Atari Games Corp. v. Nintendo of America

Nintendo of America, Inc. (Nintendo) (plaintiff) sold the Nintendo Entertainment System (NES), a game console that used game cartridges to allow users to play video games on a monitor. Nintendo copyrighted and designed the 10NES program to prevent the NES from accepting unauthorized game cartridges. The NES console contained a programmatic lock, and authorized cartridges were given a programmatic key that would send an unlocking message to the console for acceptance. Nintendo chose arbitrary programming instructions and arranged them in a unique sequence to create a data stream that would serve as the unlocking message. The NES’s lock also included a security command that would shut down the console if the lock received an incorrect signal from a cartridge. Atari Games Corporation (Atari) (defendant) attempted to analyze and replicate the NES security system by reverse engineering physical NES consoles and cartridges but was unsuccessful. Atari received a reproduction of the 10NES program from the Copyright Office by falsely claiming that it needed the copyrighted source code for a current litigation action. After receiving the source code, Atari was able to replicate the 10NES program for study, and after further research, Atari created the Rabbit program to unlock the NES console. The Rabbit program used different programming languages and processors but produced signals functionally identical to the 10NES program, including the security shutdown feature. Nintendo filed suit, alleging copyright infringement, and sought a preliminary injunction. Atari filed suit for antitrust violations and misuse of property rights. The suits were consolidated, and the court granted Nintendo’s injunction. The district court found that Atari violated copyright law by reproducing an unauthorized copy of the 10NES source code from the Copyright Office, by creating intermediate copies of the 10NES program during reverse engineering, and by creating the Rabbit program, a substantially similar program to the copyrighted work. Atari appealed the injunction. The appellate court affirmed the court’s judgment on the unauthorized copy from the Copyright Office because Atari had misrepresented its litigation status. The court affirmed the judgment regarding the Rabbit program because the Rabbit program duplicated more than just the unlocking function of the 10NES program, specifically including the security shutdown, indicating that Atari improperly copied rather than independently created its program. The court then addressed reengineering.