epic v. apple TRO hearing about to start https://cand-uscourts.zoomgov.com/j/1618764848?pwd=bW03Y2NvV0YrK2FQSkxoMXRxOWprQT09

2020 is fucking wild

Judge asks how quickly the parties can brief, Cravath says immediately and on an expedited basis. Gibson agrees to a 30 to 45-day timeframe

Judge asks how quickly the parties would be ready for trial, Cravath says as quickly as possible with a little discovery. Bench trial only

Judge asks whether Cravath (Epic) will seek monetary damages, Cravath says no

Judge says can we do it in a month? Cravath says with discovery we can do it in 4 to 6 months for a full trial on the merits

Gibson says that sounds a little tight, more likely 10 months

Judge asks what discovery Cravath wants, Cravath says some discovery produced in another case and maybe something else. Focus on efficiency. Additional discovery on in-app payment processing. Limited targeted discovery and some deps

Do you have an expert yet? In the process of lining them up, picking one out of a few

Gibson says the other case - Cameron? - is in substantial compliance on production, but depositions haven't gone

Gibson now says 6 to 8 month timeframe

Judge asks about a few exhibits, contracts, etc. Asks where certain dates are being obtained from, given that they're not on the documents. Forrest (Cravath, Epic) come from communications with Epic

These are the "Click-through dates" where people clicked to accept the contracts

Forrest says she got the dates from the Apple website

Judge asks about H/J/P/L/N/R and whether they're identical - yes, separate agreements but same content. Similarly, I/K/M/O/Q/S are identical

Bornstein (Cravath, Epic) says the declaration provided notes that the dates are obtained from Apple's panel

Judge notes lots of people are viewing, reiterates the TRO standard for the audience. Thanks, Judge! Usually only 14 days, similar to preliminary injunction. Judge's goal is to maintain the status quo so a preliminary injunction on more of the merits can happen

Four factors - likelihood of success on merits, irreparable harm, balance of equities, whether injunction/relief is in the public interest. Judge wants to start with irreparable harm

Judge says she looks at irreparable harm through two lenses. One is respect to Fortnite and other gaming apps that come to the platform through the Epic Games contract (this means stuff that runs on Unreal Engine, there's a list) incl. Infinity Blade and other non-Epic games

Second is what comes to the platform through the contract with Epic Games International. And, sorry, this means Unreal Engine specifically. She thinks the Unreal analysis is different

To clarify - lens one is games, lens two is the Engine. Judge is inclined not to grant relief with respect to the games, but IS inclined to grant w/r/t Unreal Engine.

Argument starts with Cravath/Epic. Judge thinks Epic created the situation - she's wise to their tactics. Doesn't come to the court with clean hands. Decided to breach strategically right before a new season.

Unclean hands is a popular corporate litigation argument! I'm curious to hear what Forrest says

Forrest starts by noting that multiple SCOTUS cases say unclean hands are not a defense in an antitrust case. Judge is chewing out Forrest for saying she should have raised these cases in her opening brief and not saved them for the (non-existent) reply

Judge is bothered that Forrest didn't share the cases with Doren (Gibson, Apple) before the hearing. Forrest says the cases are well-known, and binding

Forrest has a point - Apple raised the unclean hands argument, and Gibson Dunn really ought to know the law, lol

Judge has a very excited dog. The dog, by way of howling, appears to have spotted a squirrel or postal worker.

Doren says he's not prepared to address these cases, which seems like farce, but what do I know

Onto irreparable harm for Fortnite! Forrest is arguing that Fortnite is a social environment, which is both true and a clever argument. She's arguing that the updates will break the ability of users across platforms to play the games together. Judge is likely to be skeptical

Judge says why doesn't Epic just take out its payment processor via hotfix? Cameron (another case) returned from the Supreme Court over a year ago. It's not as though these things haven't been in litigation, it's not as though money damages can't provide a remedy

Judge says why not just flip the switch and return everyone to where they were? Forrest says as a matter of public policy and the Sherman Act, we shouldn't be required to comply with anticompetitive contracts

Judge says the Cameron vote was 5-4, this is not a slam dunk for Apple or for Epic Games. Forrest says 5-4 indicates a likelihood of success on the merits

Forrest says the Court would be asking Epic to engage in an anticompetitive scheme with Apple. Forrest says there's no technical barrier, but the law cannot and does not require it

Forrest says consumers are complaining every day and quitting because of Apple, this is a cognizable irreparable harm, loads of customer service complaints, Apple has the only ability to refund money. This is clever!

Forrest says this harms reputation on an immediate and irreparable basis because _only apple_ can refund money spent. Asking Epic to take out Epic Pay is asking consumers to pay more than they would in a competitive environment

Judge asks what's happening with Google. Forrest notes they're suing Google as well. Things are slightly different in the Android environment, but we're suing them too

Now we hear from Doren (Gibson, Apple)

Doren says this is solely within the control of Epic, and that Epic hid the code in a submission and triggered it after approval without Apple's consent

Query what it means to "hide code" lol

Doren says the Court shouldn't permit Epic to breach the contract with Apple

The basic fight here is about who deserves the 30% profit - Epic says Apple is unfairly profiting and Apple says Epic is unfairly profiting

Forrest says there was no hidden code. All the code was included in an app build which was reviewed by Apple several weeks prior to being enabled

Forrest says hotfixes are neither nefarious nor novel, and hundreds have occurred routinely by all parties. Hotfixes are how concerts are played and how characters are put into play

Judge asks whether Epic told Apple there was code that would allow this payment processing. Epic says we didn't hide it

Judge says on June 30th, CEO of Epic sent an email asking Apple to allow Epic to directly sell to iOS users. Apple then responded and said no. After that, you turned on the code, or you activated it. It's not as if they were being forthright - call a spade a spade

Forrest says underhandedness is not a defense in an antitrust case. Also, I think the Judge may not understand the kind of review Apple is supposed to be doing with its build approvals? To me, it seems like the burden is on Apple to catch stuff like that

Forrest said we knew what we were doing, and it had to be done by a company willing to go the distance and prepare for this fight. Focusing on the broader ecosystem, not just as-applied to Epic

Judge says why don't monetary damages suffice if you're a billion-dollar company? (Monetary damages preclude a TRO, sometimes)

Judge asks what the harm to Epic that cannot be compensated is, unless Epic is going to opt out of monetary damages in Cameron

Forrest says Epic is opting out of monetary damages in Cameron - wow! Forrest says the reputational harm is the kind of harm that constitutes irreparable harm. This isn't an area I'm super familiar with, but it sounds right (in Illinois, anyway)

Doren says irreparable harm is nonsense because Apple is getting the same complaints and has offered Epic a path back. But if you take the antitrust framework seriously, this shouldn't matter

Judge says Apple could just get money if they turn out to be right, why not allow the new processor

Doren says the new features should have been disclosed. Can't be added, installed, implemented without breach of contract

So far it seems like an argument about whether or not the contract should be binding. Doren is leaning hard on it, Forrest is saying the anticompetitive contract can't be binding because antitrust

Judge is not persuaded by the summary of recent events from Doren

Now we're getting onto Unreal Engine

Judge says she thinks the contract with Epic International has not been breached and that Apple is using its hard leverage, reaching beyond the Epic Games contract

Judge says it looks retaliatory and there wouldn't be any harm to Apple to enjoin/restrain Apple from not impacting Unreal Engine

Doren is arguing that the two Epic entities are the same. Judge is IMMEDIATELY not persuaded, and cuts Doren off

"I thought I read that they were two separate companies. Are they two companies or not?"

"They are two separate companies"

Doren is arguing that the employee overlap between companies means they're functionally the same and so the reaction was warranted

(I think this is a bad argument)

Judge's face indicates she is not persuaded by this argument

"Mr. Doren can you hear me? My focus is on the irreparable harm. I have yet to hear you talk about irreparable harm."

Doren says that when Apple is dealing with an entity breaching contracts, its practice is to terminate all its contracts with all related entities. Judge says the practice is separate and distinct from the contract. She's right!

Doren says Apple does that so the offending contact isn't transferred to a separate developer's license. But this is the exact kind of thing that tilts against them, I think

Judge says this is a TRO, doesn't know whether Epic International is a shell or whether there will be veil-piercing. But what she does know is there are two contracts and two applications from two entities. Doren says the misconduct will be transferred

Forrest notes there is a 14-day period in the Apple letter, noting they would not threaten Unreal Engine if Epic undid the Fortnite payment processing. Woof.

Forrest notes these are separate and integrated (self-containing) contracts.

Forrest notes that termination at will in the context of an alleged monopolist is an act of monopoly maintenance. Right. Surprised Doren relied on that clause.

Doren says that assumes some amount of market power that evidence hasn't been presented on, and that Apple is enforcing its contracts for legitimate business purposes. Tripling down on his "shell game" theory and says it would "spread like a virus." :|

Lewis (Gibson, Apple) asks to chime in on irreparable harm. Judge says NO - "I do not allow lawyers to double team." She requires lawyers to make arguments independently.

Doren wants to make one more point - there is no standing for a restraining order to be issued w/r/t Unreal Engine. Either it's part of Epic Games or it's not, and if it's not, it hasn't moved for a TRO.

Forrest acknowledges that Unreal Engine is handled by a subsidiary, but that Apple has overreached the allegedly breached contracts. Unreal Engine, Houseparty, and other contracts. Independent contracts that are only touched for pressure

Now moving on to public interest issue w/r/t Unreal Engine. Forrest says Unreal Engine would be functionally destroyed and unusable because developers need cross-platform app development. They want an engine that gives them access to every platform

Forrest says lots of developers have told them about concerns over Unreal Engine. And the investments developers have made in the engine have been destroyed because Epic can't update the engine for Apple devices

Forrest is talking about the deterioration of trust in Epic and Unreal as a platform because of the fact that it's been banned from Apple

Forrest offers to talk about public interest w/r/t Fornite, judge says yes. Fortnite is a social environment, not just a game. This is a great argument, I wish I had a link handy about games-as-social spaces

Forrest notes that after the update, users won't be able to contact each other. And these kinds of social connections are especially important given the current circumstances

Forrest cites 9th Circuit precedent to argue that the Court can strongly weigh some factors and the TRO standard is a sliding scale

Doren says all Epic has to do is put a compliant version of Fortnite back on the app store to get Unreal Engine back on the app store. Again, I am incredulous they would tie Unreal to Fortnite, I think this will end poorly for them

Doren is dripping with disdain - "if they want to ride their sharks or do their dances on Fortnite..."