Terms of service as shield and sword: Twitch v. Johnston (No. 8)

That legal mumbo jumbo you never read but agree to anyway? Yeah, it's kind of important

Hi Software Engineering Leaders,

Sorry I missed a letter yesterday! I have plenty of material tee’d up and ready to go most of the time (it’s how I avoid my crazy kids on the weekend), but somehow yesterday just got totally out of hand. It was really quite beyond anyone’s managerial capability; I owe you a make up.

Today’s letter is free. If you like what you read, consider signing up! Seven bucks a month seems like a great value to me.

Also, today we had a great conference call on law and software engineering topics. We talked about some of the topics in this letter, and more—LIVE! Remember, these calls are every Wednesday at noon Pacific. You—yes, YOU—are welcome to dial in and just lurk. No need to join Meetup or RSVP. Just grab that Zoom number or link.

On to today’s topic:

Twitch goes on the offensive against bots

Twitch is the hugely popular streaming service where unemployed and/or unemployable youngsters squander their youth streaming their video game playing to other, similarly unemployed youngsters. (Wait—is that my inner curmudgeonly voice or my outer curmudgeonly voice talking?)

Actually, Twitch seems cool enough. It even gets used for a lot more than gaming, including quite a number of programmers who go live on live coding sessions from time to time and some other stuff, like NBA games.

Anyway, like YouTube, some can earn substantial income streaming on Twitch (no, really, I’m not jealous or bitter), so folks have incentives to try to “game” (see what I did there) the Twitch algorithm to boost their visibility on the platform. One way people try to boost their ratings online, including Twitch, is to use bots.

Starting back in 2017 (or maybe ‘16), Twitch sued a number of individuals who were hosting, operating, and selling bots to Twitchers who wanted to boost their profile the cheap and dirty way (hey, it worked for the President).

In a recent default judgment win in the ongoing litigation, Twitch won a $100k+ judgment (plus attorneys’ fees) against two individuals operating and selling Twitch bot services.

Why this matters-

Twitch brought the lawsuits against the individuals under fairly straightforward intellectual property and breach of contract terms. This is important because it highlights why having well-defined terms of use and intellectual property can be used both to defend yourself from others and also to be used as a “sword” to prosecute, civilly, bad actors.

Without strong, clear terms of use, Twitch would have had to rely on harder to establish legal grounds like the Computer Fraud and Abuse Act or tort claims.

How the law works-

Today, I’m writing about how Twitch recently obtained default judgment against some of the defendants in the case. Default judgments happen, generally, when defendants fail to appear or respond to litigation. They aren’t always automatic, but not showing up to defend yourself puts you on the fast track to a nasty judgment.

In this case, the court was likely willing to enter a default is because Twitch had a terms of service agreement, among other contractual terms with its users, whereby users agreed not to

  • use a “robot . . . or other automated means to access the Twitch Service for any purpose”;

  • “impersonat[e] any person or entity . . . misrepresent[ing] the source, identity, or content of information transmitted via the Twitch Service”;

  • “manipulat[e] identifiers in order to disguise the origin of any Content transmitted through the Twitch Service”;

  • “mak[e] unsolicited offers, advertisements”; and

  • “us[e] the Twitch Service in any manner that would . . . negatively affect or inhibit other users from fully enjoying the Twitch Service or that could damage[] the functioning of the Twitch Service in any manner.”

Terms of use are, by and far, enforceable, even though only 3% of people actually read them before signing. Thus, there was a contractual basis between the parties that enable Twitch to prosecute the defendants on the basis that they breached their contract with Twitch and were, therefore, liable for damages.

Thus, well thought out terms of service, like most any contract, not only protect you from liability through disclaimers but can also serve as a basis for proactively seeking damages when someone does something bad.

Actions to take-

Take your terms of service and other agreements seriously! Think about them strategically. How could they be used not only to protect you from liability or to proscribe how you want users to act, but how could the enable you to strongly enforce your community’s and project’s mission?

(In more law and justice related to Twitch, as I was finishing today’s letter, I found out that the company’s San Francisco HQ was targeted by some threats by a shooter. Workers were sent home to work. So shitty, and I’m tired of it.)

In other news…

  • Kik fired back in a lawsuit by the SEC against the company for the alleged unlawful and unregistered sale of securities in the form of Ethereum-based tokens a few years ago. The 130 page answer got a lot of attention partly because it’s an interesting case, partly because it’s pretty uncommon for a defendant to file such a detailed and lengthy answer, and partly because most defendants against the SEC quickly settle. I highlight it because this will be interesting to watch unfold AND it’s a possibly an effective (if expensive) way to try this case in the court of public opinion.

  • Speaking of bots, California recently banned using bots for sort of similar purposes—the BOTS Act. See California Business and Professions Code 17940 et seq. It seems to be limited to influencing elections or trying to encourage people to buy things on big social media networks, but it seems to be a fairly complex piece of litigation, despite its relatively short length. It’s already the law in California—effective July 1. More to review!

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*LEGAL DISCLAIMERS AND OTHER MUMBO JUMBO: since this is a newsletter from an attorney, it is possible that this could be construed as attorney advertising (in blinking lights, of courts). I should also tell you that anything I say or opinions I offer in the list should never be construed as legal advice — even if you think the facts from some case or situation I discuss are pretty close to yours, small details make a big difference. And besides, since I’m just broadcasting information without seeing your individual situation, how could I possibly be giving you legal advice? Never forget the lesson of the Selfish Giant. And finally, my name is Michael Rice, I wrote this content, I’m licensed in California, and, with rare exception, can only work with clients in California.