I want to make a product (call it A) compatible with another proprietary product (B). So if I take product B and then reverse engineer the protocol by watching network traffic, I could produce a document describing the protocol. Then, lets say I give the document to another engineer. He implements the protocol based on the document, without himself being involved in the original reverse engineering of product B. Is it legal for me to use that new "green" protocol implementation in product A?
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There are a few ways that this could be illegal, but barring those, there is nothing per se illegal in doing what you describe.
It could be a TOS/contact/licence violation to sniff the traffic:
Use third-party software that intercepts, collects, reads, or "mines" information generated or stored by the Battle.net Client or the Game(s)
The protocol could be protected by patent. (U.S. Patent 5,883,893)
The use of the reverse engineered protocol could be illegal (fraudulently connecting to a company's server while posing as an authorized client).