This is a virtual crime case that involved real violence used to obtain virtual goods.  The victim was beaten and threatened with a (real) knife, with the defendants demanding he hand over a virtual mask and a virtual amulet within the online game Runescape.  So at the very least, this was a case of criminal assault.  The only issue was whether the crime amounted to theft, which hinged on whether or not the virtual items could be classified, under Dutch law, as goods.

The lawyer for the defendants argued that Runescape’s virtual items are not goods because they are not tangible and have no commercial value.  The Dutch Supreme Court disagreed.  Citing to the size of virtual economies as well as to specific sales on eBay of Runescape items, it rejected the argument that the goods had no economic value.  It also observed that the victim had invested time and effort to obtain the value of the items, that the game gave him exclusive rights to the items, and that the defendants had, by violence, acquired that value and those exclusive rights from the victim.

In my opinion, the reasoning of the Dutch Supreme Court is roughly analogous to the reasoning in the U.S. decision of Kremen v. Cohen, which found that domain names were subject to civil conversion in California despite their intangible nature.  Though I have mixed feelings about the Cohen case, I believe the recognition of the Runescape items as legal goods is the right result in this case.  As the Court explains, the victims here were clearly motivated by the prospect of acquiring the value of the virtual items of the victim and they used violence to obtain that value.

Additionally, as the Dutch Supreme Court explicitly notes, the violence here was not in the context of the game.  As I explain in Chapter 6 of my book, there can be cases where legal prohibitions against in-game theft of virtual property may be in tension with the rules of a game.  In this case, however, the theft occurred completely outside the rules of Runescape.  Given this, I think the Dutch Supreme Court’s recognition of the economic and status value of virtual items is entirely appropriate.

In addition to my work with Dan and Arno’s writing, the Court AG opinion accompanying the decision (see my comment below) cites the work of Orin Kerr, Jack Balkin, Fred Schauer, Andrea Arias, and Alec Levine.  I may have more to say once I get a better translation of the ruling — Google Translate is great to get the gist of the matter, but I have a feeling I’m missing plenty of nuance.

(X-posted on Terra Nova.)

I feel like I’m scooping Jacqui here, since she’s the Madisonian Twilight expert, but I was so bothered by the recent district court decision in the Bella’s Jacket Brouhaha that I’m chiming in on the intersection of intellectual property and teen vampires.

Twilight is probably part of basic 21st century cultural literacy, so I’ll presume that, from Jacqui’s posts if from nowhere else, you’re aware of the basic contours of the very profitable films based on Stephanie Meyer’s very profitable books.

So see the jacket at right?  (Image courtesy of SashaW, apparently a big fan of the films.)  See that tiny hangtag on said jacket?  The hangtag presents an image of Kristen Stewart, in the role of Bella, wearing the same jacket.  Apparently, the jacket was originally made by BB Dakota and was formerly known as the “Leigh” jacket.  Production of the jacket was discontinued prior to the making of the first Twilight film.

For some unknown (to me) reason, a costume designer in the employ of Summit Entertainment LLC (the studio responsible for the Twilight franchise) thought that Bella (Kristen Stewart) should wear the jacket in Twilight.  Examples of such wearing from the film are here.  And Summit used the image of  Bella in her jacket as part of the promotional materials for the film, including the iconic Bella/Twilight shot, which is plastered all over the Internet.

So far so good, legally.  Since fashion design is not protected by copyright law (at least at present!) and because consumers don’t think that every piece of clothing in a movie is a sponsored product placement (at least at present!), the makers of the Twilight film did not need to get a license from BB Dakota in order to use images of the jacket in the promotion of Twilight.

Now, admittedly, there is a long-shot claim that might have been made by BB Dakota.  If people looked at the jacket in the film and associated it with BB Dakota, BB Dakota could have claimed that the appearance of the jacket in the movie suggested to viewers that BB Dakota sponsored the film made by Summit.  And if they had thought that, they would have been wrong about that implied endorsement, and that confusion could have been the basis of a trademark claim by BB Dakota.

The standard for that claim is extremely daunting, though.  Not only would BB Dakota have to prove what is called “secondary meaning” in the “trade dress” of its jacket design, it would have to show that consumers actually understood that the appearance of the jacket in the film was indicative of Dakota’s sponsorship of the film.  And even if it did that, BB Dakota would still have to overcome a very powerful (to my mind, at least) potential First Amendment defense on the part of Summit.  Simply put, Summit should not need to seek a license to have a character wear a jacket in a film–to require that would limit Summit’s freedom of expression.

Still, film makers do worry about potential claims like that.  Trademarks in many films and television shows are blurred and/or genericized due to trademark infringement liability concerns.  (They also blur and genericize, in many cases, because company logos can be protected by copyright and fair use is a risky defense.)

Putting aside the law for a second, was it fair for Summit to use the jacket in the film without compensation to BB Dakota?  After all, making a hoodie jacket can be a creative act.  Summit used the Leigh jacket in a film and BB Dakota was not paid for its creative contribution to the film.  But then again, BB Dakota benefited from the use.  If you are BB Dakota, having a troubled & angsty, vampire-loving heroine wear your hoodie jacket in a film targeted at young women is a great way to get young women interested in purchasing said hoodie jacket.  So arguably, Summit did BB Dakota a big favor by having Bella wear the Leigh jacket.  It seems like BB Dakota must have seen things this way–there’s no sign in the factual record that BB Dakota had even an inkling of annoyance that might have lead it to consider the (long shot!) trademark claim it might have brought against Summit.

So the Twilight movie comes out and the many Twilight fans who idolize Bella and identify with her turbulent romantic life seek out her jacket.  It is out there in the stores of a few retailers, but there are not many to go around.

Then things get interesting and the facts get disputed.  As far as I can make out, there are some brief emails from some non-legal folks at BB Dakota to some non-legal folks at Summit that authorize BB Dakota to use a particular image of Bella wearing the jacket in connection with the sales of the jacket.  Apparently, there are some confused talks internally within BB Dakota and there is also some confusion in communications with retailers.  The end result is that the iconic Bella Twilight promotional image is used on the hangtag that goes with the jacket, in part because someone non-legal at BB Dakota suggests that the words “As seen in the movie Twilight” would make that okay.  (However, the tag apparently did not actually use those words.  Update & correction: Professor Risch, in the post following this one, tracks down the tag, which does add those words!) The jacket was also, apparently, referred to in marketing as “the Twilight jacket,” though someone at BB Dakota denies this usage originated with the company.

Again, let’s pause to consider what’s fair now as opposed to what’s exactly legal.  Summit used the jacket in its film without asking permission from BB Dakota.  Now BB Dakota wants to sell the jacket as the jacket worn by Bella in Twilight without permission of Summit.  BB Dakota obviously wants to capitalize on the popularity of the movie, but mostly it wants to capitalize on the new popularity of the jacket it makes.

The key issue is that it adds a small hangtag to the jacket with the iconic Bella image, the one plastered all over the Internet and recognized by Twilight fans as Bella wearing the (BB Dakota) jacket.  Is it fair for BB Dakota to add this hangtag?  Note that this jacket is the jacket that Bella wore in the film, so to the extent the Twilight fans get this information it is truthful and useful information.

Summit sued. Why?

Well, let’s step into Summit’s shoes.  Imagine you are an executive at Summit, policing and monetizing the IP rights to your billion-plus dollar intellectual property franchise.  You’re making tens of millions from licensing your IP alone.  But this isn’t an easy job.  You’re up to your neck in complex negotiations, lengthy agreements, and enforcement efforts.  You want to land the best deals for getting your product line in front of consumers and you want to spin your IP into other areas: games, posters, t-shirts, and anything else you can sell to your demographic.  You’ve got pirates already doing that internationally.  At the same time, you want to maintain the quality in your brand and you don’t want to overexpose Twilight.  But you are also now ringed with hundreds of competitors in the teen supernatural space who are inching their way as closely as possible to the niche genre that you dominate, and who are more than willing to monetize any inch of the terrain that you don’t enter.

I admit that if my day-to-day job consisted of policing and monetizing the IP rights associated with Twilight, I might be a bit miffed if I saw the iconic Bella image on a hangtag of a jacket marketed as the Twilight jacket, since I would view the image and the terms “Bella” and “Twilight” as the core IP that I oversee, and I would probably view the unauthorized use of that IP as free-riding on Twilight’s economic value and goodwill.  If I happened to be a little bit on the aggressive side about the scope of the IP rights in Twilight, this is probably a good thing–it is what my employer wants.  When you’re bullish on the size and value of what you’ve got, you start your negotiations from a strong initial position.  In fact, the less I worried I was about the letter of IP law and the more immersed I was in negotiating IP deals, the more I’d be miffed by that hangtag if I worked for Summit.  (See, e.g, Jim Gibson on how industry IP negotiation dynamics generally push IP rights to expand.)

So it really isn’t too surprising to me that Summit brought a lawsuit against BB Dakota based on the hangtag shown in the picture.  It is disappointing to me, though, that Summit won its case so handily.

Actually, I think it is pretty clear that, starting from first principles, the public interest in IP law would have required a ruling in favor of BB Dakota.  But the case came out otherwise.  (An appeal might be nice, though who knows if it would come out better.)  The district court opinion, by Judge Feess of the Central District of California, is partially about bad Ninth Circuit legal precedent and partially about a rather dismissive approach by the court to BB Dakota’s various arguments.

So let’s look at the opinion.  If you want to read it, the ruling is here on Scribd.

(NB: from here on I will get a bit technical and assume the reader knows the basics of trademark law and civil procedure.)

The ruling grants summary judgment to Summit on two claims: trademark infringement and copyright infringement.  On Summit’s trademark dilution claim, it finds that dilution has occurred, but decides the question of Twilight’s fame needs to be tried.  It rejects BB Dakota’s trademark infringement claim.  I’ll comment on these four rulings in reverse order.

BB Dakota’s TM Infringement Claim

Remember the long shot claim that I suggested BB Dakota could have made based on the use of the jacket in the film?  Well, it asserted that as a counterclaim, which was fair enough as a litigation (and potential settlement) strategy. Unsurprisingly, though, the court found it was a loser.

I think Judge Feess, however, went a bit too far in criticizing BB Dakota’s argument.  From the excerpts in the opinion, it seems like BB Dakota was making the argument it had to make on this claim — people recognized the Leigh (now re-christened Nicola) jacket as the product of BB Dakota and presumed BB Dakota had sponsored Twilight.  It also conceded that it was the Twilight movie that made the jacket popular.

What’s the problem with that?  Judge Feess seems to think it would be impossible for people to watch Twilight and understand that BB Dakota, not Summit, created Bella’s jacket.  Apparently, he thinks that all new brand value created in the Twilight movie must be brand value owned by Summit:

“Common sense dictates that BB cannot sue summit for appropriating or trading off that which Summit has created.”

The thing is that Summit didn’t create the jacket.  Fans that went looking for Bella’s jacket quickly ascertained, based on their own research into the movie and the jacket, that the jacket was made not by Summit, but by BB Dakota.  So yes, Twilight could have created secondary meaning for a jacket made by BB Dakota.  That is a possibility.

As I said before, though, I think the claim was a loser out of the gate, but I think it should have been dismissed on the basis of either BB Dakota’s abandonment of the trade dress prior to the film’s debut or BB Dakota’s failure to provide sufficient evidence of secondary meaning–or some other ground.  But I don’t think the observation that “Summit made the Twilight film” should have killed this claim.

Summit’s Dilution Claim

I can’t get too upset about this one because, like most trademark law professors, I can’t really make heads or tails of what trademark dilution is.  Perhaps that’s why we all keep writing about it?

Under the TDRA, my current impression is that dilution is more or less about preventing unauthorized dilutive associations with famous marks.

So…

Did consumers associate Bella’s jacket with Twilight?  Yes.

(I might add: Does the TDRA’s standard of trademark “association” have any redeeming basis in rational legal thought?  Probably not.)

(I might also add: Does the TDRA have even a smidgen of connection with the public’s interest in trademark law?  No.)

The court finds that the use of Summit’s marks by BB Dakota was dilutive.  It finds this becasue trademark dilution is all about divorcing trademark law from consumer protection and letting it morph into a sort of quasi-copyright protection for “famous” marks.  I’ll note that this is in blatant violation of what the Supreme Court stated about the fundamental nature of trademark law in The Trademark Cases, but I think most trademark lawyers get that — very few people have offered cogent defenses of trademark dilution.  So it is not the court’s fault that it finds the use here dilutive under the TDRA; it’s Congress’s fault for enacting the law in the first place.

Curiously, though, the district court is not convinced that Twilight is famous.  (!!!)

In the early days of the FTDA, the precursor to the TDRA, some courts were strict about fame this way. Then, over time, they decided that very local companies like Wawa (the local coffee and sandwich chain around Philadelphia) were famous for dilution purposes.  The TDRA is designed to prevent that result, but I don’t think it will prevent Summit from successfully arguing that Twilight is famous.  (If dilution law made sense, I might ask if the Twilight mark were famous for clothing, but since the TDRA is so gloriously market-agnostic, completely out of keeping with any sensible understanding of trademark law, I can’t ask that question.)

Summit’s Copyright Claim

Summit’s copyright claim is based on the iconic image of Bella.  BB Dakota used the image in the hangtag and in some other marketing materials (e.g. emails and website.) In other words, it used the same image that is plastered all over the Internet and that several legal bloggers have used to illustrate their commentary on this case.  BB Dakota defended on the basis of consent, equitable estoppel, and fair use.  I’ll ignore consent and estoppel, since I don’t see any problems with the way the court handled those.  But Judge Feess really glosses over BB Dakota’s fair use arguments in a way I find disturbing.

For starters, Judge Feess accepts Summit’s argument that “[w]holesale copying of copyrighted material precludes application of the fair use doctrine.”  The cite is to a pre-Sony case, Marcus v. Rowley (9th Cir. 1983).  I doubt the standard adopted here is really the correct fair use standard (woe be to certain legal bloggers otherwise!) — instead I’d rather say that verbatim copying weighs (strongly?) against a finding of fair use.  Since the “amount used” is the third factor in the fair use test, it would be sort of odd to have a bright-line rule that if that factor = 100%, there is no need to consult the other factors.  Indeed, many courts now have permitted entire works to be copied and found that copying the entire work can be fair use.

Judge Feess then goes on to say that if, arguendo, all four factors were considered, the Bella hangtag would still fail to be a fair use.  BB Dakota made what I think is a plausible case for fair use by marching through the four factors, but the court called it “extraordinarily wooden–at best.”  The court’s analysis, though, extraordinarily brisk–at best.  Judge Feess spends about a sentence or two on each factor and completely glosses over the fact that the image is being used not to sell consumers hangtags, but to inform consumers that this is the same jacket that Bella wore in Twilight. But the specific context of the use here is hardly noticed.  Opinions like this are why predicting the outcome of copyright fair use cases is so impossible.

Not that Judge Feess could have considered this, but why do we even protect copyright in hangtags?  Lisa Ramsey has explained that when images like this are used for advertising promotion, there really isn’t much need for copyright protection.  I tend to agree.  Indeed, the ubiquity of the Bella image on the Internet seems to indicate that Summit isn’t too bothered by its reproduction, when it is not used in conjunction with the sale of jackets.

Summit’s Trademark & Unfair Competition Claims

Of all the rulings, the trademark ruling was the one I found the most disheartening.  In theory, the question the court should be considering is whether the use of the hangtags confused consumers about the source of the jacket.  That’s what trademark law is about.  So did placing the iconic Bella image on the hangtag lead consumers to believe that Summit produced or exercised quality control over the production of the jacket?

Usually courts in the Ninth Circuit march through a list of factors to determine this, but in cases like this one, where the defendant is using the mark to make reference to the plaintiff’s goods, the Ninth Circuit has saddled its district courts with the bizarre doctrine of “nominative fair use.”  I say “bizarre” with full knowledge that this may be an idiosyncratic view–many trademark lawyers know all about New Kids on the Block and think Justice Kozinski’s invention was keen and nifty.  In my opinion, though, the Supreme Court in KP Permanent correctly determined that the so-called defense was actually a presumption in favor of the plaintiff on the issue of consumer confusion.  Judge Kozinski recently revisited the doctrine in Tabari, as Rebecca Tushnet notes in this blog post, but I don’t think he improved the situation very much.

Essentially, the Supreme Court in KP Permanent said that if there is a fair use defense to trademark infringement, then that defense should be raised by the defendant — after the plaintiff meets the burden of establishing a likelihood of consumer confusion created by the defendant’s use.  So what’s the rule in the Ninth Circuit now?  According to Tabari, the plaintiff now has the burden of disproving that the nominative fair use test applies.  If the plaintiff succeeds in negating the defense, this establishes the likelihood of confusion.

If the Ninth Circuit’s nominative fair use test had some strong connection to ascertaining actual consumer confusion — i.e. whether consumers thought that Summit sponsored the jacket — this might be okay.  It would amount to a specialized test for determining confusion in a specialized set of cases.  Federal courts have plenty of these specialized trademark infringement tests and its makes sense to have customized rules for special sorts of cases.

The problem is that the nominative fair use test is skewed toward treating trademarks like copyrights, not toward determining consumer confusion.  The three prongs are whether:

(1) the product was “readily identifiable” without use of the mark;

(2) defendant used more of the mark than necessary; or

(3) defendant falsely suggested he was sponsored or endorsed by the trademark holder.

It’s the second prong of the nominative fair use test that becomes especially pernicious in a case like this.  A test like this makes the exact copy on the hangtag, especially the typeface, important to the court.  BB Dakota’s use of the distinctive typeface borrows “too much” of the Twilight trademark.

But what does that “too much” have to do with how likely it is that consumers would think Summit was actually the party selling or authorizing the sales of the jackets?  The first two prongs of nominative fair use seem way out of line with the standard factors in a consumer confusion analysis, such as the sophistication of purchasers and the proximity of markets.

Nominative fair use in the Ninth Circuit is described as a shield for defendants, but it really operates as a sword for plaintiffs.  The nominative fair use test prevents the court from squarely considering what is going on in the minds of consumers, instead requiring it to get caught up in the misappropriation of the distinctive typeface used on the hangtag.

It would have been nice if Judge Feess could have thought about the Sleekcraft factors, but Tabari says that is not allowed.  Even if Sleekcraft controlled, it is possible that consumers would have believed the Summit endorsed the sale of the jackets due to the hangtag.

Trademark law today very often involves parties that don’t produce goods licensing their marks for use by parties that do produce goods.  So Pixar might license a toy maker to make toys for it.  If an unlicensed entity were to make a toy bearing the Pixar brand and a customer were to buy that toy due to Pixar’s reputation for quality, the consumer could be harmed if the unlicensed good had inferior qualities to those that Pixar would guarantee.

But that’s not the case here!  This is not a situation where some random company starts to make a random jacket and sells it as a “Twilight jacket.”  Rather, this is a case where Summit made a movie where Kristen Stewart did wear this exact jacket in Twilight.  Twilight fans purchasing what BB Dakota is selling are getting exactly what they want: they are getting Bella’s jacket. No harm, no foul–BB Dakota should win.

Of course, BB Dakota doesn’t get to make this argument because trademark law doesn’t even permit BB Dakota to raise it.

Indeed, if Summit were to make its own jacket and sell it to consumers as Bella’s jacket (which it may well do after this case), then that would actually be more deceptive than what BB Dakota did.  The jacket that Summit sells will not be the jacket that Bella wore.  It may be licensed, but the BB Dakota jacket is Bella’s jacket.  Summit did not make Bella’s jacket.

Judge Feess, of course, did not have the freedom to point that out.  He applied the law that applies in the Ninth Circuit, and he didn’t have the freedom to invent an alternative to the nominative fair use dictated by Tabari.

What distresses me is not so much the ruling, but how much the opinion exemplifies the general trend in trademark doctrine of ignoring the interests of consumers in favor of the proprietary claims of powerful franchises.  Ideally, trademark doctrine would primarily reflect government’s solicitude for the public’s interest in truthful commercial communication.

So this has been a longish post (3500 words!), but thanks for reading it through to the end.  Sometimes it seems the smallest things, like the hangtag on a hoodie jacket, provide the easiest avenues for complaining about the largest problems with the contemporary scope of trademark law.

Interesting YouTube contest circa 2008 — Aimee Mann invited fans to cover one of her songs and upload a video.  A video of the winners is here, but there were plenty of other good versions that didn’t make the cut.  (e.g. this).

Thought I would share it here because:

1) I’m going to be looking at various forms of amateur creativity for a new project I’m working on, and it’s really interesting to use these videos to see the contrast between amateur and professional media.  E.g., how do the amateurs in this contest recreate the standard form of music videos?  Where do they “fail” in terms of artistic method or content quality? What risks do they take that we don’t see in more polished media — e.g., would you ever see two kids in car seats in a non-amateur video?

2) I was just reading Jacqui’s article about supernatural fiction and moral rights, and was pondering the relationship between cover songs and fan fiction.  Jacqui surveys the field of vampire fiction and finds that most of its famous authors are fairly hostile toward fans who take up the pen and riff on their work.  This is obviously the opposite in the case of music. Copyright law treats the two forms of amateur creativity differently, but are they fundamentally similar?

3) I’ve recently started using Spotify, and I’ve found that one of the most interesting things to do with such a vast library of music is to dig up cover versions.  (Notably, Spotify doesn’t seem to feature any “Freeway” covers!)  As often as not, I like one of the covers better than the original song.  Actually, after watching all the contest videos, I watched the “authoritative” version and I wasn’t sure if it was as good as some of the covers.

I’m not sure whether or not this is a “law” paper, which means that it probably is not.   The footnotes are certainly not the sort I do in my legal writing — I was asked to go light and I did.  So with those caveats, this is a pretty short (7,000 word) look at how the current indie game Minecraft exemplifies the principles of Web 2.0, and how games as new media have always been allied with Web 2.0.  I’ve been interested for some time in the intersection of amateur creativity and gaming, so writing this gave me a chance to spin out my thoughts on the topic a little bit more.

Feedback, if you’ve got it, is welcome.

In my article written a few years back about Google, trademark, and search regulation, I used “Cars” (more or less randomly) as a representative search term with both a trademark and a descriptive meaning.  I found it interesting that about half of Google’s results were for automobiles while the rest were for the Disney movie. A search a few seconds ago shows roughly the same result — perhaps with the descriptive meaning gaining a little ground. In the article,  I also noted that the trademark “cars” was not a mark owned exclusively by Disney — some other companies used the word as a mark in relation to other goods and services. Last night at my visit to Target, the “Cars” trademark jumped out at me again.

The picture shows an “endcap” in the toy section of a local Target store.  I just finished writing a draft of a forthcoming article that is, more or less, an appeal to jurists to respect the traditional role of trademarks as designators of the sources of particular goods and services. But what sorts of goods and services do consumers associate with “Cars”?  The Cars mark is used here to sell not just toys, but (from the bottom up): snacks, a comforter, tissues, Nutri-Grain bars, and cereal.  Breakfast with Batman Cars, indeed.  Walking around Target, the “Cars” brand was almost everywhere.  It was hard to find any section of the store that didn’t have something (towels, notebooks, clothing) that featured the “Cars” brand.  Talk about ubiquity.

I admit I found the experience a little disquieting from a trademark policy perspective.  Looking around the toy section of the store, it was hard to spot any toy that was really just a toy marketed as valuable in itself.  Well over half of the toys were tied in to the promotion of various Hollywood movies and brands (Tranformers, Star Wars, Harry Potter, Marvel). Apparently, Disney, Warner, etc. and the toy companies agree this is the way to go.  But is the invisible hand really helping us out here?  Is there any argument that really we’re better off with Hollywood owning Target’s toy section? Do we get better toys with this use of brands?  Probably not, but, as Mark Bartholomew recently explained, a lot of people have objected to this sort of thing over the last 100 years, and the tide of brands keeps rising.

Over in the video games section, I noticed that about half of the titles advertised for the PS3 were also tied into Hollywood’s latest offerings. My son and I were looking at school notebooks and we thought it was kind of interesting that the Transformers-branded notebook is holographic — maybe you’re not just advertising the film (and its associated merchandise) to other kids in school, you’re also advertising the push toward 3D? Yay.

Other than wondering about whether the Cars(tm) invasion of Target was a good thing in general, I was also wondering how far this is going to go.  I didn’t look like Cars(tm) had much of a foothold in light bulbs, gardening equipment, duct tape… it wasn’t as if absolutely everything in Target was tied into merchandising rights for a movie.  Will that still be true 20 years from now?

I probably won’t see Cars 2, by the way.  I did see the last one and I thought it was pretty good — I found the Route 66 nostalgia in it curiously ironic.

I found Justice Alito’s concurrence more interesting, though.  Justice Alito (joined by C.J. Roberts) disagrees with Scalia not so much based on the rationale for the ruling (there is some of that), but based on his conviction that videogames are a truly unique genre with different properties and therefore deserving of different regulatory policies. I was sort of entertained and dismayed by what Alito’s was reading to come to that conclusion: Popular Mechanics? Engadget? People? GameTrailers.com? Hmm.  Evidently, ludology is still not part of the popular consciousness.

Justice Thomas has a pretty remarkable (for the lack of a better word) dissent based upon the law, culture, and political philosophy surrounding the parent-child relationship during our agrarian society of two centuries ago.  (IIRC, the founders didn’t say much about violent videogames.)

And Breyer dissents based on the social science data demonstrating connections between videogames and violence — including studies which are rather harshly denounced by Scalia.  It’s sort of interesting that Breyer is the only one paying much attention to the science on point.  Beyond that, I may be wrong, but I get the feeling that Justice Breyer, unlike Justice Kagan, isn’t too familiar with Mortal Kombat.

On a procedural note, I’m now considerably less confused about the Supreme Court’s motives for granting cert when the lower court’s ruling seemed obviously correct and deserving of affirmance.  I’m guessing that Thomas and Breyer thought differently and Roberts and Alito at least wanted to consider the arguments.  Scalia probably voted to take it too, though I’m guessing he saw it as pretty analogous to Ashcroft v. Free Speech Coalition (and Stevens) from the get-go.

Legal commentators in the blogosphere (e.g. Nic Suzor, Technollama, Rebecca Tushnet, Venkat & Eric) have already offered some initial thoughts on the Ninth Circuit decision in MDY v. Blizzard. Since I talked about the district court opinion in this case in Chapter 9 of my book, I thought I’d post a few reactions too.

This post is going to be a bit on the long side, but that’s only because the issues raised on this appeal are a bit tricky, meaning that I feel the need to lay a little doctrinal groundwork before getting to my thoughts about the case.

Though there was an interesting tortious interference decision in the appeal, I’m going to focus on the two copyright issues that were decided by the Ninth Circuit, one involving a claim that users of MDY’s Glider program breached World of Warcraft (WoW)’s software license and the other claiming that users of MDY’s Glider program violated the Digital Millennium Copyright Act (DMCA)’s prohibitions on circumventing technological protection measures that limit access to copyrighted works. This second claim focused on the operation of Blizzard’s Warden program, which monitors a player’s computer to see if it is running any unauthorized software.

The appellate court essentially found in favor of MDY on the licensing issue, reversing the lower court, and in favor of Blizzard on the DMCA-Warden issue, affirming the lower court. That adds up to a win for Blizzard. That win could be reversed, in theory, if MDY pursues further appeals.  An en banc review of the Ninth Circuit is possible and there’s always the slim chance of getting the case reviewed by the United States Supreme Court.

I’ll discuss the software licensing issue first.

1) Does violating a ban on botting make a user a copyright infringer? When a user plays WoW, some of the game’s software code is copied into the random access memory of the user’s computer. This “RAM copying” is treated as an exercise of the copyright owner’s exclusive reproduction right pursuant to existing Ninth Circuit doctrine.

Whether the RAM copy doctrine makes sense has been subject to some debate. However, if we accept that premise, it follows that playing WoW entails making a copy of the WoW software.  If you are not licensed to make that copy, you’re presumptively infringing copyright. It is worth noting that section 117 might seem to carve out an exception for software purchasers making RAM copies that are part of normal software use, but again, the Ninth Circuit’s precedent (affirmed in this case) leads to the conclusion that section 117 doesn’t apply in standard consumer software purchases.

So starting at that point, if there is a term in the software license that you fail to abide by, and you make a RAM copy while breaking the terms of the license, are you then engaged in copyright infringement? E.g., I grant you a license to use my spreadsheet program, but include in the license the condition that you must stand on one foot while doing so. You agree to my software license and then, while using the spreadsheet, you lose your balance. When your foot touches the earth, have you committed copyright infringement?

Or perhaps instead: did you merely breach an independent contract with me that is unrelated to copyright, meaning I can only sue for breach of contract?

The difference in the two sorts of claims can be very significant. Breaching a contract gives rise to traditional remedies — i.e., how were you damaged when I stood on two feet and used the software? Infringing a copyright, on the other hand, gives rise to statutory damages, which generally don’t track the actual damages that a copyright holder suffered as a result of the infringement. When you infringe, you must pay.  Statutory damages are a much more powerful remedy.

The Ninth Circuit in MDY draws a distinction between licensing terms that give rise to copyright infringement liability and those terms that fall outside the scope of the copyright entitlement. This makes abundant sense. Software copyrights should not give their owners the power to essentially regulate all user behaviors during software use with the threat of statutory damages for any breach of the terms of use.

To give rise to the infringement remedy, it makes sense that a licensing condition should have some “copyrightishness” about it. By analogy, this is sort of like the touch & concern doctrine in the law of property servitudes, which requires real covenants (persistent social arrangements regarding land use) to have some “landishness” about them if they are going to be applied to downstream purchasers of the estate.

The precise term at issue in MDY is Blizzard’s prohibition on unauthorized “botting” software. Glider is a botting program, so it pretty clearly breaches Blizzard’s license. Essentially, a bot program turns your avatar into a robot. Using Glider means that you are not playing World of Warcraft — instead you’re letting the bot program control your avatar on autopilot, setting it to run around Azeroth and kill things and collect loot.

If you use Glider, it is clear that you are in violation of the software license of WoW. And MDY essentially conceded on appeal that if users are copyright infringers when they use Glider in this way, MDY is liable as an accessory to the underlying infringement.

But, as it turns out, according to the Ninth Circuit’s ruling, using bots in violation of the WoW software license actually does not make a user a copyright infringer. Why not? Because there’s no nexus to the copyright law in the license prohibition against bots.

It’s a little hard for me to neatly sum up the reasoning here, but the basic point seems to be that “how you play the game” does not really have much to do with making copies of the game software or recording the content, etc.

As an outcome, I’m fine with this. Still, I must confess I’m a little hazy about this rule. Supporting the court’s view, it is true that the claim being made by Blizzard is not that Glider users make copies of its software or experience WoW without paying subscription fees. If this were a traditional video game, I think those facts would strongly support the lack of a copyright nexus. But WoW is not a conventional video game and the copyright at issue is not really a conventional copyright. In fact, with regard to the DMCA claim (which I’ll get to next), the Ninth Circuit opinion accepts the idea that Blizzard owns a discrete copyright interest in WoW’s “dynamic non-literal elements.”

So Blizzard is not only claiming protection of the game’s literal software code or the various multi-media components (audio files, graphics files, animation files). The copyright asserted in this case extends to the user’s experience of the game software when connected to the servers (which are in turn connected to the clients of the thousands of other players). The work accessed is “dynamic” because it is constantly evolving and “non-literal” because it is a fluid multimedia audiovisual experience rather than a conventional fixed text. Note that these dynamic non-literal elements are produced, at least to some degree, by the players.

In fact, what is particularly irksome to Blizzard (and to its subscribers) about Glider is not that Glider players get access to the world, but that that they fail to access the world. The Glider user doesn’t actually want the “dynamic non-literal elements” of Azeroth. The paradigmatic Glider user is not even experiencing WoW when Glider is active.

So why is Blizzard complaining about Glider users who pay MDY not to experience Azeroth? Because this case, I think, has always been about gold-farming. Blizzard sued Glider, I think, because the software is useful for gold-farming and gold-farming disrupts the game economy, poses virtual property headaches for the company, and is deemed cheating by a substantial portion of WoW’s user base.  If virtual gold is valuable and can be sold for profits, botting to collect it is a way to make money and Glider becomes a business tool.

But in the case, it seemed that neither side (for separate good reasons) stressed or deeply explored the connection between MDY’s profits and the gold farming business. Given that the parties did not pursue it, the court certainly did not jump on it sua sponte.

Before moving on to the DMCA, I want to touch back on the condition/covenant distinction in the license.  Is it really true that the prohibition on botting has no nexus to Blizzard’s copyright? Actually, I might argue that it does. The manner in which the Glider player acts (or more accurately, fails to act) actually does shapes the nature of the “dynamic non-literal” elements that are experienced by the other players. The Glider player is, essentially, a bad authorial collaborator, making WoW worse for other subscribers.

Is that a copyright nexus? Certainly not a traditional nexus, but I do think an argument could be made.

Still, as I said, I’m generally pleased with the outcome here. Whatever the coherence of the explanation here, the fact is that the public is certainly better off in a world where every minor violation of a clickwrap license won’t put you on the hook for copyright infringement.

2) DMCA 1201(a)(2)

Although the DMCA is another copyright claim, it is actually a much different claim involving a much different law.

The software licensing claim described above follows this logic:

1) Blizzard says no botting or you can’t make RAM copies,
2) players who use Glider make RAM copies,
3) these players infringe copyright,
4) MDY is liable for helping them do that.

As I said above, the Ninth Circuit finds for MDY (and Glider users) by failing to agree at step 3.

The DMCA claim concerns Blizzard’s effort to control bots via technology. Specifically, Blizzard created a program called Warden that monitors the active memory of the user’s computer. Warden scans the user’s computer for signs of unauthorized software. When the user connects to Blizzard’s servers and the game is running, Warden pokes around in the game memory. If it finds signs of something it doesn’t like, it severs the player’s connection to the servers.

Blizzard’s DMCA claim follows a simpler legal logic:

1) Blizzard’s Warden program is a technological measure that controls access to the “dynamic” WoW program,
2) MDY’s Glider program is a tool that circumvents Warden.

Essentially, that’s the whole claim. This is because the DMCA, at 17 U.S.C. 1201(a)(2) concisely prohibits trafficking in tools that “circumvent a technological measure that effectively controls access to a work…”

Because Blizzard relies on Warden’s policing activities for this claim, it had to take the position (mentioned above) that Blizzard holds a discrete copyright interest in WoW’s dynamic non-literal game play elements. This is because Warden controls access to those dynamic elements, but doesn’t effectively control access to the rest of the client software. E.g., the user has access to the audiovisual elements of the game and to the literal software code even when the client is not connected to the servers. The user only gets to see the game be dynamic, though, when the client ties into the server.  This is when Warden does its police work.

So Blizzard’s claim was that Warden is a technological measure that effectively controls access to WoW’s dynamic non-literal work (the gameplay). The lower court accepted this claim. The Ninth Circuit accepted it as well, disagreeing with a Federal Circuit opinion that would have interpreted 1201 more narrowly, perhaps allowing MDY to prevail on this claim as well.

A large swath of the Ninth Circuit opinion is given to explaining what is fairly obvious if you read 17 U.S.C. 1201. Namely, section 1201(a) (at issue in this case) is directed at the circumvention of access-control measures whereas the separate provisions of 1201(b) outlaw trafficking in tools that enable the circumvention of rights protections. The court’s descriptions of (a) and (b) are really quite nice, and I’ll be sure to give them to my students in the future who get confused about the difference between 1201(a) and (b).

However, the Ninth Circuit uses the difference between 1201(a) and (b) to make a more radical, though not unprecedented, claim. Following what the Second Circuit did in the case of Universal Studios v. Corley, the Ninth Circuit determines that the 1201(a) “access” provisions are essentially a new right added to copyright law that are almost entirely separate from the traditional rights of copyright owners. Disagreeing with the Federal Circuit’s decision in the Chamberlain (garage door opener) case, the Ninth Circuit rules that violations of 1201(a) can occur without the demonstration of any nexus (contra the discussion above re licensing) to copyright.

So, in essence, according to the court, it doesn’t really matter that users are circumventing Warden with Glider solely to engage in a different sort of game play that is unrelated to copyright entitlements. The court itself stated that the botting prohibition lacks a copyright nexus. This doesn’t help MDY evade 1201(a) we are essentially told, because that prohibition isn’t about any that a user might do after evading Warden. The very act of evading Warden is the violation, even if subsequent actions have nothing to do with infringing copyright.

With that established, it is also established that MDY, by providing a tool that circumvents Warden, violates 1201(a)(2), even if the use of bots by users doesn’t amount to copyright infringement.

Does that sound a bit odd? It certainly does to me.

Just like I disagreed with the Second Circuit when it decided Corley, I find myself in disagreement with the Ninth Circuit in this case. Whatever the legislative history of 1201 may say, it seems to me that 1201 is part of the copyright statute. Requiring that anti-circumvention violations bear some relation to copyright entitlements makes just as much sense here as it does with regard to the questions of software licensing. As many commentators have said over the past decade, treating 1201(a) as paracopyright entitlement essentially divorced from the logic of traditional copyright makes for both bad policy and bad copyright law.

Finally, I want to note that, for reasons that I explain in the book, I’m not unsympathetic to Blizzard’s efforts with regard to prohibiting botting software. I’m actually okay, in this particular instance, with Blizzard winning this particular case.

My main concern is about the collateral consequences of this sort of DMCA decision. Copyright owners seeking to use the DMCA in this way are not all going to be like Blizzard going after botting programs. Few plaintiffs will be enforcing game rules with the general support of the user base.

Instead I predict that future cases that cite to this ruling will involve cloud computing companies and social network providers facing off against disruptive innovators — and I’m pretty sure I’ll be significantly less sympathetic to those efforts.  Increasingly, the software we are running is going to be connected to remote servers and policed by programs like Warden that want to keep tabs on what we’re doing with our iPads and smartphones, etc.

If you think about it, the ruling in this case is essentially about technology replacing law.  Blizzard’s contractual prohibition on bots has no copyright teeth.  Its technological effort to prevent botting, however, obtains very pointy copyright teeth from 1201(a).  Seems to me like an incentive for future cloud computing titans to build more comprehensive Wardens — or even traitorware.

So there you have it. In sum, a mixed bag. (Lots of grays, a few greens, no purples.)

For more information about the conference see this link:  http://bit.ly/gamebehindgame

More details about the sorts of topics we’re looking to explore below the fold:

Topics of interest include but are not limited to:

Business and Economic
•             Labor, production, demand, and consumption of games
•             Economics and business models in the game industry
•             Virtual goods, money, property and/or services
•             Packaging/bundling of gaming into entertainment of all kinds (books, movies, games, theme parks, etc.)
•             New markets (disenfranchised communities, inexpensive games, etc.)
•             Marketing and market strategies
•             Gaming and the globalization processes
•             The economy within videogames/when “virtual” money becomes real
•             Bandwidth and video games
•             Videogame impacts on telecommunications infrastructure

Applications
•             Business applications of gaming platforms
•             New technology and non-traditional applications (e.g. defense)
•             Games as social platforms
•             Developing games in virtual worlds

Law and Policy
•             Legal aspects (e.g. Supreme Court case of California law)
•             Policy/regulatory environment/constraints of videogames
•             “Filters” and videogames; videogame regulation
•             Ethics and games
•             Political role of videogames

Society
•             The role of the press/media in gaming industry
•             Social, political and ethical issues related to digital games and gaming
•             Women and diversity in games/representations and stereotypes in games
•             Gamer culture and community trends
•             Impacts of videogames on society

Links:
Conference Website: http://comminfo.rutgers.edu/conferences/game-behind-the-game/
School of Communication and Information: http://comminfo.rutgers.edu
Institute for Information Policy: http://comm.psu.edu/about/centers/institute-for-information-policy/

My personal take is that the Cooks Source affair nicely illustrates my problem with the prior SSRN affair and with digital copyright generally.  The letter from the magazine editor is the exact sort of folk copyright that is fairly common among the public (though, thank goodness, a much rarer thing in commercial publishing!)

The Web isn’t public domain, but it is largely a free access sphere.  As I noted in the prior post, I’m very interested in how that fact plays out with regard to public expectations about copying and reposting.  As I said before, my sense is that the Attribution/Non-Commercial rule maps pretty well to popular copynorms.  In the Cooks Source affair, attribution was provided, so anti-plagiarism norms are not a problem.  The real outrage was about the commercialization of Web-posted authorship in an offline format.  So again, that maps to the SSRN affair, which elicited some pretty strong reactions in some quarters.

While I think my sense of Web norms is pretty accurate, I don’t have hard numbers & statistics to back it up.  Is anyone aware of any recent empirical work on web norms re copyright?  (E.g., something like this but significantly more rigorous.)  Since the public is increasingly in the role of author and editor, at play in the fields of copyright law, I think it’s essential that we have some good empirical understandings of how the public understands the law that they are expected to obey.