Yesterday, a federal court in Arizona decided MDY v. Blizzard, finding that violators of any licensing terms of an End User License Agreement (EULA) are liable for copyright infringement.
MDY sold Glider, a software program that let players of Blizzard’s World of Warcraft game automate their play in violation of the game’s EULA. Blizzard contended that, since every user of the game must copy the game (or at least portions thereof) into RAM in order to play it, these copies would be copyright infringements but for the existence of the EULA. If the EULA then says you don’t get this license unless you don’t use a bot, then using a bot is copyright infringement. The court agreed with this assessment.
We at PK filed an amicus brief arguing that Blizzard shouldn’t be able to claim copyright infringement merely because Glider let users break the rules of the game. Our argument was based primarily on 17 U.S.C. §117, which says that owners of software copies can’t be held liable for making copies into RAM.
The big question that needed to be decided was whether or not a buyer of the game was in fact the owner of the software. Courts in the 9th Circuit have tended to cite one early case, MAI v. Peak Software, for the proposition that someone who is a licensee of a piece of software can’t be it’s owner under the meaning of section 117. The court here adopted this reasoning, using a test taken from Wall Data Inc. v. Los Angeles County Sherrif’s Dept.:
if the copyright holder (1) makes clear that it is granting a license to the copy of the software, and (2) imposes significant restrictions on the use or transfer of the copy, then the transaction is a license, not a sale, and the purchaser of the copy is a licensee, not an “owner” within the meaning of section 117.
There’s a couple of problems with this reasoning. First of all, the test seems to indicate that ownership of a copy and licensing the use of a copyrighted work are mutually exclusive. That shouldn’t necessarily be the case. I can own a DVD, but license the ability to perform it publicly, for instance.
Secondly, and more worrying for public policy, this particular test means that a little bit of drafting on the part of a copyright holder can prevent Section 117 from ever applying. If the text of a EULA is enough to determine that a user isn’t an owner, then no software company will ever have to sell another copy of their software again. Every singly copy of every single piece of software is thus licensed, and anything in violation of that license could be a copyright infringement, as long as that EULA is drafted cleverly.
There’s a whole other issue, which I won’t go into here, about how enforceable shrinkwrap and clickwrap licenses are and should be, but for now, let me just say that it’s not so incredible that a user might not read the pages upon pages of legalese, no matter what sort of clicking or scrolling is put into the installation wizard.
And let’s be clear—it’s the effect on the user that most worries me with this case. It’s not so much that the coder of a bot becomes secondarily liable for copyright infringement; it’s that ordinary users can be subject to the harsh statutory penalties of copyright infringement just for using a piece of software in a way that the copyright holder dislikes. While Blizzard was most upset about the fact that Glider violted its “no bots” policy, nothing prevents, for instance, Microsoft from packaging a “no iTunes” policy in its Windows EULA. If this were merely a contract issue, that wouldn’t be such a problem—the remedy for breaking that agreement with Microsoft would be limited to not using the OS and whatever actual damages might be necessary to recompense for the breach. But copyright infringement comes with an automatic penalty that can reach into the thousands, or hundreds of thousands of dollars for a single infringement.
Apparently, MDY is going to appeal, and that’s an excellent thing. For one thing, the district court did specifically mention that its decision is controlled by existing 9th Circuit law:
The Court permitted the public interest group Public Knowledge to file an amicus
brief in this case (Dkt. ##74-75), and required Blizzard to respond to its arguments
(Dkt. ##76-77). Public Knowledge and the other parties have provided many helpful legal arguments. They also make various policy arguments. Although the Court appreciates these policy arguments and has benefitted [sic] from their excellent presentation, the Court is not a
policy-making body. The Court’s obligation is to apply the law, particularly the law of the Ninth Circuit. As will be seen below, many of the issues in this case are governed by established Ninth Circuit law. No matter how persuasive arguments might be for positions contrary to Ninth Circuit law, this Court is not free to depart from that law.
and
…If the Circuit’s interpretation of section 117 is to be reconsidered, it must be done by the Circuit, not this Court.
Of course, I’m still convinced that reinterpretation of 9th Circuit precedent wouldn’t have been necessary to come out the other way on this decision. But there are good arguments for revisiting some of those earlier decisions, and it’s definitely worthwhile for the 9th Circuit to do so. An appeal up to the 9th Circuit would have the case before a court less likely to be so bound by other interpretations of its own precedent, and more able to give the grave policy implications of this case the consideration they deserve.