Nintendo has had no luck in stopping stores renting its video games. Unlike the movie industry, which gets a huge cut from rentals by charging an arm and a leg for each video cassette (some up to $500 each), Nintendo has been unable to get Congress to act in the same manner for its video games because they’re not as easy to copy and VHS tapes are. Consequently, Nintendo doesn’t see any money from rentals, other than the initial purchase of the $30-$50 cartridges. With many games consistently out of stock at rental stores across the nation, it means huge profits for those stores.
One of the biggest chains is Blockbuster Video, and Nintendo may have found a way to punish them: copyright violations. It turns out many of the locations have been copying the instruction books, and Blockbuster profits by then renting the games. Nintendo alleges this is against the law and wants this stopped. We’ll have to wait and see if anything more comes of this, but for now the chain is complying with the order. Many newspapers have reporting on the matter, which we’ve included below:
Blockbuster Sued In Copyright Case
August 5, 1989|By ELLEN FORMAN, Business Writer
Nintendo of America has filed suit against Fort Lauderdale-based Blockbuster Entertainment Corp., charging that Blockbuster violated copyright laws by photocopying Nintendo video game instruction manuals.
The suit, filed in federal district court in Newark, N.J., Blockbuster`s state of incorporation, seeks injunctive relief and damages.
Blockbuster charges $4 for three nights to rent the popular Nintendo games. Each game is accompanied by a manual that is “essential for game players to fully understand and enjoy Nintendo`s video games,“ said Lynn Hvalsoe, Nintendo`s general counsel.
Manuals had been copied when the original manual was lost or not returned to a retailer after it was rented, Nintendo spokesman Richard Lindner said.
“We`ve never expanded our distribution to include any rental store. Anyone carrying it bought it through a retail store or some unauthorized means of distribution. We`re not in a position to be offering a solution to these people if they get a game back without a manual,“ he said.
“We never had any intention to have our manual rented, and we intend to protect our copyright.“
Lindner denied, however, that Nintendo was out to stop Blockbuster from renting the games.
“Our intent is to protect our copyright. Any of our materials that we can protect, we will protect,“ he said.
Blockbuster spokesman Wally Knief said the company had not studied the suit and would not comment.
Bonnie Powell, a Nintendo spokeswoman, said that technology being developed would allow duplications of Nintendo games, which cannot currently be copied.
Lindner said the average retail price of a Nintendo game was about $35, with the more popular, complex games, such as Zelda II — The Adventure of Link and Super Mario Bros., selling for $40 to $45.
As for why Blockbuster was charged, Lindner said, “We`ve determined that they`re among the most widespread and flagrant violators. Anyone else whom we find using the same practice will be in a similar position.“
“If you don`t protect your copyright, eventually, that will have an impact on your ability to maintain your copyright,“ Lindner said.
Nintendo of America is based in Redmond, Wash. It is a wholly owned subsidiary of Nintendo Co. Ltd. of Kyoto, Japan.
Chain to Stop Giving Out Nintendo Books
August 10, 1989|From Associated Press
Source: LA Times: http://articles.latimes.com/1989-08-10/business/fi-460_1_nintendo-games
NEWARK, N.J. — A nationwide video rental chain agreed not to photocopy instruction manuals for Nintendo games that its stores were renting out, according to court papers filed Wednesday.
Nintendo of America of Redmond, Wash., last week sued the chain, Blockbuster Entertainment Corp. of Ft. Lauderdale, Fla., charging copyright infringement.
Nintendo said the chain of 600 stores was frequently copying the booklets and charging renters a fee if the manuals were lost.
The Japanese video game company submitted six inches of legal papers with its complaint, most of them booklets and copies. The lawsuit specifically named four stores in New Jersey, allowing the case to be filed here.
Nintendo charged that Blockbuster ignored its request in a July 31 letter to stop the practice. In a statement released Wednesday by Blockbuster, the chain said it had already told its managers not to copy the manuals.
Both sides agreed to a court order filed Wednesday by U.S. District Judge Alfred M. Wolin. The order also requires Blockbuster within five days to send a letter drafted by Nintendo’s lawyers warning its franchises and managers not to copy manuals.
Nintendo Steps Up Blockbuster Battle
August 10, 1989|By ELLEN FORMAN, Business Writer
Heating up the legal battle between Blockbuster Entertainment Corp. and Nintendo of America, Nintendo claimed on Wednesday that it would seek damages “to the full extent possible“ in its copyright infringement suit against Blockbuster.
Meanwhile, Blockbuster, the Fort Lauderdale-based video rental chain, hinted that it might attempt to get around Nintendo`s copyright restrictions by using other materials with its Nintendo game rentals.
The fight began last Friday, when Nintendo filed suit against Blockbuster in Federal Court in New Jersey, charging Blockbuster with copyright violation through photocopying Nintendo game manuals.
Blockbuster said on Wednesday that it had consented to a preliminary injunction and responded to Nintendo`s July 31 order by telling its managers and franchisees that they should stop copying the instruction manuals.
Nintendo, the Redmond, Wash.-based subsidiary of the Japanese toy company, said that Blockbuster`s move to stop photocopying manuals “only takes care of the future. But we intend to recover for damages already sustained by Blockbuster`s illegal actions,“ said Lynn Hvalsoe, Nintendo`s legal counsel.
Blockbuster also lashed out against Nintendo`s lawsuit, calling it a “reflection of the frustration they feel“ at their inability to ban the rental of video games through a Congressional action. Video cartridges are exempted from a pending piece of legislation that would outlaw rental of computer software.
Robert A. Guerin, vice president for national development of Blockbuster said, “They`re (Nintendo) trying to intimidate the biggest players and rattle the mom and pops (individual rental store owners).“
In its release, Blockbuster said that “two companies are selling alternate forms of the Nintendo instructional booklets on the floor of the (Video Software Dealers Association) convention.“ The VSDA convention is now in session in Las Vegas, Nev.
“If need be, we might even consider writing our own,“ Guerin said. “We would look at it, get a legal opinion and do what our advisor tells us to.“
Nintendo now holds about 70 percent to 80 percent of the video game market, according to industry sources. Blockbuster said Nintendo accounts for 3 percent of its rental revenue.
Nintendo Zaps Blockbuster Reproduction Of Game Instructions Spurs Copyright Lawsuit
August 13, 1989|By ELLEN FORMAN, Business Writer
When a store rents out video games, chances are that a wide variety of fast- food drippings will find their way onto the instruction manual.
But if the video store replaces the soiled original with a fresh photocopied version, it isn`t just replacing the manual.
According to Nintendo of America, it`s stealing an idea.
That`s the basis of Nintendo`s lawsuit against Fort Lauderdale-based Blockbuster Entertainment Corp. The suit, filed on Aug. 4 in federal court in New Jersey, charges that at least one of Blockbuster`s company-owned stores and three franchises in New Jersey violated copyright laws by photocopying Nintendo`s materials.
Blockbuster said that Nintendo initiated the lawsuit out of frustration because it wants people to buy its games, not rent them. Blockbuster has complied with a temporary restraining order by telling its stores not to photocopy the instructions.
“If Blockbuster was indeed photocopying the manual, Nintendo has a good case,“ said Michael A. Epstein, a partner with Weil, Gotschal & Manges, a New York law firm, and author of the book Modern Intellectual Property.
But Nintendo said that what`s really at stake is the ability of a company whose primary asset is information to protect itself against theft.
“In an industry like ours, if you don`t have strong copyright laws, you don`t have a company. You don`t have an industry,“ said Richard Lindner, a spokesman for Nintendo, a company whose $2.3 billion sales in 1988 are expected to grow by $1 billion in 1989.
For years, computer software manufacturers have anguished about piracy. But when they finally pushed for protection in Congress earlier this summer, Nintendo was left out in the cold.
A subcommittee of the Senate Judiciary Commitee recently passed the Computer Software Rental Amendments Act, which would ban the rental of computer software unless the copyright owner gave permission.
But as the bill passed through committee, the Video Software Dealers` Association, the trade organization of the rental store industry, succeeded in knocking protection for Nintendo`s video games off the bill. The association claims that game cartridges didn`t merit the same protection as software. A similar version of the bill, also excluding game cartridges from protection, has been voted out of committee in the House of Representatives.
Law prohibits record rentals because they can easily be copied, but videotapes, which can also be copied, can be rented. Vans Stevenson, vice president for corporate affairs at Blockbuster, argues that the congressional act was designed to protect business software manufacturers, whose work costs hundreds of dollars at retail and can be easily copied.
“The real issue is, how copyable are they? How much interest will people have in copying games?“ he said.
But Nintendo claims that it`s only a matter of time before its cartridges can be duplicated as easily as computer discs. The technology exists in Taiwan, where it`s legal to duplicate video games. Because the games are still in short supply — there aren`t enough copies to meet demand — chances are some copied cartridges could make their way through to the public.
Blockbuster argued that its rentals are a marketing tool for those who want to examine Nintendo games before investing $45 or more to purchase. At the same time, Blockbuster has hinted that it could look elsewhere for instructions to video games. In a statement issued last week, Blockbuster said that two companies were selling their own versions of Nintendo software, “or if need be, we might even consider writing our own.“
According to copyright lawyer Epstein, Blockbuster or anyone else could write their own instructions as long as they were truly original.
In copyright law, he said, “You`re encouraged to make use of the idea. You`re not allowed to make use of someone`s expression of those ideas.“
“I can`t take the Nintendo manual, translate it into Spanish and say it`s a different expression, but I can come up with a three-page version of my own,“ Epstein said.
With Blockbuster deriving less than 3 percent of its income from video game rentals, James K. Willcox, who covers the video game industry for Consumer Electronics, a New York trade publication, doesn`t think it would be worthwhile for Blockbuster to develop its own materials.
“Are they going to commit their own resources to writing manuals for the 150 games out for the Nintendo system? I don`t think it`s worth the time and resources,“ Willcox said.
Meanwhile, Nintendo continues to diversify. Its U.S. operation will move into the information business with the development of its system as a home computer. The company estimates that one out of every four homes in the nation will have a Nintendo system by the end of the year — a staggering penetration rate for any potential electronic media. Nintendo`s own system will enable participants to play each other in video games, similar to the way electronic bulletin boards operate.
And as Nintendo leaps into telecommunication systems, other video game companies are chasing, some say improving on, Nintendo`s technology. Sega of America claims its Genesis system, available this fall, will outdo Nintendo`s capabilities, providing arcade-quality games in the home.
–SUIT FILED: Aug. 4 by Nintendo.
–COURT: Federal District Court, New Jersey.
–NINTENDO: Objects to Blockbuster`s practice of photocopying its video game instructions, claiming it violates copyright laws. The company says it will take any action necessary to protect its copyrighted materials.
–BLOCKBUSTER: Says it will no longer copy instructions and may seek other ways to replace Nintendo video booklets when they are lost. It may also seek “alternative“ sources of instruction materials.
SOURCES: Lawsuit, company statements
Blockbuster Blind To Value Of Copyright
August 16, 1989|By JACK NEASE, Staff Columnist
For the record, I`m usually neither a fan nor a critic of Blockbuster Entertainment or its stores.
As a videotape customer, I`m impartial. I have a rental card for both Blockbuster Video and MovieQuik, the videotape outlets in 7-Eleven convenience stores.
For about half my rentals I use Blockbuster; for the other half I use 7- Eleven. Blockbuster rents a tape for $3 for two nights; 7-Eleven rents two tapes for $2.99 or less, depending on the night, for one night.
But I`m not impartial in the Nintendo vs. Blockbuster fight.
Blockbuster is absolutely, completely, unqualifiedly wrong in this dispute. What Blockbuster is doing may be completely legal but it is not right.
CHAIN FAILS TO GET PERMISSION
Blockbuster is buying Nintendo games and renting them to customers without payment of royalties or anything else. It is, in fact, renting Nintendo games without permission of Nintendo. It is renting the Nintendo games without making any arrangement with Nintendo.
But that is not what Nintendo`s court suit against Blockbuster is about. The court suit involves what most people would consider to be a little side issue.
Nintendo has filed suit in federal court against Blockbuster, charging Blockbuster with violating copyright laws by photocopying instruction manuals for Nintendo games.
More is at stake here than the duplicating of original instruction manuals ruined by peanut butter sandwiches, soft drinks or fast-food drippings.
Blockbuster says Nintendo filed the lawsuit out of frustration because it wants people to buy its games, not rent them, and you can bet that is exactly right.
For now, it seems that Blockbuster and its allies have won a lobbying battle over the issue. Two committees of Congress, one in the House and one in the Senate, have approved a proposed law designed to protect computer software producers from pirating by rental stores. Both proposals would prohibit rental of computer software without permission of the copyright owner.
VIDEO GAMES EXEMPT FROM BILL
But the bill specifically exempts video games such as Nintendo`s. The exclusion was a victory won by the Video Software Dealers` Association, the rental store lobby.
At present, there`s no way to copy Nintendo game cartridges with technology available in this country. But it`s only a matter of time before copying begins. The technology exists in Taiwan.
Nintendo created these games and Nintendo should have exclusive rights to earn income from them.
This is the premise and purpose of our patent laws and our copyright laws. They exist to protect the work of inventors, scientists, researchers, writers and artists.
We want these people to create medicines, machines, vaccines, books, movies, painting and all the rest. Patent and copyright laws encourage production of these things by linking reward with effort.
Blockbuster officials argue that games don`t deserve the same protection as other software. “How much interest will people have in copying games?“ one asked.
Hogwash! People would have more interest in copying games than movies. And we`ve all seen the dire FBI warnings attached to videotapes. Certainly, games are no more frivolous than the latest James Bond movies.
Right now, Blockbuster fails to see the importance of copyright protection. But let`s put that belief to a test.
Open up a video store called Blockbuster II and see how long it takes for these fellows to yell copyright infringement.