NINTENDO WINS PATENT CASE
(This is an archived case summary)
Nintendo appealed a District Court ruling that awarded Alpex Computer Corporation $253 million in damages (equivalent to a 6% royalty) for patent infringement. In 1974, Alpex patented a new microprocessor-based home video game system that was meant to surpass the computing ability of the Magnavox Odyssey (which could only play one game, called “ball and paddle”, where a dot of light bounced between two vertical lines).
Alpex's invention allowed a home video system to play multiple games, including games with rotating images. This invention was commercialized by Atari, Mattel, and Coleco. The relevant claims of the patent relate to a “means for generating a video signal representing a linear player image device aligned in a first direction” and where those means include a random access memory (RAM) system. This RAM system was superior to the prior art (owned by Okuda) which employed as an alternative a series of shift registers. When Alpex filed its patent application, it specifically outlined the differences between its technology and the Okuda invention.
The court found that Nintendo's invention did not infringe the Alpex patent because Nintendo's system in fact paralleled and improved on the Okuda technology. The court denied a claim construction that would bring the operation of the Nintendo system under the scope of the Alpex patent, as Alpex had already disclosed how its patent differed from the Okuda invention.
Alpex Computer Corporation v. Nintendo Company, Inc.