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In Re Coin-Operated Audiovisual Games and Components Thereof
(viz. Rally-X and Pac Man)
No. 337-TA-105, 218 USPQ 924 (ITC 1982)

A complaint was filed against 35 respondents with the U.S. International Trade Commission by Midway Mfg. Co. alleging common law trademark infringement and copyright infringement with respect to the games Rally-X and Pac Man.

The subject of the copyright claim was the audiovisual work of the two games. It included the screen display of mazes and characters along with their sounds, but did not include the circuit board that stored the audiovisual work or the pattern of game-play. To prove copyright infringement, Midway had to prove ownership and copying by the respondents. Within the ownership prong, among other factors, the audiovisual work must be subject matter that is copyrightable. Artic, one of the respondents, argued that the audiovisual work was not proper subject matter because it was not fixed, meaning that a user could not know or predetermine the sequence of images and sounds since they were dependent upon interaction with the user. The commission rejected this argument stating that the audiovisual worked was fixed in the fact that it was stored in memory and the repetitive appearance of characters and sounds was sufficient regardless of whether the exact audiovisual sequence was displayed each game. Artic further tried to rebut Midway’s copyright by alleging lack of notice. Midway was able to produce printed circuit boards that had the required copyright information. Artic testified seeing the games earlier outside the U.S. without such information, but the commission held the physical evidence as more persuasive and stated that Artic may have seen a counterfeit version. Concerning the copyright’s deposit, the commission made it clear that a videotape was sufficient for audiovisual work even though the typical requirement was a complete copy. Once ownership was established, copying subsequently was easily found as the two games were nearly identical to the respondents’ games.

Artic opposed the common law trademark infringement claims on three grounds. First, they said that Midway had not established its mark in all fifty states, but the commission cited the nationwide advertising to reject this defense. Second, Artic claimed that “Pac Man” and “Rally-X” were titles and thus, could not be proper trademarks. The commission rejected this because they were not merely descriptive of the content of the games, but were names by which the games were traded and sold. Lastly, Artic argued that the names described functional aspects of the game, but the commission concluded that the terms had not gained generic status and remained arbitrary and distinctive.

In determining remedies, the commission found that there was a domestic market for Pac Man that had been efficiently operated and that the infringing games did substantial harm to the market. Conversely, they found that there was no longer a domestic market for Rally-X, as it had permanently declined in popularity in sales and the infringing goods did not substantially affect the market. Thus, concerning Rally-X, the commission did not reach the injury phase due to the lack of a domestic industry. However, concerning Pac Man, the commission issued a general exclusion, agreeing with Midway that cease and desist orders would be insufficient as many new infringers would otherwise likely import games into the U.S. market.

Thanks to Adam Trost for his assistance in the preparation of this case summary.
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