Lewis Galoob Toys, Inc. v. Nintendo of America, Inc.

Citation: 964 F.2d 965, 970 (9th Cir. 1992)

Date of Judgment: 21 May 1992

Court: United States Court of Appeals, Ninth Circuit

Judges: Hon. Joseph Jerome Farris and Hon. Pamela Ann Rymer

Facts:

Nintendo of America Inc. (“Nintendo”) manufactured the Nintendo Entertainment System, a home video game system. Nintendo owned copyrights to the audiovisual displays in its video games. To use the system, the player had to insert a Nintendo game cartridge containing a video game that Nintendo produces or licenses others to produce.

The Game Genie was a device manufactured by Lewis Galoob Toys, Inc. (“Galoob”) that allowed a player to alter up to three features of a Nintendo game. The Game Genie had to be inserted between a game cartridge and the video game system. Although the Game Genie did not alter the data that is stored in the game cartridge, it altered the game temporarily. Consequently, Nintendo filed a copyright infringement suit against Galoob for manufacturing Game Genie.

Issues Raised:

1. Whether Game Genie was a derivative work?

2. Whether the use of Game Genie amounts to fair use?

Laws Involved:

17 U.S.C.A. § 106(2) (Derivative works); 17 U.S.C.A. § 107 (the United States Fair Use Doctrine)

Analysis:

Nintendo initially filed a suit at the Federal Court of Northern District of California. The District Court, while denying Nintendo's request for a permanent injunction, had declared that Galoob’s Game Genie did not violate Nintendo's copyright. Then, Nintendo filed an appeal in the United States Court of Appeals, Ninth Circuit (“the Court”).

The Court held that Game Genie was not a derivative work as it merely enhanced rather than replaced the audiovisual display of Nintendo’s video games. However, it concurred with the District Court’s decision that even if the audiovisual displays created by the Game Genie are derivative works, Galoob is not liable under 17 U.S.C. § 107 because the displays of such works are a fair use of Nintendo’s copyrighted displays.

Further, the Court highlighted that the defense of fair use is available for all cases of derivative works. Additionally, on the issue of unlawful authorization to use copyrighted work, the Court emphasized that to the extent that an activity does not violate one of those five enumerated economic rights under 17 U.S.C. § 106, authorizing such activity does not constitute copyright infringement.

Conclusion:

Fair use has been analyzed in various dimensions by the US courts. This case highlights the concept of fair use in a derivative work. Even though the Court held that the Game Genie was not a derivative work, it mentioned that derivative works can be protected under fair use. The Court also protected sellers and users by stating that they do not infringe copyrights which are protected by fair use.