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).

LAW OFFICES OF

1 2 3

VENABLE, CAMPILLO, LOGAN & MEANEY, P.C.
1938 EAST OSBORN ROAD PHOENI X, ARIZONA 85016 TELEPHONE [phone] FACSIMILE [phone] E-MAIL DOCKETING@VCLMLAW .COM

Lance C. Venable (AZ Bar No 017074) 4 Joseph R. Meaney (AZ Bar No. 017371) Attorneys for Plaintiff MDY Industries, LLC 5 and Third-Party Defendant Michael Donnelly
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA MDY INDUSTRIES, LLC, Plaintiff and Counterdefendant, vs. BLIZZARD ENTERTAINMENT, INC., and VIVENDI GAMES, INC., Defendants and Counterclaimants, Response To Defendants' Motion For Summary Judgment by Plaintiff MDY Industries, LLC And Third Party Defendant Michael Donnelly With Supporting Memorandum Of Points And Authorities The Honorable David G. Campbell BLIZZARD ENTERTAINMENT, INC., and VIVENDI GAMES, INC., Third-Party Plaintiffs, vs. MICHAEL DONNELLY, an individual Third-Party Defendant. Oral Argument Requested Case No.: CV06-02555-PHX-DGC

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Table of Contents I. II. Legal Standard ......................................................................................................- 1 Introduction/Background......................................................................................- 1 -

III. The Court should deny Blizzard`s motion with respect to its copyright claims because Blizzard relies exclusively on Ticketmaster ­ a case that cannot be reconciled with the law of the Ninth and other Circuits. ................................- 2 A. Federal case law, including the Ninth Circuit, consistently holds that a mere breach of a copyright license violates copyright only when the breach pertains to an exclusive right under 17 U.S.C. § 106.......................................................... - 3 Other than Ticketmaster, Blizzard has not cited to any case that supports Blizzard`s claim that ANY breach of a copyright license equals copyright infringement ...................................................................................................... - 4 Blizzard`s view could not possibly be the law; otherwise, Blizzard could assert punitive copyright remedies against its customers for ANY non-copyright-related breach of contract. ............................................................................................. - 6 -

B.

C.

IV. Even if Blizzard correctly relied upon Ticketmaster, admissible material facts preclude summary judgment for Blizzard`s copyright claims. ................- 8 V. Blizzard`s attempt to leverage its copyright beyond the exclusive rights granted by the Copyright Act is copyright misuse and bars Blizzard from the relief it seeks here. ...........................................................................................................- 8 VI. The Court should deny Blizzard`s motion with respect to its DMCA claims because Blizzard relies exclusively on Ticketmaster ­ a case that cannot be reconciled with the law of the Ninth and other Circuits and because Ticketmaster is not a case involving piracy...................................................................- 11 A. Because no reasonable relationship exists between access obtained by Glider`s avoidance of Warden or Scan.dll and copyright protection of Blizzard`s WoW game client, MDY cannot be liable under the DMCA. ................................... - 12 Blizzard`s Warden and Scan.dll programs are not effective access control measures under 17 U.S.C. § 1201(a)(3)(b), so MDY cannot violate § 1201(a)(1) or § 1201(b)(1) as a matter of law. .................................................................. - 13 1. 2. C. Warden is a data reporting process, not an effective access control measure. ............................................................................................... - 14 Scan.dll is not an effective access control measure ............................. - 15 -

B.

MDY`s Glider program is not primarily designed and marketed as a circumvention device, nor does Glider have a limited commercial purpose. . - 16 - ii -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

VII. Because MDY has not acted improperly by creating, marketing and selling its independently created aftermarket software to Blizzard`s WoW users, MDY has not tortiously interfered with Blizzard`s contractual relations. ..........- 18 A. B. C. D. E. Because Blizzard`s EULA and TOU are anti-competitive and restrain trade, a reasonable jury could find that Blizzard`s agreements violate public policy . - 18 A reasonable jury could find that MDY did not act improperly by advertising and marketing its Glider software .......................................................................... - 20 A reasonable jury could find that Donnelly was not motivated by a malicious intent to harm Blizzard or WoW ..................................................................... - 23 A reasonable jury could find that MDY did not intend to interfere with Blizzard`s contracts........................................................................................................... - 24 A reasonable jury could find that MDY did not damage Blizzard .................. - 25 -

VIII. CONCLUSION ..................................................................................................- 26 -

- iii -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
1 2

Plaintiff MDY Industries, LLC (MDY) and Third-Party Defendant, Michael Donnelly (Donnelly) (collectively MDY or plaintiffs) respond to the defendants` Blizzard Entertainment, Inc. (Blizzard) and Vivendi Games, Inc. (Vivendi) (collectively, Blizzard) Motion for Summary Judgment. This response is supported by the separate Statement of Disputed Facts (MDY`s SDF) filed with this brief and the accompanying Memorandum of Points and Authorities. MEMORANDUM OF POINTS AND AUTHORITIES I. Legal Standard In the context of summary judgment, the Court should view disputed evidence in light most favorable to the nonmoving party.1 The Court should deny Summary judgment if a reasonable jury could return a verdict for the nonmoving party."2 II. Introduction/Background At bottom, this is a contract case concerning how people who legally acquire and install Blizzard's WoW game software make use of that software's functionality (which gives a massive multiplayer video game experience). These users all have the legal right to install the WoW software onto their computer hard drives. 3 While on its face MAI Systems Corp. v. Peak Computer, Inc says that such installation technically involves copying the program from disks (or via permissible downloading from Blizzard), such copying does not require a finding of copyright infringement.4 Blizzard contracts with its users, via Blizzard`s End User License Agreement Fed.R.Civ.P. 56(c); see, Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 3 17 U.S.C. § 117. 4 See, e.g., Sony Computer Entertainment v. Connectix Corp., 203 F.3d 596, fn.9 (9th Cir. 2000)(noting that cases like MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993) do not apply when the relevant facts involve reverse engineering to gain access to unprotected functional elements.)

-1-

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

(EULA) and Terms of Use (TOU), in an attempt to regulate the way a person plays the game - the relevant provision here is Blizzard's demand that WoW players not play WoW with so-called "bot" programs that automate certain aspects of WoW`s function. Blizzard believes that enforcement of this condition is important to its business model. As a matter of contract law, Blizzard may have an enforceable agreement with its users. The issue, however, is whether Blizzard can use copyright to enforce this particular aspect of Blizzard's business model. The answer must be "No." Otherwise, copyright becomes the enforcer of every agreement regulating the use of commodities containing software, from automobiles to washing machines. Congress designed copyright laws to regulate the market for copies and performances of copyright-protected works. Copyright is not designed and is illequipped to serve as a general business regulation statute.5 Furthermore, Arizona common law does not enable Blizzard to control a company`s legitimate efforts to sell a product on the open market under a tort theory of liability simply because Blizzard may object to the product and its effect on Blizzard`s business model. III. The Court should deny Blizzard's motion with respect to its copyright claims because Blizzard relies exclusively on Ticketmaster ­ a case that cannot be reconciled with the law of the Ninth and other Circuits. Blizzard contends that copyright infringement occurs every time one of its customers breaches its EULA and the computer subsequently loads portions of Blizzard`s World of Warcraft (WoW) software into Random Access Memory (RAM) ­ even if the EULA breach does not infringe an exclusive right granted by the Copyright Act.6 Blizzard is legally incorrect. Breaching a EULA term violates copyright only if the breach also violates an exclusive right granted by the Copyright Act. Blizzard relies
5

Sony Computer Entertainment v. Connectix Corp., 203 F.3d 596, 607 (9th Cir. 2000)(copyright owners who want a lawful monopoly on the functional concepts in its software, [] must satisfy the more stringent standards of the patent laws.) 6 See, Blizzard Ent., Inc. and Vivendi Games, Inc. Mot. For Sum. J. (Blizzard`s MSJ), at 5-7.

-2-

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

upon Ticketmaster LLC v. RMG Technologies, Inc.,7 which is not helpful because Ticketmaster cannot be reconciled with the balance of federal case law, including prevailing Ninth Circuit law.8 A. Federal case law, including the Ninth Circuit, consistently holds that a mere breach of a copyright license violates copyright only when the breach pertains to an exclusive right under 17 U.S.C. § 106.

The Ninth Circuit has consistently held that a licensee infringes the owner`s copyright if its use exceeds the scope of its license.9 This statement does not mean that every copyright license breach violates copyright as Blizzard suggests it does. Rather, [T]he critical question is not the existence but the license`s scope. The license must be construed in accordance with the purposes underlying federal copyright law.10 In S.O.S., the use the copyright owner complained about was the defendant`s copying and modification of the software.11 The Court held the act of breaching the parties` license agreement led to copyright infringement because the act itself violated the Copyright Act. The Ninth Circuit is not alone. In fact, the Federal Circuit cited S.O.S. in its ruling in Storage Technology Corp. v. Custom Hardware Engineering and Consulting, Inc.12 Storage Tech viewed the S.O.S. as standing for the entirely unremarkable position that uses` that violate a license agreement constitute copyright infringement only when those

7 8

Ticketmaster LLC v. RMG Techs., Inc., 507 F.Supp.2d 1096 (C.D. Cal. 2007). The District Court`s ruling in Ticketmaster is on appeal to the Ninth Circuit. Oral argument is currently set for May 7, 2008. 9 See, e.g., S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1087 (9th Cir. 1989). 10 Id. at 1087-88 (emphasis added); accord Sony v. Connectix, 203 F.3d at fn.9 (9th Cir. 2000)(noting that cases like MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993) must be construed within the greater context of copyright law and thus cannot be applied blindly). 11 S.O.S., Inc. v. Payday, Inc., 886 F.2d at 1085. 12 Storage Technology Corp. v. Custom Hardware Eng'g. and Consulting, Inc., 421 F.3d 1307 (Fed. Cir. 2005).

-3-

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

uses would infringe in the absence of any license agreement at all.13 Storage Tech explained why Blizzard`s view of copyright law is overbroad: 14 As an example, consider a license in which the copyright owner grants a person the right to make one and only one copy of a book with the caveat that the licensee may not read the last ten pages. Obviously, a licensee who made a hundred copies of the book would be liable for copyright infringement because the copying would violate the Copyright Act's prohibition on reproduction and would exceed the scope of the license. Alternatively, if the licensee made a single copy of the book, but read the last ten pages, the only cause of action would be for breach of contract, because reading a work does not violate any right protected by copyright law. In this case, Blizzard alleges that its EULA grants the licensee the right to make copies of its WoW software by having it loaded into the licensee`s RAM with the caveat that the licensee will not use bot programs such as Glider. As in Storage Tech, mere use of an independently-created aftermarket software program with WoW could not possibly infringe Blizzard`s copyrights in WoW in the absence of Blizzard`s EULA. Thus, when Blizzard`s licensees play WoW with Glider, they are no different from the readers of the last ten pages in the Storage Tech example. While the use of aftermarket third party software may exceed the EULA`s scope, it does not violate Blizzard`s protected rights under the copyright laws. As a result, the use of Glider does not facilitate a breach of Blizzard`s copyrights under the EULA. Without primary copyright infringement, MDY can neither contributorily nor vicariously infringe Blizzard`s copyrights as a matter of law. B. Other than Ticketmaster, Blizzard has not cited to any case that supports Blizzard`s claim that ANY breach of a copyright license equals copyright infringement

Blizzard cites Ninth Circuit cases in support of its position, but none of them apply

13 14

Id. at 1316. Id. (emphasis added).

-4-

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

to the present facts. For example, Blizzard cites LGS Architects, Inc. v. Concordia Homes15 for the proposition that any copyright license breach is also a breach of contract. Upon closer inspection, however, LGS Archictects, Inc. does not stand for the broad purpose that Blizzard cites it for. In LGS Architects, Plaintiff LGS was an architectural firm, while the Defendant Concordia built homes.16 LGS and Concordia entered into a licensing agreement that permitted Concordia to use certain of LGS's copyrighted architectural plans for a specified building project.17 Concordia also used LGS's plans on a second project, not covered by their agreement.18 The Court concluded that "Concordia exceeded the scope of its license when it used the four architectural plans in the construction" of the second project.19 In formulating its reasoning, the Ninth Circuit expressly stated that a license must be construed in accordance with the purposes underlying federal copyright law. Chief among these purposes is the protection of the author`s rights.20 The Court explained that when a license is limited in scope, exploitation of the copyrighted work outside the specified limits constitutes infringement.21 In LGS, Concordia`s copying of the plans on a project that exceeded the license`s scope is what led to the infringement. As stated in Storage Tech, Concordia`s unauthorized copying comprised copyright infringement because the unauthorized activity would have been infringing even in the absence of the license agreement.22 Unlike in the present case, however, Concordia did not merely breach a non-copyright related term in its license agreement. exclusive right under 17 U.S.C. § 106.
15 16

By copying the

architectural plans, Concordia exceeded the copyright license`s scope, and violated an

LGS Architects, Inc. v. Concordia Homes, 434 F.3d 1150 (9th Cir. 2006). Id. at 1151-52. 17 Id. 18 Id. 19 Id. at 1157-58. 20 Id. at 1157 (emphasis added), citing, S.O.S., Inc. v. Payday, Inc., 886 F.2d at 1088). 21 LGS Architects, Inc., 434 F.3d at 1156 (emphasis added). 22 Storage Tech., 421 F.3d at 1316.

-5-

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
23 24

Blizzard also cites to Perfect 10, Inc. v. Amazon.com, Inc.23; A&M Records, Inc. v. Napster, Inc.24; and Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd.25 Because none of those cases actually holds that any breach of a copyright license also violates the Copyright Act, MDY can distinguish each of these cases with the present facts. In all of those cases, Perfect 10,26 A&M Records,27 and Metro-Goldwyn-Mayer Studios,28 the accused directly violated an exclusive right under 17 U.S.C. § 106. In this light, Blizzard`s desperately relies on Ticketmaster. If Ticketmaster were the law, surely it would not be the only case to support Blizzard`s position. If anything, these cases further support MDY`s position that a person commits copyright infringement by exceeding a copyright license only if the act itself violates one of the exclusive rights under 17 U.S.C. § 106. At a minimum, Ninth Circuit law cannot reconcile Blizzard`s claim29 that a licensee is liable for copyright infringement for breaching any license term. Ticketmaster directly conflicts with every other federal circuit that has considered the issue. C. Blizzard`s view could not possibly be the law; otherwise, Blizzard could assert punitive copyright remedies against its customers for ANY noncopyright-related breach of contract.

Blizzard contends that it`s EULA conditions users` ability to copy WoW on their doing so within the license`s scope of the license.30 Blizzard notes that the first Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701 (9th Cir. 2007). A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). 25 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005). 26 In Perfect 10, the allegedly infringing act pertained to a search engine that facilitated the distribution of copyrighted photos. 27 In A&M Records, the allegedly infringing act involved the use of a software program whose sole purpose was to facilitate the distribution of copyrighted music. 28 In Metro-Goldwyn-Mayer Studios, the allegedly infringing act involved the use of a peer-to-peer file sharing program facilitating the distribution of copyrighted music and movies. 29 See Blizzard`s MSJ, at 5. 30 Blizzard`s MSJ at 6.

-6-

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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.`31 Under Blizzard`s reading of Ticketmaster, Blizzard`s EULA makes a breach of ANY term in the agreement a predicate for copyright infringement. If true, Blizzard could recover for copyright infringement for violating the EULA/TOU if the user plays WoW after: Intentionally providing a false address or sharing the user`s login information with a third party (Paragraph 3 of Blizzard`s current TOU)32; Providing matchmaking services while playing the game (TOU - Paragraph 4(a)); Attempting to disrupt the game server (TOU - Paragraph 4(c)); Using a character name that impersonates a famous person (TOU - Paragraph 5(i)); Using vulgar language in Wow`s chat feature (TOU - Paragraph 5(ii)); Doing anything that Blizzard considers contrary to the essence` of the program (TOU - Paragraph 5(iii); Selling, or even the mere offering to sell a user account to a third party (TOU - Paragraph 8). The Ninth Circuit cases described above, or other Circuit Court decisions like Storage Tech do not support Blizzard`s position. This Court should reject Blizzard`s argument that it can sue a user, much less a third party as in this case, for copyright infringement simply by breaching or facilitating a breach of a non-copyright related term in its EULA. The Court should deny Blizzard`s Motion for Summary Judgment on the issues of contributory and vicarious copyright infringement against MDY.

31

Blizzard`s Statement of Facts in Support of its Motion for Summary Judgment (Blizzard`s SOF) ¶ 89-90. 32 MDY`s SDF ­ Exhibit T.

-7-

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

IV.

Even if Blizzard correctly relied upon Ticketmaster, admissible material facts preclude summary judgment for Blizzard's copyright claims. For example, the parties dispute whether Blizzard has ever terminated one of its

licenses pursuant to the EULA`s terms.33

The parties dispute the EULA or TOU

precluded bots.34 The parties dispute that terms Blizzard contends MDY`s customers breached were within the reasonable expectations of MDY or its customers as required under Arizona law.35 Finally, a factual dispute exists regarding whether the RAM copying Blizzard alleges here is the same as the RAM copying from MAI decision.36 V. Blizzard's attempt to leverage its copyright beyond the exclusive rights granted by the Copyright Act is copyright misuse and bars Blizzard from the relief it seeks here. Copyright misuse occurs when a copyright owner attempts to leverage its copyright in a manner that exceeds the Copyright Act`s statutory grant.37 Here, Blizzard misuses its copyrights by asserting copyright violations as the basis of all of its claims against MDY. More specifically, Blizzard`s unilateral and restrictive licensing scheme, i.e., its EULA and TOU, is a transparent attempt to bootstrap the Copyright Act`s powerful remedies onto mere breaches of contract. While Blizzard attempts to justify its actions under the guise of protecting its business, the manner in which Blizzard acts here constitutes copyright misuse.38
33 34

Moreover, under the facts presently before the

MDY`S Statement of Disputed Facts (SDF) ¶ 71. MDY`S SDF ¶ 74. 35 MDY`S SDF ¶ 74-75; see, Darner Motor Sales v. Universal Underwriters, 140 Ariz. 383 (1984)(terms of adhesion contracts that are not within the reasonable expectations of the non-drafter are not enforceable). 36 MDY`s SDF ¶ 142. 37 A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1026-27 (9th Cir. 2001)(noting, The defense of copyright misuse forbids a copyright holder from "secur[ing] an exclusive right or limited monopoly not granted by the Copyright Office." 38 See Lasercomb America, Inc. v. Reynolds, 911 F.2d 970, 979 (4th Cir. 1990) (expressly rejecting Blizzard`s notion: The need of [the first creator] to protect its investment does not outweigh the public`s right under our system to expect competition and the benefits that flow therefrom...).

-8-

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Court, MDY`s business, not Blizzard`s, is the business the law should protect. The Fourth Circuit first expressly recognized Copyright misuse in Lasercomb America, Inc. v. Reynolds.39 Other Circuits, including the Ninth Circuit, have since adopted Lasercomb's misuse doctrine.40 folding into boxes and cartons.41 In Lasercomb, the plaintiff developed a software program that assisted in the making of steel rule dies used to cut cardboard for After obtaining a copy of plaintiff`s software, defendants created a competing program that "was almost entirely a direct copy of [plaintiff's program], and marketed it as its own CAD/CAM die-making software."42 The trial court entered judgment for plaintiff and awarded damages to plaintiff ­ including punitive damages -- for copyright infringement and fraud. Despite expressly noting that there is no question that defendants engaged in unauthorized copying, and the purposefulness of their unlawful action is manifest from their deceptive practices, the Fourth Circuit reversed on the basis of plaintiff`s copyright misuse.43 Because of the restrictive software license that plaintiff unilaterally tied to plaintiff`s software, the Fourth Circuit reversed.44 assisted die making software.45 In pertinent part, the Lasercomb license barred its licensees from writing, developing, producing or selling computer In effect, the Lasercomb license restricted the independent original creation of other software programs.46 The court noted that terms in

39 40

911 F.2d 970, 978 (4th Cir. 1990). A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1026-27 (9th Cir. 2001); Practice Mgmt. Info. Corp. v. American Med, Assoc., 121 F.3d 516 (9th Cir. 1997); see, also, DSC Communications Corp, v. DGI Technologies, Inc.,81 F.3d 597, 600-01 (5th Cir. 1996); Video Pipeline, Inc. v. Buena Vista Home Entertainment, Inc., 342 F.3d 191, 204 (3d Cir. 2003). 41 Lasercomb, 911 F.2d at 971. 42 Id. 43 Id. at 971, 979. 44 Id. at 973. 45 Id. 46 Id. at 978.

-9-

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

a licensing agreement designed to protect copying were permissible.47 But going beyond statutory copyrights to stifle the independent origination of different software impermissibly violated public policy: The misuse arises from Lasercomb's attempt to use its copyright in a particular expression, the Interact software, to control competition in an area outside the copyright, i.e., the idea of computer-assisted die manufacture, regardless of whether such conduct amounts to an antitrust violation.48 The doctrine of copyright misuse arises from two foundational, yet divergent policies: competition and innovation.49 On one hand, promoting competition is the foundation of our legal-economic system.50 On the other hand, encouraging innovation is the foundation of both our copyright and patent systems. 51 To encourage innovation and creativity, our copyright and patent systems grant limited statutory monopolies that prevent direct competition for the statutory term of protection. 52 The patent and copyright systems not only permit indirect competition in the form of competing inventions and works of authorship, the law encourages it.53 The incentives of these limited monopolies promote not only the creation of the first invention or work of authorship, but subsequent ones as well. As a result, copyright misuse occurs once a copyright owner seeks to impose contractual restrictions that impede or prevent a person

47

Id. (Lasercomb undoubtedly has the right to protect against copying of the Interact code.) 48 See id. at at 979. 49 See id. at 977 (A patent or copyright is often regarded as a limited monopoly ­ an exception to the general public policy against restraints of trade.) 50 Id. 51 See id. at 974-975 (for the evolution of our copyright and patent laws); see also, e.g., Video Pipeline, 342 F.3d at 204 (the underlying policy rationale for the misuse doctrine set out in the Constitution's Copyright and Patent Clause: `to promote the Progress of Science and useful Arts,'" quoting U.S. Const. art. I, § 8, cl. 8.) 52 See Lasercomb, 911 F.2d at 975 (To encourage such efforts, society grants authors exclusive rights in their works for a limited time.) 53 See e.g., Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510, 1523 (9th Cir. 1992).

- 10 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

from creating and disseminating newer and non-infringing copyrighted works.54 In this case, Blizzard complains that bots harm its business model.55 To protect its business model, Blizzard now requires that its licensees agree not to use bots. The Copyright Act does not, however, grant Blizzard the right to control whether or not its users can use bots,56 any more than it gives book publishers the right to control where, when, or with what owners of copies can read their books. As such, Blizzard misuses its copyrights by attempting to control its licensees` use of independently created and noninfringing third party software. 57 Blizzard`s misuse here is not the first time Blizzard has misused its copyrights to protect its business model.58 From November, 2005 through January, 2005, Blizzard unsuccessfully tried to use its EULA to misuse its copyright against a third-party who tried to do nothing more than sell a book that detailed how to level a WoW character from 1 to 70 in only eight days.59 VI. The Court should deny Blizzard's motion with respect to its DMCA claims because Blizzard relies exclusively on Ticketmaster ­ a case that cannot be reconciled with the law of the Ninth and other Circuits and because Ticketmaster is not a case involving piracy. Blizzard contends that mere circumvention of any software protection measure violates the DMCA. Again, Blizzard overstates the law. Only circumvention coupled with access to a protected work to facilitate a copyright violation creates liability under
54 55

See Lasercomb, 911 F.2d at 979. Whether or not Blizzard is actually being harmed is questionable. Admissible evidence suggests that Blizzard actually benefits from Glider. MDY`S SDF ¶¶ 92, 121-31. 56 A copyright protects originality rather than novelty or invention -- conferring only the sole right of multiplying copies.` Mazer v. Stein, 347 U.S. 201, 217 (1954); accord 17 U.S.C. § 106. 57 Unlike a patent, a copyright gives no exclusive right to the art disclosed; protection is given only to the expression of the idea -- not the idea itself. Mazer v. Stein, 347 U.S. 201, 217 (1954). 58 See, MDY`s SDF ¶¶ 143-46.
59

The details of Blizzard`s illegal acts are detailed in MDY`s SDF ¶¶ 143-46.

- 11 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

the DMCA.

As before, although Blizzard`s relies on Ticketmaster LLC v. RMG

Technologies, Inc.,60 the balance of federal case law, including prevailing Ninth Circuit law rejects Ticketmaster's holdings. A. Because no reasonable relationship exists between access obtained by Glider`s avoidance of Warden or Scan.dll and copyright protection of Blizzard`s WoW game client, MDY cannot be liable under the DMCA. As discussed in more detail in MDY`s Motion for Summary Judgment, the DMCA does not extend to every act of electronic circumvention.61 The DMCA extends only to circumvention measures that enable access to a protected work for the purpose of illegal copying, i.e., pirating works. In other words, the DMCA requires a nexus between access and the protection offered by copyright. No nexus exists ­ and DMCA liability does not attach ­ when efforts to circumvent technological protection merely enable rightful access to a protected work for the purpose of using it without copying, making derivative works, or distributing the work.62 In addition to Chamberlain Group v. Skylink Technologies,63 the Sixth Circuit in Lexmark held that a person must have a purpose to facilitate the piracy of protected content to violate the DMCA. The Court stated, Lexmark would have us read this statute in such a way that any time a manufacturer intentionally circumvents any technological measure and accesses a protected work it necessarily violates the statute regardless of its "purpose." Such a reading would ignore the precise language -- "for the purpose of" -- as well as the main point of the DMCA -- to prohibit the pirating of copyright-protected works such as movies, music, and computer programs. If we were to adopt Lexmark's reading of the statute, manufacturers could potentially create monopolies for replacement parts simply by using similar, but more creative, lock-out codes. Automobile
60 61

Ticketmaster LLC v. RMG Techs., Inc., 507 F.Supp.2d 1096 (C.D. Cal. 2007). MDY`s MSJ at 14-17. 62 See id.; see also, Chamberlain Group v. Skylink Technologies, 381 F.3d 1178, 1195 (Fed. Cir. 2004)(emphasis ours); accord Nordstrom Consulting, Inc. v. M & S Technologies, at 16 (N.D.Ill. 3-4-2008)(following Chamberlain and Storage Tech.). 63 See MDY`s MSJ at 16-17 for a discussion of the Chamberlain case.

- 12 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

manufacturers, for example, could control the entire market of replacement parts for their vehicles by including lock-out chips. Congress did not intend to allow the DMCA to be used offensively in this manner, but rather only sought to reach those who circumvented protective measures "for the purpose" of pirating works protected by the copyright statute. Unless a plaintiff can show that a defendant circumvented protective measures for such a purpose, its claim should not be allowed to go forward.64 In this case, Blizzard cannot argue that Glider facilitates infringement of Blizzard`s exclusive rights under the Copyright Act for its WoW game client software.65 Likewise, Blizzard cannot argue that its server software is easier to copy or distribute by a player using Glider. Or, that its game client is more vulnerable to unauthorized copying or distribution by players who use Glider. To the extent such dispute exists, such dispute would preclude summary judgment. B. Blizzard`s Warden and Scan.dll programs are not effective access control measures under 17 U.S.C. § 1201(a)(3)(b), so MDY cannot violate § 1201(a)(1) or § 1201(b)(1) as a matter of law. 17 U.S.C. § 1201(a)(2) requires that Blizzard`s Warden and Scan.dll software programs effectively control access" to its WoW client software code or the Blizzard server code. Recall, evading Warden does NOT give access to the server CODE but only the code`s functionality, as in Chamberlain and Lexmark.66 Technological measures that restrict one form of access, but leave another route wide do not effectively control access and do not give rise to DMCA liability.67 Likewise, when a technological measure controls a third-party`s ability to make use of a computer software code, but does not control the third-party`s ability to access the software code to read or copy the code, the technological measure is not an effective access control measure, because it is the code, not the code`s functionality, that copyright protects.68
64 65

Lexmark, 387 F.3d at 552 (emphasis added) (Merritt, J., concurring). Affidavit of Michael M. Donnelly (Donnelly Aff.) ¶ 36. 66 17 U.S.C. § 1201(a)(2) and (a)(3)(b)(emphasis ours). 67 Lexmark, 387 F.3d at 547. 68 See id. at 546-47.

- 13 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

1.

Warden is a data reporting process, not an effective access control measure.

Blizzard asserts that it designed Warden to prohibit WoW users who utilize cheats,` bots,` and other unauthorized programs with WoW from accessing Blizzard`s copyrighted WoW content.69 MDY disputes Blizzard`s assertion.70 Warden does not prohibit WoW users from accessing copyrighted WoW code. Blizzard limits Warden`s utility to two functions: (1) Warden scans a licensee`s computer RAM to determine if the licensee is playing WoW with third party software that Blizzard prohibits under its EULA or TOU,71 and (2) if Warden detects an unauthorized software program, Warden notifies Blizzard.72 Blizzard then reviews the data and decides whether it will close the licensee`s WoW account.73 Blizzard also asserts that once Warden detects an unauthorized program, Warden can immediately kick users out of the game or ban a user`s account so that the user cannot log in.74 Even if Blizzard`s assertion was true, Blizzard`s statement is at least misleading. Even if Warden does ban an account, or kick a user out of the game ­ thereby depriving the user of access to the game`s functionality, Warden in no way prevents the user from copying or distributing the copyright-protected code. Therefore, Warden does not control access to the copyright-protected work.75 Blizzard admits that Warden cannot prevent a person from copying, modifying, distributing, or even examining copies of the WoW client software.76 In other words, even though Warden can prevent a user from playing the game, Warden cannot preclude a user from copying the WoW software code either by copying WoW`s game CDs, copying WoW`s software code installed on the user`s hard drive, or by loading the
69 70

Blizzard`s MSJ at 11. MDY`s SDF ¶ 132-35. 71 MDY`s SDF ¶ 132-35. 72 Id. 73 Id. 74 Blizzard`s MSJ SOF ¶ 115-19. 75 MDY`s SDF at ¶ 135. 76 Id.

- 14 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

software code into RAM memory to examine it. As the Court in Lexmark analogized: Just as one would not say that a lock on the back door of a house controls access` to a house whose front door does not contain a lock and just as one would not say that a lock on any door of a house controls access` to the house after its purchaser receives the key to the lock, it does not make sense to say that this provision of the DMCA applies to otherwise-readilyaccessible copyrighted works. Warden does not lock any part of the WoW software code. Warden is a data reporting computer software program that does not control access to any part of the WoW game client software or the WoW server software. Consequently, Warden is not an access control measure, let alone an effective access control measure, for any work protected under 17 U.S.C. § 106 as defined under § 1201(a)(3)(B). Because Warden is not an effective access control mechanism, MDY cannot violate the DMCA. Thus, the Court should deny Blizzard`s Motion as a matter of law. 2. Scan.dll is not an effective access control measure

Blizzard also alleges that its Scan.dll software code prevents unauthorized copying of WoW code by preventing a user from accessing the WoW game if Scan.dll detects an unauthorized software program that violates its EULA. Blizzard argues that because MDY`s Glider program is able to evade detection from Scan.dll, MDY violates the DMCA`s anti-circumvention provision. Blizzard again overstates the law. Blizzard`s Scan.dll software code is an even less effective attempt to control access to the WoW software code than Warden. Scan.dll`s only function is to detect third-party software when the user first loads WoW into RAM.77 After a user loads the WoW game code into RAM, Scan.dll stops functioning.78 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
77 78

MDY`s SDF ¶¶ 136-139. Id.

- 15 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

licensee can access the WoW game client software code for the purpose of examining, copying, making derivative works or distributing copies of WoW.79 In fact, Scan.dll cannot prevent the licensee from manually loading the game client into RAM.80 Even if Scan.dll detects prohibited software code ­ it can only stop the licensee from playing, not copying, the WoW software code.81 As discussed above pertaining to Warden, Blizzard`s Scan.dll software does not protect access to Blizzard`s copyrights.82 Because Scan.dll cannot prevent a person from (1) accessing or copying the WoW software code, and (2) a person can easily remove Scan.dll from his computer by simply deleting the file in his directory, the Court cannot consider it to be an effective access control measure for any work protected as defined under § 1201(a)(3)(B). At a minimum, a question of fact exists as to whether Glider circumvents Scan.dll at all.83 Therefore, for all the reasons discussed above, neither Scan.dll nor Warden are effective measures that control access to a copyright-protected work. Neither Warden nor Scan.dll can prevent a person from copying, distributing, or making derivative works based upon Blizzard`s WoW software code. Thus, as a matter of law, the Court should deny Blizzard`s Motion on the issue of its DMCA claim. C. MDY`s Glider program is not primarily designed and marketed as a circumvention device, nor does Glider have a limited commercial purpose.

Blizzard argues that because Glider is designed and marketed as a circumvention device, and that Glider has only a limited commercially significant purpose, MDY is liable under the DMCA`s anti-trafficking provisions.84 For the reasons set forth above, MDY has not violated the DMCA by selling Glider, and thus cannot be liable under the
79 80

Id. Id. 81 Id. 82 Id. ¶ 138. 83 MDY`s SDF, at ¶ 136-38. 84 Blizzard`s MSJ at 13.

- 16 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

anti-trafficking sections either. Thus, how MDY markets Glider, or whether Glider has a limited commercial purpose, is not material to liability. Nonetheless, even if such facts were material, the parties dispute them. First, MDY did not design Glider to circumvent Warden and Scan.dll. Donnelly`s sole motive for designing Glider was to create a tool to assist him personally in shortening the time it required to level his WoW game character to the highest level.85 In fact, MDY did not add code to Glider`s software that enabled it to avoid detection by Warden until over four months after MDY began commercially selling Glider.86 MDY added the code only after Blizzard first banned one of MDY`s customer`s accounts so that MDY could protect its economic interest in the company that Donnelly had built over the previous six months. MDY needed to continue selling Glider to do just that.87 Second, MDY continuously updates Glider`s ability to avoid detection from Warden only as a countermeasure to Blizzard`s detection efforts.88 MDY does not continue to update its code to avoid Warden so that MDY can pirate any software code that Blizzard creates. MDY updates its Glider code solely to protect its business. Finally, Glider has many commercial uses other than to circumvent Warden.89 MDY and Donnelly have marketed Glider since its beginning as an add-on software program to assist WoW players in advancing their character`s level faster than normal.90 MDY has also made it known that physically handicapped players can use Glider to help them play the game if they have trouble using a computer keyboard.91 Additionally, since October, 2007, MDY has developed additional features in Glider`s platform so that MDY can sell Glider for use with several other computer games similar to WoW.92
85 86

MDY SDF ¶ 44. Id. 87 Id. 88 MDY SDF ¶ 140. 89 Id ¶ 42. 90 Id ¶ 44. 91 Id ¶ 42 92 Id.

- 17 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Clearly, Blizzard`s assertion that Glider has no commercial use other than to circumvent Warden is false. VII. Because MDY has not acted improperly by creating, marketing and selling its independently created aftermarket software to Blizzard's WoW users, MDY has not tortiously interfered with Blizzard's contractual relations. In addition to all of MDY`s reasons cited in its opening brief for its Motion for Summary Judgment, Blizzard`s copyright misuse also bars it from seeking equitable relief arising from its copyrights. Thus, the Court cannot grant summary judgment to Blizzard for its tortious interference with contract (TIWC) claim.93 In addition, regardless of Blizzard`s Copyright misuse, disputed material facts preclude the entry of summary judgment. First, a reasonable jury could find that Blizzard`s EULA and TOU violate public policy by restraining trade and because of the agreements` anti-competitive nature. Second, a reasonable jury could find that Blizzard cannot prove that MDY acted improperly. Third, a reasonable jury could find that Blizzard cannot prove that MDY solely acted with malice. Fourth, a reasonable jury could find that Blizzard cannot prove that MDY intended to interfere with Blizzard`s contracts. Finally, a reasonable jury could find that Blizzard cannot prove any damages. A. Because Blizzard`s EULA and TOU are anti-competitive and restrain trade, a reasonable jury could find that Blizzard`s agreements violate public policy According to the Restatement (Second) of Torts § 774, an alleged interferer is not liable for TIWC if the contract at issue effectively violates an established public policy:94 One who by appropriate means causes the non-performance of an illegal agreement or an agreement having a purpose or effect in violation of an established public policy is not liable for pecuniary harm resulting from the nonperformance.
93 94

See, infra, section V. Restatement (Second) of Torts, § 774.

- 18 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

As a result, as long as the third-party contract`s relevant provisions contract operate adversely to public policy, courts will not find TIWC ­ even if the court finds all the other TIWC elements.95 By its own terms, §774 is not limited to situations where contracts are unambiguously illegal. Anti-competitive provisions or provisions that restrain trade are enough to bar TIWC liability. In fact, the comments to §774 expressly state that such provisions are common provisions that bar a finding of TIWC:96 A common type of contract regarded as contrary to public policy is a contract tending to monopoly or undue restraint of trade (sic). In some cases this result may be the avowed purpose of the agreement in question; in others this may be the effect in view of the administration of the agreement or other circumstances, whether or not it is the purpose. ... If, however, the restriction works prejudice to both interests by tending to create a monopoly or by unduly restraining trade, it is regarded as in violation of a clear public policy. §774 expressly illustrates how an otherwise valid contact could not be used as a basis for TIWC liability even when the contract breached expressly forbids the very result that occurs:97 A, a cinema exhibitor in the town of X has a contract with the chief cinema producers that they will not permit any first-run pictures to be shown in X except at his theatre. B builds a cinema theatre in X. He is not liable for inducing one or more of the producers to license him for a first-run cinema in breach of the contract with A, if he does not use wrongful means. In this case, Blizzard contends that its EULA prohibits its licensees from using independently created aftermarket software with WoW.98 Like B in the example, MDY cannot be liable for inducing a user to use MDY`s Glider software even if such use
95 96

See id., cmt. b. Id. 97 Id., Illustration 4. 98 Blizzard`s MSJ, Section V.

- 19 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

breaches Blizzard`s contract because to do so would be anti-competitive and restrain trade. Just like there is no law that prevents B from opening his theater, there is no law that prevents MDY from selling its software. The Court should deny Blizzard`s motion for summary judgment as a matter of law. B. A reasonable jury could find that MDY did not act improperly by advertising and marketing its Glider software To survive summary judgment, Blizzard must demonstrate that MDY`s actions were illegal ­ or at least inequitable ­ for the Court to consider the actions to be tortious.99 Actions that comply with the law, of course, will not be considered tortious. The law has long permitted reverse engineering of copyrighted software for the purpose of achieving interoperability between aftermarket software and copyrighted software.100 The DMCA goes further by expressly permitting a person to circumvent technological measures the purpose of achieving interoperability between aftermarket software and copyrighted software.101 In this way, copyright law expressly authorizes the steps needed to make, use and sell independently created aftermarket software ­ that is, aftermarket software intended solely for use with another person`s copyrighted game.102 Moreover, copyright law`s purpose is to encourage artists, writers and even computer programmers to create new ideas artistic and literary works, including independently created aftermarket software, which will reach the marketplace.103 In stark contrast, Blizzard believes that it can use TIWC to achieve the opposite
99

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

- 20 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

result ­ i.e., to prevent independently created aftermarket software from reaching the marketplace. In support of its position, Blizzard contends that TIWC applies because Glider has no utility and it is not an independent good. 104 In addition to ignoring the law of the previous paragraph, the law does not give Blizzard`s assertions weight.105 Comparatively, the Court can only consider Glider independently created software ­ much more so than the defendant`s software in Lexmark.106 In support of its TIWC theory, Blizzard cites Am. Airlines v. Platinum World Travel.107 The central issue in Am. Airlines involved a promotional frequent flyer reward program that plaintiff American Airlines offered its customers.108 Before enrolling a customer in the program, American Airlines required each customer to contractually agree not to sell any reward to a third-party.109 The defendants in the case operated a business that brokered the frequent flyer rewards American Airlines issued.110 upheld on appeal.111 Even though some facts of Am. Airlines are analogous to the case at bar, it is not particularly helpful. First, as opposed to the facts in Lexmark, Congress did not expressly authorize the defendant`s acts. In fact, the court in Am. Airlines actually noted defendant`s failure to point out any authority for its position.112 Second, as an air carrier, the court found that plaintiff American Airlines was statutorily exempt from the federal and state unfair practices laws.113 Here, Blizzard enjoys no exemption from
104 105

The

District Court entered summary judgment on the issue of TIWC and the decision was

Blizzard`s MSJ at 14. See, e.g., MDY`s SDF ¶¶ 42, 44, 140; MDY`s SOF ¶¶ 38-46. 106 Lexmark, 387 F.3d at 550 (mere checksum program to complete handshake enough). 107 769 F.Supp. at 1208, aff'd 967 F.2d 410 (10th Cir. 1992). 108 Am. Airlines, 769 F.Supp. at 1204. 109 Id. 110 Id. 111 Id. at 1208. 112 Id. at 1207. 113 Id. at 1205.

- 21 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

unfair competition laws. Third, unlike plaintiff American Airlines, Blizzard has misused its copyrights and has attempted to unilaterally extend the reach of copyright law through contract in an anti-competitive manner. Fourth, the court Am. Airlines expressly decided as a misappropriation case. In fact, the court stated that defendants` acts went far beyond mere misappropriation of information:114 The defendants business goes far beyond misappropriation of information. Rather, the defendants are misappropriating the actual services of the plaintiff. Here, MDY has not misappropriated anything from Blizzard.115 Blizzard sells WoW. MDY`s Glider does not permit users to play WoW without paying for it. MDY`s Glider requires users to pay for, and log into a valid WoW account just like any other WoW user. MDY`s 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.116 Lastly, even though Glider avoids detection by Blizzard`s spyware (Warden), MDY`s actions are not the same as the defendants` actions in Am. Airlines. Unlike MDY (whose actions Copyright law promotes), the defendants in Am. Airlines were the central figures in an elaborate system of deception enlisting the aid of plaintiff`s customers, which included booking false reservations.117 Blizzard may argue that, like the defendant in Am. Airlines, MDY deceives Blizzard by actively avoiding detection from Warden. The Court should note that when MDY started selling Glider, Glider did not originally avoid detection. MDY did not include detection avoidance as a feature of Glider because Donnelly never believed that the use of Glider with WoW would violate Blizzard`s EULA.118 MDY added this feature
114 115

Id. at 1207 (emphasis ours). MDY`s SOF ¶¶ 34-45. 116 MDY`s SDF ¶ 154. 117 Id. at 1203. 118 MDY`s SDF ¶ 141.

- 22 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

to Glider solely as a countermeasure to Blizzard`s unilateral attempt to take away what Donnelly believed was a rightful software business.119 Likewise, a reasonable jury could find that Blizzard`s EULA permitted because Glider does not enable a user to do anything more than a human can do. Glider simply automates keystrokes to permit the Glider user to do something more productive.120 C. A reasonable jury could find that Donnelly was not motivated by a malicious intent to harm Blizzard or WoW The question whether a desire to interfere with the plaintiff`s contractual relations motivated the defendant is a major factor, if not the most important factor in determining whether the interference is improper.121 As long as the actor`s motive is at least partially supported by a proper purpose, the actor has not tortiously interfered.122 Malice must be the sole motivator for the actor to interfere tortiously.123 For example, a competitor does not act improperly if his purpose, at least in part, is to advance his own economic interests.124 Blizzard submits statements that MDY made as evidence that malice was MDY`s sole motivator.125 MDY`s statements do not indicate a motive to maliciously harm Blizzard. If anything, MDY`s statements demonstrate the lengths MDY had to go to protect its economic interests in maintaining its business, not that MDY harbors ill will toward Blizzard. Even if a reasonable jury could interpret MDY`s statements as hostile, ill will is not enough by itself. Ill will coupled with proper motivation, like a viable
119 120

Id. MDY`s SOF ¶¶ 38-45. 121 Restatement 2d of Torts, § 767, cmt. d. 122 Bar J Bar Cattle v. Pace, 158 Ariz. at 485(even if [defendant] had an improper motive, that fact would not necessarily make him liable in tort. One who interferes with the contractual rights of another for a legitimate competitive reason does not become a tort-feasor simply because he may also bear ill will toward his competitor.) 123 Id.; see also, Restatement (Second) of Torts, § 767, cmt. d. 124 Bar J Bar Cattle, 158 Ariz. at 485, citing with approval, Restatement (Second) of Torts § 768(1)(d). 125 Blizzard`s MSJ at 16-17.

- 23 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

business, defeats Blizzard`s claim. At a minimum, the parties dispute whether MDY maliciously sold Glider, which at a minimum, may be a question for a jury to decide. D. A reasonable jury could find that MDY did not intend to interfere with Blizzard`s contracts To obtain summary judgment, Blizzard must have irrefutable evidence that MDY had the specific intent to cause the interference.126 Even Blizzard agrees that it must show that MDY intended or knew that a breach of contract was substantially certain to occur as a result of Glider.127 Blizzard`s own motion implicitly admits that Blizzard cannot show that MDY intended or knew that Glider use with WoW would breach the EULA/TOU when Donnelly created Glider and when MDY began selling Glider in June, 2005.128 Even when viewing the facts in Blizzard`s favor, Blizzard only evidence is statements MDY made in its FAQ as early as September 2005 that Blizzard`s EULA was overly broad and a user could possibly breach the EULA by using Glider with WoW. In addition, a reasonable jury could find that MDY did not have the specific intent to cause the interference because Blizzard`s agreements did not originally prohibit bots.129 It was only after Donnelly filed this lawsuit that Blizzard unilaterally elected to modify its TOU expressly to exclude bots.130 Thus, at least until Blizzard changed its contract, a reasonable jury could find that MDY lacked the specific intent to interfere with Blizzard`s agreements. Furthermore, Blizzard has cited no case for the proposition that Blizzard can take

126

Antwerp Diamond Exchange of America, Inc. v Better Business Bureau of Maricopa County, Inc., 130 Ariz. 370 (1985). 127 Blizzard`s MSJ at 15, lines 4-5. 128 Blizzard`s MSJ at 15, lines 10-14 (noting only at least September 2005). 129 MDY`s SDF ¶ 67; see also, Darner Motor Sales v. Universal Underwriters, 140 Ariz. 383 (1984)(terms of adhesion contracts that are not within the reasonable expectations of the non-drafter are not enforceable). 130 MDY`s SDF ¶ 67; see also, MDY`s SOF ¶15-18.

- 24 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

away a business that MDY lawfully started. In other words, Blizzard cannot on its own whim, modify its EULA to unilaterally strip MDY of its software business, or any other entity such as Brian Kopp of his unauthorized WoW guidebook business, when Glider did not violate Blizzard`s EULA or TOU in the first instance. E. A reasonable jury could find that MDY did not damage Blizzard Blizzard bears the burden of showing that MDY`s alleged wrongful conduct was a substantial factor in Blizzard`s loss.131 While a jury usually determines the conduct caused damage, the mere possibility of causation is not enough to defeat summary judgment.132 Even if an inteferor`s conduct contributed "only a little" to the claimant`s injury, the claimant still must show at trial that the injury would not have occurred but for` the [interferor`s] conduct.133 In this case, Blizzard cannot present evidence of any harm that Glider caused.134 MDY`s expert has concluded that Blizzard`s calculations are speculative and unsupported by any controlled economic study.135 If anything, Glider has increased Blizzard`s revenues.136 Even if Blizzard has suffered damage as a result of bots, Blizzard cannot attribute any damage explicitly to Glider ­ a program that is very different than the other bots.137 At a minimum, the parties dispute certain material facts that preclude the Court from granting summary judgment.

131

See, MDY`s MSJ at 24; Agilysys, Inc. v. Vipond No. CV-04-2023-PHX-DGC, at 5 (D. Ariz. September 13, 2006). 132 Grafitti-Valenzuela v. Phoenix, 513 Ariz. Adv. Rep. 20, at 12 (Ariz.App. 9-27-2007) citing Badia v. City Of Casa Grande, 195 Ariz. 349, 357 (App. 1999)(Sheer speculation is insufficient to establish the necessary element of proximate cause or to defeat summary judgment.) 133 Grafitti-Valenzuela, 513 Ariz. Adv. Rep. at 12. 134 MDY`s SDF ¶¶ 147-53 135 Id. 136 Id. 137 Id.

- 25 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

VIII. CONCLUSION For the foregoing reasons, the Court should deny Blizzard`s motion for summary judgment on all counts.

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

- 26 -

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

CERTIFICATE OF SERVICE

I hereby certify that on April 24, 2008, I electronically transmitted the attached document to the Clerk`s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to 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

- 27 -