Ruling Lets Sega Rival Copy Codes

In a ruling described by the winners as “a blow for free competition,” a federal appeals court said Tuesday that a video game maker could copy a Sega computer system’s “lockout” code to design games for the Sega console.

The U.S. 9th Circuit Court of Appeals had announced its decision Aug. 28 in an order allowing Accolade Inc. of San Jose, Calif., to sell games that were compatible with the widely used Genesis console made by Sega Enterprises Ltd. of Redwood City, Calif.

The court’s reasoning, disclosed Tuesday, amounted to the first binding ruling by any of the nation’s federal appellate courts on the application of copyright law to a common process called reverse engineering. That is the practice of taking apart a product to see how it works, and using the knowledge to design one’s own product.