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Nintendo of America, Inc. v. Blockbuster Entertainment Corp.

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522:" for short. In 1991, the Taiwanese cartridge-sellers pleaded guilty to trafficking in counterfeit goods in criminal court, leading to a 1993 civil suit where they were ordered to pay $ 24 million in damages to Nintendo. Nintendo and Blockbuster repaired the business relationship after their lawsuit, and collaborated throughout the 1990s and early 2000s. This included Nintendo allowing Blockbuster to rent and sell a number of games made exclusive to the rental company's stores. The video game rental market continued to grow, and by 2008, Blockbuster was earning over $ 200 million in annual revenue from video game rentals. However, the company began to suffer losses due to competition from 503: 315: 31: 433:
Blockbuster announced their plans to find a legal alternative to photocopying. Blockbuster considered either producing their own game manuals, or purchasing alternate manuals from an upcoming Video Software Dealers Association Convention. They eventually chose the latter option, declaring that producing manuals was a waste of resources considering that video games made up only 3% of annual profits.
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passed the Computer Software Rentals Amendment Act, with Nintendo excluded from the final legislation. While the CSRAA gave copyright owners in computer software an exclusive "rental right", the same legislation allowed consumers to rent video games in an exception now commonly known as the "Nintendo
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to a court order that would suspend the practice of photocopying the game manuals. Blockbuster announced that they had already contacted store managers to stop copying the manuals when they received Nintendo's original letter. Since video game rentals often led to lost or damaged instruction manuals,
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by comparing games to movies. If film studios have a window of exclusivity in theaters before they decide to offer their work for rental, Sheff concluded that a similar model would be reasonable for games, rather than allowing video-rental stores to buy unlimited copies on the first day of release.
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Soon after the settlement, the United States Congress passed the Computer Software Rentals Amendment Act prohibiting software rentals, excluding Nintendo cartridges from similar protections. Although Nintendo criticized the game rental business, they came to accept it, even working with Blockbuster
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as one of the lawsuits that altered the course of the game industry, allowing the rental market to thrive for the years that followed. As the game industry came to accept video game rentals, companies turned their attention to the economic threat of used game sales. Later game consoles such as the
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criticized the video game rental business. He described Nintendo's business model to "spend thousands of hours and millions of dollars creating a game ... to be compensated every time the thing sells," while lamenting that rental companies can "exploit the thing—renting it out over and over again,
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Blockbuster reacted publicly, saying that Nintendo initiated the lawsuit out of frustration with being excluded from the pending software legislation. A Nintendo spokesman responded that "in an industry like ours, if you don't have strong copyright laws, you don't have a company. You don't have an
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were lost, as well as photocopying the manuals for replacement purposes. On July 31, 1989, Nintendo of America sent a letter of request to Blockbuster, requesting that Blockbuster cease photocopying and reproducing Nintendo's copyrighted game manuals. Five days later, this was followed by a formal
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of software, and argued that cartridges did not need protection as they were difficult to copy and reproduce. Nintendo attempted to find compromise legislation, such as limiting game rentals until one year after their initial release, but did not succeed. By mid-1989, the bill passed through the
337:. A similar policy discussion occurred in America, with the Rental Records Amendments Act banning music rentals in 1984. Meanwhile, the film and television industry created an extremely successful rental business, with an estimated annual revenue of over $ 5 billion in 1988, even more than their 301:
In 1989, Nintendo sold an estimated $ 2.7 billion (~$ 5.78 billion in 2023) in video game software and games, accounting for 80% of the market. Blockbuster hoped to gain an edge on their competition by renting Nintendo games at a time when their demand was on the rise. In some video rental
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for the unauthorized copying of their game manuals. Nintendo asserted that at least one Blockbuster-owned store and three franchises within New Jersey had photocopied their game manuals and rented them to their customers with their respective games.
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offered a compromise to the Software Publishers Association, promising to support a prohibition on software rentals if they still allowed the lucrative game cartridge rentals. A draft of the new rental protection bill passed through the
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technology, but relented after a consumer backlash. Attorney Mark Humphrey has noted that "secondary markets for video games are no longer protected by the first sale doctrine", as copyright holders can use new technologies such as
2816: 290:, Melk and Huzienga were able to substantially expand Blockbuster across America. By 1989, it was estimated that a Blockbuster store was opening approximately every 24 hours. Blockbuster's estimated revenue in 1989 was over 481:
During the dispute, journalist Jack Neese reacted that "what Blockbuster is doing may be completely legal but it is not right." After the dispute had been settled, Journalist David Sheff reacted in his book
306:, Blockbuster's revenues from video game rentals reached $ 150 million (~$ 309 million in 2023) by 1990, or 10% of their business. Blockbuster claimed that this only made up 3% of their annual profits. 241:
quickly became a commercial success. By 1989, it was estimated that 15 million homes in America were in possession of a Nintendo product, and this estimate rose to 20 million in the post-Christmas season.
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Blockbuster for reproducing their copyrighted game manuals. Blockbuster quickly ended the practice, and decided to hire third parties to create replacements for any lost or damaged manuals. They
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the matter outside of court for an undisclosed amount. While Nintendo continued to argue for their inclusion in the Computer Software Rental Amendments Act, the
827:"Blockbuster vs. the World : Entertainment: When it comes to videos, Blockbuster is aptly named. Now this industry leader is storming Southern California" 446:(i) a computer program which is embodied in a machine or product and which cannot be copied during the ordinary operation or use of the machine or product; or 2476: 2193: 586:
that the end-user was purchasing a singular, non-transferable license to the software, thus limiting the sale of used software. When Microsoft announced the
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argued to Congress that renting their game cartridges could destroy the market for their games. But the Video Software Dealers Association focused on
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industry." Legal scholars noted that if Blockbuster had indeed photocopied the instruction manuals, they would have violated Nintendo's copyright.
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stores, video game rentals comprised as much as 40% of their business, while comprising closer to 15% at other stores. According to journalist
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promised to crush any new law that targeted video games, as game rentals were too lucrative to give up. Backed by powerful players such as
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which allows anyone to distribute an instance of a copyrighted work that they have legally purchased. To stop the rental of software, the
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approved a bill that limited the rental of computer software without limiting the rental of video game cartridges. By November, both the
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The photocopying of video game manuals was an infringement of copyright, but the rental of video games was completely legal.
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sold in its first five years. By the end of the decade, 30% of American households owned the NES, compared to 23% for all
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worked with the Software Publishers Association to lobby the United States government against computer software rentals.
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began to rent computer software to capitalize on the growing software industry. This practice was legal, thanks to the
2462: 2411: 502: 2705: 2531: 2263: 2019: 1998: 579: 383:, but Microsoft was determined to see new protections for computer software even without protections for Nintendo. 205: 2695: 2231: 2065: 2055: 1821: 591: 583: 1232: 2791: 2510: 1369:"Blockbuster Reaches Agreement on Plan to Recapitalize Balance Sheet and Substantially Reduce its Indebtedness" 569: 113: 2619: 286:, to invest. Combining the operational techniques from Waste Management with the business expansion models of 722: 188:, prohibiting software rentals for computers while allowing stores to rent Nintendo game cartridges. With no 2750: 2443: 2435: 2382: 1879: 1164: 1096: 917: 629:
The Ultimate History of Video Games: The Story Behind the Craze that Touched our Lives and Changed the World
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reported that Nintendo had sold seven million NES systems in 1988 alone, almost as many units as the 1982
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was amended to allow copyright holders to decide their own terms and conditions for rental stores, after
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Game Over: How Nintendo Zapped an American Industry, Captured Your Dollars, & Enslaved Your Children
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to offer exclusive rental versions of their games. The first-sale doctrine was eventually subverted by
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games, including a Taiwanese company calling themselves both the "Nintendo Electronic Company" and "
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Nintendo discovered that Blockbuster's game rental practices included charging customers a fee when
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hundreds and even thousands of times," without any compensation to Nintendo or their developers.
238: 144:. Nintendo responded that they were enforcing their copyright as an essential foundation of the 2801: 2485: 2367: 2128: 2102: 1977: 1797: 1646: 1586: 1563: 1557: 1533: 1489: 1430: 1047:"The Computer Software Rental Amendments Act of 1990: Another Bend in the First Sale Doctrine" 980: 952: 890: 834: 805: 665: 633: 391: 267: 253: 152: 133: 128:. Blockbuster publicly accused Nintendo of starting the lawsuit after being excluded from the 1339: 2648: 2599: 2567: 2493: 2181: 1927: 1914: 1777: 1696: 1641: 1626: 1545: 295: 72:
Letter of Request from Nintendo to Blockbuster, requesting cessation of manual reproduction.
2688: 2624: 2578: 2347: 2144: 2060: 1782: 1772: 1711: 1686: 1656: 1636: 1375: 600: 523: 85: 2352: 2289: 2279: 2012: 2005: 1909: 1802: 1751: 1716: 1706: 1691: 1676: 1671: 1661: 1651: 1580: 1539: 623: 490: 429: 294:, cementing the brand as the 'king' of the video rental industry, as its closest rival 283: 1392: 1308: 2785: 2700: 2683: 1922: 1889: 1726: 1721: 1097:"Nintendo Zaps Blockbuster Reproduction of Game Instructions Spurs Copyright Lawsuit" 553: 542:, leading Blockbuster to file for bankruptcy in 2010. Nintendo continues to operate. 257: 141: 2663: 2614: 2284: 1792: 1787: 1767: 1666: 1551: 775: 565: 547: 249: 189: 2755: 2725: 2658: 2557: 2543: 2538: 2502: 2387: 2362: 2036: 1932: 1874: 1746: 1736: 1731: 1701: 1598: 723:"Fusion, Transfusion or Confusion / Future Directions In Computer Entertainment" 590:, they initially planned to prevent the console from playing used games through 515: 507: 303: 121: 2299: 2377: 2107: 1884: 1631: 561: 535: 338: 221: 109: 838: 669: 2745: 2710: 2653: 2604: 2372: 372: 318: 172: 2357: 1378:(Press release). Blockbuster. September 23, 2010. Retrieved April 17, 2019. 578:
enforced prohibitions on the resale of their copyrighted software using an
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Neese, Jack (August 16, 1989). "Blockbuster Blind To Value Of Copyright".
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Ganea, Peter; Heath, Christopher; Hiroshi, Saito; SaikĂ´, Hiroshi (2005).
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United States District Court for the District of New Jersey cases
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Japanese Copyright Law: Writings in Honour of Gerhard Schricker
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earned $ 180 million (~$ 385 million in 2023) in revenue.
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The End of Ownership: Personal Property in the Digital Economy
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executive John Melk saw this success and convinced his boss,
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Nintendo of America, Inc. v. Blockbuster Entertainment Corp.
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Nintendo of America, Inc. v. Blockbuster Entertainment Corp.
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Nintendo of America, Inc. v. Blockbuster Entertainment Corp.
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Nintendo of America, Inc. v. Blockbuster Entertainment Corp.
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United States District Court for the District of New Jersey
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Perzanowski, Aaron; Schultz, Jason (October 28, 2016).
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due to an exception in the Copyright Act known as the
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in 1985. As the company expanded to nearly 20 stores,
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was larger than that for all home computer software.
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Videoland: Movie Culture at the American Video Store
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Roseville, California: Prima Publishing. 2498: 2477: 2463: 2455: 2239: 2225: 2217: 2092: 1826: 1616: 1523: 1504: 1490: 1482: 697:"Just Kids' Play or Computer in Disguise?" 151:The dispute began in the late 1980s, when 29: 20: 1134:"Chain to Stop Giving Out Nintendo Books" 1956:Entertainment Planning & Development 1456:Cornell Journal of Law and Public Policy 200:the lawsuit with Nintendo a year later. 2205:Symphonic Legends – Music from Nintendo 1203:Journal of Law, Technology & Policy 928:from the original on September 19, 2020 658:"The Games Played For Nintendo's Sales" 612: 467:United States House Judiciary Committee 360:to prohibit the rental of all computer 335:Recording Industry Association of Japan 130:Computer Software Rental Amendments Act 1165:"Nintendo Steps Up Blockbuster Battle" 1128: 1126: 1124: 1122: 1107:from the original on February 14, 2019 656:Ramirez, Anthony (December 21, 1989). 471:United States House of Representatives 1466:from the original on October 21, 2022 1420: 1418: 1403:from the original on October 21, 2022 1386: 1384: 1090: 1088: 1086: 1084: 1082: 1080: 1078: 1076: 1061:from the original on October 17, 2022 1023:from the original on October 21, 2022 970: 968: 804:. New York: Wiley. pp. 32, 126. 733:from the original on January 10, 2020 140:but allowed the rental of Nintendo's 7: 1264:"Congress Restricts Software Rental" 1212:from the original on August 26, 2022 878: 876: 874: 872: 870: 868: 866: 864: 862: 860: 795: 793: 1391:Gilbert, Henry (February 4, 2014). 1338:McGee, Maxwell (February 6, 2015). 676:from the original on April 21, 2019 443:This subsection does not apply to— 412:lawsuit against Blockbuster in the 2822:Copyright infringement of software 1231:Lowell, Michael (March 30, 2012). 1045:Corsello, Kenneth R. (1991–1992). 584:declared in the software packaging 369:Video Software Dealers Association 181:Video Software Dealers Association 124:game instruction manuals owned by 14: 1319:from the original on June 7, 2019 1274:from the original on May 10, 2023 1262:Mace, Scott (November 12, 1990). 1243:from the original on May 13, 2019 1175:from the original on May 13, 2019 1163:Forman, Ellen (August 10, 1989). 1144:from the original on May 13, 2019 1095:Forman, Ellen (August 13, 1989). 845:from the original on June 8, 2019 514:Nintendo turned its attention to 2797:United States copyright case law 2309:Blockbuster Entertainment Awards 2298: 2194:Intellectual property protection 1350:from the original on May 5, 2019 1961:Platform Technology Development 1450:Lopresto, Charles (Fall 2011). 354:Software Publishers Association 169:Software Publishers Association 2827:1990 in United States case law 2532:final location in Bend, Oregon 2341:Former brands and acquisitions 1051:Catholic University Law Review 825:Citron, Alan (July 22, 1990). 564:and software services such as 263:In the same period, the first 59:Settled outside of court, 1990 1: 2812:Video game copyright case law 1985:Nintendo La Rivista Ufficiale 768:"The Making of a Blockbuster" 729:. December 1990. p. 26. 235:Nintendo Entertainment System 2071:Nintendo World Championships 889:. Diane Publishing Company. 695:Ferrell, Keith (July 1989). 386:Backed by Nintendo, several 41:District Court of New Jersey 2412:Harris v. Blockbuster, Inc. 545:The case has been noted by 206:end-user license agreements 2848: 2264:Blockbuster (Bend, Oregon) 2020:Official Nintendo Magazine 1295:South Florida Sun Sentinel 580:end-user license agreement 397:Senate Judiciary Committee 341:revenue of $ 4.5 billion. 237:in North America, and the 186:Senate Judiciary Committee 2769: 2620:Microsoft Movies & TV 2444:"A Nightmare on FaceTime" 2296: 2254: 2056:Nintendo Campus Challenge 1919:Nintendo Network Services 1282:– via Google Books. 802:The Making of Blockbuster 592:digital rights management 416:, with Nintendo alleging 367:During negotiations, the 364:, including video games. 96: 28: 2773:Video-on-demand services 2511:Culture Convenience Club 1992:Nintendo Magazine System 1374:October 3, 2018, at the 975:Herbert, Daniel (2014). 756:. June 1988. p. 50. 752:"The Nintendo Threat?". 114:copyright of video games 1999:Nintendo Player's Guide 1880:Nintendo Tumbler Puzzle 1017:Southwestern Law Review 1011:Humphrey, Mark (2013). 800:DeGeorge, Gail (1997). 377:WordPerfect Corporation 177:WordPerfect Corporation 132:, which prohibited the 2696:Le SuperClub VidĂ©otron 2674:Hastings Entertainment 2066:Nintendo PowerFest '94 1938:Nintendo Switch Online 924:. September 19, 1990. 772:Bloomberg Businessweek 511: 451: 418:copyright infringement 358:United States Congress 327:copyright law of Japan 322: 226: 161:United States Congress 2051:Iwata Asks interviews 1194:Taylor, Ivan (2015). 1138:The Los Angeles Times 883:Sheff, David (1993). 754:Computer Gaming World 727:Computer Gaming World 505: 388:video game developers 317: 224: 2832:1990 in video gaming 2706:Playdium Movie Magic 2430:The Last Blockbuster 2187:Nintendo Space World 2113:Super Nintendo World 1742:Hidemaro Fujibayashi 778:on November 13, 2010 475:United States Senate 392:unauthorized copying 274:, Texas, founded by 179:, and Nintendo. The 2807:Nintendo litigation 2583:and digital lockers 1574:Nintendo of America 1140:. 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Autodesk 548:GamesRadar+ 516:counterfeit 508:Nintendo DS 304:David Sheff 265:Blockbuster 118:Blockbuster 2786:Categories 2771:See also: 2721:Ritz Video 2561:and kiosks 2378:Record Bar 2108:Shigureden 1885:Ultra Hand 1859:Characters 1632:Koji Kondo 1520:Presidents 958:9041123938 896:0788163205 607:References 536:mail order 530:automated 526:services, 339:box office 276:David Cook 270:opened in 258:cartridges 212:Background 110:legal case 108:is a 1989 16:Court case 2746:Video Ezy 2734:Australia 2711:Quickflix 2654:CinemaNow 2610:Google TV 2605:Globoplay 2373:Movielink 2177:Marketing 2170:Data leak 2096:Operating 2089:Locations 1268:InfoWorld 1179:March 21, 1148:March 21, 1111:March 15, 932:March 15, 839:0458-3035 670:0362-4331 485:Game Over 430:consented 373:Microsoft 333:from the 319:Microsoft 229:In 1985, 173:Microsoft 2802:Nintendo 2679:LoveFilm 2643:Best Buy 2397:Lawsuits 2259:EchoStar 2199:Bergsala 2138:Upcoming 2042:Classic 1903:Services 1849:Consoles 1822:Products 1513:Nintendo 1464:Archived 1401:Archived 1372:Archived 1348:Archived 1317:Archived 1272:Archived 1241:Archived 1207:Archived 1173:Archived 1142:Archived 1105:Archived 1059:Archived 1021:Archived 926:Archived 843:Archived 731:Archived 701:Compute! 674:Archived 626:(2001). 588:Xbox One 576:Autodesk 574:, where 558:Xbox 360 556:and the 473:and the 375:and the 362:software 346:software 331:lobbying 288:Ray Kroc 245:Compute! 231:Nintendo 138:software 126:Nintendo 116:, where 2581:rentals 2165:History 2158:Related 2122:Defunct 1323:May 25, 1057:: 177. 849:May 25, 680:May 25, 540:Netflix 463:settled 437:Outcome 403:Dispute 381:Redmond 198:settled 167:by the 165:lobbied 56:Decided 2761:Zip.ca 2716:Redbox 2570:(Peru) 2358:Erol's 2044:Tetris 2030:Events 1761:Former 1620:Active 1613:People 1433:  1354:May 6, 1247:May 6, 983:  955:  893:  837:  808:  668:  636:  560:added 534:, and 532:kiosks 528:Redbox 272:Dallas 175:, the 134:rental 1210:(PDF) 1199:(PDF) 520:NTDEC 217:Facts 38:Court 1868:Toys 1472:2022 1431:ISBN 1409:2022 1356:2019 1325:2019 1280:2021 1249:2019 1218:2022 1181:2019 1150:2019 1113:2019 1067:2022 1029:2022 981:ISBN 953:ISBN 934:2019 891:ISBN 851:2019 835:ISSN 806:ISBN 784:2010 739:2022 709:2013 682:2019 666:ISSN 634:ISBN 599:and 194:sued 163:was 2332:7th 2327:6th 2322:4th 2317:1st 310:Law 2788:: 1460:21 1458:. 1454:. 1417:^ 1399:. 1395:. 1383:^ 1346:. 1342:. 1311:. 1266:. 1239:. 1235:. 1205:. 1201:. 1171:. 1167:. 1136:. 1121:^ 1103:. 1099:. 1075:^ 1055:41 1053:. 1049:. 1037:^ 1019:. 1015:. 995:^ 967:^ 920:. 905:^ 859:^ 841:. 833:. 829:. 792:^ 770:. 725:. 699:. 672:. 664:. 660:. 648:^ 615:^ 148:. 2478:e 2471:t 2464:v 2240:e 2233:t 2226:v 1505:e 1498:t 1491:v 1474:. 1439:. 1411:. 1358:. 1327:. 1297:. 1251:. 1220:. 1183:. 1152:. 1115:. 1069:. 1031:. 989:. 961:. 936:. 899:. 853:. 814:. 786:. 741:. 711:. 684:. 642:. 510:.

Index


Alfred M. Wolin
legal case
copyright of video games
Blockbuster
photocopying
Nintendo
Computer Software Rental Amendments Act
rental
software
game cartridges
video game industry
video rental shops
first-sale doctrine
United States Congress
lobbied
Software Publishers Association
Microsoft
WordPerfect Corporation
Video Software Dealers Association
Senate Judiciary Committee
legal remedy
sued
settled
end-user license agreements

Nintendo
Nintendo Entertainment System
video game console
Compute!

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