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Nintendo to pay royalties on every 3DS

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Royalty

I love patent and intellectual property law. It’s awesome to think that an idea can be owned, and someone else can make money if you dare to steal their idea. Who said there were no new things under the sun? Well, a court has now ruled that Nintendo stole another company’s genius idea, and now they will have to pay.

US Federal Judge, Jed Rakoff determined that Nintendo owes Tomita Technologies for using Tomita’s patented camera technology. Initially, Tomita wanted Nintendo to pay a flat fee per unit sold, but Rakoff decided on a percentage instead – 1.82% of the wholesale price of each 3DS sold will go to Tomita.

As the judge explained:

If, as Tomita suggests, the ongoing royalty rate were expressed as a flat dollar amount per unit sold, Tomita would capture an increasingly large proportion of each sale as the price falls, even as the technology’s reliance on the infringed patent remains constant. This would result in an unearned windfall for Tomita, and, accordingly, the court prefers an ongoing royalty rate expressed as a percentage of wholesale price.

Based on current prices, Nintendo is looking at about $3 or R32 per 3DS sold. It will certainly set them back a pretty penny – not something they need right now considering the poor sales of the Wii U. The royalty rate does not apply to the 2DS, though, so at least those sales are safe. Still, the 3DS is a major money maker for Nintendo, helping to keep their coffers full despite the less-than-stellar sales of the Wii U; this royalty set-up will cut into the profits, but I doubt it will cause any major problems for the company. With so many handheld devices sold, Nintendo can afford to pay for stolen technology.

Last Updated: January 7, 2014

10 Comments

  1. Sir Rants A Lot Llew. Jelly!!!

    January 7, 2014 at 11:49

    A little unfair I think. Isn’t there also a by-law that if you don’t actually do anything with the idea that you can’t carry on keeping it? I’m no expert so wouldn’t know.

    What part of the camera? the dual camera part for 3D pictures or what?

    Reply

    • Dean

      January 7, 2014 at 12:19

      By the look of it, it’s the 3D part of it. The “taking and rendering of stereoscopic images and video”.

      Reply

      • Sir Rants A Lot Llew. Jelly!!!

        January 7, 2014 at 14:27

        Please tell me that isn’t in the article above. I have just scanned through it again and don’t see that. Am I going blind?

        Reply

        • Dean

          January 7, 2014 at 14:43

          No you’re not. I googled for the original patent case. Zoe’s brain is still probably slugged from the holidays.

          Reply

          • Sir Rants A Lot Llew. Jelly!!!

            January 7, 2014 at 15:02

            Oh phew. So it was just me being lazy. Sjoe and here I thought I was going blind and/or illiterate

          • Her Highness the Hipster

            January 7, 2014 at 15:21

            and me being lazy… hence why I fit in around here đŸ™‚

          • Sir Rants A Lot Llew. Jelly!!!

            January 7, 2014 at 15:33

            Hehehe. “Lazyjourno Zoe reporting for Lazygamer.”

            đŸ˜›

    • Lord Chaos

      January 7, 2014 at 13:31

      After 5 years of no progress the patent expires.

      Reply

      • Sir Rants A Lot Llew. Jelly!!!

        January 7, 2014 at 14:28

        Thought there was something like that

        Reply

      • Gr8_Balls_o_Fire

        January 8, 2014 at 11:36

        Unless you pay for extensions. I think.

        Reply

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