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The Lawbringer: Purchase vs. License cage match

Welcome to The Lawbringer, WoW.com's weekly tour of the intersection between law and the World of Warcraft. I am a new law school grad, acting as your crossing guard.

Ladies and gentlemen, gnomes of all ages, welcome to THE CAGE! In our first corner, we have the provider of countless yachts to copyright lawyers, with the power of the contract, the big bad himself, the License! And in our second corner, it's the plucky defender of consumers' property rights, the champion of the Electronic Frontier Foundation, the curse of the big bads everywhere -- let's give a big welcome to the Purchase! Now let's go to Bob for tonight's rules.

The rules of tonight's fight are simple, Jim. These two contenders are fighting over who best describes World of Warcraft players' relationship to Blizzard. There will be three rounds, during which each fighter will present a case to persuade our judges. After three rounds of presentations, our judges will decide who really embodies the relationship between Blizzard and its customers.

Why is this so important, Bob?

Well, Jim, a license can contain pretty much any rights, but the EULA for a piece of entertainment software with a subscription like World of Warcraft is going to only give the bare minimum of what Blizzard is willing to allow. They can't be too stingy, or they'll go down like Linden Labs to an unconscionability claim, but they're much more worried about protecting their interests than allowing the customers to get all licentious.

Licentious, Bob?

Read a book, Jim. Anyway, if plucky little Purchase wins, then players get to be subject to the firmly defined laws instead of a mushy, Blizzard-defined license. The law regarding copyrighted copies allows them to make backup copies, get first sale doctrine protection and not be subject to copyright law for breaking the rules defined in the EULA.

What's this? License is making the first move, and he's attacking with Microsoft Corporation v. Harmony Computers and Electronics, 846 F. Supp, 208 (E.D.N.Y. 1994). It's become his standard opener -- why is that, Bob?

Well, Jim, you start a fight by playing to your strengths. In that case, the Federal District Court of Eastern New York -- that's the district with New York City in it, you know -- ruled in 1994 that entering into a software license agreement is not a sale for the purposes of the first sale doctrine. It's about as firm a statement as has been made about the strength of a software license.


Wait, there's a scuffle, and Purchase has evaded the first strike! She's calling that case persuasive evidence only, noting that particular case is in the Second Circuit, but according to the EULA's own provisions, the governing law is that of the state of Delaware. Can you explain that, Bob?

Sure, Jim. For a number of years now, Delaware has been working to create a business haven. They've written their laws to be very business-friendly and even have a separate appeals court for business cases. Most business lawyers will tell you if you have to pick a set of laws under which to do business, choose Delaware.

That's nice, Bob, but what does that have to do with circuits?

If you'd been paying attention in your civics class, Jim, you'd know that the federal judicial system is like a three-tier cake. At the bottom are the district courts, and every state has one or more. The district courts are organized into circuits, so named because back in the day the appeals judges would visit all the districts in a single "circuit." Now, what the circuit judges rule is only binding in their own circuit -- the ruling a different judge had in a different circuit can only be persuasive. If one circuit has a rule that disagrees with the rule in another circuit, it's called a circuit split, and the Supremes have to take over.

Whoa, how'd we get to Diana Ross?

Jim, I'm not going to answer that. Anyway, Purchase is pointing out that License's case is only binding in the Eastern District of New York, so it doesn't really prove anything for our purposes.

So that's Round One. Looks like Purchase is starting Round Two with an onslaught attack! It looks like she's going for blood with Verner v. Autodesk! What do you make of this, Bob?

It's only to be expected, Jim, as it's Purchase's strongest argument. And it's Vernor v. Autodesk, decided just this last September in the Western District of Washington State.

Bob, is that in the same circus thing as the first case?

No, Jim, since Washington is in the Ninth Circuit.

Hold on a minute, Bob! Purchase is attacking for all she's worth, but License isn't falling back! Why aren't her attacks working? What's this? He's actually distinguishing the case from Blizzard's! Jim, is he allowed to do that?

Of course, Jim. While Purchase would like for the judges to believe that Vernor turned every software license into a software purchase, the facts of the case don't support such a broad reading. The judges in Vernor had a specific question: Were the copies of AutoDesk's AutoCAD that Vernor was selling on eBay the purchased property of Vernor or the licensed property of AutoDesk? Let's face it, the former interpretation would be as if he rented a car, sold it and then sued the rental car company for trying to stop him. The court decided that because the agreement didn't have any provisions for AutoDesk to get the software back -- to return the car, as it were -- or for AutoCAD licensees to destroy their copies, this was a sale for the purposes of the first sale doctrine.

Seems like that ought to give Purchase the upper hand, Bob.

It might appear so, Jim, but you have to look at the World of Warcraft End User License Agreement. Most people don't read these things, but section seven clearly states:
You may terminate the License Agreement at any time by (i) permanently destroying all copies of the Game in your possession or control; (ii) removing the Game Client from your hard drive; and (iii) notifying Blizzard of your intention to terminate this License Agreement. Blizzard may terminate this Agreement at any time for any reason or no reason. Upon termination for any reason, all licenses granted herein shall immediately terminate and you must immediately and permanently destroy all copies of the Game in your possession and control and remove the Game Client from your hard drive.
Jim, that language very clearly demonstrates that Blizzard wants using World of Warcraft to be a lease, not a sale. They aren't making AutoDesk's mistake of not including such language.

So Bob, could someone sell their copy on eBay according to the EULA?

Actually, Jim, they could -- section 4B describes how to do it:
You may permanently transfer all of your rights and obligations under the License Agreement to another only by physically transferring the original media (e.g., the CD-ROM or DVD you purchased), all original packaging, and all Manuals or other documentation distributed with the Game; provided, however, that you permanently delete all copies and installations of the Game in your possession or control, and that the recipient agrees to the terms of this License Agreement.
All of this is designed to reinforce that players have no property rights in their "purchases"; instead, players have a lease only long as they abide by the terms of the EULA.

Well, Bob, that's the end of Round 2. It's not looking good for Purchase, and it appears she's attacking out of desperation. It appears she is rehashing arguments from MDY v. Blizzard! I hear on my earpiece that we actually have a mike in position to catch her argument. Let's go down to the floor.
... so it's just not fair that a corporation should be able to use copyright law to stop people from doing what they want with the software they buy. If property rights mean anything, they should cover that ...
Ooh, Bob, that doesn't sound like a strong argument.

It's not, Jim. First, it's a common argument fallacy -- the "ad negotium" as I like to call it. Saying something is bad because a business is doing it is not persuasive. Second, in so much as this is a question of property rights, shouldn't Blizzard's rights be valued at least as highly as the players'? After all, they would have nothing to buy if Blizzard hadn't created the World of Warcraft. Third, arguing that the violating the EULA shouldn't constitute a copyright violation presupposes either that the EULA isn't a binding contract -- which is contradicted by case law involving Blizzard! -- or that a long line of non-software copyright cases don't apply.

I'm not following you, Bob.

Well, Jim, courts have always struggled to define when a contract violation constitutes a violation of copyright. The current law say that a violation of the contract provisions that define the scope of the copyright constitute copyright infringement. Say I'm Scholastic, and I've got the American printing rights to the Harry Potter books. If the contract says we have to print the books in Times New Roman font and I print them in Arial, that's a contract violation, and I'd just have to pay some damages. But if the contract says I can only print 10 million copies and sell them in the United States, and I go and print 100 million copies and ship them to China, that's a violation of the scope of my copyright and I'd be a copyright infringer.

Thanks for the explanation, Bob, though I'm not sure where Purchase is going with this.

Jim, she's trying to argue that if the program is licensed, then players who hack the program, sell gold, run on virtual networks, reverse engineer and datamine the program -- all things banned by the scope of the copyright as defined in sections 1 and 2 of the EULA -- might have to face copyright penalties for their sins. As an appeal to pity, it lacks a certain something, namely anyone for whom to feel sorry.

Looking back at the match, Bob, it appears that License is not going to counterattack. With all three rounds complete, we're just waiting for the judges to rule. We'll find out their answer after this commercial.

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And we're back. Bob, looks like the judges have decided in favor of License. Are you surprised by this?

Not really, Jim. While Purchase has a few good points, License just has too much precedent on his side. He's not going down until Purchaser can muster some better arguments.

Well, Bob, that all we have for this week from The Cage!

This column is for entertainment only. If you have a real legal question, contact a real lawyer. If you have general questions about law or law school, email me or tweet me @wowlawbringer.

Filed under: The Lawbringer

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