There's no question that CD Projekt Red's video game adaptations of Andrzej Sapkowski's The Witcher franchise have been wildly successful. So much so, in fact, that the author has recently demanded over 60 million Polish Zlotys ($16 million USD) from the company for copyright royalties. CD Projekt Red revealed the demand in a report to its investors yesterday, claiming that the demand is "groundless with regard to their merit" because they legally acquired the copyrights needed to make the games.
To fully comprehend the underpinnings of this situation, we must first take a look at brief histories of CD Projekt Red and The Witcher as a video game series. CD Projekt Red was started in the mid-1990s by Marcin Iwiński and Michał Kiciński as a game distribution company. CD Projekt, as it was known at the time, quickly found its footing by importing CD games from the United States, eventually moving on to package these games with Polish manuals and boxes. However, it wasn't until the company decided to localize Baldur's Gate in 1999 that the game development aspect of the company began to emerge.
Baldur's Gate proved to be a huge success for CD Projekt, which eventually led to plans to design their very own game from scratch starting in the early 2000s. Sapkowski's The Witcher series had captivated Iwiński and Kiciński in their younger years, and as fortune would have it, the rights were available for purchase:
"After porting our first console game to the PC we got hooked and knew we had to carry on. That's when someone floated the idea to do something with 'The Witcher'. It was a grand return to Andrzej Sapkowski's literature which we had voraciously consumed in our high school and college years. When it turned out that the franchise exploitation and game development rights were for sale, we felt like we had won the lottery. " — Marcin Iwiński
This act of fortune was due to another developer's failed attempt at making a game from The Witcher. A studio known as Metropolis (co-founded by People Can Fly's Adrian Chmielarz) had previously acquired the rights to make a game from Sapkowski in the mid- to late 1990s. Due to internal issues, including Chmielarz's eventual departure, however, the game never surfaced.
CD Projekt Red was then able to negotiate a deal with Sapkowski to purchase rights to The Witcher for use in a video game. It may be due to the situation with Metropolis or maybe because CD Projekt Red had never created a game from scratch before, but whatever the case, Sapkowski opted to take a lump sum payment up front as opposed to earning royalty payments. Coming from an interview with Robert Purchese of Eurogamer:
"I was stupid enough to sell them rights to the whole bunch. They offered me a percentage of their profits. I said, 'No, there will be no profit at all - give me all my money right now! The whole amount.' It was stupid. I was stupid enough to leave everything in their hands because I didn't believe in their success. But who could foresee their success? I couldn't." — Andrzej Sapkowski
Of course, in hindsight, this proved to be the wrong move. The Witcher proved to be wildly successful, selling over 33 million copies as a franchise worldwide. This unforeseen success lies at the heart of the current issue, and though it may seem like an easy case to solve on the surface, there are a few aspects of Polish copyright law that may throw a wrench into the matter.
Let's start by examining the case from Sapkowski's side (Author's Note: I am in no way a legal expert, either in U.S. or Polish law, so keep that in mind as we proceed). In the United States, it would seem to me that this would constitute the completion of a contract, and thus there would really be no case. But Polish copyright law seems to be more pro-creator, as evidenced by Poland's Act on Copyright and Neighboring Rights.
Specifically cited by Sapkowski's lawyers, Chapter 5, Article 44 of this law states, "In the event of gross discrepancy between the remuneration of the author and the benefits of the acquirer of the author's economic rights or the licensee, the author may request the court for a due increase of his/her remuneration." In context, Sapkowski's lawyers are saying that since CD Projekt Red's economic benefits have monumentally overshadowed their client's as the result of using his work, Sapkowski has the legal right to seek additional recompense.
Later in the claim, the lawyers also suggest that CD Projekt Red's initial contract with Sapkowski relate to "only the first in a series of games, and therefore distribution of all other games, including their expansions, add-ons etc., is, simply speaking, unlawful." This argument cites Article 43 of the above law, which states in summary that if a contract does not state the transfer of rights, then the author has a right to remuneration based on the scope of the right granted and any benefits that come from the work's use.
The claim ends by stating that Sapkowski and his lawyers have been working on this claim for some time and are prepared to see it through to a "fully successful conclusion" whether by litigation or by settling in an "expeditious and quiet manner." Proceeding further, the lawyers state, will cost CD Projekt Red losses in stock value in excess of the 60 million Zloty requested by Sapkowski. Lastly, the claim notes that requests to legitimately purchase the copyrights from Sapkowski have been seen, and though a favorable outcome is not confirmed, quick processing of this claim will have "a highly positive effect on the prospects" for coming to a solution.
CD Projekt Red has responded to these claims in turn, stating:
"In the Company's opinion the demands expressed in the notice are groundless with regard to their merit as well as the stipulated amount. The Company had legitimately and legally acquired copyright to Mr. Andrzej Sapkowski's work, i.a. insofar as is required for its use in games developed by the Company. All liabilities payable by the Company in association therewith have been properly discharged."
CD Projekt Red has a point here. Their claim is that a contract was reached with Sapowski and completed as agreed upon by both parties. It was Sapowski who declined their offer of royalties in the original contract, so why should they have to pay now, effectively reversing that agreement? CD Projekt Red continues by expressing concern for keeping good relations with the authors of the works which inspire their games and thus will go to great lengths to find an amicable solution to these claims, provided they are respectful of existing contracts as well as the intent of both parties.
If you wish to read Sapkowski's full claim, you may find it here. Many may read this and see Sapkowski in a rather negative light. It could appear that he's just upset over making a mistake with his property over a decade ago and is therefore trying to profit off of CD Projekt Red's success, especially since he has expressed rather negative views of video games before. It certainly seems like he has learned a lesson from this, as he has been working closely with Netflix on their adaptation of his novels. However, based on my basic interpretation on the cited Polish law, it seems he might legitimately have a case. I'll definitely be following this one closely as more news comes out of it, as I'm very curious to see how the Polish legal system responds to such incidents.