The U.S. Court of Appeals for the Eighth Circuit held that reverse engineering copyrighted software to allow multi-user gaming on an unauthorized server using unauthorized copies of games violated the Digital Millennium Copyright Act (DMCA). Davidson & Associates, et al. v. Tim Jung, Case No. 04-3654 (8th Cir. Sept. 1, 2005) (Smith, J.). The Court also held that the plaintiffs’ state law breach-of-contract claims were not preempted because those claims neither conflict with the "interoperability exception" to the DMCA nor otherwise restrict rights given under federal law.
Davidson & Associates d/b/a Blizzard Entertainment and Vivendi Universal Games, Inc. (Blizzard) own copyrighted computer games that users can play against one another online through a free web site service called Battle.net, available only to purchasers of the copyrighted games. The games and website have security mechanisms to prevent the use of unauthorized copies. Ignoring an end-user license agreement (EULA) and terms of use (TOU) that forbid reverse engineering, the appellants circumvented Blizzard’s security mechanisms and set up a competing web site that defendants asserted offered improved performance of the games but worked with both authorized and unauthorized versions of Blizzard’s games.
Blizzard sued and the district court granted summary judgment in its favor. On appeal, the appellants argued their conduct was permissible under the "interoperability exception" to the DMCA (which allows reverse engineering under certain circumstances) and that any attempt to enforce the no-reverse-engineering clause of the EULA under state contract laws would be preempted.
On the DMCA claim, the Eighth Circuit sided with Blizzard, holding the appellants’ activities did not come within the "interoperability exemption" because their circumvention in this case constituted infringement.
The Court also held there was no preemption because the appellants "freely negotiated" a contract restricting their right to reverse engineer, and the Copyright Act allows a party to contract that right away. The EULA and TOU are not visible on Blizzard’s packaging; they appear only during the installation process. A user can access a game only by accepting the "I Agree" pop-up that appears after the TOU is displayed, and the TOU includes a statement providing users with an opportunity to return the software to Blizzard for a full refund of the purchase price within thirty days. On these facts, the Court concluded the EULA and TOU were "freely negotiated" and properly enforceable contracts, obliging the end user, among other things, not to reverse engineer the product.
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