Intellectual Property Rights

Sega Enterprises Ltd. v. Accolade, Inc.

977 F.2d 1510 (9th Cir. 1992)

Citation: 977 F.2d 1510 (9th Cir. 1992)
Court: U.S. Court of Appeals for the Ninth Circuit
Date: 20 October 1992
Bench: Canby, Reinhardt and Leavy, Circuit Judges

Facts

Sega manufactured the Genesis video-game console and sold games compatible with it.
Accolade was an independent game developer that wanted to produce its own Genesis-compatible games.
Sega did not publicly provide the technical information necessary to make compatible programs.
Accolade therefore disassembled Sega’s object code to understand the functional interface requirements.
It made intermediate copies of Sega’s software during this reverse-engineering process.
Accolade then wrote its own game code and released games that operated on the Genesis console.
Sega introduced a security system that displayed its trademark when compatible software was loaded.
Sega sued for copyright infringement and obtained a preliminary injunction.
Accolade argued that its intermediate copying was fair use because reverse engineering was the only practical way to discover unprotected functional information.

Issue

Whether intermediate copying of an entire computer program during reverse engineering constitutes infringement.
Whether reverse engineering undertaken to achieve compatibility can be fair use.
Whether copyright can be used to prevent access to unprotected functional elements.

Rule

Computer object code may be protected by copyright.
Copyright does not protect:
ideas;
functional principles;
methods of operation;
interface information dictated by compatibility.
Intermediate copying may be fair use where:
it is necessary to access unprotected elements;
no reasonable alternative method exists;
the ultimate product does not copy protected expression.
Commercial purpose does not automatically defeat fair use.
The four statutory fair-use factors must be considered in light of copyright’s purpose of promoting creative progress.

Application

Accolade had to examine Sega’s object code because object code is not directly readable by humans.
Disassembly necessarily creates copies, but those copies were an intermediate analytical step.
Sega had not made the relevant interface information publicly available.
Accolade therefore had no practical method of learning the compatibility requirements without reverse engineering.
The purpose was not to distribute Sega’s code or create a competing copy of Sega’s games.
Accolade wanted to write new and independently created games that could operate on the Genesis platform.
Although Accolade acted commercially, its use increased the availability of creative works and competition in the market.
Computer programs contain both expressive and strongly functional elements.
Where copying is necessary to discover unprotected functional information, the second fair-use factor favours broader access.
Accolade copied the entire program during analysis, but complete copying was reasonably necessary to locate the relevant interface requirements.
The amount copied must be evaluated according to the legitimate purpose of the use.
The final Accolade games did not contain Sega’s protected code.
They competed as new games rather than as substitutes for Sega’s particular programs.
Any market loss resulted primarily from lawful competition, not from exploitation of Sega’s expression.
Allowing Sega to prohibit all reverse engineering would effectively grant control over unprotected compatibility information and the market for Genesis-compatible games.

Conclusion

The Ninth Circuit held that Accolade’s intermediate copying during reverse engineering was fair use.
Copyright could not be used to monopolise functional interface information.
The preliminary injunction against Accolade was reversed.
Use this case for: intermediate copying of software may be fair use when it is reasonably necessary to discover unprotected functional elements and create an independently written compatible program.