Blizzard taking legal action vs. the creator of "Glider"

[Sky]

Originally Posted by teneran

If this "3 year grace period" is for real, then explain Richard Hatch. Filing a false tax claim (ie, not reporting income) can land you in prison, period.

I got a good chuckle from that too. Because there is no 3 year grace period for filing taxes. Hell, if you don't pay enough as an individual as you progress through the year you are assesed penalties. The IRS doesn't really screw around when it comes to collecting money. They will get it one way or another.

The funny thing about all of this is that if he had formed an LLC to do all this stuff his life wouldn't be sucking so much right now. Since it is unlikely that he did that he is offered less protection.

Regardless, the claim that he has violated copyright law is pretty funny. You can sue a person for anything, literally speaking, as to what holds up in court, that is entirely a different question.

This guy doesn't even come close to having enough money or a good enough attorney to beat blizzard. If you think that he does you are being nieve.

[Rayne]

Originally Posted by Sky

Because there is no 3 year grace period for filing taxes. Hell, if you don't pay enough as an individual as you progress through the year you are assesed penalties. The IRS doesn't really screw around when it comes to collecting money. They will get it one way or another.

Actually, as a subcontractor, I deal with IRS form 1099 on a yearly basis. I collect as many as 7-8 per year. While there is no official "grace period", the IRS has deemed that I may take up to, but not more than, three years to file a 1099. If I have a slow year, its not uncommon for me to hold a 1099 until the following year. I've held up to two at a time in past years. There is however, a penalty based upon the amount of the taxes due on each 1099 you wait to file. But if you're dealing with a figure less than $30,000, the penalty is only pennies per hundred.

My wife is the office manager of the local H&R Block, AND my personal / business bookkeeper.

[teneran]

That's completely different from fraud though. In other words, you're making a good faith effort to pay the proper taxes and the IRS recognizes there are business realities that may not make timely filing of 1099 or whatever possible.

On the other hand, not reporting income in order to avoid taxation = civil and criminal penalties, no matter when or how you made your money.

That was the point trying to be made .... there is no "grace period" for fraud.

[Szlia]

What can Blizzard win out of this? They gain street cred for fighting the good fight against botters (that's done allready) but then what? If they win, they have the makers of botting programs shaking in their boots (or more likely simply be more carefull with their hosting and billing solutions), but if they lose, they open Pandora's box, and not only for them: for the whole MMO industry.

So unless they have a case set in the hardest of iron (does such a thing even exist?), I doubt they will risk going to court over this. I would guess their plan is rather to lawyer-bully the guy into a settlement.

[Rayne]

Originally Posted by teneran

That's completely different from fraud though. In other words, you're making a good faith effort to pay the proper taxes and the IRS recognizes there are business realities that may not make timely filing of 1099 or whatever possible.

On the other hand, not reporting income in order to avoid taxation = civil and criminal penalties, no matter when or how you made your money.

That was the point trying to be made .... there is no "grace period" for fraud.

Fair enough. He isn't subcontracting either. Hes selling a product first hand. And its likely some local sales tax issues could apply here as well. Either way, this guy is in for some serious financial problems, even if criminal issues never enter the picture.

Personally, i'd rather be jailed than financially fucked for life.

[Havelock]

Originally Posted by Hal2005

Legal precident, if changed by this stupid class suit would be pretty trivial and be easily overturned when a real software case comes before the Supreme Court.

Would a straight EULA case ever go before the Supreme Court? Contracts are a matter of state law, and so far all the EULA-related cases involve state law (sometimes applied by federal courts, but state law nonetheless).

[Hachima]

This sounds very similar to Galoob Toys, Inc. v. Nintendo of America, Inc.that "was a court case which established the rights of users to modify copyrighted works for their own use."

From http://en.wikipedia.org/wiki/Game_Genie

The introduction of the original NES Game Genie was met by fierce opposition from Nintendo. Nintendo sued Galoob in the case Lewis Galoob Toys, Inc. v. Nintendo of America, Inc., claiming that the Game Genie created derivative works in violation of copyright law. Sales of the Game Genie initially stopped in the U.S., but not in Canada. In many gaming magazines of the time, Camerica placed Game Genie ads saying "Thank You Canada!" However, after the courts found that use of the Game Genie did not result in a derivative work, Nintendo could do nothing to stop the Game Genie from being sold in the U.S. Sega, on the other hand, fully endorsed the product with their official seal of approval.

The courts stated "Having paid Nintendo a fair return, the consumer may experiment with the product and create new variations of play, for personal enjoyment, without creating a derivative work."

Based on that case I would say there is a good chance Blizz will not win the case.

[Goliath]

It's a fact that income made from virtual assets is NON taxable. I'm sure that's different than what the Glider guy does, so I don't know if it applies.

[Rayne]

Originally Posted by Hachima

Based on that case I would say there is a good chance Blizz will not win the case.

Except that you cannot base it on that case. WoW is a persistent entity for which you pay a subscription for recurring authorized use. When you purchase a console game, you own it. You don't "own" WoW by virtue of purchase. You own an authorized copy of the game. And that authorization is subject to terms and conditions which you agree to each time you log into the game. It CAN and WILL be revoked if you are found to be in violation of that agreement.

There is no such agreement for console games.

[FohMD]

Originally Posted by Hachima

This sounds very similar to Galoob Toys, Inc. v. Nintendo of America, Inc.that "was a court case which established the rights of users to modify copyrighted works for their own use."

From http://en.wikipedia.org/wiki/Game_Genie


The courts stated "Having paid Nintendo a fair return, the consumer may experiment with the product and create new variations of play, for personal enjoyment, without creating a derivative work."

Based on that case I would say there is a good chance Blizz will not win the case.

I think I can hear Al screaming "NOOOOOOOOOOOOO!!!", Darth Vader-style.

[Remfin]

Originally Posted by Goliath

It's a fact that income made from virtual assets is NON taxable. I'm sure that's different than what the Glider guy does, so I don't know if it applies.

What are you talking about? Yes you aren't charged taxes based on your character gaining gold no. You ARE obligated to pay taxes if you did an auction on ebay. If anyone told you otherwise they are lying or don't know what they're talking about

And he most definately does owe taxes for either selling the program or a service (someone said it's a straight $25 lifetime?). I don't get why people automatically assume he didn't pay them however, haven't seen any evidence of that

[FohMD]

Originally Posted by Rayne

Except that you cannot base it on that case. WoW is a persistent entity for which you pay a subscription for recurring authorized use. When you purchase a console game, you own it. You don't "own" WoW by virtue of purchase. You own an authorized copy of the game. And that authorization is subject to terms and conditions which you agree to each time you log into the game. It CAN and WILL be revoked if you are found to be in violation of that agreement.

There is no such agreement for console games.

Even if you were right (you aren't), all that would mean is that the creator of Glider can have his account "revoked". Bottom-line, he isn't going to be sent to prison and he isn't going to pay a fine (unless he owes taxes).

[Usha Starchild]

Originally Posted by Szlia

but if they lose, they open Pandora's box, and not only for them: for the whole MMO industry.

So unless they have a case set in the hardest of iron (does such a thing even exist?), I doubt they will risk going to court over this. I would guess their plan is rather to lawyer-bully the guy into a settlement.

Quoted

Szlia is 100% right, Bliz cant risk losing.

[Goliath]

Originally Posted by Remfin

What are you talking about? Yes you aren't charged taxes based on your character gaining gold no. You ARE obligated to pay taxes if you did an auction on ebay. If anyone told you otherwise they are lying or don't know what they're talking about

And he most definately does owe taxes for either selling the program or a service (someone said it's a straight $25 lifetime?). I don't get why people automatically assume he didn't pay them however, haven't seen any evidence of that

Go look it up instead of assuming you know everything. Thanks.

[Havelock]

Originally Posted by Goliath

Learn to read. I said virtual assets, not ebay. Even if you are ebaying virtual assets, you are NOT obligated to pay taxes. Go look it up instead of talking out of your ass.

Do you have a cite for that? The Joint Economic Committee took the issue up a few weeks ago and the chariman's recommendation was that virtual assets be nontaxable, but as far as I know the issue's still up in the air. One curious gamer contacted the IRS earlier and the local office opined that the virtual assets were taxable on the same theory that barter clubs had been.