Page:Sega Enterprises v. Accolade.pdf/9

 that disassembly of object code in order to gain an understanding of the ideas and functional concepts embodied in the code is a fair use that is privileged by section 107 of the Act.

Neither the language of the Act nor the law of this circuit supports Accolade’s first three arguments. Accolade’s fourth argument, however, has merit. Although the question is fairly debatable, we conclude based on the policies underlying the Copyright Act that disassembly of copyrighted object code is, as a matter of law, a fair use of the copyrighted work is such disassembly provides the only means of access to those elements of the code that are not protected by copyright and the copier has a legitimate reason for seeking such access. Accordingly, we hold that Sega has failed to demonstrate a likelihood of success on the merits of its copyright claim. Because on the record before us the hardships do not tip sharply (or at all) in Sega’s favor, the preliminary injunction issued in its favor must be dissolved, at least with respect to that claim.

We have previously held that the Copyright Act does not distinguish between unauthorized copies of a copyrighted work on the basis of what stage of the alleged infringer’s work the unauthorized copies represent. Walker v. University Books, 602 F.2d 859, 864 (9th Cir.1979) (“[T]he fact that an allegedly infringing copy of a protected work may itself be only an inchoate representation of some final product to be marketed commercially does not in itself negate the possibility of infringement.”). Our holding in Walker was based on the plain language of the Act. Section 106 grants to the copyright owner the exclusive rights “to reproduce the work in copies”, “to prepare derivative works based upon the copyrighted work”, and to authorize the preparation of copies and derivative works. 17 U.S.C. § 106(1)–(2). Section 501 provides that “[a]nyone who violates any of the exclusive rights of the copyright owner as provided by sections 106 through 118 … is an infringer of the copyright.” Id. § 501(a). On its face, that language unambiguously encompasses and proscribes “intermediate copying”. Walker, 602 F.2d at 863–64; see also Walt Disney Productions v. Filmation Associates, 628 F.Supp. 871, 875–76 (C.D.Cal.1986).

In order to constitute a “copy” for purposes of the Act, the allegedly infringing work must be fixed in some tangible form, “from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.” 17 U.S.C. § 101. The computer file generated by the disassembly program, the printouts of the disassembled code, and the computer files containing Accolade’s modifications of the code that were generated during the reverse engineering process all satisfy that requirement. The intermediate copying done by Accolade therefore falls squarely within the category of acts that are prohibited by the statute.

Accolade points to a number of cases that it argues establish the lawfulness of intermediate copying. Most of the cases involved the alleged copying of books, scripts, or literary characters. See v. Durang, 711 F.2d 141 (9th Cir.1983); Warner Bros. v. ABC, 654 F.2d 204 (2d Cir.1981); Miller v. Universal City Studios, Inc., 650 F.2d 1365 (5th Cir.1981); Walker v. Time Life Films, Inc., 615 F.Supp. 430 (S.D.N.Y.1985), aff’d, 784 F.2d 44 (2d Cir.), ''cert. denied'', 476 U.S. 1159, 106 S.Ct. 2278, 90 L.Ed.2d 721 (1986); Davis v. United Artists, Inc., 547 F.Supp. 722 (S.D.N.Y.1982); Fuld v. NBC, 390 F.Supp. 877 (S.D.N.Y.1975); Cain v. Universal Pictures Co., 47 F.Supp. 1013 (S.D.Cal.1942). In each case, however, the eventual lawsuit alleged infringement only as to the final work of the defendants. We conclude that this group of cases does not alter or limit the holding of Walker.

The remaining cases cited by Accolade, like the case before us, involved intermediate copying of computer code as an initial step in the development of a competing product. ''Computer Assoc. Int’l v. Altai, Inc., 1992 WL 372273, 23 U.S.P.Q.2d (BNA) 1241 (2d Cir.1992) (“CAI”); NEC Corp. v. Intel Corp., 10 U.S.P.Q.2d 1177, 1989 WL 67434 (N.D.Cal.1989); E.F. Johnson Co. v.''