The Lawbringer: Rookie's guide to the EULA, part 2
by Amy Schley 
Aug 17th 2010 at 6:00PM
Last week, we looked at the first half of the EULA -- the license limitations, the steps to terminate the agreement and a few other provisions. This week is the back half of the EULA -- the warranties, conflict resolution provisions and miscellaneous provisions.
Export controls
Section 8 prohibits the export and sale of the game to countries the United States has embargoed or persons that are on the "Specially Designated Nationals" list, essentially a list of terrorist organizations. Alas, this means that we won't be settling the War on Terror with world PvP death match.
Limited warranty
The game is provided "as is" with no guarantee that the game can be played at any time, doesn't infringe on someone else's intellectual property or that it is fit to be played. (Vanilla WoW paladins would undoubtedly agree on this last point.) Blizzard does warranty that for 90 days after purchase, the CD-ROM will be free of defects in materials or workmanship, and if you discover such a flaw, Blizzard will fix it, exchange it or refund your money. This section is subject to state laws which can differ wildly on how such provisions are treated, so your mileage may vary considerably.
Limitation of liability
The next provision is half in caps so you don't miss it. Blizzard declares that it is not responsible for loss you suffer from use of the game. It's not their fault that trying to load Northrend melted your graphics card; it's not their fault you now have carpal tunnel syndrome from keyboard turning; and it's not their fault that you lost your job or failed your classes because you couldn't stop playing. Next, Blizzard declares that it are not liable for any loss your avatars suffer. Blizzard is not required to restore your account when it gets hacked. Blizzard does account restorations as a service to the community, but it is under no obligation to do so. You agree to hold Blizzard harmless for any injuries you suffer because of playing the game. Finally, should you try to sue Blizzard for damages you suffer anyway, your damages amount is limited to the last six months of fees. Again, state laws may leave this provision toothless, so your mileage will vary.
Equitable remedies
"Equitable remedies" is a bit of legalese that refers to anything a judge can grant you that isn't money. Injunctions to stop doing something, restraining orders to keep the ex away from you and an order to hand over the Picasso you agreed to sell for $100 are all examples of equitable remedies. These are handed down when fixing the problem can't fairly be done by simply assigning money damages or when action needs to be taken now before irreparable damage is done. In this section, Blizzard declares that it would be harmed if it had to wait for a judgment for money damages and so reserves the right to request injunctions or other equitable remedies.
Furthermore, if there is a lawsuit over the terms of the EULA, then the winning party has the right to have the losing party pay all the litigation costs. The recent private server case shows how this works. In addition to refunding the improper profits and pay the very expensive statutory damages, Scapegaming has to pay the $63,600 of Blizzard's legal fees.
Changes to the agreement
Blizzard gets to change this EULA at any time. If you don't agree with the new terms, you can terminate the agreement, as we discussed last week. Any continued use after the EULA is changed constitutes agreement to the new terms. Blizzard also can change any part of the game at any time.
Dispute resolution and governing law
Section 15 is rather large and complicated, dealing with how to resolve any problems that you may have with Blizzard. As part of the EULA, you agree that should any dispute about the EULA arise, you will go into a process of informal negotiation. If Blizzard has a problem with you, it will send notice to your billing address; if you have a problem with Blizzard, you should send a letter to Blizzard Entertainment, Inc., P.O. Box 18979, Irvine CA 92623, Attn: Legal Department.
But sometimes informal negotiation isn't enough. In that case, you agree to binding arbitration. This is a final resolution that is performed by an arbiter who hears both sides and attempts to get the sides to agree to a mutually beneficial arrangement. This arbitration will be run by the rules of the American Arbitration Association.
This provision prevents you from taking the matter to court. You can challenge whether your case belongs in arbitration in court. (In fact, it was that kind of lawsuit that gave us the Bragg v. Linden Lab decision.) Also, you may appeal to the court the award the arbiter assigns at the end of arbitration.
Why would Blizzard insist on arbitration instead of resolving things in court? Arbitration is not always cheaper, and it's not always faster (those being the most common reason given to avoid the court). The most likely reason is that arbitration decisions, unlike court decisions, are kept confidential. Every player has to approach the dispute by himself and doesn't know what deals were struck in other cases. Provision C goes so far as to insist that no two players can join their disputes together, a rule that tends to give Blizzard a lot more negotiating power in arbitration.
Blizzard makes an exception to its arbitration requirements for intellectual property disputes and allegations of piracy or unauthorized use. As we've seen, Blizzard wants everyone to know what happens when someone infringes on their intellectual property.
If you live in the United States, you can request arbitration anywhere that would be convenient for you. If you live outside the United States, arbitration will be held in Los Angeles County, California. If you want to go to court, you have agreed to sue in the courts of Los Angeles County, California. Regardless of whether the case is arbitrated or tried in court, the law of the state of Delaware and U.S. federal law will be applied.
Miscellaneous
The big thing in this section that if any part of this agreement is found improper, the rest of it remains in effect. Also, sections 6, 11, 12, 13, 15 and 16 apply even after the agreement is terminated.
I hope this help clarify the provisions that all too often are simply skipped on the way to logging in on patch day. Next week, we'll be looking at Terms of Use, which is a separate legal agreement.
Bonus info: A number of commenters were wondering what would happen with the $88 million fine assigned to Alysson Reeves and Scapegaming. The damages were assigned to Reeves personally, so she has no protection through her business. Statutory damages are generally considered unsecured, so that the fine couldn't be turned into a lien on her property. Finally, as unsecured debt, statutory damages can be discharged in bankruptcy and can lose in priority to other unsecured debt like credit cards. That last point depends on state law.
This column is for your entertainment and enlightenment only. If you have a personal legal question, contact a lawyer. For comments or general questions about law, law school or anything else, contact me amy@wow.com, @wowlawbringer on Twitter, or whisper Patent in <It Came From the Blog> on Zangarmarsh (US-H). Filed under: The Lawbringer
Reader Comments (Page 1 of 2)
Chris S Aug 17th 2010 6:11PM
We might still have a World PvP Death Match, just not on Azeroth.
Chivvy Aug 17th 2010 8:37PM
Nerf Americans, Japan is fine, buff England.
Zaros Aug 17th 2010 9:05PM
Your avatar took that statement to a whole new level.
Tribunal Aug 17th 2010 6:26PM
When I was discussing liens I wasn't implying she could/would be given one, just pointing out that debts are certainly not wiped on death, and in some cases can be your children's responsibility if they want the property :)
Anyways, thanks for these articles, really looking forward to the ToU piece.
Kaz Aug 17th 2010 6:30PM
"If you want to go to court, you have agreed to sue in the courts of Los Angeles County, California. Regardless of whether the case is arbitrated or tried in court, the law of the state of Delaware and U.S. federal law will be applied. "
Wait...so if a case makes it though arbitration and to court a California judge, and California lawyers, who have passed the California Bar have to go by the laws of Delaware...?
This is something I would think would just annoy a judge.
Brett Porter Aug 17th 2010 7:47PM
Personally I thought the wording of that section is funny, but certainly not surprising. Anyone in finance, business or any legal profession knows that the laws of the State of Delaware are *the* most pro-business in the country.
That is why you see a high percentage of corporations "based" out of Delaware, especially credit card companies; they incorporate there so they are protected by the laws there, even if they aren't actually in Delaware.
Plus, the part about the court in CA is only if you are not a US resident.
themightysven Aug 17th 2010 7:46PM
they are probably quite used to it, as almost any business that can swing it would prefer to be under the Delaware (most business friendly) laws
sinbadyeluo Aug 17th 2010 6:36PM
I'm a World of Warcraft player!~~
wutsconflag Aug 17th 2010 7:06PM
Blizzard is not required to restore your hacked account.
Blizzard never promised 100% uptime, so stop demanding repayment for "lost play time".
Two things I seem to have to remind people on a weekly basis. :/
Brett Porter Aug 17th 2010 7:56PM
Certainly glad they do restore character items, having been someone that was recently hacked.
I'll be honest, if I had permanently lost what was restored I probably would have stopped playing on that server.
If I had permanently lost everything (they hadn't gotten to my other good servers), I honestly think I just would have stopped playing period.
gamingforumpost Aug 19th 2010 10:57AM
Correct. Blizzard will never have to compensate people for a day or 2 of service loss. But it's likely good business sense that they do. However if they have a large enough service loss (for example a month) they will be responsible for refunds regardless of what that paragraph says.
Companies are not allowed to collect fees for a service they fail to deliver. There's thousands upon thousands of cases against phone companies, cable companies and utility companies of all kinds to back that up that principle. Given the choice between a $ refund to users or extending their subscription, Blizzard will always choose the extension.
Siaperas Aug 17th 2010 7:28PM
So if I'm reading that correctly, the statutory damages awarded against Allison Reeves may or may not be paid to Blizzard. In that case, it seems the real purpose of the damages isn't so that Blizzard can make the money it was owed, but really to cripple Allison Reeves. If she can't make the payment, and can't adjust the amount with further litigation, then she may have to looking at claiming bankruptcy. At that point, the courts again will decide what to do with all her debt. Essentially, the court decision wasn't just an attempt to stop the private server company, it was an attempt to keep it from ever getting started again.
Eindrachen Aug 17th 2010 9:42PM
"Essentially, the court decision wasn't just an attempt to stop the private server company, it was an attempt to keep it from ever getting started again."
Precisely. Blizzard can't get (and doesn't need) the actual money. Instead, they go for the real whammy: they destroy someone's credit enough that they'll be lucky to ever recover from it.
Rajah Aug 17th 2010 9:51PM
Even more importantly, to serve as a warning to operators of other private servers. Only the $3M part of the award was tied to the payments that Scapegaming/Alyson Reeves (Rohrs) collected, based on the accounting that Paypal provided. The $85M in statutory damages results from the copyright violation. The court calculated this as about $180 per user, multiplied by the size of Scapegaming's documented user base - around 475,000 if I recall correctly. (Why $180? I think because that's the amount each user would have paid Blizzard to play WoW legitimately for a year, but that's just a guess.) The thinking goes that any private server operator could be on the hook for similar statutory damages, even if they never accepted a single payment from anyone, footing the bill for the entire operation out of their own pockets.
Another wild theory is that Blizzard might want to use the size of the award to pressure Reeves/Rohrs. I can imagine a creative attorney saying something like, "We know you don't have $85M. Want to avoid bankruptcy? Tell us everything and we'll make a deal." She's got to have records of everyone who ever worked for Scapegaming, some of whom have moved on to working other private servers. She would also have records (e-mail and/or IP addresses) of those who played on her servers and they may be looking to kick those people out of the game (the ones who also had real accounts). This sort of amounts to discovery after the verdict, seeing as how Blizzard was denied the opportunity to discover these pieces of information before the trial. Again, all of this is sheer speculation.
verdian Aug 17th 2010 10:32PM
From personal experience in litigation (specifically involving bankruptcy) one generally makes a damages claim for the highest amount allowed in the relevant jurisdiction. Courts (in Australia) are extremely unlikely to ever award damages higher than what you've asked for, so it makes sense to ask for the highest possible amount, and let the court whittle it down from there.
In terms of making such a massive costs order against Reeves personally, Blizzard may enforce this money as a judgement debt against her (debt -in these circumstances- doesn't equal lien). If she refuses to pay, they may file a bankruptcy notice against her. If she still cannot make the payment owed to Blizzard, then she has committed an act of bankruptcy, and Blizzard has the right to make a creditors' petition, which (if successful) will lead to a court making a sequestration order against Reeves. At this point, a trustee is appointed to the bankrupt's estate, and basically everything she owns can and will be sold off to go towards paying off her debt to Blizzard, including many assets she may have owned within the last few years (the time varies). This could include Scapegaming (if she owned it at some point).
Siaperas Aug 18th 2010 2:06PM
@ Rajah
I agree with you. As mentioned in the article, Blizz will choose litigation in some cases to serve as an example and a warning. They are not to be taken lightly. Blizzard has a very intelligent legal team, and so far they have demonstrated that really not afraid to go after people for violating their terms of use with their products.
Rajah Aug 27th 2010 9:30PM
I've now received a copy of the order for damages in this case and want to correct a few details I speculated about earlier.
Blizzard provided documentation from PayPal showing that Alyson Reeves/Scapegaming received $3,052,339 in gross revenues, what some are calling "micropayments". Because the defendant provided no rebuttal--no evidence of deductible expenses, no claim that any of these revenues were received for anything other than violating Blizzard's copyright--the court ruled that Blizzard was entitled to this entire amount in disgorged profits.
Blizzard sued for statutory damages under the DMCA, which provides for "not less than $200 or more than $2,500 per act of circumvention, ... or performance of service, as the court considers just." Blizzard's legal theory was that each of the 104,431 payments received by the defendant constituted an instance of violating the DMCA and they asked for the minimum damages under this theory, $200 per instance, or $20,886,200 total statutory damages. The court disagreed with their argument: "These PayPal transactions do not reflect the number of times that Plaintiff's anti-piracy mechanisms have been by-passed or the number of times that Defendant's servers performed their infringing services for users." The court noted the difficulty in determining the number of instances that Scapegaming violated the DMCA, stating: "it is reasonable to infer that Defendant has provided each of its users with anti-circumvention products or services on at least one occasion. Although Plaintiff is unable to prove this fact definitively, the Court must draw all reasonable inferences in Plaintiff's favor on account of Defendant's failure to participate in the litigation process." In the end, it was the court that decided that the statutory damages in this case should be more than four times what was sought by Blizzard:
"Accordingly, the Court concludes that the appropriate amount of statutory damages is $85,478,600 (that is, 427,393 users multiplied by the statutory minimum of $200 per 'act of circumvention' and/or 'performance of service'). To the extent that this figure appears unreasonably large, Congress has mandated this approach and the Court is unable to deviate from it."
Had Blizzard been granted the damages they asked for, the total award would have been $24 million. Reeves might have been able to cut this down simply by participating in the legal process. Instead, she's left with a judgment against her in the amount of $88 million.
Pegoto Aug 18th 2010 4:01PM
I need to understand something.
1. When you buy the game and you don't agree to the EULA you can return the game for a FULL refund. (I assume this is correct as it forms part of the EULA).
2. Blizzard can change the EULA at any time (This is stated above)
3. If i don't agree with the new EULA, can I return my 2 year old copy of the game for a FULL refund?
Azgrimm Aug 20th 2010 1:28AM
You might be able to, but I doubt there's a single gaming retail store out there that will accept it, as most places go to great pains to say they don't accept returns on MMOs
gamingforumpost Aug 19th 2010 10:48AM
If you live outside the United States, [...] you have agreed to sue in the courts of Los Angeles County, California.
No Amy. Anyone who sues anyone for any case about any matter does so in the jurisdiction of the court they file their papers. That's the court that determines if the case will be heard. Part of that process is that parties being sued may file for a change of venue.
=Blizzard= and only Blizzard has agreed to that provision. Blizzard won't (and can't) move a case to France or Alaska due to that provision. Except it's unlikely Blizzard will ever be granted permission by whatever court (especially one outside the USA) to move the case to California.
That's the reason why "MDY v. Blizzard" (note MDY is first meaning they are the ones who started the case) has taken place in Arizona not California. I'm sure Blizzard would love to move it to California but obviously that part of the 'agreement' was thrown out of the Arizona court.