Blizzard Entertainment on Monday won a legal battle against MDY Industries, a maker of software that allows gamers automate the advancement of their World of Warcraft (WoW) characters.

The decision, if allowed to stand, could diminish consumers' already limited ownership rights over the software they buy. It could also leave consumers liable for significant financial penalties in the event of legal action.

"Stunningly, this means that 'cheating' while playing a computer game can expose you to potentially huge statutory damages for copyright infringement," said EFF staff attorney Corynne McSherry in a blog post about the ruling.

Blizzard sued MDY to stop it from selling a program called Glider, which lets Blizzard customers play WoW without being at their computers. Use of such programs violates Blizzard's terms of use under its end user license agreement. Blizzard would typically pursue a breach of contract claim against EULA violators, but in this case it sued for secondary copyright infringement and contract interference under the theory that loading a copy of WoW into a computer's memory represents copyright infringement.

In siding with Blizzard, the judge has accepted its position that MDY's actions should be judged under copyright law rather than contract law. This matters because the potential damages are much higher under copyright law.

"The decision makes anybody much more easily liable for copyright infringement when what they're doing isn't copyright infringement," said Sherwin Siy, staff attorney at Public Knowledge, a public interest advocacy group that filed an amicus brief in support of MDY. "Just by crafting an End User License Agreement cleverly, a software company takes the matter out of the realm of contract and put it into the realm of copyright."

"There are several bad things that can happen as a result of this ruling," said Lance C. Venable, a partner at Venable, Campillo, Logan & Meaney P.C., the law firm representing MDY. "What the ruling does is it allows software manufacturers to have vast powers in the EULA to control how their software is used by end users beyond the terms of a contract. It allows software developers to create their own triggers for copyright infringement, ones they wouldn't have had before this decision."

Granting such subjective power to software developers goes against the notion of an objective statute that clearly defines copyright infringement, said Venable.

There are some additional matters to be dealt with in the case, but once those are resolved, Venable said he's planning to appeal the ruling to the Ninth Circuit Court.

In a blog post, former law professor William Patry, senior copyright counsel for Google (writing as a legal scholar rather than as a representative of Google), explained that the judge managed this sleight of hand -- moving the dispute into the copyright realm -- by finding that the WoW game "even though sold over the counter, was licensed not sold." He called the court's finding "a chilling extension of control by copyright owners of software over copies of programs they have sold."

In wondering how the court could justify its decision, Patry suggested perhaps the judge was offended because MDY's software allows behavior the court regards as cheating. "If so, God help us if law is being reduced to such subjective, nonstatutory grounds," he said.