Blizzard Entertainment, Inc. v. Alyson Reeves et al

Filing 24

NOTICE OF MOTION AND MOTION for Default Judgment against Defendant Alyson Reeves d/b/a Scapegaming filed by Plaintiff Blizzard Entertainment, Inc.. Motion set for hearing on 7/19/2010 at 01:30 PM before Judge Stephen V. Wilson. (Woo, Felix)

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 1 of 39 Page ID #:129

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

FELIX WOO (State Bar No. 208107) [e-mail] BONNIE LAU (State Bar No. 246188) [e-mail] SONNENSCHEIN NATH & ROSENTHAL LLP 601 South Figueroa Street, Suite 2500 Los Angeles, California 90017-5704 Telephone: [phone] Facsimile: [phone] Attorneys for Plaintiff BLIZZARD ENTERTAINMENT, INC.

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA BLIZZARD ENTERTAINMENT, INC., Plaintiff, vs. ALYSON REEVES, D/B/A SCAPEGAMING, and DOES 1 through 5 inclusive, Defendants. Case No. 2:09-cv-7621-SVW-AJW PLAINTIFF BLIZZARD ENTERTAINMENT, INC.'S (1) NOTICE OF MOTION AND MOTION FOR DEFAULT JUDGMENT AGAINST ALYSON REEVES, D/B/A SCAPEGAMING; AND (2) SUPPORTING MEMORANDUM OF POINTS AND AUTHORITIES [Fed. R. Civ. P. 55(b)(2) Date: Time: Place: Before: July 19, 2010 1:30 p.m. Courtroom 6 Hon. Stephen V. Wilson

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 2 of 39 Page ID #:130

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

NOTICE OF MOTION PLEASE TAKE NOTICE THAT on July 19, 2010, at 1:30 p.m., in Courtroom 6 of the United States District Court, Central District of California, located at 312 N. Spring Street in Los Angeles, California, plaintiff Blizzard Entertainment, Inc. ("Blizzard"), will move, and hereby does move, the Court for Entry of Default Judgment in the amount of $24,002,139.00 against defendant Alyson Reeves, d/b/a Scapegaming ("Defendant"), pursuant to Federal Rule of Civil Procedure 55(b)(2) and Local Rule 55-1. The Clerk entered default against Defendant on January 14, 2010. Blizzard makes this motion on the following grounds, and at the time and place of any hearing will present proof of the following matters: 1. 2. Defendant is not an infant or incompetent person or in military service Blizzard effected service of the summons and complaint on Defendant or otherwise exempted under the Soldiers' and Sailors' Civil Relief Act of 1940. on November 4, 2009, and filed the Proof of Service of Summons and Complaint with this Court on January 11, 2010. 3. 4. 5. Defendant has not appeared in this action. The clerk entered default in this action on January 14, 2010. Blizzard is entitled to judgment against Defendant on the Complaint

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

for (1) Copyright Infringement, (2) Contributory and Vicarious Copyright Infringement, (3) Circumvention of Copyright Protection Systems, (4) Breach of Contract, (5) Intentional Interference with Contract, and (6) Unfair Competition, in the action entitled Blizzard Entertainment, Inc. v. Alyson Reeves, d/b/a Scapgaming, et al., pending in the United States District Court for the Central District of California, Case No. 2:09-CV-7621-SVW-AJW. 6. Blizzard seeks judgment in the amount of $24,002,139, which is equivalent to the sum of $3,052,339 in disgorgement, $20,886,200 in statutory

-1Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 3 of 39 Page ID #:131

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

damages and $63,600 in attorneys' fees, as set forth in the concurrently-filed Declaration of Bonnie Lau. This motion is based upon this Notice, the attached Memorandum of Points and Authorities, the concurrently-filed Declarations of Greg Ashe and Bonnie Lau, the pleadings and files in this action, and such evidence and argument as may be presented at the hearing of this motion. Respectfully submitted, Dated: June 18, 2010 SONNENSCHEIN NATH & ROSENTHAL LLP

By

/s/ Bonnie Lau BONNIE LAU

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Attorneys for Plaintiff BLIZZARD ENTERTAINMENT, INC.

-2Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 4 of 39 Page ID #:132

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

TABLE OF CONTENTS Page MEMORANDUM OF POINTS AND AUTHORITIES.........................................1 I. II. INTRODUCTION ............................................................................................... 1 FACTUAL BACKGROUND.................................................................................2 A. B. C. D. E. F. III. A. B. Blizzard's World of WarCraftTM Online Computer Game ................. 2 The World of WarCraftTM End User License Agreement .................. 4 The World of WarCraftTM Terms of Use ............................................ 5 Blizzard's Anti-Piracy Mechanisms ................................................... 6 Defendant's Unlawful Activities ........................................................ 9 Damages ............................................................................................ 15 Entry of Default Judgment is Proper. ............................................... 16 Defendant Should Be Held Liable For All Claims Asserted. ........... 17 1. C. D. Defendant Directly Infringes Blizzard's Copyrights by Copying the WoW Software into Random Access Memory Beyond the Scope of the EULA and TOU. ............. 17

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

DISCUSSION .................................................................................................. 16

Defendant is Secondarily Liable for its Contributory and Vicarious Infringement of WoW. ..................................................... 21 Defendant's Scapegaming Servers, Which Enable WoW Players to Circumvent Blizzard's Technological Measures That Control Access to and Protect Blizzard's Copyrighted Software, Violate DMCA Sections 1201(a)(2) and 1201(b)(1). ........................................................................................ 23 Defendant Breached The Terms Of The EULA And TOU. ............. 25 Defendant Tortiously Interfered With Blizzard's Contracts With WoW Players By Intentionally Promoting And Enabling Their Use Of Scapegaming Servers In Violation Of The WoW EULA And TOU. ............................................................ 27 Blizzard Is Entitled To Disgorge Defendant's Wrongful Profits. ............................................................................................... 28 Blizzard Is Also Entitled To Recover Statutory Damages. .............. 29

E. F.

G. H.

-iCase No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 5 of 39 Page ID #:133

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

TABLE OF CONTENTS (cont.) Page I. IV. The Court Should Award Blizzard Reasonable Attorneys' Fees....................................................................................................30

CONCLUSION ................................................................................................ 32

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
-iiCase No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 6 of 39 Page ID #:134

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

TABLE OF AUTHORITIES Page(s) FEDERAL CASES A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) .......................................................... 17, 21, 22, 23 Altera Corp. v. Clear Logic, Inc., 424 F.3d 1079 (9th Cir. 2005) ............................................................................ 25 Antione v. Atlas Turner, Inc., 66 F.3d 105 (6th Cir. 1995) ................................................................................ 17 Davidson & Assocs. v. Jung, 422 F.3d 630 (8th Cir. 2005) ........................................................................ 25, 26 Davis v. Fendler, 650 F.2d 1154 (9th Cir. 1981) ............................................................................ 17 Harris v. Emus Records Corp., 734 F.2d 1329 (9th Cir. 1984) ............................................................................ 30 LGS Architects, Inc. v. Concordia Homes of Nev., 434 F. 3d (9th Cir. 2006) .............................................................................. 20, 21 MAI Sys. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993) .................................................................. 18, 19, 24 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd. 545 U.S. 913, 942 (2005) ............................................................................. 21, 22 Microsoft Corp. v. McGee, 490 F. Supp. 2d 874 (S.D. Ohio 2007)...............................................................30 Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701 (9th Cir. 2007) .............................................................................. 21 Polar Bear Prods. v. Timex Corp., 384 F.3d 700 (9th Cir. 2004) .............................................................................. 29 S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081 (9th Cir.1989) ............................................................................. 17 Sony Comp. Enter. Am., Inc. v. Filipiak, 406 F. Supp. 2d 1068 (N.D. Cal. 2005)..............................................................30
-iiiCase No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 7 of 39 Page ID #:135

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

TABLE OF AUTHORITIES (cont.) Page(s) TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915 (9th Cir. 1987) .............................................................................. 17 Ticketmaster LLC v. RMG Techs., Inc., 507 F. Supp. 2d 1096 (C.D. Cal. 2007)............................................18, 20, 24, 25 Triad Sys. Corp. v. Se. Express Co., 64 F.3d 1330 (9th Cir. 1995) .............................................................................. 18 Twentieth Century Fox Film Corp. v. Cablevision Sys. Corp., 478 F. Supp. 2d 607 (S.D.N.Y. 2007) ................................................................ 18 STATE CASES H&M Assoc. v. City of El Centro, 109 Cal. App. 3d 399 (1980) .............................................................................. 27 PG&E v. Brea Stearns, 50 Cal. 3d 1118 (1990) ....................................................................................... 27 STATUTES 17 U.S.C. § 410(c) ................................................................................................... 18 17 U.S.C. § 501..........................................................................................................1 17 U.S.C. § 504(b) ............................................................................................. 28, 29 17 U.S.C. § 505........................................................................................................30 17 U.S.C. § 1201, et seq.. ................................................................................. passim 17 U.S.C. § 1203, et seq. ............................................................................. 23, 29, 30 OTHER AUTHORITIES Fed. R. Civ. P. 55.....................................................................................................16 Local Rule 55...............................................................................................16, 17, 31

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-ivCase No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 8 of 39 Page ID #:136

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION This is an action for injunctive relief, money damages and related relief against Defendant Alyson Reeves d/b/a Scapegaming ("Defendant"), who created and proliferated software, and operated a web server and several game servers, that unlawfully permitted access to copies of Plaintiff Blizzard Entertainment, Inc.'s ("Blizzard") interactive computer game World of WarCraft®. Via the website scapegaming.com, Defendant actively marketed and promoted "scapegaming," a web server and several unauthorized game servers that enable and encourage third parties to play Blizzard's copyrighted World of Warcraft® online computer game on the Scapegaming servers instead of Blizzard's own authorized servers, thereby denying Blizzard subscription revenue for online play. Defendant operated its Scapegaming business with knowledge that it was facilitating and promoting Scapegaming users to infringe Blizzard's copyright, circumvent its copyright protection technology, and breach their contracts with Blizzard. Defendant's actions unjustly profited Defendant while causing significant damage to Blizzard. The acts of Defendant, described in more detail below, constitute contributory, direct and indirect infringement of registered copyrights in violation of the Copyright Act, as amended, 17 U.S.C. § 501; circumvention of copyright protection systems in violation of the Digital Millennium Copyright Act ("DMCA"), as amended, 17 U.S.C. § 1201(a)(1)(A); trafficking in technology designed for the purpose of circumventing copyright protection systems in violation of the DMCA, as amended, 17 U.S.C. § 1201(a)(2) and (b)(1); breach of contract under the laws of the State of Delaware, and unfair competition and intentional interference with contractual relations under California law. Blizzard filed the Complaint in this action on October 20, 2009. Defendant was personally served with the Summons and Complaint on November 4, 2009, but never appeared or responded to the Complaint. Accordingly, the Clerk
-1Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 9 of 39 Page ID #:137

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

entered the default of Defendant on January 14, 2010. By this motion, Blizzard seeks entry of default judgment against Defendant in the amount of $24,002,139. II. FACTUAL BACKGROUND A. Blizzard's World of WarCraftTM Online Computer Game Blizzard is a premier publisher of entertainment software. Blizzard is best known for its high-quality computer games, including the DIABLO®, STARCRAFT® and WARCRAFT® gaming franchises. Since establishing the Blizzard label in 1994, Blizzard has quickly become one of the world's most respected and popular makers of computer games. Many of Blizzard's games feature online game play over the Internet via an online gaming service provided by Blizzard. Over 11 million individuals actively play Blizzard's games online. Declaration of Greg Ashe ("Ashe Decl."), at ¶ 2. Blizzard's World of WarCraftTM ("WoW") is the company's most ambitious and advanced online computer game. WoW is a Massively Multiplayer Online Roleplaying Game ("MMORPG"), a genre of computer game in which large numbers of players interact with each other simultaneously in a virtual persistent online world. WoW allows players to experience the WARCRAFT® universe in great detail, customizing their own experiences by participating in a variety of different activities alone or with others. Id. at ¶ 3. World of Warcraft® allows players from around the globe to assume the roles of different characters within the game as they explore, adventure and quest across WoW's vast online world. Id. at ¶ 4. A central objective for players of WoW is to advance their characters through the various levels recognized in the game, thereby accessing new content in the WoW gaming environment as levels increase. Leveling characters in WoW requires an investment of time and effort playing the game. Id. at ¶ 5. World of Warcraft®, like other MMORPG games, derives revenue based on a subscription fee model. In order to experience the WoW gaming environment,
-2Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 10 of 39 Page ID #:138

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

consumers must obtain a legitimate version of the WoW game client software, and then make periodic payments for a subscription permitting them to continue accessing Blizzard's authorized WoW servers and playing in the authorized WoW gaming environment. Id. at ¶ 6. Unfortunately, the gaming experience of legitimate players of WoW is under near constant attack by cheaters, scammers, and other wrongdoers seeking to exploit WoW for their own illegitimate ends. For this reason, Blizzard seeks to protect the sanctity of the WoW gaming experience through both contractual obligations and technical measures. Id. at ¶ 7. The software code responsible for the extensive and richly detailed creative elements forming the online world of the WoW gaming environment are copyrighted works owned by Blizzard. Id. at ¶ 8. Blizzard has received copyright registrations in both the server and game client software code. Id. at ¶ 9, Exhibit A [Copyright Registration Numbers TXu 1-166-151, TX 5-984-004, and PA-1-247-131]. WoW uses a client-server model. To access the online world, a user must have special software installed on his or her computer (the "WoW game client" or "game client"). Id. at ¶ 10. The game client is specifically designed to work in combination only with computer servers maintained and operated by Blizzard. Id. at ¶ 11. Because the copyrighted content making up the WoW gaming environment is stored on both the WoW game client and the WoW game server, a user seeking access to the WoW gaming environment must have both an authorized game client and authorized access to a legitimate WoW game server. Id. at ¶ 12. The WoW game server is designed only to recognize legitimate, authorized game clients. In turn, authorized game clients are specifically tailored to connect only with authorized servers. Id. at ¶ 13.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-3Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 11 of 39 Page ID #:139

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

Blizzard charges players a set monthly subscription fee for access to its authorized WoW servers. Id. at ¶ 14. Blizzard developed the WoW gaming environment through tremendous effort and at tremendous expense to the company, employing numerous game designers, artists, producers and programmers to conceive of and create a gaming experience that has appealed to millions of players worldwide. Id. at ¶ 15. B. The World of WarCraftTM End User License Agreement Prior to playing WoW, users must install the game client on a personal computer. During that installation process, the game client displays a contract to the user called the World of WarCraftTM End User License Agreement ("EULA"). Ashe Decl, at ¶ 16, Exhibit B [EULA]. In order to install the game client, and again before playing the game for the first time, the user must manifest assent to the EULA by clicking on a button labeled "Accept." The user also may decline to enter into this contract by clicking on a button labeled "Decline," at which point the game client will terminate, denying access to the user. Id. at ¶ 17. Any use of the WoW game client that is not in accordance with the EULA is expressly prohibited. Among other provisions, the EULA contains an express limitation on the license, which provides that the user may not "in whole or in part, copy, photocopy, reproduce, translate, reverse engineer, derive source code from, modify, disassemble, decompile, or create derivative works based on the Game...." See Ex. B, EULA para. 2(A). Id. at ¶ 18. The EULA also provides that the user may not "exploit the Game or any of its parts, including without limitation the Game Client, for any commercial purpose..." EULA, para 2(C). Id. at ¶ 19. The EULA also provides that the user may not "host, provide or develop matchmaking services for the Game or intercept, emulate or redirect the communication protocols used by Blizzard in any way, for any purpose, including
-4Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 12 of 39 Page ID #:140

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

without limitation unauthorized play over the internet, network play, or as part of content aggregation networks...." See EULA para 2(F). Id. at ¶ 20. The EULA also provides that the user may not "facilitate, create or maintain any unauthorized connection to the Game or the Service, including without limitation (a) any connection to any unauthorized server that emulates, or attempts to emulate, the Service; and (b) any connection using programs or tools not expressly approved by Blizzard." See EULA para. 2(G). Id. at ¶ 21. The EULA also provides Blizzard with the right to deploy patches to the user's computer, stating "Blizzard may deploy or provide patches, updates and modifications to the Game that must be installed for the user to continue to play the Game. Blizzard may update the Game remotely including without limitation the Game Client residing on the user's machine, without the knowledge of the user, and you hereby grant to Blizzard your consent to deploy and apply such patches, updates and modifications." EULA para. 9. Id. at ¶ 22. The provisions of the EULA are designed to protect the integrity of the game. Id. at ¶ 23. C. The World of WarCraftTM Terms of Use Prior to playing WoW, users must create an account with Blizzard. During that account creation process, Blizzard displays a contract to the user called the World of WarCraftTM Terms of Use (the "TOU"). Ashe Decl., at ¶ 24, Exhibit C [TOU]. In order to create a WoW account, the user must manifest assent to the TOU by clicking on a button labeled "Accept." The user also may decline to enter into this contract by clicking on a button labeled "Decline," at which point the account creation process will terminate, denying access to the user. Id. at ¶ 25. Any use of the WoW game client or access to the WoW gaming environment that is not in accordance with the TOU is expressly prohibited. Among other provisions, the TOU provides that no one other than Blizzard shall
-5Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 13 of 39 Page ID #:141

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

host, provide access to, or emulate the communication protocols used to create the WoW gaming environment. Additionally, the TOU prohibits modifying WoW software, adding components to WoW, or using third-party programs for the purpose of hosting WoW. The use of any tools to "hack or alter" WoW software also is specifically prohibited. Id. at ¶ 26. The provisions of the TOU are designed to protect the integrity of the game by, among other things, preventing the very conduct demonstrated by Defendant ­ developing pirated game servers to allow the unchecked use of pirated versions of the WoW game client. Id. at ¶ 27. The TOU also that the user may not "exploit the Game or any of its parts, including without limitation the Game Client, for any commercial purpose..." See TOU para. 2(B). Id. at ¶ 28. The TOU also provide that the user may not "host, provide or develop matchmaking services for the Game or intercept, emulate or redirect the communication protocols used by Blizzard in any way, for any purpose, including without limitation unauthorized play over the internet, network play, or as part of content aggregation networks...." See TOU para. 2(E). Id. at ¶ 29. The TOU also provides that the user may not "facilitate, create or maintain any unauthorized connection to the Game or the Service, including without limitation (a) any connection to any unauthorized server that emulates, or attempts to emulate, the Service; and (b) any connection using programs or tools not expressly approved by Blizzard." See TOU para. 2(F). Id. at ¶ 30. D. Blizzard's Anti-Piracy Mechanisms Blizzard has received United States copyright registrations in both its game client software and its server software. Ashe Decl., at ¶ 31 and Exhibit A. Blizzard's copyright in the game client covers nearly all aspects of the game client as distributed, including without limitation (a) all of the human and machine readable computer code and any other data distributed as part of the game client,
-6Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 14 of 39 Page ID #:142

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

(b) all graphical and textual elements of the screens that appear in the game client when the same is executed on a personal computer, (c) all graphical and textual elements of documents distributed with the game client, and (d) all motion picture and sound recordings, and other audio-visual elements distributed with the game client. Id. Because a substantial amount of the material that is used to create the WoW gaming environment resides in the copyrighted game client, and because the game client (like all software) is subject to unlimited copying over the Internet, Blizzard has implemented a number of technological measures to control access to the copyrighted elements in the game client. Id. at ¶ 32. In order to play WoW, a user must first install and then "launch" the WoW client. Id. at ¶ 33. After the game client has been installed, it must then interact with the WoW game server in order to create the online world and provide access to the copyrighted content of the WoW gaming environment. Game clients are preconfigured only to connect to Blizzard's WoW game server. Specifically, after the game client connects to the game server, the server examines a set of data from the game client that serves as a "digital fingerprint," allowing Blizzard to determine whether the game client attempting to communicate with the server is legitimate. Id. at ¶ 34. The WoW client software cannot be used to play WoW without a connection to a server. Id. at ¶ 35. Section 2 of the WoW EULA prohibits players from using non-Blizzard servers. Id. at ¶ 36, Exhibit B [EULA]. When the WoW client is launched, a copy of the program is loaded into the user's own computer's random access memory. Although players may load the executable portion of the game client into RAM prior to any authentication, the majority of the copyrighted content ­­ the visual and aural content that make up
-7Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 15 of 39 Page ID #:143

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

the WoW game environment ­­ are not loaded until after a player authenticates with Blizzard's WoW server. Id. at ¶ 37. Blizzard only authorizes users to copy WoW into random access memory in conformity with the terms of its EULA and TOU. Id. at ¶ 38. When users first attempt to launch the WoW game client, authenticate to the WoW game server, and access the copyrighted elements of the WoW gaming environment, they must demonstrate that they have purchased a valid license to play the game. Id. at ¶ 39. Each authorized user is issued a unique 26-digit alphanumeric authentication code (the "Authentication Code") upon purchase of a license to play WoW. Prior to playing the game, users must create an account via a separate interface that requires them to enter their Authentication Code. Once the Authentication Code has been validated, the user must create a unique account username and password. Each Authentication Code can only be used to create one account, and the Authentication Code is permanently attached to that account after the account has been created. Id. at ¶ 40. When the user runs the game client software, the game client displays a login screen in which the user must enter his or her unique account username and password. The client then sends information, including information derived from the username and password, to the server. If this information passes certain authentication tests, the server allows the player to access and experience the copyrighted material resident on the server, as well as opening access to the copyrighted material on the game client. Id. at ¶ 41. As such, access to the copyrighted content on the game client is predicated on access to the authorized WoW server. In this way, the server "unlocks" the copyrighted information on the game client. Id. at ¶ 42.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-8Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 16 of 39 Page ID #:144

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

E.

Defendant's Unlawful Activities

Defendant Alyson Reeves d/b/a Scapegaming until recently operated www.scapegaming.com, which served as a portal to a number of servers operated by scapegaming, designed to emulate the actual WoW game servers Blizzard operates. Ashe Decl., at ¶ 43. The Scapegaming servers emulated (mimicked) Blizzard's own World of Warcraft® servers, and enabled large-scale, multi-player online play of Blizzard Games. The Scapegaming servers are not authorized by Blizzard. Id. at ¶ 44. On information and belief, Defendant, and others acting in concert with it, initially began development of unauthorized or rogue servers to accommodate players that wished to play World of Warcraft without paying a monthly fee. Id. at ¶ 45. Defendant had advertised its servers on the "Top 100" list of unauthorized WoW servers. It included a link to: http://www.xtremetop100.com/in.php? site=1132192645 on its homepage and elsewhere on its website encouraging Scapegaming users to "vote" for Scapegaming as one of the "best" unauthorized servers in order to attract more users. Id. at ¶ 46. Defendant employed individuals as "game masters," or "GMs", "database" team members, "donations" supervisors, developers, and forum moderators to administer its servers and website. Id. at ¶ 47. Defendant offered five different servers to its users: WoWScape, WoWCrack, WoWLegion, Battlescape, and PTR. Id. at ¶ 48. Defendant described its WoWScape server as a "funserver." This "funserver" attempted to replicate the WoW online gaming experience, but at the same time allowed players to advance in WoW and obtain objects more quickly than Blizzard's authorized servers by offering 40x experience rates, 60x drop rates, custom gear and unscripted instances. Id. at ¶ 49.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-9Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 17 of 39 Page ID #:145

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

Defendant described its WoWCrack server as "Blizzlike High Rate." This "Blizzlike High Rate" server attempted to replicate the WoW online gaming experience Blizzard provides, but at the same time allows players to advance in WoW and obtain objects more quickly than Blizzard's authorized servers but not as quickly as the "funserver." Id. at ¶ 50. Defendant described its WoWLegion server as "Blizzlike." This "Blizzlike" server was designed to replicate the WoW online gaming experience Blizzard provides on its authorized servers, allowing players to advance in WoW at only a slightly accelerated rate. Id. at ¶ 51. Defendant described its Battlescape server as a "Pure PvP Realm," which attempted to replicate the "Player versus Player" battle realms that Blizzard provides on its authorized servers. Unlike Blizzard's servers, however, players using scapegaming's PvP realm were immediately assigned a high-level character that would take months to obtain on Blizzard's authorized servers. Id. at ¶ 52. Defendant described its PTR server as a "Test Realm," which Scapegaming used to test new features. This test realm also attempted to replicate the WoW online gaming experience Blizzard provides. Id. at ¶ 53. Defendant had also announced plans to offer another server that would attempt to replicate Blizzard's authorized servers as those servers existed several years ago, before Blizzard released its "Wrath of the Lich King" and "Burning Crusade" expansion packs. Id. at ¶ 54. Playing WoW on a Scapegaming server, other than the Battlescape server, required the user to have a copy of World of Warcraft with Blizzard's Wrath of the Lich King expansion pack installed on their computer. The Battlescape server required the player to have World of Warcraft with Blizzard's Burning Crusade expansion pack installed. Id. at ¶ 55. Blizzard did not authorize the Scapegaming servers and therefore their operation violated the express provisions of the EULA and TOU. Id. at ¶ 56.
-10Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 18 of 39 Page ID #:146

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

Likewise, players' use of the Scapegaming servers exceeded the express license limitations set forth in the WoW EULA and TOU. Id. at ¶ 57. Defendant was well aware that its activities were unauthorized, even going so far as to place a term in the Scapegaming Terms of Use designed to prevent Blizzard from discovering or receiving information about scapegaming's actions stating that: "No one from Blizzard, associated with Blizzard or any such affiliated company or anyone directed by Blizzard or its Related companies is permitted to enter these web sites or view any content contained within these sites at any time what so ever due to controversial reasons." Id. at ¶ 58. On information and belief, the copies of World of Warcraft, and the Burning Crusade and Wrath of the Lich King expansion packs that had to be installed in order to access Scapegaming servers did not need to be authentic copies. Id. at ¶ 59. On information and belief, unlike the authentic WoW game servers, the Scapegaming server never attempted to determine whether a game client connecting to it was legitimate. Instead, the Scapegaming server, as designed, allowed unauthorized versions of the game client to enter the WoW online world and access the copyrighted content residing on the game client. Id. at ¶ 60. In addition, the Scapegaming server allowed any user to create an account without first submitting a Blizzard Authentication Code. Id. at ¶ 61. The Scapegaming server thus allowed users to bypass the anti-piracy checks Blizzard has implemented that otherwise take place before the player may enter the WoW gaming environment. Id. at ¶ 62. Absent rogue servers such as scapegaming, owners of pirated versions of the game client would have no ability to access the copyrighted WoW gaming environment. Id. at ¶ 63.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-11Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 19 of 39 Page ID #:147

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

Blizzard did not authorized Scapegaming to provide servers nor did it authorize Scapegaming to create any derivative works based on its client or server software. Id. at ¶ 64. Defendant was not authorized by Blizzard to modify or reverse engineer any WoW software, including the game client, or to use the game client in conjunction with a non-Blizzard server. Id. at ¶ 65. On information and belief, Defendant and Scapegaming users bypassed the Authentication Code check required by the installation program and installed the pirated version of the game client on the hard drive of a computer for use in connecting to scapegaming's unauthorized servers. Id. at ¶ 66. On information and belief, Defendant and Scapegaming users caused this pirated version of the game client to be installed and run on a computer, and in doing so viewed the EULA and TOU, and manifested assent to the EULA and TOU by clicking on the "Accept" button. Id. at ¶ 67. On information and belief, during the course of developing the custom Scapegaming server emulation software, Defendant attempted to cause a pirated version of the game client to connect to the legitimate WoW game server. Id. at ¶ 68. On information and belief, Scapegaming developed, maintained, and actively updated its own custom emulation software designed to replicate the WoW online experience. Id. at ¶ 69. On information and belief, scapegaming's custom emulation software used content extracted and copied from the WoW client in order to replicate the WoW online experience. Id. at ¶ 70. On information and belief, scapegaming's developers disassembled, decompiled, "packet sniffed" or otherwise reverse engineered portions of Blizzard's client and server software during the course of development of the Scapegaming server. Id. at ¶ 71.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-12Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 20 of 39 Page ID #:148

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

On information and belief, at all times during the course of development of the Scapegaming server program, Defendant had specific knowledge that the server program was being used to enable individuals who had obtained pirated versions of the game client to access the game client and the copyrighted content therein and that the server program would be used to enable individuals who had obtained legitimate versions of the game client to access a WoW online game experience in violation of the EULA and TOU. Id. at ¶ 72. Scapegaming also provided instructions to its users on how to "downpatch" their WoW client programs. Id. at ¶ 73. "Downpatching" allowed users to downgrade their versions of WoW from the latest version in order to make them compatible with unauthorized servers and to avoid software controls that Blizzard implemented in new patches to prevent the use of its client software on unauthorized servers. Id. at ¶ 74. In addition to providing instructions on how to "downpatch," Scapegaming also provided links to pirated, older versions of the WoW game client designed to work with its unauthorized servers and links to "alternative patching" files and instructions that allow users to patch their game client without connecting to Blizzard's server. Id. at ¶ 75. Links to pirated versions of World of Warcraft were posted for download on the Scapegaming website. Id. at ¶ 76. Similarly, on July 29, 2009, "Justice," a "moderator" acting on behalf of Scapegaming posted links to Blizzard's copyrighted patches for use in downpatching Scapegaming users' copies of WoW without accessing Blizzard's authentication servers. Id. at ¶ 77. Applying patches without connecting to Blizzard's server allowed users to circumvent Blizzard's authentication software and patch pirated copies of WoW. Id. at ¶ 78.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-13Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 21 of 39 Page ID #:149

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

On July 26, 2009, "Peyton" (one of Defendant's aliases) announced that Scapegaming had plans to put up a new server or realm called "Chronicles" that would allow users to play an older version of World of Warcraft that did not include the popular Burning Crusade or Wrath of the Lich King expansion packs. Id. at ¶ 79. On July 28, 2009, Scapegaming user "Beckon" posted links to pirated versions of World of Warcraft version 1.12.1 for download on the Scapegaming website. WoW 1.12.1 is an older version of the game client that Beckon claims could be used with "Wowchronicles." Id. at ¶ 80. Due to Defendant's deliberate hosting, development, distribution, and promotion of the Scapegaming server, players around the world were able to use scapegaming's servers to access Blizzard's copyrighted content to play pirated copies of WoW and legitimate copies of WoW without paying monthly subscription fees. Id. at ¶ 81. The availability of unauthorized servers, like Scapegaming, that allow users with pirated versions of the game client to access Blizzard's copyrighted content on the game client without authorization contributed to demand for infringing copies of the game client on the Internet. Id. at ¶ 82. The availability of unauthorized copies, and the development of the pirated game servers designed to enable game play completely separate from the authorized WoW environment deprived Blizzard of the fruits of its labors in developing the WoW client and gaming environment. Id. at ¶ 83. Scapegaming unjustly profited from these unlawful acts by encouraging its users to make "donations" to fund its continued operation. It encouraged these "donations" by providing "donors" with additional items that those "donors" could use on scapegaming's servers. Id. at ¶ 84. The "donations" solicited by Scapegaming appear to be thinly-veiled sales of virtual property and characters available in WoW. Id. at ¶ 85.
-14Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 22 of 39 Page ID #:150

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

For example, on the "Funserver" players that "donated" to Scapegaming were able to choose from a range of items, ranging in cost from $1 (to advance their character 2 levels) to $300 for an "Ancient Pack #4" collection of a number of rare WoW items. Id. at ¶ 86. Most of the same items were available to players on the WoWLegion server, the server Scapegaming claimed was "Blizzlike," but at an increased cost. For those players, prices ranged from $2 (to advance a character two levels), to $300 for a package containing a level 70 character with weapons, gold, and other advanced in game items. Id. at ¶ 87. On the WoWCrack server, which Scapegaming described as "High Rate Blizzlike," most of the same items were available for purchase as on the other two servers, ranging in price from $2 (to advance a character two levels) to $250 for a package containing a high level character, and assorted other advanced in game items and gold. Id. at ¶ 88. The virtual property, characters and other in-game rewards received by "donors" were and are Blizzard's intellectual property. Id. at ¶ 89. In order to gain access to gameplay using the advanced items available for purchase on the WoWLegion service on Blizzard's authorized servers, a United States' resident player would have paid a $14.99/month fee for many months in order to complete the tasks required to gain access to these items. Id. at ¶ 90. By using scapegaming's servers, players were able to obtain the use of those items in an in-game environment without paying Blizzard that monthly fee, resulting in millions of dollars in lost subscription fees. Id. at ¶ 91. F. Damages Based on records subpoenaed from PayPal Inc., between July 22, 2007 and September 26, 2009, Defendant conducted approximately 104,431 transactions and received approximately $3,052,339 from players' "donations" and "Shopping Cart" transactions through scapegaming.com. Ashe Decl., at ¶ 92; Declaration of
-15Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 23 of 39 Page ID #:151

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

Bonnie Lau ("Lau Decl."), at ¶ 2. Of those totals, 103,380 transactions and $3,036,273 were from "Shopping Cart" transactions, while 581 transactions and $16,126 were from "donations." Ashe Decl., at ¶ 92; Lau Decl., at ¶ 2. In addition, Blizzard has been forced to incur attorneys' fees and costs in the investigation and prosecution of this action. Lau Decl., at ¶ 3. Assuming a judgment of at least $3,000,000, the amount of reasonable fees would be fixed by Local Rule 55-3 in the amount of $63,600. Id. at ¶ 3; see Local Rule 55-3 (for judgments greater than $100,000, attorneys' fees are fixed at "$5600 plus 2% of the amount over $100,000"). III. DISCUSSION A. Entry of Default Judgment is Proper. Federal Rule of Civil Procedure 55 authorizes the Court to enter default judgment, following the clerk's entry of default, against any defendant who has failed to appear, plead or otherwise respond to the complaint. Fed. R. Civ. P. 55(b)(2). Default judgment may not be entered against a defendant who is an infant, incompetent, in military service or otherwise exempted under the Soldiers' and Sailors' Civil Relief Act of 1940. Id. Based on the Complaint and Declarations of Greg Ashe and Bonnie Lau, Blizzard has satisfied the conditions of Rule 55(b) by establishing that Defendant has failed to plead and meets no exception to default. Here, Blizzard served the Complaint on Defendant on November 4, 2009, and filed the Proof of Service with this Court on January 11, 2010. Lau Decl., ¶ 4. Defendant has never appeared in this action nor responded to the Complaint. Id. at ¶ 5. Therefore, on January 11, 2010, Blizzard filed with this Court a Request to Enter Default, attached to which as Exhibit A was a true and accurate copy of the Proof of Service. Id. at ¶ 6. Pursuant to Blizzard's Request, the Clerk entered default against Defendant on January 14, 2010. The certificate of the Clerk of this

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

-16Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 24 of 39 Page ID #:152

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

Court as to the entry of default is attached to the Lau Declaration as Exhibit A. Id. ¶ 7, Ex. A. Counsel for Blizzard is informed and believes that Defendant is not a minor, incompetent, in military service, or otherwise exempted from default judgment under the Soldiers' and Sailors' Civil Relief Act of 1940. Id. at ¶ 8. B. Defendant Should Be Held Liable For All Claims Asserted. Upon default, the well-pleaded factual allegations of the complaint are taken as true. TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987); see also Antione v. Atlas Turner, Inc., 66 F.3d 105, 110-11 (6th Cir. 1995) (holding that once a default is entered against a defendant, "that party is deemed to have admitted all of the well pleaded allegations in the complaint"). The Court may base its judgment entirely on the submitted declarations, and may dispense with a formal hearing on the motion. Local Rule 55-2; Davis v. Fendler, 650 F.2d 1154, 1161-62 (9th Cir. 1981). Thus, the default of Defendant operates, as a matter of law, as an admission by Defendant of the material allegations of the Complaint. By this motion, Blizzard respectfully requests that the Court hold Defendant liable on all causes of action and enter default judgment against Defendant in the amount of $24,002,139. 1. Defendant Directly Infringes Blizzard's Copyrights by Copying the WoW Software into Random Access Memory Beyond the Scope of the EULA and TOU.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

In order to establish a claim of direct copyright infringement, a plaintiff must prove: 1) ownership of a copyright; and 2) a " `copying' of protectable expression. . . beyond the scope of [a] license." S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1085 (9th Cir.1989) (citation omitted); A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1019 (9th Cir. 2001). In this case, Blizzard has secured copyright registrations in both the WoW server and WoW game client software code. Ashe Decl., ¶ 9, Ex. A. These certificates of registration presumptively satisfy the first element of copyright infringement. 17 U.S.C. § 410(c).
-17Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 25 of 39 Page ID #:153

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

In this Circuit, the "copying" element may be proved in software cases by showing an unauthorized reproduction of a copyrighted software program in the computer user's Random Access Memory ("RAM"). The Ninth Circuit has recognized that "the loading of software into the RAM creates a copy under the Copyright Act." MAI Sys. v. Peak Computer, Inc., 991 F.2d 511, 519 (9th Cir. 1993), cert. dismissed 510 U.S. 1033 (1994); Triad Sys. Corp. v. Se. Express Co., 64 F.3d 1330, 1334 (9th Cir. 1995); see also Twentieth Century Fox Film Corp. v. Cablevision Sys. Corp., 478 F. Supp. 2d 607, 621 (S.D.N.Y. 2007) (agreeing with the "numerous courts [that] have held that the transmission of information through a computer's random access memory or RAM . . . creates a `copy' for purposes of the Copyright Act," and citing cases). When such a copy is made in excess of a license, the copier is liable for copyright infringement. Ticketmaster LLC v. RMG Techs., Inc., 507 F. Supp. 2d 1096, 1107 (C.D. Cal. 2007) ("When a licensee exceeds the scope of the license granted by the copyright holder, the licensee is liable for infringement.") (citation omitted). The allegations of Blizzard's Complaint, now deemed true, establish that users must load the WoW game client from their hard drive into their computers' RAM, at which point the game is able to be both perceived and communicated, including interaction with the various Scapegaming servers that replicate Blizzard's own WoW servers. Ashe Decl., ¶¶ 33-42, 44-45, 55-57. When a user first launches WoW, the executable located in the WoW game client is loaded into RAM, and as they move through the game, additional copyrighted game content is loaded from the WoW game client into RAM as the player reaches points in the game with which that content is associated. Id. at ¶¶ 33-42. Playing WoW on a Scapegaming server, rather than on one of Blizzard's own servers, requires the user to have a copy of the WoW game client installed on their computer. Id. at ¶¶ 33-36, 39. Clearly, Scapegaming users' loading of the WoW game client into RAM creates a copy for purposes of the Copyright Act. Mai Systems, 991 F.2d at
-18Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 26 of 39 Page ID #:154

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

519 ("since we find that the copy created in the RAM can be `perceived, reproduced, or otherwise communicated,' we hold that the loading of software into the RAM creates a copy under the Copyright Act." (citation omitted)). WoW players' authority to use the WoW client is governed by the terms of the WoW End User License Agreement ("EULA"). In order to play WoW, users must read and assent to the terms of both the EULA and the Terms of Use ("TOU"). Ashe Decl., ¶¶ 16-30, Exs. B and C. The EULA clearly conditions users' ability to copy WoW on their doing so within the scope of the license. Id. at ¶¶ 18-22. Copying WoW into RAM in conjunction with creating, hosting, or using unauthorized Scapegaming servers plainly exceeds the scope of the EULA and TOU, which conditions authorized copying as follows: · Paragraph 2(A) of the EULA provides that the user may not "in whole or in part, copy, photocopy, reproduce, translate, reverse engineer, derive source code from, modify, disassemble, decompile, or create derivative works based on the Game...." Id. at ¶ 18. Paragraph 2(C) provides that the user may not "exploit the Game or any of its parts, including without limitation the Game Client, for any commercial purpose..." Id. at ¶ 19. Paragraph 2(F) provides that the user may not "host, provide or develop matchmaking services for the Game or intercept, emulate or redirect the communication protocols used by Blizzard in any way, for any purpose, including without limitation unauthorized play over the internet, network play, or as part of content aggregation networks...." Id. at ¶ 20. Paragraph 2(G) provides that the user may not "facilitate, create or maintain any unauthorized connection to the Game or the Service, including without limitation (a) any connection to any unauthorized server that emulates, or attempts to emulate, the Service; and (b) any connection using programs or tools not expressly approved by Blizzard." Id. at ¶ 21. Paragraph 2(B) of the TOU provides that the user may not "exploit the Game or any of its parts, including without limitation the Game Client, for any commercial purpose..." Id. at ¶ 31. Paragraph 2(E) provides that the user may not "host, provide or develop matchmaking services for the Game or intercept, emulate or redirect the communication protocols used by Blizzard in any way, for any purpose, including without limitation unauthorized play over the internet, network play, or as part of content aggregation networks...." Id. at ¶ 32.
-19Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

· ·

·

· ·

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 27 of 39 Page ID #:155

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

·

Paragraph 2(f) provides that the user may not "facilitate, create or maintain any unauthorized connection to the Game or the Service, including without limitation (a) any connection to any unauthorized server that emulates, or attempts to emulate, the Service; and (b) any connection using programs or tools not expressly approved by Blizzard." Id. at ¶ 33. Finally, the TOU provides that no one other than Blizzard shall host, provide access to, or emulate the communication protocols used to create the WoW gaming environment. Additionally, the TOU prohibits modifying WoW software, adding components to WoW, or using third-party programs for the purpose of hosting WoW. The use of any tools to "hack or alter" WoW software also is specifically prohibited. Id. at ¶ 28.

·

Plainly, that Defendant developed, hosted, and administered unauthorized servers to enable unauthorized large-scale, multi-player play of WoW violates the express terms of the EULA and TOU. Ashe Decl., ¶ 56. Likewise, Scapegaming users are forbidden from using third-party programs to emulate or host WoW and their use of Scapegaming servers with the WoW game client exceeds the scope of authorized copying and license limitations under the EULA and TOU. Id. at ¶ 57. Indeed, Defendant included a term in the Scapegaming Terms of Use that seeks to prevent Blizzard from entering its websites or viewing any content contained therein, thereby conceding that Defendant's activities were unauthorized. Id. at ¶ 58. Finally, Defendant sought to exploit WoW for commercial purposes by encouraging its users to make "donations" and purchase advanced game items; Blizzard has pled, on the basis of records subpoenaed from Paypal, Inc., that Defendant unjustly profited from its unauthorized activities and received approximately $3,052,339 from players' "donations" and "Shopping Cart" transactions. Id. at ¶¶ 83-92. Defendant's and Scapegaming users' copying of WoW in circumstances exceeding their license is copyright infringement. LGS Architects, Inc. v. Concordia Homes of Nev., 434 F. 3d at 1150, 1156 (9th Cir. 2006). For example, in Ticketmaster, the court held that using a bot program to access and download copies of copyrighted web pages into RAM in order to purchase large quantities of tickets ­­ where the use of bots for this purpose was prohibited by the website's
-20Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 28 of 39 Page ID #:156

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

terms of use ­­ infringed Ticketmaster's copyrights. Id. at 1102-03, 1109-10. Here, Defendant and WoW players similarly agreed not to create, administer or use third-party applications to launch WoW, not to connect to any emulated servers, and not to exploit WoW for commercial use. Thus, when users played WoW on any of scapegaming's unauthorized servers, they exceeded the scope of their license, and infringed Blizzard's copyrights. Default judgment should be entered against Defendant on Blizzard's first cause of action for copyright infringement. C. Defendant is Secondarily Liable for its Contributory and Vicarious Infringement of WoW.

Under the traditional test for contributory copyright infringement, a party is liable where it had "knowledge of the infringing activity and induce[d], cause[d], or materially contribute[d] to the [activity]." Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701, 727 (9th Cir. 2007); A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1019 (9th Cir. 2001). In Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., the Supreme Court held that a software distributor also induces infringement where its product is used to infringe copyrights "if the product is not capable of `substantial' or `commercially significant' noninfringing uses." 545 U.S. 913, 942 (2005) (citation omitted). Under either of these formulations, Defendant plainly is liable for Scapegaming users' repeated infringements. First, Defendant's awareness of the EULA and TOU terms and facilitation, support and encouragement of Scapegaming users' infringements evidences knowledge of the infringing conduct. Ashe Decl., ¶¶ 58, 67, 72. Second, Defendant's contribution to the infringement was not merely material, it was essential. But for Defendant, Scapegaming users would have been unable to bypass the Authentication Code requirement, utilize pirated versions of WoW game client, access the copyrighted WoW game experience, and thereby exceed the EULA. Id. at ¶¶ 60-63. Defendant developed and administered the unauthorized Scapegaming servers, enabled users to play WoW without paying a monthly fee,
-21Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 29 of 39 Page ID #:157

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

permitted users to advance in WoW and obtain objects more quickly than Blizzard's authorized servers, facilitated and even encouraged (through "downpatches" and direct download links) the use of pirated versions of the WoW game client, and provided ongoing support to Scapegaming users to enable repeated infringements. Id. at ¶¶ 43-82. Finally, even absent Defendant's contributions, under the alternate Grokster test Scapegaming is incapable of commercially significant noninfringing uses since it existed, exclusively, to replicate the WoW online world and infringe Blizzard's copyrights. Accordingly, Defendant's enabling of and aid to Scapegaming users' infringements clearly conferred contributory liability. Grokster, Ltd., 545 U.S. at 915 ("active steps taken to encourage direct infringement, such as advertising an infringing use or instructing how to engage in an infringing use, show an affirmative intent that the product be used to infringe"); Napster, 239 F.3d at 1022 (`"[w]ithout the support services defendant provides, Napster users could not find and download the music they want with the ease of which defendant boasts"' (citation omitted)). In addition, a party is vicariously liable for the infringement of another if it has a right and ability to control the infringing activity and derives a direct financial benefit from that activity. Grokster, 545 U.S. at 931 n.9; Napster, 239 F.3d at 1023. Here, Defendant maintained control over all existing Scapegaming servers, and had the right and ability to control the infringement by disabling the servers that enabled Scapegaming users to play WoW and exceed the scope of their license. Ashe Decl., ¶¶ 43-57; Napster, 239 F.3d at 1023 ("Napster's ability to block infringers' access to a particular environment for any reason whatsoever is evidence of the right and ability to supervise"). Defendant also received a direct financial benefit from the infringements, as scapegaming's enablement of infringement is its only draw, Scapegaming users made regular purchases and "donations" to fund Defendant's continued operation, and Defendant profited generously from such transactions to the tune of approximately $3,000,000.
-22Case No. 2:09-cv-7621-SVW-AJW MOTION FOR DEFAULT JUDGMENT

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Case 2:09-cv-07621-SVW-AJW Document 24

Filed 06/18/10 Page 30 of 39 Page ID #:158

1 2 3 4 5 6 7 8 9 10 11
SONNENSCHEIN NATH & ROSENTHAL LLP 601 SOUTH FIGUEROA STREET, SUITE 2500 LOS ANGELES, CALIFORNIA 90017-5704 [phone]

Ashe Decl., ¶¶ 83-92; Napster, 239 F.3d at 1023 (financial benefit exists where ability to infringe increases draw of service). The Court should therefore enter default judgment against Defendant on Blizzard's second cause of action for contributory and vicarious copyright infringement. D. Defendant's Scapegaming Servers, Which Enable WoW Players to Circumvent Blizzard's Technological Measures That Control Access to and Protect Blizzard's Copyrighted Software, Violate DMCA Sections 1201(a)(2) and 1201(b)(1).

That Defendant's developed, administered and marketed Scapegaming servers violates the DMCA's bans on trafficking in technology that circumvents access controls to copyrighted works, and technological measures that protect the rights of a copyright owner. 17 U.S.C. §§ 1201(a)(2), (b)(1) (emphases added). Section 1201(a)(2) reads: No person shall . . . offer to the public, provide, or otherwise traffic in any technology, product . . . that (A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title; (B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; or (C) is marketed by that person or another acting in concert with that person with that person's knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title. 17 U.S.C. § 1201(a)(2)-(a)(2)(c) (emphases added). Section 1201(b)(1)(A) applies this same ban on products aimed at circumventing "protection af