by Steven Kent
In June 1990, Nintendo applied for an injunction to bar the toy manufacturer from distributing Game Genie. In a preliminary hearing, Judge Robert W. Schnacke granted Nintendo’s request on the likelihood that Nintendo could win the case. In April 1991, the case went to court before Fern Smith, the same judge who had presided over Atari Games Corporation v. Nintendo of America.
Judge Smith’s interpretation of the Fair Use Doctrine would prove central to both Nintendo’s and Galoob’s case. Nintendo claimed that Game Genie was a derivative work. It did not play original games; rather, it altered the copyrighted work of other companies. Nintendo’s lawyers compared it to the unauthorized “speed-up kits” that were used to enhance arcade games. They referenced the case of Midway Manufacturing v. Arctic International, in which a judge barred a company called Arctic from selling chips that accelerated the arcade version Galaxian.* Judge Smith, however, disagreed with Nintendo’s argument, citing that Game Genie did not physically incorporate portions of any copyrighted works and that it in no way diminished the game market.
One interesting question that emerged in this case was whether Galoob was in fact infringing on Nintendo’s copyrights or whether the real perpetrators would be consumers using the device. The argument suggested that Game Genie was simply an adapter onto which consumers attached a game cartridge. The decisive factor in the case, however, was that Nintendo’s lawyers could not demonstrate to Judge Smith’s satisfaction how Game Genie impacted their client’s business.
Nintendo has failed to show any harm to the present market for its copyrighted games and has failed to establish the reasonable likelihood of a potential market for slightly altered versions of games at suit.23
—Judge Fern Smith
While Judge Smith was unable to certify that Game Genie users would not infringe on Nintendo’s copyrights, she did conclude that Galoob had not violated the Copyright Act and ruled in favor of the toy manufacturer, ordering Nintendo to pay the company $15 million for lost sales. When the case came up for appeal before Judge Jerome Farris in 1992, he affirmed Judge Smith’s opinions. Nintendo did not concede defeat, however, until the U.S. Supreme Court declined to hear arguments on the case on March 22, 1993, sealing the decision.
Alpex Computer Corporation v. Nintendo of America
With the exception of the original Magnavox Odyssey, which had several games hardwired into its circuitry, all of the home television game consoles that retailed in the early 1970s were single-game (or dedicated) systems. In 1974, Alpex Computer Corporation created and patented a technology that enabled consoles to play multiple games stored on ROM chips stored in game cartridges. The first company to license Alpex’s technology was Fairchild Camera and Instrument, which used it in the Channel F game console released in 1976.* Two years later, Alpex applied for patent protection on that technology and received patent number 4,026,555, also known as the “555 patent.”
After receiving its patent, Alpex embarked on a campaign to enforce it, selling nonexclusive licenses to companies that infringed. Magnavox, Atari, Mattel, Bally, and Coleco were just a few of the companies that Alpex contacted. Though the other settlement sums are not public, it is known that Atari paid $380,000 to settle the affair.
Alpex declared Chapter 11 bankruptcy and ceased operation in 1983. As the company dissolved, creditors found that its only valuable asset was the “555 patent.”
In 1983, after the settlement with Atari and another with Magnavox, counsel for Alpex sent infringement letters to approximately seventy companies. These letters announced that Alpex had recently granted licenses under the patent to Atari and Magnavox and stated that Alpex had “recently obtained information indicating that your company manufactures and/or sells video game cartridges and/or consoles which may infringe the subject patent.”24
—Judge Kimba Wood
Of the seventy companies that received the letter, six companies expressed interest in settling without litigation. By 1985, Alpex had won licensing agreements in suits against ten companies.* Most companies preferred to pay Alpex rather than risk a court battle. This was especially true of Japanese companies, which were supposedly scared that U.S. jury awards might reflect anti-Japanese sentiments.25 Sega Enterprises, for instance, elected to purchase a license from Alpex in 1993. Nintendo, however, refused to settle, so Alpex sued for willful infringement of the “555 patent.”**
The case, which was tried before Judge Kimba Wood*** of the South New York District in Manhattan, hinged on a question of technology. Nintendo claimed that while the NES did use interchangeable cartridges, the bit-mapping technology developed by Alpex was not powerful enough to handle the sophisticated images in NES games.
The television raster comprises numerous discrete dots or bars, approximately 32,000, which the cathode ray beam illuminates on a standard cycle, which in turn creates the image on the television screen. The patented invention requires sufficient RAM to accommodate each of the approximately 32,000 memory positions needed to represent the raster image. The RAM holds at least one “bit” of data for each position in the memory “map” of the raster. Accordingly, this video display system is called “bit-mapping.”26
—Judge Glen Archer
According to Nintendo’s defense, Alpex’s RAM-based technology was simply too slow. Nintendo’s lawyers claimed that the NES featured a patented “picture processing unit” (PPU) that received pre-formed “slices” of data.
The PPU receives preformed, horizontal slices of data and places each slice in one of eight shift registers, each of which can store a maximum of 8 pixels. These slices of data are then processed directly to the screen. The PPU repeats this process to assemble the initial image on the screen. Thereafter, it repeats the process as necessary to form changes in images throughout the progression of the game. Nintendo refers to the PPU as an “on-the-fly” system.27
—Judge Glen Archer
The case turned into a debate about whether “on-the-fly” graphics did indeed differ from the technology in the Alpex patent. Nintendo maintained that while Alpex’s bit-mapping was fast enough for games with “linear player images,” it lacked the speed for games with “animated cartoon characters,” such as Mario. The highlight of the case was when John Strauch, lead attorney on the Alpex team, cross-examined Nintendo expert witness Stephen Ward. Strauch questioned Ward about the differences between linear player images and animated cartoons. Strauch tried to corner Ward into explaining the precise differences between the two kinds of graphics. Ward, either unwilling or unable to specify, refused to be pinned down, although he maintained that he could detect concrete differences, having viewed hundreds of games.
To clarify, Strauch drew a stick figure that he identified as a drawing of a hockey player. Ward agreed that the character would definitely be classified as a linear image. Next, Strauch colored the figure red and asked if it was still a linear image. When Ward said that it was, Strauch drew a bulge on the player that he identified as a hip and asked if it was still linear. Ward answered that they had “entered into a region” in which he had no answer. Strauch next added two little arms and asked if they were still in the gray area in which Ward could not distinguish between linear images and cartoons. Ward said, “I believe that one could arbitrarily decide to draw the line either way in that case.”
“Now using your terminology and understanding, we are using your terminology the way you want to define this, if I add a nose, are we still in a situation where we can put this one on either side of the line?”
Ward responded, “I think that at some point when you add features that make it look like a human form, for example, then it is no longer a linear player image, and if you keep adding noses and arms, then you do cross that line.”
Strauch: Let me add a tiny tail here. Let’s say this is an animal combination human-animal cartoon. Just adding a tiny tail. Have we yet reached the point where you are willing to say that it is not a linear image player?
Ward: We are getting close
to that point, yes.
Strauch: Okay. Why don’t we put a beard on it. Where are we now?
Ward: Okay. I am willing to say that it is not a linear image player.
Strauch: Okay, so now I know how you are drawing the line. If we have a nose, two little arms, a tail, more hip, and the configuration I have drawn, except for the beard, you don’t know whether it is a linear image player or not; but if we add the beard, it is not.28
According to Alpex attorneys John Strauch and Thomas Young, members of the jury tried to duck behind the rail of the jury box so that the rest of court would not see them laughing during this exchange. The jury agreed with Alpex, finding that Nintendo willfully infringed Alpex’s patent and that 118 of the games that had been introduced for the NES before the patent expired on July 31 infringed on the “555 patent.” Alpex was awarded $208 million for damages. Stating that she saw “scant” evidence of willful infringement, Judge Wood did not add further punitive damages to the award, but she allowed interest and legal fees to be tacked on, bringing it to $252 million—one of the largest patent awards in history.
Judge Glen Archer of the Federal Circuit did not see substantial evidence of infringement when the case went to Federal Appeals Court on November 25, 1996. After a thorough investigation of the bit-map and “on-the-fly” technologies, he ruled that there was insubstantial evidence that the devices operated in the same way. Based on his findings, Judge Archer reversed the original decision.
* The first two-player fighting game was Warrior, released by Cinematronics in 1979.
* In later years, Mortal Kombat, Street Fighter II, and other “completely fanciful” martial arts games that built off the Karate Champ formula would dominate both the home market and the arcade industry.
* Nakajima died of lung cancer on July 11, 1994.
* Keeping with Atari tradition, Nakajima named the company after a term from the game Go. Tengen refers to the center of a Go board.
** Nintendo licensees could publish only five games per year. Once a game was published on the NES, it could not be released for other platforms for two years. Nakajima requested that both stipulations be waived.
*** This is a figurative statement.
* This point would become pivotal in later cases.
** Steven Russel developed Spacewar on a PDP-1. Pajitnov’s Electronica 60 was considerably more powerful, the equivalent of a PDP-11.
* Logg, best known for creating the arcade games Centipede, Asteroids, and Gauntlet, deserves some credit for Atari’s coin-operated version of Tetris. He converted the code he made for the Tengen NES cartridge to work in the coin-operated game, then Atari engineers Greg Rivera and Norm Avellar finished the game. The Tengen Tetris cartridge was finished nearly four months before it was released. Atari sat on it while the arcade game was hot.
* In the Arctic case, arcade owners replaced the original chips with new ones that incorporated Namco’s original programming along with new code. A more accurate comparison would have been Atari Games v. General Computer, since the chips General Computer created to accelerate Missile Command were used to enhance Atari’s chips and modified, rather than borrowed, the original code.
* The Fairchild Channel F was the first game console to use interchangeable game cartridges.
* Alpex had an ongoing suit with Parker Brothers, the result of which was stayed pending the results of the case against Nintendo.
** At one point Nintendo offered a $3.9 million settlement.
*** Bill Clinton nominated Kimba Wood for the post of Attorney General after the nomination of Zoe Baird was withdrawn. The process ended with Janet Reno getting the position.
The Year of Hardware
Nobody, including me, thought that Game Boy would take off like it did. Game Boy is the most perfect example in the industry that you can’t be sure about anything, and anytime that somebody shows me something that I have doubts about, I remind myself that I had doubts about Game Boy, too.
—Don Thomas, former director of customer service and marketing, Atari Corporation
Nintendo was extremely dismissive about Sega. I think there was some concern about Genesis, but they were generally very dismissive. The feeling at Nintendo always was that Sega was kind of a second-class outfit.
—Richard Brudvik-Lindner, former group supervisor, Nintendo of America Account, Hill and Knowlton Public Relations
A Part of Society
By 1989, Nintendo had become a regular fixture in the news. The media reported on the company’s phenomenal record sales and press events and sometimes covered curious anecdotes associated with the company. The “Hands-Free” Controller, developed by Nintendo engineers to enable quadriplegics to play games, earned the company print and broadcast attention. To use this special controller, players rested their chins on a lever that worked like a steering device. A tube running from the controller to their mouths replaced the “A” and “B” buttons. “A” button functions were accessed by blowing into the straw, and “B” button functions were accessed by sipping.
The press also covered humorous human-interest stories such as an incident involving a burglar who noticed a Nintendo Entertainment System (NES) and couldn’t resist trying it. Somebody noticed the criminal and reported him to the police. On arrival, the police found the burglar in front of the television, playing a game.* In another story, a bomb squad blew up an NES on the runway of Los Angeles International Airport. Airport security officers X-rayed the NES inside a suitcase and, unable to identify it, called the bomb squad. Fearing the unfamiliar object to be a bomb, the police detonated it.
I was quoted in USA Today on the front page that day, or … the next day and … something to the effect of “Well, we know we have a great product, but people don’t usually get quite such a bang out of it.”
—Richard Brudvik-Lindner
Unauthorized and Never Sued
Nintendo guarded against unlicensed companies making unauthorized NES, Game Boy, and Super NES cartridges, but an Arizona-based company, Wisdom Tree, slipped through its net unchallenged.
Wisdom Tree was the offshoot of Color Dreams, a company founded by U.S. engineers who reverse engineered the NES and found a way around the lock-out chip. Using this technology, Color Dreams published games such as King Neptune’s Adventure, Pesterminator, and Metal Fighter. One of the company’s titles, Menace Beach, featured material considered highly risqué by NES standards. The goal of the game was to help a hero rescue his kidnapped girlfriend. Pictures of the chained-up woman were flashed throughout the game, and she had on less clothing in every shot. In the beginning, she wore a blouse and skirt; by the end of the game she was in a bikini.*
In 1989, Color Dreams spun off Wisdom Tree, a company that made NES games with Christian themes. For the most part, Wisdom Tree games were fairly indistinguishable from other video games and had the same basic side-scrolling, object-finding, enemy-shooting play. Some of the games had biblical trivia quizzes between rounds, and the themes of the games were adapted to convey biblical ideas. Wisdom Tree’s first game, Bible Adventures, was released in December 1990. After a slow start, the company sold approximately 350,000 copies.
Basically, what we were doing was taking the garbage out and putting Bible content in. That’s the whole reason for the company to begin with. We marketed almost 100 percent into the Christian bookstore market, not through secular channels. It took a while to get in. We got picked up by Focus on the Family, which gave us pretty much of an industry okay.
—Brenda Huff, co-owner, Wisdom Tree
Wisdom Tree eventually published seven NES games, along with four games for Game Boy,** three for Sega Genesis, and one for the Super NES. The company’s library included several original games published by outside contractors and a couple of cosmetically altered Color Dreams games. Sunday Funday, for instance, was a thinly disguised version of Menace Beach. While the owners of Wisdom Tree were openly Christian, their game designers did not necessarily share their beliefs. Peo
ple who later worked with the man who programmed Bible Adventures say that after working day and night on the project, he went to Las Vegas and blew his earnings in less than a week.
Wisdom Tree presented Nintendo with a prickly situation. The general public did not seem to pay close attention to the court battle with Atari Games, and industry analysts were impressed with Nintendo’s legal acumen; but going after a tiny company that published innocuous religious games was another story. In 1994, Wisdom Tree tested Nintendo’s ability to turn the other cheek by licensing the mazes and code to a game called Castle Wolfenstein 3D and converting them into an unlicensed Super NES game called Super 3D Noah’s Ark. This was this one of the few unlicensed games to appear on the Super NES. In Castle Wolfenstein 3D, players ran through dungeons killing Nazi soldiers and guard dogs as they hunted for Hitler. In Super 3D Noah’s Ark, which featured the exact same mazes, players shot food at little goats that had escaped from their pens.*
Ignoring Wisdom Tree was the only logical course of action. Super 3D Noah’s Ark was released toward the end of the 16-bit generation, as growing numbers of people began using computers to play games. Though Wisdom Tree was one of the last companies to manufacture and sell NES and Super NES games, the company’s focus eventually turned to publishing games for PCs.
