Alpex Computer Corporation, Plaintiff/cross-Appellant v. Nintendo Company Ltd. And Nintendo of America, Inc.

102 F.3d 1214
CourtCourt of Appeals for the Federal Circuit
DecidedJanuary 15, 1997
Docket95-1191, 95-1229
StatusPublished
Cited by82 cases

This text of 102 F.3d 1214 (Alpex Computer Corporation, Plaintiff/cross-Appellant v. Nintendo Company Ltd. And Nintendo of America, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alpex Computer Corporation, Plaintiff/cross-Appellant v. Nintendo Company Ltd. And Nintendo of America, Inc., 102 F.3d 1214 (Fed. Cir. 1997).

Opinion

ARCHER, Chief Judge.

Nintendo Company, Ltd. and Nintendo of America, Inc. (collectively Nintendo) appeal the January 6, 1995, judgment of the United States District Court for the Southern District of New York, Alpex Computer Corp. v. Nintendo Co., 34 USPQ2d 1167 (S.D.N.Y. 1994), holding U.S. Patent No. 4,026,555 (the ’555 patent), owned by Alpex Computer Corporation (Alpex), not invalid, willfully infringed, and awarding $253,641,445 in damages and interest. We affirm the judgment as to validity and reverse the judgment of infringement.

I.

This case deals with an invention within the art of video games. The video game industry began in the early 1970s and includes two branches, arcade video games and home video games. Arcade video games are large, expensive, coin-operated machines that are placed in high traffic areas such as amusement arcades. These machines are generally referred to as “dedicated” because they can play only one game. Home video games, in contrast, are small, relatively inexpensive devices that are easily connected to the antennae terminals of a standard television. The Magnavox Odyssey was the first home video game. It too was a dedicated *1216 system playing only one game which was referred to as the “ball and paddle” because a dot of light bounced between two player-controlled vertical lines.

In early 1974, the inventors of the patent in suit conceived of a new microprocessor-based home video game system that used modular plug-in units—replaceable, read-only memory, or ROM, cartridges—to permit home video systems to play multiple games, including games with rotating images. The ’555 patent on this invention issued to Alpex on May 31,1977. The patented invention was commercialized in systems by Atari, Mattel, and Coleco.

In the early 1980s, Nintendo entered the home video game market with the Nintendo Entertainment System (NES). After the NES was featured at the 1985 Consumer Electronics Show, Alpex notified Nintendo of possible infringement of the ’555 patent. Soon thereafter, in February 1986, Alpex filed suit against Nintendo for patent infringement. Over the next several years, Alpex and Nintendo conducted various pretrial proceedings. During these proceedings, Nintendo requested certification of certain issues to this court for interlocutory appeal, which the district court granted. However, this court denied leave to appeal. Alpex Computer Corp. v. Nintendo of America Inc., Misc. No. 320 (Fed.Cir. Sept. 2, 1992).

In order to resolve the outstanding questions of claim construction prior to trial, the district court held an evidentiary hearing with the assistance of a special master. The special master issued an initial report making specific recommendations on claim construction, which the district court adopted in part for purposes of instructing the jury. Following a four-week liability trial, the jury returned a verdict for Alpex. After this liability verdict, Nintendo filed a motion for judgment as a matter of law (JMOL) as to infringement and validity or, in the alternative, for a new trial. The damages trial followed before the same jury. The jury awarded Alpex a royalty of 6% which, when computed on the stipulated $3.4 billion of allegedly infringing products sold by Nintendo, resulted in a damage award of $253,641,-445. Nintendo again filed motions for JMOL or a new trial and for a remittitur on damages. Alpex moved for entry of judgment and an award of prejudgment interest. The district court denied all of Nintendo’s post-trial motions and entered judgment for Al-pex with prejudgment interest.

Nintendo now appeals the judgment as to validity, infringement, and damages, and Al-pex cross-appeals the amount of damages.

II.

The ’555 patent claims a keyboard-controlled apparatus for producing video signals by means of random access memory (RAM) with storage positions corresponding to each discrete position of the raster for a standard television receiver. Figure 2 of the ’555 patent depicts the structure of the invention, as follows:

*1217 [[Image here]]

The television raster comprises numerous discrete dots or bars, approximately 32,000, which the cathode ray beam illuminates on a standard cycle, which in turn creates the image on the television screen. The patented invention requires sufficient RAM to accommodate each of the approximately 32,000 memory positions needed to represent the raster image. Thus, the RAM holds at least one “bit” of data for each position in the memory “map” of the raster. Accordingly, this video display system is called “bit-mapping.” The advantage of this system, as disclosed in the patent, is that it provides for the representation of every image within the raster RAM, or display RAM, and thereby provides greater control of the display for the manipulation of complex images and symbols. To achieve this flexibility, however, bit-mapping requires the construction of each image within the display RAM before display, a process that requires the microprocessor to erase and rewrite each image. Because the microprocessor must refresh the display RAM for each frame to show the movement of images, the operation of the system is slowed down.

The accused NES with its game cartridges is also an apparatus for producing video signals by means of storage positions corresponding to discrete positions of the raster for a standard television receiver. A trial exhibit illustrates the NES:

[[Image here]]

*1218 The video display system for the NES does not include RAM with storage positions corresponding to each discrete position of the raster. Instead, the NES utilizes a patented picture processing unit, or PPU, to perform the generation of images on the screen. The PPU receives pre-formed, horizontal slices of data and places each slice in one of eight shift registers, each of which can store a maximum of 8 pixels. These slices of data are then processed directly to the screen. The PPU repeats this process to assemble the initial image on the screen. Thereafter it repeats the process as necessary to form changes in images throughout the progression of the game. Nintendo refers to the PPU as an “on-the-fly” system. It is undisputed that the NES video display system, using shift registers to process slices of images (as opposed to entire screens), is a faster means of displaying movement of images on the video screen than the bit-mapping of the RAM-based system of the ’555 patent.

The claims at issue are 12 and 13 of the ’555 patent:

12. Apparatus for playing games by displaying and manipulating player and ball image devices on the screen of a display tube, comprising
first means for generating a video signal representing a linear player image device aligned in a first direction, second means for generating a video signal representing a ball image device,
manually operable game control means, and

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Bluebook (online)
102 F.3d 1214, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alpex-computer-corporation-plaintiffcross-appellant-v-nintendo-company-cafc-1997.