Okay. I'm gonna try to give a full analysis of this situation here, as I see it. I'm not a lawyer, but I just finished up a class on Intellectual Property, the vast majority of which was spent on copyright. I could try to email the professor and see if she'd give me her opinion on it, but I have a feeling it would be about the same as I come up with as I work my way through it here. (Also, I started on this about 4:00 in the afternoon, Central Time in the US, and came back to it about 10:30, and I didn't refresh the page. So, if anyone has said any of what I say in here, I apologize).
Under US law, Section 106 of the Copyright code gives 6 exclusive rights to the creators/owners of IP.
§ 106. Exclusive rights in copyrighted works38
Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and
(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.
CE would fall under the area of "derivative works", since it would be a "mid-quel". Now, obviously, there's a lot of various fan fictions for different series, whether video games, TV, movies, books, etc. Generally, even though these works are derivatives of the originals, although they make not necessarily be embraced by the copyright owner, they're at least tolerated, as the copyright owners 1) don't want to alienate their fans, and 2) don't think that it'll hurt the market for their own derivative works.
Looking at it from SE's perspective, while they allow other fan fiction, there's 2 main issues here. They probably feel that the release of the CE patch would encourage people to illegally download a CT rom, and that the downloading of the rom would likely discourage many fans from purchasing CTDS. Also, although CE is a patch for the SNES rom, it still makes use of and modifies their original CT game. A similar idea is that of sampling pieces of music to use in the creation of new music. Done with permission from the copyright owners, it's okay, but when done without permission, it has been the cause of many lawsuits. Sometimes the bits taken are so small that they constitute fair use, but that's pretty rare. Think of the CE situation like this: CE takes a couple little snippets of music (some from CT, some from CC) and uses it as part of the creation of a whole new song. It doesn't use much, just enough that it's recognizable. Even though this new song gives credit to the creators of the first 2 songs, it's still using those pieces without the permission of the owners.
Now, I mentioned fair use. There are limitations on the Sec 106 exclusive rights of copyright owners, but exactly what constitutes fair use will vary from case to case. Looking at what the law says,
§ 107. Limitations on exclusive rights: Fair use40
Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include —
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.
Now, fair use isn't so much an allowance as it is a defense to a claim of infringement. You may look at the 4-part analysis for fair use and think something (like CE) falls under it. SE may look at it and say "No way in hell does it fall under fair use." The only way to know for sure is if it goes to court. And even then, with appeals, you may get 3 different answers before it's settled (provided it makes it to the Supreme Court).
My personal take on whether or not CE is fair use... Well, let's see:
1) purpose and character of the use - obviously, it's non-profit, and while that doesn't make it a shoe-in, it does make it a lot easier than if the CE team were charging to download the patch, a patched ROM, or even had ads on the site (well, I'm assuming they don't. Somebody else said their no ads on the compendium, and I'm gonna take their word for it, since I have ad-block on my firefox). As we well know, CE wasn't meant to take the place of a possible future SE Chrono title, just give the fans something to keep them into the series, as well as fuel their own creative desires and see how others liked them. To me, that would help push towards fair use.
2) nature of the work - the work in this case is a patch for a rom of used in the emulation of an obsolete gaming system. There may be something in the DMCA about obsolete tech. I dunno, didn't stay on it much in class besides discussions of YouTube, digital transmissions, and such, but even without it, knowing that the Super Nintendo hasn't been available commercially since like 1998 would again get me leaning towards CE being fair use. On the other hand, the game was just re-released for the DS, which is a new system. Granted, there are some additions and changes in the new release, but it's still the same game. Kinda like how 2 people can record the same song. That being said, the patch is intended for backup copies of the old game, and not the new.
3) amount and substantiality of portion used - obviously I can't completely comment on this, since I wasn't a tester or creator, but from what I remember reading about and seeing screenshots of, this would be a weak point in the fair use defense. Even though CE is a completely new game, it uses stuff from the CT game. It obviously uses the main characters, as well as supporting characters, places, items, etc. Obviously the point of CE was to make a new game with the CT engine that tied together CT and CC. While it's a whole new storyline, the fact that it uses the CT rom and so many things from the Chronoverse would definitely lessen the chances of it being seen as fair use.
4) effect of use upon the market - the release of CTDS not so long ago might make CE seem like it would have an effect on the market, as there would be people who would illegally download the SNES CT rom rather than buy CTDS knowing they could patch it and get a second game out of it. Granted, most of those people would probably illegally download rather than buy anyways, but there's still a chance.
Obviously, I'd like to say that CE falls under fair use, and going through the analysis leads me to lean that way, but really, I dunno about how a pro would see it. There's a chance it would be and a chance it wouldn't be. Even if it wasn't, there's the chance that SE wouldn't actually file suit. Generally if the send a C&D, though, they will.
As far as other ROM hacks that are available for various games (Mario, Zelda, Metroid, etc), the fact that they are out there doesn't mean that it's legal. It may be that the copyright owners either don't know or just don't view it as a threat to their business. As I first stated, the fact that CE was to come out now, when there may be people still considering buying CTDS may be what set SE off, compared to if it came out, say, 3 years ago.
Oh, and just to settle it for anyone who's wondering, making or obtaining backup copies of computer programs is legal, so long as you own and still own the original and destroy the backup if you get rid of the original. That is under this section of the Copyright Code:
http://www.copyright.gov/title17/92chap1.html#1-53In regards to SE waiting until now to send out a C&D, as stated elsewhere, so much stuff dies on the vine that they may not have been worried about it. Or it just got caught in a drag net with the increased publicity. Who knows. However, just because they send out a C&D doesn't mean that something isn't fair use. In IP class the one day we were discussing YouTube and how many videos get deleted and what not because of all the DMCA (Digital Millennial Copyright Act) provisions when they are in fact fair use or not even in a position where it should have been a problem, but these big corporations just drag a net through and send out notices. Because many people don't know copyright law, they just cave to the C&D when, in fact, what they have isn't an infringement or is fair use.
Sorry that got so long. TL/DR version is that CE may be fair use, but the only way to find out would be to call SE's bluff, get taken to court, and see how they interpret CE in view of copyright law and the DMCA.
I hope that all makes sense and ties together well. I'd go back and proofread it more, but I just finished my first beer and since I had my last final this afternoon, I think I'm gonna have a couple more.
