Ninth Circuit Concludes that Violation of WoW TOU Did Not Give Rise to Copyright Infringement Claim
On June 7, 2010, the Ninth Circuit heard oral argument in Seattle in three cases raising important and interesting issues under the Copyright Act. The three cases are: UMG Recordings, Inc. v. Augusto, No. 08-55998 (9th Cir.) from the Central District of California; MDY Industries, LLC v. Blizzard Entertainment, Inc., Nos. 09-15932, 09-16044 (9th Cir.) from the District of Arizona; and Vernor v. Autodesk, Inc., No. 09-35969 (9th Cir.) from the Western District of Washington.
The Ninth Circuit issued its first opinion in the cases on September 10, 2010 in the case of Vernor v. Autodesk, discussed previously here. On December 14, 2010, the Ninth Circuit issued its second decision, this time in the case of MDY Industries, LLC v. Blizzard Entertainment, Inc.
The most complicated—both factually and legally—of the three appeals pits the creator of the wildly successful MMORPG World of Warcraft (Blizzard) against the creator of a piece of add-on software used in connection with WoW called Glider (MDY and its founder, Michael Donnelly).
Described at its most basic level, WoW allows players to assume the roles of various races (e.g., humans, elves, trolls, orcs, etc.) and level those characters from, currently, level 1 to 85 by, among other things, completing quests. Reaching the maximum level (a time-consuming task) is desirous because it gives players access to more challenging content through which players can obtain better gear and other desirable items. WoW also incorporates a "complex closed economy" in which players can buy and sell virtual items for virtual gold. At the time of the District Court's opinions, WoW had some 10 million active players and generated more than $1.5 billion in revenue annually.
To play WoW, users must install the game client software during which they must choose to accept the End User License Agreement (“EULA”). Users must also create an account with Blizzard in order to play the game and pay a subscription fee. As part of the account creation process, users are asked to accept or decline the Terms of Use Agreement (“TOU”). Once these steps are taken, users can begin playing by launching the WoW client and logging into the game server. Additionally, each time Blizzard updates the game with new content or fixes (known as "patches"), users must again accept both the EULA and the TOU before being able to play the game.
WoW has spawned a large market for "add-on" software to be used, in some form, in conjunction with WoW. For example, numerous add-ons have been developed to allow customization of the WoW user interface, to provide information relating to the WoW economy, and to gather information and provide warnings during combat in the game.
Michael Donnelly, a software developer, created a software program called Glider, which played WoW for its owner, intended to speed up the leveling process. Glider is known as a "bot," short for robot. Donnelly offered Glider for sale through his company, MDY Industries, apparently with significant success.
In October 2006, three representatives of Blizzard appeared at Donnelly's home, demanding, according to Donnelly, that he stop selling Glider and turn over that day all the profits MDY had earned that day. In response, Donnelly filed a declaratory judgment action against Blizzard, which responded with counterclaims against MDY and a third party complaint against Donnelly for tortious interference with contract, contributory copyright infringement, vicarious copyright infringement, violation of the Digital Millenium Copyright Act ("DMCA"), trademark infringement, unfair competition and unjust enrichment.
The District Court's Decisions.
As relevant to the appeal, the District Court issued two opinions in the case, one on July 14, 2008 on the parties' motions for summary judgment, and another on January 28, 2009 following a two-day bench trial.
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