According to a stipulation (.pdf) filed with the court, World of Warcraft player Antonio Hernandez has settled his dispute with Internet Gaming Entertainment U.S. (“IGE U.S.”) securing an agreement that IGE U.S. “will not engage in the selling of World of Warcraft virtual property or currency (commonly referred to as “gold,” “gold farming,” “real money trade” or “RMT”) for a period of five (5) years.”  However, this agreement likely will not impact IGE.com’s business model significantly (and indeed, World of Warcraft gold remains for sale at IGE.com) because IGE U.S. “has denied engaging in any improper activities,” and says it does not operate IGE.com.

According to a declaration filed by IGE’s sole officer, Brock Pierce (.pdf) “IGE U.S. consists solely of its stock holdings in Affinity Media,” a company IGE U.S. sold all of its assets to on May 25, 2007, six days before this lawsuit was filed.  Other U.S. IGE assets, including its RMT business, had previously been sold to a company called Atlas Technology Group.  Pierce says that “IGE U.S. does not own, operate, or administer … IGE.com.”

The lawsuit will be dismissed “with prejudice” (meaning that it cannot be refiled) only with respect to the named plaintiff, Antonio Hernandez.  Any of the remaining members of the proposed class (the other ten million or so people who play World of Warcraft) are free to refile the suit against other defendants, such at Atlas and or Affinity, if they want to.

For the full background of this case, see our complete coverage. In brief, plaintiff sued IGE U.S. on behalf of essentially all World of Warcraft players on the grounds that IGE, by farming gold, spamming chat, camping spawns, and generally diminishing the World of Warcraft experience, allegedly prevented players from receiving the full benefits Blizzard intended them to receive as third party beneficiaries of Blizzard’s Terms of Use and End User License Agreement.

Commentary

Bottom line?  There could have been a better result here, but no harm, no foul.  The judge never ruled on class certification, so any other World of Warcraft player is free to pursue this claim against Atlas (or Affinity, or whoever ultimately ended up running the RMT business that operates at IGE.com) or any other RMT provider, and Hernandez did get an agreement from IGE U.S. not to engage in RMT.  That maybe doesn’t make a lot of practical difference, but has some symbolic value as it puts everyone on notice that this kind of claim could go further than it did here.

Given that IGE U.S. was the only company named in this suit, this is really the best possible outcome.  Notably, it’s also the outcome that Hernandez and his lawyer, Rich Newsome, said they were seeking originally, at least in general terms.  In an interview at The Escapist last summer, Newsome said:

Guys like Tony [Hernandez, the plaintiff] have paid their $15 for some entertainment, and IGE is polluting that entertainment. It’s kind of like, if someone pays for a ticket to go see a movie, and if someone else comes in behind them and kicks their seat, you can get them to stop doing that. We’re just trying to get IGE to stop kicking the seats. This is not unlike other consumer complaints where someone has paid for a service, and someone else is interfering with it. It’s really very simple. We want to make IGE stop kicking the seat – stop polluting the service that’s been paid for. We’re going to get an injunction. We pleaded for money damages, but the No. 1 goal that we really want is to make them stop.

Personally, I’d have loved to see this go farther (and I suspect Newsome would have too) but it simply wasn’t going to happen.  The problem here is that the company that was sued (IGE U.S.) wasn’t really the right target for this lawsuit.  That’s just how it goes in lawsuits sometimes; there is really no way that Hernandez or his attorney could have known IGE’s corporate structure when the suit was filed — a mere six days after IGE sold all of its assets to Affinity Media in a private transfer and less than two months after the transfer of the RMT business to Atlas in a similar private deal.  The near-constant changes to IGE’s corporate structure and ownership are complex enough that there’s a lengthy article at MMOBux devoted to the subject, and after close to a year of following the company, I still don’t entirely understand who owns and runs it.

Hernandez might have been able to add Affinity Media and Atlas, but the deadline for adding parties apparently passed before it became clear that IGE U.S. wasn’t really the right target.  Moreover, another original party to the suit, IGE Ltd. (a Hong Kong company), could not be served with the lawsuit in time, and so had to be dropped as a party.  Sometimes, that’s just how it goes.

I asked Rich Newsome, Hernandez’s attorney, to comment, but he said (understandably) that he had to limit his commentary to statements in a fairly sparse joint press release about the settlement (.pdf) and previous interviews.

For me, this is still a pretty cool case because it highlighted a novel legal theory that we have not, I suspect, seen the last of.

Here’s how it breaks down: Hernandez claimed that gold farmers diminished the value of his (and everybody’s) World of Warcraft play experience, something people shell out around $15 a month to enjoy.  The theory he was suing under was that every gold farming company has to agree not to farm gold, spam chat, and do all of the other bad things associated with RMT companies, and they break that agreement all the time.  The point of that agreement, Hernandez argued, was to provide him and the other players a clean game experience free of RMT.

The claim was a semi-longshot, but I think it had a chance.  If Blizzard had weighed in with a declaration to the court that Hernandez and the rest of the class were “intended third party beneficiaries” of the EULA and TOU — and I suspect that it might have, given its public support of the suit — and a few other things fell into place, I think the plaintiffs would have had a real shot.

We’re not talking about a lot of money on an individual basis but even a month or two worth of game fees per player would be enough to put any RMT company out of business when you are talking about a class of 10 million potential plaintiffs.   This suit turned out to not be the right one to test this theory, but it exposed a potential avenue for future claimants, and players owe Hernandez a debt of gratitude for taking the first steps, even if the result doesn’t directly change the RMT landscape significantly.

Late last month, World of Warcraft creator Blizzard asked the U.S. District Court for the District of Arizona for a permanent injunction which would functionally shut down MMO Glider, a “bot” program that lets people play World of Warcraft unattended.  In addition, Blizzard asked the court for the relatively unconventional relief of an order prohibiting Glider’s creator MDY from making the source code for MMO Glider software available to the public, and prohibiting MDY from helping people develop other World of Warcraft automation software.  The parties have both filed followup briefing.

Here are the documents:

• MDY’s Response to Request for an Injunction (.pdf) and Exhibits (.zip)
• Blizzard’s Reply re: Request for an Injunction (.pdf) (no exhibits)

A lot of this amounts to legal wrangling that is important to the participants but not all that compelling to observers.  There are some highlights, though.

MDY’s new brief argues, among other things, that “a district court should only include injunctive terms that have a common sense relationship to specific case’s needs, and the conduct for which the defendant has been held liable.”  MDY says that some of the restrictions Blizzard seeks “punish MDY rather than protect Blizzard from potential infringers.”

MDY further argues:

Blizzard asks the Court to enjoin MDY from “developing or maintaining Glider.” The Court’s Order found MDY liable for acts pertaining to Glider’s use with World of Warcraft only. Because Blizzard’s EULA and TOU do not prohibit MDY from developing or maintaining Glider on MDY’s computers if Glider does not interact with World of Warcraft, Blizzard’s request is outside the scope the Court’s Order. Even if the Court enjoins MDY from selling, marketing or remotely activating Glider, enjoining MDY from developing or maintaining Glider on MDY’s own computers is cumulative and could not possibly violate Blizzard’s EULA or TOU. Thus, Blizzard’s proposed restriction does not narrowly address MDY’s liability under the Court’s July 14 Order. And the Court should deny Blizzard’s request to enjoin MDY from developing or maintaining Glider.

Blizzard further argues that it is concerned MDY may release its Glider software to third parties who may distribute Glider as a way to circumvent the Court’s judgment. Blizzard cites statements Glider users made on MDY’s message boards encouraging MDY to release its software as a way “flout the efficacy of the judgment.” Blizzard’s argument is speculative and completely without merit. Certainly, MDY has no control over what its customers may say on its message boards, but Blizzard is ridiculous to imply that message board posters’ suggestions would cause MDY to give up its most important asset.

Simply stated, in the past MDY never threatened or implied that it would release its Glider software to third parties to harm Blizzard. MDY has made it clear to Blizzard that it will likely appeal the Court’s July 14 ruling. If MDY released Glider to the public as open source software, MDY’s only capital asset would become worthless and cause MDY to shut down its business.48 Releasing Glider to the public would prevent MDY from generating income if this court’s ruling is reversed.

MDY, however, could conceivably want to sell Glider or its company to a third party. The Court’s July 14 order did not hold that Glider infringes Blizzard’s copyright or causes a breach of Blizzard’s contracts – only Glider’s use with World of Warcraft created liability. Third parties can use Glider’s underlying technology to develop other software, which is wholly unrelated to World of Warcraft. If the Court enjoins MDY from selling Glider under all circumstances, the injunction would be an overbroad view of the Court’s order.

Blizzard, for its part, argues that the remedies it seeks are necessary to prevent further infringement.  Blizzard says:

Blizzard’s requests regarding the form of the injunction constitute only those measures necessary to ensure that the Glider software is not used by MDY, Donnelly, or any third parties to infringe Blizzard’s rights. MDY suggests that it should be allowed to continue to develop and maintain Glider “if Glider does not interact with World of Warcraft.” (Resp. at 13.) MDY offers no explanation, however, of the need or use for such development and maintenance given that, by Donnelly’s own admission, Glider’s only current viable use is in conjunction with WoW. Glider serves no identified purpose outside of its interaction with WoW, and as such, any continued development or maintenance can serve only to facilitate infringement. MDY also requests that the Court allow it to transfer the Glider code to third parties, ostensibly so that those “parties can use Glider’s underlying technology to develop other software, which is wholly unrelated to World of Warcraft.” (Resp. at 14.)

Neither Donnelly nor MDY has offered any testimony that Glider’s “underlying technology” is useful in combination with any other product, particularly as Donnelly has spent three years adapting Glider to the unique detection mechanisms employed by Blizzard specifically to combat Glider. On the other hand, MDY could, in the absence of injunctive relief, sell or give Glider to a third party or third parties whose purpose would be to continue enabling Glider use with WoW, requiring Blizzard to investigate and bring suits against those parties to enforce the rights already established here. The value of Donnelly’s “substantial asset” is far higher to entities that would seek to employ it in conjunction with WoW than to individuals who might hypothetically attempt to use it with some other product. Accordingly, the evidence of record suggests that any distribution of the Glider code would contribute to infringement, and thus should be enjoined.

MDY also argues that Donnelly should be able to advise others in their development of their own bots.9 Here again, Donnelly offers no evidence of how his Glider knowledge would be useful for anything other than enabling bot usage in WoW without detection. Of course, that knowledge would be valuable to other entities seeking to develop and maintain bots that operate in conjunction with WoW in violation of the TOU (which precludes all bots). Again, Donnelly should not be granted the opportunity to continue to damage Blizzard’s interests by monetizing the knowledge he has gained in developing his infringing product and exploiting Blizzard.

MDY originally brought this action seeking an order that it did not violate Blizzard’s copyright by selling MMO Glider, but instead, the court ruled in Blizzard’s favor before the case could get to a jury.  For the full background of this suit, see our complete coverage of MDY v. Blizzard.

Given the speed with which the court here ruled on motions for summary judgment, I would not be surprised to see a quick ruling on this motion.

I’ve got a few extra Expo Floor passes for the upcoming Virtual Worlds Expo (September 3-4 at the Los Angeles Convention Center) that I’m making available to law students in the LA area (or who can make it there) who are interested in virtual law.  If you want one, shoot me a note; first come, first served.  These passes will not get you into the full conference, but they will get you into the Virtual Worlds Conference Expo Hall (a $195 value) during both show days.  You’ll be able to visit with the over 40 exhibitors, network, and attend the Virtual Worlds Innovation Awards on September 3rd.  Hope to see you there!

This edition of the site’s Reading Room (the first of two this week) features a student paper addressing the application of the privacy tort “intrusion on seclusion” to virtual worlds.  The paper, Common Law Privacy in a Not So Common World: Prospects for the Tort of Intrusion upon Seclusion in Virtual Worlds (.pdf), is exclusively available here pre-publication.  It comes from Tigran Palyan, a student at Southwestern Law School, in Los Angeles, California.

In the paper, Palyan sets forth a “reasonable avatar” standard as a way of determining what should constitute ‘highly offensive’ intrusion and a ‘reasonable expectation of privacy’ in a virtual world. From Common Law Privacy in a Not So Common World:

While virtual worlds exist on massive computer networks, the communities they inhabit are real. However, in some virtual worlds such as Second Life, users have unlimited freedom to program devices that allow one avatar to eavesdrop or spy on the other.

Can one protect the “right to be let alone”  in a communal environment that thrives by bringing people together? That is, can one avatar assert invasion of privacy against a virtual resident in real court? This Comment answers that question by showing that the tort of intrusion upon seclusion may be applicable to invasions of privacy in the virtual world.

The site’s Reading Room is here to make virtual law papers, particularly papers that haven’t yet been widely distributed, broadly available to the growing field of attorneys and scholars interested in virtual law. If you have a published or unpublished paper you’d like to have hosted here, drop me a note.