On 12 January 2017, the German Federal Court of Justice has handed down its second landmark decision on cheat software within three months. After clarifying the question under which conditions cheat software may constitute copyright infringement in October last year, the Federal Court of Justice has now decided that cheat software can constitute an act of unfair competition, too.

To be able to play online games, e.g. World of Warcraft (WoW) or Diablo III , it is necessary to download a client software and install it on the computer. Achieving progress within the game regularly takes several hours. To save time and to easily achieve the goals of the game some companies develop software, so-called cheat- or buddy-bots, allowing the player to overcome the challenges of the game automatically. Online game developers are not pleased by this fact, which is why they try to prevent the distribution of such cheat bots up front.

Cheat Software and Copyright

In October 2016, the Federal Court of Justice had already decided that the commercial downloading and copying of the client software to develop cheat software constitutes copyright infringement. According to the court, this act is neither permitted by the End User License Agreement (EULA), as it only allows private use of the client software, nor does it fall within the scope of § 69 Sec. 3 of the German Copyright Act, which in order to determine the ideas and principles which underlie any element of a software allows users to observe, study or test the functioning of the program without the authorization of the right holder. However, this exception only applies to computer programs and does not justify the reproduction of the audiovisual content.

Cheat Software and Unfair Competition

Three months later, the Court further decided that the distribution of such cheat bots can also amount to an illegal obstruction of a competitor. The court held that not the breach of contract as such constitutes an act of unfair competition. An act of unfair competition is rather to be seen in the development and distribution of cheat bots which are able to impair the business model by circumventing protective measures which were meant to avoid such impairment. According to the Court it shall remain up to the developer how the game should be played.

A Look Ahead

These decisions make the cheat software business model much more difficult. Due to the fact that for the development of such bots it is necessary to copy the client software, which automatically implies a copying of the audiovisual content, such acts always constitute copyright infringement.

Further, it was held that the development and distribution of cheat bots can constitute an act of unfair competition, if and to the extent the developer´s product is impaired. Therefore, these two decisions may affect the development of software bots beyond the gaming industry. So-called “social bots” used within social networks to automatically generate posts may also impair the business of the operator, and thus may be prohibited as well based on the reasoning of these decisions. How this will be assessed in detail remains to be seen.

This article was originally published on AllAboutIP – Mayer Brown’s  blog on relevant developments in the fields of intellectual property and unfair competition law. For intellectual property-themed videos, Mayer Brown has launched a dedicated channel available here.