MDY Industries vs Blizzard Inc Case Analysis


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MDY Industries vs Blizzard Inc Case Analysis

  1. 1. MDY Industries vs. Blizzard LLC<br />The case and how it applies to VXGaming LLC<br />
  2. 2. VXGaming Background<br />Software development company that plans to develop a gaming system where players can play game tournaments from home with cash prizes<br />Profits by charging a 10% commission on each game played<br />The more players, the more profit<br />
  3. 3. Hackers / Cheaters<br />AIM-Bots<br />Wall hacking<br />Modified player models<br />Ruins the credibility of the company<br />Accounting nightmare of refunding players<br />Tolerating any sort of cheating will destroy the business<br />The Issue<br />
  4. 4. Blizzard Entertainment has been dealing with similar issues in World of Warcraft<br />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<br />Have been fairly successful in shutting down people creating unauthorized 3rd party software for WoW through Cease and Desist letters<br />I’m not the only one<br />
  5. 5. Warden is World of Warcraft’s anti-cheat mechanism<br />Operates by scanning the memory of a computer for known signatures of unauthorized software [similar to what a virus scanner does]<br />Prevents the player from running WoW if unauthorized software is found and reports the account to Blizzard so they can suspend/ban the player<br />Terms of Use state that it is illegal for players to run 3rd party programs that modify the behavior of the game.<br />Warden and ToU<br />
  6. 6. Creator of WoWGlider, a popular bot for World of Warcraft<br />Allows the player to level up and acquire items while being away from their computer<br />Michael Donnelly is the one and only employee of MDY Industries<br />MDY Industries LLC<br />
  7. 7. 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<br />Michael Donnelly refuses to stop distributing WoWGlider<br />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 <br />The Case<br />
  8. 8. Tortious Interference with Contract<br />Contributory Copyright Infringement<br />Vicarious Copyright Infringement<br />Violation of the Digital Millennium Copyright Act<br />Trademark Infringement<br />Unfair Competition<br />Unjust Enrichment<br />Alleges that MDY Industries is the alter ego of Michael Donnelly<br />The Counter Claim<br />
  9. 9. Blizzard argues that ‘Warden’ is a copyright protection device because it prevents the game executable from being launched when unauthorized software is detected<br />WoWGlider circumvents ‘Warden’<br />Blizzard has copyrighted the code for their game client<br />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<br />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<br />The Trick<br />
  10. 10. Michael Donnelly found GUILTY of counts I, II and III [Tortious Interference with Contract, Contributory Copyright Infringement, Violation of the DMCA]<br />Personally held liable for $6,500,000 in damages to Blizzard<br />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<br />The Judgment<br />
  11. 11. Copyright the code<br />Add in Terms of Use that the user is not allowed to modify the software in any way<br />Bundle the software with a ‘copyright protection device’<br />This will give me the ability to go after cheaters legally by using the Blizzard case as a precedent<br />How do I apply it to my business?<br />
  12. 12. Questions or comments?<br />Thank You<br />