Published On: Thu, Aug 9th, 2018

Scientific Games Ordered to Pay Up

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Earlier this week, a US jury ordered Scientific Games Corporation to pay $315 million to its competitors after it had been ruled by a Chicago-based federal court that the company had filed “frivolous” lawsuits to establish “sham patents” as part of a larger effort to monopolize the automatic card shuffler market.

 

It was determined that Scientific Games had relied on sham patent lawsuits against multiple competitors in an attempt to gain absolute control over the card shufflers market. The company is believed to be working towards filing an appeal currently.

 

The lottery and casino equipment giant, based in Las Vegas, stated that the jury had given out a wrong verdict in a filing to the SEC (Securities and Exchange Commission). Now, the company is looking to have the ‘damages award’ and the ‘finding of liability’ reviewed on appeal and also before the trial court.

 

Triple threat

 

Aces Up Gaming, Shuffle Tech, and Poydras-Talrickc Holdings were the three companies that collaborated in 2012 to develop a new automatic card shuffler for casinos. The newly developed product was debuted at the Las Vegas Global Gaming Expo in the same year.

 

But, soon enough, a patent infringement lawsuit was filed by SHFL Entertainment (formerly known as Shuffle Master) alleging that the three firms were using its technology without authorization. SHFL was acquired in 2013 by Bally Technologies for $1.3 billion. In 2014, Bally was acquired by Scientific Games for $1.5 billion.

 

Due to the lawsuit, Shuffle Tech and the others had to take the product off the market. However, in 2015, they filed an antitrust lawsuit against Scientific Games alleging that SHFL Entertainment was aware of its patent being unenforceable and invalid.

 

The lawsuit also blamed the company for misleading the patent office and engaging in filing a sham patent lawsuit against prospective competitors.

 

The jury sided with Shuffle Tech and its partners, awarding them with a total of $315 million. The original amounts were $65 million to Shuffle Tech, $25 million to Poydras, and $15 million to Aces Up. However, the figures were tripled by a judge.

 

Bittersweet

 

Shuffle Tech’s CEO, Rick Schultz, told the media that the company was satisfied with the ruling, but that they were unsure of what the next step would be. It is believed that Shuffle Tech sold the patent for its unique card-shuffler for casinos. As of now, Shuffle Tech serves the consumer market.

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