Atari Incorporated and Others v. Soundic Electronics Ltd and Others

HCA005984/1982

Interim injunction - question of copyright in video game - American Cyanamid considered - copyright may exist if similar game produced on T. V. screen using different form of electronic circuitory - game may be subject of copyright if reduced to material form – image on screen may be such material form.

BETWEEN

------------------------

BETWEEN

----------------------

Coram: Penlington J.

Date: 23 August 1982

__________

JUDGMENT

__________

1. These are applications for interim interlocutory injunctions restraining the Defendants in each action from infringing what the Applicants say is their copyright in a video game known as "PAC-MAN". The Applicants also found their action on passing - off but this was not as strenuously argued. They also seek consequential orders that the Defendants be restrained from disposing of any offending articles which are now in their possession and the usual order that the Defendants filed an affidavit setting out the names of all persons to whom they have supplied or from whom they have received any offending articles.

2. Prior to the hearing of the Plaintiffs' summonses the Defendants in turn took out summonses which attacked the claim of the Plaintiffs to be the exclusive licensee of the Japanese firm Namco which originally designed the "PAC-MAN" game. These summonses were not preceded with and the matter was argued on the basis that the Applicants are the holders of exclusive licence rights to manufacture and sell the "PAC-MAN" game in Hong Kong which had been obtained from the original Japanese designers. These rights did not however extend to the coin-operated or hand-held versions of the game.

3. It is clear that although these were separate actions the facts relating to both are very similar and the applications were heard together.

4. The principles governing applications of this sort have since 1975 been as set out in the decision of Diplock L.J. in American Cyanamid v. Ethicon Ltd. ^(1). The Court must see first of all whether there is a serious issue to be tried i.e. has the Applicant a real prospect of success, and if satisfied of that should then turn to see whether the balance of convenience favours the granting of the injunctions sought. In the Hong Kong decision of Moses v. The Royal Hong Kong Jockey Club ⁽²⁾, it was held that the Applicant must show more than "an outside chance of success" and in Parnass/ Pelly Ltd. v. Hodges ⁽³⁾ Whitford J. held that the applicants needed to show more than a mere "arguable case". It is however important to remember what was also laid down in American Cyanamid ⁽¹⁾ by Diplock L.J. at 510 -

"It is no part of the Court's function at this stage of litigation to try to resolve conflicts o￡ evidence on affidavit as to facts on which the claims of either party may ultimately depend or to decide difficult questions of law which call for detailed argument and mature consideration. These are matters to be dealt with at the trial."

5. I an quite satisfied that on the affidavit evidence in these actions, as they now stand, the Plaintiffs in each of them have a good prospect of success:

6. The games in dispute have been demonstrated in Court and I have had the opportunity to see the similarities and dissimilarities of the Defendants' games as compared with that of the Applicants. It has been submitted by Counsel for the Applicants that in cases of this sort the Court should look more to similarities than dissimilarities. I think that is correct and the similarities between the various games are striking. In any event it was not argued by Counsel for the Defendants that in fact the Defendants' games were not copies of the Applicants. He based his argument entirely on a submission that while the' Defendants may have copied the Applicants' idea of a maze game; the Applicants had not reduced that idea to a material form which could enable them to claim copyright.

7. In view of the way the Defendants' case has been argued I do not consider it necessary for me to go into any detail about the form of the game except to say that it involves five characters pursuing each other within a maze. One is controlled by the player, the movements of the others depend on that other character plus obviously the form of the electronic circuitory which must. be highly complex. It is a very ingenious game and it has become a star performer in the intensively competitive world of video games.

8. The Applicants and the Defendants have each produced two pieces of equipment which, combined together, produce a video game. The first of these is a console which is known as the "hardware". The Applicants make no complaint about the Defendants' hardware as being in any way a copy of theirs. The other piece of equipment is a cartridge which fits into the console, known as a "Read - Only Memory" or ROM. When a game has been designed and perfected the necessary electronic circuitory is contained in the ROM. The Defendants in their affidavits claim that their hardware is designed in a totally different manner than that of the Plaintiffs. That is not in dispute., It is quite clear that a cartridge produced by either one of the three manufacturers involved here cannot be used in a console of one of its competitors. It follows and again it is not in dispute that the circuitory contained in each RCM must also be different. Miss Anne Leung, Marketing Manager for Video Technology Limited has said in an affidavit that the electronic design of their hardware and software is entirely the creation of their own employees and owes nothing to the Plaintiffs. The affidavit of Mr. Lawrence Leung filed on behalf of Soundic Electronics Ltd. makes a similar claim.

9. Both those allegations may be perfectly true so far as the actual electronic circuitory is concerned. What however remains is that the Defendants have, albeit by using their own design, produced on a television screen the image of a game which I am satisfied is fundamentally the same as that of the Plaintiffs. Some of the features of the game have been changed: It has been produced using a different sort of electronic circuitory. It is still in my view the same game which by producing it on a video screen the Applicants have reduced to a material form.

10. Considerable emphasis was laid by leading Counsel for the Defendants on the maxim that one cannot have copyright in an idea. It was his fundamental submission that the Plaintiffs had not reduced their idea of the "PAC-MAN" game to any material form which could be the subject of copyright. Section 49(4) of the Copyright Act 1956 reads as follows:-

"References in this Act to the time at which, or the period during which, a literary, dramatic or musical work was made are references to the time or period at or during which it was first reduced to writing or some other material form."

He argued that the game depends on the way in which it is played The player has a control stick and the characters on the television screen move in accordance with the way in which that control stick is operated. As in a game of chess no two games are ever the same. There are infinite varieties. While it is true that the manufacturer supplies the means by which the player can control the characters and play the game, it is entirely up to him as to how he does it. All the Plaintiffs have done is to supply an idea and that is not the subject of copyright. This is a very interesting and ingenious argument and no doubt much will be made of it at the trial of this action. It seems to me however that it is necessary for the idea of the "PAC-MAN" game to be embodied in some form of electronic circuitory before the player becomes involved at all. It may be argued that the moving image on the screen is the result partly of the player's skill and partly of the electronics which enable him to display that skill. If so, the Applicants may find support in Ladbroke (Football) Ltd. v. William Hill (Football) Ltd. ⁽⁴⁾ where at 277 Lord Reid says:

"A wrong result can easily be reached if one begins by dissecting the plaintiffs' work and asking, could section A be the subject of copyright if it stood by itself, could section B be protected if it stood by itself, and so on. To my mind, it does not follow that, because the fragments taken separately would not be copyright, therefore the whole cannot be. Indeed, it has often been recognised that if sufficient skill and judgment have been exercised in devising the arrangements of the whole work, that can be an important or even decisive element in deciding whether the work as a whole is protected by copyright."

(That decision also approves, per Lords Reid, Hodson and Pearce the dicta of Peterson J. in University of London Press Ltd. v. University Tutorial Press Ltd. "a rough practical test that what is worth copying is prima facie worth protecting".)

11. On the basis of the dicta in American Cyanamid ⁽¹⁾ I do not propose to go further into that except to say that quite clearly it does involve a difficult question of law and clearly there are strong arguments on either side:

12. That computer software may be the subject of copyright finds support in Copinger and Skone James on Copyright at paragraph 154:

"On the other hand because some form of notation is sufficient there seems no reason why items of computer software such as punched cards,. punched tapes, magnetic tapes and even magnetic cords should not be protectable as 'literary works' apart from the more obviously literary works such as printouts and so on since 'human readability' is not a requirement."

In my view the same argument would apply to a ROM.

13. I am therefore satisfied that there is evidence to show that the Plaintiffs' idea of the "PAC-MAN" game has been reduced to a material form and that it is at the very least arguable that that material form, the ROM, plus the image and movement on the screen it produces, can be the subject of copyright.

14. The Applicants also rely on the decision of the United States Court of Appeal in Atari Inc. v. North American Phillips, which has been exhibited. There the Defendants had made very considerable efforts to change the format of its maze game and from the detailed description of it set out in the judgment did not resemble Pac-Man as much as does the Defendants' games here. Nevertheless an injunction was granted. Leading Counsel for the Defendants submitted that as the decision was based on American law it carried little weight here. I do not agree. The Appeal Court very clearly had in mind the very same principles at issue here. It quoted with apparent approval the maxim relied on by the Defendants "unlike a patent, a copyright gives no exclusive right to the art disclosed; protection is given only to the expression of the idea, not the idea itself". (P.14) Copyright law tends by its very nature to be international and I consider that the decisions of other jurisdictions can often be most helpful. It was pointed out by leading Counsel for the Applicants that such is the trend today and I think it is clearly right. So also I consider the Applicants can properly rely on Northern Office Micro Computers (Pty) Ltd. and Others v. Rosenstein ⁽⁵⁾ - a decision of the South African Supreme Court - that a suite of computer programmes was a literary work which was entitled to copyright protection. The relevant South African legislation seems to be identical to ours.

15. I am therefore satisfied that the Applicants have a good prospect of success at the trial. I therefore turn to the second point which is where does the balance of convenience lie as between the parties.

16. It is not in dispute that the Plaintiff is a very substantial manufacturer indeed. Sales of its products and in particular "PAC-MAN" have been very very substantial. It is also clear that sales of this type of game are concentrated before the Christmas period. The Plaintiffs say that it is essential that they obtained this interim injunction as their potential sales for the coming Christmas period are likely to be severely damaged by products emananting from the Defendants. They say, and it is not in dispute, that this type of product has a very short commercial life. If an injunction is not obtained by the time the trial comes on the damage will already have been done and it would be extremely difficult indeed to ascertain what that damage has been if the Plaintiffs succeed in their action. On the 'other hand while clearly the Defendants will also suffer damage if an injunction is granted, I do not consider that it would be such as could not be adequately compensated by an award of damages. I am satisfied that when the Defendants commenced to produce their video game they must have been well aware that they were running the very gravest risk of being involved in these proceedings and indeed the fact that action has been taken in America- and other places in respect of this same game must have served as a warning to all manufacturers of similar products. An injunction will not in any way prevent the Defendants from continuing to manufacture and market their hardware and other game cartridges. An injunction will clearly limit the range of games that they can offer, but as has been said by leading Counsel for the Plaintiffs there is no reason why they cannot produce another maze type game provided it is not a copy of the Plaintiffs' game.

17. I agree that if the Defendants succeed it will not be easy to assess their damages but I consider that the right course in such a situation is to maintain the status quo. Elanco Products Ltd. and Another v. Mandops (Agrochemical Specialists) Ltd. and Another ⁽⁶⁾ per Roskill L.J. at 230 and Buckley L.J. at 231. I am also satisfied that the status quo should be that prevailing before the offending action began. See Metric Resources Corporation v. Leasemetrix Ltd^.(7) per Megarry V.C. at 581-82.

18. There has been Some argument as to the ability of the Defendants to meet a substantial award of damages and costs. The financial statements exhibited by the Defendants does not show great wealth of the Applicants and there may well be some doubt as to their financial ability but as I have reached the conclusions I have I do not need to go into that.

19. I am satisfied that the balance of convenience here is in favour of the Plaintiffs. I am also satisfied that in order to make the injunction effective there should be a freezing of the status quo and that the Defendants should be prohibited with parting with possession of any allegedly infringing material which is in their possession. I an also satisfied that in each case the Applicants are entitled to the affidavits sought in paragraph 2 of the Summonses.

20. The only other matter I should perhaps deal with is the allegation of the Defendants in Action No. 5894 that do not manufacture or assist in the manufacture of the “Puck-Boy” cartridges, but these are made by another firm Celeste Trading Company. If that is so the Defendant will not be harmed by the injunction as it would be of no effect so far as it is concerned in relation to that particular game.

21. The Defendants must have anticipated the virtual certainty of these proceeding being brought and in my view the very strong possibility, to put it no higher, that an interim injunction would be sought and obtained. Under those circumstances there will be an order for Plaintiffs' costs in the cause.

(1)    1975 1 A.E.R. 504

(2)    C.A. 141/81

(3)    1982 Fleet Street Reports 329

(4)    1964 1 W.L.R. 273

(5)    1982 Fleet Street Reports 124

(6)    1980 R.P.C. 213

(7)    1979 Fleet Street Reports 571

Representation:

Mr. Gavin Lightman Q.C. and Mr. Peter Garland instructed by Deacons for all plaintiffs in both actions.

Mr. Charles Ching Q.C. , Mr. Anthony Rogers and Mrs. Verina Bokhary instructed by Robert W.H. Wang & Co. and Woo, Lee & Lo for all defendants in both actions.