Data East USA, Inc. v. Epyx, Inc.

Data East USA, Inc. v. Epyx, Inc. 862 F.2d 204, 9 U.S.P.Q.2d (BNA) 1322 (9th Cir. 1988),[1] is a court case in which Data East, a video game manufacturer, contended that Epyx, a competing video game manufacturer, licensed and distributed a video game, World Karate Championship, that infringed on the copyright of a video game developed by Data East, Karate Champ. After a district court sided with Data East, the United States Court of Appeals for the Ninth Circuit court on appeal reversed the decision of copyright infringement. This judgment was based on the lack of "substantial similarity" between the games, because the identified similarities were inherent to all karate video games.[1]

Data East USA, Inc. v. Epyx, Inc.
CourtUnited States Court of Appeals for the Ninth Circuit
DecidedNovember 30, 1988
Citation(s)862 F.2d 204, 9 U.S.P.Q.2d (BNA) 1322
Case history
Prior action(s)Epyx published a karate video game with gameplay fairly similar to the Data East's karate game, which was already available for several years. Data East subsequently brought action against Epyx for, among other allegations, copyright infringement. The district court ruled for Data East on the copyright infringement issue and Epyx appealed.
Holding
There was no infringement on the copyright of Data East by Epyx.
Court membership
Judge(s) sittingJames R. Browning, Procter Ralph Hug Jr., Stephen S. Trott
Keywords
Copyright Infringement

Background and facts of the matter

Data East, a video game company, released the Karate Champ video game in late 1984. It was initially released as a coin-operated arcade game, and subsequently in October 1985 as a home computer game. In April 1986, Epyx, another video game company, licensed and began distributing a competing and similar home computer video game under the title World Karate Championship, rebranded from the original International Karate title, which it had licensed from a British developer System 3.

Both Karate Champ and World Karate Championship depicted a karate match between two opponents. There were several similarities between the two games; combatants each wore white and red, referees looked the same in each game, the allowed moves were similar, and the scoring mechanisms were based on increments and bonus points. Data East alleged that World Karate Championship, and thus Epyx, infringed on their copyright, trademark, and trade dress established by Karate Champ.[1]

District Court opinion

The United States District Court for the Northern District of California held that Epyx infringed on Data East's copyright, due to the qualitative similarities in the appearance of the games. There was no infringement on trademark or trade dress. The district court then enjoined Epyx from copying, distributing, or preparing any derivative works from the copyrighted work. Additionally, all World Karate Championship games were recalled. The case was appealed by Epyx to the United States Court of Appeals for the Ninth Circuit.[1]

Arguments on appeal

Data East asserted that Epyx infringed on their copyright. In order to demonstrate that there is copyright infringement, it is necessary to prove ownership of a copyright and copying of the work.[2] It was not disputed that Data East owned the copyrights for Karate Champ. However, there was no evidence of direct copying of Karate Champ. Thus, in order to demonstrate that their copyright had been infringed, Data East had to show that

  • Epyx had access to the copyrighted work prior to creating their own work
  • their work exhibited "substantial similarity" to the copyrighted work.[3]

In the appeal, Epyx disputed that the two games exhibited substantial similarity.

Judgment

The Ninth Circuit reversed the district court's finding of copyright infringement by failing to find a substantial similarity between the two games. This judgment was reached based on the notion that "no substantial similarity of expression will be found when the idea and its expression are inseparable."[4]

In order to determine whether a substantial similarity between the two works existed, the Ninth Circuit applied the "extrinsic-intrinsic test".[5][6] The purpose of this test is to determine if both the ideas and the expression of those ideas are substantially similar in the two works. Both of these tests must pass in order for a finding of substantial similarity to be reached. The extrinsic test, which determines if the ideas embodied by the works are the same, was used to determine that the ideas ("a martial arts karate combat game conducted between two combatants") were similar or identical. Next, the intrinsic test, regarding the "total concept and feel of the works", was used to determine the similarity of the expression of that idea. Because copyright protection cannot be extended to all elements of an expression, such as expressions that are indispensable or standard to the idea (i.e. Scènes à faire), the court performed an analytic dissection of the similarities between the two games to determine if the similarities were not simply the use of common ideas, and thus protected by copyright.

The court found the following similarities:

  • A. Each game has fourteen moves.
  • B. Each game has a two-player option.
  • C. Each game has a one-player option.
  • D. Each game has forward and backward somersault moves and about-face moves.
  • E. Each game has a squatting reverse punch wherein the heel is not on the ground.
  • F. Each game has an upper-lunge punch.
  • G. Each game has a back-foot sweep.
  • H. Each game has a jumping sidekick.
  • I. Each game has low kick.
  • J. Each game has a walk-backwards position.
  • K. Each game has changing background scenes.
  • L. Each game has 30-second countdown rounds.
  • M. Each game uses one referee.
  • N. In each game the referee says "begin," "stop," "white," "red," which is depicted by a cartoon-style speech balloon.
  • O. Each game has a provision for 100 bonus points per remaining second.

The similarities were judged by the court to "encompass the idea of karate" and necessarily follow from the idea of a karate video game. Thus, the district court was in error because it did not limit the scope of the copyright protection to the unique elements, such as the background and the score keeping. Furthermore, the Ninth Circuit decided that even those elements were dissimilar, concluding that a 17.5-year-old boy (the average age of a consumer of the video game) "would not find the games substantially similar". Because the idea and expression are inseparable, the court found that there was no substantial similarity and no copyright infringement.

Consequences

The Data East case is a significant judgment because "it is the first time in the computer industry that a look-and-feel lawsuit has been decided in favor of the defendant".[7] The litigation of copyright infringements based on look-and-feel similarities was fairly new, and previous cases had been settled out of the court, to the benefit of the presumed copyright holder. For example, in 1985, Digital Research had to change some aspects of their Graphics Environment Manager (GEM) product and agreed to pay Apple a financial compensation as part of a settlement that would keep them out of court.[8][9]

The opinion of the judges in the Data East case has been cited in several other major look-and-feel cases, even those that do not necessarily involve parties from the software industry.

Subsequent cases that cite this case contend over the copyright of the graphical user interfaces, such as in Apple Computer, Inc. v. Microsoft Corporation. In this case, the ninth circuit Court of Appeals rejected the argument of Apple that the extrinsic-intrinsic test had gone too far and should have not happened at all because "[The district court] should have recognized protectability of arrangements and the total concept and feel of the works under a substantial similarity standard."[10] As in Data East, the court ruled for the defendant, considering that "almost all of the similarities spring either from the license or from basic ideas and their obvious expression",[10] i.e. that the scènes à faire doctrine invalidates the copyright infringement claim.

In 1994, Data East faced a copyright infringement claim from Capcom U.S.A. and a preliminary injunction to stop distributing the video game Fighter's History.[11] Although Data East had clearly used Capcom's game Street Fighter II as a reference in the development of its own game, the preliminary injunction was denied. Under the analytic dissection of the work, the court only found unprotectable similarities, once again relying on the scènes à faire doctrine. Data East's largest objection in court was that their 1984 arcade game Karate Champ was the true originator of the competitive fighting game genre, which predated the original Street Fighter by three years.[12]

Effects outside the software industry

An opinion that cites this case outside the computer industry is Pasillas v. McDonald's Corporation.[13] In this case, the plaintiff, the creator of a latex Halloween mask depicting a man in the moon, claims that the advertising campaigns of McDonald's, also depicting a mask with a man in the moon, infringed on his copyright. The court refers to the "Aliotti line of cases" for deciding this case. In particular, the intrinsic test of substantial similarity of expression leads the judges to conclude that the very treatment of the idea of a man in the moon is the only source of similarities, and that those similarities are not substantial, explicitly stating the Data East scènes à faire doctrine that "no copyright protection is afforded to elements of expression that are indispensable or standard in treatment of idea".[1][13]

Criticism

Independent observers noted that the intrinsic-extrinsic test used by the Ninth Circuit almost always led to a rejection of the copyright infringement accusation.[14] The extrinsic test is performed by a non-expert observer, who will eventually decide on the presence of a substantial similarity.[14] Indeed, "a lay observer may mistakenly determine that two user interfaces are similar because they appear similar, even though the details of their implementation may be very different".[15] Another criticism of the extrinsic-intrinsic test is the "failure to consider medium and market needs."[14] For instance, the printing and the information industry do not share some of the same characteristics. Namely, the marginal costs of copying data in the information industry are typically insignificant compared to the printing industry. These characteristics could be kept in mind when deciding on a substantial similarity, since there are no clear guidelines for making this decision, but "the preservation of the balance between competition and protection reflected in the patent and copyright laws".[4]

See also

References
  1. Data East USA, Inc. v. Epyx, Inc., 862 F.2d 204 (9th Cir. 1988).
  2. Sid & Marty Krofft Television Products, Inc. v. McDonald's Corp., 562 F.2d 1157 (9th Cir. 1977).
  3. Baxter v. MCA, Inc., 812 F.2d 421 (9th Cir. 1987).
  4. Herbert Rosenthal Jewelry Corp. v. Kalpakian, 446 F.2d 738 (9th Cir. 1971).
  5. McCulloch v. Albert E. Price, Inc., 823 F.2d 316 (9th Cir. 1987).
  6. Krofft, 562 F.2d at 1164.
  7. Epyx Chairman and CEO David Morse in Epyx wins appeal on karate gale copyright lawsuit - PR Newswire, December 5, 1988
  8. Digital's new look in Computer Horizons (Computer Briefing): Trade unionists under screen stress - The Times (London), October 8, 1985
  9. 1989 Starts with writs aplenty; 1988 was a bad legal year in the computer industry, but 1989 could be worse - Sydney Morning Herald (Australia), January 9, 1989
  10. Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435 (9th Cir. 1994).
  11. Capcom U.S.A. Inc. v. Data East Corp., 1994 WL 1751482 (N.D. Cal. 1994)
  12. GAMEST Magazine. 134. December 30, 1994. Missing or empty |title= (help)
  13. Pasillas v. McDonald's Corporation, 927 F.2d 440 (9th Cir. 1991).
  14. I. Intellectual Property: A. Copyright: 3. Derivative Works: a) Substantial Similarity Test: Tiffany Design, Inc. v. Reno-Tahoe Specialty, Inc. in Berkeley Technology Law Journal Annual Review of Law and Technology, 2000, 15 Berkeley Tech. L.J. 49
  15. It walks like a duck, talks like a duck, but is it a duck? Making sense of substantial similarity law as applied to user interfaces - Ellen M. Bierman in Seattle University Law Review, Fall 1992, 16 Puget Sound L. Rev. 319
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