The opinion of the court was delivered by: Decker, District Judge.
Midway Manufacturing Co. v. Artic International, Inc., No. 80 C
5863, slip op. at 16 (N.D.Ill. June 2, 1981) (order denying
defendant's motion for summary judgment). Here, the videotapes
were merely copies of the work. The work, for which copyright
protection was granted, is the audiovisual display reflecting
the author's creativity.
B. Validity of Midway's Copyrights
Section 410(c) of the Copyright Act, 17 U.S.C. § 410(c),
provides that a certificate of registration from the Copyright
Office "shall constitute prima facie evidence of the validity
of the copyright." As noted above, plaintiff Midway has
received Certificates of Copyright Registration from the
Copyright Office covering both its Galaxian and Pac-Man games.
Artic has the burden of overcoming that presumption of validity
in this case. See Flick-Reedy Corp. v. Hydro-Line Manufacturing
Co., 351 F.2d 546 (7th Cir. 1965), cert. denied, 383 U.S. 958,
86 S.Ct. 1223, 16 L.Ed.2d 301 (1966).
Artic makes three arguments which it contends overcome the
presumption of validity. First, Artic contends that the
audiovisual aspects of Midway's video games are not "fixed in
any tangible medium of expression," 17 U.S.C. § 102(a), and so
do not qualify for copyright protection at all. Second, Artic
claims that the publication of the video games by Namco in
Japan, without the proper copyright notice attached, resulted
in forfeiture of the copyrights under 17 U.S.C. § 401. Finally,
Artic argues that the video games may not be copyrighted
because they are useful, mechanical devices not subject to
copyright protection. Each of Artic's contentions will be
considered in turn.
Before a copyright can attach in any original work of
authorship, the work must be "fixed in any tangible medium of
expression, now known or later developed, from which [it] can
be perceived, reproduced, or otherwise communicated, either
directly or with the aid of a machine or device." 17 U.S.C. § 102(a).
The phrase is defined in the Copyright Act as
17 U.S.C. § 101.
Artic contends that the audiovisual displays of Midway's
games do not meet that requirement. Artic's argument is based
on the specific technology by which the images that appear on
the game screens are generated. Basically, Artic notes that
the ROMs in the video games do not contain enough memory to
store the entire picture that appears on the game's screen at
any one instant. Rather, the ROMs contain a number of symbols
or patterns which are combined in various ways by the
microprocessor to make up the images seen on the screen. Artic
argues, therefore, that the computer is simply generating a
new set of pictures at all times, pictures that are themselves
not fixed in any medium.
Defendant also claims that Midway's copyright in the video
games is void because Namco, the developer of both games,
published them in Japan without attaching any copyright
notice. 17 U.S.C. § 401(a) provides that:
Evidence was presented at the hearing which showed that
Namco's game machines did not display a copyright notice.
Artic argues that the failure to attach a copyright notice to
those games voids Midway's copyrights.
Defendant's argument is not supported by the Copyright Act,
however. The statute only requires notice to be placed on
those copies published "by authority of the copyright owner."
Id. Midway is the owner of the United States copyright in the
games, as is evidenced by the certificates of registration. As
noted above, all copies of the games published or sold by
Midway contained sufficient notice to comply with the
requirements set forth in the Act. Midway did all that it could
reasonably do to comply with the Act. It has no control over
the actions taken by Namco in Japan. See Goldman-Morgen, Inc.
v. Dan Brechner & Co., 411 F. Supp. 382, 389-90 (S.D.N.Y. 1976).
C. Registration of Midway's Copyrights
Artic claims that Midway was guilty of several instances of
improper or fraudulent conduct before the Copyright Office
when attempting to register its copyrights in the two video
games. The alleged fraud is the basis for Artic's motion for
summary judgment on the copyright claims, which motion will be
discussed at the present time.
Russ Berrie & Co. v. Jerry Elsner Co., 482 F. Supp. 980, 988
(S.D.N.Y. 1980). See Vogue Ring Creations, Inc. v. Hardman,
410 F. Supp. 609 (D.R.I. 1976). Defendant's motion for summary
judgment relies largely on its claim, discussed above, that
plaintiff Midway has succeeded in copyrighting only the
videotapes it submitted to the Copyright Office. On the basis
of that assumption, Artic says that a number of the statements
made by Midway on the applications for its copyrights were
false. Specifically concerning the Galaxian application, Midway
stated that the work that it was copyrighting was published in
Japan on September 15, 1979, by Namco, Limited, the author of
the work. As Artic notes, those facts are not correct if the
"work" copyrighted was the videotape, which was made by Midway
in Illinois on February 14, 1980, and never published at all.
In addition, Artic relies on the testimony of one David
Albee, Senior Copyright Examiner for the Copyright Office. Mr.
Albee was the examiner who handled Midway's Galaxian and
Pac-Man copyright applications. He testified at a hearing held
before the United States International Trade Commission, which
was considering many of the issues currently before this
court, and a transcript of his testimony was admitted into
evidence before the court during the preliminary injunction
hearing. To the extent that Mr. Albee was able to remember
anything about the video game applications, he testified that
an attorney for Midway told him that the videotapes had been
published and that the copies were used for promotional
purposes. Mr. Albee also testified that he viewed the tapes.
The above analysis by the court should not be taken to mean
that the court totally disagrees with the propositions put
forth by Artic. It does appear that the applications and
procedures followed by Midway in registering its copyrights
were not entirely clear and straightforward. However, much of
whatever confusion there was appears to have resulted from the
fact that Midway was attempting to copyright new technology
that the Copyright Office had never directly dealt with
before. Particularly in view of that situation, the court is
guided by the following statement in Freedman v. Milnag Leasing
Corp., 20 F. Supp. 802, 804 (S.D.N.Y. 1937):
In addition to claiming that Midway engaged in fraud before
the Copyright Office, Artic also argues that Midway failed to
comply with the requirements of 17 U.S.C. § 205(d). That
Artic's arguments under this section center on the Pac-Man
registration. The recorded document for that copyright is
dated October 10, 1980, and is entitled "Assignment of
Copyrights." It reads in part as follows:
"Namco Limited . . . has assigned to and does
hereby assign to Midway Mfg. Co. . . . the entire
right, title and interest in common law and
statutory copyrights in and to said Game
[Pac-Man] in the United States and The Western
On the following day, a representative of Midway signed and
dated a letter to the president of Namco relating to the
assignment of the copyrights. That letter states in full:
"Midway Manufacturing Co. fully understood and
agreed that the "ASSIGNMENT OF COPYRIGHTS" for
both [PAC-MAN] and [RALLY-X] which were signed by
Namco's representative and granted to Midway Mfg.
Co. shall be governed and restricted by the
License Agreement of the above games. The License
Agreement above mentioned shall be finalized no
later than November 15, 1980."
Finally, on November 4, 1980, Namco and Midway entered into a
formal "LICENSE AGREEMENT" under which Midway received the
full rights to market the Pac-Man game in the United States.
Paragraph 2(b) of that document once again purports to
transfer from Namco to Midway all United States copyrights in
the Pac-Man game. Artic claims that the October 10 document
which was recorded was not the "instrument of transfer"
required by the statute. Rather, Artic says that Midway should
have recorded the November 4 license agreement, which, Artic
argues, actually transferred the copyrights.
The court begins its analysis by noting that the language of
the assignment, by its terms, clearly transfers Namco's
copyrights in the Pac-Man game to Midway. That transfer is not
repudiated in the subsequent letter from Midway to Namco. The
letter only states that the extremely general grant,
registered with the Copyright Office, is subject to a more
specialized agreement between the parties. It is instructive
to note that the more specialized license agreement, insofar
as the copyright is concerned, is entirely consistent with the
earlier assignment. Apparently, the practice followed by
Midway in this case is well accepted by the Copyright Office.
Professor Nimmer states:
"A transferee sometimes hesitates to record his
transfer for the reason that he does not wish the
amount or nature of the consideration which he
has paid to become a matter of public knowledge.
This problem is often solved through the device
of the so-called `short form' document of
transfer. That is, at the same time the
transferor executes the full contract of transfer
which recites the consideration which the
transferee has or will thereafter pay to the
transferor, a second short form document is also
executed by the transferor which recites in full
the rights transferred but which refers to the
consideration therefor either in general terms
(e.g., `for good and adequate consideration') or
which refers to the longer document for a
recitation of the consideration. Only the short
form is recorded."
3 Nimmer on Copyright § 10.07[A], n. 2 (1981). While there are
some technical differences between the practice described by
Professor Nimmer and that followed by Midway in the instant
case (i.e., the two documents were not executed at the same
time and the "short form" that was recorded does not contain a
purely formalistic statement of consideration), the court does
not believe that those differences are significant. The court
finds that Midway adequately complied with the requirements of
17 U.S.C. § 205(d).
D. Artic's Infringement of Midway's Copyrights
Section 106 of the Copyright Act provides the following
exclusive rights to the holders of valid copyrights:
"(1) to reproduce the copyrighted work in
copies . . .;
"(2) to prepare derivative works based upon the
"(3) to distribute copies . . . of the
copyrighted work to the public by sale or other
transfer of ownership, or by rental, lease, or
"(4) in the case of . . . motion pictures and
other audiovisual works, to perform the
copyrighted work publicly; and
"(5) in the case of . . . the individual images
of a motion picture or other audiovisual work, to
display the copyrighted work publicly."
17 U.S.C. § 106. Midway claims that one or more of those
exclusive rights are violated by Artic's sale of its Puckman
printed circuit boards and its Galaxian speed-up kits.
Turning first to the Puckman printed circuit boards, Midway
contends that their sale violates its right to make copies.
Artic's circuit boards fit well within the definition of
"copies" under 17 U.S.C. § 101, because they are "material
objects . . . in which a work [here Puckman] is fixed . . . and
from which the work can be perceived . . . with the aid of a
Artic suggests that this court should not find that its
circuit boards infringe Midway's valid copyrights, because no
evidence showing direct proof of copying was presented at the
hearing. Courts, however, have recognized the difficulty that
plaintiffs are likely to have in finding direct proof of
copying of a protected work, and have allowed a finding of
copying from evidence that the defendant had access to the
copyrighted work and that defendant's work is substantially
similar to plaintiff's. See Walker v. University Books, Inc.,
602 F.2d 859 (9th Cir. 1979); Granite Music Corp. v. United
Artists Corp., 532 F.2d 718 (9th Cir. 1976).
Here, there is ample evidence of Artic's access to the
copyrighted work. Artic's president admitted that he became
aware of Namco's Puckman game in Japan before Artic began
selling the printed circuit boards. In addition, Artic began
selling the boards after Midway's Pac-Man game was widely
distributed in the United States. It was also demonstrated at
the hearing that Artic's Puckman game is not only
"substantially similar" to Midway's Pac-Man, but that the two
games are, in fact, essentially the same. There is ample
evidence that Artic copied Midway's Pac-Man game.
Artic makes two arguments which, it claims, preclude a
finding of infringement, even if the court finds that Artic
copied Midway's Pac-Man game. First, Artic urges this court to
follow the district court holding in Data Cash Systems, Inc. v.
JS&A Group, Inc., 480 F. Supp. 1063 (N.D.Ill. 1979), aff'd on
other grounds, 628 F.2d 1038 (7th Cir. 1980). That case
involved a computer program designed to be used in a
computerized chess game. The written program itself was
copyrighted by the plaintiff in that case. The program was then
embodied in a ROM, which was made part of a hand-held computer
chess game. The defendants allegedly copied plaintiff's ROM and
used it in a computer chess game of their own. The district
court granted summary judgment for the defendants, stating,
"Even assuming that the ROM in plaintiff's
CompuChess was copied by defendants JS&A,
Sugarman and Stanke, the ROM is not a `copy' of
plaintiff's computer program and therefore the
copying is not actionable. Since a complete
defense as a matter of law with respect to
plaintiff's claim of copyright infringement
exists, the motion of defendants JS&A, Sugarman
and Stanke for summary judgment is granted . . ."
480 F. Supp. at 1069. Artic argues that, if it copied anything
from Midway's game, it copied the ROMs only. Therefore,
following Data Cash, the court should find as a matter of law
that no infringement took place.
The court, however, is unable to accept Artic's argument.
Initially, it is important to note that, in affirming the
district court's outcome in Data Cash, the Seventh Circuit
Court of Appeals expressly refused to consider the grounds
relied upon by the lower court, saying, "The parties had
neither briefed nor argued that issue and neither side on
appeal defends the district court's position, so we do not
consider it further." 628 F.2d at 1041. Also, another
district court has expressly rejected the lower court's
reasoning in Data Cash. See Tandy Corp. v. Personal Micro
Computers, Inc., 524 F. Supp. 171 (N.D.Cal. 1981).
This court as well is not persuaded by the lower court's
reasoning in Data Cash. To reach its conclusion that a ROM can
never, as a matter of law, be a "copy" of anything, that court
adopted the following definition of the word "copy": "Both at
common law and under the 1909 Act, a `copy' must be in a form
which others can see and read." 480 F. Supp. at 1068. That
definition is far narrower than the one adopted by Congress and
included in the current Copyright Act. As noted above, the word
"copy" is there defined, among other things, as a material
object in which the work is fixed "and from which the work can
be perceived . . . with the aid of a machine." 17 U.S.C. § 101.
By its very terms, that includes items like videotapes and tape
recordings that cannot be read with the naked eye, and
definitely covers the ROMs used by Midway in its Pac-Man game.
This holding is supported by the General Counsel of the
International Trade Commission. He said,
"Complainant further argues that if a work is
embodied in an object, be it a ROM, a tape or a
disc, that work is copyrightable, regardless of
whether machines, with or without the aid of
computer programs, are necessary for the work to
be visually perceived. As stated by Nimmer, `a
work is no less a motion picture (or other
audio-visual work) because the images are
embodied in a video tape, video disc, or any
other tangible form.' 1 Nimmer § 2.09[D]. . . . The
General Counsel agrees with this position."
Memorandum from the General Counsel of the International Trade
Commission to The Commission, at 7 (June 8, 1981).
Artic also suggests that its copies of the Pac-Man printed
circuit boards do not constitute infringement of Midway's
copyright, because the boards are useful devices that may be
and are used to repair defective or broken video games. This
argument is easily disposed of. Whether or not Artic's
statement of the relevant law is correct, no evidence was
presented at the hearing which tended to show that Artic's
Puckman circuit boards were used for innocent purposes. To the
contrary, there was substantial evidence presented which
showed that even Artic recognized that its boards were being
used in contravention of the law. As soon as this suit was
filed, Artic began taking every effort to disguise the fact
that it was selling Puckman circuit boards.
The question of whether Artic's speed-up kits, used in
Midway's Galaxian game, violate any of Midway's exclusive
rights is more difficult. Fortunately, many of those
difficulties were dealt with in this court's June 2, 1981,
ruling in this case denying Artic's motion for summary
Midway again claims that Artic's speed-up kits violate the
second of its five exclusive rights provided by the Copyright
Act, specifically, the right "to prepare derivative works
based upon the copyrighted work." 17 U.S.C. § 106. In its
earlier opinion, the court stated:
"The court believes that the success of this
theory depends on the resolution of two key
factual questions. The first factual question
concerns the scope of the copyright. It is, of
course, impossible to tell whether defendant has
induced others to prepare a derivative work, when
the court is uncertain as to what original work
was copyrighted. As noted, the scope of the
copyright is in dispute between the parties.
Second, there is also the factual question of
whether the speed up kits are designed and used
solely to modify the visual images of plaintiff's
copyrighted game or whether the device can be
used in a variety of electronic games."
Midway, supra, slip op. at 18. The evidence presented at the
hearing allows the court to now address those factual concerns.
As this court discussed at length above, the copyrighted
work at issue in this case is the audiovisual display that
appears on the video game's screen. The speed-up kit sold by
Artic clearly changes that display during the play mode of the
game. The characters
in the game move at a faster speed, and the number of alien
characters that attack the character controlled by the player
is increased. Such modifications of plaintiff's copyrighted
display fit well within the definition of derivative works.
Also, the facts presented at the hearing clearly show that
the speed-up kit was designed solely to modify Midway's
Galaxian game. In no way can it be described as a
technological breakthrough benefitting the entire electronic
games industry. The evidence showed that the speed-up kit is
physically compatible with very few games other than Galaxian.
To the extent that the kit did work in other games, it changed
them in ways which further showed that it was meant to be used
only in the Galaxian game. For example, it caused the words
"WE ARE THE GALAXIANS" to appear on the screens of the other
games, and caused the characters of those games to move in a
way extremely similar to the way the characters in the
Galaxian game moved. Also, the earliest advertising used by
Artic to promote its speed-up kits referred only to speeding
up Galaxian games. No other use of the kits was mentioned. In
view of the above factual showings, the court concludes that
Artic's speed-up kits are infringing "derivative works" of
Midway's Galaxian video game.
In summary, the court is convinced that Midway has shown a
likelihood of success on its copyright claims, despite the
plethora of arguments to the contrary raised by Artic. Midway
has shown that it is the owner of valid copyrights covering
the audiovisual features of both its Galaxian and Pac-Man
video games. Midway has also shown that those copyrights are
infringed by the actions of the defendant, Artic. Because the
court believes Midway will prevail on its copyright claims, it
is not necessary for the court to consider Midway's claims
based on its trademarks, the Lanham Act, and various
provisions of state and common law.
II. Irreparable Harm
In a copyright infringement case, the burden on the
plaintiff to show irreparable harm necessary to support a
preliminary injunction is very light. In fact, if the
plaintiff can show probable success on the merits, the
requisite irreparable injury is normally presumed.
Wainwright Securities Inc. v. Wall Street Transcript Corp.,
558 F.2d 91 (2d Cir. 1977), cert. denied, 434 U.S. 1014, 98 S.Ct.
730, 54 L.Ed.2d 759 (1978); Novelty Textile Mills, Inc. v. Joan
Fabrics Corp., 558 F.2d 1090 (2d Cir. 1977).
Defendant attempts to rebut this assumption of irreparable
harm, at least so far as the Galaxian game is concerned, by
noting that Midway no longer sells that game. Consequently,
Midway could not possibly lose any sales as a result of
defendant's infringement. Particularly in the case of the
speed-up kit, however, that showing is not enough to rebut the
presumption of irreparable harm. Plaintiff's reputation for
high quality and distinctive video games is entitled to
protection from copyright infringers, just as its potential
sales are. See Dallas Cowboys Cheerleaders, Inc. v. Pussycat
Cinema, Ltd., 604 F.2d 200 (2d Cir. 1979). Artic's speed-up kit
modifies Midway's Galaxian game in such a way as to make it
considerably more difficult, for the unskilled player in
particular. It is very possible, if not likely, that that will
discourage those individuals from playing Midway's video games,
and so reduce the overall demand for plaintiff's games as a
whole. Such damages would be impossible to measure in monetary
III. Balance of Hardships
If this preliminary injunction does not issue, Midway's
substantial investment in Galaxian and Pac-Man, two extremely
popular video games, will be jeopardized. On the other hand,
Artic's president has testified that Artic has a substantial
business in the sale of integrated circuits, that the speed-up
kit is not a substantial part of Artic's business, and that
Artic sells printed circuit boards for about thirty different
games. In view of that, the court finds that the balance of
hardships clearly favors issuing an injunction. See Midway
Manufacturing Co. v. Drikschneider, supra, 543 F. Supp. at 484.
IV. The Public Interest
The Copyright Act evidences a public interest in creativity
by demonstrating an intent to provide an economic reward for
creative expression. By granting an injunction here, the court
would be furthering that interest by rewarding plaintiff's
development and dissemination of new video games. The court
can conceive of no public interest that is furthered by
allowing defendant to continue to distribute and sell its
For the reasons stated above, the court finds that plaintiff
has successfully demonstrated that all elements necessary for
issuing a preliminary injunction are present in this case.
Therefore, plaintiff's motion for preliminary injunction is
granted, and defendant's motion for summary judgment on
copyright issues is denied. Defendant Artic and its agents and
servants are hereby preliminarily enjoined from selling,
marketing, distributing, or otherwise disposing of the items
found in this opinion to infringe plaintiff Midway's
copyrights in the Galaxian and Pac-Man video games, and
defendant is preliminarily enjoined from inducing others to
infringe those copyrights. Plaintiff will prepare an
appropriate order to submit to the court, and at that time,
bond will be fixed.
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