Nintendo is well accustomed to tackling legal battles around the world, particularly patent disputes that have been prominent since the phenomenal success of the Wii and DS. While Nintendo comes out on the winning side in most cases, it lost a notable case to Seijiro Tomita over the 3DS, and has been facing a worrying series of claims from major Dutch technology company Philips.
Nintendo and Philips have history as business partners, with the two companies working on a CD-based system in the '90s after a similar project with Sony had fallen through; there was no combined console released to the public from that partnership, though Philips was — infamously — allowed to use brands like Mario and Zelda on its CD-i system. Earlier this year it emerged, however, that Philips was taking Nintendo to court over patent claims related, in particular, to the Wii and the Wii Remote motion controls.
Philips stated that it advised Nintendo of the patent issue in 2011 but, with no agreement evidently reached, initiated proceedings throughout Europe and in the US — the company was seeking to have the Wii U and Wii removed from sale and to receive financial compensation. While the former is rarely a realistic proposition, it was clear that Philips had a case when it secured an early victory in the UK courts, with Nintendo set to appeal.
The two companies have now settled outside of court, however, with Nintendo issuing the following statement:
Nintendo today announced that it has entered into a global patent license agreement with Royal Philips (NYSE:PHG, AEX: PHIA). As part of the agreement, Nintendo and Philips will cross license portions of each company’s patent portfolio. This agreement ends patent invalidity proceedings brought against Philips by Nintendo in multiple countries, as well as patent infringement proceedings brought by Philips against Nintendo.
“We are pleased to have reached agreement with Philips, as it demonstrates that both companies recognize the importance of intellectual property rights,” said Martina Franke, European General Counsel of Nintendo of Europe. “Nintendo has a substantial IP portfolio and a long history of developing innovative products while respecting valid intellectual property rights of others.”
Financial details and other terms of the license agreement will not be disclosed.
It ends all legal proceedings and threats to the current Wii U, while our interpretation of the legalese is that there's been some acknowledgement that Nintendo's patents are overlapping with those of Philips. Nintendo seems keen to stress that it's a two-way street with some Philips properties also being shared with the Kyoto company, though considering the voracious nature of Philips' actions in courts around the world we'd suggest that it may have secured a share of profits or revenues from technology related to the Wii Remote.
We're unlikely to see details revealed by either side, however, though future financial reports may help to indicate whether Nintendo is paying off Philips with sizeable fees, or whether we have the preferable scenarios of shared revenues or a renewed working relationship.
Whatever the case, a worrying legal problem appears to have been averted.