What many people may not know is how quickly these small scams add up and how often they lead to more complex cons.  Below is a 30-minute interview with a former “professional” scammer.  He discusses the techniques he used to rip off EVE Online and World of Warcraft players and how fraudulent account sales eventually turned into more elaborate scams, including identity theft and old-fashioned grifting.

Patrick, the scammer being interviewed, claimed that he easily made between $10,000-20,000 in his first year of scamming, but he worked with other individuals pulling in over $100,000 a year.  I highly recommend giving the interview a listen (you can play it in the background, as I can’t think of a good reason to actually watch an interview over the telephone)  in order to understand the types of scams occurring online.  While we tend to focus on IP and licensing issues on Laws of Play, Patrick’s interview highlights the increasing importance of criminal law to the average gamer.

In a case that has been described as “pitting distasteful gaming behavior against an unsavory over-assertion of copyrights,” Blizzard Entertainment and Vivendi SA seek damages against software company MDY Industries for alleged tortious interference with contract and secondary copyright infringement. Blizzard claims that MDY’s program “Glider,” which is used by players to automatically level up their character as they go about their daily lives, not only illegally interferes with Blizzard’s End User License Agreement (“EULA”) and encouraging users to breach said agreement, but also makes MDY secondarily liable for copyright infringement.

While companies and individuals can be held secondarily liable for copyright infringement in a number of ways (contributory infringement, induced infringement, and vicarious liability), this liability is always contingent upon plaintiff proving that some sort of direct infringement occurred in the first place. Here, Blizzard claims that the portions of World of Warcraft (“WoW”) that are copied into RAM whenever a user plays the game are infringements. However, Blizzard “excuses” these infringements through the terms of the EULA. Therefore, whenever a user violates the EULA by running Glider, Blizzard claims that the copy of WoW loaded into RAM is no longer “excused” and becomes a direct infringement, which would entitle Blizzard to statutory damages.

So, what’s the big deal?

Well, the big deal seems to be the fact that Section 117 of the Copyright Act allows purchasers of software to make copies of that software when it is essential to use. Without Section 117 it would theoretically be infringement to install a copy of a program on your hard drive or load the program into RAM in order to run it.

However, Blizzard contends that Section 117 doesn’t apply because a purchaser of WoW does not “own” the copy of the game. Instead, Blizzard claims that users simply license the software, as provided in the EULA.

There are two major problems with this argument. First, courts look to the actual substance of transactions to determine whether they are sales or true leases. This has been an issue for years as companies often receive tax benefits for leasing equipment and would prefer to disguise a credit sale as a lease. Second, if Blizzard’s argument was accepted, this would allow nearly all media producers to maintain control over their products indefinitely. For instance, if any media producer could add a line to an EULA that magically turns a sale into a lease, these companies would effectively extinguish the used media market.

For more on MDY v. Blizzard, check out Public Knowledge‘s amicus brief, the Electronic Frontier Foundation, and Patent Arcade.

If there exists a segment of the population more vocal and protective of their hobby than gamers, I would love to meet them. No longer content with complaining on forums and signing meaningless Internet petitions, Antonio Hernandez, a former Orlando-area video game store assistant manager, has taken his grievances to court.

Hernandez, an avid World of Warcraft player, has filed suit against Internet Gaming Entertainment, Ltd. (“IGE”) in Fort Lauderdale, FL.  Hernandez claims that IGE’s practice of gold farming diminishes the enjoyment and satisfaction of consumers and violates the World of Warcraft Terms of Service.  Hernandez ultimately argues that gold farmers damage the game’s economy by forcing legitimate players to spend more time earning the virtual currency that is necessary to improve their in-game personas.   Hernandez’s suit claims that “[t]his loss of time, conservatively, amounts to hundreds of thousands of hours of subscriber time and causes the irreparable harm of driving subscribers away from ‘World of Warcraft’ . . . .  The economic harm incurred by this loss of time is in the millions of dollars.”

In response, IGE claims that:

Hernandez and other players have no standing to sue because they have no ownership or property rights within “World of Warcraft.” Hernandez’s lawsuit fails to show how he suffered actual damages[.]

Interestingly, if IGE is correct and World of Warcraft players have no ownership or property rights within World of Warcraft, one must wonder how IGE is able to sell in-game assets for real-world currency in the first place.

What makes this case interesting is that it’s the first time a player has filed a lawsuit in response to “real money trading” in a virtual world.  Hernandz also hopes to make this the first class-action lawsuit involving online role-playing games.

When asked about the litigation, Paul Sams, Blizzard Entertainment’s Chief Operating Officer, commented:

We believe that shutting down gold farming and real-money transfer is in the interest of all ‘World of Warcraft’ players and that a victory in this case would have a positive long-term effect on the online gaming industry as a whole.

For more about this pending litigation:

Sarasota HeraldTribune
Justia