“Let’s a-go!” Nintendo Appeals $21 Million Judgement And Injunction

Posted on | August 13, 2008 | 2 Comments

2008-1500 Anascape v. Microsoft
ED/TX 06-cv-158
Judge Ron Clark

Nintendo appeals from the orders and judgment of Judge Ron Clark affirming a jury’s verdict that Nintendo’s GameCube controller, GameCube Wavebird wireless controller, and Wii Classic controller connected to the Wii remote controller infringes claims of 6,906,700.  The claims were also found valid and, after a bench trial, not unenforceable due to inequitable conduct.  The jury awarded $21 million and Judge Clark granted a permanent injunction (stayed due to some serious bonds posted by Nintendo).

To the relief of kids everywhere (including a couple at my house), the Wii remote connected to the Wii Nunchuk was found to not infringe.  The parties also stipulated to summary judgment of non-infringement as to certain claims of the ’700 and 6,222,525 based on claim construction.

Michael Smith down at EDTexweblog has several posts on this case, including here.

The patents are generally directed to video game controllers, and court described the ’700 as "focus[ing] on the possibility of using the invention in controllers operable in six degrees of freedom (hereinafter “6 DOF”). Having 6 DOF means that movement can occur on three linear axes: 1) forward/backward, 2) up/down, 3) left/right, and on three rotational axes: 1) yaw, 2) pitch, and 3) roll."

JMOL:  The court summarily dismissed Nintendo’s arguments for JMOL and/or a new trial on arguments related to infringement, claim construction and damages.  The only topic generating much explanation was on invalidity (although infringement is discussed in the remittitur, below).

Invalidity.  The court found enough evidence to support the jury’s finding the patent not invalid–the issue turned on whether the asserted references were, in fact, prior art which, in turn, hinged on whether the ’700 was entitled to priority based an earlier application.  Did the earlier application provide support for controllers with more than one input member movable in 6DOF?  The court described the evidence as a "classic ‘battle of the experts’" where the jury chose to believe Anascape’s expert that the earlier application would convey to one skilled in the art that the inventor possessed a controller with more than one input member movable in 6DOF.

Remittitur:  The court also rejected Nintendo’s motion for remittitur for damages or a new trial on damages.  Its theory was that Anascape’s expert did not break damages out by accused products, and the award from its partial victory on 3 of the 4 accused products was excessive and not support by the evidence.

The court turned the argument around against Nintendo.  First, the court rejected that the jury was inflamed by prejudice, passion or bias because, in part, it found for Nintendo on the Wii Nunchuk despite knowing it was the "big money-maker."  Indeed, the court found this part of Nintendo’s trial strategy on infringement:

Nintendo hammered on its theme that the patentee wrote claims specifically to cover its Gamecube controller. Tr. at 363:21 – 365:21. As the jury was instructed, writing claims to cover a product is perfectly legal. Jury Instructions, [Doc. #350, p. 13]; Tr. at 1569:12 – 20. It is not surprising that the jury would find infringement as to the Gamecube. The Wavebird and the Wii Classic are very similar to the Gamecube. Minor enhancements and additions to an infringing product do not constitute a design-around that avoids infringement. Nintendo’s choice to emphasize that the patentee had “copied” the Gamecube was a legitimate trial tactic to try and turn the jury against him. However, that perfectly legitimate trial tactic was a double-edged sword, and leaves Nintendo with no room to complain of passion, prejudice, or a lack of evidence to support the infringement findings.

As to the damages award, the court noted that the jury awarded less than 1/2 of the amount demanded by Anascape–again, not showing (to the judge) any passion or prejudice against Nintendo.  As to the imprecision in the damages evidence, the court blamed Nintendo:

It may be true that there was not an exact breakdown of the precise number of Wii Remote sales associated with sales of the Wii Classic, but whose fault is that? Nintendo chose not to present an expert on damages or to explain to the jurors how to best segregate sales of Wii Remotes with the Wii Nunchuk should they choose to do so. This cleverly avoided setting a floor for damages for the Gamecube etc., but waived the opportunity to present contravening evidence on damages.

The court concluded:

It appears to the court that Nintendo made some skillfully calculated decisions regarding trial tactics to protect the Wii Nunchuk with Remote. Sales revenue to date from the Wii Nunchuk totals more than the revenue from the other three products combined. In terms of an on-going royalty or compulsory license, that is where substantial future damages would have been. Having virtually admitted that three “old school” products infringe, and having made no serious attempt to rebut Anascape’s damage calculations, Nintendo is not in a good position to argue that the jury’s verdict is the result of passion or prejudice, or even that it is disproportionate to the injury sustained. The court finds that the jury’s verdict on damages is not against the great, nor the greater weight of the evidence, and, to the contrary, finds that the verdict is supported by sufficient evidence.

More reading:

Order on Remittitur
Order on JMOL
Final Judgment and Permanent Injunction

Counsel:

Anascape: McKool Smith (Douglas A Cawley, Samuel Franklin Baxter, Anthony Matthew Garza, Christopher Thor Bovenkamp, Jamie Mozola Shouse, Steven Chase Callahan, Theodore Stevenson, III ) and Parker, Bunt & Ainsworth, Tyler TX (Charles Ainsworth, Robert Christopher Bunt, Robert M Parker).

Nintendo: Wilmer Cutler Pickering Hale & Dorr (Robert J Gunther, Jr) and Nixon & Vanderhye, Arlinton, VA (Joseph S Presta, Robert W Faris) and Germer Gertz, Beaumont, TX (Lawrence Louis Germer, Charles W Goehringer, Jr, ) and Kaye Scholer (James S Blank).

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