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Micro Star v. Formgen Inc. - 154 F.3d 1107 (9th Cir. 1998)

Rule:

The Copyright Act defines a derivative work as a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a "derivative work."

Facts:

FormGen Inc., GT Interactive Software Corp. and Apogee Software, Ltd. (collectively FormGen) made, distributed and own the rights to Duke Nukem 3D (D/N-3D), an immensely popular computer game. With FormGen's encouragement, players frequently post levels they have created on the Internet where others can download them. Micro Star, a computer software distributor, did just that: It downloaded 300 user-created levels and stamped them onto a CD, which it then sold commercially as Nuke It (N/I). N/I was packaged in a box decorated with numerous "screen shots," pictures of what the new levels look like when played. Micro Star filed suit in district court, seeking a declaratory judgment that N/I did not infringe on any of FormGen's copyrights. FormGen counterclaimed, seeking a preliminary injunction barring further production and distribution of N/I. The district court held that N/I did not infringe FormGen's copyright. The district court did, however, grant a preliminary injunction as to the screen shots, finding that N/I's packaging violated FormGen's copyright by reproducing pictures of D/N-3D characters without a license. The court rejected Micro Star's fair use claims. Both sides appeal their losses.

Issue:

Was FormGen entitled to a preliminary injunction to bar Micro Star from further production and distribution of N/I?

Answer:

Yes.

Conclusion:

The Court of Appeals for the Ninth Circuit reversed the district court's order denying a preliminary injunction on the basis that FormGen would likely succeed at trial in proving that Micro Star had infringed its copyright, and affirmed the partial grant of a preliminary injunction. The Court stated that FormGen’s copyright registration created a presumption of ownership. To succeed on the merit then, FormGen only needed to show copying of protected expression by Micro Star. The CD was found to be a derivative work, because the work incorporated the protected work in a concrete and permanent form, and infringed on the story contained in the protected work. As a derivative work, FormGen as copyright holder held exclusive right to prepare derivative work based on the game under the Copyright Act, 17 U.S.C.S. § 106(2). The Court further rejected the defenses of fair use and abandonment as raised by Micro Star.

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