## Facts

- Sega Enterprises Limited and Sega of America, Inc. (collectively, Sega) manufactured and sold the Genesis video game console and game cartridges containing Sega’s copyrighted game programs.
- Sega owned federal copyright registrations for multiple video games distributed for the Genesis platform.
- Sega used the SEGA trademark on its products and in connection with its games; the mark appeared in game files and on-screen during gameplay.
- Sharon Judith Sabella operated an electronic bulletin board system (BBS) known as “THE SEWER LINE,” through which users could upload and download electronic files, including video-game software.
- Users uploaded multiple Sega video-game files to the BBS, and those files were listed with “Sega” in their titles.
- Sabella solicited users to upload game data to the BBS and sold game-cartridge copiers that allowed users to play downloaded game files.
- Sabella had the technical ability to moderate or control the content available on her BBS.
- Sega sued Sabella for copyright and trademark infringement under federal and California law, along with related unfair-competition claims.
- Sabella submitted testimony asserting she did not know users were uploading or downloading Sega-copyrighted games or games bearing Sega’s trademark.

## Issues

1. Whether Sega was entitled to summary judgment on Sabella’s liability for copyright infringement based on the presence and distribution of Sega game files through Sabella’s BBS and Sabella’s related conduct.
2. Whether Sega was entitled to summary judgment on Sabella’s liability for California trade-name infringement arising from use of “Sega” and Sega’s mark in connection with pirated Sega game files.
3. Whether Sega was entitled to summary judgment on Sabella’s liability for federal trademark infringement and false designation of origin/unfair competition under the Lanham Act.
4. Whether Sega was entitled to summary judgment on Sabella’s liability for California unfair competition.
5. Whether, given the established violations, Sega was entitled to a permanent injunction barring further copying of Sega games through THE SEWER LINE or any other BBS run by Sabella.

## Decision

- The court granted summary judgment for Sega on Sabella’s liability for copyright infringement.
- The court granted summary judgment for Sega on Sabella’s liability for California trade-name infringement.
- The court denied summary judgment on Sega’s federal trademark infringement claim.
- The court denied summary judgment on Sega’s federal false designation of origin/unfair competition claim under 15 U.S.C. § 1125(a).
- The court denied summary judgment on Sega’s California unfair competition claim.
- The court granted Sega a permanent injunction prohibiting further copying of Sega games via THE SEWER LINE BBS or any other bulletin board run by Sabella.

## Legal Principles

- Summary judgment is appropriate only if there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of law.
- Copyright infringement requires proof of ownership of a valid copyright and unauthorized copying (or other violation of an exclusive right) of protected expression.
- A BBS operator’s active involvement with infringing activity—such as soliciting uploads of game files and supplying equipment used to play copied files—can support liability for copyright infringement on an undisputed record.
- California trade-name infringement may be established where a protected name or mark is used in connection with unauthorized goods in a manner likely to mislead or confuse.
- Federal trademark infringement and Lanham Act false designation/unfair competition claims often turn on fact-dependent questions, including whether the defendant made a legally relevant “use in commerce” and whether consumers are likely to be confused; disputes on those points can defeat summary judgment.
- A permanent injunction may issue after liability is shown when the record indicates a risk of continued or future infringement absent court-ordered relief.

## Conclusion

In this BBS-era dispute, the court entered partial summary judgment holding Sabella liable for copyright infringement and California trade-name infringement based on Sega game files made available through THE SEWER LINE and Sabella’s related conduct, denied summary judgment on the Lanham Act and California unfair-competition claims due to remaining factual disputes, and issued a permanent injunction barring further copying of Sega games through Sabella’s BBS operations.


Sega Enterprises, Ltd. v. Sabella, 1996 WL 780560 (1996)