UPDATE: Virtual Horse Case, Amaretto Ranch v. Ozimals

When Judge Frank Easterbrook disparaged the emerging field of cyberspace law in 1996 by comparing it to the “law of the horse,” i.e. that there was no such thing, it’s unlikely that he ever imagined that there would one day be a serious case about virtual horses.  Ah the marvels of technology!  Those of you who have been reading my blog for a while might remember a case about competing virtual animal breeders in Second Life that got some press coverage this summer.  To fill you in briefly, “[b]oth parties sell virtual animals to online gamers who “live” in the online universe known as Second Life. Their respective creatures—Ozimals “breeds” rabbits; Amaretto creates horses and makes feed... In short, the parties are competitors.”  Amaretto Ranch Breedables v. Ozimals, Inc., 2012 WL 359729 (N.D. Cal. Feb. 2, 2012).

That case, you may be surprised to learn, is still ongoing, although not without some procedural hiccups.  It turns out that the Defendants, Ozimals, Inc., have run up some hefty legal bills that have they have neglected to pay, prompting one of their attorneys to petition the court for permission to withdraw.  The Plaintiffs counter that this is merely a delay tactic to forestall a deposition of one of the owners of Ozimals, Cameron Holt.

You may be wondering why I would bother telling you about this rather dry procedural squabble that would probably bore even a civil procedure professor.  For one thing, it’s interesting to follow a case as it works its way through the legal system, and this is the first update in the case since July.  Second, it’s a good excuse to talk about the potentially important legal implications of the Plaintiff’s use of the DMCA as a strategic weapon that could have effectively bankrupted the Defendant before the trial even got under way.

The Digital Millennium Copyright Act has a number of provisions written to aid content owners in preventing ongoing infringement.  One of these sections permits a content owner to seek a court order that requires an interactive service provider to block or remove access to  content that allegedly infringes copyrighted content.  The problem highlighted by this case is that Ozimals’ demand for Second Life to remove Amaretto Ranch’s virtual horses and feed would have cut off Amaretto’s primary source of income and crippled or destroyed it well before it could have its chance to challenge Ozimals’ copyright claim, which, on review, was highly specious.

Plaintiff has at least raised serious questions going to the merits of its section 512(f) claim. This is because software copyright protection does not apply to functionality. See 17 U.S.C. § 102(b). Thus, even if Defendant was the first to come up with a virtual animal that requires “food” to “live,” any copyright it has does not prevent another company from marketing virtual animals with similar traits provided, essentially, that that company did not copy Defendant’s programming. Because, among other things, Plaintiff has submitted Declarations supporting the conclusion that it did not copy or otherwise “steal” Defendant’s code (and that Defendant knew this to be true when it filed the DMCA Takedown Notification), Plaintiff has raised serious questions as to whether Defendant “materially misrepresen[ed]” that Plaintiff’s virtual horse product line infringes Defendant’s copyright(s).

Amaretto Ranch Breedables v. Ozimals, Inc., 2010 WL 5387774 (N.D. Cal. Dec. 21, 2010). The Court recognized the threat to Amaretto and quickly granted the Plaintiff’s motion for a temporary restraining order to enjoin Second Life from taking action on Ozimals’ demand.

The DMCA’s “notice and take-down” measures were meant to be used as a scalpel, not a chainsaw.  Content owners who try to use the law as a way to unfairly eliminate competition should rightly be stopped in their tracks.   It’s ironic that Ozimals is now running out of money to pay their attorneys in a fight they started.  Considering that the case continues on without a settlement, there appears to be a strong likelihood that we’ll see a proper decision in this case in the near future.


About Justin Kwong

An attorney in the Twin Cities and adjunct professor at William Mitchell College of Law where I teach a seminar on the law of virtual worlds.
This entry was posted in Intellectual Property, Litigation, Multi-user Online Environments, Virtual Items / Virtual Goods, Virtual Stuff..., Virtual Worlds and tagged , , , , , , . Bookmark the permalink.

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