## Facts

- Nintendo sold the Nintendo Entertainment System (NES) and used a security program, 10NES, to prevent unlicensed game cartridges from operating on the console.
- 10NES functioned as a lock-and-key system: code in the console (lock) exchanged data with code in authorized cartridges (key); incorrect signals triggered a shutdown feature.
- Nintendo held copyrights in the 10NES source and object code.
- Atari and its subsidiary Tengen, a competitor in NES-compatible games, sought to sell cartridges without accepting Nintendo’s licensing conditions.
- Atari attempted to reverse engineer 10NES from lawfully obtained consoles and cartridges but did not fully replicate it.
- Atari obtained a complete copy of 10NES source code from the U.S. Copyright Office by misrepresenting its entitlement or need for the deposit copy.
- Using the obtained source code and further work, Atari developed “Rabbit,” an access program that generated signals functionally indistinguishable from 10NES, including the shutdown feature.
- Nintendo sued Atari for, among other claims, copyright infringement; the district court issued a preliminary injunction barring Atari from exploiting Nintendo’s copyrighted program.

## Issues

1. Whether Nintendo showed a likelihood of success on its copyright infringement claim sufficient to support a preliminary injunction.
2. Whether 10NES contained protectable expression, as opposed to unprotectable ideas, processes, or functional requirements.
3. Whether the evidence supported likely copying and substantial similarity in protectable expression, including through Atari’s Rabbit program.
4. Whether Atari’s intermediate copying and reverse engineering constituted fair use, particularly given Atari’s acquisition of unauthorized source code.
5. Whether Nintendo’s lock-out system and licensing practices supported a copyright misuse or antitrust-based defense that would bar enforcement at the injunction stage.

## Decision

- The Federal Circuit affirmed the preliminary injunction.
- The court held Nintendo showed a likelihood of success on copyright infringement, supporting a presumption of irreparable harm under applicable Ninth Circuit standards.
- The court found 10NES likely included protectable expression in the selection and arrangement of instructions and data stream, not solely functional elements.
- The court concluded Atari likely engaged in unlawful copying by reproducing and using an unauthorized copy of 10NES source code and by creating a substantially similar program.
- The court rejected Atari’s fair-use and reverse-engineering defense as applied to work “tainted” by the unauthorized source code.
- The court found Atari had not shown a sufficiently developed copyright-misuse/antitrust defense on the preliminary-injunction record.

## Legal Principles

- A preliminary injunction in a copyright case may be supported where the plaintiff shows a likelihood of success on the merits; under then-applicable Ninth Circuit doctrine, likely success can trigger a presumption of irreparable harm.
- Computer programs may contain protectable expression even when serving functional purposes; specific selection, sequence, and arrangement not dictated by external constraints can be copyrightable.
- Copying may be shown by literal reproduction or by access plus substantial similarity in protectable expression; similarities beyond those necessary for interoperability can support infringement.
- Intermediate copying for reverse engineering may qualify as fair use when based on lawfully possessed copies and when necessary to understand functional behavior, but fair use does not protect copying derived from unauthorized acquisition of source code.
- Copyright misuse requires a showing that the copyright holder improperly extended the copyright beyond its lawful scope; platform-control measures and licensing terms did not, on this record, bar enforcement.

## Conclusion

The court upheld injunctive relief because Nintendo was likely to prove that 10NES contained protectable expression and that Atari copied it, and Atari could not rely on fair use where its reverse engineering was infected by an illicitly obtained source-code copy; Atari’s misuse/antitrust defenses did not defeat enforcement at the preliminary stage.


Atari Games Corp. v. Nintendo of Am. Inc., 975 F.2d 832 (Fed. Cir. 1992)