Lewis Galoob Toys, Inc. v. Nintendo of America, Inc.

Lewis Galoob Toys, Inc. v. Nintendo of America, Inc. (United States Court of Appeals for the Ninth Circuit, 1992) was a court case which established the rights of users to modify copyrighted works for their own use.

Galoob manufactured an add-on product called Game Genie, which allowed users to modify video games by entering in certain codes; for example, a code might make the player invincible by negating the code that updates the player's health amount. Nintendo, which sold a video game system and video games that could be modified by Game Genie, sued Galoob for copyright infringement, arguing that Game Genie made a derivative work, violating Nintendo's copyright in their video game.

The Court denied Nintendo's motion for a preliminary injunction, holding that Game Genie did not create a derivative work and also suggesting that even if it did, it might well be fair use. As the district court wrote, "Having paid Nintendo a fair return, the consumer may experiment with the product and create new variations of play, for personal enjoyment, without creating a derivative work."

Legacy
A 2002 case involving the ClearPlay technology, raised a similar issue in the context of home viewing of DVDs. At no point was a copy of the DVD made, rather, offensive parts of the movie were automatically skipped. Hollywood studios and the Director's Guild of America sued ClearPlay alleging copyright infringement and trademark infringement. The case, however, was made moot by the passage of the Family Entertainment and Copyright Act of 2005, a law that because of its narrow applicability did not abrogate Midway or affirm Galoob. (There was no judicial opinion issued in the case because it became moot in light of the new law.)

SonicBlue was sued over the commercial-skipping feature of ReplayTV on similar grounds. "Your contract when you get the show is you're going to watch the spots [advertisements]. … Any time you skip a commercial … you're actually stealing the programming," asserts Turner Broadcasting CEO Jamie Kellner. He admits that "there's a certain amount of tolerance" for going to the bathroom during commercials. Due largely to the lawsuit, SonicBlue went bankrupt, even though the court never reached the point of ruling that selling what is essentially a better VCR that can skip commercials is illegal.