Tuesday, July 27, 2010

Thoughts on MDY v. Blizzard

A commenter recently asked what I thought about the MDY v. Blizzard case. For the most part, I think the court makes the same mistakes that we've seen in other cases. The court surmises that simply because the EULA states that the software is licensed, then it must be true. Ergo, they say, the user is a licensee, not an owner of the software and section 117 does not apply.

According to the court, the only thing that makes the transfer of a copy of WoW a license instead of a sale, is the EULA itself:

The EULA thus makes clear that Blizzard is granting to its users a license, not ownership, of the copies of the game client software.
The court ignores the fact that by all other accounts, the transaction would perfectly fit the definition of a sale. And what if the buyer rejects the EULA? Then who owns the copy? The EULA doesn't apply if it's rejected, so any requirement within it to return the software is inoperable. It seems to me that the end user would own the copy of WoW in such a case -- then what?

The bottom line in this case is the same as it is everywhere else. The question of ownership turns entirely on who owns the media on which the software resides. In their amicus brief in support of Autodesk in a separate, but similar case, the SIIA refers to the media as, "a worthless plastic CD." This is very telling of the software industry's indifference to who owns the media. And the reason for their visible indifference is because they know they can't demonstrate ownership of the media. After all, what owner in their right mind would allow the property they own to be distributed all around the country, not knowing who possesses it or where it's located? Yet, this is exactly what software companies do.

But why is ownership of the media so key? It's because the media is the copy. The Copyright Act specifically defines it as such. Whoever owns the media, owns the copy. It's really as simple as that. Bought software online? The copy resides on your hard drive? You own the hard drive, you also own the copy. Same goes for the owner of a CD-ROM or floppy disk.

In the case of WoW, it's pretty clear that the users own the media. Again, Blizzard has no idea who possesses the media or where the media is located. It would be quite a stretch for them to claim they own the media. It's even possible to buy WoW as a direct download: there is no media for Blizzard to own, only the user's hard drive. Any claim that Blizzard owns the media (especially if the media is your own hard drive!) is plain nuts, and patently false.

I also find this sentence from the court's opening statements somewhat amusing (emphasis added):

A user can obtain the game client software by purchasing a copy at a retail store or downloading a copy from the WoW website.

Apparently, even the court is still confused as to whether users are licensing or purchasing the copies. I find it telling that they would make such a mistake. I believe the reason for the mistake is because it feels natural to characterize these transactions as purchases/sales, because they seem like it in virtually every way. Even the court can't shake the feeling.

In my opinion, the court was mistaken when it ruled that MDY committed contributory copyright infringement. However, there's more to the MDY case than copyright infringement. There are also questions related to the WoW terms of use (TOU). The TOU of the online services are governed by a completely different set of rules. It seems likely that MDY did cause end users to violate the TOU, and MDY does admit as much.

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