A U.S. District Court jury has found Nintendo of America guilty of infringing a patent held by a bankrupt computer company, a decision that could cost the Redmond, Wash., video game maker hundreds of millions of dollars.
The verdict came in a lawsuit filed in 1986 by the trustees of Alpex Computer Corp., a Connecticut firm that went bankrupt in 1983. The company claims a basic patent on video game consoles that attach to television sets and use removable cartridges, and that feature rotating images on the screen.
Most other video game companies, including Sega and Atari, have already reached settlement agreements with Alpex, so the verdict is not expected to have broad consequences. The Alpex patent, filed in 1977, expired last week.
The damages phase of the Alpex-Nintendo trial will begin next month. Alpex says Nintendo sold $3.5 billion worth of game consoles and cartridges that infringed its patent, and it will seek 10% to 12% of those sales as damages, according to attorney Richard Sayler of the Cleveland law firm Jones, Day, Reavis & Pogue.
The suit covers only products introduced by Nintendo before mid-1989, but the Alpex estate could pursue additional claims on consoles and games introduced after that, Sayler noted. Alpex could also pursue legal action in other countries, including Japan, where it holds patents and where Nintendo's parent company is based, he said.
Nintendo said it will appeal the verdict.
While large damage verdicts in intellectual property cases are often overturned on appeal, the legal system in recent years has become far more friendly to individual inventors and small companies that pursue patent claims against large corporations.
Traditionally, Japanese companies have been quick to settle many types of lawsuits rather than go to court, in part because they fear juries will be biased against Japanese firms.
But they have grown bolder in recent years, and Nintendo has long been aggressive in protecting its own patents and copyrights in U.S. courts.