III. CHANGING THE GAME A. Enhancements

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1 THE GAMES 83 III. CHANGING THE GAME A. Enhancements The original Game Genie was a device sold by Lewis Galoob Toys that allowed players to change up to three features of games played on Nintendo s NES console. 70 A cartridge-like hardware pack that connected the video game cartridge to the NES console, the Game Genie introduced its own start-up screen from which a player could enter special codes from examples listed in the Game Genie code book. By entering those codes or by programming their own codes, players could modify a maximum of three gameplay features, including, for example, the number of lives of the player s character, the speed at which a character moved, how much time, energy or ammunition a player had, the number of obstacles a player would face and on what world or level the action would start. Although the Game Genie allowed these gameplay characteristics to be altered, it did not change the data stored in Nintendo s game cartridge. In other words, the Game Genie s impact on gameplay was only a temporary alteration or enhancement. In Lewis Galoob Toys v. Nintendo of America, 71 the Court of Appeals found that the Game Genie did not violate any Nintendo copyrights. Copyright law protects the original creative work and its derivatives. 72 Nintendo claimed that the Game Genie was a derivative work, even though Similarly, see OG International v. Ubisoft Entertainment, 2011 U.S. Dist. LEXIS (U.S. Dist. Ct. Northern Dist. of California), where the District Court denied Ubisoft s motion for a preliminary injunction and temporary restraining order to prevent OG from releasing its dancebased game Get Up and Dance in competition with Ubisoft s Just Dance series of dancebased games. Ubisoft filed its motion after OG had filed a declaratory motion to determine whether OG had infringed Ubisoft s copyright and trade dress rights in avatar and instructor features in Just Dance. In denying Ubisoft s motion, the court held that Ubisoft had failed to demonstrate a clear likelihood of success on the merits, nor a clear showing of irreparable harm. With respect to Ubisoft s copyright infringement claims, the court held that the avatars are entitled to protection against substantially similar copying, while the instructors are only entitled to protection against virtually identical copying. In both cases, the court held that Ubisoft had failed to demonstrate a clear likelihood of success. With respect to Ubisoft s trade dress infringement claims, the court held that the elements of avatars and instructors which Ubisoft alleged to be protected by trade dress are functional in nature and thus excluded from trade dress protection. Also, in a battle between two Japanese companies, a Tokyo court ordered DeNA to pay GREE damages of U.S. $2.9 million and to stop making available its fishing game on the basis that the game infringed GREE s copyrights. See online: < Versions of the Game Genie were also released for the SNES, Game Boy, Sega Genesis and Sega Game Gear U.S. App. LEXIS (9th Cir. 1992). For example, the U.S. Copyright Act, 17 U.S.C. 101 defines derivative work as follows: A derivative work is a work based upon one or more preexisting works such as a translation,

2 84 VIDEO GAME LAW to be protected, derivative works usually physically incorporate the copyrighted work. The court rejected Nintendo s argument: The district court s finding that no independent work is created is supported by the record. The Game Genie merely enhances the audiovisual displays (or underlying data bytes) that originate in Nintendo game cartridges. The altered displays do not incorporate a portion of a copyrighted work in some form. Nintendo argues that the Game Genie s displays are as fixed in the hardware and software used to create them as Nintendo s original displays. Nintendo s argument ignores the fact that the Game Genie cannot produce an audiovisual display; the underlying display must be produced by a Nintendo Entertainment System and game cartridge. The Game Genie s display has no form. Even if we were to rely on the Copyright Act s definition of fixed, we would similarly conclude that the resulting display is not embodied, see 17 U.S.C. 101, in the Game Genie. It cannot be a derivative work. 73 Additionally, the court held that even if the audiovisual display created by the Game Genie were derivative, there would be no copyright infringement because the Game Genie s functions were a fair use of Nintendo s copyright. 74 Crucial to this finding were several conclusions of the lower court, which were cited with approval: musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgement, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications, which, as a whole, represent an original work of authorship, is a derivative work. Section 3(1) of Canada s Copyright Act, R.S.C c. C-42, although not using the term derivative work, covers off this concept with the words produce or reproduce the work... in any material form whatever. Worth noting is that if the taking from the original is not substantive, fair use/dealing will apply. Lewis Galoob Toys v. Nintendo of America, 1992 U.S. App. LEXIS at para. 6 (9th Cir. 1992). The finding in Galoob seemingly overrules an earlier contradictory finding on similar facts made by the Court of Appeals for the Seventh Circuit in Midway Mfg. Co. v. Arctic International Inc., 1983 U.S. App. LEXIS 28945, 704 F.2d 1009 (7th Cir. 1983). In Midway, considering a printed circuit board that accelerated the arcade game Galaxian, the court stated at 1013 (F.2d): The final argument of defendant s that we address is that selling plaintiff s licensees circuit boards that speed up the rate of play of plaintiff s video games is not an infringement of plaintiff s copyrights. Speeding up the rate of play of a video game is a little like playing at 45 or 78 revolutions per minute (RPM s) a phonograph record recorded at 33 RPMs. If a discotheque licensee did that, it would probably not be an infringement of the record company s copyright in the record. One might argue by analogy that it is not a copyright infringement for video game licensees to speed up the rate of play of video games, and that it is not a contributory infringement for the defendant to sell licensees circuit boards that enable them to do that. There is a critical difference between playing records at a faster than recorded speed and playing video games at a faster than manufactured rate: there is an enormous demand for speeded-up video games but there is little if any demand for speeded-up records. Not many people want to hear 33 RPM records played at 45 and 78 RPM s so that record licensors would not care if their licensees play them at that speed. But there is a big demand for speeded-up video games. Speeding up a video game s action makes the game more challenging and exciting and increases the licensee s revenue

3 THE GAMES 85 (a) Game Genie users were engaged in a non-profit activity. Therefore, their use of the Game Genie to create derivative works was presumptively fair. In coming to this conclusion, the court referenced the 1984 decision, Sony Corp. of America v. Universal City Studios, Inc., 75 where the U.S. Supreme Court held that the videotaping of televised material by consumers (through a Sony Betamax recorder or VCR) was a fair use; 76 (b) The published nature of Nintendo s console and cartridges supported the fairness of what the Game Genie does. In this light, the Game Genie was akin to a commentary on a literary work that incorporates large portions of that original work; per game. Speeded-up games end sooner than normal games and consequently if players are willing to pay an additional price-per-minute in exchange for the challenge and excitement of a faster game, licensees will take in greater total revenues. Video game copyright owners would undoubtedly like to lay their hands on some of that extra revenue and therefore it cannot be assumed that licensees are implicitly authorized to use speeded-up circuit boards in the machines plaintiff supplies. Among a copyright owner s exclusive rights is the right to prepare derivative works based upon the copyrighted work. 17 U.S.C. 106(2). If, as we hold, the speeded-up Galaxian game that a licensee creates with a circuit board supplied by the defendant is a derivative work based upon Galaxian, a licensee who lacks the plaintiff s authorization to create a derivative work is a direct infringer and the defendant is a contributory infringer through its sale of the speeded-up circuit board U.S. LEXIS 19, 464 U.S. 417 (U.S. 1984). The court in Sony observed that consumers were engaged in time-shifting programs, that is, taping them for later viewing since the originally scheduled broadcast time was not convenient. The court went on to find that time-shifting was a fair use of copyright material. Similarly, in Cartoon Network LP, LLLP v. CSC Holdings, Inc., 2008 U.S. App. LEXIS (2d Cir. 2008), the court held that a cloud-based remote storage digital video recorder system did not infringe the copyright of the plaintiffs. The service relied on a router located at a user s home, which transmitted video received from the user s cable service provider to a remote server hosted by the defendants. The remote server would store programs received from the user s router and transmit the programs back to the user for viewing at a later time. The Court of Appeals held that: (a) any work temporarily buffered by Cablevision prior to storage was of a transitory nature, and thus it did not meet the fixation requirement under the Copyright Act; (b) the selection and storage of videos on the server were directed entirely by the user, and therefore Cablevision was not directly making any copies of the video; and (c) the transmission by Cablevision of a video uploaded by a user back to that user is not a transmission to the public. In a similar vein, see Viacom International Inc. v. YouTube, Inc., 2010 U.S. Dist. LEXIS 62829, 718 F. Supp. 2d 1180 (S.D.N.Y. 2010), the District Court for the Southern District of New York, in which Viacom alleged that YouTube was liable for vicarious and direct copyright infringement on the grounds that YouTube had hosted thousands of Viacom s copyrighted works for YouTube users to view without Viacom s permission. The court held that because YouTube had a well enforced and reasonable notice and takedown policy and had consequently removed the allegedly infringing videos promptly after being notified by Viacom that unauthorized videos were available, it was protected from liability for copyright infringement under the DMCA s safe harbor provisions. YouTube s general awareness that infringement was occurring on its website was insufficient to result in liability. Viacom has announced its intention to appeal this decision.

4 86 VIDEO GAME LAW (c) The fact that the derivative works created by the Game Genie were comprised almost entirely of Nintendo s copyrighted displays does not militate against the finding of fair use ; and (d) Nintendo could not demonstrate harm to its market or the likelihood of a potential market for slightly altered versions of Nintendo s games. In fact, the court noted that Nintendo had not, at the date of the trial, issued or considered issuing altered versions of existing games. 77 Nintendo of America v. Prima Communications 78 is another case dealing with game enhancements. The District Court rejected Nintendo s attempt to prevent Prima from continuing to sell its GoldenEye 007: Unauthorized Game Secrets strategy guidebook. Nintendo argued that Prima had infringed copyrighted maps that were included in Nintendo s game manual. The court found that the maps contained much factual material and only some protected original material. Accordingly, any copying by Prima was noninfringing, as the copyright material in those maps was held to be de minimus, or trifling, in the overall context. Neither Galoob nor Prima dealt directly with the question of whether game enhancements can be protected because they improve the intellectual property of others and are therefore not prejudicial. Although this may seem a logical argument, copyright law does not recognize the doctrine of improvements found in patent law. 79 This means that whether devices like the See also Nintendo of America Inc. v. Camerica Corp., [1991] F.C.J. No. 58, 34 C.P.R. (3d) 193 (F.C.T.D.), affd [1991] F.C.J. No. 445, 36 C.P.R. (3d) 352 (F.C.A.), where Rouleau J. dismissed Nintendo s application for an interlocutory injunction against the manufacturer of the Game Genie (created to modify Super Nintendo games). Although acknowledging that serious copyright issues had been raised, the court found that Nintendo did not meet the burden of showing the irreparable harm necessary for an injunction to be granted. In this regard, Rouleau J. stated at para. 33 of the judgment: Having taken this and all the affidavit evidence of the plaintiffs into consideration, I am resolved that not one scintilla of proof has been offered to support the imputation of irreparable harm. The plaintiffs have not demonstrated the loss of a single sale in spite of the fact that the defendant Camerica started shipping Game Genie to customers in June, This confirms my view that, even if they are successful at trial, the plaintiffs injuries would be severely circumscribed and, being limited to damages resulting from the alleged infringement of its copyright as opposed to loss of profits resulting from diminished sales, would be relatively insubstantial and compensable in damages U.S. Dist. LEXIS (W.D. Wash. 1997). In patent regimes, improvements can be patented as a new work; generally, there is no statutory scheme for a derivative work in patent law that vests ownership in improvements to the creator of the original invention. Though the copying of creative materials is generally intended to be incidental to and in aid of the original game, from a legal perspective, this is irrelevant when considering whether a derivative infringes a publisher s or developer s copyright. The extent to which a copy may fit the definition of a derivative work of the author s original (which allows the author control over some changes of medium and adaptations of the original work) is a matter of debate in the U.S., focusing on the interpretation of the words recast, transformed, or adapted found in the Copyright Act, 17 U.S.C As these expansive words are not present in the Canadian Copyright Act, the Supreme Court has ruled that artist s rights under the Act do not permit him to prevent purchasers of a work to resell a modified copy (although not multiples) in the same market as the artist unless the copy is to the prejudice of honour or reputation of the author, (known as the moral right of integrity). Copyright Act, R.S.C. 1985, c. C-42,

5 THE GAMES 87 Game Genie, strategy guides, and other enhancements constitute original non-infringing works turns on traditional fair use/fair dealing defences: for example, whether the copyrighted material in the game cartridge was actually copied or altered (the Galoob issue), or whether the de minimus principle applies even where some physical copying occurred (the Prima issue). In summary, modifications that enhance games have been permitted, provided they do not copy the original work, do not infringe on any underlying patents, and do not circumvent any copy protection mechanisms. 80 B. Mods From the beginning of computer-based video games, it has been possible to modify an original game by adding or changing the original software. Games such as Doom permitted active communities to develop and create additional levels or worlds. Modifications (mods) can include changes to maps, levels, weapons, vehicles, skins, characters, storylines, scenery and almost anything that can be imagined, including the gameplay itself. 81 It can easily be argued that mods infringe the copyright in the original game. 82 After all, mods are usually based on original code and gameplay elements s. 28.2(1). Unlike French law, Canadian law does not recognize a moral right to control the use that is made with the authorized copy of the artist s work (a right known as a droit de destination ). See Théberge v. Galerie d Art du Petit Champlain inc., [2002] S.C.J. No. 32, [2002] 2 S.C.R. 336 (S.C.C.). In the granting of a preliminary injunction in Sony v. GameMasters, 1999 U.S. Dist. LEXIS 21719, 87 F. Supp. 2d 976 (N.D. Cal. 1999), the court seemed to have little doubt that the Game Enhancer, a chipping and cheating device would likely be found to violate the Digital Millennium Copyright Act, Pub. L. No , 112 Stat (1998) (DMCA) despite the fact that one of its apparently legitimate uses was to temporarily modify the rules of a specific game for gameplay enhancement. Some of the best or most popular mods have included Counter-Strike for Half-Life, Desert Combat for Battlefield 1942, and 65 Season for Grand Prix Legends. For example, video game publisher Tecmo, Inc. has sued webmasters and members of an online forum dedicated to creating custom skins, including several skins... designed to make Tecmo Characters appear naked. These mods were for Tecmo s Xbox games, including Dead or Alive Xtreme Beach Volleyball. Tecmo s general manager was quoted as saying: [W]e believe it is our duty to uphold the integrity of our work. The action, filed in the District Court, Northern District of Illinois, on January 25, 2005, claims copyright infringement, the circumvention of copyright protection systems in violation of the DMCA, passing off and unfair competition. An attorney with the Electronic Frontier Foundation stated: This complaint is absurd... The law allows for fair use of other people s copyrighted works without any permission needed, and one of the key things that you re allowed to do is make copies in order to reverse engineer and understand how they work... If they d offered a competing video game with Tecmo s code in it, it s a legal issue. But here, they have simply offered a way for legitimate game owners to modify how the game looks on their screen. It s like a home customization kit. It s not competing in any way with Tecmo s product. In fact, you have to own Tecmo s product to use this stuff. See Kevin Poulsen, Hackers sued for tinkering with Xbox games (February 10, 2005), online: The Register <

6 88 VIDEO GAME LAW On the other hand, many developers and publishers appreciate the mod communities that have evolved and see modding as an asset to their games. By the late 1990s, it was not uncommon for developers and publishers to include tools that allowed and encouraged mods, along with limited but explicit permissions set out in the accompanying End User Licence Agreements (EULA). 83 The final step in the evolution of mods seems to be the active encouragement and even the subsidization of mod teams by publishers and developers. Does modding infringe copyright in the absence of the publishers and developers permission? The answer is almost certainly yes. 84 A useful legal starting point in considering this phenomenon is that every commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright. 85 In Micro Star v. FormGen Inc., 86 the owners of the intellectual property in the first-person shooter game Duke Nukem 3D (D/N-3D) sued Micro Star, which had compiled 300 player-created levels for the game onto a disc that was commercially sold to players under the name Nuke It (N/I). Ironically, these levels were created because the original game included a utility called Build Editor, which enables players to create such new content. FormGen sought a preliminary injunction barring the sale of Nuke It, claiming that Micro Star violated FormGen s exclusive right to prepare derivative works based on Duke Nukem 3D. To succeed in its claims, FormGen had to overcome the principles enunciated six years earlier, in Galoob, 87 by the same court. In that case, an intermediate device that modified certain gameplay parameters was protected. The court began its consideration most appropriately: Duke Nukem routinely vanquishes Octabrain and the Protozoid Slimer. But what about the dreaded Micro Star? For example, Microsoft releases software development kits (SDKs) for its PC Flight Simulator series. These SDKs are free and allow modders to produce additional planes and scenery. As well, Electronic Arts (EA) seems to have made a conscious effort to ensure that its Formula 1 series of games could be modded relatively easily. In the PC game FI Challenge , EA even included code for some unnecessary features (such as headlights and horns, which Formula 1 cars do not have) that could be activated by modders. See the discussions related to Davidson, Section II.C. Davidson & Associates v. Internet Gateway: Pwned by the EULA ; iracing, Section II.D. iracing v. Robinson: Open Wheels, Closed Games and MDY, Section II.E. MDY Industries, LLC v. Blizzard Entertainment, Inc.: Not Bots, below. Sony Corp. of America v. Universal City Studios, Inc., 1984 U.S. LEXIS 19, 464 U.S. 417 at 451 (U.S. 1984) U.S. App. LEXIS (9th Cir. 1998). Lewis Galoob Toys v. Nintendo of America, 1992 U.S. App. LEXIS (9th Cir. 1992). Micro Star v. FormGen Inc., 1998 U.S. App. LEXIS at para. 1 (9th Cir. 1998).

7 THE GAMES 89 The court then distinguished Galoob in order to find copyright infringements: Micro Star argues that the MAP 89 files on N/I are a more advanced version of the Game Genie, replacing old values (the MAP files in the original game) with new values (N/I s MAP files). But, whereas the audiovisual displays created by Game Genie were never recorded in any permanent form, the audiovisual displays generated by D/N-3D from the N/I MAP files are in the MAP files themselves. In Galoob, the audiovisual display was defined by the original game cartridge, not by the Game Genie; no one could possibly say that the data values inserted by the Game Genie described the audiovisual display. In the present case the audiovisual display that appears on the computer monitor when a N/I level is played is described in exact detail by a N/I MAP file Micro Star further argues that the MAP files are not derivative works because they do not, in fact, incorporate any of D/N-3D s protected expression. In particular, Micro Star makes much of the fact that the N/I MAP files reference the source art library, but do not actually contain any art files themselves. Therefore, it claims, nothing of D/N-3D s is reproduced in the MAP files. In making this argument, Micro Star misconstrues the protected work. The work that Micro Star infringes is the D/N-3D story itself a beefy commando type named Duke, who wanders around post-apocalypse Los Angeles, shooting Pig Cops with a gun, lobbing hand grenades, searching for medkits and steroids, using a jetpack to leap over obstacles, blowing up gas tanks, avoiding radioactive slime. A copyright owner holds the right to create sequels, and the stories told in the N/I MAP files are surely sequels, telling new (though somewhat repetitive) tales of Duke s fabulous adventures. A book about Duke Nukem would infringe for the same reason, even if it contained no pictures. 91 Essentially, the court found that the enhancements provided by the additional game levels substantially incorporated protected material by using the characters and story fundamentals of the original game. The court also rejected Micro Star s claims that its use of Duke Nukem 3D s protected expression fell within the doctrine of fair use 92 because: (1) Micro Star s use MAP files contain a series of instructions that tell the game engine where to place what objects from the source art library. Micro Star v. FormGen Inc., 1998 U.S. App. LEXIS at para. 11 (9th Cir. 1998). Micro Star v. FormGen Inc., 1998 U.S. App. LEXIS at para. 13 (9th Cir. 1998) [citations omitted]. 17 U.S.C. 107 permits unauthorized use of copyrighted works for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship or research, and instructs courts in determining whether the use made of a work in any particular case is a fair use to consider four factors: (1) the purpose and character of the use, including whether it is commercial in nature; (2) the nature of the copyrighted work; (3) the amount and sustainability of the copied material in relating to the copyrighted work as a whole; and (4) the effect of the use on the potential market for the copyrighted work.

8 90 VIDEO GAME LAW of FormGen s copyright work was made purely for financial gain; (2) the fair use defence is much less likely to succeed where it is applied to fiction or fantasy creations; 93 (3) the quantity and importance of the material used was substantial; and (4) Micro Star impinged on FormGen s ability to market new versions of the Duke Nukem story when only FormGen has the right to enter that market. Finally, the court forcefully rejected Micro Star s argument that it was the beneficiary of the implicit licence FormGen gave to its customers by authorizing them to create new levels: Micro Star also argues that it is the beneficiary of the implicit license FormGen gave to its customers by authorizing them to create new levels.... Nothing indicates that FormGen granted Micro Star any written license at all; nor is there evidence of a nonexclusive oral license. The only written license FormGen conceivably granted was to players who designed their own new levels, but that license contains a significant limitation: Any new levels the players create must be offered [to others] solely for free. The parties dispute whether the license is binding, but it doesn t matter. If the license is The scope of Canada s fair dealing provisions are more limited. Sections 29, 29.1 and 29.2 of the Copyright Act, R.S.C. 1985, c. C-42 set out the parameters of fair dealing in Canada, providing protection for: research or private study, criticism or review and news reporting. The Supreme Court of Canada s decision in CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] S.C.J. No. 12, [2004] 1 S.C.R. 339 (S.C.C.) significantly clarifies the concept of fair dealing in Canada at paras Any act falling within the fair dealing exception will not be an infringement of copyright. The fair dealing exception, like other exceptions in the Copyright Act, is a user s right. In order to maintain the proper balance between the rights of a copyright owner and users interests, it must not be interpreted restrictively.... The Copyright Act does not define what will be fair ; whether something is fair is a question of the fact and depends on the facts of each case At the Court of Appeal, Linden J.A. acknowledged that there was no set test for fairness, but outlined a series of factors that could be considered to help assess whether a dealing is fair. Drawing on the decision in Hubbard, [[1972] 1 All E.R (C.A.)], as well as the doctrine of fair use in the United States, he proposed that the following factors be considered in assessing whether a dealing was fair: (1) the purpose of the dealing; (2) the character of the dealing; (3) the amount of the dealing; (4) alternatives to the dealing; (5) the nature of the work; and (6) the effect of the dealing on the work. Although these considerations will not all arise in every case of fair dealing, this list of factors provides a useful analytical framework to govern determinations of fairness in future cases. CCH is part of a recent trilogy of Supreme Court of Canada decisions, including Théberge v. Galerie d Art du Petit Champlain inc., [2002] S.C.J. No. 32, [2002] 2 S.C.R. 336 (S.C.C.) and Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, [2004] S.C.J. No. 44, [2004] 2 S.C.R. 427 (S.C.C.), which favoured user rights over those of copyright holders. In this regard, in Micro Star v. FormGen Inc., 1998 U.S. App. LEXIS (9th Cir. 1998), the court pointed out at para. 17, that Duke Nukem s world is made up of aliens, radioactive slime and freezer weapons, clearly fantasies, even by Los Angeles standards.

9 THE GAMES 91 valid, it clearly prohibits commercial distribution of levels; if it doesn t, FormGen hasn t granted any written licenses at all. In case FormGen didn t license away its rights, Micro Star argues that, by providing the Build Editor and encouraging players to create their own levels, FormGen abandoned all rights to its protected expression.... Given that it overtly encouraged players to make and freely distribute new levels, FormGen may indeed have abandoned its exclusive right to do the same. But abandoning some rights is not the same as abandoning all rights, and FormGen never overtly abandoned its rights to profit commercially from new levels. Indeed, FormGen warned players not to distribute the levels commercially and has actively enforced that limitation by bringing suits such as this one. 94 Although copyright holders may find advantages in the additional content being created, on current trajectories there are and will continue to be pockets of hostility pitting game makers directly against the modding community. This is particularly true as game makers try to ensure that all available revenues attributable to their content are captured, which is becoming increasingly important to game makers as games become more expensive to produce. After all, even in Micro Star, it was not the actual modders who were being sued, but rather those who sought commercial gain from the creative efforts of others. In the same light, if a mod were to significantly diminish the appeal of an authorized commercial product, at a minimum, the likely result would be threats of litigation. Though it was once an intriguing question as to whether or not a copyright holder could successfully sue a publisher/developer for providing the tools used for infringing purposes, the answer is now fairly clear. 95 Jurisprudence in the realm of video games and related technical areas indicates that the DMCA is being applied in such a way that the answer is yes. Several arguments that, at first blush, would seem to offer a way for the Micro Star v. FormGen Inc., 1998 U.S. App. LEXIS at para. 18 (9th Cir. 1998). For example, Marvel Enterprises Inc. sued NCsoft Corporation and Cryptic Studios Inc. in the District Court, Central District of California, because of the massively multiplayer game City of Heroes. Marvel claimed that the character customization functionality in the game allows players to create superheroes that closely resemble trademarked Marvel comic characters like The Incredible Hulk and the X-Men. As well, Marvel alleged that since the game is played on the defendant s servers, they are responsible for their customers copyright breaches. On March 9, 2005, as a result of a preliminary motion, the court dismissed six of Marvel s causes of action, although significant copyright claims remain. See Tor Thorsen, Marvel sues NCsoft over City of Heroes (November 12, 2004), online: Gamespot < 11/12/news_ html>; and Allen Raush, NCsoft Scores Partial Victory over Marvel (March 11, 2005), online: < Nintendo used the DMCA to threaten Pokémon fan sites with litigation when they posted screenshots from Pokémon Black and Pokémon White in advance of the games release. See Luke Plunkett, Report: Nintendo Threatens Pokémon Website For Showing Pictures Of Pokémon (September 20, 2010), online: Kotaku <

10 92 VIDEO GAME LAW publisher/developer to avoid liability under the DMCA have not carried the day in court. For example, courts have held that fair use is irrelevant when assessing liability for using or trafficking in devices that circumvent technological measures that control access to a copyrighted work (access-control technological measures). 96 In the same vein, courts have also held that a copyright violation is unnecessary to establish liability for circumventing access-control technological measures. 97 Furthermore, although section 1201(f) of the DMCA allows technological measures to be circumvented if done for the purpose of achieving interoperability of computer programs through reverse engineering, this exception does not apply if the alleged circumvention constitutes copyright infringement. 98 When licensing software, copyright owners are able to grant a licence that is subject to certain conditions, such as a promise by the licensee not to reverse engineer the software. 99 Copyright infringement results if the conditions are not satisfied. 100 Because it is copyright owners who very often, if not virtually exclusively, draft software licences in the video game context, the current legislative framework arguably gives copyright owners all practical control over when the DMCA s interoperability exception will apply. Any practically workable exceptions to the DMCA will probably have to be politically driven. For example, every three years, the Librarian of Congress issues exemptions from the prohibitions in the DMCA related to the use or trafficking of devices for circumventing access-control technological measures. Given the proper motivation, the Librarian of Congress may see it fit to add an exemption allowing the modding of games. 101 Any narrower exceptions to the DMCA s allowing modding will probably be limited to traditional categories of institutions that are preferentially treated under the current fair dealing and fair use regimes, such as educational institutions See, for example, Realnetworks, Inc. v. DVD Copy Control Assn. Inc., 2009 U.S. Dist. LEXIS 70503, 641 F. Supp. 2d 931 (N.D. Cal. 2009). 97 MGE UPS Systems Inc. v. GE Consumer and Industrial Inc., 2010 U.S. App. LEXIS (5th Cir. 2010), substit. opinion, 2010 U.S. App. LEXIS (5th Cir. 2010). 98 Davidson & Associates, Inc. v. Internet Gateway, 2004 U.S. Dist. LEXIS (E.D. Mo. 2004), affd 2005 U.S. App. LEXIS (8th Cir. 2005). 99 See, for example, the licence agreement that was the subject of the litigation in Davidson & Associates, Inc. v. Internet Gateway, 2004 U.S. Dist. LEXIS (E.D. Mo. 2004), affd 2005 U.S. App. LEXIS (8th Cir. 2005). 100 Vernor v. Autodesk, Inc., 2009 U.S. Dist. LEXIS (W.D. Wash. 2009), petition for certiorari denied 2011 U.S. LEXIS 6875 (S. Ct. 2011). 101 An exemption currently exists to allow the jailbreaking of phones. The Librarian of Congress is allowed to pass exceptions only in respect of the DMCA s access-control provisions. To avoid liability for copyright infringement and the DMCA s copy-control provisions, any modding would have to be done without infringing copyright (e.g., be classified as a fair use). 102 Section 1201(d) of the DMCA already provides limited exceptions to the access-control provisions of the DMCA for non-profit libraries, archives, and educational institutions.

11 THE GAMES 93 C. Davidson & Associates v. Internet Gateway: Pwned by the EULA 103 The clearest example of a direct conflict between copyright holders and modders is the case of Davidson & Associates, Inc. v. Internet Gateway. 104 Despite the apparent acceptance of reverse engineering as a fair use, Davidson establishes that an End User Licence Agreement (EULA) can functionally negate other legal considerations. The plaintiffs were Vivendi Universal Games, Inc. and Davidson & Associates, Inc., a.k.a. Blizzard Entertainment, producers of the games in the StarCraft, Warcraft and Diablo series. Two computer programmers, Ross Combs and Rob Crittenden, were defendants, as was Jim Jung. Jung was the president, co-owner and day-today operator of Internet Gateway, an Internet service provider based in St. Peters, Missouri, which was also a defendant. In January 1997, Blizzard officially launched Battle.net, a popular 24- hour online gaming service. Battle.net service is free and allows owners to play certain Blizzard games against each other, linked through the Internet. Because there were occasional difficulties with the Battle.net service, the defendants became frustrated and joined a group of volunteer game hobbyists, programmers and others in what became known as the bnetd project. This group focused on creating a program that attempted to emulate Blizzard s Battle.net service. Reverse engineering was used to learn Blizzard s protocol language and ensure that bnetd worked with Blizzard games. Eventually, the project was completed and the bnetd program was offered for free to anyone who wanted a copy of it. Because Blizzard games were designed to connect only to Battle.net servers, a utility program called BNS was developed to allow Blizzard games to easily connect to bnetd servers. Technically, it was not possible to implement a check for Blizzard s CD key validity in the bnetd program. As a result, some individuals were able to play pirated copies of Blizzard games using the bnetd server. 103 Pwned is a variant of the word owned. This term purportedly originated in Warcraft, in which a map designer misspelled owned. See Urban Dictionary < com/define.php?term=pwned>. For an example of EULAs that are used in practice, refer to Appendix A, which contains copies of an exemplary Electronic Arts EULA, Terms of Service and Privacy Policy, all of which have been reproduced with permission. Current versions of Electronic Arts EULAs, Terms of Service, and Privacy Policy can be found online: Electronic Arts < < and < respectively. The documents in Appendix A are made available with the express permission of Electronic Arts for reference purposes only, do not constitute legal advice and are not to be otherwise used or copied without the express written permission of Electronic Arts. 104 Davidson & Associates, Inc. v. Internet Gateway, 2004 U.S. Dist. LEXIS (E.D. Mo. 2004), affd 2005 U.S. App. LEXIS (8th Cir. 2005).

12 94 VIDEO GAME LAW Each of the defendants had previously agreed to a EULA in respect of Blizzard games, which provided: [S]ubject to the grant of license hereinabove, you may not, in whole or in part, copy, photocopy, reproduce, translate, reverse engineer, derive source code, modify, disassemble, decompile, create derivative works based on the Program, or remove any proprietary notices or labels on the program without the prior consent, in writing, of Blizzard. 105 As well, the defendants had executed a Terms of Use (TOU) for Blizzard s Battle.net which provided: You are entitled to use Battle.net for your own personal use, but you shall not be entitled to... (ii) copy, photocopy, reproduce, translate, reverse engineer, modify, disassemble, or de-compile, in whole or in part, any Battle.net software; (iii) create derivative works based on Battle.net; (iv) host or provide matchmaking services for any Blizzard software programs or emulate or redirect the communication protocols used by Blizzard as part of Battle.net, through protocol emulation, tunneling, modifying, or adding components to the Program, use of a utility program, or any other technique now known or hereafter developed for any purpose, including, but not limited to, network play over the Internet, network play utilizing commercial or noncommercial gaming networks, or as part of content aggregation networks without the prior written consent of Blizzard or exploit Battle.net or any of its parts for any commercial purpose The court effectively held that the EULA and TOU contracts trumped copyright law and were not pre-empted by it. 107 Most significantly, the EULA and TOU were held to be enforceable, even though a prohibition on reverse engineering violates the fair use doctrine. The court found that although reverse engineering as fair use is a firmly established copyright concept, private parties are free to contractually forego the limited ability to reverse engineer a software product under the exemptions of the Copyright Act: 108 The defendants in this case waived their fair use right to reverse engineer by agreeing to the licensing agreement. Parties may waive their statutory 105 Davidson & Associates, Inc. v. Internet Gateway, 2004 U.S. Dist. LEXIS at para. 13 (E.D. Mo. 2004). 106 Davidson & Associates, Inc. v. Internet Gateway, 2004 U.S. Dist. LEXIS at para. 14 (E.D. Mo. 2004). 107 The Copyright Act, 17 U.S.C. 301(b)(3) states that nothing limits any rights or remedies under the common law or statutes of any state with respect to activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright. The court found that the EULA and TOU are not statutorily pre-empted by the Copyright Act. This is because the contractual restrictions created by the EULA and TOU in question created rights that do not exist under copyright law, and therefore cannot be pre-empted by copyright law. 108 In this regard, the court followed Bowers v. Baystate Technologies., Inc., 2003 U.S. App. LEXIS 1423 (Fed. Cir. 2003), rather than Vault Corp. v. Quaid Software, Ltd., 1988 U.S. App. LEXIS 8456 (5th Cir. 1988).

13 THE GAMES 95 rights under law in a contract.... In this case, defendants gave up their fair use rights and must be bound by that waiver. 109 Further, the court rejected arguments that the EULA and TOU were unenforceable because they failed to square with the reasonable expectations of the parties, either because of oppression or surprise due to unequal bargaining power, or because the contract terms were so one-sided as to shock the conscience. 110 In this regard, the court pointed out that the defendants were computer programmers and administrators familiar with the language used and were not taken aback by the contract terms. The terms of the EULA and TOU were also not considered a misuse of Blizzard s copyright. The defence of abuse of copyright was firmly rejected: Considering these factors, the Court finds that the EULAs and TOU terms do not constitute copyright misuse. The language used does not prevent defendants from competing with Blizzard by prohibiting them or their employees from developing video game software as in Lasercomb or require defendants to use or buy only Blizzard games similar to the AMA s prohibition on use of a competitor s coding system in Practice Management. The parties can terminate the licenses at any time. Finally, the Court is reluctant to apply the copyright misuse defence as a defence to a contract claim, because the defence is normally used in copyright infringement actions and the copyright claim has been dismissed in this case. 111 On appeal, the Court of Appeals for the Eighth Circuit affirmed the District Court s decision to grant summary judgment. 112 The Eighth Circuit specifically affirmed that private parties are free to contractually waive their fair use rights under the Copyright Act, which includes their right to reverse engineer software. The Eighth Circuit also held that the defendants violated the access control provisions of the DMCA that prohibit circumvention of technological protection measures that effectively control access to a copyrighted work, and prohibit trafficking in devices that circumvent such technological protection measures. 113 The court held that the BNS program acted a prohibited circumvention device: 109 Davidson & Associates, Inc. v. Internet Gateway, 2004 U.S. Dist. LEXIS at para. 47 (E.D. Mo. 2004). 110 In a humorous attempt to show that few people read these conditions, Gamestation, a U.K. online video game retailer, added a clause on April 1, 2010 to their online terms and conditions, which stated that Gamestation owned the soul of anyone accepting the agreement. Eighty-eight per cent of customers reportedly did not notice it; the 12 per cent that did received gift vouchers. See Joe Martin, GameStation: We Own Your Soul, online: bitgamer < 111 Davidson & Associates, Inc. v. Internet Gateway, 2004 U.S. Dist. LEXIS at para. 51 (E.D. Mo. 2004). 112 Davidson & Associates v. Jung, 2005 U.S. App. LEXIS at **26 (8th Cir. 2005) U.S.C. 1201(a).

14 96 VIDEO GAME LAW Blizzard games, through Battle.net, employed a technological measure, a software secret handshake (CD key), to control access to its copyrighted games. The bnetd.org emulator developed by Appellants allowed the Blizzard game to access Battle.net mode features without a valid or unique CD key. As a result, unauthorized copies of the Blizzard games were played on bnetd.org servers. 114 The appellants argued that the interoperability exception 115 of the DMCA, which absolves individuals from liability for using circumvention technology for the sole purpose of trying to achieve interoperability of computer programs through reverse engineering applied to the alleged infringement of Blizzard games and Battle.net. In order for the interoperability exception to apply, the appellants had to establish that use of the BNS program in circumventing Blizzard s CD key protection did not constitute copyright infringement. The Eighth Circuit held that they did not: Appellants circumvention in this case constitutes infringement. As detailed earlier, Blizzard s secret handshake between Blizzard games and Battle.net effectively controlled access to Battle.net mode within its games. The purpose of the bnetd.org project was to provide matchmaking services for users of Blizzard games who wanted to play in a multi-player environment without using Battle.net. The bnetd.org emulator enabled users of Blizzard games to access Battle.net mode features without a valid or unique CD key to enter Battle.net. The bnetd.org emulator did not determine whether the CD key was valid or currently in use by another player. As a result, unauthorized copies of the Blizzard games were freely played on bnetd.org servers. 116 What is shockingly clear from Davidson is the extent to which the contractual terms of EULAs and TOUs can be used to overcome well established intellectual property rights At **26/* U.S.C. 1201(f). 116 Davidson & Associates v. Jung, 2005 U.S. App. LEXIS (8th Cir. Mo. 2005) at ** A picture of the legal landscape following Davidson is given in the Opening Appeal Brief of Defendants-Appellants Internet Gateway, Inc., Tim Jung, Ross Combs and Rob Crittenden at 39: Indeed, under the District Court s reasoning, all fair use rights protected by Congress, including fair use for the purposes of scholarship, criticism, or parody, could be prohibited through private contracts of adhesion or even outright bans by state legislatures. Movie studios could add language to the back of ticket stubs prohibiting newspaper or television critics from including any examples of dialogue in a critical review of the film. Publishers could shrinkwrap their novels with a license banning any high school English teacher or college professor from quoting the novel during a lecture. Clearly, Congress did not intend that the fair use rights that it worked so hard to protect in the Copyright Act and the DMCA could be so easily and completely vitiated through state law. Because Plaintiffs prohibition on all fair use, including fair use by reverse engineering, is a clear obstacle to the accomplishment of Congress s objective of protecting and encouraging fair use activities, Plaintiffs state law claim must be conflict preempted.

15 THE GAMES 97 D. iracing v. Robinson: Open Wheels, Closed Games In a series of decisions styled iracing.com Motorsports Simulations, LLC v. Tim Robinson, 118 which in part relied on Davidson, the District Court of Massachusetts enjoined a gamer from, and found the gamer liable for, modifying and distributing a PC-based racing simulator called NASCAR The executable file that is run when NASCAR 2003 is played is NR2003.exe. NR2003.exe includes a copy of a copy-protection program called SecuROM. SecuROM checks to see whether the NASCAR 2003 CD is in the computer s drive; if not, NR2003.exe shuts down. Everyone who played NASCAR 2003, including Robinson, had to agree to a EULA. The EULA includes the following terms: You may not, in whole or in part, copy, photocopy, reproduce, translate, reverse engineer, derive source code, modify, disassemble, decompile, create derivative works based on [NASCAR 2003], or remove any proprietary notices or labels on [NASCAR 2003] without the prior consent, in writing, of [iracing]. 119 Robinson modified NASCAR 2003 in several ways. First, in 2004, as one of several modders, he modified the NR2003.exe executable to create OWSC.exe, which introduced open wheel style cars to the game. Robinson made OWSC.exe available for download over the World Wide Web. In 2005, Robinson decompiled NR2003.exe and modified the lines of source code that governed the simulation of the NASCAR vehicles physical properties, such as shock rates and weight distribution, to again introduce open wheel cars to the game. Robinson again made this game available to the public. 118 Three decisions involving iracing and the modder, Tim Robinson, are relevant. The first is a memorandum and order for partial summary judgment, dated May 25, 2007, in which the District Court granted summary judgment in favour of iracing in respect of a DMCA claim against Robinson, but refused to grant summary judgment regarding copyright infringement on the basis that a triable issue existed concerning fair use: iracing.com Motorsports Simulations, LLC v. Tim Robinson, District Court for the District of Massachusetts, Civil Action No. 05cv11639-NG, Document 60. The second is a memorandum and order for summary judgment dated September 24, 2008, in which the District Court found Robinson liable for breaching an End User Licence Agreement it had with iracing: iracing.com Motorsports Simulations, LLC v. Tim Robinson, District Court for the District of Massachusetts, Civil Action No. 05cv11639-NG, Document 78. The third is a findings of fact and conclusions of law resulting from a bench trial in which the District Court found that Robinson had no fair use defence against iracing s claims of copyright infringement, and assessed quantum of damages payable by Robinson: iracing.com Motorsports Simulations, LLC v. Tim Robinson, District Court for the District of Massachusetts, Civil Action No. 05cv11639-NG, Document iracing Motorsport Simulations, LLC v. Robinson, No NG (D. Mass. May 25, 2007) at 14.

16 98 VIDEO GAME LAW Additionally, Robinson created a patch called NO-CD that could be applied to NASCAR 2003 so that SecuROM no longer operated, and so that a gamer could play NASCAR 2003 without having a copy of the game s CD in his or her computer. In response to Robinson s actions, iracing commenced suit against Robinson and alleged, among other things, that Robinson had infringed iracing s copyright in NASCAR 2003 by reverse engineering, modifying and distributing NASCAR 2003; was liable under the DMCA for circumventing SecuROM; and had violated the terms of the EULA. The District Court found in favour of iracing in respect of all of these allegations. The District Court found that Robinson was liable for copyright infringement by virtue of his unauthorized reverse engineering, modifying and distributing of NASCAR 2003, and that his actions were not sanctioned by fair use. The court did not find, however, that Robinson s agreeing in the EULA not to reverse engineer NASCAR 2003 prohibited him from making a fair use defence. Referencing Davidson, the court held that Robinson s waiving his fair use rights in the EULA could only lead to liability for breach of contract: [Davidson] did not hold that the existence of a contract waives a fair use defense, as plaintiff claims here. [Davidson] held that copyright and contract claims are to be considered separately. A defendant may successfully raise a fair use defense against a copyright infringement claim while still being found in breach of a contract not to copy.... Thus, even if Robinson contractually agreed in the EULA not to reverse engineer, modify or distribute the NASCAR 2003 code, that fact would go only to breach of contract, not to fair use. 120 In response to iracing s claim that the NO-CD patch contravened the DMCA, Robinson argued that even when using the NO-CD patch, gamers still needed to own an authentic version of NASCAR 2003: the user still had to have installed NASCAR 2003 using a valid CD key. Even assuming Robinson s claim was true, the District Court nonetheless found Robinson liable under the DMCA: Taking Robinson s allegations as true, it appears that there are two antipiracy devices on NASCAR 2003 SecuROM and the CD key described by Robinson of which NO-CD circumvents only the first. Nevertheless, NO-CD disabled one of the protections on NASCAR It is therefore a technology... primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work. Furthermore, it has only limited commercially significant purpose 120 iracing.com Motorsports Simulations, LLC v. Tim Robinson, District Court for the District of Massachusetts, Civil Action No. 05cv11639-NG, Document 60 at 14 [emphasis in original; citations omitted].

17 THE GAMES 99 or use other than to circumvent a technological measure that effectively controls access to a work. NO-CD violates the policy of the DMCA as well as its language. To hold that a patch only violates the DMCA if it, by itself, allows complete access to the target software would defeat the statute s goal of providing legal backup to software protections. 121 Given the clear evidence in the case of Robinson s decompiling, modifying and distributing NASCAR 2003, the District Court quickly and unsurprisingly also found that Robinson had breached the EULA. The inability of gamers not only to modify the game, as in iracing, but how the game is played, is particularly demonstrated in the case of MDY Industries, LLC v. Blizzard Entertainment, Inc. E. MDY Industries, LLC v. Blizzard Entertainment, Inc.: Not Bots In another action involving Blizzard, MDY Industries, LLC v. Blizzard Entertainment, Inc., 122 Blizzard relied on a Terms of Use (TOU) and the DMCA in order to control how one of its video games was played. The game in question was World of Warcraft (WoW), in which players assume the role of characters in a virtual universe and compete against each other to advance through WoW s various levels. 123 The WoW software included game client software and game server software. Players obtain the game client software by purchasing it and installing it on their personal computers. The game server software is located on a Blizzard-owned server. Players play WoW by loading the game client software on their personal computers and connecting to the Blizzard-owned server. In order to obtain the right to connect to the Blizzard-owned server, players pay Blizzard a monthly fee iracing.com Motorsports Simulations, LLC v. Tim Robinson, District Court for the District of Massachusetts, Civil Action No. 05cv11639-NG, Document 60 at 22 to 23 [emphasis in original; citations omitted]. 122 MDY Industries and Blizzard met in court several times. At the District Court level, two relatively important proceedings include 2008 U.S. Dist. LEXIS (D. Ariz. 2008), a proceeding in which Blizzard obtained summary judgment against MDY Industries for, inter alia, contributory and vicarious copyright infringement, and 2009 U.S. Dist. LEXIS 9898 (D. Ariz. 2009), a bench trial in which Blizzard obtained judgment against MDY for, inter alia, violations of the DMCA s access and copy control provisions. 123 World of Warcraft is incredibly popular. In October 2010, Blizzard stated that the game had 12 million active subscribers. See Jaz McDougall, World of Warcraft has 12 million active subscribers (October 7, 2010), online < 124 MDY Industries, LLC v. Blizzard Entertainment, Inc., 2009 U.S. Dist. LEXIS 9898 (D. Ariz. 2009) at **4/*962. As of November 2004, WoW had roughly 11,500,000 players and generated more than U.S. $1.5 billion annually for Blizzard.

18 100 VIDEO GAME LAW Blizzard owned the copyright for the WoW software code. To use the court s terms, the game client software included both literal and nonliteral elements protected by copyright. Literal elements were the compiled object code files resident on the players computers. Nonliteral elements were further subdivided as individual nonliteral elements and dynamic nonliteral elements. 125 Individual nonliteral elements were some of the 400,000 discrete visual and aural components that the players personal computers displayed to the players when appropriately prompted by the Blizzard-owned server. Dynamic nonliteral elements referred to the changing, dynamic WoW virtual universe in which the individual nonliteral elements interacted to create an immersive experience for the players. Blizzard did not employ any technological protection measures to inhibit access to nonliteral elements or individual nonliteral elements; however, Blizzard did use a technological protection measure known as Warden to prevent access to the dynamic nonliteral elements. Warden was designed to prevent the use of bots by WoW players. A bot is a program that plays WoW for its owner while the owner is away from his or her computer. Players who used bots could advance more quickly through WoW than players who did not. Consequently, players who used bots had an unfair advantage over players who did not, which resulted in a substantial number of players complaining to Blizzard and damage to Blizzard s reputation and goodwill. Warden was designed to prevent the use of bots by detecting their presence and by preventing the bot owners from connecting to the Blizzard-owned server. Notwithstanding Blizzard s efforts, MDY programmed and distributed one bot, named Glider, that could successfully evade Warden. At a proceeding for summary judgment, the court considered whether WoW players who also used Glider had infringed Blizzard s copyright in WoW, and whether MDY Industries was accordingly liable for contributory and vicarious copyright infringement. In respect of whether WoW players who used Glider were liable for copyright infringement, the court found that the answer was yes. At the heart of this finding was the court s conclusion that by using Glider, WoW players were violating sections of the TOU that limited the scope of the copyright licence given to WoW players by Blizzard to play WoW (i.e., contractual conditions), as opposed to simply contractual covenants that set out the rules of the game. In this regard, the court commented: [T]he limitations on scope are found in section 4 of the TOU. The provisions of section 4 generally are designed to preserve and protect Blizzard s proprietary interests in its software and game, including its copyright interests. Subsection A of section 4 prohibits users from intercepting, emulating, or redirecting the proprietary components of the game, activities that would U.S. Dist. LEXIS 9898 (D. Ariz. 2009) at **8-9/*964.

19 THE GAMES 101 include the exclusive copying and distribution rights possessed by Blizzard under section 106 of the Copyright Act. Subsection B prohibits users from modifying files that are part of the game, an activity akin to the creation of derivative works another right possessed exclusively by Blizzard as copyright holder. Subsection C prohibits users from disrupting the game or others players use of the game. Subsection D reserves Blizzard s exclusive right under section 106 of the Act to create derivative works. The provisions of section 4 thus make clear that although users are licensed to play WoW and to use the game client software while playing, they are not licensed to exercise other rights belonging exclusively to Blizzard as the copyright holder copying, distributing, or modifying the work. The provisions are limits on the scope of the license granted by Blizzard. 126 Playing WoW necessarily required it to be copied into RAM. Under Ninth Circuit law, copying licensed software into RAM without authorization constitutes copyright infringement. Because WoW players who used Glider were operating outside the scope of the copyright licence granted by Blizzard and therefore lacked authorization to make any copies of WoW, the court found that they were infringing Blizzard s copyright. Given MDY s development and sale of Glider, its knowledge that the user of Glider resulted in a breach of the TOU, and the financial benefit MDY received through sales of Glider, the court also found MDY liable for contributory and vicarious copyright infringement. At a bench trial following the proceeding for summary judgment, one issue was whether using and distributing Glider violated the access and copy control provisions of the DMCA because of Glider s ability to circumvent Warden. The court again found that the answer was yes. The District Court found that Warden did not prevent access to literal elements, as players could access the object code files stored on their computers. The court also found that Warden did not prevent access to individual nonliteral elements, as players could view and listen to the individual nonliteral elements without connecting to the Blizzard-owned server and triggering Warden. However, the court found that Warden did effectively prevent access to the dynamic nonliteral elements of WoW: Although an owner of the game client software may thus view and listen to the discrete nonliteral components of the game stored on his hard drive, the user cannot create or experience the dynamic, changing world of the game without signing on to a Blizzard server. The user could call up discrete elements to create a landscape and place a discrete character of a monster within it, and thus achieve a single visible scene on his computer screen, but the scene would not be dynamic the user could not fight the monster, travel through the countryside, and encounter other players or scenes as he 126 MDY Indus., LLC v. Blizzard Entertainment, Inc., 2008 U.S. Dist. LEXIS at paras. **11-12 (D. Ariz. 2008) [citations omitted].

20 102 VIDEO GAME LAW can while playing WoW. Thus, although the individual nonliteral illustrations and sounds created by the game client software may be viewed in isolation, or even in limited combinations, they cannot be viewed in the dynamic context of the WoW game, or controlled or choreographed by a Blizzard server, unless the user logs on and stays connected to a Blizzard server. To do so, of course, requires the user to bypass scan.dll and the resident component of Warden. Warden therefore controls access to the dynamic nonliteral elements of the WoW game environment. 127 Glider s circumvention of Warden in the context of providing access to the dynamic nonliteral elements therefore breached the DMCA s access control provisions. With regard to the DMCA s copy control provisions, the District Court commented that the copy-control provisions protected the right to copy works. Warden, when not circumvented by Glider, prevented players from copying the dynamic nonliteral elements of WoW. Because circumventing Glider allowed the players to copy WoW s dynamic nonliteral elements without Blizzard s permission, the court determined that using Glider also violated the DMCA s copy-control provisions. The Court of Appeals affirmed the District Court s decision to hold MDY liable for violating the DMCA s access-control provisions, but overturned the District Court s decision to hold MDY liable for violating the DMCA s copy-control provisions, and similarly overturned the District Court s findings that MDY was liable for contributory or vicarious copyright infringement. 128 With regard to copyright infringement, the Court of Appeals commented on the distinction between a contractual covenant and a contractual condition, saying that a contractual covenant is a manifestation of intention to act or refrain from acting in a particular way, while a contractual condition is an act or event that must occur before a duty to perform a promise arises. 129 Applying these principles, the Court of Appeals concluded that the provisions of section 4 of the TOU, which the District Court had held to be contractual conditions, were in fact contractual covenants: The antibot provisions at issue in this case, ToU 4(B)(ii) and (iii), are similarly covenants rather than conditions. A Glider user violates the covenants with Blizzard, but does not thereby commit copyright infringement because Glider does not infringe any of Blizzard s exclusive rights. For instance, the use does not alter or copy WoW software. 127 MDY Indus., LLC v. Blizzard Entertainment, Inc., 2009 U.S. Dist. LEXIS 9898 (D. Ariz. 2009) at **11 and **12 and * MDY Indus., LLC v. Blizzard Entertainment, Inc., 2010 U.S. App. LEXIS 25424, 629 F.3d 928, (9th Cir. 2010). 129 MDY Indus., LLC v. Blizzard Entertainment, Inc., 2010 U.S. App. LEXIS 25424, 629 F.3d 928 at 939 (9th Cir. 2010).

21 THE GAMES 103 Were we to hold otherwise, Blizzard or any software copyright holder could designate any disfavored conduct during software use as copyright infringement, by purporting to condition the license on the player s abstention from the disfavored conduct. The rationale would be that because the conduct occurs while the player s computer is copying the software code into RAM in order for it to run, the violation is copyright infringement. This would allow software copyright owners far greater rights than Congress has generally conferred on copyright owners. We conclude that for a licensee s violation of a contract to constitute copyright infringement, there must be a nexus between the condition and the licensor s exclusive rights of copyright. Here, WoW players do not commit copyright infringement by using Glider in violation of the ToU. MDY is thus not liable for secondary copyright infringement, which requires the existence of direct copyright infringement. 130 Because Glider users were breaching only covenants of the TOU as opposed to acting outside the scope of their copyright licence, they were not liable for copyright infringement. Accordingly, MDY could not be liable for contributory or vicarious copyright infringement. The Court of Appeals affirmed the District Court s finding that MDY was liable for violating the DMCA s access-control provisions. However, because the Court of Appeals concluded that users of Glider were not committing copyright infringement simply by playing WoW, it accordingly overturned the District Court s decision that MDY had violated the DMCA s copy control provisions. 131 Given Davidson and MDY, a question that arises is whether there is any practical way to rely on fair use rights, given that almost all contracts of adhesion in the video game context will include a waiver of these rights, and that complementing any waiver will be technological protection measures protected by the DMCA. It is questionable whether the current legal framework has taken the fair use rights and has made them applicable only if 130 MDY Indus., LLC v. Blizzard Entertainment, Inc., 2010 U.S. App. LEXIS 25424, 629 F.3d 928 at 941 (9th Cir. 2010) [citations omitted]. 131 The Ninth Circuit construed the access-control provisions of the DMCA differently than the Federal Circuit. See, e.g., MDY Indus., LLC v. Blizzard Entertainment, Inc., 2010 U.S. App. LEXIS 25424, 629 F.3d 928 at 943 et seq. (9th Cir. Ariz. 2010). et seq. For violation of the DMCA s access control provisions, the Federal Circuit requires a circumvention device to facilitate copyright infringement; simply facilitating access to a copyrighted work is insufficient to result in liability. In contrast, the Ninth Circuit construed the DMCA s access-control provisions to apply even if only access per se to the copyrighted work is facilitated. The District Court had also found that both MDY and Donnelly were liable for tortious interference with contract by supplying Glider to WoW players, who then breached Blizzard s TOU by using Glider. The Ninth Circuit vacated this finding and remanded for trial.

22 104 VIDEO GAME LAW copyright owners acquiesce or allow them to be utilized, which arguably defeats the purpose of having them at all. 132 F. Not Such a Minor Point The law surrounding the enforceability of contracts with minors is generally uncertain and varies significantly depending on the applicable jurisdiction and context. In most common law jurisdictions, the default rule is that minors do not have the capacity to enter into and be bound by contracts subject to specific exceptions, which vary by jurisdiction. Some of these exceptions include: 133 contracts for necessities (for example, food, clothing, medicine); 134 beneficial contracts of services (for example, apprenticeship, service, education, livelihood); the right of a minor to enter into a contract subject to the right of the minor to disaffirm the contract upon reaching the age of majority; or the requirement that a minor ratify the contract on the age of majority. 135 In addition, some jurisdictions have enacted legislation to address minors providing services in specific industries, such as the entertainment industry Also of interest is an earlier Court of Appeals decision, Vernor v. Autodesk, 2010 U.S. App. LEXIS 18957, 621 F.3d 1102 (9th Cir. 2010), petition for certiorari denied 132 S. Ct. 105 (U.S. 3 October 2011) in which the court held that a software user is a licensee rather than an owner where the copyright owner (1) specifies that the user is granted a licence; (2) significantly restricts the user s ability to transfer the software; and (3) imposes notable use restrictions. In Vernor, the court held that users of AutoCAD software were licensees and not owners of the software, and therefore could not transfer the software to others without Autodesk s permission. Some believe that freedom of expression should be at the forefront of our copyright system. If contract law has now superseded copyright law in its importance, query whether freedom of expression should be considered a more important principle than contract law. Such a view could present a logical framework to reinvigorate fair use rights. See Tony Pak, Freedom of Expression or Copyright: Should One Take Precedence over the Other? (November 11, 2009), online: IP Osgoode < For another decision beneficial to copyright holders, see a decision of the Tenth Circuit, Golan v. Holder, 2010 U.S. App. LEXIS (10th Cir. 2010), which overturned a District Court decision and held that the Uruguay Round Agreements Act, online: The United States Patent and Trademark Office < was constitutional. The Uruguay Round Agreements Act restored copyright protection to certain non-us works that had previously been in the public domain. Golan has been appealed to the United States Supreme Court. 133 See Bob Tarantino, A Minor Conundrum: Contracting with Minors in Canada for Film and Television Producers ( ) 29 Hastings Comm. & Ent. L.J. 45 for a more detailed analysis of the state of the law in various U.S. and Canadian jurisdictions. 134 See, for example, the Ontario Sale of Goods Act, R.S.O. 1990, c. S.1, s. 3(1). 135 See, for example, the Ontario Age of Majority and Accountability Act, R.S.O. 1990, c. A For example, the State of California and the State of New York have enacted legislation to provide the conditions under which a minor may be bound by a contract of services in the entertainment industry (see California Civil Code, online: Legislative Counsel State of California < California Family Code, online: Legislative Counsel State of California < query?codesection=fam> and New York Code General Obligations Law, online: Laws of

23 THE GAMES 105 In the video game context, the enforceability of contracts with minors, such as EULAs and contracts granting rights in content provided by minors, 137 are of particular concern. With respect to EULAs, many game publishers have attempted to address this concern by drafting EULAs that require users to represent that they are of the age of majority or require parental consent. However, the legal effectiveness of these provisions is suspect, considering that they are contractual in nature and would be subject to the same general uncertainty in the law affecting the enforceability of contracts with minors. Ultimately, the video game publisher must balance the risks of entering into potentially unenforceable EULAs with minors versus the cost of instituting practices that diminish the significant revenue potential associated with selling games to minors. IV. NAMES, GAMES AND CLAIMS Trademarks are proving to be an essential part of selling video games. Branding is important in many industries, but seems increasingly so in the video game industry. 138 New York < TARGET=VIEW>). 137 A teenage girl whose topless photograph appeared as a prize in The Guy Game sued Gathering of Developers Inc., Top Heavy Studios, Sony, Microsoft and others, claiming that any consent she may have given for the inclusion of her image in the game was moot since she was a minor at the time the consent was given. The court issued a preliminary restraining order prohibiting the distribution of the game pending the outcome of the case. The final resolution of this case has not been made publically available. 138 An ironic example is the domain name dispute between The Game Group Plc., which operates more than 500 video game retail stores in Europe, and Garth Sumpter over the Internet address game.co.uk. See Kieren McCarthy Domain dispute puts question mark over UK ecommerce (February 16, 2005), online: The Register < game_domain_dispute/>. In another domain name dispute, Activision was successful in its complaint against Anthony Abraham, who at the time was the owner of the domain name ModernWarfare3.com. Activision took issue with Abraham s hosting of a webpage under the domain name that redirected visitors to Electronic Art s website for Battlefield 3, a rival game to Modern Warfare 3. See Rachel Weber, Activision triumphs in Modern Warfare3.com dispute (September 8, 2011), online: gamesindustry.biz < In January 2011, Apple and ios developer Lima Sky sent out trademark infringement warnings to a number of other developers that used Doodle in the name of their apps, such as Doodle Monster and Doodle Hockey. Lima Sky has a trademark on only the full name of their game, Doodle Jump, and after public outcry they withdrew their request that the other games names change. See Andy Chalk, Doodle Jump Dev Admits Trademark Claim Overreached (January 14, 2011) online: The Escapist < Doodle-Jump-Dev-Admits-Trademark-Claim-Overreached>. The authors of this book were originally planning to title it Doodle Video Game Law but decided not to take any chances.