Gearbox Case

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GEARBOXS PARTIAL SUMM. J. MOTION
NO. 3:13-CV-01962 JD

ROBERT M. SCHWARTZ (S.B. #117166)
rschwartz@omm.com
VICTOR JIH (S.B. #186515)
vjih@omm.com
HARRISON A. WHITMAN (S.B. #261008)
hwhitman@omm.com
OMELVENY & MYERS LLP
1999 Avenue of the Stars, Seventh Floor
Los Angeles, California 90067-6035
Telephone: (310) 553-6700

Attorneys for Defendant Gearbox Software, LLC
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION
DAMION PERRINE, and JOHN LOCKE,
individually and on behalf of a class of
similarly situated persons,

Plaintiffs,
v.

SEGA OF AMERICA, INC., and
GEARBOX SOFTWARE, L.L.C.,

Defendants.

Case No. 3:13-CV-01962 JD
NOTICE OF MOTION AND MOTION BY
DEFENDANT GEARBOX FOR PARTIAL
SUMMARY JUDGMENT (CLAIMS 1-4);
MEMORANDUM OF POINTS AND
AUTHORITIES
Hearing Date:
Time:
Courtroom:
Judge:
September 10, 2014
9:30 a.m.
11
Hon. James Donato
Case3:13-cv-01962-JD Document66 Filed07/30/14 Page1 of 20
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TO PLAINTIFFS AND THEIR ATTORNEYS OF RECORD:
Please take notice that Defendant Gearbox Software, LLC (Gearbox) hereby moves the
Court for partial summary judgment, to be heard on September 10, 2014, at 9:30 a.m., in
Courtroom 11 of this Court, at 450 Golden Gate Avenue, San Francisco, California 94102. This
motion is brought pursuant to Rule 56 of the Federal Rules of Civil Procedure and on the grounds
that no genuine issue of fact exists on at least four of the six claims for relief plaintiffs allege in
their First Amended Complaint and that Gearbox is entitled to prevail on those four claims as a
matter of law. The claims and grounds on which this motion is based are as follows:
1. First Claim for Relief, for violation of the Consumer Legal Remedies Act (Cal.
Civ. Code 1750): Gearbox is entitled to prevail on this claim because:
a. the subject matter of the lawsuit, video game software, is not a good or
service under the CLRA; and
b. plaintiffs have no viable remedy against Gearbox under this claim because
all available CLRA remedies (i.e., damages, injunction and restitution) are inapplicable to
Gearbox:
i. plaintiffs expressly disclaimed any right to recover damages under
this claim;
ii. plaintiffs are not entitled to pursue injunctive relief against Gearbox
because the allegedly wrongful conduct was confined to a specific
period of time before the products 2013 commercial release
(which, by definition, cannot recur); and
iii. plaintiffs are not entitled to pursue an award of restitution against a
party who, like Gearbox, received no money from plaintiffs, either
directly or indirectly.
2. Second and Third Claims for Relief, for violations of the Unfair Competition Law
(Cal. Bus. & Prof. Code 17200) and the False Advertising Law (Cal. Bus. & Prof. Code
17500): Gearbox is entitled to prevail on these claims because neither statute provides a viable
remedy against Gearbox:
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a. plaintiffs are not entitled to pursue injunctive relief against Gearbox
because the allegedly wrongful conduct was confined to a specific period of time before
the products 2013 commercial release (which, by definition, cannot recur); and
b. plaintiffs cannot pursue an award of restitution against a party who, like
Gearbox, received no money from plaintiffs, either directly or indirectly.
3. Fourth Claim for Relief, for breach of express warranty. Gearbox is entitled to
prevail on this claim because Gearbox did not sell or contract to sell the product.
This motion is based on this Notice of Motion and Motion, the Memorandum of Points
and Authorities filed herewith, the Declaration of Steve Gibson and the exhibits thereto, the
argument of counsel, the pleadings on file in this action, and any other matters properly
considered by the Court at the hearing on this motion.
Issues To Be Decided
1. Whether plaintiffs can obtain equitable restitution from Gearbox, a party who
never received any of plaintiffs money.
2. Whether plaintiffs can obtain an injunction against Gearbox for conduct that was
confined to a period of time that occurred in the past and cannot, by definition, recur.
3. Whether video game software is a good or service under the Consumer Legal
Remedies Act.
4. Whether Gearbox sold or contracted to sell the video game at issue in this case.
Dated: July 30, 2014. ROBERT M. SCHWARTZ
VICTOR JIH
HARRISON A. WHITMAN
By: /s/ Robert M. Schwartz
Robert M. Schwartz
Attorneys for Defendant Gearbox Software
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TABLE OF CONTENTS

Page

i

I. INTRODUCTION .............................................................................................................. 1
II. THE UNDISPUTED FACTS ............................................................................................. 4
A. Gearbox Was the Developer, Not the Manufacturer, Publisher or Seller ............... 4
B. Sega Hires Gearbox To Develop Code For Aliens: Colonial Marines ................... 4
C. Sega Promotes, Markets and Sells the Game .......................................................... 5
D. Sega Releases Aliens: Colonial Marines ................................................................ 5
III. LEGAL STANDARD ......................................................................................................... 6
IV. GEARBOX IS ENTITLED TO PREVAIL ON PLAINTIFFS FIRST, SECOND,
THIRD, AND FOURTH CLAIMS FOR RELIEF ............................................................. 6
A. Gearbox Is Entitled To Prevail On Plaintiffs Section 17200 and Section
17500 Claims .......................................................................................................... 6
1. Plaintiffs Have No Right To Seek Restitution From Gearbox .................... 7
2. Plaintiffs Have No Right To Injunctive Relief ........................................... 7
B. Gearbox Is Entitled To Prevail On Plaintiffs CLRA Claim .................................. 8
1. The Subject Matter Of Plaintiffs Claim Falls Outside The CLRA ............ 8
2. Plaintiffs Have No CLRA Remedy ........................................................... 11
C. Gearbox Is Entitled To Prevail On Plaintiffs Express Warranty Claim
Because Gearbox Did Not Sell The Game ............................................................ 12
V. CONCLUSION ................................................................................................................. 12

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TABLE OF AUTHORITIES
Page(s)
CASES
Berry v. Am. Express Publg, Inc.,
147 Cal. App. 4th 224 (2007) .............................................................................................. 9-10
Campion v. Old Republic Home Prot. Co.,
861 F. Supp. 2d 1139 (S.D. Cal. 2012) ..................................................................................... 8
Celotex Corp. v. Catrett,
477 U.S. 317 (1986) .................................................................................................................. 6
Fairbanks v. Super. Ct.,
46 Cal. 4th 56 (2009) ................................................................................................................ 9
Ferrington v. McAfee, Inc.,
2010 WL 3910169 (N.D. Cal. Oct. 5, 2010) ....................................................................... 9, 10
Freeman v. ABC Legal Servs., Inc.,
877 F. Supp. 2d 919 (N.D. Cal. 2012) ................................................................................... 7-8
Gest v. Bradbury,
443 F.3d 1177 (9th Cir. 2006) ................................................................................................... 7
Green v. Canidae Corp.,
2009 WL 9421226 (C.D. Cal. June 9, 2009) .......................................................................... 12
Hauter v. Zogarts,
14 Cal. 3d 104 (1975) ............................................................................................................. 12
In re Intel Laptop Battery Litig.,
2011 WL 7290487 (N.D. Cal. Apr. 7, 2011) ............................................................................ 8
In re iPhone 4S Consumer Litig.,
2013 WL 3829653 (N.D. Cal. July 23, 2013) ......................................................................... 11
In re iPhone Application Litig.,
2011 WL 4403963 (N.D. Cal. Sept. 20, 2011) ......................................................................... 9
In re Napster Copyright Litig.,
354 F. Supp. 2d 1113 (N.D. Cal. 2005) ................................................................................. 6-7
Korea Supply Co. v. Lockheed Martin Corp.,
29 Cal. 4th 1134 (2003) ............................................................................................................ 7
Lujan v. Defenders of Wildlife,
504 U.S. 555 (1992) .................................................................................................................. 8
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Madrid v. Perot Sys. Corp.,
130 Cal. App. 4th 440 (2005) ................................................................................................... 7
Mason v. Natures Innovation, Inc.,
2013 WL 1969957 (S.D. Cal. May 13, 2013) ......................................................................... 11
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574 (1986) .................................................................................................................. 6
McMahon v. Take-Two Interactive Software, Inc.,
2014 WL 324008 (C.D. Cal. Jan. 29, 2014) .................................................................... passim
Pelletier v. Pac. WebWorks, Inc.,
2012 WL 43281 (E.D. Cal. Jan. 9, 2012) .......................................................................... 10, 11
Perez v. Nidek Co., Ltd.,
711 F.3d 1109 (9th Cir. 2013) ................................................................................................. 11
Rebel Oil Co., Inc. v. Atl. Richfield Co.,
51 F.3d 1421 (9th Cir. 1995) ..................................................................................................... 6
S. Cal. Water Co. v. Aerojet-General Corp.,
2003 WL 25537163 (C.D. Cal. Apr. 1, 2003) .......................................................................... 7
Wang v. OCZ Tech. Grp., Inc.,
276 F.R.D. 618 (N.D. Cal. 2011) .............................................................................................. 8
STATUTES
Cal. Bus. & Prof. Code 17200 ................................................................................................. 3, 6
Cal. Bus. & Prof. Code 17203 ..................................................................................................... 6
Cal. Bus. & Prof. Code 17500 ................................................................................................. 3, 6
Cal. Bus. & Prof. Code 17535 ..................................................................................................... 6
Cal. Civ. Code 1770(a) ................................................................................................................ 8
Cal. Civ. Code 1780(a) .............................................................................................................. 11
Cal. Com. Code 2103(d) ............................................................................................................ 12
Cal. Com. Code 2313 ................................................................................................................. 12
Cal. Com. Code 2313(1) ............................................................................................................ 12

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OTHER AUTHORITIES
Fed. R. Civ. P. 56(a) ........................................................................................................................ 6
Fed. R. Civ. P. 56(e) ........................................................................................................................ 6
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I. INTRODUCTION
Defendant Gearbox Software moves the Court for partial summary judgment to eliminate
four unsustainable claims. Based on the few undisputed facts that are necessary to resolve those
claims in Gearboxs favorand in light of the narrow role that Gearbox played in the events
giving rise to this lawsuitGearbox demonstrates below that it is entitled to prevail as a matter of
law on the first four claims for relief pleaded in the First Amended Complaint (FAC). Those
are plaintiffs claims for violation of Californias Consumers Legal Remedies Act (First Claim),
Unfair Competition Law (Second Claim), Unfair Advertising Law (Third Claim), and a common
law claim for breach of express warranty (Fourth Claim). Simultaneously, Gearbox is moving to
strike the class allegations as to all claims, including those for plaintiffs claims for fraudulent
inducement (Fifth Claim) and negligent misrepresentation (Sixth Claim). Those claims are fatally
unsuited for class treatment.
As explained below, Gearbox never belonged in this lawsuit. Gearbox is a video game
software developer. It was neither the publisher nor seller of the video game at issue. For more
than a year, Gearbox has quietly abided the plaintiffs claims so that Sega, the games publisher
and the party responsible for the games marketing and sale, could assume the defense of this
lawsuit. Gearbox has honored its publishers request in spite of plaintiffs highly-publicized
and highly-misplacedclaims against Gearbox. At this point, however, Gearbox is obligated to
pursue its rightful departure from this case.
The relevant facts begin in 2006, when Sega decided to sell a video game based on the
Aliens motion pictures (later titled Aliens: Colonial Marines). To achieve that objective, Sega
contracted with Gearbox, on a work-for-hire basis, to write software that would run the game.
See Ex. A, 7.3.
1
Under its contract with Gearbox, Sega vetted and approved all of the games
subject matter, content, game play mechanics, and technical specifications. Id. 2.1. Gearbox
successfully completed and delivered the software in accordance with Segas specifications and
approval. See Gibson Decl. 7.

1
All exhibits cited herein are attached to the Declaration of Steve Gibson (Gibson Decl.).
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Plaintiffs allege (on only information and belief) that Gearbox shorted its efforts on
the game by diverting resources away from the game and onto other Gearbox games. See Dkt. 26
22. This allegation, presumably intended to inflame aspiring class members, is not only untrue
but legally irrelevant. In reality, Gearbox did the opposite of what has been alleged: When Segas
project needed additional resources, Gearbox voluntarily contributed millions of dollars of its own
money on Segas behalf, not the other way around. Gibson Decl. 6.
Critical to this case, the contract between Sega and Gearbox confirms that Sega reserved
to itself all authorship and publishing rights and responsibilities. Gearbox had none. As the
games publisher, Sega reserved to itself the sole right to do such things as designing the
packaging for the game, replicating Segas desired content onto computer discs, and
importantlythe marketing and advertising of the game to Segas distributors, retailers, Internet
download sites and, finally, to Segas consumers. See Ex. A, 6.1, 7.3. Notably, when the
game was sold, it was pursuant to Segas End User License Agreement, not Gearboxs. Indeed,
Gearbox does not own the product; Sega does. Id 1.1. At no time did Gearbox ever sell a
single unit of the game. Gibson Decl. 11. In a class action over these controlling issues, suing
Gearbox has been a legal non sequitur.
The core facts of this case are fatal to plaintiffs attempt to bootstrap liability on Gearbox.
Plaintiffs allege that the game failed to meet expectations that were allegedly formed by pre-
release marketing efforts. See, e.g., Dkt. 26 24-26. Plaintiffs ignore, however, that Segas
game demonstrations prominently identified the game as a work-in-progress during such
periods. Instead, plaintiffs offer the false premise that defendants somehow enjoyed the time and
resources to craft a multitude of game engines for the narrow purpose of marketing and selling
something that only the publisher could market and sell. That never happened. Gibson Decl. 5.
Plaintiffs have also falsely alleged an embargo claim, which misstates the record on
whether purchasers could have seen the retail content before its release. On this fundamental
point, Plaintiffs have obscured the irrefutable fact that the final, retail version of the game was
exhibited online, for extended periods of time, nearly two weeks before the games official
release. See Gibson Decl. 10. During this broadcast, consumers (including all potential pre-
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orderers) were shown the retail version of the product and were free to share their thoughts and
observations about what they saw. Id. Thus, any consumer (or potential class member) who
wanted to know what the product looked like before buying itas plaintiffs insist they did
either saw the final version of the game or could have done so. In fact, the number of persons
who watched the actual game before it was released outnumbers all of the pre-orders. And many
of these viewers took advantage of the unfettered opportunity to write about what they saw. Such
pre-release availability and publicity stands in stark contrast to the embargo theory that
plaintiffs assert in their complaint.
The verifiable facts demonstrate that there is no legal case against Gearbox. To the
contrary, Gearbox is entitled to prevail on each of plaintiffs four primary claims, based on the
few undisputed facts and governing law:
Gearbox is entitled to prevail on plaintiffs Unfair Competition Law and False
Advertising Law claims (Cal. Bus. and Prof. Code 17200 & 17500) because plaintiffs possess
no remedy against defendants such as Gearbox for those claims. Those statutes authorize only
two remedies: restitution or injunction. Neither applies against Gearbox. Here, Gearbox did not
sell the game. Sega did. Moreover, the monies Gearbox received from Sega to develop the game
were unaffected by any subsequent sales. The payments Gearbox received would not have
changed if Sega had published a blockbuster or had failed to sell a single unit. To date, Gearbox
has received no money belonging to plaintiffs (or the proposed class) and plaintiffs are, by
definition, ineligible for restitution from Gearbox. As to an injunction, the alleged harmful
conduct consists of statements and information about the game that, by plaintiffs own admission,
were made before it became publicly available in February 2013. Once the game was
commercially released on that date, there was nothing left to enjoin.
Gearbox is entitled to prevail on plaintiffs Consumer Legal Remedies Claim
because video game software is not a good or service under the CLRA. Gearbox is also
entitled to prevail because plaintiffs have no viable remedy. Not only are plaintiffs not entitled to
restitution or an injunction (for the reasons applicable to their 17200 and 17500 claims), but in
their complaint, plaintiffs have expressly disclaimed any recovery of damages.
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Finally, Gearbox is entitled to prevail on plaintiffs express warranty claim
because Gearbox did not sell the game or distribute it to wholesalers, retailers, or anyone else.
II. THE UNDISPUTED FACTS.
A. Gearbox Was the Developer, Not the Manufacturer, Publisher or Seller.
Founded in 1999, Gearbox is an award-winning, independent video game developer of
some of the industrys most popular games. See Gibson Decl. 1-2. For years, Gearbox has
worked to develop a loyal fan base and industry respect through dedication to its craft and the
pursuit of the highest quality video games. Id. 2.
As an independent developer, Gearbox is not affiliated with any one video game
publishing companyi.e., the companies that actually own, market and sell the games. Id. 1.
Gearboxs autonomy gives it the freedom to work with different publishers and on different
projects. Id.
B. Sega Hires Gearbox To Develop Code For Aliens: Colonial Marines.
In 2006, Sega began discussing with Gearbox the possibility of having Gearbox develop a
game for Sega based on the popular Aliens franchise. Id. 3. Those discussions led Sega and
Gearbox to enter into a Development Agreement, under which Sega (as the games publisher)
hired Gearbox on a work for hire basis to develop the games software. Ex. A, 7.3. Per the
agreement, Sega approved the final content, game play mechanics, and technical specifications.
Id. 2.1.
The Development Agreement also established Sega as the author of the [game] for all
purposes and the exclusive owner of copyrights in the game. Id. 7.3. And, as the owner of
the video game, Sega reserved the absolute right to control and direct the marketing and the sales
of the game. The contract reads, in pertinent part: As between the Parties, all aspects of
marketing, distribution and/or other such exploitation of the Packaged Product shall be in Segas
absolute discretion. Id. 6.1 (emphasis added).
For its part, Gearbox agreed to provide Sega with stated software deliverables (often
referred to as milestones) and, once Sega reviewed and approved the deliverables, Sega would
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pay Gearbox pre-set Milestone Payments. Section 8.1 of the contract memorialized those
parameters:
In exchange for Developers commitments and performance of its obligations
under this Agreement, Sega agrees to provide Developer with Milestone
Payments, provided that each respective Milestone Payment is expressly
conditioned upon Segas acceptance and approval of the Milestone
Deliverables. Id. 8.1 (emphasis added).
With that dynamic in place, Gearbox proceeded to develop the software for the game.
C. Sega Promotes, Markets and Sells the Game.
Beginning in mid-2011, Sega launched its marketing plan for Aliens: Colonial Marines.
Gibson Decl. 8. In July 2011, Sega sponsored a live gameplay demonstration at the video game
industrys annual E3 convention in Los Angeles. To avoid any confusion about the unfinished
status of the project, the demonstration included a distinct work-in-progress disclaimer on the
screen. Id. At the subsequent E3 convention, Sega again sponsored live demonstrations that,
contrary to the allegations of the FAC, used code from the then-current version of the game. Id.
9. Between September 2012 and January 2013, Sega released Pre-Order Trailers, each of
which, again contrary to the FAC, contained in-game footage from the final version of the game.
Id. And, on February 2, 2013almost two weeks before the release of Aliens: Colonial
Marinesthe popular video game website IGN.com hosted a live gameplay event. Id. 10.
Those who attended the event played (or watched others play) the actual game for nearly two
hours, and were not restricted (i.e., embargoed) from publicly commenting on the game
content. Significantlyand, again, contrary to plaintiffs claimsthose who watched the event
on the Internet also watched actual game play footage. Id.
D. Sega Releases Aliens: Colonial Marines.
On February 12, 2013, Sega released Aliens: Colonial Marines. Gearbox did not sell a
single unit of the game; only Sega and the retail third parties with whom Sega chose to do
business could and did so. Id. 11. The sales never triggered any further payments to Gearbox.
To be clear: Gearbox has not received a penny from any consumer who purchased Alien:
Colonial Marines, regardless of the consumers dissatisfaction (or satisfaction) with the product.
See id. 12.
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Approximately two months after the video games release, plaintiff Perrine filed this
lawsuit against Sega and Gearbox. Dkt. 1. On July 5, 2013, plaintiff Perrine and plaintiff Locke
filed a First Amended Complaint against the same defendants. Dkt. 26.
III. LEGAL STANDARD
Summary judgment is appropriate when the pleadings, affidavits and other material
present no genuine issue of material fact and the moving party is entitled to judgment as a matter
of law. Rebel Oil Co., Inc. v. Atl. Richfield Co., 51 F.3d 1421, 1432 (9th Cir. 1995); see also
Fed. R. Civ. P. 56(a). The non-moving party can only create a genuine dispute on a material
issue by adducing admissible evidence on the issue which is sufficient for a reasonable jury to
find for the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986) (citing Fed. R. Civ. P. 56(e)); Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
Here, plaintiffs can adduce no such evidence, and Gearbox is entitled to prevail on the first four
claims for relief pleaded in the FAC.
IV. GEARBOX IS ENTITLED TO PREVAIL ON PLAINTIFFS FIRST, SECOND,
THIRD, AND FOURTH CLAIMS FOR RELIEF.
A. Gearbox Is Entitled To Prevail On Plaintiffs Section 17200 and Section
17500 Claims.
Plaintiffs second claim for relief arises under California Business and Professions Code
section 17200 (the unfair competition law or UCL) and their third claim for relief arises
under section 17500 (the false advertising law or FAL). A private plaintiff may seek only
two remedies under the UCL and FAL: restitution and injunctive relief. See Cal. Bus. & Prof.
Code 17203, 17535; McMahon v. Take-Two Interactive Software, Inc., 2014 WL 324008, at
*6 (C.D. Cal. Jan. 29, 2014) (recognizing that remedies under the UCL and FAL are limited to
injunctive relief and/or restitution). Gearbox is entitled to prevail on these two claims as a
matter of law because plaintiffs have no right to obtain restitution or injunctive relief against
Gearbox, who never received plaintiffs money and have nothing to enjoin. See, e.g., In re
Napster Copyright Litig., 354 F. Supp. 2d 1113, 1126-27 (N.D. Cal. 2005) (dismissing UCL
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claim because claimant was not entitled to restitution or injunctive relief); Madrid v. Perot Sys.
Corp., 130 Cal. App. 4th 440, 467 (2005) (same).
1. Plaintiffs Have No Right To Seek Restitution From Gearbox.
Plaintiffs have no right to seek restitution from Gearbox unless Gearbox has their money.
See Madrid, 130 Cal. App. 4th

at 453 (restitution is limited to the return of property or funds in
which the plaintiff has an ownership interest). It is undisputed, however, that Gearbox did not
collect or receive any money from purchasers of Aliens: Colonial Marines. As noted above,
plaintiffs did not purchase the game from Gearbox. Plaintiffs, therefore, cannot establish that
Gearbox directly received their money from the sale of the game.
The undisputed evidence also shows that Gearbox did not indirectly receive any money
from plaintiffs purchase of the game. See Gibson Decl. 12. As Segas work-for-hire
developer, Gearbox received only development payments from Sega and, even then, the payments
only occurred upon Segas approval of Gearboxs work, not sales. Ex. A, 8.1. The milestone
payments were pre-set in the agreement between Sega and Gearbox to account for development,
and the amounts were not tied in any way to the number of units sold, whether that number was
one million, one hundred, or zero. That development money represents the only money Gearbox
received. See Gibson Decl. 12.
Gearbox has not received a single penny tied to the sales or profits (if any) of the game.
Id. Because Gearbox never obtained any monies from plaintiffs, even indirectly, plaintiffs are not
entitled to restitution from an independent contractor that never received any of their money. See
Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1147 (2003) (rejecting
nonrestitutionary disgorgement under UCL); S. Cal. Water Co. v. Aerojet-General Corp., 2003
WL 25537163, at *11 (C.D. Cal. Apr. 1, 2003) (same). Put simply: Gearbox cannot be subject to
restitution of money it never received.
2. Plaintiffs Have No Right To Injunctive Relief.
Injunctive relief is not available unless the plaintiff can demonstrate he is realistically
threatened by a repetition of the alleged violation. Gest v. Bradbury, 443 F.3d 1177, 1181
(9th Cir. 2006) (emphasis in original); see also Freeman v. ABC Legal Servs., Inc., 877 F. Supp.
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2d 919, 926 (N.D. Cal. 2012) (plaintiffs must show a real and immediate threat of repeated
injury in order to seek injunctive relief in federal court.) (citations omitted). In this case,
repetition is a factual impossibility.
It is undisputed that Aliens: Colonial Marines was released to the public on February 12,
2013. See Dkt. 26 51. Plaintiffs complaint alleges harm from the pre-release promotion of a
game that stopped well over a year ago. Plaintiffs complaint acknowledges that, once the game
was released, no one could have purchased it in alleged reliance on any of the pre-release
advertising: The demonstrations of Aliens: Colonial Marines were used and promoted up
until the games actual retail release in February 2013. Id. 26 2 (emphasis added). That is
why the proposed class is limited to persons who purchased the game before its release. Id. 101
(Requesting a class of [a]ll persons in the United States who paid for a copy of the Aliens:
Colonial Marines video game either on or before February 12, 2013.) (emphasis added).
Both the facts and the law doom plaintiffs request for injunctive relief: Allegations of
[p]ast exposure to illegal conduct does not in itself show a present case or controversy regarding
injunctive relief, and a plaintiff must demonstrate a continuing, present adverse effect[].
Lujan v. Defenders of Wildlife, 504 U.S. 555, 564 (1992) (citations omitted). Federal courts have
regularly rejected requests for injunctive relief in UCL and FAL claims when plaintiffs cannot
demonstrate a likelihood of future harm. E.g., Campion v. Old Republic Home Prot. Co., 861 F.
Supp. 2d 1139, 1150 (S.D. Cal. 2012) (rejecting plaintiffs request for injunctive relief under the
UCL because the plaintiff did not show he [was] realistically threatened by a repetition of the
alleged violation); Wang v. OCZ Tech. Grp., Inc., 276 F.R.D. 618, 626-27 (N.D. Cal. 2011)
(same); In re Intel Laptop Battery Litig., 2011 WL 7290487, at *2 (N.D. Cal. Apr. 7, 2011)
(same). By definition, these plaintiffs cannot seek or obtain an injunction against Gearbox.
B. Gearbox Is Entitled To Prevail On Plaintiffs CLRA Claim.
1. The Subject Matter Of Plaintiffs Claim Falls Outside The CLRA.
Plaintiffs first claim for relief, for violation of Californias Consumer Legal Remedies
Act (the CLRA), fails as a matter of law because the allegedly-wrongful conduct did not result
in the sale or lease of goods or services, as required by the statute. Cal. Civ. Code 1770(a)
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(emphasis added). Although the Court deferred resolution of this issue when defendants prior
counsel raised it at the pleading stage (see Dkt. 40), it is now ripe for resolution as it is
undisputable that the product at issue in this litigationAliens: Colonial Marinesis software.
Courts in this circuit have recognized that the sale of softwarehere, video game
softwaredoes not fall within the CLRAs definition of goods or services. See, e.g.,
McMahon, 2014 WL 324008, at *10 (software falls outside the goods and services covered
by the CLRA); In re iPhone Application Litig., 2011 WL 4403963, at *10 (N.D. Cal. Sept. 20,
2011) (same); Ferrington v. McAfee, Inc., 2010 WL 3910169, at *19 (N.D. Cal. Oct. 5, 2010)
(same). The recent McMahon case is directly on point, in Gearboxs favor.
In McMahon, plaintiffs who disappointedly purchased the Grand Theft Auto V (GTA V)
video game software alleged similar claims, citing the publishers representations regarding an
online multiplayer feature. McMahon, 2014 WL 324008, at *1. Although GTA V was released in
September 2013, plaintiffs alleged that the online feature was not available until two weeks later,
and brought statutory claims for unfair competition and false advertising. Id. To satisfy the
unlawful prong of the UCL, plaintiffs alleged that the defendants misrepresentations
constituted a violation of the CLRA. Id. at *10.
Consistent with Gearboxs argument, the court flatly rejected plaintiffs argument as a
matter of law, ruling that video game software and online services fall outside the goods and
services covered by the CLRA, and [p]laintiffs cannot assert a CLRA violation based on
allegations arising from their purchase of GTAV and GTA Online. Id.
The court in Ferrington reached the same conclusion. There, plaintiffs sued McAfeea
provider of computer security softwarefor allegedly transferring plaintiffs billing information
to a third party upon plaintiffs purchase of McAfee software. See Ferrington, 2010 WL
3910169, at *1. Dismissing plaintiffs CLRA claim, the court explained that a good under the
CLRA is defined as tangible chattels, and that definition, under California law, cannot be read
to include software. See at *19. The court agreed with defendants that software was comparable
to insurance and credit, both of which California courts previously determined to be intangible
chattel. Id. at *18 (citing Fairbanks v. Super. Ct., 46 Cal. 4th 56 (2009) and Berry v. Am.
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Express Publg, Inc., 147 Cal. App. 4th 224 (2007)). Based in part of section 9102(a) of the
California Commercial Code, which includes software in its definition of general intangibles,
the court dismissed plaintiffs CLRA claim because the CLRAs express limitation of goods to
tangible chattels must be given meaning, and current California law suggests that these words
exclude software from the Acts coverage. Id. at *19 (Additionally, the Court finds that
software generally is not a service for the purposes of the CLRA).
On the issues central to plaintiffs case against Gearbox, the courts have spoken with
clarity, and in Gearboxs favor. It is undeniable that plaintiffs CLRA claim arises from the
purchase of a video game and alleged misrepresentations concerning the functionality of the
games software. See Dkt. 26 2, 3, 26 & 60. As such, plaintiffs case against Gearbox is every
bit as flawed as were the McMahon plaintiffs now-dismissed claims.
Plaintiffs allege that the software they purchased contained a different software engine
(Dkt. 26 23-26, 48), the features of which were considered disappointing. But no matter what
plaintiffs thought of the software they received, it is still software. Ones alleged disappointment
over software does not convert it into non-software (or any other good that qualifies for relief
under the CLRA). And just as the recent McMahon opinion explained, a software product
cannot, as a matter of law, form the basis for a CLRA claim.
Plaintiffs may point to Judge Whites reluctance in October 2013 to dismiss CLRA claims
at the pleading stage of the case. See Dkt. 40. That decision has no bearing on whether this issue
can be resolved in Gearboxs favor here, at the summary judgment stage. Indeed, Judge White
noted that the Court may ultimately be persuaded that Aliens: Colonial Marines cannot be
considered a good under the CLRA, but at this stage of the proceedings plaintiffs alleged
sufficient facts to state a claim under the CLRA. Dkt. 40 at 7 (emphasis added). Further,
another district court in this circuit has since considered the CLRA in the context of a video game
and concluded that a video game does not constitute a good under the CLRA. See McMahon,
2014 WL 324008, at *10. Plaintiffs authority at the motion to dismiss stagePelletier v. Pac.
WebWorks, Inc., 2012 WL 43281 (E.D. Cal. Jan. 9, 2012)is no longer applicable.
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Indeed, in Pelletier, the court declined to dismiss a CLRA claim at the pleading stage
because plaintiff alleged that the product (which she never received) was an actual, physical
product and never alleged that the product was computer software. Id. at *5. Again, this
case is no longer at the pleading stage, and there can be no dispute that the subject matter of this
lawsuit is video game software.
2
Courts recognize that software, regardless of its perceived
quality, is not a good under the CLRA. That is what plaintiffs purchased. Accordingly,
summary disposition for Gearbox is appropriate and timely.
2. Plaintiffs Have No CLRA Remedy.
Gearbox has a second, independent ground to prevail on plaintiffs CLRA claim, namely,
the absence of any viable remedy that can be lawfully sought from Gearbox. The CLRA
authorizes three potential remedies: damages, restitution, and injunctive relief. See Cal. Civ.
Code 1780(a). None of these potential remedies can be lawfully sought against Gearbox.
In their complaint, plaintiffs request an injunction and expressly disclaim any recovery
of damages. See Dkt. 26 129 (For the sake of clarity, Plaintiffs explicitly disclaim any claim
for damages under the CLRA at this time.). For the same reasons discussed in Section IV.B,
above, (i.e., that plaintiffs cannot pursue an injunction and are not entitled to restitution from
Gearbox under the UCL and FAL), plaintiffs have no right to such remedies under the CLRA.
See Perez v. Nidek Co., Ltd., 711 F.3d 1109, 1114 (9th Cir. 2013) (affirming dismissal of CLRA
claim because class plaintiff was not entitled to injunctive reliefthe only remedy sought for the
alleged CLRA violation); Mason v. Natures Innovation, Inc., 2013 WL 1969957, at *5 (S.D. Cal.
May 13, 2013) (dismissing claims for injunctive relief under the CLRA, UCL and FAL).

2
Plaintiffs other case, In re iPhone 4S Consumer Litig., 2013 WL 3829653 (N.D. Cal. July 23,
2013), is also inapposite. Apple admitted that its phone was a good for purposes of the CLRA,
but characterized the complaint as focusing on the phones Siri software and, on that basis, asked
the court to dismiss the claim. Id. at *13. The court disagreed with Apples characterization,
explaining that Plaintiffs specifically plead in the CLRA claim that, among other things, Apple
represented that the iPhone 4Snot Sirihad characteristics and features that it did not, and that
the iPhone 4Snot Siriwas of a particular standard, quality or grade, although it was not, that
Apple advertised the iPhone 4Snot Siriwith intent not to sell as advertised. Id. Here, by
contrast, Aliens: Colonial Marines was not sold as a component of an admitted good.
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C. Gearbox Is Entitled To Prevail On Plaintiffs Express Warranty Claim
Because Gearbox Did Not Sell The Game.
Plaintiffs fourth claim for relief, for breach of express warranty, fails because Gearbox is
not a seller of the product at issue. Under California law, a claim for breach of express
warranty is governed by California Commercial Code section 2313. Hauter v. Zogarts, 14 Cal.
3d 104, 115 (1975). Section 2313 describes three circumstances in which express warranties are
created. Cal. Com. Code 2313(1). Crucially, such a warrantyassuming it exists despite the
overriding language in Segas End User License Agreement (EULA), to which each purchase is
subjectcan exist only from the seller, who is defined as a person who sells or contracts to
sell goods. Cal. Com. Code 2103(d); see also Green v. Canidae Corp., 2009 WL 9421226, at
*5 (C.D. Cal. June 9, 2009) (With respect to breach of express warranty, California Commercial
Code 2313 governs the ways in which a seller can create an express warranty.) (emphasis in
original). California courts have noted that the key issue under section 2313 is whether the the
sellers statements actually became part of the ultimate bargain. Hauter, 14 Cal. 3d at 115.
It is undisputed that Gearbox did not sell Aliens: Colonial Marines. See Gibson Decl.
11. By contract, Sega alone was responsible for publishing and sale of its game. In fact, under
the contract by which Sega hired Gearbox to write the software , Sega expressly retained for itself
the exclusive right to sell the game. See Ex. A, 6.1.
The bargain in this case is the one that was struck between consumers and Sega (and via
Segas retailers), not Gearbox. Plaintiffs do not allege otherwise. Further, these transactions
were subject to Segas EULA, the terms and conditions of which were understandably mandated
by the games publisher, not Gearbox. Because Gearbox had no part in the bargains or sales at
issue, Gearbox cannot be subject to liability under Section 2313.
V. CONCLUSION
For the foregoing reasons, Gearbox respectfully requests that the Court grant Gearbox
partial summary judgment on plaintiffs First, Second, Third, and Fourth Claims for Relief.
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Dated: July 30, 2014.

Respectfully submitted,

ROBERT M. SCHWARTZ
VICTOR JIH
HARRISON A. WHITMAN
By: /s/ Robert M. Schwartz
Robert M. Schwartz
Attorneys for Defendant Gearbox Software

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GIBSON DECL. ISO PARTIAL SUMM. J. MOTION
NO. 3:13-CV-01962 JD

rschwartz@omm.com
vjih@omm.com
hwhitman@omm.com
Telephone: (310) 553-6700


Plaintiffs,
v.


Defendants.

DECLARATION OF STEVE GIBSON IN
SUPPORT OF DEFENDANT GEARBOXS
MOTION FOR PARTIAL SUMMARY
JUDGMENT (CLAIMS 1-4)
Hearing Date:
Time:
Courtroom:
Judge:
September 10, 2014
9:30 a.m.
11
Hon. James Donato
Case3:13-cv-01962-JD Document66-1 Filed07/30/14 Page1 of 17
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1
GIBSON DECL. ISO SUMM. J. MOTION
NO. 3:13-CV-01962 JD

DECLARATION OF STEVE GIBSON
I, STEVE GIBSON, do hereby declare as follows:
I submit this declaration in support of Gearbox Softwares Motion for Partial Summary
Judgment (Claims 1-4). I am Vice President of Marketing for Gearbox Software, and I have
worked at Gearbox since 2009. The facts set forth herein are known to me of my own personal
and firsthand knowledge, and if called as a witness, I could and would testify competently
thereto.
Background
1. Gearbox began in 1999. Gearbox is an independent video game developer. By
independent, I mean that Gearbox is not owned by or affiliated with any one video game
publisheri.e., the company that replicates the game discs, markets and advertises the game, and
sells it to retailers, wholesalers, and others who sell it to the public. This gives Gearbox the
freedom to work with different publishers and on different projects.
2. Gearbox has created some of the industrys most popular games. For years,
Gearbox has worked to develop a loyal fan base and industry respect. We are dedicated to our
work and our fans, and to the development of the highest quality video games.
3. In 2006, Gearbox and Sega began discussing the possibility of Sega engaging
Gearbox to develop the video game software for a game based on the Aliens motion pictures
(Alien, Aliens, Alien 3, and Alien: Resurrection). Those discussions resulted in Sega and Gearbox
entering a Development Agreement in late 2006. True and correct copies of sections 1.1, 2.1, 6.1,
7.3, 8.1, and 9.1 from the Development Agreement dated October 5, 2006 are attached hereto as
Exhibit A.
4. Under the Development Agreement, Sega reserved to itself absolute discretion
over the games marketing, advertising, and sale. Sega also was the owner of copyrights in the
game. On that latter point, the game was a work for hire by Gearbox for Sega, under a contract
in which Gearbox was hired to write the software in accordance with specifications
(milestones) that Sega approved.
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NO. 3:13-CV-01962 JD

5. With the agreement in place, Gearbox began developing the software for the game,
which was eventually titled Aliens: Colonial Marines (A:CM). To develop the software,
Gearbox utilized the Unreal game engine, licensed from Epic Games; this was the only game
engine Gearbox used in the design and development of the game. Contrary to what some believe,
the pre-release demonstrations were not made using different game engines.
6. During the development process, Gearbox supplemented Segas development
budget with its own money to help Sega finish its game; Gearboxs contributions to A:CM
totaled millions, none of which was ever repaid. Gearbox never received money from Segas
A:CM purchasers, nor has Gearbox received a single royalty from any such sales by Sega.
7. Sega approved every milestone submission from Gearbox throughout A:CMs
development. Gearbox eventually completed and delivered the software in accordance with
Segas specifications, which Sega vetted, approved and accepted.
Sega Promotes and Releases Aliens: Colonial Marines
8. Beginning in mid-2011, Sega launched its marketing plan for A:CM. In July 2011,
Sega sponsored a live gameplay demonstration at the video game industrys annual convention,
known as E3, in Los Angeles. The demonstration included a work-in-progress disclaimer on
screen.
9. At the next years E3 convention, the game was further along in development and
Sega again sponsored live demonstrations using existing code from the game. Between
September 2012 and January 2013, Sega released Pre-Order Trailers, each of which contained
in-game footage from the final version of the game.
10. On February 2, 2013, video game website IGN.com hosted a live event. Those
who attended the exhibition played the actual game, were not restricted from publicly
commenting on the game, and the entire event was viewable on the Internet. This exhibition of
retail content lasted nearly two hours, and occurred more than a week prior to A:CMs
commercial release.
1 11. On February 12, 2013, Sega released Alien: Colonial Marines. As a developer
2 Gearbox did not sell any units of the game; the development agreement assigned this function to
3 the game's publisher.
4 12. The game's sales were insufficient to trigger any sales-based payments to Gearbox
5 and, as a result, Gearbox has not received any additional monies from Sega for the sale of the
6 game. Gearbox only received the milestone payments made by Sega during the game's
7 development. Those milestone payments were pre-set before any games were sold, and the
8 milestone payments to Gearbox were not tied to the number of units of the game that Sega
9 ultimately sold.
10 I declare under penalty of perjury under the law of the United States of America that the
11 foregoing is true and correct. Executed this 30th day of July 2014 at Plano, Texas.
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3
NO. 3:13-CV-01962 JD
Redacted
Redacted
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Redacted
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[PROPOSED] ORDER
NO. 3:13-CV-01962 JD

rschwartz@omm.com
vjih@omm.com
hwhitman@omm.com
Telephone: (310) 553-6700


Plaintiffs,
v.


Defendants.

[PROPOSED] ORDER GRANTING
DEFENDANT GEARBOX SOFTWARE,
LLCS PARTIAL SUMMARY JUDGMENT
MOTION (CLAIMS 1-4)
Hearing Date:
Time:
Courtroom:
Judge:
September 10, 2014
9:30 a.m.
11
Hon. James Donato
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[PROPOSED] ORDER
NO. 3:13-CV-01962 JD

On September 10, 2014, Defendant Gearbox Software, LLCs (Gearbox) Motion for
Partial Summary Judgment came on hearing before the Hon. James Donato. Gearbox moved for
summary judgment on plaintiffs first four claims for relief in their First Amended Complaint on
the grounds that no genuine issue of fact exists on plaintiffs claims and that Gearbox is entitled
to judgment as a matter of law.
The Court, having considered the points, authorities, evidence, and oral argument
presented by the parties, the files and pleadings in this case, HEREBY ORDERS that Gearboxs
Motion for Partial Summary Judgment is GRANTED in full. The facts established by Gearboxs
evidence show that plaintiffs cannot establish one or more elements of the following claims for
relief:
1. First Claim for Relief, for violation of the of the Consumer Legal Remedies Act
(Cal. Civ. Code 1750) against Gearbox. Gearbox is entitled to prevail on this claim. First, the
subject of this lawsuit, the video game Aliens: Colonial Marines, is not a good or service under
the Consumer Legal Remedies Act. Second, plaintiffs do not possess a remedy that they can
pursue against Gearbox under the Consumer Legal Remedies Act because they disclaim damages
in their complaint, are not entitled to an injunction against Gearbox, and are not entitled to
restitution from Gearbox.
2. Second Claim for Relief, for violations of the Unfair Competition Law (Cal. Bus.
& Prof. Code 17200) against Gearbox. Gearbox is entitled to prevail on this claim. Plaintiffs
do not possess a remedy that they can pursue against Gearbox under the Unfair Competition Law
because plaintiffs are not entitled to an injunction against Gearbox and are not entitled to
restitution from Gearbox.
3. Third Claims for Relief, for the False Advertising Law (Cal. Bus. & Prof. Code
17500) against Gearbox. Gearbox is entitled to prevail on this claim. Plaintiffs do not possess a
remedy that they can pursue against Gearbox under the False Advertising Law because plaintiffs
are not entitled to an injunction against Gearbox and are not entitled to restitution from Gearbox.
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[PROPOSED] ORDER
NO. 3:13-CV-01962 JD

4. Fourth Claim for Relief, for breach of express warranty against Gearbox. Gearbox
is entitled to prevail on this claim. Gearbox did not sell or contract to sell the product at issue in
this lawsuit, the video game titled Aliens: Colonial Marines.
Plaintiffs did not produce in their papers or at oral argument any authorities or evidence
contradicting the Courts ruling.
GOOD CAUSE APPEARING, Gearboxs Motion for Partial Summary Judgment is
hereby GRANTED in full.
Dated: _______________ ____________________________________
The Honorable James Donato
United States District Court Judge

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