Midway Mfg. Co. v. Artic. Int’l, Inc., 704 F.2d 1009 (7th Cir. 1983), cert. denied, 464 U.S. 823 (1983).
Galaxian is a video that is something of a cross between Space Invaders and Galaga:
Artic manufactured a computer chip to speed up the game play in Midway’s Galaxian video games. The Court of Appeals for the Seventh Circuit ruled this infringed on Midway’s copyright. The court ruled that the speeded up version of the video game constituted a derivative work. While Artic argued that speeding up the video game was like speeding up a phonograph record and so should not be considered a derivative work, the court rejected the argument based on the fact that there is a market for speeded up video games while there is no market for speeded up phonograph records. The court did acknowledge that the definition of derivative work had to be stretched to reach this result.
(Sorry this case summary is short, we will supplement later as time permits)