Alpex Computer Corp. v. Nintendo Co.

Alpex Computer Corp. v. Nintendo Co.
102 F.3d 1214
1996 U.S. App. LEXIS 29068

Facts: This case involves a patent infringement suit brought by Alpex Computer Corporation against Nintendo Company. Alpex, whose patent covers the game systems such as Atari, claimed Nintendo infringed Alpex’s patent by creating its own video game system- the Nintendo Entertainment System (NES). Alpex was awarded the ‘555 patent in 1977. The ‘555 patent covered game systems that operate using random access memory (RAM) which creates an entire image bit-by-bit before it is displayed on the screen. Unlike the Alpex systems, the NES does not process an entire image before it is relayed to the screen. Instead, it uses a picture processing unit to create images in slices that are then relayed to the screen “on the fly.” Alpex argued that NES infringed claims 12 and 13 of the ‘555 patent. Specifically at issue was the portion of the claim which read “means for generating video signal.”

Procedural History: In 1986, Alpex filed a patent infringement suit against Nintendo. An evidentiary hearing was held prior to the hearing to determine the claim meaning of ‘555. The meanings of the claims determined at the hearing were presented to the jury. The jury found in favor of Alpex and awarded damages and a royalty. The District Court denied Nintendo’s motions for judgment as a matter of law and entered judgment for Alpex. Nintendo appealed to the Federal Circuit.

Issues: (1) Is the ‘555 patent valid? (2) Did Nintendo infringe the ‘555 patent? (3) Was the court correct to enter an award of damages against Nintendo?

Holdings: (1) Yes; the Federal Circuit deferred to the District Court’s finding of the validity of the ‘555 patent. (2) No; the Court found that Nintendo neither literally infringed the patent, nor did it infringe under the doctrine of equivalents. (3) No; because Nintendo did not infringe, the damages award is vacated.

Analysis: The District Court relied heavily on a determination of equivalency made by Alpex’s expert witness. The witness claimed that the Alpex and Nintendo systems functioned so similarly that they are equivalent. The court also determined that the prosecution history relating to the ‘555 patent was irrelevant to the determination of the claim construction. The Federal Circuit did not agree with either conclusion. First, it found that the lower court erred by analyzing equivalency based only on function without considering structure. The court found that both systems create game images, but that the images are created in distinguishably different ways through a different game processing structure. Second, the court found that the prosecution history was very relevant for determining the scope of the patent claims and prosecution history estoppel. The court decided that because Alpex explicitly rejected similarity to a previous system which processed images like the NES, the patent scope was narrowed so that the NES was not included in that scope.

Future Importance: This case played an important role in the rise of the Nintendo game company and the downfall of other game systems like Atari. As the court found, the systems do function very differently, and these differences gave rise to a system that operated more effectively than the other. From a policy perspective, the Federal Circuit, by choosing not to recognize the equivalency of the two systems, has allowed for greater development of video game technology.

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