Stern Electronics, Inc. v. Kaufman

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Stern Electronics, Inc. v Kaufman
CourtUnited States Court of Appeals for the Second Circuit
Full case nameSTERN ELECTRONICS, INC v. Harold KAUFMAN d/b/a Bay Coin, et al; Omni Video Games, Inc., et al.
ArguedJuly 15 1981
DecidedJanuary 20 1982
Citation(s)669 F.2d 852 (1982)
Case history
Procedural historyPreliminary injunction issued against defendants, 523 F. Supp. 635 (E.D.N.Y. 1981)
Holding
An electronics company can copyright the sounds and images in a video game, not just the source code.
Court membership
Judge(s) sittingCircuit Judges Jon O. Newman, Ellsworth Van Graafeiland District Judge Edward Dumbauld
Case opinions
MajorityNewman
Laws applied
Copyright Act of 1976

Stern Electronics Inc. v. Kaufman, 669 F.2d 852 (2d Cir. 1982),[1] was a case decided by the U.S. Court of Appeals for the Second Circuit that ruled that a video game manufacturer, Stern Electronics, could copyright the images and sounds in a game, not just the underlying source code that produced them. The decision was one of the first to rule on the copyrightability of video games as an artistic work and one of a series of lawsuits in the early 1980s brought forth by video game manufacturers like Stern aimed at combatting the increasing number of knock-off video games on the market.[2][3]

Background[]

In 1981, Stern Electronics, an arcade video game manufacturer, obtained an exclusive license from Konami Industry Co., a Japanese game developer, to distribute Konami's game "Scramble" in North and South America.[4] The game is a side-scrolling shooter in which the player controls a "Jet" aircraft and fires weapons at enemies, attempting to destroy as many as possible before running out of fuel or crashing into an obstacle. Stern began selling the game in the U.S. on March 17, 1981 and it quickly gained popularity, selling 10,000 units in its first two months on the U.S. market.[1]

In April 1981, the defendant Omni Video Games, Inc. began selling a knock-off game called "Scramble 2" that bore substantial similarities to Konami's "Scramble" game.

Screenshot of Konami's Scramble game

Procedural history[]

The case was initially brought to trial in the United States District Court for the Eastern District of New York (Stern Electronics, Inc. V. Kaufman 523 F.Supp. 635 (1981). The plaintiff, Stern, succeeded in showing probable success on the merits of its claim of copyright infringement and the court ruled they were entitled to injunctive relief. Both parties claimed common law trademark rights to the "Scramble" mark and moved to enjoin the other from using it. Omni had ordered and sold a small number of headboards (to be placed above the arcade game unit) bearing the mark in the months prior to Stern's release of the game and, based upon that fact, made a first use in commerce claim. The court found that the defendants' first use of the mark was not in good faith and solely in anticipation of later imitating the audiovisual display of Stern's game, once Omni had developed their own "Scramble 2". Further, continued use of the mark by both parties could result in consumer confusion and economic harm to both parties to the lawsuit. Based on Stern's considerable investment in the development and marketing of the game and the large number of units already sold, the balance of hardships was determined to tip in Stern's favor and Omni was preliminarily enjoined from use of the mark.[4]

Legal issues[]

Copyright issue[]

Anticipating that a unique, non-infringing code could be easily reverse-engineered to create a "knock-off" game that imitated the sounds and images of their game, Konami did not register a copyright of the underlying code of the game, but instead registered the game as an audiovisual work by submitting a video of the game in both "play mode" and "attract mode" to the U.S. Copyright Office.[2]

In its appeal, Omni argued that Stern was entitled only to copyright protection of the underlying computer code of the game as a literary work and that the certificate of registration granted to Scramble as an audiovisual work by the U.S Copyright office was invalid.[3] Valid copyright protection exists only in "original works of authorship fixed in any tangible medium of expression."[5] Omni argued that the audiovisual aspects of the game were neither original nor fixed. They argued that the sequence of images displayed were created by the underlying computer program and were not the original work of the game developer. Further, because the sequence of images varies based on the actions of the player, they contended that each play of the game produced a new, original audiovisual work, not a fixed copy of the registered work. The court rejected these arguments, stating that sufficient elements of the look and feel of the game remain fixed regardless of the individual player's actions.[1] The court also found that a moment of originality did occur in the creation of the specific images (spaceships, fuel tanks, and the look of the background terrain) and sounds (missiles firing, explosions upon destroying enemy ships) present in the game and that the originality of these images was not completely dependent upon the underlying program, as many different underlying programs could have been written to generate the images and sounds the game creator had imagined.[3]

Trademark issue[]

Omni appealed the trademark ruling by arguing that they did indeed have superior common law rights to the mark due to their first use of the mark. Neither party held a registered trademark. Omni's prior use claim was based upon the fact they had ordered a very limited number of headboards bearing the mark in December 1980. Only five of those headboards found their way to the market prior to Stern's release of "Scramble" in March 1981, affixed to game units featuring other Omni video games. The appellate court agreed with the lower court's ruling that it was likely "the defendants contrived this usage of the mark solely for trademark maintenance purposes in anticipation of plaintiff's introduction of the 'Scramble' video game into the market" and "with the expectation that they would later imitate the audiovisual display [of 'Scramble']" and therefore the defendants' first use of the trademark was not in good faith.[4] The preliminary injunction was affirmed.[1]

Impact[]

Stern Electronics, Inc v. Kaufman was one in a series of lawsuits that resulted from the increase in "knock-off" video games in the early 1980s.[2] It is noted as one of the earliest and leading cases where the court found copyright infringement in a video game.[6] It determined that video games may qualify for multiple types of copyright protection at the same time – as audiovisual, graphical, and/or literary works – and would follow parallel developments in computer software with Apple Computer, Inc. v. Franklin Computer Corp.[7] By 1988, the trend of copyright jurisprudence expanded from "protect[ing] entertainment software involving fanciful creatures and characters to allowing this protection to extend to the user interface of productivity ... software containing little or no artistic or creative originality."[8]

In the 1982 essay The Adaptation of Copyright Law to Video Games, Thomas Hemnes noted that it is common "for defendants in video game cases to include in their pleadings the argument that 'the original work of authorship is the computer program' ... and not the game itself. This argument has been uniformly unsuccessful."[6][9] Hemnes summarizes the court's opinion, that the audiovisual display is plainly original enough to be copyrightable, even though the underlying code exists independently and is itself eligible for copyright.[6][1] Hemnes also summarized the efforts of defendants to say that video games lack the fixation to qualify for copyright, saying "this defense is also unavailing."[6] The 1997 book Ownership of Rights in Audiovisual Productions explains how this case establishes that video games are audiovisual works, because they are fixed in the "memory devices" that can be displayed with the benefits of other technological components.[10] The principle that video games are fixed, audiovisual works would be affirmed in Atari v. Amusement World,[6] as well as Williams Electronics v. Arctic.[7] The principle would continue through the decision Midway Manufacturing Co. v. Artic International, Inc., after which the U.S. Copyright Office asked copyright registrants to decide whether to register the display as an audiovisual work and the computer program as a literary work, not both.[11]

References[]

  1. ^ a b c d e Stern Electronics, Inc. v. Kaufman, 669 F.2d 852 (2nd Cir. 1982)
  2. ^ a b c Grabowski Jr., Theodore J (1983). "Copyright Protection for Video Game Programs and Audiovisual Displays; and - Substantial Similarity and the Scope of Audiovisual Copyrights for Video Game". 3 Loy. L.A. Ent. L. Rev. 139.
  3. ^ a b c McKenna, Pamela (1982). "Copyrightability of Video Games: Stern and Atari". 14 Loy. U. Chi. L.J. 391. Retrieved 21 March 2012.
  4. ^ a b c Stern Electronics, Inc. v. Kaufman, 523 F.Supp 635 (E.D.N.Y. 1982)
  5. ^ "U.S. Copyright Act 17 USC § 102".
  6. ^ a b c d e Hemnes, Thomas M. S. (1982). "The Adaptation of Copyright Law to Video Games". University of Pennsylvania Law Review. 131:171: 171–233. doi:10.2307/3311832. JSTOR 3311832.
  7. ^ a b H, Gaon, Aviv (2021-09-07). The Future of Copyright in the Age of Artificial Intelligence. Edward Elgar Publishing. ISBN 978-1-83910-315-5.
  8. ^ Justice, United States Congress House Committee on the Judiciary Subcommittee on Courts, Intellectual Property, and the Administration of (1991). Computers and Intellectual Property: Hearings Before the Subcommittee on Courts, Intellectual Property, and the Administration of Justice of the Committee on the Judiciary, House of Representatives, One Hundred First Congress, First and Second Sessions, November 8, 1989, and March 7, 1990. U.S. Government Printing Office.
  9. ^ Hemnes, Thomas (2021-03-02). How Law Works: Collected Articles and New Essays. Vernon Press. ISBN 978-1-64889-161-8.
  10. ^ Salokannel, Marjut (1997-05-28). Ownership of Rights in Audiovisual Productions: A Comparative Study. Martinus Nijhoff Publishers. ISBN 978-90-411-0415-1.
  11. ^ Craig Joyce et al., Copyright Law 77 (7th ed. 2006). See also Copyright Office Notice of Registration Decision, Docket No. 87-4, 53 Fed. Reg. 21817, June 10, 1988.

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