MOVIE URBAN LEGEND: Universal Studios sued Nintendo, saying Donkey Kong infringed on its King Kong trademark.
One of the most interesting aspects of trademark law is that cases involving infringement rarely make it to trial. That’s because it’s almost always more cost-effective to simply change the trademark after receiving a cease-and-desist letter rather than to spend the money to go to trial to defend its use. If you follow that train of thought to its logical conclusion, you’ll realize that it’s possible for large companies to successfully argue trademark infringement even if they don't have a legal leg to stand on, simply because they have enough money to threaten smaller entities into backing down. They’re essentially the 300-pound gorilla in the room, and everyone has to get out of their way. When one of those small companies does choose to fight back, however, the results can be surprising. An excellent example of this is when Universal City Studios ("Universal") decided to sue Nintendo, claiming Donkey Kong infringed upon its King Kong trademark.
Debuting in 1981, the arcade game Donkey Kong soon became one of the most successful video games of all time. The premise is that Donkey Kong is the pet of Jumpman (later renamed Mario in the United States) who’s abused to the point that he kidnaps his owner’s girlfriend Lady (later renamed Pauline). Jumpman has to rescue her by traveling up a series of ladders while Donkey Kong throws barrels in an attempt to stop him. Donkey Kong was one of the first video games (if not the first) to use a storyline and established characters to make play more exciting. You're not just blasting away at inanimate objects, you're specifically trying to rescue a damsel in distress! Donkey Kong soon became the template many video games would try to copy over the years (and Donkey Kong and Mario became two of the most famous video game characters ever). However, there were some who felt the game’s template seemed mighty familiar. The idea of a giant ape kidnapping a woman and taking her to the top of a building sure sounds like King Kong, doesn't it?
Well, in 1982, with the game a pop-culture sensation, Universal president Sid Sheinberg finally heard about Donkey Kong, and had one of his subordinates investigate. He was told that it seemed like the game infringed on the studio’s rights to King Kong, so Sheinberg contacted Coleco president Arnold Greenberg, whose company was licensing the game in the United States for consoles. Sheinberg threatened Greenberg with a trademark-infringement lawsuit, and ultimately got him to agree to give Universal a 3 percent cut of all sales of Donkey Kong video games, which was worth roughly $4 million.
An issue arose, however, when Tiger, a manufacturer of handheld video games, licensed King Kong. Universal quickly realized the arrangement it had signed with Tiger would prohibit the studio from licensing King Kong to another video game company, which would void the deal just signed with Coleco. In addition, the Tiger handheld game looked a bit too much like Donkey Kong. Universal tried unsuccessfully to pull out of the agreement with Tiger, but the studio was able to get company to ease off on the rights exclusivity and alter the game so it didn’t so closely resemble Donkey Kong.
While Coleco caved in quickly, Nintendo, decided that Universal's claims of ownership regarding King Kong weren’t based on a solid ground and refused to settle. Universal then sued Nintendo for trademark infringement and sent cease-and-desist letters to all of the companies that had licensed Donkey Kong for other products (cereal and board games, for instance). But Universal overplayed its hand. Why? Well, as it turned out, Universal didn't actually own the King Kong name!
King Kong was created by filmmaker Merian C. Cooper for the 1933 classic produced by RKO Pictures. Cooper believed he retained the rights, and merely licensed the character to the studio, but as he learned many years later, he had actually lost the rights to King Kong and its sequel Son of Kong to RKO. He did, however, own the rights to the novelization of King Kong.
The battle over the rights to King Kong came to a head in the mid-1970s, when famed producer Dino De Laurentiis and Universal were fighting over who had the rights to create a remake. De Laurentiis went to buy the rights to Kong from RKO. Universal, however, argued that because Cooper owned the rights to the novelization but had failed to renew the copyright, the novelization was in the public domain; therefore, Universal should be allowed to produce a film based on that novelization. So Universal sued RKO, which would become an important point years later in the Nintendo lawsuit.
It was ultimately ruled that RKO owned the rights and associated trademarks to the first two King Kong films, the novelization was in the public domain (but only the parts of the book that weren’t also in the RKO films, which basically is meaningless) and the rights to the King Kong character belonged to Cooper's estate. The estate sold all but the publishing rights to Universal, which then worked out a deal with De Laurentiis in which the studio would get a cut of profits from his remake (the 1976 film starring Jeff Bridges and Jessica Lange) in exchange for delaying its King Kong picture for 18 months (Universal didn’t end up producing its version until 2005, with Peter Jackson at the helm). In addition, RKO agreed not to sue if Universal made a King Kong film (Universal would then give RKO a very small cut of the film's profits).
When Universal and Nintendo went to court, the judge basically tore Universal apart over the events of its previous lawsuit against RKO. Essentially, his position was that Universal had to know it didn’t actually own any trademark to King Kong as he appeared in the original RKO films because that was the result of the previous case. Universal only owned the copyright to the actual character King Kong; the rights studio gained from the Cooper purchase did not include a trademark on the name or appearance of the character. So not only did Universal not have a legal leg to stand on, but the studio had to know that it didn’t before suing Nintendo. Therefore, the studio was guilty of abusing the legal process.
The judge also ruled that even had Universal owned the trademark on King Kong, he would have ruled against the studio, as Donkey Kong was not similar enough to King Kong to cause any confusion. At worst, he would be a parody of King Kong and would be protected by parody rights. Finally, the judge also found that the Tiger King Kong game was too similar to Donkey Kong. So Nintendo not only won the case, it received Universal's licensing fees from the Tiger King Kong game as well as all legal fees in the case (more than $1 million). Plus, all of Nintendo's licensees were able to seek damages against Universal (Universal paid off Coleco by buying stock in the company).
It was a total victory for Nintendo and helped to demonstrate that Nintendo was here to stay. Nintendo gave the lawyer who represented the company, John Kirby, a yacht called Donkey Kong. There’s also a decent chance that the Nintendo video game character Kirby was named in honor of him.
The legend is...
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