Case Cite

Tomita Tech. USA, LLC v. Nintendo Co., LTD, No. 11 Civ. 4256(JSR), 2013 WL 4101251 (S.D. N.Y. August 14, 2013).

IPDQ Commentary

First, the Tomita Technologies court concluded Plaintiff’s damages were based on the smallest salable patent practicing unit, making the EMVR moot. Then, the court halved the jury’s damages award because (1) the accused device was not profitable, and (2) the patented feature was determined to be “ancillary” to the “core functionality” of the gaming system. In essence, the court applied the “basis for consumer demand” test from LaserDynamics to the “smallest salable patent practicing unit” rule.

Case Summary

Defendant moved for remittitur after a jury found infringement, awarding $30.2 million in reasonable royalty damages. Id. at *1, *7-*9. Defendant argued Plaintiff’s damages expert improperly relied on the entire market value (EMVR) of the accused hand-held gaming counsel when calculating reasonable royalty damages. Id. at *7.

The court reasoned the EMVR was not violated because the complete accused product was the smallest salable patent practicing unit. Id. at *8. Defendant neither bought nor sold the individual components of the system, the components could not practice the patent prior to assembly and programming, and the product was imported fully assembled. Id. at *8.

Nonetheless, the verdict was considered intrinsically excessive. Id. The award did not square with the Georgia-Pacific factors the jury was instructed to employ in determining damages. In addition, the accused device was not profitable, and the vast majority of games designed to run on the device did not use the patented technology. Id.

Finally, even though the EMVR did not apply, the concerns underlying that doctrine were at play. The patented technology was ancillary to the core functionality of the accused product, and consumer reception of the patented feature was mixed. Based on those factors, there was no reason to believe Defendant would have agreed to the royalty awarded by the jury. Id.

The court concluded the award was at least twice as much as the amount a reasonable jury could have awarded. Therefore, it shocked the judicial conscience, giving Plaintiff a choice between accepting a remitter of damages to $15.1 million or undertaking a new trial on damages. Id. at *9.