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Epic Games, Inc. v. Sykes

United States District Court, E.D. North Carolina, Western Division

December 12, 2019

EPIC GAMES, INC., Plaintiff,
v.
RONALD SYKES, Defendant.

          FOR THE PLAINTIFF CHRISTOPHER M. THOMAS ATTORNEY FOR PLAINTIFF EPIC GAMES, INC.

          FOR THE DEFENDANT THOMAS KREGER ATTORNEY FOR DEFENDANT RONALD SYKES

          FINAL JUDGMENT AND PERMANENT INJUNCTION ON CONSENT

          HONORABLE LOUISE W. FLANAGAN UNITED STATES DISTRICT JUDGE

         Plaintiff Epic Games, Inc. (“Plaintiff” or “Epic”) and Defendant Ronald Sykes (“Defendant” or “Sykes”) (together, the “Parties”) have reached an agreement to settle the above-captioned action, and have consented to the entry of this Final Judgment and Permanent Injunction on Consent (the “Consent Judgment”) based on the following stipulated findings of fact and conclusions of law, which the Court hereby adopts for purposes of entry of this Consent Judgment.

         FINDINGS OF FACT AND CONCLUSIONS OF LAW

         1. This Court has proper jurisdiction over the subject matter in this litigation under 28 U.S.C. §§ 1331 and 18 U.S.C. § 1836(c) because this action arises under the Defend Trade Secrets Act, 18 U.S.C. §§ 1832, et. seq. (DE 1, Complaint ¶ 17) This Court has supplemental jurisdiction over Plaintiff's related state law claims under 28 U.S.C. § 1367(a).

         2. This Court has personal jurisdiction over Defendant under N.C. Gen. Stat. § 1-75.4(1) because he is a natural person domiciled within this State and because he consented to the exclusive jurisdiction of courts located in this State. This Court also has personal jurisdiction over Defendant because he purposefully availed himself of the privileges of conducting activities and doing business in the State of North Carolina and in this District, thus invoking the benefits and protections of North Carolina's laws. (DE 1, Complaint ¶ 18)

         3. Venue is proper in this District under 28 U.S.C. § 1391(b) because this is a District in which a substantial part of the events giving rise to Plaintiff's claims occurred, and where a substantial part of the property that is the subject of this action was conceived, created, and is situated. It is also where Defendant committed acts of trade secret misappropriation and breached his contract, which was entered into in this District and is governed by North Carolina law, and where Plaintiff's injuries were suffered. (DE 1, Complaint ¶ 19)

         4. Epic, a Maryland corporation with its principal place of business in Wake County, North Carolina, is the creator of the video game Fortnite® (“Fortnite”). Epic is the owner of all the intellectual property related to Fortnite, including, without limitation, the trade secrets described below. (DE 1, Complaint ¶¶ 15, 20-22, 34)

         5. Fortnite was broadly released on July 25, 2017. Fortnite's free-to-play “Battle Royale” game mode was released on September 26, 2017. Since that time, Fortnite has become extremely popular in the United States and across the globe. With over 250 million accounts, it is played by millions of users and videos and livestreams of Fortnite gameplay are among most popular content on platforms like YouTube and Twitch. (DE 1, Complaint ¶ 21-22, 25-26)

         6. An important part of Fortnite's dramatic success is the unexpected changes and surprises Fortnite's fans experience as the game, its story, and its environment continually evolve. This, along with the regular introduction of new content, including, without limitation, planned events; playing formats; themes; narratives; storylines; plot twists and developments; player capabilities; “emotes” (i.e., dances or gestures a player's avatar can perform); cosmetics (e.g., outfits aka “skins” for player avatars); weapons; vehicles; “Easter eggs;” new map locations, points of interest (POIs) and other environmental changes; and other secrets and surprises, have kept Fortnite's millions of users excited about and engaged with the game. (DE 1, Complaint ¶ 27)

         7. Epic is the owner of all right, title, and interest in and to the Fortnite-related proprietary, secret, and confidential business and technical information and data described in the Complaint (DE 1), specifically including its planned changes to Fortnite's map and environment that were made following the end of Fortnite Season X, (i.e., the new Chapter 2 map itself and its new map locations, points of interest, environmental features, such as rivers and the mountains shown on the picture of the map Defendant disclosed and otherwise described in the text of his tweets shown and described in the Complaint); new player capabilities (i.e., the ability to swim); new game features (i.e., weapon upgrade stations); a new vehicle (i.e., boats); a new weapon (i.e., bandage bazooka); new rules and reward system (i.e., Daily Medals awarded for searching chests, getting kills, and surviving); and new gameplay (i.e., new ways to get more powerful weapons and move around the new map by swimming and using boats in the riverways) (collectively with the trade secrets described in paragraphs 58 and 59 of the Complaint, “Epic's Trade Secrets”). (DE 1, Complaint ¶¶ 34, 58-59)

         8. Epic invested considerable time, effort, and financial resources to develop and protect Epic's Trade Secrets, and Epic's Trade Secrets derived independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who could obtain economic value from the disclosure or use of Epic's Trade Secrets. (DE 1, Complaint ¶¶ 5, 35, 95)

         9. At all relevant times, Epic took reasonable measures to keep Epic's Trade Secrets secret by, including, without limitation: (i) maintaining them in secure working spaces; (ii) requiring a fully executed NDA for each person who might have access to Epic's Trade Secrets; (iii) limiting access to Epic's Trade Secrets to onl y thos e who are w orking on Fo rtnite, are product testers, or are part of senior management; (iv) requiring (a) an assigned Epic user name, (b) password (with leading-edge industry standards for password requirements), and (c) multifactor authentication to access the computer system in which Epic's Trade Secret-related files are stored and/or live-streamed meetings during which Epic's Trade Secrets might be discussed or disclosed; and (v) encrypting files that Fortnite users download in order to be able to play the game to prevent “data miners” from accessing the information. (DE 1, Complaint ¶ 37)

         10. Epic's Trade Secrets derived economic value and competitive advantage from not being generally ...


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