In this follow up to Dirkschneider I, the court grants summary judgment to Midway with respect to Midway's claims again the defendants for copyright and trademark infringement under 17 U.S.C. §§ 101 et seq. and section 43(a) of the Lanham Act of 1946 respectively, and for deceptive trade practices prohibited by the Nebraska Uniform Deceptive Trade Practices Act.

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.

Galxian:


The defendants purchased, through their partnership, A-1 Machines, at least ten "copy games" and three conversion kits from their distributor. The game names on the headboards of these video cabinets featured variations of Midway's trademarks: "Pac Man" was replaced by "Mighty Mouth"; "Galaxian" was replaced by "Galactic Invaders." Midway's "Rally-X" name was appropriated in toto onto the defendants' version of the game. None of the defendants' games had "Midway" imprinted on the cabinet. The strategy, design, and sound effects of these games resemble their Midway counterparts. The defendants resold these games or kits, or placed them in various locations for public use. The defendants divided the proceeds with the owners of the premises where the games were played.

Because of the difficulty of providing direct evidence of copying, plaintiffs in copyright action soften demonstrate copying by establishing (1) access by defendants to plaintiff's work and (2) a substantial similarity between defendants' work and plaintiff's work. In this case, the defendants admitted to seeing the Midway games. The court also stated that "[i]n virtually every detail, the defendants' games are identical to the plaintiff's" and the games are so strikingly similar that copying may be inferred without direct proof of access. The court also applied a reasonable observer standard, stating that "[a] reasonable observer, comparing the overall appearance of these games, could only conclude that the Mighty Mouth, Galactic Invaders, and Rally-X machines and printed circuit boards resold and displayed for public use by the defendants, copied plaintiff's unique expression of ideas for coin-operated video games." The court thus found the games to be substantially similar and that a prima facie case of obviousness had been established.

The defendants, acting pro se, argued that they did not know that the machines they purchased were copies of the Midway machines. However, the court noted that absence of scienter is not a valid defense to a charge of copyright infringement, and that the law is well settled that liability attaches to the so-called "innocent infringer" regardless of intent.

The defendant's other defense, that they did not manufacture the infringing games, was also cast aside by the court, stating that the Copyright Act clearly comprehends resale and public display of unlawfully copied machines within the ambit of activities prohibited. "The owner of copyright has the exclusive rights ... (3) to distribute copies ... of the copyrighted work to the public by sale or transfer of ownership, or by rental, lease or lending; [and] (4) in the case of ... audio visual works, to perform the copyrighted work publicly."

After a brief discussion of the Trademark and Lanham Act claims, the court granted Midway's motion for partial summary judgment.