CITATION:
Blizzard v. Simpson, 2012 ONSC 4312
COURT
FILE NO.: CV-12-453889
DATE:
20120723
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Blizzard Entertainment, Inc.,
Applicant
AND:
Michael Simpson, Respondent
BEFORE: Carole J. Brown J.
COUNSEL: Andy Radhakant, for the
Applicant
Michael Simpson, representing himself
HEARD: July 20, 2012
E N D O R S E M E N T
[1]
The applicant, Blizzard Entertainment, Inc. (" Blizzard")
seeks to have recognized and enforced in Ontario a judgment of the United
States District Court for the Central District of California (the
"California Court") granted by United States District Judge Cormac J.
Carney dated July 20, 2011, which granted an injunction and damages against the
respondent, Michael Simpson (" Mr. Simpson"). The defendant/respondent
did not defend the California action, nor appeal the judgment, and has not
provided any responding materials or evidence to this application, although
duly and properly served in both the California action and in this application.
The respondent did, however, appear before this Court and make oral
submissions.
[2]
The California judgment concerns Simpson's infringement of Blizzard's copyrights
and other rights in the computer game StarCraft® II – Wings of Liberty ("StarCraft
II"). Blizzard, in its action in California, had specifically alleged that
Simpson's online sale of unauthorized "map hacks" designed to alter
and impair the online, multiplayer functionality of StarCraft II violated Blizzard's
copyright and contractual rights. Specifically, as set forth in the affidavit
of the California attorney involved in this matter, Marc E. Mayer, the map hack
software, CraniX Map Hack allowed users to alter the gameplay of StarCraft II
in order to gain an unfair competitive advantage in StarCraft II, thereby
disrupting and impairing the competitive multiplayer aspect of the game. In the
California action, and the judgment which the applicant seeks to have
recognized and enforced in Ontario, Simpson was enjoined from infringing Blizzard's
StarCraft II copyright and from violating the applicable Terms of Use and End
User License Agreement ("EULA"). The California Court also awarded
damages plus interest, fees and costs payable by Mr. Simpson to Blizzard.
[3]
As set forth in the affidavit of Marc E. Mayer, referred to above, the
District Court of California granted leave on December 15, 2010 to obtain
discovery in order to learn of the identities of the defendants and to serve
subpoenas on PayPal, Inc., Google, Inc. and CrowdGather, Inc. under the United
States Federal Rules of Civil Procedure in order to obtain such identities.
Following investigation, it was determined that the StarCraft II Map Hack Software
and the website affiliated with it were linked to Mr. Simpson.
[4]
Blizzard thereafter served Mr. Simpson, who resides in Carlton Place,
Ontario, by making requests with Canada's designated Central Authority under
the Convention on the Service Abroad of Judicial and Extrajudicial Documents
in Civil or Commercial Matters (the “Hague Convention”). Mr. Simpson
was properly served pursuant to the Hague Convention on March 1, 2011. The
applicant submits that Mr. Simpson acknowledged receipt of the Summons and
Complaint by posting the full text of the Summons and Complaint along with his
comments on his website www.SC2hackdev.org on March 1, 2011. Mr. Simpson
admitted during his appearance in this Court that he, in fact, received service
of the Summons and Complaint.
[5]
However, Mr. Simpson did not serve or file a defence or otherwise
respond to the California action or appear at the California proceeding. He was
noted in default in the California action on April 11, 2011 and default
judgment was obtained following proper service of the motion for default
judgment on Simpson, who again did not respond.
[6]
On July 11, 2011, the Hon. Judge Cormac J. Carney of the United States
District Court (California) heard argument on Blizzard's motion for entry of
the default judgment and issued the judgment now sought to be recognized and
enforced in Ontario. The judgment granted is as follows:
Mr. Simpson is ordered to pay Blizzard
statutory damages in the amount of $150,000 plus postjudgment interest pursuant
to 28 U.S.C. § 1961 at the rate of 0.16%, attorneys fees of $41,792.75 and
costs of $3645.21. Furthermore, Mr. Simpson and his officers, agents, servants,
employees, attorneys, successors, licensees, partners, and assigns, and all
those acting directly or indirectly in concert or participation with any of
them, are permanently enjoined from: (1) infringing Blizzard's StarCraft II
copyrights by engaging in activities including without limitation the
development, sale, and/or distribution of software products designed to modify
or hack Blizzard's online videogame StarCraft II including without limitation
the "CraniX Map Hack," (2) including or contributing to third party
infringements of Blizzard's StarCraft II copyrights, (3) intentionally
interfering with Blizzard's contract with StarCraft II players, and (4) violating
the StarCraft II End User License Agreement ("EULA") and Battle.net
terms of use ("TOU").
[7]
The California judgment was properly served on Mr. Simpson on August 1,
2011. Mr. Simpson took no steps to satisfy, appeal, vary or set aside the
California judgment, which remains valid and unsatisfied.
Law and Analysis
[8]
In order to determine whether the California judgment should be
recognized and enforced in Ontario, the Ontario Court must be satisfied that
the California Court properly assumed jurisdiction according to Canadian
conflict of laws rules, that there are no applicable defences of fraud, breach
of natural justice, or public policy, established upon which this Court could
refuse to enforce the California judgment and that the injunctive relief granted
in the foreign judgment is enforceable in Canada.
[9]
The Supreme Court of Canada in Beals v Saldanha, 2003 SCC 72 (CanLII), [2003] 3 S.C.R.
416 sets forth a two-stage approach for the recognition and enforcement of
foreign judgments. Firstly, the moving party must establish that the foreign
court took jurisdiction according to Canadian conflict of laws rules, i.e. there
must be "real and substantial connection" to the jurisdiction. This
test requires a significant connection between the cause of action and the foreign
court and is "the overriding factor in the determination of
jurisdiction". As stated in Van Breda v Village Resorts Limited,
2012 S. C. C. 17, the most recent pronouncement of the Supreme Court of Canada
on the "real and substantial connection" test, jurisdiction may be
based on traditional grounds, such as the defendant's presence in the
jurisdiction or consent to submit to the court's jurisdiction, if established
(paragraph 79). In this case, based on the documentation produced by the
applicant, including the StarCraft II End User License Agreement and the
respondent's acceptance of the terms therein, including the governing law
(stipulated to be the Laws of the United States of America) and the location of
the court of competent jurisdiction to determine disputes (stipulated to be the
County of Los Angeles, State of California), the applicant submits that the
real and substantial connection test has been satisfied, as the defendant
consented to the jurisdiction.
[10] Where
the real and substantial connection test has been satisfied, the responding
party has the onus of establishing any applicable defences, including fraud,
public policy and lack of natural justice in resisting the foreign judgment. In
this case, the respondent, Mr. Simpson, did not defend the California action
nor appear at the California proceeding. Mr. Simpson has not raised any defences
which would satisfy his onus in resisting the foreign judgment.
[11] I
am satisfied, based on all of the evidence before me and the caselaw cited and
considered, including Beals v. Sakhara, supra., United States of
America v. Yemec, 2012 ONSA 414 and Facebook Inc. v. Guerbuez, 2010 QCCS 4649 (CanLII), 2010
QCCS 4649 aff’d 2011 QCCA 268 (CanLII), 2011 QCCA 268, that the defences of fraud, denial of natural
justice and breach of public policy are not applicable.
[12] Mr.
Simpson did appear at the application hearing before this Court and argued, for
the first time, that Blizzard had committed a breach of Mr. Simpson’s hacker
software website. He submitted that Blizzard had accessed his hacker website to
determine his identity, and in so doing breached the user terms and conditions
set forth in his website. He argued that the applicant had produced as evidence
in this Court the screenshot of his forum posted on his www.SC2hackdev.org
website, which contained his comments regarding receipt of the Summons and
Complaint in the California action, and that such access was in breach of the
contractual terms of his website and software. While he did not provide any
responding material, he did refer to the applicant's materials which included
the snapshot of Mr. Simpson's hacker software website with his comments, and
also a copy of his posted registration, with “terms of use”.
[13] The
terms of use on Mr. Simpson’s StarCraft II hacker software website included the
following:
By using our website, you agree
to the terms described below...
1. You
are not an employee or know an employee of any companies listed:
- Activision
Blizzard,
- Vivendi,
- Blizzard
Entertainment, Inc.,
- Activision.
[14] Mr.
Simpson submitted that the Blizzard lawyers must have gained access to his
website and, in so doing, given the terms and conditions, would have breached
those conditions, being affiliated with Blizzard. I note that the snapshot was
taken in the context of the investigation pursuant to the California Court order.
He further admitted that he did accept service of and received all material
served on him pursuant to the Hague Convention. He further submitted
that he had developed the map hack software and marketed it, making $5000 on
the map hack software.
[15] With
respect to the Blizzard lawyers accessing Mr. Simpson’s map hack website and
breaching the terms of his user agreement, Mr. Radhakant submitted that if
infringers could protect themselves from infringement actions by posting terms
and conditions on their websites, this would be an untenable position in IP
law. I agree with the Applicant’s submissions, Mr. Simpson has not satisfied
the onus of establishing any applicable defences to enforcement of the California
judgment.
[16] I
find, on all the evidence before me, and on the submissions of the parties,
that the California Court did properly assume jurisdiction and that there are
no defences to enforcement of the judgment which are applicable.
[17] Based
on the evidence before me, the submissions of Mr. Radhakant and Mr. Simpson,
and the case law upon which the plaintiff relies, I am satisfied that the
plaintiff has met the test for recognition and enforcement of foreign
judgments, as set forth by the Supreme Court of Canada in Beals v Saldana,
supra, and that none of the defences to enforcement are applicable,
including fraud, denial of natural justice or breaches of public policy. I am
satisfied that the injunctive relief sought is enforceable in this Court, that
the terms of the Order of the California Court are clear and specific and that
the considerations set forth in Pro Swing Inc. v Elta Golf Inc., 2006
S.C.C. 612 have been satisfied. Accordingly, I order that the judgment of the
United States District Court of the Central District of California, Southern
Division CV – 01495 – CJC (MLG) dated July 20, 2011 be recognized and enforced
as a judgment of this Court.
Costs
[18] I
would urge the parties to agree upon costs, failing which I would invite the
parties to provide any costs submissions in writing, to be limited to three
pages, including the costs outline. The submissions may be forwarded to my
attention, through Judges’ Administration at 361 University Avenue, within thirty
days of the release of this Endorsement.
________________________
Carole J. Brown J.
DATE:
July 23, 2012
