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

Filing 60

Filed (ECF) Appellants Michael Donnelly and MDY Industries, LLC in 09-15932, Appellees Michael Donnelly and MDY Industries, LLC in 09-16044 petition for rehearing en banc (from 02/17/2011 opinion). Date of service: 02/17/2011. [7667382] [09-15932, 09-16044] (LV)

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

Doc. 60

Appeals No. 09-15932 and 09-16044 In the UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

MDY INDUSTRIES LLC AND MICHAEL DONNELLY, Plaintiffs-Appellants, v. BLIZZARD ENTERTAINMENT, INC. AND VIVENDI GAMES, INC., Defendants-Appellees. APPEAL FROM THE UNITED STATES DISTRICT COURT, DISTRICT OF ARIZONA CASE NO. 06 CIV. 2555 JUDGE DAVID G. CAMPBELL PETITION FOR EN BANC REHEARING

Lance C. Venable Joseph R. Meaney Venable, Campillo, Logan & Meaney, P.C. 1938 East Osborn Rd. Phoenix, Arizona 85016 [phone] Attorneys for Plaintiff-Appellant

Dockets.Justia.com

TABLE OF CONTENTS I. II. III. Argument. ...................................................................................................1 Certificate of Compliance...........................................................................3 Appendix ....................................................................................................4

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TABLE OF AUTHORITIES

CASES MDY Industries, LLC v. Blizzard Entertainment, Inc., --- F.3d ----, 2010 WL 5141269 (9th Cir. 2010) ............................................................................1 STATUTES 17 U.S.C. § 1201 ...................................................................................................1

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I.

Argument. On December 14, 2010, a panel of this Court issued a groundbreaking

opinion on the meaning of §1201 of the Digital Millennium Copyright Act.1 It was correct in all respects but one: in part of its opinion, the panel read § 1201(a)(2) inconsistently with § 1201(f).2 When MDY pointed this out on rehearing,3 the panel altered its opinion to state that MDY never raised this point to either this Court or the District Court and therefore waived its argument about contradictory readings of § 1201(a)(2) and § 1201(f).4 This disposition is plainly wrong. First, waiver does not free the court to misconstrue a statute and ignore the in pari materia rule of statutory construction--especially when the two provisions are easily reconcilable. The en banc court should correct this flaw, appearing as it does in an important case of first impression. And if it does, the full Court will also see that there was no waiver at all: MDY's Petition cited to the record and demonstrated that its briefs before this Court and in the District Court contained arguments requesting that the Court MDY Industries, LLC v. Blizzard Entertainment, Inc., --- F.3d ----, 2010 WL 5141269 (9th Cir. 2010). 2 See id; see also 17 U.S.C. § 1201. 3 See generally, MDY Industries LLC's Petition for Panel Rehearing filed with this Court on January 25, 2011. 4 See Order Denying MDY's Petition for Panel Rehearing, Docket Entry 70, (February 17, 2011). -11

harmonize the § 1201(a) and § 1201(f) and find that MDY's Glider software fell under the § 1201(f) exception to § 1201(a).5 The principle is an important one to observe: a court must always read statutes ­ and especially provisions within a single statute ­ in pari materia. Correct legal interpretation is not waivable. We urge the full Court to fix this corrigendum.

Respectfully submitted this 3rd day of March 2011, s/Lance C. Venable/ / Lance C. Venable, Esq. Joseph R. Meaney, Esq. Venable, Campillo, Logan & Meaney, P.C. 1938 East Osborn Rd. Phoenix, Arizona 85016 [phone] ­ Tel Email: [e-mail] Attorneys for Appellants

See MDY's Petition at 4, footnote 8 (citing MDY's Supplemental Excerpts of Record at 32, lines 12-20, footnote 102, which is page 20 of MDY's Response to Blizzard's Motion for Summary Judgment) attached as Exhibit A herein; See also id (citing MDY's Supplemental Excerpts of Record at 32, lines 12-20, footnote 101, which is page 20 of MDY's Response to Blizzard's Motion for Summary Judgment (pages 44-56 of the Ginsburg transcript is attached as Exhibit B herein; See also id (citing MDY's Supplemental Excerpts of Record at 41, lines 19-21, which is page 9 of MDY's Reply Brief in Support of its Motion for Summary Judgment) is attached as Exhibit C herein. -2-

5

II.

Certificate of Compliance Under Fed. R. App. P. 32(a) (7) (C) and Ninth Circuit Rule 32-1, the

Appellant's petition is proportionally spaced, has a typeface of 14 points or more and contains 414 words.

Lance C. Venable, Esq. Attorney for Appellants

March 3, 2011 Date

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III.

Appendix

INDEX TO APPENDIX
Document Pages

Exhibit A
MDY's Supplemental Excerpts of Record at 32, lines 12-20, footnote 102, which is page 20 of MDY's Response to Blizzard's Motion for Summary Judgment. Cited in MDY's Petition for Panel Rehearing at 4, footnote 8.

1-2

Exhibit B
MDY's Supplemental Excerpts of Record at 32, lines 12-20, footnote 101, which is page 20 of MDY's Response to Blizzard's Motion for Summary Judgment, Exhibit 7, referencing pages 44-56 of the Ginsburg transcript. Cited in MDY's Petition for Panel Rehearing at 4, footnote 8.

3-19

Exhibit C
MDY's Supplemental Excerpts of Record at 41, lines 19-21, which is page 9 of MDY's Reply Brief in Support of its Motion for Summary Judgment. Cited in MDY's Petition for Panel Rehearing at 4, footnote 8.

20-21

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CERTIFICATE OF SERVICE

I certify that on March 3, 2011, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to all registrants of the CM/ECF system for this case.

I certify that on _______________________, I served the attached document by ELECTRONIC MAIL on the following, who are not registered participants of the CM/ECF System: Name Physical or Email Address

s/ Lance C. Venable

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En Banc Appendix Exhibit A
MDY's Supplemental Excerpts of Record at 32, lines 12-20, footnote 102, which is page 20 of MDY's Response to Blizzard's Motion for Summary Judgment. Cited in MDY's Petition for Panel Rehearing at 4, footnote 8.

MDY'S Petition for En Banc Rehearing - Appendix 1

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

breaches Blizzard's contract because to do so would be anti-competitive and restrain trade. Just like there is no law that prevents B from opening his theater, there is no law that prevents MDY from selling its software. The Court should deny Blizzard's motion for summary judgment as a matter of law. B. A reasonable jury could find that MDY did not act improperly by advertising and marketing its Glider software To survive summary judgment, Blizzard must demonstrate that MDY's actions were illegal ­ or at least inequitable ­ for the Court to consider the actions to be tortious.99 Actions that comply with the law, of course, will not be considered tortious. The law has long permitted reverse engineering of copyrighted software for the purpose of achieving interoperability between aftermarket software and copyrighted software.100 The DMCA goes further by expressly permitting a person to circumvent technological measures the purpose of achieving interoperability between aftermarket software and copyrighted software.101 In this way, copyright law expressly authorizes the steps

needed to make, use and sell independently created aftermarket software ­ that is, aftermarket software intended solely for use with another person's copyrighted game.102 Moreover, copyright law's purpose is to encourage artists, writers and even computer programmers to create new ideas artistic and literary works, including independently created aftermarket software, which will reach the marketplace.103 In stark contrast, Blizzard believes that it can use TIWC to achieve the opposite
99

See, MDY's MSJ, at 18­23 for a more detailed discussion of applicable law. See, Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510, 1523 (9th Cir. 1992); Sony Computer Entertainment v. Connectix Corp., 203 F.3d 596 (9th Cir. 2000). 101 See, Anti-Circumvention Rulemaking Hearing, at 44-56, at http://www.copyright.gov/1201/2003/hearings/transcript-may9.pdf (testimony of Professor Jane Ginsburg), attached to MDY's SDF as Exhibit L. 102 Id.; see also, 17 U.S.C. § 1201(f)(3); Lexmark Intern. v. Static Control Components, 387 F.3d 522 (6th Cir. 2004). 103 See, Sony v. Connectix Corp., 203 F.3d 596, 605-08 (9th Cir. 2000)(the "ultimate aim" of the Copyright Act is "to stimulate artistic creativity for the public good.")
100

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Page 23 of 30

MDY'S Supplemental Excerpts of Record 32

MDY'S Petition for En Banc Rehearing - Appendix 2

En Banc Appendix Exhibit B
MDY's Supplemental Excerpts of Record at 32, lines 12-20, footnote 101, which is page 20 of MDY's Response to Blizzard's Motion for Summary Judgment, Exhibit 7, referencing pages 44-56 of the Ginsburg transcript. Cited in MDY's Petition for Panel Rehearing at 4, footnote 8.

MDY'S Petition for En Banc Rehearing - Appendix 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

breaches Blizzard's contract because to do so would be anti-competitive and restrain trade. Just like there is no law that prevents B from opening his theater, there is no law that prevents MDY from selling its software. The Court should deny Blizzard's motion for summary judgment as a matter of law. B. A reasonable jury could find that MDY did not act improperly by advertising and marketing its Glider software To survive summary judgment, Blizzard must demonstrate that MDY's actions were illegal ­ or at least inequitable ­ for the Court to consider the actions to be tortious.99 Actions that comply with the law, of course, will not be considered tortious. The law has long permitted reverse engineering of copyrighted software for the purpose of achieving interoperability between aftermarket software and copyrighted software.100 The DMCA goes further by expressly permitting a person to circumvent technological measures the purpose of achieving interoperability between aftermarket software and copyrighted software.101 In this way, copyright law expressly authorizes the steps

needed to make, use and sell independently created aftermarket software ­ that is, aftermarket software intended solely for use with another person's copyrighted game.102 Moreover, copyright law's purpose is to encourage artists, writers and even computer programmers to create new ideas artistic and literary works, including independently created aftermarket software, which will reach the marketplace.103 In stark contrast, Blizzard believes that it can use TIWC to achieve the opposite
99

See, MDY's MSJ, at 18­23 for a more detailed discussion of applicable law. See, Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510, 1523 (9th Cir. 1992); Sony Computer Entertainment v. Connectix Corp., 203 F.3d 596 (9th Cir. 2000). 101 See, Anti-Circumvention Rulemaking Hearing, at 44-56, at http://www.copyright.gov/1201/2003/hearings/transcript-may9.pdf (testimony of Professor Jane Ginsburg), attached to MDY's SDF as Exhibit L. L 102 Id.; see also, 17 U.S.C. § 1201(f)(3); Lexmark Intern. v. Static Control Components, 387 F.3d 522 (6th Cir. 2004). 103 See, Sony v. Connectix Corp., 203 F.3d 596, 605-08 (9th Cir. 2000)(the "ultimate aim" of the Copyright Act is "to stimulate artistic creativity for the public good.")
100

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Document 57

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Page 23 of 30

MDY'S Supplemental Excerpts of Record 32

MDY'S Petition for En Banc Rehearing - Appendix 4

MDY'S Petition for En Banc Rehearing - Appendix 5

MDY'S Petition for En Banc Rehearing - Appendix 6

MDY'S Petition for En Banc Rehearing - Appendix 7

MDY'S Petition for En Banc Rehearing - Appendix 8

MDY'S Petition for En Banc Rehearing - Appendix 9

MDY'S Petition for En Banc Rehearing - Appendix 10

MDY'S Petition for En Banc Rehearing - Appendix 11

MDY'S Petition for En Banc Rehearing - Appendix 12

MDY'S Petition for En Banc Rehearing - Appendix 13

MDY'S Petition for En Banc Rehearing - Appendix 14

MDY'S Petition for En Banc Rehearing - Appendix 15

MDY'S Petition for En Banc Rehearing - Appendix 16

MDY'S Petition for En Banc Rehearing - Appendix 17

MDY'S Petition for En Banc Rehearing - Appendix 18

MDY'S Petition for En Banc Rehearing - Appendix 19

En Banc Appendix Exhibit C
MDY's Supplemental Excerpts of Record at 41, lines 19-21, which is page 9 of MDY's Reply Brief in Support of its Motion for Summary Judgment. Cited in MDY's Petition for Panel Rehearing at 4, footnote 8.

MDY'S Petition for En Banc Rehearing - Appendix 20

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solicitations."35 Finally, as the Arizona Supreme Court has stated, it "is difficult to see anything defensible, in a free society, in a rule that would impose liability on one who honestly persuades another to alter a contractual relationship."36 Because Blizzard has not provided any evidence that MDY acted improperly with respect to inducing Blizzard's customers to purchase Glider, MDY can obtain Summary judgment against Blizzard.37 Moreover, Blizzard admits that MDY warned potential Glider purchasers that Blizzard views use of Glider as a breach of Blizzard's EULA.38 In addition, Blizzard has not presented any evidence that MDY has induced even one of Blizzard's customers.39 Potential Glider purchasers seek out MDY, not the other way around. Every Glider purchaser independently decides to purchase and install Glider without any coercion from MDY, which Arizona law sanctions as "honest persuasion." B. Even if "improper" can relate to the manner of breach, summary judgment is still appropriate

13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Blizzard offers no legal support for its theory that circumvention and reverse engineering are "improper" when they only relate to the manner of breach - not the motive or means of inducing the breach. Even if Blizzard's theory is true, the Court should still grant summary judgment. As discussed more fully in MDY's Response to Blizzard's MSJ, Glider did not originally avoid detection.40 MDY added detection

avoidance after Blizzard unilaterally tried to stop Glider users. Blizzard's copyright misuse, §774 of the Restatement, and the DMCA's "interoperability" section all operate to bar Blizzard's TIWC claim as a matter of law.41 See Middleton v. Wallichs Music & Entertainment Co., 24 Ariz. App. 180 (1975). Wagenseller v. Scottsdale Memorial Hosp., 147 Ariz. 370, 388 (1985)(emphasis ours). 37 See, Blizzard's Response at 17-18 (MDY's Nature of Conduct and Motive); SOF Improper Motive section, ¶¶ 234-45. 38 See, Blizzard's SOF, Exhibit 39 at 3. 39 Any evidence Blizzard has offered relates to general advertising not direct solicitation of Blizzard customers. Id. 40 See, Blizzard's Response to SOF, ¶ 58. 41 See, 8 (copyright misuse), at 18 (§774) and at 20 (interoperability).
36 35

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Document 69

-9Filed 05/12/2008

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MDY'S Supplemental Excerpts of Record 41

MDY'S Petition for En Banc Rehearing - Appendix 21