Advanced Copyright Law on the Internet

(xiv) Blizzard Entertainment v. Reeves

In this case, the defendant ran a website that enabled its users to bypass the checks and
restrictions for access to the plaintiff’s World of Warcraft online gaming environment. After
granting a default judgment, the court turned to what the appropriate award of statutory damages
should be. The court estimated the number of circumvention violations by looking to the total
number of community members on the defendant’s website (427,393), each of whom was
assumed to have downloaded, access or otherwise used anti-circumvention software, services, or
products offered by the defendant. The court then awarded the $200 minimum amount per
violation, for a total award of $200 x 427,393 = $85,478,600.^935

(xv) The Craigslist Cases

a. Craigslist v. Naturemarket

In Craigslist, Inc. v. Naturemarket,^936 the defendants distributed software that bypassed
the CAPTCHA system of the Craigslist site and enabled users to post ads automatically in
whatever quantity, frequency, and location the user wished, in violation of the Craigslist site
Terms of Use.^937 Upon a motion for a default judgment, a magistrate judge issued an opinion
recommending that the defendants’ distribution of the software be found in violation of Sections
1201(a)(2) and 1201(b)(1) because the software “enabled unauthorized access to and copies of
copyright-protected portions of Plaintiff’s website controlled by [the CAPTCHA system] –
particularly the ad posting and account creation portions of the website.”^938 The magistrate
judge also recommended an award of statutory damages in the amount of $1,000 per copy of
software distributed, estimated at 470 copies (obtained by dividing the defendants’ estimated
revenue of $40,000 by the list price of $84.95 for the software), for a total statutory damages
award of $470,000.^939 The district court adopted the magistrate judge’s recommendations and
opinion in every respect, and entered a permanent injunction against the defendants enjoining
them from distributing software that enabled postings on Craigslist without each posting being
entered manually or that used automated means to download or otherwise obtain data from
Craigslist, from circumventing the CAPTCHA system or other technological measures
controlling access to the site, from repeatedly posting the same or similar content on the site or in
more than one category, and from accessing or using the site for any commercial purpose
whatsoever.^940

(^935) Blizzard Entertainment, Inc. v. Reeves, 2010 U.S. Dist. LEXIS 85560 at *7-8 (C.D. Cal. Aug. 10, 2010).
(^936) 694 F. Supp. 2d 1039 (N.D. Cal. 2010) (report and recommendation of magistrate judge re plaintiff’s motion for
default judgment).
(^937) Id. at 1048-49.
(^938) Id. at 1056.
(^939) Id. at 1063-64. The magistrate judge also recommended that an award of actual damages be made against the
defendants based on the liquidated damages clause of the Terms of Use, which provided for $200 for every ad
the defendants posted as posting agents on behalf of users, for a total of $840,000. Id. at 1064.
(^940) Craigslist, Inc. v. Naturemarket, Inc., 694 F. Supp. 2d 1039 (N.D. Cal. 2010) at 1046-47.