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Nintendo Accused by Texas Company of Violating U.S. Chip Patent

By Hiroshi Suzuki and Jeff St.Onge

June 14 (Bloomberg) -- Nintendo Co. was sued by a Texas company claiming its patent for a way to make faster semiconductors is being used in the Japanese company's Wii video- game console.

Nintendo's U.S. unit is using the invention without permission and should be stopped by court order, Lonestar Inventions LP said in a June 7 complaint in federal court in Tyler, Texas. Closely held Lonestar also asked for cash compensation.

``We do a pretty thorough investigation before we make such claims, so we're pretty confident in our case,'' Phillip Bruns of Gibbs & Bruns in Houston, Lonestar's lawyer, said in a telephone interview.

The patent covers a space-saving way of increasing the power of capacitors by using parallel layers of conducting strips. Infringing parts were found in Nintendo's Wii, Bruns said.

Richard Flamm, a spokesman for Nintendo America, didn't immediately reply to a voice-mail message seeking comment.

Nintendo sold 5.84 million of the game consoles from its introduction in November to March 31. The company, based in Kyoto, Japan, aims to sell 14 million units in the year ending in March 2008. It reported net income rose almost sevenfold to 42.4 billion yen ($345 million) for the fourth quarter ended March 31, on sales of Wii's and DS portable game players.

Nintendo expects to sell as many as 35 million Wii consoles in the U.S. by 2011 or 2012, George Harrison, marketing chief at Nintendo of America, said last month. The company is increasing production at factories in China to meet growing demand, he said.

Lonestar Inventions, a Texas-based electronics device maker, has sued other companies, claiming violation of the same patent, court records show. Lonestar sued Rochester, New York-based Eastman Kodak Co. earlier this month, according to court documents. It sued Austin, Texas-based Freescale Semiconductor Inc., a maker of chips for cars and mobile phones, and Allentown, Pennsylvania-based Agere Systems Inc., a maker of microchips used in wireless devices, in January.

The case is Lonestar Inventions LP v. Nintendo of America Inc., 07-cv-00261, U.S. District Court, Eastern District of Texas (Tyler).

To contact the reporters on this story: Hiroshi Suzuki in Tokyo at Hsuzuki5@bloomberg.net; Jeff St.Onge in Washington at jstonge@bloomberg.net.

Last Updated: June 14, 2007 17:17 EDT

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