News Article

Nintendo Ordered to Pay Royalties on 3DS Sales For Patent Infringement

Posted by Thomas Whitehead

1.82% of the wholesale price

Last year we told you about the ongoing patent dispute between Nintendo and Seijiro Tomita of Tomita Technologies USA. The case dated back to 2011, with Tomita arguing that the use of glasses-free 3D — in particular the 3D camera option — utilised his patented technology. Tomita had presented this technology to Nintendo before the system was released and was declined, so therefore he lodged his complaint once the portable hit the market.

A jury initially awarded Tomita $30.2 million, with Federal Judge Rakoff then suggesting halving that award in August 2013; Nintendo stated that it would appeal that decision, while Tomita pursued the original award. In the latest progression to the case Judge Rakoff has now ordered Nintendo to pay Tomita 1.82% of the wholesale price (the rate that retailers pay for stock) for each unit sold — this is more than an implied equivalent of 1.36% from the halved reward in August, while Tomita was seeking a fixed amount of $4.45 per device. The decision to award a royalty was based on a principle of fairness, that Tomita's reward decreases with the value of the product; the same ruling ordered Nintendo to pay $241,231 in "supplemental damages and prejudgment interest."

That decision was reached back on 11th December 2013. As the previous changes and disputes of 2013 show, there may be more back-and-forth in the courts if there's scope for appeal at this stage. If more emerges we'll post an update.

Thanks to Ryan Millar for the tip.

[via law360.com]

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User Comments (73)

Therrus

#2

Therrus said:

Well people this is corparate America...
I'll be honest: this company sucks. Let's sue everyone cuz we can make money with it...

Intellectual property laws are good and all but not if they are used as a weapon. Who has honestly ever heard of this company not in conjunction with Nintendo? Its just to grab some money of the success or to weaken Nintendo but again: that's corparate America...

DarkKirby

#3

DarkKirby said:

This kind of patent use is disgusting, patent squatters intentionally waiting for someone else to be successful with something and then suing for infringement so they can make money without producing anything rather than trying to stop the production from the beginning because of so called patent infringement. Why would they stop the production of the product in the 1st place? They never intended to use the patent they own to produce a product, only sue others for having a similar patent and actually producing a product with it.

McHaggis

#6

McHaggis said:

You guys are forgetting that this guy approached Nintendo with his patented technology before they built the 3DS. It's not like he patented something akin to vapourware; he invented something, patented it and tried to sell it. Calling the justice system a joke, or the guy a patent troll, or evil is just embarrassing for you because you know absolutely nothing about the case and can't see past your oh-so-obvious bias for Nintendo.

Of course, I'm not saying that Nintendo are infringing, that's for the courts to decide. Which they have done, several times in Tomita's favour.

Einherjar

#7

Einherjar said:

I may be mistaken, but 250000$ isnt really that much for such a huge company. Its a blow but definitly not a really heavy one.
If nintendo hadnt declined the offer for the same / a similar tech beforehand, i guess they would have won the case.
But declining and offering and later using the stuff you were offered does shed some bad light on you.
But the case i closed, lets all continue on ;)

JacketsNest101

#8

JacketsNest101 said:

@ McHaggis Very well stated. This is a case of actual infringement on an idea, this is not in any way a case of patent trolling. He approached nintendo with the idea, nintendo turned him down and ended up using it anyway. This one is on nintendo.

Kaze_Memaryu

#10

Kaze_Memaryu said:

Weird. Back in 2010, I saw a report about a man in Munich, germany, who invented glasses-free 3D, and he held all patents to prevent TV manufacturers from copying it. I dunno if TomitaTech already did the same back then, but this case seems fishy to me, not because I suspect patent trolling against Nintendo, but against the guy from germany. I'm gonna check on it...

AVahne

#12

AVahne said:

@McHaggis
So how about all the other companies that Nintendo claims to have come to them with 3D technology? Should every one of the other options that Nintendo turned down come back and sue them then?

AVahne

#13

AVahne said:

I need to go back and read about this guy again. His entire case just seems fishy; at least the last time I read about it.

Zach

#14

Zach said:

@AVahne If the patented technology presented to and rejected by Nintendo is similar enough to technology that Nintendo later sold, yes, of course, definitely they should sue as well.

AlexSora89

#15

AlexSora89 said:

Is this ever going to end? Just wait until the next SSB gets released; it will mark the point of Nintendo's switch from "it's getting better than its sucky launch" to "IT PRINTS MONEYYYYYY".

steamtrain

#16

steamtrain said:

With intellectual property and patents or whatever, there should be a legal responsibility to realize & reinvent it.

I don't know what's the deal with this case, I'm just saying...

BinaryFragger

#20

BinaryFragger said:

@McHaggis

If it was Sony or Microsoft who were guilty in infringing the patent, I doubt anyone here would be calling Tomita a patent troll.
Fanboys tend to forget that despite of Nintendo being a great company, they DO make mistakes.

WaLzgiStaff

#22

WaLzgi said:

Good news is this does not affect the 2DS sales as the system does not use the allegedly infringed patent

WaLzgiStaff

#23

WaLzgi said:

Also, I think this also only effects US sales. I can't imagine the US having the authority to affect overseas sales as well

123akis

#31

123akis said:

so tomita gets 1.82% of 3ds wholesale price of 3ds' sold so far or for 3ds' sold in the future?

moomoo

#32

moomoo said:

It's Nintendo's fault for breaking the patent. They broke the law, so they should pay.

123akis

#33

123akis said:

http://en.wikipedia.org/wiki/Patent_troll this is what barak obama says about patent trolls: '"they don't actually produce anything themselves, they're just trying to essentially leverage and hijack somebody else's idea and see if they can extort some money out of them"

look at this wikipedia page for yourself if you don't believe me, the text above is from the wikipedia page, look under the 'Legal and regulatory history' heading

WaLzgiStaff

#35

WaLzgi said:

@unrandomsam That's not what the infringement was on. The patent was on the 3D screens

Also, both companies are based in Japan. Why does the US have that much authority over this?

TysonOfTime

#38

TysonOfTime said:

I don't know the facts but the court ruled in his favor. End of story. If it was true, then I'm glad he got royalties from the lawsuit.
The people calling him a patent troll seem to care infinitely more than necessary, and that's sad.

Liking Nintendo doesn't mean starting a crusade on anyone who kicks dirt at them you guys.

DarkKirby

#40

DarkKirby said:

@unrandomsam

I know the story. I don't agree with how the patent system works and how it is abused.

If he wanted to enforce his patent (whether it was actual infringement or not) he should have sued Nintendo when the 3DS was announced and demand production be stopped rather then waiting for the 3DS to be successful (it was a failure at 1st) than demanding a portion of the profits made. He did that on purpose so he could extort the most money possible.

And there are multiple patents on 3D technology without glasses. Where is the evidence Nintendo stole his and used his specifically?

The whole patent system and use infringements stifles creativity far more than it protects inventors in the first place if you ask me.

And if you don't know New York, especially Manhattan, the person with less money is ALWAYS "right", and the person with more money is ALWAYS "wrong", and that opinion of the populace, especially the populace that actually shows up to jury duty, reflects in the rulings of pretty much all lawsuits.

retro_player_22

#41

retro_player_22 said:

Well at least he earn some cash for some of the 3DS sales but he can't claim royalty for 2DS though as that had no 3D in it and right now 2DS are hot sellers.

MagikarpSplash

#42

MagikarpSplash said:

Tomita: "Here's a cool technology."
Nintendo: "thanks for no thanks"
Tomita: "Aw shucks..."
Nintendo: "Start development with this cool technology...."
Tomita (3 years later): "Wait a minute..."

Rect_Pola

#43

Rect_Pola said:

If they had provably had contact with Nintendo like they described, then they have every right to drag Nintendo all the scrutiny they deserve. As much as I like Nintendo and all, they are a company, and fully have the capacity to be complete jerks (they have before). As much as I dislike lawsuits popping up from people you never heard of, the (alleged) fact they were trying to shop their tech around changes everything. When it's looks, walks, and sounds like squatting, they should get a pittance that doesn't make the legal effort worthwhile.

IceClimbers

#44

IceClimbers said:

Doesn't Sharp produce the 3D screens on the 3DS? Why is Tomita attacking Nintendo rather than Sharp?

GreatPlayer

#45

GreatPlayer said:

Did Nintendo use Tomita's technology without his/her permission at the first place? What are all the complains about American Justice System?

Goginho

#46

Goginho said:

@DarkKirby lol hey, let's patent something, and never produce a product with it. We'll just wait for others to create something that infringes on our patent, and then sue them :P Anyone got any brilliant ideas? Something creative? Something the world hasn't seen yet, but is likely to happen in the near future? hmm? lol :D jks

Memeboy3

#47

Memeboy3 said:

@moomoo That's a stupid payback...the company that sued is incompetent. I should try bombing that company....nah...Nintendo DOES NOT deserve it..

Memeboy3

#48

Memeboy3 said:

to quote a fellow Ytuber...
 
''Nintendo actually lost a case? That's a great way to start 2014 off huh?

But seriously. Who the hell is Tomita? I absolutely never heard of them! and Nintendo lost to a nameless company?! BLASPHEMY!''

  • SuperCuccoSaiyan.

Patent trolling at it's finest, i'm sure Nintendo can fight back with some revisions to the 3D camera...wait..Sharp made the cameras....Why sue Ninty? Where's SHARP?!?
Stupid Patent trolls....

Knuckles

#49

Knuckles said:

@MagikarpSplash The legal system is slow, he sued in summer 2011 if memory serves correct.

@Memeboy3 This guy used to work for Sony, its not like he is unheard of, its just his company isn't a household name.

HappyHappyist

#50

HappyHappyist said:

@McHaggis
finally, someone who makes sense. i was just about to comment EXACTLY what you said, then i read your comment :P its amazing how much fanboiz flare up when their company takes a critical hit. nintendo did this to themselves.

GN004Nadleeh

#52

GN004Nadleeh said:

everyone here is so quick to call him a patent troll without even reading the article. and i guess we are to assume that if most of you owned that patent you would willingly give it up for free so nintendo can make tons of money off of it while charging you an extra dollar to move your nes mario game to your wii u

element187

#53

element187 said:

@AlexSora89 I think you are putting too much stock in a single game... The only thing to "save" the Wii U is a HUGE library of exclusives, not just one or two massive games.

WaxxyOne

#54

WaxxyOne said:

This guy isn't a patent troll, he has a genuine grievance against Nintendo. As much as I hate to see Nintendo lose a legal battle, vilifying him for using the law as it was intended is certainly not helpful. Hopefully the award, if it stands, will not hurt Nintendo too badly or impact the future of the 3DS console and hurt gamers, but they really should have been more careful about how they implemented the 3D technology in the first place.

Groosenator

#55

Groosenator said:

This is the Dark Age of the Law... when prosecutors ring up false charges, and lawyers fight back with falsified evidence. Oh, wait, wrong legal system. I need to get back to my Ace Attorney game...

goonow

#57

goonow said:

I wonder if this is why they made the 2ds? So nintendo would not have to pay royalties on the 2ds.

Assassinated

#59

Assassinated said:

While I know he isn't a patent troll, from what I understand Tomia showed their technology to Nintendo, but Nintendo went with Sharp instead, yet they are being sued for using Tomita's technology which they did not use. Unless the wording of the patent is vague enough to encompass and supersede Sharp's patent's, it doesn't seem like Nintendo would be infringing.

MAB

#61

MAB said:

Good stuff... Now we can say that every 3DS sold is losing Nintendo money because they copied the idea from elsewhere ;)

jayclayx

#62

jayclayx said:

Tomita show by that time some evidence about a conference with nintendo many years ago about a 3d screen technology before ninty reelased the 3ds so... haters gonna hate

McHaggis

#63

McHaggis said:

@Therrus: so you're willing to write this guy off as a patent troll until someone shows you otherwise? To quote your original post:

"I'll be honest: this company sucks. Let's sue everyone cuz we can make money with it..."

Maybe you'd like to provide a source for other companies that Tomita Technologies USA have sued? Perhaps some credible article that bolsters your reason to believe that the company sucks? No? But I'm the one conjuring out of thin air?

Since you asked, there's plenty of articles stating a few more facts, including one here on Nintendo Life.

@AVahne

'So how about all the other companies that Nintendo claims to have come to them with 3D technology? Should every one of the other options that Nintendo turned down come back and sue them then?'

Well, only if they sincerely believe that Nintendo's technology infringes. My guess is that they have all thoroughly investigated the 3DS and found it to be non-infringing otherwise they would most definitely have sued by now (assuming they could afford it).

This is exactly what I was talking about in my first post; you guys were quick to write off the supposed inventor of the technology, but how would you feel if you tried to sell a patented invention to a company and they sidestepped you several years later with suspiciously similar technology? For some people, inventing technology is their livelihood and they're just trying to make a living like everybody else. They deserve to get paid if people use their technology and that's the whole point of patents.

Of course, Nintendo could be innocent in all this and they really might not infringe. Then again, anyone remember Anascape v. Nintendo? Nintendo were ordered to pay $21 million back in 2008, they lost an appeal that same year and the judgement was finally overturned in 2010. That could happen here, too, although it's been up in front of 3 judges already and not looking good for Nintendo.

ReigningSemtex

#64

ReigningSemtex said:

Well good luck to Tomita he approached Nintendo with his idea they said no, they then used his tech and he sought payment I don't think there is anything wrong with that I'm glad the little man got paid I would want paying had I been in that situation.

DangaiohDark

#65

DangaiohDark said:

Another american company claiming they did first. To the americans they always create everything first, but its them that steal everyones idea, oh but its alright for them to do it. To hell with america.

electrolite77

#66

electrolite77 said:

The instant unthinking, research-devoid, pro-Nintendo fanboy zealot response to this is pretty embarrassing

unrandomsam

#67

unrandomsam said:

@DangaiohDark He is Japanese same as Nintendo. The amusing thing about the situation is China is starting to do to America exactly what they did to everybody else in the early times.

StarDust4Ever

#73

StarDust4Ever said:

Nintendo has been known for pinching pennies with regards to patented technologies (No MP3 on Wii, no DVD playback, LPCM only for surround sound on Wii-U, etc...) so now to avoid paying further royalties to this patent troll of a company they will simply discontinue the 3DS in favor of 2DS, and possibly release a 2DS xL with clamshell design, then most new games won't utilize the 3D features anymore, which would suck. Writing's on the wall, folks. Half of the videos available on Nintendo Video aren't even 3D anymore, breaking their original promise of 100% 3D content. Thank you Nintendo for screwing us...

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