In Nintendo of America Inc v Jeramie Douglas King and Go Cyber Shopping (2005) Ltd, 2017 FC 246, Campbell J. of the Federal Court awarded Nintendo $11.7 million in statutory damages and $1 million in punitive damages against Go Cyber Shopping (2005) Ltd. in respect of copyright infringement and the circumvention of technological protection measures (“TPMs”). This decision is the first to consider ss. 41, 41.1, and 41.12 of the Copyright Act on the merits.
Sections 41 and 41.1 were added to the Copyright Act in 2012 to prohibit circumventing TPMs and trafficking in circumvention devices. TPMs are any effective technology, device or component that controls access to copyrighted works or restricts acts of copyright infringement. Section 41.12 offers an affirmative defence to the prohibited activities under s. 41.1, allowing a person who lawfully has permission to use a computer program to circumvent a TPM for the sole purpose of obtaining information that would allow that person to make the program and any other computer program interoperable.
Circumvention of Nintendo’s TPMs
To protect its copyrighted video games, Nintendo relied upon multiple TMPs on its DS, 3DS, and Wii consoles. These TPMs included the physical configuration of game cards, boot up security checks, encryption and scrambling technology, unique data format, and copy protection code.
Since 2013, Go Cyber had advertised and offered for sale ten different models of game copiers. A game copier is inserted into the game card slot in the DS or 3DS console to enable users to play infringing copies of Nintendo’s copyrighted video games. These game copiers mimic Nintendo’s game cards to circumvent the TMPs employed on the DS or 3DS consoles.
Additionally, Go Cyber had offered for sale eleven different models of mod chips and mod chip installation services. Mod chips operate by modifying the disc drive of Nintendo’s Wii console or disabling certain security routines. They are usually installed as an after-market component and the installation may involve disassembling the console. Mod chips also allow users to play unauthorized copies of Wii video games.
Justice Campbell held that Go Cyber’s game copier and mod chips circumvented Nintendo’s TPMs and therefore Go Cyber had violated Nintendo’s rights to legal protection for its TPMs. Further, Campbell J. held that Go Cyber had trafficked in circumvention devices and provided services primarily for the purpose of circumventing TPMs by installing mod chips.
Go Cyber’s Interoperability Defence
Go Cyber raised the interoperability exception as a defence. Go Cyber argued that the sale of its devices and the mod chip installation services were for the purpose of making Nintendo’s game consoles “interoperable” with “homebrew” software. Homebrew software is designed for use on Nintendo consoles but is not owned or licensed by Nintendo.
Justice Campbell found Go Cyber’s argument to be unfounded. He held that the primary purpose of Go Cyber’s devices was to enable users to play unauthorized copies of Nintendo video games. Further, Campbell J. noted that the only mention of “homebrew” on Go Cyber’s website was “no homebrew at the moment”, indicating that homebrew was not actually available.
This decision recognizes the importance of TPMs in the digital age. Sections 41 and 41.1 are likely to be of significance to copyright owners as they offer additional legal tools to protect copyrighted works and pursue those who facilitate copyright infringement.