Vermont on Nintendo Patent Infringement Suit

Professor Samson Vermont told the Washington Post that the likelihood of Japan-based video game provider Nintendo being forced to stop selling its popular Wii product in the U.S. is small, even if Hillcrest Labs' claim of patent infringement proves true.

"It could happen, but the stakes would be so high that Nintendo wouldn't let it happen," Vermont said. "The reality of it is, one of two things is going to happen: either there's no merit to (Hillcrest's) suit and they'll lose, or Nintendo will settle."

Hillcrest Labs, a small Rockville, MD, technology company, asked a U.S. trade panel to top Nintendo from importing its Wii system into the U.S. and filed a suit for damages, claiming it owns the patents to the technology used in the Wii. Hillcrest's technology allows users to control devices by moving the controller in front of the device, rather than through a convential pushbutton system.

Wii Controllers Get Tangled in Patent Game, Washington Post, August 21, 2008. By Zachary A. Goldfarb.

"Patent lawsuits are fairly common and the outcomes are mixed, experts said.

"In 2006, Research In Motion, the Canadian maker of BlackBerry devices, paid $612.5 million to resolve a patent-infringement case with NTP of Arlington, Va. Just last month, Nintendo faced a setback when a U.S. court in Texas ordered the video game maker to pay $23 million to resolve a patent-infringement suit with another company. The court said Nintendo also had to stop selling several types of controllers. Nintendo has appealed.

"The U.S. International Trade Commission, the panel with which Hillcrest filed its complaint, has the authority to block imports of products that infringe U.S. patents. The lawsuit was filed in the U.S. District Court in Maryland.

"Hillcrest cites four patents filed in 2004 or before which describe functions present in the Wii, such as the motion-sensing accelerometer in the remote control. The most recent of these patents was approved on Tuesday. Three of the patents relate to the remote control's design and mention a number of possible uses, though not for video games. The fourth patent relates to the software that guides the on-screen interface and makes mention of several uses related to video games.

"'You can describe multiple products in your patent application and the fact that you don't describe the exact same product, that's not the key,' said Robert Sokohl, a patent attorney unaffiliated with the case from Sterne, Kessler, Goldstein & Fox, a Washington D.C. law firm.

"Hillcrest has licensed its technology to Logitech and to Universal Electronics. The company has attracted $50 million in venture capital, including $25 million in January 2008, from investors including New Enterprise Associates, Grotech Ventures, AllianceBernstein and others."

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