Intellectual Property, Pages 465–473

Sega Enterprises Ltd. v. Accolade, Inc.

United States Court of Appeals for the Ninth Circuit, 1992

Facts:

The plaintiff Sega made the Genesis gaming console and game cartridges to play in it. The defendant wanted to make games to compete with Sega but did not want to pay to have Sega manufacture cartridges for its games. It instead bought copies of three of Sega's games, wired a decompiler into a Genesis console, and used the decompiler to load the games' compiled code into their computer as "decompiled" code. It then experimented with the code to to discover how the Genesis worked so that it could create its own game cartridges that would work with it. Defendant then created a manual describing the interface requirements and did not include any of Sega's code in its commercial products.

Procedural History:

District court issued a preliminary injunction against defendant.

Issue:

Did defendant's decompilation constitute copyright infringement?

Defendant's Arguments:

  • This was just intermediate copying which does not infringe upon the plaintiff's rights because the end product is substantially similar.

  • The disassembly is lawful because the machine code is not protectable because of the idea-expression dichotomy. It is not actually readable by a human; it is just functional for a computer.

  • The lawful owner of a program is allowed to load it into a computer.

  • Disassembly of object code in order to gain an understanding of the ideas and functional concepts in the code is a fair use.

Reasoning:

  • Intermediate copying can still infringe copyrights.

  • Saying that compiled programs are functional would lessen the amount of protection computer programs receive, which was not intended by the Copyright Act. It clearly intended to protect compiled programs. This does not lead to an absurd result. Most functional parts can determined without disassembly, and only

Rule:

Reasoning:

  1. This is a commercial use, which weighs against defendant, but there are degrees to commercial uses. Defendant did not sell anything made by Sega. It only studied it, which was a legitimate, non-exploitative purpose. The commercial aspect was of minimal significance. In addition, promoting independent game development benefits the public's interest, thus overcoming the presumption of unfairness and weighing in defendant's favor.
  2. Computer programs are complicated in copyright law as the expressive portions are protected but the functional parts are not. Defendant copied the entirety of plaintiff's programs, but it did so because that was the only way to gain access to the interface specifications. Despite plaintiff's emphasis that one could theoretically read the ones and zeros, translate them into the machine code in his mind, translate that to assembly in his mind, remember the entire program, and figure out how it works without creating an actual copy, this is not actually humanly possible. There are millions of bytes in Genesis games. Because copying was the only way, Sega's games are afforded a lower degree of protection than tradition literary works.
  3. Defendant copied the entire programs written by Sega. This weighs against defendant. However, as the ultimate use is to not copy defendant's program at all, the factor is of very little weight.
  4. While defendant was intending to compete with Sega, it was with competing its own expressions, not with Sega's. Thus, this too weighs in defendant's favor.

Holding:

Defendant's decompilation was fair use.

Note:

The Sega Genesis did not contain any DRM. Under the Digital Millennium Copyright Act, this would no longer be allowed if the defendant had to circumvent DRM.