Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze and recommend the defense strategy for our client, Redstone Gaming Corp. ("Redstone" or "RGC"), in the copyright infringement action brought by Luminos Interactive LLC ("Luminos"), filed on March 18, 2024, in the United States District Court for the District of Nevada, Case No. 2:24-cv-00587-RWL, assigned to the Honorable Rebecca W. Langford. Plaintiff

II. Background A. The Parties Redstone Gaming Corp. Redstone is a Delaware corporation, publicly traded on the Nasdaq Stock Market under the ticker symbol "RDST." The company maintains its principal executive offices at 4100 Obsidian Tower Boulevard, Suite 2200, Las Vegas, Nevada 89109. Redstone's registered agent in Delaware is Capitol Registered Agents, Inc., located at 1209 Orange Street, Wilmington, Delaware 1980

1. Fair use under 17 U.S.C. § 107;

2. Independent creation, on the ground that the challenged assets were independently created by Redstone's creative team without reference to or copying from Shardfall Chronicles;

3. Scènes à faire / merger doctrine, on the ground that the challenged visual elements are unprotectable genre conventions; and

4. Failure to state a claim upon which relief can be granted, to the extent that Luminos's allegations of substantial similarity are legally insufficient. The Answer preserves all other defenses and objections available under the Federal Rules. This memorandum provides the detailed analysis and evidentiary foundation for the three principal affirmative defenses asserted in the Answer.

III. Defense Pillar One: Independent Creation A. Legal Framework Copyright infringement requires proof of two elements: (i) ownership of a valid copyright and (ii) copying of constituent elements of the work that are protectable. Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). Because direct evidence of copying is rarely available, a plaintiff may establish copying circumstantially by demonstra

IV. Defense Pillar Two: Scènes à Faire / Merger Doctrine A. Legal Framework Under the scènes à faire doctrine, elements of a work that are standard, stock, or common to a particular topic, genre, or subject matter are not protectable by copyright. The doctrine recognizes that certain expressive choices are so closely associated with the treatment of a particular idea, theme, or setting that granting copyright protect

V. Defense Pillar Three: Fair Use Under 17 U.S.C. § 107 A. Legal Framework

Section 107 of the Copyright Act codifies the defense of fair use, providing that "the fair use of a copyrighted work . . . for purposes such as criticism, comment, news reporting, teaching . . . scholarship, or research, is not an infringement of copyright." 17 U.S.C. § 107. The statute identifies four non-exclusive factors to be considered in determining whether a particular use constitutes fair use: (1) the purpos

VI. Rebuttal of Luminos's Damages Theory A. Luminos's Apportioned Profits Model Luminos claims actual damages of $28,500,000, derived from Ironclad Dominion's first-year revenue of $312,000,000 multiplied by 9.13% — the percentage that Luminos contends represents the proportion of Ironclad Dominion's commercial appeal attributable to the thirty-seven challenged visual assets. This apportioned profits model is set for

VII. Expert Witness and Consultant Recommendations A. Dr. Ingrid Lautner — Visual Comparison Expert Title: Professor of Digital Media and Game Design, Pacific Western University Specialty: Visual asset comparison, procedural generation, transformative design methodologies, and the history and conventions of digital game visual design Proposed Engagement: Dr. Lautner will be engaged to perform a pixel-level visual com

VIII. Insurance Coverage Redstone maintains a media and entertainment liability insurance policy with Pinnacle Mutual Insurance Co. (200 Commerce Drive, Hartford, Connecticut 06103), bearing Policy Number PML-IP-2023-08841. The policy includes an intellectual property litigation sub-limit of $15,000,000 per occurrence, with a deductible of $5,000 per claim. Based on our preliminary review of the policy terms, the cla

IX. Proposed Litigation Plan and Timeline A. Immediate Next Steps (April – May 2024) The following actions should be undertaken immediately:

1. Expert and Consultant Retentions. Finalize engagement letters for Dr. Ingrid Lautner (visual comparison expert), Brindoval Forensic Consulting LLC (metadata verification), and Evergreen Valuation Group LLC (damages rebuttal). All three retentions are critical to the development of the evidentiary record and should be in place no later than the end of April 2024 to ensure sufficient lead time for the expert and dis

2. Insurance Coverage Tender. Send coverage tender letter to Franklin Teague, Claims Adjuster, Pinnacle Mutual Insurance Co., under Policy No. PML-IP-2023-08841, Claim No. PML-CLM-2024-3392. Include copies of the Complaint and Answer and request confirmation of coverage for defense costs.

3. Rule 26(f) Conference. Prepare for the Rule 26(f) discovery-planning conference, which is currently scheduled for May 6, 2024. During the conference, we will negotiate the scope and timing of discovery with Luminos's counsel at Hargrove, Tanaka & Whitmore LLP, including proposed deadlines for document production, interrogatories, depositions, and expert disclosures. We will seek a discovery schedule that allows su

4. Initial Disclosures. Prepare initial disclosures under Federal Rule of Civil Procedure 26(a)(1) for service on Luminos's counsel. Target service date: May 20, 2024. The initial disclosures will identify the following key witnesses: • Jordan Kessler, VP of Creative Development, Redstone Gaming Corp. — knowledge of Ironclad Dominion's development process, creative pipeline, independent creation, and the absence of a