Sega Enterprises Ltd v Galaxy Electronics Pty Ltd

[1996] FCA 761

CATCHWORDS

COPYRIGHT - cinematograph film - effect of definition - meaning of the word "embodied" - computer generated images in video games - whether films - construction of copyright legislation - nature of copyright - Parliament's intention not to tie film copyright to any particular technology.

WORDS & PHRASES - "embodied".

Copyright Act 1968, ss.10(1), 23, 24

Avel Pty Ltd v Wells (1991) 105 ALR 635; and on appeal (1992) 36 FCR 340
Computer Edge Proprietary Limited v Apple Computer, Inc. (1986) 161 CLR 171
Autodesk Inc v Dyason (1992) 173 CLR 330
Bach v Longman (1777) 2 Cowp. 623; 98 ER 1274
Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 131 ALR 141
Australian Trade Commission v Film Funding and Management Pty Ltd (1989) 87 ALR 49
Pacific Film Laboratories Pty Limited v The Commissioner of Taxation of the Commonwealth of Australia (1970) 121 CLR 154
Millar v Taylor (1769) 4 Burr. 2303; 98 ER 201
Jefferys v Boosey (1854) 4 HLC 815; 10 ER 681
Nintendo Co Ltd v Golden China TV-Game Centre (1993) 28 IPR 313

SEGA ENTERPRISES LIMITED & ANOR -V- GALAXY ELECTRONICS PTY LIMITED

NG 902 of 1994

SEGA ENTERPRISES LIMITED & ANOR -V- GOTTLIEB ELECTRONICS PTY LIMITED

NG 001 of 1995

Burchett J.
Sydney
28 August 1996

IN THE FEDERAL COURT OF AUSTRALIA )  
  )
NEW SOUTH WALES DISTRICT REGISTRY )    NG 902 of 1994
  )   
GENERAL DIVISION                 )

BETWEEN:SEGA ENTERPRISES LIMITED

First Applicant

AND:     AVEL PTY LIMITED

Second Applicant

AND:GALAXY ELECTRONICS PTY LIMITED

Respondent

CORAM:    Burchett J.
PLACE:    Sydney
DATE:     28 August 1996

MINUTE OF ORDERS OF THE COURT

THE COURT ORDERS THAT:

(1)The applicants bring in, on a date to be fixed, short minutes of orders appropriate to be made pursuant to the reasons of the Court.

(2)  The respondent pay the costs of the determination of the separate question.

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 )    NG 001 of 1995
  )   
GENERAL DIVISION                 )

BETWEEN: SEGA ENTERPRISES LIMITED

First Applicant

AND:     AVEL PTY LIMITED

Second Applicant

AND:     GOTTLIEB ELECTRONICS PTY LIMITED

Respondent

CORAM:    Burchett J.
PLACE:    Sydney
DATE:     28 August 1996

MINUTE OF ORDERS OF THE COURT

THE COURT ORDERS THAT:

(1)The applicants bring in, on a date to be fixed, short minutes of orders appropriate to be made pursuant to the reasons of the Court.

(2)  The respondent pay the costs of the determination of the separate question.

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 )    NG 902 of 1994
  )    NG 001 of 1995
GENERAL DIVISION                 )

BETWEEN:SEGA ENTERPRISES LIMITED

First Applicant

AND:     AVEL PTY LIMITED

Second Applicant

AND:GALAXY ELECTRONICS PTY LIMITED

Respondent

AND BETWEEN :    SEGA ENTERPRISES LIMITED

First Applicant

AND:     AVEL PTY LIMITED

Second Applicant

AND:     GOTTLIEB ELECTRONICS PTY LIMITED

Respondent

CORAM:    Burchett J.
PLACE:    Sydney
DATE:     28 August 1996

REASONS FOR JUDGMENT

BURCHETT J.:

Each of these proceedings raises, as a separate question, a problem of the meaning and possible application of the definition of "cinematograph film" in s.10(1) of the Copyright Act 1968, as amplified by s.24. Are the applicants' video games, involving computer-generated images, cinematograph films within the definition? The answer to this question is

vital because, if they are not, it is accepted that the applicants' cases meet an insuperable obstacle in Avel Pty Limited v Wells (1992) 36 FCR 340.

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.

I was provided with a considerable amount of evidence concerning the manner in which Virtua Cop was created.  Sega Enterprises Limited formed a team to do this.  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".

While disputing the ultimate conclusion, the expert called for the applicants conceded the technical accuracy of these propositions, insofar as they describe the nature of the processes performed by the computer.  But I think it should not be overlooked that 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.

The provisions of the Copyright Act 1968 with which this case is centrally concerned are the definition of "cinematograph film" in s.10(1), and the amplification of that definition which is to be found in s.24. Section 10(1) provides:

"In this Act, 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 provides:

"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."

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.)".  The precise sense conveyed by it, as a matter of English idiom, appears in the lines W.S. Gilbert put into the mouth of the Lord Chancellor in Iolanthe:

"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."

The Lord Chancellor is claiming that the Law contains and reflects all excellence, and that he himself holds (and therefore will pronounce) the Law.  Excellence may be a somewhat indefinite abstraction, but the law involves precise rules, and Gilbert, who had practised briefly at the bar, was perhaps thinking of the Latin expression "in gremio iudicis".  The word "embodied" may well have been taken, by the draftsman of s.10, from a usage in copyright law that closely paralleled that of Gilbert's Lord Chancellor.  In Jefferys v Boosey (1854) 4 HLC 815; 10 ER 681 (a case so important in this area that it was described by Windeyer J. in Pacific Film Laboratories Pty Limited v The Commissioner of Taxation of the Commonwealth of Australia (1970) 121 CLR 154 at 166 as "[t]he great case"), Lord Cranworth L.C. said (at 955; 736):

"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."

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" (emphasis added).  The same meaning, I think, is to be found in s.10.

To narrow the sense of the word so as to confine an embodiment of a visual image to something in the nature of a frame, of which the image on the screen is a reflection, would be to introduce a limiting concept not inherent in the language.  The phonetic symbols on paper to which Lord Cranworth alluded did not directly reflect words.  Sumerian cuneiform or Egyptian hieroglyphics would have come closer to doing so.  But, in reality, writing is a code which the brain interprets, just as the computer in the present case interprets coded co-ordinates and input data which it "reads" as visual images on the screen.

A novel or poem will generally be conveyed by the medium of writing; and a film by some means of showing its visual images upon a screen.   But in neither case should the medium, through some narrow interpretation, be permitted to obscure an understanding of the subject matter of copyright.  As regards literary copyright, its true nature was stated by Lord Mansfield in Millar v Taylor (1769) 4 Burr. 2303; 98 ER 201 at 2396; 251, when he said:

"I use the word 'copy,' in the technical sense in which that name or term has been used for ages, to signify an incorporeal right to the sole printing and publishing of somewhat intellectual, communicated by letters.

...

The property in the copy ... is equally an incorporeal right to print a set of intellectual ideas or modes of thinking, communicated in a set of words and sentences and modes of expression.  It is equally detached from the manuscript, or any other physical existence whatsoever."

He went on to describe copyright as "a property in notion" which "has no corporeal tangible substance".  Lord Mansfield's proposition is restated in The Modern Law of Copyright and Designs by Laddie Prescott and Vitoria, 2nd ed. (1995), at para. 2.36:

"It should be borne in mind that although it does no harm to refer to an author's manuscript as his 'work' in everyday speech, it is far otherwise when precision of thought is required.  The 'work' is the product of his mind; the manuscript or other record is merely the medium whereby the precise nature of that mental product may be discovered."

See also the classic American work A Treatise on the Law of Property in Intellectual Productions by E.S. Drone (1879) at 6.   Similarly, in the case of a film, "the copyright subsists in the collage of visual images and sounds which together constitute the film":  per Gummow J. in Australian Trade Commission v Film Funding and Management Pty Ltd (1989) 87 ALR 49 at 64.

The law of copyright, as Windeyer J. declared in Pacific Film Laboratories Pty Ltd (supra, at 166), "is entirely the creature of statute".  In the construction of the various Acts since the statute of Queen Anne (8 Anne c.21) entitled "An Act for the Encouragement of Learning by vesting the Copies of printed Books in the Authors or Purchasors [sic] of such Copies during the Times therein mentioned", the courts have for more than two centuries taken a broad view.  In Bach v Longman (1777) 2 Cowp. 623; 98 ER 1274, which concerned the pirating of two sonatas by J.C. Bach, Lord Mansfield said (at 624; 1274-1275):

"The words of the Act of Parliament are very large:  'books and other writings.'  It is not confined to language or letters.  Music is a science; it may be written; and the mode of conveying the ideas, is by signs and marks.   ...   If the narrow interpretation contended for in the argument were to hold, it would equally apply to algebra, mathematics, arithmetic, hieroglyphics.  All these are conveyed by signs and figures.  There is no colour for saying that music is not within the Act."

This was rightly called by Drone, op. cit. 140, a "liberal" interpretation.  The same approach to construction is reflected in two recent High Court cases.  In Computer Edge Proprietary Limited v Apple Computer, Inc. (1986) 161 CLR 171 at 187-188, Gibbs C.J. said:

"However although it would be no doubt right to give the Copyright Act a liberal interpretation, it would not be justifiable to depart altogether from its language and principles in an attempt to protect the products of scientific and technological developments which were not contemplated, or only incompletely understood, when the statute was enacted."

In Autodesk Inc v Dyason (1992) 173 CLR 330 at 335, Mason C.J. Brennan and Deane JJ., explaining their rejection of a particular argument, said (at 335):

"That narrow literal construction would, however, partly frustrate the obvious legislative intent to confer real protection upon the actual set of instructions regardless of whether they be actually expressed in written form or merely embedded or stored in a non-sensate form such as electrical impulses on a disk, ROM or EPROM." 

Similarly, in his dissenting judgment in Australasian Performing Right Association Ltd v Telstra Corporation Ltd (1995) 131 ALR 141 at 155, Sheppard J. said:

"While I am quite prepared to give the Act a beneficial construction so that it will embrace cases arising because of new technology when its language is tolerably clear, I do not think it right to take this course unless one can be satisfied that the right which is said to exist is one which reasonably arises from the language which parliament has used."

In the case of copyright in a film, the legislative history shows plainly that Parliament did intend to take a broad view, and not to tie the copyright to any particular technology.  The often cited Gregory Report of 1952, presented to the Parliament of the United Kingdom, attests this.  By para.93, attention was drawn to developments in recording technology.  The committee commented: 

"Further, it can no longer be assumed that the reproduction of visual effects must be preceded by photographs, and we are given to understand that even now it is possible to record on a magnetic tape a spectacle which can be reproduced visually as a television programme.  Accordingly, in drafting provisions relating to records, cinematograph films and such matters, we consider that the wording adopted should have regard to the end-product (e.g.

sound or visual representation) rather than to the means whereby these effects are produced."

Similarly, in Australia, the second reading speech of the Attorney-General, Mr N.H. Bowen QC (as he then was), in relation to the Copyright Bill 1968 includes the following (Hansard (1968), House of Representatives, 1534):

"For many purposes, ordinary cinematograph film and videotape are interchangeable.  Thus a scene may be recorded by a television camera on videotape and the videotape later copied on to [an] ordinary cinematograph film.  The incidents recorded may be seen either by viewing the videotape on a television screen or by viewing the cinematograph film on a cinema screen.  The Bill therefore assimilates videotape to ordinary cinematograph film for the purposes of copyright protection and the term 'cinematograph film' appearing in the Bill is defined as including videotape."

Legislative amendments in England, too, have been designed to ensure that videotape is covered:  Copinger and Skone James on Copyright 13th ed. (1991) para.2-30. Against the background of previous legislation, of technological developments, and of the Gregory Report, 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, and they would not have any effect upon my conclusion.

An important additional matter of context, bearing on the construction of the definition of "cinematograph film", is the definition in s.10(1) of "copy". For this, "in relation to a cinematograph film, means any article or thing in which the visual images or sounds comprising the film are embodied". It cannot have been intended that the word "embodied" should, in this definition, have a meaning which would allow computer technology, of the kind employed in the present case, to be utilised to mimic with impunity, for example, a new animated film of the "Mickey Mouse" variety. Dr Lambert, a suitably qualified expert called on behalf of the applicants, gave evidence that some existing movies could be reproduced by object based encoding, and I can see no reason to doubt the feasibility of this being done, now or at least at some time in the expanding future of the technology. An "infringing copy" of a cinematograph film, as defined in s.10(1), must be "a copy of the film". It would be strange indeed if Parliament intended the definition of "copy" to be construed so narrowly that a representation of an animated film, which looked just like the film, would not constitute an infringement, simply because it was produced by the computer technology involved in the present case.

But the respondents refer to the provisions of the Copyright Act and of the Circuit Layouts Act 1989 which were in question in Avel Pty Ltd v Wells (1991) 105 ALR 635; and on appeal, (1992) 36 FCR 340, to argue that the integrated circuits involved in this case must find their protection, if at all, in those provisions. I do not accept this argument. The fact that there are here integrated circuits, and that these give rise to the application of particular statutory provisions, does not subtract from the further, and relevant, fact that the use of the integrated circuits is capable of bringing to the screen, so as to be shown as a moving picture, the aggregate of visual images making up Virtua Cop. That attracts the operation of the provisions of the Copyright Act in respect of cinematograph films.

Then the respondents return to the proposition that a cinematograph film must utilize frames, as, of course, the original moving pictures produced by photographic processes did.  But it seems to me that this involves the fallacy of confusing the means with the ends.  A cinematograph film is "shown as a moving picture".  That is how it appears to the viewer.  But the means by which the effect is produced are not the effect, and it may be accepted that the frames involved in the original technology may not be essential to the production of the effect by other technologies, such as computer graphics.  The argument is as if, in construing a building contract, we were to say that pouring concrete could not refer to pumping it through a pipe because pouring it is doing so bucket by bucket.  It was once.  And moving pictures were once achieved only frame by frame; but now or in the future the motion may pour across the video screen in pixels. 

Although the Acts in force in the United Kingdom and South Africa today differ from the Australian legislation, it is interesting to note that Joynson-Hicks on UK Copyright Law (1989) at para.1.49 states:

"As with sound recordings, neither the medium from which the moving image may be produced, nor the means of producing the image is relevant.  For that reason again, computer programs and in particular many computer games, could be protected as films, as well as in their own right."

And the Supreme Court of South Africa has held in Nintendo Co Ltd v Golden China TV-Game Centre (1993) 28 IPR 313 that a computer generated video game is, within the meaning of the South African legislation, a cinematograph film.

Against the event that I should take a different view, the applicants relied, in the alternative, on the proposition that the equipment included a sound recording. However, s.23 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".  Accordingly, this proposition is a true alternative, and cannot stand with a finding that the sound track belongs to a cinematograph film.  In the circumstances, it is unnecessary to consider the point further. 

I have concluded that the applicants are entitled to succeed on the separate question, but the only order I make at this stage is to direct them to bring in, on a date to be fixed, short minutes of appropriate orders.  The respondents must bear the costs.

I certify that this and the preceding sixteen (16) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Burchett.

Associate:

Date: 28 August 1996

Counsel for the Applicants:      Mr D.K. Catterns QC with Mr R.J. Webb

Solicitors for the Applicants:    Kemp Strang & Chippindall

Counsel for the Respondents:     Mr J.W. Burnside QC with Ms J.R. Baird

Solicitors for the Respondents:   Corrs Chambers Westgarth

Dates of hearing:                8 & 9 February 1996