## Facts

- Stern Electronics, Inc. held an exclusive sublicense to distribute the coin-operated arcade video game *Scramble* in North and South America and marketed it successfully in the United States in 1981.
- The game presents recurring, programmed visual scenes and accompanying sounds, including a spaceship moving through six scenes featuring terrain, missiles, fuel depots, enemy aircraft, and tunnel-like passages, with player-controlled inputs affecting play.
- Omni Video Games, Inc. marketed and sold a competing coin-operated game also titled *Scramble*.
- The district court found Omni’s game to be nearly identical to Stern’s in sight and sound, and Stern characterized it as a “knock-off.”
- Omni argued it did not copy Stern’s program code and contended that only code, not the audiovisual display, is copyrightable.
- Omni also claimed superior trademark rights in “SCRAMBLE,” citing December 1980 purchase orders for “Scramble” nameplates as evidence of earlier use.
- Stern sued for copyright infringement of the *Scramble* audiovisual work and for trademark infringement of “SCRAMBLE.”
- The district court granted a preliminary injunction barring Omni from infringing the *Scramble* copyright and from further use of the “SCRAMBLE” trademark in connection with electronic video games.

## Issues

1. Whether a video game’s audiovisual display (images and sounds) qualifies as an original work of authorship “fixed in any tangible medium of expression” under the Copyright Act, despite variations in each play-through.
2. Whether Stern showed superior rights to the “SCRAMBLE” trademark for purposes of preliminary injunctive relief, given Omni’s claim of earlier use.
3. Whether the preliminary injunction was properly granted based on likelihood of success on the merits and equitable considerations.

## Decision

- The Second Circuit affirmed the preliminary injunction.
- The court held that the video game’s audiovisual display is a protectable audiovisual work, separate from the underlying program code.
- The court concluded the audiovisual display satisfied fixation because significant visual and aural elements recur and are embodied in the game’s circuitry, even if the precise sequence varies with player input.
- The court found sufficient originality in the selection and arrangement of the game’s recurring scenes, characters, and sound effects.
- The court agreed that Omni’s game was nearly identical in protected sight and sound, supporting Stern’s likelihood of success on copyright infringement.
- The court upheld injunctive relief on trademark grounds, concluding Stern had superior rights and that Omni’s asserted priority evidence did not reflect bona fide good-faith use.
- The court determined the balance of hardships favored Stern, and any hardship to Omni largely stemmed from its infringing conduct.

## Legal Principles

- A video game’s recurring images and sounds may constitute a copyrightable “audiovisual work,” and protection is not limited to the program code.
- Fixation is satisfied where substantial portions of the audiovisual display are repeatedly and predictably generated from a permanent embodiment in the game hardware, even though player interaction changes some details of each performance.
- Originality requires only a minimal degree of creative expression; the selection and arrangement of audiovisual elements in a game can meet this threshold.
- Close similarity in protectable audiovisual expression can establish a strong likelihood of success on infringement at the preliminary-injunction stage.
- Trademark priority and entitlement to injunctive relief depend on bona fide use; adoption of an identical mark for an essentially copied competing product supports findings of bad faith and likely consumer confusion.
- Preliminary injunctive relief is appropriate where the plaintiff shows likely success on the merits and equities favor preventing ongoing infringement and marketplace confusion.

## Conclusion

The Second Circuit sustained preliminary injunctive relief against a competing arcade game seller, ruling that a video game’s repeating sights and sounds are protectable as a fixed, original audiovisual work and that a party marketing a near-identical “knock-off” under the same title could not establish superior trademark rights through purported earlier, non-bona fide use.


Stern Elecs., Inc. v. Kaufman, 669 F.2d 852 (2d Cir. 1982)