Cheating in video games – lessons from Blizzard’s successful case against cheat and bot developer

Published 23 August 2019 By: Oliver Fairhurst

Gaming Station

Blizzard, the video game developer and publisher behind hugely successful games such as World of Warcraft, Starcraft and Overwatch, has recently won its claim against a developer of cheat software. The case highlights some of the key issues in play in the world of video games, and what is involved in calculating the money owed to a game developer that makes a successful claim for copyright infringement.

Cheating in gaming and e-sports

Cheating affects all sports and can come in many forms. Whether doping in athletics or simulation in football, the effect is the same - cheating undermines the trust in the contest and devalues the sport. Just as cheating affects traditional sports, it can affect video games and e-sports as well. Particularly in the context of "massively multiplayer online games" (MMOs) such as World or Warcraft, or indeed any number of other multiplayer online games, cheating undermines the fairness of the competition and can ultimately reduce players’ desire to take part.

Cheating has long been a part of the video games industry, but it’s important to define exactly what we mean by the term “cheat”. Looking back as far as some of the video game titles in the 1980’s, gamers have been able to press various button combinations or input codes to gain access to new game modes, special advantages and other hidden content. However, those "cheats" were deliberately built into the game’s software by developers.

Technological cheating on the other hand refers to making some modification or deploying some technological tool or software to the game which gives an unfair advantage to a player. Cheating in this sense has become national news in relation to e-sports. As with other areas of technology, this ability to cheat has become democratised, with players now being widely able to download advanced cheat software and "bots" from the internet and deploy them to their advantage in MMOs.

Some software helps gamers accrue in-game virtual currency and thereafter sell it on secondary / black markets (invariably in contravention of the game developer’s terms and conditions). "Aimbots" and "triggerbots" can be used to help gamers automatically point and shoot at their targets in first person shooters. "Lag switches" can be used to disrupt other players’ data uploads to the server, causing them to experience slow or interrupted gameplay. Other hacking software allows users to skip early levels, bypass the need to pay for in-game purchases or otherwise view more of the game world than intended by the developer.

There is a clear desire from developers to prevent this type of cheating to ensure a level playing field for all gamers. And with the meteoric rise of e-sports to consider, preserving the trust in the competition is even more critical.

The Blizzard case

Blizzard is the creator and publisher of a number of well-known and successful multiplayer online games, including MMOs (such as World of Warcraft and Overwatch) played by millions of users worldwide. Blizzard brought legal proceedings1 against “Bossland” and its directors, accusing them of copyright infringement and inducing users to breach the terms and conditions that govern players’ use of the games. It is not the first time Blizzard has done so, having sued Bossland in the USA and Germany, and another bot developer in the USA.

Bossland sold two types of software around the world that could be used in relation to Blizzard’s games. Bossland produced “cheats” (which gave various advantages to players using the cheat software) and “bots” (which automated parts of playing the games, such as collecting resources that can then be used by the human user or allowing the user to skip certain tasks). Because of the unfairness involved in these cheats and bots, Blizzard creates counter-measures against them, resulting in an arms race reminiscent of the battle between bacteria and antibiotics.

The games’ terms and conditions2 gave a licence to users to use the software (which involves copying it) subject to compliance with its other provisions, including not using cheats and bots. Blizzard argued that by supplying its software, Bossland had authorised the users to breach the terms and conditions and therefore infringe Blizzard’s copyright. Similarly, Blizzard argued that Bossland had induced the games’ users to breach their contracts with Blizzard by not acting in accordance with the terms and conditions.

Bossland surrenders (partially)

It appears from the judgment that Bossland folded quickly. Bossland consented to a judgment being entered against it which recorded that Bossland had done all the things that Blizzard complained about. Why Bossland chose not to fight, and why no negotiated commercial settlement could be reached, is something that only Blizzard, Bossland and their respective lawyers will know. The potentially thorny legal issues that would have been involved in such a fight are discussed further below. At the time of writing, Bossland’s website bears a somewhat uncomfortable statement publicising the judgment and confirming that “Bossland and its directors are no longer permitted to advertise or offer for sale such software to UK residents.3

Determining the amount of compensation

As in the vast majority of intellectual property cases, the court determines whether or not the defendant is liable first, and only then does it go on to consider the amount for which it is liable. This is known as a “split trial” where liability is determined first, and the amount of compensation (or "quantum") is decided later. In the vast majority of IP cases that go to trial, the parties settle before the quantum part.

In this case, and despite Bossland’s apparent desire to avoid litigation, the parties were unable to settle the amount payable before the quantum trial. From experience, this is likely to be because the parties were arguing over the way to calculate that amount.

In intellectual property infringement cases, a successful claimant can choose between receiving damages or an account of profits. Damages are usually calculated by reference to what the parties would have hypothetically agreed had they sat down and negotiated a licence for the infringer to do whatever it is that the claimant objects to. It does not matter that the parties would not have agreed a licence - the court assumes a hypothetical willing licensor and licensee. An account of profits looks at what benefit the infringer gained from the infringement and requires that it/he/she pay that figure over to the claimant. Claimants typically elect whichever route (damages or an account of profits) will generate a bigger figure.

The biggest area of dispute in cases such as this is the extent to which the losing defendant (who is found to have infringed the claimant’s IP right) is able to deduct from its profit figure various overheads of the business.

The general rule is that a proportion of the infringer’s general overheads can be deducted from its gross profits (giving a lower figure that it will have to pay to the successful claimant) unless

  1. the overheads in question would have been incurred anyway, and

  2. the sale of the infringing products would not have been replaced by the sale of non-infringing products.

To take an example, imagine that a shopkeeper has 10 shelves in her shop selling flower pots, and she decides to devote one of those shelves to a new range of mugs featuring an infringing copyright design. The starting point is that she must pay any profit that she makes on the mugs to the owner of the copyright by way of compensation. The profit figure is calculated by taking the value of sales, and deducting the cost of the mugs themselves, as they are a direct cost. But can she also deduct a proportion (here, say 1/10) of the general overheads (the “indirect costs”) she incurs in running her business, e.g. the rent, staff, heating and lighting costs? The answer is yes, but only if she can prove that those costs would have been incurred anyway and that the sale of mugs would have been replaced by the sale of flower pots (or something else).

This is a fact specific question, but the governing principle is making sure that the infringer does not profit from its activity without giving an unjustified windfall to the claimant. This analysis can become very complicated. In one case4, the court went into the depreciation of machinery used to manufacture infringing products, and in another5 the court looked into the extent to which shelves were filled and ranges of products changed over seasons.

Bossland argued that it should be entitled to deduct various costs from the profit figure it would have to pay over to Blizzard. For example, it sought to deduct transactional fees from the sale of the software, server costs, worker costs, software costs, legal costs, costs of its management and affiliate fees. Blizzard accepted that Bossland could deduct the transactional fees, which were increased by sales of the software. The rest were contested.

Decision

Ultimately, the court refused to allow deductions for any of the other costs except the affiliate costs. Crucially, Bossland operated a global business and could not show that its infringing business would have been replaced by other business had it not been involved in the production of the cheats and bots that Blizzard complained of.

The only indirect cost the judge allowed to be deducted was in respect of affiliate costs. While there was little evidence as to the amounts paid to affiliates in respect of UK sales, the judge made clear that accounts of profits are never a precise mathematical exercise and that sometimes judges can use their discretion to make proportionate deductions.

Analysis

From Blizzard’s perspective, and arguably from the perspective of other publishers that might want to rely on the case against suppliers of cheats and bots, it is helpful that Bossland surrendered. However, from a spectator’s perspective, it is a shame that the case did not go to trial on the copyright infringement and breach of contract issues, which could have been interesting.

The question of whether someone can be liable for supplying a product that can be used for infringing copyright is not new. In the mid-1980s, various owners of music copyrights sued Amstrad over its production of hi-fi systems that enabled users to copy cassettes at high speed. Despite its product obviously being suited to copying tapes containing music, the UK’s highest court at the time, the House of Lords6, held that Amstrad was not liable for authorising the copying by its customers, nor was it liable jointly with its customers for infringements conducted by those customers. Amstrad had released its product onto the market, after which it was no more responsible for what its customers did with it, than someone who sold video-recording equipment was liable for film piracy.

However, there have been various other cases where the supply of tools that enable copyright infringement to take place has been found to infringe copyright. While most are not particularly analogous to the Bossland situation, numerous decisions7 have found the operators of file-sharing websites and suppliers of file-sharing software liable for what is essentially the acts of independent third parties. Bossland might have had a difficult time arguing that its software, the only use of which is to cheat in contravention of the games’ terms and conditions, does not amount to authorising or otherwise participating in the infringement of publishers’ copyright.

It will be interesting to see how similar legal principles could be applied in other contexts. For example, could a software developer that enables broadcast sports feeds to be streamed illegally be liable? Possibly in the right circumstances.

Comment

This case is a win for publishers. Many video games publishers have to wrestle with cheating and other forms of unauthorised activity on the online version of their games, and to see a cheat producer held to account will undoubtedly be welcome. Many will be able to rely on this case as an example against other cheat developers to discourage or prevent such cheating on their games.

As a wider point though, it is a victory against cheats. Just as athletics is lessened by doping, and cricket is undermined by match-fixing or rubbing the ball with sandpaper, video gaming is threatened and diminished by gamers gaining unfair advantages through cheating. As in life in general, people need to know that the rules are adhered to by everyone or they lose faith in the whole game.

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Author

Oliver Fairhurst

Oliver Fairhurst

Senior Associate, Lewis Silkin

Oliver advises on a wide range of clients across a broad spectrum of industry sectors with a particular focus on retail, advertising & marketing and media & entertainment.

Oliver has assisted clients in a number of reported cases, including before the High Court, Court of Appeal, Supreme Court and EU courts.

+44 (0)20 7074 3173

Examples of his work include:

  • Intellectual property: advising on the intersection between intellectual property rights and the businesses of brands. This includes trade marks (including comparative advertising and parallel importing), copyright, passing off and designs, licensing of IP rights, and the registration & management of IP rights. I act for both rights holders and those who claim that their rights have been infringed. Notable cases include Jack Wills v House of Fraser [2016] EWHC 626 (Ch).
  • Reputation management: acting for individuals and companies whose reputations are threatened or harmed, as well as for publishers. This includes before the Independent Press Complaints Organisation and in the High Court and Court of Appeal. I worked on the Lachaux v AOL libel action that was the first case to reach the Court of Appeal (and subsequently the Supreme Court) since the introduction of the Defamation Act 2013.
  • Competition: advising in relation to compliance with competition law, dealing with investigations by regulatory authorities, and private litigation. I have also completed the King’s College London Postgraduate Diplomat in EU Competition Law.
  • Regulatory investigations: advising in relation to investigations by the Serious Fraud Office, Competition & Markets Authority and various sector focused regulators such as the Advertising Standards Authority and Ofcom.
  • IP portfolio management: working with trade mark attorneys and other IP specialists to advise on the registration of trade marks and designs, portfolio management and enforcement of rights (and defence of such claims). I am regularly involved in proceedings before the UK Intellectual Property Office, EU Intellectual Property Office, Intellectual Property Enterprise Court, High Court and EU Courts.
  • Advertising: advising brands, advertising agencies, media owners and publishers on the contractual relationships between advertising agencies and their clients, risks involved with particular campaigns, disputes between brands (including in relation to comparative advertising), regulatory investigations and clearance, including compliance with the CAP and BCAP Codes, and intellectual property considerations involved in advertising.
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