Nintendo alleges TSMC counterfeiting

Electronic News, Sept 19, 1994

REDMOND, WASH. - Nintendo of America Inc. last week filed a lawsuit in the U.S. District Court for the Northern District of California charging Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) of Hsin-Chu, Taiwan, and its TSMC-USA, Inc. subsidiary of San Jose, Calif., with the illegal production of semiconductors contend in counterfeit Nintendo video game products.

Seeking monetary damages and injunctive relief, Nintendo said the filing of the civil suit followed the discovery of bogus semiconductors contained in counterfeit 16-bit Super Nintendo Entertainment Systems (Super NES) and Super Famicom s (the 16-bit game's name in Asia) plus in counterfeit video game software and security devices. An independent laboratory in the U.S., Nintendo do said, analyzed counterfeit devices in many of these products and found they "bore the distinctive markings' of TSMC.

"Our investigation discovered counterfeit chips manufactured by TSMC contained in illegal Nintendo video game products in at least nine countries tries across three continents," said Nintendo of America - the U.S. subsidiary of Nintendo Co., Ltd., of Kyoto, Japan. Nintendo also asked the U.S. government to request that the R.O.C. (under the obligations of the country's export monitoring system) closely scrutinize TSMC exports to prevent semiconductors that infringe on Nintendo's intellectual property rights.

Nintendo claimed an estimated mated 61 percent of TSMC's worldwide sales are in the U.S. TSMC's principal owners are the Republic of China (R.O.C) government and N.V. Philips Gloeflampenfabrieken. The suit against TSMC represents the latest action in Nintendo's war against video game piracy; in recent years, it has filed hundreds of complaints against alleged counterfeiters, winning several victories.

TSMC-USA, meanwhile, essentially disavowed knowledge that TSMC components may or may not be going into illegal Nintendo games. The U.S. company maintained that TSMC, as Taiwan's largest semiconductor fabrication facility, "operates strictly as a manufacturing source for die which are designed, developed and wholly-owned by its customers, semiconductor companies."

TSMC-USA said since customers own product designs and tooling used in the manufacturing process, TSMC has no way to identify by the designs if final customers violate patents held by other companies. "One of the cornerstones of TSMC's business is not to allow the co-mingling of intellectual properties between our customers who actually market the finished semiconductor products."