Guiding Rights Blog :: Victory for EULA: Software Distributors Rejoice

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Victory for EULA: Software Distributors Rejoice

by Mark VB Partridge on Wed 26 Nov 2008 03:10 PM CST | Permanent Link

[Abstract of article by Sanjiv Sarwate]

End user license agreements (EULAs) are used to impose terms and conditions on the use of software. EULAs may restrict the user's ability to make copies of the software, to access or reverse engineer source code, or to make or use other software applications with the software. EULAs may also contain provisions fixing the location or mandating arbitration for disputes.

EULAs have received particular attention recently for massively multiplayer online games (MMOs). Leading examples include World of Warcraft and Second Life. In most MMOs, users run a program on their own computer to connect to servers where the game actually runs. Users interact in this virtual world through avatars or characters who accumulate virtual money, purchase items and access higher levels of gameplay. Incredibly popular, these games boast millions of users and generate billions in revenue. World of Warcraft, for example, has over 10 million users and generates $1.5 billion in revenue annually.

Recently, the operator of World of Warcraft (WoW) MMO, objected to the development of a software add-on, called WoW Glider, that allowed a user's character in the game to play even after the user signs off. Such add-ons (known as "bots") were explicitly prohibited by the World of Warcraft Terms of Use (TOU), incorporated into the EULA. MDY Industries, LLC v. Blizzard Entertainment, Inc., 2008 U.S. Dist. LEXIS 53998 (D. Ariz. 2008).

Blizzard claimed that the copy of the World of Warcraft client software loaded into RAM by a user running WoW Glider was an infringement because the copy violated the TOU and therefore of the EULA. The court agreed, holding that the TOU limited the license granted by the EULA. Thus, any operation of the software contrary to the TOU, such as running bots like the WoW Glider, was copyright infringement.

Needless to say, this decision represents a substantial victory for software distributors. For more details, see Sanjiv Sarwate's article in our latest firm newsletter available here.

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