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In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; the nature of the copyrighted work; the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and the effect of the use upon the potential market for or value of the copyrighted work.
Lewis Galoob Toys manufactured Game Genie, a device that allowed a player to alter up to three features of a Nintendo game. The Game Genie functions by blocking the value for a single data byte sent by the game cartridge to the central processing unit in the Nintendo Entertainment System and replacing it with a new value. Subsequently, Nintendo filed a complaint, arguing that Lewis Galoob violated its copyrights. It prayed for a permanent injunction enjoining Lewis Galoob from marketing the Game Genie. The district court denied Nintendo’s prayer. Hence, the present appeal.
Did Lewis Galoob’s device violate Nintendo’s copyrights?
The Court of Appeals for the Ninth Circuit held that Lewis Galoob’s device was useless by itself, that it could only enhance but could not duplicate or recast any video game's output, and that it did not supplant demand for the video game cartridges; hence, no independent work was created. According to the Court, even if Lewis Galoob’s game enhancement device created derivative works, the displays were fair use under 17 U.S.C.S. § 107, because use of the device for private home enjoyment was a non-commercial, non-profit activity. Moreover, Nintendo failed to show any harm to the present market for its copyrighted games or to any potential market for derivative works because the original games had already been designed to appeal to the largest number of consumers. Hence, the Court affirmed the judgment of the district court.