USDC D. Arizona, January 28, 2009

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Blizzard Entertainment, Inc. (Blizzard) is the creator and operator of the popular online computer game World of Warcraft (WoW). Michael Donnelly is founder and president of MDY Industries, LLC (MDY), which develops and distributes Glider software. Glider is a “bot” program which allows WoW players to continue to advance in the game while they are away from their computers, giving Glider users a competitive advantage over non-users. Glider is specifically designed to avoid detection by Blizzard’s Warden program, which, prior to allowing a user access to Blizzard’s servers and periodically during game play, scans the user’s computer for unauthorized “bot” programs. If Warden detects Glider on the user’s computer, the user is denied access to Blizzard’s servers and cannot continue the game.

Donnelly incorporated MDY in 2004 and began selling Glider in 2005. After Blizzard informed Donnelly that Glider infringed its copyright and that Blizzard might sue, MDY brought an action against Blizzard in Arizona. Blizzard counterclaimed for, inter alia, violations of §§ 1201(a)(2) and 1201(b)(1) of the Digital Millennium Copyright Act (DMCA). The court previously held MDY liable for tortious interference with contract, contributory copyright infringement, and vicarious copyright infringement. The court granted summary judgment in favor of MDY with respect to Blizzard’s claim that MDY violated § 1201(a)(2) of the DMCA, insofar as that claim applied to Blizzard’s literal software code.

Following a bench trial, the court held MDY liable for violation of § 1201(a)(2) of the DMCA with respect to non-literal elements of Blizzard’s software. Section 1201(a)(2) provides that “[n]o person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology . . . primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access” to a copyright-protected work. 17 U.S.C. § 1201(a)(2)(A). The court began its analysis by finding that dynamic, non-literal elements of Blizzard’s software are protected by copyright. These non-literal elements are the combination of environmental graphics, sound effects, music, and characters produced by the execution of the literal software code. In finding copyright protection, the court rejected arguments that non-literal elements are not copyrightable because they are not “fixed” or because they are controlled by users of the game.

The court continued its § 1201(a)(2) analysis by distinguishing game users’ hard drives, which store the game’s literal software code, from Blizzard’s servers, which users must access to enjoy the dynamic, non-literal elements of game play. The basis for that distinction is the fact that Blizzard’s servers are protected by access-control technology within the meaning of the DMCA, while users’ hard drives do not have such protection. While the literal software code on a user’s hard drive could be copied without encountering Blizzard’s protective technology, an individual seeking to copy the non-literal elements of the game could only do so by circumventing Warden and gaining access to Blizzard’s servers. Because Glider is designed to allow users access to the non-literal elements of game play by circumventing Warden, the court held that MDY violated § 1201(a)(2) of the DMCA.

The court applied a similar analysis to hold MDY liable for violation of § 1201(b)(1) of the DMCA. Where § 1201(a)(2) applies to “a technological measure that effectively controls access” to a protected work, § 1201(b)(1) bars designing or producing technology primarily for the purpose of circumventing a technological measure “that effectively protects a right of a copyright owner under this title in a work or a portion thereof.” 17 U.S.C. § 1201(b)(1)(A). Having found both the literal software code and the dynamic, non-literal elements of the WoW software protected by copyright, the court identified the right to copy as the sole right protected by Warden. Although the court agreed with MDY that Warden does not protect the right to copy the literal code or static nonliteral elements found on a WoW home user’s hard drive, it found that MDY’s Glider violated § 1201(b)(1) with respect to the Warden-protected dynamic non-literal elements on Blizzard’s servers.

The court also held Michael Donnelly personally liable for MDY’s DMCA violations, contributory copyright infringement, and vicarious copyright infringement. The court applied the doctrine of strict liability in copyright infringement to refute Donnelly’s argument that he should not be held liable because he lacked knowledge of the infringement. Stating that “[k]nowledge is not required,” the court reasoned that Donnelly, as president of MDY, satisfied the two-prong test for holding a corporate officer “jointly and severally liable with the corporation for copyright infringement.” That test is that “(1) the officer has the right and ability to supervise the infringing activity, and (2) the officer has a direct financial interest in such activities.”

As well as holding MDY and Donnelly liable for tortious interference with contract under Arizona law, the court also granted Blizzard’s application for a permanent injunction “against the continued sale, distribution, and servicing of Glider.”