Igt v. Bally Gaming Intern. Inc.
| Decision Date | 28 April 2009 |
| Docket Number | Civ. No. 06-282-SLR. |
| Citation | 610 F.Supp.2d 288 |
| Parties | IGT, Plaintiff, v. BALLY GAMING INTERNATIONAL INC., et al., Defendants. |
| Court | U.S. District Court — District of Delaware |
William J. Wade, Esquire and Anne Shea Gaza, Esquire of Richards, Layton & Finger, Wilmington, DE, Of Counsel David P. Enzminger, Esquire and David P. Dalke, Esquire of O'Melveny & Myers LLP, Los Angeles, CA, for Plaintiff.
Jack B. Blumenfeld, Esquire and Karen Jacobs Louden, Esquire of Morris, Nichols, Arsht & Tunnell LLP, Wilmington, DE, Of Counsel: Charles K. Verhoeven, Esquire of Quinn Emanuel Urquhart Oliver & Hedges, LLP, San Francisco, CA; Edward J. DeFranco, Esquire and Alexander Rudis, Esquire of Quinn Emanuel Urquhart Oliver & Hedges, LLP, New York, NY, for Defendants.
IGT ("plaintiff") filed this action against Bally Gaming International Inc., Bally Technologies, Inc. and Bally Gaming, Inc. d/b/a Bally Technologies (collectively, "Bally" or "defendants") on April 28, 2006, alleging infringement of U.S. Patent Nos. RE 38,812 ("the '812 patent"), RE 37,885 ("the '885 patent"), 6,832,958 ("the '2958 patent"), 6,319,125 ("the '125 patent"), 6,224,958 ("the '4958 patent"), 6,431,983 ("the '983 patent"), 6,607,441 ("the '441 patent"), 6,565,434 ("the '434 patent"), and 6,620,046 ("the '046 patent"). (D.I. 1)1 Plaintiff alleges that defendants' "Bally Power Bonusing®" slot machine technology infringes one or more claims of the asserted patents.
On June 30, 2006, defendants filed their answer, and asserted counterclaims for a declaratory judgment of noninfringement, invalidity and unenforceability of each asserted patent (counts I-IX); attempted monopolization in violation of Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2 (count X); false representation in violation of the Lanham Act, 15 U.S.C. § 1125 (count XI); and "intentional interference with business relationships" (count XII). (D.I. 40) Plaintiff moved to dismiss defendants' counterclaim counts X-XII. (D.I. 53) Plaintiff also moved for a preliminary injunction. (D.I. 75) The case was assigned to this judicial officer on April 2, 2007. Following a discovery conference, on June 21, 2007, plaintiff's pending motions were withdrawn. Discovery proceeded and has now since closed. (D.I. 160, 175)
On February 25, 2008, by agreement of the parties, all claims, defenses, and counterclaims related to the counterclaims of invalidity and unenforceability of these patents, and defendants' counts X-XII. This case is set for a jury trial commencing May 26, 2009.
Currently pending before the court are seven motions for summary judgment. Plaintiff has filed motions: (1) of infringement (D.I. 178); (2) of validity of the '885 and '812 patents (D.I. 180); and (3) that Bally does not have either an express or implied license to practice the '885, '812, or '983 patents ("no licensing defense") (D.I. 182). Defendants have filed motions: (1) of noninfringement (D.I. 191); (2) of invalidity of the '983 patent (D.I. 193); (3) of invalidity of the '885 and '812 patents (D.I. 219); and (4) that Bally has a valid license defense with respect to the '983 patent (D.I. 221).2 The court has jurisdiction over these matters pursuant to 28 U.S.C. § 1338.
This suit relates to casino slot machine technology and player rewards. Casino slot machines may be networked together. Networking allows for advantages such as the casino's ability to monitor patrons' slot play and to extract accounting data from individual machines. (JA01631-32) Monitoring systems require the use of playertracking cards (hereinafter "PTC"s) and machines equipped with card-tracking devices. Casinos typically issue PTCs to patrons who sign up for an account through the casino's promotions department, and use PTCs to track play, allow players to obtain rewards or participate in promotions when their PTC is in use, and to enable players to access funds that they previously have deposited with the casino for use at a gaming device or table. The casino maintains a database of its patrons on a host computer. PTCs can be inserted into a tracking device that includes a magnetic card reader, display for messages and a keypad to accept any inputs from the patron; such devices are typically found on slot machines.
Both parties in this case provide software products used by casinos to provide awards to players who are gambling on a networked gaming device such as a slot machine. Such "bonusing" increases player loyalty and entertainment, and can be provided in many ways, such as by special awards or free play credits. A "progressive" jackpot is a common jackpot that increases a small amount for every game played on the machines included within a certain network whereon the progressive is offered.
Defendants manufacture a product suite called Bally Power Bonusing, which includes the following accused products: Power Winners, Power Rewards, Power Promotions, and Power Bank. These systems will be discussed in greater detail infra in connection with the court's infringement analyses. Each comprises hardware and software to run on a slot network, the software having main components: a slot management system (or "SMS") and a casino management system (or "CMS"). (D.I. 142 at 8) The SMS handles the slot accounting functions and collects player tracking data such as a player's wages. The SMS provides this data to the CMS, which handles the marketing and reporting functions of the casino. (Id.)
There are several components to the slot network. A "host computer" is located at the back end of the system in the control room and maintains a database of PTC holders. A slot interface board, or "controller," is located between the gaming machine and the host computer; it receives and transmits instructions and messages between the components. Finally, the "player account" is the location on the network that records the amount of funds available to a player. Player accounts are often categorized according to the level of gaming activity by the player (e.g., silver, gold or platinum); defendants' products are targeted to specific players as compared to specific gaming devices. (Id.)
All three patents in suit share the same named inventors (John F. Acres, Alec Ginsburg, and David Wiebenson) and assignee (Acres Gaming Incorporated ("Acres")) on the face of the patents. Plaintiff acquired each patent when it acquired Acres in 2003.
The '885 patent is a reissue of U.S. Patent No. 5,752,882 ("the '882 patent"), issued May 19, 1998. The '882 patent was filed on June 6, 1995 as U.S. Patent Application 08/465,915, a divisional application claiming priority to U.S. Patent Application No. 08/322,172, filed October 12, 1994, now U.S. Patent No. 5,655,961 ("the '961 patent"). The reissue application (No. 09/573,470) leading to the '812 patent was filed on May 16, 2000.
Plaintiff asserts that defendants' products infringe claims 1, 10, 22, 33 and 46 of the '885 patent. All five independent claims share the backbone reproduced below.
A method of operating gaming devices interconnected by a host computer having a user-operated input device comprising: associating each gaming device with a unique address code; preselecting less than all of the gaming devices interconnected by the host computer responsive to a user-effected action at the input device which identifies the preselected gaming devices with the respective associated address codes; using the network to track activity of the preselected gaming devices [...]
In addition to the foregoing, claims 1, 10, 22, 33 and 46 contain additional limitations, as reproduced below.
1. [...] initiating a bonus play period; issuing a command over the network to each of said preselected gaming devices responsive to initiation of the bonus play period; and paying a bonus at each of said preselected gaming devices in accordance with the command.
10. [...] issuing a command over the network to one of said preselected gaming devices responsive to a predetermined event; and paying at said one gaming device in accordance with the command.
22. [...] initiating a bonus play period; issuing a command over the network to each of said preselected gaming devices responsive to initiation of the bonus play period; and paying a bonus via each of said preselected gaming devices in accordance with the command.
33. [...] initiating a bonus play period; generating a message including data related to a payment amount; transmitting the message over the network to at least one of said preselected gaming devices responsive to a predefined event; and paying via at least said one gaming device during the bonus play period in accordance with the message.
46. [...] issuing a command over the network to at least one of said preselected gaming devices responsive to a predefined event; and paying via at least said one gaming device in accordance with the command.
The '812 patent is a reissue of U.S. Patent No. 5,836,817 ("the '817 patent"), issued November 17, 1998. The '812 patent is related to the '855 patent; it was issued from divisional application 08/465, 717, the sister application to U.S. Patent Application 08/322,172 (issuing as the '961 patent). The reissue application (No. 09/574,632) leading to the '812 patent was also filed on May 16, 2000.
Plaintiff asserts that defendants' products infringe claims 21 and 44 of the '812 patent, as reproduced below.
22. A method of operating...
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