Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992)

“Reverse engineering for compatibility can constitute fair use when aimed at promoting innovation and competition.”

Short Description

This case established that reverse engineering of software to achieve compatibility with another system could be considered fair use under copyright law. It was a landmark decision balancing copyright protection and technological advancement, encouraging interoperability in the gaming industry.

Facts

Sega Enterprises, creator of the popular Genesis video game console, implemented a security system that allowed only authorized games to run. Accolade, a competing game developer, reverse-engineered Sega’s software to understand its compatibility code, enabling its own games to work on the Genesis system. Sega sued Accolade for copyright infringement and unfair competition.

Findings / Reasoning

The Ninth Circuit found that Accolade’s reverse engineering involved copying Sega’s software, but this copying was justified under the doctrine of fair use. The purpose was to study functional elements necessary for compatibility, not to copy Sega’s creative expression. The court emphasized that allowing such limited reverse engineering promotes competition and benefits consumers.

Suggestions / Observations

This ruling recognized the importance of interoperability in the software industry. It allowed independent developers to create compatible products, paving the way for innovation. However, it also cautioned that reverse engineering must be for legitimate, non-exploitative purposes.

Judgment & Date

The Ninth Circuit ruled in favor of Accolade, Inc. on October 20, 1992, holding that its reverse engineering constituted fair use under U.S. copyright law.