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Intellectual Property Law: Nintendo Loses $21 Million Lawsuit

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Lufkin, TXAnascape Ltd. has been awarded $21 million in an intellectual property lawsuit against Nintendo. The well-known video game maker has lost the $21 million lawsuit filed by Anascape, Ltd., a small Texas-based company.

The lawsuit alleged that Nintendo's designs for certain Wii, WaveBird and GameCube controllers infringed on copyrights held by the Texas video game developer. In a U.S. District Court jury decision, Nintendo was found guilty of intellectual property law violation.

intellectual property lawsuitKyoto, Japan based Nintendo is the world's largest manufacturer of handheld video games. Last month the company projected that it expects to sell 25 million Wii consoles in 2008 alone. US retailers sold 721 000 Wii consoles in March and the game system is sold out at some stores, according to market researcher NPD Group.

Brad Armstrong, the founder of Anascape asserted that Nintendo used his patented invention in the development of both the Wii and GameCube gaming systems. According to Armstrong, the invention in question had to do with ways of designing game controllers. The jury in the intellectual property case against Nintendo found that 12 patents filed by Anascape were violated by the video game giant. The patents filed by Anascape had descriptive names, unmistakably linked to technologies employed by Nintendo in its popular and successful systems. These names include Remote Controller with Analog Button," "3D Controller with Vibration," and "Game Controller with Analog Pressure Sensor."

Only some of the controllers developed by Nintendo were established as patent infringing. Jurors decided in favor of Nintendo in determining that the rectangular Wii remote and the ''Nunchuk'' corded attachment do not violate Anascape's patent. Spokesperson Charlie Scibettra said Nintendo was pleased no patent infringement was found with the motion-sensing technology used in its wand-like Wii and Nuncheck controllers, which mimic movements by users in games such as tennis and boxing. According to the Jury, Nintendo units that allegedly violated the patent are the Nintendo GameCube, and the Wii's Classic and WaveBird controllers.

Video game fans everywhere were angered by the decision. On GamesAreFun.com, Brandon Carlson wrote, "Patent-infringement lawsuits are commonplace in the gaming industry. When one company makes it big and hits the jackpot, there's plenty of people lined up to take a stab at making some quick settlement cash."

But what if you're the little guy? What if your idea, A.K.A. intellectual property is stolen by a giant with the means to exploit it? What defense does the little guy have? In the case of Anascape, Ltd., revenge is so sweet. Earlier this month, Microsoft Corp settled its part of the case in Anascape Ltd. v. Microsoft Corp., 06cv158, U.S. District Court, Eastern District of Texas. Little guy: 2 Giant Tech Corporations: 0!

Nintendo quickly announced plans to appeal the court decision. The company expects the sum it was ordered to pay to be reduced significantly. Nintendo claims it did not use the technology developed by Anascape and furthermore challenged the validity of Anascape's patent.

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