January 1, 1986 by David Spratley
(This is an archived case summary)
This was an appeal from a judgment of the United States District Court for the Southern District of New York in favour of counterclaims brought by the defendants, Nintendo Co., Ltd. and Nintendo of America, Inc. (Nintendo), against plaintiff Universal City Studios, Inc. (Universal).
This case represents the last round of dispute between Universal and Nintendo over whether Nintendo had infringed Universal's “King Kong” trade-mark by marketing its popular video game ”Donkey Kong”. The District Court, in 1983, on motions for summary judgment, dismissed Universal's complaint of trade-mark infringement and unfair competition against Nintendo (Universal City Studios v. Nintendo Co., 578 F.Supp. 911 (S.D.N.Y.1983)). The Court of Appeals later affirmed that judgment in Universal Studios v. Nintendo Co., 746 F.2d 112 (2d Cir.1984).
The District Court then proceeded to try Nintendo's counterclaims against Universal. On July 29, 1985, the District Court ruled for Nintendo on part of its tortious interference counterclaim; for Nintendo on its vicarious copyright infringement counterclaim; and against Nintendo on its unjust enrichment counterclaim (Universal City Studios v. Nintendo Co., 615 F.Supp. 838 (S.D.N.Y.1985)). The court also awarded Nintendo punitive damages for tortious interference, attorney's fees for successfully defending against Universal's trade-mark infringement claim, and attorney's fees for successfully prosecuting its vicarious copyright infringement counterclaim. Both parties then appealed on each of the claims it lost.
In this appeal, the Court of Appeal upheld the lower court’s ruling that (1) Universal tortiously interfered with contractual relations by sending “cease and desist” letters to Nintendo's “Donkey Kong” licensees; (2) an award of attorney's fees was proper; (3) the award of punitive damages on tortious interference counterclaim was appropriate; (4) Universal had vicariously infringed “Donkey Kong” copyright by licensing a competing King Kong game; and (5) the “Donkey Kong” copyright holder was not entitled to damages for alleged tortious interference with license agreements.
Tortious Interference with Contractual Relations
Punitive Damages for Tortious Interference
On appeal, Universal argued that the District Court erred by failing to specify which part of Nintendo's arcade game represented protectable expression as distinguished from the underlying and unprotectable idea. Universal also argued that the characters involved in “Donkey Kong” are not protectable because they are not “wholly fanciful.”
An overview of this series of cases is available at GameSpy.com’s Universal Goes Ape The 25 Dumbest Moments in Gaming.”
Universal City Studios, Inc. v. Nintendo Company Ltd. and Nintendo of America, Inc.