After considering and rejecting contrary holdings by the U.S. Court of Appeals for the Federal Circuit, the U.S. Court of Appeals for the Ninth Circuit held that a party can be held liable for violating the Digital Millennium Copyright Act’s (DMCA) prohibition on anticircumvention technology even when the party did not engage in or facilitate copyright infringement. MDY Industries, LLC v. Blizzard Entertainment, Inc. et al., Case Nos. 09-15932, -16044 (9th Cir., Dec. 14, 2010) (Callahan, J.).

Blizzard is the creator of World of Warcraft (WOW), an online role playing game in which players interact in a virtual world while advancing through the game’s 70 levels. MDY produces a software “bot” called Glider that automates play through the WOW game. Glider does not use, alter or copy WOW’s software. Using Glider, a player can rapidly advance through the WOW game levels because Glider can automatically play the game without the player even being present at a computer. In response, WOW launched Warden, a technology it developed to prevent players from using unauthorized software, including bots. WOW also modified its terms of use agreement (TOU) to prohibit players from using unauthorized software, including bots, while playing the WOW game. Subsequently, MDY modified the Glider software to avoid detection by Warden and also promoted Gilder’s anti-detection features.

Blizzard sued MDY for secondary copyright infringement and violation of the DMCA. The district court granted Blizzard’s motion for partial summary judgment, finding that MDY’s sales of the Glider software contributorily and vicariously infringed Blizzard’s copyrights, but granted MDY’s motion for partial summary judgment finding that MDY did not violate the DMCA.

On appeal, the 9th Circuit reversed, finding that MDY did not secondarily infringe Blizzard’s copyrights, but concluding that it did violate the DMCA.

Concerning its copyright infringement claim, Blizzard argued that game players are licensees to Blizzard’s software and that MDY induces players to directly infringe Blizzard’s copyrights by encouraging them through the sale of the Glider software to violate the TOU. The 9th Circuit noted that a software licensee directly infringes a licensor’s copyrights if the licensee acts outside the scope of the license by violating a license condition. The court concluded that Blizzard’s TOU prohibition on players using unauthorized software, including Glider, was not a license condition, but rather a contractual covenant. Thus, the court explained that since there was no direct infringement by players, MDY could not be held liable for secondary infringement.

Concerning its DMCA claim, Blizzard argued that MDY’s efforts to avoid detection from Blizzard’s Warden violates the DMCA. The DMCA prohibits technologies that circumvent access control measures that are designed to protect copyrighted materials. As an issue of first impression, the 9th Circuit addressed the issue of whether MDY could be held liable for violating the DMCA when use of its Glider software did not constitute or facilitate copyright infringement. After considering the statutory language, the legislative history and cases from other jurisdictions, the 9th Circuit concluded that the anticircumvention provisions of the DMCA are independent of the Copyright Act and that a party can be held liable for violating the DMCA without engaging in copyright infringement. In doing so, the 9th Circuit rejected two contrary holdings from the Federal Circuit; Storage Tech. v. Custom Hardware Eng’g Consulting (2005) and Chamberlain Group v. Skylink Techs. (2004). The 9th Circuit went on to hold that MDY’s Glider violated the DMCA with respect to WOW’s dynamic non-literal elements by using a technology that is primarily designed to circumvent a technological measure that effectively controls access to a copyrighted work.