MDY Industries vs. Blizzard LLC

The case and how it applies to VXGaming LLC

VXGaming Background

• Software development company that plans to develop a gaming system where players can play game tournaments from home with cash prizes

• Profits by charging a 10% commission on each game played

• The more players, the more profit

• Hackers / Cheaters• AIM-Bots• Wall hacking• Modified player models• Ruins the credibility of the company• Accounting nightmare of refunding players• Tolerating any sort of cheating will destroy the

business

The Issue

• Blizzard Entertainment has been dealing with similar issues in World of Warcraft

• People run “bots” [programs that play the game for them by itself] in order to gain in-game currency that they can sell for real money

• Have been fairly successful in shutting down people creating unauthorized 3rd party software for WoW through Cease and Desist letters

I’m not the only one

• Warden is World of Warcraft’s anti-cheat mechanism• Operates by scanning the memory of a computer for

known signatures of unauthorized software [similar to what a virus scanner does]

• Prevents the player from running WoW if unauthorized software is found and reports the account to Blizzard so they can suspend/ban the player

• Terms of Use state that it is illegal for players to run 3rd party programs that modify the behavior of the game.

Warden and ToU

• Creator of WoWGlider, a popular bot for World of Warcraft

• Allows the player to level up and acquire items while being away from their computer

• Michael Donnelly is the one and only employee of MDY Industries

MDY Industries LLC

• Blizzard’s attorneys show up at Michael Donnelly’s door and serve him with a Cease and Desist, where he has to immediately stop distribution of WoWGlider and hand over all profits

• Michael Donnelly refuses to stop distributing WoWGlider

• Mr. Donnelly proceeds to the court house and files a civil case against Blizzard in order to get a declaratory judgement that it is not infringing any rights, copyright, or otherwise owned by Blizzard Entertainment

The Case

• Tortious Interference with Contract• Contributory Copyright Infringement• Vicarious Copyright Infringement• Violation of the Digital Millennium Copyright Act• Trademark Infringement• Unfair Competition• Unjust Enrichment• Alleges that MDY Industries is the alter ego of

Michael Donnelly

The Counter Claim

• Blizzard argues that ‘Warden’ is a copyright protection device because it prevents the game executable from being launched when unauthorized software is detected

• WoWGlider circumvents ‘Warden’• Blizzard has copyrighted the code for their game client• Blizzard argues that because ‘Warden’ is circumventing the

copy of the game from the hard drive into RAM [Random Access Memory] is an unauthorized copy

• Copying a program into RAM is something that happens no matter what application you launch as it is the way the operating system is designed

The Trick

• Michael Donnelly found GUILTY of counts I, II and III [Tortious Interference with Contract, Contributory Copyright Infringement, Violation of the DMCA]

• Personally held liable for $6,500,000 in damages to Blizzard

• If he is successfully in appealing any one, or two of the counts in Appellate Court, then the remaining count will cover the entire $6.5 million

The Judgment

• Copyright the code• Add in Terms of Use that the user is not

allowed to modify the software in any way• Bundle the software with a ‘copyright

protection device’• This will give me the ability to go after

cheaters legally by using the Blizzard case as a precedent

How do I apply it to my business?

• Questions or comments?

Thank You