to a television set and plugs his controls, or "joysticks",
into the computer. A game cartridge, which is usually
purchased separately, is then inserted into the computer. The
computer program in the cartridge causes the audiovisual
aspects of the game to emanate from the television. The 2600
has been a resounding commercial success.
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
Atari's copyright claim against JS&A is for contributory
infringement. "[O]ne who, with knowledge of the infringing
activity, induces, causes or materially contributes to the
infringing conduct of another,
may be held liable as a `contributory' infringer."
Gershwin Publishing Corp. v. Columbia Artists Management, Inc.,
443 F.2d 1159, 1162 (2d Cir. 1971) (footnote omitted). JS&A
raises no issue as to its knowledge or encouragement of the use
of the PROM BLASTER to copy copyrighted Atari and other
2600-compatible video games. The defendant argues instead that
the copying of those games is legal and, even if it is not, the
court may not enjoin the sale of the PROM BLASTER because it
has other, legal uses.
Whether the copying of others' video games is an infringing
activity is an issue the court discusses in detail below.
Here, it must be noted that if JS&A is wrong, and such copying
does infringe, its misinterpretation of the Copyright Act is
no defense to a charge of contributory infringement.
Universal City Studios v. Sony Corp. of America, 659 F.2d 963,
975 (9th Cir. 1981), cert. granted, 457 U.S. 1116, 102 S.Ct.
2926, 73 L.Ed.2d 1328 (1982). Furthermore, it is not enough for
JS&A to establish that the PROM BLASTER has a legal use. The
machine must have a substantial noninfringing use to preclude
an injunction against its sale. Id.; accord, Midway Mfg. Co.
v. Artic International Co., 211 U.S.P.Q. 1152, 1160 (N.D.Ill.
The PROM BLASTER can perform only two functions: copy
others' video games or duplicate JS&A's own games. JS&A argues
that the later use, which is of course noninfringing, is
enough. This argument fails because that use is not
substantial. JS&A markets only nine games. Since they
evidently went on the market with the PROM BLASTER, quite
recently, no one knows if consumers want to play these games,
much less copy them. Furthermore, PROM BLASTERS sell for $119.
It strains credulity to assert that consumers would spend that
much for a machine that could only copy JS&A's games. This
capability of the PROM BLASTER is by itself insufficient to
make its sale legal.
JS&A's liability as a contributory infringer thus turns
ultimately on the legality of the primary use of the machine,
that which JS&A encourages with its advertisements, the
duplication of others' video games. This is the machine's only
substantial use, and if it is an infringing use the PROM
BLASTER is fatally limited.
Section 106 of the Copyright Act details the exclusive
rights of copyright owners, and it states in relevant part:
"Subject to sections 107 through 118, the owner
of copyright under this title has the exclusive
right to do and to authorize any of the
(1) To reproduce the copyrighted work in
copies. . . ."
17 U.S.C. § 106. Absent an exception, therefore, the
duplication of Atari's copyrighted games is an infringement of
its rights. Atari is likely to prevail unless JS&A can
establish that an exception applies. JS&A has the burden
because it "claims the benefits of an exception to the
prohibition of a statute." United States v. First City National