MDY v. Blizzard: District Court Declares Purchasers of Software to Be Licensees

Copyright Patent

MDY Industries, LLC v. Blizzard Entertainment, Inc. et al.

District Court of Arizona, July 14, 2008, No. CV-06-2555-PHX-DGC
Order (via Justia)

The District Court of Arizona entered a summary judgment motion finding that MDY Industries, LLC (“MDY”), creators of a software program called WoW Glider (“Glider”), were liable for contributory and vicarious copyright infringement because their program loaded a copy of a copyrighted Blizzard Entertainment, Inc. and Vivendi Games, Inc. (collectively, “Blizzard”) game into computer memory on the game-owners' machines against the terms of the game’s End User License Agreement (“EULA”). As part of this decision, the Court also found that over-the-counter buyers of the computer game were licensees rather than owners and were thus bound by the terms in the EULA.

Judge David Campbell ruled that the EULA created a limited license rather than a sale because the title explicitly uses the word “limited” and because several of the provisions contain explicit restrictions on the use of the game which, when read together, prohibit the use of Glider. As licensees rather than owners of the game, users were only allowed to copy it under circumstances dictated by the EULA and were thus guilty of direct infringement when they used Glider because it loaded the game into the user’s RAM. A line of Ninth Circuit cases had previously held this to be “copying,” an exclusive right of the copyright holder under Section 106 of the Copyright Act. MDY was found to be liable for contributory and vicarious copyright infringement because it materially contributed to users’ direct infringement, profited from it, and declined to exercise its ability to stop Glider users from activities infringing the license.

The motions of both parties can be found here.

Public Knowledge argued that because 17 U.S.C §117 reserves to the computer user the right to make RAM copies to run the program, this construction of the EULA will allow Blizzard to retain rights it has never owned. Their amicus brief can be found here, and and Blizzard’s reply can be found here.

The Patry Copyright Blog notes the dismissal of the DMCA claim with approval but finds the copyright ruling to be wrongly decided and to also be a “chilling extension of control” by copyright holders over their products.

Corynee McSherry of the Electronic Freedom Foundation Blog also disagrees with the copyright ruling and notes other recent district court cases under Ninth Circuit jurisdiction which have come out differently, speculating that there will be an appellate decision on this matter soon.

A Note by Christina Hayes published at 22 Harv. J.L. & Tech. touched on whether Blizzard's EULA could be enforced to limit users' copyright fair use rights.

World of Warcraft (“WoW”) is a multiplayer online role-playing game whose copyright is owned by Blizzard. Many copies, though not all, are sold over the counter. To play the game a user must load a copy of the software and then access the online server using an online account for which the user pays a monthly fee. Glider automates some of the tedious game activities so that players progress through the game faster. In the process of carrying out this function Glider loads WoW onto the computer’s RAM.

The Court also ruled that MDY did not violate 17 U.S.C. § 1201(a)(2)(part of the Digital Millennium Copyright Act), which forbids tools that circumvent technological measures that a copyright holder has implemented to control access to its copyrighted work. Since the user does not have to pass through Blizzard’s security devices to gain access to the code, the Court found that Glider’s circumvention of these devices is not a § 1201(a)(2) violation. The Court denied summary judgment and wanted further fact-finding on the question of whether MDY violated this section with respect to “non-literal elements” of the game. Similarly, it denied summary judgment on potential MDY violations of § 1201(b)(1), which focuses on whether a technological measure protects copyright rather than whether it controls access.

The Court also granted summary judgment to Blizzard on a claim of tortious interference, to MDY on Blizzard's claim of unfair competition, and denied summary judgment to MDY on an unjust enrichment claim.