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

Filing 58

STATEMENT OF FACTS and Disputed Facts and Exhibits A to Z and Exhibits AA to CC re 57 Response to 39 Motion by Plaintiff MDY Industries, LLC, ThirdParty Defendant Michael Donnelly, Counter Defendant MDY Industries, LLC filed by MDY Industries, LLC, Michael Donnelly. (Attachments: # 1 Exhibit List, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit O, # 15 Exhibit P, # 16 Exhibit Q, # 17 Exhibit S, # 18 Exhibit T, # 19 Exhibit U, # 20 Exhibit V, # 21***STRICKEN PURSUANT TO ORDER #79, FILED 7/2/08***Exhibit W # 22 Exhibit X, # 23 Exhibit Y, # 24 Exhibit Z, # 25 Exhibit AA, # 26 Exhibit BB, # 27 Exhibit CC)(Venable, Lance) Modified on 4/25/2008 INCORRECT DOCUMENT EVENT SELECTED. THIS ENTRY HAS BEEN MODIFIED FROM (Declaration) TO (Statement of Facts); LINKAGE ADDED. (REW). MODIFIED ON 7/2/08 TO STRIKE EXHIBIT W ON (MAP).

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LAW OFFICES OF

VENABLE, C AMPILLO , LOGAN & MEANEY, P.C.
1938 EAST OSBORN ROA D PHOE NIX, A RI ZON A 850 16 TELEPHONE [phone] FACSIMILE [phone] E-MAIL [e-mail]

Lance C. Venable (AZ Bar No 017074) Joseph R. Meaney (AZ Bar No. 017371) 5 Attorneys for Plaintiff MDY Industries, LLC and Third-Party Defendant Michael Donnelly
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UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA MDY INDUSTRIES, LLC, Plaintiff and Counterdefendant, vs. BLIZZARD ENTERTAINMENT, INC., and VIVENDI GAMES, INC., Defendants and Counterclaimants, Case No.: CV06-02555-PHX-DGC STATEMENT OF DISPUTED FACTS BY PLAINTIFF MDY INDUSTRIES, LLC, AND THIRD PARTY DEFENDANT MICHAEL DONNELLY IN RESPONSE TO BLIZZARD'S MOTION FOR SUMMARY JUDGMENT The Honorable David G. Campbell BLIZZARD ENTERTAINMENT, INC., and VIVENDI GAMES, INC., Third-Party Plaintiffs, vs. MICHAEL DONNELLY, an individual Third-Party Defendant.

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The Parties 1. MDY Enterprises, LLC ("MDY") and Michael Donnelly ("Donnelly") (collectively, "the MDY Parties") do not dispute paragraphs 1-3.

Michael Donnelly and MDY Industries, LLC 2. The MDY Parties do not dispute paragraphs 4-8.

World of Warcraft 3. 4. The MDY Parties do not dispute paragraphs 9-17. In paragraph 18, the MDY Parties state that the "universe" must refer to the

experience when a user actually plays WoW. A person does not need to be "connected to a WoW server using an authorized subscription" in order to load the WoW software code into RAM memory. (Deposition of Greg Ashe ("Ashe Dep."), 43:17 - 44:8 relevant excerpts of which are attached hereto as Exhibit A). 5. 6. The MDY Parties do not dispute paragraphs 19-49. The MDY Parties dispute paragraph 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 is not making a "copy" in the copyright sense, but rather is simply moving software code from the hard drive to RAM so that the computer can execute the coded instructions more efficiently. In fact, a computer could execute the coded instructions directly from the hard drive. (Deposition of Joseph Calandrino ("Calandrino Dep.") at 49, 54, 68, attached hereto as Exhibit B).); (Expert Report of Joseph Calandrino ("Calandrino Rep."), attached hereto as Exhibit C) at 2-5). 7. The MDY Parties do not dispute paragraphs 51-52.

Threats to WoW Gaming Experience - Bots

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8. 9.

The MDY Parties do not dispute paragraphs 53-56. The MDY Parties dispute paragraph 57. Blizzards implies that it includes

Glider in the definition of the term "bots." The MDY Parties do not dispute that Glider is a "bot" program. When Blizzard, however, states that "bots" can play much longer than a human without stopping, this is not true with Glider. After a person uses Glider in WoW for a certain amount of time, Glider can no longer increase a characters level in the game and, thus becomes useless. A human must regularly interact with Glider in order for it to work with WoW (Castronova Dep. 62:8 ­ 63:13 which is attached hereto as Exhibit CC) and (Donnelly Aff. ¶ 2, which is attached hereto as Exhibit D).

In-Game Economic Impact of Botting 10. The MDY Parties dispute paragraph 58 in part. Botting may or may not distort the game economy, but the number of Glider customers is too small to have any impact. (Strumpf Rep. at 6 which is attached hereto as Exhibit E). 11. 12. The MDY Parties dispute paragraph 59 in part. See paragraph 58. The MDY Parties dispute paragraph 60. The effect is balanced because the

majority of the economy consists of players both selling and buying, thus receiving both the positive and negative effects of inflation (Strumpf Rep., at 18 and 21). 13. The MDY Parties dispute paragraph 61. See paragraph 12.

In-Game Resource Shortages Due to Botting 14. The MDY Parties dispute paragraph 62. Blizzards game design compensates for any acquisition of resources by Glider users. (Donnelly Aff. ¶ 3) 15. The MDY Parties dispute paragraph 63. The number of Glider customers

is too small to have any impact. (Strumpf Rep.at 6).

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Real-World Resource Drain Due to Botting 16. The MDY Parties dispute paragraph 64. Glider cannot cause more than 3.6% server loading. Given 9.3 million active WoW customers (Strumpf Rep. at 6) and 27,300 active Glider customers (Id), active Glider customers comprise a mere 0.03% of active WoW customers. Even assuming that every Glider customer is somehow running 24 hours per day, (Castronova Rep. at 21, which is attached hereto as Exhibit F) which is very unlikely (Strumpf Rep. at 16), instead of the intended 2 hours per day (Castronova Rep. at 20), then each Glider customer is causing 12 times the loading. This translates to to 3.6% loading at 0.03% penetration. No evidence has been presented that Glider customers choose servers differently from other WoW players. 17. above. The MDY Parties dispute paragraph 65. See response to paragraph 64

Social Impact of Botting 18. 19. Rep. at 15). The MDY Parties do not dispute paragraphs 66-67. The MDY Parties dispute paragraph 68. Players do not mind if they play a

game in which the other players are not actually present. (Donnelly Aff. ¶ 4; Strumpf

Decrease of Demand Due to Botting 20. The MDY Parties dispute paragraph 69. (Strumpf Dep. and Rep.). A copy of the Strumpf Dep. is attached hereto as Exhibit G 21. The MDY Parties dispute paragraph 70. (Strumpf Dep. and Rep.).

The Problems of RMT and Gold Farming 22. The MDY Parties do not dispute paragraphs 71-72.

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23. 24. 25. 26.

The MDY Parties assert that paragraph 73 is a legal conclusion, not a fact. The MDY Parties do not dispute paragraphs 74-75. The MDY Parties dispute paragraph 76. (Strumpf Report., at 18-21). The MDY Parties do not dispute paragraphs 77-79.

Blizzard's Need to Have and Enforce Rules 27. 28. The MDY Parties do not dispute paragraph 80. The MDY Parties dispute paragraph 81. The use of Glider with WoW has

little, or no negative impact on the game-play experience of others. (Donnelly Aff. ¶ 5; Strumpf Report at 6). 29. 30. The MDY Parties do not dispute paragraphs 82. The MDY Parties dispute paragraph 83. The MDY Parties do not dispute

that Blizzard may have received 465,000 in-game petitions from users complaining about bots. The petitions, however, are extremely unreliable as to their accuracy and constitute inadmissible hearsay. Most significant is the fact that Blizzard never presented any evidence to confirm that all of the petitioners actually encountered a bot during play. Additionally, some of the petitions were flat out false. For example, two of the complaints Blizzard provided specifically mention Glider (Blizzards SOF ¶ 164-65). Those two complaints were filed by the same user when Glider was physically off-line due to Blizzards November, 2006 ban wave (Donnelly Dep. at 139:4-23, a copy of which is attached hereto as Exhibit H). Because MDY prohibited Glider use by its customers during the dates specified, it was impossible for the complaints to refer to Glider. Another example pertained to a third complaint in Blizzards SOF ¶ 162 that claims to identify Glider based on the character spinning repeatedly on October 12, 2006. This complaint likely identifies InnerSpace instead, a competitor to Glider (Deposition of Joseph Thaler ("Thaler Dep.") at 18:3-7, a copy of which is attached hereto as Exhibit I),

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based on this thread: http://ismods.com/forums/viewtopic.php?t=2586 (a copy of which is attached hereto as Exhibit U) from InnerSpace's support board on October 11, 2006. Glider had no similar reported bug at the time. Furthermore, Blizzard has presented no evidence that any of the 465,000 bot complaints pertained to Glider users. In fact, because MDY had not sold Glider until June, 2005 (Donnelly Dep. at 60:5), Blizzards alleged complaints between December 22, 2004 and June, 2005 could not have pertained to Glider. The World of Warcraft EULA and TOU 31. The MDY Parties do not dispute paragraphs 84-89. Blizzard's EULA and TOU Provisions at Issue 32. The MDY Parties do not dispute paragraphs 90-104. Blizzard's Technical Measures to Enforce Rules 33. The MDY Parties do not dispute paragraphs 105-07. Warden ­ Scan.dll 34. 35. The MDY Parties do not dispute paragraphs 108-10. The MDY Parties dispute paragraph 111. Scan.dll stops the game from

copying elements into RAM. The user can still copy the elements at any time by simply dragging the WoW folder somewhere else, such as a hard disk, flash drive, CD-ROM, or other storage. The contents will also pass through RAM during this copy. (Donnelly Aff. ¶ 7). 36. The MDY Parties dispute Paragraph 112. The entire executable code for

wow.exe is loaded into memory at the authentication portion, including game logic for spells, combat, LUA scripting, and everything else. The only content that is not yet loaded into memory is game resource, namely graphics, sound, text. (Donnelly Aff. ¶ 8). 37. The MDY Parties dispute Paragraph 113. Specifically, the user cannot

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attempt to authenticate if scan.dll detects a program.

Scan.dll is not part of the

authentication process, but it happens before authentication. (Donnelly Aff. ¶ 9). 38. The MDY Parties dispute Paragraph 114. InnerSpace, by Joseph Thaler, is

also completely undetectable and has only been picked up by Warden on a few occasions in June of 2007. (Thaler Dep. at 20:24-25, 21:1-4). WOWmimic, cited as as the possible bot complaint in Blizzard SOF 169, has also been on the open market since September of 2007 and has not been detected. (WOWmimic launch announcement: http://www.gamemimic.com/static/ff80808114fc01fe01150f788e64000a.jsp) Warden ­ The Resident Component 39. The MDY Parties do not dispute paragraph 115, 117-119. The MDY Parties dispute paragraph 116. Warden has the ability to stop the game from copying further elements into RAM. The user can still copy the elements at any time by simply dragging the WoW folder somewhere else, such as a hard disk, flash drive, CD-ROM, or other storage. The contents will also pass through RAM during this copy. (Donnelly Aff. ¶ 7).

The MDY Business Glider 40. The MDY Parties dispute paragraph 120. MDY did not make its first sale of Glider until June, 2005. (Donnelly Dep. at 60:5). 41. 42. automate The MDY Parties do not dispute paragraphs 121-22. The MDY Parties dispute paragraph 123. Glider currently can be used to Windows Solitaire. (http://www.youtube.com/watch?v=f7Oy9fOwyr4).

Additionally, MDY is currently developing the Glider platform for use with other games similar to WoW. Glider can also be used as a tool to assist people with physical disabilities in playing WoW. In particular, any person who has difficulties using a

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standard keyboard can program Glider to mimic the keystrokes they would use to play WoW. (Donnelly Aff. ¶ 10); (See Exhibit Z ­ Handicap letters). 43. 44. The MDY Parties do not dispute paragraphs 124-25. The MDY Parties dispute paragraph 126. Glider is not designed to

circumvent Warden. Glider is designed, and is solely marketed as, a tool to assist WoW players in leveling their characters to level 70 at a faster than normal rate. Gliders ability to circumvent Warden is a feature of Glider. Furthermore, MDY did not even implement Gliders ability to circumvent Warden until over six months after MDY first began developing Glider. MDY added the anti-detection feature in September, 2005 only after MDY realized that Blizzard objected to Gliders use with WoW. (Donnelly Dep. ¶ 83:12-15, Donnelly Aff. ¶ 11). MDY Affiliates 45. 46. The MDY Parties do not dispute paragraphs 127-28. The MDY Parties dispute paragraph 129. MarkeeDragon.com resells

Glider. (Eikenberry Dep. at 25:19-21, a copy of which is attached hereto at Exhibit J). MDY does not sell or resell Glider through MarkeeDragon.com. (Donnelly Aff. ¶ 12). 47. The MDY Parties do not dispute paragraphs 130-31. Operation of Glider 48. 49. The MDY Parties do not dispute paragraphs 132-34. The MDY Parties dispute paragraph 135. Launchpad was a feature of

Glider from October, 2005 through January, 2008 and was not necessary for use (Calandrino Dep. at 80:22). It is no longer necessary or even possible for a Glider user to start the WoW software client using Glider as of version 1.5.7, released in January, 2008. (Donnelly Aff. ¶ 13). 50. The MDY Parties dispute paragraph 136. See paragraph 49 above.

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51.

The MDY Parties dispute paragraph 137. Launchpad has been not been a

feature since January, 2008. Since that time, Blizzard has not detected one use of Glider by any of Gliders customers through a component of Warden. (Donnelly Aff. ¶ 14). Additionally, Launchpad is not essential to avoiding detection. (Calandrino Dep. at 80:22). How Glider Avoids Detection 52. The MDY Parties do not dispute paragraphs 138-44. The Value of Glider's Anti-Detection Features 53. 54. The MDY Parties do not dispute paragraphs 145-47. The MDY Parties dispute paragraph 148. Joseph Thaler did not sell

information about Blizzards new detection measures to MDY for $18,000. MDY paid Thaler $18,000 in advance for licenses of a new integration between InnerSpace and Glider. But, the integration was disrupted by the present suit. (Donnelly Dep. at 154, attached as Exhibit H, which also includes a copy of referenced Exhibit 9) Glider's Communications with MDY's Server 55. The MDY Parties do not dispute paragraphs 149-55. In-Game Impact of Glider 56. The MDY Parties do not dispute paragraphs 156-58. Sample User Complaints Concerning Glider 57. The MDY Parties do not dispute paragraphs 159-61. Blizzard, however, has presented no evidence that the cited complaints referred to an actual incident where Glider was in fact being used by a WoW player. 58. above. 59. The MDY Parties do not dispute paragraph 163. Blizzard, however, has The MDY Parties dispute paragraph 162. See answer to paragraph 83

presented no evidence that the cited complaint referred to an actual incident where Glider
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was in fact being used by a WoW player. 60. 61. The MDY Parties dispute paragraphs 164-65. See paragraph 30 above. The MDY Parties do not dispute paragraph 166. Blizzard, however, has

presented no evidence that the cited complaint referred to an actual incident where Glider was in fact being used by a WoW player. Furthermore, Blizzard has presented no evidence that the petitioner canceled his/her account as a result of the alleged incident. 62. The MDY Parties do not dispute paragraph 167. Blizzard, however, has

presented no evidence that the cited complaint referred to an actual incident where Glider was in fact being used by a WoW player. Furthermore, Blizzard has presented no evidence that the petitioner canceled his/her account as a result of the alleged incident. 63. The MDY Parties dispute paragraph 168. The reference to "AFK'ing Although Glider can

[botting]" is for the battlegrounds feature of WoW and is not used to gain experience in the game (http://www.worldofwarcraft.com/pvp/battlegrounds). function in battlegrounds, it requires a third-party add-on program. MDY explicitly discourages using Glider in battlegrounds and does not sell or promote any add-on programs that would enable Glider to work in battlegrounds. (Donnelly Aff. ¶ 15); (http://vforums.mmoglider.com/showpost.php?p=221025&postcount=10); (http://vforums.mmoglider.com/showpost.php?p=197587&postcount=34); Dep. at 287-88). 64. The MDY Parties do not dispute paragraph 169. Blizzard, however, has (Donnelly

presented no evidence that the cited complaint referred to an actual incident where Glider was in fact being used by a WoW player. 65. The MDY Parties dispute paragraph 170. See paragraph 63 above. Glider Use Violates the WoW EULA and TOU Bots and Other Automated Programs are Prohibited 66. The MDY Parties do not dispute paragraphs 171-73.

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67.

The MDY Parties dispute paragraph 174. The statement in paragraph 174

is a conclusion of law. To the extent that the TOU prohibits bots, the TOU only began prohibiting bots in December, 2006 when Blizzard added the term "bots" as one of the explicit types of programs Blizzard apparently did not allow to be used with WoW. (Ashe Dep. 133:10-41:15, specifically 138:21-41:15). Compare Section 2C of TOU as of September 2005 (Exhibit O); Compare TOU from June 2005:

with Section 4C of TOU as of December 11, 2006 (Exhibit T).

Programs that Collect Information from WoW are Prohibited 68. 69. The MDY Parties do not dispute paragraph 175. The MDY Parties dispute paragraph 176. The statement in paragraph 176

is a conclusion of law. Unauthorized Third Party Programs are Prohibited 70. The MDY Parties do not dispute paragraph 177. The MDY Parties, however, wish to clarify the statement that MDY did not know that Blizzard disapproved of Glider use until after four months of selling the program when Blizzard first banned
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one of MDYs customers. (Donnelly Aff. ¶ 16). 71. terminates: The MDY Parties dispute paragraph 178. The statement in paragraph 178

is a conclusion of law. In addition, the EULA expressly states how Blizzards license

(Exhibit S, attached hereto.) MDY is not aware of a single case in which Blizzards license has ever been terminated under any of the provisions set forth in Section 6 of EULA. (Donnelly Aff. ¶ 35.) And, Blizzard has not provided any evidence that any of its licenses have ever been terminated in the manner specified in the EULA. Moreover, Blizzard has modified the EULA and TOU by its own conduct. In it termination letters, Blizzard never suggests that the copyright license is terminated. Blizzard simply states:

See, Exhibit Y. Thus, even assuming Blizzards legal argument is correct, an issue of fact exists whether any paying user has ever loaded WoW into RAM in a manner that exceeds the scope of the license. Donnelly Agreed to and Understood the EULA and TOU 72. The MDY Parties do not dispute paragraphs 179-80.

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MDY Knew that Glider Violates the EULA and TOU 73. 74. The MDY Parties do not dispute paragraph 181. The MDY Parties dispute paragraph 182. MDY did not add the language in

its FAQ section until after September of 2005 ­ shortly after Blizzard banned the first Glider customers. The MDY Parties did not believe Glider would be a violation of the terms before then. (Donnelly Aff. ¶ 17, Donnelly Dep. 83:12-15) Also, Blizzards quote of MDYs FAQ in paragraph 182 omits the rest of MDYs statement that refers to the sweeping nature of the contract and shows that the MDY Parties did not believe Glider was specifically prohibited by Blizzards TOU. MDYs statement referred to MDYs suspicion that Blizzard might have believed that it could ban any third party program. Specifically, the following language currently appears in the MDY Parties FAQ section. "While Glider does not violate any of the terms listed under Blizzard's ,,Client/Server Manipulation Policy, it is still a third-party program and their Terms of Service are very open in what falls under that definition, meaning they can find you in violation for pretty much anything they want." (Donnelly Aff. ¶ 17). 75. The MDY Parties dispute paragraph 183. Blizzards citation to the record

in paragraph 183 refers to what Donnellys understanding of Blizzards EULA was as of June, 2007. The MDY Parties did not know that Blizzard objected to Glider use until several months after MDY began selling Glider. (Donnelly Dep. at 83:12-15, 293:13297:22). 76. The MDY Parties do not dispute paragraphs 184-187. MDY Knows its Customers Use Glider for Commercial Purposes 77. The MDY Parties dispute paragraph 188. Marcus Eikenberry managed the

forum that Blizzard refers to in paragraph 188. The MDY Parties removed the forum on September 17, 2006 even before the litigation commenced due to its content. (Donnelly Aff. ¶ 19). What MDY specifically stated about the post is located on MDYs forum at http://vforums.mmoglider.com/showthread.php?t=31623.
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78.

The MDY Parties dispute paragraph 189.

While it is true that MDY

markets Glider on MarkeeDragon.com, MDY markets Glider on that website because the site has a reputation for being a place where many WoW players go to discuss the WoW game. The MarkeeDragon.com website is a site devoted to the discussion of several computer games of a similar genre to WoW (See Exhibit Q). MDY does not market on the site because the site features forums about buying, trading or selling WoW accounts in violation of Blizzards TOU. MDY has no control over what MarkeeDragon.com discusses or promotes (Donnelly Aff. ¶ 20). 79. 80. The MDY Parties do not dispute paragraphs 190-91. The MDY Parties dispute paragraph 192. See the MDY Parties response

to paragraph 188. 81. The MDY Parties dispute paragraph 193. Although Blizzard is correct that

MDY posted information about referring to MarkeeDragon.com with regard to selling Glider efforts on November 22, 2005. (Donnelly Aff. ¶ 21). MDY does not earn a commission or have any business interest in MarkeeDragon.com website other than to sell Glider (Donnelly Dep. at 219:9-12). Selling or buying accounts is not allowed on the Glider forums (http://vforums.mmoglider.com/announcement.php?f=30) Note: WTT/WTS/WTB are short-hand for "want to trade", "want to sell", and "want to buy" respectively. 82. The MDY Parties do not dispute paragraphs 194-95. The MDY Parties, In fact, the MDY Parties actively discourage such a practice. ¶ 22, forum post by Jason Beatty, MDY employee: Donnelly:

however, for the purpose of clarification do not market Glider for the purpose of gold farming in WoW. (Donnelly Michael http://vforums.mmoglider.com/showpost.php?p=448270&postcount=128. Aff.

http://vforums.mmoglider.com/showpost.php?p=659355&postcount=17, forum post by

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83.

The MDY Parties do not dispute paragraph 196.

The MDY Parties,

however, for the purpose of clarification actually rejected the emailers offer because MDY is not in the business of selling gold. (Donnelly Dep. at 213:17 to 214:25). 84. The MDY Parties do not dispute paragraph 197. Glider use Harms Blizzard 85. The MDY Parties do not dispute paragraphs 198-202. The MDY Parties,

however, for the purpose of clarification, respond by stating that Blizzard has not provided any evidence of damages caused by MDYs sales of Glider except for completely unsupported opinions by its expert, Edward Castronova (Strumpf Report. at 31-32). 86. 87. The MDY Parties do not dispute paragraphs 203-05. The MDY Parties dispute paragraph 206. Blizzards expert, Edward

Castronova, has no basis to offer what is nothing more than an opinion. Repeatedly, when asked at his deposition if he had ever interviewed WoW players or conducted any scientific study on any issue related to customer complaints or damages to Blizzard, he indicated he had never done so. (Castronova Dep. at 40:8-11, 110:14-21, 174:10-18, 204:11-21, 239:14-21). 88. 89. The MDY Parties do not dispute paragraph 207. The MDY Parties dispute paragraph 208. Paragraph 208 is a misstatement

by Blizzard. Donnelly did not say that he understands that most WoW players dislike seeing bots in the game. When Blizzard asked him to speculate what a WoW player might do if he located a person suspected of automating play. Donnelly responded by saying that they would report the person to the in-game staff. (Donnelly Dep., at 122:1523). 90. The MDY Parties dispute paragraph 209. Paragraph 209 is a misstatement

by Blizzard. Donnelly did not say that he agreed that was proper for Glider users to be
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banned upon detection.

Blizzard asked him whether he thought it was proper for

Blizzard to ban an account it suspected of using Glider. He stated that if Blizzard believed it was against its terms, in his opinion, Blizzard could ban the account. (Donnelly Dep., at 197:17-23). 91. The MDY Parties dispute paragraph 210. Blizzards expert, Edward

Castronova, has no basis to offer what is nothing more than an opinion. Repeatedly, when asked at his deposition if he had ever interviewed WoW players or conducted any scientific study on any issue related to customer complaints or damages to Blizzard, he indicated he had never done so. (Castronova Dep. at 40:8-11, 110:14-21, 174:10-18, 204:11-21, 239:14-21). Furthermore, Castronova offered no evidence tying damages from a user complaint to Glider. (Strumpf Rep. at 7). 92. The MDY Parties dispute paragraph 211. Blizzards expert, Edward

Castronova, has no basis to offer what is nothing more than an opinion. Repeatedly, when asked at his deposition if he had ever interviewed WoW players or conducted any scientific study to support such an assertion, he indicated he had never done so. (Castronova Dep. at 40:8-11, 110:14-21, 174:10-18, 204:11-21, 239:14-21). Furthermore, at least as to Glider customers, Blizzard actually has an increase in subscription revenues. (Strumpf Supp. Rep. at 4). 93. The MDY Parties dispute paragraph 212 in part. While it may be true that

botters move through WoW game content more quickly than they otherwise would, Blizzard provided no evidence that Blizzard loses revenue as a result of Glider. See answer to paragraph 211 above. 94. 95. The MDY Parties do not dispute paragraph 213. The MDY Parties dispute paragraph 214. Blizzards expert, Edward

Castronova, has no basis to offer what is nothing more than an opinion. Repeatedly, when asked at his deposition if he had ever interviewed WoW players or conducted any

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scientific study to support his claim that Blizzard suffered reputation harm, or evidence of any person who quit WoW, or who never signed up to play WoW because of WoWs reputation for having bots in its game, he indicated he had never done so. (Castronova Dep. at 40:8-11, 110:14-21, 174:10-18, 204:11-21, 239:14-21). Furthermore, MDYs damages expert refuted Castronovas claims. (Strumpf Rep. at 31-32). 96. above. 97. 98. above. 99. 100. The MDY Parties do not dispute paragraph 218. The MDY Parties dispute paragraph 219 in part. The MDY Parties have no The MDY Parties do not dispute paragraph 216. The MDY Parties dispute paragraph 217. See answer to paragraph 214 The MDY Parties dispute paragraph 215. See answer to paragraph 214

way to refute that a large number of complaints on its European website forums regarding bots. Blizzards citation, however, to Exhibit 45 shows no evidence that Glider bots were identified as the source of the complaints or that contributors to the thread cancelled their subscriptions. 101. 102. The MDY Parties do not dispute paragraph 220. The MDY Parties dispute paragraphs 221-22 in part. The MDY Parties

have do not dispute Blizzards contentions regarding Glider and Blizzards resources. Glider, however, is not a cheat program. Glider is a bot program. 103. 104. The MDY Parties do not dispute paragraphs 223-26. The MDY Parties dispute paragraph 227. Blizzard decides on its own

initiative to ban Glider users accounts. They are under no obligation to do so. Even if Blizzard bans a Glider users account, Glider users can and often choose to immediately open up another account (Strumpf Supp. Rep page 3, Ashe Dep. 254, Donnelly Aff. ¶

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23). 105. The MDY Parties dispute paragraph 228. Ashes statement is a speculative

opinion, not a fact. 106. below. 107. The MDY Parties dispute paragraph 230 in part. Blizzards statement that The MDY Parties dispute paragraph 229. See paragraphs 147 through 153

a Glider user has a special advantage because he can play multiple accounts simultaneously. This is not a special advantage because any player who does not use Glider can play multiple accounts simultaneously. This practice is known as "multiboxing" and is explicitly permitted by Blizzard. (Donnelly Aff. ¶ 24, WoW forums: http://forums.worldofwarcraft.com/thread.html?topicId=5103947753&postId=523547236 99&sid=1#2). Glider Gross Revenues 108. The MDY Parties do not dispute paragraphs 231-33. MDY's Improper Motive 109. The MDY Parties dispute paragraph 234. MDY has never actively

developed Glider to be used in breach of WoWs EULA and TOU. First, Ashe cannot speak on behalf of Donnelly or MDY, which means that his statement is pure speculation as to Donnellys motive. Second, whether Glider is a violation of the EULA or TOU is a question of law, not fact. Third, Donnelly designed the Glider program initially for his personal use, and then for other WoW users to level their characters at a faster rate than normal. Donnelly did not even know that Blizzard objected to Glider use until Blizzard first banned a Glider users account in late September, 2005 ­ nearly four months after Donnelly first sold a Glider key. Donnellys intent in designing and selling Glider was not to harm Blizzard or the World of Warcraft experience, but rather his intent was to capitalize on a market demand for a program like Glider and make a profit. (Donnelly

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Aff. ¶ 25). 110. The MDY Parties dispute paragraph 235 in part. While Donnelly did

reverse engineer Warden, the reverse engineering was solely for the purpose of allowing Glider to work with WoW. (Donnelly Aff. ¶ 26). 111. 112. The MDY Parties do not dispute paragraph 236. The MDY Parties dispute paragraph 237. At one time, MDY did suggest to

its Glider customers to use Launchpad as a way to avoid detection of Warden. MDY, however, eliminated the Launchpad feature of Glider in January, 2008. See paragraph 49 above. 113. 114. The MDY Parties do not dispute paragraph 238. The MDY Parties dispute paragraph 239. Donnelly did not design Glider

to encrypt output to make it difficult for Blizzard to analyze it. Donnelly designed Glider with encrypted output to prevent a competitor from analyzing Glider. (Mike D Dep. 187:18 ­ 188:9). 115. The MDY Parties dispute paragraph 240. See the MDY Parties response

to paragraph 209. 116. The MDY Parties dispute paragraph 241 in part. It is still Donnellys

opinion that if the botting population becomes too big, other players become more aware of botters and will think badly about the game. Donnelly, however, currently believes that the botting population has not become too big and is not in danger of becoming too big, given the microscopically small penetration of Glider. Donnelly does not believe that botting hurts the game in any measurable way at present, and does not believe MDY will ever sell enough Gliders to hurt the game due to the microscopically small penetration of Glider. (Donnelly Aff. ¶ 28). 117. The MDY Parties do not dispute paragraphs 242-43.

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118.

The MDY Parties dispute paragraph 244. See the MDY Parties response

to paragraph 193. 119. The MDY Parties dispute paragraph 245 in part. While Donnelly did share As stated above for

his account credentials, Donnelly did so only with other employees of WoW to assist in the reverse engineering process of WoWs Warden feature. paragraph 235, reverse engineering for the purpose of interoperability with a computer program is a legitimate act under federal copyright law. See 17 U.S.C. § 1201(f). See also, Testimony of Professor Ginsburg, attached hereto as Exhibit L. MDY Targets Advertising to Players Looking for Cheats and Exploits 120. The MDY Parties do not dispute paragraphs 246-47. Quantifying Financial Damages 121. The MDY Parties dispute paragraph 248. Blizzard has provided no

evidence that Glider use causes Blizzard real, concrete reputational and financial harm. (Strumpf Rep. at 31-32). 122. The MDY Parties dispute paragraphs 249-52. Blizzard does not have to

devote any time to bot enforcement. Blizzard chooses to do so. 123. The MDY Parties dispute paragraph 253. Blizzard has suffered no harm to

its reputation as evidenced by the fact that despite MDY has increased its sales of Glider keys from zero to over 100,000 from June, 2005 to the present, Blizzard has increased its subscription from 3.5 million active subscribers to well over 10 million in the same time period. Furthermore, Blizzard has presented no evidence that WoW subscribers have actually terminated their accounts because of Glider. (Strumpf Dep. at 62:25 to 73:16). 124. 125. The MDY Parties do not dispute paragraphs 254-57. The MDY Parties dispute paragraph 258. Castronova offered no empirical

evidence to support his claim that a "casual WoW player can be expected to average 2

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hours of play per day." In fact, when asked how he arrived at this figure, he stated "Thats how often I play, about two hours a day, when I play those games." (Castronova Dep. at 240:19 to 241:9). 126. The MDY Parties dispute paragraph 259. While theoretically if a person

uses Glider 24 hours a day, a person could complete 480 hours of play in just 20 days, no person actually does use Glider 24 hours a day because it requires human interaction to continue leveling. In fact, the number of hours that people use Glider varies in the same way that the number of hours that people who play WoW without Glider varies. When asked if he had any evidence to support his assertion, Castronova stated that he did not. (Donnelly Aff. ¶ 2); (Castronova Dep. at 243:11 to 244:15). 127. The MDY Parties dispute paragraph 260. See the MDY Parties responses

to paragraphs 258-59. 128. The MDY Parties dispute paragraph 261. Castronovas model is flawed in

its entirety. The MDY Parties damages expert, Koleman Strumpf, refuted every aspect of Castronovas model in Strumpfs report. (See generally, Strumpf Rep.). 129. The MDY Parties dispute paragraph 262. If anything, Blizzards statement

in paragraph 262 acknowledging that WoW "remains very popular, and indeed has generally increased in popularity," is evidence that Glider use has had no impact on Blizzards bottom line. This is further established by what the MDY Parties expert has stated. (Strumpf Report at 6). 130. The MDY Parties dispute paragraph 263. Despite Castronovas conclusion

that a 1.0% increase in cheating behavior such as botting results in a .05% decrease in demand for WoW, Castronova could not attribute any decrease in the demand for WoW to Glider. Furthermore, Castronovas conclusion is directly contrary to the fact that the public demand for WoW has never decreased since Glider first became available in June, 2005. Additionally, the MDY Parties expert rebutted the validity of Castronovas

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model. (Castronova Dep. at 261:21 to 266:11); (Strumpf Report at 6). 131. The MDY Parties dispute paragraph 264. See the MDY Parties response

to paragraph 263 above. Blizzard's Warden Program 132. Warden is a mechanism Blizzard uses to detect the presence of third-party

software that Blizzard deems is unauthorized under its EULA or TOS. See Exhibit V (Bates No. BLIZZM00335490, BLIZZM00335507). 133. When a licensee is running the WoW game client, Warden detects changes

to the licensees computer memory (RAM) and reports any changes back to Blizzard. Blizzard then compares the changes in the licensees RAM for known patterns of code that indicate that an unauthorized third-party software program is running. Once Blizzard confirms the licensees use of an "unauthorized" third-party program, such as a bot program, Blizzard decides whether it will ban the licensees account. See Exhibit W (Deposition of Matthew Versluys), at 18-22. 134. Blizzard does not ban, nor has it ever banned the licensee itself. If Blizzard

bans a licensees account, the licensee may immediately sign up for a new account using the licensees name and same credit card number that it previously used for the banned account. See Exhibit A (Deposition of Greg Ashe), at 254. 135. Warden is not a copy protection program in that it cannot: a. Prevent a person from accessing the WoW game client software code; b. Prevent a person from copying the WoW game client software from a compact disc or DVD to another form of storage medium; c. Prevent a person from copying a downloaded version of the WoW game client obtained from Blizzards server to another form of storage medium;

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d. Prevent a person from distributing copies of the WoW game client software; e. Prevent a person from making derivative works of the WoW game client software. See Exhibit A, at 43-44.

Blizzard's Scan.dll Program 136. Scan.dll is the second element of Wardens cheat detection system.

Scan.dll is a dynamic link library file that is part of the WoW game client. After the WoW game client is loaded into a licensees RAM, the computer executes the Scan.dll file. The file scans the inside of the licensees RAM and WoW game data files and checks for changes or modifications to the WoW game client code and game files to determine whether the licensee has loaded any "unauthorized" third-party programs. If Scan.dll detects an unauthorized program, the WoW game client will present an error message and will not allow the licensee to log onto WoW server to play WoW. See Exhibit A, at 53-56, 63. Blizzards entire argument pertaining to Scan.dll is moot. Since January of 2008, MDYs Glider software no longer needs to launch the WoW software client program to work with WoW. (Donnelly Aff. ¶ 40.) Glider users are now able to load the WoW software first, and then load Glider. Id. Because Scan.dll can only detect third-party software when a user first loads WoW, when a user loads Glider, Scan.dll is not even active. Thus, Glider does not circumvent Scan.dll at all. If anything, this demonstrates how ineffective Scan.dll is as an access control means, as well as proving that MDY could not be liable under the DMCA as it pertains to Scan.dll since Glider does not circumvent Scan.dll.

137.

If any of the three tests fail, then the WoW game client will present an error
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message and will not allow the licensee to log into the WoW game client to play WoW. See id. 138. Like Warden, Scan.dll is not a copy protection program in that it cannot: a. Prevent a person from accessing the WoW game client software code; b. Prevent a person from copying the WoW game client software from a compact disc or DVD to another form of storage medium; c. Prevent a person from copying a downloaded version of the WoW game client obtained from Blizzards server to another form of storage medium; d. Prevent a person from distributing copies of the WoW game client software; e. Prevent a person from making derivative works of the WoW game client software. See Exhibit A, at 43-44. 139. Scan.dlls only function is to detect third-party software when WoW is first loaded into RAM. (Donnelly Aff. ¶ 37.) After a user loads the WoW game code into RAM, Scan.dll stops functioning. Id. Although Scan.dll can control whether a licensee can access the WoW game client software to play the WoW game during the initial loading of the WoW game client, Scan.dll cannot control whether a licensee can access the WoW game client software code for the purpose of examining, copying, making derivative works or distributing copies of WoW. Id. In fact, Scan.dll cannot prevent the licensee from manually loading the game client into RAM. Id. Even if Scan.dll detects prohibited software code ­ it can only stop the licensee from playing, not copying, the WoW software code. Id. Any person can manually copy the game client into RAM by using any file viewer, such as Notepad, to open individual WoW software files from a persons hard drive. When this is done, the files are loaded into RAM. All Scan.dll can do is prevent a person from playing the game.

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Glider's Detection Avoidance Features 140. 38). 141. When MDY started selling Glider, Glider did not originally avoid MDY continuously updates Gliders ability to avoid detection from Warden

only because MDY must maintain Gliders interoperability with WoW. (Donnelly Aff. ¶

detection. MDY did not originally include detection avoidance as a feature of Glider because Donnelly never believed that Blizzard would object to the use of Glider with WoW. MDY added this feature to Glider solely as a countermeasure to Blizzards unilateral attempt to take away what Donnelly believed was a rightful software business. (Donnelly Aff. ¶ 39). 142. MDYs expert witness, Mr. Joseph Calandrino, has offered his opinion that

that computer experts distinguish between copying software code from an external source such as a compact disc to an internal hard drive, and moving software code from a hard drive to RAM in terms of copyright infringement. See Exhibit C. Mr. Calandrino proffers the opinion that because the hard drive and RAM are technically connected to each other as part of one system, once a copy of machine readable code is fixed to a computers hard drive, simply moving the code to RAM is not copying, but rather it serves to enable the CPU to execute the code faster than if it remained on the hard drive (Calandrino Dep at 49:6). In other words, he notes that a computers CPU can execute WoWs software code directly from either a users hard drive or RAM. The program, however, would execute much slower from a hard drive than if it was able to execute the instructions from RAM memory (Id at 68). Mr. Calandrinos opinion demonstrates that MAI is distinguishable to the present case because the "copying" in MAI pertained to the loading of code from an external source into RAM, whereas here the computer merely moves the data from a hard drive to a more convenient location to be executed by the CPU (Id at 54:17). Blizzard Has Misused Its Copyrights Before
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143.

In November, 2005, Blizzard tried shutdown a business where the owner

did nothing more than sell a book that provided extensive details in how to level a WoW character to level 70 in as little as eight days. The owner of the business, Brian Kopp, sold his books through eBay. 144. Over a period of two months, Blizzard filed several requests with eBay

demanding that eBay remove Kopps auctions selling his book. Blizzard asserted the identical bases for terminating Mr. Kopps auctions as Blizzard asserts against MDY ­ that Kopps book sales violated Blizzards EULA/TOU by (1) infringing Blizzards copyrights, (2) using WoW software for commercial purposes, and (3) trading off of Blizzards good will by selling an unauthorized leveling guide to WoW. Because of Blizzards demands to eBay, eBay removed Kopps auctions and ultimately terminated his eBay user account. Blizzard threatened Kopp that if he continued to sell his unauthorized book, Blizzard would sue him. 145. Reacting to Blizzards threats, Kopp filed suit against Blizzard in early Shortly thereafter, Blizzard settled with Kopp.

2006 alleging various causes of action including tortious interference with contracts and copyright misuse (See Exhibit X). Blizzard, however, did allow Kopp to continue selling his book, and Kopp continues to sell his book even today. Blizzards acts raise two important issues. First, Blizzard asserted the same liability theories against Kopp as it does with MDY. Blizzard used its breach of its EULA as a basis for alleging copyright infringement to stop the sale of an independently created literary work that effected WoW. Second, MDY should have as much right to sell its literary work (a software program) as Kopp should have to sell his literary work (a book). Clearly, Blizzards acts demonstrate a pattern and practice of misusing its EULA and its copyright in WoW in ways that the copyright laws do not apply. 146. Kopps book and Glider have nearly identical purposes. The only

difference is that the book describes how a WoW player can save time by getting to level

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70 faster than a normal user, while Glider uses software to accomplish the leveling task. More importantly, the book advertises a person can get to level 70 in eight days, while under normal circumstances, Glider requires a minimum of one to two months. Strumpf Report 147. MDYs damages expert witness, Dr. Koleman Strumpf ("Strumpf")

categorically rejects all of Blizzards damage calculations cited by Blizzards expert, Edward Castronova (Strumpf Rep. at 31-32, Exhibit E). Strumpf, in his expert report, supplemental report, and his deposition, provided concrete evidence that exposed Castronovas calculations as entirely speculative (Id. at 7-8,) and wholly unsupported by any controlled economic study. 148. Strumpf demonstrated that Castronovas opinions that Glider adversely

affected WoWs in-game economy were not only offered without Castronova conducting a single economic study (Strumpf Dep. 94:5-95:21, 310:1-13, Exhibit G), but Castronova never interviewed one WoW player or Glider user (Castronova at Dep. 66:45, 111:1-23) in arriving at his conclusions. 149. Furthermore, Strumpf provided concrete evidence that Glider likely helped

Blizzard increase its revenues (Strumpf Rep. at 10-11, Strumpf Supp. at 4, Exhibit K). Most importantly, Strumpf demonstrated that whatever revenues Blizzard may have lost as a result of bots, Castronova provided no evidence to determine whether Blizzards alleged lost revenues originated from the literally thousands of various bots and human gold farmers that play WoW and exploit WoWs resources, and WoW users who use Glider (Strumpf Rep. at 12-14; Strumpf Dep. 140:1-10). 150. Strumpf also presented the most obvious evidence that Blizzard has

suffered no harm - that being the fact that since MDY introduced Glider in June, 2005, MDY has sold over 100,000 Glider keys, yet Blizzards active WoW subscription total increased from 3.3 Million to well over 10 Million in the same time period (Strumpf Rep.

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at 3-5).

During that time, Blizzard has steadily experienced an increase in WoW

subscribers at a rate of approximately one million every 3.5 to 4 months ­ a rate that has never been seen before by a computer game by a factor of twenty. 151. Additionally, Strumpf presented evidence in his Supplemental Report that a

survey of over 6,200 Glider users that MDY conducted indicated that the majority of Glider users purchased multiple WoW accounts, several even purchase three or more accounts (Strumpf Supp. Rep. at 1-3). The survey demonstrated that Glider users, on average, purchase one additional WoW account (Strumpf Supp. at 3). The survey also demonstrated that a substantial majority of Glider users indicated they played WoW much longer with Glider once they reached level 70 than if they had spent a substantial period of time grinding through the repetitive tasks in levels 1-70 without Glider. Id. 152. Strumpfs evidence proves that Glider users provide, on average, twice as

much subscription revenue as non-Glider users and the evidence also rebuts Castronovas meritless opinion that Glider users deprive Blizzard of revenues from levels 1-70 because they play faster than normal. Strumpfs evidence demonstrates that whatever revenue Blizzard might lose by Glider user leveling faster than normal prior to level 70, Blizzard is more likely to make up that revenue after a Glider user reaches level 70 because the Glider user will likely play WoW longer once he reaches level 70 Id. 153. Furthermore, MDY regularly receives unsolicited comments in its Glider

Forum from Glider users who state that were it not for Glider, the user would have either quit playing WoW or would have never begun playing WoW at all. (See Exhibit M). 154. MDYs Glider does not modify or change any WoW software or coding.

MDY independently created Glider as an aftermarket software application that permits its users to play WoW on auto-pilot. (Donnelly Dep. at 286:4-8). Dated this April 24, 2008

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Venable, Campillo, Logan & Meaney, P.C.

By /s/Lance C. Venable Lance C. Venable SBN 017074 Joseph R. Meaney SBN 017371 1938 East Osborn Road Phoenix, Arizona 85016 Tel: [phone] Fax: [phone] E-Mail [e-mail] Attorneys for Plaintiff MDY Industries, LLC and Third-Party Defendant Donnelly

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CERTIFICATE OF SERVICE

I hereby certify that on March 21, 2008, I electronically transmitted the attached document to the Clerks Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Name Christian Genetski, Esq. Scott Jeremy Stein, Esq. Shane McGee, Esq. Email Address [e-mail] [e-mail] [e-mail] [e-mail]

I hereby certify that on __________________, I served the attached document by FIRST CLASS 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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