The Lawbringer

Changes

2010-09-14T10:48:00.000-07:00

As you have probably noticed, I'm no longer working for WoW.com or the WoW Insider. The good news is that I'm still around, monitoring the cases and laws that shape the World of Warcraft experience. I will still be posting, though perhaps a bit more irregularly as I try to balance my responsibilities as my family's breadwinner in my work as a patent law intern with those of being a good wife, sister, church-member, and raiding resto shaman. You can still follow me on Twitter @wowlawbringer and email me question or comments lawbringerjd@aol.com.

Stay tuned for my analysis of the breaking case of Vernor v. Autodesk and what it may suggest is in MDY v. Blizzard's future.

I am NOT a Blizzard Stooge

2010-04-15T06:02:00.000-07:00

Everyday, I wake up, stagger over to the couch, and check my email. All the comments left on my columns are mailed to me; this makes monitoring what people think of the Lawbringer much easier, as I don't have to constantly read through old columns to check for anything new. The last few morning, I've woken up to see comments like these:

Waitaminute, so she is coughing out her professor's material in class?

Ms. Schley, it would help us all if you disclosed what appears to be a "conflict of interest". Your bio lists your employment with a firm as a clerk; exactly what firm, and exactly what type of employment? Your opinions were never qualified as directly related to Blizzard's own legal positions, and you did not disclose your rather close contact with a member of their legal team. In the future it will help those reading your opinions, if these sources of obvious motivation are provided -- in advance.

Where to begin? Let's start with noting where this idea that I'm getting lectured by Blizzard's legal team originated. When I discussed contract law in Europe, I made the following comment:

(As my Intellectual Property professor, an associate at the law firm that represents Blizzard, put it: question marks and exclamation points have no place in a contract.)

I'm taking a class in Intellectual Property Licensing, (note there is a missing word in the quote -- whoops) which teaches how to write contracts like End User License Agreements. The adjunct professor teaching the class is an associate for Sonnenschein, Nath, and Rosenthal, a well respected firm of 700 lawyers in 14 offices around the US and in Europe. Blizzard Entertainment is one of the firm's many clients. None of Blizzard's work is done in the Kansas City office. My professor has never worked on any Blizzard related business. My professor has never told me anything about any part of Blizzard's legal issues. In fact, during the few outside of class discussion we've had, I've been informing her of Blizzard's legal strategy.

"Ah," you charming detractors might be thinking, "maybe you aren't learning anything from said professor, but you are conflicted because you're slanting your analysis in hopes of getting a better grade." Let me note several facts:

My prof is a working parent and busy associate who doesn't have time to read gaming blogs.
The class is blind graded, so even if the prof read my column, sucking up would have no effect.
My grade in IP Licensing is the best grade I've gotten in law school, minimizing any need to suck up.
I wrote much of this same analysis of the legal issues involved with gold farming in my dissertation, which was finished before I ever stepped foot in IP Licensing.

As for my employment: I work for a small firm in Kansas City whose main client is General Motors. I draft patents for various ways of integrating shape memory alloys into vehicles. I suppose that makes me conflicted because my boss went to law school with my prof, but frankly, the idea that 1) my prof would check my blog, 2) find my tone worthy of informing my boss, 3) notify my boss I'm writing about one of my prof's clients, 4) prompting my boss to change the way he treats me, and thus 5) I slant my tone to make the two of them happy is ludicrous.

I will admit, I may be somewhat biased towards Blizzard, but it is NOT because of some second hand connection between myself and their legal team. Any bias I have is because of my fundamental beliefs. I believe in the freedom of contract -- if you don't like what a EULA says, you shouldn't have signed it. I also am a strong believer in property rights: real property, personal property, and intellectual property. Even if I disagree with the terms and some provisions of the patent, copyright, and trademark laws, I still strongly believe in the importance of recognizing that property. Finally, I also strongly believe in the importance of the rule of law. Even laws I don't like, such as the Computer Fraud and Abuse Act or the Digital Millennium Copyright Act, should be respected and obeyed. (I'm also all for using the political process to get such idiotic laws repealed.) Thus, when Blizzard is sued by MDY for having the temerity to request MDY to stop facilitating subscribers' EULA/TOU violations and copyright infringement, I'm inclined to side with the people not breaking the law.

Perhaps this means I'm too biased to speak to anything about Blizzard. I don't think so, and my employers don't seem to think so either. But for those convinced, I will add a final thought. Given that Blizzard wins its lawsuits against botters and private realm providers, perhaps reality also is biased towards Blizzard.

The Tax Man Cometh

2010-04-12T09:16:00.000-07:00

What do you mean, my taxes are not prepared?

Greetings from the Lawbringer! It's mid-April, which means beautiful weather here in Kansas City, frantic studying for my last round of law school finals, my church's triannual world conference, and tax season. In an attempt to be seasonally appropriate for our American readers while incorporating that whole World of Warcraft bit, I'll be describing how to report any income to the IRS you have received by selling gold or power-leveling services.

First, I must make a confession -- I HATE tax law. I was required to take a class in federal tax law by my law school, and I spent those hours laughing at my professor's really bad jokes and writing short stories about a zombie tax attorney. (I remain eternally thankful to my professor for giving an open note, open book, multiple choice final.) Suffice it to say, take any comments in this column with a grain of salt, preferably one big enough for a graduation party's worth of margaritas.

So you've decided to sell gold or power-leveling. We've already discussed how it's against the End User License Agreement and Terms of Use and may even be a felony under the recent interpretations of the Computer Fraud and Abuse Act. But having done so anyway, you need to know that you are still liable for that income under the tax laws.

Taxes for a Self-Employed Gold Seller

We'll start by noting that you are required by law to report all income. Any income you make selling gold or power leveling will likely be considered self-employment. (If you are somehow working for a company paying you to sell gold, they should give you a W-2 and this won't be your problem.) As most US gold sellers appear to be hard core gamers making a little money on the side, this is self-employment.

The self-employment tax rate is 15.3%. This is 12.4% of old, widowed, and disabled people tax (aka Social Security) for the first $106,800 of your yearly net income and 2.9% of poor sick people tax (aka Medicare) for all your net income. In addition to self-employment taxes, you are required to pay regular federal income taxes (and state income taxes too, if you don't live the nine states awesome enough to not have state income taxes.) These numbers are readily available, but the most likely numbers to apply are those for single taxpayer. A single guy will owe 10% on the first $8,350 and then 15% on what's left up to $33,950.

Filing

Because the US is a pay-as-you-go system, you may be responsible for making quarterly estimated tax payments. To estimate how much you should have paid last year (or should be paying this year), fill out this worksheet. If you expect to owe $1000 or more for the year's taxes, you'll need to make your quarterly payments, or you'll get slapped with $100 failure to make payments fine. You'll need to make $6,205 to owe $1000 or more in taxes, so it may be a legitimate concern.

Even if you aren't required to make quarterly payments, you are required to file a return by April 15 if you net more than $400 in a single year. As a sole proprietor of your gold selling business, you should fill out Schedule C-EZ, if you've made less than $5000. If not, prepare to whip out your calculator and slog through Schedule C which comes with its very ownInstruction Manual. This is in addition to the 1040 or 1040EZ that you have to file.

How Much?

Now for the question we all want to ask -- how much will this cost me? Answer: it depends. (Tip for aspiring law students: nearly every question you are ever asked in law school can be answered this way. To pass though, you'll need to explain why.) For the average Joe, you'll be paying the 15.3% ~~unemployment~~ [self employment] tax no matter how much you make, unless somehow your gold selling revenue is over $106,800. In which case, we need to talk. :)

If you earn less than $5,700 as a single person, you'll owe no Federal income taxes, as the standard deduction will bring your taxable income down to zero, and only $872.10 in self employment taxes. Keep in mind -- these numbers aren't taking into account the millions of deductions and tax credits and other behavioral modification incentives known as the rest of tax code. Have a house? Different answer. Qualify as dependent for your parents? Different answer. Drive a hybrid vehicle? Different answer. If the Secretary of the Treasury and the Chairman of the House Ways and Means Committee can't figure out this stuff, you certainly shouldn't look to me for definite answers.

Deductions

I should note that the income numbers in question are "net" numbers, meaning that various deductions can be made to reduce the taxable income. This where the possible illegality of gold selling comes into consideration. Recall that under the government's interpretation of the Computer Fraud and Abuse Act in US v. Drew violating the Terms of Use of a website is a crime. The judge ruled under normal circumstances it wasn't, but that violations for money, such as gold selling, may be felonious under the law. Now, normal costs of running a business are deductible, even for businesses involved in illegal activities, Commissioner v. Tellier, 383 U.S. 687, except where allowing them would sharply frustrate national policy. Examples of the latter include bribes, kickbacks, and expenses related to selling illegal drugs, the last being specifically prohibited as taxable deductions by 26 USC 280E. Yes, strippers can deduct the cost of their implants and junkyard owners the cost of cat food for strays, but drug dealers can't deduct the costs of related to selling cocaine. What a country.

Might the costs involved with selling online goods -- internet service, game subscription, computer or electricity -- be considered "sharply frustrating" to public policy? I seriously doubt it, though I could see an attempt to argue gold selling as such in order to demand a heavier fine in addition to the jail time prescribed for the felony. A number of states have levied sales taxes on marijuana for a similar reason.

Bartering

Some of you may be thinking, "I don't have to worry about this; I power level or sell gold, but only to my buddies in exchange for a TV or a Starbucks(tm) run." One cannot escape income taxes by simply not transacting in cash -- you have received something of value for your service, and so you technically owe income and self employment tax off the fair market value of that beer run. Again, you don't have to file if it's less than $400 of net income.

Foreigners

I was not able to get any good information about whether a non-resident non-citizen operating over the internet might have any US tax liability. (Read, awesome professor mentioned above didn't know and the irs.gov site didn't have it in an obvious place.) So the Chinese gold farmers are probably safe from Uncle Sam, though I'm sure Uncle Mao wants his cut.

Well, I hope this has been an interesting investigation into a weird little intersection of law and Warcraft. Stay tuned next week, when we begin a new series on copyright law.

This column is provided for your entertainment and is not legal advice. If you have a real legal issue, contact a real lawyer. If you are interested in law school or just want to shoot the breeze, email me at lawbringerjd@aol.com or tweet me @wowlawbringer.

Not a gold selling site

2010-03-15T10:08:00.000-07:00

You clicked on the link, didn't you? You thought it would be cute to click on the link, even though the column said you would get a keylogger when you went there.

This is why your inbox is full of spam and your account gets hacked, guys.

Gold Farming

2010-02-02T06:43:00.000-08:00

Table of Contents

Background

Massive Multiplayer Online Role Playing Games. 2

Gold Farming Techniques. 4

Legal Issues of Gold Farming. 4

Breach of Contract. 5

Tortious Interference with Contract. 5

Tortious Interference with Contract, Third Party Beneficiary. 6

Copyrights in Computer Programs. 8

EULA Violation as a Copyright Infringement. 10

Gold Farming as a Civil Copyright Violation. 13

Contributory Copyright Infringement. 13

Circumvention of Copyright. 14

Countermeasures Against Gold Farming. 18

Revocation of Contract. 18

Self Help and Unconscionability. 19

Criminal Sanctions. 23

Computer Fraud and Abuse Act. 23

Conclusion. 25

Appendix: 26

World of Warcraft End User License Agreement: 26

World of Warcraft Terms of Use. 27

Linden Lab Terms of Service. 30

Full Tilt Poker EULA.. 32

Imagine if you could play a game for your paycheck. Your desktop computer runs the best gaming hardware possible, you cooperate with your coworkers to bring down the best monsters, and you get paid to play the game for twelve hours a day. The loot you get in the game is sold online and provides you with a moderate income. Welcome to the world of the MMORPG gold farmer.

Gold farming intersects with the law in a number of interesting fields, including contract, copyright, computer fraud, and tax. This paper will explore each of these in turn. First, the nature of MMORPGs and “gold farming” will be explored. Then, the various torts and crimes that gold farmers commit will be analyzed: breach of contract, tortious interference in contract (regular and third party beneficiary), copyright infringement (civil, criminal, and contributory). After that, the various countermeasures that MMORPG owners use to protect their product will be examined, included lawsuits, dispute resolution, and encouraging criminal prosecution. Finally, the author will give her recommendation for how MMORPG companies might wish to proceed.

Background

Massive Multiplayer Online Role Playing Games

We will begin our discussion by explaining what the ponderous acronym MMORPG really means. Working through the acronym backwards, these MMORPGs are Games – meaning that they are intended to provide entertainment. Second, these games are “Role Playing,” that is, they allow a player to assume an identity, or avatar, separate from himself as a person. This avatar is the means through which a player interacts with the game.

Unlike traditional console games, Online games split the code needed to run the game into two parts: a “client” located on the player’s computer that is composed of static elements – elements that remain constant regardless of how the game is played – and a “server” which is located on the game owner’s computer(s) that coordinates the actions of the many players into a cohesive whole.[1] A player sends his commands to the server and the server sends back the information of what changes have occurred in the meantime through an internet connection.[2]

These games are also multiplayer games. They provide an online environment that allows for easy interaction with other players so that they can duel, cooperate, or trade their goods and services for other assets in the game. Finally, the term “Massive Multiplayer” refers to the number of players who can interact with each other. The largest MMORPG is World of Warcraft, which has eleven million subscribers as of December 2008.[3]

An ubiquitous feature of MMORPGs is an economy in which players exchange goods and services for an in-game currency. Raw materials are acquired by killing monsters, mining ores, skinning animals, gathering herbs, or chopping down trees in the environment. These raw materials can be sold to other players and non-player characters (NPCs) directly, or crafted into usable goods and then sold. In-game currency, referred to herein as “gold,” is acquired through sales to these NPCs, gathered from monster kills, or in some games stolen from other characters.

The idea of exchanging in-game assets and gold for real world money (e.g., dollars, euros, pounds, etc.) is merely a natural extension of this process. Some MMORPGs, such as “Second Life” owned and distributed by Linden Labs, Inc., embrace the practice by exchanging in-game currency for real world money at the game’s website.[4] Most MMORPGs, however, forbid the practice. Rogue players, known as “gold farmers,” have stepped into the economic void, supplying the desired gold which is generally acquired to be resold to other players through the internet.[5]

Gold Farming Techniques

Gold farming companies use a number of methods to acquire their gold. The simplest way to “get rich” in an MMORPG is to pay someone to play the game. This is often done in countries with an advantageous exchange rate and purchasing power disparity, allowing the company to pay better than average salaries to their workers while allowing a healthy profit margin. The “Chinese gold farmer” is the common archetype, but gold farmers are also at work in Mexico, Singapore, and Korea.

Alternatively, these companies may use bot programs that control avatars without any need for player involvement. These bots may simply play the game as a normal player would, or they may take advantage of aspects of the program to simply generate gold. An example of this would be purchasing raw materials from one vendor, performing an inexpensive manufacturing process, and then selling the new item to another vendor for an increased profit. This loop is then repeated ad infinitum. Some companies even go so far as to improperly acquired account information from players to then “steal” the victim’s in game assets.

Legal Issues of Gold Farming

The legal issues of gold farming are myriad. This paper will primarily focus on the issues of the exchange of real world value for in game currency itself and the main technique of acquiring gold, though it should be acknowledged that gold farming also involves the legal fields of international law, labor law, fraud, and tax. Most of this exposition will be done by focusing on the contracts and legal history of the game “World of Warcraft” (WoW) which is owned and distributed by Blizzard Entertainment, Inc. (Blizzard). This game is designed to be a “high fantasy” immersion experience wherein a player’s avatar undergoes a heroic journey from rag wearing pauper to a hero of their nation. The other MMORPG that will be dealt with is “Second Life.” This program is not goal oriented, as WoW is, but rather seeks to provide an online counterpart to real life, wherein avatars own land, become artists, advertise their real world business, and the like. WoW is an archetypical MMORPG, while Second Life is an unparalleled experiment.

Breach of Contract

The practice of gold farming attaches liability to the gold farmer under a number of legal doctrines, including breach of contract, tortious interference with contract, and copyright infringement, both regular and contributory. The first theory is most easily dealt with. To play any MMORPG, a player must sign at least one contract, generally the End User License Agreement (EULA) and/or the Terms of Use (TOU). World of Warcraft’s EULA states that the player will not “exploit the Game … for any commercial purpose, including … gathering in-game currency, items or resources for sale outside the Game.” [6] The act of gold farming – of gathering in-game currency to be sold outside the game – is a per se breach of this contract.

Tortious Interference with Contract

The second theory of tort liability is that the gold farmer is committing a tortious interference with contract, which is defined as “intentionally and improperly interfer[ing] with the performance of a contract … between another and a third person by inducing or otherwise causing the third person not to perform the contract.”[7] This theory of liability was tested in the ongoing case of MDY Indus., LLC v. Blizzard Entm't, Inc.[8] MDY Industries sold a program that allowed players to play World of Warcraft while away from their computers, a violation of both the EULA and TOU.[9] To establish that MDY was tortiously interfering with Blizzard’s contracts with its customers, Blizzard had to show that (1) a valid contractual relationship existed between Blizzard and its customers, (2) MDY knew of the relationship, (3) MDY had intentionally and improperly interfered in the relationship and caused a breach or termination of the relationship, and (4) Blizzard had been damaged as a result.[10]

A gold farmer would find itself in the same position as MDY Industries. Clearly, any gold farmer would know of the relationship between an MMORPG and its players, as the gold farmer would have agreed to those same agreements himself. By selling gold, a gold farmer induces the buying player to breach his contract with the MMORPG. As for the question of whether the MMORPG has been damaged, Blizzard alone spends approximately $1M/year combating gold farmers.[11] With all the elements met, a gold farmer is most likely to be liable to the MMORPG under the tortious interference doctrine for his gold selling.

Tortious Interference with Contract, Third Party Beneficiary

A gold farmer might also be liable to fellow players of an MMORPG under a third party beneficiary theory of tortious interference of contract. “One who intentionally and improperly interferes with the performance of a contract … between another and a third person, by preventing the other from performing the contract or causing his performance to be more expensive or burdensome, is subject to liability.”[12] In the case of gold selling, the gold farmer interferes with the MMORPG’s performance of the contracts (EULA and TOU) between itself and its players. Players pay the MMORPG for the ability to enjoy a game, but the gold farmers interfere with this enjoyment in numerous ways. These ways include monopolizing the harvest of scarce and valuable resources, killing monsters needed for the completion of game quests, and causing inflation of the economy by increasing the monetary supply. Combating these gold farmers makes providing an immersive game experience more burdensome for MMORPG owners.[13] Thus, gold farmers should be liable under this theory as well.

This theory of liability was proposed in Hernandez v. Internet Gaming Entertainment, LTD. and IGE U.S. Hernandez, a World of Warcraft player, launched a suit against who he thought was the owner of www.IGE.com, a notorious gold farming site. This was a class action in which the class was defined as:

All individuals in the United States and its territories who, for purposes other than resale, purchased Blizzard Entertainment’s World of Warcraft software and paid subscription fess at any time from November 27, 2004 until present. [June 6, 2007].[14]

Hernandez argued that every player is a third party beneficiary of the contract between Blizzard Entertainment and www.IGE.com.[15] Thus, Hernandez alleged, when www.IGE.com violated its contracts with Blizzard by selling gold, spamming chat rooms, and filling mailboxes with advertisements, all other players were harmed.[16] Unfortunately, Hernandez was unable to properly serve the operators of www.IGE.com, which are neither Internet Gaming Entertainment, LTD nor IGE U. S., facts he was unable to ascertain before the suit and relevant deadlines. Before the court ruled whether to certify the class in preparation for a trial, the case settled. IGE US agreed not to sell World of Warcraft currency for five years beginning August 26, 2008, in exchange for the dismissal with prejudice of Hernandez’s claims.[17]

Copyright Infringement

A further theory of civil liability is that of copyright violation, a much more powerful claim than breach of contract. We will begin with an analysis of the copy-protection given to computer programs.

Copyrights in Computer Programs

Computer programs are written in code. The term code may refer to either “object” or “source” code, that is, the code as seen by the computer that accomplishes the desired task or the symbols used by programmers to design the program, respectively[18]. Programs known as compilers convert the source code into the equivalent object code that the computers then run. The source code has always been considered a copyrightable work.[19] Object code was declared protectable in Williams v. Artic International, a case in which one game creator was found to have improperly copied the object code of another video game. [20] Both the object and source code are considered literal elements of the protected work and have the same protections as any block of text in a novel. Furthermore, video games have been explicitly protected as copyrightable works.[21] This code was created by the companies in question, and those companies are careful to only release this code to those who have agreed to the limited license agreement of the EULA. Literal code, then, clearly meets the first prong of the DMCA test.

Copyright protection has also been extended to nonliteral elements of creative works. Nonliteral elements refer to those parts of a work that are original expressions of ideas, expressions that are not reducible to what is merely set down in a fixed medium.[22] In computer programs, nonliteral elements included file structure, screen outputs, subroutines, and combinations of sound and video files.[23] Lacking clear guidance from Congress, courts have developed several tests to determine whether nonliteral elements of computer programs are protectable expressions of ideas or non-protectable ideas themselves.

The first test suggested in Whelan Associates v. Oman that “the purpose or function of a utilitarian work” was the non-protectable idea, while “everything that is not necessary to that purpose or function” was the copyrightable expression.[24] This test assumes that a program has only one purpose, an assumption that seems unlikely, and as a result grants perhaps over generous protection to a computer idea.[25] The test has evolved over the years, and the current test comes from Computer Associates International, Inc. v. Altai, Inc.[26] Like Whelan, the first step is abstraction to determine the idea of the computer program. Then, all non-protectable elements of the original program are filtered out, and these elements are then compared with the potentially offending program.[27]

In the case of online games, the core “idea” would be the object of the game, whether that be killing monsters for loot or playing Texas Hold’em. Obviously, these ideas could never be protected. However, the parts of the game that are unique – the decoration on the back of the playing cards or the sounds the monsters make when killed – are protectable. Furthermore, the dynamic nonliteral combination of literal elements has been found to be a protectable expression.[28]

EULA Violation as a Copyright Infringement

Traditionally, a nonexclusive license to use copyrighted material is a waiver of the right to sue for copyright infringement; the right-holder is only able to sue for breach of contract.[29] The ability to bring an action for copyright infringement is still valid if the “license is limited in scope and the licensee acts outside the scope.”[30] The license is limited in scope if the terms in question are “limitations on the scope of the license rather than independent contractual covenants.”[31] In determining whether a gold farmer has gone beyond simple breach of contract, the contracts – EULA and TOU – must be analyzed to determine whether they are “limited in scope” and whether the sections prohibiting gold farming are limitations on the scope of the license.

Again, this issue was examined in MDY v. Blizzard. MDY’s program violated a provision of then section four of the EULA. This section prohibited the use of programs that automated the process of playing the game.[32] The judge’s summary judgement opinion examined whether the World of Warcraft license was limited and whether the prohibitions regarding using automation software and commercial exploitation were designed to be limitations on the scope of the license.[33]

Examining the EULA, the judge noted the language of section one of the EULA, which states that this contract is a “grant of limited use license” and that “subject to your agreement to and continuing compliance with this License Agreement, Blizzard hereby grants, and you hereby accept, a limited, nonexclusive license.”[34] Given the clear notification of the license’s limited nature, the judge found that the contract passed the first prong of the “ability to sue under copyright” test.

Next, the judge examined whether the provisions in question were to be limitations on the scope of the license or simply contractual covenants that would bar a recovery under copyright law.[35] In examining the provisions of then section four, the judge determined that all the provisions dealt with the scope of the license, as opposed to other sections, including one on game rules, that were clearly designed to be simple contractual covenants.[36]

It must be noted that the court examined the provision against commercial exploitation of the game, this being the main provision violated by gold farmers. It refused to grant summary judgment on the basis that the provision was ambiguous and that “Blizzard ha[d] presented no legal authority in support of license provisions that ‘self-destruct’ when users commit certain violations.”[37]

While the court found that the commercial exploitation provisions of the WoW EULA and TOU at the time of this suit were not clearly limitations on the scope of the license, the license has changed significantly. Currently, the limited use license is described in sections one and two. The grant of the limited use license described in section one is conditioned on use for “non-commercial entertainment purposes only.”[38] Section two describes the additional license limitations, one of which is the commercial exploitation provision. Both show Blizzard’s intent that its license is extended solely for non-commercial use and that it considers commercial exploitation an affront to the limited nature of the license itself, not merely a contract dispute.

The second issue raised by the judge against using commercial exploitation as a basis for a copyright dispute was the lack of precedent. Obviously, a new means by which to violate a contract is going to require an unprecedented legal theory to sue those violators. However, situation is not entirely without precedent, as non-digital copyright cases have long dealt with the challenged of licensees going beyond the limited terms of the license. Court have held that “[w]here a licensee utilizes a copyrighted work in a manner or to an extent not authorized by the license agreement, the licensee's position is no different from that of an infringer having no contractual relationship with the holder of the copyright.”[39] Therefore “the resulting cause of action is one for copyright infringement.”[40] As the judge in MDY might point out, violating a term of the license caused that license to “self-destruct” and leave the licensor with a cause of action in copyright law. There seems to be no compelling reason why licensees who overstep their license in a digital medium should be excused from being sued under copyright law while their paper counterparts are not. Thus, violation of license limitations that prohibit commercial exploitation of the MMORPG should give rise to claims in copyright law as well as contract.

While not conclusive, the strong possibility exists that provisions against commercial exploitation, if clearly indicated as limitations on the license and if argued using support from non-digital copyright cases, may be a valid basis on which to claim that a gold farmer’s violation of the EULA and TOU rise to the level of a copyright infringement.

Gold Farming as a Civil Copyright Violation

Having established that a gold farmer’s breach of contract may be serious enough to justify an action in copyright, we must now examine the nature of the copyright suit. Demonstrating a breach of a license limiting term is not enough; “[c]opyright plaintiffs must therefore satisfy two requirements to establish direct infringement: (1) they must show that they own the allegedly infringed copyright, and (2) they must show that the alleged infringer has violated at least one of the exclusive rights granted under section 106.”[41] In a case of an MMORPG suing a gold farmer, demonstrating ownership of the copyrights of the MMORPG is quite simple. A gold farmer violates the exclusive right to copy the work when he acts outside the license, because “copying for purposes of copyright law occurs when a computer program is transferred from a permanent storage device to a computer's RAM.”[42] Thus, copyright infringement is another basis for civil liability.

Contributory Copyright Infringement

Related to the tort of regular copyright violation is that of contributory copyright infringement, the act of “intentionally inducing or encouraging direct infringement.”[43] This is yet another theory of liability that was tested in its application to MMORPGs by MDY v. Blizzard. The court held that “when users launch WoW using Glider[the automation program], they exceed the license in the EULA and TOU and create infringing copies of the game client software.”[44] In summary judgement, MDY was found liable for contributory copyright infringement because it induced “this direct infringement by Glider users … by developing, [advertising] and selling Glider with the knowledge that Glider users will create infringing copies.”[45]

In the context of a gold farmer, selling gold induces a player to breach any contract provision barring the purchase of in game goods for real world money. It should be noted that World of Warcraft only explicitly prohibits the sale of in game goods; the prohibition of the purchase thereof is only implied in section 11, which states: “Blizzard does not recognize any purported transfers of virtual property executed outside of the Game, or the purported sale, gift or trade in the ‘real world’ of anything that appears or originates in the Game.”[46] Given as this provision is not labeled as a limitation of the copyright license, a gold farmer of an MMORPG with a EULA and TOU substantially similar to World of Warcraft may successfully argue that while his own actions of selling gold may constitute a violation of the license amount to copyright infringement, his customer’s actions of buying that gold are not.

Circumvention of Copyright

The legal issues do not stop there, however, as one of the gold farmer techniques of botting, by violating the EULA and TOU, may impose liability for several copyright violations. Bot programs are different from other EULA breaches in that they create liability for their users under the Digital Millennium Copyright Act by circumventing measures put into place to protect the game. To establish liability under the basic DMCA statute 17 U.S.C. §1201, a botter must establish that the material in question is protected under copyright, that there is a valid protection mechanism of that material, and that the botter circumvented those protections.[47] We have already examined the copyrightable nature of the literal and nonliteral elements of computer programs. Thus, the analysis will move to the next prong of the test – whether the copyrighted work has been protected.

The Protection of the Copyrighted Work

In determining whether a copyrighted aspect of an online game has been protected for the purposes of §1201, the nature of the protections must be examined. An online game provides for the download of the client, which contains all the necessary code for running the program. Any analysis beyond this level of generality is difficult, as each game client operates somewhat differently in terms of its internal protections. An excellent example case, however, would be MDY v. Blizzard.[48] It is one of the few cases about online game bots that has been brought before the court and it is one of the most recent analyses of the Digital Millennium Copyright Act.

The case began with MDY Industries selling a botting program known as “WoWGlider” (Glider).[49] This program existed separately from the World of Warcraft program and mimicked the actions that would be taken by a legitimate player.[50] This being a violation of WoW’s EULA, Blizzard issued a cease and desist, whereupon MDY sued Blizzard seeking a declaratory judgment that Glider did not infringe rights owned by Blizzard.[51] Blizzard filed counterclaims alleging, among other things, that Glider circumvented WoW’s protection measures in violation of the DMCA.[52]

Blizzard protects its WoW code with a program known as Warden.[53] The program has two parts, the first of which being a “scan.dll” component that scans the user’s computer for unauthorized programs before the user logs onto a Blizzard game server to play the game.[54] This scan examines certain portions of the user’s RAM and WoW game files for the presence of known bots, and if an undesired presence is detected, the user is unable to log into the server.[55] The second component is considered a “resident” that reports the content of certain portions of WoW memory to the Blizzard game server to check for unauthorized programs.[56] Again, if these programs are detected, Warden can block access to the Blizzard server.[57]

The court noted that neither the scan.dll nor the resident blocked a player from accessing the client code located on the player’s own computer.[58] Lacking any controlling authority in the Ninth Circuit, they looked to Lexmark International, Inc. v. Static Control Components, Inc., in which the question of whether an authentication key constituted sufficient protection of the source code to be circumvented for the purposes of a DMCA claim.[59] The Sixth Circuit found that the code was available even if one lacked an authorization key.[60] This protection was even analogized to a locked back door in a house with the front door wide open; in no circumstances could such protection constitute controlling access to the underlying source code.[61] The Arizona district court, after being shown in court how a player could access the client files without even encountering Warden, ruled that the source code was not protected in any way that would trigger the DMCA.[62]

The analysis then moved to the non literal elements of WoW. After finding that the dynamic nonliteral combination of the literal elements expressed in the code was copyright protected,[63] the court examined whether Blizzard’s Warden protected those elements. The dynamic combination is only possible through a connection to the WoW servers and Warden’s scan.dll prevents a user from logging onto those servers if the scan detects any known bots in the player’s computer RAM.[64] Furthermore, if a player’s RAM suggests that he has activated a bot after logging in, Warden’s resident is able to block access to the server.[65] Upon these facts, the court granted that the nonliteral elements of the game were protected.[66]

Given the diversity of the online game industry, few generalizations can be made. However, it seems safe to conclude that more than a mere authentication key to access the client code is necessary to constitute a technological protection measure for the purposes of the DMCA. The good news is that a program able to block access to one’s server is probably sufficient to trigger the DMCA, as it protects those dynamic nonliteral combinations of elements.

The Circumvention of the Protection

The last element needed to be shown for a DMCA offense is circumvention of protection. Again, given the variety of online games, MDY v. Blizzard will be used as an example. After having established that Blizzard had a valid copyright in the dynamic nonliteral combination of elements in WoW and that the combination was protected by its Warden program, the court investigated whether MDY’s Glider circumvented Blizzard’s protection mechanism.[67] Testimony given to the court showed that Glider examined a user’s computer configuration to make recommendations on minimizing the risk of detection.[68] Furthermore, on three occasions, Blizzard was able to adapt Warden to detect players using Glider, only to have MDY alter Glider to be undetectable.[69] Given this clear pattern of circumventing Blizzard’s protection measures, the court found that MDY’s bots satisfied the requirements of §1201.[70] As for applicability to other online games, it seems that having a protection similar to Warden breached by a bot is sufficient to sue the bot user for violating the DMCA.

Countermeasures Against Gold Farming

Revocation of Contract

Perhaps surprisingly, no MMORPG has sued a gold farmer for simple breach of contract. Rather, an MMORPG’s normal procedure is to suspend or remove the account of a player suspected of gold farming. The ability of the MMORPG to do remove accounts is normally guaranteed in the EULA or TOU. In Blizzard’s case, these contracts additionally prohibit the sale of in-game goods, and the latter prohibits the purchase of in-game goods as well.[71] For example, the WoW TOU reads:

“BLIZZARD MAY SUSPEND, TERMINATE, MODIFY, OR DELETE ACCOUNTS AT ANY TIME FOR ANY REASON OR FOR NO REASON, WITH OR WITHOUT NOTICE TO YOU. [Capitalization is original] For purposes of explanation and not limitation, most account suspensions, terminations and/or deletions are the result of violations of this EULA or TOU.”[72]

Blizzard uses this provision quite frequently, banning hundreds of thousands of accounts a year.[73] Blizzard has also deleted the accounts of notorious gold or avatar purchasers, such as a player who bought an avatar for seven thousand Euros in September 2007.[74]

Self Help and Unconscionability

In trying to combat gold farmers, MMORPGs have begun implementing watchdog programs like Blizzard’s Warden to monitor for improper use of their games. While utilizing a program similar to Warden may be necessary to have one’s intellectual property be considered protected for the purposes of §1201 (as discussed above), the program may raise other legal issues. Blizzard requires all players to agree to the scanning done by Warden when they agree to the EULA and TOU;[75] however, those agreements may not be binding due to a concept called unconscionability.

Elements of Unconscionability

Simply stated, unconscionability is the idea that a contract may be so unfair that a court will decline to enforce it. This unfairness may be present either the way the contract was negotiated or by the terms of the contract itself; however, some amount of unfairness must be present in both.

Procedural unconscionability is shown by either “oppression through the existence of unequal bargaining positions or surprise through hidden terms common in the context of adhesion contracts.”[76] An adhesion contract is one in which one party lays out all the terms and the other party is required to “take it or leave it.”[77] In this situation, oppression and therefore procedural unconscionability are present. [78] As for surprise, courts generally do not rely on the “plaintiff’s subjective reading of the contract, but rather on ‘the extent to which the supposedly agreed-upon terms of the bargain are hidden in the prolix printed form drafted by the party seeking to enforce the disputed terms.’”[79] Poorly drafted online agreements have been found to contain surprise when the clause in question was “listed in the middle of a long section without line breaks” and labeled Miscellaneous.[80]

The second requirement for a finding of unconscionability is that terms in the contract must be overly harsh or one-sided terms, terms that as one case so vividly described “shock the conscience.”[81] The terms obviously vary contract to contract, but terms that have a grossly disparate impact on one party – clauses requiring costly arbitration or distant venues – have been held unconscionable.[82]

Unconscionability of Game Contracts

In the context of online games, a challenge of unconscionability of a EULA was made and won in 2007. This case, Bragg v. Linden Research, Inc., involved a dispute over the plaintiff’s use of a bug in the online game Second Life.[83] Upon realizing that Bragg was using a bug to purchase land, Linden Research suspended his account.[84] Bragg sued, and Linden Research filed a motion to compel arbitration under the Rules of Arbitration of the International Chamber of Commerce (ICC) located in San Francisco, California, the remedy required by Second Life’s Terms of Service (TOS).[85]

Upon analyzing the TOS, the court found that procedural unconscionability was met. The TOS was an adhesion contract, so oppression was found. Furthermore, surprise existed , as the arbitration provision was buried “in a lengthy paragraph under the benign heading ‘GENERAL PROVISIONS.”[86] Furthermore, Linden Research did not provide any explanation of the costs and rules of arbitration that would be required for any dispute resolution.[87]

Substantially unconscionability was found by examining the terms of this arbitration clause. The TOS gave Linden Research the right to suspend or terminate a player’s account, to terminate the contract, or to refuse use of the game service for any reason or no reason,[88] Linden held the right to decide if the agreement had been violated,[89] and the agreement could be amended at any time by Linden only without the consent of the player.[90] Furthermore, the cost of bringing any arbitration in the ICC was estimated by the court to be $17,250, a prohibitive number for the vast majority of Second Life players, especially when the costs and difficulties involved with attending arbitration in San Francisco for a world wide player base are taken into account.[91] Given the lopsided nature of the contract provisions, the court found this arbitration clause to be both procedurally and substantially unconscionable.[92]

Unconscionability of Anti-botting Monitoring

Having shown that online game contracts, if unreasonable enough, can succumb to unconscionability challenges, it remains to be determined if a contract that permits a Warden-like program to monitor a user’s computer would be vulnerable to a challenge. We will again examine Blizzard’s World of Warcraft to help make this determination.

Both Blizzard’s EULA and TOU are adhesion contracts – the player is given only the choice to accept or reject the terms. Thus, under California law (this being the controlling law set forth in the EULA and TOU), the contracts are already suspect as being oppressive. Unlike Linden Research’s Second Life TOS, however, no one who reads the contracts can be unaware of the presence of this provision. The relevant provisions, numbered 6 in the EULA and 17 in the TOU, are labeled as “Consent to Monitor” and “Acknowledgments” and explain their terms in all capital letters.[93]

The required substantial unconscionability is requires a more investigative analysis. Unfortunately, cases in which contractually agreed upon computer monitoring was analyzed have eluded the author’s attempts to find them. However, Blizzard’s entire EULA was analyzed in Davidson & Associates, Inc. v. Internet Gateway, Inc when Davidson (aka Blizzard) sued to stop an emulator of Blizzard’s battle.net online game playing service.[94] At that point, no terms in the EULA or TOU were considered shocking, though it should be noted that the appropriately dated contracts are not available. Without that availability, it cannot be determined whether the contract included provisions that would allow Warden to monitor the player’s computer, and so whether the court gave its blessing to such monitoring.

It seems likely however that such monitoring, under circumstances similar to Blizzard’s Warden, is permissible. According to all available information, Warden only examines what is needed to determine if a player is using a bot. Furthermore, the fact that Blizzard admits Warden is not capable of detecting the latest version of Glider suggests that Warden is not so intrusive to “shock the conscience” and thus be vulnerable to unconscionability challenges.[95] It can only be assumed that similarly unobtrusive programs with equally clear warnings of their natures would likely also be unlikely to be unconscionable.

Criminal Sanctions

Beyond simple banning of accounts or self-help watchdogs, MMORPGs could move to a more serious way of combating gold farmers – approaching federal prosecutors to request criminal sanctions. These could be done under several legal theories, some simply more serious extensions of civil violations, such as copyrights, and another being a crime unrelated to any torts.

Copyright Infringement

The elements of a criminal copyright infringement are similar to those of a civil infringement. The government must prove that the infringer 1) willfully 2) made an improper copy of 3) a protected work 4) with knowledge that the work was protected 5) for profit.[96] A gold farmer meets each of these criteria. He has a copy of the program on his computer. By selling gold, he has willfully breached the license through which his copy is made proper and thus is in possession of an infringing copy. The gold seller knew that his behavior was improper, yet he did it for a profit anyway.

Computer Fraud and Abuse Act

A novel theory of criminal liability comes from 18 USC §1030. “Whoever intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains information from any protected computer”[97] commits a misdemeanor or, “if (i) the offense was committed for purposes of commercial advantage or private financial gain; [or] (ii) the offense was committed in furtherance of any criminal or tortious act in violation of the Constitution or laws of the United States or of any State,” commits a felony[98]. This statutory language was distilled into a three part test:

First, the defendant intentionally [accessed without authorization] or [exceeded authorized access of] a computer;

Second, the defendant’s access of the computer involved an interstate or foreign communication; and

Third, by [accessing without authorization] or [exceeding authorized access to] a computer, the defendant obtained information from a computer … [used in interstate or foreign commerce or communication][99]

The latter two elements will always be met when an individual using a computer contacts or communicates with an Internet website[100], since the facts that “the Internet is an instrumentality and channel of interstate commerce”[101] and “a computer providing a ‘web-based’ application accessible through the internet would satisfy the ‘interstate communication’ requirement”[102] are now a firmly established precedents. The third element, that of access, was explored most recently in United States v. Drew, where an after trial hearing ruled that the Terms of Service for a website constitute the limits of access[103]. The court then ruled that the misdemeanor was void for vagueness, as the crime of violating a website’s Terms of Service lacks a scienter requirement.[104] The felony version of the crime, wherein the act is done for commercial advantage was left standing, as the scienter element was satisfied by the pursuit of lucre.[105]

The act of gold farming, then, satisfies the elements for a felony Computer Fraud conviction. The gold farmer exceed his authorized access by violating the EULA and TOU, he does this intentionally and for commercial advantage, his access of a computer involves interstate commerce, and he “obtained” – that is, downloaded – information from a computer used in interstate commerce.

Conclusion

This paper has examined a number of legal theories and issues. MMORPGs are computer programs in which people buy, sell, and trade with a virtual currency. This currency can be purchased for real world money in violation of most MMORPGs’ End User License Agreements and Terms of Use and is acquired by these sellers through a number of shady dealings, including through computer programs that can “play” automatically.

This act of gold selling is a breach of contract and probably an interference in other players’ contracts. Furthermore, given that the prohibitions on gold trading are limitations on the scope of the license, gold trading is likely a breach of contract that rises to copyright infringement and contributory copyright infringement. The botting programs used by many gold farmers are also circumventions of copyright protection, punishable in its own right.

MMORPGs are not unaware of these problems and have tried to resolve them in a number of ways, including the banning of accounts, the requirements of arbitration, and the use of programs to monitor for potential gold farmers. These tactics though have led to problems, including the finding that overly lopsided EULA terms may cause a contract to be unconscionable. Another possibility for MMORPG owners might be the use of criminal sanctions, but the novelty of the prosecutorial theory, irregardless of the challenges of the criminal justice system and the difficult of finding a willing prosecutor, make the use of criminal sanctions unlikely.

Appendix:

World of Warcraft End User License Agreement:

Grant of a Limited Use License.

If you agree to this License Agreement, you may install the computer software (hereafter referred to as the "Game Client") onto your computer for purposes of playing the Game by registering for and accessing an account with the Service (the "Account"). Subject to your agreement to and continuing compliance with this License Agreement, Blizzard hereby grants, and you hereby accept, a limited, non-exclusive license to (a) install the Game Client on one or more computers owned by you or under your legitimate control, and (b) use the Game Client in conjunction with the Service for your non-commercial entertainment purposes only. All use of the Game Client is subject to this License Agreement and to the Terms of Use agreement, both of which you must accept before you can use your Account to play the Game.

Additional License Limitations.

The license granted to you in Section 1 is subject to the limitations set forth in Sections 1 and 2 (collectively, the "License Limitations"). Any use of the Game in violation of the License Limitations will be regarded as an infringement of Blizzard's copyrights in and to the Game. You agree that you will not, under any circumstances:

A. 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; provided, however, that you may make one (1) copy of the Game Client and the Manuals for archival purposes only;
B. use cheats, automation software (bots), hacks, mods or any other unauthorized third-party software designed to modify the World of Warcraft experience;
C. exploit the Game or any of its parts, including without limitation the Game Client, for any commercial purpose, including without limitation (a) use at a cyber cafe, computer gaming center or any other location-based site without the express written consent of Blizzard; (b) for gathering in-game currency, items or resources for sale outside the Game; or (c) performing in-game services in exchange for payment outside the Game, e.g., power-leveling;

6. Consent to Monitor.

WHEN RUNNING, THE GAME MAY MONITOR YOUR COMPUTER'S RANDOM ACCESS MEMORY (RAM) FOR UNAUTHORIZED THIRD PARTY PROGRAMS RUNNING CONCURRENTLY WITH THE GAME. AN "UNAUTHORIZED THIRD PARTY PROGRAM" AS USED HEREIN SHALL BE DEFINED AS ANY THIRD PARTY SOFTWARE PROHIBITED BY SECTION 2. IN THE EVENT THAT THE GAME DETECTS AN UNAUTHORIZED THIRD PARTY PROGRAM, THE GAME MAY (a) COMMUNICATE INFORMATION BACK TO BLIZZARD, INCLUDING WITHOUT LIMITATION YOUR ACCOUNT NAME, DETAILS ABOUT THE UNAUTHORIZED THIRD PARTY PROGRAM DETECTED, AND THE TIME AND DATE; AND/OR (b) EXERCISE ANY OR ALL OF ITS RIGHTS UNDER THIS AGREEMENT, WITH OR WITHOUT PRIOR NOTICE TO THE USER.

World of Warcraft Terms of Use

Welcome to Blizzard Entertainment, Inc.’s ("Blizzard") "World of Warcraft®" (the "Game"). The Game includes two components: (a) the software program along with any accompanying materials or documentation (collectively, the "Game Client"), and (b) Blizzard’s proprietary World of Warcraft online service (the "Service"). Your use of the Service is subject to the Terms of Use and the End User License Agreement (the "EULA"), incorporated herein by this reference, both of which you must accept before you can use the Game Client or the Service.

1. Grant of a Limited License to Use the Service

Subject to your agreement to and continuing compliance with the Terms of Use agreement, you may use the Service solely for your own non-commercial entertainment purposes by accessing it with an authorized, unmodified Game Client. You may not use the Service for any other purpose, or in connection with any other software.

2. Additional License Limitations.

The license granted to you in Section 1 is subject to the limitations set forth in Sections 1 and 2 (collectively, the "License Limitations"). Any use of the Service or the Game Client in violation of the License Limitations will be regarded as an infringement of Blizzard’s copyrights in and to the Game. You agree that you will not, under any circumstances:

A. use cheats, automation software (bots), hacks, mods or any other unauthorized third-party software designed to modify the World of Warcraft experience;

B. exploit the Game or any of its parts, including without limitation the Service, for any commercial purpose, including without limitation (a) use at a cyber cafe, computer gaming center or any other location-based site without the express written consent of Blizzard; (b) for gathering in-game currency, items or resources for sale outside the Game; or (c) performing in-game services in exchange for payment outside the Game, e.g., power-leveling;

C. use any unauthorized third-party software that intercepts, "mines", or otherwise collects information from or through the Game or the Service, including without limitation any software that reads areas of RAM used by the Game to store information about a character or the game environment; provided, however, that Blizzard may, at its sole and absolute discretion, allow the use of certain third party user interfaces;

D. modify or cause to be modified any files that are a part of the Game Client or the Service in any way not expressly authorized by Blizzard;

E. host, provide or develop matchmaking services for the Game or the Service, 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;

F. 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; or

G. disrupt or assist in the disruption of (i) any computer used to support the Service (each a "Server"); or (ii) any other player's Game experience. ANY ATTEMPT BY YOU TO DISRUPT THE SERVICE OR UNDERMINE THE LEGITIMATE OPERATION OF THE GAME CLIENT MAY BE A VIOLATION OF CRIMINAL AND CIVIL LAWS. You agree that you will not violate any applicable law or regulation in connection with your use of the Game Client or the Service.

8. Account Suspension/Deletion.

BLIZZARD MAY SUSPEND, TERMINATE, MODIFY, OR DELETE ACCOUNTS AT ANY TIME FOR ANY REASON OR FOR NO REASON, WITH OR WITHOUT NOTICE TO YOU. For purposes of explanation and not limitation, most account suspensions, terminations and/or deletions are the result of violations of this Terms of Use or theEULA.

11. Ownership/Selling of the Account or Virtual Items.

Blizzard does not recognize the transfer of WoW Accounts or Blizzard Accounts (each an "Account"). You may not purchase, sell, gift or trade any Account, or offer to purchase, sell, gift or trade any Account, and any such attempt shall be null and void. Blizzard owns, has licensed, or otherwise has rights to all of the content that appears in the Game. You agree that you have no right or title in or to any such content, including without limitation the virtual goods or currency appearing or originating in the Game, or any other attributes associated with the Account or stored on the Service. Blizzard does not recognize any purported transfers of virtual property executed outside of the Game, or the purported sale, gift or trade in the "real world" of anything that appears or originates in the Game. Accordingly, you may not sell in-game items or currency for "real" money, or exchange those items or currency for value outside of the Game.

17. Acknowledgments.

You hereby acknowledge and agree that:

A. WHEN RUNNING, THE GAME MAY MONITOR YOUR COMPUTER'S RANDOM ACCESS MEMORY (RAM) AND/OR CPU PROCESSES FOR UNAUTHORIZED THIRD PARTY PROGRAMS RUNNING CONCURRENTLY WITH WORLD OF WARCRAFT. AN "UNAUTHORIZED THIRD PARTY PROGRAM" AS USED HEREIN SHALL BE DEFINED AS ANY THIRD PARTY SOFTWARE THAT, WHEN USED SIMULTANEOUSLY OR IN CONNECTION WITH THE GAME, WOULD CONSTITUTE A VIOLATION OF SECTIONS 1, 2 OR 9. IN THE EVENT THAT THE GAME DETECTS AN UNAUTHORIZED THIRD PARTY PROGRAM, BLIZZARD MAY (a) COMMUNICATE INFORMATION BACK TO BLIZZARD, INCLUDING WITHOUT LIMITATION THE ACCOUNT NAME, DETAILS ABOUT THE UNAUTHORIZED THIRD PARTY PROGRAM DETECTED, AND THE TIME AND DATE THE UNAUTHORIZED THIRD PARTY PROGRAM WAS DETECTED; AND/OR (b) EXERCISE ANY OR ALL OF ITS RIGHTS UNDER THIS AGREEMENT OR THE EULA, WITH OR WITHOUT PRIOR NOTICE TO THE USER.

B. WHEN THE GAME IS RUNNING, BLIZZARD MAY OBTAIN CERTAIN IDENTIFICATION INFORMATION ABOUT YOUR COMPUTER AND ITS OPERATING SYSTEM, INCLUDING WITHOUT LIMITATION YOUR HARD DRIVES, CENTRAL PROCESSING UNIT, IP ADDRESS(ES) AND OPERATING SYSTEM(S), FOR PURPOSES OF IMPROVING THE GAME AND/OR THE SERVICE, AND TO POLICE AND ENFORCE THE PROVISIONS OF THIS AGREEMENT AND THE EULA.

Linden Lab Terms of Service

1.5 Second Life offers an exchange, called LindeX, for the trading of Linden Dollars, which uses the terms "buy" and "sell" to indicate the transfer of license rights to use Linden Dollars. Use and regulation of LindeX is at Linden Lab's sole discretion.

The Service currently includes a component called "Currency Exchange" or "LindeX," which refers to an aspect of the Service through which Linden Lab administers transactions among users for the purchase and sale of the licensed right to use Currency. Notwithstanding any other language or context to the contrary, as used in this Agreement and throughout the Service in the context of Currency transfer: (a) the term "sell" means "to transfer for consideration to another user the licensed right to use Currency in accordance with the Terms of Service," (b) the term "buy" means "to receive for consideration from another user the licensed right to use Currency in accordance with the Terms of Service," (c) the terms "buyer," "seller", "sale" and "purchase" and similar terms have corresponding meanings to the root terms "buy" and "sell," (d) "sell order" and similar terms mean a request from a user to Linden Lab to list Currency for sale on the Currency Exchange at a requested sale price, and (e) "buy order" and similar terms mean a request from a user for Linden Lab to match open sale listings with a requested purchase price and facilitate completion of the sale of Currency.

You agree and acknowledge that Linden Lab may deny any sell order or buy order individually or with respect to general volume or price limitations set by Linden Lab for any reason. Linden Lab may limit sellers or buyers to any group of users at any time. Linden Lab may halt, suspend, discontinue, or reverse any Currency Exchange transaction (whether proposed, pending or past) in cases of actual or suspected fraud, violations of other laws or regulations, or deliberate disruptions to or interference with the Service.

DISPUTE RESOLUTION

If a dispute arises between you and Linden Lab, our goal is to provide you with a neutral and cost-effective means of resolving the dispute quickly. Accordingly, you and Linden Lab agree to resolve any claim or controversy at law or in equity that arises from or relates to this Agreement or our Service (a "Claim") in accordance with one of the subsections below.

7.1 Governing Law.

This Agreement and the relationship between you and Linden Lab shall be governed in all respects by the laws of the State of California without regard to conflict of law principles or the United Nations Convention on the International Sale of Goods.

7.2 Forum for Disputes.

You and Linden Lab agree to submit to the exclusive jurisdiction and venue of the courts located in the City and County of San Francisco, California, except as provided in Subsection 7.3 below regarding optional arbitration. Notwithstanding this, you agree that Linden Lab shall still be allowed to apply for injunctive or other equitable relief in any court of competent jurisdiction.

7.3 Optional Arbitration.

For any Claim, excluding Claims for injunctive or other equitable relief, where the total amount of the award sought is less than ten thousand U.S. Dollars ($10,000.00 USD), the party requesting relief may elect to resolve the Claim in a cost-effective manner through binding non-appearance-based arbitration. A party electing arbitration shall initiate it through an established alternative dispute resolution ("ADR") provider mutually agreed upon by the parties. The ADR provider and the parties must comply with the following rules: (a) the arbitration shall be conducted, at the option of the party seeking relief, by telephone, online, or based solely on written submissions; (b) the arbitration shall not involve any personal appearance by the parties or witnesses unless otherwise mutually agreed by the parties; and (c) any judgment on the award rendered by the arbitrator may be entered in any court of competent jurisdiction.

7.4 Improperly Filed Claims.

All Claims you bring against Linden Lab must be resolved in accordance with this Dispute Resolution Section. All Claims filed or brought contrary to this Dispute Resolution Section shall be considered improperly filed. Should you file a Claim contrary to this Dispute Resolution Section, Linden Lab may recover attorneys' fees and costs up to one thousand U.S. Dollars ($1,000.00 USD), provided that Linden Lab has notified you in writing of the improperly filed Claim, and you have failed to promptly withdraw the Claim.

Full Tilt Poker EULA [106]

This agreement (the "Agreement") should be read by you (the "User" or "you") in its entirety. Please note that the Agreement constitutes a legally binding agreement between you and Full Tilt Poker (referred to herein as "FTP"), which owns and operates the Internet site found at www.FullTiltPoker.com (the "Site"). In addition to the terms and conditions of this Agreement, please review our Privacy Policy (http://www.fulltiltpoker.com/privacy-legal.php), which is incorporated herein by reference.

1. GRANT OF LICENSE.

Subject to the terms and conditions contained herein, Full Tilt Poker grants the User a non-exclusive, personal, non-transferable right to install and use the Software in order to access the Servers and play the Games.

4. PROHIBITED USES.

4.4 EXTERNAL PLAYER ASSISTANCE PROGRAMS (EPAs).

Full Tilt Poker prohibits external player assistance programs (EPA programs) which are designed to provide an "unfair advantage" to players. Full Tilt Poker defines external to mean computer software (other than the Full Tilt Poker game client provided by Full Tilt Poker), and non-software-based databases or profiles (e.g., web sites and subscription services). Full Tilt Poker defines an "unfair advantage" as a User accessing or compiling information on other players beyond that which the User has personally observed through the User's own game play.

4.4.1 AUTOMATIC PLAYERS (BOTS).

The use of artificial intelligence including, without limitation, "robots" is strictly forbidden in connection with the Software and the Games. All actions taken in relation to the Games by a User must be executed personally by players through the user interface accessible by use of the Software.

You agree that Full Tilt Poker may take steps to detect and prevent the use of prohibited EPA programs. These steps may include, but are not limited to, examination of software programs running concurrently with the Full Tilt Poker Software on the User's computer.

For further information, see the Prohibited Program Policy http://www.fulltiltpoker.com for detailed description of prohibited software.

Prohibited Program Policy[107]

Not Permitted Under Any Circumstances

The following classes of programs are unconditionally prohibited:

1. Automated poker-playing programs capable of participating in online poker games:

The use of poker-playing programs ("bots") is strictly prohibited. Having such a program on your computer system, whether it is being used or not, is grounds for immediate closure of your Full Tilt Poker account, and possible forfeiture of account funds.

[1] Edward Castronova, Synthetic Worlds 30 (2005).

[2] Id. at 82.

[3] Press Release, Blizzard Entertainment, World of Warcraft Subscriber Base Reaches 11.5 Million Worldwide, Nov. 21, 2008 (Website: http://us.blizzard.com/en-us/company/press/pressreleases.html?081121) (Accessed 12/7/2009).

[4]Terms of Service, Second Life, §1.5 http://secondlife.com/corporate/tos.php, (Accessed 12/7/2009). An excerpt appears in the Appendix.

[5] Examples of gold selling companies include ige.com and susanexpress.com

[6] World of Warcraft End User License Agreement, § 2(C)(b), (7/29/2009) http://www.worldofwarcraft.com/ legal/eula.html. (accessed 12/7/2009), excerpted parts reproduced in the appendix

[7] Restatement (Second) of Torts, §766 (1979).

[8] MDY Indus., LLC v. Blizzard Entm't, Inc., No. CV-06-2555, 2008 LEXIS 53988, (D. Ariz. 2009)

[9] MDY case, facts

[10] Id, See Antwerp Diamond Exch. of Am., Inc. v. Better Bus. Bur. Of Maricopa County, Inc., 637 P.2d 733, 740 (Ariz. 1981);

[11]Findings of Fact, MDY Indus., LLC v. Blizzard Entm't, Inc, Item 250 No. CV06-02555-PHX-DGC (D. Arizona Ariz. 3/21/2008) http://docs.justia.com/cases/federal/district-courts/arizona/azdce/2:2006cv02555/322017/40/0.pdf (Accessed 12/7/2009)

[12] Restatement (Second) of Torts §766A (1979).

[13]Findings of Fact, MDY Indus., LLC v. Blizzard Entm't, Inc, Item 250.

[14] Complaint of Hernandez, Hernandez v. Internet Gaming Entm’t, LTD. and IGE U.S. LLC., No. 07-CIV-21403, p. 12, (F.L.S.D. 6/01/2007), available at http://docs.justia.com/cases/federal/district-courts/florida/flsdce/1:2007cv21403/296927/1/0.pdf (Accessed 12/7/2009).

[15] Complaint of Hernandez, Hernandez v. Internet Gaming Entm’t, LTD. and IGE U.S. LLC., No. 07-CIV-21403, p. 20.

[16] Complaint of Hernandez, Hernandez v. Internet Gaming Entm’t LTD. and IGE U.S. LLC., No. 07-CIV-21403, pps. 9, 10, 11.

[17] Joint StipulationWith Atttached Order Adopting Join Stipulation As Order of Court, Hernandez v. Internet Gaming Entm’t, LTD., No. 07-CIV-21403, (F.L.S.D. 8/26/2008), available at http://virtuallyblind.com/files/hernandez/hernandez_stipulation.pdf (Accessed 12/7/2009).

[18] Julian Velasco, The Copyright of Nonliteral Elements of Computer Programs, 94 Colum. L. Rev. 242, 244 (1994).

[19] Id. at 258.

[20] Williams Electronics, Inc. v. Artic Int’l, Inc. 685 F.2d 870 (3d Cir. 1982).

[21] Atari Games Corp. v. Oman, 888 F.2d 878, 884 (D.C. Cir. 1989).

[22] Velansco, supra, at 253.

[23] Id. at 260.

[24] Whelan Associates v. Jaslow Dental Lab., Inc., 797 F.2d 1222, 1236 (3d Cir. 1986).

[25] Velansco, supra, at 260.

[26] Computer Associates Int’l, Inc. v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992).

[27] 3 Melville B. Nimmer, Nimmer on Copyright § 13.03[F] (1976)

[28] MDY 2, supra, at 967.

[29] Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115, 1121 (9th Cir. 1999).

[30] Id.

[31] Id. at 1122.

[32] MDY Indus., LLC v. Blizzard Entm’t, Inc. 2008 U.S. Dist. LEXIS 53988, *17.

[33] Id. at *12-14.

[34] Id. at *13-14.

[35] Sun, 188 F.3d at 1119

[36] MDY Indus., LLC v. Blizzard Entm’t, Inc. 2008 U.S. Dist. LEXIS 53988, *18.

[37] Id. at *15, n. 5.

[38] WOW EULA, § 1.

[39] Kanakos v. MX Trading Corp., 1981 U.S. Dist. LEXIS 14802 *6. (N.Y.S.D. Sept. 16, 1981).

[40] Id.

[41] See A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001).

[42] MAI Sys. Corp. v. Peak Computer, 991 F.2d 511, 518 (1993).

[43] MGM Studios Inc. v. Grokster, Ltd., 545 US 913 (2005).

[44] MDY Indus., LLC v. Blizzard Entm’t, Inc. 2008 U.S. Dist. LEXIS 53988, *8.

[45] Id.

[46] WOW TOU §11.

[47] 17 U.S.C.A. §1201 (1998).

[48] MDY v. Blizzard refers to two cases: the initial summary judgment and a later pretrial conference that ruled on issues left unresolved in summary judgement. These will be referred to as MDY1 and MDY2, respectively.

[49] MDY 1, supra, at *4.

[50] Id.

[51] Id. at *5.

[52] Id.

[53] Id. at *34.

[54] Id.

[55] Id.

[56] Id.

[57] Id.

[58] Id. at *38.

[59] Lexmark Int’l, Inc. v. Static Control Components, Inc., 387 F.3d 522, 547 (6^th Cir. 2004).

[60] Id.

[61] Id.

[62] MDY 1, supra, at *38.

[63] MDY 2, supra at 968.

[64] Id. at 964.

[65] Id.

[66] Id. at 968.

[67] Id. at 966.

[68] Id.

[69] Id.

[70] MDY was found liable in summary judgment for violating 1201(a), which prohibits the selling of programs such as Glider. MDY has since appealed to the Ninth Circuit.

[71] World of Warcraft Terms of Use § 11, (7/29/2009) http://www.worldofwarcraft.com/legal/termsofuse.html, (accessed 12/7/2009), excerpted parts reproduced in the appendix.

[72] WOW TOU §8

[73] As of Dec. 2006, the last time Blizzard released figures, 105,000 accounts had been closed for suspected gold farming. Press Release, Blizzard Entertainment, World of Warcraft Accounts Closed Worldwide, (12/21/2006) http://www.worldofwarcraft.com/news/rss-12-2006.xml (Accessed 12/7/2009).

[74] Cristina Jimenez, The High Cost of Playing Warcraft, BBC News, Sept. 24, 2007. http://news.bbc.co.uk/nolpda/ukfs_news/hi/newsid_7007000/7007026.stm (Accessed 12/7/2009).

[75] WoW EULA § 6 and WoW TOU § 17, respectively.

[76] Comb v. Paypal, Inc., 218 F. Supp. 2d 1165, 1172 (N.D. Cal. 2002).

[77] Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1282 (9^th Cir. 2006).

[78] Id.

[79] Bragg v. Linden Research, Inc., 487 F. supp. 2d 593, 606 (E.D. Pen 2007), quoting Gutierrez v. Autowest, Inc., 7 Cal. Rptr. 3d 267, 275 (Ct. App. 2003).

[80] Net Global Mktg. v. Dialtone, Inc., No 04-56685, 217 Fed Appx. 598, 2007 U.S. App. LEXIS 674 at *7 (9^th Cir. Jan. 9, 2007).

[81] Combs supra, id.

[82] 7-29 Arthur Linton Corbin, CONTRACTS, § 29.4 (2009).

[83] Bragg, supra., id.

[84] Id. at 597.

[85] Id at 603.

[86] Id.

[87] Id. at 607.

[88] Id. at 608.

[89] Id.

[90] Id.

[91]Id. at 609.

[92] Id. at 611.

[93] WoW EULA §6, WoW TOU §17, see appendix.

[94] Davidson & Associates, Inc. v. Internet Gateway, Inc., 334 F. Supp. 2d 1164 (E.D. Mo. 2004).

[95] MDY 2, supra, at 966.

[96] United States v. Atherton, 561 F.2d 747 (9^th Cir. 1977), expounding 17 USC §506.

[97] 18 USC §1030 (a)(2)(C) (2009).

[98] 18 USC §1030 (c)(2)(B) (2009).

[99] United States v. Drew, 259 F.R.D. 449, 2009 U.S. Dist. LEXIS 58780, *22 (C.A.C.D. Aug. 28, 2009), quoting Ninth Circuit Model Criminal Jury Instruction 8.80 (2003 ed.) (brackets in original)

[100] Id.

[101] United States v. MacEwan, 445 F.3d 237, 245 (3d Cir. 2006).

[102] Paradigm Alliance, Inc. v. Celeritas Technologies, LLC, 248 F.R.D. 598, 602 (D. Kan. 2008).

[103] United States v. Drew, *41.

[104] United States v. Drew, *61.

[105] United States v. Drew, *61 n.31.

[106] http://www.fulltiltpoker.com/end_user_license_agreement

[107] http://www.fulltiltpoker.com/prohibited_programs.php