Atari Incorporated and Others v. Video Technology Ltd and Others

CACV000117/1982

Headnote

"Claim for copyright in electronic video game. Plaintiffs' claim would depend upon novel point of law. This was a factor to be taken into account when considering application for interlocutory relief.

In the circumstances interlocutory relief refused."

________________________

________________________

Coram: Hon. Leonard, V.P., Cons, J.A. & Power, J.

Date: 6 October 1982

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JUDGMENT

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Cons, J.A. :

1. In the court below the plaintiffs obtained interlocutory injunctions drafted in very wide terms. Their general effect is to restrain the two sets of defendants from dealing in any way whatsoever with certain electronic games which are named therein or with any electronic video game similar to Pac-man, a particular game in which the plaintiffs claim copyright. The injunctions extend to the characters, incidents and sound effects incidental to the plaintiffs. game and there is the usual order for delivery up and for discovery of those from whom the defendants have received or to whom they have supplied infringing articles or printed matter. The injunctions also restrain the defendants from passing off any game as and for Pac-man or as a game associated therewith.

2. I think there can be no doubt that the action itself will necessarily involve serious questions of law. These will arise from the plaintiffs' basic submission, that statutory provisions, enacted now more than a quarter of a century ago, are nevertheless sufficiently flexible to embrace the sophisticated products of modern microtechnology and to bring within their protection the peculiar and complex pattern of ideas that provides the special attraction of the plaintiffs' electronic toy. It is a submission which, if successful, would seem to me to represent a major step in the development of copyright law, taking it far beyond the bounds of any case to which we have been referred. Such a step, if taken at all by the judiciary, ought to be taken only after, in the words of Lord Diplock, "detailed argument and mature consideration"⁽¹⁾. I do not accent the contention of defence counsel that this submission will inevitably be rejected out of hand. There are arguments in its favour, conveniently set out in Laddie on Copyright, and some suggestion of authority in the words of Lord Hailsham in L.B. Plastic Ltd. v. Swish Products Ltd.⁽²⁾. On the other hand I hesitate to predict the outcome with the same confidence as the learned judge below, for ultimate success, as I presently see it, will need to depend more upon considerations of policy than upon the express words of the Copyright Act of 1956.

3. The possible importance of a party's prospects of success was referred to in American Cyanamid itself :-

"... if the extent of the uncompensatable disadvantage to each party would not differ widely, it may not be improper to take into account in tipping the balance the relative strength of each party's case as revealed by the affidavit evidence  adduced on the hearing of the application."

4. Subsequent cases have illustrated circumstances where those prospects may play a vital part : in N.W.L. Ltd. v. Woods⁽³⁾ and Parnass/Pelly Ltd. v. Hodges⁽⁴⁾.

5. The judge below took the view that while, if an injunction were not granted, the damage to the plaintiffs would be extremely difficult to ascertain, the damage to the defendants, if an injunction were granted, could be adequately compensated by damages. I must confess to some difficulty in understanding why he drew the distinction. The matters on which he appeared to rely, namely the concentration of sales for the Christmas period and the very short commercial life of products of this nature, would seem to apply equally to all concerned.

6. What are not equal, however, are the financial strengths of the respective companies. Neither of the defendant companies could fairly be described as wealthy and both have necessarily invested much of what they do have in the production and promotion of the home video systems upon which the games in question are played. It is those systems, as much as the particular games themselves, which are at the core of these proceedings, for the games of one company cannot be played upon the hardware of another, and once a customer has invested in the hardware of one company, it is unlikely that he will spend further capital on the hardware of another, but will instead continue to purchase further games, and other video and computer associated products, from the company with whom he started. The plaintiffs' affidavits, as well as those of the defendants, stress the importance of this aspect. Both defendant companies feel that the effect of an injunction at this stage would be to put the commercial success of those systems in real jeopardy, not only through the actual loss of particular sales, but by the damage done to their reputation and goodwill. As Mr. Lightman, who appears for tire plaintiffs, pointed out in the course of argument, the electronic industry is not large. News of an adverse decision would quickly spread. The defendant companies argue that this would soon be reflected in a loss of confidence. I tend to agree with them. The experience of Video Technology Ltd. with Hannimex confirms the likelihood. Moreover the plaintiffs would not be slow to exploit to the full the opportunities thus offered. No one else can have been responsible for the swift despatch to the regular customers of Video of the article that appeared in the Hong Kong Standard on the 10th June this year.

7. On the other hand the plaintiffs do not risk financial disaster in any way. They are wealthy successful companies, and their game Pac-man is having enormous success, both here and elsewhere, despite the competition of the defendant companies. If that competition were allowed to continue for a short while - I understand that a speedy trial has now been directed - it would make no more than a dent in the plaintiffs' business. Against that they ask the defendant companies to pay what seems to me an unduly high price when one considers that the substance of the plaintiffs' claim depends upon an as yet untried submission of pure law. That is an equation which the judge below did not consider, and one which in my judgment admits of resolution only in favour of the defendants.

8. The judge was, I think, strongly influenced by his view that the defendants were, in the phrase that came to be used in argument before us, "courting litigation". If that phrase is used in the sense that a company which engages in a highly competitive industry, where the law at the moment leaves an important question unanswered, must expect its competitors to use litigation as a weapon, then no doubt the defendants were courting litigation. Litigation would be a natural hazard of the game. And if in the end any defendant should lose and be faced with heavy financial commitment, that defendant could not reasonably complain. But that is something quite different from presenting a substantial bill when play has only just started and the outcome is still in considerable doubt.

9. It is said the defendants should have taken warning from the plaintiffs action in the United States. Two matters must here be noticed. One, at the time the defendants first entered upon the particular course we are concerned with, the plaintiffs were in the position of having lost the initial round. Two, in that jurisdiction the legislature had already answered the legal question that here awaits the outcome of the substantive action.

10. It is said also that the defendant companies may not be able to meet in full the damages and costs if ultimately these are awarded against them. Here again two points must be noticed, apart from the passing observation that there are in each case personal defendants of whose finances we have been told nothing. Firstly, although as I have said, neither company is wealthy, neither could be described as fly by night or of no substance. One has been in the trade for 5 years, the other 7. During those periods each has expanded its operations. Secondly, we do not have here, as in most of the cases to which we have been referred, a conflict of evidence as to fact. We have a genuine dispute of law. There would be an undesirable tendency to inhibit genuine competition if in that circumstance, and perhaps upon a mistaken view of the law, larger companies were able, simply by initiating proceedings and obtaining immediate relief on this ground, to preempt smaller companies from ever satisfactorily establishing themselves.

11. I can deal very briefly with passing off. In my view the evidence is simply not sufficient to warrant interlocutory relief upon that ground, and so, for the reasons I have given, I would for my part allow the appeal and set aside the injunctions granted below.

(1)    American Cyanamid Co. v. Ethicon Ltd. (1975) A.C. 396 at 407

(2)    (1979) R.P.C. 551 at 629

(3)    (1979) 1 W.L.R. 1294 at 1305-1307

(4)    (1982) F.S.R. 329

Leonard, V-P. :

12. I have had the advantage of reading the judgment of Cons J.A. in draft form and agree that this appeal should be allowed. As we are differing from the trial judge on a matter of discretion I wish to make some observations. Firstly, the order appealed against is in wide terms; it is based both on passing off and on infringement of copyright. The trial judge remarked "The applicants also found their action on passing off but this was not so strenuously argued." Had he adverted further to the question of passing-off in his judgment I feel sure that he must have concluded that on the papers before him a serious issue on passing off had not been raised. We are told that when judgment was given and a question as to the terms of orders consequent upon it arose, counsel for the appellants said that order might follow the terms of the summons as it did. The trial judge cannot be reproached for the manner in which the order was framed and the matter might well have been referred back to him before this appeal was prosecuted. I consider, however, that this is of less significance than might have been the case had the question been strenuously argued below.

13. It is contended that copyright vests under Hong Kong law in various works attending the process of creating the game Packman. These are listed as follows :

(a) the literary and artistic works and the original drawings of the shapes and symbols which appear on the monitor or Television screen and in promotional or other literature,

(b) the literary computer programme which is incorporated into the R.O.M.s,

(c) the cinematograph films which are reproduced when the game plays in the attract mode and when it is played by a player or players,

(d) the musical works representing the sound effects which are heard when the game is played and

(e) the sound recordings embodying such musical works.

14. As to the artistic works and drawings appearing on the monitor or Television screen I do not think it can fairly be said on the affidavits that these have been copied. Rather it may be said that their functions have been assumed and the ideas behind them and their movements have been taken. In each case the appellants have been careful not to copy individual components. Again such original drawings as we have seen do not appear to have been copied.

15. I do not consider that what appears on the screen when the games are played can be said to be a cinematograph film within the definition of that term in the Ordinance. The term is defined as meaning "any sequence of visual images recorded on material of any description.. so as to be capable by use of that material - (a) of being shown as a moving picture or (b) of being recorded on other material .. by the use of which it can be shown". To my mind this definition contemplates something in the nature of a permanent record of a sequence of images which is capable of being replayed. The appellants do not have an attract mode and when the game is played the sequence of movement varies with the variations imparted to the principal character. There is no sequence of visual images recorded since the sequence changes with each playing. Furthermore the "maker" of such sequence as there may be is the player jointly with the programmes of the computer.

16. As to the musical works and sound recordings embodying such musical works again I consider that no case has been made out that these have been copied or that there has been the infringement of musical works and sound recordings themselves as distinct from the ideas behind them. As I see it, the material available to the Court fails to disclose that the appellant has any real prospect of succeeding in its claim for a permanent injunction at the trial in respect of items (a), (c), (d) and (e). Such difficulties as I have arise with regard to (b) the computer programme which is incorporated into the R.O.M.s. By Section 48 of the Act "literary work" includes "any written table or compilation". Written tables or compilations there must have been and as I understand it, it is common case that what is embraced in the plaintiff's R.O.M.s is a compilation taking the form of directions in computer "language" for the game its characteristics and the sequence of events which will by means of electrical impulses eventually appear upon the screen. When I refer to "computer 'language'" I should not be taken to mean that what is fed into the R.O.M. is necessarily a 'language' within the meaning of that word where it is used in the 1958 Act.

17. Section 46(5) of the Act is restrictive in that "no copyright or right in the nature of copyright shall subsist otherwise than by virtue of this Act or of some other enactment in that behalf" so that the questions for decision will be whether or not the Copyright Act of 1956 envisages copyright or any right in the nature of copyright subsisting in the respondents' R.O.M.s and if it does whether the actions of the appellants contravene the restrictions imposed by Section 2(5) of the Act. These I regard as most difficult questions of law so that undoubtedly there is a serious question to be tried (It may well be that on the facts as proved at the trial other questions will arise but I am not persuaded on the papers before us that they will). That our legislation has not yet made express reference, as has the legislation in the United States of America, to "audio visual works" is not I think conclusive. It may be possible that the Courts here will find after detailed argument and on mature consideration that literary copyright does subsist and is infringed by the appellants activities.

18. Secondly, I would refer to American Cyanamid v. Ethicon Ltd.⁽¹⁾. I consider that in a case where what separates the parties is as it is in this case, a highly complex question of law the dictum "It would be most exceptional for your Lordships to give leave to appeal to this House in a case which turned on the issue of balance of convenience" is one which must be approached with caution for it was made in relation to a case turning on disputed facts rather than a dispute of law. It is to be noted that having decided that the grant of an interlocutory injunction in actions for infringement of patents is governed by the same principles as in other cases and turned to consider what those principles are Diplock L.J. at page 406 prefaced his remarks by the words :

"When an application for an interlocutory injunction to restrain a defendant from doing acts alleged to be in violation of the plaintiff's legal right is made upon contested facts, the decision whether or not to grant an interlocutory injunction has to be taken at a time when ex hypothesi the existence of the right or the violation of it, or both, is uncertain and will remain uncertain until final judgment is given in the action."(emphasis added)

19. He went on to discuss the need for the interlocutory injunction in the interim period, the use of the undertaking in damages and the need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated under the plaintiff's undertaking in damages and held that

"the Court must weigh one need against another and determine where the balance of convenience lies."

20. Again with reference to "those cases where the legal rights of the parties depend upon facts which are in dispute" he indicates that "the purpose sought to be achieved by giving the Court discretion would be stultified if the discretion were clogged by a technical rule forbidding its exercise if upon that incomplete untested evidence the Court evaluated the chances of the plaintiff's ultimate success in the action at 50% or less but permitting its exercise if the Court evaluated his chances at more than 50%", and in that context stressed that "the use of such expressions as 'a probability' 'a prima facie case' or 'a strong prima facie case' in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief. The Court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words that there is a serious question to be tried."

21. I doubt if the approach should be exactly the same where the legal rights of the parties depend on legal problems not yet the subject of definitive ruling as distinct from contested facts. 

22. At the foot of page 407 Diplock L.J. says :

"It is no part of the Court's function at this stage of the litigation to try to resolve conflicts o￡ evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature consideration."

but this is not to say that the "balance of convenience" may not be affected where what separates the parties is a difficult question of law.

23. I recognise that this case does not fall into that class of case of which Whitford J. spoke in Parnass/Pelly Ltd. v. Hodges⁽²⁾. The grant of interlocutory relief will not be effective finally to determine the proceedings. Consolidation of the two actions and a speedy trial has already been ordered at the instance of the defendants. But the effect of an interlocutory injunction being granted will be attended by extreme consequences to the appellants firstly since the trade is one in which business reputation counts for much and the respondent has shown itself as not slow to publicise the grant to it of interlocutory relief and secondly since an interlocutory injunction may well effect sales of the appellants !'hard ware" in addition to the cartridges under attack. It is then scarcely "one of those cases where one can perhaps say "Well" so long as there is an arguable case, that is good enough for the grant of interlocutory relief". As did Whitford J. in Parnass/Pelly Ltd., ⁽²⁾ I feel I must say "the plaintiffs have got to do somewhat better than that."

24. In N.W.L. Ltd. v. Woods⁽³⁾ Section 17(2) of the Trade Union and Labour Relations Act which declared "for the avoidance of doubt" that where "the party against whom an interlocutory injunction is sought claims that he acted in contemplation or furthermore of a trade dispute, the Court shall, in exercising its discretion whether or not to grant an injunction have regard to the likelihood of that party's succeeding at the trial ..." was considered. Of this Section Lord Diplock had this to say at page 1305.

"I turn next to the effect of section 17(2) upon applications for interlocutory injunctions in cases of this kind. The nature and goals of industrial action, the virtual immunity from liability for tort conferred upon trade unions by section 14, and the immunity from liability for the tort of wrongfully inducing breaches of contract conferred upon all persons by section 13 where this is done in connection with a trade dispute, are three factors which, in combination would make the balance of convenience come down heavily in favour of granting an interlocutory injunction if the usual criteria were alone applied.

In the normal case of threatened industrial action against an employer, the damage that he will sustain if the action is carried out is likely to be large, difficult to assess in money and may well be irreparable. Furthermore damage is likely to be caused to customers of the employer's business who are not parties to the action, and to the public at large. On the other hand the defendant is not the trade union but an individual officer of the union who, although he is acting on its behalf, can be sued in his personal capacity only. In that personal capacity he will suffer virtually no damage if the injunction is granted, whereas if it is not granted and the action against him ultimately succeeds it is most improbable that damages on the scale that are likely to be awarded against him will prove to be recoverable from him. Again, to grant the injunction will maintain the status quo until the trial; and this too is a factor which in evenly balanced cases generally operates in favour of granting an interlocutory injunction. So on the face of the proceedings in an action of this kind the balance of convenience as to the grant of an interlocutory injunction would appear to be heavily weighted in favour of the employer.

To take this view, however, would be to blind oneself to the practical realities."

and again

"Subsection (2) of section 17 which is said to be passed 'for the avoidance of doubt' and does not apply to Scotland, appears to me to be intended as a reminder addressed by Parliament to English judges, that where industrial action is threatened that is prima facie tortuous because it induces a breach of contract they should, in exercising their discretion whether or not to grant an interlocutory injunction, put into the balance of convenience in favour of the defendant those contervailing practical realities and, in particular, that the grant of an injunction is tantamount to giving final judgment against the defendant."

Again at page 1306/7 he had this to say :

"Cases of this kind are exceptional, but when they do occur they bring into the balance of convenience an important, additional element. In assessing whether what is compendiously called the balance of convenience lies in granting or refusing interlocutory injunctions in actions between parties of undoubted solvency the judge is engaged in weighing the respective risks that injustice may result from his deciding one way rather than the other at a stage when the evidence is incomplete. On the one hand there is the risk that in the interlocutory injunction is refused but the plaintiff succeeds in establishing at the trial his legal right for the protection of which the injunction had been sought he may in the meantime have suffered harm and inconvenience for which an award of money can provide no adequate recompense. On the other hand there is the risk that if the interlocutory injunction is granted but the plaintiff fails at the trial, the defendant may in the meantime have suffered harm and inconvenience which is similarly irrecompensable. The nature and degree of harm and inconvenience that are likely to be sustained in these two events by the defendant and the plaintiff respectively in consequence of the grant or the refusal of the injunction are generally sufficient disproportionate to bring down, by themselves, the balance on one side or the other; and this is what I understand to be the thrust of the decision of  this House in American Cyanamid Co. v. Ethicon Ltd.⁽¹⁾ Where, however, the grant or refusal of the interlocutory injunction will have the practical effect of putting an end to the action because the harm that will have been already caused to the losing party by its grant or its refusal is complete and of a kind for which money cannot constitute any worthwhile recompense, the degree of likelihood that the plaintiff would have succeeded in establishing his right to an injunction if the action had gone to trial, is a factor to be brought into the balance by the judge in weighing the risks that injustice may result from his deciding the application one way rather than the other."

25. This as I have indicated is not a case where the granting of an interlocutory injunction will have the practical effect of putting an end to the action but it may well cause financial disaster to the defendants. As Cons J.A. pointed out financial disaster to the plaintiffs is unlikely.

26. I do not wish to go into the question of the ultimate likelihood of success in any detail. Suffice it to say that I have grave doubts as to where success will ultimately lie. There are however a number of hurdles which the respondents will have to surmount. As was said by Lord Hailsham in L.B. Plastics Ltd. v. Swish Products Ltd. at page 629⁽⁶⁾ :

"Of course it is trite law that there is no copyright in ideas and it may be that if all the respondents were shown to have copied from the appellants was the idea .. this would have been a sound enough conclusion ... What the respondents copied was no mere general idea. It was, to quote the respondent's own language to 'follow the pattern' on principle 'in part or in whole' with minor changes to the design."

27. As I see it what the appellants did was not to copy not the literary work in the R.O.M. but the general effect of what appeared on the screen as a consequence of the interplay between the product of the R.O.M. and the actions of the player.

28. Megarry V.C. in Foley v. Ellott⁽⁴⁾ observed at page 434 :

"The essence of a reproduction ... is that the reproduction should be some copy of or representation of the original. I do not see how anyone looking at the knitted garment could then say 'Well that is a copy of or a reproduction of the words and numerals to be found in the knitting guide' ".

Adopting this I do not see how anyone looking at the game of either of the defendants could say "That is a reproduction of the numerals fed into in the plaintiff's R.O.M." rather one would say

"The appellants have achieved the same effect by means of different "hard ware" and different R.O.M.s".

The appellants' R.O.M.s were, we are told, themselves original work. They were, as I understand it, calculated to achieve the same effect by different means. To paraphrase the words of Buckley L.J. in Catnic Components Ltd. v. Hill & Smith Ltd.⁽⁵⁾:

"What is protected is the skill and labour devoted to making the literary work itself." (in our case the plaintiff's R.O.M.) "not the skill and labour devoted to developing some idea or invention communicated by the literary work."

It seems to me that it may well be found that the respondents have taken the latter and not the former. In the United States of America "audio visual works" are expressly protected. The term is defined in the American legislation in a manner which would embrace the plaintiff's game. In Atari Inc. v. North American Phillips⁽⁷⁾it was conceded that Atari had copyright in the game; that is not conceded before us. It may well be that legislative intervention would be necessary to give to the plaintiffs the protection they claim. I consider that the doubts I have as to the strength of the plaintiff's case are a factor to be taken into consideration when determining on the balance of convenience whether an interlocutory injunction should be granted and they coupled with the factors mentioned above and by Cons J.A. are sufficient to compel me to the belief that it would be wrong to grant one.

(1)    (1975) A.C. 396.

(2)    (1982) F.S.R. 329.

(3)     (1979) 1 W.L.R. 1294.

(1)     (1975) A.C. 396.

(6)    (1979) R.P.C. 551 at 629.

(4)    (1982) R.P.C.

(5)    (1979) F.S.R. at page 627.

(7)    (1982) United States Court of Appeal for the 7th Circuit.

Power, J. :

29. In the original actions in this matter the respondents are contending that the appellants are making and selling video games which are an infringement of the copyright in games of which they are the licensees. In each appeal the 3 respondents are the same and can, as they are allied companies, be treated, for all practical purposes as one entity.

30. There were five appellants in each appeal and they also can, for practical purposes, be treated as one entity as each set consists of a company and its directors. I will refer to the appellants in C.A. 117 as the first appellants and the appellants in C.A. 118 as the second appellants. In each action the respondents applied for, and were granted, an interlocutory injunction restraining the appellants from manufacturing and selling their video games. The first appellants' game is "Crazy Chewy" and the second appellants' game is "Nibble Man". The respondent's game, "Pac-Man", originally known as "Puck Man", was devised by Namco, a Japanese company, and was originally a coin-operated machine. This machine was first released in early 1980 and was introduced into H.K. in mid 1980. On 4th November 1980 Namco assigned to Midway Manufacturing Co., an American company, its copyright in "Pac-Man" for the United States. Midway changed the name from "Puck Man" to "Pac-Man" and launched the coin-operated game onto the market in North America. In April of 1981 the respondents obtained from Namco America Inc. an exclusive sub-licence to exploit the copyrights and trade-marks in respect of home video games for "Pac-Man" throughout the world.

31. No issue was taken as to the validity of this licence before the learned trial judge and no question in that regard can properly be raised in this hearing.

32. The design work on the "Crazy Chewy" game was completed by 16th June 1981 and the programming work was completed by mid October 1981. Sales of this game started in November 1981. The original name of the game was "Crazy Moonie" but it was changed in February 1982 to "Crazy Chewy".

33. The "Nibble Man" game was first marketed in Hong Kong in April 1982.

34. "Pac-Man", in the home video version, was first marketed in the U.S.A. in March 1982 and in Hong Kong in April 1982. It is clear, from the dates on which the games came onto the market, that the appellants did not cony the respondents' home video game. What is alleged is that both appellants copied the coin-operated game.

35. The video games are played by inserting a cassette, which contains the ROM (Read Only Memory) into a console which is attached to a television set. The console relays the instructions from the ROM to the set on which an image of the game appears which can then be played by manipulating the controls on the console. It is common ground that the programmes used to instruct the appellants' ROMs are of their own devising and are not copies of the programme used to instruct the respondents' ROM.

36. The respondents contend, and I am satisfied that, for the purposes of their interlocutory application, this contention is established by the affidavits, that the home video game was essentially the same as the coin-operated game and that the only changes were minor ones which had to be made so that it could be adapted to the home video format. That no significant changes were made is stated in the affidavits and, indeed, it is in accord with common sense that a person obtaining a licence to market a version of a successful game would make as few changes as possible.

37. The respondents contend that they, as licensees, are entitled to the same protection of copyright as that to which the owners of the coin-operated game are entitled and that the appellants by copying the coin-operated game and manufacturing and marketing their copies are infringing that copyright.

38. The appellants argue that what has to be determined in the actions is : -

(a) What exactly in the coin-operated game is protected by copyright?

(b) Have the appellants copied that game in a way which was an infringement of copyright.

39. Mr. Young who appeared for the first appellant and Mr. Rogers who appeared for the second appellant contended that, as regards a game, the Copyright Act gives no right to overall protection but gives a bundle of rights in particular features of the game. It was submitted that, when it is alleged that the copyright in a game has been infringed, one must first identify the features of the game to which protection attaches and then look to see whether the corresponding features of the other game do constitute an infringement.

40. Basic to this approach was the provision in s. 46 that no copyright or right in the nature of copyright subsists otherwise than by virtue of the act. Mr. Young pointed out that the act only protects the skill and labour of someone who produces a work within the meaning of the act.

41. He submitted, citing A.J. Caley & Son Ltd. v. G. Garnett & Sons Ltd.⁽¹⁾, that there was no copyright in the idea of a game however original and that this case showed that what was protected was the form, whether it be for the rules or the board, in which the originator expressed the idea. The headnote it is true says that there is no copyright in the idea of a game. It must be remember however that what the court was dealing with there was "a simple game" and that the only question being dealt with was whether the rules of the defendant's game infringed the copyright of the plaintiff in his rules. Whether the expression of the totality- of the ideas, which are the foundation of a complex game, might be protected was never canvassed. Indeed before the invention of video games the totality of ideas going to make up a complex game could not be expressed except through the rules, the board, the counters, etc. There could be no expression of the totality of the ideas behind the game such as can now be programmed into a cassette and shown on a video screen.

42. Mr. Young then dealt with the elements of "Pac-Man" which, in his submission, might be protected by copyright. Given that his approach was correct he appeared to me to be in a position strongly to contend, with regard to everything except literary work, that no arguable case could be made out as to infringement. It was however the thrust of the respondents' argument that it was the literary work in their game which was protected.

43. Having seen the games in operation I am satisfied that the games of the appellants are strikingly similar to those of the respondents and are, in essence, the same game. I do not intend to canvass the similarities and dissimilarities other than to say that, in my view, when an assessment such as this is being made, it is to the similarities, which were numerous and striking, that one must look rather than to the dissimilarities.

44. Mr. Lightman, who appeared for the respondents conceded that copyright does not protect the basic idea of a game but contended that the respondents were entitled to copyright in the idea of the game as expressed. He said that the basic idea behind "Pac-Man" was that of a maze-chase game and that this was taken and developed by applying to it a series of ingenious and original interlocking ideas and that the end development was expressed by incorporating it into a ROM capable of producing the image of the game, i.e. its totality, on a video screen. He submitted that the approach to be adopted was that indicated both in Laddie on Copyright and by Lord Hailsham in L.B. (Plastics) Limited v. Swish Products Limited⁽²⁾ when he said, the underlining is mine, at 629 -

"First, as I have said, they seem to have been influenced by their mistaken belief that the judgment of the trial judge rested solely on inference based on the inspection of similarities and dissimilarities. But generally they seem to have been led into error by two independent but closely related chains of reasoning of their own. The first is the belief that, subject to the second chain, all the respondents were shown to have "adopted" was the appellants' "concept" or "idea", and that this was not copyright. Of course, it is trite law that there is no copyright in ideas, and it may be that if all the respondents were shown to have copied from the appellants was the idea of some sort of external latching of the moulded corner pieces and clips to the extrusions this would have been a sound enough conclusion. But, of course, as the late Professor Joad used to observe, it all depends on what you mean by "ideas". What the respondents in fact copied from the appellants was no mere general idea. It was, to quote the respondents' own language to "follow the Pattern" or principle "in part or in whole" with "minor changes" to the design, with the same choice of principal members interfitting in the same way to the same critical dimensions, and even incor porating such a trivial element as the reverse countersink, and then to countercheck their work by superimposing their own drawings on the appellants' to make sure that they had made no mistake."

45. Mr. Lightman argued that the interlocking complex of ideas, which is programmed into the ROM and the image of which appears on the screen, was protected. He submitted that the Copyright Act was designed to protect the skill and labour that went into such a development and that it was protected once it was shown that it had been reduced to a material form. He submitted that the maker had reduced the ideas to a material form both in the ROM and in the image and that each, for the purposes of the act, must be regarded as literary works. He argued that when a person by copying the game as shown on the video screen or, as was suggested in the present case, on the screen of the coin-operated game, devised a ROM which produced a colourable imitation of the original game that both the ROM and the image it produced infringed the copyright of the owner of the original game. He submitted that the ROM of the appellants, although expressed in a "language" different from that in which the owner's ROM was expressed, was nonetheless an infringing reproduction of the owner's ROM because it was a "translation" of it achieved by turning the image produced by the owner's ROM back into computer language.

46. He submitted that the image itself infringed because it was a literary work which, by copying, reproduced the essential feactures of another literary work i.e. the owner's image. It was not really contended before us that the ROM was not a literary work. Mr. Young conceded that it was, for the purposes of these hearings, and Mr. Rogers while making no concession as to the ROM itself did concede that the programme which was fed into the ROM was a literary work.

47. The basic argument of the appellants as I have indicated was that the copyright both in the ROM and the programme could, as the law stands, be no different from the copyright that attaches to any game and that once the copyrightable features were isolated it would be seen that none had been infringed by the appellants. The appellants went further and said that whatever copyright might be in the original ROM would not be infringed by an entirely differently "worded" ROM because there was no copying but, at most, a use of the ideas in the image produced by the original ROM.

48. As to the suggestion that the appellants' image was an infringement it was argued that the respondents' image was neither a literary work nor a reproduction in a material form in accordance with the meaning of those terms as they are used in the Copyright Act.

49. It appears to me that in this action the respondents will have to establish that :-

50. It was common ground that there is no direct authority on these questions and that when the Copyright Act was passed it could have had no such matters in its contemplation as video games had not yet been devised.

51. Mr. Lightman submitted that the law must, within proper bounds, adapt to meet the challenge of the times. This is undoubtedly so, but before the Courts embark upon such adaptation they must be quite satisfied that it is, indeed,, a matter for them and not a matter which lies with sole purview of the legislature. Difficulties both of interpretation and application are likely to arise if the courts go beyond their proper function in matters such as this and, perhaps because of a conviction that the broad dictates of justice require it, try to apply to apply the legislation of another age to the complex and totally new technology of today.

52. In this regard the appellants, of course, contend that the legislation has no application to a video game as such and seek to demonstrate the validity of their argument by a strict of the act couched, as it is, in terms which relate to the technology of the decade in which it was enacted. They submit that it has no application to an "audio visual work" as such.

53. Counsel for all parties referred to the case of Atari Inc.v. North American Philips Consumer Electronics Corporation which decided in March 1982 by the United States Court of Appeals for the Seventh Circuit. In any consideration of this case it must be constantly borne in mind that the American legislation, unlike the Copyright Act, provides that there can be copyright in "an audio-visual" work and that it was conceded in that action that the plaintiffs had valid copyright in their audio-visual work namely "Pac-Man". The Court was concerned only with whether there was "substantial similarity" between the 2 games. The case is, therefore, of no assistance in the decision as to whether the total concept of a game, once it is encapsulated in an ROM, is protected by the Copyright Act which is the real question in the present litigation.

54. The respondents have, in my view, advanced persuasive arguments in support of their contention that the act does have application to a video game. As to (ii)(a), above, the respondents have, I am satisfied, shown that there is a serious question to be tried as to which they have a real prospect of succeeding. In that regard they have, I am satisfied, a good arguable case. They are perhaps on less certain ground as regards (ii)(b). As to the fundamental issue contained in (i) I am also satisfied that the respondents have established that there is a serious question to be tried. In this regard they have, in my view, a good arguable case but not more than that. I would not characterize it as a strong arguable case.

55. Does the balance of convenience fall on the side of issuing an injunction. It is true that this is not a case such as was dealt with by the House of Lords in N.W.L. Ltd. v. Woods⁽3) where the grant or refusal of the interlocutory injunction would have had have the practical effect of putting an end to the action. I am satisfied, however, because this is a matter which, it may eventually be decided, can only be dealt with by legislation, that this is a case, as was Parnass Pelly Ltd. v. Hodges⁽⁴⁾, where it would not be proper for the Court simply to say, "Well so long as there is an arguable case, that is good enough for the grant o￡ interlocutory relief"

56. In American Chanamid v. Ethicon Ltd. ⁽⁵⁾, Lord Diplock, at p. 408, said -

"As to that, the governing principle is that the court should first consider whether, if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant's continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff's claim appeared to be at that stage. If, on the other hand, damages would not provide an adequate remedy for the plaintiff in the event of his succeeding at the trial. the court should then consider whether, on the contrary hypothesis that the defendant were to succeed at the trial in establishing his right to do that which was sought to be enjoined, he would be adequately compensated under the plaintiff's undertaking as to damages for the loss he would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction.

It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or to both, that the question of balance of convenience arises."

57. In the present case given the difficulty of judging loss of reputation and loss of sales of other components, it would, I am satisfied, be extremely difficult to calculate damages both for the respondents if an injunction is refused and they are eventually successful and for the appellants if an injunction is granted and they are eventually successful.

58. Indeed upon the basis of the evidence presently before the court I consider that the incalculable damage likely to be suffered by the respondents if an injunction is granted and they are eventually successful may well be very significantly greater than that which would be suffered by the respondents if an injunction is refused and they are eventually successful. I am conscious that, when assessing the balance of convenience, one must bear in mind the possibility, suggested by the respondents, that the appellants might not be able to meet damages awarded. Having made these preliminary observations I do not consider that I need say more in this regard than that I have had the opportunity to read the judgment of my learned brother Cons and am in respectful agreement therewith. I am satisfied that the balance, in all the circumstances of this case, has not been tipped sufficiently to warrant the grant of an interlocutory injunction.

59. I also am satisfied as to passing off that the evidence was not sufficient to warrant the grant of an interlocutory injunction on that ground. The anneals must be allowed.

(1)    (1937) Copyright Cases 99

(2)    (1979) R.P.C. 551

(3)    3 ALL E.R. 614

(4)    (1982) Fleet Street Reports 329

(5)    (1975) A.C. 396

Representation:

Anthony Rogers (M/S Robert W.H. Wang & Co.) for Appellants in C.A. 117/82.

David Young, Q.C., and Anthony Rogers (Woo, Kwan, Lee & Lo) for Appellants in C.A. 118/82.

Gavin Lightman,Q.C.,Arjan Sakhrani, Q.C., and Peter Garland (Deacons) for Respondents in both Appeals.