The Internet is full of opinions. I have been reading recently here and there about reverse engineering. I've seen people write that it is illegal. Others say the opposite. Lawyers don't speak or write that way. Nothing in the law is as simple as that, or very little, anyway, which is why they have to attend law school for years before they can practice law instead of just reading a book or surfing the Internet. That is also why, if you are in a situation where the answer to that question matters, you need a lawyer, so he or she can look at your facts and your situation and then analyze how it fits in with the statutes and case law. That analysis is a large part of what you are paying for. Doing that yourself usually leads to mistakes, because it is simply too complex for a layman to do reliably on his own. Even lawyers generally hire other lawyers when it is their own personal situation at stake. And it's simply a fact that lawyers themselves, asked the same question, won't always agree. Even judges disagree, which is why some decisions will have dissenting opinions attached to them.
General principles, however, can be grasped, as opposed to figuring out what applies to a specific situation, and so here is the section of copyright law that deals with reverse engineering, Section 117 of the Copyright Act. Chilling Effects Clearing House has a FAQ that explains the basics on reverse engineering, including some vital information about the DMCA. EFF has a collection on emulation, including the Bowers v. Baystate decision, regarding EULAs that forbid reverse engineering, as well as a DMCA collection and a collection on digital rights management. Sega v. Accolade is the case most often referred to. Here's a bit about the case from the FAQ: In Sega v. Accolade, the case most often referred to discussing reverse engineering of computer software, the appellate court determined that reverse engineering is a fair use when "no alternative means of gaining an understanding of those ideas and functional concepts exists." The court considered Accolade's intermediate copying of parts of Sega's video game console during the reverse engineering process in order to make compatible games of minimal significance to the rights in Sega's copyrighted computer code. The court held that forbidding reverse engineering in this context would defeat "the fundamental purpose of the Copyright Act--to encourage the production of original works by protecting the expressive elements of those works while leaving the ideas, facts, and functional concepts in the public domain for others to build on." But there's another famous case about reverse engineering, Sony v. Connectix, which I thought worth adding to our collection, but keep in mind it applies to the copyright analysis, not DMCA claims involving the circumvention of technological protection systems. People write entire chapters on that subject. Here is an early case that explains it somewhat, RealNetworks v. Streambox. And here's Ernie Miller's Corante on the Apple-Real dispute. If you read all this and then say, But which is it? Can I or can't I? The answer is, for any particular problem, ask your lawyer. And be aware that this is an area of the law that is in flux, so [s]he won't know for sure sometimes either until you go to court and find out. The law is like a river, not a pond. It moves and changes as it goes, with input here and there along the way to refresh and complicate the mix. By that I mean, sometimes the best you can do when seeking an answer to a legal question is get a probable answer, with footnotes and exceptions. The legislature passes a law. It enters the river at that point, but further downstream courts begin the process of interpreting that law as cases come up. How does the new law apply in such and such a situation? How about a different situation? A court can decide many things about that law, adding on a lot of refinements, not only as to what the legislature meant, but even having the power to decide if the law itself is harmonious with other laws, including the US Constitution, as well as with prior cases. If it decides the law is not lawful, it goes back to the legislature to either rewrite it better or give up on that issue. Where you are in that river is very much part of the legal analysis of any case. Unless your fact situation is identical to that of the parties in a prior decided case, the case may not help you at all. For that matter, it might only apply in one area of the country, where you aren't residing or doing business. The case might have been interpreted away, so to speak, by a court, so it isn't useful to you or anyone now after all. A new case may come along that completely changes the value or applicability of the case you found. Maybe your case was overturned on appeal. Maybe you are the first case to be used in any court to figure out what a new law means. If so, I wish you the best, because absolutely nobody can tell you what will happen for sure, and if he or she is any good, they will tell you that. As I say, it's very complex, which is why there is so much training involved, not only in law school, but on the job. So just because you find a good case, it doesn't mean a thing on its own. Currently, there are efforts to expand copyright law, particularly the DMCA, and the SCO cases are, I believe, part of that effort. And just because something never stood up in court before doesn't mean it never could. Anyway, that's what lawyers are for, to look at a specific situation and try to see where you fit in the river's flow so as to try to perceive where you stand and what is likely to happen if you go to court. The GPL is different. It's easier to know what the license is intended to mean, because those who wrote it are alive and they explain what they intend it to mean as needed. They already have written a great deal of explanatory information. They even run seminars so you can learn all about it. So there is less confusion there. It's a license, not a statute, so the licensor sets the terms. One of the precious freedoms guaranteed by the GPL is that you can look at the code, copy it and modify it, so you don't need to have aggravating conversations about whether or not you are allowed to write something or copy it or modify or distribute it. All the disputes have to do with violations of the terms of the license, not whether you can copy, modify and distribute. That is, under normal circumstances, when you aren't dealing with entities desiring to destroy the GPL or those wishing to make a buck from threatening phony lawsuits. For some problems in life, there is no "quick and dirty" legal remedy; deliberate liars and other evil types are not so easy to control, even by the law, when they set out to game the system. It takes time and it certainly can be aggravating. But if it's a GPL question, there is a GPL answer that normal, reasonable people understand and apply without ever having to set foot in any courtroom. But once you step in to the proprietary software sphere, the sky's the limit, as far as how elaborate the questions and answers become. With all those warnings and disclaimers, here is the U.S. 9th Circuit Court of Appeals' decision in the Sony v. Connectix case, which will give you an idea of how this court viewed the matter in this circumstance. It illustrates my point, because here Sony's lawyers thought they could rely on some cases they found, including the Sega case, only to find out that the court disagreed, deciding to distinguish the facts of the new situation from those earlier rulings. The law isn't precise and predictable, like conjugating Latin verbs. It's alive and constantly changing. That's one of the things that makes it so interesting.
*****************************
SONY COMPUTER ENTERTAINMENT, INC., a Japanese corporation;
SONYCOMPUTER ENTERTAINMENT AMERICA, INC., a Delaware
corporation,
D.C. No.
Plaintiffs-Appellees,
CV-99-00390-CAL
v.
CONNECTIX CORPORATION, a
California corporation,
Defendant-Appellant.
OPINION
No. 99-15852
Appeal from the United States District Court
for the Northern District of California
Charles A. Legge, District Judge, Presiding
Argued and Submitted
September 14, 1999--San Francisco, California
Filed February 10, 2000
Before: Herbert Y. C. Choy, William C. Canby, Jr. and
Barry G. Silverman, Circuit Judges.
Opinion by Judge Canby
_________________________________________
COUNSEL
William S. Coats, III, Howrey & Simon, Menlo Park, Califor-
nia, for the defendant-appellant.
Ezra Hendon, Crosby, Heafey, Roach & May, Oakland, Cali-
fornia; James G. Gilliland, Jr., Townsend and Townsend and
Crew, San Francisco, California, for the plaintiffs-appellees.
Annette L. Hurst, Howard, Rice, Nemerovski, Canady, Falk
& Rabkin, San Francisco, California, for amicus Institute for
Electrical and Electronics Engineers - USA. Peter M. C.
Choy, American Committee for Interoperable Systems, Palo
Alto, California, for amici American Committee for
Interoperable Systems and Computer & Communications
Industry Association. Mark Lemley, University of Texas at
Austin, Austin, Texas, for amicus Law Professors. Steven J.
Metalitz, Smith & Metalitz, Washington, D.C., for amici Nin-
tendo of America, Inc., Sega of America, Inc., and 3dfx Inter-
active.
____________________________________________
OPINION
CANBY, Circuit Judge:
In this case we are called upon once again to apply the principles of copyright
law to computers and their software, to determine what must be protected as
expression and what must be made accessible to the public as function. Sony
Computer Entertainment, Inc., which brought this copyright
infringement action, produces and markets the Sony PlayStation console,
a small computer with hand controls that connects to a television console and
plays games that are inserted into the PlayStation on compact discs (CDs). Sony
owns the copyright on the basic input-output system or BIOS, which is the
software program that operates its PlayStation. Sony has
asserted no patent rights in this proceeding.
The defendant is the Connectix Corporation, which makes and sells a software
program called "Virtual Game Station." The purpose of the Virtual Game Station
is to emulate on a regular computer the functioning of the Sony PlayStation console,
so that computer owners who buy the Virtual Game Station software can play
Sony PlayStation games on their computers. The Virtual Game Station does not
contain any of Sony's copyrighted material. In the process of producing the
Virtual Game Station, however, Connectix repeatedly copied Sony's copyrighted
BIOS during a process of "reverse engineering" that Connectix conducted in order
to find out how the Sony PlayStation worked. Sony claimed infringement and sought
a preliminary injunction. The district court concluded that Sony was likely to
succeed on its infringement claim because Connectix's "intermediate copying "
was not a protected "fair use" under 17 U.S.C. S 107. The district court enjoined
Connectix from selling the Virtual Game Station or from copying or using the Sony
BIOS code in the development of other Virtual Game Station products.
Connectix now appeals. We reverse and remand with instructions to dissolve the
injunction. The intermediate copies made and used by Connectix during the course
of its reverse engineering of the Sony BIOS were protected fair use, necessary to
permit Connectix to make its non-infringing Virtual Game Station function with
PlayStation games. Any other intermediate copies made by Connectix do not
support injunctive relief, even if those copies were infringing.
The district court also found that Sony is likely to prevail on its claim that
Connectix's sale of the Virtual Game Station program tarnishes the Sony
PlayStation mark under 15 U.S.C. S 1125. We reverse that ruling as well.
I. Background
A. The products
Sony is the developer, manufacturer and distributor of both the Sony PlayStation
and Sony PlayStation games. Sony also licenses other companies to make games
that can play on the PlayStation. The PlayStation system consists of a console
(essentially a mini-computer), controllers, and software that produce a three-
dimensional game for play on a television set. The PlayStation games are CDs
that load into the top of the console. The PlayStation console contains both
(1) hardware components and (2) software known as firmware that is written
onto a read-only memory (ROM) chip. The firmware is the Sony BIOS. Sony has
a copyright on the BIOS. It has claimed no patent relevant to this proceeding on
any component of the PlayStation. PlayStation is a registered trademark
of Sony.
Connectix's Virtual Game Station is software that "emulates" the functioning of
the PlayStation console. That is, a consumer can load the Virtual Game Station
software onto a computer, load a PlayStation game into the computer's CD-ROM
drive, and play the PlayStation game. The Virtual Game Station software thus
emulates both the hardware and firmware components of the Sony console.
The Virtual Game Station does not play PlayStation games as well as Sony's
PlayStation does. At the time of the injunction, Connectix had marketed its
Virtual Game Station for Macintosh computer systems but had not yet completed
Virtual Game Station software for Windows.
B. Reverse engineering
Copyrighted software ordinarily contains both copyrighted and unprotected or
functional elements. Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510, 1520
(9th Cir. 1993) (amended opinion); see 17 U.S.C. S 102(b) (Copyright protection
does not extend to any "idea, procedure, process, system, method of operation,
concept, principle, or discovery" embodied in the copyrighted work.). Software
engineers designing a product that must be compatible with a copyrighted
product frequently must "reverse engineer" the copyrighted product to gain
access to the functional elements of the copyrighted product. See Andrew
Johnson-Laird, Software Reverse Engineering in the Real World, 19 U. Dayton
L. Rev. 843, 845-46 (1994).
Reverse engineering encompasses several methods of gaining access to the
functional elements of a software program. They include: (1) reading about
the program; (2) observing "the program in operation by using it on a computer;"
(3) performing a "static examination of the individual computer instructions
contained within the program; " and (4) performing a "dynamic examination
of the individual computer instructions as the program is being run on a
computer." Id. at 846. Method (1) is the least effective, because individual
software manuals often misdescribe the real product. See id. It would be
particularly ineffective in this case because Sony does not make such
information available about its PlayStation. Methods (2), (3), and (4) require
that the person seeking access load the target program on to a computer,
an operation that necessarily involves copying the copyrighted program into
the computer's random access memory or RAM.
Method (2), observation of a program, can take several forms. The functional
elements of some software programs, for example word processing programs,
spreadsheets, and video game displays may be discernible by observation of
the computer screen. See Sega, 977 F.2d at 1520. Of course, the
reverse engineer in such a situation is not observing the object code
itself,
only the external visual expression of this code's operation on the computer.
Here, the software program is copied each time the engineer boots up the
computer, and the computer copies the program into RAM. Other forms of
observation are more intrusive. Operations systems, system interface procedures,
and other programs like the Sony BIOS are not visible to the user when they
are operating. See id. One method of "observing" the operation of these programs
is to run the program in an emulated environment. In the case of the Sony BIOS,
this meant operating the BIOS on a computer with software that simulated the
operation of the PlayStation hardware; operation of the program, in conjunction
with another program known as a "debugger," permitted the engineers to observe
the signals sent between the BIOS and other programs on the computer. This
latter method required copying the Sony BIOS from a chip in the PlayStation
onto the computer. The Sony BIOS was copied again each time the engineers
booted up their computer and the computer copied the program into RAM.
All of this copying was intermediate; that is, none of the Sony copyrighted
material was copied into, or appeared in, Connectix's final
product, the Virtual Game Station.
Methods (3) and (4) constitute "disassembly" of object code into source
code.
In each case, engineers use a program known as a "dissassembler" to
translate the ones and zeros of binary machine-readable object code
into the words and mathematical symbols of source code. This translated
source code is similar to the source code used originally to create the
object code
but lacks the annotations drafted by the authors of the program that help
explain the functioning of the source code. In a static examination of the
computer instructions, method (3), the engineer disassembles the object
code of all or part of the program. The program must generally be copied
one or more times to perform disassembly. In a dynamic examination of
the computer instructions, method (4), the engineer uses the disassembler
program to disassemble parts of the program, one instruction at a time,
while the program is running. This method also requires copying the program
and, depending on the number of times this operation is performed, may
require additional copying of the program into RAM every time the computer
is booted up.
C. Connectix's reverse engineering of the Sony BIOS
Connectix began developing the Virtual Game Station for Macintosh on
about July 1, 1998. In order to develop a PlayStation emulator, Connectix
needed to emulate both the PlayStation hardware and the firmware (the Sony BIOS).
Connectix first decided to emulate the PlayStation's hardware. In order to
do so, Connectix engineers purchased a Sony PlayStation console and extracted
the Sony BIOS from a chip inside the console. Connectix engineers then copied
the Sony BIOS into the RAM of their computers and observed the
functioning of the Sony BIOS in conjunction with the Virtual Game Station
hardware emulation software as that hardware emulation software was
being developed by Connectix. The engineers observed the operation of
the Sony BIOS through use of a debugging program that permitted the
engineers to observe the signals sent between the BIOS and the hardware
emulation software. During this process, Connectix engineers made
additional copies of the Sony BIOS every time they booted up their computer
and the Sony BIOS was loaded into RAM.
Once they had developed the hardware emulation software, Connectix
engineers also used the Sony BIOS to "debug" the emulation software. In
doing so, they repeatedly copied and disassembled discrete portions of the
Sony BIOS.
Connectix also used the Sony BIOS to begin development of the Virtual
Game Station for Windows. Specifically, they made daily copies to RAM
of the Sony BIOS and used the Sony BIOS to develop certain Windows-specific
systems for the Virtual Game Station for Windows. Although Connectix
had its own BIOS at the time, Connectix engineers used the Sony BIOS
because it contained CD-ROM code that the Connectix BIOS did not contain.
Early in the development process, Connectix engineer Aaron Giles
disassembled a copy of the entire Sony BIOS that he had downloaded
from the Internet. He did so for the purpose of testing a "disassembler"
program he had written. The print-out of the source code was not used
to develop the Virtual Game Station emulator. Connectix engineers initially
used this copy of the Sony BIOS to begin the reverse engineering process,
but abandoned it after realizing that it was a Japanese-language version.
During development of the Virtual Game Station, Connectix contacted Sony
and requested "technical assistance" from Sony to complete the development
of the Virtual Game Station. Connectix and Sony representatives met during
September 1998. Sony declined Connectix's request for assistance.
Connectix completed Virtual Game Station for Macintosh computers in
late December 1998 or early January 1999. Connectix announced its new
product at the MacWorld Expo on January 5, 1999. At MacWorld, Connectix
marketed the Virtual Game Station as a "PlayStation emulator." The materials
stated that the Virtual Game Station permits users to play "their favorite
Playstation games" on a computer "even if you don't yet have a Sony
PlayStation console."
D. Procedural history
On January 27, 1999, Sony filed a complaint alleging copyright infringement
and other causes of action against Connectix. Sony subsequently moved for a
preliminary injunction on the grounds of copyright and trademark infringement.
The district court granted the motion, enjoining Connectix:
(1) from copying or using the Sony BIOS code in the development of the
Virtual Game Station for Windows; and
(2) from selling the Virtual Game Station for Macintosh or the Virtual Game
Station for Windows. Order on Mot. for Prelim. Inj. at 27.
The district court also impounded all Connectix's copies of the Sony BIOS and
all copies of works based upon or incorporating Sony BIOS. Id. at 27-28.
Connectix now appeals from this order.
II. Discussion
[1] To prevail on its motion for injunctive relief, Sony was required to
demonstrate "either a likelihood of success on the merits and the possibility
of irreparable injury or that serious questions going to the merits were raised
and the balance of the hardships tip sharply in its favor." Cadence Design Sys.,
Inc. v. Avant! Corp., 125 F.3d 824, 826 (9th Cir. 1997) (internal quotation
marks and bracket omitted), cert. denied, 523 U.S. 1118 (1998). We reverse
the grant of a preliminary injunction only when "the district court abused
its discretion or based its decision on an erroneous legal standard or on
clearly erroneous findings of fact." Roe v. Anderson, 134 F.3d
1400, 1402 n.1 (9th Cir. 1998) (internal quotation marks omitted), aff'd
on other grounds, sub nom. Saenz v. Roe, 526 U.S. 489 (1999). We review
the scope of injunctive relief for an abuse of discretion. SEC v. Interlink
Data Network of L.A., Inc., 77 F.3d 1201, 1204 (9th Cir. 1996).
Connectix admits that it copied Sony's copyrighted BIOS software in
developing the Virtual Game Station but contends that doing so was protected a
s a fair use under 17 U.S.C. S 107. Connectix also challenges the district court's
conclusion that Sony has established a likelihood that Connectix's Virtual Game
Station tarnishes the PlayStation trademark. We consider each of these claims below.
A. Fair use
The fair use issue arises in the present context because of certain characteristics
of computer software. The object code of a program may be copyrighted as expression,
17 U.S.C. S 102(a), but it also contains ideas and performs functions that are not
entitled to copyright protection. See 17 U.S.C. S 102(b). Object code cannot, however,
be read by humans. The unprotected ideas and functions of the code therefore are
frequently undiscoverable in the absence of investigation and
translation that may require copying the copyrighted material. We conclude that,
under the facts of this case and our precedent, Connectix's intermediate copying
and use of Sony's copyrighted BIOS was a fair use for the purpose of gaining access
to the unprotected elements of Sony's software.
[2] The general framework for analysis of fair use is established by statute, 17
U.S.C. S 107. We have applied this statute and the fair use doctrine to the disassembly of computer software in the case of Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1993) (amended opinion).
Central to our decision today is the rule set forth in Sega:
[W]here disassembly is the only way to gain access
to the ideas and functional elements embodied in a
copyrighted computer program and where there is a
legitimate reason for seeking such access, disassem-
bly is a fair use of the copyrighted work, as a matter
of law.
Id. at 1527-28 (emphasis added).
In Sega , we recognized that intermediate copying could constitute copyright
infringement even when the end product did not itself contain copyrighted material. Id.
at 1518-19. But this copying nonetheless could be protected as a fair use if it was
"necessary " to gain access to the functional elements of the software itself. Id. at
1524-26. We drew this distinction because the Copyright Act protects expression
only, not ideas or the functional aspects of a software program. See id. at 1524
(citing 17 U.S.C. S 102(b)). We also recognized that, in the case of computer
programs, this idea/expression distinction poses "unique problems" because
computer programs are "in essence, utilitarian articles-- articles that accomplish
tasks. As such, they contain many logical, structural, and visual display elements
that are dictated by the function to be performed, by considerations of efficiency,
or by external factors such as compatibility requirements and industry demands."
Id. Thus, the fair use doctrine preserves public access to the ideas and functional
elements embedded in copyrighted computer software programs. This approach
is consistent with the " `ultimate aim [of the Copyright Act], to stimulate artistic
creativity for the general public good.' " Sony Corp. of Am. v. Universal City
Studios, Inc., 464 U.S. 417, 432 (1984) (quoting Twentieth Century Music Corp.
v. Aiken, 422 U.S. 151, 156 (1975)).
We turn then to the statutory fair use factors, as informed by our precedent in Sega.
1. Nature of the copyrighted work
[3] Under our analysis of the second statutory factor, nature of the copyrighted
work, we recognize that "some works are closer to the core of intended copyright
protection than others." Campbell v. Acuff-Rose Music, Inc. , 510 U.S. 569, 586
(1994). Sony's BIOS lies at a distance from the core because it contains unprotected
aspects that cannot be examined without copying. See Sega, 977 F.2d at 1526.
We consequently accord it a "lower degree of protection than more traditional
literary works." Id. As we have applied this standard, Connectix's copying of the
Sony BIOS must have been "necessary" to have been fair use. See id. at 1524-26.
We conclude that it was.
[4] There is no question that the Sony BIOS contains unprotected functional
elements. Nor is it disputed that Connectix could not gain access to these
unprotected functional elements without copying the Sony BIOS. Sony admits that
little technical information about the functionality of the Sony
BIOS is publicly available. The Sony BIOS is an internal operating system
that does not produce a screen display to reflect its functioning. Consequently,
if Connectix was to gain access to the functional elements of the Sony BIOS it
had to be through a form of reverse engineering that required copy-
ing the Sony BIOS onto a computer.
Sony does not dispute this proposition.
[5] The question then becomes whether the methods by which Connectix
reverse-engineered the Sony BIOS were necessary to gain access to the
unprotected functional elements within the program. We conclude that they
were. Connectix employed several methods of reverse engineering
(observation and observation with partial disassembly) each of which
required Connectix to make intermediate copies of copyrighted material.
Neither of these methods renders fair use protection inapplicable. Sega expressly
sanctioned disassembly. See id. at 1527-28. We see no reason to distinguish
observation of copyrighted software in an emulated computer environment.
Both methods require the reverse engineer to copy protected as well as
unprotected elements of the computer program. Because this intermediate
copying is the gravamen of the intermediate infringement claim, see 17 U.S.C.
S 106(1); Sega, 977 F.2d at 1518-19, and both methods of reverse engineering
require it, we find no reason inherent in these methods to prefer one to another
as a matter of copyright law. Connectix presented evidence that it observed the
Sony BIOS in an emulated environment to observe the functional aspects of the
Sony BIOS. When this method of reverse engineering was unsuccessful, Connectix
engineers disassembled discrete portions of the Sony BIOS to view directly the
ideas contained therein. We conclude that intermediate copying in this manner
was "necessary" within the meaning of Sega.
[6] We decline to follow the approach taken by the district court. The district
court did not focus on whether Connectix's copying of the Sony BIOS was
necessary for access to functional elements. Instead, it found that Connectix's
copying and use of the Sony BIOS to develop its own software
exceeded the scope of Sega. See Order at 17 ("[T]hey disassembled Sony's
code not just to study the concepts. They actually used that code in the
development of [their] product."). This rationale is unpersuasive. It is true
that Sega referred to "studying or examining the unprotected aspects of
a copyrighted computer program." 977 F.2d at 1520 (emphasis added). But
in Sega, Accolade's copying, observation and disassembly of Sega's game
cartridges was held to be fair use, even though Accolade "loaded the disassembled
code back into a computer, and experimented to discover the interface specifications
for the Genesis console by modifying the programs and studying the results."
Id. at 1515. Thus, the distinction between "studying" and "use" is unsupported in
Sega. Moreover, reverse engineering is a technically complex, frequently iterative
process. Johnson-Laird, 19 U. Dayton L. Rev. at 843-44. Within the limited context
of a claim of intermediate infringement, we find the semantic distinction between
"studying" and "use" to be artificial, and decline to adopt it for purposes of
determining fair use.
[7] We also reject the argument, urged by Sony, that Connectix infringed the
Sony copyright by repeatedly observing the Sony BIOS in an emulated environment,
thereby making
repeated copies of the Sony BIOS. These intermediate copies could not have been "necessary" under Sega , contends Sony, because Connectix engineers could have disassembled the
entire Sony BIOS first, then written their own Connectix BIOS, and used the Connectix BIOS to develop the Virtual Game Station hardware emulation software. We accept Sony's factual predicate for the limited purpose of this appeal.
Our doing so, however, does not aid Sony.
[8] Sony contends that Connectix's reverse engineering of the Sony BIOS should be considered unnecessary on the rationale that Connectix's decision to observe the Sony BIOS
in an emulated environment required Connectix to make more intermediate copies of the Sony BIOS than if Connectix had performed a complete disassembly of the program. Under this
logic, at least some of the intermediate copies were not necessary within the meaning of Sega. This construction stretches Sega too far. The "necessity" we addressed in Sega was the
necessity of the method, i.e., disassembly, not the necessity of the number of times that method was applied. See 977 F.2d at 1524-26. In any event, the interpretation advanced by Sony
would be a poor criterion for fair use. Most of the intermediate copies of the Sony BIOS were made by Connectix engineers when they booted up their computers and the Sony BIOS was copied into RAM. But if Connectix engineers had left their computers turned on throughout the period during
which they were observing the Sony BIOS in an emulated environment, they would have made far fewer intermediate copies of the Sony BIOS (perhaps as few as one per computer). Even if we were inclined to supervise the engineering solutions of software companies in minute detail, and we are
not, our application of the copyright law would not turn on such a distinction. Such a rule could be easily manipulated. More important, the rule urged by Sony would require that a software engineer, faced with two engineering solutions that each require intermediate copying of protected and unprotected material, often follow the least efficient solution. (In cases in which the solution that required the fewest number of
intermediate copies was also the most efficient, an engineer would pursue it, presumably, without our urging.) This is precisely the kind of "wasted effort that the proscription against the copyright of ideas and facts . . . [is] designed to prevent." Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340,
354 (1991) (internal quotation marks omitted). Such an approach would erect an artificial hurdle in the way of the public's access to the ideas contained within copyrighted software programs. These are "aspects that were expressly denied copyright protection by Congress." Sega, 977 F.2d at 1526
(citing 17 U.S.C. S 102(b)). We decline to erect such a barrier in this case. If Sony wishes to obtain a lawful monopoly on the functional concepts in its software, it must satisfy the
more stringent standards of the patent laws. See Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 160-61 (1989); Sega, 977 F.2d at 1526. This Sony has not done. The
second statutory factor strongly favors Connectix.
2. Amount and substantiality of the portion used
[9] With respect to the third statutory factor, amount and substantiality of the portion used in relation to the copyrighted work as a whole, Connectix disassembled parts of the Sony BIOS and copied the entire Sony BIOS multiple times. This factor therefore weighs against Connectix. But as we con-
cluded in Sega, in a case of intermediate infringement when the final product does not itself contain infringing material, this factor is of "very little weight." Sega, 977 F.2d at 1526-27; see also Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 449-50 (1984) (copying of entire work does not
preclude fair use).
3. Purpose and character of the use
[10] Under the first factor, purpose and character of the use, we inquire into whether Connectix's Virtual Game Station
merely supersedes the objects of the original cre-
ation, or instead adds something new, with a further
purpose or different character, altering the first with
new expression, meaning, or message; it asks, in
other words, whether and to what extent the new
work is "transformative."
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994) (internal quotation marks and citations omitted). As an initial matter, we conclude that the district court applied an erroneous legal standard; the district court held that Connectix's commercial purpose in copying the Sony BIOS gave rise to
a "presumption of unfairness that . . . can be rebutted by the characteristics of a particular commercial use." Order at 14-15 (citing Sega, 977 F.2d at 1522). Since Sega, however, the
Supreme Court has rejected this presumption as applied to the first and fourth factor of the fair use analysis. Acuff-Rose, 510 U.S. at 584, 594 (clarifying Sony, 464 U.S. at 451). Instead,
the fact that Connectix's copying of the Sony BIOS was for a commercial purpose is only a "separate factor that tends to weigh against a finding of fair use." Id. at 585 (internal quota-
tion marks omitted).
[11] We find that Connectix's Virtual Game Station is modestly transformative. The product creates a new platform, the personal computer, on which consumers can play games designed for the Sony PlayStation. This innovation affords opportunities for game play in new environments, specifically
anywhere a Sony PlayStation console and television are not available, but a computer with a CD-ROM drive is. More important, the Virtual Game Station itself is a wholly new product, notwithstanding the similarity of uses and functions between the Sony PlayStation and the Virtual Game Station.
The expressive element of software lies as much in the organization and structure of the object code that runs the computer as it does in the visual expression of that code that appears on a computer screen. See 17 U.S.C.S 102(a) (extending copyright protection to original works of authorship that "can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or
device"). Sony does not claim that the Virtual Game Station itself contains object code that infringes Sony's copyright. We are therefore at a loss to see how Connectix's drafting of entirely new object code for its VGS program could not be transformative, despite the similarities in function and screen
output.
[12] Finally, we must weigh the extent of any transformation in Connectix's Virtual Game Station against the significance of other factors, including commercialism, that militate
against fair use. See Acuff-Rose, 510 U.S. at 579. Connectix's commercial use of the copyrighted material was an intermediate one, and thus was only "indirect or derivative." Sega, 977
F.2d at 1522. Moreover, Connectix reverse-engineered the Sony BIOS to produce a product that would be compatible with games designed for the Sony PlayStation. We have recognized this purpose as a legitimate one under the first factor of the fair use analysis. See id. Upon weighing these factors,
we find that the first factor favors Connectix.
The district court ruled, however, that the Virtual Game Station was not transformative on the rationale that a computer screen and a television screen are interchangeable, and the Connectix product therefore merely "supplants " the Sony PlayStation console. Order at 15. The district court clearly
erred. For the reasons stated above, the Virtual Game Station is transformative and does not merely supplant the PlayStation console. In reaching its decision, the district court apparently failed to consider the expressive nature of the Virtual Game Station software itself. Sony's reliance on Infinity
Broadcast Corp. v. Kirkwood, 150 F.3d 104 (2d Cir. 1998), suffers from the same defect. The Infinity court reasoned that a "change of format, though useful, is not technically a transformation." Id. at 108 n.2. But the infringing party in that case was merely taking copyrighted radio transmissions and
retransmitting them over telephone lines; there was no new expression. Id. at 108. Infinity does not change our conclusion; the purpose and character of Connectix's copying points toward fair use.
4. Effect of the use upon the potential market
[13] We also find that the fourth factor, effect of the use upon the potential market, favors Connectix. Under this factor, we consider
not only the extent of market harm caused by the
particular actions of the alleged infringer, but also
"whether unrestricted and widespread conduct of the
sort engaged in by the defendant . . . would result in
a substantially adverse impact on the potential
market" for the original.
Acuff-Rose, 510 U.S. at 590 (quoting 3 M. Nimmer & D. Nimmer, Nimmer on Copyright, S 13.05[A][4], at 13-102.61 (1993)). Whereas a work that merely supplants or supersedes another is likely to cause a substantially adverse impact on the potential market of the original, a transformative work is less
likely to do so. See id. at 591; Harper & Row, Publishers, Inc. v. Nation Enters, Inc.,
471 U.S. 539, 567-69 (1985).
[14] The district court found that"[t]o the extent that such a substitution [of Connectix's Virtual Game Station for Sony PlayStation console] occurs, Sony will lose console sales and profits." Order at 19. We recognize that this may be so. But because the Virtual Game Station is transformative, and does
not merely supplant the PlayStation console, the Virtual Game Station is a legitimate competitor in the market for platforms on which Sony and Sony-licensed games can be played. See Sega, 977 F.2d at 1522-23. For this reason, some economic loss by Sony as a result of this competition does not
compel a finding of no fair use. Sony understandably seeks control over the market for devices that play games Sony produces or licenses. The copyright law, however, does not confer such a monopoly. See id. at 1523-24 ("[A]n attempt to monopolize the market by making it impossible for others to
compete runs counter to the statutory purpose of promoting creative expression and cannot constitute a strong equitable basis for resisting the invocation of the fair use doctrine."). This factor favors Connectix.
[15] The four statutory fair use factors must be "weighed together, in light of the purposes of copyright. " Acuff-Rose, 510 U.S. at 578. Here, three of the factors favor Connectix; one favors Sony, and it is of little weight. Of course, the statutory factors are not exclusive, Harper & Row, 471 U.S. at
560, but we are unaware of other factors not already considered that would affect our analysis. Accordingly, we conclude that Connectix's intermediate copying of the Sony BIOS during the course of its reverse engineering of that product was a fair use under 17 U.S.C. S 107, as a matter of law. With
respect to its claim of copyright infringement, Sony has not established either a likelihood of success on the merits or that the balance of hardships tips in its favor. See Cadence Design
Sys., Inc. v. Avant! Corp., 125 F.3d 824, 826 (9th Cir. 1997), cert. denied, 523 U.S. 1118
(1998). Accordingly, we need not address defenses asserted by Connectix under 17 U.S.C.
S 117(a)(1) and our doctrine of copyright misuse. We reverse the district court's grant of a preliminary injunction on the ground of copyright infringement.
B. Tarnishment
[16] The district court found that Connectix's sale of the Virtual Game Station tarnished Sony's "PlayStation" mark under 15 U.S.C. S 1125(c)(1). The district court based its preliminary injunction, however, exclusively on Sony's copyright claim, and did not cite its tarnishment finding as a
ground for the injunction. Although we can "affirm the district court on any ground supported by the record, " Charley's Taxi Radio Dispatch Corp. v. SIDA of Haw., Inc., 810 F.2d 869, 874 (9th Cir. 1987), we decline to affirm on this alternative ground. Sony has not shown a likelihood of success on
each element of the tarnishment claim.
[17] To prevail on its tarnishment claim, Sony must show that (1) the PlayStation "mark is famous;" (2) Connectix is "making a commercial use of the mark;" (3) Connectix's "use began after the mark became famous;" and (4) Connectix's "use of the mark dilutes the quality of the mark by diminishing the capacity of the mark to identify and distinguish goods and services." Films of Distinction, Inc. v.
Allegro Film Prods., Inc., 12 F. Supp. 2d 1068, 1078 (C.D. Cal. 1998); 15 U.S.C. SS 1125(c)(1), 1127 (definition of "dilution"). Connectix does not dispute the first and third of these elements. We address only the fourth element.
Because Sony proceeds under a tarnishment theory of dilution, it must show under this fourth element that its PlayStation mark will "suffer negative associations" through Connectix's use. Hormel Foods Corp. v. Jim Henson Prods., Inc., 73 F.3d 497, 507 (2d Cir. 1996); see also 4 J. Thomas McCarthy,
McCarthy on Trademarks and Unfair CompetitionS 24.95 (4th ed. 1996 & Supp. 1999). The district court found the Virtual Game Station does not play PlayStation games as well as the PlayStation console, and that although the Virtual Game Station's packaging contains a disclaimer to this effect, "game
players do not comprehend this distinction." Order at 24-25.The Sony PlayStation mark therefore suffers negative associations because of this confusion on the part of consumers who
play Sony games on the Virtual Game Station software. Id. at 25.
[18] The evidence on the record does not support such a finding of misattribution. The district court relied primarily on a series of semi-anonymous reviews posted on the Internet
and submitted by Connectix. As the district court acknowledged, these reviews were neither authenticated nor identified. More important, the print-out of the comments does not
reveal the context in which the comments were made; this omission makes the extent of any confusion by game players difficult to assess reliably. The district court also referred to two focus group studies conducted by market research firms at Sony's bequest. These studies address the difference of
quality between the Virtual Game Station and PlayStation, but shed no light on the question of misattribution. Thus, we reject as clearly erroneous the district court's finding that the
Virtual Game Station tarnishes the Sony PlayStation mark on a misattribution theory of tarnishment.
[19] Nor are we persuaded by Sony's argument that the difference in quality between the two platforms is itself sufficient to find tarnishment. See Deere & Co. v. MTD Prods, Inc., 41 F.3d 39, 43 (2d Cir. 1994) ("`Tarnishment' generally arises when the plaintiff's trademark is linked to products of
shoddy quality," diminishing the value of the mark "because the public will associate the lack of quality . . . with the plaintiff's unrelated goods."). Even if we assume, without deciding, that the concept of tarnishment is applicable to the present factual scenario, there is insufficient evidence to support a finding of tarnishment. "The sine qua non of tarnishment is a finding that plaintiff's mark will suffer negative associations through defendant's use." Hormel Foods, 73 F.3d at 507. The evidence here fails to show or suggest that Sony's mark or product was regarded or was likely to be regarded
negatively because of its performance on Connectix's Virtual Game Station. The evidence is not even substantial on the quality of that performance. The Sony studies, each of included eight participants, presented a range of conclusions. One study concluded that "[o]n balance, the results of this
focus group study show that the testers preferred the PlayStation gaming experience over the Virtual Game Station gaming experience." The other concluded that consumers found the
Virtual Game Station was "generally acceptable " for one game, but "nearly unplayable" on another. The internet reviews submitted by Connectix also presented a range of opinion; while some anonymous reviewers loved the Virtual Game Station, some were ambivalent, and a relative few hated the Virtual Game Station emulation. In the only review for attribution, Newsweek said the software played
"surprisingly well," and that some games on the Virtual Game Station "rocked." Steven Levy, "Play it Your Way," Newsweek, Mar. 15, 1999, at 84. This evidence is insufficient to support a conclusion that the shoddiness of the Virtual Game Station alone tarnishes the Sony mark. Sony's tarnish-
ment claim cannot support the injunction.
CONCLUSION
Connectix's reverse engineering of the Sony BIOS extracted from a Sony PlayStation console purchased by Connectix engineers is protected as a fair use. Other intermediate copies of the Sony BIOS made by Connectix, if they infringed Sony's copyright, do not justify injunctive relief. For these
reasons, the district court's injunction is dissolved and the case is remanded to the district court. We also reverse the district court's finding that Connectix's Virtual Game Station has tarnished the Sony PlayStation mark.
REVERSED AND REMANDED.
1
Any purchaser of a copyrighted software program must copy the pro-
gram into the memory of a computer in order to make any use at all of the
program. For that reason, 17 U.S.C. S 117(a)(1) provides that it shall not
be an infringement for one who owns a software copy to make another
copy "created as an essential step in the utilization of the computer pro-
gram in conjunction with a machine and that it is used in no other
manner." Connectix contends that its copying is within the protection of
section 117, but our disposition of the fair use issue makes it unnecessary
for us to address that contention. See Sega, 977 F.2d at 1517-18 (rejecting
contention that disassembly is protected by section 117).
2
Object code is binary code, consisting of a series of the numerals zero
and one, readable only by computers.
3
Source code is readable by software engineers, but not by computers.
4
Software is generally written by programmers in source code (and in
other more conceptual formats) and then assembled into object code.
5
The factors for determining fair use include:
(1) the purpose and character of the use, including whether such
use is of a commercial nature or is for nonprofit educational
purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation
to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value
of the copyrighted work.
17 U.S.C. S 107.
6
Connectix offers evidence that it attempted to gain access to the func-
tionality of the Sony BIOS by attaching a "logic analyzer" to the input and
output leads of the chip on which the Sony BIOS was located within the
PlayStation console. This form of observation does not appear to require
the making of an intermediate copy, but was of limited value because it
permitted the observation of inter-chip, but not intra-chip signals. Sony
does not suggest that this form of observation alone would have permitted
Connectix engineers to gain access to the functional elements of the Sony
BIOS.
7
We are unable to locate evidence in the record to support the district
court's finding that Connectix "gradually convert[ed] Sony's code to their
own code," Order at 11, if by this statement the court meant that Connec-
tix engineers failed to create an original work. True, Connectix engineers
admitted to combining the Sony BIOS with the Virtual Game Station
hardware emulation software to test and develop the hardware emulation
software. But in drafting the Connectix BIOS, Connectix engineers never
claimed to do anything other than write their own code, even though they
used, observed, copied and sometimes disassembled the Sony BIOS as
they did so. Sony presents no evidence to the contrary, nor does Sony con-
tend that Connectix's final product contains infringing material.
8
The depositions of Connectix engineers Aaron Giles and Eric Traut
suggest that Connectix engineers recognized that other engineering solu-
tions were sometimes available.
With respect to the observation of the Sony BIOS in an emulated envi-
ronment, Traut admitted that it was easier to use the Sony BIOS to
develop the hardware emulation software than to develop Connectix own
BIOS first, and then use the Connectix BIOS to develop the hardware
emulation software.
With respect to the observation of the Sony BIOS with selective disas-
sembly of the code, Traut stated with respect to one bug that there would
have been no way to fix the bug without disassembling a portion of the
Sony BIOS. He also stated that at other times he disassembled portions of
the Sony BIOS when doing so was "the most efficient way of finding that
bug." In a subsequent question, he clarified that disassembly was not the
only way to fix the bug, just the fastest way to do so.
With respect to Connectix's observation of the Sony BIOS in the devel-
opment of the Virtual Game Station for Windows, other solutions, pre-
sumably disassembly, may have been possible. Connectix engineer Giles
responded "I don't know" when asked by Sony counsel if "it would have
been possible to write the CD-ROM code before building the emulator."
9
Sony relies on these RAM copies for its contention, which we reject,
that there is no significant difference between the facts of this case and our
decisions in Triad Systems Corp. v. Southeastern Express Co., 64 F.3d
1330 (9th Cir. 1995) and MAI Systems Corp. v. Peak Computer, Inc., 991
F.2d 511 (9th Cir. 1993). Those cases are inapposite to our fair use analy-
sis. Neither involved reverse engineering of software to gain access to
unprotected functional elements.
10
Sony points to Micro Star v. Formgen, Inc., 154 F.3d 1107 (9th Cir.
1998), for the proposition that commercial use creates a presumption of
unfairness. See id. at 1113 (quoting Sony Corp. of Am. v. Universal City
Studios, Inc., 464 U.S. 417, 451 (1984)). We do not read Micro Star that
way; moreover, such a reading would be contrary to Acuff-Rose. Acuff-
Rose expressly rejected such a "hard evidentiary presumption" and stated
that the Court of Appeals "erred" by giving such dispositive weight to the
commercial nature of the use. 510 U.S. at 584. Also, Micro Star itself
involved a use that was non-transformative, which is not the case here. See
Micro Star, 154 F.3d at 1113 & n.6. Cf. American Geophysical Union v.
Texaco, Inc., 60 F.3d 913, 921-22 (2d Cir. 1995) (amended opinion)
(rejecting, on grounds of Acuff-Rose and collected cases, presumption of
unfairness for commercial use as applied to Texaco's intermediate copy-
ing of copyrighted articles).
11
We do not accept Sony's argument that the downloading of Sony's
BIOS from the Internet was itself an infringement justifying the injunc-
tion. The evidence of record suggests that the downloaded BIOS played
a minimal role, if any, in development of the Virtual Game Station. We
conclude that, on this record, the downloading infringement, if such it
was, would not justify our upholding the injunction on the development
and sale of the Virtual Game Station. The Virtual Game Station itself
infringes no copyright. Bearing in mind the goals of the copyright law, "to
stimulate artistic creativity for the general public good," Sony, 464 U.S.
at 432 (internal quotation marks omitted), we conclude that there is a legit-
imate public interest in the publication of Connectix's software, and that
this interest is not overborne by the record evidence related to the down-
loaded BIOS. The imposition of an injunction is discretionary. See 17
U.S.C. S 502(a). On this record, we conclude that it would be inappropri-
ate to uphold the injunction because of Connectix's copying and use of the
downloaded Sony BIOS; damages would adequately protect Sony's inter-
est with respect to that alleged infringement. See Acuff-Rose, 510 U.S. at
578 n.10 (discussing factors to be evaluated in deciding whether to enjoin
product found to have exceeded bounds of fair use).
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