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

Filing 40

STATEMENT of of Facts in Support of Motion for Summary Judgment re 39 MOTION for Summary Judgment and Memorandum of Points and Authorities in Support by Defendants Vivendi Games, Inc., Blizzard Entertainment, Inc., Third Party Plaintiffs Vivendi Games, Inc., Blizzard Entertainment, Inc., Counter Claimants Vivendi Games, Inc., Blizzard Entertainment, Inc.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10)(Genetski, Christian)

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

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SONNENSCHEIN NATH & ROSENTHAL LLP

Scott Stein (AZ Bar No. 022709) Shaun Klein (AZ Bar No. 018443)
2398 East Camelback Road, Suite 1060 Phoenix, AZ 85016-9009 Facsimile [phone] Telephone [phone]

Christian S. Genetski (Pro Hac Vice) Shane M. McGee (Pro Hac Vice)
1301 K Street, NW, Suite 600-East Tower Washington, DC 20005 Facsimile [phone] Telephone [phone]

Attorneys for Defendants Vivendi Games, Inc. and Blizzard Entertainment, Inc.

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA ) ) Plaintiff and Counter-Claim ) Defendant ) ) vs. ) ) BLIZZARD ENTERTAINMENT, INC., ) and VIVENDI GAMES, INC. ) ) Defendants and ) Counter-Claim Plaintiffs. ) ) 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 BLIZZARD ENTERTAINMENT, INC. AND VIVENDI GAMES, INC. STATEMENT OF FACTS IN SUPPORT OF THEIR MOTION FOR SUMMARY JUDGMENT The Honorable David G. Campbell

The Parties

Blizzard Entertainment
1. Blizzard Entertainment, Inc. ("Blizzard") is a Delaware corporation,

with its principal place of business located in Irvine, CA. Vivendi Games, Inc., a Delaware corporation having a principal place of business in Los Angeles,

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California, is Blizzard's corporate parent. 2. Blizzard has been developing and selling popular computer games for

14 years, and more than 20 million accounts have been registered by individuals to play Blizzard's games online. (Mar. 20, 2008 Aff. of Greg Ashe ("Ashe Aff."), Ex. 1 ¶ 4). 3. Blizzard has received numerous accolades for its games, and in

particular World of Warcraft ("WoW"), and has been repeatedly recognized for its unsurpassed attention to the desires of its customers, and for creating games that best cater to those customer demands. (Ashe Aff., Ex. 1 ¶ 5; Jan. 24, 2008 Dep. of Koleman S. Strumpf, Ph.D. ("Strumpf Dep."), Ex. 2 at 247:7-22).

Michael Donnelly and MDY Industries LLC
4. Defendant Donnelly is an Arizona resident residing at 4808 N. 24th

Street, Apt. 1008, Phoenix, Arizona. (MDY & Donnelly's Answer to Defs.' Countercl. & Third Party Compl. ("MDY's Answer"), Ex. 3 ¶ 5; Defs.' Answer to First Am. Compl., Countercls. & Third-Party Compl. ("Defs.' Answer"), Ex. 4 ¶ 5 of Countercls. & Third Party Compl.). 5. Defendant Donnelly is the only member of MDY Industries LLC, and

MDY Industries LLC is an Arizona Limited Liability Company organized in December 2004, and registered at 2311 E. Shea Boulevard, Phoenix, Arizona. (MDY's Answer, Ex. 4 ¶ 6). 6. Donnelly's online alias is "Mercury," sometimes abbreviated as

"Merc.". (Sept. 25, 2007 Dep. of Michael M. Donnelly Volume I ("Donnelly I"), Ex. 5 at 71:23-72:1).
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7.

Jason Beatty is an employee of MDY Racing. (Sept. 26, 2007 Dep. of

Jason E. Beatty, Ex. 6 at 5:8-13). 8. Donnelly and MDY (collectively, "MDY") operate the website

mmoglider.com (formerly wowglider.com), from which they promote, sell and distribute the software program Glider (formerly WoWGlider). World of Warcraft 9. In November 2004, Blizzard released World of Warcraft® (hereinafter

"WoW"), the company's most ambitious and advanced online computer game to date. WoW is a Massively Multiplayer Online Roleplaying Game ("MMORPG"), a genre of computer game in which large numbers of players interact with each other simultaneously in a virtual persistent online world. (Ashe Aff., Ex. 1 ¶ 3). 10. Blizzard developed the WoW gaming environment through great effort and expense to the company, employing numerous game designers, artists, producers and programmers to conceive of and create a gaming experience that has made it one of the most popular online computer games in history. (Ashe Aff., Ex. 1 ¶ 6). 11. WoW allows players to experience the vast WARCRAFT universe in great detail, customizing their own experiences by participating in a variety of different activities alone or with others. (Ashe Aff., Ex. 1 ¶ 8). 12. WoW allows players from around the globe to assume the roles of different character races (including humans, elves, dwarves, trolls and gnomes) and classes (including warlocks, warriors, druids and priests) as they explore, adventure and quest across WoW's vast universe. (Ashe Aff., Ex. 1 ¶ 9).
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13. Thousands of WoW players can play on any given WoW server simultaneously, and can communicate, cooperate with, fight and otherwise interact with other players on that server. (Ashe Aff., Ex. 1 ¶ 10). 14. Methods of communication among WoW players include private chat, group chat, area chat (chat that can be seen by players near the speaker), channel chat (chat limited to people in a particular channel), direct voice communication, animations and gestures conveying emotions (emotes) and other methods. (Ashe Aff., Ex. 1 ¶ 11). 15. There is no "single-player" mode in WoW. (Ashe Aff., Ex. 1 ¶ 12). 16. In order to play WoW, consumers must obtain and install a legitimate version of the WoW game client on a personal computer. (Ashe Aff., Ex. 1 ¶ 13). 17. Also in order to play WoW, consumers must make periodic payments for a subscription permitting continued access to authorized WoW servers. (Ashe Aff., Ex. 1 ¶ 14). 18. The WoW universe cannot be experienced unless a user is connected to a WoW server using an authorized subscription. (Ashe Aff., Ex. 1 ¶ 15). 19. A central objective for WoW players is to advance their characters through the various levels recognized in the game. (Ashe Aff., Ex. 1 ¶ 16). 20. WoW players can gain experience and obtain levels by engaging in individual or group quests with a range of goals. (Ashe Aff., Ex. 1 ¶ 17). 21. WoW players can also gain experience points and obtain levels by engaging in battles with monsters located throughout the WoW universe. (Ashe Aff., Ex. 1 ¶ 18).
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22. By achieving new levels, players can access new content in the WoW universe. (Ashe Aff., Ex. 1 ¶ 19). 23. Gaining new levels requires the investment of substantial time and effort playing the game. (Ashe Aff., Ex. 1 ¶ 20). 24. There are hundreds of WoW servers active at any given time, each with hundreds or thousands of players online playing. (Ashe Aff., Ex. 1 ¶ 21). 25. WoW currently has more than 10 million subscribers worldwide. (Ashe Aff., Ex. 1 ¶ 22). 26. WoW currently has more than 2.5 million subscribers in North America. (Ashe Aff., Ex. 1 ¶ 23). 27. WoW incorporates a complex closed economy continually balanced by Blizzard to maintain economic equilibrium. (Nov. 13, 2007 Expert Report of Edward Castronova ("Castronova Report"), Ex. 7 at 6-7; Ashe Aff., Ex. 1 ¶ 26). 28. WoW players enjoy playing WoW in numerous ways. Many players seek the advancement of their characters to the highest level, and attempt to acquire more and better in-game assets such as weapons and armor. (Nov. 13, 2007 Dep. of Greg Ashe Volume I ("Ashe I"), Ex. 8 at 17:1-21). 29. Many WoW players enjoy the social and role-playing aspects of the game. For these players, in-game chat and socialization in an immersive virtual universe is a primary draw to the game. (Ashe I, Ex. 8 at 17:4-9, 171:9-20, 172:814). 30. Blizzard attempts to calibrate the advancement of characters through WoW to maintain a stable, in-game economy that provides equal opportunities for
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players to reap similar rewards consistent with their investment of time in the game. For example, WoW is fine-tuned to establish the amount of in-game virtual currency a player should earn from level 1 to level 40 in the game, and at subsequent progressions. (Ashe I, Ex. 8 at 157:6-25, 161:16-19). 31. WoW's economy includes the ability to buy and sell through in-game vendors; loot defeated enemies; buy, sell and barter directly with other players; and buy and sell goods using any of the auction houses placed throughout the WoW universe. (Ashe Aff., Ex. 1 ¶ 24). 32. The goods available to buy, sell and barter in WoW include food, drink, armor, weapons, trinkets, pets, costumes and thousands of other items. (Ashe Aff., Ex. 1 ¶ 25). 33. The WoW game is frequently updated and enhanced. (Ashe Aff., Ex. 1 ¶ 28). 34. The largest update since WoW's launch came in the form of a large expansion pack called World of Warcraft: The Burning CrusadeTM. (Ashe Aff., Ex. 1 ¶ 29). 35. With the exception of The Burning Crusade expansion pack, all updates to WoW have been free to WoW users. Ashe cite. (Ashe Aff., Ex. 1 ¶ 30). 36. Blizzard has been recognized throughout the gaming industry and among game players for its careful attention to meeting the demands of players in creating some of the world's most popular game. (Ashe Aff., Ex. 1 ¶ 5-6; Strumpf Dep., Ex. 2 at 247:7-22).
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37. Blizzard's track record includes ten #1-selling games and multiple Game of the Year awards. (Ashe Aff., Ex. 1 ¶ 7). 38. Blizzard's achievements have been recognized in the media as well. On January 16, 2007, New York Times writer Seth Schiesel began playing Blizzard's "Burning Crusade" expansion for WoW and he wrote about his experiences in what the newspaper described as an "online serial review and travelogue through the world's most successful virtual universe." (N.Y. Times Article, Conquering the Burning Crusade, Ex. 9 at 1, 2). 39. Mr. Schiesel's observations were made during a two week period in which he played WoW for 186 hours and his observations were posted on the newspaper's website at the following URL: http://www.nytimes.com/ref/arts/warcraft-journal.html.(Id., Ex. 9 at 2). 40. In his January 31, 2007 post, he remarked that "World of Warcraft is so compellingly designed and so finely measured that it has been unnervingly easy to lose myself in completely. Once you have some friends in the game, and in some cases even if you don't, there is simply always more to do ­ another skill to learn, another quest to complete, another tier of luxury goods to revel in." (Id., Ex. 9 at 2). 41. In a post dated January 29, 2007, Schiesel described how his character had reached the maximum level a character could attain two years ago. (Id., Ex. 9 at 3-4). 42. While reviewing the "Burning Crusade," he decided that to create a new character "to see how the other half lives." (Id., Ex. 9 at 4).
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43. In that context he remarked that "[f]rom a gameplay perspective, the new zones and new races work well for introducing new players to the game. Massively-multiplayer games can be extremely complex, but one of the top reasons WOW has been so popular is that it doles out that complexity very carefully. If a game frustrates you in the first 15 minutes you will probably put it away and never go back to it. World of Warcraft almost never makes that mistake." (Id., Ex. 9 at 4). 44. In his January 25, 2007 post, Schiesel discussed what players can do after their characters have reached the maximum level of 70. (Id., Ex. 9 at 8-19). 45. He observed that "the game-making goblins and gnomes at Blizzard Entertainment want you to keep playing and paying and they know that what keeps players psychologically engaged is a sense of progress. There always has to be another carrot dangling just out of reach - one more challenge to conquer, one more foe to defeat and, not least, one more rare and powerful weapon or magic artifact to acquire." (Id., Ex. 9 at 9). 46. He also noted that the environment created by Blizzard creates a fun game play environment for players of varying skill levels, "I've been looking for some really poorly designed dungeons and I just haven't found them yet. Each has been finely tuned; the battles are appropriately challenging, the stories are interesting and the rewards have been attractive. One of the coolest things Blizzard has done in the expansion is take some of the epic "feel" that was previously the exclusive province of big raids and bring it to smaller settings. In WOW's older five-player dungeons, the big bad guy at the end has usually been just that: a guy not much larger than the players themselves. If you wanted to fight big dragons and such, you had to play with dozens of other characters.
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Now, even players in five-person dungeons can go up against massive hydra and the towering elemental of sound called Murmur. It's a nice switch because it lets more casual players feel like they playing an important part in the overall WOW storyline." (Id., Ex. 9 at 10-11). 47. In his January 23, 2007 post, Schiesel explained: "the real genius [of games like "The Sims" and "Grand Theft Auto"] has been not in great characters or fabulous graphics but in providing settings that draw in players like an inhabitant. That dynamic is even more important in online role-playing games like World of Warcraft and may be the prime reason why the game is set to take in more than $1 billion this year. People who play such games can end up spending hundreds or thousands of hours in them over many years for two reasons: the other real people inside them and the overall virtual environment they occupy.. . . [T]he environment itself has to be fun to be in, great to look at and rewarding to explore. And providing such an environment is the one thing that World of Warcraft does better than any other game. As I have spent most of the last week playing The Burning Crusade I have been impressed over and over again at how richly textured the world is that the team at Blizzard Entertainment has created and how much care they clearly lavished on making sure it is almost impossible to get bored. Everywhere you turn is a new spot to discover, a new monster to gawk at, a new problem in need of solving." (Id., Ex. 9 at 14-15). 48. Schiesel also observed that "[t]here is so much to do and so much to see across Outland that I did nothing but follow quest chains around the continent all the way from Level 60 to Level 70 and I still barely touched one of the game's high-end zones. In most games, players often feel like they've run out of content. That was almost never a problem in the original World of Warcraft and certainly won't be one for expansion players any time soon." (Id., Ex. 9 at 15). 49. The software code responsible for the extensive and richly detailed creative elements forming the online world of the WoW gaming environment are copyrighted works owned by Blizzard. Blizzard has received copyright registrations in both the server and game client software code. (Copyright
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Registration Numbers TXu 1-166-151, TX 5-984-004, and PA-1-247-131, Ex. A to Defs. Answer, Ex. 10). 50. When users launch a copy of WoW from their hard drive in order to access the game servers and play the game, the user makes a copy of WoW in RAM. (Nov. 14, 2007 Dep. of Matthew Versluys ("Versluys Dep."), Ex. 11 at 26:21 to 27:5; Ashe I, Ex. 8 at 98:21-99:11). 51. After the initial launch of the client from the hard drive into RAM, as a player moves through the game, additional copyrighted game content is loaded from the hard drive into RAM as the player reaches points in the game as needed, depending on the circumstances in the game. (Versluys Dep., Ex. 11 at 28:7-14). 52. When Glider users load WoW into RAM, WoW is able to be both perceived and communicated to, including interacting with Glider itself. (Jan. 11, 2008 Dep. of Joseph Calandrino ("Calandrino Dep."), Ex. 12 at 69:11 to 70:16). Threats to WoW Gaming Experience - Bots

Explanation of Bots and Botting
53. The word "bot" is a shortened version of the phrase "software robot." (Castronova Report, Ex. 7 at 3). 54. A bot is a piece of software used to automate game play tasks normally performed by a human. (Donnelly I, Ex. 5 at 49:10-11; Ashe 163:6-18; Castronova Report, Ex. 7 at 3-4). 55. Botting is a term used to describe the practice of using a bot to perform functions normally performed by a human. (Ashe I, Ex. 8 at 163:6-18, 164:2-9; Castronova Report, Ex. 7 at 3-4).
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56. Bots can be used to automate game-play in WoW to the extent that, in using a bot, a WoW character can travel through the WoW universe, fight and defeat foes, sell the loot taken from defeated foes, and, in doing so, continue to acquire experience points (resulting in increasing levels) and virtual wealth without a human at the keyboard. (Ashe I, Ex. 8 at 178:16-23; Castronova Report, Ex. 7 at 3-4). 57. Because bots do not eat, sleep, work or go to school, bots can play much longer than a human without stopping. (Ashe I, Ex. 8 at 164:6-9; Castronova Report, Ex. 7 at 2).

In-Game Economic Impact of Botting
58. Botting distorts the game economy by flooding it with excess resources. (Feb. 29, 2008 Castronova Supplemental Report ("Castronova Supplemental"), Ex. 13 at 2; Ashe I, Ex. 8 at 164:2-22). 59. Botting skews game balance, because the game is fine-tuned to control the kinds and amounts of virtual in-game resources a player may accumulate at various stages, and botting enables those resources to enter the game more quickly. (Ashe I, Ex. 8 at 157:9 to 158:18). 60. Bots create an oversupply of items acquired in the game, devaluing those items and reducing the amount of virtual currency legitimate players can earn from selling them within the game environment. (Ashe I, Ex. 8 at 162:4-11; Jan. 15 2008 Dep. of Edward Castronova ("Castronova Dep."), Ex. 14 at 128:17 to 129:8). 61. Botting causes inflation of in-game costs, and significant depreciation
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of the value of certain in-game items. (Ashe I, Ex. 8 at 162:4-11; Castronova Dep., Ex. 14 at 135:17 to 136:3).

In-Game Resource Shortages Due to Botting
62. Botters consume in-game resources real players need to advance and accomplish quests (Ashe I, Ex. 8 at 177:4-21; Castronova Dep., Ex. 14 at 124:12 to 125:9). 63. Botters monopolize non-consumable in-game resources real players need to advance and accomplish quests (Ashe I, Ex. 8 at 177:4-21; Castronova Report, Ex. 7 at. 6-7).

Real-World Resource Drain Due to Botting
64. Blizzard attempts to balance the load of players on its multiple game servers so that network resources are allocated equally over various servers within the WoW universe. The key variable in achieving this balance is the number of hours typically spent in the game by an average user, and Blizzard uses these averages to set its design expectations. (Ashe I, Ex. 8 at 165:8 to 166:15; Nov. 14, 2007 Deposition of Bill Galey ("Galey Dep."), Ex. 15 at 58:23 to 59:8). 65. Blizzard's designs expectations are frustrated, and resources are allocated unevenly, when bots are introduced into the WoW universe, because bots spend far more time in-game than an ordinary player would and consume resources the entire time. (Ashe I, Ex. 8 at 166:5-15; Castronova Dep. Ex. 14 at 136:13-148:4).

Social Impact of Botting
66. "[B]ots compete with real players, crowding them out of game content
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and sometimes even `beating' them in the game." (Castronova Supplemental, Ex. 13 at 2). 67. Botting destroys interactive role-playing elements, because players cannot interact with the bots. (Ashe I, Ex. 8 at 158:8 to 159:2). 68. "Players do not want to play a game in which the other players are not actually present." (Castronova Supplemental, Ex. 13 at 2; Ashe I, Ex. 8 at 158:814; Nov. 6, 2007 Dep. of Robert Hale ("Hale Dep."), Ex. 16 at 23: 1-3).

Decrease of Demand Due to Botting
69. "The presence of bots negatively affects the nature, atmosphere, and reputation of WoW, in the same way that steroids negatively affect the nature, atmosphere, and reputation of baseball." (Castronova Supplemental, Ex. 13 at 2). 70. "[C]heating (and its ancillary effects, such as economic distortions) reduces the demand of consumers to participate in the product." (Castronova Supplemental, Ex. 13 at 2). The Problems of RMT and Gold Farming 71. Real Money Trade ("RMT") is the practice of selling the in-game gold for real money outside of the game. (Ashe Aff., Ex. 1 ¶ 31) 72. Gold farming is the practice of gathering as much in-game gold as possible for purposes of engaging in RMT. (Ashe Aff., Ex. 1 ¶ 32) 73. Selling in-game gold outside of WoW is a violation of the Terms of Use ("TOU"). (See provisions quoted in paras. 74-75, infra). 74. Before October 16, 2006, the WoW TOU provided in pertinent part: "Blizzard Entertainment does not recognize any property claims outside of World
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of Warcraft or the purported sale, gift or trade in the `real world' of anything related to World of Warcraft. Accordingly, you may not sell items for `real' money or exchange items outside of World of Warcraft." (June 6, 2005 TOU, Ex. 17 at § 8). 75. After October 16, 2006, the WoW TOU provided in pertinent part: "Blizzard does not recognize any virtual property transfers executed outside of the Game or the purported sale, gift or trade in the `real world' of anything related to the Game. Accordingly, you may not sell items for `real' money or otherwise exchange items for value outside of the Game." (Oct. 6, 2006 TOU, Ex. 18 at § 5(c)(8)). 76. Gold farming and RMT skew WoW's in-game economy by causing inflation and other economic pressures. (Castronova Dep., Ex. 14 at 158:13-15, 159:1-3). 77. Gold farming and RMT introduce commercial elements into WoW, damaging the immersive effect of the game. (Ashe I, Ex. 8 at 170:23-173:9). 78. Players that buy gold have an immediate and sizeable advantage over other players, because they can use that gold to buy goods, including armor, weapons, potions and other items, that make their character(s) much more powerful in the game compete at highest level. (Castronova Dep., Ex. 14 at 178:17 to 179:17). 79. WoW players have filed a class action lawsuit against IGE, the operator of the largest RMT marketplace. The complaint alleges that rule-abiding players' game experience is being ruined by IGE's encouragement and facilitation
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of RMT because it is destroying the WoW in-game economy and rendering the game unfair to users who play by the rules. (June 1, 2007 Class Action Compl., Hernandez v. Internet Gaming Entm't (S.D. Fla. Filed June 1, 2007), Ex. 19). Blizzard's Need to Have and Enforce Rules 80. As a multiplayer, interactive game, the conduct of each player impacts the game-play experience of other players. (Ashe I, Ex. 8 at 170:23-173:9; Castronova Supplemental, Ex. 13 at 2). 81. The use of bots and other cheats inside WoW have a significant negative impact on the game-play experience of other users. (Ashe I, Ex. 8 at 170:23-173:9; Castronova Supplemental, Ex. 13 pg. 2). 82. Blizzard employs a staff of customer service representatives, including in-game "Game Masters" who respond to and assist players with in-game problems and complaints. (Galey Dep., Ex. 15 at 11:24 to 12:18, 48:21 to 49:7). 83. Between December 22, 2004 and March 18, 2008, Blizzard received more than 465,000 in-game petitions from users complaining about bots. (Ashe Aff., Ex. 1 at 27). The World of Warcraft EULA and TOU 84. Players' usage of the game is governed by the terms of both the WoW End Use License Agreement ("EULA") and the TOU. (Nov. 14, 2007 Dep. of Greg Ashe Volume II ("Ashe II"), Ex. 20 at 328:14 to 329:2; Ashe Aff., Ex. 1 ¶ 33) 85. To play WoW, users must view and demonstrate acceptance of the EULA at numerous times: before installing the software; upon running the
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software for the first time; and upon applying patches to the software when it is changed or upgraded by Blizzard. (Ashe II, Ex. 20 at 328:14 to 329:2). 86. To play WoW, users must view and demonstrate acceptance of the TOU at numerous times: when creating an account; when connecting to the service for the first time; and upon applying patches to the software when it is changed or upgraded by Blizzard. (Ashe II, Ex. Ex. 20 at 328:14 to 329:2). 87. Users must scroll through the entire EULA and TOU agreements, and then affirmatively indicate their assent by clicking the word Accept on each of the contracts, before they can access the game content. (Ashe II, Ex. Ex. 20 at 328:14 to 329:2) 88. Users are again required to scroll through and agree to the EULA and the TOU after each revision of the WoW game or the WoW EULA or TOU. (Ashe I, Ex. 8 136:19 to 137:2). 89. The EULA conditions users' right to copy and use the game upon doing so only in conformity with the scope of the license. The first paragraph of the EULA states: "IF YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT, YOU ARE NOT PERMITTED TO INSTALL, COPY, OR USE THE GAME." The EULA further notes that "Any use, reproduction . . . of the Game not expressly authorized by the terms of this License Agreement is expressly prohibited." (Feb. 2, 2007 EULA, Ex. 21 at Introduction, § 1, 2).

Blizzard's EULA and TOU Provisions at Issue
90. Prior to June 1, 2006, the WoW EULA provided in pertinent part: "IF YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT,
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PROMPTLY RETURN THE UNUSED SOFTWARE PROGRAM TO THE PLACE OF PURCHASE, OR CONTACT BLIZZARD CUSTOMER SERVICE AT [phone] FOR A FULL REFUND OF THE PURCHASE PRICE WITHIN 30 DAYS OF THE ORIGINAL PURCHASE." (Nov. 2004 EULA, Ex. 22 § 1). 91. Prior to June 1, 2006, the WoW EULA provided in pertinent part: "Licensor hereby grants, and by installing the Game Client you thereby accept, a limited, non-exclusive license and right to install the Game Client for your personal use on one (1) or more computers which you own or which are under your personal control." (Nov. 2004 EULA, Ex. 22 § 1). 92. Prior to June 1, 2006, the WoW EULA provided in pertinent part: "this Agreement shall coexist with, and shall not supersede, the Terms of Use." (Nov. 2004 EULA, Ex. 22 § 13). 93. After June 1, 2006, the WoW EULA provided in pertinent part: "IF YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT, YOU ARE NOT PERMITTED TO INSTALL, COPY, OR USE THE GAME." (June 1, 2006 EULA, Ex. 23 at Introduction). 94. After June 1, 2006, the WoW EULA provided in pertinent part: "Any use, reproduction . . . of the Game not expressly authorized by the terms of the License Agreement is expressly prohibited." (June 1, 2006 EULA, Ex. 23 at Introduction). 95. After June 1, 2006, the WoW EULA provided in pertinent part: "Subject to your agreement to and continuing compliance with this License
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Agreement, Blizzard hereby grants, and you hereby accept, a limited, nonexclusive license to (a) install the Game Client on one or more computers owned by you or under your legitimate control, and (b) use the Game Client in conjunction with the Service for your non-commercial entertainment purposes only." (June 1, 2006 EULA, Ex. 23 § 15). 96. After June 1, 2006, the WoW EULA provided in pertinent part: "this Agreement shall coexist with, and shall not supersede, the Terms of Use." (June 1, 2006 EULA, Ex. 23 § 15). 97. Prior to June 1, 2006, the WoW EULA provided in pertinent part: Users may not "create or maintain, under any circumstance, any unauthorized connections to the Game or the Service. All connections to the Game and/or the Service, whether created by the Game Client or by other tools and utilities, may only be made through methods and means expressly approved by Licensor. Under no circumstances may you connect, or create tools that allow you or others to connect, to the Game's proprietary interface or interfaces other than those expressly provided by Licensor for public use." (Nov. 2004 EULA, Ex. 23 § 4(iv)). 98. After June 1, 2006, the WoW EULA provided in pertinent part: Users shall not "exploit the Game or any of its parts, including without limitation the Game Client, for any commercial purpose" or "facilitate, create or maintain any unauthorized connection to the Game or the Service, including without limitation any connection to any unauthorized server that emulates, or attempts to emulate, the Service. All connections to the Game and/or the Service, whether created by
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the Game Client or by other tools and utilities, may only be made through methods and means expressly approved by Blizzard. Under no circumstances may you connect, or create tools that allow you or others to connect, to the Game's proprietary interface other than those expressly provided by Blizzard for public use." (June 1, 2006 EULA, Ex. 23 § 4(iv)). 99. Before October 16, 2006, the WoW TOU provided in pertinent part: "You agree that you will not (i) modify or cause to be modified any files that are a part of a World of Warcraft installation; (ii) create or use cheats, "mods", and/or hacks, or any other third-party software designed to modify the World of Warcraft experience; (iii) use any third-party software that intercepts, "mines", or otherwise collects information from or through World of Warcraft...." (June 2, 2005 TOU, Ex. 24 § 2(c)). 100. Before October 16, 2006, the WoW TOU provided in pertinent part: Users may not "Use bots or other automated techniques to collect information from World of Warcraft or any forum or website owned or administered by Blizzard Entertainment; ... Cheat or utilize World of Warcraft "exploits" in any way, including without limitation modification of the game program files." (June 2, 2005 TOU, Ex. 24 §§ 3(B)(vi), (Viii)). 101. After October 16, 2006, the WoW TOU provided in pertinent part: "You agree that you will not (i) modify or cause to be modified any files that are a part of the Program or the Service; (ii) create or use cheats, bots, "mods", and/or hacks, or any other third-party software designed to modify the World of Warcraft experience; or (iii) use any third-party software that intercepts, "mines", or
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otherwise collects information from or through the Program or the Service." (Oct. 16, 2006 TOU, Ex. 18 § 3(B)). 102. After October 16, 2006, the WoW TOU provided in pertinent part: Users may not "Use bots or other automated techniques to collect information from the Program or any forum of website owned or administered by Blizzard; ... Cheat or utilize `exploits' while playing the Program in any way, including without limitation modification of the Program's files...." (Oct. 16, 2006 TOU, Ex. 18 §§ 5(b)(6)-(7). 103. The October 16, 2006 update to the WoW TOU added the word "bot" was to section 4.B.(ii) to add additional clarity to the section, and not to correct an ambiguity. (Ashe I, Ex. 8 at 140:18 to 141:5). 104. Even before October 16, 2006, the WoW TOU prohibited use of unauthorized third-party software running in parallel with the game. (Ashe I, Ex. 8 at 140:18 to 141:5). Blizzard's Technical Measures to Enforce Rules 105. Blizzard employs several different technical measures to prevent breaches of its EULA and TOU. (Ashe Aff., Ex. 1 at 34). 106. Game servers are part of Blizzard's technological measures preventing unauthorized access because they implement discipline when unauthorized use of WoW is detected. (Versluys Dep., Ex. 11 at 35:13-21). 107. One of Blizzard's most important technical measures is referred to as Warden. (Ashe Aff., Ex. 1 at 35).

Warden - Scan.dll
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108. Warden consists of two components, the scan.dll component and the client-server, or resident component. (Ashe I, Ex. 8 at 53:21-25, 81:10-15). 109. The scan.dll component scans for unauthorized programs before the user logs into the game. (Ashe I, Ex. 8 at 85:13-20). 110. If the scan.dll component finds unauthorized programs, including Glider, it will prevent the user from entering the game. (Ashe I, Ex. 8 at 53:25 to 54:17, 81:10-15, 85:13-20). 111. Scan.dll stops the copying of post-authentication elements into RAM if it detects an unauthorized program. (Ashe I, Ex. 8 at 99:5-11). 112. At the time the user logs into his or her account, only the authentication portion of the game program is loaded into memory; those portions including the game content are loaded into memory only after the user has successfully logged in. (Ashe I, Ex. 8 at 79:6 to 80:15). 113. If scan.dll does not detect Glider or any other unauthorized programs, the user is able to authenticate and log into the game server. (Ashe I, Ex. 8 at 92: 21 to 93:8). 114. At present, Glider's anti-detection features are able to circumvent scan.dll's detection and permit users running Glider with WoW to access the game. Glider's ability to circumvent Blizzard's anti-cheat and access control technology separates it from nearly all other unauthorized third-party programs, almost all of which Blizzard has successfully blocked (Ashe I, Ex. 8 at 238:1-10).

Warden ­ The Resident Component
115. The client-server portion of Warden (the resident component) stays
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resident in memory conducting scans for cheats and other unauthorized programs while the game is being played. (Ashe I, Ex. 8 at 15:2-10, 32:5-11). 116. Upon detecting an unauthorized program, the resident component can immediately kick users out of the game and prevent further copying of copyrighted WoW game content into RAM. (Ashe I, Ex. 8 at 57:15-21). 117. Upon detecting an unauthorized program, the resident component can immediately ban a user's account so that the user cannot log in, effectively denying the user access to the game. (Ashe I, Ex. 8 at 57:15-21). 118. Thousands of Glider users have been kicked out of the game and had their accounts banned for running Glider as a result of detection by Warden's resident component. (Ashe Aff., Ex. 1 ¶ 36). 119. At present, Glider's anti-detection features are able to circumvent the resident component's ability to detect and block Glider usage. (Ashe I, Ex. 8 at 238:1-10). The MDY Business

Glider
120. Donnelly conceived of and began developing Glider in March 2005, and began offering the Glider software for download and sale to the public through the WoWGlider.com website in May 2005. (Donnelly I, Ex. 5 at 34:1625, 51:21 to 52:2). 121. MDY sells and distributes the Glider software, formerly known as WoWGlider, through its website located at http://www.mmoglider.com, previously located at http://www.wowglider.com. (MDY's Answer, Ex. 3 ¶ 40).
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122. MDY sells a license to use Glider for $25. (Donnelly I, Ex. 5 at 182:12-25; 183:1-5). 123. MDY offers no products or services other than Glider, which he concedes has no viable use other than with WoW. (Sept. 26, 2007 Dep. of Michael M. Donnelly Volume II ("Donnelly II"), Ex. 49 at 298:8-15). 124. The MDY website offers a forum for users, including Donnelly, to share information on avoiding detection by Blizzard. (Donnelly I, Ex. 5 at 161162). 125. Donnelly regularly posts messages on forums located at the Glider website under the alias "Mercury," discussing use of Glider, ways in which to avoid being detected by Blizzard, and development of new versions of the program. (MMOGlider.com Forums Threads, Ex. 25). 126. MDY does not dispute that Glider is designed to circumvent Warden. (Donnelly I, Ex. 5 at 94:121-22).

MDY Affiliates
127. MDY's primary and long-standing affiliate marketer for Glider is a company called "Markee Dragon." (Donnelly I, Ex. 5 at 218:19 to 219:8; Nov. 6, 2007 Deposition of Marcus Eikenberry ("Eikenberry Dep."), Ex. 26 at 56:8 to 57:9, 67:1-11, 81:10-14). 128. Markee Dragon is owned and operated by Marcus Eikenberry a/k/a Markee Dragon. (Eikenberry Dep., Ex. 26 at 11:4-7). 129. MDY resells Glider through the www.markeedragon.com website. (Pl's. Resps. to Defs.' First Set of Interrogs. ("I.R."), Ex. 27 at 4:3-8; 20-21).
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130. MDY also resells Glider through the following affiliated websites: www.worldofglider.de; www.wow-glider.de; www.wowglider.com.cn. (I.R., Ex. 27 at 4:22-27). 131. Robert Hale a/k/a "Rabid Dog" is a paid forum moderator for the MDY website. In that role, Hale provides assistance and instruction to Glider purchasers on how to use the program. (Hale Dep., Ex. 16 at 8:4-7). Operation of Glider 132. Glider operates by examining data structures inside the WoW program file in order to determine the game state, including such items as nearby monsters, player statistical data (health, etc.), chat window contents, visible interface objects such as dialog boxes, and other data. (I.R., Ex. 27 at 7:28, 8:1-3) 133. Glider examines the game state to determine the proper course of action and initiates it by injecting input into the computer via the SendInput Windows API or by directly sending the game WM_CHAR, WM_MOUSEMOVE, and WM_(L/R)BUTTON(UP/DOWN) messages. (I.R., Ex. 27 at 8:1-3) 134. Glider also hooks several kernel functions to facilitate injecting input into the game, such as GetCursorPos, SetCursorPos, and GetCursorInfo. (I.R., Ex. 27 at 8:3-5) 135. To avoid easy detection and blocking of Glider by Blizzard's cheat detection software, Glider users must use the Glider program's "launch pad" to initiate the start up and loading of WoW into RAM. (Ashe II, Ex. 20 at 319:1-9; Calandrino Dep., Ex. 12 at 78:12-18; Donnelly I, Ex. 5 at 103:13-16).
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136. When the Glider launch pad is used, the Glider program launches both WoW and Glider, loading both programs into RAM at the same time. (Donnelly I at 103:13-16). 137. Blizzard can detect Glider fairly easily when Glider users do not use the Glider launch pad. (Ashe II, Ex. 20 at 319:1-4; Calandrino Dep., Ex. 12 at 78:1-18).

How Glider Avoids Detection
138. Glider avoids manual detection by attempting to appear human with cues including jumping, pausing, and delaying responses to duels, trades, and party invitations. (I.R., Ex. 27 at 8:8-10). 139. Glider further avoids manual detection by detecting other players nearby and pausing, alerting the operator, or logging off altogether. (I.R., Ex. 27 at 8: 10-11). 140. Glider also avoids manual detection by advising its operators when they have configured Glider in a way that is likely to be detected by players. (I.R., Ex. 27 at 8:11-14). 141. Glider avoids automated detection by randomly renaming itself and using the shadow driver to remove its process object from the Windows task list via a rootkit-like technique commonly known as DKOM (Direct Kernel Object Manipulation). (I.R., Ex. 27 at 8:17-19). 142. Glider avoids direct attempts to examine it by using the shadow driver to hook several kernel functions, including NtOpenProcess, NtUserBuildHwndList, ZwQuerySystemInformation, GetForegroundWindow, and
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GetActiveWindow. (I.R., Ex 27 at 8:20-22). 143. Glider avoids detection of its window titles by randomizing the title bar, including those of any "help windows" created by Glider. (I.R., Ex. 27 at 8:23-24). 144. Glider's shadow driver avoids detection by randomly renaming itself and removing itself from the list of loaded modules. (I.R., Ex. 27 at 8:25-26).

The Value of Glider's Anti-Detection Features
145. Glider's viability arises entirely from its ability to evade detection, and many of Glider's features are dedicated to anti-detection. (Donnelly I, Ex. 5 at 86, 96, 105, 108-09, 113-16, 130, 135-36, 172-73). 146. MDY constantly updates Glider to ensure its continued success in cracking Warden's evolving detection and access control technologies. Each time Blizzard devises a new method to detect Glider and block Glider users' access to WoW, Donnelly makes changes to Glider to avoid detection. (Donnelly I, Ex. 5 at 85:10-25; 86:1-6, 90-96). 147. MDY acknowledged the value of the anti-detection features in refraining from charging extra fees for advanced circumvention functionality, noting that Glider's circumvention ability is as essential to Glider's success as seatbelts are to a car, and that Glider's value would be limited if it could not circumvent Blizzard's technological measures. (Donnelly I, Ex. 5 at 129:16-25; 130:1-7). 148. At one point, after Blizzard developed a new method of detecting Glider, Donnelly sought and received help from Joseph Thaler who sold
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information about Blizzard's new detection measures to MDY for $18,000. (Nov. 9, 2007 Dep. of Joseph Thaler, Ex. 28 at 48:3 - 49:21).

Glider's Communications with MDY's Server
149. When Glider runs, it first authenticates with the MDY server at www.mmoglider.com by negotiating a key exchange to create a secure channel. (I.R., Ex. 27 at 9:2-3). 150. Once a secure channel is determined, Glider sends the game version, Glider version, and product key to the MDY server at www.mmoglider.com for validation. (I.R., Ex. 27 at 9:2-4). 151. If the Glider key communicated to the MDY server at www.mmoglider.com has not been locked, and is otherwise in good standing, the server allows Glider to operate by providing it with memory locations of game data for the specified game version. (I.R., Ex. 27 at 9:2-6). 152. If the authentication fails, the MDY server at www.mmoglider.com will not provide Glider with the memory locations of game data, and Glider will not run. (I.R., Ex. 27 at 9:6-8). 153. Glider updates itself by comparing its internal version number to the one available at the MDY server at www.mmoglider.com. Glider will prompt the user to update the program if it finds a more recent version available from the MDY server. (I.R., Ex. 27 at 9:9-11). 154. MDY maintains control of all purchased Glider programs by requiring that they connect to the MDY server at www.mmoglider.com before running. Thus, MDY has the ability to disable any copy or all copies of WoWGlider at any
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time. (MDY's Answer, Ex. 3 ¶ 93). 155. MDY, by maintaining a central server of software keys for paying Glider users, has the right and ability to terminate the use of Glider at any time, and MDY receives a direct financial benefit from Glider sales. (MDY's Answer, Ex. 3 ¶¶ 93-94)). In-Game Impact of Glider 156. Glider enables players to level and otherwise develop characters faster. (Nov. 6, 2007 Dep. of Robert Hale, Ex. 16 at 31:4-7, 14-16, 20-25) 157. Glider enables players to collect large amounts of in-game gold and items for RMT (real world sale). (Hale Dep., Ex. 16 at 31:4-7, 14-16, 20-25) 158. Glider includes specific profiles that allow users to, without human participation, battle monsters, recover from death, loot fallen adversaries, sell goods to vendors for gold, fish for food and treasure, and several other activities available to WoW players. (Ashe I, Ex. 8, 111:15-22). Sample User Complaints Concerning Glider 159. On August 9, 2006, a petition filed by a user (account number 4740445) indicated that during a 3 day period, a player who was "using a bot (such as glider)" was observed "kill[ing] the orcs" in a specific area of the WoW game environment, "completely ruining the area for everyone else." (Aug. 9, 2006 User Compl., BLIZZM00034311, Ex. 29). 160. On August 25, 2006, a petition filed by a user (account number 8506996) indicated that s/he could not complete an in-game quest due to 2 bots who were farming "in the Highlands." The user demanded that Blizzard "DO
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SOMETHING ABOUT WOWGLIDER!!!!!!!!!!!" (Aug. 25, 2006 User Compl., BLIZZM00081706, Ex. 30). 161. On September 9, 2006, a petition filed by a user (account number 8506996) indicated that s/he had identified two players using WoWGlider. The user asked whether Blizzard intended to address the "absolutly [sic] Horrible Botting Problem." (Sept. 9, 2006 User Compl., BLIZZM00081758, Ex. 31). 162. On October 12, 2006, a petition filed by a user (account number 3426538) indicated that a character named "Arlann" was exhibiting "common bot behaviour [sic]...WoW Glider...He's busily spinning around like WoW glider does." The user also stated that the bot's presence hurt his game experience . (Oct. 12, 2006 User Compl., BLIZZM00034576, Ex. 32). 163. On November 15, 2006, a petition filed by a user (account number 3821196) indicated that four "auto-farmers Clearly using Glider" were making impossible for him to play. The user suggested that if Blizzard could not keep players from using Glider, s/he would stop playing (and paying for) the game. (Nov. 15, 2006 User Compl., BLIZZM00072302, Ex. 33). 164. On November 16, 2006, a petition filed by a user (account number 3821196) indicated that the user had cancelled his/her WoW account due to frustration with players using Glider who were "clearing a quest area 3 DAYS NON-STOP," making it impossible for that user to complete in-game quests. (Nov. 16, 2006 User Compl., BLIZZM00072307, Ex. 34). 165. On November 25, 2006, a petition filed by a user (account number 3821196) indicated that s/he had observed two characters using Glider to "farm in
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exactly the same spot for a week 24 hours a day." The user also expressed his/her belief that, because Blizzard has millions of subscribers, it does not care that the problems caused by the use of Glider were going to get worse in the future. (Nov. 25, 2006 User Compl., BLIZZM00072365, Ex. 35). 166. On April 24, 2007, a petition filed by a user (account number 6536425) indicated that s/he had consistently encountered four characters using "a cheat code or that glider program" to farm in a specific location within the game. The user explicitly states that s/he will cancel her/his account if Blizzard did not put a stop to such activities. (Apr. 24, 2007 User Compl., BLIZZM00288837, Ex. 36). 167. On April 25, 2007, a petition filed by a user (account number 6536425) indicated that it was the fourth, and final, petition s/he would submit complaining about multiple characters using Glider. The petition went on to say that, because the use of Glider by other players made it "impossible to play," the user was cancelling his/her account. (Apr. 25, 2007 User Compl., BLIZZM00288845, Ex. 37). 168. Over time, Blizzard's WoW forums have contained a number of threads filled with messages complaining about the presence of bots, and specifically Glider, in WoW. For example, in a post dated November 3, 2007, a user stated that "Blizzard needs to beef up the warden and autoban Glider users if they want to get rid of AFK'ing [botting]. The software is using a rootkit to hide behind (avoid Warden). They also have a software called Tripwire that monitors Warden. As warden changes, tripwire will notify the glider software and shut it
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down until they can adapt to the newest warden. Its quite involved. Forget about all that. The whole thing is the rootkit, figure out a way around that and these guys are done." (Mar. 20, 2008 Aff. of Jonathan B. Berroya ("Berroya Aff"), Ex. 38 ¶ 2 & attachment 1). 169. Another post on Blizzard's WoW forums, dated January 14, 2008, stated that, "The facts of the matter are on Rampage battlegroup, for at least the last 2-3 weeks the majority of our team is botting which is the real reason we don't win." The poster goes on to say that "[y]ou can stand in our base and watch all the botters recalling over and over or pathing down the same paths over and over using mimic/glider. It gets worse after midnite." (Berroya Aff. ¶ 3, Ex. 38 & attachment 2). 170. On February 1, 2008, a WoW forum user posted a message stating: "Everyone keeps asking for BG's [Battle Grounds] to suck less. There's a very simple solution: track down and delete Gliders." The user concluded his post by saying "Seriously. Crack down on the botters. They ruin the BG's. If I want to play with bots I'll load up something like Battlefielld 1942 and play a bot match. Instead AV has turned into the 6 humans + 34 Gliders vs the same on other team . . . ." (Berroya Aff., Ex. 38 ¶ 4 & attachment 3). Glider Use Violates the WoW EULA and TOU

Bots and Other Automated Programs are Prohibited
171. Glider is a bot. (Donnelly I, Ex. 5 at 49:4-15; Eikenberry Dep., Ex. 26 at 51:11-12; Hale Dep., Ex. 16 at 10:2-4). 172. Glider is designed to automate user tasks in the World of Warcraft
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environment. (Donnelly I, Ex. 5 at 49:4-15). 173. Glider allows users to play WoW without actually spending time in front of the computer. (Donnelly I, Ex. 5 at 52:12-15, 54:2-19). 174. The use of bots and other automation software in WoW is prohibited by those provisions of the TOU quoted in paragraphs 100 - 102, supra.

Programs that Collect Information from WoW are Prohibited
175. Glider collects information from WoW. (Donnelly I, Ex. 5 at 103:7 to 104:13). 176. The use of software that collects information from WoW is prohibited by those provisions of the TOU quoted in SOF ¶¶ 99 - 102, supra.

Unauthorized Third Party Programs are Prohibited
177. MDY agrees that Glider is not approved or authorized by Blizzard. (Donnelly I, Ex. 5 at 195:9-12). 178. Unauthorized third party programs such as Glider are prohibited by the provisions of the EULA and TOU quoted in SOF ¶¶ 89 - 104, supra.

Donnelly Agreed to and Understood the EULA and TOU
179. Donnelly agreed to the TOU and EULA. (Donnelly I, Ex. 5 at 193:9 to 194:25). 180. Donnelly understands that all WoW users must agree to the TOU and EULA. (Donnelly I, Ex. 5 at 194:22-25).

MDY Knew that Glider Violates the EULA and TOU
181. Donnelly recalls seeing the EULA upon WoW launch, being required to scroll through the document and agree, seeing the EULA again upon being
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patched, and seeing and agreeing to the TOU (Donnelly I, Ex. 5 at 193:9 to 194:25). 182. The Frequently Asked Questions ("FAQ") on the Glider website provide in relevant part: "Q: Is using Glider cause for suspension/ban? A: Yes, Glider is against the Terms of Service as provided by Blizzard for World of Warcraft. If you are detected using Glider, your account will be suspended for 72 hours and very likely banned completely." The MDY website's FAQ boasts that
"Glider provides a number of features to help lower the risk of detection," and that the "current version of Glider...is not known to be detected by these methods." (FAQ,

Ex. 39 at 2). 183. MDY knew that Blizzard considered Glider use to be a violation of its TOU. (Donnelly I, Ex. 5 at 197:17-23). 184. Robert Hale, an MDY forum moderator who regularly assists Glider users, also acknowledged that use of bots results in Blizzard banning WoW accounts. (Hale Dep., Ex. 16 at 14:13-25). 185. Hale had multiple WoW accounts banned for using Glider. (Hale Dep. Ex. 16 at 15:2-11) 186. Glider contains functionality that "examines your configuration and then gives you recommendations on what you can do to minimize your risk of detection." (Donnelly I, Ex. 5 at 105:17-21). 187. A November 25, 2005 email from Donnelly to a Glider user acknowledges that "[s]ince Blizzard does not want bots running at all, it's a violation to use them." (MDY 06987, Ex. 40).
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MDY Knows its Customers Use Glider for Commercial Purposes
188. The MMOGlider.com website previously offered a forum on professional botting and farming for money. (Ashe I, Ex. 8 at 284:19-25 to 285:5). 189. MDY markets Glider on MarkeeDragon.com, a site featuring forums about buying, selling, and trading WoW accounts in violation of the WoW TOU. (Eikenberry Dep., Ex. 26 at 15:14-21). 190. Marcus Eikenberry, owner of MarkeeDragon.com, encouraged Donnelly to refer users who sought to trade, buy, and sell WoW accounts and items to Eikenberry's website, which had popular trading forums in place. (Eikenberry Dep., Ex. 26 at 41:19 to 42:11). 191. The MarkeeDragon site users and Glider users constitute the "same demographic" (Eikenberry Dep. Ex. 26 at 42:19-24). 192. The Glider and MarkeeDragon sites both had forums where account trading and Glider were discussed. (Eikenberry Dep., Ex. 26 at 43:1-7). 193. Donnelly tells Glider users how to use Markeedragon.com to "sell your Glider efforts." (Nov. 22, 2005 Glider Forum Post, Ex. 41). 194. A March 1, 2007 email message from a Glider user to Donnelly reads, in relevant part: "I got hit so hard with these bans I won't be gliding on 7+ accounts for a while.. at least until I get back on my feet. I owe you so much.. only 25 dollars a key and your program became one of my main sources of income." (MDY 06653, Ex. 42). 195. A November 17, 2006 email message from a Glider user to Donnelly
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reads, in relevant part, that the Glider purchaser uses 6 Glider keys to convert his LAN centre to a gold farming factory. (MDY 06801, Ex. 43). 196. A May 17, 2007 email message from a Glider user to Donnelly reads, in relevant part: "I'd like to talk to you more about Glider and the potential of using it on a wide scale for the purposes of account leveling and gold farming." (MDY 07562, Ex. 44). 197. MDY forum moderator Robert Hale testified that he has promoted Glider use to customers by explaining that a $25 investment in Glider allows botters to use the program to acquire and sell in-game virtual property at a profit. (Hale Dep., Ex. 16 at 29:9-25). Glider use Harms Blizzard 198. The proliferation of Glider has resulted in enormous direct costs for Blizzard to combat its destructive effects on WoW and its legitimate users. (Ashe I, Ex. 8 at 159, 238-239). 199. Blizzard spends at least $970,939.60 in direct costs addressing the problem of bots in WoW, and this greatly understates the overall costs of botting to Blizzard. (Castronova Supplemental, Ex. 13 at 1 n.1). 200. Blizzard must devote significant resources to anti-cheating mechanisms that would instead be used to improve the product and the overall game-play experience. (Ashe I, Ex. 8 at 159:3-23) 201. Cheating increases Blizzard's costs because it must respond to cheating and try to keep it in check by developing and deploying costly anticheating software, policies and processes; investigating and responding to
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customer complaints; and locating and disciplining cheaters. (Castronova Supplemental, Ex. 13 at 2; Ashe I, Ex. 8 at 159:3-23). 202. Blizzard must employ its Game Masters, who act as in-game moderators to answer customer questions and ensure a fair gaming experience, in the remedial task of attempting to manually detect Glider Use. (Castronova Report, Ex. 7 at 14). 203. Game Masters also must review and respond to the ever-increasing numbers of user complaints relating to cheating. (Ashe I, Ex. 8 at 159, 179-180, 211). 204. Intentionally Left Blank; See Para. 83. 205. The over 465,000 petitions from players complaining about bots include only "those specifically referencing bots, as opposed to complaints about [the] secondary effects of bots, such as over-farmed areas, in-games sales, and game economy imbalances." (Castronova Supplemental, Ex. 13 at 1; Ashe I, Ex. 8 at 180:3-20). 206. "[P]layer petitions complaining of in-game bots . . . represent only a small percentage of the players whose game experience is significantly diminished by bots." (Castronova Supplemental, Ex. 13 at 1). 207. Complaints take time and effort to file, exhibiting customers' extreme displeasure (Castronova Supplemental, Ex. 13 at 1). 208. Donnelly understands that most WoW players dislike seeing bots in the game, acknowledging that players report botting by other players "because they don't like it." (Donnelly I, Ex. 5 at 122:15-23).
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209. Donnelly agrees that it is proper for Glider users to be banned upon detection (Donnelly I, Ex. 5 at 197:17-23). 210. "[A] more accurate picture of the negative impact that Glider has on the goodwill of WoW players and potential players is reflected in the flood of messages concerning bots and game economy imbalances on Blizzard's own [website] forums [and] numerous other third-party forums." (Castronova Supplemental, Ex. 13 at 1). 211. Blizzard loses subscription fees because botters proceed through the game at an accelerated pace compared to what their normal subscription lifetime would be without using a bot. (Ashe I, Ex. 8 at 160:15-17; Castronova Supplemental, Ex. 13 at 2). 212. "Botting itself allows botters to move through game content more quickly than they otherwise would, which reduces Blizzard's revenue." (Castronova Supplemental, Ex. 13 at 2). 213. Botting reduces the time investment necessary to reach higher levels. (Hale Dep., Ex. 16 at 12:15 to 13:17). 214. Glider causes reputation harm to Blizzard which, in turn, causes "[p]layers [to] quit subscribing to [WoW]; [causes] fewer new players to subscribe; and [causes] those that do subscribe [to be] less willing to pay for game elements such as expansion packs, game time cards, character transfers, and the like." (Castronova Supplemental, Ex. 13 at 2). 215. "The number of Glider bots does not have to be large for their effect on the game to be huge[; a] single incident is sufficient to ruin the reputation of a
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game." (Castronova Supplemental, Ex. 13 at 2). 216. Botting results in an increased supply of certain items in the WoW economy, which devalues special items. (Ashe I, Ex. 8 at 161:1-7, 162:4-11). 217. New players are frustrated by attempted interaction with bots, resulting in "an extremely traumatic experience when we have sold the idea that this is an online game that allows you to play with other players." (Ashe I, Ex. 8 at 173:2-9). 218. Glider is the most well-known bot. (Ashe I, Ex. 8 at 181:7-11). 219. The largest customer complaint thread ever created on the WoW European website forums concerns botters, with Glider as the primary culprit. (Ashe I, Ex. 8 at 211:1-15; WoW-Europe.com Forums Thread, Ex. 45). 220. Customers have made clear that botting impacts their experience and they want it out of the game. (Galey Dep., Ex. 15 at 48:9-25, 49:1-6). 221. Glider consumes more Blizzard resources than other cheat because of its sophisticated anti-detection features. (Ashe I, Ex. 8 at 223:2-7). 222. Glider is the longest-standing cheat and has had the most resources devoted to it. (Ashe I, Ex. 8 at 238:22-25). 223. Blizzard has to divert resources from game development to combat Glider. (Ashe I, Ex. 8 at 238:22-25, 239:4-19). 224. Blizzard must devote programming resources to automatic detection of Glider use, a cost that has increased each time MDY has revised the Glider code to combat these measures. (Castronova Report, Ex. 7 at 15-16). 225. Blizzard has received "tons of customer service tickets" complaining of botting. (Ashe I, Ex. 8 at 159:1-23).
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226. Galey says that customers specifically mention Glider as a cause of dissatisfaction when they contact Blizzard's customer service personnel, and that "[i]t has become commonplace and acknowledged amongst our players that, yes, they are aware of Glider specifically." (Galey Dep., Ex. 15 at 52:3-12, 58:4-25). 227. Blizzard loses many customers because players who previously displayed an interest in playing the game without Glider make the poor choice of using Glider and must be terminated as a result. (Ashe I, Ex. 8 at 250:3-10). 228. Many of these banned users would have continued to play absent Glider. (Ashe I, Ex. 8 at 251:8-15). 229. While some players may operate and pay for separate accounts for Glider use, those players still impact legitimate players in the same way other Glider users do, such as by skewing the advancement curve. (Ashe I, Ex. 8 at 257:11-19). 230. Glider players have special advantages because they can play multiple accounts simultaneously, play when not at the keyboard, and play while doing other things. (Ashe I, Ex. 8 at 260:15 to 261:2).

Glider Gross Revenues
231. Glider's first sale was made on June 14, 2005. (I.R., Ex. 27 at 10:22). 232. As of March 10, 2008, MDY had sold over 100,000 Glider keys. (Supplemental Discovery Response from MDY Counsel). 233. The following are MDY's gross revenues by quarter: 2Q05: $210; 3Q05: $14,175; 4Q05: $66,699; 1Q06: $147,075; 2Q06: $209,675; 3Q06: $293,360; 4Q06: $216,732; 1Q07: $238,255; 2Q07: $201,095. (I.R., Ex. 27 at
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10:22 to 11:9). 3Q07: $366,306.28; 4Q07 $476,404.82; 1Q07 (through March 12) $633,229.43. (I.R. at 10:22-25; 11:1-9). (Mar. 13, 2008 Email from Venable to Genetski, Ex. 46).

MDY's Improper Motive
234. MDY sells and actively develops a program that is designed to be used in breach of WoW's EULA and TOU. (Ashe I, Ex. 8 at 263:1-8). 235. Donnelly reverse engineered Warden in violation of the WoW EULA. (Donnelly I, Ex. 5 at 91:15-25). 236. Donnelly reverse engineered Warden to learn how to make his program undetectable and thus more attractive to users. (Donnelly I, Ex. 5 118:14 to 121:4; MDY 06718, Ex. 47). 237. MDY encourages users to use Launch Pad ­ a component of Glider ­ as a primary means of avoiding detection by Blizzard. (Ashe II, Ex. 20 at 319:14). 238. Glider avoids detection by other players because "if another player suspects that the game play is automated, they'll report that character to the ingame staff." (Donnelly I, Ex. 5 at 122:13-18). 239. Donnelly designed Glider to encrypt output to make it difficult for Blizzard to analyze it. (Donnelly I, Ex. at 188:11-17). 240. Donnelly agrees that it is proper for Glider users to be banned upon detection (Donnelly I, Ex. at 197:17-23). 241. Donnelly admits that "[t]he downside of it [botting] is the impact on non-botters in the long-term: if the botting population becomes too big, other
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players become more aware of them and think badly about the game." (MDY 06981, Ex. 48). 242. Donnelly believes that "[t]he trick here is that Blizzard has a finite amount of development and test resources, so we want to make it bad business to spend that much time altering their detection code to find Glider, since Glider's negative effect on the game is debatable." (MDY 06987, Ex. 40). 243. Donnelly believes that "[t]he bottom line is that Blizzard can detect anything that's available to the public with enough effort, since they control the client. So rather than attack that strength, we attack the weakness and try to make it a bad idea or make their changes very risky, since they don't want to risk banning or crashing innocent customers." (MDY 06987, Ex. 40). 244. Donnelly tells Glider users how to use Markeedragon.com to "sell your Glider efforts." (Nov. 22, 2005 Glider Forum Post, Ex. 41). 245. Donnelly violated the WoW TOU by sharing his account credentials with third parties for the purpose of testing Glider. (Donnelly I, Ex. 5 at 78:1824).

MDY Targets Advertising to Players Looking for Cheats and Exploits
246. MDY bid on the Google AdWords search terms "World of Warcraft bot" and "World of Warcraft cheat" because "[y]ou try to guess what people are searching for that might also be interested in Glider." (Donnelly I, Ex. 5 at 65:113; 68:15-25). 247. Donnelly bought banner ads on RPGbugs.com and mmoexploits.com, websites that promote cheats and hacks for WoW. (Donnelly II, Ex. 49 at 232:1- 41 -

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3). Quantifying Financial Damages 248. Evidence supporting that Glider causes Blizzard real, concrete reputational and financial harm is absolutely overwhelming.