Trademark Security System and Sega v. Accolade
Main article:
Sega v. Accolade
After the release of the Sega Genesis in 1989, video game publisher
Accolade began exploring options to release some of their
PC game titles onto the console. At the time, Sega had a licensing deal in place for
third-party developers that increased the costs to the developer. According to Accolade co-founder
Alan Miller, "One pays them between $10 and $15 per cartridge on top of the real hardware manufacturing costs, so it about doubles the cost of goods to the independent publisher."
[65] To get around licensing, Accolade chose to seek an alternative way to bring their games to the Genesis. It did so by purchasing one in order to decompile the
executable code of three Genesis games. Such information was used to program their new Genesis cartridges in a way that would allow them to disable the security lockouts on the Genesis that prevented unlicensed games from being able to be played.
[66][67] This strategy was used successfully to bring
Ishido: The Way of Stones to the Genesis in 1990.
[68] To do so, Accolade had copied Sega's copyrighted game code multiple times in order to reverse engineer the software of Sega's licensed Genesis games.
[69][70]
An edition of the original model of Genesis, known as the Genesis III, was the model at the center of
Sega v. Accolade for its incorporation of the Trademark Security System (TMSS)
As a result of piracy from foreign countries and unlicensed development issues, Sega incorporated a technical protection mechanism into a new edition of the Genesis released in 1990, referred to as the Genesis III. This new variation of the Genesis included a code known as the Trademark Security System (TMSS), which, when a game cartridge was inserted, would check for the presence of the
string "SEGA" at a particular point in the memory contained in the cartridge. If the string was present, the console would run the game, and would briefly display the message: "Produced by or under license from Sega Enterprises, Ltd."
[66] This system had a twofold effect: it added extra protection against unlicensed developers and software piracy, and forced the Sega trademark to display when the game was powered up, making a lawsuit for trademark infringement possible if unlicensed software were to be developed.
[67][70] Accolade learned of this development at the
Winter Consumer Electronics Show in January 1991, where Sega showed the new Genesis III and demonstrated it screening and rejecting an
Ishido game cartridge.
[67]With more games planned for the following year, Accolade successfully identified the TMSS file. It later added this file to the games
HardBall!,
Star Control,
Mike Ditka Power Football, and
Turrican.
[67]
In response to the creation of these unlicensed games, Sega filed suit against Accolade in the
United States District Court for the Northern District of California, on charges of trademark infringement,
unfair competition, and copyright infringement. In response, Accolade filed a counterclaim for falsifying the source of its games by displaying the Sega trademark when the game was powered up.
[69][71] Although the district court initially ruled for Sega and issued an injunction preventing Accolade from continuing to reverse engineer the Genesis, Accolade appealed the verdict to the
United States Court of Appeals for the Ninth Circuit.
[72]
As a result of the appeal, the Ninth Circuit overturned the district court's verdict and ruled that Accolade's decompilation of the Sega software constituted fair use.
[73] The court's written opinion followed on October 20, 1992, and noted that the use of the software was non-exploitative, although commercial.
[66][74] Further, the court found that the trademark infringement, being required by the TMSS for a Genesis game to run on the system, had been inadvertently triggered by a fair use act and was the fault of Sega for having caused false labeling.
[66] Ultimately, Sega and Accolade settled the case on April 30, 1993. As a part of this settlement, Accolade became an official licensee of Sega, and later developed and released
Barkley Shut Up and Jam! while under license.
[75] The terms of the licensing, including whether or not any special arrangements or discounts were made to Accolade, were not released to the public.
[76] The financial terms of the settlement were also not disclosed, although both companies agreed to pay their own legal costs.
[77]
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