Midway Manufacturing Co. v. Artic International, Inc.

District Judge Bernard Decker granted an injunction against Artic,^[19] denying their motion for summary judgement, and preventing them manufacturing or distributing circuit boards that infringed both Pac-Man and Galaxian.^[16] Artic appealed the injunction to the United States Court of Appeals for the Seventh Circuit, but Chief Judge Walter J. Cummings Jr. affirmed the lower court decision.^[20]

Artic argued that the games cannot be protected as audiovisual works as they are not fixed.^[15] The court acknowledged that the framers of the Copyright Act did not anticipate the issues raised by electronic games,^[18] but rejected Artic's arguments.^[17] According to the court, Midway's video games meet the Copyright Act's definition of an audiovisual work as a "series of related images", because there is sufficient repetition of images between playthroughs.^[16] The court also accepted that the inventor of the game was the creator of the audiovisual work, and not the player, thus allowing Midway to register the copyright.^[16]

Galaxian created further issues, as Artic argued that their hardware speeding the rate of play did not infringe Midway's copyright.^[16] However, the court held that Artic violated Midway's exclusive right to create derivative works of Galaxian, as Artic's speed-up kit incorporated copyrighted material from the game, and supplanted demand for Midway's game.^[21]

Having established that Midway owned a valid copyright in both games,^[22] the court found that Artic infringed Pac-Man by producing a near identical copy,^[18] and infringed Galaxian by creating an unauthorized derivative work.^[22] The court denied Artic's motion for summary judgement against Midway, and instead enjoined Artic from infringing Pac-Man and Galaxian.^[16]

Midway v. Artic was one of several early video game lawsuits involving "knock-off" video games, along with Stern Electronics, Inc. v. Kaufman and Midway v. Dirkschneider.^[18] Since a knock-off involves strong evidence of copying, these cases depended on whether video games were eligible for copyright at all.^[23] Midway v. Artic helped establish that video games are indeed eligible for copyright protection as audiovisual works,^[22] and that a copyright holder can register a video game as an audiovisual work by submitting a video tape of gameplay.^[18] The judge's interpretation of Pac-Man helped establish that a near identical clone of a game will usually be considered copyright infringement.^[18] The decision was also notable for going beyond an ordinary observer test for similarity, relying on expert testimony to parse similarities in source code between the games, including an identical error in the two circuit boards.^[24]

This case also illustrates a challenge for understanding the concept of "fixation" in copyright law. Midway v. Artic is one of the first copyright decisions where a computer program stored in hardware memory was sufficient to qualify as a fixed creative work.^[15][21] Even though the combinations of images change between game sessions, most of the images are fixed in memory of the printed circuit boards.^[21] Along with early cases Stern Electronics, Inc. v. Kaufman and Atari, Inc. v. North American Philips Consumer Electronics Corp., courts accepted that the image sequences were the creations of the author, and not an algorithm or a player.^[15] In Play/Write, Scott Nelson argues that this has implications for copyright ownership in procedurally generated games such as Diablo, Dwarf Fortress, and Minecraft.^[15]

Midway v. Artic was also one of the first cases about using hardware to modify a copyrighted game, with Midway's exclusive right to prepare derivative works violated by Artic's speed-up kit.^[21] This interpretation was distinguished in 1992 with the ruling in Lewis Galoob Toys, Inc. v. Nintendo of America, Inc.,^[25] where the court decided that there was no copyright infringement in attaching Game Genie hardware to a Nintendo cartridge to alter a game's mechanics.^[26][27] The legal distinction was that Artic's hardware incorporated a portion of the original Galaxian, while the Game Genie did not incorporate any copyrighted content.^[22] Another distinction was that the Galaxian speed-up kit was interpreted as a threat to the commercial demand for Galaxian, whereas another court found that the Game Genie would not have the same commercial impact.^[22][25] Thomas Hemnes criticized this opinion about commercial impact in the University of Pennsylvania Law Review, noting that the speed-up kit could not function without first owning a working version of the original game.^[17] Pamela Samuelson made a similar criticism in the Georgetown Law Journal, that the injunction against the speed-up kit may have hindered competition in the video game industry.^[26]