Case Update:

This case ended on August 20, 2009, following a final judgment on consent. The judge ordered a permanent injunction, and a dismissal of the action with prejudice. Nintendo was also awarded damages in the amount of $1,100,000.

Original Post:



Nintendo of America (NOA) has filed suit against Daniel Man Tik Chan and Inspire Electronics for violation of the Digital Millennium Copyright Act, copyright infringement, trademark infringement, and unfair competition.

NOA is the wholly-owned subsidiary of Nintendo Co. Ltd. responsible for the marketing and sale of Nintendo products in the Western hemisphere and for enforcing Nintendo’s intellectual property rights worldwide (except Japan).

According to the complaint Daniel Man Tik Chan is the owner, President or CEO of the other defendant Inspire Electronics and does business as Inspire Technologies and Inspiretech Electronics as well as on the websites http://www.dselite.com/, http://www.thedsdeals.com/, and http://www.blogger.com/www.inspiretech.com.

NOA alleges that the defendant sells devices “designed to circumvent the technological security measures built into” Nintendo’s DS handheld video game systems. The accused devices, referred to in the complaint as “Game Copiers” are “commonly used to play illegally downloaded pirated copies of Nintendo DS video games on the Nintendo DS.” The Nintendo DS is Nintendo's popular dual-screen handheld portable video game system featuring a clamshell design with two LCD screens inside, the bottom one a touchscreen.

The complaint states that Nintendo is the target of a lot of intellectual property piracy because of the immense popularity of its games and systems. In addition to registering its intellectual property rights, the company builds protections into its systems and software. The Nintendo DS contains design-based protection in that the system will only play game cartridges that fit, with a certain size and matching electrical components. Nintendo also has a technological security measure where commands are exchanged between the system and game card inserted into the system. Copyrighted programs are repeatedly accessed and copied during the use of the system. So even if the game card fits, passing the design-based measure, if the game card doesn’t have the software necessary to pass (or circumvent) the technological security measure, the game can’t be played.

The defendants’ accused devices consist of two parts: 1) the game card itself (referred to as the “Game Copier Card”), which substantially matches the DS cartridges so it passes the design-based measure, and 2) a portable memory device (or instructions to purchase one) that can hold hundreds of illegally pirated DS games that can be inserted into the Game Copier Card for unauthorized play that passes the second measure. When the Game Copier Card is used as instructed by the defendants, Nintendo’s trademark appears on the screen. NOA alleges this may confuse users into thinking they are using an authorized copy of the game.

On June 1, 2009, NOA alerted defendants that they were infringing on NOA’s IP rights and ordered them to cease their infringing operations, but the defendants failed to respond.

NOA brings four causes of action in this suit:

1. Violation of the Digital Millenium Copyright Act:
   
   NOA alleges that the defendants’ willfully violated the DMCA because their actions fell into at least one of the categories listed in 17 U.S.C. § 1201 (a), Violations Regarding Circumvention of Technological Measures:
   
   (1) (A) No person shall circumvent a technological measure that effectively controls access to a work protected under this title.
   
   (2) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that:
   (A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title;
   (B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; or
   (C) is marketed by that person or another, acting in concert with that person with that person’s knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title.








2. Copyright Infringement
   
   NOA alleges that the defendants’ actions “constitute the vicarious or contributory reproduction, preparation of derivative works, distribution, and inducement of the same, in violation of Nintendo’s exclusive rights in its copyrighted works under 17 U.S.C. § 106.”








3. Trademark Infringement
   
   NOA alleges that the defendants violated the Lanham Act, 15 U.S.C. §§ 1114, 1125 (a) because they cause the Nintendo trademark to appear on the DS without Nintendo’s authorization. The complaint says the defendants violate § 1114 because they used a “reproduction, counterfeit, copy, or colorable imitation” of NOA’s registered trademark in commerce which is likely to cause confusion or to deceive. The defendants allegedly violate § 1125 (a) because use of the trademark is a false or misleading representation, likely to cause confusion or deceive the user as to the origin or approval of the goods provided.








4. Unfair Competition
   
   Nintendo also alleges that the defendants have willfully and persistently violated the California Business and Professions Code section 17200 et seq.

Nintendo is seeking a preliminary and permanent injunction and monetary damages.

Read the full complaint here.