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</ref>. the district court held MDY liable under DMCA §§ 1201(a)(2) and (b)(1) and also held Donnelly personally liable for MDY¶s conduct.S. Ltd. The district court also granted MDY partial summary judgment. and is liable for vicarious infringement if it (1) has the right and ability to control Glider users¶ putatively infringing activity and (2) derives a direct financial benefit from their activity. violation of DMCA §§ 1201(a)(2) and (b)(1). the district court granted Blizzard¶s partial summary judgment. After a January 2009 bench trial. Inc. v. Appellate Court Proceedings Secondary Infringement To establish secondary infringement. In 2008. finding that MDY¶s Glider salescontributorily and vicariously infringed Blizzard copyrights and tortiously interfered with Blizzard¶s contracts. In September 2008. 2006.Trial Court Proceedings Following numerous attempts by Blizzard to block the Glider program. a determination that a player is an owner would enable a player. a plaintiff must first demonstrate direct infringement. WoW¶s ToU and EULA indicate that a player is a licensee. 545 U. WoW¶s ToU clearly prohibits the use of bots in conjunctive with the online service. finding that MDY did not violate DMCA § 1201(a)(2) with respect to accessing the game software¶s source code. and tortious interference with contract. MDY is liable for contributory infringement if it has ³intentionally induc[ed] or encourag[ed] direct infringement´ by Glider users. The court of appeals reversed the district court except as to MDY¶s liability for violations of DMCA § 1201(a)(2) and remanded for trial on Blizzard¶s claim for tortious interference with contract. therefore. The district court also permanently enjoined MDY from distributing Glider and MDY appealed. to avail itself of the essential step defense. This copy potentially infringes unless the player (1) is a licensee whose use of the software is within the scope of the licenseor (2) owns the copy of the software. Grokster. 930 (2005) (full-text). and to ban its users.. In February 2007. however. the issue ofinfringement hinges on a determination of whether a player is a licensee or owner. 913. To establish direct infringement. the parties stipulated to entry of a $6 million judgment against MDY for the copyright infringement and tortious interference claims and further stipulated that Donnelly would be personally liable for the same amount if found personally liable at trial. a player¶s computercreates a temporary copy of the game¶s software in the computer¶s RAM in order to run the program. MGM Studios. on December 1. Subsequently. a plaintiff must demonstrate copyright ownership and a violation of at least one of its exclusive rights. When playing WoW. Copyright owners have the exclusive right to reproduce their works. . MDY filed an amended complaint seeking a declaration that Glider does not infringe Blizzard¶s copyright or other rights. who is also a Glider user. Blizzard filed counterclaims and thirdparty claims against MDY and Donnelly forcontributory and vicarious copyright infringement.
At the time of the proceedings. Autodesk.663 licenses to the defendant subject to a nonexclusive license that permitted use of the software on a single computer. the defendants maintained computers that ran the plaintiff¶s operating system software.C. Licensee The determination of a software user as an ³owner´ or ³licensee´ was recently visited in Vernor v. a software user who is the ³owner of a copy´ of a copyrighted software program does not infringe by making a copy of the program if the new copy is ³created as an essential step in the utilization of the computer program in conjunction with a machine and . Inc. MAI Sys. (d) forbade duplication of prints.(c) required the return or destructions of the prints. ³licensee´ in the ³MAI trio´ of cases (See.3d 769 (9th Cir. the court held that the customers were licensees who were not entitled to the essential step defense and that the defendants had therefore infringed on the plaintiffs¶ copyrights by loading the software into RAM . and then only if the software were also removed from the original computer. The first sale doctrine allows owners of copies of copyrighted works to resell those copies. Because the software sold by both plaintiffs had been sold subject to restrictive license agreements. In Wall Data. (b) provided that the copyright owner retained title to the prints. Following cross motions for summary judgment. 550 F.3d 1330 (9th Cir. . . under both defenses. 447 F. The court against visited the issue of ³owner´ vs. the court held that the essential step defense was unavailable where the copyright owner merely granted the user a license that significantly restricted the user¶s ability to transfer the software. three considerations emerge to determine whether a software user is a licensee or an owner: (1) whether the copyright owner specifies that a user is granted a license. 1993). Citing MAI. 2006)). 2010). or whether he improperly purchased them from licensees in violation of Autodesk¶s software license.Owner vs. Vernor had two copies of AutoCAD that he wanted to sell on eBay. (2) whether the copyright owner significantly restricts the user¶s ability to transfer the software. plaintiff sold 3... 1977). a criminal copyright infringement case. Corp. Inc. v. the determinative issue is whether Vernor was the ³owner´ of his copies as he alleges. Under the essential step defense. Wise.S.. The defendant subsequently installed the software on 6. 991 F. Wall Data.2d 1180. Se. 1995). 621 F. Accordingly. the district court granted Vernor¶s declaratory action based on his two affirmative defenses of the first sale doctrine and the essential step defense. v. Inc.007 computers and the plaintiff sued for copyright infringement. When the defendants ran the computers the computers automatically loaded plaintiffs¶ software into RAM. Express Co. Considering Wise and the MAI trio. v.´ 17 U. the court determined whether a first sale of copies of a motion picture had occurred pursuant to written distribution agreements based on whether the agreement (a) was labeled a license. §117(a)(1). 64 F. Corp. is used in no other manner. or (e) required the transferee to maintain possession of the prints for the agreement¶s duration. Triad Sys.2d 511 (9th Cir. and that restricted transfers of the software to once per month. 1190-92 (9th Cir. In MAI and Triad. In United States v. and (3) . Peak Computer.3d 1102 (9th Cir. Los Angeles County Sheriff¶s Dep¶t.
188 F.´ and all other license terms are considered ³covenants. who are also Glider users. Ch. the licensee acts outside the scope of the license. Applying these factors it was clear to the Court that Autodesk¶s transfers to the original purchasers were mere licenses and that Vernor¶s subsequent purchases were improper.3d 1115.´ In addition.´ As such. Applying Vernor. The WoW ToU prohibits bots and the use of unauthorized third-party software. the district court held that because Autodesk did not require its customers to return copies of old software. Blizzard imposes a number of transfer and use restrictions on players. Covenants vs. the court reversed the district . a contractual provision that limits a license¶s scope is considered a ³condition. such as a requirement to transfer all original documentation and packaging when transferring a license. the potential for infringement exists only where the licensee¶s action (1) exceeds the license¶s scope (2) in a manner that implicates one of the licensor¶s exclusive statutory rights. Sun Microsystems. As such. these prohibitions are considered covenants rather than ³copyright-enforceable conditions. v. 325 A. v. and it may sue only for breach of contract. The district court. limited license. any software publisher could designate any disfavored conduct during use as copyright infringement by conditioning the license on a user¶s abstention from such action. however. Therefore. Inc. and (3) imposes notable restrictions. the court concluded that ³for a licensee¶s violation of a contract to constitute copyright infringement. concluded that Wise and the MAI trio were irreconcilable and followed Wise as the first-decided case. Ultimately. Clark. 386 (Del. do not own their copies of the software. and prohibiting the use of the game for commercial purposes. 1121 (9th Cir. there must be a nexus between the condition and the licensor¶s exclusive rights of copyright.´ If. they are unable to claim the essential step defense. 1999). 1974). limited license ordinarily waives the right to use licensees for copyright infringement.´ When the terms of a license are ambiguous. Therefore. nothing in those sections condition Blizzard¶s grant of a limited license on players¶ compliance with the ToU restrictions.whether the copyright owner imposes notable use restrictions. The court noted that were it to hold otherwise. then the licensor may sue for copyright infringement. the court held that WoW players are licensees of Blizzard¶s game client software and as such. however.. courts will construe a term as a covenant rather than a condition. Co. however. Microsoft Corp. In order for Blizzard to show that a Glider user commits copyright infringement it must demonstrate that the violated term is a condition rather than a covenant. Blizzard retains title in the software and grants players a non-exclusive. 2d 383. While admitting that under the MAI trio Autodesk¶s transfer was a license. (2) significantly restricts the user¶s ability to transfer the software. Vernor was unable to raise his affirmative defenses and was not privileged to sell his copies. under Wise. Conditions ³A copyright owner who grants a nonexclusive. Because WoW players. that the transfer was more correctly classified as a sale. See Wilmington Tr. The Court of Appeals ultimately ruled that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license.
. one of the elements on appeal is whether certain provisions of § 1201 ³prohibit circumvention of access controls when access does not constitute copyright infringement. With respect to WoW¶s non-literal and dynamic elements. § 1201(a)(1)(A). Accordingly. In addressing WoW¶s literal elements. is a general prohibition against ³circumventing a technological measure that effectively controls access to a work protected under [the Copyright Act]. of Blizzard¶s copyrights in WoW software. This court declined to follow that rule based on its interpretation of Congress¶ intent ³to create a new anti-circumvention right in § 1201(a) distinct from infringement. In considering Blizzard¶s DMCA claims. Furthermore. and the dynamic non-literal elements . 17 U.´ Digital Millennium Copyright Act The first provision of the DMCA. In addressing this point. the individual non-literal elements . the district court¶s entry of a permanent injunction against MDY to prevent future § 1201(a)(2) violations was affirmed. this court agreed with the district court that Warden did not effectively control access because the code was available on the player¶s hard drive as soon as it had been installed (Warden only guarded access to the online service after installation). and also vacated the portion of the district court¶s permanent injunction that barred MDY and Donnelly from ³infringing. however.´ Section 1201(a)(2) prohibits trafficking in technology that circumvents a technological measure that ³effectively controls access´ to a copyrighted work. In considering Blizzard¶s § 1201(b)(1) claims.court¶s grant of summary judgment to Blizzard on its secondary copyright infringement claims.´ The Federal Circuit had previously adopted a rule that required a nexus between potential DMCA violations and copyright infringement. or contributing to the infringement. In addition. Warden does nothing to prevent a player from taking screen shots during game play. To meet this standard. and as such does not protect WoW¶s dynamic non-literal elements. Blizzard contends that Warden protects its reproduction right against unauthorized copyright. the court determined that Blizzard could prevail only if Warden ³effectively protect[s] a right´ of Blizzard under the Copyright Act.S.C. only with access to the online service. the court noted that a user is already entitled to copy portions of the game client into their computer¶s RAM in order to play the game. the court disagreed. and Section 1201(b)(1) prohibits trafficking in technology that circumvents a technological measure that ³effectively protects´ a copyright owner¶s right. the district court assessed whether MDY violated §§ 1201(a)(1) and (b)(1) with respect to the literal elements of the game client software. The interruption by Warden if an unauthorized program is also found to be running in a player¶s RAM does not interfere with the loading of the game client. the court held that Warden did effectively control access as a player could only connect to the online service once Warden had scanned the player¶s RAM and determined that no prohibited programs were running.
_Blizzard_Entertainment http://cyberlawcases. (2) MDY was aware of the relationship and stated on its own website that it was aware that Glider violated these agreements.3d 102.com/2010/12/14/ninth-circuit-decision-in-mdy-v-blizzard/ . Guerrero. Blizzard must prove: (1) the existence of a valid contractual relationship. While the court rejected MDY¶s argument that Blizzard¶s tortious interference claims were preempted by the Copyright Act. 1025 (Ariz. Sources: http://itlaw.wikia.Tortious Interference To recover for tortious interference under Arizona law. (3) MDY¶s intentional interference in including or causing the breach. See Safeway Ins. Co. 2005). v. (2) MDY¶s knowledge of the relationship. (3) MDY intentionally interfered with Blizzard¶s contracts even after attempts by Blizzard to restrict or ban the use of Glider. and (4) Blizzard was damaged at least so far as the money spent in responding to complaints about the use of Glider. (4) the impropriety of MDY¶s interference.com/wiki/MDY_Industries_v. 106 P. the court did vacate the grant of summary judgment on this issue and remand for a determination of the outstanding issues of material fact. and (5) resulting damages. Blizzard satisfied four of the five elements above based on undisputed facts: (1) a valid contractual relationship exists between Blizzard and its customers based on the EULA and ToU.
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