Judge Rules Apple Can’t Block Epic’s Unreal Engine, But Fortnite Is Fair Game

Epic Games has won a somewhat pyrrhic victory in its ongoing battle against Apple’s so-called “injustices” in the gaming and software industry as a U.S. after a judge issued a temporary restraining order yesterday against Apple to prevent it from blocking further development of the Unreal Engine by terminating Epic’s developer account, however the order is only a small part of the much bigger issue of what’s at stake between the two companies.

Although Judge Yvonne Gonzalez Rogers’ ruled that Apple wouldn’t be allowed to terminate the developer account used by Epic Games to develop the Unreal Engine, this was really a side skirmish in the much larger war being waged by Epic Games against Apple and its App Store dominance, and when it came to the bigger picture and the future of Fortnite on the App Store, Judge Rogers sided squarely with Apple in declining Epic’s request to force Apple to return the game to its store.

The Court finds that with respect to Epic Games’ motion as to its games, including Fortnite, Epic Games has not yet demonstrated irreparable harm. The current predicament appears of its own making.

Judge Yvonne Gonzalez Rogers

In a move that really shouldn’t have come as a big surprise to anyone with even a basic understanding of contract law, Rogers sided with Apple’s position that the “emergency” that Epic was claiming to be in was a situation that it had entirely created for itself through its wilful and premeditated violation of its longstanding developer agreement with Apple.

Your client created the situation. Your client doesn’t come to this court with clean hands. Epic made a strategically and calculated move to breach, and decided to breach right before a new season. So in my view, you cannot have irreparable harm when you create a harm yourself. All Epic has to do is take it back to the status quo and no one suffers any harm. And you can have a trial date in the spring. Flip the switch to the way it was August 3rd and return everybody back to where they were.

Judge Yvonne Gonzalez Rogers

As Judge Rogers notes, Epic chose to “disturb the status quo,” with its stunt, but she also maintained that Apple has no right to mess with the status quo by cutting off Epic’s access to the developer tools necessary to support and maintain the Unreal Engine. Rogers added that in that case it was Apple who had “chosen to act severely” by creating a situation that would result in even more collateral damage.

Epic Games and Apple are at liberty to litigate against each other, but their dispute should not create havoc to bystanders.

Judge Yvonne Gonzalez Rogers

Basically, Judge Rogers basically said that the two behemoths are more than welcome to duke it out as much as they want in a fair fight as long as they keep the fight between them rather than going for the “scorched earth” approach like a pair of giants in the playground who are so focused on their own private war that they don’t care who else they kick over in the process.

Business as Usual — For Now

The ruling actually didn’t come as a big surprise, and it seems likely that both Apple and Epic knew they were pushing for a lot more ground than they were likely to get; Epic’s request to have Fortnite forcibly reinstated was never likely to happen, although it’s hard to say whether Apple’s threat to block access to the development of Unreal Engine was a bluff that it fully expected to be called on, or if left unchallenged it would have actually gone through with it.

In fact, in a hearing prior to the actual ruling, Judge Rogers had already suggested she was more inclined to protect the Unreal Engine, saying that she wasn’t likely going to “grant relief with respect to the games,” and most legal experts also agreed that this was the most likely direction in which the chips would fall.

While Apple is within its technical rights to terminate its entire relationship with Epic for breach of contract, Epic also has a right to ask the courts to stay Apple’s hand while litigation is pending in order to prevent irreparable harm, since of course there’s no point in winning a legal victory if the actions you’re fighting against have already destroyed your company, and Judge Rogers agreed with Epic that losing the ability to support and develop the Unreal Engine for other developers could cause serious harm to Epic.

Also key to the ruling is also the fact that Epic actually had two separate developer accounts with Apple — one for Fortnite and its other games and another that supports the development of the Unreal Engine. However, as Apple’s Phil Schiller explained in his declaration as part of Apple’s opposition filing, it’s the company’s normal policy when there’s a serious violation to terminate all related developer accounts.

In the past, where Apple has terminated a developer account for bad faith or deceptive conduct like what Epic did here, we have also terminated accounts that we know to be affiliated with the offending account.

Apple Fellow Phil Schiller

In his declaration, Schiller also explained that in the case of Epic, the company “administers these two accounts as if they are one,” including the sharing of the exact same tax, payment, and account holder information, and both accounts “were renewed within a minute of each other,” back in June.

However, the fact that there were two separate accounts made the ruling more clear, since Apple will still be free to terminate Epic Games’ account that’s used to support Fortnite and its other titles — it’s only the account specifically used to support the Unreal Engine that Apple isn’t allowed to touch, at least not until the matter is resolved.

As to when that’s going to happen? That’s still going to be a much longer road. Judge Rogers’ ruling responded only to the specific motion for injunction that Epic Games requested, and it’s actually just a preliminary ruling to preserve the status quo, since Apple’s ultimatum to Epic was originally scheduled to take place on August 28th. A full hearing on the injunction is still scheduled for September 28th, which will determine whether Apple is allowed to take further action, or any action at all, and both parties are expected to file additional arguments relating to the motion for an injunction, with Epic likely continuing the fight to have Fortnite restored, and Apple continuing to opposed at least that part of the motion, and possibly even digging its heels in on Unreal Engine as well.

However, these current hearings have nothing to do with the actual merits of Epic’s case — they’re completely preliminary to the actual court battle that’s still be to be waged against Apple by Epic. By all estimates, this won’t even start until next year, as Epic’s counsel has said that they likely won’t have their case ready for four to six months, and Apple has asked for an even longer discovery period that would push an actual trial date out to next summer.