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«Principal Editor Professor Brian Fitzgerald Head of School of Law, Queensland University of Technology, Australia With the assistance of Jessica ...»

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3. host or provide matchmaking services for any Blizzard software programs or emulate or redirect the communication protocols used by Blizzard as part of Battle.net, through protocol emulation, tunnelling, modifying, or adding components to the Program, use of a utility program, or any other technique now known or hereafter developed for any purpose, including, but not limited to, network play over the Internet, network play utilizing commercial or noncommercial gaming networks, or as part of content aggregation networks […]

4. use any third-party software to modify Battle.net to change game play, including, but not limited to cheats and/or hacks;

5. use Blizzard’s intellectual property rights contained in Battle.net to Davidson & Associates v Jung 422 F.3d 630 (8th Cir. 2005) 5 (at footnote 4).

create or provide any other means through which Blizzard entertainment software products […] may be played by others, including, not limited to, server emulators. 221

6. The defendants were frustrated by the poor performance of Blizzard’s Battle.net service, as well as cheating and otherwise offensive players. They subsequently began free development of bnetd, which would act as a replacement server for Battle.net which gave users more control over the games they played online. To create bnetd, the defendants had to reverse engineer the protocol spoken by Battle.net and the Blizzard games, and they also developed a small utility which was used to modify the Blizzard games so they could connect to other multiplayer servers. Notably, the defendants had no way of enforcing the cd-key validity check, and were forced to treat any cd-key presented as valid.

The district court granted summary judgment to Blizzard, holding that fairuse reverse engineering could be excluded by terms in shrink-wrap or click-wrap contracts, and that the reverse-engineering exceptions in the DMCA do not protect reverse-engineering in order to create fully functional alternative products, or where the program is distributed for free. 222 The Eight Circuit Court of Appeals affirmed the decision. Blizzard's EULA and ToS were enforceable contracts, and the defendants had waived any fair-use defence they may have had. 223 The ‘secret-handshake’ constituted an effective Technological Protection Measure (TPM), and bnetd circumvented that TPM by allowing all clients to connect. The ‘interoperability’ exception did not apply, on the basis that the bnetd emulator allowed unauthorised copies of the Blizzard games to be played on the bnetd.org servers. The court considered that this constituted infringement of copyright, and as such, the interoperability defence could not apply. The Court did not consider whether bnetd was a dual use technology which could have both infringing and non-infringing uses, or whether the playing of an infringing copy of a game on an internet server constituted copyright infringement at all.

Ibid 6 (at footnote 5); see Blizzard Entertainment, Battle.net Terms of Use (2006) http://www.battle.net/tou.shtml at 4 September 2006.

Davidson & Associates v Internet Gateway 334 F. Supp. 2D 1164 (E.D. Mo., 30 September 2004).

Davidson & Associates v Jung 422 F.3d 630 (8th Cir. 2005).

The Australian position In Australia, reverse engineering to make interoperable products is protected as an exception to copyright by Copyright Act s 47D. Section 47H provides that section 47D, which was inserted by the Copyright Amendment (Digital Agenda) Act 2000, can not be excluded by contract. In Australia, Blizzard could not require that its users refrain from reverse engineering.

Reverse engineering for interoperability is also an exception to circumvention of a technological protection measure, in s 116A(3), where a ‘qualified person’ is permitted to circumvent a TPM for a permitted purpose, which includes interoperability from s 47D. A qualified person in this case would mean the owner or licensee of the copy of the game.

Section 116A(4)(b) provides a similar exception for supplying a circumvention device.

There is nothing in the text of the anti-circumvention law that prevents the right to reverse engineer for interoperability from being excluded by contract. The exceptions to infringement in s 116A are not protected in the same way as s 47D protects ss 47B(3), 47C, 47D, 47E and 47F. This case shows that this gap in Australian anti-circumvention law can have real consequences for Australian developers. Reverse engineering for interoperability is an important exception to the exclusive rights of the copyright owner, in that it provides developers with a mechanism to make competing products, or to adapt a technology product to work in new environments.

These exceptions are important – they concern not the piracy of games, but the right of players to make use of their lawfully acquired games in the way they want. A player who purchases a game which doesn't work satisfactorily with another product, like an internet game server, should not be precluded from seeking to play the game on another interoperable server. The right to use a game is a fundamental right of a purchaser of a copy of that game, and if the game must be reverse engineered in order to enable its use, then that reverse engineering should be permissible.

Both the CLRC Copyright and Contract report and the Philips Fox Digital Agenda Review recommended that the Copyright Act be amended so that the permitted purpose exceptions in s 116A(3) cannot be excluded by contract. 224 If these recommendations are not followed, there is a significant risk that the ability to create interoperable software in Australia will be crippled, and producers of computer games will be able to require that purchasers of their games are tied to their other software products and services in order to make use of the games.

Marvel v NCSoft NCSoft and Cryptic Studios are the creators of a popular Massively Multiplayer Online Role Playing Game (MMORPG) in which players create superheroes and do battle with the forces of evil. Marvel are publishers of comic books, one of the two production houses credited with creating, or at least resurrecting, the superhero genre. 225 Marvel alleged that NCSoft had “created, marketed, distributed and provided a host environment for a game that brings the world of comic books alive”, not by the creation of new or original characters but, by directly contributory and vicariously infringing upon Marvel copyrights and trademarks”. 226 Marvel pointed to the character creation process in City of Heroes, which allows players to design their own superheroes, and, with some work, replicate to some extent the likeness of well known protagonists of Marvel’s comic books. Marvel alleged that the flexibility in the character creation system empowers users to infringe their valuable copyrights and trademarks.

The claim is alarming. For years, children have role-played with the Copyright Law Review Committee, Copyright and Contract (2002) [7.50] http://www.ag.gov.au/www/clrHome.nsf/AllDocs/RWP092E76FE8AF2501CCA256C 44001FFC28?OpenDocument at 4 September 2006; Philips Fox, Digital Agenda Review (2004) 113 http://www.ag.gov.au/DigitalAgendaReview/reportrecommendations at 4 September 2006.

See ’Marvel Comics’ on Wikipedia http://en.wikipedia.org/wiki/Marvel_Comics at 4 September 2006. The other similarly large production house is DC comics: see ‘DC Comics’ on Wikipedia http://en.wikipedia.org/wiki/DC_Comics at 4 September 2006.

Second Amended Complaint, Marvel Enterprises v NCSoft Corporation (25 January

2005) CV 04-9253-RGK (PLAx) available at http://www.eff.org/IP/Marvel_v_NCSoft/ at 4 September 2006. Most of Marvel's claims for direct and indirect trademark infringement were dismissed by the District Court, except for direct infringement of a common law trademark: see Marvel Enterprises Inc v NCSoft Corporation (Unreported, CV 04-9253-RGK (PLAx), Klausner J, 9 March 2005) available at http://www.eff.org/IP/Marvel_v_NCSoft/ at 4 September 2006.

characters that form their popular culture. Content producers have used advertising and merchandising so extensively that it is difficult for a child not to be immersed in a world populated by representations of these characters. These same companies encourage children to buy licensed merchandise in order to role-play with their favourite characters. For years children have played not only with that merchandise, but also with homecrafted representations – drawings, paintings, a handmade cape or costume, the possibilities are only limited by imagination. This sort of play is either a symptom of, or fuel for, the popularity of the characters depicted, and is encouraged by the production companies. However, once this role-playing moved into the digital environment, Marvel brought suit for copyright infringement.

It would be unthinkable for a production company to sue children for dressing up as their favourite comic book character and playing in the park.

A shift in context to a digital environment is little different conceptually. If Marvel were successful, the ability to role-play online would have been removed to a large extent. It is difficult to reconcile how Marvel can on the one hand bombard children with images and merchandise of their characters, in the hopes of encouraging them to play with those characters, and on the other hand, bring suit to restrict those same children from playing with those characters in an unlicensed setting.

The case was settled out of court in the United States in December 2005.

The terms of the settlement were not disclosed, but no changes to NCSoft’s City of Heroes character generation process are to be made. Whilst this may be a win for NCSoft in this case, the fact remains that a similar case brought under Australian law may be significantly more difficult to defend.

Primary liability in Australia Superhero comics, and potentially the superheroes themselves, are original artistic works for the purposes of Part III of the Copyright Act. Liability for primary copyright infringement will occur when a player of a game can be shown to reproduce the characters, or the characters as a substantial part of the comics, in a material form, or to communicate a substantial part of the characters or comics to the public. 227 ‘Material form’ includes “any form (whether visible or not) of storage of the work or adaptation, or a substantial part of the work or adaptation, (whether or not the work or adaptation, or a substantial part of the work or adaptation, can be Copyright Act 1968 (Cth) ss 36, 31(1).

reproduced)”. 228 This broad definition will cover the creation of a character in a game, as will the definition of 'communicate to the public' in a multiplayer game (to “make available online or electronically transmit”). 229 In determining whether the characters have been reproduced, the Court will look for objective similarity between the in-game character and the original superhero, and the establishment of a causal link between the original work and the in-game character. 230 Where the two characters are objectively similar, a causal connection may be inferred by the popularity and level of exposure of the original, even if the person is copying subconsciously. 231 Where only some features of the character have been reproduced, the plaintiff will need to show that those features are substantial. The question of substantiality with respect to Part III works is determined primarily by reference to the original features that have been reproduced. Determining whether a substantial part has been reproduced will again be determined by the qualitative value of the part taken, but the emphasis is on the originality of the reproduced portions. Reproduction of a large quantity of unoriginal features is unlikely to constitute reproduction of a substantial part, 232 but reproduction of a small portion of original material which resulted from a high degree of skill and labour is likely to be substantial. 233 Given the recent restrictive approach taken by the Federal Court in relation to substantiality in Part IV subject-matter, 234 the features of a superhero are likely to constitute an important part, or a highlight, of the artistic or literary work of a comic book. Unless the court takes into account the type of use made of the player character, it is likely that they will be seen to infringe copyright in the original superheroes. Australian players will not be able to rely on a fair dealing exception to infringement. 235 The logical conclusion is that the players will be liable to the original owner. However, owners of copyright are understandably reluctant to sue their fans for Copyright Act 1968 (Cth) s 10.

Copyright Act 1968 (Cth) s 10.

Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 All ER 465; SW Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466.

Francis Day & Hunter v Bron [1963] Ch 587.

Data Access Corp v Powerflex Services (1999) 202 CLR 1.

Blackie & Sons Ltd v Lothian Book Publishing Co Pty Ltd (1921) 29 CLR 396;

Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 All ER 465; Fasold v Robers (1997) 70 FCR 489.

See TCN Channel Nine Pty Ltd v Network Ten Pty Ltd (No 2) (2005) 145 FCR 35.

Reproduction for entertainment will not fit within exceptions for news reporting, research or study, or criticism or review.

copyright infringement. It is much less embarrassing and more convenient to achieve the same result by suing the producers of the game for secondary liability.

Secondary liability in Australia Secondary liability for copyright infringement in Australia arises when a person ‘authorises’ the doing of any act comprised in the copyright. 236 Section 36(1A) tells us that, when determining whether a person has ‘authorised’ the doing of any such act, the matters that must be taken into

account include:

1. the extent (if any) of the person’s power to prevent the doing of the act concerned;

2. the nature of any relationship existing between the person and the person who did the act concerned;

3. whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.

The meaning of ‘authorisation’ was recently considered in the Federal Court by Wilcox J in Universal v Sharman. 237 This case dealt with authorisation of infringement in sound recordings, but the relevant provisions in the Copyright Act for Part III works are worded identically.

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