862 F.2d 204 (9th Cir. 1988), 87-2294, Data East USA, Inc. v. Epyx, Inc.

Docket Nº:87-2294.
Citation:862 F.2d 204
Party Name:9 U.S.P.Q.2d 1322 DATA EAST USA, INC., a California corporation, Plaintiff-Appellee, v. EPYX, INC., a California corporation, Defendant-Appellant.
Case Date:November 30, 1988
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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862 F.2d 204 (9th Cir. 1988)

9 U.S.P.Q.2d 1322

DATA EAST USA, INC., a California corporation, Plaintiff-Appellee,


EPYX, INC., a California corporation, Defendant-Appellant.

No. 87-2294.

United States Court of Appeals, Ninth Circuit

November 30, 1988

Argued and Submitted July 13, 1988.

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H. Michael Brucker, Oakland, Cal., Steven M. Kipperman, San Francisco, Cal., for defendant-appellant.

Sheldon R. Meyer, Karen S. Smith, Fliesler, Dubb, Meyer & Lovejoy, San Francisco, Cal., William McLean, Thoits, Love, Hershberger & McLean, Palo Alto, Cal., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of California.

Before BROWNING, HUG and TROTT, Circuit Judges.

TROTT, Circuit Judge:

Plaintiff-appellee Data East USA, Inc., brought this action against defendant-appellant Epyx, Inc. for copyright, trademark, and trade dress infringement. The district court found a copyright infringement and issued a permanent injunction and impoundment. Epyx appeals the grant of the permanent injunction.

Epyx contends (1) the district court erred in granting the injunction because Epyx never had access to Data East's copyrighted work, (2) the district court erred in finding substantial similarity, and (3) the district court's injunction was impermissibly vague and overbroad. We reverse.


Data East is a California corporation engaged in the design, manufacture, and sale of audio-visual works embodied in video games for coin-operated and home computer use. In July 1984, Data East commenced distribution in Japan of an arcade game entitled "Karate Champ" ("Arcade # 1"). In September 1984, Data East commenced distribution in Japan and later in the United States and Europe of an updated version of "Karate Champ" ("Arcade # 2" or more generally as "arcade game"). Finally, on October 12, 1985, Data East commenced distribution in the United States of a home computer game version of "Karate Champ" ("home game"). Data East applied for and received audio-visual copyright certificates for each game.

In November of 1985, System III Software, Ltd., an English company, commenced distribution in England of a home computer game entitled "International Karate." Epyx, a California corporation engaged in the development and distribution of audio-visual works for use on home computers, obtained a license agreement with System III and commenced distribution in the United States on April 30, 1986 of a Commodore-compatible version of "International Karate" under the name "World Karate Championship."

Each competing product, "Karate Champ" and "World Karate Championship," consists of the audio-visual depiction of a karate match or matches conducted by two combatants, one clad in a typical white outfit and the other in red. Successive phases of combat are conducted against varying stationary background images depicting localities or geographic scenes. The match is supervised by a referee who directs the beginning and end of each phase of combat and announces the winning combatant of each phase by means of a cartoon-style speech balloon. Each game has a bonus round where the karate combatant breaks bricks and dodges objects. Similarities also exist in the moves used by the combatants and the scoring method.

Data East alleged that the overall appearance, compilation, and sequence of the

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audio-visual display of the video game "World Karate Championship" infringed its copyright for "Karate Champ" as embodied in the arcade and home versions of the video game. Data East also charged Epyx with trademark and trade dress infringement.

The district court found that except for the graphic quality of Epyx's expressions, part of the scoreboard, the referee's physical appearance, and minor particulars in the "bonus phases," Data East's and Epyx's games are qualitatively identical. The district court then held that Epyx's game infringes the copyright Data East has in "Karate Champ." The district court, however, found no trademark or trade dress infringement. Based upon its decision, the district court permanently restrained and enjoined Epyx from copying, preparing derivative works, distributing, performing, or displaying the copyrighted work in the "Karate Champ" video game, the "World Karate Championship" game, or the "International Karate" game. A recall of all Commodore computer games of "World Karate Championship" and "International Karate" was ordered. This appeal followed.


A district court's determination of findings of fact is subject to the clearly erroneous standard of review. McCulloch v. Price, 823 F.2d 316, 318 (9th Cir.1987); Anderson v. City of Bessemer City, 470 U.S. 564, 572, 105 S.Ct. 1504, 1510, 84 L.Ed.2d 518 (1985). The issues of access and substantial similarity are findings of fact reviewable for clear error. McCulloch, 823 F.2d at 318. Under the clearly erroneously standard of review, an appellate court must accept the lower court's findings of fact unless upon review the appellate court is left with the definite and firm conviction that a mistake has been committed. United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948); Dollar Rent a Car of Washington, Inc. v. Travelers Indemnity Co., 774 F.2d 1371, 1374 (9th Cir.1985).

To establish copyright infringement, Data East must prove both ownership of a valid copyright and "copying" by Epyx of the copyrighted work. Sid & Marty Krofft Television Products, Inc. v. McDonald's Corp., 562 F.2d 1157, 1162 (9th Cir.1977). It is undisputed that Data East is the registered copyright owner of the audio-visual work for each version of "Karate Champ." Thus we need only determine whether Epyx 1 copied "Karate Champ." This sounds simple and straightforward. It is not.

As in most infringement cases of this kind, no direct evidence was developed that System III Software or anybody else copied any version of Data East's product. There seldom is any direct evidence of copying in these matters. Therefore, copying may be established instead by circumstantial evidence of (1) the defendant's access to the copyrighted work prior to defendant's creation of its work, and (2) the substantial similarity of both the general ideas and expression between the copyrighted work and defendant's work. Id.; Baxter v. MCA, Inc., 812 F.2d 421, 423 (9th Cir.1987), cert. denied, --- U.S. ----, 108 S.Ct. 346, 98 L.Ed.2d 372 (1987). In essence, the question of copying becomes a matter of reasonable inferences. Because we find no substantial similarity, we decline to address the issue of access.

A. Sufficiency of Evidence

Preliminarily, we consider Epyx's contentions regarding the sufficiency of Data East's evidence. First, Epyx argues Data East's reliance on the contents of the audio-visual works of the home game is irrelevant for proof of substantial similarity because there was no finding of access to this version. We agree with this contention. We note, however, that the district court determined Data East's home game

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was an adaptation of its arcade game. The record contains substantial direct evidence that the works embodied in the arcade game and the home version are essentially similar. A finding of substantial similarity with the audio-visual unit present in the arcade game would, for the purposes of this case, support a finding of substantial similarity with the audio-visual representation of the home game. 2

Second, Epyx raises the question of whether there was sufficient evidence presented at trial to establish the contents of plaintiff's "work" in the arcade game. As evidence of the arcade game's audio-visual work, plaintiff submitted still photographs. Plaintiff did not produce in court the arcade game itself or a video reproduction of the arcade game. Defendant contends there was nothing to prohibit plaintiff from putting the entire audio-visual work before the court and that the court should not have been deprived of having the entire work to view.

This case is distinguishable from Seiler v. Lucas Film, Ltd., 808 F.2d 1316 (9th Cir.1986), cert. denied, --- U.S. ----, 108 S.Ct. 92, 98 L.Ed.2d 53 (1987), a case used by Epyx to support its argument that the court erred in not viewing the original version of the arcade game. In Seiler, the plaintiff tried to prove the contents of his copyrighted work with the use of "reconstructions" after alleging that no originals were in existence. The court ruled:

The contents of Seiler's work are at issue. There can be no proof of 'substantial similarity' and thus of copyright infringement unless Seiler's works are...

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