The Law Developer

     In the past couple of weeks, three important decisions regarding copyright infringement have been made by various courts. LimeWire, ISOHunt, and RapidShare all involve companies that allow users to share and download files. While there are technical differences as to how each of them work, from a high level, these applications all perform pretty much the same functions. Yet one of these companies, RapidShare, made out okay while the other two will most likely be shut down. So what’s the difference?

     Let’s start with some history. The Grokster case sets the stage for all three of these cases. Grokster provided software that allowed users to share files via a peer-to-peer file sharing network. Normally a company whose products could be used for copyright infringement but have a valid, non-infringing use would not be liable for the infringement of its users. However, in this case the court found that Grokster induced its users into infringing and was thus held liable. This wasn’t too far of a reach for the court, considering that Grokster marketed its application as a way to download copyright infringing content. Ever since, companies have been very careful as to how they market their applications.

     This brings us to LimeWire and ISOHunt. In the former case, the court held (among other things) that LimeWire’s purchase of search terms induced users into downloading copyright infringing material. LimeWire purchased search keywords for the terms “napster”, “kazaa”, and “morpheus”, all popular applications for downloading copyrighted material. The court found that by associating itself with these keywords, LimeWire induced its users into downloading copyrighted material. ISOHunt is in the same boat. The court found that “evidence of Defendants’ intent to induce infringement is overwhelming and beyond reasonable dispute.” These two cases show that courts don’t take kindly to file sharing sites, but then how did RapidShare get so lucky?

     First of all, the RapidShare case is still in the preliminary injunction phase, so the case is far from over. But RapidShare does something different than the others. When RapidShare finds infringing material , instead of just deleting the offending material, it attempts to provide a link that allows users to purchase the material legally. At a time when courts are slapping down file sharing sites, this little action seems to have made a big difference. It shows that RapidShare actively seeks out and removes infringing content.

     RapidShare’s future is still anything but certain, but at least it is starting off on the right foot. Unfortunately for LimeWire and ISOHunt, their fates are pretty much sealed. But maybe the big difference in outcomes just depends on the plaintiff. In RapidShare, the plaintiff is an adult entertainment company as opposed to mainstream movie companies as in the other two cases. Perhaps the courts are alright with being prevented from getting the latest ‘Sex and the City’ movie, but take away their favorite means of downloading porn and well…

Stephen Burch

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UbiSoft®, a game development company, announced some time ago that their new games were going to require an always-on connection to the Internet so they can be authenticated to prevent piracy.

I am not a big fan of DRM. The only people hurt by DRM are legitimate customers. Hackers and pirates just bust the DRM and steal it anyway. In the case of UbiSoft®, it took a whole day. Meanwhile, all of the legitimate users are treated like criminals and forced to jump through hoops. They can’t play their game unless they have a constant Internet connection. And to top it all off, legitimate users are at the mercy of UbiSoft®’s ability (or inability) to keep its authentication servers running.

Besides being a rant against DRM, what does this have to do with the law? Well, I have to ask whether or not there is any claim for affected users. First off, let me state that I don’t use these games and am unsure how they are purchased so this all conjecture and hypothetical. UbiSoft® most likely has an EULA which disclaims any liability. I would imagine that the people who download the game are presented with a click-wrap version of this agreement before purchase. These agreements have generally been upheld in court. So, assuming UbiSoft®’s agreement properly disclaimed any sort of liability, these guys are probably out of luck.

But what about the people who buy the game at a store? These people would likely expect some sort of DRM measures, but requiring that a game constantly maintains contact with an authentication server is probably more than they expect. And while they probably click and accept the same licensing agreement as the online purchasers, these users do so after going to the store, purchasing the game, opening it up (which makes it ineligible to return to most stores), and installing the software. While both are adhesion contracts (which are not illegal btw), the ability of the in-store purchaser to decline is much harder than for the online purchaser. If a lawyer could convince a judge that the liability disclaimer or the whole license is unconscionable under these circumstances, then a major legal hurdle has been cleared. Courts have held that these shrink-wrap type licenses are valid if there is consent.  However, if the provisions in the license so overwhelmingly favor UbiSoft®,  and the buyer was already so invested when the terms were presented, then this argument might have a chance in the right circuit.

So if the users can get around the EULA terms that disclaim liability, what claim could they bring? I would bring a claim for trespass to chattels. In this case, UbiSoft® is interfering with the gamers’ use of their personal property. This claim has been used by internet companies to prevent unauthorized access (i.e. eBay v BiddersEdge) and I believe it would be successful here.

Damages will present a problem. What, if any, are the measurable damages? While I don’t know the expected play time, many of these games have online components and are meant to be played indefinitely. So what percentage of the game was lost by having the authentication servers down for a few hours? Probably not much. And what about a class-action suit? Again I don’t know if UbiSoft® even sells its games in stores, let alone what percentage, so a lawyer looking to take this case would be taking on a lot of risk for what would most likely be a very little reward.

If damages aren’t the solution (or an adequate enough solution), maybe an injunction is. The users could get a ruling requiring UbiSoft® to cease and desist trespassing on the users’ property, preferably by patching the game so that the need to check the authentication servers doesn’t happen at all, or at least only upon install of the application.

So are we left with only recourse in court? No. I think this is where the market can work. Game development is incredibly expensive. And if users refuse to buy games with crippling DRM, then developers will take it out. Unfortunately, these games are highly anticipated and most gamers will put up with the problems of DRM to have it (or pirate it). DRM started out simple enough- as an authentication key. Then it moved to forcing the user to keep the CD in the tray. Now it requires constant authentication with servers. At some point, the benefit of having the newest game will not outweigh the detriment of dealing with DRM. Then the developers will be forced to make a choice. Until that happens, we get what we pay for. The conscience of many will waiver when weighing whether to spend $50-$80 on a crippled game or pirate a non-crippled version for free. I don’t own a software company, so I can’t speak from experience, but I would think that is a bad position to put your customers in.

Stephen Burch

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