Wednesday, March 09, 2011

9th Circuit: Contract Battles Copyright in World of Warcraft's Killer 'Bots

World of Warcraft:  Contract Battles Copyright Over Killer 'Bots
In copyright cases it is often difficult to tell where copyright law ends and where contract law begins. This has a significant effect on how a case will be litigated and pleaded, it will also have an effect on how copyrighted works may and may not be used. Using contracts to extend the control of a copyright owner over the creativity and commercial freedom of users of the copyrightable works raises First Amendment and antitrust concerns, on the one hand. On the other, following the US Supreme Court’s decision in Feist which rejected the “sweat of the brow” doctrine and which deprived (in that case owners of telephone directories) databases lacking in originality of copyright protection if the databases lacked originality in selection and arrangements. By shrinking the traditional contours of copyright law, the Supreme Court left a greater task to contract law in protecting the rights of database owners or software owners.

Thus, copyright law can tell us that material is in the public domain and that we are free to use it. However, if you enter a contract permitting you access to a private database comprised of public domain materials, how many restrictions can be placed on a user? End User License Agreements (EULAs) or Terms of Use (TOU) are the agreements that most of us enter into daily by clicking “I accept”. Although almost no one reads or understands these agreements, courts engage in the legal fiction that we have all entered into contracts that are governed by these agreements. There was a rumor that an early Microsoft WORD EULA asserted Microsoft’s copyright in any document created on Microsoft WORD.

In these swampy precincts where copyright and contract intersect MDY Industries LLC v. Blizzard Entertainment Inc., 629 F.3d 928 (9th Cir. Dec. 14, 2010) emerges. This action was commenced by the plaintiff seeking a declaratory judgment that its software did not infringe Blizzard’s copyright. Blizzard creates and operates a popular multiplayer online game called “World of Warcraft”. This is a world where chubby geeks the world over assume avatars and go on sex, drug and violence-lace rampages from the safety of a home computer. The game has 70 levels and stores where you can buy goods to use in the online world and where you can sell goods that you’ve made online. The game consists of 70 levels.

One entrepreneur decided to make a software or “bot” that plays the first levels of the game, basically letting the player advance levels without having to spend the time, energy or skill to do so. Blizzard initially did not have any rules against this, but then amended the EULA and also started implementing technological anti circumvention measures to detect and eject bots. MDY responded by changing its software to avoid detection by the bots. In a year, MDY was making $3.5 million from the bot software.

The questions are: did MDY breach the contract? Did MDY violate the Copyright Act in some way?

The court found no copyright infringement. The reason is that when someone enters into a licence agreement exceeds the bounds of the agreed use, the court will look to whether the unauthorized use is a breach of a “covenant” of the contract or a “condition” of the contract. If it is a breach of a condition, a copyright infringement claim may be pursued. If the unauthorized use is a breach of a covenant, the copyright owner (licensor) is limited to a breach of contract claim. In this instance, MDY breached a covenant of the license, not a condition.

I cover the case law discussing the distinction between covenants and conditions in Copyright Litigation Handbook (West 5th Ed. 2010).

Additionally, the Copyright Act did not preempt Blizzard’s claims based on the EULA under contract law. Further, although the court did not grant summary on tortious interference with contract, holding that MDY’s improper motive had to be established at trial, that claim was permitted to proceed.

The Court did find a violation of the trafficking in anti-circumvention technology provisions of the Copyright Act. 17 U.S.C. Section 1201. Significantly, the Ninth Circuit declined to adopt the Federal Circuit’s “infringement nexus” test for finding a violation of Section 1201. Compare Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178 (Fed. Cir. 2004).

This opinion is big, dense, and will give you a headache but is required reading for DMCA mavens.

 Purchase Copyright Litigation Handbook 2010 by Raymond J. Dowd from West here  

1 comment:

Punctuation Cop said...

This has a significant effect on how a case will be litigated and pleaded, it will also have an effect on how copyrighted works may and may not be used.

You're joining two independent clauses here; hence, the comma is incorrect. You should use a semicolon. Your error is commonly known as a "comma slice."