Nexon Awarded $3.6 Million in Private Server Lawsuit
Nexon America was recently awarded $3.6 million in damages from the creators of UMaple, a MapleStory private server. The judgment was issued in the U.S. District Court of California on the 3rd of April 2012. UMaple, a private server with an alleged 17,938 users, and its creator Gurvinder Kumar were fined $200 per act of circumvention (the statutory damages minimum) set out by the DMCA (Digital Millennium Copyright Act) 17 USC 1203.
Kumar did not appear in court to defend himself leading to a default decision by the court. However, the judge seemed extremely skeptical that UMaple significantly affected Nexon’s business through the operation of their limited private server. Techdirt.com explains,
Thus on most of the claims, the judge seems to look for ways to avoid giving MapleStory much, if any, money. For example, in determining profits made by UMaple, the judge repeatedly knocks MapleStory for failing to show what profits were specific to UMaple’s infringement, telling it that it can’t just assume all money made by UMaple belongs to MapleStory. So the judge dumps a request for $68,764.23 in profits made by UMaple down to just $398.98.
The DMCA is considered by many to be ridiculous and far overreaching the ethics of copyright law. Eric Goldman, Associate Professor of Law at Santa Clara University of Law shared his thoughts on the case in a recent blog post:
Today’s opinion is a default judgment brought by MapleStoy, a MMORPG, against UMaple, a service that runs an unauthorized MapleStory server, i.e., UMaple users can play MapleStory (using the MapleStory client software) without ever touching MapleStory’s servers. UMaple then solicits “donations” that lead to enhanced privileges in the UMaple environment.
As usual in a default judgment, the court doesn’t question the absentee defendants’ liability. Thus, the action moves to damages.
MapleStory sought profit disgorgement under copyright law. All that MapleStory can make stick is UMaples’ AdSense revenue, a paltry $400. MapleStory can’t get at any of the alleged donations because it can’t connect the dots that the revenue was solely attributed to UMaple and not other properties or activities…
It’s rare to see a judge so skeptical in a default judgment. This suggests that MapleStory’s advocacy failed to engender a high degree of sympathy. Instead, it looks like MapleStory’s advocacy (handled by a team from Mitchell, Silberberg & Knupp) alienated the judge. Later in the opinion, the judge calls out MapleStory’s lawyers for their arguments about the appropriate anti-circumvention damages calculations in various precedent cases. The judge says ominously that the advocacy led “the Court to question very seriously whether Plaintiff intended to actively mislead the Court or whether these oversights were merely the result of poor legal research.” If it weren’t obvious, neither conclusion would be a credit to MapleStory’s lawyers. The worst part is that no stretching was required in a layup case like this. It’s a default judgment, and judges will usually bless all reasonable requests.
Nevertheless, the judge had no choice based on the formula it felt was binding, so this produces a massive anti-circumvention award. If it were collectible, it would be quite noteworthy as one of the biggest anti-circumvention awards of all time. But, it’s not collectible.
As a final dis of the plaintiffs, the judge rejects the attorneys’ fee award automatically produced by a formula in the local rules (about $71k). Instead, the judge only promises to award actual fees incurred.
It’s hard for the plaintiff to feel good about this win. You don’t expect to see such palpable skepticism from a judge when the defendant doesn’t even show to protect its own interests. But this case does provide an excellent example of the ridiculousness of anti-circumvention statutory damages. $3.5M+ can’t be the right damages award in this case, and it’s so guffaw-inducing that it further erodes the legitimacy of our copyright rules.
Nexon hasn’t exactly been winning any awards with their customers so far this year (see Nexon VP Min Kim’s announcement about server instability earlier this year) and the UMaple doesn’t seem to be helping public opinion amongst many Maplers on forums. Private Servers have always been a refuge for players who disliked the official version of the game and wanted to create their own and for the most part have been defended by the MapleStory community. With the recent outcry against SOPA and PIPA public opinion also seems to be questioning the powers set forth in the DMCA which could spell trouble for Nexon whom has almost entirely relied on it to shut down private servers and hacking websites.
It’s been about four years since Nexon announced their war on private servers and it’s hard to say whether any significant progress has been made. This all begs the question: was it worth it? Are private servers that host making a couple hundred players on the most popular servers at a time really affecting Nexon’s business that adversely? After all Nexon announced in November 2011 that their third quarter revenues had increased 29% over 2010. Lawsuits hurt public opinion of a company (it’s why many musicians don’t sue possible infringers and why going to try is the last thing anyone wants), especially when a company is asking for over $70 million dollars in damages from a private server that barely made $400 is profit compared to the millions Nexon makes off their games. Copyright is a popular topic these days but it’s wise to ask yourself if that kid playing a version 0.55 private server that crashes every few hours is really worth the thousands of dollars spent on lawyers and bad publicity that goes with it.
You can read the court documents here.