Nintendo Fails to Kill Patent Claim Behind $10M Jury Verdict

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By Peter Leung

Nintendo of America Inc.’s administrative challenge to a patent related to motion sensing technology was partially revived by a federal appeals court Dec. 27, but it likely won’t knock out a $10.1 million jury verdict against the video game maker.

The decision is the latest chapter in the patent dispute between Nintendo and iLife Technologies Inc. In August, a Texas jury found several of Nintendo’s products infringed a claim in the patent and awarded iLife a lump-sum royalty for the technology.

The Patent Trial and Appeal Board, part of the Patent and Trademark Office, had ruled against Nintendo in its inter partes review of claims in iLife’s patent. The U.S. Court of Appeals for the Federal Circuit on Dec. 27 partially reversed in a nonprecedential ruling, telling the PTAB to reconsider Nintendo’s challenge to iLife’s patent claims 3, 12, 19, and 20.

However, the court affirmed the PTAB’s decision against Nintendo’s challenge to claim 1, which formed the basis of the $10.1 million verdict. The jury said Nintendo’s Wii and Wii U game consoles, when used with motion control accessories and games including Wii Sports and Mario Kart 8, infringed the claim.

Though Nintendo’s PTAB attack failed, it still has another outstanding challenge to claim 1 at the board. The trial court is also considering Nintendo’s motion for a judgment as a matter of law, which argues the claim covers an unpatentable abstract idea and is indefinite.

Motion Sensing Patent

iLife sued Nintendo in the U.S. District Court for the Northern District of Texas, alleging infringement of U.S. Patent No. 6,864,796 covering systems that measure body movement relative to the environment. Nintendo filed an IPR against several of the patent’s claims, including claim 1, arguing they were obvious in light of an earlier patent referred to as Yasushi, the inventor’s last name.

Nintendo failed to prove the challenged claims were obvious, the PTAB said in its final written decision. Yasushi actually isn’t prior art because iLife’s patent claims predate it as they can be traced to an earlier patent application, it said.

The invention was reduced to practice, or shown to work as intended, before Yasushi’s November 1998 publication date, it said. Evidence including documentation and testimony showed the inventors built a prototype before that publication date.

The iLife patent gets a priority date of when the invention was reduced to practice because it was filed before the 2011 America Invents Act. The AIA changed the law so that, for applications filed after March 2013, the priority date is determined by the application date.

Some Before, Some After

The Federal Circuit found that some—but not all—of the iLife patent claims predated the Yasushi prior art. Substantial evidence supported the conclusion that claim 1, along with several others, were reduced to practice in the inventor prototype, the court said.

However, claims 3, 12, 19, and 20 were not reduced to practice, the court said. For example, claims 3 and 12 describe systems that included a handheld or portable computer, and there’s no evidence the prototype had such a feature, the court said. Claims 19 and 20 similarly had features not found in the prototype.

The case will go back to the PTAB, which will re-evaluate Nintendo’s obviousness arguments against claims 3, 12, 19, and 20 with Yasushi as prior art.

Judge Raymond T. Chen wrote the opinion, which Judges Alan D. Lourie and Richard G. Taranto joined. Nixon & Vanderhye PC represented Nintendo, while Munck Wilson Mandala LLP represented iLife.

The case is Nintendo of Am. Inc. v. iLife Techs., Inc. , Fed. Cir., No. 16-2266, nonprecedential 12/27/17 .

To contact the reporter on this story: Peter Leung in Washington at pleung@bloomberglaw.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bloomberglaw.com

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