Nintendo, Hillcrest Settle Patent Dispute

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Nintendo and Hillcrest Laboratories have settled a legal fight in which Hillcrest alleged the popular Wii videogame unit violated the remote-control developer's patents.

Hillcrest had filed a patent-infringement lawsuit against Nintendo last August in the U.S. District Court in Maryland. The Rockville, Md.-based company also filed a complaint with the U.S. International Trade Commission to investigate the patent claims.

The companies notified the ITC on Aug. 21 that they had settled their dispute and requested that the commission's investigation be terminated. The motion was granted by ITC chief administrative law judge Paul Luckern.

Nintendo, if it had lost the case, could have been barred from selling the Wii in the U.S. The Japanese company has seen sales of the gaming console fall dramatically this year, including a 57% drop in the second quarter, according to Bloomberg.

Under the terms of the agreement, Hillcrest dropped all patent claims against Nintendo. The companies, however, said the settlement does not constitute a ruling on merits of Hillcrest's claims or the liability of the parties.

Nintendo's Wii features a motion-sensing controller users move through the air to control on-screen action, for example, to swing a virtual tennis racket. Hillcrest, meanwhile, has licensed its Freespace motion-sensing technology to consumer-electronics manufacturers, including Logitech and Universal Electronics Inc. (UEI), a supplier of remote controls to cable operators and other customers.

Hillcrest claimed the Wii infringes four of its patents: U.S. Patent Nos. 7,158,118, 7,262,760, and 7,414,611, which relate to a handheld three-dimensional pointing device, and U.S. Patent No. 7,139,983, which relates to a navigation interface display system that graphically organizes content for display on a television.

Most of the terms of the settlement between Nintendo and Hillcrest have been redacted in the version of the agreement that is publicly available.However, the document does have a section headed "license grants."

Hillcrest declined to comment on the settlement; representatives for Nintendo of America did not respond to a request for comment.

The agreement was signed by Hillcrest president and CEO Daniel Simpkins, Nintendo of America chairman and CEO Tatsumi Kimishima and Nintendo Co. Ltd. senior managing director Genyo Takeda.

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