Papaya Games is attempting to turn the tables on Skillz, making claims of bot use that are very similar to Skillz’s original claims against Papaya. The countersuit, filed Monday, also accuses Skillz of defamation, deceit, and intellectual property violations. Skillz sued Papaya in March, alleging in court filings that it pits its players against house-operated “bots” in real-money contests and that this constitutes an unfair business practice that hurts Skillz’s bottom line.
In its version of things, Papaya describes Skillz as a company in dire financial straits, lashing out at competitors in any way it can. Skillz previously sued another similar company, AviaGames, for patent violations. During discovery for that case, Skillz uncovered evidence pointing to AviaGames using bots. Those charges were similar to what it has now accused Papaya of.
Although Skillz won its case against Avia, Papaya argues that the current lawsuit is nothing more than an attempt to smear the competition.
Relatedly, sometime last year, a website titled 4FairPlay appeared, warning of bot use by Papaya, Avia, and other skill gaming companies and encouraging readers to file complaints against them. Through legal action, Papaya determined that Skillz had been instrumental in the creation of the site—something Skillz has since confirmed. The site has been offline since at least the date of Papaya’s counterclaim.
Despite some similarities between Papaya’s games and those of Skillz, two key differences between the companies are relevant to the case.
Papaya and other mobile skill gaming companies develop their games in-house, but Skillz provides only the matchmaking and monetization platform. It relies on third-party companies to create and market the actual games. Furthermore, Skillz pits players against each other in one-on-one contests, while Papaya’s contests take place between multiple users at once. That means bigger prize pools for Papaya, which it argues is the source of its competitive advantage and Skillz’s purported jealousy.
Official Statement from Papaya Gaming
A public relations agency representing Papaya provided Bonus with the following statement:
Papaya’s counterclaims against Skillz are based on extensive evidence. The counterclaims allege that Skillz has engaged in a pattern of tortious and deceptive conduct. The counterclaims describe how — with its business performing poorly — Skillz embarked on a deceitful campaign against Papaya by falsely claiming that Skillz is a virtuous crusader for fairness while accusing others of the same type of deceitful conduct they are engaging in themselves. That behavior is the height of hypocrisy. Among other wrongful conduct described in the counterclaims, we allege that Skillz created and operated a website that posted fabricated data and false representations about Papaya; consistently touted that its games are bot-free while seemingly turning a blind eye to bot use on its platform; promised consumers easy access to deposited funds while customers complain of delayed and blocked withdrawals. The counterclaims further allege that Skillz knowingly infringed Papaya’s intellectual property when developing its own games. We seek to hold them accountable for those behaviors and we look forward to the opportunity to make our case in court.
Papaya’s court filing references Skillz’s declining sales and share values, a lawsuit by its shareholders, delays in its regulatory filings, and the high turnover rate of its Chief Financial Officers.
Editor’s Note: Papaya’s counterclaim mentions Bonus.com and Catena Media due to a previous piece covering this lawsuit, which originally ran with an incorrect headline and introductory paragraph. The error was corrected soon after publication, but not before it had been shared by Skillz. From this, Papaya has inferred that Skillz was involved with the writing of the piece. This is incorrect. The error was due to a misreading of Papaya’s motion to dismiss. Both companies, through their respective PR agencies, have occasionally provided Bonus with court documents and official statements on the case, but have not otherwise been involved with the creation or publication of any news articles on Bonus.
Papaya’s Defense and Counteraction Against Skillz
Papaya has tried and failed to have the Skillz lawsuit thrown out of court. Even so, it continues to argue that Skillz’s claims are invalid for various reasons, including the doctrine of unclean hands.
Put simply, that legal principle means that a plaintiff can’t seek restitution for the defendant’s alleged misconduct if the plaintiff is also doing the same thing.
Failing that, Papaya says it believes it is also entitled to compensation from Skillz and that these damages should offset one another.
In its motion for dismissal, Papaya argued that it has never represented to users that it doesn’t use bots, so no “false advertising” is possible. It has now told the court more specifically that it doesn’t use bots in competitive play, though it makes this assertion only as of the date of filing of its counterclaim.
Conversely, Skillz has represented on its website that it doesn’t use bots and has made this a selling point. Papaya claims to believe this is a lie. It points out that in court, Skillz rephrased the claim, stating only that it doesn’t “sponsor” bots in its games.
Papaya’s countersuit consists of ten claims, which break down into three broad categories:
- False Advertising: Papaya argues that if Skillz does use bots, it’s guilty of the same thing it alleges Papaya has done. Furthermore, Papaya claims that its brand is suffering damage due to customer confusion between its products and bad experiences with Skillz.
- The 4FairPlay Website: Papaya accuses Skillz of defamation, deceptive trade practices, and civil conspiracy for having created 4FairPlay through what Papaya describes as a “front organization,” Fair Play for Mobile Games.
- Intellectual Property Infringement: Papaya argues that Skillz is responsible for alleged infringements of Papaya’s intellectual property by Skillz’s third-party developer partners.
Papaya Accuses Skillz of Bot Use
There are two parts to Papaya’s accusation that Skillz allows bots on its platform.
Firstly, Papaya argues that Skillz explicitly references bot use in its developer documentation. Factually, that statement is accurate. Skillz’s developer documentation is publicly available, and the section on randomness contains a subsection titled Utilizing Bots in Gameplay.
Skillz will likely argue that the type of bot use described there doesn’t match its accusations. It allows developers to use bots as part of the First-Time User Experience (i.e., tutorials) and as part of the gameplay when the contest involves comparing one human player’s final score to another’s. In the latter case, the winner of the contest would be the human player who performs better against an identical computer opponent.
Importantly, neither of those cases involves the bot being able to win a player’s money. A portion of the case may well hinge on a dissection of the semantics of the word “bot” in various contexts.
However, there is a second facet to Papaya’s argument, based on Skillz’s business model.
Papaya claims that Skillz “incentivizes” third-party developers to add bots to their games to boost liquidity because it requires a minimum of 100 active users before allowing monetization. Furthermore, it says Skillz doesn’t use adequate countermeasures to detect and prevent such hypothetical bot use.
The 4FairPlay Website
Although 4FairPlay has gone offline, internet archives show the site dating back to at least Nov. 7, 2023. While it was online, it featured allegations of bot use by what it described as “scam mobile games.”
Three of Papaya’s counterclaims relate to that site.
Papaya states that visitors to the 4FairPlay site were greeted with what appeared to be a real-time tracker of complaints against the companies in question. However, the tracker was not connected to any database and would reset to 12,594 each time the page was refreshed and increment at a rate of every three seconds. It likewise calls into question the rest of the data presented on the site, such as a map of reports by state and a pie chart showing the products that had supposedly been reported.
That pie chart suggested that Papaya’s games received the most reports, followed by those of Avia and two other competitors, Acerena and MOBIRIX Corporation.
Notably, none of Skillz’s games were among those mentioned on the site.
The site also encouraged users to file their own reports with government agencies and provided a form to do so. However, Papaya alleges that the form only allowed visitors to select games created by Papaya, Avia, or Acerena. An FAQ on the site directed users concerned about bot use in other products to email the site owners instead.
In its counterclaim, Papaya states that it had to pursue its own legal case in Virginia state court to determine Skillz’s involvement with the site and Fair Play for Mobile Games.
Skillz acknowledged that relationship in an email to Bonus, stating:
Skillz is a founding supporter of 4FairPlay and supports their work. It is not surprising that a company accused of committing fraud responded by attacking a website that was committed to exposing fraud. We trust that the US Courts will make Papaya answer for its conduct.
Intellectual Property Issues
The remaining six of Papaya’s ten counterclaims aren’t directly related to botting but rather to trademark infringement, copyright infringement, or false association by Skillz and its developer partners. Several of the claims relate to two developers in particular, Tether and Golden Wood.
Papaya alleges direct infringement of its trademarks and copyrights by Skillz. It also argues that Skillz is responsible for the alleged infringements of those developer partners because it contributes to their actions by providing them with software, a testing environment, and a monetization platform. Papaya asserts that “at minimum,” Skillz is “materially contributing to the infringement of Payapa’s intellectual property and continuing to provide its services to developers it knows are infringing Papaya’s intellectual property.”
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