Bnetd case affirmed by 8th circuit
In Davidson & Associates v. Jung,Download file, the 8th Circuit today has affirmed the district court ruling that found computer hackers liable for breach of their end user software license agreements and for violation of the anti-circumvention and anti-trafficking provisions of the DMCA. We previously summarized and posted the district court ruling here.
By way of background, the plaintiff in the case, Davidson & Associates, which does business as Blizzard, is owned by Vivendi and sells PC games. Blizzard also offers an online gaming service called Battle.net, which enables purchasers of its games to play them through their PCs over the Internet against other players.
For authentication purposes, to ensure that the user has a validly licensed copy of a Blizzard game, the game initiates an authentication sequence of "secret handshake" between the game and the Battle.net server. In addition, to install the software and access the Battle.net site, users are required to click-thru an end user license agreement (EULA) and a terms of use for the web site (TOU).
The defendants were Battle.net enthusiasts who participated in a non-profit group called the "bnetd project". The project was focused on developing a server that could emulate the Battle.net service. In order to do so, the server needed to be compatible with Blizzard's software, and therefore use the same protocol used in the Blizzard software's "secret handshake". To develop the bnetd server, the defendants reverse engineered the software and protocols, although the EULA and TOS expressly prohibited reverse engineering.
The Court concluded that the federal copyright law does not preempt Blizzard's state law breach of contract claims. And the Court reasoned that even though the copyright law permits reverse engineering in some cases, a person can forego this right by contract. The Court cited Bowers v. Baystate Techs, Inc., for the proposition that:
"[A] state can permit parties to contract away a fair use defense or to agree not to engage in uses of copyrighted material that are permitted by the copyright law if the contract is freely negotiated."
This conclusion is troubling in terms of the viability of the fair use doctrine, although clearly it is beneficial to anyone seeking to enforce online contracts. In an electronic world where all interactions are increasingly wrapped in EULAs, TOS and the like that are not negotiated by the parties, end users may find themselves having inadvertently contracted away their fair use rights.
Given the potential impact on consumers, and their likely inadvertent waiver of fair use rights, one wonders whether the FTC might someday require prominent disclosure of this type of boilerplate, as it recently did in a case where the fine print permitted installation of adware. See our prior post on the Advertising.com case. As always, restraint is advised when drafting contract terms that could appear overreaching or unfair where consumers are involved.
The Court also affirmed the holding that the DMCA was violated. The court distinguished the case from Lexmark v. Static Control, on the grounds that the Battle.net codes were not acccessible by purchasing a product, as in the case of the Lexmark printer.
However the Court did not address whether the DMCA should have applied in light of the fact that the reverse engineering may have been fair use under the copyright law, even though the Court noted that:
"[T]he focus of Section 1201(b)(1) is circumvention of technologies designed to permit access to a work but prevent copying of the work or some other act that infringes a copyright."
Last week the Federal Circuit in StorageTek concluded that the DMCA could not be used to extend rights beyond those protected by copyright. See our prior post on the case.
This ruling is disappointing in that it lacks much depth in its analysis. In addition to rather cursory treatment of the issues above, the Court did not address the copyright misuse argument, under which a copyright holder should not be able by contract to restrict lawful fair use rights and thereby extend the bounds of their copyright monopoly. This issue was briefed by the Bnetd side. See the EFF's page with all the pleadings.
Cathy Kirkman is a partner at Wilson Sonsini Goodrich & Rosati in Palo Alto, California. Her practice focuses on intellectual