September 29th, 2008 by Benjamin Duranske
MDY Industries has agreed to pay World of Warcraft creator Blizzard $6,000,000 in damages arising from the use of MDY’s game bots in World of Warcraft, pending appeal. The court formalized this agreement with an Order and Stipulated Judgment (.pdf). Blizzard prevailed on several key issues at summary judgment earlier this year, setting up this stipulation regarding damages. Had MDY lost on its damages arguments at trial, MDY could have conceivably ended up owing Blizzard several times this amount.
This judgment does not entirely conclude the matter. Issues still slated for trial in January include whether MDY’s sales of Glider violated the Digital Millennium Copyright Act and whether MDY’s owner Michael Donnelly can be held personally liable for the $6,000,000 judgment.
Beyond trial, of course, there will almost certainly be an appeal to the 9th Circuit on the issue of liability, which would negate the stipulation, and thus the $6m damages judgment, if MDY prevails.
MDY did not formally concede that Blizzard would have prevailed at trial on all triable issues, but did agree “that given the likelihood that some amount of damages would be awarded, a stipulated judgment for the amount of damages to which Blizzard is entitled to recover [...] is an appropriate method to resolve the issue of damages.”
For the background of this suit, see VB’s complete coverage of MDY v. Blizzard. Very briefly, Glider is a program that users run along with World of Warcraft. It automates key tasks in World of Warcraft, making it possible to play the game essentially unattended. Glider users can thus both harvest resources and generate high level characters without actually playing. Blizzard claimed that Glider violates Blizzard’s copyright when Glider copies World of Warcraft into the computer’s memory as part of its loading sequence, and prevailed on that claim, among others, earlier this year when the judge decided these issues at summary judgment. The issue of damages was to be tried in January, but this stipulated $6m judgment takes that issue off the table.
From the order:
1. Blizzard shall be entitled to recover the total sum of $6,000,000 as monetary damages for counts I, II and III of its Counterclaims and Third Party Complaint related to the sale of Glider up through and including September 1, 2008.
2. Blizzard shall not be entitled to double or triple recovery for counts I, II and III. That is, Blizzard shall be entitled to receive a total of $6,000,000 in damages for counts I, II and III. However, should liability on any one or two of the counts be reversed on appeal, any one of these counts independently supports the $6,000,000 award.
3. In the event that the Court determines that Michael Donnelly is personally liable, either individually or jointly and severally, under counts I, II, or III, this stipulation shall extend to him.
4. The parties shall submit their disputed and undisputed statements of facts and law related to the DMCA claim on September 10, 2008.
5. Counts V and VII of Blizzard’s Counterclaims and Third Party Complaint alleging trademark infringement and unjust enrichment are hereby dismissed by stipulation of the parties.
Trial on the remaining issues is scheduled for January 8, 2009.
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