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Originally Posted by Nintendo Manual
WARNING: Copying of any Nintendo game is illegal and is strictly prohibited by domestic and international intellectual property laws. "Back-up" or "archival" copies are not authorized and not necessary to protect your software. Violators will be prosecuted.
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It sounds to me like they're offering to replace any damaged CDs for free. That's the only scenario I can think of where a back-up copy would be unnecessary. Someone should get a lawyer and challenge them on it.
Actually, it's an interesting question. I know that the "fair use" clause in US copyright law covers back-ups and format conversion for things like music and movies. Does the same law also apply to software?