Older handhelds had also their quirks! The original gameboy boot bios would load the Nintendo logo from the cartridge ROM and would run a "checksum" of the logo data, to compare it with a constant value stored in the Bios itself - it the logo in the cartridge is the copyrighted Nintendo logo, it would start the game.
With that Nintendo wanted to be sure that any cartridge would require a copyrighted logo so a License would be technically required.
SEGA also did this! The so-called trademark security systems. Completely insecure, but violating it gave the console manufacturer the perfect excuse to sue the violator.
Lawsuits involving this system had really interesting results. In one case, the judges not only ruled that the trademark infringement was fair use, they said that SEGA made the trademark infringement necessary in order to produce compatible games due to their own security system. The infringement was SEGA's own fault!
The world used to be great before DMCA criminalized even the attempt to cricumvent these things.
You might also be interested in the Bleem and Virtual Game Station lawsuits. They're notable because they involve commercial emulators, nobody settled out of court and it clearly demonstrates how large and rich companies abuse the legal system to put their smaller competitors out of business.
I'm not a lawyer so I don't fully understand the laws here. I found they were quite easy to read though.
Sony complained that Connectix copied their copyrighted code during the reverse engineering process. This is obviously necessary in order to reverse engineer the code, access the unprotected ideas embodied in it and produce compatible products. It was ruled as fair use.
Sony complained about their use of screenshots of copyrighted games in advertising. This is comparative advertising intended to show that the emulator performs as intended, which is obviously good for consumers. It was ruled as fair use.
Despite this precedent, I still see companies issuing DMCA claims to emulator developers whenever they find some screenshot on an emulator website! It makes me wish some judge would award the developers millions just to punish the audacity of these companies. They're wrong but they know the developers won't ever take it to court so they take advantage of the situation.
Also, at no point is the legality of emulators ever disputed. It's not even a gray area. Emulators are competitors. They compete directly with the original hardware. They even try to argue that these competing products will tarnish their trademarks!
Sony lost all lawsuits yet they won in the end, because judges granted injunctions which prevented the smaller companies from selling their emulator software. That led to their ruin and the discontinuation of their emulator development. This was their goal all along. Their arguments are clearly insane, they just wanted some shoddy excuse to take their competitors to court and burn their money. In a just world, the judges would calculate the amount of lost profits caused by Sony and make them pay with interest.
