 Sega argued that Accolade had infringed upon its copyrights because Accolade's games contained Sega's material.Accolade insisted that their use of Sega's material constituted fair use.However, Judge Caulfield did not accept this explanation since Accolade was a game manufacturer, their works were for financial gain, and because their works competed directly with Sega's licensed games, likely resulting in a sales decrease for Sega's games.