Today’s not-so-mysterious guest columnist is James Dunstan, attorney-at-law and total geek like us.  He and I went to law school together and unfortunately, the pull of the dark side was too much for him.  Luckily though, he has maintained a sense of humor, love for gaming and has been involved in both my previous companies (AUSI & Mythic) from day one.  He has spent more than 25 years providing legal services to high technology, communications, and computer game law clients. He has been involved in almost every aspect of the digital revolution, from representing the true “fathers” of the Internet, to cable, telecommunication and media giants, to assisting computer game startups mature to profitable enterprises.  Jim has been an active “coder” since the early 1980s when he wrote computer games while in law school. Among the titles he’s provided most of the coding for include Lunar Eclipse Software’s “Return to the Moon” and “Mission: Planet Earth,” as well as writing the motion code for the first PC-based motionbased video arcade game, New Luna’s “Lunar Defense.”  He is the founder of Mobius Legal Group and he can be contacted at

So, without further ado, I present:

Warning: Do Not Use This MMO To Trim Your Hedge, And Other Happenings In CyberLaw – By James Dunstan

While the dog days of summer come to an end and we look forward to Fall’s changing colors, courts haven’t taken a lot of vacations. Two important decisions came down during August that remind us again that the real world can be a silly place to live.

We begin with the case of Craig Smallwood versus NCSoft. It seems that Mr. Smallwood launched a lawsuit in late 2009 in Hawaii, after his Lineage II accounts were banned. He accused NCSoft of all manner of heinous acts, including taking his money, not conducting a “fair and square” game, not uniformly enforcing its no botting and no gold farming rules, and the one that has hit the blogosphere, not warning him that Lineage II can be addictive. In short, a disgruntled subscriber run amok. The judge threw out the case once, but because he was proceeding pro se (without benefit of an attorney), the judge allowed him to amend his complaint. He refiled, this time doing a much better job, too good a job in fact, as NCSoft argued that the amended complaint had been ghostwritten by a lawyer, who actually showed up at the hearing. The judge agreed, smacked the lawyer, and then moved on to discuss the merits of the case.

Posts are running rampant about how the judge agreed with Smallwood on the addiction claim and is allowing the case to proceed. That’s true enough, but misses the far more important aspects of this decision. First, the judge found that the End User License Agreement (EULA) was valid. The impact of this? The provision that limits NCSoft’s liability to $65 for contract violations and negligence are fully enforceable. That means even if Smallwood can prove NCSoft breached its promise to run a “fair and square” game, or took three months of Smallwood’s money, all he gets back is $65. Second, the only way Smallwood can cash in big on this case is to prove that NCSoft was grossly negligent in not warning him that Lineage II is addictive. THAT will be an incredibly tall order, since Smallwood will have to prove both that Lineage II is addictive (whatever that is), and that NCSoft knew it was addictive and chose not to warn subscribers of this defect in the game.

For those of you who have heard me speak at various industry conferences know how hard I stress the importance of crafting an enforceable EULA. My 2007 LOGIN presentation “It’s All in the EULA” stemmed from the 2003 case Black Snow Enterprises v. Mythic Entertainment, the first virtual property case that I litigated. There, all plaintiff’s claims against Mythic’s Dark Age of Camelot were short-circuited when the judge agreed that the EULA was enforceable, and we were able to dismiss the case and turn it over to arbitration. Faced with very clear language in the EULA that banned all forms of gold farming and item selling, the case evaporated in a heartbeat. While my “stock” EULA does not use the term “addictive,” it has clear language urging players to take frequent breaks from the game, and that prolonged playing may trigger all manner of ills, including triggering dormant photosensitivity and halitosis (ok, maybe not halitosis). Depending on how good NCSoft’s EULA is (I haven’t gone back to read it, so it may or may not be fully enforceable), chances are Mr. Smallwood now faces a similar fate. While others in the blogosphere may scream about the silliness of placing these types of warnings on games (hence the apocryphal reference to warning labels on lawn mowers to not use them as hedge trimmers), I urge all game designers to spend the time and legal budget to craft a EULA that protects themselves against frivolous claims.

Our second summer reading exercise comes to us from Mississippi, where local television anchor Toni Miles sued Raycom Media, her former employer and owner of WLOX in Biloxi. Her claim was that Raycom was guilty of “cyber libel” for allowing viewers of its website to post comments in response to an article reporting that Ms. Miles was arrested for cocaine possession. The judge found that the article itself was true (she was arrested but the charges were later dropped), and that Raycom was protected by the Communications Decency Act (CDA) as a web publisher from libel allegations related to the posts by readers. This is another huge win in a line of cases where courts have applied this immunity to websites that host third party forums. Those who lose sleep at night wondering if all the flame wars conducted in their user forums can come back to bite them can sleep a little easier.

Now, before folks start flaming Mr. Smallwood about his suit against NCSoft after reading the paragraph above, do remember that the CDA does not protect individual posters against libel. You may have to answer to Mr. Smallwood and Casper the Friendly Ghostlawyer.

James Dunstan


So, thanks to Jim for this guest column.  Opinions expressed by my guest columnist are theirs alone and if you have any questions feel free to comment on this post or look it up in your Funk and Wagnalls.