Appendix — North American Philips Consumer Electronics Corp. v. Atari, Inc.

Supreme Court brief1982

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Anited States Court of Appeals

Bar the Sruenth Cirrutt

No. 81-2920

ATARI, a Delaware corporation, and Mipway Mrc.

Co., an corporation,

ARGUED JANUARY 19, 1982—Decipep Marcu 2, 1982

Before Woop and EscHpacu, Circuit Judges, and

Gorpon, District Judge.*

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Opinion by Judge Wood

JUDGMENT—ORAL ARGUMENT

United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

March 2, 1982.

Before

Hon. CHARLINGTON WOOD, JR., Circuit Judge

Hon. JESSE E. ESCHBACH, Circuit Judge

Hon. MYRON L. GORDON, District Judge*

ATARI, INC., a Delaware corporation, *

and MIDWAY MFG. CO.., an Illinois

corporation,

Plaintiff: Appellants, from the United States

ts ty ty By BE

No. 81-2920 District of Minots Eastern Divi-

vs. ‘ sion.

NORTH AMERICAN PHILIPS CON.

SUMER ELECTRONICS CORP., a George N. =

Tennessee corporation, and PARK

Sy oe

Defendants-Appellees.

This cause was heard on the record from the United States

District Court for the Northern District of Illinois, Eastern

Division, and was argued by counsel.

On consideration whereof, IT IS ORDERED AND AD.

JUDGED by this Court that the judgment of the said District

Court in this cause appealed from be, and the same is hereby,

—

* The Honorable Myron L. Gordon, District Judge of the United States District

Court for the Eastern District of Wisconsin. is sitting by designation.

yy.

Hon. HARLINGTON WOOD, JR., Circuit Judge

Hon. JESSEE E. ESCHBACH, Circuit Judge

Hon. MYRON L. GORDON, District Judge*

ATARI, INC., a Delaware corporation,

and MIDWAY MFG. CO., an Illinois

Plaintiffs- Appellants,

No. 81-2920 vs.

NORTH AMERICAN PHILIPS agg

SUMER ELECTRONICS tee F

TELEVISION, d/b/a Park

Home Entertainment Center, an

Partnership,

Defendanis- Appellees :

For reasons which we present in our opinion entered

today, we grant plaintiffs-appellants’ motion for injunction,

pending this Court’s final disposition of the appeal.

It is ordered that this matter is remanded forthwith to the

district court’ for the limited purpose of additional proceedings

for the entry of an order by the district court enjoining, pending

* District Judge Myron L. Gordon. of the Eastern District of Wisconsin. is sitting

by designauon

* Cireuit Rule 18 shail not apply.

final disposition of the appeal, the defendants’ infringing

The order entered by the district court shall provide that its

enforcement shall be supervised by that court.

This order is without prejudice to the setting of a bond by

the district court staying the enforcement of the injunction

pending completion of the proceedings in this Court or before

the Supreme Court of the United States.

Piaintiffs shall file a status report on these proceedings on

limited remand on or before Monday, March 8, at 5:00 p.m. or

within 24 hours of the district court’s order, whichever is sooner.

be a ee

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

; EASTERN DIVISION

ATARI, INC., a Dela corporation, |

and MIDWAY MFG. CO. an Illinois

corporation,

No, 81 C 6434

NORTH AMERICAN PHILIPS CON- | Before the Honorable

SUMER ELECTRONICS CORP. a [ Coors N. Lelghion

Tennessee corporation, and PARK United States District Judge

TELEVISION nuted

This suit, alleging infringement of a copyright, deceptive

Atari, Inc., a Delaware corporation, and Midway Mfg. Co.,

an Illinois corporation, owners of exclusive rights to the “Pac-

Man” copyright, have moved for a preliminary injunction

barring defendants, North American Philips Consumer Elec-

tronics Corporation and Park Television, d/b/a Park Magna-

vox Home Entertainment Center, “their employees, servants,

agents, and all persons in active concert with them, from

advertising, distributing, displaying, performing, selling, or

offering for sale, the ‘K. C. Munchkin’ home video game, or in

any other manner violating plaintiffs’ exclusive rights under the

been heard consisting of testimony of witnesses and exhibits

which have been offered and received. It has been agreed

between the parties that for the purpose of this proceeding, the

validity of the copyright is not an issue; nor is it contested that

during the relevant period defendants had access to the arcade

video game, “Pac-Man.” The issue to be resolved, however, is

whether plaintiffs have established a likelihood that on the

merits they will succeed in proving that defendants have

infringed the copyright to “Pac-Man,” and have engaged in

deceptive trade practices and unfair competition. Resolution of

this issue requires reference to the facts, including a detailed

description of the two games.

A. Background

Plaintiff Atari, Inc., a leading developer and manufacturer

of home video games and personal computers, is a Delaware

corporation with its principal place of business in Sunnyvale,

California. It markets and sells its products to dealers and

distributors on whom it depends for sales to consumers. Plain-

tiff Midway Mfg. Co., a leading developer and manufacturer of

coin-operated video games, is an Illinois corporation, having its

principal place of business in Franklin Park, [linois. Its coin-

operated games are placed for use in a wide variety of public

places, such as arcades, bars, hotels, shopping centers, retail

stores, and restaurants.

corporation, is a citizen of Tennessee, organized under the laws

Midway their exclusive ownership of the copyright to “Pac-

Man.” These rights have great monetary value.

For example, since October 31, 1980, Midway has sold in

excess of 75,000 “Pac-Man” video games throughout the

United States a for wholesale value in excess of $150 million.

Each “Pac-Man” game sold by Midway contains a notice of its

claim of co might. The game has achieved widespread

popularity among members of the American public. It has

been the subject of numerous unsolicited news reports and has

been featured on a number of nationwide television programs.

Opinion polls rank it second among uy.ight coin-operated

video games in earnings. Widely circulated magazines of the

video game industry have published pools relied upon by those

in the video game industry. As a result of the game's

Popularity, Atari has engaged in transactions that represent

large investment in its future dintribution for home video and

Personal computer use. It has paid substantial sums of money

and has obligated itself to pay royalties for its exclusive

ownership in “Pac-Man”. In all, Atari has expended in excess

of $1.5 million in licensing, developing, and advertising its

B. The “Pac-Man” game

“Pac-Man,” as it is now on the market, is an arcade maze-

chase game. It is housed in a six feet tall and approximately

twenty-four inch wide cabinet that has a viewing plate facing

diagonally upwards toward a player standing in front of it.

Through the viewing plate, a player sees a television type

display, an oblong shaped maze with varying size and shape of

geometric figures, and a number of characters, one a yellow dot

with a V-shaped aperture at one side which opens and closes

like a mouth. The maze *ppears in double blue lines; and

throughout are several hundred evenly spaced pink dots which

the central, yellow character gobbies as he moves about.

There are four other moving figures or characters, identical

except that one is red, one blue, one turquoise, and one orange.

All of these, sometimes called goblins, have eyes and appen-

dages which simulate feet. They do not consume the dots, but

move in a prearranged pattern about the maze which is

unchang ag. In the center is a blue box to which the goblins

return each time the player begins a game. Four of the pink

dots, located at approximately the four corners of the maze, are

those dots, the goblins change color to blue. When the goblins

are in their original variety of colors, the central character is

vulnerable, so that when the central character and one of the

goblins collide, the central character is deflated ( with accom-

panying audible sounds). At this point that particular play, but

not the game, is finished.

When the goblins turn to blue for a few seconds, they are

vulnerable to the gobbler and can be consumed by it, thus

scoring points for the player. The player also gains points by

avoiding the goblins and consuming the normal sized pink dots

in the maze. The player may additionally gain points by

consuming various fruit symbols placed “ear the center of the

maze. The game is controlled by a joy stick on "he front of the

arcade structure so that a player can guide the ,\obbler up or

down, and left or right, through the fixed maze. Throughout

the play of “Pac-Man,” a number of musical notes are sounded

for the audio portion of the game, and also a number of

whistles and siren-like sounds can be heard in the background.

C. The “K. C. Munchkin” Game \ 6

“K. C. Munchkin” has physical features which meet the

technical requirements for presenting a game in an arcade type

of viewer. These technical differences result in a different visual

display. “K. C. Munchkin” as a home video game is also a

maze-chase; but the maze is rectangular and appears on the

home video screen as broader than it is tall, and there are more

horizontal passageways in which the characters can move than

in “Pac-Man”. In “K. C. Munchkin”, there is a practically

infinite number of mazes, all of which give patterns as a matter

of mechanics, as a matter of appearance, and as a matter of

play tactics ana technique. There is variability of mazes in

“K. C. Munchkin.”

The characters in “K. C. Munchkin” are different from

those in “Pac-Man”. In “K. C. Munchkin,” the central

character, the munchkin, appears as a blue figure with horns,

normally with a smile, but when he is attacked by a monster,

his smile turns to a frown; and then he evaporates upwardly

from the screen. The character, or the appearance of the

central figure, is that he initially faces the viewer rather than

showing 2 profile. As he moves along the maze he shows a

profile, and when he stops, he turns around to face the viewer

with another smile. Thus, the central character is made to have

a personality which the ceaual character in “Pac-Man” does

not have. “K. C. Munchkin” has munchers which are much

“spookier” than the goblins in “Pac-Man.” Their legs are

longer and move more dramatically; their eyes are vacant, all of

these features being absent in “Pac-Man.” The munchers are

red, green, and yellow.

Oe OT. ee aS ee — Ca 0 ee eee Ee

An apparent difference, from the point of view of play of

the two games, is the changing orientation of the center of the

maze in “K. C. Munchkin.” In “Pac-Man,” the center portion

of the maze is elongated to accommodate the goblins and is

stationary, never changing. The goblins simply move upward

out of a fixed center “box” into the maze, while in “K. C.

Muachkin,” the first mode of play shows the center of the maze

as a box changing the open side by ninety degrees every two or

three seconds.

There are only twelve dots in “K. C. Munchkin™ as

opposed to over two hundred dots in “Pac-Man”.” In “K. C.

Munchkin,” the dots are randomly spaced, whereas in “Pac-

Man,” the dots are uniformly spaced. Furthermore, in “K. C.

Munchkin,” the dots are square and are always moving, and

when the game is played, it becomes progressively more

difficult for the central character to catch the remaining dots

after he consumes the first one or two. The remaining dots

accelera‘e so that toward the end the dots reach the same speed

as the munchkin. The last dot is the most difficult to catch. It

cannot be caught by overtaking it; it must be munched by

strategy.

In playing the “K. C. Muachkin” game, it is necessary for

the player to “out-think” the movements of the dots which is

not the way that “Pac-Man” is played. In “K. C. Munchkin,”

the player must observe the whole grid and anticipate the

movements of characters and dots; while in “Pac-Man,” the

characters follow a set pattern, one which a skilled player can

determine fairly readily. The dots do not move at all.

And in “K. C. Munchkin,” in several of the modes of play,

the maze is a periodically changing pattern or is a disappearing

maze, that is, it appears on the screen when the player stops

moving the munchkin and disappears when the munchkin is in

motion, so that the person who is playing has to anticipate

where the walls of the maze might be. These disappearing

maze modes are not present in “Pac-Man.” “K. C. Munchkin”

makes it possible for a player to program the maze shown on

the screen by operation of the console. Stated another way, the

player might draw on the screen whatever walls he wishes to

create in the maze, thus creating a continuously changing maze

from game to game. This is < significant difference in appear-

ance from the fixed maze of “Pac-Man.” a

Finally, “K. C. Munchkin” has a set of sounds accom-

panying it which are distinctive t» the whole line of Odyssey

home video games. These sounds are not at all like the sounds

which are played in the arcade form of “Pac-Man.” The tone

sequences are different, the notes are different, and create an

entirely different impression on the listener. The reason for the

sounds in “Pac-Man” is its installation in arcades where there

are many competing noises from neighboring games and

players.

“K. C. Munchkin,” as a home audio-visual video game,

was create. for defendant North American by Ed Averett,

independent contractor, who has been its consultant in creating

home video games for the last four years. His first interest in

developing the game was met by a desire of North American

executives to obtain a license to usé “Pac-Man.” Overtures were

made to Midway Mfg. Co. without success. Mr. Averett, on the

other hand, had developed approximately 21 such games, one

of which was called “Take the Money and Run.” That game is

a maze-chase game whose maze configuration is rectangular

and almost identical with that in “K. C. Munchkin.” In the

development of “K. C. Munchkin,” Mr. Averett’s wife, a highly

skilled computer programmer, offered several suggestions

which were adopted in the creation of “K. C. Munchkin,” the

most notable of which was the moving dot principle. Prior to

embarking on the development of his game, Mr. Averett, in the

company of a North American executive, saw a “Pac-Man” in

an Atlanta, Georgia airport arcade. On at least one occasion

before completing his design, he played a “Pac-Man.” He was

not impressed with the game because, in his judgment, it did

: mode to mode, but also a change during the course of each

| game, and made them programmable. Mr. Averett and his

wife were both quite enthusiastic about the use of movable dots

to be caught, both from the standpoint of building challenges

into a game and also from the attractiveness of the game to a

home video game player. The movement of the dots makes a

maze-chase game much more challenging to play and less likely

to lose interest for players over a period of time. The

movements of the munchers was another item on which he

wanted to exercise creativity; and in creating the “K. C.

Munchkin” game, he wanted to give these the appearance of

thinking so that they would be challenging to avoid. Accord-

ingly, Mr. Averett and his wife built into “K. C. Munchkin” the.

need for a player to out-maneuver or trap the dots as they move

about the mazes, and “out-think” ©oth the dots and the

munchers as they move in apparently purposeful fashion For

Mr. Averett, it was necessary to trap the dots through skill

rather than simply chase them around. These features in the

initial version of “K. C. Munchkin” have been carried over into

the final version.

The executives at North American were aware of possible

difficulties with the plaintiffs in this action, even though they

believed their “K. C. Munchkin” game was different from

“Pac-hian.” They urged Mr. Averett to create more differences;

and consequently, the game’s central character was given its

ultimate appearance by changing the shape, adding antennas,

and changing the color from yellow to blue. The colors of the

munchers were changed in order wo get away from even a

cosmetic similarity to the colors in “Pac-Man”. The revised

version of “K. C. Munchkin” was approved by the defendant

North American in August 1980 and pro-luction was begun.

D. The post-production events

In the advertising, sale and distribution of its game, North

American took steps which its executives believed would avoid

any possible conflict or confusion between “K. C. Munchkin”

and “Pac-Man.” Internal instructions were issued within the

company to avoid use of all trade names, trademarks, or trade

designations of others in connection with the game promotion.

Specifically, instructions given were for the purpose of avoiding

any reference to the “Pac-Man” game. On October 27 and

November 27, 1981, memoranda were addressed to its sales

force in which North American stressed that it did not want

“others to misapply our game names and trademarks to their

games. Likewise, we should not use other people's trademarks

of game names to refer to our own games [sic].” The advertise-

ments used referred to the “K. C. Munchkin” video game

cartridge, iis packaging for that cartridge, and the instruction

manual; it aid not include any material which could reasonably

result in confusion with “Pac-Man.”

One of North American’s distributors in the greater

metropolitan Chicago area is “Minnesota Fats, the Video

King ” This company is an independent retailer who purchases

hor.e video games from North American, but is not controlled

by it. It does not now receive any advertising allowance from

North American for games, and has not done so for some time

in the past. On November 13, 1982, in a Chicago-Sun Times

advertisement, Minnesota Fats included a description of “K. C.

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Munchkin” saying that it was “a Pac-Man type game.” The

insertion of this statement was not with permission of North

American or any of its executives.

Some of North American’s dealers in the Chicago area are

On a cooperative advertising basis, but not Minnesota Fats. Co-

op advertising dealers submit ads to North American for prior

approval; and all approvals of cooperative advertising come to

the attention of North American's district general manager, Mr.

Ronald E. Giese. He administers and enforces North Ameri-

can’s policy of avoiding use of any other trademark, trade

name, or other trade designation. Ordinarily, the November

13, 198i advertisement by Minnesota Fats would have come to

Mr. Geise’s attention, but in fact did not. After the advertise-

ment appeared in the Chicago-Sun Times, Mr. Geise hearned of

this fact. A North American representative was instructed to

call Minnesota Fats for the purpose of attempting to get that

company to delete any reference of “Pac-Man” game in any

future advertisement.

On the same day that the Minnesota Fats advertisement

appeared in Chicago newspapers, Linda Pierce, a lega! secre-

tary employed ivy the law firm represenung Atari, was instruct-

ed to locate and purchase a “K. C. Munchkin” home video

game. After calling several Chicago Loop department stores,

Ms. Pierce contacted Wieboldt’s at One North State Street in

Chicago and spoke to a Mr. Sarno. She wid him that she

wanted to purchase a “K. C. Munchkin” home video game but

he mistakenly believed that the game she wanted could hook

up to a television set. Mr. Sarno explained to Ms. Pierce he

thought she was confused and told her that the “K. C.

Munchkin” home video game was a cassette that could be

played on an Odyssey II home video system. He then explained

to her that the “*K. C, Munchkin’ game was just like ‘Pac-

Man.’” He told her they did not have the game, but expected

to have some in the near future.

Lhasa |

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Two days later, Thomas P. Gallo, another investigator for

Atari's lawyers, called one of Minnesota Fats’ locations in Oak

Lawn, Illinois in order to investigate North American's method

of selling its “K. C. Munchkin” game at retail. Mr. Gallo knew

that Minnesota Fats had advertised “K. C. Munchkin” as a

“*Pac-Man’-type game.”’When he entered the store, he ap-

proached a female sales clerk asking to purchase a “K. C.

Munchkin.” There were only three such games in stock. He

purchased one; and in a conversation, the salesgir! told him that

the “K. C. Munchkin” was “just like ‘Pac-Man.’ When Gallo

asked her if the store had a “Pac-Man,” she said it didn’t but

that they would have it in March; and the cost would be

“probably higher, it’s hard to say.” In the same investigation,

Gallo called a Magnavox Home Entertainment Center in

its allotment of “K. C. Munchkin.” Mr. Gallo was told that the

distributorship received an allotment of a limited number of

test units of “K. C. Munchkin.” Gallo was unsuccessful in

locating any additional “K. C. Munchkin” units since all the

distributors he contacted had either sold out the game, or did

not initially receive any.

From these facts, the court concludes that plaintiffs have

not shown a probability that when this case is heard on its

merits they will prove that defendants, in manufacturing and

distributing “K. C. Munchkin,” have infringed the copyright to

“Pac-Man.” In a copyright case, as in all others, a plaintiff

seeking preliminary injunctive relief must demonstrate that

there is a substantial likelihood of success on the merits at trial.

issues, that the threatened injury to the movant outweighs the

damage which the injunction may cause the opponent, and that

the injunction will not be adverse to the public interest. Dallas

Di2

Cowboys Cheerleaders vs. Scoreboard Posters, G00 F.2d 1184,

1187 (Sth Cir. 1979); Metro-Goldwyn-Mayer vs. Showcase

Atlanta Co-op. Prod., 479 F.Supp. 351, 355 (N.D. Ga. 1979).

Whether a preliminary injunction will issue is entrusted to the

discretion of this court. The factors which should guide exercise

of this discretion are:

(1 )the threat of irreparable harm to the plaintiff; (2) the

state of the balance between this harm and the injury that

granting the injunction will inflict on other parties litigant:

(3) the probability that plaintiff will succeed on the merits;

and (4) the public interest.

Dataphase Systems, Inc. vs. C. L. Systems, Inc., 640 F.2d 109,

113 (8th Cir. 1981). No one of these is determinative.

In this proceeding, plaintiffs’ ownership of a valid cop-

yright is conceded; therefore, allegations of irreparable injury

need not be detailed, because such injury can normally be

presumed when a copyright is infringed. Wainright Securities,

Inc. v. Wail Street Transcript Corp., 558 F.2d 91, 94 (2d Cir.

1977), cert. denied, 434 U.S. 1014 (1978); 98 S.Ct. 730. But, in

order to prevail on their claim of copyright infringement,

plaintiffs must prove that defendants performed and distributed

games copies from the audio-visual work, “Pac-Man.” Scogt v.

W. K. J. G., Inc. 376 F.2d 467 ( 7th Cir. 1967), cert. denied, 389

U.S. 832 (1967); cf. Bell v. Combined Registry Company, 397

F.Supp. 1241 (N.D. Ill. 1975), 429 U.S. 1001; 97 S.Ct. 530; see

3 M. Nimmer, Copyright $$ 13.01 13.02[A] 1978). In this

court’s judgment, plaintiffs, on a trial of the merits, will not be

able to make this proof.

“Copied,” within copyright infringement cases, is shown

“if ordinary observation would recognize it as having been

appropriated from or patented after the copyrighted work.”

Peter Pan Fabrics, inc. v. Arcadia Co., \73 F.Supp. 292, 300,

274 F.2d 487 (1960). “Copying” proscribed by copyright law

means more than tracing original, line by line; to some cxtent it

includes appropriation of artist’s thought in creating his own

D13

form of expression. Franklin Mint Corp. v. National Wild Life

Ant Exchange, Inc., 575 F.2d 62, 65 (3d Cir. 1978), cert.

denied; see C. M. Paula Co. v. Logan, 355 F Supp. 189, 191

(N.D. Tex. 1973).

Since plaintiffs cannot prove copying, they advance the

theory that “K. C. Munchkin” is substantially similar to “Pac-

Man.” However, substantial similarity for copyright in-

fringement purposes it is determined by the ordinary observer

test. Novelty Textile Mills, Inc. v. Joan Fabrics Corp., 558 F.2d

1090, 1093 (2d Cir. 1977); of., Walter vy. University Books, Inc.,

602 F.2d 859 (9th Cir. 1979). But evidence in this record

shows that “K. C. Munchkin” is not substantially similar to

“Pac-Man.” In fact, it has been established in this proceeding

that defendants created their game from a source they had

utilized before “Pac-Man” came into existence; the maze

defendants utilized is different, and the way their game is

played is different from plaintiffs’ “Pac-Man.”

As to plaintiffs’ claims of deceptive trade practices and

common law unfair competition by confusion of goods, no

showing has been made of probable success on the merits. The

test of confusion of goods is whether similitude of labels would

probably deceive a purchaser exercising ordinary prudence, not

whether it would deceive a carcless buyer who makes no

examination. Avrick v. Rockmont Envelope Co., 64 F Supp.

765, 766 (D.C. Colo. 1945) rev'd on other grounds, 155 F.2d

568. The evidencs does not show a similitude of labels by

which plaintiffs sell “Pac-Man” and those under which defend-

ants distribute and sell “K. C. Munchkin.” Neither the testi-

mony of Mr. Gallo, nor the affidavit of Ms. Pierce shows a

confusion by members of the public of plaintiffs’ video game

with that of defendants’. The advertisement by Minnesota Fats

referring to “K. C. Munchkin” as “a Pac-Man type game” did

not confuse one game with the other. se bsaginam wih

which the two were separately identified.

questionable. Eagle-Friedman-Roedetheim Co. v.

Co., 204 F.Supp. 679 (D.C. Pa. 1962); Dallas Cowboys

Cheerleaders v. Scoreboard Posters, 600 F.2d 1184, 1187 (Sth

Cir. 1979); O'Neill Developments, Inc. v. Galen Kilburn, Inc.

Slip Op. (N.D. Ga. October 22, 1981).

Dated: Dec 4 1981

‘5

APPENDIX E

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

ATARI, INC.., eiewene cespeniee

and MIDWAY MFG. CO. an

corporation,

Plaintiffs, No. 81 C 6434

NORTH AMERICAN PHILIPS CON. > Before the Honorable

SUMER ELECTRONICS CORP., a George N. Leighton,

Tennessee and PARK | United States District Judge

In accordance with the Opinion and Order, each dated

March 2, 1982, of the United States Court of Appeals for the

Seventh Circuit in Appeal No. 81-2920 in this matter ( copies of

which are attached heretc ), defendants, North American Phil-

ips Consumer Electronics Corp. ( North American), and Park

Television, d/b/a Park Magnavox Home Entertainment Center

(Park), and all of their respective officers, agents, servants,

employees, and attorneys, and those persons in active concert or

participation with them who receive actual! notice of the order

by personal service or otherwise, are hereby enjoined and

forming, selling, or offering for sale a video game cartridge

known as “K. C. Munchkin”, or in any other manner violating

plaintiffs’ exclusive rights under the copyright in the Pac-Man

audiovisual work pending final disposition of Appeal No. 81-

2920. This injunction shall be supervised by this court in

accordance with the order of the United States Court of

Appeals for the Seventh Circuit. This order shall be effective

upon the filing with the Clerk of the United States District

Court for the Northern District of Illinois by plaintiffs of a boad

in the amount of One Hundred Thousand Dollars

($100,000.00).

Dated: March 5, 1982

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¥ an 4 ine ‘ vty a $

a” a *.

RELEVANT PARTS OF STATUTES

INVOLVED

$101. Definitions

As used in this title, the following terms and their variant

forms mean the following:

“Audiovisual works” are works that consist of a series of

related images which are intrinsically intended to be shown by

the use of machines, or devices such as projectors, viewers, or

electronic equipment, together with accompanying sounds, if

any, regardless of the nature of the material objects, such as

films or tapes, in which the works are embodied.

§ 102. Subject matter of copyright; In general

(a) Copyright protection subsists, in accordance with this

title, in original works of authorship fixed in any tangible

medium of expression, now known or later developed, from

which they cen be perceived, reproduced, or o:herwise commu-

nicated, either directly or with the aid of a machine or device.

Works of authorship include the following categories:

(1) literary works;

(2) musical works, including any accompanying

words;

(3) dramatic works, including any accompanying

music;

(4) pantomimes and croreographic works;

. (5) paccorial, graphic, and sculptural works;

(6) motion pictures and audiovisual works; and

(7) sound recordings.

(b) In no case does copyright protection for an original

work of authorship extend to any idea, procedure, process,

system, method of operations, concept, principle, or discovery,

regardless of the form in which it is described, explained,

illustrated, or embodied in such work.

§ 501. Infringement of copyright

(a) Anyone who violates any of the exclusive rights of the

who imports copies or phonorecords into the United States in

violation of section 602, is an infringer of the copyright.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

ATARI, INC.

v. CIVIL NO. Y-81-803

Benjamin Lipsitz, Esquire, Baltimore, Maryland, and Arthur J

Levine, Esquire, Washington, D.C.. counsel for the defendant.

YOUNG, United States District Judge

MEMORANDUM OPINION AND ORDER

Atari, Inc., holder of a copyright on the electronic video

game “Asteroids,” seeks to enjoin defendants Amusement

World, Inc., and its president Stephen Holniker, from manufac-

turing or distributing any product in violation of plaintiff's

$125,000,000 making “Asteroids” the largest-selling video

corporation employing a total of five people. Its business has

consisted largely of repair work on coin-operated games, but

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recently it has attempted to enter the lucrative video business by

producing and distributing a video game called “Meteors.”

On March 13, 1981, plaintiff first became aware that

defendants were selling “Meteors,” which plaintiff alleges is

substantially similar to “Asteroids.” On March 18, 1981, plain-

tiff sent defendants a cease and desist letter, which defendants

have ignored. Plaintiff then filed suit and now seeks injunctive

relief.

THE GAMES

Each of the two video games is contained in a cabinet with

a display screen and a control panel for the player. The course

of the game is controlled by a computer program, which has

been chemically implanted to printed circuit boards inside the

cabinet. When no one is playing the game, the machine is in

the so-called “attract mode,” in which there appears on the

display screen an explanation of the. game and/or a short

simulated game sequence, which is intended to attract custom-

ers. Placing a coin in the machine causes it to go into “play

mode,” in which the computer program generates scenes of

dangerous situations, to which the player responds by pressing

various buttons on the control panel.

The principle of the two games is basically the same. The

player commands a spaceship, represented by a small symbol

that appears in the center of the screen. During the course of

the game, symbois representing various sized rocks drift across

the screen and, at certain intervals, symbols representing enemy

spaceships enter and move around the screen and attempt to

shoot the player’s spaceship. Four control buttons allow the

player to rotate his ship clockwise or counterclockwise, to move

the ship forward, and to fire a weapon. A variety of appropri-

ate sounds accompany the firing of weapons and the destruction

of rocks and spaceships.

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Many of the design features of the two games are similar

or identical. In both games:

(1) There are three sizes of rocks.

(2) The rocks appear in waves, each wave being

composed initially of larger rocks.

(3) Larger rocks move more slowly than smaller ones.

(4) When hit, a large rock ¢plits into two medium

rocks, a medium rock splits into two small ones, and a

small rock disappears.

(5) When a rock hits the player’s spaceship, the ship

’ is destroyed.

(6) There are two sizes of enemy spaceships.

(7) The larger enemy spaceship is an easier target

than the smaller one.

(8) The player’s ship and enemy ships shoot projec-

tiles.

(9) When a spaceship’s projectiles hit a rock or

another ship, the latter is destroyed immediately.

(10) The destruction of any rock or spaceship is

accompanied by a symbol of an explosion.

(11) When an enemy spaceship is on the screen, the

player hears a beeping tone.

(12) There is a two-tone beeping noise in the

background throughout the game, and the tempo of this

noise increases as the game progresses.

(13) The player gets several spaceships for his quar-

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( 14) The score is displayed in the uoper left corner for

one player and the upper right and left corners ‘for two

players.

(15) The control panels are painted in red, white, and

blue.

(16) Four control buttons from left to right, rotate the

player’s spaceship counter-clockwise, rotate it clockwise,

move it forward, and fire the weapon.

(17) When a player presses the “thrust” button, his

spaceship moves forward and when he releases the button

the ship begins to siow down gradually ( although it stops

more quickly in “Meteors”).

(18) The player gets an extra spaceship if he scores

10,000 points. a

(19) Points are awarded on an increasing scale for

shooting (a) large rock, (b) medium rock, (c) small rock,

(d) large alien craft, (¢) small alien craft.

(20) When all rocks are destroyed a new wave of

large rocks appears.

(21) Each new wave of rocks has progressively more

large rocks than the previous waves to increase the chal-

lenge of the game.

(22) A general overhead view of the battle field is

presented.

There are also a number of differences between the games:

(1) “Meteors” is in color, while “Asteroids” is in

black and white.

(2) The symbols for rocks and spaceships in “Mete-

ors” are shaded to appear three-dimensional, unlike the

flat, schematic figures in “Asteroids.”

(3) The rocks in “Meteors” appear to tumble as they

move across the screen. ‘

(4) “Meteors” has a background that looks like

distant stars.

(5) At the beginning of “Meteors,” the player's

spaceship is shown blasting off the earth, whereas “Aste-

roids” begins with the player’s spaceship in outerspace.

(6) The player’s spaceship in “Meteors” fires faster

and can fire continuously, unlike the player’s spaceship in

“ Asteroids,” which can fire only bursts of projectiles.

(7) The player’s spaceship in “Meteors” fires faster

and can fire continuously, unlike the player’s spaceship in

“Asteroids,” which can fire only bursts of projectiles.

(8) The pace of the “Meteors” game is faster at all

stages.

(9) In “Meteors,” after the player’s spaceship is

destroyed, when the new spaceship appears on the screen,

the game resumes at the same pace as immediately before

the last ship was destroyed; in “Asteroids” the game

resumes at a slower pace.

The necessary elements for copyright infringement have

been stated succinctly in 3 Nimmer, The Law of Copyright,

§ 13.01:

Reduced to most fundamental terms, there are only two

elements necessary to the plaintiff's case in an infringement

action: ownership of the copyright by the plaintiff. and

copying by the defendant.

—_

Ss —

OWNERSHIP OF THE COPYRIGHT

As stated by Nimmer, supra § 13.01( A):

Ptaintiff'’s ownership in turn breaks down into the follow-

The ia} sserati if id ns facie eve

dence of the above elements of the claim of ownership:

Act’s definitions of copyrightable material. The Act includes

among the types of works of authorship that may be copy-

righted “motion pictures and other audiovisual works.” 17

U.S.C. § 102(a)(6). The Act 17 U.S.C. § 101, defines “audio-

visual works” as:

“Motion pictures” are defined as:

audiovisual works consisting of 2 series of related images

which, when shown in succession, impart an impression of

motion, together with any accompanying sounds, if any.

- :

Defendant contends that plaintiff has not properly copy-

righted the “Asteroids” game, arguing that the original work of

authorship is the computer program, as embodied in the

printed circuit board.’ Plaintiff filed a video-tape of what

appeared on the display screen during one of an infinite

number of possible game sequences with the copy-right office,

rather than the printed circuit board. Defendant argues that

this registration affords no protection for the underlying com-

puter program/ printed circuit board.

Defendants’ analysis is faulty, because it fails to distinguish

between the work and the medium in which it is fixed. In order

to receive a copyright, a work must be both copyrightable ( that

is, it must fit one of the definitions of a copyrightabie work ) and

fixed in a tangible medium of expression. 17 U.S.C. § 102(a).

Plaintiff’: “work,”. the thing that plaintiff has created and

desires to protect, is the visual presentation of the “Asteroids”

game. That work is copyrightable as an audiovisual work and

as a motion picture. 17 U.S.C. § 101; Stern Electronics, Jnc. v.

Harold Kaufman, ¢ al, No. ® C 3248 (E.D.N.Y., May 22,

1981) (vejecting defendant's claims that the video game's

presentation was not an original work and that only the

computer program could be comsiderecd an original work );

Midway Mfg. Co. v. Dale Drikichnaider, et al. No. $1-0-243

(D.Neb., July 15, 1981) (rejecing 2 similar claim). Plaintiff's

work also happens to be fixed .o the medium of cireuitry on a

* Defendant uses the term “read-only memory” (ROM).

which is the electronic aircuit tat consists of the thousands of

“switches” that ihave been chemically imprinted on the

printed circuit board. This follows from the definition in 17

U.S.C. § 102 of a tangible medium of expression as a medium

“from which [the work] can be perceived, reproduced, or

otherwise communicated, either directly or with the aid of a

machine.” A video game’s printed circuit board is clearly such a

medium of expression, since the “work,” the audio-visual

presentation, can be communicated from the printed circuit

board with the aid of the video game's display screen. See

Midway, supra, at 13-14. Thus, plaintiff's work meets both the

requirements of copyrightability and fixation and is entitled to

fixed is irrelevant—as long as a copyrightabie work is fixed in

some tangible medium, the work is entitled to copyright

protection. 17 U.S.C. § 101. The owner of a copyrightable

work need not, and indeed, cannot copyright the medium in

which the work is fixed.

; Defendants also argue that plaiutiff is attempting to copy-

right an idea, rather than the expression of an idea. The

that this is impermissible. 17 U.S.C. § 102(b). Apparently

defendants are claiming that piaintff is attempting to monopo-

lize the use of the idea of a video game in which the player

fights his way through asteroids and spaceships. Defendamts

cite the case of Herbert Rosenthall v. Kalpakian, 446 F.2d 738

(9th Cir. 1971), in which the court held that plaintiff could not

bee pin. The court based this holding on the finding that the

idea of a jewelled bee pin is capable of only one expression,

and, therefore, when defendam used plaintiffs idea of a

jewelled bee pin, as defendant was entitied to do, it was

The crinical in this case is that the idea of a video

game involving asteroids is a much more general idea than the ;

rather specific concept of a jewelled pin in the shape of a bee, .

and the former is capable of many forms of expression. Thus,

when plaintiff copyrighted his particular expression of the

game, he did not prevent others from using the idea of a game

with asteroids. He p,evented only the copying of the arbitrary

design features that makes plaintiff's expression of this idea

unique. These features consist of the symbols that

appear on the di screen, the ways in which those symbols

move around the screen, and the sounds emanating from the

game cabinet. Defendants are entitled to use the idea of a

video game involving asteroids, so long as they adopt a

different expression of the idea—i.e., a version of such a game

that uses symbols, movements, and sounds that are different

from those used in plaintiff's game.

Defendants’ second challenge concerns plaintiff's com-

pliance with the applicable statutory procedures for registering

a copyright. The Copyright Act requires the registrant to

deposit two “complete copies” of the work, 17 U.S.C. § 40%.

Plaintiff submitted a videotape of one game sequence, and

defendants contend that this is not a complete copy of the

“Asteroids” game. However, the Copyright Office Regulation,

37 C.F.R. 202.20(d), allow the Register of Copyrights to

permit the deposit of only one copy or “alcernative identifying

material.” Given the bulkiness and cost of the actual video

game, a video tape of the audioviseal presentation in the game

is a reasonable “alternative identifying material.” See Midway,

supra, Findings 15, 20. and 25; Stern, supra, at 8.

INFRINGEMENT 8Y DEFENDANTS

* Simce direct evidence of copying is seldom available,

plaintiff may prove copying by showing that defendants had

access to plaintiff's work and that the two works are substan-

tially similar. Novelty Textile Mills, Inc. v. Joan Fabrics Corp.,

558 F.2d 1090, 1092 (2d Cir. 1977). Access was shown

indirectly by evidence that plaintiff's work had been widely

disseminated. See Detective Comics, Inc. v. Bruns Publication,

Inc., 28 F. Supp. 399 (S.D.N.Y. 1939), mod., 111 F.2d 432 (2d

Cir. 1940).

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Therefore, the crucial issue is whether defendants’ game,

“Meteors,” is substantially similar to plaintiffs game, “Aster-

oids.” Substantial similarity is determined by a general

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Corp., 251 F.2d 487, 488 (2d Cir. 1958)... .

Novelty Textile Mills, supra, at 1093. Another court has held

that a work is substantially similar to a preceeding work when it

captures the “total concept and feel” of the first work. Roth

Greeting Cards v. United Card Co., 429 F.2d 1106, 1110 (9th

Cir. 1970), quoted in Sid and Marty Krofft Television ¥.

McDonald's Corp., 562 F.2d 1157, 1167 (9th Cir. 1977).

expression of aa idea is copyrightable, the underlying idea one

uses is not. Mazer v. Stein, 347 US. 201, 217 (1954); 17

U.S.C. § 102(b). A corollary to this principle is that when an

idea is such that any use of that sdea necessarily involves certain

forms of expression, one may not copyright those forms of

expression, because to do so would be in effect to copyright the

underlying idea. The classic case illustrating this concept is

Kalpakian, supra. \n that case, the court held that plaintiff

Gil

could not copyright his version of a jewelled bee pin, because

the idea of such a pin was capable of only one expression, and a

basic ides.

This principle must also apply in less extreme cases in

which a creator’s expression of an idea includes some forms of

expression that are essential to the idea (i.¢., forms of ex-

pression which cannot be varied without aitering tne idea) and

some forms of expression that are not essential to the idea. In

such a case, the latter forms of expression are copyrightable, but

the former are not, because if the creator could copyright the

essential forms of expression, then others would effectively be

This doctrine has been recognized by courts in a variety of

situations. In Rehyer v. Children’s Television Workshop, 533

F.2d 87, 91 (2d Cir. 1976), ~-.«. denied, 429 U.S. 980, the court

stated that:

Another helpful analytic concept is that of scenes a faire,

sequences of events which necessarily follow from a com-

mon theme. “[S]imilarity of expression ... which neces-

sari-y results from the fact that the common idea is only

capable of expression in more or less stereotyped form will

preclude a finding of actionable similarity.” | Nimmer

§ 143.11 at 626.2; see Yankwich, Originality in the Law of

Intellectual Property, || F.R.D. 457, 462 (1951).

Copyrights, then, do not protect thematic concepts or

scenes which necessarily must follow from certain similar

plot situations.

The court in Alexander v. Haley, 460 F. Supp. 40, 45 (S.D.N.Y.

1978 ), held tha: “incidents, characters or settings which are as a

practical matier indispensable, or at least standard, in the

treatment of a given topic” are not protected by the copyright

laws. The court listed a number of types of incidents that are

not .copyrightabie in a slave story:

attempted escapes, flights through the woods pursued by

baying dogs, the sorrowful or happy singing of slaves .. . .

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scenes portraying sex between male slaveowners and fe-

male slaves and the resentment of female slave owners . . .

slave owners complaining about the high price of slaves

Id. at 45 and n.7.

In Franklin Mint Corp. v. Nat. Wildlife Art Exchange, 575

F.2d 62 (3d Cir. 1978), cert. denied, 439 U.S. 880, the court

considered two paintings of a pair of cardinals. The court noted

that:

The court also observed that the nature of the idea, namely a

painting of cardinals, necessarily limits the forms of expression

that can be utilizec in articulating the idea:

Expert testimony described conventions in ornithological

art which tend to limit novelty in depictions of the birds.

Given this, the court said that “[a] pattern of differences is

sufficient to establish a diversity of expression rather than only

an echo,” and the court affirmed the lower court holding of no

This Court has held that plaintiff is entitled to a copyright

on “Asteroids,” because the idea of a videogame in which the

player shoots his way through a barrage of space rocks is an

idea that is sufficiently general so as to permit more than one

Gi3

form of expression. However, under the doctrine set forth

above, the Court must be careful not to interpret plaintiff's

expression that are inextricably associated with the idea of such

a videogame. Therefore, it is not enough to observe that there

are a great number of similarities in expression between the two

gam<s. It is necessary to determine whether the similar forms

ef expression are forms of expression that simply cannot be

avoided in any version of thz basic idea of a videogame

involving space rocks.2

There are, as noted supra, a number of similarities in the

design features of the two games. However, the Court finds

ments of the idea of a game involving a spaceship combatting

space rocks and given the technical demands of the medium of

a videogame There are certain forms of expression that one

must necessarily use in designing a videogame in which a player

fights his way through space rocks and enemy spaceships. The

player must be able to rotate and move his craft. All the

spaceships must be able to fire weapons which can destroy

targets. The game must be easy at first and gradually get

harder, so that bad players are not frustrated and good ones are

challenged. Therefore, the rocks must move faster as the game

2 This determination requires & type of close analysis that

the court in Sid & Marty Krofft, supra, 562 F.2d at 1164-65,

rejected as inappropriate in the subjective, “ordinary observer”

test for substantial similarity. However, even that court impli-

citly recognized the reality that the finder of fact must in effect

make a detailed comparison of the two works in order to reach

a general, subjective conclusion regarding substantial similarity.

Jd. at $167 n.9. Moreover, the fact chat the underlying idea

here is a type of videogame, rather than just an idea for a story

or a game, raises the possibility that certain forms of expression

are required by the medium itself. Given that possibility, a

broad-brush observation that the two games have many similar

forms of expression is not a sufficient basis on which to conclude

that the games are substantially similar.

: 4 és CU Monee

progresses. In order for the game to look at all realistic, there

must be more than one size of rock. Rocks cannot split into

very many pieces, or else the screen would quickly become

filled with rocks and the player would lose too quickly. All

to increase the sensation of action. The player must be

awarded points for destroying objects, based on the degree of

difficulty involved.

All these requirements of a videogame in which the player

combats space rocks and spaceships combine to dictate certain

forms of expression that must appear in any version of such a

game. In fact, these requirements account for most of the

similarities between “Meteors” and “Asteroids.” Similarities so

accounted for do not constitute copyright infringement, because

they are part of plaintiffs idea and are not protected by

plaintiff's copyright.

In light of this conclusion that the similarities in the forms

of expression are inevitable, given the idea and the medium, the

large number of dissimilarities becomes particularly significant.

Given the unavoidable similarities in expression, the Court

finds that the ordinary player would regard the aesthetic appeal

of these two games as quite different. The overall “feel” of the

way the games play is different. In “Meteors” the symbols are

more realistic, the game begins with the player’s spaceship

blasting off from earth, and the player’s spaceship handles

differently and fires differently. “Meteors” is faster-paced at ail

stages and is considerably more difficult than “ Asteroids.”

It seems clear that defendants based their game on piain-

tiffs copyrighted game; to put it bluntly, defendants took

plaintiff's idea. However, the copyright laws do not prohibit

this. Copyright protection is available only for expression of

and those portions of plaintiffs expression that were in-

extricably linked to that idea. The remainder of defendants’

expression is different from plaintiff's expression. Therefore,

~ the Court finds that defendants’“Meteors” game is not substan-

tially similar to and is not an infringing copy of plaintiff's

“Asteroids” game.

Accordingly, for the reasons stated herein, it is this 27th

day of November, 1981, by the United States District Court for

the District of Maryland, ORDERED:

1. That plaintiff's motion for preliminary injunction

BE, and the same IS, hereby and

2. That judgment BE, and the same IS, hereby

entered in favor of the defendants.

United States District Judge

i ae ae ee Pe ae

IN THE UNITED STATES*DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

ATARI INC., a corporation,

Plaintiff, No. CV-F-81-410 MDC

DEFENDANTS PROPOSED

vs. } FINDINGS OF FACT AND

KEN WILLIAMS, doing business as | SUcchUSIONS OF Law

FINDINGS OF FACT

L. KEN WILLIAMS, doing business as ON-LINE SYS-

TEMS, has a place of business in Coarsegold, California. and

manufactures, distributes and sells computer software and

among its products includes computer software for audiovisual

computer games.

3. Defendant, without admitting infringement, withdrew

an opposition to an injunction on its gilihe referred to as

“Gobbler” in favor of its “Jawbreaker” game.

4. ATARI INC., by sub-license with Namco-America, a

corporation, acquired rights under a copyright for an audiovi-

sual game entitled “Pac-Man.”

5. The claimant set forth in the copyright registration is

Namco Limited, a Japanese company. The registration of the

registration the Midway Manufacturing Corpuration, an Illinois

corporation.

6. ATARI INC. does not manufacture, distribute, produce

or sell computer software for the audiovisual game entitled

“Pac-Man.”

7. ATARI INC. at this time is trying to perfect a computer

software program for | isual game called “Pac-Man”

and #eas not been able 90 at this time butset a target date

for reaching the marketplace with its “Pac-Man” game in about

the second quarter of 1982.

8. John Harris is the author of the computer program for

the audiovisual game of “Jawbreaker.”

9. John Harris has granted an exclusive license to KEN

WILLIAMS, doing business as ON-LINE SYSTEMS, to pub-

lish the audiovisual game of “Jawbreaker.”

10. ATARI INC, has not produced, nor do they have in

their possession, a computer program for an audiovisual game

of “Pac-Man.”

11. John Harris independently developed and wrote his

program for the audiovisual game of “Jawbreaker” without

copying any copyrighted game of ATARI INC.

12. John Harris’ game of ‘ sawbreaker” is not a copy of

the ATARI INC. game “Pac-Man,” although he got the idea

from viewing “Pac-Man.” pg)

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_ Computer program of the game of -“Pae-Man~ from whieh

COPYIRE 6 porerire

14. The Court viewed the audiovisual game introduced by

Plaintiff of the “Jawbreaker” game and one of the “Pac-Man”

game.

15. The idea of both “Jawbreaker” and “Pac-Man” is

basically a maze with a number of small objects (dots or

circles) aligned within a maze. An object, appearing to be a

mouth, referred to herein as an eater, is guided through the

Tie

maze by a player and appears to eat the small objects. Within

the maze, a plurality of chasers chase the eater through the

maze. If the chaser catches the eater before he can eat all of the

small objects, the player’s score is reduced. However, if the

eater can devour all of the small objects in the maze before the

chaser catches him, then the player’s score is increased. If, at

one point, the chaser catches the player, a replay begins. In the

maze, at certain spots, a larger (power) object appears in the

maze. If this larger object is eaten by the eater, it can then turn

and chase the chasers for a specified time, scoring points as they

are devoured.

16. The non-similarities between that which is expressed

ia “Pac-Man” and “Jawbreaker” are as follows:

a. In Plaintiff's game of “Pac-Man”, the chasers are in

the shape of ghosts which have small legs extending

downward and they seem to run along ‘n the maze and

travel in the maze in a s~t pattern in the maze.

In Defendant's game of “Jawbreaker”, the chasers are

in the form of happy faces which seem to roll along in the

maze and travel in a random pattern in the maze while

keying in on the object it is chasing.

b. In Plaintiff's game of “Pac-Man”, the object which

is chased by the chaser is a round-shaped object which has

a pie-shaped opening which opens and shuts when it

devours dots aligned in the maze.

In Defendant’s game of “Jawbreaker”. the object

which is chased by the chaser is a set of teeth, simulating

false teeth, which chomp up and down on small circles

aligned in the maze.

¢. The colors of the chasers and the eaters used in

“Pac-Man” are different than those used in the “Jawbreak-

er” game.

d. The music played is different in both games and

“Pac-Man” has an attract mode which plays prior to each

game, and “Jawbreaker” has no attract mode.

e. Io Plaintiff's game of “Pac-Man”, the eyes of the

ghosts look in the direction in which they are travelling.

In Defendant’s game of “Jawbreaker”, the smiling

faces appear to be rolling and will go in any direction,

notwithstanding the direction they are facing.

f. In “Pac-Man”, the items used to mark scores are

cherries, oranges, strawberries, and grapes, while in

“Jawbreaker” the items used to score are candycanes,

sailboats, and gumdrops.

g. In Plaintiff's game of “Pac-Man”, the energizer

dots in the maze glow at a constant color, while in the

Defendant's game of “Jawbreaker”, the energizer dots in

the maze are a plurality of rotating diffsrent colored

smaller dots.

h. The maze in each game is not the same.

i. In Plaintiff's game of “Pac-Man”, when the ghosts

catch the eater, it appears to melt.

In the Defendant's game of “Jawbreaker”, when the

stniling faces appear to catch the false teeth, the teeth fall

out to the bottom of the maze.

17. Defendant’s game of “Jawbreaker” includes many

features not found in the Plaintiff's game of “Pac-Man.” For

example, if the player manipulates his eater in such a method

that it devours all the dots before it is caught by the chaser, then

a toothbrush appears on the screen and brushes the teeth of the

eater. Each of the chasers rotate in a different direction. All

four chasers have different faces.

18. No documents were introduced into evidence to show

a chain or tide or rights from Midway Manufacturing Co., the

assignor of Namco Limited, to Namco-Amenca.

CONCLUSIONS OF LAW

I. Plaintiff ATARI INC. will suffer no irreparable harm by

the sale and marketing of the “Jawbreaker” games by Defend-

ant.

2. There is nothing protectable under the copyright laws as

to the “Pac-Man” game itself, and the laws do not protect the

strategy of a player symbol being guided through a moze

& 7#APAR We Cannot rely upon Midway's sales and

C Production of its coin-operated arcade games of “Pac-Man” te pt)

show marketplace use when it has no connection with Midway

7. There are no similar features between the non-

functional features of “Jawbreaker” and “Pac-Man.”

uf 9. Thani liktinood ches the Peis would veceed

the merits at time of trial.

DATED: Dec 28th 1981 a8

M. D. Crocker

. M. D. Crocker

e Judge, U.S. DISTRICT COURT

: *

"OUT ates one

* ~

IN THE UNITED STATES DISTRICT COURT

MIDWAY MFG. CO., an | CIVIL NO. 81-0-243

Illinois corporation,

URBOM, Chief Judze | |

ae The plaintiff, Midway Manufacturing Co., is 4 manufac-

ae ne “i wy Oe. hy to jae Ti eae eee ee ee

obtained copyright registrations on many of these games,

including Galaxian, Pac-Man, and Rally-X. The plaintiff

alleges that the defendants’ are engaged in the manufacture,

distribution, and sale of video games which are virtually

identical to the plaintiff's Galaxian, Pac-Man and Rally-X

games. The plaintiff contends tha: the conduct of the defend-

ants infringes the plaintiff's copyrights, violates the Lanham

Act, and violates the Nebraska Deceptive Trade Practices Act.

For relief, the plaintiff seeks damages and an injunction

prohibiting future infringement.

On Apiil 341. 1981, Judge Robert V. Denney issued an ex

parte temporary order [ Filing #17]. He also issued

an order directing the States Marshal to impound any

allegedly infringing articles in the possession of the defendants

[Filing #9}. On May 18, 1981, a hearing was held before

Judge Denney on the plaintiff's request for a preliminary

injunction {Filing #1}. Upon Judge Denney’'s hospitalization

and death the case has been reassigned to me, and the parties

have agreed to my resolving the matter of preliminary relief on

the basis of the record already made, but requested oral

argumeuts. Such arguments were held on July 3, 1981, and the

issue of preliminary relief is now ready for resolution. The

following discussion constitutes this court's findings of fact and

conclusions of law on the plaintiff's request for preliminary

relief.

L. Findings of Fact.

|. The plaintiff, Midway Manufacturing Co., is an Illinois

corporation having its principal place of business at Franklin

Park, Illinois. The plaintiff is a designer and manufacturer of

coin-operated electronic video games. In the United States,

Midway sells its video games to regional distributors who scl!

’ plaintiff's complaint names Venture Line. Inc.. as a defendant. The “ourt,

fas no personal jurisdiction over Venture Line. Inc. This corporation.

therefore, will not be identified as a defendant in this Memorandum Opinion.

"ab. ae

pais Sri: te

ee a 95, OE:

the video games to operators. The operators place the ma-

chines in arcades and other places for public use. [Tr. 80, 91].

2. Venture Line, Inc. [Venture Line} is an Arizona

corporation. Its primary business is the manufacturing of

printed circuit boards for coin-operated electronic video games.

These printed circuit boards are sold to businesses which

manufacture audiovisual games using Venture Line's circuit

boards. Venture Line does not manufacture any video games.

[Ex. #25, pp. 15, 73-74, 162-62).2

3. Defendant Gary Kraayenbrink is the president of Soo

Valley Vending, Inc. [Soo Valley Vending]. This corporation

has a place of business at 440 Sixth Street, Northwest, Sioux

Center, lowa. Soo Valley Vending was incorporated six or _

seven Years ago and has been in the business of operating coin-

operated electronic video games since its formation. {Ex. #26,

pp. 6, 8-10, 11}.

4. In the latter half of 1980, Soo Valley Vending began to

assemble and distribute coin-operated video games under the

name Soo Valley Distributing Co. [Soo Valley Dirtributing}.

In April of 1981, Soo Valley Distributing was incorporated.

The capitalization of this new corporation was based in part on

a payment of $39,000.00 from Soo Valley Vending. This

payment did not give rise to any indebtedness on the part of

Soo Valley Distributing to Soo Valley Vending. [Ex. #26, pp.

16-18, 19-20, 21-22, 110-14}.

5. Soo Valley Distributing is in the business of assembling

boards which are inccrporated in these games are purchased

from a number of sources including Venture Line. The assem-

bled games are eithe: sold to distributors or are placed on

routes operated by Soo Valley Vending. [Ex. #26, pp. 6, 8-10,

59, 79-80}.

® Uniess otherwise indicated. all references are to the plainuff’s exhibus.

7? *

6. The relationship between Soo Valley Vending and Soo

Valley Distributing has remained close. In addition to oper-

ating out of the same building, the corporations share corporate

officers and shareholders. Defendant Kraayenbrink is the

president of Soo Valley Distributing. Kraayenbrink, his son,

Henry, and Harlan Bootsma each own equal shares in both Soo

Valley Vending and Soo Valley Distributing, and all three are

officers and directors of 300 Valley Distributing and Soo Valley

Vending. [Ex. #26, pp. 6, 7-8, 11-12, 14-15, 18-19}.

7. Defendants Dale Dirkschneider and Harold Peterson

are residents of the State of Nebraska and partners in a

partnership operated under the nance “A-1 Machines.” A-1

Machines has a place of business at 620 South Saddle Creek,

Omaha, Nebraska. The business of A-| Machines includes the

games. A-| Machines purchases some of the video games it

operates and distributes from Soo Valley Distributing. [Ex.

#27, pp. 2-4, 5, 9-10; Ex. #28, p. 2).

8. The audiovisual games involved here consist of a

cabinet containing electronic circuitry and a television picture

tube which serves as a screen upon which the visual images of

the game are shown. The electronic circuitry is in the form of

cause the images of each game to be seen on the screen and

generate the sounds of each game. The printed circuit board

for each game is loaded with electronic components. These

components include computer ships, called ROMs, PROMs and

EPROMs by those in the trade. The PROMs store the

information which produces the games’ images and sounds.

This information includes the field on which the game is piayed,

the design of the playing symbols or images seen on the screen,

their interactions with one another, and the accompanying

3 ROMs, PROMs, and EPROMSs are hereinafter referred to as “PROMs”.

oad ,* a> . y 7 "ls

AV oe OH ae OR ed

musical and sound effects. A game may be copied by elec-

tronically copying the PROMSs. (Tr. 55-56; Ex. #17, 42; Ex.

#25, pp. 29-30, #1; Ex. #26, pp. 25-31).

9. Prior to the insertion of 4 coin, the video games operate

in a repeating attract mode which summarizes each game for

prospective players. When a coin is deposited and the start

button is depressed, the shifts into the play mode. In the

play mode, some of playing sumbois or images on the

screen are responsive to operation of the player control panel,

and others move in a predetermined sequence and interact with

the player-contolied images in a preset manner. [ Ex. #17, 13;

Ex. #26, p. 36].

10. The market for audiovisual games is very unpredict-

able. A game’s commercial popularity often terminates abrupt-

ly after a short period of time. The average game generally

would lose its 4 peai within a year of being introduced on the

market. [Ex. #17. ¥ 12}.

Il. The elements of the Galaxian video game appear on a

background star pattern consisting of twinkling colored lights

that roll from the top of the screen to the bottom. The game

involves a missile-firing rocket ship operated by the player, plus

a formation of enemy aliens. The aliens are arranged in a

convoy of five horizontal rows. There are four denominations

or ranks of aliens, with the highest ranking nearest the player’s

alien is shaped like a rocket ship, but the other ranks have

flapping wings. Individual aliens unpredictably invert and

sweep down to bomb the player’s ship. Sometimes the alien

attack consists of miniformations involving the alien flagship or

chief, as well as flying alien escorts. Whenever a ship is

destroyed, a bright explosion appears on the screen, with

appropriate sound effects. The player’s score is measured by

the number and rank of aliens destroyed. {Ex. #17, 45; Ex.

#18}.

;

12. The Galazian video game was created by Namco in

1979, and was first published by Namco on September 15,

1979, in Japan. Midway became aware of Galaxian at a

private showing at Namco’s offices in Tokyo on October 17,

1979. Because of the game's unique features, Midway decided

to acquire rights in the game. (Tr. 82-83; Exs. #11, #12; Ex.

#17, 15).

13. In an assignment dated February 2, 1980, Namco

assigned all United States rights in Galaxian to Midway. The

considerxtion for this assignment was the payment of substan-

tial advances and royalties. The amount of payments made

through March of 1981 has amounted to approximately 3.5

million dollars {Tr. 83-84; Ex. #10].

14. Since February, 1980, the plaintiff has sold in excess of

game has a notice of Midway's claim of copyright, the name of

the game, and Midway’s name. The notice is affixed near the

screen of the video game. [Tr. 99-100, 107; Ex. #17, 1 11; Ex.

#18).

15. The plaintiff made video tape recordings of the

audiovisual presentation of the Galaxian play and attract

modes. The video tapes were made in Franklin Park, Illinois.

The video tapes and applications to register the copyright on

the Galaxian audiovisual work were submitted by Midway to

the Copyright Office. A certificate of copyright registration, No. _

PAS59-977, effective March 6, 1980, was issued for the audiovi-

sual work found in the Galaxian’s play mode. A second

certificate of registration, No. PA68-323, effective May 23,

1980, was issued for the audiovisual work found in the Gala-

xian’s attract mode. [Tr. 94-95; Ex. #11; Ex. #12). —

16. The Pac-Man video game centers on a maze which

covers the entire screen. The player guides the Pac-Man

character through the maze. Points are scored when the Pac-

Man eats dots in his path. Four ghost monsters, Inky, Blinky,

Foon

~ _ a be 9A

PIR ee OP ae ee A

Pinky and Clyde, chase after the Pac-Man, trying to capture

and deflate him. The Pac-Man can counterattack by eating a

big power capsule that enables him to overpower the monsters

for additional scores, After all the dots are gobbled up, the

screen is cleared, and the Pac-Man game continues for another

round. Each round or rack features a special fruit target in the

maze, which, if eaten, earns bonus points. Audio and musical

effects accompany the play of the game. [Tr. 113; Ex. #17, 17:

Ex. #19}.

17. The Pac-Man video game was created by Namco in

1980 and was first published by Namco on May 22, 1980, in

Japan.* At the invitation of Namco, Midway representatives

first viewed the Pac-Man game in Japan on August 13, 1980.

This showing convinced Midway’s representative that the

game's extraordinary presentation made it a good target for

acquisition. [Tr. 84-85; Ex. #15; Ex. #17, 16].

18. An assignment dated October 10, 1980, gave Midway

all United States rights in Pac-Man. The consideration for this

assignment was the payment of substantial advances and

royalties. To date, the plaintiff has paid over | million dollars

for use of Namco’s rights in the Pac-Man and Rally-X video

games. (Tr. 86-87; Ex. #13; Ex. #17, 14].

19. Twenty-five thousand Pac-Man games have been sold

by Midway since sary, 1980. Each game has a notice of

Midway’s claim of yr the name of the game, and

Midway’s name. The copyright notice is affixed near the screen

and is also contained in the game's attract mode. [Tr. 99-100,

107; Ex. #17, 7 11; Ex. #19}.

20. A video tape recording of the audiovisual presenta-

tions of the Pac-Man attract and play modes was made by the

plaintiff in Franklin Park, Illinois. Midway submitted this video

4 When originally developed by Namco, the game was called “Puck Man.” Nameo

and Midway, however. ‘ater agreed that the game would be marketed in the United

States under the same * Pac-Man.” Tr. 85. 104-051.

tape and an application to register the copyright on the Pac-

Man audiovisual work to the Copyright Office. A certificate of

1980, was issued for the audiovisual work found in the Pac-

Man attract and play modes. [Tr. 94-95; Ex. #15].

21. Rally-X is a combination maze chase and race game.

Each player begins the game with a full fuel tank. The object

of the game is to drive a car through the maze clearing vatious

checkpoint flags before the fuel is exhausted. Increasing point

values are scored for each checkpoint flag cleared. The player

is aided in his race rhrough the maze by a radar screen which

shows the position of the checkpoint flags and red pursuit cars.

This radar is necessary because, unlike Pac-Man, the entire

Rally-X maze is not projected on the screen. Rather, the player

only views the area of the maze over which his car is passing.

The red pursuit cars try to wreck the player’s car. The player

can outmaneuver the pursuit cars by releasing a smoke screen

that causes the cars to spin and stall. If the pursuit cars run into

the player’s car, an explosion effect and the word “BANG”

appear on the screen. The play of the game is accompanied by

sound effects and music. [Tr, 114-15; Ex. #17, 78, Ex. #20).

22. The creator of the Rally-X game is Namco. The first

publication of the game occurred in Japan on October 3, 1980.

At the invitation of Namco, Midway representatives first

viewed the Rally-X game in Japan on August 13, 1980.

Midway’s representatives were impressed by the Rally-X’s

extraordinary presentation and decided that the game was a

good target for acquisition. [Tr. 84-85; Ex. #16,; Ex. #17, 16}.

23. An assignment dated October 10, 1980, gave Midway

all United States rights in Rally-X. The consideration for this

assignment was the payment of substantial advances and

royalties. To date, the plaintiff has paid over | million dollars

for the use of Namco’s rights in Pac-Man and Rally-X. [ Tr. 86-

87; Ex. #14, Ex. #17, 14).

, P

q , * 4 * Py

* ’ rt. - ium , ?

et Te eo PS a ee pale tus a ~ Y, os ghd 5. +e Pe ¥

24. Twenty-five hundred Rally-X video games have been

sold by Midway. Each game has a notice of Midway's claim of

the game. [Tr. 99-100, 107; Ex. #17, 411: Ex. #20).

25. Midway has made a video tape of the attract and play

modes of the Rally-X game. This tape was made in Franklin

Park, Illinois. This tape and an application to register the

Midway to the Copyright Office. A certificate of copyright

registration, No. PA88-049, effective January 6, 1981, was

issued for the audiovisual work found in the Rally-X attract and

play modes. [Tr. 94-95; Ex. #16).

26. The promotion of the Galaxian, Rally-X and Pac-Man

in full color, and contains prominent displays of the name of the

game and explicit pictorial and graphic representations of the

visual elements of the game. These brochures, in turn, are used

by the distributor to advertise and promote the new game to the

distributor's customers, who are generally operators.

Midway also places advertisements in trade magazines,

such as Replay, Play Meter, Vending Times, Market Place and

Canadian Coin Box. The advertisements are similar to

Midway’s bro. )wures. Midway promotes its new games at

national and local trade shows. Finally, Midway distributes

Promotional items such as mugs and T-shirts. [Tr. 88-89, 90-

93; Ex. #17, 99; Filing #14 attachments).

27. Midway has invested over 20 million dollars in parts,

inventory and equipment for the mass production of the

- Galaxian, Pac-Man and Rally-X video games. [ Ex. #17, #10).

110

28. The defendants’ Galactic Invaders games is for all

practical purposes identical to the plaintiff's Galaxian game.* A

few of the specific similarities between the games are discussed

below to illustrate the extent to which they are the same. This

discussion is not intended to list all the similariues between the

games.

The attract mode of these games may be divided into two

parts. The first part of the attract mode is a display of the alien

attackers and the amount of points scored for destroying them.

The shape of the aliens in the Galactic Invaders jame is

identical to the shape of the aliens in the Galaxian game and

the points awarded are the same. In addition, the manner in

which these aliens are presented is the same in each game. The

only difference between the games in this part of the attract

mode is that the defendants’ game does not have certain

nonessential textual material found in the plaintiff's game.

The second part of the attract mode is a demonstration of

how the game is played. The only difference between the

games in this part of the attract mode is that the Galaxian

demonstration varies, whereas the Galactic Invader demonstra-

tion is always the same. This difference is so minute that it

would not be notices unless the games were subject to a side-by

side comparison.

In addition to the attract mode, the sound effects of each

game are identical. Among the distinctive sound effects

common to both games are: the musical sound activated when

the play button is pushed; the pulsating sound heard through-

out the play mode; the sound heard when the aliens swoop out

of the convoy to attack; and the explosion and other sound

effects heard when the player's ship is destroyed.

_ The play modes of each game are also virtually identical.

This may be illustrated by placing the player's ship in the center

* Unlike the Galaman. the Galacuc Invaders game offered into evidence 1s not in

color. (Ex. #2). ;

112

This discussion is not intended to list all the similarities between

the games.

The attract mode «f the Mighty Mouth game contains the

only readily apparent differences between the games. The

names of the Mighty Mouth characters are different from the

names given the Pac-Man characters. The other difference is

the speed at which the attract modes run. The Mighty Mouth

attract mode runs somewhat faster than the Pac-Man. This

difference in speed can only be observed when the games are

sted dda iendite

In all other respects, the attract modes of each game are

identical. The color and shape of the characters of each game

are the same. The maze through which these characters move

is the same color and configuration. Each game presents these

characters in identical fashion. The attract modes demonstra-

tion of the games’ play is identical. The monster character and

the player puck in each game’s demonstration moves in the

same directions and stop at the same place.

The sound effects of each game are also the same. Several

of these sound effects deserve brief mention be :use of their

distinctive qualities. Each game has the same sound effects

when the play button is pushed; when the player puck is

gobbling dots; and when the player puck is caught by the

monster characters.

The progression of play appears to be identical. If the

games are placed in the play mode without moving the player's

control stick, the monster caaracters in each game will move

along the same routes and will ultimately destroy the player

puck in the same manner. In addition, the visual display when

the player puck eats a power capsule is the same in each game.

When this occurs, the monster characters turn a Jark blue and

race around the maze. Finally, in each game, a player puck

which is caught by a monster character defiates and disappears

from the screen. [Ex. #6; Ex. #9; Ex. #19).

113

31. The defendants’ Rally-X game is, for ail practical

purposes, identical to the plaintiff's Rallv-. games. A few of

the specific similarities are discussed below to illustrate the

extent to which the giimes are the same. This discussion is not

meant to list all the similarities between the games.

- The ateract mode of each game may be divided into two

parts. First, the attract modes contain a description of the rules

of the games. Aside from the name of the manufacturer, these

displays are the same. Second, the attract modes contain a

demonstration of the games’ play. The color and shape of the

cars and maze are the same in each game. The demonstrations

are different in that the cars often follow different routes

through the maze. This difference, however, can only be

observed if the games are compared side-by-side. In all other

respects, the attract modes are the same.

The Rally-X play modes are also very similar. The sound

effects accompanying the games’ play are the same. Particu-

larly striking are the sound effect which is heard when the play

button is pushed and the monotonous melody which is played

when the cars are moving. In addition, each game has an

32. Soo Vaaley Distributing has assembled Galactic

Invaders, Kamikaze Ill, Mighty Mouth, and Rally-X video

games and conversion kits. The conversion kits were all sold.

The video games were sold or were placed on routes operated

by Soo Valley Vending. Defendant Kraayenbrink knew that

these games were substautially similar to the games manufac-

tured by Midway.® He admits that he had received notice of the

*Some of the Mighty Mouth games assembled by Soo Valley Distributing had

features different from the Mighty Mouth descnned above The Mighty Mouth games

Coe a amy amaree were made from Venture Line primed circun boards The

Court has & video tape of the auract mode of the Venture Line board | Ex. #24).

Although this Mighty Mouth is more distinctive than the Mighty Mouth described

above. the game is sull similar to the plasnuff's Pac-Man game. (Ex. #25. pp. 124-26).

114

. plaintiff's claim of infringement, but did not cease distributing |

: or operating the allegedly infringing goods. (Ex. #26, pp. 30

| 35-49, 53-54, 60-61, 62, 63-64, 72-73, 75-76, 77-81, 83-85, 86-

88, 89-90, 91, 151, 152, 153-54, 104-05, 107, 109, 142-43, 168-

71}.

33. On at least one occasion, a cusiomer contacted

defendant Kraayenbrink to purchase a conversion kit for a

Gaiaxian game. The defendant's response to such an inquiry

was to offer to sell the customer a Galactic Invaders conversion

kit. He would tell the potential customer that Galactic Invader

was the same thing as a Galaxian. [ Ex. $25, p. 136].

34. Soo Valley Distributing and Soo Valley Vending

currently own few Galactic Invader, Kamikaze [ll], Mighty

Mouth or Rally-X video games or printed circuit boards. No

printed circuit boards are currently on order. [ Ex. #26, pp. 60-

62, 121, 143-161].

35. Defendants Peterson and Dirkschneider, through their

partnership, A-| Machines, have purchased Galactic Invaders,

Mighty Mouth and Rally-X video games from Soo Valley

Distributing. Of these games, all but five have been sold. A-!

Machines is currently operating the remaining machines at

various locations. The defendants were aware that these games

were similar to the games manufactured by the plaintiff. (Ex.

#27, pp 14-16, 17, 18, 23-27, 28, 53-54, 55-57, 63; Ex. # 28, pp.

5, 7-9, 13-15, 16}.

36. On at least one occasion, a customer called A-|

Machines and asked to purchase a Pac-Man game. Defendant

Dirkschneider offered tw sell the customer a Mighty Mouth

game, explaining that it was similar to the Pac-Man game. The j

customer ultimately purchased the Mighty Mouth In A

Dirkschneider’s opinion, one of the selling points of the Mighty ‘

Mouth game was its similarity to the Pac-Man game. (Ex. #26,

pp. 7-8, 13-14].

ship has no outstanding orders to purchase any of these games.

(Ex. #27, pp. 14-16, 19-20; Ex. #28, pp. 20-21, 25-26}.

38. A-l Machines has received complaints abort the

Performance of its Mighty Mouth ame These complaints

came from two young persons wh. were playing the Mighty

Mouth game. They told Dirkschneider that they didn’t like the

way the game played and’ that they wamted “a regular factory

game.” Dirkschneider interpreted this to mean that the custom-

ers wanted a Midway game. [Ex. #28, pp. 8, 17-20).

Il. The Preliminary Injunction Standard

The determination of whether a preliminary injunction

should be issued is entrusted to the discretion of the trial court.

The factors which should guide the exercise of this discretion

are:

(1) the threat of irreparable harm to the plaintiff; (2) the

state of the balance between this harm and the injury that

Dataphase Systems, Inc. v. C L Systems, Inc., 640 F.2d 109, 113

( 8th Cir. 1981). No one of these factors is determinative.’ The

" The interrelationship of these factors is illustrated by the following passage from

Dataghe ¢-

strongly in his favor, the showing of success on the merits can be less.

he at

Court will therefore discuss each of these factors as it applies to

the plaintiff's various causes of action.®

ILL. Copyright Infringement

A. Probable Success on the Merits

In order to prevail on its claim of copyright infringement,

the plaintiff must prove that it is the owner of a valid copyright

and that the defendants have performed and distributed games

copied from the plaintiff's audiovisual works. See Ferguson v.

National Broadcasting Co., 584 F. 2d 111, 113 (Sth Cir, 1978);

Novelty Textile Mills v. Joan Fabrics Corp., 558 F. 2d 1090,

1092 (2d Cir. 1977); Testa v. Janssen, 492 F Supp. 198, 202

( W.D. Pa.1980). For the reasons discussed below, the Court is

of the opinio: that the plaintiff has established that it will

probably succeed on the merits of its infringement cause of

action.

1. Validity of Copyright

Under the Copyright Act, a certificate of copyright registra-

tion, obtained within five years of first publication, constitutes

“prima facie evidence of the validity of the copyright and of the

facts stated in the certificate.” 17 U.S.C. § 410(c) (1976). The

plaintiff has offered into evidence its certificates of copyright

registration for the audiovisual works contained in the Pac-

Man, Galaxian and Rally-X games. These copyright registra-

tions were obtained within five years of the first publication of

these works. Through this evidence, the plaintiff has made a

prima facie showing that its audiovisual works are copyrigh-

table subject mattet, that the works are original, that the

statutory formalities of registration have been satisfied, and that

the plaintiff is the owner of the copyrights. 3 M. Nimmer,

Nimmer on Copyright §12.11[A], [B], [C] (1980) [{here-

inafter cited as “Nimmer on Copyright”]. See also Dolicraft

* The plaintiff can obtain the relief 1 requests based on its copyright and Lanham

Act claims. The Court will therefore not discuss the plaintiff's state law claim.

as toatl ae

Industries, Lid. v. Well-Made Toy Manufacturing Co.,, 479 F.

Supp. 1105, 1114 (E.D. N.Y. 1978). This showing places of the

defendants the burden of coming forward with evidence which

rebuts the plaintiff's claim to ownership of valid copyrights in its

audiovisual we rks. Dolicraft Industries, Lid. v Well-Made Toy

copyrightable subject matters enumerated in the Act. 17 U.S.C.

§ 102(a). Second, the Court must determine whether the wr-k

is fixed in 2 tangible medium of expression.

ray tube my means of elctronic equipment. These character-

_ istics of the plaintiff's games clearly extablish that the plainuff’s

The Act provides that copyright protection may be obtained “in

works of authorship fixed in any tangible medium of ,

expression, now known or later developed, from which they can

be perceived, reproduced, or otherwise communicated, either

directly or with the aid of a machine or device.” 17 U.S.C.

$102(a) (emphasis supplied). A work is fixed in a tangible

medium of expression “when its embodiment in a copy or

phonorecord, by or under the authority of the author, is

sufficiently permanent or stable to permit it to be perceived,

reproduced, or otherwise communicated for a period of more

than transitory duration.” 17 U.S. C. $101. The Act contains

no restrictions on the type of material objects suitable for

fixation. See | Nimmer §§ 2.03 [B]{1], 2.09(D][1]. See also

H. Rep. No. 94-1476, 94th Cong., 2d Sess. 52 ( 1976) reprinted

in [1977] U.S. Code Cong. & Ad. News 5665.

Under these statutory provisions, it is clear that the piain- —

tiff’s audiovisual works are fixed in the printed circuit boards.

audiovisual works may be perceived for a period of time more

than transitory. The fact that the audiovisual works cannot be

viewed without a machine does not mean the works are not

fixed. The Court therefore is of the opinion that the plaintiff's

audiovisual works are fixed, and thus may be copyrighted.

The defendants’ second challenge to the validity of the

plaintiff's copyrights focuses on the distinction between an idea

. and an expression. Under the Act, a copyright holder may not

monopolize an idea, but is limited to protecting his expression

of an idea. 17 U.S.C. §102(b). See generally, Durham

Industries, Inc. v. Tomy Corp., 630 F.2d 905, 912-13 (2d Cir.

1980); Franklin Mint Corp. v. National Wildlife Art Exchange,

1i9

575 F.2d 62, 64-65 (3d Cir. 1978), cert. denied 439 U.S. 880

(1978); Sid & Marty Krofft Television v. McDonald’s Corp., 562

F.2d 1157, 1163, 1167-69 (9th Cir. 1977). The defendants

contend that the plaintiff is attempting to use its copyrights to

monopolize an idea. As an example, the defendants suggest

that the plaintiff's Galaxian copyright is an attempt to monopo-

lize “the very idea of a video game in which alien ships break

away from a convoy to attack a defender ship.” Defendants’

Brief of May 15, 1981, at p. 7. The Court disagrees.

The plaintiff's copyrights cover the plaintiff's audiovisual

expression of various game ideas. This expression includes the

distinctive color and design of the space ships and other

players, as well as the sounds accompanying the playing of the

games. Such expressions of game ideas are an appropiate

subject of copyright protection. See Midway Manufacturing v.

Arctic International, Inc., supra, Slip op. at 13-14, 1 Nimmer on

Corp., supra, 630 F.2d 2d at 914-15 (illustrates how identical

games may be expressed in different ways).

In addition to challenging the subject matter of the plain-

tiffs copyrights, the defendants also raise the issue of whether

the plaintiff has complied with the statutory formalities of

applicant submit, “in the case of a work first published outside

the United States, one complete copy or phono-record as so

published.” 17 U.S.C. $408(b)(3). The plaintiff has submitted

to the Copyright Office a videotape of each of its games in their

attract and play modes. These videotapes were made in the

United States.

Videotapes are “copies” within the meaning of that term as

defined in the Act. 17 U.S.C. $101. The defendants, however,

contend that the videotapes submitted by the piaintiff are not

copies of the works as first published in Japan. The defendants

have offered no evidence which suggests that the games which

were videotaped were not the same as those first published in

‘ot : RO ae licati n Le

issues, however, are closely related to the validity issue, and will

therefore be considered in connection therewith.

A copyright registration is a prerequisite to the institution

of an infringement suit. 17 U.S.C. § 411(a). The defendants

contend that the plaintiff has failed to satisfy this requirement

because no copyright registration has been obtained in the

computer programs underlying the plaintiff's games. The basis

of this contention is the defendants’ argument that the instant

action is not a suit to prevent the infringement of the plain‘it’s

audiovisual works, but is rather a suit to protect the computer

programs contained in the games’ printed circuit boards. Since

the computer programs are not the subject of a copyright

bring the instant action. A challenge, very similar to the one

raised by the defendants, was rejected by the United States

District Court for the Eastern District of New York. Stern

Electronics Inc. v. Harold Kaufman, et al., No. 80 C 3248, Slip

op. at 7-9 (E.D. N.Y. May 22, 1981). For the reasons

discussed in Stern Electronics, the Court finds that the plaintiff's

failure to obtain copyright registrations on the computer pro-

grams underlying its audiovisual works does not preclude the

plaintiff from bringing a suit to prevent infringement of its

audiovisual works.

forward with evidence that Proper notice has been given.

Dollcraft Industries, Lid. vy. Well-Made Toy Manufacturing Co.,

supra, 479 F Supp. at 1116.

§ 12.41(B}.

122

§ 201.20(g)(1) & (3) reprinted in 4 Nimmer on Copyright

Appendix 3. This pivposed regulation clearly comports with

the spirit of § 401(c) of the Act since the regulation would

place the notice where it would be most likely to be observed by

those viewing the work. Although the proposed regulations are

not binding on the Court, they do suggest a persuasive inter-

pretation of the requirements of § 401(c). The Court therefore

finds that the plaintiff has satisfied the Act's notice requirements

for each of its games.

2. Copying of the Plaintiff's Work

’ The second element of an infringement action is copying of

the plaintiff's work. For the purposes of this case, the copying

requirement should be divided into two parts. See 2 Nimmer

on Copyright § 8.01{A]. First, the plaintiff must prove that the

defendants’ games are copies of the plaintiff's games. In other

words, the plaintiff must show that the allegedly infringing

games did not have an origin independent of the plaintiff's

works. Second, the plaintiff must establish that the defendants’

conduct infringed one of the piaintiff’s rights enumerated in the

Act. In this regard, the plaintiff contends that the defendants

infringed its rights to exclusive distribution and performance of

its audiovisual works. 17 U.S.C. § 106(3) & (4).

Because of the difficulty of producing direct evidence of

copying, a plaintiff in a copyright cction generally proves

copying “by showing that the person who composed the

defendants’ work had access to the copyrighted work and that

the defendants’ work is substantially similar to the plaintiff's.”

Ferguson v. National ”-oadcasting Co., supra, $84 F.2d at 113.

However, if the similarity between the works is so striking that

the possibility of independent creation is precluded, a court may

find tha. copying occurred without direct proof of access.

Ferguson v. National Broadcasting Co., supra, 584 F.2d at 113:

Testa v. Janssen, supra, 492 F Supp. at 202-204; Knickerbocker

Tay Co. v. Genie Toys, Inc., 491 F.Supp. $26,528 (E.D. Mo.

1980). In the instant case, the similarities between the works

Ee ioe tee ef

ie Sci mS 5 yey

are so striking that copying may be inferred without direct

proof of access.

A comparison of the defendants’ games and the plaintiff's

games shows that the games are virtually identical. The Court

will briefly discuss a few of the similarities between the

games. '°

sters which chase the player puck through 2 maze. These

monsters are colored red, pink, aqua and yellow. They have a

semicircular shape with feet or legs on the flat, bottom side, and

have eyes which look in the direction of their movement. The

_ design of these characters is unique. The monster characters in

the defendants’ Mighty Mouth game are identical to those in

the plaintiff's game.

The plaintiff's Galaxian game has a convoy of aliens

approaching the player’s defense ship. These aliens are unique

in their shape and movement. In formation, the aliens fly with

aliens break away from the convoy to swoop down on the

defense ship, their wings are extended upward in a stationary

position. Although the defendants’ Galactic Invaders game

offered in evidence is not in color, the shape and movement of

its aliens are identical to the plaintiff's game.

The plaintiff's Rally-X game is a chase game in which the

player’s car is pursued through a maze by several pursuit cars.

One way of avoiding the pursuit cars is for the player's car to

release a smoke screen which sends the pursuit car into a

whimsical spin. The defendants’ Rally-X game incorporates a

smoke screen escape device and spin-out identical w the

plainufl’s.

"© The burden on the plainaff of proving that (wo works are strikingly smular ts 2

heavy one. ee eee enn bee OTS. Dest dommeteinse ston

such

comedence.

are of a kind that can oaly be explained by copying. rather than by

cfeation of por common source ~ Testa v Johnson. supra.

492 F Supp. at 203. ithustranve sumilanues discussed herein clearly sansfy hes

This list of similarities is intended merely to illustrate the

extent to which the defendants’ games are similar to the

plaintiff's. It is not meant to be exhausuve. It cannot be

overemphasized that, in virtually every detail, the defendants’

games are identical to the plaintiff's. See Sid & Marty Krofft

Television v. McDonald's Corp., supra, 562 F.2d at 1164. See

also Franklin Mint Corp. v. National Wildlife Art Exchange,

supra, $75 F.2d at 65-66.

In addition to specific similarities, the overall appearance

of the games is identical. A reasonable observer, comparing the

overall appearances of these games, could anly conclude that

the defendants’ games not only copy plaintiff's ideas, but

capture the plaintiff's unique expression of those ideas. See

generally, Durham Industries, Inc. v. Tomy Corp., supra, 630

F.2d at 911-13; Sid & Marty Krofft Television v. McDonaid’s

Corp., supra, $62 F.2d at 1164-65; Universal Athletic Sales Co.

vy. Salkeid, $11 F.2d 904, 907, 908-09 ( 3d Cir. 1975); McMahon

v. Prentice-Hall, Inc., 486 F.Supp. 1296, 1304 (E.D. Mo.

1980); Dolicraft Industries, Lid. v. Well-Made Tay Manufac-

turing, supra, 479 F Supp. at 1116-17.

In light of the foregoing discussion, the Court finds that the

defendants’ games are so strikingly similar to the plaintiff's

works that a finding of independent origin is precluded. The

Court therefore concludes that the defendants’ games are copies

of the plaintiff's.

The remaining issue to be resolved is whether the defend-

ants have infringed any of the plaintiff's statutory rights. A

public copies'’ of his work, and to perform in public the

copyrighted work. Both of the defendants have adm‘ed that

'’ The defendants did not reproduce copies of the plainuff™s work. Rather. they

distributed copies of the wort This distribuuon ovcurred when the defendants sold

games which housed copies of the plainuff™s work. The copres of the work were the

printed circu boards which contained the plainuffs work and which were manufac

tured by Venture Line. Inc.

“* This conclusion is mor ahered by the defendants’ iack of knowledge that its

games were copies of plaintiff's games. see Knickerbocker Toy Co. v. Genie Toys. inc.

supra 49| F. Supp. at 529. or by the fact thar the defendants did not themselves make

the copes which were distributed ov performed. See Amencan Imernavona) Pictures.

Inc. v. Foreman, 576 F.2d 661. 663 a. |, 664 (Sth Cir. 1978).

_ Balanced against the harm to the defendants is the harm

suffered by the plaintiff if the injunction is not issued. Allowing

the defendants’ infringing activity to continue would cause the

plaintiff substantial harm. The popularity of audiovisual games

is notoriously short-lived. Despite this fact, the plaintiff has

invested large sums of money in the acquisition and devel-

opment of the games . issuc here. Without an injunction, the

public interest in the plaintiff's copyrighted works may dissipate

before plaintiff is able to vindicate its rights. In such a situation,

a preliminary injunction is the only effective means of protect-

ing the copyright. Siern Electronics v. Harold Kaufman, supra,

Slip op. at 5. See Dollarcraft Industries, Lid. v. Well-Made Tay

Manufacturing, supra, 479 F Supp. at 1117. The Court there-

fore finds that the balancing of the equities favors the issuing of

an injunction.

C. The Public Interest

The Copyright Act evidence a public interest in encour-

By granting the plaintiff the relief requested, the Court would.

_ be furthering this public interes: by rewarding the plaintiff's

development of new and challenging audiovisual games. In

addition, one court has noted that counterfeits of copyrighted

games post a threat to the health of the video game industry.

Stern Electronics, Inc. v. Kaufman, supra, Slip op. at 6. The

Court can conceive of no public interest served by permitting

the defendants to engage in the continued distribution and

performance of games which are virtual replicas of the plain-

would be served by the issuance of an injunction.

D. Summary

The plaintiff has made a strong showing of probable

success on the merits. This showing is sufficient to establish that

the plaintiff will suffer irreparable harm. Balanced against this

harm is the rather insubstantial harm which an injunction will

cause the defendants. Based on these findings, the Court will

issue a preliminary injunction prohibiting the defendants from

engaging in further infringing conduct.

The plaintiff's second cause of action is founded on alleged

violations of §43(a) of the Lanham Act. 15 U.S. C. $1125(a).

likely to cause confusion in the marketplace."3 Truck Equipment

Service Co. v. Fruehauf Corp., $36 F.2d 1210, 1217-21 ( 8th Cir.

1976), cert. denied 429 US. 861 (1976). For the reasons

discussed below, the Court is of the opinion that the plaintiff

will probably succeed on the merits of its Lanham Act cause of

action.

|. Nonfunctional Design Features of the Plaintiff's Games.

design features is not always bright, certain established prin-

ciples guide the Court’s consideration of this issue. In the

Fruehauf case, the Eighth Circuit held:

“Imitation of the physical details and design of a com-

petitor’s product may be actionable, if the !

: commercial success of the product, the interests in free

competition permits its imitation in the absence of a patent

"2 The defendants do not dispute that this suit involves goods affecting intersate

commerce.

“ =.

, * .

coloring of the characters in the plaintiff's games are

nonfunctional.

source. RJR Foods, Inc. v. White Rock Corp.. 03 F.2d 1058,

1059 (2d Cir. 1969); see Trek Equipment Service Co. v.

Fruehauf Corp., supra, $36 F.2d at 1220.

such goods * * * that it serves to identify

distinguish them from the goods * * * of others. When

such an association exisis, the name, mark, or symbol is

said to have acquired a ‘secondary meaning,’ in

original user has . property right which equity will protect

against unfair appropriation by a competitor." * * *

Truck Equipment Service Co. y. Fruehauf Corp., supra, $36

F.2d at 1219. Secondary meaning may be established by

circumstantial evidence. Faberge, inc. v. Saxony Products, Inc.,

605 F.2d 426, 428 (9th Cir. 1979).

The existence of a secondary meaning may be inferred

from evidence that the defendants have consciously imitated

the nonfunctional design features of the piaintiff’s products.

Faberge, Inc. v. Saxony Products, Inc., supra, 60$ F.2d at 428:

RJR Foods v. White Rock Corp., supra, 603 F.2d nt 1060: Truck

Equipment Service Co. v. Fruehauf Corp., supra, 536 F.2d at

" 1220 n. 13. This inference is based on the expectation that a

businessman would not adopt a specific nonfunctional design

feature without a purpose. Since the design feature could not

have been adopted because of its functional usefulness, the only

reasonable motivation for such conscious imitation would be to

take advantage of the secondary meaning associated with the

design.'* Absent proof of other motivation, evidence of con-

scious imitation . sufficient to create an inference that the

imitated design feature did in fact have a secondary meaning.

Applying this analysis to the instant action, the Court finds

that the defendants were aware of the existence of the plaintiff's

games and of the similarities between their games and the

plaintiff's. The games are for all practical purposes identical.

The record also reveals that customers who wished to purchase

plaintiff's games from the defendants were offered the defend-

ant’s games as substitutes. This substitution suggests that the

defendants were attempting to take advantage of consumer

interest in the plaintiff's games. Based on this evidence, the

Court finds that the defendants consciously imitated the

nonfunctional design features of the plaintiff's games with the

intent to enjoy some of the consumer acceptance of the

plaintiff’s games. See generally Fleischmann Distilling Corp. v.

Maier Brewing Co., supra 314 F.2d at 157; Markel v. Scovill

Manufacturing Co., 471 F Supp. 1244, 1252 (W.D. N.Y. 1979)

aff'd without opinion 610 F.2d 807 (2¢ Cir. 1979); Armstrong

Cork Co. v. Armstrong Plastic Covers Co., 434 F.Supp. 860, 871

“4 The rauonale behind this inference was explained in Flerschman Disulling Corp

v. Maier Brewing Co.. 314 F. 2d 149 ( 9th Cir. 1963).

We canaot conclude but that Maier deliberately adopted the name knowing

that Black & White was the name and wademark of Buchanan and they must have

done so with some purpose in mind. The only possible purpose could have been to

capitalize upon the popularity of the name chosen. This popularity. they must have

known. would extend to their product because the public would associate the name

Black & White with something old and reliable and meritorious in the way of an

alcoholic beverage.

id. at 157. See also Audio Fidelity, Inc. v. ers oro" gee me 283 F. 2d

551, 558 ( Mh Cir. 1960).

(E.D. No. 1977); Mortellito v. Nina of California, Inc., 335

F.Supp. 1288, 1292-93 (S.D. N.Y. 1972). This conscious

imitation is evidence that the nonfunctional design features of

the plaintiff's games had acquired secondary meaning.

A finding of secondary meaning is also supported by the

evidence of consumer complaints about the defendants’ games.

Dale Dirkschneider testified that customers piaying his Mighty

These customers told Dirkschneider that they wanted “a regu-

lar factory game” which Dirkschneider interpreted to mean a

Midway game.

This testimony indicates that something about the appear-

ance of the defendants’ games suggested to the customers that

their money would purchase a type of game action associated

with the plaintiff's games. These customers’ beliefs could not

have been created by the games’ cabinets which are not similar

to the cabinets used on the plaintiff's games. Since the attract

mode of the defendants’ games prominently displayed charac-

ters identical to those used in the plaintiff's games, it is

‘reasonable to infer that the customers’ expectations were in part

engendered by the fact that the defendants’ games imitated the

nonfunctional design feature of the plaintiffs games. This

consumer expectation is evidence that the nonfunctional design

features of the plaintiff's games had acquired a secondary

meaning. See Harlequin Enterprises Lid. v. Gulf & Western

Corp., 503 F.Supp. 647, 649 (S.D. N.Y. 1980).

There is one other factor which suggests that the design

features of plaintiff's games have acquired a secondary mean-

ing. The substantial number of games sold by the plaintiff is

evidence of secondary meaning. Truck Equipment Service Co.

v. Fruehauf Corp., supra, 536 F.2d at 1220. Since early 1980,

the plaintiff has sold 40,000 Galaxian games, 25,000 Pac-Man

games and 2,500 Rally-X games. From these sales, it may be

inferred tha: customers are familiar with the plaintiff's games,

132

and associate the design features of these games with a single

source. '§

The preceding discussion summarizes the evidence of

secondary meaning.'* This evidence by no means conclusively

establishes the existence of secondary meaning. Although the

issue is a close one, the Court is of the opinion that the plaintiff

has represeuted sufficient evidence to establish that it will

probably succeed in proving that the nonfunctional design

features of its games have acquired secondary meaning.

3. Likelihood of Confusion

The determination of whether the defendant's conduct is

likely to cause confusion depends upon the perceptions of the

reasonable consumer. See RJR Foods, Inc. v. White Rock

Corp., supra, at 1060; Armstrong Cork Co. v. Armstrong Plastic

Covers Co., supra, 434 F.Supp. at 671.'7 The plaintiff must

show that the defendants’ use of the plaintiff's game characters

is likely to confuse a reasonable consumer about the source of

the defendants’ games or the plaintiff's connection with them.

*® This conciusion is reinforced by the operations! characteristics of the plaintiff's

games. Each game has an attract mode which prominently displays the games’

characters. This display of the games’ characters makes « more likely that the public

would associate the characters with games made by the piainuff, The significance of the

attract mode is considered in greater detail in the Court's discussion of likelihood of

confusion.

® Adverusing is another factor which is relevant to resolving the issue of secondary

meaning. Truck Equipment Service Co. v. Fruehauf Corp.. mpra. $36 F.2d at 1220.

The plainuff has offered evidence of its substanual adverusing campaigns designed to

promote its games. This advertising was directed primarily at distributors who

purchase games from the piainuff. The piainuff. however. does not appear w contend

that its games’ design features have acquired secondary meaning among distributors.

among those persons who actually play :he games. Adverusing directed at distributors

is of little probative value in proving secondary meaning recognized by ultimate

consumers.

The Armstrong case is a tradema.. infringement action under 15 U.S.C.

§$ 1114(1). Although the current action involves a claim under 15 U.S.C. §1125( a).

cases such as Armstrong provide authority for assessing the likelihood of confusion in

the instant action. See generally, Biack Hills Jeweiry Manufacturing Co. v. Gold Rush.

Inc.. 633 F.2d 746, 753 a. 7 (8th Cir, 1980).

133

See Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Lid.,

supra, 604 F.2d at 204-05. Whether the plaintiff has satisfied

this burden depends upon a variety of factors, no one of which

is determinative. SqguirtCo v. Seven-Up Co., 628 F.2d 1086,

1091 (8th Cir. 1980).

The strength of plaintiff's mark is one factor which should

be considered in assessing the likelihood of confusion.

SquirtCo v. Seven-Up Co., supra, 628 F.2d at 1091. If the

plaintiff's mark has strong secondary meaning in the public’s

mind, the defendants’ use of that mark is likely to cause greater

confusion than the use of a weaker mark would cause. In the

instant case, the showing of secondary meaning does not

suggest that the plaintiff's mark has a strong secondary meaning

among the consuming public. The weakness of the plaintiff's

mark, however, does not mean that likelihood of confusion

cannot be proven. Rather, it means that a strong showing on

the other factors must be made if the plaintiff is to prevail.

Alpha Industries, Inc. v. Alpha Steel Tube & Shapes, Inc., 616

F.2d 440, 445-46 (9th Cir. 1980). The plaintiff has clearly

made such a showing. :

One factor which should be considered in assessing the

likelihood of confusion is the similarity of the design features

used by the parties. The design of the defendants’ game

characters is virtually identical to the design of the plaintiff's

game characters. Because of this striking similarity, the overall

impression created by the defendants’ characters is in-

distinguishable from the impression conveyed by the plaintiff's

characters. SguirtCo v. Seven-Up Co., supra, 628 F.2d at 1091;

RJR Foods, Inc. v. White Rock Corp., supra, 603 F.2d at 1060.

This similarity strongly suggests that the defendants’ use of the

plaintiff's design features would cause confusion in the market-

place.

The risk of confusion created by the striking similarity of

the design features is exacerbated by the manner in which these

134 *

games operates.'* Each of the parties’ games has an attract

mode, which is a display continuously shown on the cathode

ray tube whenever the game is attached to a power source and

not in the play mode. The attract mode is designed to entice

passersby into playing the game. The game's characters are

prominently displayed in the attract mode.

The attract modes of the plaintiff's and defendants’ games

are identical in their overall appearance. The attract modes of

the defendants’ games imitate not only the design features of

the plaintiff's game characters but also the plaintiff's manner of

presenting these characters. For example, in both the plaintiff's

Pac-Man game and the defendants’ Mighty Mouth game, the

attract mode features the game characters and their nicknames

in a vertical column. Although the names given the characters

in defendants’ games are different from plaintiff's, the general

impression created by the presentation is the same. After the

characters are introduced, a number of them engage in a chase

underneath the column of characters and nicknames. This

chase is identical in both games.

The operation of the attract mode enhances the likelihood

of confusion from the defendants’ use of characters identical to

the plaintiffs. A person interested in playing a game must

make his choice based on the attract mode. Since the defend-

ants’ attract mode features characters identical to the plaintiff's

and presents these characters in a manner very similar to the

plaintiff's, the ordinary consumer viewing the attract mode

would likely think the game being advertised was the plaintiff's.

In other words, the ordinary consumer would likely be confused

about the source of the game.

“Similarity of the marks . .. mus be considered as they are encountered in the

marketplace. Although similarity is measured by the marks as entities. semilaruies

weigh more heavily than differences.” AMP, inc.. $99 F. 2d at 351. The comparison

should be made “in light of what occurs in the marketplace.” taking into account the

circumstances surrounding the purchase of the goods.

Alpha Industries, Inc. v. Alpha Steel Tube & Shapes, Inc.. supra. 616 F. 2d at 444.

135

An additional factor which should be considered is the

degree of care likely to be used by potential customers.

SquirtCo v. Seven-Up Co., supra, 628 F.2d at 1091; RJR Foods,

Inc. v. White Rock Corp., supra, 603 F.2d at 1061. The cost of

playing the parties’ games is a quarter. This alone suggests that

customer care would not be particularly keen. In addition, the

atmosphere surrounding the games in their normal setting

indicates that a customer would not be likely w scrutinize a

game with such intensity that he would be able to distinguish

the plaintiff's and defendants’ games. This lack of consumer

care is further evidence that there is a likelihood of confusion in

the marketplace.

Two other factors which are related to the degree of

consumer care deserve brief mention. These factors are degree

of similarity between the parties’ products and the competitive

proximity of the products. Alpha Industries, Inc. v. Alpha Steel

Tube & Shapes, Inc., supra, 616 F.2d at 445; Markel v. Scovill

Manufacturing Co., supra, 471 F.Supp. at 1250-51, 1252.

When the parties’ products are similar, defendants’ use of the

plaintiff's mark is likely to cause greater confusion than when

dissimilar products are involved. The likelihood of confusion is

further increased if the parties’ products are distributed through

similar channels of trade to the same ultimate customers. In the

instant case, the parties’ games are identical aad are distributed

through similar trade channels. These facts are further proof of

likelihood of confusion.

Actual incidents of consumer confusion is another impor-

tant factor which should be considered. Although actual

confusion is not an essential element of a Lanham Act cause of

action, it is positive proof of likelihood of confusion. SguirtCo

v. Seven-Up Co., supra, 628 F.2d at 1091; Markel ¥. Scovill

Manufacturing Co., supra, 471 F.Supp. at 1251. See also Truck

Equipment Service Co. v. Fruehauf Corp., supra, 536 F.2d at

1220-2!. The Court has already discussed the consumer

complaints received by Dirkschneider. These complaints in-

136

dicate that some customers placed their money in the defend- —

ants’ games expecting that the games would perform like the

plaintiff's. These complaints are evidence of actual consumer

confusion and provide further proof that the defendants’ con-

duct is causing a likelihood of confusion in the marketplace-

The final factor relevant to the issue of likelihood of

confusion is the defendants’ conscious imitation of the plaintiff's

game characters.'® RJR Foods, Inc. v. White Rock Corp., supra,

603 F.2d at 1060. See also Truck Equipment Service Co. v.

Fruehauf Corp., supra, $36 F.2d at 1220. In the instant action,

the defendants had knowledge of the plaintiff's games and used

characters in their games identical to the characters used by the

plaintiff. This conduct suggests that the defendants were

seeking to capitalize on the public recognition of the plaintiff's

characters. The defendants’ intent to capitalize gives rise to an

inference that the defendants were successful in capitalizing on

the plaintiff's reputation by confusing the public. Markel v.

Scovill Manufacturing Co., supra, 471 F.Supp. at 1252; D C

Comics, Inc. v. Powers, 465 F Supp. 843, 848 (S.D. N.Y. 1978).

Thus, the defendants’ conscious imitation is evidence of likeli-

hood of confusion.

The evidence of likelihood of confusion is substantial. The

Court therefore finds that the plaintiff will probably succeed in

proving that the defendants’ use of the plaintiff's game charac-

ters is likely to cause confusion in the mind of the average

consumer.

B. irreparable Harm and Balancing of the Equities.

The plaintiff need not present specific evidence of irrepa-

rable harm. Once the plaintiff proves the tendency of the

defendants’ conduct to deceive, the requirement of irreparable

harm is satisfied. Black Hills Jewelry Manufacturing Co. v. Gold

Rush, Inc., supra, 633 F.2d at 753; Markel v. Scovill Manufac-

turing Co., supra, 471 F.Supp. at 1254. The plaintiff has clearly

established a tendency to deceive.

® The issue of intent is thoroughly discussed in the Court's consideration of

secondary meaning ;

Id. at 753 n. 7 quoting J. McCarthy, Trademarks & Unfair

Competition §27:5A at 250-5! (1973). The plaintiff has made

4 substantial -howing that the public is likely to be confused.

Thus, an injunction in the instant case would further the public

interest by protecting consumers from the danger of confusion

created by the defendants’ products.

D. Summary

The plaintiff has made a substantial showing that it will

Probably succeed in proving that its game characters are

~ nonfunctional, and that the defendants’ use of the characters

creates a likelihood of confusion. Although the evidence of

secondary meaning is not as substantial, this does not preclude

the Court from issuing a preliminary injunction.

The record contains overwhelming evidence of the likeli-

hood of confusion caused by the defendants’ products. This

confusion is evidence of the substantial injury which both the

plaintiff and public will suffer if a preliminary injunction is not

issued. In light of this injury, the Court is of the opmion that

the plaintiff has made a sufficient showing that it will probably

succeed in proving secondary meaning. The Court therefore

finds that the plaintiff is entitled to a preliminary injunction

the defendants from further violations of the Lan-

ham Act.

An Order will be issued contemporanecously with this

Memorandum Opinion.

Dated this 15th day of July, 1981.

Warren K. Upham

Chief Judge

FILED

District of Nebraska

JUL 15 1981

ss a

™ (T}he court ordinarily is not required at an carly stage wo draw the fine line

between a mathemanca!l probability and a substanual possibility of success. This

endeavor may. of course.. be necessary in some circumstances when the balance of

equities may come to require a more careful evaluation of the merits. But where the

balance of other (actors ups decdedly toward plainuff a preliminary injunction may

issue if plainnff has raised quesuons so senous and difficult a3 to call for more deliberate

invesuganon.

Dataphase Systems. Inc. v. C L Systems. Inc. supra, 640 F.2d at 113. See also now |

npre. .

lat ‘ ao, Mh! a a se FT ia

r. —_— wee a ee ee, | ee e es ee age ear er

In the Matter of

CERTAIN COIN-OPERATED

AUDIO-VISUAL GAMES AN igation No. 337-TA-87

COMPONENTS THEREOF

COMMISSION ACTION AND ORDER

Introduction

On May 22, 1980, Midway Mfg. Co., 10750 West Grand

15. Kyugo Co., Ltd.

16. Miyabi Inc., d/b/a Compu Game, Inc.

17. Nihon Bussan Co., Ltd., a/k/a Nichibutsu

18. Stan Rousso, Inc.

19. Taito of Japan

20. T.T. Sales & Service, a/k/a Enterprise, Inc.

21. Wesco Co.

The names of the games at issue are the following: Moon Alien,

Cosmic Alien, Fuso Karateco, Hoei Galaxy, Kyugo Galaxy,

Fuso Galaxian, and Artic Galaxian.

The complainant in this investigation, Midway Mfg. Co.

(Midway ), is an Illinois corporation engaged in the business of

ponents thereof. Galaxian is Midway's trademark for its coin-

operated audio-visual game.

Because of the complexity of the copyright issue, the

Commission published a Notice of Request for Fur.ser Briefing

on May 4, 1981. As a result of the notice; the Commission

received 15 amicus briefs on the copyright question.?

On June 9, 1981, at a public meeting, the Commission

unanimously determined that there is a violation of section 337

of the Tariff Act of 1930 (19 U.S.C. § 1337) in the importation

and sale of certain coin-operated audio-visual games, kits and

components thereof which infringe complainant's copyrights or

common-law trademark or bear false designation of origin as to

an exclusion is the appropriate remedy. The Commission also

unanimously determined that public interest considerations do

not preclude the granting of an exclusion order in this in-

vestigation and that a bond of 54 percent of the c.i.f. value of

the imported articles is appropriate during the Presidential

review period.‘

Action

Having reviewed the record compiled in investigation No.

337-TA-87 and the recommended determination of the ALJ,

the Commission, on June 9, 1981, determined —

3 Briefs were submitted by the following: Richard Kinney,

Esq., Richard H. Stern, Esq., and Jeffrey L. Squires, Esq.;

Harold L. Novick, Esq.; Sega Enterprises, Inc., and Gremlin

Industries Inc., (Sega/Gremlin ); Omni Video Games, Inc., and

Ferncrest Distributors, Inc.; Intel Corp.; Arthur L. Levine, Esq.;

Finnegan, Henderson, Farabow, Garret & Dunner, IBM;

Kaye, Scholer Fierman, Hays & Handler, Williams Electronics,

Inc.; and Atari, Inc.

“The Commission also voted to deny the joint motion of

complainant and respondent Nichibutsu to terminate Nichi-

butsu as a party respondent based upon a consent order

agreement.

1. To deny the joint motion to terminate respondent

Nichibutsu as a party respondent:

tendency of which is to substantially injure an industry, effi-

ciently and economically operated. in the United States;

3. That the appropriate remedy for such violation of

section 337 is an exclusion order, Pu uant to subsection (d) of

section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337(d)),

Preventing the importation of certain coin-operated audio-

visual games, kits and components thereof as follows:

Play mode of that game: (1) Moon Alien, (2) Kyugo

Galaxy, (3) Hoei Galaxy, (4) Taito Galaxian, (5) Kara-

teco and Fuso Galaxian, and (6) Artic Galaxian.

B. Exclusion of coin-ope’ ated audio-visual games,

kits or components thereof which infringe Midway's com-

mon law trademark through the use of the names Gala-

xian, Galaxy or Galaxip or which bear a false designation

of origin.

4. That the public interest factors enumerated in subsec-

tion (d) of section 337 of the Tariff Act of 1930 (19 U.SiC.

§ 1337(d)) do not preclude the issuance of an exclusion order

in this investigation; and

§, That, as provided in subsection (g)(3), of section 337

vw me Tariff Act of 1930 (19 U.S.C. § 1337(g)(3)) the

propriate bond during the period this mauer is pending

yaw am. f q -

ese Ne Ba?

before the President is in the amount of 54 percent of the c.i.f. :

value of the imported articles.

Order

Accordingly, it is hereby ORDERED THAT—

1. The joint motion (Motion 87-16) of complainant

and respondent Nihon Bussan Co., Inc., d/b/a/ Nichi-

butsu to terminate Nichibutsu as a party respondent on the

basis of a consent order agreement is denied;

2. Certain coin-operated audio-visual games, kits and

components thereof which infringe complainant's attract

mode and the first few moments of the play mode before

the player takes control of the game are excluded from

entry into the United States—specifically, Moon Alien,

Kyugo Galaxy, Hoei Galaxy, Taito Galaxian, Karateco :

and Fuso Galaxian, and Artic Galaxian.

3. All games, kits and components which infringe

complainant’s trademark or bear false designation of ori-

gin are excluded from entry into the United States.

4. The articles to be excluded from entry into the

United States shall be entitled to entry under bond in the

amount of 54 percent of the c.i.f. value of the imported

articles from the day after this order is received by the

President pursuant to subsection (g) of section 337 of the

Tariff Act of 1930 (19 U.S.C. § 1337(g)) until such time

as the President notifies the Commission that he approves

or disapproves this action, but, in any event, not later than

60 days after the date of receipt; :

5. Notice of this Action and Order be published in the

Federal Register;

6 A copy of this Action and Order, and of the Commis-

sion opinivn in support thereof be served upon each party of

ae OFT Sy cae WE ee Sth Oy A

record to this investigation and upon the Department of Health

and Human Services, the Department of Justice, the Federal

Trade Commission, and the Secretary of the Treasury; and

7. The Commission may amend this Order in accordance

with the procedure described in rule 211.57 of the Commis-

sion’s Rules of Practice and Procedure (46 F.R. 17533, Mar. 18,

1981).

By order of the ©~=mmission.

KENNETH R. MASON

Secretary

Issued: June 25, 1981

yg *

OPINION OF THE COMMISSION

1. PROCEDURAL HISTORY'

On May 22, 1980, Midway Mfg. Co., 10750 West Grand

Avenue, Franklin Park, Illinois, filed a complaint with the U.S.

International Trade Commission under section 337 of the Tariff

Act of 1930 (19 U.S.C. $1337). An amendment to the

complaint was filed on July 9, 1980. The amended compiaint

alleges unfair methods of competition and unfair acts in the

unauthorized importation of certain coin-operated audiovisual

games into the United States, or in the unauthorized sale of

such articles in the United States based upon common-law

trademark infringement; passing off,? imitation of trade dress,?

and false designation of origin. The complaint alleges that the

effect or tendency of these unfair methods of competition and

unfair acts is to substantially injure an industry, efficiently and

economically operated, in the United States.

Complainant seeks cease and desist orders against the

domestic respondents and an exclusion order against the alleg-

edly offending imported games and kits (i.e., circuit boards).

On June 19, 1980, the Commission instituted an in-

vestigation based on Midway's amended complaint. On June

20, 1980, a notice of investigation was issued and thereafter

' In this opinion, the following abbreviations will be used:

ALJ means the Administrative Law Judge. RD means Recom-

mended Determination of the ALJ. CX means exhibit filed

2 This count was subsequently waived by complainant and

therefore the Commission need not address this issue. (Com-

plainant's Pre-hearing Brief, p. 5, Aug. 11, 1980.)

3 This count was also waived by complainant and thus wilil

not be considered by the Commission. (Complainant’s Brief,

p. 2, Dec. 30, 1980.)

: Se Pa) RAO ie, ee Oh ea

Published in the Federal Register (45 F.R. 42891, June 25,

1980). On October 8, 1980 on complainant's motion, the notice

of investigation was amended to add a count of copyright

infringement.

Eight foreign and 12 domestic respondents were named in

the original notice of investigation. Since institution of the

investigation, several motions to add and/or terminate respond-

ents have been granted by the Commission.é

The following respondents remained in this investigation

at the time the record was certifed to the Commission:

- Active Amusement Co.

. Artic Electronics Co., Ltd.

. Arjay Export Co.

Bonanza Enterprises, Ltd.

Tee

15. Kyugo Co., Ltd.

16. Miyabi Inc., a/k/a Compu Game, Inc.

17. Nichibutsu, a/k/a Nihon Bussan Co., Ltd.

18. Stan Rousso, Inc.

J10

19. Taito of Japan

20. T.T. Sales & Service, a/k/a M. Enterprise, nc.

21. Wesco Company

The games at issue are Moon Alien, Cosmic Alien, Hoei

Galaxy, Kyugo Galaxy, Fuso and Karateco Galaxian, Artic

Galaxian. The kits are Wesco Galaxian Kit, KEK Galaxian

Kit, Hobby Galaxian Kit, and En’sco Galaxian Kit.

The ALJ has recommended that the Commission deter-

mine that there is g violation of section 337 by the following

respondents: Hoei Sangvo, Nihon Bussan Co., Ltd., a/k/a

Nichibutsu, Artic Electronics Co., Ltd., Fuso Corporation,

Kyugo Company, Ltd., Chens International, Inc., Arjay Export

Co., LJ.S., Inc., General Vending Sales Corp., Taito Corpo-

ration, Stan Rousso, Inc., Compu-Game, Inc. (Miyabi), M.

Enterprise, Inc. a/k/a T.T. Sales & Service, and Circle Inter-

national. The ALJ also recommended that 10 other respond-

ents be dismissed. The ALJ found that each of the respondents

listed above committed one or more of the following unfair

acts: (1) common law trademark infringement, (2) false

designation of origin, (3) simulation of trade dress, and, (4)

Only the IA filed exceptions to the R.D.¢

* Hobby Industries, Ltd., En’sco Co., Ltd., Universal Co.,

Lid., Universal U.S.A., Inc., Wesco Co., Active Amusement

Co., International Trademarks, Bonanza Enterprises, Inc., KEK

Industries, Inc., and Sunrise New Sound, Inc. As noted in

footnote 4, supra, Universal U.S.A., Universal Co., Ltd., and

Sunrise New Sound have already been dismissed.

*IA Pre-hearing Brief (p. 8). The Commission in-

vestigative attorney disagrees with and takes exception to that

part of the R.D. which finds that:

|. Respondents Nichibutsu, Generai Vending, and

1J.S. violated section 337 by infringing both of complainant's

copyrights, by the manufacture and sale of The Moon Alien

( Footnote continued on following page)

Jil

Because of the complexity of the copyright issue, the

Commission published a notice of request for further briefing

on May 4, 1981 As a result of that Notice, the Commission

received fifteen amicus briefs on the copyright question’

IL. PRELIMINARY ISSUE

On November 19, 1980, complainant and respondent

Nichibutsu, Ltd., filed a motion to terminate as to Nichibutsu

based upon a proposed consent order and a proposed consent

order agreement. The IA opposed that motion because he was

J12

lll. FACTUAL BACKGROUND

The products involved in the investigation are certain coin-

operated audiovisual games 2~“ kits. The “Galaxian” game

was introduced by Namco, Lid., the Japanese company that

created the game, at a trade fair of the Japan Amusement

Trade Association in Tokyo in October 1979. (TR 367.) The

game became popular almosi immediately in Japan. (TR 37.)

Shortly after the introduction of the Galaxian game in

Japan, on November 13, 1979, Midway purchased from Nam-

co the exclusive right to manufacture and sell the Galaxian

game in the United States. (CX 25.) The license agreement

includes the “attract mode” for the game, and the game itself

(the “play mode”). As part of the license agreement with

Namco, Midway agreed to make no changes in the game itself,

and only a few minor changes, expressly agreed to by Namco,

could be made in the trade dress of the game.

The Galaxian game has both a “play mode” and an

“attract mode.” The attract mode is a short sequence of images

nity for public comment. The general rule set forth by the

Administrative Procedure Act in 5 U.S.C. 556(c)(1) that an

“agency shail give all interested parties opportunity for the

a rr 7 —?

a n3

lated game, which ends with the destruction of the player's

rocket base defense ship.

Once a coin is inserted the game enters the “play mode” in

which the player controls the lateral movement of the defense

ship and fires missiles at the attacking aliens.

Galaxian is Midway's trademark for a coin-operated

audio-visual game which incorporates numerous distinctive

design features in both its video screen and cabinctry. The

video screen of the Galaxian game displays a visual work

incorporating five rows of “alien” figures swinging in a slow

sideways movement back and forth across the top of the screen.

For scoring purposes, there are four denominations or ranks of

these aliens, which are reflected in different colors for the

different rows, with the highest ranking near the top of the

screen and the lowest ranking near the bottom. The top-most

row of aliens consists of two rocket-shaped figures with station-

ary wings, and the lower rows of aliens have flapping wings. At

the bottom of the Galaxian screen is a two-color rocket figure or

defense ship (Galaxip) that shoots yellow missiles in a vertical

trajectory toward the aliens. When the missiles collide with an

alien, the alien is destroyed. accompanied by a multicolored

“explosion” appears on the screen. Surviving aliens invert and

swoop down to bomb the defense ship. This “peeling off” from

the alien convoy occurs either by single aliens or by aliens in

formation. The defense ship is shifted horizontally along the

base of the screen under control of the player to avoid a

destructive collision with the aliens and the shower of bombs

dropping from the aliens as they descend. Behind the aliens

appears a twinkling star background of multicolored lights

which rolls from the top of the screen to the bottom. In the

lower right corner of the screen, the number of alien convoys

destroyed is recorded by means of images shaped as pennants,

and at the lower left corner of the screen the number of defense

ships is recorded by means of images of defense ships remain-

ing to be played.

Ji4

The visual features of the Galaxian game are acco.npanied

by distinctive sound effects, including musical phrases and

sounds of firing rockets and explosions.

Midway’s Galaxian game is manufactured in two models,

an upright console, approximately 6 feet by 2 feet by 2 feet, and

a cocktail table configuration, approximately 3 feet by 3 feet by

2 feet. Both types of cabinet contain a logo characterized by the

word “Galaxian” in distinctive lettering with a distinctive style

in the form of a large arc over the letters and a star as the dot of

the “I”. This logo appears in the upper part of the front of the

upright cabinet and on the top horizontal surface of the cocktail

table. The logo without the star appears on the sides of the

upright cabinet. The sides of the upright cabinet also depict a

large robotic insect in flight over an extraterrestrial landscape.

(CPX-i2)

IV. COMMON LAW TRADEMARK INFRINGEMENT.

The elements necessary to prove ccmmon law trademark

infringement are as follows:

1. The mark must be distinctive;

2. The mark must be arbitrary or created for the

express purpose of serving as a trademark;

3. The mark, if a design, must be nonfunctional;

4. The mark must have achieved secondary meaning,

unless the mark is either “suggestive”® or non-descriptive,

5. There must be likelihood of confusion.

‘eibacncaiietineess at enade atnicaane measoemtoaen anes

quality or ingredients of goods as opposed to a descnptve mark

(1 J.T. MeCarthy, Trademarks an Unfair Competition.

wor (fa

ais Cenain Novelty Glasses, 337-TA-SS, USITC Pub. 991

(1979).

hat

Ji5

There isa conflict between the IA and complainant as to

whether secondary meaning’' is a necessary element of

Midway’s common law trademark infringement claim.'? The

IA concedes, and the ALJ found, however, that secondary

meaning as to “Galaxian” has been established, and that the

name “Galaxian” has acquired a common law trademark

status. The Commission also agrees that the use of the word

“Galaxian” by any other manufacturer would misappropriate

complainant’s proprietary interest in the name “Galaxian”.

The term “Galaxian” .

The ALJ found that the word “Galaxian” is arbitrary and

id atari Ste ceilliiiinn: Mataiieen: Hatitieasinn titi tal

i a common law trademark not requiring proof of secondary

meaning." All parties agreed that the term “Galaxian” is

nonfunctional. The ALJ noted that complainant does not claim

that there is confusion of the playing public by the use of the

cares who manufactured the game. Rather, Midway is con-

cerned about the confusion of the operator who buys the games

from the distributor.'* An operator is the owner of an arcade or

a person who buys a game, finds a restaurant or bar location for

it, and splits the income from it with the owner of the restaurant

or bar. We agree with the ALJ and we believe that the word

Galaxian is entitled to protection.

" Secondary meaning occurs when the name of a product

is associated with a particular manufacturer in the minds of

consumers. Carter-Wallace v. Proctor & Gamble Co., 434 F.2d

794 (9th Cir. 1970).

5g jammecn get Grad: xa iehcaamsmmmamna aed

3 R.D., p. 10; See also Miller Brewing Co. v. G. Heilman

Brewing Co., Inc., 561 F.2d (7th Cir. 1977), J. T. McCarthy,

ee ee eee

» P.

er ak

J16

The Restatement of Torts § 729 sets forth four criteria to

4 be considered in determining likelihood of confusion:

eh (a) the degree of similarity between the designation

a _ amd the trademark or trade name‘in

| (i) appearance;

(ii) pronunciation of the words used;

(iti) verbal translation of the pictures or designs

involved;

(iv) suggestion;

(b) the intent of the actor in adopting the designation;

between the goods and services marketed by the actor and

those marketed by the other;

(d) the degree of care likely to be exercised by

The three-part test of Restatement § 729(a) has been

characterized as the “sound, sight and meaning” trilogy. | J. T.

McCarthy, § 23:4. That is, the conflicting marks are to be

compared with respect to similarity of pronunciation, appear-

ance, and verbal translation. /d.

As to the other elements of likelihood of confusion, there is

testimony of actual confusion in the record. (CX 61 p. 5-6)

viewing respondent's games are misled into thinking

= = a

The terms “Galaxy” and “Galaxip”

The remaining question is whether using the words “Ga-

laxy” and “Galaxip” infringe Midway's trademark because of

respondents who used the words “Galaxy” and “Galaxip” had

also infringed complainant’s trademark rights. The LA argued

that “Galaxy” and “Galaxip” are not similar enough to “Gala-

xian” to infringe the common law trademark accorded to the

‘word Galaxian.

A discussion of the test for likelihood of confusion based

upon similarity in sound, meaning and appearance as to each

game follows: '¢

The ARTIC GAME is manufactured by Artic Electronics,

Inc., and sold in the United States by Chens International. A

comparison of the Artic game and Midway's game shows that

they are extremely similar. Both use the name “Galaxian” on

the game cabinet, and in both names there is an arc between

the “G” and the “N”, and a star above the “I”. Although the

colors are different, in both games the colors are split horizon-

tally. The words “Galaxip” and “Galaxians” appear in the

attract mode.

Since there is a likelihood of confusion between the Artic

game and the Midway game, both Chens and Artic have

infringed Midway's common law trademark “Galaxian.”

or any similar sounding name. No allegation of common law

trademark infringement was made against Nichibutsu, General

Vending, or LJ.S., Inc.

Ji8

As to the KARATECO GAME, manufactured by Fuso

Corp. and imported by Arjay, there is a lik-lihood of confusion

between the two games because the name “Galaxian” is used

by both games, and because the Karateco game and the

Midway Galaxian game are almost identical. The Karateco

game uses the aame “Galaxians” and the word “Galaxip” in

the attract mode, but not on the cabinet. (CPX-I1). We agree

with the ALJ that Fuso has infringed Midway's common law

trademark.

The TAITO GALAXIAN GAME (CPX-Q) is manufac-

tured by respondents Taito of Japan and is imported and

distributed in the United States by a wholly owned subsidiary,

Taito of Hawaii, Corp. The game uses the word “Galaxians,”

Midway’s common law trademark, in the attract mode. We

therefore determine that TAITO has infringed the common law

trademark of Midway. .

The HOEI G4ME, manufactured by Hoei Sangyo

distributed by Stan Rousso and Miyabi, Inc., d/b/a Compu-

Game, uses the name “Galaxy” on the cabinet. (CPX-F).

Because the Hoei Galaxy game and the Midway Galaxian

game are so similar and the name “Galaxy” is so close to the

name “Galaxian” the use of the name “Galaxy” creates a

likelihood of confusion. In addition, the attract mode of the

Hoei game uses the word “Galaxians”. We therefore deter-

mine that Hoei Sangyo, Stan Rousso, and Compu-Game, Inc.,

have infringed Midway’s common law trademark.

The FUSO GALAXIAN GAME manufactured by Fuso

Corp. and distributed by M. Enterprise, Inc., uses the word

“Galaxian”. We determine that Fuso and M. Enterprise, Inc.,

have infringed Midway's common law trademark.

The Commission finds that the complainaat’s common law

trademark has been infringed by the following respondents by

ot)

seh ee

Ji9

use of the terms “Galaxian”, “Galaxy” or “Galaxip”:'7 Chens

International, Inc.; Taito of Japan, Ltd.; Artic Electronics Co.,

Ltd.; Fuso Corporation; T.T. Sales and Service; Hoei Sangyo;

Stan Rousso, Inc.; and Miyabi. Ind., d/b/a Compu-Game,

Kyugo Co. Ltd. and Circle International, Inc. ,

FALSE DESIGNATION OF ORIGIN

The complainant has alleged the count of false designation

of origin. The same elements which establish common-law

trademark infringement also establish a prim facie case of false

designation of origin, i.e. of the manufacturer. We, therefore,

find that Taito of Japan, Lid., Hoei Sangyo, Stan Rousso, Ina,

Miyabi, Inc., Fuso Corporation, Circle International, Inc., and

T.T. Sales & Service have violated sectidn 337 by reason of

false designation of origin.'* Respondents Chens International

and Artic Electrouics, because of the conspicuous use of the

name of the manufacturer (Artic) in the attract mode, on the

sides of the cabinet, and on the instruction panel as well as such

instructions being in Japanese, are not found to have falsely

‘7 It is interesting to note that, when complainant filed its

application for federal registration of the Galaxian trademark,

the application was objected to on the ground that there was

another mark registered as “Galaxy Ranger.” tr., p. 17. How-

ever, upon a showing by the complainant that it also owned

that mark, the objection was withdrawn and complainant is

currently awaiting publication of the trademark “Galaxian.”

The initial objection to the use of the name “Galaxian” was

based upon the finding by the examiner in the Pa: nt and

Trademark Office that there might be the likelihood of con-

fusion between “Galaxian” and “Galaxy Ranger.”

*® Chairman Alberger, Vice Chairmar Calhoun, and Com-

missioner Bedell note that there is no respondent found to have

engaged in false designation of origin which is not also covered

under the common-law trademark findings. Furthermore, there

is no additional or more appropriate relief available under

section 337 for this particular violation beyond that which the

Commission is already granting for common-law trademark

infringement.

J20

designated the manufacturer of origin. Additionally, there is no

finding made against Kyugo Company Ld. as there was no

evidence presented that Kyugo had misrepresented the origin

of its Galaxy game.

VL UNFAIR ACTS REGARDING COPYRIGHT

In order to sustain a claim of copyright infringement, a

plaintiff in federal court’? is required to demonstrate two

elements: (1) ownership of the copyright in question; and (2)

copying by the defendant. Samet & Wells, Inc. v. Shalom Tay

Co., Inc., 429 F. Supp. 895 (E.D.N.Y. 1977), aff'd 578 F.2d

1369 (2d Cir. 1978); Russ Berrie & Co., Inc. v. Jerry Elsner Co.,

Inc., 482 F. Supp. 980 (S.D.N.Y. 1980); Sid & Marty Krofft

Television Productions, inc. v. McDonald’s Corp., 562 F.2d

1157, 1162 (9th Cir. 1977); M. Nimmer, Nimmer on Copyright

§ 13.01 (hereinafter Nimmer). We deal with each of these

elements separately.

A. COPYRIGHT OWNERSHIP

According to Professor Nimmer, the copyright law of the

made. 3 Nimmer § 13.01[a} and cases cited therein. These

elements are as follows:

1. Originality in the author;

19 At least one of the briefs rec _- ‘ed by the Commission as

a result of our request for further briefing of copyright issues

suggested that the Commission has the power to remedy an

os)

J21

2. Copyrightability of the subject matter;

3. Citizenship status of the author such as to permit a.

claim of copyright;

4. Compliance with applicable statutory formalities;

and

5. If the plaintiff is not the author, a transfer of right

or other relationship between the author and the plaintiff

sO as to constitute the plaintiff the valid copyright claimant.

Complainant alleges that it has made a prima facie showing of

each of these elements and, therefore, that the Commission

should conclude that it is the copyright owner.

A review of the record in this investigation reveals that the

complainant has alleged facts tending to prove each of these

elercents. It appears to us that, in the absence of any rebuttal,

the evidence brought forth by the complainant in support of

those allegations is sufficient to meet threshold levels of reliabil-

ity and probative value.

In finding that ownership of the copyright has been

established in this case, we note that the respondents in this

investigation are in default—that is, none of the named re-

spondents participated in the fact-finding phase before the

Commission's. ALJ. the record certified to the Commission

consists exclusively of evidence presented by the complainant

and by the commission investigative attorney. Since no evi-

dence was presented by any of the respondents, we are

constrained to rely upon that evidence presented by the com-

plainant and the IA. Therefore, while our factual conclusions

are based upon the record before us, we will not speculate

whether we would reach the same conclusions after examining

the record of a fully litigated proceeding.

We turn now to each of the requisite elements.

Originality. As cited above, there is evidence on the record

that the game known as Galaxian was created by Namco of

J22

Japan, and there is alsc evidence that Namco transferred ail its

rights, title, and interest in the game, at least for the U.S.

market, to the complainant. The document of transfer, in fact,

has been filed with the Copyright Office. No evidence has been

brought forward to rebut this evidence of originality and

transference of rights. Therefore, we find chat Midway is the

proprietor of all legal rights in the Galaxian game.

Validity. The record of this investigation reveals that the

certificates of registration have been made a part of the record

of this investigation. The certificates of registration recite

complainant’s claim that copyright extends to all audiovisual or

cinematographic work.

The Copyright Act of 1976 treats the existence of certifi-

cates of registration as evidence relevant to the prowf of the

validity of copyright:

$410. Registration of claim and issuance of certificate.

_(¢) In any judicial proceedings, the certificate of a

made before or within 5 years after first

within the discretion of the court. (Emphasis supplied.)

17 US.C. 410(c). Since registration appears to have been

made within five years of the date of first publication, the

certificates of registration constitute prima facie evidence of the

validity of the claimed copyright.” This follows the principles

of case law enunciated under the Copyright Act of 1909.

22 Although the record is not specific, the first publication

of Galaxian appears to have occurred in 1979 and registration

was made in 1980.

J23

The legislative history makes it clear that § 410(c) is a

codification of the principles developed in judicial decisions

under the Copyright Act of 1909. H.R. Rep. 94-1476, 94th

Cong., 2d Sess, p. 157 (1976). It is well settled in that case law

that once a copyright certificate is issued, it constitutes prima

Sacie evidence of the facts stated therein.2' The issuance of a

certificate of registration by the Copyright Office gives rise to a

presumption of ownership and validity of the claimed copy-

right.22 The presumption so created is rebuttable, and the

burden of going forward shifts to the defendant.2* These

2" Monogram Models v. Industro Motive Corp., 448 F.2d

284 (6th Cir. 1971); Herbert Rosenthal Jewelry Corp. v.

Grossbardt, 428 F.2d 551 (2d Cir. 1970).

22 Novelty Textile Mills, Inc. v. Joan Fabrics Corp., 558

F.2d 1090 (2d Cir. 1977); Kieselstein-Cord v. Accessories by

Poor, Tes, 498 F- Supp. 732 (S.D.N.Y. 1980).

23 Monogram Models, Inc. v. Industro Motive Corp., 448

F.2d 284 (6th Cir. 1971); Rohauer v. Friedman, 306 F.2d 933

(9th Cir. 1962); Jerry Vogel Music Co. v. Forster Music

Pubeion, 147 F.2d 614 (2d Cir. 1945).

24 Monogram Models, Inc. v. Industro Motive Corp., 448

F.2d 284 (6th Cir. 1971); Rohauer v. Frielman, 306 F.2d 933

(9th Cir. 1962); Samet & Wells, Inc. v. Shalom Toy Co., Inc.,

429 F. Supp. 895 (E.D.N.Y. 1977), aff'd 578 F.2d 1369 (2d

Cir. 1978); Stratchborneo v. Arc Music os 357 F. Supp.

1393 (S.D.N.Y. 1973); See also Epoci. ‘'roducing Corp. v.

Killiam Shows, Inc. 522 F.2d 737 (2d Cir. het den. 424

U.S. 955 (1976); Plymouth Music Co. v. Magnus Organ Co.,

456 F. Supp 676 (S.D.N.Y. 1978).

J24

Complainant's certificates of registration create, at law, the

presumption of validity of the claimed copyright. Since no

evidence to rebut that presumption has been brought forward

by any of the respondent parties or by the Commission

investigative attorney, we must conclude that complainant has a

valid copyright.75

Citizenship, Statutory Formalities, and Transference. The

same reasoning also dictates our conclusions with regard to the

citizenship status of the author, compliance with applicable

the basis of the lack of any evidence to rebut the presumptions

created by the certificates of registration and the facts brought

forward by the complainant, we find that the complainant has

estabiished a prima facie case for each of these elements.

28 We note that the Commission has recently instituted an

based upon another complaint by Midway, which

appears to involve similar allegations of copyright in-

fringement. Since our conclusions today are based upon an

uarebutted presumption, we expressly reserve judgment on the

copyrightability of the games covered by the new investigation,

particularly the audiovisual displays of those games.

Chairmas Alberger and Commissioner Stern note further

form of deposit and regis.cation, whether the work was first

published in Japan or the United States.

J25

B. Copying

The second substantive element necessary to sustzin a

Since it is rare for the plaintiff to be able to prove copying by

direct evidence, the courts have developed the principle that

evidence of access and substantial similarity create an inference

of copying. The plaintiff has the burden of showing both.

Jewel Music Publishing Co. v. Leo Feist, Inc., 62 F Supp. 596

(S.D.N.Y. 1945); Sarkadi v. Wiman, 135 F.2d 1002 (24 Cir.

1943). As Professor Nimmer has stated:

It has been held tt.at where the plaintiff has made a strong

prima facie case of copying by proving both access and a

convincing number of similarities there is a high probabil-

ity that copying whether intentional or unintentional has in

fact occurred so that at that point the burden of going

forward with evidence shifts to the defendant who must

either negative the probability of copying by evidence of

independent creation, or justify the copying by evidence of

authority from or through the plaintiff. Ouce a prima facie

case of copying has been made by evidence of access and

substuntial similarity, it has been said that in the absence

of countervailing evidence of independent creation by

defendant (or, presumably of authority from or through

plaintiff), a finding that there has been no copying would

be clearly erroneous. (Citations omitted )

3 Nimmer § 12.11[D], pp. 12-83-85.

In this investigation, there is no direct evidence of copying.

Therefore, we must look to see whether the respondents had

access to plaintiff's work and whether there is substantial

similarity. There is evidence in the record that the respondents

had access to the Galaxian games. There were at least two

trade shows at which the games were displayed. In addition,

the games have been available in the market place for some

time, and respondents’ alleged infringing games did not appear

ei Ml a:

J26

until well after they had such access. Therefore, there is a

sufficient demonstration on the record to support the proposi-

tion that the respondents had access to the complainant's

Galaxian game, and we so find.

Since respondents had access to complainant’s work, we

turn now to an analysis of the alleged similarity between

complainant's work and the allegedly infringing works.

Similarity itself ~ insufficient; there must be “substantial

similarity” between the two works. 3 Nimmer § 13.03. How-

ever, the determination of substantial similarity is difficult, and

it is almost impossible to lay down a general definition. 3

Nimmer § 13.03[ A); See Caddy-Imler Creations, Inc., v. Caddy,

299 F.2d 79 ( %h Cir. 1962); L & L White Metal Casting Corp.

v. Joseph, 387 F. Supp. 1349 (E.D. N.Y. 1975). In general, the

courts have applied what may be called the “ordinary observ-

er” test: 3 Nimmer § 13.03(E)}[1); for example, Novelty Textile

Mills, supra.

The ordinary observer test in discussing fabric designs, for

example, has been stated to be “whether an ordinary observer,

who is not attempting tc discover disparities ‘would be disposed

to overlook them and regard their aesthetic appeal as the

same.’ Novelty Textile Mills, supra, 1093. The ordinary

observer test appears to have been modified in the leading case

of Arnstein v. Porter, 154 F.2d 464 (2d Cir. 1946), where the

Court divided the issue of substantial similarity into two

and whether the copying constitutes appropriation. See for

example, Mattel, Inc. v. S. Rosenberg Co., 296 F Supp. 1024

(S.D.N.Y 1968); Stratchborneo, supra. The Ninth Circuit also

appears to have established a two-step analysis. Sid & Mary

Krofft Television Productions, supra. First the court would

examine whether theré is a substantial similarity between the

“general ideas” of the two works. If such substantial similarity

With regard to all games available to the Commission, and

which physical exhibits have been submitted, the ALJ, the

Commission, and the Commission's staff have conducted ex-

games are “substantially similar” to Galaxian with regard to

the attract mode. We therefore concur with the ALJ's con-

clusion with regard to the attract mode.

It is also apparent to us that the play mode of each of the

alleged infringing games, at least up until that moment in which

the player is given control over the defenseship, is substantially

similar tw the play mode of the complainant's game. To this

extent, we concur with the opinion of the ALJ.

Moon Alien is different from the other infringing games in

that there are original works of authorship which are apparent-

ly unique to Moon Alien. These are the energy bar, which

appears at the bottom of the screen during the actual perform-

ance of the game itself and during the performance of the

simulated game in the attract mode, and the trajectory of the

missiles fired by the player have some lateral movement subject

to control by the player. In all other respects, the Moon Alien

game appears to be derived from the Galaxian game.

With regard to the attract mode of Moon Alien, our

observation demonstrates that Moon Alien is similar to Galax-

ian in several significant aspects.

|. The rolling star background:

328

2. The shape and color of the aliens in the simulated

game,

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