Monday, 28 May 2012

The Flow



Cases Regarding Copyright - Part 2

Sony Computer Entertainment, Inc. v. Connectix Corporation

  Sony Computer Entertainment v. Connectix Corporation (, is a decision by the Ninth Circuit Court of Appeals which ruled that the copying of a copyrighted BIOS software during the development of an emulator software does not constitute copyright infringement, but is covered by fair use. The court also ruled that Connectix Corp. had not tarnished Sony's PlayStation trademark by selling its emulator software, the Virtual Game Station.
    Connectix started the development of the Virtual Game Station (VGS) for the Macintosh platform in July 1998 with the aim of creating a software program that emulated Sony's popular PlayStation video games console's hardware and firmware. This would make it possible for the VGS' users to play games developed for the PlayStation on Macintosh hardware, with plans to release a Windows PC compatible version at a later date. To accomplish the emulation goals, Connectix reverse engineered the BIOS software, i.e., the firmware, of the PlayStation, first by using the unchanged BIOS to develop emulation for the hardware, and after that, by developing a BIOS of their own using the original firmware as an aid for debugging. During the development work Connectix contacted Sony, requesting “technical assistance” for completing the VGS, but this request was eventually declined in September 1998.
    The Video Game Station development reached completion in December 1998, with the software being commercially released the following month, in January 1999. Sony perceived the VGS as a threat to its video game business, and filed a complaint alleging copyright infringement as well as violations of intellectual property against Connectix on January 27, 1999. Sony drew support from fellow video game hardware manufacturers Nintendo, Sega, and 3dfx Interactive, while Connectix was backed by fellow software firms and trade associations. The district court awarded Sony an injunction blocking Connectix from copying or using the Sony BIOS code in the development of the Virtual Game Station for Windows; and
from selling the Virtual Game Station for Macintosh or the Virtual Game Station for Windows.
   The district court also impounded all of Connectix' copies of the Sony BIOS and all copies of works based upon or incorporating Sony BIOS. Connectix then successfully appealed the ruling, with the United States Courts of Appeals for the Ninth Circuit reversing the earlier decision.

The court's decision

    The Ninth Circuit Court's 3-0 ruling centered on deciding whether or not Connectix' copying of the PlayStation firmware while reverse engineering it was protected by fair use. The court relied heavily on the similar case between Sega Enterprises Ltd. and Accolade Inc. in 1992, where the key finding relating to Connectix v. Sony was that copying for the purpose of reverse engineering was within fair use.
Each of the four components of fair use, the nature of the copyrighted work, the amount and substantiality of the portion used, the purpose and character of the use and the effect of the use on the potential market were considered by the court individually :

1. Nature of the copyrighted work
   While the Ninth District Court did acknowledge that software deserves copyright protection, the court, following the precedent of Sega vs. Accolade, deemed the PlayStation firmware to fall under a lowered degree of copyright protection due to it containing unprotected parts (functional elements) that could not be examined without copying. The court also rejected the semantic distinction between “studying” and “use” made by the district court: ("They disassembled Sony's code not just to study the concepts. They actually used that code in the development of [their] product."), finding it to be artificial.

2. Amount and substantiality of the portion used
  The court saw this criterion as being of little significance to the case at hand. While Connectix did disassemble and copy the Sony BIOS repeatedly over the course of reverse engineering, the Virtual Game Station, the final product, contained no infringing material. As a result, “this factor [held]... "very little weight." in determining the decision.

3. Purpose and character of the use
   Sony had argued that Connectix infringed Sony's copyright by making numerous intermediate copies (that is, copies of copyrighted computer code created to aid the development of a non-infringing product) of the PlayStation BIOS during the reverse engineering process. The court rejected this notion, ruling that such a copy-grounded basis for what qualified as fair use would result in software engineers choosing inefficient engineering methods that minimized the number of intermediate copies. Preventing such "wasted effort," they argued, was the very purpose of fair use.
   In addition, the court found that the ultimate purpose and character of Connectix's use of Sony's BIOS - in that it created a new platform for Sony Playstation games - qualified as "modestly transformative." This factor of fair use, therefore, lay in Connectix's favor.

4. Effect of the use upon the potential market
   The court held in favor of Connectix on this point as well. While the Virtual Game Station might very well lower Sony's Playstation console sales, its transformative status- allowing Playstation games to be played on Mac - rendered it a legitimate competitor in the market for Sony and Sony-licensed games: “For this reason, some economic loss by Sony as a result of this competition does not compel a finding of no fair use. Sony understandably seeks control over the market for devices that play games Sony produces or licenses. The copyright law, however, does not confer such a monopoly.”
   The Ninth Circuit Court also reversed the district court's ruling that the Video Game Station tarnished Sony's “PlayStation” trademark. Sony had to show that 
(1) the PlayStation “mark is famous;” 
(2) Connectix is “making commercial use of the mark;” 
(3) Connectix's “use began after the mark became famous;” and that 
(4) Connectix's “use of the mark dilutes the quality of the mark by diminishing the capacity of the mark
        to identify and distinguish goods and services.” 
   As the first three points were not under debate (Connectix conceded points (1) and (3), the court addressed only the fourth point.
   The court also took the opinion of the studies provided lacking sufficient evidence of diluting the PlayStation trademark: “The evidence here fails to show or suggest that Sony's mark or product was regarded or was likely to be regarded negatively because of its performance on Connectix's Virtual Game Station. The evidence is not even substantial on the quality of that performance. … Sony's tarnishment claim cannot support the injunction.”

    The Ninth Circuit Court reversed the district court's decision both on the copyright infringement and the trademark tarnishing claims, lifting the injunction against Connectix. Connectix immediately filed a motion with the district court to summarily dismiss Sony's lawsuit. After a failed attempt by Sony to appeal the case to the Supreme Court, the two companies settled out of court about a year later. On March 15, 2001, Sony purchased the VGS rights from Connectix. They discontinued the product June 30th of that year. Connectix itself closed in August 2003.