To pay or not to pay, that is the question.

Blizzard has won $6m in damages in the trial it brought against MDY earlier this year. In a nutshell, Blizzard brought a claim against MDY on the grounds that Glider, a software produced by MDY infringed the copyright of Blizzard in the World of Warcraft ('WoW').

The US District Court ruled that Glider did in fact break the terms of the licence which users of WoW agree to before playing WoW. Commentators have argued that the award of damages could have been more substantial if MDY did not succeed on some of the grounds it presented to the Courts. It remains to be seen whether MDY will appeal against the judgement. Readers of CyberPanda will remember the reservations advanced by CyberPanda in an earlier post on the legal reasoning used by the Courts to reach its ruling. These concerns are still very much present at the moment and in the view of CyberPanda, MDY should seriously consider appealing the ruling as the legal reasoning used to determine liability in this instance is very much overstretched and illogical.

The case is far from over as MDY is due to appear in court again at the start of 2009 when the Courts will rule whether or not has breached the provisions of the US Digital Millennium Copyright Act and whether Mr Donnelly will have to pay the damages from his own pocket.

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Yesterday, you were cheating whilst playing the latest MORPG... Today, you owe the software company million of dollars for breach of copyright!!!

The District Court of Arizona has rendered the much awaited ruling in the case of MDY Industries LLC v Blizzard Entertainment Inc and Vivendi Games Inc.

Blizzard Entertainment Inc. and Vivendi Games Inc. ("Blizzard") are the creators, operators and copyright owners of World of Warcraft ("WoW") which is one of the most popular MORPGs. Players are allowed to do a number of things when using WoW including fighting with monsters, acquiring new skills, interacting with other players and characters of the game. The use of WoW is governed by two separate contracts namely, an End User Licence Agreement ("EULA") and Terms of Use Agreement ("ToU"). Players are required to agree to the terms and conditions of both contracts before playing WoW.

MDY Industries LLC ("MDY") are the owners, creators and operators of the software program WowGlider ("Glider") which is a "bot." What this means in essence is that Glider plays WoW for its owner whilst the latter is away from his computer. The advantage of Glider is that it enables the player to advance more quickly in the game than would have otherwise been possible. MDY filed an action in court in the first instance seeking a declaration that Glider did not infringe the IPR of Blizzard. Blizzard, in turn, filed a counterclaim and third-party claim against MDY on seven grounds including breach of copyright. This post will focus only on the copyright infringement claim.

Blizzard submitted that the users of WoW are in fact licensees who are authorised to copy the copyrighted game client software only if they do so in accordance with the EULA and the ToU. In this present case, Blizzard contended that users who launched WoW using Glider were actually acting outside the scope of license granted to them by the EULA and ToU and were in fact creating infringing copies of the software in question.

MDY`s answer to these submissions was that, if there was any breach by the users, it was actually a breach of contract (EULA and ToU) rather than a breach of copyright. MDY argued that users of Gliders do not infringe the copyright of Blizzard as they are licensed to copy the game client software to the computer`s random access memory. This licence is acquired upon purchase and loading of WoW. MDY accepted that the EULA and ToU contained express prohibitions on the use of bots. However, MDY argued that the use of bots by users of Glider was a breach of contract rather than breach of copyright.

The Court carefully considered the terms of the EULA and ToU and in particular paid specific attention to section 1 of the EULA which addresses the nature and scope of the licence Blizzard grants to users of WoW. The judge ruled that in this case, the licence Blizzard grants to users of WoW is limited in scope by the EULA and ToU as this is expressly provided by the aforedmentioned contracts. Hence, the actions of the Glider users do infringe the copyright of Blizzard.

This is a very interesting ruling which has attracted a lot of criticism from the EFF . The concerns of the EFF are to some extent justified: if an individual who is breaching the terms of the contract of use is actually found to be in breach of copyright, s/he will be liable for far more in terms of damages. However, this does not detract from the fact that in this instance, a true construction of the EULA and ToU supports the conclusion reached by the Court.

When the right legal approach gives way to the wrong factual answer, the real question is how does one redress the inherent flaw within the mechanism which leads to the incorrect answer. This ruling further supports my view that the current legal framework of "old wine in new bottles" does not satisfactorily answer the legal issues posed by cyberspace. This ruling is more a case of old wine in new bottles gone bad... Let`s see how the sequel pans out in the appellate courts.

Disclaimer: The copyright in this image belongs to WOW.