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US District Court hands eight-month sentence to Pandora's Cube employee for "Super Xboxes." 31-year-old Hitesh Patel was an employee of Pandora's Cube, a game retailer in the Washington, DC area.


Read article here.
On July 25, 2005, the Court of Appeals for the 8th Circuit affirmed the Western District of Missouri's dismissal of Frosty Treat's complaint against Sony Computer Entertainment America, Inc. Frosty Treats asserted claims under state and federal law for trademark infringement and dilution, and for unfair competition, based on Son'y depiction of an ice cream truck and clown character in Sony's Twisted Metal video game series. A complete case summary will be forthcoming, but for now the opinion can be obtained here.
In Re Coin-Operated Audio-Visual Games and Components Thereof
No. 337-TA-87, 214 USPQ 217 (ITC 1981)

A complaint was filed against numerous competitors with the U.S. International Trade Commission by Midway Mfg. Co. alleging common law trademark infringement, passing off, imitation of trade dress, false designation of origin, and copyright infringement. The complaint sought cease and desist orders against domestics respondents and exclusion orders against international respondents. The products in question were coin-operated audiovisual games and components. Midway purchased from Namco exclusive rights to manufacture and sell within the United States “Galaxian,” a game introduced in Japan in 1979. The agreement prohibited any changes to the game itself and limited those pertaining to the game’s trade dress. An ITC attorney did an investigation, the results of which the court often notes. This decision was based purely on evidence produced by the claimant, so the findings were rebuttable.

Galaxian:


The court found that the term “Galaxian” was protectable as a common law trademark because it was arbitrary and distinctive in it stylization, lettering, and coloring, making it exempt from proving secondary meaning; it is also nonfunctional. After establishing these facts, Midway had to prove a likelihood of confusion to be successful on this claim. The court stated that the consuming public playing the game was irrelevant since they did not care who was the manufacturer, but instead focused on those companies and individuals purchasing consoles directly from the manufacturer. The court decided that those games using the word “Galaxian” did create a likelihood of confusion and infringed. The court also found that those games using “Galaxy” and “Galaxip” also infringed because of the similarity in the words along with the similarity in gameplay.

Regarding the claim of false designation of origin, the court found for Midway against those respondents that did not conspicuously present the manufacturer’s name on the screen and console.

The court also found that there was copyright ownership of the game. Midway proved originality since they purchased the rights from the creator Namco and validity by providing the copyright registrations. There was no direct evidence of copying, so the court examined whether there was prior access to Galaxian and substantial similarity between it and the other games. The alleged infringing games were released subsequent to trade show displays and the release of Galaxian, therefore, the court found that access existed. Determination of substantial similarity is much more difficult to quantify. The court cited the “ordinary observer” test where such a relationship is found when someone not attempting to discern disparities would regard the aesthetic appeal as the same. Another test cited was two-pronged, which first looks at the general ideas of the works, and second, examines the response of the ordinary and reasonable person. The court found that all but one game was nearly identical, and further found the remaining game substantially similar under both tests because of its rolling star background, shape and color of aliens, alien formation, movement of aliens while attacking, and scoring table.

There was clear evidence of damage to the Galaxian sales by Midway. The court found the in rem remedy of exclusion appropriate as it was created to overcome the problem of in personam remedies against foreign companies that have no offices or assets within the United States. The court granted an exclusion remedy directed at those games that clearly infringed on the common law trademark by using “Galaxian,” “Galaxy,” or “Galaxip.” Concerning the copyright claim, the court limited exclusion to those parties that have been specifically identified by the court as infringing. The reason for the limitation was to ease the process for Customs, as it would be exceedingly difficult to have them determine whether a game infringed on Midway’s copyright. The court denied the use of cease and desist letters to domestic respondents as they were all distributors and since no evidence of stockpiles existed, such a remedy would have been unnecessary given the exclusionary order.

Thanks to Adam Trost for his assistance in the preparation of this case summary.
The 'hot coffee' mod for Grand Theft Auto resulted in the game's rating being changed from Mature to Adults Only. Many games not only don't mind modding, but the game's developer actually encourages it. There any many legal implications to modding, and who owns the resultant IP. See, for example, Microstar v. Formgen Inc., 154 F.3d 1107 (9th Cir. 1998).

But that's not the point of this post. I just wanted to point out a Yahoo! article with some interesting musings about modding.
Data East USA, Inc. v. Epyx, Inc.
862 F.2d 204 (9th Cir. 1988).

In July 1984, Data East USA, Inc. began distributing in Japan a video game titled “Karate Champ,” and later in October 1985, began distributing the game in the United States. In November 1985, Epyx began distributing a similar video game in the United States titled “World Karate Championship.” Data East subsequently brought a suit against Epyx, alleging that Epyx’s game infringes Data East’s copyright for “Karate Champ.” The district court agreed with Data East, granting a permanent injunction that enjoined Epyx from distributing “World Karate Championship. Epyx appealed.

Karate Champ:


The Ninth Circuit first discussed an evidentiary issue involving whether photographs constituted sufficient evidence for the contents of a video game’s audiovisual work. The court found that “still photographs which depict all images and all moves that occur when the game sequences through the various skill levels, along with testimony,” was sufficient to make a fair comparison between the two games.

The court then directed its attention to the copyright infringement claim. Because there was no direct evidence of copying, the court employed the test for establishing copying by circumstantial evidence, which requires evidence of (1) the defendant having access to the copyrighted work, and (2) “substantial similarity of both the general ideas and expression between the copyrighted work and the defendant’s work.” Because the court found the works were not substantially similar, it declined to consider whether the defendant had access.

World Karate Championship:


After setting forth the “axiom of copyright law that copyright protects only an author’s expression of an idea, not the idea itself,” the court explained the two-step test for determining substantial similarity. The first step is an objective test asking whether the two ideas are substantially similar. Finding that the ideas were substantially similar, if not identical, the court immediately moved to the second step, which is a subjective test asking whether the forms of expression are substantially similar from the perspective of the ordinary reasonable person.

The court established that the proper analysis requires a comparison of the similarities, while avoiding comparison of dissimilarities or forms of expression that necessarily flow from an idea, i.e., scenes a faire. The court found that both games encompassed the idea of a karate video game in fifteen respects, including the number of different moves available, one player or two player options, a number of the same type of moves, the ability to change the background scenes, the length of the rounds, and having a referee for each round. The court recognized that there are constraints inherent to the sport of karate, such as the types of moves and the use of a referee, and also inherent to the computer, such as the use of sprites to create the graphical images and the limited access to color. Because of these constraints, the court held that the aforementioned similarities necessarily flowed from the idea of a karate video game.

The Ninth Circuit therefore held that the district court erred by not limiting the scope of Data East’s copyright protection to the author’s contribution, i.e., the scoreboard and the background scenes. Because the backgrounds were dissimilar and the method of scorekeeping was similar but inconsequential, the court found that a typical purchaser of the game, a 17.5 year old boy, would not regard the works as substantially similar. Therefore, the court held that Data East’s copyright was not infringed and remanded to the lower court to lift the injunction.

Thanks to Brandon Rash for this assistance with the preparation of this Case Summary.
Microsoft Corp. said on Thursday it won exclusive rights to develop and publish multiplayer online games starring Marvel Enterprises Inc.'s super heroes, including Spider-man, the X-men and the Hulk. The deal covers massively multiplayer online (MMO) game titles developed for Microsoft's upcoming Xbox 360 gaming console and published by the software giant's game studio.

Read more here.

Universal City Studios v. Nintendo Co. Ltd.
746 F.2d 112 (2nd Cir. 1984)

Tanks, soldiers, countless helicopters, and even Godzilla were no match for King Kong, so how did Nintendo manage to stop the giant gorilla?

King Kong:


The arcade game “Donkey Kong” was a quick success for Nintendo. The star of the game is the formidable yet humorous gorilla, who climbs buildings, hurls barrels and fireballs, all the while dragging along a blond damsel whom Mario must attempt to rescue. Gamers may have loved Donkey Kong, but Universal saw far too much resemblance to the 1933 classic film “King Kong,” for which Universal owned trademarks for the name, character, and story. Universal brought suit against Nintendo for trademark infringement under the Lanham Act, and for dilution of a trademark under New York’s anti-dilution act. When Nintendo’s summary judgment motion was granted in Southern District of New York, Universal appealed to the 2nd Circuit Court of Appeals.

Donkey Kong:


The Court of Appeals affirmed the decision of the district court. Even if Universal validly owned the trademark to King Kong, and the mark had acquired the “secondary meaning” required to be the basis of a successful action (issues not yet resolved at trial), the court nonetheless held that Nintendo’s Donkey Kong did not infringe upon the trademark. While there were undoubtedly resemblances between the two, there was no evidence to show that consumers would confuse Donkey Kong and King Kong. Universal introduced as evidence videogame reviews which shows that Donkey Kong’s theme “loosely evoked the film.” However, the Court held that the decisive question in trademark infringement is, “whether there is any likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question.” Mushroom Markers, Inc. v. R.G. Barry Corp., 580 F.2d 44, 47 (2nd Cir. 1978). Thus, even if purchasers are reminded of classic film, the trademark action would not succeed unless they actually thought they were buying a videogame sold by Universal.

Universal sought to show that the names were substantially confusing by conducting a telephone survey of 150 arcade and bowling alley owners who had purchased or leased a Donkey Kong game. 18% of the respondents answered “Yes” when asked, “To the best of your knowledge, was the Donkey Kong game made with the approval or under the authority of the people who produce the King Kong movies?” Universal argued that this survey proved confusion, yet the Court disagreed, reasoning that the question did not prove confusion with the item trademarked. Universal owned the name, character, and story of King Kong, but did not claim ownership rights to the film itself, thus the question was unfair because it did not connect Donkey Kong to the name King Kong. Further, the Court found the question to be unfairly leading, and that Universal’s survey was defective because it surveyed previous buyers instead of potential buyers.

Universal introduced further evidence, a letter from Nintendo stating that there was no connection between Donkey Kong and King Kong, to show that Nintendo implicitly admitted consumer confusion by writing the letter. The Court rejected this argument. Since the letter was written after the commencement of the lawsuit, it was clearly only meant to cut short Nintendo’s legal troubles. Besides, these statements would not be a substitute for actual evidence showing that there was no confusion about Donkey Kong’s source.

The Court also commented that Nintendo’s Donkey Kong paraphernalia, marketed separately from the videogame, had the potential to cause genuine confusion with King Kong. However, this argument was not raised by Universal, and the Court noted that it probably would not have been successful in this case. The videogame itself was the dominant marketing vehicle for any Donkey Kong toys, and these items had the same “total concept and feel” as the videogame. Therefore, the paraphernalia were just as unlikely to be confused as was the Donkey Kong game.

Finally, the Court addressed Universal’s request for an injunction under New York anti-dilution law. The Court used the same rationale to deny the injunction against Donkey Kong. Universal had failed to offer evidence that Donkey Kong had an “adverse effect on King Kong’s reputation” or would “deprive the mark of its distinctiveness.” Therefore, an injunction would be inappropriate, and the summary judgment in favor of Nintendo was affirmed.

Thanks to Brian Brisnehan for his assistance with the preparation of this case summary.
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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