I recently re-read the Eighth Circuit’s 2005 decision addressing online gaming, reverse engineering and interoperability (Davidson & Associates v. Jung, 422 F.3d 630 (8th Cir. 2005)). The case raises the usual questions regarding open- versus closed-system competition, but it adds a twist and it is that twist that I want to focus on. As usual, I will come out on the side of evil, or at least evil as most of the copyright world usually sees these things.
Blizzard produces a variety of war games, including StarCraft and WarCraft. In 1997, Blizzard created an online gaming environment, Battle.net. At Battle.net, you could test your WarCraft skills against other users. Today, this is a common move in the game industry taking what had been a freestanding product—a game DVD or CD—and turning it into a full-blown service and a multi-player environment.
A small group of programmers and game players decided that they would like to create an alternative online gaming environment, a competitor to Battle.net. We might characterize this group as entering the online gaming environment market. To enter, the group needed to reverse engineer the protocol language required to interact with the free-standing Blizzard CDs. That protocol operates as a technological barrier to entry, and, in reverse engineering it, the entrants did nothing more than what was required to make possible entry into the gaming-environment market.
Blizzard would undoubtedly see the case otherwise. This is a systems competition case, meaning that we have two or more components that work together. Here those components are the free-standing physical games and the Battle.net online environment. The stronger the ties between the physical games and the environment the more that Blizzard can choose a sensible mix of prices between the games and the environment. If there is simply free entry in the online environment market, Blizzard will have to charge a relatively high price for the freestanding games.
These are standard systems competition issues and I will not belabor them. The interesting wrinkle has to do with the relationship between the online environment and attempts to control illegal copying of the physical games. Imagine this copy-control system: each time you play the game, the game has to be authenticated over the Internet. That might not prevent physical sharing of a single copy of the game, but that isn’t necessarily what the game maker is concerned about. Instead, authentication online will prevent simultaneous use of multiple copies of the same game. That is precisely the sort of indiscriminate copying and sharing that the game maker would like to try to prevent and that online authentication would address.
Of course this presents a number of issues. Many games are played off-line; our Xbox at home for example is not on the Internet. Moreover, if we required the game to phone home with each use, this could raise privacy concerns, though we are seeing and will see much more of this. I just set up two new Dell laptops at my house and I am not sure exactly how many phoning-home technologies I turned on. At least one for Windows Update, another for McAfee for viruses and another for Dell itself. Maybe more.
What is the alternative to mandatory online authentication? Honey, honey in the form of Battle.net. Far better that your users want to go online. Turn a freestanding product into a service and use that ongoing relationship as a way to monitor copying of the physical media. This is exactly what Blizzard was doing, as the Eighth Circuit’s opinion makes clear.
Now we see the problem of the competing gaming environment. That environment made no effort to assess whether the games that were going online were legitimate or illegitimate. The emulator simply granted access regardless of whether the user going online could present a valid CD key. Indeed, one suspects the part of the attraction of creating an alternative online environment was precisely that it would make possible multi-player participation for those who do not have legitimate copies.
In this case, the link between the online and the offline—the online gaming environment and the physical CDs—operates as a way of policing impermissible offline copying of the CDs. A competitor in the online gaming market will have no incentive to respect the copyrights in the games, indeed, just the opposite, as it can offer the illegitimate copy holder a place to play.
We have choices. We can bar the reverse engineering and thereby prevent entry of a competitive online gaming environment for WarCraft (or, more precisely, entry without Blizzard’s permission). That was the result in the Eighth Circuit which upheld a contract that waived the right to reverse engineer. Alternatively, we can allow reverse engineering and lose the copy control check that Blizzard created. We might order a series of forced transactions by requiring Blizzard to unbundle copy authentication from the online environment and by forcing entrants to buy authentication services from Blizzard (at what price?).
What choice do you like?