Video Game Emulation: Shouldn't this be illegal?
 

Matthew Brick, University of Iowa
Cyberspace Law Seminar, Spring 1999
Rough Draft, March 12, 1999

Table of Contents

I. Introduction 3

II. What is emulation? 4

III. Emulation today 5

IV. Emulation and the Internet 7

V. Legal Issues 9

A. Copyright and Intellectual Property 9

B. Trademark and Unfair Competition 14

C. Patent Law 16

VI. Policy issues for Emulation 19

VII. Conclusion 20

After years of tortuous, mind-numbing work your great American novel is finally finished. You spent the best years of your life laboring away at your typewriter, and you are finally happy enough with the finished product to turn it over to your editor. Your book receives glowing reviews from critics all over the country and you make millions of dollars off the paperback version of your book. To celebrate your new affluence, you and your spouse go to see a movie. You just settle in with your popcorn and soda when the previews begin to roll. Imagine your surprise when the first preview is for an unauthorized movie based on your best-selling book. Clearly copyright law would protect you from such an upsetting scenario. However, a similar situation is happening to video game manufacturers and the applicable law for this area is anything but clear.
Near the end of the 1970's a new pastime developed that would consume the quarters of an entire generation of America's youth. When arcade games came into existence they were so popular that they quickly became a familiar sight in movie lobbies, family restaurants and shopping malls. Trying to expand upon this success Atari released a machine that allowed users to play arcade games at home. The Atari 2600 was such a huge success that it soon replaced television as the electronic baby-sitter of choice. For over half a decade homes all over the U.S. were filled with the bleeps, chirps and whistles of video games. Now, nearly 15 years later, thanks to emulation, Generation X is allowed the opportunity to repeat the experience from their younger days.

II. What is emulation?

An emulator is a software program that allows one type of computer to run software written for another computer. This is distinguished from software that imitates other software. For example, if you were to play "PacMan" on an Atari 2600, the Atari would be merely imitating the arcade version of "PacMan", but if you were to play "PacMan" on an emulator, you would be playing an exact duplication of the arcade game. Until recently, the terms "computer emulation" and "slow as molasses" went hand in hand, however thanks to the breakneck speed of current computers, there has been an explosion of emulation in the past couple of years.
One of the earliest video game emulators was from a company called Coleco. Coleco was the creator of the ColecoVision, a video game machine for the home that competed directly with the Atari 2600. Since Atari had many more games than the ColecoVision, Coleco released a $60 adapter for their game machine that allowed every Atari game to be played on the ColecoVision. Of course Atari sued Coleco for this 'obvious' violation of copyright and patent law. The funny thing is that Atari lost and Coleco was allowed to keep their emulator on the market. After their victory, just to rub it in, Coleco released the Gemini, a video game system which was a complete emulation of the Atari 2600 game system. These two products and the legal precedent they set have created the situation that current game manufacturers now find themselves immersed in.

III. Emulation today

After the home video game market crashed in 1984, emulation went from video games to business applications. In the 1990's there have been several emulation products for the Apple Macintosh that allows the Mac user to exist in a Microsoft Windows world. Both SoftWindows by Insignia and Virtual PC from Connectix fully emulate Microsoft Windows, however it is important to note that these products both have the full support and blessing of Microsoft. There are other emulation programs that allow newer computers to exist and work with older, different computers. As with SoftWindows and Virtual PC, the creators of these types of emulators have the original owner's permission.
In 1997, video games again became the primary focus of emulation efforts. Several programs were released that year which allowed the user to emulate nearly every video game ever made. Because the emulated game systems were no longer for sale, the release of the emulators at first was of little concern to game manufacturers, since emulation did not hurt their bottom line. The release of both the Connectix Virtual Game Station (CVGS) and UltraHLE in February of 1999 quickly changed the views of the gaming industry. The $49 CVGS, made by the makers of Virtual PC, is a fully functional emulation of the Sony PlayStation video game machine. UltraHLE, is a free program that completely emulates the Nintendo 64 video game machine on an IBM personal computer.
Video game manufacturers have viewed both CVGS and UltraHLE far differently than the other emulators, because these emulators replicate game systems that are still available in stores. As a result, both Nintendo and Sony quickly responded to these threats to their pocketbooks. Nintendo threatened legal action against the creators of UltraHLE and aggressively attempted to shut down all web sites that offered the program.
Sony immediately filed suit against Connectix to prevent the sale of CVGS. Sony's argument is that CVGS infringes Sony's copyright, circumvents the PlayStation's piracy protection, dilutes Sony's trademark, and interferes with contract. Connectix argued that it had "worked hard to prevent the use of pirated [games]." In addition Connectix believes that Sony has "no basis for legal action since we haven't used any copyrights in creating [CVGS]." They also noted that "Šsoftware emulation of a hardware system does not violate patent law." However, in keeping with the precedent set by Atari v. Coleco, Connectix won the first round and no injunction was issued.

IV. Emulation and the Internet

One of the key differences between these current emulators and the ColecoVision emulator is the ease with which it can be obtained. Although the Coleco emulator raised the same legal issues raised by current emulators, the Internet has significantly changed the availability of emulators. In the 1980's, to emulate the Atari 2600 you had to own a ColecoVision, buy an Atari emulator and buy an Atari game. In the 1990's, to emulate any of these video game systems all you need is Internet access and a floppy disk. An example of how Internet distribution is destroying copyright law is the Diamond Rio. This little device is the new generation of tape players. It allows you to download songs off the Internet directly into the device and then use it as you would any other Walkman.
The ease with which any emulator can now be obtained raises an interesting legal question. For example, even if Nintendo wins a lawsuit against UltraHLE, what would they ultimately gain? They would run up a substantial legal fees and obtain a judgment from a defendant who has no money. As for their injunction, how can they possibly enforce it? As soon as they close down one site that hosts the emulator, fifteen more will spring up. This is what is currently happening to Nintendo as it attempts to enforce its copyrights on the games. Although the Internet is a great tool for sharing information, as the Diamond Rio and this emulation movement show, it is an even greater tool for copyright infringement.

V. Legal Issues

Although there is plenty of case law concerning disputes over the actual video games, there is precious little legal precedent regarding the emulators themselves. In fact the only quasi-legal precedent is the early 1980's decision between Atari and Coleco. Unfortunately, as often as that case is mentioned it is impossible to locate. In addition there are conflicting reports how the dispute was even resolved. Most stories have Coleco winning outright in court. However, there are some accounts that say the parties settled.
As a result of the lack of case law concerning emulation, the legal issues discussed below are based on issues that Sony has raised in their lawsuit against Connectix. These issues will be analyzed by examining the typical legal issues raised in disputes over software and then comparing and contrasting emulation to software.

A. Copyright and Intellectual Property

One of Sony's key claims against Connectix is violation of Copyright law. A copyright protects creative work from unauthorized use by others. An owner of a copyrighted work has the exclusive rights to (1) to reproduce the copyrighted work in copies or phonorecords; and (2) to prepare derivative works based upon the copyrighted work.
To understand how copyright law works it is important to understand that copyrights apply only to a specific expression of an idea and not the actual idea. Therefore, copyright law would protect the game "PacMan", but not the idea of a little man eating little dots. It is clear that releasing exact duplicates of video games on the Internet is a violation of copyright law, however it is not clear how an emulator itself actually violates copyright law. Since judges typically try to place new concepts in old legal analysis, it is likely that the examination of video game emulators would follow along the analysis used to determine if video games violate copyright law.
To show that a video game violates copyright law there must be evidence of direct copying or evidence of access and substantial similarity. Since emulators are software versions of computer hardware, they would not meet the direct copying requirement. The next step requires that the programmer both had access to the copied game and there is substantial similarity between the two games. In the Capcom case the judge found access because the disputed game had been released all over the country. This would equally apply to the hardware that housed the game, in Sony's case the court should find access.
The final step requires a court to apply an extrinsic/intrinsic test. This test first looks at the objective similarities between the games. In the current litigation this favors the emulators because, objectively at least, the gaming hardware and the emulation software do not appear to have anything in common in the manner that they run games. The video game makers should instead should focus on the Intrinsic test by arguing that an 'ordinary reasonable person' would find that the emulator captures the 'total concept and feel' the hardware.
The hardware manufacturers will not want to base their copyright claim solely on a violation of their machines' copyright. They should also attack the emulators for their contribution to the massive violations of video game copyrights, since it is impossible to use an original video game with an emulator. However, Emulation proponents argue that without emulators people who make backup copies of original games would not be able to play the backups if something happens to the original game. Emulator opponents should argue that the language of the Copyright Act does not allow them to make copies of the games anyway, let alone play the backup copies.
The previous argument should carry some significant weight with a judge, and if it is agreed with it would destroy the emulation community. The primary way the emulation web sites have fended off legal challenges has been their claim that it is legal to make a backup copy of all software including video games. However, the purpose of the exception to the Copyright Act which permits owner of copyrighted program to prepare archival copies of it is; to protect use of program against particular type of risk of destruction or damage by mechanical or electrical failure, and only where medium may be destroyed by mechanical or electrical failure does archival exception protect owners of program stored in that medium by granting them a right to make backup copies. Under a strict reading of the exception, it is illegal to make backup copies of any media that is susceptible to mechanical or electrical damage. This should preclude copying CD-Roms or video game cartridges, since they are so durable.
In addition, although an owner of a copyrighted program can make a backup of any software, the backup must be destroyed if the holder should cease to own the original. Since the majority of the emulated games are from the early 1980's is goes without saying that even if making backups of the video games is legal, the overwhelming majority of the backups are used by people who no longer have or who never had the original game. The reason it is important to stress upon the illegality of the backup copies is that there is a 1983 ruling concerning video game duplicators that held that to defend a claim of copyright infringement, it is not enough to establish that a duplicator machine has a legal use; rather the machine must have substantial non-infringing use to preclude an injunction against its sale. Although this case concerned duplicators, the ruling appears to cover emulators as well.
Finally, there is another copyright tactic that emulation opponents can take to stop emulation. In a 1996 case, a federal court held that changing the format of Nintendo's works from the original cartridge hardware to a software file violated Nintendo's exclusive rights to prepare derivative works under 17 U.S.C. § 106(2). This is an important case because it appears to have, unintentionally, overruled whatever precedent was established by the Atari v. Coleco dispute. If the holding from this case is applied to the facts at hand it appears likely that use of a copied game on an emulator would also impair the exclusive distribution right accorded to copyright holder. By applying 17 U.S.C. § 106(2) to emulation, the video game creators would have to simply argue that an emulator of their system is a "derivative work" and therefore, under the statute, they have the exclusive rights to create the emulator.

B. Trademark and Unfair Competition

An alternative to attacking emulation under Copyright law would be to attack it as a violation of the hardware manufacturer's trademark. "A trademark is a distinctive work, phrase, logo, graphic symbol or other device that is used to identify the source of a product or service and to distinguish a manufacturer's or merchant's product from anyone else's." In a claim for trademark infringement a hardware manufacturer would be arguing that the emulator of their product causes unfair competition. Unfair competition occurs when one person uses another's trademark "in a context likely to confuse the public."
To show a trademark infringement, the emulator opponents must show confusion. Factors to be considered in finding confusion include; the strength or weakness of the trademark, similarity in appearance, sound and meaning the class of goods in question, the marketing channels, evidence of actual confusion, and evidence of the intention of � in selecting and using the alleged infringing name.. Since the emulators typically have not incorporated the names of the emulated products, at first glance, this would not seem to be a winning strategy. However, emulation opponents would certainly want to bring to a court's attention the decision in Sega v. Maphia, 875 F.Supp 679 (N.D.Ca. 1994).
In Sega, the court held that "confusion" was found when a copied game began with showing of trademark and logo. Emulation opponents can push this case even farther and argue that "confusion" also occurs when the trademark and logo appear throughout an emulator's documentation and in the emulator itself. Several of the emulators use pictures of the emulated machines as their icons and all of the emulators' documentation and read-me files contain multiple references to the emulated machines. If the courts have found that a brief appearance of a logo at the start of a game caused "confusion", then the references to the emulated machine and the use of pictures and logos certain would cause "confusion."
Emulation proponents are not without defenses to any trademark claims. Some courts that have found that the use of a trademark to exclude competitors from the market is inconsistent with the Lanham Trade-Mark Act. The argument here is that any claim of trademark infringement is merely a guise to allow the hardware manufacturers to remove competition in the market. However, the problem with this argument is that the emulators (except for the Connectix GameStation) are not commercial products competing in a market with the corresponding hardware. Most emulators are pretending to be hardware that was discontinued years ago and is no longer commercially available. So although the "exclusion" argument may have some merit for Connectix, the other emulator creators would have a much more difficult time creating a successful exclusion argument.

C. Patent Law
Patent law has not been used extensively by software developers in their fight against game copiers, however it is an area that can be useful for hardware manufacturers. A patent is a document that grants a monopoly for a limited time (around 20 years) on the use and development of an invention. To qualify for a patent, an invention must be novel, non-obvious and it must fit into an existing patent category. Of the three types of patents that can be issued, the utility patent is the type that would be issued to video game hardware. There are five categories of utility patents: a process, a machine, a manufacture, a composition of matter, or an improvement. Video game hardware would qualify as a "machine", which is defined as a device that takes information from an input device and moves it to an output device.
Attacking emulation based on patent law would follow the same lines as copyright law. A game manufacturer would bring suit claiming patent infringement for non-authorized use of its patent. To be successful, the hardware manufacturer must show that the patent is valid and enforceable and that the emulator infringed upon the patent. Assuming that the patent is held to be valid, the hardware manufacturer would attempt to show infringement based on a "means-plus-function" claim. Under this type of analysis, infringement would be found if the emulator performed an identical, important function of the hardware and performed that function using either the structure disclosed in patent specification or an equivalent structure. Patent law further favors the hardware manufacturers because the courts have found that interchangeability is evidence of equivalency in a patent infringement case.
The argument the hardware manufacturer would want to make would consist of two parts. First the manufacturer would have to prove they had a valid patent for the game player. Patents are held invalid on a number of grounds, such as "fraud on the U.S. Patent and Trademark Office during the application period; a violation of the anti-trust laws that curb restraints of trade and monopolistic practices; or-as is most common-if an alleged infringer can show that the invention really wasn't novel or non obvious, that the patent examiner simply made a mistake in issuing the patent." This is a complicated area of patent law that is beyond the scope of this paper, therefore we will assume that the hardware manufacturer can prove their patent is valid. Next the hardware manufacturer would argue that, since emulators allow the user to play the exact same games on the emulator as on the hardware, there is "interchangeability." They would do this to show "equivalency", that the emulator and the hardware performed the equivalent functions. Based on the fact that both the emulator plays the exact same games as the hardware (and in the case of the Connectix GameStation, it even plays the original games), there appears to be sufficient evidence for courts to find equivalency.
For emulation proponents all is not lost. Although there are many cases claiming patent infringement of video game hardware, the overwhelming majority of those cases fail to find any infringement. See Alpex Computer Corp. v. Nintendo Co. For an example of a typical patent infringement claim that fails. Also, the parties in these cases have all been competing manufacturers, so if the courts are unwilling to find a competing business infringing on a patent it is likely they would be even less willing to find infringement when one of the parties is not in the video game business. Another defense against a patent infringement suit is that typically a utility patent only lasts twenty years, therefore the emulators of the older system are not open to a claim of patent infringement.

VI. Policy issues for Emulation

As shown from the preceding discussion of emulation legal issues, the law in this area is anything but clear. In litigation it is always useful to touch upon policy reasons for the outcome you want, however this is especially true when the law is unclear and there is no established precedent. Emulation proponents often argue that since most emulation systems have been discontinued and the programs created for them are no longer available, there's no way for people to otherwise play these games. They argue that since the games are not commercially available anymore, then the manufacturers cannot possibly be losing any money. However, recently (maybe in preparation for litigation) several game manufacturers have released versions of the old games that run on the new hardware.
Another policy argument often advanced by emulation proponents is that "emulation helps preserve video arcade games, many of which would be approaching extinction if not for the efforts of fans." The argument is that many of the original game manufacturers and hardware manufacturers have gone out of business or have no interest in their old games, so without emulation we would all lose a slice of Americana. This argument attempts to touch the heartstrings and set up the emulator proponents as heros for saving our childhood heritage. However, emulation opponents would argue that the creators of these games and game machines have the exclusive rights to their creations. So if they want to destroy every last copy of "PacMan", then that is their right.

VII. Conclusion

Regardless of any policy reasons for emulation or my personal reasons for emulation, I believe that any precedent from the Atari v. Coleco dispute should be overruled. It is fun to relive the countless hours spent trying to get the highest score, and it is true that emulators are be preserving a part of history that would otherwise be forgotten. However, as opposed to the Diamond Rio discussed above (the Internet music player), there is not a substantial legal reason for the existence of emulators. The only way emulators can be used is with illegal copies of games, therefore the continued existence of the emulators combined with the Internet will eventually cause irreparable harm to video game manufacturers.
Even if the emulators never actually hurt the hardware manufacturer's sales, emulation should be illegal anyway because playing video games on an emulator "impairs the exclusive distribution right accorded to copyright holder." In other words, emulation prevents the video game creator and the hardware manufacturer the opportunity to decide how and where their games will be played. If emulation eventually destroys that distribution right, then it is likely that the video game companies will get out of the market. The ultimate irony of that possibility is that in effect the emulation of video games to preserve the past could eventually destroy the future of video games.