Jury deals $315M verdict to casino tech maker who said rival used patent litigation to stifle competition

By Jonathan Bilyk | Aug 7, 2018

A group of casino technology manufacturers have hit a legal jackpot, as a Chicago federal jury has dealt them a verdict potentially worth more than $300 million, amid their ongoing antitrust battle against a rival manufacturer accused of misusing patents to stifle competition.

A group of casino technology manufacturers have hit a legal jackpot, as a Chicago federal jury has dealt them a verdict potentially worth more than $300 million, amid their ongoing antitrust battle against a rival manufacturer accused of misusing patents to stifle competition.

On Aug. 7, the jury found in favor of Shuffle Tech International LLC and its subsidiaries, Aces Up Gaming Inc. and Poydras-Talrick LLC, in its dispute with Las Vegas-based Scientific Games and its subsidiaries, Bally Technologies Inc. and Bally Gaming Inc.

In the judgment, the jury ordered Scientific Games and the Bally entities to pay $195 million directly to Shuffle Tech International, $75 million to Poydras-Talrick and $45 million to Aces Up Gaming. The total base award was $105 million, but under antitrust law, damages are automatically tripled, bringing the total jury award to $315 million.

In statements following the verdict published by Reuters, Scientific Games pledged to seek to reduce or undo the verdict, and appeal, if necessary.

The case had landed in Chicago federal court in 2015, when Shuffle Tech and its affiliates formally rolled out the complaint against the defendants, accusing them of improperly suing Shuffle Tech for allegedly infringing on a patent, even though Scientific Games allegedly knew the patent claim wasn’t valid.

The dispute centered on two patents Shuffle Tech acquired for a device known as “Deckmate 1,” a card shuffler placed under the gaming table, which retrieves cards and returns them to a dealer.

In 2012, Shuffle Tech, through a deal with equipment manufacturer DigiDeal, developed and began to distribute to casinos a device incorporating the technology.

According to court documents, Shuffle Tech’s entrance into the market represented a significant challenge to Scientific Games, which had enjoyed near total domination of that particular market segment.

After Scientific Games filed suit against DigiDeal to enforce alleged patent rights, Shuffle Tech responded with its own suit in 2015, asserting Scientific Games had sought to fraudulently press its patent claim to reestablish its monopoly over the card shuffler market.

While U.S. District Judge Matthew F. Kennelly dismissed some of the counts in the lawsuit, he allowed Shuffle Tech to proceed to trial on its claims Scientific had used patents and sham litigation to eliminate competition.

About 10 months later, the trial began July 16, ending in the verdict for Shuffle Tech.

In a motion for judgment filed as the case went to the jury, Scientific asserted yet again Shuffle Tech had failed to establish its case the company had wrongly pursued the patent litigation.

They noted judges in Nevada presiding over the litigation against DigiDeal declined to declare Scientific’s patents invalid.

“As the magistrate judge and district judge found in the Nevada litigation, there was a good faith basis to believe the patents were valid, and its lawsuit had ‘substantive strength,’” Scientific wrote in its Aug. 1 motion for judgment.

Likewise, Scientific asserted Shuffle Tech had failed to demonstrate Scientific had used “sham litigation” against DigiDeal to improperly clear a competitor from the marketplace.

“Plaintiffs offered no evidence of any subjective intent of (Scientific Games) in filing suit against DigiDeal, let alone proved that the sole intent was to harass DigiDeal and stifle their business through abuse of the litigation process,” Scientific Games wrote in its motion.

Jurors, however, sided with Shuffle Tech.

Shuffle Tech is represented in the action by attorneys with the firms of Nixon & Vanderhye P.C., of Arlington, Va.; Freeborn & Peters LLP, of Chicago; and Miller, Canfield, Paddock and Stone, P.L.C., of Chicago.

Scientific Games is represented by the firm of Jenner & Block LLP, of Chicago.

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Organizations in this Story

Freeborn & Peters Jenner & Block LLP Miller Canfield Paddock & Stone Nixon & Vanderhye PC Scientific Games Corporation Shuffle Tech International LLC U.S. District Court for the Northern District of Illinois

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