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.

Clamping down online IP crime.

My attention has been caught by the relatively recent release of a strategy paper by the Department Department of Culture, Media and Sport entitled "Creative Britain: New Talents for the New Economy."

The strategy paper recognises the need for "a balanced IP framework relevant to today’s world... [the] need [for] new business models which recognise changes in technology – and their democratisation of content – yet capture the value provided by content producers and distributors. "The strategy paper forcefully makes the point that the Government is determined to tackle "IP crime" by adopting several measures as educating creators on their IP rights, voluntary agreements between ISPs and content owners and / or more formal regulatory framework to deal with IP crime which reflects the changes in the business models.

In the first instance, the Government would prefer voluntary agreements between ISPs and right owners . However, the Government has made it clear that if this does not materialise itself, it will legislate in this area as it sees fit. The Government anticipates the new regulatory framework to be in place sometime in 2009, so CyperPanda will be watching this space.

It also appears that the British Government is working in collaboration with the French Government on this matter. This, of course, does not mean that the French measures will be adopted here but it will be interesting to observe how the regulatory framework will evolve in France as well.

It is undeniable that ISPs should bear some responsibility for the materials that are published on their websites. However, the nature and extent of their responsibility should be a realistic reflection of what they can do rather than an unrealistic reflection of ISPs as cyberpolicemen. The Government needs to think carefully how to balance the responsibility between ISPs, content owners and other stakeholders and ensure that the ensuing framework is a realistic reflection of what can be done by each stakeholder to combat online IP crime .

Is the silver lining in the cloud hanging over YouTube no more than a silver thread actually?

It appears from the website of the Electronic Frontier Foundation that Viacom has formally responded to the concerns of the EFF in relation to the nature of the silver lining reported in the last post.

The EFF was concerned that the agreement between YouTube and Viacom in relation to the disclosure of the data of users of YouTube was not backed up by a court order. The obvious danger with that is that both parties can alter the agreement at a later date.

Viacom has now informed the EFF that the latter will be notified in advance if the agreement is to be amended so that the EFF can either discuss its concerns with YouTube and Viacom or raise more formal objections in Court.

Viacom has also forwarded a draft Protective Order to the EFF. CyberPanda agrees with the EFF that it is crucial that the scope and nature of the disclosure of the data should be formally defined by a court order. It is undeniable that Viacom has shown a lot of goodwill in this matter. Nonetheless, it will be in the best interests of the data subjects if the disclosure was more formally regulated by a Court order. That will breach the gap between the silver thread and the silver lining.

The silver lining in the cloud hanging over YouTube.

Users of YouTube and indeed YouTube itself will, no doubt, be relieved that Viacom has now agreed for YouTube to handover the viewing history of its users without handing over any data that might enable Viacom to actually identify the specific user.

This is a welcome development which will no doubt be applauded by privacy activitists and users of YouTube as well since the original demand would have undoubtedly raised serious privacy concerns.

This is however a very tiny silver lining in the big cloud hanging over YouTube as the copyright infringement lawsuit is all but over.

It looks like the luck of Ebay might just be changing!!

The long awaited ruling in the landmark trademark trial of Tiffany (NJ) Inc. and Tiffany and Company v. eBay Inc is here at last!

Yesterday the District Judge Sullivan of the US District Court, Southern District of New York, delivered the ruling in favour of eBay which will, no doubt, breathe a sigh of relief after the scathing rulings of the French Courts earlier in July in actions brought by LVMH and Hermes against eBay.

The first allegation by Tiffany was that eBay "actively advertised the availability of Tiffany merchandise" on its website and using sponsored links on Google and Yahoo!. The judge ruled that the only way a "Tiffany" product could be described by sellers was to use the brand "Tiffany."

The second argument of Tiffany was that eBay should be held liable for the sale of counterfeit Tiffany products on its website. Taking into account the fact that eBay acted promptly once it was notified of infrigements by Tiffany, the judge reject the theory of "infringement in the air" advanced by Tiffany.

In short, this judgment from the US clarifies that it is the job of the trademark owner to police its mark rather than the job of the platform.

This judgement will no doubt be welcomed by all the intermediaries and, in particular, eBay whose business models were very much threatened by the recent rulings in the French jurisdiction.