Galaxy Electronics Pty Ltd v Sega Enterprises Ltd & Anor Gottlieb Enterprises Pty Ltd v Sega Enterprises Ltd
[1997] FCA 403
•23 MAY 1997
CATCHWORDS
INTELLECTUAL PROPERTY - Copyright - computer games - parallel importation - circuit layout - integrated circuit containing copy of computer program - whether series of visual images generated is a “cinematograph film” within the meaning of s 10 Copyright Act 1968 - whether visual images “embodied” in the integrated circuit - time of “publication” of computer game.
WORDS AND PHRASES - “embodied”.
Copyright Act 1968 ss 10, 24
Circuit Layouts Act 1989 ss 5, 24
Stern Electronics Inc v Kaufman 669 F 2d 852 (1982)
Midway Mfg Co v Artic International Inc 704 F 2d 1009 (1983)
GALAXY ELECTRONICS PTY LTD v SEGA ENTERPRISES LTD & ANOR
No NG 785 of 1996
GOTTLIEB ENTERPRISES PTY LTD v SEGA ENTERPRISES LTD & ANOR
No NG 786 of 1996
Lockhart, Wilcox, Lindgren JJ
Sydney
23 May 1997
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No NG 785 of 1996
GENERAL DIVISION )
On appeal from a Judge of the Federal Court of Australia
BETWEEN:
GALAXY ELECTRONICS PTY LIMITED
Appellant
AND:
SEGA ENTERPRISES LIMITED
First RespondentAVEL PTY LIMITED (ACN 009 041 016)
Second RespondentNo NG 786 of 1996
BETWEEN:
GOTTLIEB ELECTRONICS PTY LIMITED (ACN 002 809 538)
Appellant
AND:
SEGA ENTERPRISES LIMITED
First RespondentAVEL PTY LIMITED (ACN 009 041 016)
Second Respondent
CORAM:Lockhart, Wilcox, Lindgren J
PLACE:Sydney
DATE:23 May 1997
MINUTE OF ORDERS
No 785 of 1996
THE COURT ORDERS THAT:
The appeal be dismissed.
The appellant pay the respondents’ costs.
- 2 -
No NG 786 of 1996
THE COURT ORDERS THAT:
The appeal be dismissed.
The appellant pay the respondents’ costs.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY ) No. NG785 of 1996
)
GENERAL DIVISION )
BETWEEN:GALAXY ELECTRONICS PTY LIMITED
Applicant
AND: SEGA ENTERPRISES LIMITED
First Respondent
AVEL PTY LIMITED
Second Respondent
No. NG785 of 1996
BETWEEN:GOTTLIEB ELECTRONICS PTY LIMITED
Applicant
AND: SEGA ENTERPRISES LIMITED
First Respondent
AVEL PTY LIMITED
Second Respondent
COURT: LOCKHART, WILCOX and LINDGREN JJ.
PLACE: SYDNEY
DATE: 23 MAY 1997
REASONS FOR JUDGMENT
LOCKHART J.
I have read the reasons for judgment of Wilcox J and agree with them. I also agree with the additional observations of Lindgren J.
I certify that this and the
preceding one (1) page are a
true copy of the reasons for
judgment herein of the Honourable
Justice LockhartAssociate
Dated: 23 May 1997
IN THE FEDERAL COURT OF AUSTRALIA )
)No. NG785 of 1996
NEW SOUTH WALES DISTRICT REGISTRY )
)
GENERAL DIVISION )
ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA
BETWEEN:GALAXY ELECTRONICS PTY LIMITED (ACN 061 917 728)
Appellant
AND:SEGA ENTERPRISES LIMITED
First Respondent
and
AVEL PTY LIMITED (ACN 009 041 016)
Second Respondent
No. NG786 of 1996
BETWEEN:GOTTLIEB ELECTRONICS PTY LIMITED (ACN 002 809 538)
Appellant
AND:SEGA ENTERPRISES LIMITED
First Respondent
and
AVEL PTY LIMITED (ACN 009 041 016)
Second Respondent
CORAM:LOCKHART, WILCOX and LINDGREN JJ
PLACE: SYDNEY
DATE: 23 MAY 1997
REASONS FOR JUDGMENT
WILCOX J: These two appeals raise an important question of copyright law: whether computer-generated moving images fall within the statutory definition of "cinematograph film". If this question is answered affirmatively, the images are subject to copyright protection under Part IV of the Copyright Act 1968 ("the Act"). That Part relates to "copyright in subject-matter other than works", including cinematograph films. If it is answered negatively, the images will usually be devoid of copyright protection. I should explain why this is so.
The reason for exclusion of Part III protection
It is common ground between the parties that the moving images with which these appeals are concerned are not protected under Part III of the Act. That Part deals with "copyright in original literary, dramatic, musical and artistic works". The term "literary work" is defined in s 10 of the Act specifically to include "a computer program or compilation of computer programs". But for one factor, the moving images would be protected as an adaptation of a literary work: see s 32(1)(a)(vi) of the Act. According to counsel's analysis, the only reason for excluding the images from protection under Part III is that s 24(2) of the Circuit Layouts Act 1989 applies. I agree with this conclusion. It seems to me that s 24(2) of the Circuit Layouts Act excludes any protection of these moving images under Part III of the Copyright Act. This will usually be the case in relation to imported computer programs.
The term "circuit layout" is defined by s 6 of the Circuit Layouts Act as meaning "a representation, fixed in any material form, of the three-dimensional location of the active and passive elements and interconnections making up an integrated circuit". An "integrated circuit" is:
"a circuit, whether in a final form or an intermediate form, the purpose, or one of the purposes, of which is to perform an electronic function, being a circuit in which the active and passive elements, and any of the interconnections, are integrally formed in or on a piece of material."
Section 16 of the Circuit Layouts Act deals with the question who is the owner of what the Act calls "EL rights", the nature of which are specified by s 17. The abbreviation, "EL" refers to "eligible layouts". An "eligible layout" is:
"an original circuit layout;
(a)the maker of which was, at the time the layout was made, an eligible person; or
(b)that was first commercially exploited in Australia or in an eligible foreign country."
Section 24 of the Circuit Layouts Act provides:
Where:
(a)an eligible layout is commercially exploited, whether in Australia or elsewhere, by, or with the licence of, the owners of the EL rights in the layout; and
(b)a person acquires a copy of the layout, or an integrated circuit made in accordance with the layout, as a result of that commercial exploitation;
it is not an infringement of the EL rights in the layout if the person commercially exploits the copy or the integrated circuit in Australia.
In spite of section 37 of the Copyright Act 1968 and section 38 of that Act to the extent that section 38 applies to imported articles, where the commercial exploitation of an integrated circuit containing a copy or adaptation of a work (being an integrated circuit made in accordance with an eligible layout) is not, under this section, an infringement of the EL rights in the layout, that commercial exploitation is not an infringement of the copyright in that work unless the making of that copy or adaptation was an infringement of that copyright.
Expressions used in subsection (2) that are used and defined in the Copyright Act 1968 have the same respective meanings in that subsection as they have in that Act."
For present purposes, the critical element in s 24 is the exclusion, by subs (2), of the protection that ss 37 and 38 of the Copyright Act would otherwise provide in respect of the commercial exploitation of an integrated circuit, made in accordance with an eligible layout which contains a copy or adaptation of a work. Sections 37 and 38 of the Copyright Act deal with infringements of works, including literary and artistic works.
The respondents to the present appeals accept the above result, in relation to Part III of the Act. But they seek to enforce Part IV against the appellants.
The games
The respondents, Sega Enterprises Pty Limited ("Sega") and Avel Pty Limited ("Avel"), are respectively the manufacturer and exclusive Australian licensee of two video games, "Virtua Cop" and "Daytona USA Twin". The appellant, Galaxy Electronic Pty Limited ("Galaxy"), imported into Australia machines containing copies of the computer program that generated the visual images and sounds constituting the game "Virtua Cop" and displayed them for sale or hire at its premises. The appellant, Gottlieb Electronics Pty Limited ("Gottlieb"), did the same things in relation to "Daytona USA Twin". Both appellants concede that, if the video games are a "cinematograph film", their actions constitute an infringement of the respondents' rights; but they say the games are not cinematograph films.
It is not necessary to describe both games in detail. They are similar in nature. The description given by the learned trial judge, Burchett J, was not challenged. I gratefully adopt it.
"There are two video games with which the cases are concerned, one entitled 'Virtua Cop' and the other 'Daytona USA'. Each presents on the video screen a series of images resembling, more or less, a traditional movie film. In the case of Virtua Cop, an extremely simple but violent tale is told of assaults by police upon a criminal organisation. In the case of Daytona USA, what is involved is car racing. The parties were agreed that it is sufficient to concentrate upon Virtua Cop, since the two video games are constructed upon the same principle. In Virtua Cop, the protagonists are two police officers (with whom the players of the game identify) whose investigations are resisted, first, at a cargo wharf, next, at a construction site, and finally at their antagonists' evil headquarters. To begin with, there is a brief introduction, followed by the main part of the game in which the player must keep shooting quickly and accurately, with a make-believe weapon or 'input' device, at the correct villainous targets, so that the various assaults will progress according to the script. At the end, there is a triumphant finale, when the police congratulate each other and the dastards are led away in handcuffed defeat. Only the successful player will reach this denouement, and only the very skilled can possibly do so without numerous setbacks along the way, caused by misdirected responses, or failures to respond, to the actions depicted on the screen. For example, if the player's shot misses a criminal, the player may himself be shot by the criminal; and if this happens a predetermined number of times, the assault fails, and the game ends. Also, each time a criminal is merely winged, he may react differently, depending on where he has been hit. Thus, except for the opening and closing sequences, the events represented on the screen will show differences from screening to screening, except where the player's responses are all correct.
What this means, it will be appreciated, is that the apparatus is designed to screen the simple story only when the correct responses to a series of cues are fed into it by the player; and when incorrect responses are given, a number of variations will result."
Burchett J detailed the way "Virtua Cop" was created. He said:
"Graphic designers developed the scenes, and representations of the characters. In doing so, they made drawings and models, and decided, for instance, how a particular character would walk. Sets were made up. A 'test version' was prepared on a computer and copied onto a video tape. Further detailed sketches of scenes to be depicted on the screen were prepared by hand. These sketches were used as the basis for the preparation of the computer programme, according to which particular scenes were ultimately enabled to be depicted on the screen. The programme itself was extremely sophisticated. It calculated the three-dimensional position of each part of each object and character at each stage of all movements. An example of the sophistication involved is the windscreen of a car, which is shown three-dimensionally, with a superimposed two-dimensional image of a reflection of the sky appearing on it.
Sound effects, music, and very simple dialogue were also required. Over eighty sound effects were selected from a sound library or created, and then manipulated, for inclusion in the programme. Dialogue was recorded, and that recording was also manipulated and included in the programme. Music was added after composition on a synthesiser.
When all the work had been completed and was brought together, it was represented by a highly specialized piece of computer equipment, suitable, and suitable only, for bringing Virtua Cop to the screen. Although, as I have said, sketches, models and video tape were used in the course of the creation of the programme, in the finished product, the screen images were not represented by anything comparable to the tiny translucent images which characterize the original technology of cinematograph film. A closer analogy could be drawn to video tape, containing magnetic fields that may be transformed into visual images upon a screen. But the respondents argue that even this analogy misses the mark. According to their contention, Virtua Cop is not represented in any form until it is born on the screen out of the union between the player's input and the computer programme that calculates the three-dimensional reference points, not images, by reference to which the images themselves are made to appear on the screen. The respondents say that the visual images were not stored in any manner; mathematical co-ordinates of models of objects, together with animation and texture mapping data, were stored in digital form, and are used by the controlling programme to create images on the screen. In doing so, the respondents say, the 'microcomputer controls the sequence of visual displays and aural effects in response to a player's actions and this generates a different game play for each player within the overall limitations of objects and scenes available to be generated by the controlling program'. Thus, they contend, ' the visual imagery ... is an artefact of real-time computer graphics in that the images on the screen are synthesised on the fly by the controlling program'. On this basis, their argument asserts it is 'not correct to say that the 2-dimensional screen images themselves are stored in the computer like some form of 'digital movie' and simply played back during the game.'
The parties called "the respondents" by his Honour are, of course, the present appellants.
Burchett J noted that the expert called to give evidence on behalf of Sega and Avel, while disputing the ultimate conclusion, conceded the technical accuracy of the proposition put by Galaxy and Gottlieb.
The trial judge's reasoning
At the beginning of his reasoning, Burchett J made an important observation:
"... there is a significant concession involved in the proposition that the influence of the player's actions is confined within 'the overall limitations of objects and scenes available to be generated by the controlling program'. What this must mean is that stored within the computer is the capacity to produce, and the limitation to producing only, the co-ordinates and other effects necessary to constitute upon the screen a particular limited number of variants upon the basic theme. Of course, if a player, to use the technical jargon, responds at all times with the correct 'inputs', only the one version of the story will appear upon the screen."
His Honour then set out the definition of "cinematograph film" in s 10 of the Act and its amplification in s 24. Section 10 provides that, unless the contrary intention appears:
"'cinematograph film' means the aggregate of the visual images embodied in an article or thing so as to be capable by the use of that article or thing:
(a)of being shown as a moving picture; or
(b)of being embodied in another article or thing by the use of which it can be so shown;
and includes the aggregate of the sounds embodied in a sound-track associated with such visual images;"
Section 24 reads:
"For the purposes of this Act, sounds or visual images shall be taken to have been embodied in an article or thing if the article or thing has been so treated in relation to those sounds or visual images that those sounds or visual images are capable, with or without the aid of some other device, of being reproduced from the article or thing."
Burchett J commented:
"The expert evidence adduced by the respondents appeared to seize upon the expression 'the visual images embodied in an article or thing'. Plainly enough, what is seen by the viewer is shown as a moving picture; but the point made was 'that there does not exist inside the computer anywhere a 2-dimensional image [of what appears on the screen]. That 2-dimensional image is simply computed from looking at all the three-dimensional vertices of the polygon model [this is a reference to the way in which the computer apprehends objects] and doing what is a clever arithmetic on it'. The validity of this argument must depend on how the word 'embodied' is understood. This word, as is made clear by The New Shorter Oxford English Dictionary (1993), generally refers to the giving of 'a material or discernible form to (an abstract principle, concept, etc.)"
His Honour called in aid the Lord Chancellor's song in Iolanthe, saying it indicated the "precise sense" conveyed by "embodied":
"The Law is the true embodiment
Of everything that's excellent.
It has no kind of fault or flaw,
And I, my Lords, embody the Law."
He also referred to the words of a real Lord Chancellor, Lord Cranworth, in Jefferys v Boosey (1854) 4 HLC 815; 10 ER 681:
"So long as a literary work remains unpublished at all, it has no existence, except in the mind of its author, or in the papers in which he, for his own convenience, may have embodied it."
The trial judge said:
"When Lord Cranworth used the word 'embodied' in that way, I think he was speaking of an author giving his creation a form in which it could be held for continued existence and use. In my opinion, that is the essence of the meaning also intended to be conveyed by the Report on Computer Software Protection (1995) of the Copyright Law Review Committee, chaired by Sheppard J, at para.10.142, where the Committee referred to the importation of an integrated circuit in order 'to import a copyright work embodied in that integrated circuit' (Burchett J's emphasis)."
Burchett J rejected the notion that an embodiment of a visual image required something in the nature of a frame, as on a reel of film, of which the image is a reflection. He cited a number of judicial decisions favouring a liberal construction of copyright legislation. He said the legislative history shows Parliament intended to take a broad view in relation to copyright in a film, "and not to tie the copyright to any particular technology". He cited the United Kingdom's Gregory Report (1952) and the Second Reading Speech for the Australian Copyright Bill 1986, both of which refer to the technical interchangeability of cinematograph film and video tape. Burchett J commented that, against this background:
"... it seems to me that the definition of 'cinematograph film', expressed as it is in terms of the result achieved rather than of the means employed, points very strongly to an intention to cover new technologies which do actually achieve the same result. This view is, of course, strengthened by the terms of s.24. That section was plainly inserted to ensure that the word 'embodied' did not receive a narrow construction. It applies quite literally in the present case. With the aid of 'some other device', namely, the input device utilised by the player of the video game, the apparatus is capable of reproducing quite precisely the aggregate of the visual images created by Sega Enterprises Limited so that they are shown as a moving picture. To demonstrate this, it is sufficient, of course, to refer to the visual images created to be shown upon the reception by the apparatus of the 'correct' inputs. In any case, as I have already pointed out, the variations are within predetermined limits ..."
After referring to other matters, Burchett J noted the applicants' alternative argument that the subject machines constituted a "sound recording". He pointed out that, if the computer-generated images constituted a "cinematograph film", this argument must fail; s 23(1) of the Copyright Act provides that "sounds embodied in a sound track associated with visual images forming part of cinematograph film shall be deemed not to be a sound recording."
The arguments on appeal
The appellants' counsel submit that the trial judge should have determined whether the video games should be classified as cinematograph films or as computer programs, but failed to do so. They say this was necessary because the Copyright Act "does not contemplate the possibility that one subject matter can be protected both as a work and as a subject matter other than a work". If Burchett J had made a choice, they argue, he would have held the games were each a computer program, and so a "literary work". The result would have been that ss 37 and 38 of the Act operated to exclude a finding of infringement.
Next, counsel argue that the trial judge erred in rejecting their clients' contention regarding frames. They say:
"The reference to 'the aggregate of the visual images' is a reference to the frames which have always been the basic element of cinematograph films. It cannot be a reference to individual visual elements within a single frame because the individual images on a single frame are not capable of being shown as a moving picture. It is the sequence of frames which enables a cinematograph film to create an illusion of motion. Furthermore, if the images on a single frame are the images referred to in the definition, then the single frame would constitute a cinematograph film.
The video games in this case do not embody a plurality of individual frames. Rather, they generate individual frames from moment to moment by combining:
(a)data about individual 3-dimensional objects;
(b)input data which dictates, within limits, the position of those objects;
(c)data about the stage which the player has reached in the particular instance of the game."
Finally, counsel emphasise the distinctive nature of computer-generated images:
"A movie which is encoded in a form capable of being decoded and displayed by a computer remains a 'cinematograph film'. The techniques employed here are entirely different. Each 'frame' of the visual display is generated at the moment it is displayed. It is generated not by decoding information about an existing image, but by calculating the position and aspect of each object and computing its 2-dimensional appearance from that data.
The content of each individual frame during the particular instance of a game is generated 'on the fly' by the program, and may not have an exact counterpart in any other instance of the game. The fact that individual scenes are similar in various instances of the game deflects attention from the much more significant fact that the individual scenes are rarely identical. That is a phenomenon which has no precedent in cinematography.
Accordingly, the subject matter of the case does not comfortably fit within the definition of 'cinematograph film', even if it can be made to fit by adopting a liberal approach to the task, as His Honour did. However, the subject matter fits exactly the definition of 'computer program'. As a matter of construction, the subject matter should be regarded as computer programs."
Counsel for the respondents say these submissions contain two essential errors: they confuse the subject matter in which copyright subsists with the physical embodiment or material form in which it is made, and they attempt to limit the concept of cinematograph film to frames.
In relation to the first matter, counsel argue:
"It has always been the case that no copyright can subsist in a work (and, more recently, subject matter other than work) until it is 'made': that is 'reduced to' some material form or 'embodied in' some physical thing. In addition to the obvious need for copyright subject-matter to be made so that it can be identified, it is also necessary in the international system of copyright for a work to have sufficient physical connection with its country of origin. The distinction always remains between the physical form in which a work or other subject-matter is made and the subject-matter itself."
Counsel for the respondents say Burchett J identified this distinction; it provided the basis for his construction of the definition of "cinematograph film" in s 10 and of s 24. They argue it is wrong to speak of dual protection for a single subject-matter:
"The subject-matter of each of the Respondents' cinematograph films is an aggregate of images and sounds. The subject-matter of each of the Respondents' computer programs is a set of instructions. The instructions affect the functioning of a device with the aid of which the images and sounds are reproduced, in terms of s24." [Original emphasis]
Conclusions
There was a dispute between counsel as to whether it is technically accurate to say that computer-generated images are not framed. I do not find it necessary to reach a view about that question. I accept the respondents' submission that there is no warrant for reading into the definition of "cinematograph film" a requirement of frames. This element is not included within the definition.
I agree with Burchett J that it would be wrong to interpret narrowly the definition of "cinematograph film" in s 10 and s 24. These provisions were intended to cover new technologies, the emphasis being on the end product - motion pictures - rather than the means adopted to create those pictures. Nonetheless, the definition will apply to any particular new technology only if that technology satisfies the words of the definition, liberally read.
I also accept that Burchett J was not required to choose between a classification of the video games as a "cinematograph film" and a "computer program". If the video games fell within the definition of "cinematograph film", the distinction as to subject matter postulated by counsel for the respondents would apply.
It is necessary to distinguish between three things: the integrated circuit, the computer program and the visual images. As the definition used in the Circuit Layouts Act demonstrates, an integrated circuit is a physical thing, an electrical circuit containing active and passive elements. It is protected by s 19(2) of the Circuit Layouts Act, although subject to the limitations contained elsewhere in that Act. A computer program, as previously mentioned, is a set of instructions. As I understand the situation, the program is stored in the computer's memory, which memory comprises a series of specially-configured integrated circuits. So it is covered by the Circuit Layouts Act. At the same time, as an expression of instructions, it falls readily within the traditional copyright concept of "literary work". As earlier stated, that term is defined by s 10 of the Copyright Act so as to include a computer program, a term that is itself defined by s 10. So Part III of the Copyright Act applies to any copying or adaptation of a computer program, but subject to the considerable limitations on this application effected by s 24 of the Circuit Layouts Act. The visual images are the product of the interaction of the computer program with the integrated circuit. They are not part of the program; they are its effect.
The appellants' submission about choice of categories must be evaluated against this background. The submission seems to assume that it would not be possible for anyone to copy the visual images created by the Sega graphic designers without copying the computer program, and perhaps vice versa. This is not so. Copiers could take advantage of the intellectual effort of the Sega designers in either of two ways. A person having the requisite skills and equipment could open up the machine and microchip housings and copy the circuit layout and program. This would involve an infringement of the Circuit Layouts Act, at least. For present purposes, that is immaterial. What is material is that the copier would not be copying any of the visual images that the program is capable of creating, but merely the circuit designs and program instructions that make the images possible. Theoretically at least, the copier might do this without knowing what images were capable of being generated by the layout and program being copied.
Conversely, it would be possible for a person who had no knowledge of computer technology to copy the visual images that the computer program was capable of generating; not by copying the program but by copying the images themselves. For example, the copier could place a video camera in front of the game screen and video the images that appeared during the course of a game. The resultant video film would comprise only that game; it would reflect the player input of that particular game. But it would comprise images, and sequences of images, devised by the graphic designers; even though there had been no copying of the circuit layout or computer program.
Against this background, I have come to share the opinion of Burchett J that the critical question in these cases is the application to them of the word "embodied". The definition of "cinematograph film" refers to "the aggregate of the visual images embodied in an article or thing ...". Section 24 sets out circumstances under which "visual images shall be taken to have been embodied in an article or thing". I also agree that the word "embodied" refers to the giving of a material or discernible form to an abstract principle or concept. The Lord Chancellor's Iolanthe song neatly illustrates this meaning. According to his Lordship, the abstract concept of excellence achieves material manifestation in the Law; and the Law, in turn, is manifested in his noble person.
It seems inherent in both the dictionary definition and the Iolanthe illustration that the abstraction must pre-exist the material manifestation. Counsel for the appellants argue that the images visible to players of the games do not exist before the moment of visibility; accordingly, it cannot be said that they represent an embodiment of pre-existing images. Counsel make the point that computer-generated images are fundamentally different to film or video images; in the latter case the images are fixed on celluloid or videotape before the moment of projection and viewing.
This analysis is superficially attractive; but, I think, unsound. The visual images depicted in these video games did exist before the game was played. They existed in the minds of their creators and the drawings and models they made. The images were embodied in the computer program built into the video game machine so as to be capable, by the use of that program, of being shown as a moving picture. It does not matter that they were embodied in a different form; that is, three-dimension vertices of the polygon model, rather than a two-dimensional image. The statutory definition says nothing about the form of embodiment. Nor does it matter that the images seen by players are created by computer calculations only immediately before their appearance on the screen of the video game machine. Although that means, in a sense, that they are new, they are exact recreations of images previously devised by the graphic designers. Similarly, of course, it is unimportant that the images could not be seen on the screen as a moving picture until generated by the computer, any more than it matters that a length of video tape is incapable of being seen as a moving picture until passed through a video player.
Counsel for the appellants emphasise the circumstance that the sequence of images seen in any particular game reflects player input. It may be true that no two sequences will be identical. But that does not mean the sequence is incapable of coming within the definition of "cinematograph film". As is demonstrated by analogous American cases, a question of degree is involved. The question in those cases was whether the subject video game was an "audiovisual work". The legislation defined "audiovisual works" as "works that consist of a series of related images which are intrinsically intended to be shown by the use of machines, or devices such as projectors, viewers, or electronic equipment, together with accompanying sounds, if any, regardless of the nature of the material objects, such as films or tapes, in which the works are embodied". In Stern Electronics Inc v Kaufman 669F 2d 852 (1982) it was contended that there was no copyright in the subject game because it was neither fixed in a tangible medium of expression nor original. Both contentions arose from the fact that the sequence of some of the images appearing on the screen during each play of the game varied according to player actions. Speaking for the United States Court of Appeals, Second Circuit, Newman J said at 855-856:
"If the content of the audiovisual display were not affected by the participation of the player, there would be no doubt that the display itself, and not merely the written computer program, would be eligible for copyright. The display satisfies the statutory definition of an original 'audiovisual work,' and the memory devices of the game satisfy the statutory requirement of a 'copy' in which the work is 'fixed'.
...
"We agree with the District Court that the player's participation does not withdraw the audiovisual work from copyright eligibility. No doubt the entire sequence of all the sights and sounds of the game are different each time the game is played ... Nevertheless, many aspects of the sights and the sequence of their appearance remain constant during each play of the game. These include the appearance ... of the player's spaceship, the enemy craft, the ground missile bases and fuel depots, and the terrain over which (and beneath which) the player's ship flies, as well as the sequence in which the missile bases, fuel depots, and terrain appears. Also constant are the sounds heard whenever the player successfully destroys an enemy craft or installation or fails to avoid an enemy missile or laser. It is true, as appellants contend, that some of these sights and sounds will not be seen and heard during each play of the game in the event that the player's spaceship is destroyed before the entire course is traversed. But the images remain fixed, capable of being seen and heard each time a player succeeds in keeping his spaceship aloft long enough to permit the appearances of all the images and sounds of a complete play of the game. ... The repetitive sequence of a substantial portion of the sights and sounds of the game qualifies for copyright protection as an audiovisual work."
At 857 he said:
"We need not decide at what point the repeating sequence of images would form too insubstantial a portion of an entire display to warrant a copyright, nor the somewhat related issue of whether a sequence of images ... might contain so little in the way of particularized form of expression as to be only an abstract idea portrayed in noncopyrightable form ... Assessing the entire effect of the game as it appears and sounds, we conclude that its repetitive sequence of images is copyrightable as an audiovisual display."
The following year a similar question came before the Seventh Circuit of the United States Court of Appeals, with a similar result. The case was Midway Mfg Co v Artic International Inc 704 F 2d 1009 (1983). Speaking for the Court, Cummings CJ observed that it was not immediately obvious that video games fell within the definition of "audiovisual works", the reason being that, each time a video game is played, a different sequence of images appears on the screen. But he held that the phrase "series of related images" might be construed to refer, not only to a set of images displayed in a fixed sequence, but also "to any set of images displayed as some kind of unit". At 1011-1012 he said:
"The person playing the game can vary the order in which the stored images appear on the screen by moving the machine's control lever. That makes playing a video game a little like arranging words in a dictionary into sentences or paints on a palette into a painting. The question is whether the creative effort in playing a video game is enough like writing or painting to make each performance of a video game the work of the player and not the game's inventor.
We think it is not. Television viewers may vary the order of images transmitted on the same signal but broadcast on different channels by pressing a button that changes the channel on their television. ... Playing a video game is more like changing channels on a television than it is like writing a novel or painting a picture. The player of a video game does not have control over the sequence of images that appears on the video game screen. He cannot create any sequence he wants out of the images stored on the game's circuit boards. The most he can do is choose one of the limited number of sequences the game allows him to choose. He is unlike a writer or a painter because the video game in effect writes the sentences and paints the painting for him; he merely chooses one of the sentences stored in its memory, one of the paintings stored in its collection."
Upon analysis, the present case seems to fall directly within the terms of the s 10 definition of "cinematograph film", without the necessity of resorting to s 24. However, that section puts the matter beyond doubt. The visual images that constitute the moving picture are taken to have been "embodied" in the computer program because the computer program was so treated in relation to those images as to be capable of reproducing them.
Counsel for the appellants argue it is not enough that a particular article was capable of producing particular sounds or visual images. If capability is the test, they say, every piano would have to be held a "sound recording" of Beethoven's "Moonlight Sonata". Every piano is capable of producing the notes that constitute that work. Counsel have in mind that the term "sound recording" is defined by s 10 as meaning "the aggregate of the sounds embodied in a record" and a "record" includes any "device in which sounds are embodied".
I accept capability is not enough. It is important to note the requirement of s 24 that the article or thing "has been so treated in relation to those sounds or visual images" that they are capable of being reproduced from the article or thing. There must have been a treatment of the article or thing that is related to specific sounds or visual images. This can be said of a computer program, not of a piano. It is necessary to include a keyboard in a piano, if it is to be capable of reproducing the notes that constitute the "Moonlight Sonata". But the inclusion of a keyboard is not something done "in relation to" those particular sounds; it is done in relation to piano music generally.
I think Burchett J was correct in holding that the aggregate of the visual images generated by the playing of each of the two subject video games constituted a "cinematograph film" within the meaning of s 10 of the Copyright Act.
Both appeals should be dismissed with costs.
I certify that this and the preceding twenty-four (24) pages
are a true copy of the Reasons for Judgment
of the Honourable Justice Wilcox.
Associate:
Dated: 23 May 1997
APPEARANCES
Counsel for the Applicant: J Burnside QC and J Baird
Solicitors for the Applicant: Corrs Chambers Westgarth
Counsel for the Respondent: D Catterns QC and R Webb
Solicitors for the Respondent: Kemp Strang & Chippindall
Date of hearing: 13 February 1997
IN THE FEDERAL COURT OF AUSTRALIA )
NEW SOUTH WALES DISTRICT REGISTRY ) No NG 785 of 1996
GENERAL DIVISION )
On appeal from a Judge of the Federal Court of Australia
BETWEEN:
GALAXY ELECTRONICS PTY LIMITED
Appellant
AND:
SEGA ENTERPRISES LIMITED
First RespondentAVEL PTY LIMITED (ACN 009 041 016)
Second RespondentNo NG 786 of 1996
BETWEEN:
GOTTLIEB ELECTRONICS PTY LIMITED (ACN 002 809 538)
Appellant
AND:
SEGA ENTERPRISES LIMITED
First RespondentAVEL PTY LIMITED (ACN 009 041 016)
Second Respondent
CORAM:Lockhart, Wilcox, Lindgren J
PLACE:Sydney
DATE:23 May 1997
REASONS FOR JUDGMENT
LINDGREN J:
I have had the benefit of reading the Reasons for Judgment of Wilcox J in draft and agree with the substance of those Reasons and the orders proposed by his Honour. I add the following observations.
The first is historical. Prior to the commencement of the Copyright Act 1968 ("the Copyright Act") on 1 May 1969, copyright under the Copyright Act 1912 subsisted in "works", that is to say, in original literary, dramatic, musical or artistic works, now the subject of Part III of the Copyright Act, but not in "subject-matter other than works", and therefore not in the sound recordings, cinematograph films, television broadcasts and sound broadcasts, and published editions of works, the subject of Part IV of that Act. The question of copyright in respect of cinematograph films was treated as a question of copyright in an original dramatic work. Components of a cinematograph film might also have been the subject-matter of copyright as artistic, musical or literary works.
Under the Copyright Act, the expression "cinematograph film” is defined in sub-s 10 (1) (the definition appears in Wilcox J's judgment); those acts which copyright in a cinematograph film gives the exclusive right to do are identified in s 86; and the copyright is created by s 90. Section 221 provides that copyright does not subsist by virtue of s 90 in a cinematograph film made before 1 May 1969. However, in relation to such a film, sub-s 204 (2) provides that a "dramatic work" includes "a cinematograph production where the arrangement, the acting form or the combination of incidents represented gives the work an original character." Otherwise, the expression "dramatic work" is defined in sub-s 10 (1) to include a scenario or script for a cinematograph film, but not the actual "aggregate of visual images" constituting a cinematograph film as defined in the sub-section.
The advent of the computer chip exposed the inadequacy of existing copyright protection in relation to the new technology. There were difficulties in accommodating the layout of a chip's integrated circuit to the notion of an "artistic work". There was, as well, difficulty posed by the possible requirement of registration of the layout as an industrial design. In the result, the Circuit Layouts Act 1989 ("the Circuit Layouts Act") was enacted and the Copyright Act was amended. The substantive provisions commenced to operate on 1 October 1990.
By s 49 of, and the Schedule to, the Circuit Layouts Act, (a) the definition of "artistic work" in sub-s 10 (1) of the Copyright Act was amended to exclude "a circuit layout within the meaning of the Circuit Layouts Act 1989", and (b) the Designs Act 1906 was amended in two respects. The definition of "article" in sub-s 4 (1) of the Designs Act was amended by the exclusion of "an integrated circuit, or part of an integrated circuit, within the meaning of the Circuit Layouts Act, or a mask used to make such a circuit"; and a new s 7 provided that where a design applicable to an integrated circuit, or part of an integrated circuit or to a mask used to make such a circuit was registered under the Act before, in effect, 1 October 1990, the registration was not to be renewed after that date.
Like the cinematograph film some twenty-one years earlier, now the computer chip gave rise to a special and exclusive regime of copyright protection in respect of a product. But like the copyright in the cinematograph film, the new form of copyright under the Circuit Layouts Act did not necessarily exclude copyright in antecedent works. This consideration directs attention to the scheme of the Circuit Layouts Act.
Under the regime in place since 1 October 1990, it is necessary to distinguish between three concepts: a "circuit layout", an "integrated circuit" and a "computer program". The first concept, "circuit layout", is defined in s 5 of the Circuit Layouts Act to mean:
"a representation, fixed in any material form, of the three-dimensional location of the active and passive elements and interconnections making up an integrated circuit."
A circuit layout can be conceived of as the "drawing" or the "mask", in accordance with which the integrated circuit of a chip is to be made. The Circuit Layouts Act protects only "eligible layouts". An eligible layout is an original circuit layout, the maker of which had, when the layout was made, a stipulated connection with Australia, or which was first commercially exploited in Australia or relevant foreign country. Section 17 of the Circuit Layouts Act creates "EL rights" in eligible layouts. EL rights are the exclusive rights to copy the layout in a material form, to make an "integrated circuit" in accordance with the layout or a copy of it, and to exploit the layout commercially in Australia. Section 8 defines "commercial exploitation" for the purposes of the Act. There is commercial exploitation of a circuit layout if the acts of exploitation specified in the section are done, not only in respect of the layout or a copy of it, but also if they are done in respect of an integrated circuit made in accordance with the layout.
The second concept to which I referred, an “integrated circuit”, is defined in s 5 of the Circuit Layouts Act to mean:
"... a circuit, whether in a final form or an intermediate form, the purpose, or one of the purposes, of which it is to perform an electronic function, being a circuit in which the active and passive elements, and any of the interconnections, are integrally formed in or on a piece of material;"
The third concept, a "computer program", is defined in sub-s 10 (1) of the Copyright Act to mean:
"an expression, in any language, code or notation, of a set of instructions (whether with or without related information) intended, either directly or after either or both of the following:
(a)conversion to another language, code or notation;
(b)reproduction in a different material form;
to cause a device having digital information processing capabilities to perform a particular function;"
A computer program or compilation of computer programs is a form of literary work as the definition of "literary work" in sub-s 10 (1) of the Copyright Act makes clear.
Again, it is important not to lose sight of the fact that, subject to one qualification not presently relevant, the subsistence of copyright in subject-matter other than works, such as a cinematograph film, by virtue of Part IV of the Copyright Act, does not affect the operation of Part III of that Act in relation to any literary, dramatic, musical or artistic work from which that other subject-matter is wholly or partly derived, and that, accordingly, "any copyright subsisting by virtue of [Part IV] is in addition to, and independent of, any copyright subsisting by virtue of Part III": s 113 of the Copyright Act. It follows that if the computer games the subject of the present appeals are cinematograph films in which copyright subsists by virtue of Part IV, this does not detract from the subsistence, by virtue of Part III, of, for example, copyright in the computer programs involved.
Section 24 of the Circuit Layouts Act is set out in the Reasons for Judgment of Wilcox J. A computer chip’s integrated circuit will contain a copy or adaptation of a computer program, as defined: see sub-ss 24 (2) and (3) of the Circuit Layouts Act and the definitions of "work", "literary work", "computer program", and para (ba) of the definition of "adaptation" in sub-s 10 (1) of the Copyright Act. But the parallel importing provisions contained in ss 102 and 103 of the Copyright Act 1968 on which the respondents to the present appeals rely, apply in respect of subject-matter other than works, and are not touched by sub-s 24 (2), because ss 37 and 38 of the Copyright Act, which are referred to in that sub-section, comprise parallel importing provisions relating to works alone.
Section 90 of the Copyright Act provides that copyright subsists in the cinematograph films described in the section. The definition of "cinematograph film" in sub-s 10 (1) of that Act which is set out in Wilcox J's Reasons for Judgment, states that the copyright subsists in an "aggregate of the visual images embodied in an article or thing ...". I do not think that the word "embodied" in the definition should be understood to refer only to forms of embodiment known in earlier times. In this respect I agree with the following commentary:
"As in the case of sound recordings there has been some argument as to whether visual images which originate in digital form come within the definition of cinematograph film. But again, the critical factor is the fact that visual images are, directly or indirectly, capable of being shown as a moving picture in whatever form the initial `embodiment' may take place. To assert that the definition requires that the material cannot originate in digital form would seem to involve an extremely literal and unnecessary construction." (Lahore, Copyright and Designs, Vol 1 para [8040], pp 8066-8067-footnote superscript omitted)
At least one form of the "argument" to which this passage refers was noted by the Copyright Convergence Group established by the Minister for Justice, in its report, "Highways to Change", made in August 1994:
"It is not clear whether the [Copyright] Act (in particular section 24) requires that sounds or visual images must exist prior to the treatment of any article or thing. Sounds or visual images may be created by means of writing a code and being emitted as the result of their embodiment in the article or thing, rather than being created and then recorded. The CCG [Copyright Convergence Group] is of the view that the Act should be clarified to ensure that such creations constitute sound recordings or films, and that this issue should be addressed in a further review of the Act." (at para 7.5)
Section 24 of the Copyright Act is also set out in the Reasons for Judgment of Wilcox J. I do not construe that section or any other provision of the Copyright Act to require that the "aggregate of visual images" exist as an aggregate of visual images prior to embodiment. Rather, the aggregate of visual images referred to is the end product which, in the present case, comprises the moving pictures seen as the games are played from time to time. It is true to say of those many possible visual images that they "are" visual images embodied in integrated circuits. In the alternative, the aggregate of visual images did exist prior to embodiment, in that, as Wilcox J has observed, "[t]hey existed in the minds of their creators and the drawings and models they made”.
The appellants submit that the notion of "publication" poses a difficulty for the construction advanced by the respondents. The submission is that since some of the potential combinations of images may never be seen, and since certainly not all of the potential combinations of the images will be seen at the one time, a time of publication of the supposed cinematograph film cannot be identified or, at least, there will be numerous times of publication. The time of publication is an important concept of the Copyright Act since s 94 defines the period of subsistence of copyright in a cinematograph film by reference to the time of its publication. Paragraph 29 (1) (b) of that Act provides that for the purposes of the Act, a cinematograph film is deemed to have been published:
"... if, but only if, copies of the film have been sold, let on hire, or offered or exposed for sale or hire, to the public; ..."
The word "copy" is defined in s 10 in relation to a cinematograph film to mean:
" ... any article or thing in which the visual images or sounds comprising the film are embodied;"
Once it is accepted, as I think it should be, that all the potential visual images are embodied in an integrated circuit, it is clear that there is a single time of publication in respect of all of them.
Similarly, the notion of the "making" of a cinematograph film is not dependent upon the generation of images which arises from a particular actual playing of the computer game. Sub-section 22 (4) of the Copyright Act provides:
"(4) For the purposes of this Act:
(a)a reference to the making of a cinematograph film shall be read as a reference to the doing of the things necessary for the production of the first copy of the film; and
(b)the maker of the cinematograph film is the person by whom the arrangements necessary for the making of the film were undertaken." (underlining supplied)
Once the special definition of a "copy" of a cinematograph film, noted above, is read into this provision, there is no uncertainty as to the time of the making, or the identity of the maker, of a film.
I certify that this and the preceding 10 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.
Associate:
Dated:23 May 1997
Counsel for the Appellants: J Burnside QC and Ms J Baird
Solicitors for the Appellants: Corrs Chambers Westgarth
Counsel for the Respondents: D Catterns QC and R Webb
Solicitors for the Respondents: Kemp Strang & Chippindall
Date of hearing: 13 February 1997
Date of decision: 23 May 1997
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