Unpublished Disposition, 908 F.2d 977 (9th Cir. 1990)

MEMORANDUM^* 

Disctronics, Inc. appeals the district court's order granting Dale Rodesch's motion for a preliminary injunction in Rodesch's copyright infringement action. We reverse and remand.

* Dale Rodesch created a laser video disc based game known as the Quarter Horse Video Disc in 1981. The following year he received a copyright registration certificate and began marketing the game in both a video game version and a licensed gambling version.

In 1987, Century Electronics, Inc. put together a similar game entitled the Deluxe Edition Quarter Horse Video Disc. Disctronics, Inc. reproduced the video discs upon which the horse races were recorded.

Both games include visual recordings of actual horse races which took place at the Los Alamitos track in California. In each game players place bets on horses, just like gamblers at racetracks. Both games include the sounds of hoof beats, cheering crowds, and a commentary mentioning the names of some of the horses. Each game has a freeze-frame photo finish, and each game ends with a win, place and show listing.

There are some differences between the games as well. The Deluxe Edition consists of fifty-four nine-horse races while Rodesch's game consists of sixty ten-horse races. Unlike Rodesch's game, Disctronics's game does not use a starting bell and includes horses of different colors. The Deluxe Edition does not include Rodesch's "place all bets now" or "hold all bets" messages. It employs varying weather conditions, and a different commentator with a discernibly different speaking pattern. It also makes use of close-ups and has a slower fade out feature. Finally, the shorter-running Deluxe Edition uses a solid red finish line instead of a broken white finish line.

Rodesch brought a copyright infringement action against Disctronics, Inc. in 1989. After a hearing, the district court concluded that the two video games were substantially similar and granted Rodesch's motion for a preliminary injunction. The court did not require Rodesch to post a bond.¹  Disctronics appeals.

II

We will reverse a district court's preliminary injunction order only if the district court abused its discretion, based its decision on an erroneous legal standard, or based its decision on clearly erroneous findings of fact. Vision Sports, Inc. v. Melville Corp., 888 F.2d 609, 612 (9th Cir. 1989). We will affirm the grant of a preliminary injunction when the moving party shows (1) probable success on the merits and the possibility of irreparable harm if the injunction is not granted, or 2) serious questions as to the merits and a sharp tilt in the balance of hardships toward the moving party. See, e.g., Official Airline Guides, Inc. v. Goss, 856 F.2d 85, 87 (9th Cir. 1988).

The tests are not independent. They represent opposite ends on a continuum in which the required showing of harm varies inversely with the required showing on the merits. Republic of the Philippines v. Marcos, 862 F.2d 1355, 1362 (9th Cir. 1988) (en banc), cert. denied, 109 S. Ct. 1933 (1989). The balance of hardships is the most important factor. Id.

In copyright infringement actions, when plaintiffs prove a likelihood of infringement, we presume irreparable harm. Johnson Controls, Inc. v. Phoenix Control Systems, Inc., 886 F.2d 1173, 1174 (9th Cir. 1989). In this appeal, we reverse because the district court based its decision on an erroneous legal standard.

III

To establish copyright infringement, Rodesch must prove (1) that he had a valid copyright, (2) that Disctronics had access to the copyrighted work prior to creating the accused work, and (3) that Rodesch's game and Disctronics's game are substantially similar in both ideas and expression. Data East USA, Inc. v. Epyx, Inc., 862 F.2d 204, 206-7 (9th Cir. 1988); Frybarger v. International Business Machines Corp., 812 F.2d 525, 529 (9th Cir. 1987).

Disctronics argues that the two games are not substantially similar. " [T]he determination of the extent of similarity which will constitute a substantial and hence infringing similarity presents one of the most difficult questions in copyright law." 3 M. Nimmer, Nimmer on Copyright Sec. 13.03 [A] at 13-23 (1989). We review substantial similarity findings for clear error. Data East, 862 F.2d at 206.

We originally developed a two-part test for determining substantial similarity. See Sid & Marty Krofft Television Productions, Inc. v. McDonald's Corp., 562 F.2d 1157, 1164 (9th Cir. 1977). In the first part, the "extrinsic" test, we determine whether two ideas are substantially similar. Id.; Data East, 862 F.2d at 208. This objective test examines specific criteria that can be listed and analyzed. Data East, 862 F.2d at 208.

In the second part, the "intrinsic" test, we look at the forms of expression. This subjective test evaluates the "total concept and feel of the works" from the perspective of an "ordinary reasonable person." Id. An ordinary reasonable person is a person in the intended market. Krofft, 562 F.2d at 1166. We do not analytically dissect dissimilarities and similarities under the intrinsic test because that would distract from a comparison of the total concept and feel of the works. Data East, 862 F.2d at 208.

We have inserted a third part to Krofft's substantial similarity test between the intrinsic and extrinsic tests. Aliotti v. R. Dakin & Co., 831 F.2d 898, 901 (9th Cir. 1987). The third part of the test examines whether the idea and its expression are "separable." If the idea and expression are inseparable, we will not find substantial similarity because that "would confer a monopoly of the idea upon the copyright owner." Id. (citations omitted). See 17 U.S.C. § 102(b) ("In no case does copyright protection for an original work of authorship extend to any idea [.] ...") We can analytically dissect similarities in expression between works to determine whether all similarities in expression necessarily arise from the use of common ideas. Aliotti, 831 F.2d at 901; Data East, 862 F.2d at 208.

We have twice examined substantial similarity and the idea/expression continuum in the context of video games. See Data East, 862 F.2d 204; Frybarger, 812 F.2d 525. See generally Recent Development, Substantial Similarity Between Video Games: An Old Copyright Problem in a New Medium, 36 Vand. L. Rev. 1277 (1983); Hemnes, The Adaptation of Copyright Law to Video Games, 131 U.Penn.L.Rev. 171 (1982).

In Frybarger, we affirmed a summary judgment in favor of a defendant because we found no copyright infringement as a matter of law. We held that the only similar features in the two video games at issue were nonprotectable ideas.²  We explained that we would only protect indispensable expression of the ideas against virtually identical copying. Because no reasonable jury could conclude that the indispensable expression of the similar ideas was virtually identical in the works, we found no substantial similarity as a matter of law.

Similarly, in Data East, we reversed the district court's factual finding that two karate video games were substantially similar and remanded with instructions to lift an injunction. We explained:

The fifteen features³  listed by the court

"encompass the idea of karate." These features ... result from either constraints inherent in the sport of karate or computer restraints. After careful consideration and viewing of these features, we find that they necessarily follow from the idea of a martial arts karate combat game, or are inseparable from, indispensable to, or even standard treatment of the idea of the karate sport. As such, they are not protectable.

862 F.2d at 209.

We continued: "the lower court erred by not limiting the scope of Data East's copyright protection to the author's contribution--the scoreboard and background scenes." Id. We concluded that the two games were not substantially similar because a discerning 17.5 year-old boy, the average person in the intended market, would not regard those two features as similar. Id. at 209-210.

In this case, Disctronics maintains that the similarities between the two games (sounds of hoof beats and cheering crowds, commentary, win-place-show listing, etc.) necessarily flow from the idea of a horse race and cannot be copyrighted. Rodesch argues that the idea of a horse race does not require the sound of hoof beats and crowds, commentators, win-place-show listings and the like. He also claims that Disctronics could have designed a horse race game that did not take place at the Los Alamitos race track, that did not include several of the same names of horses, that was not named Deluxe Edition Quarter Horse Video Disc, and that was not organized in a similar fashion.⁴ 

Much of Rodesch's "expression" in the Quarter Horse Video Disc is nonprotectable because it is inseparable from the idea of a horse race. Just as referees, players and various kicks are inseparable from the idea of a karate game, the sounds of hoof beats, crowds and commentators are inseparable from the idea of a horse race. Rodesch cannot copyright inherent components of the idea of a horse race. However, the use of Los Alamitos, the use of the same names of horses in the audio track, the use of a similar name for the games, and the use of a similar organization of races do not necessarily flow from the idea of a horse race.

Disctronics argues that the name of the racetrack, the names of the horses, and the name of the game are not independently copyrightable. However, even where items are not independently copyrightable, their compilation as a whole may be within the scope of copyright protection. See Harper House, Inc. v. Thomas Nelson, Inc., 889 F.2d 197, 204 (9th Cir. 1989).

Disctronics further contends that virtually all of the names in the audio track are names of registered quarter horses. It claims that Rodesch cannot copyright the use of registered names of horses and deprive others of the use of the names. Rodesch argues that it "authored" the names of those horses. This factual dispute remains to be cleared up by the district court.

Disctronics also maintains that Rodesch did not raise similarity in game organization before the district court. However, although the district judge did not discuss the organization of the races in the games in the hearing on the preliminary injunction, Rodesch argued prior to the hearing that Disctronics used a virtually identical ordering of quarter horse names as in Rodesch's game. See C.R. 15 at 5.

In sum, Rodesch could make an argument for copyright infringement based on Disctronics's use of Los Alamitos, similar names of horses, a similar game name, and a similar organization of races. The compilation of these items may be copyrightable. Harper House, 889 F.2d at 204. We reverse the district court's judgment because it "erred by not limiting the scope of ... copyright protection to the author's contribution." Data East, 862 F.2d at 209. Instead of focusing only on protectable expression, the district court inappropriately applied the total concept and feel test by comparing "the look of the thing coming out of the gate, the look of the bunching, and to a certain degree, the look of the races themselves." E.R. tab RT at 33.

Although we reverse the award of a preliminary injunction because the district court applied an erroneous legal standard, we make no comment on the merits of Rodesch's copyright infringement claim. On remand, the district court, in determining the merits, should focus only on protectable expression, and it should reexamine Rodesch's copyright infringement claim with the understanding that ideas are not copyrightable.

REVERSED AND REMANDED.