Let's Be Clear: You Do Not "Own" Your Software

MDY Industries, LLC v. Blizzard Entertainment, US District Court for the District of Arizona, No. CV-06-2555-PHX-DGC, July 14, 2008. Signed by Judge David G. Campbell.

The facts of the case are that Blizzard, the creator and operator of World of War Craft (WoW), sued Michael Donnelly (MDY) for a number of things, including copyright infringement due to MDY’s creation and sale of a software program known as WowGlider (Glider). Glider basically plays WoW for the user while the user is away and can thus raise the user’s game playing level more quickly than could otherwise be. Game levels go from 1 to 70. WoW, at the time of the court order, had 10,000,000 users and generated more than $1.5 billion in annual revenue. Glider had sold 100,000 copies to date.

On the copyright infringement claims, the court held in favor of Blizzard stating that when the WoW program is copied onto users’ RAM (Random Access Memory) in order to activate Glider, this constitutes a copy and is thus copyright infringing. Key were the Terms of Use (TOU) and End User License Agreement (EULA). Even though section 117 of US copyright law says it is acceptable for a user to make a copy of a program she owns in order for the program to function, the court found that the TOU/EULA language over-rode section 117. In order to come to this conclusion the court had to decide that the purchaser of the WoW program is not in fact an “owner” but is instead a mere “licensee” subject to the terms set forth by WoW in its TOU and EULA.

The court found in favor of MDY on Blizzard’s DMCA claim. The DMCA prohibits the sale of technologies that circumvent others’ anti-circumvention controls. WoW has an element called “wardens” that patrol for “bots” or robots. Glider is a bot but was developed in order to evade detection by the wardens. The court said that because the code needed in order to accomplish this circumvention was plainly available to the user, Glider did not violate the DMCA.

On several other counts the court did not make a determination and so the case will continue and is set for trial. It can be followed on Justia.com.

In finding copyright infringement, the court relied on the Grokster case, written about previously by Jim Porter and me (http://www.ncte.org/cccc/gov/committees/ip/125704.htm), and Grokster’s definition of contributory copyright: “intentionally inducing or encouraging direct infringement.” The court said that because Glider required the copying of WoW onto the users’ RAM, Glider’s owner induced others to infringe on WoW’s copyrights.

Another issue that determined the court’s decision was whether the EULA and TOU were limitations on the scope of license or separate contractual covenants. If this matter had instead been determined to be one of breach of contract rather than copyright infringement, the damages would have likely been far less (although damages have not been determined yet). Contract violations are generally limited to actual damages, but copyright violations include actual damages plus other damages as well such as the infringer’s profits, and including up to $150,000 per violation statutory damages. The court decided that purchasers of the software were not owners in order to avoid the application of section 117 which allows copying of a software program when it is necessary to operate the program. Instead, the court said: “The EULA thus makes clear that Blizzard is granting to its users a license, not ownership, of the copies of the game client software” (p. 14).

Here, I think, the court while following the precedent of existing case law, takes a strange logical turn. If we think about ownership in the way the court has constructed it, we are never owners of any copyrighted material we purchase. For example, I am not the “owner” of the book I just purchased from amazon.com because I cannot do anything I want with the book. I cannot make mass copies of it and sell those for profit. So, I am a “licensee” of sorts based on this court’s definition of “ownership.” It’s clear that the logic of the court’s definition here doesn’t play out well if applied to other situations, and the only reason for such a definition is to circumvent the application of section 117 which was not written in anticipation of such a move as Glider makes with respect to requiring the copying of another’s software. If section 117 had anticipated this set of facts, it would have said something like, “You can make copies of a computer program you own if it’s necessary for you to do so in order for the computer program to work, unless you are making the computer program work for something bad, or to cheat at a game.”

I think the implications of this case are something to consider for those of us concerned with software and other kinds of documentation. The court heavily relied on the EULA and TOU and how those two texts interacted with each other. It appears from this case that writers of EULAs and TOUs can create any terms they want for end users, and if written clearly and carefully, really try to control how users use end products.

From the user’s perspective, this case really limits users’ rights on the software they purchase. Those EULA and TOUs in their 6 point font should be read closely, especially if one is a software developer creating software that scaffolds on existing software. I can imagine the damages in this case are going to be astronomical for the creator of Glider.

I can also imagine taking the reasoning of this case to other levels. What if I write a book and then list all the ways the user is allowed to use that book in the last chapter. I could say – you can only use my book if you teach from a feminist perspective and are anti-racist; you cannot use my book alongside books by “name some authors you don’t care for.” You may only use my book to stop war and not to promote war; you may not use my book to even out the legs on your table, or in order to start fires, and so on. I can’t imagine why book authors couldn’t start writing detailed licenses on how others can use their texts in order to avoid unwanted negative consequences. If the software developers can do this I don’t see why the rest of us can’t. Hum . . .