By Zachary A. Goldfarb
Washington Post Staff Writer
Thursday, August 21, 2008
A small local technology company, citing patent infringement, yesterday asked a U.S. trade panel to stop Japan-based video game giant Nintendo from importing its Wii system into the United States and filed a suit in federal court for unspecified damages.
The Wii video game system, released in late 2006, became massively popular with a new interface that lets players swing a remote to play tennis or tilt a controller left and right to drive a car.
Hillcrest Labs, a seven-year-old Rockville company, said it owns the patents to the technology underpinning the Wii.
Hillcrest's technology allows users to select movies, browse the Web, control their cable box or otherwise interact with content -- not by pressing a button on a conventional controller, but by moving a device left, right, up and down in front of a television or computer screen.
"While Hillcrest Labs has a great deal of respect for Nintendo and the Wii, Hillcrest Labs believes that Nintendo is in clear violation of its patents and has taken this action to protect its intellectual property rights," the company said in statement, adding that it would not comment further.
Nintendo spokesman Charlie Scibetta said, "We have not been served with any lawsuit or other action by Hillcrest and therefore have no comment."
Even if Hillcrest's claims are valid, the likelihood that Nintendo will be forced to stop selling the Wii is small, said Samson Vermont, a patent expert and law professor at George Mason University.
"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."
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 Northern Virginia. 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 District 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, from investors including New Enterprise Associates, Grotech Ventures, AllianceBernstein and others.