Fan Fiction: If Blizzard Sued TL for Streaming

I. THE DISTRICT COURT CORRECTLY GRANTED SUMMARY
JUDGMENT AGAINST TEAMLIQUID FOR INDUCING
COPYRIGHT INFRINGEMENT OF STARCRAFT II.

The District Court properly granted summary judgment, based on the
undisputed facts, in favor of Blizzard. Specifically, the court found Teamliquid
liable for contributory copyright infringement under both vicarious and
contributory theories of liability.
Contributory copyright infringement is a common-law doctrine rooted in
longstanding principles of joint tort liability. Since at least the nineteenth century,
individuals have been subject to liability in circumstances where they assist or
encourage the act resulting in injury. In the context of copyright infringement,
persons who knowingly assist or encourage unlawful copying have been deemed
contributory infringers. These secondary infringers may be held liable for
copyright infringement, which may be premised on the separate doctrines of
vicarious and contributory liability.

A. Blizzard’s copyright extends to StarCraft II tournaments and is covered
by the Terms of Use contained within the software.

Blizzard owns the copyright for StarCraft II software. Ever since, the early
1980’s courts have recognized that the Copyright Act covers videogames as
literary works. See Williams Electronics, Inc. v. Arctic Intern, Inc. 685 F.2d 870
(3rd Cir. 1982). The software in StarCraft II consists of two components: the
“game client” software and the “game server” software. A user can obtain the
game client software by purchasing a copy at a retail store or downloading a copy
from the StarCraft II website. The user plays StarCraft II by loading the game
client software on his personal computer and accessing the game server software
through an online account for which he pays a monthly fee. Use of StarCraft II is
governed by an End User License Agreement (“EULA”) and Terms of Use
Agreement (“TOU”). These agreements are displayed on a player's computer
screen when the game client software is loaded and the player seeks online access
to the game servers. Players are required to agree to the terms of the EULA and
TOU before proceeding to play the game.

In order to establish a claim of direct copyright infringement, a plaintiff must
prove: 1) ownership of a copyright; and 2) a ” ‘copying’ of protectable
expression... beyond the scope of [a] license.” S.O.S., Inc. v. Payday, Inc., 886 F.2d
1081, 1085 (9th Cir.1989) (citation omitted); A&M Records, Inc. v. apster, Inc.,
239 F.3d 1004, 1019 (9th Cir. 2001). In this case, Blizzard has secured copyright
registrations in both the StarCraft II server and StarCraft II game client software
code. These certificates of registration raise a presumption of the validity of
Blizzard's copyrights in its software, and there is no evidence of record to dispute
that validity. 17 U.S.C. § 410(c).

In this Circuit, the “copying” element may be proved in software cases by
showing an unauthorized reproduction of a copyrighted software program in the
computer user's Random Access Memory (“RAM”). The Ninth Circuit has
recognized that “the loading of software into the RAM creates a copy under the
Copyright Act.” MAI Sys. v. Peak Computer, Inc., 991 F.2d 511, 519 (9th Cir.
1993), cert. dismissed 510 U.S. 1033 (1994); Triad Sys. Corp. v. Se. Express Co.,
64 F.3d 1330, 1334 (9th Cir. 1995); see also Twentieth Century Fox Film Corp. v.
Cablevision Sys. Corp., 478 F. Supp. 2d 607, 621 (S.D.N.Y. 2007) (agreeing with
the “numerous courts [that] have held that the transmission of information through
a computer's random access memory or RAM... creates a ‘copy’ for purposes of
the Copyright Act,” and citing cases.) When such a copy is made in excess of a
license, the copier is liable for copyright infringement. Ticketmaster LLC v. RMG
Techs., Inc., 507 F. Supp. 2d 1096, 1107 (C.D. Cal. 2007) (“When a licensee
exceeds the scope of the license granted by the copyright holder, the licensee is
liable for infringement.” (citation omitted).

Every user who loads Starcraft II onto his or her computers has the
information or essence of the game copied through that user’s computer’s RAM,
just like any other computer program. The users of Starcraft II are limited by the
TOU, which grants permitted uses of reproduction in a users’ computer RAM and
non-permitted uses. The TOU, which every user agrees to when installing Starcraft
II lays out the limitations for users and what constitutes permitted and non
permitted uses. If a user does not wish to comply with the TOU of Starcraft II,
Blizzard will refund that person the full price that person paid for Starcraft II
provided they uninstall all the Starcraft II files they have installed on the user’s
computer. The TOU contains a clause that restricts users from holding their own
Starcraft II tournament without first obtaining Blizzard’s permission. Violating
that TOU is a breach of both contract and copyright law.

B. Unauthorized streaming of Starcraft II tournament is a violation of the
public performance rights of the underlying work.

To “perform” a work and to perform it “publicly” are terms of art defined by
the Copyright Act. “Perform” is defined to mean: “to recite, render, play, dance, or
act [a work], either directly or by means of any device or process or, in the case of
a motion picture or other audiovisual work, to show its images in any sequence or
to make the sounds accompanying it audible.” 17 U.S.C. §101. To perform ... a
work ‘publicly’ means :

“(1) to perform or display it at a place open to the public or at any place where a
substantial number of persons outside of a normal circle of a family and its social
acquaintances is gathered; or

(2) to transmit or otherwise communicate a performance or display of the work to a
place specified by clause (1) or to the public, by means of any device or process,
whether the members of the public capable of receiving the performance or display
receive it in the same place or in separate places and at the same time or at
different times.” 17 U.S.C. §101.

Taking the statute at face value, a user violates the public performance rights
of Starcraft II when that user broadcasts the game to others across the internet. It is
as if someone were to take a video and upload it onto a file sharing network only it
the act is occurring in real time. Or perhaps more realistically, it’s like someone
sharing a copyrighted video on YouTube. Technically speaking, one user is
watching a legitimate stream and then that user uses software to capture his or her
own screen and then in real time broadcasts a stream onto the internet of his or her
screen, such that any multitude of users can effectively watch the legitimate stream
illegitimately. There are a multitude of websites that feature this streaming service
including justin.tv, ustream.tv, and livestream.com. In this common infringement
scenario, which occurs frequently on Teamliquid’s website, the first user is a direct
infringer of the public performance rights. Similarly, each other user who views
the stream in an unauthorized manner is also a direct infringer of the copyright.
However, while Blizzard does go after these individual users, stopping individual
users is like playing whack-a-mole and can hardly stem the flood of infringing
behavior. Thus, Blizzard’s most realistic course of action is to stop the contributory
infringer: Teamliquid.

Indeed Courts have long recognized that the public performance rights of
video games can be violated. For instance in Red Barron – Franklin Park v. Taito
Corp., a business was found liable for the violation of the performance rights in a
coin operated video game, “The exhibition of its [the videogame’s] images in
sequence constitutes a “performance” of an audiovisual work. Indeed, it is the
sequential showing of its images that distinguishes the “performance” of an
audiovisual work from its “display,” which is defined as a nonsequential showing
of individual images.” Red Barron – Franklin Park v. Taito 883 F.2d 275 (1989).
While Congress later made an express exception for coin operated video games,
the same extension does not apply to videogames broadcasted over the internet.
Likewise, the performance is “public” whether or not it is in the physical realm.
Indeed, websites, unless protected by some kind password or encryption are by
their very nature open to the public. Anyone may travel to Teamliquid’s website,
and Teamliquid encourages such behavior. Likewise, anyone visiting Teamliquid’s
website is free to click on the featured links which carry the infringing material.

C. Teamliquid is liable for contributory infringement because it had direct
knowledge of its users infringing behavior and not only refused to take
actions to prevent infringing behavior, but actually encouraged such
behavior.

Under the traditional test for contributory copyright infringement, a party is
liable where it had “knowledge of the infringing activity and induce[d], cause [d],
or materially contribute[d] to the [activity].” Perfect 10, Inc. v. Amazon.com, Inc.,
487 F.3d 701,727(9th Cir. 2007); A&M Records, Inc. v. apster, Inc., 239 F.3d
1004, 1019(9th Cir. 2001). Likewise, in Metro-Goldwyn-Mayer Studios Inc. v.
Grokster Ltd., the Supreme Court held that “one who distributes a device with the
object of promoting its use to infringe copyright, as shown by clear expression or
other affirmative steps taken to foster infringement, is liable for the resulting acts
of infringement by third parties.” Metro-Goldwyn-Mayer Studios Inc. v. Grokster
Ltd. 545 U.S. 913, 936 (2005).

This is a classic case of aiding and abetting illegal conduct. Respondents
have enabled, encouraged and profited from the infringement and should be held
contributory liable under ordinary common-law principles of secondary liability.
See Keeton et al., Prosser & Keeton on the Law of Torts, § 46 at 323 (secondary
liability encompasses “[a]ll those who, in pursuit of a common plan or design to
commit a tortious act, actively take part in it, or further it by cooperation or
request, or who lend aid or encouragement to the wrongdoer, or ratify and adopt
the wrongdoer's acts done for their benefit”).

By featuring unauthorized streams on its website, Teamliquid has enabled
thousands of users to infringe Blizzard’s copyright. It is no different than a
restaurant broadcasting copyrighted HBO boxing matches to its patrons, without
the permission of HBO. Like viewing an HBO match, viewing a Starcraft II match
has real world value and it is to the detriment of paying subscribers to have others
acquire this value without paying and subsidize their viewing experience.
Teamliquid has directly financially benefited from the infringement of
Starcraft II. Like many websites, Teamliquid is financed for the most part by
advertising revenue. This revenue increases the more users visit the website. It is
no surprise that when Teamliquid features streams that carry unauthorized
streaming of Starcraft II, the number of users to its website increases
correspondingly. There is a direct cause-and-effect relationship between the
unauthorized streaming and website traffic. This traffic provides a tremendous
financial benefit to Teamliquid to the detriment of Blizzard.

D. Teamliquid is also liable under a theory of vicarious infringement
because it had direct financial benefit from its user infringing behavior
and failed to supervise its user’s actions despite its clear ability.

Vicarious liability for copyright infringement exists where a defendant “has
the right and ability to supervise the infringing activity and also has a direct
financial interest in such activities” A&M Records, Inc. v. apster, Inc., 239 F.3d
1004, 1022 (9th Cir. 2000). According to the facts of record, Teamliquid has the
right and ability to supervise the infringing activity of its users. Teamliquid
operates a forum which is frequently and heavily moderated by its administrators.
Likewise, Teamliquid has developed a code of conduct for its website’s users and
violations of this code have resulted in permanent bans or temporary bans to users
that have violated this policy. Teamliquid’s staff is frequently logged into the
website and has issued numerous bans over the course of the websites history.
Accordingly, the website has also used permanent internet protocol (“IP”) bans to
ban particularly offensive users. This meticulous moderation of its forums with
regard to its own code of conduct demonstrates that Teamliquid could use the same
resources when identifying infringing content and could easily ban such users
under the own prerogative, yet they refuse to do so. Likewise, Teamliquid’s staff
has demonstrated the ability to quickly delete comments in its forums, especially
offensive ones. However, like refusing to ban specific users who infringe the
copyright of Starcraft II, Teamliquid refuses to delete links to infringing content.
Teamliquid directly financially benefits from the infringement of Blizzard’s
copyright in Starcraft II. Teamliquid’s advertisement revenue is correlated to the
number of viewers that visit Teamliquid’s website and the number of clicks that
click on the advertisers’ links. Numerous advertisers have used Teamliquid’s
service and the revenue generated in recent months has increased dramatically
since the release of Starcraft II. Likewise, the number of viewers visiting
Teamliquid’s website spikes during the broadcast of Blizzard sanctioned Starcraft
II tournaments, at the same moment when Teamliquid’s website is posting links to
illegal streams of the Blizzard sanctioned tournament.

E. The DMCA provides no safe harbor for Teamliquid’s contributory
infringing activities.

Under the DMCA there are “safe harbors” for ISPs for conduct relating to
“communications functions associated with sending information over the internet.”
17 U.S.C. § 512(c). The most common safe harbor essentially provides that an ISP
is not liable for damages for infringing material others post on its website unless it
has “actual knowledge” that as it is “apparent” that the material is infringing unless
the site quickly removes the infringing material after receiving a “notice” that
complies with the statutory requirements. 17 U.S.C. § 512(c)(1). Section 512(c)
should not be interpreted to give blanket immunity to Teamliquid, if the record
shows that the business intentionally relied on the facilitation of copyright
infringement to grow its business, knowingly contributed to the infringing conduct
of its users, and declined to exercise its right and ability to control that
infringement while seeking to benefit directly from it.

This Court should follow long established precedents regarding contributory
infringement with regards to internet postings. For instance, in Sega Enterprises
Ltd. v. MAPHIA, a court found the operators of an online bulletin board to be
guilty of contributory copyright infringement because they knowingly profited
from the uploading and downloading of unauthorized copies of Sega's copyrighted
video games. Sega Enterprises Ltd. v. MAPHIA, 857 F. Supp. 679, 683 (N.D. Cal.
1994). Likewise, in Playboy Enterprises, Inc. v. Webbworld, Inc, a court imposed
liability on the operator of a subscription-based bulletin board system that provided
access to digitized versions of Playboy's copyrighted images. Playboy Enterprises,
Inc. v. Webbworld, Inc., 968 F. Supp. 1171, 1175 (N.D. Tex. 1997). The Playboy
court imposed liability, reasoning that the defendant website operator “gets paid
for selling the images it stores on its computers.”

Indeed nowhere in the DMCA, not even in Section 512, does it permit
service providers to immunize themselves from liability arising from the
inducement of, or knowing contribution to, copyright infringement, nor does it
permit a service provider from declining to exercise the right and ability to control
infringing activity from which they directly benefit financially. See S. Rep. No.
105-190, at 8, 48 (confirming that the safe harbors are not intended to apply to
“pirate” websites “where sound recordings, software, movies or books [are]
available for unauthorized downloading, public performance or public display”).
Section 512 was designed to protect legitimate service providers that were required
to grow the internet not for individual websites like Teamliquid, which have direct
knowledge, benefit, and contribution to copyright infringement.
Similarly, Section 512 does not require specific knowledge of infringement
(as opposed to actual). Thus although amici and Teamliquid argue that general
knowledge of infringement is not enough, and instead assert that Blizzard must
demonstrate that Teamliquid had the type of specific knowledge of particular
infringing material provided in a DMCA-compliant notice, this is not the case. In
both apster and Grockster, courts have imputed actual knowledge when internal
documents, the actual nature of the files being shared, and other extrinsic evidence
pointed towards, regardless of a DMCA notice. Thus, specific knowledge of each
individual act of infringement is not necessary, but general awareness of
infringement is enough. In this case, the extrinsic evidence points toward
Teamliquid having specific knowledge of infringement, because its owners and
operators repeatedly posted in forums that contained links to the infringing content.
The owners and operators had the power to remove these links and instead allowed
the infringement to continue.

This case is distinguishable from Viacom Intern. Inc. v. Youtube, Inc., in that
the court found in favor YouTube, because its model and its existence was based
on more than mere copyright infringement. See Viacom Intern. Inc. v. Youtube,
Inc., 540 F. Supp. 2d 461 (S.D.N.Y. 2008). In this case, Teamliquid relies on
tournament coverage for most if its viewers and most of its ad revenue and website
traffic are tied to this coverage. Teamliquid’s own mission statement it is dedicated
to coverage of Starcraft II. While YouTube attracts users because it acts as a forum
for individuals to upload individual created content, much of which is noninfringing;
Teamliquid’s “featured user streams” attracts most of its traffic from
the unauthorized streaming of Starcraft II tournaments, only a very small
percentage of streams is dedicated to user created content.

F. Teamliquid’s featured streaming has insignificant legitimate noninfringing
uses.

In Sony Corp. of America v. Universal City Studios Inc., the Supreme Court
has held that one cannot find in favor of contributory infringement if there are
significant non-infringing uses. Sony Corp. of America v. Universal City Studios
Inc. 464 U.S. 417 (1984). However, this rule was clarified Grokster, “Sony's rule
limits imputing culpable intent as a matter of law from the characteristics or uses
of a distributed product. But nothing in Sony requires courts to ignore evidence of
intent if there is such evidence, and the case was never meant to foreclose rules of
fault-based liability derived from the common law.” 545 U.S. 913 at 934.
Teamliquid argues that its featured streams section features many non-infringing
uses and that it cannot be found liable for contributory infringement. Even if
Teamliquid is correct and that there are some non-infringing uses of the featured
stream section, a contention which Blizzard vehemently disagrees; it is ultimately
irrelevant. The facts of record show that Teamliquid had actual knowledge of
infringement. Sony never displaced the ordinary theories for finding contributory
infringement and actual knowledge has always been enough to find contributory
infringement.

If this Court were to find that Teamliquid did not have knowledge of the
infringing user streams, under the analysis in Grockster, the undisputed evidence
shows that the majority of uses of the “featured links” section of Teamliquid’s
home page were infringing, rather than non-infringing. In Grockster, the Court
dismissed the substantial non- infringing uses defense, after weighing the noninfringing
activity against the infringing activity and finding the infringing activity
to be substantial. Under Grockster, it is not enough to be capable of non-infringing
use this, but the actual use should be considered. For example, the software in
question of Grockster could be used for non-infringing uses but this was rarely the
case.

In this case, Teamliquid asserts that many of the “featured streams” are in
fact not infringing. For instance, Teamliquid asserts that many of the featured user
streams include users who merely discuss the game without breaching copyright
Starcraft II. Likewise, Teamliquid asserts that many of its most popular streams
are not even related to Starcraft at all. For instance, one user named “konodora”
streams videos of Korean pop music and has established a large following. Another
user “day9” uses his stream to broadcast a daily show where he talks about strategy
and provides news updates concerning the game and has a license with Blizzard to
do so. While the parties have agreed that these actions do not infringe the copyright
of Starcraft II, these streams make up the minority of the total number of featured
streams. It is undisputed fact of record has that the majority of users are attracted to
streams that feature unauthorized tournament coverage.

G. Blizzard is entitled to injunctive relief and recovery of Teamliquid’s
profits for Teamliquid’s secondary infringement.

A victorious copyright owner is entitled to injunctive relief and recovery of
its actual damages plus any profits of the infringer attributable to the infringement
and not taken into account in actual damages. 17 U.S.C. §§ 502(a), 504(b). “In
establishing the infringer's profits, the copyright owner is required to present proof
only of the infringer's gross revenue, and the infringer is required to prove his or
her deductible expenses and the elements of profit attributable to factors other than
the copyrighted work.” 17 U.S.C. 504(b). Teamliquid's gross revenues from
advertising sales and sponsorships for the year 2010 so far are $6.8 million. Thus,
in addition to its own damages discussed Blizzard is entitled to a judgment of $6.8
million, minus any deductible expenses Teamliquid can prove. Likewise, an
injunction is appropriate that requires Teamliquid to stop its users continued
copyright infringements of Starcraft II; failure to adhere to such an injunction
should result in additional damages.

II. THE DISTRICT COURT PROPERLY DISMISSED TEAMLIQUID’S
FAIR USE DEFENSE.

The district court properly dismissed Teamliquid’s fair use defense, because
all four of the fair use factors weigh in favor of Blizzard and a finding of
infringement. Courts look to four factors when considering the fair use defense:
(1) the purpose and character of the use, including
whether such use is of a commercial nature or is for
nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in
relation to the copyrighted work as a whole, and
(4) the effect of the use upon the potential market for or
value of the copyrighted work

A. Blizzard owns a valid copyright in StarCraft II and Teamliquid’s use of
that work is purely commercial; tournament play is fully protected by
copyright and such play does not substantially transform the underlying
work.

Blizzard has both registered and established a valid copyright in Starcraft II
and Teamliquid’s use of this work is purely commercial and for its own individual
profit. Furthermore, Starcraft II tournaments are fully and completely covered by
Blizzard’s copyright in Starcraft II. Individuals who create their own tournaments
without the permission of Blizzard violate Blizzard’s copyright and the fair use
defense does not save these individuals. The individual tournaments are often run
for profit and often involve some sort of prize; such tournaments implicate a
commercial character use. A commercial use has been defined broadly by the
courts. A use that brings attention or attracts fans to a group may be used for future
commercial exploitation. Furthermore, tournament play in no way transforms the
underlying work. While, the users are controlling the objects in the game and
moving them in certain patterns, these patterns are restricted by the underlying
code in the game. While each game may be unique and there is an infinite
possibility of movements that can be created, based on the indeterminate length of
a game; they are governed by the rules created in the software of Starcraft II.
While it may be a clever argument that players add some essence of transformation
into the game; the analogy proposed by Teamliquid that Starcraft II is like
Microsoft’s word and that the game is an individual document created in the
program is a false analogy. Microsoft does not own a copyright in the English
language, but Blizzard does own a copyright on the elements within Starcraft II.
Furthermore, courts have granted copyrights in specific fonts; this would be
analogous to the images contained within the Starcraft II game.
B. Teamliquid’s actions substantially cut into Blizzard’s market by directing
users away from Blizzard’s own website and by preventing Blizzard
access from other potential markets.

Blizzard has made substantial investments, in making Starcraft II a valuable
videogame franchise and e-sport, including spending millions of dollars on the
development and launch of the game. To date, Blizzard has also spent significant
resources licensing limited broadcast rights to certain sponsors for specific
tournaments. Blizzard uses these licensing fees to create more content, facilitate
additional tournaments, and to grow the Starcraft II e-sports scene. By allowing
individuals to circumnavigate the pay structure Blizzard has created, it prevents the
growth of this infant industry. Revenue that would have been earned by viewers
paying subscription fees is completely negated. Furthermore, Teamliquid has direct
commercial benefit from these viewers that have been siphoned away through
increased advertising revenue.

III. THE DOCTRINE OF LACHES IS INAPPLICABLE IN THIS CASE:
THE DELAY WAS MORE THAN REASONABLE AND THE
INFRINGEMENT WAS WILLFUL.

The doctrine of laches is an equitable doctrine that prevents a plaintiff who
“with full knowledge of the facts, acquiesces in a transaction and sleeps upon his
rights.” Southern Pac. Co. v. Bogert 250 U.S. 483, 500 (1919). In the copyright
context Learned Hand justified the doctrine by stating:

It must be obvious to everyone familiar with equitable
principles that it is inequitable for the owner of a
copyright, with full notice of an intended infringement, to
stand inactive while the proposed infringer spends large
sums of money in its exploitation, and to intervene only
when his speculation has proved a success. Delay under
such circumstances allows the owner to speculate without
risk with the other's money; he cannot possibly lose, and
he may win.
Haas v. Leo Feist, Inc., 234 F.105, 108 (S.D.N.Y. 1916).

In the Ninth Circuit the defendant must prove both an unreasonable delay by the plaintiff and prejudice to itself. Couveau v. Am. Airlines, Inc., 218 F.3d 1078, 1083 (9th Cir. 2000).
However, the Ninth Circuit has also acknowledged that willful infringement
provides an exception to the doctrine of laches, such that the doctrine of lahces
cannot apply when the infringement is willful. In the copyright context the Ninth
Circuit has imported the definition of ‘willful’ from 17 U.S.C. § 504(c) and has
acknowledged that a willful infringement cannot be defended using the doctrine of
laches. See Danjaq LLC v. Sony Corp. 263 F.3d 942 (9th Cir. 2001).
A. Blizzard timely filed suit and caused no undo prejudice to Teamliquid.
Teamliquid’s defense of laches is almost laughable, because the extent of the
delay between the filing of this suit and the purported infringement is a mere three
months. To determine whether a delay is reasonably courts look to whether or not
there was a delay and if so, the reasons for such a delay. Delay is reasonable when
the plaintiff must exhaust other administrative remedies, needs time to prepare and
assess a complicated claim, or needs time to determine whether the scope of the
infringement will justify the cost of litigation. Id. at 954. Teamliquid contends that
Blizzard was aware of all of Teamliquid’s purported infringement an unreasonably
delayed in brining this suit. A delay may be unreasonable if the delay’s, “purpose
is to capitalize on the value of the alleged infringer's labor, by determining whether
the infringing conduct will be profitable.” Id at 108. Teamliquid argues that by
having previous dealings with Blizzard regarding the original Starcraft and
Starcraft II that Blizzard was aware of any purported infringement and thus
somehow implicitly communicated that they were alright with any infringing
behavior. Furthermore, Teamliquid contends that Blizzard waited until Teamliquid
grew in popularity and in revenue before bringing this lawsuit; that the rise in
Teamliquid’s revenue is the basis of this lawsuit rather than the issue of copyright
infringement. While there might be a correlation in the rise in revenue and the
timing of the lawsuit, the rise in revenue is a direct result of the infringement of
Blizzard’s copyright in Starcraft II. Blizzard acknowledges previous dealing with Teamliquid regarding the original Starcraft and Starcraft II, but these dealing do not extinguish Blizzard’s
copyright claims. For instance, Blizzard acknowledges that the original Starcraft
was released in 1998 and that Teamliquid has hosted its website, teamliquid.net
since 2001. Furthermore, Blizzard acknowledges that it has entered into
agreements with Teamliquid and acknowledges that it has been aware since 2001
that Teamliquid’s has been focused on coverage of Starcraft. However, this lawsuit
does not concern copyright with regards to the original Starcraft. Instead, this
lawsuit is solely focused on copyright violations of Starcraft II. Blizzard has
interacted and dealt with many fan websites regarding Starcraft II, including
Teamliquid. However, Teamliquid’s infringement only occurred recently, and
Blizzard only became aware of infringement regarding Starcraft II recently.
Originally, it was Blizzard’s hope that Teamliquid would correct such offending
behavior, but when it became apparent that it would not this current litigation was
the result.

Ultimately, the actual extent of the delay in this case has been more than
reasonable. From the release of Starcraft II in July and the first alleged case of
infringement in August, until the first filing in this action in September, there has
been a delay of less than three months. This Circuit has held that the delay period
runs from when the plaintiff knew or should have known about the claim and ends
when the plaintiff initiated suit. Id. at 952. The claims in question arise out of
Starcraft II and cannot be backdated to run from Blizzard’s dealing regarding the
original Starcraft. Furthermore, the delays in question are more than reasonable, in
fact they could be considered generous and fall well within the statutory three year
time frame under 17 U.S.C. 507(b).

Teamliquid has not suffered any inequity or prejudice based on the delay in
bringing this suit. A defendant may demonstrate prejudice by “showing that it took
actions or suffered consequences that it would not have, had the plaintiff brought
suit promptly.” Danjaq LLC v. Sony Corp. 263 F.3d 942, 955 (9th Cir. 2001).
Teamliquid’s prejudice argument is nearly entirely reliant upon its first argument:
that the claims in this action originate back in 2002. However, this is improper.
The suit at hand regards Starcraft II and Starcraft II alone, past dealing between
Teamliquid and Blizzard are not before this Court and are irrelevant.
Furthermore, Blizzard generously gave notice to Teamliquid before
commencing this lawsuit in a letter that specifically outlined what actions by
Teamliquid Blizzard thought to be infringing and even gave Teamliquid the
opportunity to correct its actions. Teamliquid has only itself to blame for infringing
the copyrighted works in Starcraft II and the remedies asked for by Blizzard are
not unreasonable. Similarly, both the timing of the suit and the reasons for suit
preclude the defense laches from applying.

B. Because Teamliquid’s infringement was willful, the defense of laches
cannot apply.

This Court should follow the district court ruling on summary judgment that
Teamliquid’s infringement was willful, which precludes the applicability of the
defense of laches. In Danjaq LLC v. Sony Corp, this Court held that the defense of
laches cannot apply to a willful infringement. Id. at 957. In Danjaq, a case dealing
with copyright infringement, the Court decided to adopt the definition of willful
infringement from the Copyright Statute, and applied it to that case at hand. This
Court should follow this same standard. Teamliquid was on notice that it was
assisting in copyright violations. Furthermore, the owners and users of Teamliquid
have all read the TOU contained in the Starcraft II software, which explained the
legal obligations of Starcraft II users. Blizzard has always laid claim to its
copyrighted material and has never indicated that it relinquished such rights. In the
face of this evidence, and the direct benefit the owners and operators of
Teamliquid received from contributing to the violation of Blizzard’s copyright in
Starcraft II, the district court properly found Teamliquid’s copyright violations
willful and rejected its defense of laches.