543 F. Supp 466 (D. Neb. 1981)
In one of the earliest decisions in a video game infringement case, the court issues a preliminary injunction in favor of Midway, to enjoin the defendants from infringing Midway’s copyrights in its coin-operated Pac-Man, Rally-X, and Galaxian electronic video games. The court also ruled in Midway’s favor with respect to Trademark and other Lanham Act claims.
Midway is a designer and manufacturer of coin-operated electronic video games. In the United States, Midway sells its video games to regional distributors who sell the video games to operators. The operators place the machines in arcades and other places for public use. Among other games, Midway owns the U.S. rights to Pac-Man, Rally-X, and Galaxian, which it acquired from Namco. As per the findings of fact in the decision, over 40,000 Galaxian games had been sold since February 1980, generating royalties of over $3.5M to Namco. Similarly, over 25,000 Pac-Man games and 2,500 Rally-X games have generated another $1M in royalties to Namco.
Each defendant makes or sells conversion kits for one or more of the Galactic Invader, Kamikaze III, Mighty Mouth or Rally-X games. Galactic Invader and Kamikaze III are nearly identical to Glaxian. Mighty Mouth is nearly identical to Pac-Man, and the defendants’ version of Rally-X is nearly identical to Midway’s version of Rally-X, and also uses the same name.
The court went through the usual analysis to determine whether a preliminary injunction was proper: 1) Probable success on the merits, 2) Irreparable harm and balancing of equities, and 3) The public interest. In determining success on the merits, the court analyzed, for each game, the validity of the copyright, and copying of protectable material. The court provided a thorough analysis in its determination that the copyrights are valid, especically in view of the fact that the court has no previous video game case law, controlling or otherwise, to draw from.
At the end of the day, Midway got its preliminary injunction. The case was finally decided by the District of Nebraska in Midway Mfg. Co. v. Dirkschneider, 571 F. Supp. 282 (D.C. Neb. 1983). A sample flyer for one of the defendants’ games is shown below, albeit from another country: