MDY INDUSTRIES, LLC v. Blizzard Entertainment
629 F.3d 928
9th Cir.2011Background
- Blizzard created World of Warcraft (WoW), a massively multiplayer online game with a two-part structure (game client and online server).
- MDY and Donnelly developed and sold Glider, a bot that automatically plays WoW’s early levels for players.
- Blizzard claimed MDY’s actions violated copyright, DMCA §§ 1201(a)(2) and (b)(1), and tortious interference with Blizzard’s contracts; MDY sought declaratory judgment that Glider did not infringe.
- Warden, Blizzard’s anti-bot tech, was introduced to block Glider; MDY then modified Glider to evade detection and launched Glider Elite with anti-detection features.
- Initial district court rulings found MDY liable for some copyright and contract claims, andMDY and Donnelly personally liable; on appeal the court reversed some holdings and remanded on others.
- Key issue centers on whether WoW players are licensees or owners of copies, and whether ToU/ToS terms are conditions or covenants affecting copyright infringement analysis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Secondary infringement viability | Blizzard argues MDY caused direct infringement via Glider users. | MDY contends license framework or essential-step defense negates liability. | Glider liability rejected for 1201(a)(2) in core elements; remanded on tort. |
| Essential step defense / ownership | Blizzard owns the rights; players’ RAM copying constitutes infringement absent license defense. | MDY claims players own copies or are licensees; essential step may bar infringement. | WoW players are licensees, not owners; essential step defense unavailable; Glider impermissible under license scope. |
| DMCA §1201(a)(2) and §1201(b)(1) applicability to dynamic vs. literal elements | Warden’s access controls and Glider’s evasion violate both provisions. | Some elements are not effectively controlled or protected by DMCA measures; different nexus. | MDY liable under §1201(a)(2) for dynamic non-literal elements; not liable under §1201(b)(1) for those elements; others rejected. |
| Tortious interference with contract | MDY knowingly interfered with Blizzard’s contracts by aiding bot usage and evading detection. | MDY contends ambiguous contract terms and potential legitimate business interests; facts are contested. | Summary judgment vacated; issues of material fact remain; remand for trial on Arizona tortious interference claim. |
| Copyright act preemption of tort claim | Tort claim should be preempted by the Copyright Act. | Contractual rights not equivalent to exclusive copyright rights; not preempted. | Tortious interference not preempted; however, remand on factual questions. |
Key Cases Cited
- Vernor v. Autodesk, Inc., 621 F.3d 1102 (9th Cir. 2010) (distinguishes owners vs. licensees for essential step defense)
- Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115 (9th Cir. 1999) (essential step and license scope framework)
- ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) (copyright vs. contract rights dichotomy; worlds apart)
- Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178 (Fed. Cir. 2004) (infringement nexus requirement for §1201(a)(2) liability)
- Lexmark International, Inc. v. Static Control Components, 387 F.3d 522 (6th Cir. 2004) (authentication/access controls; analogous access cases)
- Storage Tech. Corp. v. Custom Hardware Eng’g. Constr., 421 F.3d 1307 (Fed. Cir. 2005) (infringement nexus considerations under §1201)
- A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) (direct infringement nexus for secondary liability; general rule)
- Sun Microsystems, Inc. v. Microsoft Corp. (Sun I), 188 F.3d 1115 (9th Cir. 1999) (owner-licensee distinctions and the scope of licenses)