Update: Blizzard Owns Your Software

As expected, the Ninth Circuit has declared link that Blizzard’s World of Warcraft (WoW) software licensees are just that — licensees, and not owners — because the WoW Terms of Use sufficiently restrict the transfer and use of the WoW software. MDY Industries, LLC v. Blizzard Entertainment et al., No. 09-15932 (9th Cir. December 14, 2010). This outcome was predictable, and consistent with the court’s decision in Vernor v. Autodesk, which outlined a three-part test for determining the owner/licensee status of a software user.

In Vernor, the court determined that Vernor’s sale of used copies of AutoCad was outside the scope of the AutoCad license agreement. Further, because it was Autodesk’s exclusive right to copy and distribute the AutoCad software, Vernor’s sale thereof constituted copyright infringement. The outcome was different in MDY Industries, however, and liability rested on a DMCA violation even though no copyrights were infringed. As explained previously, MDY created a software “bot” that enabled WoW users to play the game on “autopilot.” The court explained that, although the use of “bots” was prohibited by the WoW Terms of Use, it did not follow that operating outside of the scope of the license resulted in copyright infringement. For this to happen, the licensee’s action must (1) exceed the license’s scope, and (2) implicate one of the licensor’s exclusive statutory rights. In this case, the anti-bot provisions of the Terms of Use did not implicate copyright law. So, although “a Glider user violates the covenants with Blizzard,” it “does not thereby commit copyright infringement because Glider does not infringe any of Blizzard’s exclusive rights [such as alter or copy World of Warcraft software].” The court explained further:

Were we to hold otherwise, Blizzard — or any software copyright holder — could designate any disfavored conduct during software use as copyright infringement, by purporting to condition the license on the player’s abstention from the disfavored conduct. The rationale would be that because the conduct occurs while the player’s computer is copying the software code into RAM in order for it to run, the violation is copyright infringement. This would allow software copyright owners far greater rights than Congress has generally conferred on copyright owners.

The MDY Industries decision is more notable, perhaps, for its treatment of the anti-circumvention provisions of the Digitial Millennium Copyright Act (DMCA), discussed in my subsequent post.

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