Midway Mfg. Co. v. Bandai-America, Inc.

• Decision Date: 22 July 1982
• Docket Number: Civ. A. No. 81-3911.
• Citation: 546 F. Supp. 125
• Parties: MIDWAY MFG. CO., an Illinois corporation, Plaintiff, v. BANDAI-AMERICA, INC., a New Jersey corporation, Bandai Company, Ltd., a Japanese corporation, Bandai Overseas Corporation, a Japanese corporation, Epoch Company Ltd., a New Jersey corporation, Epoch Corporation, a New Jersey corporation, Toys R. US, Inc., a California corporation, Lionel Leisure, Inc., a Pennsylvania corporation, Best Products, Inc., a Virginia corporation, and Lash-Tamaron Distributors, Inc., a New Jersey corporation, Defendants. COLECO INDUSTRIES, INC., a Connecticut corporation, Plaintiff, v. BANDAI-AMERICA, INC., a New Jersey corporation, Bandai Company, Ltd., a Japanese corporation, Bandai Overseas Corporation, a Japanese corporation, Epoch Company Ltd., a Japanese corporation, and Epoch Corporation, a New Jersey corporation, Defendants.
• Court: U.S. District Court — District of New Jersey

546 F. Supp. 125

MIDWAY MFG. CO., an Illinois corporation, Plaintiff, v. BANDAI-AMERICA, INC., a New Jersey corporation, Bandai Company, Ltd., a Japanese corporation, Bandai Overseas Corporation, a Japanese corporation, Epoch Company Ltd., a New Jersey corporation, Epoch Corporation, a New Jersey corporation, Toys R. US, Inc., a California corporation, Lionel Leisure, Inc., a Pennsylvania corporation, Best Products, Inc., a Virginia corporation, and Lash-Tamaron Distributors, Inc., a New Jersey corporation, Defendants.

COLECO INDUSTRIES, INC., a Connecticut corporation, Plaintiff, v. BANDAI-AMERICA, INC., a New Jersey corporation, Bandai Company, Ltd., a Japanese corporation, Bandai Overseas Corporation, a Japanese corporation, Epoch Company Ltd., a Japanese corporation, and Epoch Corporation, a New Jersey corporation, Defendants.

Civ. A. No. 81-3911.

United States District Court, D. New Jersey.

July 22, 1982.

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Pitney, Hardin, Kipp & Szuch by Gregory C. Parliman, Morristown, N. J., and Loeb & Loeb by Robert A. Meyer, Los Angeles, Cal., for plaintiff Midway Mfg. Co.

Kaye, Scholer, Fierman, Hays & Handler by Frederic W. Yerman, New York City, for plaintiff Coleco Industries, Inc.

Carella, Byrne, Bain & Gilfillan, New York City by R. Gale Rhodes, Jr., Newark, N. J., for defendants Bandai-America, Inc., Bandai Overseas Corp., Bandai Co., Ltd. and Toys R. US, Inc.

OPINION

MEANOR, District Judge.

Technological advances and the incessant quest for new forms of leisure time amusement converge in the instant case to thrust this Court into the center of the current video game mania gripping the United States. Specifically, this case involves two of the most popular video games of all time, Pac-Man and Galaxian. Plaintiffs, Midway Manufacturing (Midway) and Coleco Industries (Coleco), manufacture and sell, respectively, the full-size arcade and two of the authorized handheld miniaturized versions of these games. They are suing Bandai Industries (Bandai), a New Jersey corporation importing two other handheld games named Galaxian and Packri Monster. These games are manufactured and exported from Japan respectively by defendants Bandai Company, Ltd. (BL) and Bandai Overseas Corp., (BO). Both of these Japanese corporations are related to Bandai.¹

Plaintiffs allege that the Bandai handheld games violate the copyright and trademark laws of the United States, as well as the unfair competition laws of New Jersey and California. Midway in particular charges that the audiovisual displays of the Bandai games infringe its copyright in the audiovisual works of its own arcade games while the names of the Bandai games infringe Midway's trademarks in the names of its arcade machines. Coleco as a licensee of these copyrights and trademarks joins in Midway's allegations of infringements of same. Presently before the court are Midway's motions for summary judgment that:

1. Bandai's Galaxian game infringes Midway's copyrights in its Galaxian game;

2. Bandai's Galaxian game infringes Midway's trademark "Galaxian";

3. Bandai's Packri Monster game infringes Midway's copyright in its Pac-Man game;

4. Bandai's Packri Monster game infringes Midway's trademark "Pac-Man".

In the alternative, Midway requests preliminary injunctive relief on these claims.²

I. Background

Midway is a well-known American producer of video arcade games. Its Galaxian and Pac-Man games were created by Namco, Ltd. (Namco), a Japanese corporation. Both games were first published in Japan by Namco, Galaxian on September 17, 1979 and Pac-Man on May 22, 1980. Midway learned of both games at showings in Japan and determined that they had commercial potential in the United States. Namco and Midway accordingly entered into an agreement whereby Midway would receive all copyright and trademark rights in the two games in both the United States and the rest of the Western Hemisphere. Assignments of the copyright rights in Galaxian and Pac-Man were recorded with the Copyright Office on March 6, 1980 and November 13, 1980, respectively. On the strength of these assignments, Midway was issued copyright registrations in its name for both games as audiovisual works, effective the same dates as the assignments were filed.³

Midway began marketing Galaxian in the beginning of 1980 and Pac-Man in early 1981. It has promoted these games at considerable expense and they have proved to be two of the most successful video games ever. Although Midway ceased marketing its Galaxian in July 1981, it apparently continues to sell Pac-Man.⁴ Midway has actively licensed rights to its two games. As part of a consent judgment, Midway granted Entex Ltd. a limited license, since expired, to produce handheld Pac-Man and Galaxian games. A similar license as to a Galaxian-type game was granted Epoch, originally a defendant here but since dismissed. Tomy Corporation also has a license to produce its own handheld Pac-Man electronic game. This license expires on December 1, 1983 and was part of a quit claim assignment by Tomy to Midway of any rights it might have claimed in the mark Pac-Man as well as in Tomy's mechanical game of the same name. Midway also licensed back Namco, its original assignor of the copyright rights, the rights to the home video versions of the games. Namco has since sublicensed Atari to manufacture such units. Finally, Midway has licensed its co-plaintiff in this suit, Coleco, to produce handheld versions of both Galaxian and Pac-Man bearing those marks. This "semi-exclusive" license is of an indefinite duration and commenced on February 1, 1982. Coleco has been soliciting orders for its games at least since January 1982. Its Pac-Man game was available for retail sale then and its Galaxian game apparently was so available the following month; in any event, both are now being sold to the public. Coleco has expended large sums in advertising and marketing its handheld games.

Bandai's Packri Monster Game was designed for it by another Japanese company named Kaken. Work on the game apparently began in October 1980; it was first produced for distribution in April or May 1981. BL created its Galaxian game in Japan apparently during early 1980. BL sells these games to BO; BO sells them, in Japan, to Bandai which, in turn, actually imports them into the United States. Bandai has been selling Galaxian units in the United States since late 1980 and Packri Monster Games since July 1981.

Midway's Arcade games cost several thousand dollars and are sold primarily to arcades, bars, and similar establishments. Bandai's games sell for approximately $30-$50 and are retailed to the general public mainly through toy stores.

II. The Games

At the heart of a copyright infringement action are the works themselves. Since audiovisual works are at issue here, extensive visual and aural examinations have been undertaken. A description of the various games is thus in order.⁵

A. Midway's Pac-Man: The Seventh Circuit in the recent case of Atari v. North American Philips Consumer Electronics Corp., 672 F.2d 607 (7th Cir. 1982) had before it an infringement action involving the very same Midway Pac-Man game as is at issue here. The following description, which this court adopts, may be found at 672 F.2d 610-611:

The copyrighted version of PAC-MAN is an electronic arcade maze-chase game. Very basically, the game "board," which appears on a television-like screen, consists of a fixed maze, a central character (expressed as a "gobbler"), four pursuit characters (expressed as "ghost monsters"), several hundred evenly spaced pink dots which line the pathways of the maze, four enlarged pink dots ("power capsules") approximately located in each of the maze's four corners, and various colored fruit symbols which appear intermittently near the middle of the maze during the play of the game.

Using a "joy stick," the player guides the gobbler through the maze, consuming pink dots along the way. The monsters, which roam independently within the maze, chase the gobbler. Each play ends when a monster catches the gobbler, and after three plays, the game is over. If the gobbler consumes a power capsule, the roles reverse temporarily: the gobbler turns into the hunter, and the monsters become vulnerable. The object of the game is to score as many points as possible by gobbling dots, power capsules, fruit symbols, and monsters.

The PAC-MAN maze has a slightly vertical rectangular shape, and its geometric configuration is drawn in bright blue double lines. Centrally located on the left and right side of the maze is a tunnel opening. To evade capture by a pursuing monster, the player can cause the central character to exit through one opening and re-enter through the other on the opposite side. In video game parlance this concept is called a "wraparound." In the middle is a rectangular box ("corral") which has a small opening on the upper side. A scoring table, located across the top of the maze, displays in white the first player's score on the left, the high score to date in the middle, and the second player's score on the right. If a player successfully consumes all of the dots, the entire maze flashes alternately blue and white in victory, and a new maze, replenished with dots, appears on the screen. When the game ends a bright red "game over" sign appears below the corral.

At the start of the game, the gobbler character is located centrally near the bottom of the maze. That figure is expressed as a simple yellow dot, somewhat larger than the power capsules, with a V-shaped aperture which opens and closes in mechanical fashion like a mouth as it travels the maze. Distinctive "gobbling" noises accompany this action. If fate (or a slight miscalculation) causes the gobbler to fall prey to one of the monsters, the action freezes, and the gobbler is deflated,

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