Nintendo case

Avoiding a $10 Million Judgment: Texas District Court Rules Nintendo Did Not Infringe on iLife Patent

By Benjamin Gilman, Michigan 3L

In 2013, iLife Technologies Inc. (“iLife”) sued Nintendo of America, Inc. (“Nintendo”) claiming that Nintendo’s Wii gaming console infringed on iLife’s U.S. Patent No. 6,864,796 (“Claim 1”).  Claim 1 is described as a system for evaluating body movement relative to an environment.  The patent includes the use of a sensor and a processor to locate the dynamic and static accelerative phenomena of the body.  Similarly, the Nintendo Wii uses motion sensor technology to make out its users’ body to perform different gaming functions. After a trial, the jury returned a verdict in favor of iLife for over $10 million in damages.  Nintendo appealed the verdict, arguing that (1) Claim 1 was patent-ineligible subject matter, (2) the patent was indefinite, and (3) the patent was invalid for lack of written description and enablement.  

On Jan. 17, 2020, the Northern District of Texas vacated the jury verdict and ruled that Claim 1 was patent-ineligible subject matter under 35 U.S.C. §101.  Since the court resolved the case under the first issue, it did not reach the second and third issues raised by Nintendo.  In order to determine that Claim 1 was patent ineligible, the court analyzed the two factor test set up by the Supreme Court in Alice Corp. Pty. Ltd. v. CLS Bank Intern.  The first factor is whether the character of the relevant claim is directed to patent-ineligible subject matter, such as laws of nature, natural phenomena, or abstract ideas.  If the relevant claim is directed to a patent-ineligible subject matter, the second factor is whether, considering the elements of the claim, both individually and combined, the elements transform the nature of the claim.  To satisfy the second factor, the patent holder must demonstrate that the elements or combination of elements are not merely well-understood, routine and conventional, but involve an inventive concept.  

Applying the first factor, the court ruled that Claim 1 was directed to a patent-ineligible concept because Claim 1 described nothing beyond conventional motion sensor technology and conventional activities. The court also reasoned that the concepts in Claim 1 were all previously known to the industry. Because of this, the court found that the patent constituted an abstract idea of gathering, processing, and transmitting information.  

iLife attempted to argue Claim 1 was not an abstract idea because it specified the type of information (dynamic and static accelerative phenomena), it used a mathematical algorithm to generate new information, and it was implemented on conventional computer components.  The court rejected all three of these arguments, noting that none of the arguments made Claim 1 any less abstract.  First, a patent must do something beyond specifying a particular type of information, such as changing the character of the information, to not be considered an abstract idea.  Second, applying a mathematical algorithm was not sufficient because the new information generated by the algorithm was no less abstract than the information prior to using the tool.  Third, implementing the idea on conventional computer components was not sufficient because it did not improve the functionality of the components, and the implementation method was well known to the industry at the time.

Moving to the second factor, the court held that Claim 1 was not an inventive concept because it did not add anything to the routine processes of data collection, analysis, and transmission.  Claim 1 described the ordinary order of steps for data analysis, provided no new source or type of information, and did not explain how the data may be evaluated differently (for example a child versus an adult). 

iLife argued that Claim 1 could be considered inventive because the processor distinguished between normal and abnormal events as well as other characteristics.  Again, the court was not persuaded by this argument.  Under the second factor, the language in the claim must provide for the specifics about the inventiveness of the limitation or technology, and looking at the language in Claim 1, the patent failed to include any of the information or details argued by iLife.  Because Claim 1 was determined to be an abstract idea and not involve an inventive concept sufficient to transform the abstract idea, the court ruled that Claim 1 was patent-ineligible.  The court thus vacated the $10 million jury verdict against Nintendo, as the company cannot infringe on an invalid patent.

The iLife decision demonstrates how gaming companies must remain vigilant about the potential patent infringement claims and some of the powerful defenses to those claims when looking to implement the newest technology into their games and consoles in order to avoid potentially significant adverse judgments.  While there is still ambiguity about what constitutes patentable subject matter under the Alice test, Courts have shown an overwhelming willingness to grapple with the issue in the early stages of litigation when presented with a properly framed motion.  For those seeking to assert their patents and forestall early motion practice, adding allegations to a complaint to demonstrate the inventiveness of the claimed concepts can help avoid early unpatentability determinations.  For those accused of infringing patents that appear to cover unpatentable subject matter, framing the invention as one that simply uses computers to simplify things humans can or have done before, versus something that actually makes a computer function better, can be an effective approach to demonstrating unpatentability.  

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