Decided September 10 1992 Majority Randall Ray Rader | Citation(s) 975 F.2d 832 End date 1992 | |
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Full case name ATARI GAMES CORP. and Tengen, Inc., Plaintiffs-Appellants, v. NINTENDO OF AMERICA INC. and Nintendo Co., Ltd., Defendants-Appellees. Judge(s) sitting Raymond C. Clevenger, Edward Samuel Smith, Randall Ray Rader Court United States Court of Appeals for the Federal Circuit Similar Lewis Galoob Toys - Inc, Sony Corp of America v Univers, Feist Publications - Inc - v Ru, Oracle America - Inc v Go, Apple Computer - Inc v Mic | ||
Atari Games Corp. v. Nintendo of America Inc., 975 F.2d 832 (Fed. Cir. 1992), is a United States Court of Appeals for the Federal Circuit case, in which the court held that Atari Games engaged in copyright infringement by copying Nintendo's lock-out system, the 10NES. The 10NES was designed to prevent Nintendo's video game console, the NES, from accepting unauthorized game cartridges. Atari, after unsuccessful attempts to reverse engineer the lock-out system, obtained an unauthorized copy of the source code from the Copyright Office and used it to create its 10NES replica, the Rabbit. The case involved copyright infringement claims by Nintendo and a defense based on fair use and copyright misuse by Atari.
Contents
- Background
- Decision
- Protectable expression vs unprotectable ideas
- Verbatim Copying
- Substantial Similarity
- Fair Use Defense of Reverse Engineering
- Copyright Misuse Defense
- Impact
- References
The Federal Circuit declared that Nintendo was likely to prove that Atari made unauthorized verbatim copies of the 10NES program and affirmed the imposition of a preliminary injunction by the United States District Court for the Northern District of California, preventing Atari from exploiting Nintendo's copyrighted code. The Federal Circuit, however, disagreed with the district court on the matter of reverse engineering and held that the intermediate copying of the 10NES object code incurred during the examination of the microchip itself was fair use. Atari's copyright misuse defense was precluded by the doctrine of unclean hands, as Atari had lied to the Copyright Office to obtain an unauthorized copy of the 10NES.
Background
Nintendo designed the 10NES lock-out system to prevent unauthorized games from running on its video game console, the NES. Both the console and authorized game cartridges contained a microchip that contained the 10NES program, and the communication between the two controlled access to the NES. In 1986, Atari began their attempts to reverse engineer the 10NES, which included monitoring communications between the console and cartridges chips, chemically peeling layers from the chip, and microscopically examining the code embodied in the chip's silicon. However, Atari was unable to sufficiently decipher its operation and thus failed to break the lock-out system.
In December 1987, Atari became a licensee of Nintendo and gained the rights to make video games for the NES. The license terms strictly controlled Atari's access to the console technology. To sell a video game, Atari was required to give the game to Nintendo, and Nintendo would place the game on cartridges equipped with 10NES and resell them to Atari. The license also contained an exclusivity term that prohibited licensees from creating adaptations of such games for other consoles for a period of two years following the first sale.
In 1988, Atari obtained the source code for the 10NES from the Copyright Office, by falsely alleging that a copy of the code was needed in a copyright infringement action. Atari used this copy to develop its own replica of the 10NES, the Rabbit, which generated signals functionally indistinguishable from the 10NES. As Atari gained access to NES owners without Nintendo's licensing conditions, Nintendo sought a motion to enjoin Atari's alleged infringement of its copyright, which was granted by the District Court. Atari then asserted copyright misuse to defend against copyright infringement claims.
Decision
The courts found that Atari had infringed Nintendo's copyright by creating verbatim and substantially similar copies of the protected elements of the 10NES chip. Atari was unsuccessful in claiming that such copying was fair use, or that Nintendo had misused its copyright.
Protectable expression vs. unprotectable ideas
In order for there to be copyright infringement, a copyright owner needs to show there actually exists expression which is protected under copyright, since elements such as those constrained by external considerations (e.g. third-party specifications), ideas (which are covered by patents, not copyright), and "expression necessarily incident to the idea" are unprotectable. Following procedures established in cases such as Computer Associates Int'l, Inc. v. Altai Inc., the courts defined the data stream (or key) generated by the chip to be creative expression protectable under copyright, and the generation of such a data stream as the "idea" of the 10NES. Furthermore, by demonstrating that there were multiple ways to generate the data stream, Nintendo showed the courts that any one implementation of the idea was not necessarily incident to the idea and thus also protectable.
Verbatim Copying
Federal Circuit affirmed the District Court's holding that Atari infringed the 10NES copyright by obtaining an unauthorized copy from the Copyright Office. Atari had requested a copy of the source code in connection with litigations involving the copyrighted work, but the court determined that Atari had no reason to fear an infringement suit at the time. Atari's request was therefore in violation of the Section 201.2(d)(2) of the Regulations of the Copyright Office, and the obtained copy was unauthorized.
Substantial Similarity
To decide whether Atari's replica of the 10NES, the Rabbit, was infringing on Nintendo's copyright, the court analyzed whether there was substantial similarity between the two systems. The court stated that Nintendo incorporated creative organization and sequencing unnecessary to the lock and key function, and that Nintendo could protect the unique arrangement of programming instructions to create a purely arbitrary data stream. Nintendo also produced expert testimony showing that there were a multitude of different ways to generate a data stream to unlock the NES. Atari's unlocking program also contained elements of the 10NES that were unnecessary for unlocking. Atari's argument that these unnecessary instructions were included to ensure future compatibility was rejected.
Fair Use Defense of Reverse Engineering
The courts found that reverse engineering the 10NES using a copy of its source code obtained from the Copyright Office infringed Nintendo's copyright by creating unauthorized intermediate copies of the code not protected under fair use, which requires the original copy to be authorized. However, the appeals court disagreed with the district court, which had declared reverse engineering itself to be copyright infringement, by clearly stating that, "untainted by [a] purloined copy", "Atari did not violate Nintendo's copyright by deprocessing computer chips in Atari's rightful possession." In particular, the Federal Circuit reasoned that since it was necessary to understand the chip, Atari's initial attempts to decipher the 10NES by chemically stripping the device, microscopically examining it and hand copying the binary object code to learn how it operates were all fair use.
Copyright Misuse Defense
Nintendo conceivably committed copyright misuse by attempting to "maintain a monopoly" of NES-compatible cartridges through their use of the 10NES lock-out system. However, because Atari deceived the Copyright Office to obtain an unauthorized copy of the 10NES source code, the courts denied Atari any defense based on copyright misuse because such a defense requires the defendant to have acted in good faith and have "clean hands," citing Keystone Driller Co. v. General Excavator Co. - 290 U.S. 240 (1933).
Impact
The opinion is notable for having stated that an arbitrary data stream in a lock-out device was not dictated by function and could be copyrighted, and provided support for the copyrightability of protocol elements themselves. The case has also been cited for the court's stance on reverse engineering. In Bowers v. Baystate Technologies, the opinion is cited to support that reverse engineering is fair use, and that the fair use defense is necessary so that copyright protection does not extend to ideas embodied in works. The case shares its basic fact pattern with Sega v. Accolade, with the notable exception that Atari committed fraud to obtain a copy of Nintendo's code.