Cheaters Never Prosper: MDY v. Blizzard

[Crossposted at Innovators Network]

Mothers have always told their children cheaters never prosper. In MDY v. Blizzard, the Ninth Circuit has held that adults who help cheaters don’t prosper either.

The case involves the manufacturer of a popular online video game (Blizzard’s Worlds of Warcraft) which alleges copyright infringement and violations of the Digital Millennium Copyright Act (DMCA) against a company (MDY) that designed a program allowing users to cheat the game.  Worlds of Warcraft is a game that is played exclusively online in a multiuser environment. Players who use MDY’s cheat program advance more quickly through the game’s early stages without actually playing — a robot manages the character.  Nearly five percent of all non-cheating players have registered complaints that this works to their competitive disadvantage and degrades quality of play for the fair playing masses (ten million in total).

The key issue for the appellate court to decide was whether MDY’s cheat infringed on Blizzard’s copyrighted works and violated the DMCA.  The Ninth Circuit moved to vacate the decision of a lower court while ruling that MDY did indeed violate the DMCA.  This means we haven’t heard the last of this case.

So what are the legal implications?  Indulge me a bit as we examine this in the language of the court.  First, from the Court’s ruling:

The Court concluded that MDY… traffics in a technology, or part thereof, that is primarily designed, produced or marketed for, or has limited commercial significant use other than, circumventing a technological measure that effectively controls access to a copyrighted work.

Some organizations rushed to publish quick analyses of the decision that, unfortunately, missed the point.  After having the opportunity to fully review the decision in the context of related and impacted cases, this is what I believe has, in fact, just occurred.

Based upon the Ninth Circuit reading of Lexmark (and the text of 1201(a)), the Ninth Circuit’s interpretation of the DMCA does not compel a different result in a case like Chamberlain.  Under MDY, It would appear that you must show that access controls were intended to control access in order to protect a copyrighted work–not in order to use some code as an excuse to eliminate competition in the secondary market for garage-door controllers. Chamberlain and Storage Tek don’t really say that circumvention is only actionable if it is the “nexus” that enables actual copyright infringement, and MDY did not really say that no “nexus” to the protection of a copyrighted work is required to prove a 1201(a) violation.  Some have distorted this point.

What really happened is that MDY v. Blizzard confirmed both the validity of software-licensing agreements and the wisdom of the anticircumvention rights that Congress and President Clinton conferred upon copyright owners in the DMCA. Nevertheless, the Ninth Circuit’s highly technical analyses should not obscure the practical implication of its decision: The Court held that, together, software-licensing agreements and the DMCA empower creators of online games to prevent other companies from profiting by helping cheaters breach their legal duties not to ruin wildly popular games enjoyed by millions of who play by the rules.

Thomas Sydnor II is Senior Fellow in Intellectual Property at the Innovator’s Network, a public-interest-focused think tank that studies innovation in Washington, D.C.  He researches and writes on intellectual-property law, particularly on copyrights.