Judge Rejects Epic's Temporary Restraining Order Request For Fortnite (But Grants It For The Unreal Engine)
On Monday there was a... shall we say... contentious first hearing in the antitrust fight/contract negotiation between Apple and Epic over what Apple charges (and what it charges for...) in the iOS app store. The issue for the hearing was Epic's request for temporary restraining orders against Apple on two points: first, it wanted a restraining order that would force Apple to return Fortnite to the app store. Second, was a restraining order on Apple's plan to basically pull Epic's developer license for the wider Unreal Engine.
As the judge made pretty clear would happen during the hearing, she rejected the TRO for Fortnite, but allowed it for the Unreal Engine. The shortest explanation: Apple removed Fortnite because of a move by Epic. So Epic was the cause of the removal. The threat to pull access for the Unreal Engine, however, seemed punitive in response to the lawsuit, and not for any legitimate reason.
More specifically, for a TRO to issue, the key issue is irreparable harm (i.e., you can get one if you can show that without one there will be harm that can't be easily repaired through monetary or other sanctions). But here, as the court notes, Epic, not Apple, created the first mess, and so it can fix it by complying with the contract. So there is no irreparable harm, since it can solve the issue. The opposite is true of the Unreal Engine, though:
The Court finds that with respect to Epic Games' motion as to its games, includingFortnite, Epic Games has not yet demonstrated irreparable harm. The current predicament appearsof its own making. See Second City Music, 333 F.3d at 850 (Only the injury inflicted by one'sadversary counts for this purpose."). Epic Games remains free to maintain its agreements withApple in breach status as this litigation continues, but as the Seventh Circuit recognized in SecondCity Music, [t]he sensible way to proceed is for [Epic to comply with the agreements andguidelines] and continue to operate while it builds a record." Id. Any injury that [Epic Games]incurs by following a different course is of its own choosing." Id. Epic Games admits that thetechnology exists to fix" the problem easily by deactivating the hotfix." That Epic Gameswould prefer not to litigate in that context does not mean that irreparable harm" exists.
By contrast, Epic Games has made a preliminary showing of irreparable harm as toApple's actions related to the revocation of the developer tools (SDKs). The relevant agreement,the Apple Xcode and Apple SDKs Agreement, is a fully integrated document that explicitly wallsoff the developer program license agreement. (See Dkt. No. 41-21 at 16.) Apple's reliance on itshistorical practice" of removing all affiliated" developer accounts in similar situations or onbroad language in the operative contract at issue here can be better evaluated with full briefing.For now, Epic International appears to have separate developer program license agreements withApple and those agreements have not been breached. Moreover, Apple is hard-pressed to disputethat even if Epic Games succeeded on the merits, it could be too late to save all the projects bythird-party developers relying on the engine that were shelved while support was unavailable.Indeed, such a scenario would likely lead to nebulous, hard-to-quantify questions, such as, howsuccessful these other projects might have been, and how much in royalties would have beengenerated, much less the collateral damage to the third-party developers themselves.
This same analysis effectively shows up on the other issues, such as the "balance of equities" question:
... the Court observes that Epic Games strategically choseto breach its agreements with Apple which changed the status quo. No equities have beenidentified suggesting that the Court should impose a new status quo in favor of Epic Games. Bycontrast, with respect to the Unreal Engine and the developer tools, the Court finds the oppositeresult. In this regard, the contracts related to those applications were not breached. Apple doesnot persuade that it will be harmed based on any restraint on removing the developer tools.
None of this is all that surprising, but it certainly suggests that the judge is not being distracted by Epic turning this whole thing into an anti-Apple marketing campaign.