The fair use defense in derivative work cases
Even if a work is found to be an unauthorized derivative work, an alleged infringer can escape liability via the defense of fair use. For example, in Campbell v. Acuff-Rose Music, Inc., the Supreme Court found that although a parody of the song "Oh, Pretty Woman" by 2 Live Crew was an unauthorized derivative work, fair use was still available as a complete defense. This case marked the Supreme's Court's pointing to transformativeness as a major clue to application of the fair use defense to derivative works.
The defense of fair use has become very important in computer- and Internet-related works. Two 1992 Ninth Circuit decisions are illustrative.
In Lewis Galoob Toys, Inc. v. Nintendo of America, Inc.,[9] the appellate court held that it was a fair use for owners of copies of video games, such as Super Mario Bros., to use Galoob's product the Game Genie to customize the difficulty or other characteristics of the game by granting a character more strength, speed, or endurance. Nintendo strongly opposed Galoob's product, allegedly because it interfered with the maintenance of the "Nintendo Culture," which Nintendo claimed was important to its marketing program.[10] The court held, among other things, that the fair use defense shielded Galoob's conduct. The court said that "a party who distributes a copyrighted work cannot dictate how that work is to be enjoyed. Consumers may use ... a Game Genie to enhance a Nintendo Game cartridge?s audiovisual display in such a way as to make the experience more enjoyable."
In Sega Enterprises, Ltd. v. Accolade, Inc.,[11] the court excused Accolade from copyright infringement liability on fair use grounds. Nintendo and Sega produced video game consoles for playing video games. Each stored the games in plastic cartridges that provided game data to the consoles. By way of analogy, the Sega hardware console's ?platform? differed from Nintendo's, as a Macintosh platform differs from that of a ?PC.? Hence, a video game cartridge that works on one system does not work on the other. Sega and Nintendo sought to ?license? access to their hardware platforms, and each company developed software "locks" to keep out cartridges that did not have the proper "key." Accolade sought a license from Sega for its key, but negotiations broke down over price. Accolade then decided to reverse engineer Sega's lock and key system. To do so, it had to download (copy) all of the computer code from Sega's product and disassemble it (translate it from 1s and 0s to a human-intelligible format). Accolade succeeded and began to market new video games that it independently wrote, which were capable of being operated in Sega consoles. This led to copyright infringement litigation, in which Sega alleged that the downloading was improper copying (reproduction) of Sega's code. The court held that Sega was trying to use the copyright in its computer code to maintain a monopoly over the sale of video games, to which it was not legally entitled. Accolade downloaded the computer code only to ascertain how the lock worked, so that it could make a key that would permit its games to work in Sega consoles. The court held that such a use was fair use: "We conclude that where 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, disassembly is a fair use of the copyrighted work, as a matter of law."[12]
