Last week, the U.S. International Trade Commission ruled that Nintendo Co.’s Wii system does not infringe two patents owned by Motiva LLC and will not be blocked from import into the U.S.

In November 2008, Motiva filed its suit for patent infringement against Nintendo, over Motiva’s 7,292,151 patent for “Human Movement Measurement System” filed in June 2005 and granted in November 2007.  Motiva’s infringement claim was based on a theory that Nintendo infringed two patents for a system that tracks a game user’s position through the player’s Wii controller.

Motiva’s suit involves a patent that was filed the same year Nintendo introduced the Wii and the Wii remote at issue to the world market.  Because the ITC court, unlike federal courts, requires that a company have actual products on the market in order to make a claim, the fact that Motiva does not have a product on the market was fatal to the company’s suit. 

This suit resembles a recent suit brought against Nintendo involving patents filed very close in time.  In September, ThinkOptics sued Nintendo for infringing on several patents related to technologies used in the Wii. ThinkOptics produces the Wavit Remote and sued Nintendo over three patents: 7,796,116: Electronic equipment for handheld vision based absolute pointing system; 7,852,317: Handheld Device for Handheld Vision Based Absolute Pointing System; 7,864,159; Handheld Vision Based Absolute Pointing System.  However, all three patents were applied for in July of 2005, two months after Nintendo first introduced the Wii to the public at the 2005 E3 conference. ThinkOptics claims that because several of Nintendo’s patent applications were rejected based on the ’116 patent, Nintendo had prior knowledge of the ThinkOptics patents and “knew or should have known of the objective risk that one or more of their patents infringed at least one claim of the ‘116 patent.’” The ’116 patent, titled “Electronic Equipment for Handheld Vision Based Absolute Pointing System,” was issued Sept. 14, 2010.

These two cases exemplify two distinct problems in patent law today: the availability of double litigation through the ITC loophole and the lack of an independent creation defense for inventors not first-to-file.

Motiva brought suit through the U.S. International Trade Commission rather than the court system.  This approach utilizes a “loophole” which allows patent holders to claim that the infringing goods were an “unfair trade practice” in order to seek an injunction against the import of those products into the U.S. – effectively the same thing as a court injunction against sale – while also bringing the same case before the federal courts.  Companies have been utilizing the alternate ITC forum to bring suit against their American counterparts just as often as the ITC is used against foreign companies.  A report finds that while there’s only a slight increase in the likelihood of the ITC finding in favor of the patent holder, it’s much more likely to grant an injunction barring the sale of a product. This two-track system allows companies to bring essentially the same case twice and will potentially result in inconsistent rulings.  Further, this abuse of the ITC and court system will not provide precedent on which companies may rely, spurring further infringing business activity.  Greater coordination between the ITC and federal court system is necessary to prevent companies from taking advantage of the loophole available currently.

ThinkOptics’ case exemplifies the frequent problem of several companies developing similar technology simultaneously, and patent protection providing inadequate deterrence of infringing development of products utilizing similar technology.  ThinkOptics was awarded three patents, and the Patent office denied claims in two Nintendo-assigned patent applications because of ThinkOptics’ ‘116 patent.  However, because ThinkOptics was two months too late in filing its patents, Nintendo brought its product to market utilizing the potentially infringing technology and ThinkOptics may be unable to win its infringement suit for the products of its research and development.  No public information from either company was available prior to the patent filing to indicate that Nintendo was making this technology.  As such, how can patent law only protect the efforts of one company for winning the race to file by two months, while still promoting the creation of the useful arts?  An independent creation defense should be implemented to protect companies who in good faith, invest in research and development but lose the race to file for a patent.

Judging by the Motiva and ThinkOptics claims, Nintendo seems to be walking a thin line between simply being the winner of the race to file and bring its products to market, and infringing on technology that it knew or should have known to exist and be patent-pending at other companies.  It appears fair that Motiva’s claims failed and the company was unable to take advantage of the ITC loophole.  However, the ThinkOptics case will present the question whose innovation efforts should be rewarded: the little known owner of the more comprehensive patent, or the holder of the worldwide consumer market?  ThinkOptics’ suit against Nintendo is pending in the District Court for the Eastern District of Texas.  The case is ThinkOptics, Inc. v. Nintendo of America, Inc. et al, 6:2011cv00454.

Judge Robert Rogers’s findings in the Motiva case will be made public after each party has redacted confidential business information. Although Judge Rogers’s decision is subject to review by a six-member commission in Washington, the commission usually follows rulings by ITC judges.  If the commission decides to review Rogers’s findings, the case is scheduled to complete the process by March 5, 2011.  The case is In the Matter of Video Game Systems & Controllers, 337-743, U.S. International Trade Commission (Washington).

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