The opinion of the court was delivered by: Decker, District Judge.
MEMORANDUM OPINION AND ORDER
This is a suit for declaratory and injunctive relief and for
damages for contributory copyright infringement, patent
infringement, unfair competition, and various state law torts.
The plaintiff, Atari, Inc. ("Atari"), brought this suit
because the defendant, JS&A, Inc., ("JS&A") sells and
advertises a device called the "PROM BLASTER". The case is
before the court on plaintiff's motion for a preliminary
injunction on the copyright infringement claim.
The various game cartridges consist of a heavy plastic
housing which contains an electronic circuit, or "chip", which
in turn contains the game's computer program. The chips in
Atari 2600 game cartridges are "Ready Only Memory", or "ROM",
chips. The parties have stipulated that a ROM can neither be
reprogrammed nor erased. The game cartridges sell for as much
as $40 apiece.
Atari has copyrighted its video games as audiovisual works.
In addition, it is seeking to register a copyright of the
computer program for the CENTIPEDE game. Plaintiff's Exhibit
JS&A is a retailer of electronic products. It began this
fall an effort to market its PROM BLASTER, a device for the
duplication of those video games which are compatible with the
Atari 2600 home computer. The machine has two slots, one for
a 2600-compatible cartridge and one for a blank cartridge sold
by JS&A for $10. In the words of JS&A's advertisements, "[y]ou
simply plug in your Atari© or Activision©*fn1
cartridge in one slot and a blank cartridge in another, press
a button and three minutes later you've created an exact
duplicate." Plaintiff's Exhibit A. The PROM BLASTER sells for
$119, and JS&A currently has $12,000 in inventory on hand. The
defendant agreed not to fill any orders for the product
pending the disposition of this motion.
JS&A markets the PROM BLASTER primarily as a means of making
"back-up" copies of 2600-compatible games. The advertisements
urge the consumer to protect his investment in video game
cartridges which "can easily be ruined." Plaintiff's Exhibit
A. The advertisements assure the public that this copying does
not violate the copyright laws because "[i]n 1980, Congress
passed an amendment to the copyright act that clearly
permitted consumers to duplicate their cartridges" but warn
that "[y]ou can't sell, lease or give away a duplicate
cartridge produced from a copyrighted original that you own."
Id. A related selling point for the PROM BLASTER is that the
buyer "can make copies for [his] friends who wish to own
archival copies of their favorite games and charge them for the
JS&A also sells nine 2600-compatible video games of its own.
JS&A grants the purchaser of a PROM BLASTER the right to copy
the games, and even to sell the copies, without any
Atari alleges that any copying of its video games infringes
its copyrights, even if the consumer does it for "archival
purposes." Atari also contends that "[t]he purpose and effect
of JS&A's acts are actively to induce, cause, and materially
contribute to the making of infringing copies of ATARI's
copyrighted home video games." Complaint at ¶ 5. Atari seeks a
preliminary injunction against JS&A to prevent the use,
advertising, offering for sale, and the sale of the PROM
BLASTER and the blank cartridges.
To establish its right to a preliminary injunction, Atari
must show that it is likely to prevail on the merits, that it
will suffer irreparable harm if the injunction does not issue,
that the balance of hardships is in its favor, and that
granting the injunction is in the public interest. Midway Mfg.
Co. v. Artic Intern. Co., 547 F. Supp. 999, 1005 (N.D.111.
1982), aff'd 704 F.2d 1009 (7th Cir.), cert. denied, ___ U.S.
___, 104 S.Ct. 90, 78 L.Ed.2d 98 (1983).
1. Likelihood of Success on the Merits