Nintendo IP suit shows value of intellectual property insurance

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Justin Kozak

VP of Sales



Who doesn’t love video games? Okay, they might not be everybody’s thing but it’s also hard not to be impressed by how powerful the technology is inside gaming systems your little cousin uses after school.

Well, according to one 2013 suit, Nintendo stole one of the pieces of this technology from somebody else. But the party that alleged Nintendo did this wasn’t another gaming company. It was a company called iLife that sells products designed to save babies’ lives.

So, how did iLife get to a point where they wanted to sue a company that has nothing to do with the space they’re in? Not because of the product but because of the idea, or the intellectual property.

iLife sued Nintendo for allegedly stealing their motion-sensing accelerometer technology which they claimed was used in the creation of the Wii Remote. iLife held rights to this technology through this patent (along with 5 others) and sought $144M in damages, $4 for each of the 36 million Wii gaming system sold.

Ultimately, the jury settled on a $10M award for iLife, which was recently upheld on appeal.

Why is this important?

Nintendo is a behemoth in the technology and gaming space. It’s safe to say they have unlimited resources to fight this type of lawsuit. Although unsuccessful in their appeal, they got off with a $10M price tag as opposed to $144M – not too shabby.

But what if this happens to you? With growth comes notoriety and a bigger target. Being self-aware is easy but, as seen in Nintendo’s case, a lawsuit can come from anywhere. Even from a health tech company who helps save infants while you are creating games for their older brothers and sisters to become obsessed with.

You need to be well equipped to have the same success Nintendo did in avoiding the big hit in damages.

How intellectual property insurance can help

Intellectual property insurance has become a standard product for companies in innovative spaces. (By the way, an intellectual property lawsuit is about 22 times more likely than one coming from an investor.)

Intellectual property insurance can provide coverage that will defend you, pay damages and even pay settlement fees to avoid long and costly suits. But it doesn’t end there. Having a partner in the insurance market offers something even more valuable: experience and expertise.

You are not Nintendo, and although we firmly believe you will be one day, it is no secret that litigation is expensive. You need the right people with the right experience in your corner.

An intellectual property insurance policy will give you access to a team of incredible patent attorneys who know how to make these lawsuits go away and how to minimize the damage if whichever jabroni suing you actually has a leg to stand on.

At the end of the day

Nintendo was sued by someone they didn’t see coming but was able to pay a fraction of the ask because they could bring in the right team to fight it.

We work with an incredible amount of innovative and creative companies who we are proud to watch grow. Just like our clients want to protect their company from lawsuits coming from customers or investors, protecting the idea that made the company possible in the first place has become a priority

By working with a broker who can help you find the right intellectual property insurance policy, you are also putting yourself in the same position Nintendo was in – when that jabroni we mentioned knocks on the door, you’ll be answering it with a team of experts ready to get to work.

Want to know more?

You can contact us at info@foundershield.com or create an account here in order to get a quote for intellectual property insurance and patent insurance.

Want to read more on the subject?  Check out our other blog posts on intellectual property insurance.

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