IP Law Daily, PATENT—N.D. Ill.: Casinos’ patent misuse claims against card-shuffler manufacturers go forward; class certification granted, (Apr 3, 2026)

By Justin Marcus Smith, J.D.

Casinos provided evidence that manufacturers wrongfully obtained patents for automatic card shufflers by failing to disclose prior art to the USPTO and created a monopoly in the card shuffler market by using the patents.

In ongoing antitrust litigation brought by Queen Marquette, Inc. and Casino Queen, Inc. against card shuffler manufacturers Light & Wonder, Inc. and LNW Gaming, Inc., the federal district court in Chicago wholly denied the casinos’ motion for summary judgment. Contrary to the allegations, the manufacturers were not estopped from advancing their arguments based on purportedly contrary arguments made in earlier cases. The on-sale bar record about the “Nicoletti” shuffler also presented genuine disputes that were not suitable for judgment as a matter of law. The court largely denied the casino Defendants’ partial motion for summary judgment. Disagreements about product substitution did not overcome the Plaintiffs’ direct evidence that the Defendants held near-total market power over all types of automatic shufflers. The Plaintiffs’ overcharge and yardstick evidence also raised triable issues on antitrust injury and damages. The Walker Process claims related to competitive abuse of the patent system largely survived such that the sham litigation theory likewise survived, as did the Plaintiffs’ “monopoly broth” theory. The court granted the motion to certify a class under Fed. R. Civ. P. 23(b)(2) and (b)(3). The court held the casinos satisfied R. 23 contrary to the manufacturers' attacks on typicality because it appeared that each class member experienced an overcharge, and variation appeared to be minimal, only affecting damages (In re Automatic Card Shufflers Litigation, No. 1:21-cv-01798 (N.D. Ill. Mar. 31, 2026)).

Background. As alleged in multiple litigations over automatic card shufflers, casinos Casino Queen Marquette, Inc. and Casino Queen, Inc. purchased automatic playing card shufflers from Scientific Games Corp., Bally Technologies, Inc., and Bally Gaming, Inc. According to the casinos, the manufacturers obtained fraudulent patents for the card shufflers and engaged in sham lawsuits to enforce those patents. The casinos claimed that they first learned about the allegedly anticompetitive conduct and realized that the manufacturers had been charging supra-competitive prices for card shufflers only after discussions with their lawyers following a March 20, 2020, federal court decision, in which the court denied a motion to dismiss in a similar suit (See TCS John Huxley Am., Inc. v. Sci. Games Corp., N.D. Ill. Mar. 20, 2020).

In 2022, the federal district court denied a motion to dismiss. The Defendants argued the Plaintiff casinos should have discovered their alleged injury more than four years before they filed suit. However, the court held the complaint conceivably alleged that Plaintiffs brought the action within the applicable limitations period (Casino Queen Marquette, Inc. v. Scientific Games Corp., May 19, 2022, Kness, J.). The court compelled arbitration in two other matters involving the same underlying facts and Defendants (Giuliano v. Scientific Games Corp., May 19, 2022, and Tonkawa Tribe of Indians of Oklahoma v. Scientific Games Corp., May 19, 2022).

Presently, in the instant action, Plaintiffs Casino Queen Marquette, Inc. and Casino Queen, Inc., maintained a putative class action against Defendants Light & Wonder, Inc. and LNW Gaming, Inc. for violations of antitrust law in connection with the allegedly fraudulent patents. The court summarized how the Defendants have consistently held a near 100% share of the relevant market for automatic card shufflers certified and approved for casino use in the United States. The Plaintiffs valued the market at $100 million per year. Casinos have no practical alternative but to use automatic card shufflers. The Plaintiffs alleged the Defendants’ dominant market share predated the 2004 onset of allegedly fraudulent patent behavior that protected the Defendants’ market share by excluding competitive entry.

There are four main types of card shuffler, and the Plaintiffs provided evidence that the Defendants’ now-extinct competitors developed multifunctional specialty shufflers defying strict type categorization. The Defendants moved for summary judgment, and the Plaintiffs moved for partial summary judgment.

Defendants’ motion. The court denied the Defendants’ motion for summary judgment on the issues of market definition and power. The Plaintiffs’ market definition was sufficient to reach a jury. The Defendants conceded they had no significant price-constraining rivals. The Defendants either sued or bought out the competition.

The Plaintiffs also presented triable evidence that the Defendants used sham patents to drive out competitors. Absent that alleged conduct, all of the VendingData shufflers would have remained in the market competing in various segments.

Internal documents suggested the Defendants’ goal was to eliminate competing shufflers in general. It appeared to work out that way. Taiwan Fulgent, for example, was apparently deterred from entering the multi-deck continuous shuffler market after seeing the Defendants’ “aggressive litigation” against VendingData.

Nearly ubiquitous market control pertained to all kinds of card shuffling devices, but the distinctions were not that important where the Plaintiffs’ main point was that the Defendants cornered the whole market for casino-grade automatic shufflers in the U.S. That made the economic analysis simple.

The court rejected the Defendants’ argument that the Plaintiffs failed to present a formal quantitative cross-elasticity of demand study (SSNIP) between relevant categories of shufflers. Evidence developed in discovery satisfied the purpose of SSNIP analysis. A quantitative SSNIP may not have even been possible due to the lack of competitive market data.

The court also found issues of fact existed about antitrust injury and damages. The Plaintiffs’ expert employed a yardstick or benchmark methodology. The Defendants argued it was speculative and unreliable, but there was “little doubt” that the overcharge harm alleged was classic antitrust injury.

The use of comparator markets and regression analysis provided a jury with a rational basis for estimating damages. The yardstick method for comparing prices to approximate competitive prices was legally acceptable and already passed Daubert muster in a prior decision.

As for the “monopoly broth” theory, the Plaintiffs presented evidence of an integrated scheme of antitrust conduct including fraudulent procurement and enforcement of patents, exclusionary settlements, and “shrewd” acquisitions. The Plaintiffs could present a full picture.

With respect to the Plaintiffs’ Walker Process claims, the court found sufficient evidence for a jury to infer both an intent to deceive and materiality with respect to the Shuffler Art Disk Patents and post-2004 disclosures.

As for pre-2004 patents, the Defendants argued there was no evidence they knew of key prior art prototypes at the time they prosecuted those five early patents, but the court found the Plaintiffs presented evidence of knowledge of three of the patents. There was a lack of evidence of knowledge of the other two and of the Nicoletti and Luciano prototypes. The court held the defendants were entitled to summary judgment only with respect to two of the five patents.

With regard to five other patents, the court granted summary judgment on three of them because they pertained more to the sham litigation and “monopoly broth” theories than Walker Process. However, summary judgment was not warranted on the other two.

With respect to the sham litigation exception to Noerr-Pennington, the court held it must view the evidence in Plaintiffs’ favor. The sham claim survived to the extent the Walker Process claim largely survived.

Plaintiffs’ motion. The court denied the Plaintiffs’ motion for summary judgment in full. First, judicial estoppel was improper because a previous court decision did not rely on the position presently contradicted. The Plaintiffs did not show that a Nevada court accepted the Defendants’ factual assertions about market harm. Judicial estoppel also did not apply where the Defendants’ cited statements were not clear admissions of monopoly power, and the Nevada court never found Shuffle Master to be a monopolist.

The Defendants were also correct that factual disputes prevented summary judgment about whether the Nicoletti shuffler triggered the on-sale bar. The Plaintiffs argued that the inventor had already sold his earlier automatic card shuffler years before these patents were filed, but the Defendants argued 1995 circumstances were a transfer of intellectual property. The court denied summary judgment as to whether the Nicoletti shuffler triggered the on-sale bar under 35 U.S.C. § 102(b).

Class certification. The court granted the Plaintiffs’ motion for class certification. First, joinder of all class members, presumably hundreds of casinos that bought or leased the Defendants’ card shufflers over a 13-year period, was impractical.

Commonality with respect to an overarching monopolization scheme presented a low hurdle. The Plaintiffs presented issues in common to all class members, and the Defendants did not seriously contest commonality.

The Defendants argued there was no typicality because the Plaintiffs did not use continuous shufflers, as do about half of the blackjack tables in Las Vegas. The court conceded some differences between the Plaintiffs and absent class members, but the court found these differences did not preclude a finding of typicality in this antitrust context because each claim turned on the same course of conduct and price effects. Differences went more to impact than nature of claim.

As for adequacy, the record showed alignment of interests. Again, all class members seek relief for the same alleged overcharge. Differences in product type did not create a disabling conflict.

Certification of the injunctive and declaratory relief class was also appropriate. The court applied the same reasoning, and the Defendants did not seriously contest it.

As for predominance, there was no significant debate about liability. The facts did not vary from customer to customer. The Defendants tacitly conceded that the fact of their alleged conduct could be shown commonly.

Turning to the predominance of injury, the court found the Plaintiffs met their burden. they put forward market evidence indicating the automatic shuffler market was conducive to common impact. The court analyzed the issues here at great length.

As to predominance of damages, the Plaintiffs proposed a common methodology for calculation. The approach flowed directly from the Plaintiff’s theory of harm that every purchase was inflated by a roughly uniform percentage and therefore consistent with their theory of liability. Defendant objections here merely repackaged impact contentions the court already addressed. The method of calculating damages was workable class wide. Individual questions would not overwhelm common issues.

As to the limitations periods, the Defendants contended each class member’s knowledge of the facts giving rise to their claim could differ, but the court found this did not preclude class certification. Courts typically reject limitations period defenses to class certification, especially in antitrust cases, because they rarely predominate over the common issues of liability and impact. All class members shared the argument that the limitations period was tolled until at least 2017 due to the hidden nature of the fraud with ongoing injury due to high prices. All told, the court found common issues predominated.

The presence of smaller casinos made the class action form superior. There was no indication of any overlapping suits elsewhere on behalf of the victims. The class form would also avoid mini-trials on individual issues. The class form appeared to be the only practical method for resolving the claims fairly and efficiently.

The Case is No. 1:21-cv-01798.

Judge: Kness, J.

Attorneys: Scott A. Martin (Hausfeld LLP) for Casino Queen Marquette, Inc. Brittany L. Sukiennik (Cravath, Swaine & Moore LLP) for Light & Wonder, Inc.

Companies: Casino Queen Marquette, Inc.; Light & Wonder, Inc.

Cases: Patent IllinoisNews