company on a product that is not even finished?

    Hex is currently in close-beta, it is not under NDA, but it is not public released either. US law gives kickstarter backers no customer status either, they simply donated money so that the product can be created. The patent runs out June 22. I would say it is safe to assume that hex will not be released before that date anyway. So how is there even a patent case?

    1. If they have infringed Wizards’ IP, then they have infringed it already. The patent claims may be limited in effectiveness by the time limit issue but the trade mark and copyright claims not so much. I don’t think the patent claims are a big part of this one, partly for the time reason and partly because Hex could probably just agree to remove “tapping” and whatever other parts of the patent look like they could hold up, and Wizards isn’t after just some minor changes to Hex.

      Wizards may not get as much or anything by way of damages or an account of profits from the infringements by sueing before the commercial release of Hex, but what they will be after most of all is an injunction against further infringement e.g. an injunction against the commercial release of Hex.

    2. Minor quibble: it’s worth noting that the original WotC filing predates a significant change in the law for patent duration (June 8, 1995 was the critical date), which makes it a little more complicated to identify when the patent actually expires. I don’t think the June 22 date is correct; for the original “tapping” patent, the correct date is more likely September 2, 2014 (17 years from date of issuance, rather than 20 years from earliest priority date).

  20. Doug,

    [Fellow lawyer here]: I think this article is excellent except for one element – I strenuously disagree with your assessment of the pleading on the Lanham Act claim. You wrote:

    Wizards’ own lawyers blow it in their complaint when they say “The distinctive design of the Magic cards is not essential to the use or purpose of the game nor does the design affect the cost or quality of the cards; the design is merely an ornamental arrangement of features, some of which are functional.”

    I think you’re missing the point – they’re not arguing that the *Content* is nonfunctional; they’re arguing that the graphic design of the card is nonfunctional and I think they are completely correct. If you compare an MTG card, a Hex card, and a Hearthstone card side by side you can see that the Hex card *very* closely copies the layout and graphic design of the Magic Card while Hearthstone does not. Every element of the graphic design placement is arbitrary. Hearthstone did a very good job of looking inspired by, but not a slavish copy of, MTG.

    1. Both the Hex and Hearthstone cards place their use and flavor text, to play cost, and attack/defense values in the same place. The difference on the MtG card is that the to play cost is in the upper right. All three have an image in the same place. The only difference that Hearthstone has is that the name placard is in a different location.

      1. The name placard is a pretty critical difference. Creature type is also placed differently. Hex has similar shape and proportion on the art box, and Hearthstone “breaks the frame” in a way Hex doesn’t. Hearthstone looks like somebody played Magic and then made their card; Hex looks like somebody took a Magic card and moved an element or two.

        1. So, you are arguing that having creature type bottom and name middle distinguishes HS enough from Hex and it’s threshhold bar, despite them both having costs top left to mtg’s top right that Wizards has a case against the later but not the former…

          Have you perchance SEEN a WoWTCG card?

          Go on, I’ll wait.

    2. Take a look at The Spoils, It is MUCH farther from MTG then Hex (Although it was deisgned by pro MTG players, even Jon Finkel helped). The Spoils has a MUCH more open turn structure, any card can be played from hand face down as a “generic” resource. The cost system is VERY different (Hex got this from Spoils). Also the faction cards allow for the game to be as different as they want it to be (different starting “life”, hand size, turn order, deck size, everything really.

      The ornamental layout is different even though there are still battle stats and costs (as well as a title bar, rules text and name bar)

      Spoils combat is also WAY deeper then MTG with a LOT less rules. Overall, Spoils is a much different game then MTG (Also very much worth taking a look at if you love MTG)

  21. I feel like it is important to say that I am a Kickstarter for HEX and very much enjoy the game. I have also played MTG since Legends.

    I think the worse thing HEX is going to have to deal with is the terrible timing of the claim. HEX is supposed to be a MMO-like TCG. There are supposed to be dungeons and stories and raids. There are supposed to be three-sided cards, equipment, gem slotting. HEX is supposed to be RIDDLED with MMO-like qualities, but it isn’t because it is in beta. The only part that is finished is the “PVP” mode.

    Even within the PVP mode there is a very large difference in the resource system. In magic if you have 2 Swamps and 10 moutains you can cast murder once. In HEX if you have 2 “Swamps” (blood) and 10 “Mountains” (ruby), you can cast murder 4 times. I use murder because it is often one of the cards compared as being the same but I feel it is obvious it isn’t. Really the resource system is stolen from The Spoils so is “Naw, we stole that from these guys” a valid argument?

    1. This is very true, the Hex resource system is an exact copy of The Spoils resource system.

      To me it feels like they took turn structure, card type, battle stats and layout from MTG and Cost/Resource structure from Spoils.

  22. IANAL, but it seems to me that the content/arrangement distinction applies fine here? I don’t think WotC is in any way arguing that something + something = nothing, but rather that the arrangement itself is nonfunctional (despite the arranged items being functional). Maybe that’s too thin a line though.

  23. Great write up! I was out of the country the week the suit was filed, so I’m playing catch-up a bit, but I’ve started recording my thoughts on the suit here:

    http://agbulleteric.tumblr.com/post/86230262616/wotc-hex-suit-some-guys-do-nothing-but-complaint

    http://agbulleteric.tumblr.com/post/86507963606/wotc-hex-suit-copyright-and-so-what

    I plan to do a more in-depth post on the patent stuff in the coming weeks after spending some time with the file histories (especially the reissue stuff, that’s always fascinating)

    The only thing I would quibble with is that I’d be shocked if there’s summary judgment briefing before fact discovery, expert discovery, and claim construction are completed. We might see substantive briefing soon if Wizards files for preliminary injunction, but for some reason, there’s no sign of that yet.

    I was an IP litigator until very recently, and would be happy to discuss this further at any time! Again, great writeup!

  24. I’ve played about a dozen TCGs including Magic, L5R, Pokemon, Warhammer: Invasion, etc and every TCG Ive seen is differently in gameplay in mechanics in card design, to the point where Im clearly playing games that have virtually no similarities beyond building decks with cards and basic things like drawing and tapping. When I look through the first set of Hex cards, honestly, if you reframed all the cards in Magic frames and told me it was spoilers for a new Magic set, I would believe you. There are functional reprints, including a 3 mana instant called Murder in black that destroys a target dude. The resource cards function in a way identical to Magic with an identical color pie that features red burn, blue draw/card filtering, black discard, green ramp and white life gain. You couldn’t make a game closer to Magic if you tried. Kind of pathetic that with all the incredibly deep design space TCGs have, they had to clone an existing game. Hex even uses “Summoning Sickness” and combat is identical to Magic. Seriously, try playing another card game, Ive seen a dozen resource systems that make themselves massively distinct and a dozen combat systems that function a lot differently and all work perfectly well for their game’s themes. There was no need to just clone Magic in every way.

    1. Not even reframed, really. Besides the power of the card on the lower left, it’s an exact copy of the frames from Futuresight.

      And from among Hex’s card pool, I’ve already seen Form of the Dragon, Greed, Oblivion Ring, Corrupt, and Pacifism. And yes, the color wheel is exactly the same.

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  28. The one thing that everyone seems to believe is that all other TCG/CCG’s are immune or not in infringement. But why consider the far simpler notion that they simply pay royalties?
    Just read the patient, WoW TCG used nearly all the mechanics and I would guess that Bizzard (not Crypto) paid for the TCG and now for Hearthstone. (as it would be far cheaper than court)
    All the undisclosed royalties probably would pay for quite a number of court cases.
    .
    Sorry to disappoint all of you, but I have little doubt that Crypto copied-&-pasted MTG mechanics for Hex. I have met many of them (in person) and they seem to think that they can rip-&-twist any game and no one notices. BigBang=Apples2Apples, WDead=Take6, DC/SF/LotR/etc=(superbasic deckbuilder), etc, etc…….
    .
    .
    (It looks like a bot has spammed this post, since this is quite well written and informative, it deserves a little clean-up)

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