Galoob manufactured an add-on product called Game Genie, which allowed users to modify video games by entering in certain codes; for example, a code might make the player invincible by negating the programming that updates the player's health amount. Nintendo, which sold a video game system and video games that could be modified by Game Genie, sued Galoob for copyright infringement, arguing that Game Genie made a derivative work, violating Nintendo's copyright in their video game.
The Court denied Nintendo's motion for a preliminary injunction, holding that Game Genie did not create a derivative work and also suggesting that even if it did, it might well be fair use. As the district court wrote, "Having paid Nintendo a fair return, the consumer may experiment with the product and create new variations of play, for personal enjoyment, without creating a derivative work."
See also Foresight v. Pfortmiller, 719 F. Supp 1006 (D. Kan. 1989). An earlier appellate case on similar facts came out the other way, favoring the original copyright holder in Midway Manufacturing Co. v. Artic International, Inc..
SonicBlue was sued over the commercial-skipping feature of ReplayTV on similar grounds. "Your contract when you get the show is you're going to watch the spots [advertisements]. … Any time you skip a commercial … you're actually stealing the programming," asserts Turner Broadcasting CEO Jamie Kellner. He admits that "there's a certain amount of tolerance" for going to the bathroom during commercials. Due largely to the lawsuit, SonicBlue went bankrupt before the court reached a decision on the merits of the case.