MDY Industries, LLC v. Blizzard Entertainment, Inc. et al

Filing 95

ORDER AND STIPLATED JUDGMENT - Blizzard shall be entitled to recover the total sum of $6,000,000 as monetary damages for counts I, II and III of its Counterclaims and Third Party Complaint related to the sale of Glider up through and including September 1, 2008. Blizzard shall not be entitled to double or triple recovery for counts I, II and III. That is, Blizzard shall be entitled to receive a total of $6,000,000 in damages for counts I, II and III. However, should liability on any one or two of the counts be reversed on appeal, any one of these counts independently supports the $6,000,000 award. In the event that the Court determines that Michael Donnelly is personally liable, either individually or jointly and severally, under counts I, II, or III, this stipulation shall extend to him. The parties shall submit their disputed and undisputed statements of facts and law related to the DMCA claim on September 10, 2008. Counts V and VII of Blizzard's Counterclaims and Third Party Complaint alleging trademark infringement and unjust enrichment are hereby dismissed by stipulation of the parties. Signed by Judge David G Campbell on 9/26/08. (KMG)

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MDY Industries, LLC v. Blizzard Entertainment, Inc. et al Doc. 95 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA ) ) Plaintiff/Counterdefendant ) ) ) ) vs. ) ) BLIZZARD ENTERTAINMENT, INC., ) and VIVENDI GAMES, INC. ) ) Defendants/Counterclaimants ) ) ) BLIZZARD ENTERTAINMENT, INC., ) and VIVENDI GAMES, INC. ) ) Third-Party Plaintiffs, ) ) vs. ) ) MICHAEL DONNELLY, ) ) Third-Party Defendant. ) ) MDY INDUSTRIES, LLC, Case No.: CV06-02555-PHX-DGC ORDER AND STIPULATED JUDGMENT In this Court's July 14, 2008 Order, the Court granted summary judgment in favor of Blizzard with respect to MDY's liability for tortious interference (Count I) and contributory and vicarious copyright infringement (Counts II-III). That Order also granted summary judgment in favor of MDY on a portion of the DMCA claim (Count IV) and the unfair competition claim (Count VI) and contemplated that trial would follow Dockets.Justia.com 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 on damages for Counts I, II and III as well as on the claims, or portions thereof, that remained unresolved -- portions of the DMCA claim, the trademark claim, and the unjust enrichment claim. In support of the judgment on damages the parties wish the Court to enter, the parties jointly submit that the following undisputed facts would have been presented to the jury if trial proceeded on the damages claim: 1. MDY began selling Glider on June 14, 2005. Through September 10, 2008, MDY has sold approximately 120,000 licenses for Glider. The amount of gross revenues received by MDY from the sale of Glider from June 14, 2005 through September 10, 2008 is approximately $3.5 million dollars. 2. Blizzard spends at least $942,614.57 per year responding to customer complaints as to bots generally and implementing a bot enforcement program to decrease the number of bots in the game. Glider represents the large majority of bots used in connection with World of Warcraft. 3. Between December 22, 2004 and March 18, 2008, Blizzard received more than 465,000 in-game petitions from users complaining about bots. Several thousand of these petitions mention Glider by name. Blizzard has continued to receive complaints about bots generally, and Glider specifically, after March 18, 2008. In addition, the parties agree that if this matter proceeded to a trial on damages, Blizzard would assert and introduce evidence in an attempt to prove the following disputed facts and legal conclusions: -2- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. That MDY and/or Donnelly's conduct caused harm to Blizzard both in the form of the direct expenses used to combat Glider use and infringement, as well as in the form of lost subscription revenue, lost profits, and harm to Blizzard's goodwill and reputation. 2. That Blizzard's damages expert would testify that the lost subscription revenue and harm to Blizzard's goodwill and reputation can be quantified to exceed $20 million dollars. 3. That MDY and/or Donnelly's conduct was willful and wanton and an award of the highest amount of statutory damages--$2,500 per sale of the Glider software--would be appropriate. 4. That Blizzard is entitled to an award of punitive damages against MDY and Donnelly for their intent to cause injury to Blizzard or because they were motivated by spite or ill will or because MDY and Donnelly acted to serve their own interests, having reason to know and consciously disregarding a substantial risk that their conduct might significantly injure Blizzard. Although MDY and Blizzard would contest these disputed facts and conclusions of law, the parties have agreed that given the likelihood that some amount of damages would be awarded, a stipulated judgment for the amount of damages to which Blizzard is entitled to recover on Counts I, II and III of its Counterclaims and Third Party Complaint (the "Complaint") is an appropriate method to resolve the issue of damages. The parties agree and understand that this stipulated judgment will be the final word on Blizzard's right to recover damages on Counts I, II and III of the Complaint. That is, the parties knowingly waive their right to argue in any future proceeding that the damages that Blizzard is entitled to receive on Counts I, II and III of the Complaint for -3- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 conduct from June 14, 2005 through September 1, 2008 should be more or less than the damages specified herein. Furthermore, even if the determinations of summary judgment are appealed and reversed or modified on appeal, this stipulated judgment as to damages shall remain in effect as a stipulation as to the agreed-upon amount of damages related to each of Counts I, II and III of the Complaint so long as liability on any of those counts is affirmed, or is subsequently proven to a jury. WHEREFORE, based upon the disputed and undisputed facts and the agreement of the parties, IT IS ORDERED: 1. Blizzard shall be entitled to recover the total sum of $6,000,000 as monetary damages for counts I, II and III of its Counterclaims and Third Party Complaint related to the sale of Glider up through and including September 1, 2008. 2. Blizzard shall not be entitled to double or triple recovery for counts I, II and III. That is, Blizzard shall be entitled to receive a total of $6,000,000 in damages for counts I, II and III. However, should liability on any one or two of the counts be reversed on appeal, any one of these counts independently supports the $6,000,000 award. 3. In the event that the Court determines that Michael Donnelly is personally liable, either individually or jointly and severally, under counts I, II, or III, this stipulation shall extend to him. 4. The parties shall submit their disputed and undisputed statements of facts and law related to the DMCA claim on September 10, 2008. 5. Counts V and VII of Blizzard's Counterclaims and Third Party Complaint alleging trademark infringement and unjust enrichment are hereby dismissed by stipulation of the parties. -4- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated this 26th day of September, 2008. -5-