[Editor's Note: This article originated when the Gamasutra editors noticed a number of online sources such as Wikipedia stating that it was now completely legal to make NES 'clone' consoles, because all of Nintendo's patents regarding the NES had expired. How true was this statement? We asked game IP lawyer S. Gregory Boyd the question: "Are the NES patents expired? If so, is a company free to build and sell new NES-like systems?" Here's his response.]

Introduction

Law, particularly IP law, has a lot in common with quantum mechanics. In both fields, answers are often given in the form of probabilities rather than certainties. It is rare that a client can come in with a question and receive a “yes” or “no” answer. Answers almost always start off with “it depends” and end up talking about levels of risk and the practical interaction of business decision making with potential legal consequences. This short essay is a sample of one of those common and difficult questions.

The Question – Are the NES patents expired? If so, is my company free to build and sell new NES-like systems?

This is a deceptively simple inquiry. What follows in this short article is a partial and woefully incomplete analysis of factors involved in answering that question.

	The Nintendo Entertainment System has sold over 62 million official hardware unitsworldwide since its launch.

NES Patents

A search yields that the NES system is protected by at least the following US utility patents, which cover the functionality of the system: 4,687,200; 4,799,635; 5,070,479; 5,207,426; 5,426,762. In addition, there are these design patents, which cover the system design: D376,826; D376,795; D377,488; D379,832; D381,628; D382,868.

Searching each of the patents above bears out several ideas. First, some of these are expired, and some of them are not. The issue dates range from 1987 to 1995. The expiration dates show that at least one of the patents does not expire until 2013, but at least two others are set to expire in the next year.

Calculating a patent expiration date is complicated because the law is complicated and changing, but a good rule of thumb is that patents that were pending as applications in June 1995 are valid either for seventeen years after the issue date or for twenty years after the earliest priority date listed on the patent, whichever is longer. Patents filed after June 1995 are generally valid for twenty years after the earliest filing date listed on the patent. These dates are good for the most common type of patent in the US , the utility patent. Of course, there are separate rules that govern design patents (the patents with a “D” before the number above). A design patent is valid for fourteen years after the date on which it issues.

The discussion above applies just to the US . What if the client considers selling these new NES-like consoles internationally? In Canada alone, there are at least the following patents to consider: 1,226,605; 1,270,339; 2,048,167; 77,894; 77,984; 78,658; 80,621. The complexity does not end here.

NES Trademarks, Copyrights

What about other types of IP protection, like copyright and trademark? These types of protection are actually longer lasting than patent protection and cheaper to apply for. A copyright registration is about thirty dollars and a trademark registration can usually be done for a few thousand dollars.

Trademark covers names, slogans, and phrases that designate the origin of goods. The name “Nintendo” and “Nintendo Entertainment System” are both federally registered trademarks in the US . A search of the trademark office finds about forty live trademarks surrounding the word “Nintendo.” Registered trademarks are valid as long as the fees are paid and the mark is used in commerce. This means that the name “Nintendo” and “Nintendo Entertainment System” have potentially immortal IP protection. Any client wishing to build NES-like systems should worry about this as a possible pitfall.

Nintendo also has copyright registrations associated with the NES. Copyright is not immortal, but it is cheaper to register and can last more than a lifetime, literally. The length of copyright protection for works created after 1978 is 95 years after publication or 120 years after creation. This means the copyright registrations for the NES system are valid until about 2090. Copyright also has some substantial legal “teeth.” Under certain circumstances, it is possible for executives of corporations to have personal liability for copyright infringement. Statutory damages can be as much as $150,000 per instance of infringement plus attorneys fees for egregious cases. Actual damages can be even higher. Prison time is also possible for criminal copyright infringement. All that power for a thirty dollar registration.

Nintendo has actually tested the power of one of its copyrights on the NES in the case, Atari Games Corp. v. Nintendo of America¹. This case was in the U.S. Court of Appeals for the Federal Circuit in 1992. The case involved Nintendo suing Atari for copyright and patent infringement of its “10NES” cartridge authentication system. This system is used by the NES to discern the difference between licensed and unlicensed cartridges. The Federal Circuit upheld a judgment in favor of Nintendo based on the copyright analysis alone. This copyright is still valid and will be for about eighty more years. This is also true for other Nintendo copyright registrations associated with the NES.

	The PolyStation is a notable gray-market NES clone, with physical similarities to a certain Sony console.

Conclusion

So, it is clear that the answer to the question is not simple. Not all the patents are expired, but some are and a few more will be this time next year. The trademarks and copyrights are still valid and enforceable. Furthermore, if past behavior is any indication, Nintendo will litigate to protect its IP rights. On balance, making an NES-like console in the next century appear to be a legally risky proposition.

On the other hand consider the business realities. How many NES consoles did Nintendo sell last year? Is it worth it to Nintendo to fight over an obsolete product? These factors mitigate the business risk, but do not remove it. In the final analysis Nintendo still has the power, resources, and track record to come down hard on someone perceived as infringing their IP. The more money made by an infringer, the more worthwhile it would be for Nintendo to spend the resources to come after them and try to collect damages.

It may be possible to build an NES-like system without infringing any of the remaining valid Nintendo IP, but the path is laden with traps for the unwary. It is a risky proposition at best.

Developer Ramifications

How can game developers use this information to create better protection for their own games? Consider the big picture. A well planned IP strategy is a multi-layered offensive and defensive system. As discussed above, the parts compliment each other and work together to protect core product.

This yields three useful points for game developers today. First, patents are just the beginning of an IP analysis. They are a critical portion of IP protection for any game company, but they are not the sole protection available. Second, stay well-clear of another company's' IP to minimize the risk of litigation. Your company may be operating outside patent coverage, but what about trademark and copyright? Finally, after developing new IP, consider and use every possible form of IP protection available given your company's resources. Patents are resource intensive, but trademark and copyright registration are also important and available for a much smaller investment. The multi-faceted and thorny protections of IP law can be just as powerful for your company as they are for Nintendo.

¹975 F.2d 832 (Fed. Cir. 1992)

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[The information contained in this article is for general information purposes only and should not be construed as legal advice. The opinions are the author's alone and do not represent the opinions of Kenyon & Kenyon or those of its clients. The author gratefully acknowledges the assistance of attorneys Gary Morris and Jude Thomas of Kenyon & Kenyon in the preparation of this article.]

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