USITC to investigate whether Wii violates month-old patent

Can a two-and-a-half-year-old game console infringe upon a company's IP portfolio that includes patents that are younger than the device itself -- including one that's only days old? A new case now tests a curious loophole.

The US International Trade Commission says it will formally investigate whether Nintendo's Wii game console violates Section 337 of the Tariff Act -- specifically, whether Nintendo is importing devices that infringe upon the intellectual property held by Hillcrest Labs. This after the licensing firm filed suit against Nintendo in US District Court in Maryland for infringing four patents, literally one day after the US Patent Office granted Hillcrest one of those patents.

The most recent patent under consideration, number 7,414,611, was filed on June 20, 2007, and was granted just last August 19 -- the day before Hillcrest filed suit against Nintendo. Entitled "3D pointing devices with orientation compensation and improved usability," it essentially describes how a control device with two on-board sensors can determine how much that device may be tilted by its user, by means of pairing two-dimensional transforms to make a three-dimensional one. The Wii was introduced to North American gamers at the E3 show in Los Angeles in 2006, and was already being sold by Christmas of that year.

Hillcrest's lawsuit does not claim willful infringement by Nintendo, but it does include boilerplate language that makes reference to past actions by Nintendo that constitute a trend. "Defendants' past and continued acts of infringement have damaged Hillcrest in an amount not yet determined and will continue to damage Hillcrest in the future," the August 20 lawsuit complaint reads, "and thus Hillcrest is entitled to recover damages adequate to compensate for that infringement."

Typically, a patent system rewards the first to file for an invention, so long as prior art -- the pre-existence of the thing which the filer is claiming -- has not been demonstrated. But the US system currently gives precedent to the first to invent an item or concept, even if someone else has filed an application earlier, if it can be proven that the inventor started work on the concept prior to that earlier application.

Patent reform legislation that passed the House of Representatives in September 2007 would reform US law, changing the patent system to favor the first-to-file. That bill was supposedly fast-tracked upon reaching a Senate committee, but has since gone nowhere. It would also make provisions for average citizens -- beta testers, if you will -- to serve the patent system by researching and demonstrating when and where prior art exists.

Had the Senate passed the Patent Reform Act last year, as at one time appeared likely, Hillcrest Labs would probably never have been able to file this suit. Even if it were the first to file for such things as a tilt-determination scheme -- or, as one other patent describes, a way for a TV viewer to switch channels via remote control using menu items that zoom in and out -- Nintendo itself could conceivably have proved the existence of prior art.

The ITC has a 45-day time limit from yesterday in which to determine a target date for the completion of its investigation.