Page:Sony Computer Entertainment America, Inc. v. Bleem, LLC.pdf/3

 ; Riley R. Russell, Sony Computer Entertainment America, Foster City, California, for the plaintiff-appellee.

Appeal from the United States District Court for the Northern District of California; Charles A. Legge, District Judge, Presiding. D.C. No. CV–99–01590–CAL.

Before: O’SCANNLAIN, LEAVY, and RYMER, Circuit Judges.

O’SCANNLAIN, Circuit Judge:

We must decide whether the unauthorized use of a “screen shot”—a frozen image from a personal video game—falls within the fair use exception to the law of copyright.

Personal video games come in two basic varieties: console games and PC games. Console games are played by loading a game disk into a console, which is connected to the user’s television. PC games are played by loading a game disk into the CD drive of a personal computer. Sony Computer Entertainment America, Inc., (“Sony”) manufactures both consoles—the highly popular Sony PlayStation—and their game disks. Sony PlayStation game disks are engineered such that they cannot by played on a PC.

Bleem, LLC (“Bleem”), has developed a product, called a “software emulator,” that allows one to cross the divide between console games and PC games. By using Bleem’s software, one can now play a Sony PlayStation game on a personal computer. This development has two consequences: first, one need not buy a PlayStation console in order to enjoy Sony PlayStation games; second, the quality of the games’ graphics may be greater because a computer screen is capable of greater resolution than a television screen. Bleem’s product therefore allows it to tap into the two segments of video game players. For those enthusiastic video game players who do not want to pay for a PlayStation console, they can avoid having to do so by paying a smaller sum for the Bleem software. For those afficionados who have already purchased a Sony PlayStation console, the new Bleem software allows them to enjoy their games even more by playing them on a computer, which is capable of producing higher resolution graphics than a television. The graphics are a large component of any video game, such that games with better graphics—and products that enhance the quality of graphics—are highly prized in the market.

The video game market is enormous and lucrative, and Sony, with its PlayStation console and games, is a market leader, having sold more than 60 million consoles and 460 million video game disks worldwide. Emulators, such as that produced by Bleem, may not adversely affect the sales of Sony game disks—in fact, they may help them—but emulators very likely will reduce the sales of consoles.

The Bleem emulator was developed by Randy Linden who, together with David Herpolsheimer, comprise the entire staff of Bleem. Linden developed PC software that effectively emulates the function performed by Sony’s hardware console through a process of reverse-engineering the components in the console. He devised a computer program to perform these same functions on a personal computer. The legality of the emulator is not at issue in this lawsuit.

The issue in this appeal is the validity of the method by which Bleem is advertising its product. In various advertising media, Bleem has included comparative “screen shots” of Sony PlayStation games. The shots show what the game looks like when played with a Sony console on a television screen, what it looks like when played with Bleem’s emulator on a computer screen, and also at times what it looks like when played with Bleem’s emulator and speed-enhancing hardware (called a graphics card) on a computer screen. A video game screen shot is a small image depicting the computer or television screen in a frozen moment during the playing of the video game. The cinematic equivalent of a