Tobold's Blog
Tuesday, August 17, 2010
Assessing the damage from pirates

It is certainly true that in many cases the exact amount of damage done by video game piracy is difficult or even impossible to determine. Fortunately in the case of Blizzard winning the lawsuit against Scape Gaming, who ran a "private" pirate server for WoW, we do have some extremely solid facts that help to assess the damage. Because Scape Gaming wasn't letting play WoW for free, but ran their WoW servers on a Free2Play business model, taking money from players for everything from $1 for 2 levels to $300 for a set of epics. And they got that money via PayPal. So all Blizzard had to do was get an injunction persuading PayPal to tell them how much money Scape Gaming received. The result was an astonishing $3,052,339 in gross revenues. There were 427,000 users in the Scape Gaming community, which made Scott Jenning remark that it is kind of humbling if World of Warcraft thieves get more users than most MMORPGs.

Now some people on this blog made comments comparing video game piracy to a starving man stealing bread to feed his family, or similar arguments on the line of "poor people can't afford those video games, so they have to steal them". But even if we would accept those arguments, I don't see how they could possibly apply in this case. This isn't some poor kids downloading a game from Bittorrent. This is a criminal organization which stole intellectual property from Blizzard and then sold it for $3 million. How can any defender of piracy possibly justify that?

With Captain Kirk and Mr. T making TV spots for World of Warcraft it is extremely unlikely that Scape Gaming and their users made any noticeable positive "word of mouth" contribution to the success of World of Warcraft. And while again we could argue endlessly how much money would have made from the 427,000 players if those had played on official servers instead of pirate servers, *at the very least* we can say that the $3 million Scape Gaming made from running WoW belong rightfully to Blizzard. It is very hard to argue that the people playing on Scape Gaming servers were too poor to afford the real game, when obviously they had up to $300 to spend on virtual WoW items.

So I am quite happy that Scape Gaming got shut down, has to pay Blizzard the $3 million plus another $85 million in statutory damages, which should guarantee that they stay out of business and discourage other pirate server owners as well. As to the 427,000 players of Scape Gaming, I'd say they are sufficiently punished by losing their characters including all the virtual items they bought for them. Maybe they should try the real WoW: You can't buy levels and epics there, but at least the servers aren't likely to shut down anytime soon.
There were actually people paying to play on servers that are ten times more buggy than the real ones? Wow! I'm sorry to say this but that's stupid.
How did they get WoW's server code in the first place? or did they just reverse-engineer it? If the latter I think the only issue here would be the use of WoW's name and art assets which, while still a big deal, is not quite the same as piracy.
Even if they reverse engineered the server, they're still using the client code and all the music/3d models/world data. It's copyright infringement just the same.
If you are only making a digital copy of something, I'd argue that you aren't technically stealing.

As soon as you use the digital content, whether it be for your own enjoyment, or to sell, then it would be the theft of content.

i.e. if I pirate a copy of a movie, save it to my harddrive, and never use it, what benefit did I derive from it? Almost none.

If, on the other hand, I watch the movie, or, I make copies of the movie and then sell it, I think it is clear that I have benefited from the "intellectual property" of others and have "stolen" property.

There is a huge difference between pirating a game to use as a trial before buying that game, and pirating a game and then selling copies of it. Again, there is a gray area in my mind. I don't think you can assume that any one "pirate" has caused financial harm automatically, just from downloading a copy of something. What they do with it matters.
Quote: "*at the very least* we can say that the $3 million Scape Gaming made from running WoW belong rightfully to Blizzard"

No, Tobold, they don't. Scape Gaming took a Blizzard manufactured product (at least partially - as assets are original, but servers are reverse-engineerd - i.e. an emulation) and managed to sell it to people whom Blizzards themselves couldn't monetize.

Let me say it again simple - SG made $3 mil. with Bliz product, but their own customers. Bliz does not deserve at any rate those $3 mil. because they did not manage to sell their product to the people who paid said money. This is not theft - it is competition of distributors. (and the only thing that muddies the waters is that one distributor is also a creator/manufacturer)
What exactly would Scape Gaming have had to sell if their customers hadn't got game clients from Blizzard, and Scape hadn't used Blizzard's property as basis for their reverse engineering?

And if they were just a distributor, they would still owe Blizzard money, as distributors have to pay producers for the goods they want to distribute.
Hey Tobold, why do you think those customers chose to pay this alternative company rather than Blizzard?

Since they paid more than what would have cost them to play the original WoW and I think it is fair to assume that all of them knew that there was a "real" WoW as well.

Isn't this a case of a company tapping into a different need one that has nothing to do with the original product.

Make no mistake I don't support piracy and I do think they had every right to shut this company down. I am simply poiting out that your conclusions are wrong that 3 million was earned because they weren't blizzard!
If I want to sell my used car, and have trouble finding a buyer, and you steal my used car and being a better salesman manage to sell it, I don't think you get to keep the money, just because you "tapped into a different need" than I did.

There are good reasons why Blizzard isn't selling levels and epics: It would destroy WoW in the long run. A pirate server which doesn't care about that can sell those things, but the levels and epics have still been created originally by Blizzard, and being able to sell them doesn't make Scape Gaming anything else but thieves.
427,000 players paying $15 would net $6.4 million in one month. Scape Gaming only got $3 million total from them.

Care to comment on what this says about the viability of microtransactions as a business model?
I don't know, I just don't know. These are difficult issues and you seem to think it is cut and dried. It's really not.

First of all, when you "violate a license" it is not a Federal offense. Shrinkwrap (or "clickwrap") licenses have been mostly upheld in court but not in every case. The WoW client is available for a free download or at the very least you can buy a "functional demo" for a few bucks next to a cash register anywhere. So that is the basis for people having the client, fully legal.

Reverse-engineering anything is still legal in the U.S. and even the supreme court has stated that it is a "time-honored means" in the process of creating something better. Our crappy DMCA law (which deals more with liability) has slowly been toned down every year by the Copyright Office, the latest change being an allowance for "jailbreaking" cell phones. It has been the hammer used against too many people and companies in an effort to prevent competition, and you can bet Blizz would and probably has used it without blinking an eye.

Had they remained a free company I doubt there would be any action but when they started making money it caused everyone to go crazy and litigate, the great American Way.

They did not steal anything from Blizz. Those were not Blizz customers and likely would not have been nor will ever be. That is a non-starter and the same crap that RIAA/MPAA tries to use to bolster their legal position against piracy of music/movies.

You cannot logically conclude there was a loss of income. You *can* conclude there was a loss of POTENTIAL income, which is a totally different thing, and purely subjective. Subjectivity has no place in any court of law, as evidenced by the fact that Lady Justice is wearing a blindfold.

Thus back to my original thoughts that this is very muddy and nowhere near as conclusive as you seem to have made it out to be.
Having a pirate company sell a facsimile of your product also potentially damages the brand. Value lost can be extreme, but of course difficult or impossible to calculate.

I'm blown away that anyone defends this. A new philosophy of "if I'm smarter than you I can steal from you?"
@MuShu: if you download music for free, you don't consider it theft right? Because "no one was hurt" and you "wouldn't have bought it anyways?"

If you download music, burn it to cds, and sell albums for less than the price they would pay in a store or even on iTunes, then you are making FREE money (your investment was merely time and cost of blank cds, and not the content in those cds), do you consider THAT theft or pirating? Do you have any moral dilemma there?

@Firefox: Since Scape Gaming didn't make a deal with Blizzard, then they are NOT a distributor of WoW. Therefore, they don't own the money they made from stolen intellectual property. Emulator or not.
I continue to weep for humanity...
A lot of people seem to be ignoring the fact that:

There IS a difference between a digital COPY of an mp3/video game/etc and stealing a physical copy from say, a store.

A digital copy takes 0 dollars to produce individually, while the materials for a physical copy give it inherent value.

And if said person copying/downloading would have *never bought the product*, then the artist/developer/etc is losing ZERO dollars.

In fact, as the music industry has seen (and many comments note), this "illegal piracy downloading"* actually can have a positive effect on sales/revenue. If said "pirate" would have never downloaded an artist's songs and became a fan, then when they grew older and had more income they would have never started BUYING cds/songs/concert tickets.

I believe some poster actually said this exact thing, but AGAINST "piracy". He couldn't afford any music in college so he downloaded tons, and now he has repented and only pays on iTunes. Who wants to bet he is buying stuff from some groups he listened to in college?

*To me calling this piracy is like how in the 50s there was basically propaganda (e.g. Reefer MADNESS!!!) about how a puff of marijuana makes teens go CRAZY, having orgies, running naked, satanic rituals, murdering, etc.

It's like how certain media will make GTA out to be the cause of teen violence. ETC.
JDangerous, you seem to be in complete ignorance about what this thread is about. How about reading the original post?

We are NOT talking about the rights of a poor student to download a pirated song. We are talking about organized criminals selling something which is mostly a copy of WoW, plus some reengineered modifications, for $3 millions.

I'd say there is a big difference between ZERO dollars and 3 million dollars. It is sad that you can't see that difference.
Part of the problem with IP come with selling it. If I buy a thing like a car, then I have the right to decide how, when and where to use it. The state regulates its use but only in the interest of public safety which is not the issue here. If I want to use my car on Texas roads I do and if I choose to move to Colorado then I can use my car there. And finally I can decide when or if I will sell it to someone else.

In the case of software, they are selling us something but we are not free to resell it nor use it as we will. We can only use it as they dictate. So what was I sold really? A license to use it I suppose but that is still not resellable. So the problem is, if I bought WoW in a package, why should I not get to choose which servers I connect it to and if I choose somone other than Blizzard is that not much choice and wouldn't the competition encourage Blizzard to lower their prices or do a better job? What was stolen from Blizzard? They sold me the game. They got my $49 or $69 so they are being compensated for the item. I am not using their servers without there knowledge so it is not like digital trespassing.

The only question is if there is anything real to the idea that I should be restricted in how I use that which I bought. Some say yes, blizz owns the art, blizz laid it out in the EULA. Some say no, I am not copying blizz's art I am simply using the client that they sold me. As for EULA's not every contract agreed to is legal. Even if you wanted to you cannot sell yourself into slavery and have it legally enforced in most countries.

So it really boils down to what really is IP and how should it be handled. For as much as big companies and govts would like us to believe that it is a done deal, it really isn't. There is much that will need to be worked though in the coming decades. Not only because the laws are not entirely clear, but also because laws can change and even if they don't laws are not the same as morality and ethics.
@Pangoria: the fallacy in this discussion is having any sort of emotional feelings about the subject. Morality is purely an emotional and thus subjective thing. Everyone has a different definition of morality, and it ultimately ends up being what the majority of people in a geographic area decide. If you would lose the emotional "touchy-feely" component from your arguments perhaps you can see that this boils down to a factual basis for the rational description of "intellectual property ownership and distribution rights" which is completely different than "piracy is stealing therefore bad".

@JDangerous: correct re:physical vs digital. Back in the old days, before computers, the term "stealing" was easy to qualify since it was the act of physically removing a "thing" and depriving the owner of the use of that "thing". In today's world, a digital copy is perfect, an exact replica, and thus it does not deprive the original owner of anything when a copy is made.

You can have endless debates of the morality but that is all a red herring. When you bring in emotion, you are going down a different path than the original topic and attempting to cloudy the waters in an indefensible conclusion.

A co-worker just stated this: "at the end of the day if you download something that was created by another and you did not pay for it then you have stolen it."

While that simple statement may have a certain basis of correctness, it still dances around the real issue that no financial harm was done to the original creator, thus no monetary basis for legal remuneration should be provided.

The company running the illegal WoW server should have been found guilty of the tortuous conduct ("tort", a legal term, Google it) of breach of contract and unlawful distribution of intellectual property, with associated punative fines, but they should not have been found to have "stolen" any income from Blizz because they didn't.
One point--- Scape gaming made 3 million. They didn't necessarily COST Blizzard three million.

Since 3 million is half of one month of subscription fees 475000 people would generate for Blizzard, the actual damages are probably much higher(but maybe lower) but difficult to calculate (how many Scape subs would have gotten WoW subs). So I don't have a problem with them shutting Scape down. This is exactly the kind of thing that IP was made for.

So Scape was taking some money from Blizzard. Who knows the real amount though.
I like how Tobold sits there and calls them a criminal organization when its just some middle-aged chick.

I think the extra 85 million that Blizzard were awarded is just fucking retarded.
@MuShu: Umm, was I emotional?

Morality = the morality of all those around you, is what you said. Aside from that being a tautology akin to those used by all sorts of Fundamentalists, it fails to answer the question.

Morality = the distinction between right and wrong.

So here is my question again, without purchasing the rights to do so, is it right or wrong to make exact duplicates of art (music, video, game whatever), and sell it?

I have my own opinion, but I'm wondering what exactly is your answer to this.
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@Pangoria: I fail to see how this discussion has anything to do with the original article. To answer your *latest* question, I feel that this contrived example is morally ambiguous at best, however I wouldn't do it simply from the fact that I would not enjoy the potential ramifications of the deed. To your *original* question however, my answer is "no, downloading music for free is not theft." In that simplistic case I would cite "fair-use" claims and other issues.

Morality: "conformity to the rules of right conduct; moral or virtuous conduct."

Note that even the definition of morality cannot escape from a religious or emotion-driven context. Who defines "right"? But I (we) digress...when Tobold brings up right/wrong decisions (the "how can anyone justify that" statement) the entire discussion degrades into an emotion-driven mess.

And this company didn't "make exact duplicates of art and sell it" but I assume that was merely an example you put up in an attempt to see my level of emotion related to this topic.


Notice how you see the word "illegal" next to the word "download" always used by the RIAA/MPAA. However, we all know that there is NO law that says "downloading a music or movie file is illegal". If there is no law that states it, then it is not illegal. Period. No emotion, no morality issue, simple pure black and white logic. They are simply trying to get the public on their side by endlessly parroting the same crap and the sheeple of this country seem to buy it hook, line, and sinker, as evidenced by recent RIAA lawsuit jury comments. Just.Sad.

The damage award in this case is utterly ridiculous and should be challenged on the basis that the punishment far exceeds the crime.

This is akin to the RIAA claiming that it loses billions from music downloads, yet everyone knows that the actual value of each song is only one dollar, based on the most common purchase price for a song file. The punishment must be proportional to the crime. This is why that crazy RIAA jury award got reduced on appeal, and I hope this company appeals this craziness as well.

In fact, I would argue that Blizz lost zero, unless you can somehow quantify the value of "using artwork without permission." I just hate to see morality legislated through the court system ala "let's make an example of them."
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Werent you for F2P model? There is obviously market for it which blizzard themselves does not provide

disclaimer: I played more on wow private servers than I did on official ones.Better rulesets and customization were the attraction for me .

Now of course there is this aspect that they do rely on wow assets on client side. But in this case its the clients which do the criminal act, not the servers. AS the server software is open source and has no code from blizzard.

p.s. seems in this case it was more complicated as they were hosting wow client as week

There are claims using text from blizzard for quests is copyright violation as well - now what if they used custom texts?
AS some have said, they may have indeed been tapping into a market that WoW would not reach and therefore not actually costing Blizzard any money. But that's an imperfect defense. First off, there's no proof that every single customer would not have paid for WoW if the f2p private server wasn't there; in other words Blizzard probably was losing a non-trivial number of subscribers. Second, even without calling it theft of revenue, it is IP theft, and attempting to claim that its okay to steal ideas but not revenue is just asking for excessively complicated investigations and would possibly be impossible to prove one way or another in a court.
I'll give you this round Tobold, for that one specific scenario is actually a case of "true" piracy, where someone is making money off of copyright with no permission.

This is no different than making a video game, unapologetically using Mario characters to be sold commercially without receiving permission for the use of those characters. The amount of money made from such a product is inconsequential when it comes to the enforcement of copyright law.

However, suing an individual for $85 million dollars more than the revenue they made is an outright filthy use of our corrupt legal system. In what universe can they expect to be paid these moneys? The rest that person's entire life is ruined because a company was out for witch-hunting and greed. Can you justify that?

In response to VikingGamer's quote: "In the case of software, they are selling us something but we are not free to resell it nor use it as we will."

I assume you are speaking specifically of WoW. The only reason it's "not for resale" is that by selling the game box after using the registration code, you are effectively scamming someone out of what someone would be buying the box to get. And even that is just a suggestion, which mostly reads "buyer beware". You are most certainly free to resell anything that you buy, because when you sell the game/shirt/tv/etc, you are selling the license with it. Not so if you make a copy for the express purpose of sale. You are also expressly allowed to make backup copies for personal use of (afaik) any software product. This is a service for those people who want their original discs to be unharmed for whatever reason.
I'll add to what I mentioned about making a game with Mario characters this: In the same vein that making a commercial game with them is a cardinal sin, making a non-commercial game (especially for personal use only) with them is not going to garner you any attention from Nintendo. Look around the internet and you can find sites offering hundreds to thousands of character sprites/models that people have ripped from games and these sites never get shut down or see any press.

Is that not also piracy? Why then doesn't Nintendo do anything about it? Why don't machinima sites get shut down? Could the companies that are "victims of piracy" be somehow turning a blind eye or even in favor of these things? What a concept!
One: The lady did not show up to defend herself in court.

Two: The $85 million came from the minimum statutory damages of $200 per circumvention is a statuatory minimum, multiplied by the number of users on the website's community, 427,393 users. That brings it to $85,478,600. From the judgement: "To the extent that this figure appears unreasonably large, Congress has mandated this approach and the Court is unable to deviate from it,"

tl;dr: The amount of money awarded had nothing to do with the gross revenues and everything to do with the laws laid out by Congress. The defendant did not show up to court so that number could not have been disputed.

@MuShu: There is a very straight forward bill of rights in the US, from which morality can easily be judged. In there is a simple statement, that we have a fundamental human right to LIFE, LIBERTY and PROPERTY.

What we are dealing with here in this discussion is, who that property belongs to, and what about it is property.

The creation of an artist (or team of artists) is their property. Therefore, the song written by the artist, the picture taken by the photographer, and the game made by the company, belongs to them. It is their property. To help define and protect it, the copyright laws were made.

These laws are there to give the artist control over the duplication and distribution of their property. This is not only to foster creativity, but so that artists can remain solvent through their work (their art becomes their job, and they are able to live/survive).

The private server affected that distribution and duplication.

The decision (as ludicrous as it was) was done so because it was not contested. I agree that the only thing that should have been paid, is the earned income, but it seems that your emotions on the subject are blinding you to what is a very black and white moral issue.

Morality is more than just what everyone agrees to. If everyone agreed that murder was okay, it wouldn't suddenly become moral.

Theft is not moral, and piracy, is a type of theft.

I explain it better on my blog, but as far as this conversation is concerned, all of your responses are ambiguous, and full of tautology. You are nothing more than a thief who wants his thieving ways to be vindicated by the masses. You don't even believe that stealing is wrong, even in the most direct way that I could ask you.

You only won't do things because you might get caught, which is exactly the same as not killing people because you don't want to go to hell.

You are as shallow as a religious fundamentalist, or even any fundie really.
"The creation of an artist (or team of artists) is their property."

Why? I get the economic argument for intellectual property. But explain why every copy, even one that the artist had nothing to do with, is his/her property.

Also, the constitution is great and all, but thats not a moral basis for anything. Perhaps the ideas that animated the document are; but the document itself is not.
@Pangoria: Are you really claiming that creativity is stifled by copycats?

How can people make such ridiculous claims? Go look at ANY industry, games, music, tv, movies, books, whatever you please. Completely original ideas are a tiny piece of the pie these days, largely just used to legally separate new from old. Play any facebook game, they all adopted RMT, is that stealing?

Again, you argue that "stealing is wrong" but you're extending the definition of theft to places it doesn't reach (digital content). Chastising people for doing things you feel are morally dubious doesn't make you look like a great guy, honestly. And just to nip the circular fight of "no you're a jerk" in the bud, I don't care if you think I'm an asshole, because I am, and it has no bearing on my ability to make a clear point.

I don't know how many times it has to be said before it gets through thick skulls; if you have something and I have the same thing because I made a copy of it, you still have your thing, therefore no *theft* has occured.

Copyright/trademeark infringement laws may apply if I've made the same thing you have without your permission, even working entirely independently (see Coldplay), but not criminal larceny.
However, suing an individual for $85 million dollars more than the revenue they made is an outright filthy use of our corrupt legal system. In what universe can they expect to be paid these moneys? The rest that person's entire life is ruined because a company was out for witch-hunting and greed. Can you justify that?


A) It's the law, not Blizzard, not even the judge, who decides on the amount of $85 million extra.

B) There *must* be some extra penalty for theft. If the only penalty for theft is that you have to give back the stolen goods, then the optimum course of action would be to keep stealing, because once in a while you get lucky and aren't caught, and there isn't too much risk if you get caught.

C) The alternative would be a jail sentence.

D) Whether it is $1 million extra or $85 million extra makes no difference to the person sued. They can't pay either way.

E) Greed doesn't come into it, because the money will never be paid. The huge amount is just there by law to scare other people from stealing.

So, as you have infinite wisdom: What exactly would your judgment have been? How much money exactly do you think Scape Gaming should have paid, or what other penalty?

As to the "it was just one middle-aged chick" comment, yeah, sure. She probably was running WoW servers plus website for 427,000 people alone in her basement on $1,000 PC from Walmart. Get real! Theft of that size requires *some* organization, whoever the front man (or woman) is.

I'm not sure what your background is, but I will venture a guess that you're not a lawyer. Either way, you may want to follow your own advice and google those legal terms you've been using.

More generally, although this debate has clearly been done to death both here and elsewhere, I am still unclear on one thing and it would be great if one of the "no harm done"-liners could offer an explanation.

I don't think anyone fully familiar with them argues that copyright regulations are perfect. However, what is the alternative? If it's not the person who created this digital material who should get to decide how its being distributed, then who should it be? Who, in your minds, would be better placed to decide about these things than the originator (or, as is very often the case, the owner of the right: yes, copyrights are almost fully tradeable)?
Slave labor! Oh wait, that's what the work will be for the rest of her life. Garnished wages until she can barely afford to feed herself even given a CEO's salary in a clumsy attempt to "repay" those damages.

You feel that $200/count over 470k counts is justice served? She's not responsible for every one of those players signing up through automated systems to play on the server she just runs. Maybe the first tens or even hundreds of people, but then word of mouth spreads like wildfire onto blogs, or game sites, or what have you.

This is the problem with witch-hunting. Where do the people who joined the game (who could realistically easily be tracked through email addresses, IP addresses, or even real name and mailing addresses if provided to the registration server) get their punishment for endorsing a "criminal" product? Abetting criminals is a criminal act in itself. Ever hear of the US Patriot Act? Your private information is now the government's public information, whenever they feel like it.

Also, chances are that of the 3 million dollars generated, the person who received that money had spent some of it. So requiring payment of 3 million dollars would not be an easy thing to swallow.

Why is this punishment larger than bail for a murderer? They say "punishment should fit the crime", is what this person did worse than murder? Making an example out of someone like this does nothing to deter others, it just makes them hope it doesn't happen to them.

How about CEO's of corrupt companies like Enron taking enormous sums of money (billions) and being forced to pay only a small percentage of it as legal recompense? Did this person commit a worse crime than these? Yet you eagerly slam your fist and claim that she should be punished by paying out 30x the amount of money she made (and likely will never see again) running a more legitimate business.

Have some perspective maybe?
@AndruX: I'm not talking about copycats, I'm talking about piracy. Which is that topic of discussion.

If Twilight comes out, and 50 other authors also have vampire romances that they quickly write in response, that is competition and not plagiarism. If those books specifically have sparkly vampires (which have never been done before), then you are starting to get into troubling waters, no?

Now for the next part, copyright covers distribution. If you copy something I made, without permission to do so, then it is theft. If I tell you, you have to have paid me $5 to own that copy, and you don't pay me $5, then it is theft.

That is currently what copyright law states. Now, the question is, if the fees it charges is correct or not.

For example, if an individual downloads something, without redistribution (they don't sell it or give copies away), should they be charged a fee, or only the cost of the item?

That is where the gray area comes in. Not in that it is stealing (it is), but how much the punishment for stealing should be.

In general I think it should be on a case by case basis, and in this case, the guilty party defaulted, and failed to defend themselves in any aspect of the decision.

If my intent is to sell something, and you copy it, without purchase, or facilitate others to receive copies without purchase, then your actions violate my right to distribute something I created. Regardless of whether you would have paid or not, or whether you would they would have paid or not, if you don't pay, you shouldn't have it, because I wasn't going to give it to you for free.
Intellectual Property Laws need to be reassessed. Their purpose is to motivate creative people to create. But whether they do this under the present technological circumstances is unclear. And many people unconsciously feel this.

Which doesn't imply that we simply need to abolish them. There's just an enormous amount of uncertainty.
AndruX, you are just repeating your previous statement that the punishment wasn't just, without answering my question: What exactly would a just punishment have looked like in your opinion?

And if you want my opinion, I would say that she got off lightly, because somebody who had worked in a bank and stolen $3 million from there would face jail time, and not just personal bankruptcy. Your idea that she'll be in "slave labor" for the rest of her life shows that you don't know anything about private bankruptcy laws. She'll just pay everything she owns today, then declare bankruptcy, and Blizzard won't even see the $3 million, much less the other $85 million. Really not much of a punishment, having to return the money you stole.

The only good thing for Blizzard is that the little money the will recover will pay for a legal assistant paid to surf the web to find private servers, and send each of them a nice letter saying "This is Blizzard. We would like to draw your attention to the $88 million the last guy we sued for having a private server had to pay us. We suggest you cease to run a private server and desist to run one in the future." That should shut down a couple of them at minimal cost to Blizzard.
I would just pose the question of whether or not downloading software, for which I have not paid the owner the right to download, is actually stealing or not?

If I make a copy of something, and keep it for myself, have I stole anything, or have I simply just circumvented the ability of the artist/programmer/developer to recoup their rightful royalty?

Have I stole their product, or have I stole money from them?

Economists call this "lost opportunity costs", in which it is argued that I have prevented them from having the ability to market and sell me the use of their intellectual property. I tend to agree with this notion.
I would just pose the question of whether or not downloading software, for which I have not paid the owner the right to download, is actually stealing or not?

I do not suggest putting some poor kid into jail or slapping him with a huge fine for a couple of downloaded video games or songs. We all do stupid things as kids, and its mostly a result of bad parenting. I'd claim that the kid would be better off if his parents had taught him about values, and he had cleaned tables at McDonalds to buy a few select video games and songs he really wanted, than if he succumbs to the "everything should be free" false creed that spread through the internet. Because if you feel entitled to everything you desire without thinking you'll need to work for it, sooner or later you end up with a mountain of debt and a ruined life.

So while downloading for personal use without paying is legaly and moraly wrong, it is at most petty theft, and shouldn't be harshly persecuted. Copying stuff illegaly and then selling it on for $3 million is a very different order of magnitude of crime, and deserves much harsher punishment to discourage people from trying it.
Tobold said:

than if he succumbs to the "everything should be free" false creed that spread through the internet.

The problem here, is that this creed eminates from the minds of piracy adovcates who feel that they are justified in doing what they are doing. I'm not offering this as a maxim of truth, but rather as am example of how Law has always lagged technology in that regard, and the ability of a few to effect social ideology.

People used to get hanged for stealing horses, yet people still stole horses. If a Law took effect tomorrow that stated one would receive the death penalty for driving under the influence of drugs or alcohol if convicted, you can bet that there would still be people who would jump in the drivers seat impaired.

The right and wrong have already been established, the rest is social acceptance.
@Chris: in Brasil, there is an absolute law, any alcohol found in a person's system means they lose their license.

Drunk driving is severely down over there.

Yes, some people will do it, but even at a smaller penalty than death, you get a majority of the people doing the right thing.

Yes. Agreed to your point.

The problem with Piracy is that the laws have yet to catch up with, and have the ability to effect public opinion to where the same acceptance and definition of what is considered right or wrong is viewed by the populace as worthy of doing what's right.
@Chris: Agreed.
Tobold, I did go beyond the scope of this one incident you posted about yes. But I believe the discussion carrying through these threads has indeed expanded in scope to encompass illegal downloading/playing of games in general.

As many people have said, 3 million in profit for the "pirate" does NOT equal 3 million lost for Blizzard, not by a long shot.

Also, there are a great number of *free* illegal means to play games. These generate no profit for the "pirate", and cost EVEN LESS to the developer.

The point being that it is somewhat ridiculous to award 80+ million in damages, when the cost to Blizzard is definitely less than 4% of that, and more likely less than 1%.

It is equally ridiculous to call someone providing a game/song/etc for *free* a pirate. I know this person did make money, and for that reason I would concede it might be slightly applicable.

But its still not the same as taking over a ship filled with tanks or something off the coast of Somalia.

Funny, I don't think that law would be physically possible to enforce in Canada. There would be no one left on the roads.
@JDangerous: From my blog post, "In the case of the most horrible offenders of plagiarism and piracy, an intellectual work, would be copied, and sold or even given away, for less than the price that the owner of the material intended, resulting in the owner not gaining value for their work (depriving use)."

Earlier I define theft as, "Theft is the dishonest appropriation of someone's property, without the owner's consent, with the intent to deprive them of its use, either temporarily or permanently (taking something from someone, with the result being that they cannot use it)."

Therefore giving away free copies of IP that are not yours to give away, since copyright holders get to decide how their material is distributed (in other words, if you buy an MP3 from iTunes, it is assumed that you will listen to it at your computer, and on your iPod, but that you won't be putting it up on a torrent site).
As many people have said, 3 million in profit for the "pirate" does NOT equal 3 million lost for Blizzard, not by a long shot.

To me it appears obvious that the 3 million in revenue to the pirate caused MORE THAN 3 million lost for Blizzard. If the 427,000 pirate server players had all played on official WoW servers for a year, they would have paid Blizzard the $88 million they got now awarded by the law suit.

That the players paid the pirate PROVES that it wasn't a case of "I wouldn't have paid for that anyway". And if they hadn't played on a pirate server, they would have played on a regular one. Thus many millions of lost revenue to Blizzard.
"Slave labor! Oh wait, that's what the work will be for the rest of her life. Garnished wages until she can barely afford to feed herself even given a CEO's salary in a clumsy attempt to "repay" those damages."

No one held a gun to her head when she made the conscious decision to embark on this scheme. All she saw was a flow of income without spending a dime of her capital, either monetary or "sweat", in developing the platform.

(Following statement not directed at one person in particular - just so you don't think I'm engaging in ad hominem attacks)

The stench of moral relativism makes me want to puke.
How about let's change the direction this discussion is going. Is it fair to have high punishments for laws that cannot be fully enforced (this is an extreme case, but a more obvious and common one is speeding on the road - x number of "points" on your license and they take it away, even though you may have been driving next to 3 other people at the same speed who got away). "Making examples of people" does nothing to deter others from going down the same road. Do you stop speeding for the rest of your life because you saw someone else get pulled over?

The drunk driving = no license rule is not unique to Brazil, which is great. It is in fact a fantastic idea, but because in that instance, people's lives are in danger. Nobody's going to die because Blizzard didn't *maybe* get 3 million dollars. It is also a hard and fast law that applies to everyone 100% of the time. Not "if you're x% blood alcohol beyond the standard DUI limit", but in any DUI situation.

Also, Tobold, I did offer a more just solution to your rebuttal, maybe it can help if you read what I write instead of putting on your "I hate AndruX" hat as soon as you see my name.

My suggestion was that in addition to this lady paying back the money she's personally responsible ($3m + probably up to a couple hundred people worth of subscription), that the rest of the money would be the responsibility to be paid by the players on that server. I'll repeat myself: why should they get away scot-free for "stealing the game" just as much as she did?

@forreststump: Take your moral compass and shove it. Having to read past your "this makes me sick" every 5 posts is a waste of my monitor's life cycle. If you don't feel comfortable discussing a topic, then don't. Then again, this post of mine will probably get deleted because Tobold doesn't like what I have to say either, and he has the power to do that on this thread.

Of course nobody held a gun to her head, but nobody also held a threat of being accountable for 30x the amount of money she might make should it make enough money for Blizzard to notice, I'll bet. This retroactive litigation style is really something to behold. Blizzard could have stopped the server before it made $0.01, but did nothing until it made $3m.
It just dawned on me, I can't help but think that people are taking what I say and making it sound like "hey everyone, go steal a lot of stuff right now!" If I have once actually advocated the act of piracy, I apologize, as this is not my intent. I will not, however, watch idly by as a bunch of anti-piracy conspiracy theorists have a circle jerk. There are 2 or more sides to every discussion, and I'm sorry that I really enjoy adult (non-childish) debate.

I apologize for the length of my post (and other posts), if it's too much let me know. Imo, there's a lot of points to be made.
@AndruX: I'm just as guilty at over long post sizes, but I really don't know how much of a detriment that is to a discussion, since there ARE so many points being made here.

I understand looking at both sides of a debate, and aside from me expressing my opinion, I do try to listen. In the end though, I'm a writer, and when I write something that I plan to sell, I don't necessarily want people getting it for free unless I give it to them. I intend to make a living with my words (or at least supplemental income), and piracy (copying my data without my permission) would hinder that.
I apologize for the length of my post (and other posts), if it's too much let me know. Imo, there's a lot of points to be made.

Funnily enough, while I didn't think you posted too much, the new automated Blogger spam filter did, and held back a double post of yours until I released it. Apparently the filter can't even be turned off, my apologies.

I do not agree with your solution that a thief should only be forced to give the money back she stole, with zero additional penalty. As I already explained, if that is the law, I'd start stealing myself. Hey, there is zero risk in it! If I don't get caught it is 100% profit, and if I get caught I'm not worse off than if I had stayed honest.

Thus, no, your solution is not fair, because it treats honest people unfairly and rewards thiefs.
But I didn't suggest that she pay back the money with no additional penalty. I suggested that her (individual) punishment would be the money that she made plus the "opportunity cost" (or whatever you want to call it) of probably about a few hundred accounts, let's include a multiplier like *number of months the server ran.

I also argued that the people who paid for this service should be held accountable for their actions. Wouldn't it make a much better example to have 1 person owing 3+ million dollars, and 400k+ more people owing a few hundred dollars each? But instead Blizzard takes the low road and decides it's too much work to sue so many people over so little, and makes a spectacle for news headlines instead.

Thus, no, your solution is not fair, because it treats honest people unfairly and rewards thiefs.

I hate to bring up things like ugly reality, but a lot of crimes, especially petty larceny (talking about breaking & entering + theft of physical property and possibly physical harm to home owners) go unsolved. The police are human. If one was so inclined, one could argue that these thieves do indeed "win" over honest people. But that's really a different discussion.

Off topic, this is my favorite series of posts on your entire blog so far (and I'm sorry if I'm monopolizing it, it's an interesting and fun topic to discuss). I say, more controversial topics!
My suggestion was that in addition to this lady paying back the money she's personally responsible ($3m + probably up to a couple hundred people worth of subscription), that the rest of the money would be the responsibility to be paid by the players on that server. I'll repeat myself: why should they get away scot-free for "stealing the game" just as much as she did?

I think this is exactly the strategy that has backfired so badly in the past. Publishers and, above all, their industry organisations have been almost universally reviled for going after individuals who have pirated software, music or films. Instead, they have more recently tried to focus on the distribution channels. Something that's of course a bit hard to do in bittorent times, which in itself makes a private MMO server a great target.

As to your question whether it wouldn't be better to have the users pay the statutory $200 per circumvention, I wouldn't be surprised if they already have that obligation (their use of the software was probably a "circumvention" too), but imagine going after 427,000 individuals at court. That's going to cost a whole lot more than $200 per case to drive home.

For legislators, the problem is that they lack the benefit of hindsight. In the legislative process, $200 per copy probably sounded great. Small-time pirates who made a couple of copies would be deterred from doing it in face of paying several thousand dollars in damages, whereas the more nefarious pirates who made a system of copying and distribution, pushing out several thousand copies would be seriously in pain. It seems this system was devised in the pre-download era – I have no information either way - since it appears to be geared towards a scale of manual reproduction of copies, i.e. discs, manuals, cassettes or what have you.

As someone pointed out above, the judge felt this too: the damages were awarded as a result of an applicable statute that the judge clearly thought yielded an unfair result in this case.
I hope I'm not infringing any copyrights now, but I found the court's order here. If you can live through the slowness of the language there are a couple of interesting points there. Note particularly that the judge awarded the minimum possible statutory damages under the DMCA – the scale goes from $200 to $2,500 per infringment.
Oscar, that document should satisfy AndruX, as it shows that Blizzard only asked for $20 million is statutory damages, and the court rejected their calculation of those damages, replaced it by a different way to calculate how many acts of piracy had been commited, and came up with a *higher* number than Blizzard had asked for.
Poor linkage technique on my side there, sorry.

I'd settle for "only" $20m any day ;)
Still amazed at how many people are so quick to justify egregious violations of copyright and piracy of digital content. It's a damn shame and a direct cause of developers disregarding the PC as a potential platform.

Also, lol at the "morality" discussion. Making sweeping generalizations with loosely defined terms and assumed/implicit premises does not a philosophical argument make. If you want to say something about the morality of playing WoW on a pirate server, then tell me first what you mean by morality. A vague utilitarianism that seems to be the ethical system of choice for the mainstream public? Some sort of early 1900s emotivism? Perhaps a new guard virtue ethics, in which case the morality of an action is rather the question of whether that action is befitting a conception of you as a person or of human beings more generally? Do you realize that morality and ethics are not synonymous terms and that one is a subset of the other?

Before people start hyperventilating in their attempts to justify piracy, perhaps reflect on the validity of the premises you hope to use in said justification. If for instance you think the only relevant question is whether the results of your actions cost a company money or not, while at the same time providing you entertainment, ask yourself why the act itself and your intention in doing it are not relevant. How confident are you in consequentialism as a general category of ethical theories? Even if you are, how would you defend yourself against a rules utilitarian argument that one should not pirate because it leads to lost revenues that in turn depress the breadth/depth of games on offer, the closing of game studios, and a shift away from entire platforms on which many people wish to play games?
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>>>It is very hard to argue that the people playing on Scape Gaming servers were too poor to afford the real game, when obviously they had up to $300 to spend on virtual WoW items.

This is the worst sentence in your post. Just because SG offered a $300 reward, it doesn't mean that anyone bought it, let alone it represents their typical subscriber. As countless others already showed by doing the real math, they made $7 per user. However you want to curve out that average, it definitely tells me the average user was not able or interested in spending that much money on WoW. In fact Blizzard probably spent more than $3 million legislating the case.

"If he'd just pay me what he's spending to make me stop robbing him, I'd stop robbing him!"

Is this case an example of naked piracy? Yes. Should the abuser be punished? Probably. Is this at all relevant in terms of the vast majority of "legally defined" piracy cases? Not at all.

And finally, if it were a crime to pirate from Blizzard, then *insertmodernMMO* would be out of business right now. Hey-o!
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