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The Basics of EULAs
Garthilk writes "Blizzard recently made a bit of press when they announced that they would be actively enforcing their End User License agreement and prohibit the third party sale of game items and characters. Many people don't believe these clickthrough EULAs to be enforceable contracts. Thankfully Don Shelkey from the Corporate Finance and Technology section of the law firm Buchanan Ingersoll stops by to give us the low down. Mind you he is speaking on his own behalf and not on behalf any of his clients."
the number 1 rule with the EULA is screw the customer.
It really doesn't matter if click-through is binding or not. Most companies just play the "Right or wrong, we'll sue your ass into the ground and bankrupt you on court costs."
Who does an 800 pound gorilla sue? Anyone he wants.
What I can't understand from this is WHY Blizzard would be opposed to this? If a mini-economy were to open up around your game, isn't that a good thing? They could get into the act themselves -- selling magic items and high level characters to the highest bidder? Hasn't anyone learned ANYTHING from the file swapping issues, Hacked satellite boxes or even drug interdiction? You can't stop people from doing what they want, and by picking battles of silly stuff like this weakens the arguments in legitimate cases where people actually are injured.
If there is a market for WoW stuff, then people will buy and sell it. p>Alot of times you'll here the legal phrase "Qui Bono" which literally means "Who benefits." It's used in the context of trying to establish who really ganis from certain actions. In litigation like this, I think the question that needs to be asked is "Qui Incolmunis" -- or, who is injured. In this case, where (as far as I can tell) no one is injured, there should be no litigation.
I have read the players complaining about the constant "buy now" things they see online. I don't think that legislation is the right way to solve a social problem. Why not make all artifacts have a permanent lifespan with the character who first posesses them, and only 24 hours after that? You could make items/characters untradable, but people don't want that. They just want them to be not tradable for money. Unfortunately, the way the world is, money is a universally accepted currency that can be used to acquire things of value. Driving the market underground is exactly the same as an ostrich sticking it's head undergound -- you can't see the problem anymore, but it will still be there.
Nothing great was ever achieved without enthusiasm
The problem with EULAs is once you have purchased the product, say a game and opened the box (unreturnable at this point) you are exposed and forced, lest you forego the purchase price of your game/app/whatever lest you click on the little "I agree" box. It's a sort of blackmail. The vendor does not make the EULA available prior to purchase and "read it on the web" is not practical. Too much effort on behalf of the consumer, and conveniently not enough on behalf of the manufacturer/vendor.
While this is not the case all of the time, it is most often the case.
I will believe that EULAs are enforcable as soon as the first EULA is enforced, but not sooner.
I think the real issue is whether shrinkwrapped EULAs are enforceable, not EULAs in general. If I can view the EULA online, for example, as with GPL'd software, then why shouldn't it be legal? But if I have to pay money, remove shrinkwrap, view license keys, insert CDs, then have the option of reading the EULA, but cannot return the opened software if I disagree, should that be legal?
I don't think it should be legal, but then again I am not a lawyer, judge, or Congressman.
24 beers in a case, 24 hours in a day. Coincidence? I think not!
It's the Terms of Service you agree to online when you give them a credit card number and say 'Yes, I Agree' in order to play. Whatever questionable status EULA's may have, if this isn't enforceable then no online contract is.
Read it yourself.
If you don't agree to that, then you don't click through, don't create an account, and do something else. This is a valid, 2-party contract. Deal with it.
R: That voice. Where have I heard that voice before? B: In about 365 other episodes. But I don't know who it is either.
GPL'ed software has no EULA, and the GPL does not rely on contract law, rather it uses copyright law as it only covers distribution of the program, not how it is used.
The GPL is still a type of contract. Copyright itself is a type of contract -- the owner grants me permission to use the product if I agree to abide by the terms of the license. This license may be "pay me $20 for a CD and promise not to copy it" or it might be "take it for free, change it, and give it away."
24 beers in a case, 24 hours in a day. Coincidence? I think not!
If you're an online game implementor, you know that people will want to trade items. You know it, because you're not the first game out there, you're the fifteenth. You're the fiftieth. You can see that people want to trade items.
Sure, the arguments run in two major veins: it's not fair to the game for people to shortcut their character development, and it's not fair to the users, because sales fraud is rampant.
If you gripe about players trading items, you're pissing into the hurricane. Even if it's against all the rules, people will be trading items. And what's worse, people will be offering sales and not following through, so other people will scream about fraud. You're in a no-win situation: people who follow the "rules" are unhappy and people who try to get better game goods are unhappy.
Unhappy customers are not a good thing for any subscriber-oriented product. Unhappy customers who are highly connected, organized, and communicative are a major threat to a subscriber-oriented product.
So why make them unhappy unnecessarily?
Implement an escrow mechanism into the game service.
If a player wants to sell a +20 Sword of Wounding to another player (even on another server/shard/instance/cluster/whatever), let them. Have them put the item into a secure locker-style location in the game world. This takes the item out of the control of the player, to completely remove the ability to defraud. The item is listed up for sale, either to a specific customer, to a guild or alliance, or to anyone. Real cash will buy that item.
Now, where does the cash go? Most of it goes to the selling party. That's why they wanted to sell it in the first place. Whether the cash is presented as future service credits, or a company check, it doesn't matter. Games may differ on the finer points, but one thing is clear.
A cut of the escrow money goes to the game producer.
That's right: if you own the escrow, YOU earn money when YOUR players trade goods. You're the marketplace. It pays for all the effort you made to implement the secure lockers. It pays for the customer service aspect of managing the transactions. More transactions will go through without complaint, and you are in a position to ensure that.
You can't control eBay. You can't control the gentleman's handshake at the pub. You can control the secure locker mechanism that's hosted on your own servers. So earn some money from it.
What about that other line of reasoning, the thing about being fair to the players? What's more fair than instantiating a single set of rules, by which everyone has access? Many people don't trade because of the fraud, but they'll complain about how it's unfair that other people do trade. Others complain that if they don't trade, they can't be the best in the game. Well, it's not about being the best in the game, it's about being the best you can be.
When I was a big game player, the game I played had one simple warning to those who complain about fairness and balance and competition. There will ALWAYS be someone who is stronger, faster, better-equipped, higher-leveled, and prettier than you are. Get over it. It's a game, and the best way to have fun is to skip the notion that you'll be the biggest and baddest in the game. Just be the biggest and baddest you can be. If you don't want to trade, then don't. But if you want to trade, do it securely.
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The GPL gives you additional rights not offered by default in copyright law. It doesn't require you do anything, it merely says "If you do such and such, in this kind of way, you're ok".
All of which is getting off-topic. The GPL is not an EULA, at least not usually (there are a lot of braindead installers out there I've noticed for OS X that force users to "Agree" to the GPL before installation, interestingly I wouldn't be surprised if non-copyright holders distributing such packages are actually violating the GPL by distributing it in such packages...
The GPL only grants rights. EULAs restrict them. The GPL says "You didn't have the right to do this before, you can now do this"; EULAs say "We don't care what copyright law says you can do, we're tearing up those rights and giving you an entirely new set."
You are not alone. This is not normal. None of this is normal.
Some time ago, courts had doubts about standard contracts, that is, contracts that a company imposed on all customers that the customer had no chance of changing. Some of these contracts were held unenforcable, because the customer's bargaining power was so inferior to the company's. (cf. Henningsen v. Bloomfield Motors; Williams v. Walker-Thomas Furniture Co., )
The courts found there was no way these contracts were made by two equal, free parties, which is a cornerstone of a valid contract. Also, many contracts written in legalese, unintelligible to the customer, were thrown out, because the customer's inability to comprehend the contract was seen as evidence that he couldn't fully and freely accept the contract
In many ways, I see shrinkwrap EULAs as having similar problems: there's a gross inequality in bargaining power between the sides, there's no real way the customer can negotiate the contract (especially since the company has no agent authorized to change the contract available to the customer), and you can't realistically read and understand the contract before agreeing to it.
IANAL, but I am a philosopher of law.
There was almost no real useful information in this article. It basically amounted to "EULAs are enforceable, usually, so long as the conditions aren't outrageous." It doesn't answer any of the really hard questions about EULAs. What happens when someone who isn't old enough to enter into a legal contract (which is to say, probably half of everyone who plays these games) clicks through an EULA? What if I don't like the EULA, but the store/company doesn't want to give me my money back? What if I find a way to install and run the game without ever reading the EULA - am I still in violation of it, even though I never saw it or agreed to it? If I don't agree to the EULA, can their copyrights restrict my use of their software for private, non-commercial purposes?
Placing the EULA inside that sealed envelope or some other sealed package that requires you to force agreement with it in order to get to it in the first place is best described as "entrapment."
OCO is Loco
On one side of the picture, Blizzard is trying to protect the quality of it's product. While they cannot prevent informal agreements between people, they do want to stop the Walmart style superstores (Yantis, etc.).
See here is the problem with a secondary market that involves real cash: it simply reduces the illusion of the game. If you have ever played a P&P rpg this is akin to Metagaming. "My ring is worth $150". The game ceases to become a game for certain players and becomes a new marketplace - bringing with it all forms of behavior that simply does not promote the original vision of the game.
What you end up with are players that essentially become "farmers". The unfortunate side effect of this is that they are impeding upon the casual player's experience of (Blizzard's original vision) the game.
You really almost have to consider WoW as a form of artwork that Blizzard feels is devalued by outside monetary influence.
As far as the idea that Blizzard should welcome and embrace online trading of items: Show me an online game that does this now (seriously - I would like to know). Every server crash would be followed by inevitable lawsuits.
There may be (and I daresay there are) good grounds for challenging the validity of EULAs, but this case really isn't one of them.
This is a very interesting point. When I sign a contract, the terms that both parties agreed to are pretty much set in stone. They can't update the contract, and then force me to sign it. If there's not something in the new contract that piques my interest, I can say "Nope, I like the original contract better." And under the terms of the contract, they have to continue giving me what the original contract specified for as long as I continue my end. Why, after a change in a MMORPG EULA, isn't there a button that says "No thanks, I'll stick to the original terms."? I guess a lot of depends on the EULA. If it's made to come up everytime you play the game, the length of the contract could be worded to be for "one play session". In which case you have to sign a new contract each time you play the game again. WoW isn't like this, it only comes up when it changes. But I guess somewhere buried in there is something that says this contract is binding until we change it, at which point you must agree all over again.
...it did a pretty good job of showing examples of other cases where you order something, but you do not get the full terms until later. A typical example was ordering travel tickets by phone. There's a huge list of travel conditions, but you don't get all of them quoted to you over the phone. You're expected to know "standard" terms for travel.
Another example quoted was purchasing concert tickets. The terms of the concert may be no cameras, and it is enforcable. You agree to behave after the rules of the concert by being there, even though you didn't agree to those terms before purchasing the ticket.
The court made a pretty good case that this would also be true of EULAs. When you purchase the box, you are aware that terms and confitions apply. You may not know them in detail, but you know you'll probably be presented with an EULA. That is the sticky part about "reasonable" terms.
It is also greatly influenced by what materials you do have to do by. If you purchase "FooBar personal edition", there's a different understanding of reasonable than if you purchased "FooBar enterprise edition". Acting deceptively is a good way to get your EULA thrown out.
What I did like was that it was quite clear that if you have the means to easily present the contract up front, there's little excuse. So if you're e.g. offering commercial software for download, you'd better present those terms before completing the purchase.
One thing it didn't cover (as it was obvious from the case that he was aware he was buying a personal edition), was whether the terms should be available up front, e.g. on a website. I believe there's a case about this going on now, and I hope the answer will be yes. In my non-lawyer opinion it is certainly "reasonable" to expect the terms to be available on demand.
Oh, and for the love of god.. can we please stop the "minor/drunk/cat/installed it some other way" solutions? If you reasonably knew the software is covered by an EULA, the court will take your use of the software (when sober, or whatever) as behavior indicating acceptance. Think of it as raising your hand at an auction, while it is not a signature the court will see it in the same way.
Kjella
Live today, because you never know what tomorrow brings
This is a basic misunderstanding. The GPL gives you rights in exchange for your agreement to follow certain conditions. Otherwise the GPL would be pointless; why not just put it in the public domain? That would grant the same rights without any conditions. If the GPL is a grant of rights without imposing any conditions, then why would anyone try to "enforce" the GPL?
To show that this is the case, consider what happens if you do not follow those conditions: You lose the rights granted to you. Failure to comply with the conditions imposed by the license can result in you losing the rights granted by the license. This shows that the GPL is a grant of rights in exchange for agreement to conditions, not a free grant of rights.
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