Ex©lusive Rights

MDY Industries, LLC v. Blizzard Entertainment, Inc. et al, CV-06-2555-PHX-DGC (D. A.Z. January 28, 2009) (order)

(h/t to Timothy B. Lee at Ars Technica for picking up this order before it was available through Westlaw.)  Blizzard Entertainment, Inc. and Vivendi Games, Inc. owned and distributed World of Warcraft, a game where users controlled characters within a virtual universe, performed quests and interacted with other players. Glider was an application, produced by MDY Industries, LLC, that played World of Warcraft on behalf of gamers, allowing them to advance while they were away from their computers.  According to the Court, “Glider upset[] th[e competitive] balance [of World of Warcraft] by enabling some payers to advance more quickly, diminishing the game experience for other players.”

The building blocks of World of Warcraft, such as monsters, trees and individual sounds, remained saved on a users hard drive and could be loaded into RAM without signing onto Blizzard’s servers.  But to view the individual and collective elements in the choreographed context of the World of Warcraft, a user had to log onto a Blizzard server.  Blizzard used an application, called Warden, to detect and lock down users who used applications, such as MDY’s, to play Warcraft.

Blizzard’s Section 1201(a)(2) Claim

Section 1201(a)(2) provides that no person shall “traffic in any technology” that “is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title[.]”

MDY apparently made two arguments: First, that the choreographed context, provided by Blizzard when gamers were logged in, wasn’t copyrightable because it wasn’t fixed in a tangible medium and, secondly, the choreographed context was controlled by users of the game, arguably creating a joint work.  The court tersely rejected both of these arguments citing to, among other cases, Atari Games Corp. v. Oman, 888 F.2d 878, 884-85 (D.C. Cir. 1989).

Blizzard’s Section 17 U.S.C. 1201(b)(1) Claim

Section 1201(b)(1) is similar to section 1201(a)(2), except that, instead of applying to protective measures that control “access,” it applies to “a technological measure that effectively protects a right of a copyright owner.”

The Court concluded that MDY violated section 1201(b)(1): Warden constituted a “technological measure” to the extent it prevents a user from copying the dynamic elements Warcraft as it is being played; MDY’s Glider application circumvented Warden; and the Glider application was knowingly marketed by MDY for use in circumventing Warden.

Personal liability of corporate officers for copyright infringement

The Court found that the president of MDY was personally liable for the vicarious infringement, contributory infringement, and DMCA violations because he (1) profited directly from the infringement and (2) had a right and ability to supervise the direct infringer, even though he may have initially lacked knowledge of the infringement.

Presumption of harm and the granting of a permanent injunction

Blizzard argued that courts assume irreparable harm when evaluating whether to grant a permanent injunction under 17 U.S.C. 502(a).  The Court rejected this argument and, citing to eBay, inc. v. MercExchange, L.L.C., found that Blizzard must satisfy the traditional four-part test to obtain a permanent injunction.  The Court granted a permanent injunction finding that all four requirements were satisfied: [1] irreparable injury (Blizzard received 500,000 customer complaints regarding bots in World of Warcraft); [2] remedies at law (Blizzard’s damages to goodwill could not be calculated with certainty); [3] balance of hardships (loss of profits merits little equitable consideration); and [4] public interest (Congress has determined that the public interest is served by enforcing intellectual property rights.)

The Court, however, demurred from entering the permanent injunction until the parties had the opportunity to brief whether the injunction should be stayed pending appeal to the Ninth Circuit.

Documents:

Counsel:

• MDY Industries, LLC: Venable Campillo Logan & Meaney PC (Phoenix, AZ)
• Blizzard Entertainment, Inc: Sonnenschein, Nath & Rosenthal LLP (Washington, D.C., Phoenix, AZ)