IP Law Daily, PATENT—FedCir: Indirect Infringement of Gaming Machine Patents to Be Reconsidered in Light of Akamai, (Mar 14, 2013)

By William Zale, J.D.

In a dispute over infringement of casino gaming machine patents claiming methods for awarding a progressive prize through a bonus game that may appear in addition to the main game, the U.S. Court of Appeals for the Federal Circuit affirmed a summary judgment of no direct infringement, but vacated the judgment of no indirect infringement (Aristocrat Technologies Australia PTY Ltd. v. International Game Technologies, March 13, 2013, O’Malley, K.). The court affirmed the district court’s claim constructions and remanded the ruling on indirect infringement for reconsideration in light of Akamai Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012).

Aristocrat Technologies Australia asserted infringement of U.S. Patent Nos. 7,056,215 (the '215 patent) and 7,108,603 (the '603 patent) by International Game Technology (IGT). Aristocrat accused IGT gaming devices that feature various bonus games in which a player may win progressive prizes.

As an improvement on incremental jackpot systems known in the prior art, the '215 patent describes a system for awarding an additional prize to a player through a secondary feature game appearing after the main game is completed. The '603 patent is a continuation of the '215 patent, and its claims are substantially similar except for the removal of a step relating to player input for selection of a progressive jackpot.

Claim construction—“awarding prize.” The district court construed the “awarding prize” limitation of the term “awarding said one progressive prize” as conferring rights to a prize as opposed to simply displaying the amount of the prize won. Because it was undisputed that during the testing of gaming machines, legal entitlement to a prize was never conferred upon IGT employees, the district court determined that the “awarding step” was not performed by IGT during the testing of the machines, and summary judgment in favor of IGT was appropriate.

The court agreed with IGT and the district court that the awarding step must be construed as conferring rights from the operator of the game to the player. Aristocrat’s evidence failed to show that awarding means “presenting to the player the monetary amount determined to be due.” Aristocrat’s proposed construction of the “awarding” step was inconsistent with the surrounding claim language, which showed that the “awarding prize” step cannot be met simply by displaying the amount of the prize won because this would render the “identifying prize” step superfluous,” according to the court.

Claim construction—“making a wager.” The court also agreed with the district court that the term “making a wager” should be construed to mean “betting, which is an act performed by the player.” The claims of the asserted patents describe a network of gaming machines, “each of said gaming machines being capable of accepting different wager amounts made by a player.” As interpreted by the district court, this claim language “indicates that gaming machines accept wagers, while players make wagers.”

Aristocrat argued that the district court failed to recognize that, when a claim requires that a step be performed by the player, the claim explicitly states “by the player.” Aristocrat’s contentions were inconsistent with the specification, which made clear that credits are bet by the player, the court found.

Direct infringement. For method claims—such as those at issue here—a patent holder must establish that an accused infringer performs “all the steps of the claimed method, either personally or through another acting under his direction or control. The court rejected Aristocrat’s argument that the player’s entire gaming experience is dictated by IGT’s programming of the gaming machine. No material issue of fact existed as to IGT’s lack of direction or control over the player, the court determined.

As to Aristocrat’s argument that a reasonable jury could find that IGT directly infringes during the testing of its machines, the court found no evidence in the record that testers are given the right to use any credits added to the credit meter or claim any prizes won in the course of such use. Because Aristocrat failed to establish a genuine fact dispute regarding employee entitlement to a prize, the district court properly granted summary judgment in IGT’s favor on the issue of infringement during testing, according to the court.

Indirect infringement. The district court granted IGT’s motion for summary judgment of noninfringement as to all asserted claims of both patents explaining that IGT’s accused products require two separate actors: (1) the casino via the gaming machine and (2) the player. The district court found that the lack of a single entity performing all of the steps of the asserted claims precluded direct infringement as a matter of law, under Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1330 (Fed. Cir. 2008).

Based on Akamai, the court vacated and remanded the portion of the order relating to indirect infringement. As stated in Akamai, 692 F.3d at 1308-09, “[r]equiring proof that there has been direct infringement as a predicate for induced infringement is not the same as requiring proof that a single party would be liable as a direct infringer” (emphasis in original). Thus, “[a] party who knowingly induces others to engage in acts that collectively practice the steps of the patented method—and those others perform those acts—has had precisely the same impact on the patentee as a party who induces the same infringement by a single direct infringer; there is no reason, either in the text of the statute or in the policy underlying it, to treat the two inducers differently.”

While expressing no opinion on the ultimate merits of Aristocrat’s indirect infringement position, the court said that adduced evidence could support a judgment in its favor on a theory of induced infringement.

Alternative grounds for noninfringement. IGT argued that the court could affirm the grant of summary judgment of noninfringement, and avoid remand of this case on indirect infringement, on the basis that the bonus game in the accused machines appears during the main game as opposed to after it. Aristocrat contended that it presented substantial expert testimony relating to the source code responsible for triggering the bonus game and that the trigger only occurs upon the completion of the main game. The court agreed with the district court that a material issue of fact exists as to when the main game completes.

The case is No. 2010-1426.

Attorneys: Meredith Martin Addy ( Brinks Hofer Gilson & Lione) for Aristocrat Technologies Australia PTY Ltd. Deanne E. Maynard (Morrison & Foerster, LLP) for International Game Technology.

Companies: Aristocrat Technologies Australia PTY Ltd.; International Game Technology.

Cases: Patent FedCir