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Australian Court grants Search and Freezing Orders against Grand Theft Auto cheat developers

Posted on 24 October 2018 by Peter Nunn & Max Nicolaides

Australian Court grants Search and Freezing Orders against Grand Theft Auto cheat developers

The Australian Federal Court has granted the video game publishers Take-Two Interactive and Rockstar Games the right to raid the homes and has frozen the assets of five people accused of creating and selling cheats for its hit game Grand Theft Auto V

Why are cheats in video games a problem?

When a game has millions of players, the incentive to create cheats and monetise this potential market is a very tempting proposition for the cheat creators. Players are willing to pay a monthly subscription or one-off fee for cheats that enable them to, for example, acquire in-game currency or other rewards, or simply to give them an advantage over other players. 

Cheats can pose a real threat to the financial success of video games if they lead to a decrease in the number of people playing a game or buying in-game content.

Why is this case important?

Publishers suing the creators - or even the users - of cheats is nothing new. Such actions are normally for copyright infringement and/or breach of the game user agreement. However, so far as we are aware, this case is the first instance of a Court granting Search and Freezing Orders against such people.

Search and Freezing Orders have long been known as the law's "nuclear weapons" due to their highly invasive nature.  A Search Order gives the party obtaining it the right to search both the target's business and domestic property, take away all relevant documents, and all image all electronic devices. Freezing Orders prevent the target from disposing of its assets (including money), placing it in a financial strait jacket.

Criteria for Search and Freezing Orders

Because their effects are so draconian, an applicant in England for Search and Freezing Orders has to satisfy the court on a number of points.

For a Search Order, it has to show that:

  1. it has a very strong legal claim;
  2. the target's wrongdoing has or will cause serious damage;
  3. there is clear evidence that the incriminating documents or other evidence is in the target's possession and that there is a real possibility that the target would destroy that evidence once it learns of the claim against it; and
  4. the harm a Search Order may cause the target or its business affairs is not excessive or disproportionate.

For a Freezing Order, it has to show that:

  1. it has a good arguable claim over which the English court has jurisdiction;
  2. the target has assets to be frozen;
  3. there is a real risk that, unless its assets are frozen, the target would dispose of its assets so as to put them out of the applicant's reach. 

The applicant will also need to provide an undertaking to the court to compensate the target for any losses it suffers as a result of its assets being frozen, if it transpires that the Freezing Order was wrongly granted.

In Summary

That the Australian Court granted these orders shows that Courts now recognise the value of the video game market. This case sends a powerful message to video game hackers who look to monetise their wrong-doing: the law may come down very heavily on you.

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