LibriumArcana.Games

By Susan Decker
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July 22 (Bloomberg) -- Nintendo Co., the world's biggest maker of handheld game machines, is facing a ban on U.S. sales of some controllers for its Wii and GameCube systems after it lost a bid to overturn a $21 million patent-infringement verdict.

U.S. District Judge Ron Clark in Lufkin, Texas, rejected Nintendo's request for a new trial in the case won by closely held Anascape Ltd. of Tyler, Texas. He said that he would stop sales of the Wii Classic Controller, WaveBird controller and Nintendo GameCube controller. His ban will be put on hold while Nintendo appeals the verdict to the U.S. Court of Appeals for the Federal Circuit, according to Anascape lawyer Doug Cawley.

The judge, scheduled to issue his ban order tomorrow, said Nintendo will have to post a bond or put royalties in an escrow account to avoid the halt, said Cawley, of McKool Smith in Dallas. The opinion denying a new trial was issued July 18, the same day as the hearing on Anascape's request for an order blocking sales of products found to infringe its patent.

``Nintendo was already planning to appeal this case to the Federal Circuit court,'' Nintendo spokesman Charlie Scibetta said in an e-mailed statement. ``The recent ruling by the trial court does not impact that decision.''

Scibetta said Nintendo will ``immediately appeal'' once Clark issues his order and post a bond. The company no longer makes the GameCube or WaveBird controllers, and ``is free to continue selling the Wii Classic Controller'' pending the appeal, he said. The Wii replaced the GameCube as the company's main home video-game system.

Nunchuk Controller Excluded

Not all controllers were found to infringe the patent. Jurors agreed with Kyoto, Japan-based Nintendo that the rectangular Wii remote, when not used with the Wii Classic, and the ``Nunchuk'' controller attached to the remote don't violate the patent at the heart of the case. The rectangular Wii remote is the one that comes with the console.

Anascape's patent covers certain configuration of the remote to control six types of motions at the same time. The inventor, Brad Armstrong, spent years developing game controllers in his garage after ``he became fascinated with computers including video games'' in the late 1970s, Cawley said.

Cawley said he argued last week that Anascape was entitled to a ban on the Nintendo controllers because Anascape wants to enter the market and Nintendo has ``clogged the channel.'' Sony Corp., maker of the PlayStation game system, licensed the patent in 2004 and Microsoft Corp., maker of the Xbox 360, settled lawsuit claims on May 1, just before the trial began.

Nintendo said it didn't use Anascape's technology and challenged the patent's validity.

`Sufficient Evidence'

``The trial record contains sufficient evidence to support the jury's finding'' against Nintendo, Clark said in the July 18 ruling. He also said the damage award was ``supported by substantial evidence'' and denied Nintendo's request to reduce the amount it was told to pay.

The Wii, a machine that plays games by swinging a motion- sensing controller like a bat, tennis racket or other item, overtook Microsoft's Xbox 360 as the leading console in U.S. homes among the latest generation of video-game players.

As of last month, U.S. consumers had purchased almost 10.9 million Wii consoles since the player was introduced in November 2006, passing the Xbox 360, which began selling in 2005, research firm NPD Group Inc. said last week.

The case is Anascape Ltd. v. Microsoft Corp., 06cv158, U.S. District Court, Eastern District of Texas (Lufkin).

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net.
Last Updated: July 22, 2008 18:53 EDT
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